Dev Labtech Venture Ltd Management Discussions

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 Dev Labtech Venture Limited.

(1) COMPANY OVERVIEW:

About Us

Dev Labtech Venture Limited was founded by Mr. Jerambhai Lavjibhai Donda in the year of 1993. Mr. Jerambhai Lavjibhai Donda is having 42 years of business experience in Diamond Industry. The Company is an established leader in the diamond industry. We are dedicated to providing our customers with the highest quality Lab-grown & Natural diamonds at affordable prices.

We have an eye for detail and a passion for creating exquisite pieces. Our diamonds are perfect for any occasion, from engagements and weddings to special anniversaries. We pride ourselves on our commitment to our customers and strive to provide the best experience possible. We use Microwave plasma chemical vapor deposition (MPCVD), the latest cutting-edge technology to create beautiful, high-grade lab-grown diamonds, and our diamonds are guaranteed to be of the highest quality. Our diamonds are also certified by international laboratories and come with a certificate of authenticity. At Dev Labtech, we are committed to providing our customers with exceptional service and quality diamonds.

Dev Labtechs diamonds are cultivated and polished with precision to have unmatched quality and are certified by GIA Certification and IGI Certification. We currently operate at Bhavnagar, Surat and Mumbai. By focusing on quality, innovation, excellence, reliability, review and customer centric approach we provide excellent diamonds to our customer.

Our Company was originally incorporated on April 29, 1993 as "Gandhinagar Plastronics Private Limited" under the provisions of the Companies Act, 1956. The Name of our company changed from "Gandhinagar Plastronics Private Limited" to "Jay Gems (India) Private Limited" and fresh certificate of incorporation dated February 05, 2010 was issued. Subsequently, the name of our company was changed from "Jay Gems (India) Private Limited" to "Dev Labtech Venture Private Limited" on June 22, 2022 and then Company was converted into Public Limited Company and name of company was changed to "Dev Labtech Venture Limited" vide fresh certificate of incorporation dated September 23, 2022 issued by the Registrar of Companies, Ahmedabad.

Mission Statement

To craft the worlds most exquisite diamonds, meticulously sourced and with skilful cut to the perfection with a strong commitment to ethical practices and sustainability, we aim to adorn lives with symbols of enduring beauty and love, while positively impacting our stakeholders and the communities we touch. Through innovation, integrity, and unwavering craftsmanship, we seek to inspire awe and celebrate lifes precious moments with each dazzling gem we create.

Vision Statement

To be the worlds premier diamond manufacturing company, inspiring awe and enchantment with every meticulously crafted gem. With precision craftsmanship and cutting-edge technology, we aim to create the most exquisite and ethically sourced diamonds which captive hearts and celebrate lifes most cherished moments. With an unwavering focus on innovation, sustainability, and ethical practices, we aim to redefine the art of diamond manufacturing, setting new industry standards that showcase our commitment to brilliance, transparency, and social responsibility. To blend cutting-edge technology with the timeless artistry of our skilled craftsmen with responsibly sourced diamonds, create a symbol of enduring love, cherished memories, and everlasting beauty by making each precious stone.

(2) ECONOMIC OVERVIEW:

GLOBAL ECONOMIC REVIEW

According to the International Monetary Fund (IMF) World Economic Outlook (April 2025), the global economy grew by a moderate 3.3% in 2024, navigating a complex and often challenging macroeconomic environment. Key headwinds included persistent geopolitical tensions, trade route disruptions, and high interest rates in major economies, all of which weighed on global trade and consumption.

Despite these challenges, several factors helped sustain global economic activity:

Resilient labour markets, particularly in advanced economies

Easing inflationary pressures, supporting real incomes

Stable private consumption, especially in emerging markets

The US economy has been resilient, driven by strong growth in the services sector, a robust labour market, and high real wages. Europe, including the UK, faced softer growth due to the war in Ukraine, high energy prices, and slowdowns in manufacturing and services. Chinas growth was weaker than expected, with a slowdown in the real estate sector and industrial activity.

