"ANNEXURE - 3" TO DIRECTORS REPORT
This chapter on Managements Discussion and Analysis ("MD&A") is to
provide the stakeholders with a greater understanding of the Companys business, the
Companys business strategy and performance, as well as how it manages risk and capital.
The following management discussion and analysis is intended to help the reader to
understand the results of operation, financial conditions of STARLINEPS ENTERPRISES
LIMITED.
(1) ECONOMIC OVERVIEW, INDUSTRY STRUCTURE AND DEVELOPMENTS:
GLOBAL ECONOMY:
The global economy experienced a slowdown in 2022-23 due to high inflation rate,
tightening financial conditions, increasing interest rates, rising geopolitical tensions,
ongoing Russia and Ukraine war, as a result of these the global economy could only grow by
3.2% in 2022. With most of these challenges continuing in 2023, the global economy is
projected by IMF to grow at 2.8% in 2023 which will be one of weakest growth rates since
2001. Concern over slowdowns in major economies remain, with recent troubles in banking
sector aggravating worries that runaway inflation and tight monetary policy would hamper
growth and financial investments. As per IMF close to 90% advanced economies will
experience slowing growth this year.
INDIAN ECONOMY:
The Indian economy demonstrated resilience despite challenges in the global environment
on the back of strong demand, support from Government policies and strong banking system.
As per World Bank report of April 2023, India was one of the fastest growing economies in
the world in 2022- 23 at 7% growth. Outlook for Indian economy remains positive for
2023-24 with projected growth at 6.3%. IMFs bi-annual World Economic Outlook projects
Indias retail inflation to ease in 2023- 24 to 4.9% from 6.7% in FY 2022-23 which will
help improve demand and the discretionary expenditure. Indias direct and indirect tax
collections were robust in 2022-23. Direct tax collections increased by 17.63% and
indirect tax collections increased by 22% over the previous year. Merchandise and service
exports estimated at US$ 765 billion jumped by 16% during the year 202223. IMDs
prediction of normal rains during the current year at 96% of long period average will be
good for agricultural sector and rural economy of India. Increased focus on infrastructure
development by the Government of India and affordable data pricing has helped the rural
and semi urban areas not only in terms of improved employment opportunities and income
source but has also brought them closer to urban centres and thereby increasing
aspirations for better life style. Rural consumption of FMCG products grew by 8.9% during
2022-23 which indicates increased preference towards quality products. Changes in the
weather pattern with increased unseasonal spells of heavy rains and larger periods of
heatwaves during the summer months may however, have a negative impact on some sectors of
the economy. With signs of resurgence of Covid-19 pandemic virus, the same needs to be
closely monitored with increased preventive steps to control the spread so as not to
adversely affect the economic growth in 2023- 24.
INDUSTRY STRUCTURE AND DEVELOPMENTS:
The Company is a part of an Industry, which largely operates through unorganized
constituents. However, unlike the industry, the Company has attempted to operate through
as systematic and organized manner as possible. However, since Diamonds and Jewellery is
one industry, in which India holds, commendable position in the world, akin to the
software industry, one can look forward to more international involvement coming up in
this industry. The Company is engaged in only one Business i.e. Trading of Precious
Metals, Stones & Jewellery. The Company expects that these businesses will persist in
the coming years.
OPPORTUNITY AND THREATS:
• Opportunities
Diamond and Jewellery volumes in India have remained resilient over the years aided by
strong cultural affinity or the yellow metal and stable returns from the asset class. The
major growth drivers for the industry are:
> Stable asset class
Gold has historically been one of the most stable assets providing investors best
returns over a long-term horizon, compared to other assets.
> An essential part of Indian culture
Jewellery in India has traditionally been an integral part of weddings and festivals.
Indian customers often purchase contemporary jewellery as a form of self-expression and
this has led to evolution of distinct targeted collections including wedding wear, work
wear, regular or daily wear andfashion wear as well as very premium limited edition
signature collections.
