D. P. Abhushan Ltd Management Discussions.

The Managements views on the companys performance and outlookare discussed below:

INDUSTRYDEVELOPMENTS-GEMS AND JEWELLERY

The Gems & Jewellery sectors plays a significant role in the Indian economy, contributing around 7 per cent of the countrys GDPand 15.71 per centto Indias total merchandise export. Italso employs over 4.64 million workers. One of the fastest growing sectors, it is extremely export oriented and labour intensive.

Based on its potentialfor growth and value addition, the Government of I ndia has declared the Gems and Jewellery sector as a focus area for export promotion. The Government has recently undertaken various measures to promote investments and to upgrade technology and skills to promote Brand India in the international market.

India is deemed to be the hub of the global jewellery market because of its low costs and availability of high-skilled labour. India is the worlds largest cutting and polishing centre for diamonds, with the cutting and polishing industry being well supported by government policies. Moreover, India exports 75 per cent of the worlds polished diamonds, as per statistics from the Gems and Jewellery Export promotion Council (GJEPC). Indias Gems and Jewellery sector has been contributing in a big way to the countrys foreign exchange earnings (FEEs). The Government of India has viewed the sector as a thrust area for export promotion. The Indian government presently allows 100 per cent Foreign Direct Investment (FDD in the sectorthrough the automatic route.

MARKETSIZE

Gold demand in India rose to 737.5 tonnes between 2017. Indias gemsand jewellery exports stood at US$32.71 billion in FY 2018. During the same period, exports of cut and polished diamonds stood at US$ 23.73 billion, thereby contributing about 72.55 per cent of the total gems and jewellery exports in value terms. Exports of gold coins and medallions stood at US$ 1,917.09 million and silverjewellery export stood at US$ 3,385.65 million during FY 2018.

The gems and jewellery market in India is home to more than 300,000 players, with the majority being small players. Its market size is about US$ 75 billion as of 2017 and is expected to reach US$ 100 billion by 2025. It contributes 29 per cent to the globaljewellery consumption.

India is one of the largest exporters of gems and jewellery and the industry is considered to play a vital role in the Indian economy as it contributes a major chunk to the total foreign reserves of the country. UAE, US, Russia, Singapore, Flong Kong, Latin America and China are the biggest importers of Indian jewellery. The Goods and Services Tax (GST) and monsoon will steer Indias gold demand going forward.

INVESTMENTS/DEVELOPMENTS

The Gems and Jewellery sector is witnessing changes in consumer preferences due to adoption of western lifestyle. Consumers are demanding new designs and varieties in jewellery, and branded jewellers are able to fulfil their changing demands better than the local unorganized players. Moreover, increase in per capita income has led to an increase in sales of jewellery, as jewellery is a status symbol in India.

The cumulative Foreign Direct Investment (FDD inflows in diamond and gold ornaments in the period April 2000 - December 2017 were US$1,111.52 million, according to Department of Industrial Policy and Promotion (DIPP).

Some of the key investments in this industry are listed below.

An international diamond exchange will be set up in Surat by October 2020 at a cost of? 2,400 crore (US$ 372million). Various jewellery businessmens are planning to introduce a virtual-reality (VR) experience for their customers. The customer will have to wear a VR headset, through which they can select any jewellery, see the jewellery from different anglesandzoomonittoviewintricatedesigns.

GOVERNMENT INITIATIVES

The Government of India would notify a new limit for reporting about transactions in gold and other precious metals and stones to authorities, to avoid the parking of black money in bullion.

The Bureau of Indian Standards (BIS) has revised the standard on gold hallmarking in India from January 2018. The gold jewellery hallmark will now carry a BIS mark, purity in carat and fitness as well as the units identification and the jewellers identification mark.The move is aimed at ensuring a quality checkon gold jewellery.

The Government of India has planned to set up a Common Facility Center(CFC) at Thrissur, Kerala.

The Gems and Jewellery Export Promotion Council (GJEPC) signed a Memorandum of Understanding (MoU) with Maharashtra Industrial Development Corporation (MIDC) to build Indias largest jewellery park in at Ghansoli in Navi- Mumbai on a 25 acres land with about more than 5000 jewellery units of various sizes ranging from 500-10,000 square feet. The overall investment of Rs 13,500 crore (US$ 2.09 billion).

ROADAHEAD

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 organised market and are opening opportunities to grow. Increasing penetration of organised players provides variety in terms of products and designs. Online sales are expected to account for 1 -2 per cent of the fine jewellery segment by 2021-22. Also, the relaxation of restrictions of gold import is likely to provide a fillip to the industry. The improvement in availability along with the reintroduction of low cost gold metal loans and likely stabilisation of gold prices at lower levels is expected todrive volume growth for jewellers overshort to medium term. The demand for jewellery is expected to be significantly supported by the recent positive developments in the industry.

