arman holdings ltd share price Management discussions

Pursuant to Regulation 34 (2)(e) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion & Analysis Report for the year under review is given below:

Indian Economy

India continues to be among the fastest-growing economies in the world. Despite a challenging external environment, the Indian economy registered healthy growth in FY 2022- 23. The real GDP grew by 7.2% in FY 2022-23 as against 9.1% in FY 2021-22 and reflects Indias underlying economic resilience, relatively robust domestic consumption and lesser dependence on global demand. The accelerated pace of economic reforms has led to the sustainable growth of the Indian economy and strengthened its position in the world. However, higher inflation remains a challenge and headline inflation increased to 6.7% in FY 2022-23 from 5.5% in FY 2021-22. Following the gradual normalisation of global supply chains, softening of global commodity prices, and successive hikes in the policy repo rate by 250 basis points in FY 2022-23 by the Reserve Bank of India (RBI), the consumer price index (CPI) inflation subsided to 4.25% (provisional) in May 2023 against 4.70% recorded in April 2023. Further, 5.1% growth in the Index of Industrial Production (ITP) in FY 2022- 2023 and 12% Y-0-Y growth in the gross Goods and Services Tax (GST) revenue collection of % 1.57 trillion in May 2023, present signs of optimism for the Indian economy.

Despite the weak external demand, the merchandise exports contributed significantly to economic growth in FY 2022-23. It was the highest-ever at US$ 447 46 billion with 6.03% growth during FY 2022-23 surpassing the previous years record exports of US$ 422.00 billion. As per the Union Budget 2023-24, Indias export is expected to grow at 12.5% in FY 2023-24, which will further boost the economy. The IMF projects the Indian economy to advance steadily at 5.9% in FY 2023-24 before rising to 6.3% in FY 2024-25. The optimistic growth stems from positive factors such as the rebound of private consumption, rapid infrastructure development, improvement in capacity utilisation, increased production, and revival in credit growth. Further, emphasis on capital expenditure with an allocation of 2 10 lakh crore in the Union Budget 2023-24 will significantly boost industrial competitiveness, strengthen job creation and demand and provide a fillip to the growth momentum.


• Recovering from pandemic-induced contraction, Russian-Ukraine conflict and inflation, the Indian economy is staging a broad-based recovery across sectors, positioning to ascend to the pre-pandemic growth path in FY23.

• Indias GDP growth is expected to remain robust in FY24. GDP forecast for FY24 to be in the range of 6-6.8%

•. Private consumption in HI is the highest since FY15 and this has led to a boost to production activity resulting in enhanced capacity utilisation across sectors.

• The Capital Expenditure of the Central Government and crowding in the private Capex led by strengthening the balance sheets of the Corporates is one of the growth drivers of the Indian economy in the current year

•. The credit growth to the MSME sector was over 30.6% on average during Jan-Nov 2022

•. Retail inflation is back within RBIs target range in November 2022.

• Indian Rupee performed well compared to other Emerging Market Economies in Apr-Dec 2022.

• Direct Tax collections for the period April-November 2022 remain buoyant.

• Enhanced Employment generation seen in the declining urban unemployment rate and in the faster net registration in Employee Provident Fund.

• Economic growth to be boosted by the expansion of public digital platforms and measures to boost manufacturing output.

https://www.ibef org/economy/economic-survey-2022-23

Indias nominal gross domestic product (GDP) at current prices is estimated to be at Rs. 232.15 trillion (US$ 3.12 trillion) in FY22. With more than 100 unicorns valued at US$ 332.7 billion, India has the third-largest unicorn base in the world. The government is also focusing on renewable sources to generate energy and is planning to achieve 40% of its energy from non-fossil sources by 2030.

According to the McKinsey Global Institute, India needs to boost its rate of employment growth and create 90 million non-farm jobs between 2023 and 2030 in order to increase productivity and economic growth. The net employment rate needs to grow by 1.5% per annum from 2023 to 2030 to achieve 8-8.5% GDP growth between 2023 and 2030. Indias current account deficit (CAD), primarily driven by an increase in the trade deficit, stood at 2.1% of GDP in the first quarter of FY 2022-23.

