Aaswa Trading and Exports Ltd Management Discussions.

Overview:-

The year 2018 started with encouraging data on global economic growth. But as the year, momentum started fading. According to World Economic Situation and Prospectus 2019, the economic activities are severely disrupted as the global economy is facing convergence risks, which could have major impact on long term development, improvements are expected later and global economic growth in 2020 is expected to return to 3.6 percent. The World Trade Organization (WTO) as well as the World Bank and the Organisation for Economic Cooperation and Development have downgraded their projections across trade, equities, currencies and interest rates.

According to IMF, India has transpired as the fastest growing major economy in the world. Forecast by the World Bank envisages Indias GDP to grow at 7.3% in 2019 and likely to maintain growth rate for the next two years. It may so be assessed that this growth of India may even reach higher over the years with countrys favorable demographics and continued streamlining of its reform policies. The domestic demand is likely to be the key driver which gives the economy some protection from global headwinds. With an improving business ecosystem and stable macroeconomic indicators coupled with continued implementation of various reforms is likely to provide impetus to the domestic economy.

Despite these positive aspects, there seems to be various risks to the Indian Economy including ongoing global trade tensions, international crude oil price developments, financial market volatility and populist fiscal measures, etc. They may cause a growth slowdown and trigger inflationary implications. Continued implementation of structural and financial reforms remains essential for the health of economys growth prospects.

Segment Analysis and Review:-

The company is predominantly a trading company and operates only in one segment, trading of Fabrics. Based on its product profile and its operating performance during the year, the Company has been able to able to increase the volumes further during the year. However, the segment exercised better controls on other operational costs and kept overall costs under control.

Financial Results and Outlook:-

During the year under review, the Company has earned total revenue of Rs. 365.24 Lacs from the operations of the Company as compared to previous year revenue of Rs. 273.22 Lacs. Your Company has reported a profit of Rs. 11.46 Lacs as compared to loss of Rs. 0.34 Lacs in previous year.

Significant Changes in Financial Ratios:

Financial Ratio FY 2018-19 FY 2017-18 Change in % Reasons for change
Current Ratio 1.05 4.00 -73.83% Current ratio during previous year were high since there were no trade payables and trade receivables.
Operating profit Margin 3.14 -0.13 2402.73% Change in ratio due to recovery of doubtful advances for which provisions was made in earlier years.
Net Profit Margin 3.14 -0.13 2402.73% Change in ratio due to recovery of doubtful advances for which provisions was made in earlier years.
Return on Net Worth 7.17 -0.23 3005.67% Change in ratio due to recovery of doubtful advances for which provisions was made in earlier years.

Research and Development:-

Company recognizes the importance of research and development across all important areas and continues to maintain and update its functional facilities, in spite of its financial position, in order to meet the changing product requirements of the customers, achieve cost efficiencies and meet compliance requirements of statutory agencies.

Opportunities, Threats and Risks:

With the financial reforms likely to add impetus to industry growth and likelihood of stable political environment, the domestic market should pose better opportunities in terms of volume growth. Improved financial liquidity in the economy as a whole would be a key concern for the company to achieve higher volumes coupled with improved margins.

Human Resources Development and Health & Safety:-

The Company follows proper policies and practices for the welfare of its employees and takes adequate measures for attracting and retaining the right talent. The Company does not operate in any manner in which it violates any laws. Moreover, the employees of the Company are being provided better work environment.

Internal Control System:-

There are adequate internal control system existing in the company across all the areas of operations and processes. This ensures efficiency of operations, compliance with internal policies and applicable laws and regulations, protection of resources and/or assets and accurate reporting of financial transactions. The audit committee reviews the adequacy and, effectiveness of the internal control systems and improvements are carried out to strengthen them.

Cautionary Statement:-

Statements in the Management Discussion and Analysis Report containing the objectives, expectations or predictions of the company may be forward-looking within the meaning of securities laws and regulations. Actual results may differ materially from those expressed in the statement. The operations of the Company could be influenced by various factors such as domestic and global demand and supply conditions affecting sales volumes and selling prices of finished goods, input availability and cost, government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.

FOR, AASWA TRADING AND EXPORTS LIMITED
KEYURJ. PARIKH BHAVESH G. SHAH
Date: 29th May, 2019 CHAIRMAN DIRECTOR
Place: Ahmedabad DIN:00156455 DIN:02333042