Outlook

In its latest estimates released in April 2025, the IMF projects the global economic growth to be 2.8% in 2025 and 3% in 2026. The global economy will face challenges as rising tariffs are expected to increase inflation, while economic growth may slow down. Cross-border trade and investment flows will likely weaken, leading to higher costs, lower productivity, and slower improvements in efficiency. This will create a difficult environment for policymakers and central banks.

INDIAN ECONOMY REVIEW:

Indias economy demonstrated strong momentum amid global uncertainty, expanding by 7.4% year-on-year inthe March 2025 quarter, surpassing expectations. For the full fiscal year 2025, the economy grew by 6.5%, in line with thegovernments February projection.

This robust performance was driven by several domestic factors:

Strong private consumption, both rural and urban

Increased infrastructure investment, particularly in public capital expenditure

Continued policy reforms, enhancing business confidence and structural resilience

Despite external headwinds such as global trade disruptions and high interest rates abroad, inflation moderated, and domestic demand remained firm, underscoring Indias position as one of the fastest growing major economies in the world.

Outlook

The IMF projects Indias GDP growth at 6.2% in 2025 and 6.3% in 2026, driven by strong agricultural and_industrial performance, resilient rural demand, and rising consumer confidence. While external risks_such as trade barriers, supply chain disruptions, and _geopolitical tensions persist, Indias growth outlook_remains robust. The countrys ability to adapt to global_shifts and leverage its domestic strengths will be key to_sustaining growth in a sustainable manner.

(3) INDUSTRY STRUCTURE AND DEVELOPMENTS:

INDUSTRY STRUCTURE:

The gems and jewellery industry stands as one of the most vibrant and culturally significant sectors of the global economy. Rooted in centuries of tradition and craftsmanship, this industry not only symbolizes wealth and status but also serves as a reflection of human creativity and artistry. As we navigate the complexities of the modern world, the gems and jewellery sector continue to evolve, driven by innovation, consumer preferences, and the imperative of sustainability. Indias

gems and jewellery industry holds a prominent place in the global market, renowned for its rich history, unparalleled craftsmanship, and significant contribution to the economy. The gems and jewelry sector are one of the leading contributors to Indias economy in terms of employment and foreign exchange earnings. It provides employment to a large number of people, including skilled artisans and craftsmen, especially in rural areas. As one of the largest exporters of gems and jewellery in the world, Indias industry is a vibrant and diverse sector that blends tradition with modernity, making it a ke y player in both domestic and international markets. The jewellery industry is witnessing a significant shift, with branded jewellery emerging as a dominant trend, particularly among young consumers and those in emerging markets. This segment of customers, who are generally brand-conscious and place a high value on the assurance and prestige that established brands offer, is reshaping the dynamics of the industry. In emerging markets, where economic growth is fueling a rise in disposable income, consumers are increasingly gravitating towards branded jewellery as a symbol of their upward mobility and modern lifestyle.

The global gems and jewelry market is a vast and dynamic industry, encompassing a wide range of products from high-end luxury items to more accessible fashion pieces. This market plays a critical role in the global economy, driven by factors such as cultural significance, personal expression, economic conditions, and evolving consumer preferences. In recent years, the industry has undergone significant changes, influenced by technological advancements, shifting consumer behaviors, and the increasing importance of sustainability. The global diamond market is significant, with diamonds being a sought-after gemstone for engagement rings, luxury jewelry, and investments. Key diamond trading centers include Antwerp (Belgium), Mumbai (India), and Tel Aviv (Israel). The trade in colored gemstones, such as emeralds, rubies, sapphires, and more, is a vital part of the global gems and jewelry industry. Countries like Myanmar, Colombia, and Sri Lanka are known for their production of specific gemstones. High-end luxury jewelry brands cater to the affluent segment of consumers. Countries like France, Switzerland, and the United States have prominent luxury jewelry markets. Overall, the global gems and jewelry industry is diverse, dynamic, and plays a crucial role in various economies worldwide. It involves a complex supply chain that spans mining, manufacturing, trading, and retailing, and it continues to evolve with changing consumer preferences and global trends. With need-based measures in place to curb sticky inflation, manage the depreciation of the Indian currency and mitigate the immediate effects of the fiscal deficit on the economy, it is expected that there will be a significant improvement in business prospects. This, coupled with a favorable policy environment, is anticipated to enhance consumer confidence, bringing some modest relief to the domestic economy.