> Personnel
More and more benefits are likely to come in the way as Induction of widely experienced
and specialized personnel on the Board of the Company. There is good combination of
technical as well as advisory personnel in the management.
> Rising female workforce
Better job opportunities, rising demand for skilled and professional workforce and
rapid urbanization are leading to increasing share of women in workforce. And by virtue of
women being the primary consumers of jewellery, their increasing entry into workforce and
disposable income are likely to drive the demand, going forward.
> E-commerce
With the rising internet penetration in the country, e-commerce is gaining significant
boost with rising consumer confidence along with the advantage of ease in shopping,
lucrative discounts, access to wider variety, free shipping, and quality assurance.
Though, an online sale through online channel is currently miniscule, it is gaining
importance facilitating jewellers in reaching out to more customers.
> Government support
Realizing the sectors potential, the Government has identified it to be a focused area
for export promotion. Adopting policies of Make in India and Design in India there is
a strong intent to push growth. The Government has also undertaken various measures to
promote investments and upgrade technology & skills to promote Brand India in the
international market.
The unfavorable government policies cut throat competition amongst manufacturers and
exporters remains major concerns for the Gems and Jewellery Business
• Threats
> Fast-changing fashion trends
Diamond and Jewellery, being a vital fashion and lifestyle statement, demands the
players to be more agile and responsive to the constantly evolving trends and consumer
preferences.
> Regulatory framework
Changes in regulations and stringent compliances may cause temporary blip in sales
during the transition period.
> Liquidity crisis
The industry is highly capital intensive in nature with long working capital cycles,
since the jewellery conversion from gold typically requires 15 days. Strength of the
balance sheet and access to easy credit is often required to facilitate and sustain ease
in operations.
(2) OUTLOOK:
The Company has done reasonable in the current year and expects to achieve a really
good percentage of market share in the Diamond manufacturing and Jewellery marketing
fields. The outlook for the Company can therefore be termed as optimistic and expects
higher growth then inflation and average grow thin the industry.
Growth of the Gems and Jewellery Industry is expected to be moderate to better in the
years to come depending on the policies of the Government. However Gems and Jewellery
Industry is seeing robust growth in the years to come. The Growth rate of the Gems and
Jewellery Industry is closely related to the growth of the other Sector and hence
movements and developments in the other sectors would also indirectly affect the future of
Gems and Jewellery Industry.
(3) RISK 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 at tremendous impact on the capital markets.
> Likely opening up of the economy, which can be a double-edge sword.
> The Diamond market in India is heavily influenced by the US Markets.
> Geo political tensions and impact of war is seen in fluctuating raw materials
prices like gold and diamonds. Also currency rate fluctuations due to this global scenario
can impact business.
> Increasing competition among the Indian Exporters in this industry.
(4) INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:
The Company has a proper and adequate system of internal controls. This ensures that
all transactions are authorized, recorded and reported correctly, and assets are
safeguarded and protected against loss from unauthorized use or disposition. In addition,
there are operational controls and fraud risk controls, covering the entire spectrum of
internal financial controls. An extensive programme of internal audits and management
reviews supplements the process of internal financial control framework. Properly
documented policies, guidelines and procedures are laid down for this purpose. The
internal financial control framework has been designed to ensure that the financial and
other records are reliable for preparing financial and other statements and for
maintaining accountability of assets.
In addition, the Company has identified and documented the risks and controls for each
process that has a relationship to the financial operations and reporting. The Company
also has in place an Audit Committee to have a periodic overview 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
(5) DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE :
During the year under review, the Company has posted higher Revenue from Operation of ?
1,999,380.10/- Hundreds as compared to ? 1,616,673.93/- Hundreds in the corresponding
previous year. Due to higher income generation during the year under review, the Company
has posted higher Net Profit after tax of ? 61,234.13/- Hundreds in the current year as
compared to the Net Profit after Tax of ? 30,713.88/- Hundreds in the corresponding
previous year.
