patdiam jewellery ltd Management discussions

ECONOMIC SCENARIO:

The Year 2022 was memorable for India as the nation celebrated its 75^th year of independence while claiming its place as the worlds fifth-largest economy, boasting a nominal GDP of $3.5 trillion. According to CSO estimates, the Indian economy grew by 7.2%, the fastest among major economies, driven by strong domestic private consumption, government expenditure on infrastructure and a favorable investment climate. Although India, too, faced high inflation, the Reserve Bank of India undertook a series of policy rate hikes to bring it down within its comfort range. Despite the challenges of higher oil prices leading to increased import bills and trade deficits, concerns about the current account deficit and its financing has eased over time.

INDUSTRY STRUCTURE AND DEVELOPMENTS

Gems and jewellery industry plays a vital role in the Indian economy as it is one of the largest exporters and contributes a major chunk to the total foreign reserves of the country. Indias gems and jewellery industry is one of the largest in the world contributing almost 29% to the global jewellery consumption. India is deemed to be the hub of the global jewellery market because of its low costs and availability of high-skilled labour. One of the fastest growing sectors, gems and jewellery industry is extremely export oriented and labour intensive.

OPPORTUNITIES AND THREATS

Jewellery exports have been recording a decelerating trends since the beginning of FY21 on account of various domestic as well as global challenges including rise in import duty on precious stones viz. polished diamonds and colored gem stones, tightening of lending terms by banks, declining demand from export markets and withdrawal of GSP benefit by USA among others.

SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

The Companys main business is diamond jewellery manufacturing and all the activities of the Company during the year are related to this business. As such there are no separate reportable segments.

OUTLOOK

The Company has done reasonable in the current year and expects to achieve a good percentage of market share in the Diamond manufacturing and Jewellery marketing fields in the years to come. The outlook for the Company can therefore be termed as optimistic and expects higher growth then inflation and average growth in the industry. In the coming years, growth in Gems and Jewellery sector would be largely contributed by the development of large retailers/brands. Established brands are guiding the organized market and are opening opportunities to grow. The demand for jewellery is expected to be significantly supported by the recent positive developments in the industry. There is a Strong possibility of revival of the Indian economy after a 1year pause and result in favour of discretionary spending categories.

RISKS AND CONCERNS

Following can be some of the risks and concerns the Company needs to be wary of: ? The largely unorganized structure of the market can affect the systematic functioning of the Company. ? Political instability, which has a tremendous impact on the capital markets. ? Likely opening up of the economy, which can be a double-edged sword. ? The Diamond market in India is heavily influenced by the US Markets. ? The major income component of the Company being exports, changes in economies or government policies of the countries to which ? The Company is exporting may also affect the operations of the Company. ? Increasing competition among the Indian Exporters in this industry.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has adequate internal control procedures commensurate with the size of the Company and the nature of its business for purchase of stores, raw materials, components, plant and machinery, equipment and other assets, and for the sale of goods.

The Company also has in place an Audit Committee to have a periodic over view of the internal control procedures of the Company. The Audit committee is accessible at all times to the employees of the Company for any improvement to be recommended in the procedures in place.

TRADING STATUS ON THE STOCK EXCHANGE:

The companys equity shares are Listed and traded on Bombay Stock Exchange Limited.

HUMAN RESOURCE DEVELOPMENT

The company considers human resources as one of the vital and important factors for sustained growth. The human resources strategy is to attract talent in the industry, develop and upgrade their skill and competence on the job and ensure employee satisfaction through reward, appreciation and development of environment based on culture and values nurtured by the Group over the years.

CAUTIONARY STATEMENT

Statement in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectation or predication may be "forward-looking" statements within the meaning of applicable laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include raw material availability and prices, cyclical demand and pricing in the Companys principal markets, changes in government regulations, tax regimes, economic developments within India and the countries in which the Company conducts business and other incidental factors.