RISKS AND CONCERNS

As the Company is dealing in very high value goods / items, it is always exposed to operational risks. The Company therefore always ensures that its entire inventory, from raw material to finished goods is insured at all times, whether under transit at showrooms or at the manufacturing facilities. Entire inventory is computerized and is available for tracking at all times.

The Company has cash pick up arrangements with leading banks, with transit insurance. All of its showrooms have strong rooms for overnight safe custody of the inventory. In addition all theshowrooms have CCTV vigilance and armed guards. The Company has in place a comprehensive risk management framework that helps anticipate, identify and evaluate business risks and challenges across the Company and finding ways to mitigate the same. The Company has also put in place a strong team to take careofall the required compliances and hence mitigate any compliance risk.

INTERNAL CONTROL SYSTEMS AN D TH ElR ADEQUACY

The Company has an effective internal control system, which ensures that all the assets of the Company are safeguarded and protected against any loss from unauthorized use or disposition. The Internal Auditors of the Company regularly carry out review of the internal control systems and procedures. The internal audit reports are periodically reviewed by Audit Committee.

The Company has also put in place adequate internal financial controls with reference to the financial statements commensurate with the size and nature of operations of the Company. Based on the assessment carried out by the management and the evaluation of the results of the assessment the Board of Directors are of the opinion that the Company has adequate Internal Financial Controls systems that are operating effectively as of March 31,2018.

There were no instances of fraud which necessitates reporting in the financial statements. There have been no communications from regulatory agencies concerning non-compliance with or deficiencies in financial reporting practices.

FINANCIAL PERFORMANCE

The financial statements have been prepared in compliance with the requirements of the Companies Act, 2013, including revised Schedule III, Generally Accepted Accounting Principles (GAAP) in India and as per the applicable Accounting Standards laid down by the Institute of Chartered Accountants of India. A well known and reputed firm of Chartered Accountants performs the audit and they have confirmed that our practices are as stringent and complete as internationally

FINANCIAL PERFORMANCE (2017-18)

Financial Results

Particulars FY 2017-18
Revenue From Operations
- Gems and Jewellery 65,864.34
-Windmill 109.79
Other Income 17.16
Total Income 65,991.29
Less: Total Expenses before depreciation and Finance cost and Tax 63,783.73
Profit before Depreciation, Finance Cost and Tax 2207.56
Less: Depreciation 131.36
Less: Finance Cost 951.44
Profit Before Tax 1124.75
Less: Current Tax 273.04
Less: Deferred Tax Liability (Asset) 37.06
Profit after Tax 814.65

HUMAN RESOURCES

One of the key pillars of the companys business is its people. The companys HR policies and practices are built on companys core values of integrity, passion, speed, commitment. Further, the Company has taken various steps for strengthening organizational competency through the involvement and development of employees as well as installing effective systems for improving their productivity and accountability at functional levels. The Company acknowledges that its principalasset is its employees. Ongoing in-house and externaltraining is provided to the employees at all levels to update their knowledge and upgrade their skills and abilities. As on March 31, 2018, the total employees on the companys role stood 300.

1.CORPORATE OVERVIEW

D. P. Abhushan Limited is engaged in the business of manufacturing, sale and trading of Gold jewellery, Diamond studded jewellery, Platinum Jewellery, Silver Jewellery and other precious Metals.

The Company is also engaged in the business of Power generation through Windmill.

D.P Abhushan Limited was originally formed as a Partnership Firm in the name and style of "M/s D.P. Jewellers". The name of the partnership firm "M/s D.P. Jewellers" was changed to "M/s D.P. Abhushan" vide partnership deed dated February 14, 2017. "M/s D.P. Abhushan" was converted from partnership firm to Public Limited Company with the name of "D.PAbhushan Limited" on May 02,2017 vide CIN No. U74999MP2017PLC043234 under the Part I of chapter XXI read with section 366 of the Companies Act 2013.

Under the registration of the company under chapter XXI of the Companies Act, 2013 the business and assets and liabilities of M/s. D.PAbhushan (Partnership Firm) have become the property of the company and have been taken at their book-value (i.e. Total assets less total liabilities) on and from the date of incorporation of the company. Accordingly the company shall undertake, pay, observe, satisfy, perform and fulfil the agreements, arrangements and liabilities of the said firm entered into in the name of the said firm and in relation to said business and assets brought in as aforesaid, and indemnify the erstwhile partners, their executors, estates, and effects from and against all actions, proceedings, claims and demands in respect thereof.

The Company came out with Initial Public Offer of 59,32,000 Equity shares of FV of 10/-each issued at a Premium of? 18/- during the period .The companys shares are listed on SME board of National Stock Exchange (NSD.

"The Financials contained in Profit & Loss A/c for the period ended on 31/03/2018 shall mean for the period from 02/05/2017 (the date on which the Firm is converted into Company) to 31/03/2018."