DEVELOPMENTS:

The lab grown diamond industry is seen as the Sunrise Industry for the global economy and especially for an economy like India which derives livelihood of millions of people and foreign exchange from the diamond industry. A natural diamond is a gemstone/precious stone made up of carbon. Lab Grown Diamonds are created in a controlled environment by using high- pressure high-temperature" method (HPHT), and the "chemical vapor deposition" method (CVD). HPHT Diamonds and CVD Diamonds are exactly similar to natural diamonds.

Over the course of 2025, Indias gems and jewelry sector has seen rapid evolution. The industrys market size, projected to grow at a CAGR of over 9%, continues to thrive on rising disposable incomes, strong festive and wedding demand, and expansion of digital and organized retail channels.

Rise of Lab-Grown Diamond (LGD) Market: Lab-grown diamonds have emerged as a major growth driver—India currently contributes around 15% of global LGD production, with exports more than doubling over recent years. Domestic LGD jewelry revenues are expected to rise from under USD 300M in 2023 to over USD 1.2B by 2033, expanding at nearly 15% CAGR.

Strengthened Certification & Standards: In Surat, the International Gemological Institute (IGI) significantly expanded its LGD certification operations in early 2025, launching a new facility in the Surat Diamond Bourse. IGI reported a 24% year-on-year increase in certification and introduced Light Performance Analysis alongside traditional 4Cs grading to boost consumer confidence.

Infrastructure & Trade Hubs: The completion and operational launch of the Surat Diamond Bourse (SDB) in late 2023/early 2025 has opened the worlds largest diamond office complex and includes Indias largest in-house customs clearance facility. Its anchored within the broader DREAM City development, which is reshaping Surat into a modern diamond -trading metropolis with thousands of businesses and high-tech infrastructure.

Trade Policy Shifts - Pressures & Opportunities: The U.S. imposed a rising 25% tariff on Indian jewelry imports starting August 2025, heavily impacting exports (nearly $10B annually). The tariffs have triggered export declines, job losses in Surat,

and production disruptions. Industry and government, however, are pursuing bilateral negotiations and diversifying export markets to Europe and the Middle East to mitigate the impact. Conversely, Indias new India-UK Comprehensive Economic and Trade Agreement (CETA) has eliminated UK import duties on Indian plain gold and diamond jewellery, expected to boost export competitiveness in that market significantly.

Sustainability, Digital Innovation & Consumer Trends: Consumers increasingly favor ethical and eco-friendly jewelry practices, prompting brands to emphasize conflict-free sourcing, recycled metals, and LGD lines. Augmented reality (AR) shopping experiences, AI-guided personalized design, and 3D-printing production are transforming the digital retail landscape. Heritage-inspired yet modern designs—like customized Polki and Kundan pieces—are appealing especially to younger millennials and Gen Z buyers.

Institutional & Government Support: Initiatives via GJEPC and the government include establishing Common Facility Centres (CFCs) across major Indian cities, support for lab-grown diamond R&D at IIT-Madras (InCent-LGD), and megaprojects like the India Jewellery Park in Mumbai. These ecosystem developments aim to boost quality, exports, and skill-based employment in the sector.

In conclusion, the Indian diamond and jewelry industry in 2025 reflects a dynamic blend of opportunity and challenge. The rise of lab-grown diamonds, digital innovation, and sustainability-focused consumer preferences are reshaping the industrys future. Infrastructure developments like the Surat Diamond Bourse and supportive government initiatives are strengthening Indias global positioning. While external pressures—such as increased U.S. tariffs—pose significant export challenges, new trade agreements like the India-UK deal offer alternative growth avenues. Overall, the sector remains resilient, adaptive, and well-positioned to leverage its strengths in quality, craftsmanship, and innovation to sustain growth in a rapidly evolving global market.

(4) SWOT ANALYSIS:

STRENGTH:

Wide Varieties of our products: Our product portfolio consists of wide range of products which differentiate us from other companies. The wide variety of products in lab grown diamonds and natural diamonds enable us to cater our customer taste and preferences.