Exports fared remarkably well during the pandemic and aided recovery when all other growth engines were losing steam in terms of their contribution to GDP. Going forward, the contribution of merchandise exports may waver as several of Indias trade partners witness an economic slowdown. According to Mr. Piyush Goyal, Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, Indian exports are expected to reach US$ 1 trillion by 2030.

https://www.ibef .org/economy/indian-economy-overview

Indian Bullion &Jewellery Industry


As of February 2021, Indias gold and diamond trade contributed ~7.5% to Indias Gross Domestic Product (GDP) and 14% to Indias total merchandise exports. The gems and jewellery sector are likely to employ ~8.23 million persons by 2022, from ~5 million in 2020. Based on its potential for growth and value addition, the Government declared the gems and jewellery sector as a focus area for export promotion.

The Government has undertaken various measures recently to promote investment and upgrade technology and skills to promote ‘Brand India in the international market. The Government has permitted 100% FDI in the sector under the automatic route, wherein the foreign investor or the Indian company do not require any prior approval from the Reserve Bank or the Government of India. The Indian Government also signed a Comprehensive Economic Partnership Agreement (CEPA) with the United Arab Emirates (UAE) in March 2022, this will allow the Indian Gems and Jewellery industry to further boost exports. CEPA will provide the industry with duty-free access to the UAE market. Indias Gems Jewellery Export Promotion Council (GJEPC) aims to triple its exports to the UAE post the CEPA.

The Government has permitted 100% FDI in the sector under the automatic route, wherein the foreign investor or the Indian company do not require any prior approval from the Reserve Bank or Government of India. The Government has made hallmarking mandatory for gold jewellery and artefacts and a period of one year is provided for its implementation. https://www.ibef org/industry/gems-jewellery-india

Market size

• Indias gems and jewellery market size was at US$ 78.50 billion in FY21. Growth in exports is mainly due to revived import demand in the export market of the US and the fulfilment of orders received by numerous Indian exhibitors during the Virtual Buyer-Seller Meets (VBSMs) conducted by GIEPC.

• Indias gems and jewellery exports reached US$ 39.14 billion in 2021-22, a 54.13% rise from the previous year. From April-December 2022, Indias gems and jewellery exports were at US$ 28.6 billion, a 6.28% rise compared to the previous years period.. While. the export during. April-March. 2023 stood at US$ 37.95 billion.

• The Government of India is aiming at US$ 70 billion in jewellery export in the next five years (until 2025), up from US$ 35 billion in 2020.

• India has 10 special economic zones (SEZ) for gems & jewellery. These zones have more than 500 manufacturing units, which contribute 30% to the countrys total exports.

• As per Union Budget 2021, the Gem and Jewellery Export Promotion Council has proposed a reduction in import duty on cut and polished diamonds to 2.5%, from the existing 7.5%, in order to double exports of gems & jewellery to US$ 70 billion by 2025.

• Cumulative FDI inflows in diamond and gold ornaments in India stood at US$ 1,201.56 million between April 2000-December 2021, according to Department for Promotion of Industry and Internal Trade (DPIIT).


Cumulative FDI inflows in diamond and gold ornaments stood at US$ 1,213.06 million between April 2000-March 2022, according to the Department for Promotion of Industry and Internal Trade (DPIIT).

Some of the key developments in this industry are listed below:

• In February 2022, GJPEC organized a four-day Internal Jewellery Show Signature 2022, where 850 exhibitors participated and there were more than 400 internationals visitors, buyers, and delegations from the US, UAE, Egypt, Nepal, Uzbekistan, and Bangladesh.

• In September 2021, Malabar Group invested Rs. 750 crore (US$ 100 million) in a gold refinery and jewellery unit in Hyderabad.

• India has signed an FTA with the UAE which will further boost exports and is expected to reach the target of US$ 32 billion.

Government Initiatives

• The government has reduced import duty for Gold & Silver (from 12.5% to 7.5%) and Platinum & Pallidum (from 12.5% to 10%) to bring down the prices of precious metals in the local market.

• Indian Government made hallmarking mandatory for Gold Jewellery and Artefacts.

• The Government has reduced custom duty on cut and polished diamond and colored gemstones from 7.5% to 5% and NIL.

• Based on its potential for growth and value addition, the Government declared gems and jewellery sector as a focus area for export promotion.

• The Government has undertaken various measures recently to promote investment and upgrade technology and skills to promote ‘Brand India in the international market. R The Government has permitted 100% FDI in the sector under the automatic route, wherein the foreign investor or the Indian company do not require any prior approval from the Reserve Bank or Government of India.

