Sawaca Business Management Discussions


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

1. INDUSTRY STRUCTURE, DEVELOPMENT:

During the period under the review, the Company had been operating in the Business of Trading. The main products for Trading include Various Perfumery Chemicals.

The performance of company is positive during the entire FY 2022-23. The year gone by saw high inflation, rising cost of imported fuel, moderating economy and a volatile political environment, which contributed to the challenging market environment. The GDP of Indian Economy has shown estimated growth of around 6.5% during the year 2022-23.

2. OPPORTUNITIES & THREATS:

The Government is committed to encourage the healthy growth of Capital Market for development of the Economy. While the government seems committed to reforms to address the challenges, political compromises and high populist spending in an election year will mean that tough decisions are more likely to be deferred. However, steps by RBI to stabilize the exchange rate by reducing liquidity support to the banking system will create a challenging environment for investments.

3. SEGMENT-WISE PERFORMANCE:

The Companys main business activity is trading of Perfumery & Organic Chemicals, Textile and information Technology Consulting & Support service during the year under review the Company has also invested in started business of matrimony website in the name of nextgenshaadi.com

4. OUTLOOK:

The Company continues to explore the possibilities of expansion and will make the necessary investments when attractive opportunities arise.

5. RISK & CONCERNS:

The Company is exposed to specific risks that are particular to its business, including interest rate volatility, economic cycle, market risk and credit risk. The management continuously assesses the risks and monitors the business and risk management policies to minimize the risk.

6. INTERNAL CONTROL SYSTEMS & THEIR ADEQUEACY:

The Companys operating and business control procedures ensure efficient use of resources and comply with the procedures and regulatory requirements. There are adequate internal controls to safeguard the assets and protect them against losses from unauthorized use or disposition and the transactions are authorized, recorded and reported correctly.

The Audit Committee periodically reviews the internal controls systems and reports their observations to the Board of Directors.

The Directors have appointed Mr. Shridhar Shah of M/s. Shridhar Shah & Co, Chartered Accountants as the Internal Auditors of the Company for the FY 22-23 on 29.05.2023

7. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

The Companys total revenue from operations during the financial year ended 31stMarch, 2023 were Rs. 364.72 Lacs as against Rs. 382.02 Lacs of the previous year representing decrease of approximately about 4.53% over the corresponding period of the previous year with total expenses of Rs. 305.08 lacs (previous year of Rs.326.44 lacs). The Company has made Net Profit of Rs. 54.47 Lacs as against Rs. 40.62 Lacs of the previous year after considering Depreciation and Provision for Tax and other adjustments representing an increase of approximately about 34.34% over the corresponding period of the previous year.

The EPS of the Company for the year 2022-23 is Rs. 0.48

8. HUMAN RESOURCE DEVELOPMENT:

The Company believes that the human resources are vital in giving the Company a Competitive edge in the current business environment. The Companys philosophy is to provide congenial work environment, performance oriented work culture, knowledge acquisition / dissemination, creativity and responsibility. As in the past, the Company has enjoyed cordial relations with the employees at all levels.

The Company continues to run an in-house training programme held at regular intervals and aimed at updating their knowledge about issues.

9. ACCOUNTING POLICIES:

The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year. The financial statements have been prepared under the historical cost convention on an accrual basis. The management accepts responsibility for the integrity and objectivity of the financial statements, as well as for the various estimates and judgment used therein

10. DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY

PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS:

Sr. No. Particulars As at March 31, 2023 As at March 31, 2022 % change from March 31, 2021 to March 31, 2023 Reasons for % change from March 31, 2021 to March 31, 2023
1. Current ratio 0.83 1.11 35.49% The Change is due to high recovery from debtor in FY 22-23
2. Debt- Equity Ratio 0.02 0.03 27.91% The change is due to issue of bonus share if FY 22-23
3. Debt Service Coverage ratio 2.10 1.60 -23.93% -
4. Return on Equity ratio 0.04 0.03 -23.94% -
5. Inventory Turnover ratio - - 0.00% -
6. Trade Receivable Turnover Ratio 1.40 1.73 23.05% There is detororiation in Trade receivable turnover ratio as the sales is in last quater of the year and has not been converted into cash.
7. Trade Payable Turnover Ratio 1.17 1.63 39.22% The change is mainly due to payment to creditors
8. Net Capital Turnover Ratio 86.11 17.48 -79.70% There is decrease in net capital turnover ratio due to decrease in average working capital during the year.
9. Net Profit ratio 0.15 0.14 -7.28% There is increase in net profit ratio on account of increase in net profit after taxes, which in turn is due to increase in revenue from new segement of the company.
10. Return on Capital Employed 0.05 0.05 -4.41% There is improvement in return on capital employed on account of increase in capital employed which is due to net profit after tax during the year.

11. DISCLOSURE OF ACCOUNTING TREATMENT IN PREPARATION OF FINANCIAL STATEMENT:

The Company has followed all relevant Accounting Standards laid down by the Institute of Chartered Accountants of India (ICAI) while preparing Financial Statements.

12. CAUTIONERY STATEMENT:

Statements in this report on Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied.

PLACE : AHMEDABAD For and on behalf of the Board
DATE : 12.08.2023 For, SAWACA BUSINESS MACHINE LIMITED
Sd/-
[SHETAL SHAH]
DIN: 02148909
Managing Director