Experienced Promoters: Our promoters are experienced in our line of business. Our management and employee team combine expertise and experience to outline plans for the future development of the company. Our Promoters have significant industry experience and have been instrumental in the consistent growth of our company.

Customer Satisfaction: High customer satisfaction has consistently been one of our core strengths, driving strong brand loyalty and repeat business.

Quality of our products: Consistent product quality has enabled us to build long-term relationships and stand out in a competitive market.

Integrated Manufacturing facility: At the Company, we take pride in our reliable infrastructure, which forms the backbone of our business operations. Built on the principles of efficiency and resilience, our infrastructure ensures seamless and uninterrupted performance to meet the demands of our customers and stakeholders.

Our reliable infrastructure comprising strong capabilities, quality manufacturing facilities and efficient distribution network are all geared up to help us deliver Consistent Performance.

Our strategy to have our own manufacturing capacities to ensure absolute high-quality products and even more robust supply chain is playing out well. Now all factories are gradually enhancing utilisation and reducing our dependency on outsourcing.

We believe that a reliable infrastructure is the cornerstone of our commitment to delivering excellence. It empowers us to provide consistent, top-quality products/services and enables us to focus on what truly matters - exceeding our customers expectations and driving success in the ever-changing marketplace. Emphasis on Quality, Outstanding Quality System, Skilled & Knowledgeable Team, best in class equipment.

Worlds Leading Hub: India is a global leader in cutting and polishing diamonds, handling over 90% of the worlds diamonds by volume.

Well-trained employee base and Skilled Workforce: Availability of a Well-trained employee base and highly skilled, low- cost labor force with generations of experience in craftsmanship.

Strong Domestic Demand: Deep-rooted cultural and religious traditions drive steady domestic demand, especially Diamond and Jewellery in India has traditionally been an integral part of weddings and festivals.

An essential part of Indian culture: 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 and fashion wear as well as very premium limited edition signature collections.

Export Powerhouse: Jewelry is one of Indias top export items, particularly to the USA, UAE, and Europe.

Timely Delivery of Products and Established Supply Chain: Presence of Timely Delivery of Products and well-integrated supply chains, from sourcing to retail. The Company has well established relationship with our supplier.

Government support: Realizing the sectors potential, the Government has identified it to be a focused area for Export promotion councils and schemes like SEZs, duty-free imports for exporters, etc. and 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.

WEAKNESS:

Dependence on Imports: Heavy reliance on imported raw diamonds and gold, exposing the industry to global price volatility and currency risks.

Fragmented Industry: Dominated by unorganized players, leading to inconsistent quality, limited scalability, and tax challenges.

Lack of Innovation: Limited focus on design innovation and branding compared to global luxury jewelry brands.

Environmental and Ethical Concerns: Issues like conflict diamonds, lack of transparency, and unsustainable practices may tarnish the industry image.

OPPORTUNITY:

Growing Middle Class and Increasing affordability: Rapidly expanding economy, increasing urban per capita income and governments focus to double farmers income by this year, aspiration for luxury items boost domestic consumption of branded jewelry, huge opportunities will open up with increasing affordability of this segment.

Digital and E-commerce: Expansion of online jewelry retail opens access to new markets and younger demographics.

Lab-Grown Diamonds (LGDs): Opportunity to become a global leader in eco-friendly and affordable LGDs.

Global Expansion: Indian brands have the opportunity to expand globally, especially in diaspora-rich countries.

Brand Development: Scope to build strong Indian jewelry brands that compete with global luxury players.

Stable asset class: Diamond and Jewellery has historically been one of the most stable assets providing investors best returns over a long-term horizon, compared to other assets.

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.

Changes in lifestyle: Diamond and Jewellery sector is witnessing changes in consumer preferences due to adoption of western lifestyle.

THREATS:

Fluctuating Gold and Diamond Prices: Market remains highly sensitive to global commodity price changes which can directly impact consumer demand, sales volume, and inventory valuation.

High Regulatory Pressure: Stringent regulations on imports, hallmarking, and taxation (like GST) can impact operations.

International Competition: Rising competition from China, Thailand, and African countries in manufacturing and design. The Indian jewellery retail sector remains highly competitive, with participation from organized and unorganized players, as well as online platforms, potentially impacting market share and pricing dynamics.