• Revised SEZ Act is also expected to boost gems and jewellery exports.

Financial Performance

The current year was a not good year for your Company. The Company is trading in textile, plastic products, precious metal and stones and related products. The Company has managed to maintain a growth trajectory in its financial performance in the current financial year. Further, the Management expects a good financial performance in the new business in the next financial years.

The Total Income for the financial year under review increased to Rs.415.70 Lakhs against Rs. 406.88 Lakhs during previous year whereas the Profit after Tax generated by the company during the year under review is Rs. 2.09 Lakhs as compared to Rs. 2.43 Lakhs during the previous year. The company is working hard to increase the profitability in the forthcoming years

Key Financial Ratio:

The key financial ratios are as under:

Particulars FY 2022-23 FY 2021-22
EBITDA Margin 0.87% 0.90%
PBT Margin 0.67% 0.80%
PAT Margin 0.50% 0.60%
RONW -11.49% 0.43%


Not Applicable since there is no debt Not Applicable since there is no debt
Debtor Turnover Ratio 1.66 3.07

Opportunities and Threats

We believe that the factors which contribute to our strengths are our ability to adapt to the ever changing environment, maintaining continuous growth, creating new market opportunities, efficient leadership qualities and maintaining good customer relationship. The company is doing business of trading and importing in toys, plastic and related products, textile and trading of precious stones & metal which is as per the objects of the company. The management is hopeful of expanding its business.

There is a huge opportunity to move the gold and Jewellery business from unorganized to organized space in many countries including India and China. The organized segment has tremendous growth prospects. Growing consciousness of branded jewellery, increasing purchasing power in the Tier I & IT locations, and increasing demand for diamond jewellery are major opportunities for the next 10 to 15 years. The major threat could be changes in government policy with regard to import and export of gold products.

Risk & Concern

The Board of Directors have framed and regularly implement and monitor risk management plan of Company. Major risk identified by the business and function are systematically addressed through mitigating actions on a continuing basis.

The Company has successfully been in gold business for many years and has developed systems to mitigate most of the perceivable risks. The Company has ambitious expansion plans to increase its profitability, these plans require large scale and meticulous execution capabilities. Even though the company has planned its execution strategy, there would always be a concern and risk of execution.

Segment-wise Performance:

The company has three reportable business segments i.e. Textile Products, Precious Metal & Stones and Plastic & related products.

(Amount Rs in Lakhs)

Particulars FY 2022-23 FY 2021-22
Segment Revenue
a) Textiles Products 0.00 0.00
b) Plastic Products 0.98 4.09
c) Precious Metal & Stones 414.72 402.78
Total 415.70 406.87

Internal control systems and their adequacy

Adequate internal controls, system and checks are in place commensurate with the size of the Company and nature of its business. The Company has a well-placed, proper and adequate internal financial control system which ensures that all assets are safeguarded and protected and that the transactions are authorized recorded and reported correctly.

The Board reviews the effectiveness of controls documented as a part of internal financial control framework and take necessary corrective and preventive actions wherever weaknesses are identified as a result of such reviews. This review covers entity level controls, process level controls, fraud risk controls and Information Technology environment.

Material developments in Human Resources / Industrial Relations front, including number of people emploved.

The companys objective is to create an inspirational work climate where talented employees engaged in creating sustained value for the stakeholders. There is no material development in Human Resources / Industrial Relations front except those mentioned in the directors report. Total No. of employees appointed in the company are 5.

Cautionary Statement

Statements in the Management discussion and analysis, describing the Companys objectives, outlook, opportunities and expectations may constitute “Forward Looking Statements” within the meaning of applicable laws and regulations. The actual result may vary materially from those expressed or implied in the statement. Several factors make a significant difference to the companys operations including the government regulations, taxation and economic scenario affecting demand and supply condition and other such factors over which the Company does not have any direct control.

Code of Conduct

As prescribed under Regulation 34(3) of SEBI (LODR) Regulations 20153, a declaration signed by the Whole time Director and Chief Financial Officer affirming compliance with the Code of Conduct by the Directors and Senior Management Personnel of the Company for the financial year 2022-23 forms part of the Corporate Governance Report.

For Arman Holdings Limited
Deepak Kumar Babel
Place: Surat Managing Director
Date: May 30, 2023 DIN : 05200110