SW Investments Ltd Management Discussions.

INDUSTRY STRUCTURE AND DEVELOPMENT

The outbreak of the pandemic COVID-19 globally and in India compelled the Government to impose a nationwide lockdown, bringing economic activities to a halt. It has radically altered the economic landscape and increased volatility in the global capital markets. The after-effects of such a pandemic will continue to show on the financial and capital markets for a substantial amount of time.

The Government of India and Reserve Bank of India announced various measures such as the concession in TDS rates, moratorium on servicing of term loans, determination of default in servicing of debt etc. to deal with such unprecedented circumstances to revive the economy.

Apart from the above measures, various relaxations have also been granted by Securities and Exchange Board of India (SEBI) and Ministry of Corporate Affairs (MCA) to reduce the inordinate amount of logistical and practical burdens. The regulators have taken measures to enable companies to carry on their operations and protect the interests of investors.

OUTLOOK

In times where the economy is dealing with a global pandemic, the role of the capital market regulator, SEBI has become all the more significant.

The Companys growth prospects remain positive as it is well equipped to handle any exigency. The Company is consistently adding its revenue sources while containing costs and work upon disruptions to its advantage. The Company has adequate capital and financial resources to run its business operations and has adequate internal financial reporting and control.

BUSINESS OVERVIEW

The Company is an Investment Company holds Rs. 12.21 lakhs of its assets in the form of investments in Equity shares and debentures. The thrust of the business is to hold and continue to hold securities in various companies.

The financial and securities market since the year end has revived with overall improvement in sentiments.

Highlights of Financial Performance during FY 2019-20

Total Income from Operation of Rs. 162.50 Lakhs

Proft Before Tax of Rs. 4.92 lakhs (Rs. 57.52 lakhs in FY18-19)

Net Proft of Rs. 3.72 lakhs (Rs. 42.39 lakhs in FY18-19)

Basic EPS stood at Rs. 0.41 (Rs. 4.71 in FY18-19).

RISKS AND CONCERNS

The Companys income is mainly from commission, interest and dividends that may be receivable on investments held by it /maybe held in future. The Company has quoted investments which are exposed to fluctuations in stock prices. These investments represent a portion of the Companys capital and are vulnerable to fluctuations in the stock markets. Any decline in these quoted investments has impact on its financial position and results of operations. Any slowdown in the growth of Indian economy or future volatility in the global financial market, could also affect the business.

Liquidity risk is the risk of being unable to raise necessary funds from the market at optimal costs to meet operational and debt servicing requirements. The Company tracks the potential impact of prepayment of loans at a realistic estimate of its near to medium-term liquidity position.

Business cycle risk is the risk associated with the seasonal or cyclical nature of a business. As customers include both individuals and business, loan products are used by customers in various industries, trade cycles and have limited impact on Companys business.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has adequate internal control systems to ensure operational efficiency and accuracy in financial reporting and compliance of applicable laws and regulations. The internal control is supplemented by review of internal auditors. Observations of the internal auditors are subject to periodic review and compliance monitoring. The Audit Committee of Directors reviews the Internal Audit process and the adequacy and effectiveness of internal audit and controls periodically.

CAUTIONARY STATEMENT

Certain statements in this document may be forward-looking statements. Such forward- looking statements are subject to certain risks and uncertainties like regulatory changes, local political or economic developments, technological risks, and many other factors that could cause our actual results to differ materially from those contemplated by the relevant forward looking statements. SW Investments Limited will not be in any way responsible for any action taken based on such statements and undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.