Changing Consumer Preferences: Younger consumers may prefer minimalist, artificial, or branded luxury jewelry over traditional designs.

Geopolitical and Economic Instability: Export-heavy nature makes the industry vulnerable to global trade tensions, sanctions, and slowdowns.

Regulatory framework: Changes in government policies related to import duties, compliance requirements, and regulatory norms may affect operating costs and market dynamics.

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.

(5) RISK AND CONCERNS:

The Company operates in a highly competitive market with rapidly changing innovative product and pricing. We are subject to the threat of our competitors launching new products in our markets before we make corresponding updates and development to our own product range. This could render our products and services outdated and could result in loss of market share. To reduce this risk, we undertake new product with wide variety of customer centric design development and maintain strong supplier relationships to ensure that we have products at various stages. Competitor risk also manifests itself in price pressures which are usually experienced in more mature markets. This results not only in downward pressure on our gross margins but also in the risk that our products are not considered to represent value for money. The Company therefore monitors market prices on an ongoing basis. The Company seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably. External funding facilities are managed to ensure that both short term and long-term funding is available to provide short term flexibility whilst providing sufficient funding to the Companys forecast of working capital requirements. The Company does not perceive any risks or concerns other than those that are common to the industry such as regulatory risks, exchange risk, cyber risks and other commercial and business-related risks as mentioned above.

(6) 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 an Audit Committee to interact with the Statutory Auditors,

Internal Auditors and Management in dealing with matters within its terms of reference. This Committee mainly deals with accounting matters, financial reporting and internal controls.

(7) 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 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. Ongoing in-house and external training is provided to employees at all levels to update their knowledge and upgrade their skills and abilities. The effort to rationalize and streamline the workforce is a continuous process. The industrial relations scenario has remained harmonious throughout the year. The total numbers of employees as on 31^st March, 2025 were 66 (Sixty-Six).

(8) DISCUSSION ON FINANCIAL PERFORMANCE OF THE COMPANY:

On Standalone basis:

During the year, Net Income of your Company was increased to Rs. 5241.77 Lakh as against Net Income of Rs. 4323.06 Lakh of the previous year. However, the Companys Net Profit after tax has been decreased to Rs. 129.38 Lakh for the current year as against the Net Profit after tax of Rs. 134.13 lakh of the previous year due to decrease in profit margin against higher expenditure incurred.

On consolidated basis:

During the year, Dev Labtech Venture INC, Subsidiary Company of the Dev Labtech Venture Limited has not carried on business activity. Net Income of your Company was increased to Rs. 5241.77 Lakh as against Net Income of Rs. 4323.06 Lakh of the previous year. However, the Companys Net Profit after tax has been decreased to Rs. 129.38 Lakh for the current year as against the Net Profit after tax of Rs. 134.13 lakh of the previous year due to decrease in profit margin against higher expenditure incurred.

(9) 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:

Ratios	F.Y. 2024-25	F.Y. 2023-24	Percentage of Variance	Reason for variance
Current ratio (in times)	29.54	14.01	110.85	Increase in stock in trade
Debt - Equity ratio (in times)	3.14	4.28	-26.64	Due to Repayment of loans
Debt Service coverage (in times)	13.22	20.93	-36.84	Due to Repayment of loans
Return on equity (in %)	13.22%	7.10%	-99.87	Margin in FY 2024-25 Increase in Comparison with Previous Year
Inventory Turnover (in times)	2.01	0.46	-97.99	Due to Increase in stock in trade
Trade receivables turnover (in times)	15.61	0.04	-84.39	Due to increase in Trade Receivable
Trade payables turnover (in times)	102.76	0.01	2.76	Due to increase in Stock in trade
Net capital turnover (in times)	1.37	1.97	-30.46	Due to increase in Current Assets
Net profit ratio (in %)	2.47%	4.24%	-41.75	Increase in Revenue from operation
Return on capital employed (in %)	16.35%	7.19%	-127.40	Due to increase in Share capital
Return on investment (in %)	11.45%	5.20%	120.19	Due to increase in Shareholders fund

(10) 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 Dev Labtech Venture Limiteds Annual Report, 2024-25.