(6) HUMAN RESOURCES & INDUSTRIAL RELATIONS:
The Companys human resources philosophy is to establish and build a strong performance
and competency driven culture with greater sense of accountability and responsibility. The
Company acknowledges that its principal asset is its employees. The expertise of the
management team, the professional training provided to the staff, their personal
commitment and their spirit of teamwork together enhance the Companys net worth. The
total numbers of employees as on 31st March, 2023 were 5 (Five).
The Company considers that its relationship with its employees is vital and ensures
that employees feel valued and is endeavoring to create an environment and culture within
which every employee can put his best efforts and maximize his contribution.
The Company ensures that all its employees remain competent through education, skills,
training and experience as necessary. The Company has had cordial relations between the
management and employees and an atmosphere of harmonious working to achieve the business
objectives of the Company throughout the year. The Company is poised to motivate each of
its employees to perform to the fullest extent possible and to appropriately reward their
excellence.
(7) DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIO:
Pursuant to provisions of Regulation 34 (3) of SEBI (LODR) Regulation, 2015 read with
Schedule V part B(1) details of changes in Key Financial Ratios is given hereunder:
| Sr.No. |
Ratios |
FY 2022-23 |
FY 2021-22 |
Change in Ratio |
| 1 |
Debtors Turnover Ratio |
34.21 |
1.71 |
1898.56 |
| 2 |
Inventory Turnover Ratio |
4.52 |
21.00 |
-78.47 |
| 3 |
Interest Coverage ratio |
0.00 |
0.00 |
0.00 |
| 4 |
Current Ratio |
60.57 |
36.97 |
63.84 |
| 5 |
Debt Equity ratio |
0.00 |
0.00 |
0.00 |
| 6 |
Operating Profit Margin ratio |
0.06 |
0.06 |
-0.82 |
| 7 |
Net Profit Margin |
0.03 |
0.02 |
60.06 |
| 8 |
Return on Net Worth |
0.028 |
0.014 |
99.37 |
*Previous years Figures have been regrouped / rearranged wherever necessary.
NOTES FOR CHANGE IN RATIOS:
1. Debtors Turnover Ratio - This ratio is increased due to the timely collection of its
receivables from the customers who pay their debts quickly.
2. Inventory Turnover Ratio -It is decreased due to the excessive inventory of product
in stock during the year under review to adjust in rapid market changes.
3. Current Ratio - Current Ratio is increased due to decrease in the current
liabilities of the Company.
4. Operating Profit (EBIDTA) and Net Profit Margin -Both ratios are increased due to
the higher sales revenue generated during the year under review.
5. Return of Net Worth -It is increased due to higher profitability in the Company
during the year under review.
(8) CAUTIONARY STATEMENT:
This document contains forward-looking statements about expected future events,
financial and operating results of the Company. These forward-looking statements are based
on assumptions and the Company does not guarantee the fulfillment of the same. These
statements may be subject to risks and uncertainties. Readers are cautioned not to place
undue reliance on forward-looking statements as a number of factors could cause
assumptions, actual future results and events to differ materially from those expressed in
the forward-looking statements. Accordingly, this document is subject to the disclaimer
and qualified in its entirety by the assumptions, qualifications and risk factors referred
to in the managements discussion and analysis of StarlinePS Enterprises Limiteds Annual
Report, 2022-23.
By order of the Board of Directors
For STARLINEPS ENTERPRISES LIMITED
SHWETKUMAR KORADIYA
Chairperson & Managing Director
DIN: 03489858
Place: Surat
Date: 29/08/2023
REGISTERED OFFICE:-
Shop - F/1, 1st floor, Athwa Ark Shopping Centre, Opp. Yatim Khana, Athwa
Gate,
Surat-395001, Gujarat, India
+91-9892691696
