Equilateral Enterprises Ltd Management Discussions

In CY 2024, the global economy expanded by 3.3%, supported by moderating inflation, rapid technological advancements and structural reforms across various regions. This growth was achieved despite persistent macroeconomic challenges, including geopolitical tensions and ongoing supply chain disruptions. While the global economy demonstrated resilience, the overall growth remained below the longterm average of 3.7%. Emerging Market and Developing Economies (EMDEs) were the key drivers, recording a rate of 4.3%, significantly outpacing the 1.8% expansion seen in advanced economies.

This relative economic stability was largely attributed to timely and coordinated monetary policy measures implemented by central banks worldwide. These interventions were instrumental in curbing inflation, which declined from 6.6% in CY 2023 to 5.7% in CY 2024, stabilising prices and restoring consumer confidence. As a result, despite the headwinds, the global economy managed to sustain forward momentum through a combination of policy support and structural adaptability. We submit herewith the Management Discussion and Analysis Report on the business of the Company as applicable to the extent relevant.

The global economy is expected to maintain modest growth, with forecasts of 2.8% in CY 2025 and 3.0% in CY 2026, supported by accommodative monetary policies aimed at ensuring price stability, stimulating economic activity and boosting employment. However, recent uncertainties stemming from reciprocal tariffs imposed by the US on imports is disrupting international trade. These measures may potentially increase production costs, strain supply chain and elevate the risk of recession. In response, businesses worldwide are adopting a cautious stance- delaying investments and restructuring operations. Global policymakers are engaging in diplomatic efforts, strategic negotiations and trade alliances aimed at defusing tariff tensions. As this uncertainty surrounding US tariffs subsides, inflationary pressures are expected to ease, with global headline inflation projected to decline at approximately 4.3% in CY 2025 and further to 3.6% in CY 2026. Meanwhile, the outlook for Emerging Market and Developing Economies (EMDEs) remains optimistic, with projections indicating sustained growth momentum in the coming years.

INDUSTRY STRUCTURE AND DEVELOPMENT

Indias gold and diamond trade contributed ~7% to Indias Gross Domestic Product (GDP). The Gems & Jewellery sector has employs ~5 million. Based on its potential for growth and value addition, the Government declared the Gems & 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 & Jewellery industry to further boost exports. CEPA will provide the industry with dutyfree access to the UAE market. Indias Gems Jewellery Export Promotion Council (GJEPC) aims to triple its exports to the UAE post the CEPA.

Indias Gems & 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 GJEPC.

In FY25, Indias Gems & Jewellery exports stood at Rs. 2,43,162 crore (US$ 28.50 billion). In March 2025, Indias Gems & Jewellery exports stood at Rs. 2,20,379 crore (US$ 25.82 billion).

OPPORTUNITIES, CHALLENGES AND OUTLOOK

Opportunities

Following can be termed as the opportunities / strengths of the Company:

• Induction of widely experienced and specialized personnel on the Board.

• Good combination of technical as well as advisory personnel in the management.

• More and more benefits and exemptions are likely to come in the way of exports and Special Economic Zones and the Company, having commendable exports and being situated in SEEPZ-SEZ, is likely to receive the advantage of the same.

• Some of the world retail majors have decided sometime back to source part of their requirements from India. This shall further the growth of the Diamond industry in India.

Challenges

Competitive rivalry between big players is intense in the industry

• Working Capital and Liquidity Stress in the market.

• Low demand in the market.

• Stringent regulatory norms prevent new entrants;

• Low-margin products;

• Mixture of the organized and unorganized sectors in Jewellery Industry affects profit margins drastically.

• The unfavorable government policies cut throat competition amongst manufacturers and exporters remains major concerns for the Gems and Jewellery Business.

Outlook

In the coming years, growth in the Gems & Jewellery sector would largely be 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. Also, the relaxation of restrictions on 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 also expected to drive volume growth for jewellers over the short to medium term. India has 450 organised jewellery manufacturers, importers & exporters and is the hub for jewellery manufacturing. These players have benefited greatly due to the increasing liberal policies by the government. The demand for jewellery is expected to be significantly supported by the recent positive developments in the industry. Indias Gems & Jewellery industry is expected to reach US$ 100 billion by 2027.

DISSCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The financial statements have been prepared in accordance with the requirements of the Companies Act, 2013 and applicable accounting standards issued by the Institute of Chartered Accountants of India. The details ofthe financial performance of the Company are appearing in the Balance Sheet, Profit & Loss Accounts and other financial statements forming part of this annual report.

INTERNAL CONTROL SYSTEM

Given the magnitude and nature of its business, the Company has maintained sound and commercial practice with an effective internal control system. The system ensures that all transactions are authorized, recorded and reported correctly to safeguard the assets of the Company and protect them from any loss due to unauthorized use or disposition. The adequate internal information system is in place to ensure proper information flow for the decision- making process. The Company also has well-established processes and clearly defined roles and responsibilities for people at various levels. The control mechanism also involves well documented policies, authorization guidelines commensurate with the level of responsibility and standard operating procedures specific to the respective businesses, adherence to which is strictly ensured. Internal audit is carried out frequently to create awareness and to take corrective actions on the respective units or areas, which need rectification. These reports are then reviewed by the Management Team and the Audit Committee for follow-up action.

HUMAN RESOURCE DEVELOPMENT

The Company regards its human resources as amongst its most valuable assets and proactively reviews policies and processes by creating a work environment that encourages initiative, provides challenges and opportunities and recognizes the performance and potential of its employees attracting and retaining the best manpower available by providing high degree of motivation.

Your Company believes in trust, transparency & teamwork to improve employees productivity at all levels.

RATIO ANALYSIS

(Rs. In Lakhs)

Key Financial Ratios	F.Y. 2024-25	F.Y. 2023-24
1 Non- Current Assets	2543.36	1877.99
2 Short term Loans	-	-
3 Current Assets	(464.70)	418.41
4 Cash & Cash equivalent	28.05	9.08
5 Inventory Turnover Ratio	5.01	12.16
6 Operating Profit Margin (%)	1.21%	0.21%
7 Net Profit Margin (%)	1.20%	0.20%
8 Return on equity (%)	1.65%	0.22%
9 Book value per share (Rs.)	10	10
10 Earnings per share (Rs.)
Basic	0.15	0.02
Diluted	0.15	0.02
11 Debtors Turnover Ratio	-4.03	14.61
12 Current Ratio	-0.51	0.36
13 Return on Net worth (%)	1.65%	0.22%
14 Debt/Equity Ratio	0.88	1.11
15 Trade Payables Turnover Ratio	1.71	1.58
16 Net Capital Turnover Ratio	-1.09	-1.52
17 Return on Capital employed	0.02	0.002

CAUTIONARY STATEMENT

The management discussion and analysis report containing your Companys objectives, projections, estimates and expectation may constitute certain statements, which are forward looking within the meaning of applicable laws and regulations. The statements in this management discussion and analysis report could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operation include raw material availability and prices, cyclical demand and pricing in the Companys principal markets, changes in the governmental regulations, tax regimes, forex markets, economic developments within India and the countries with which the Company conducts business and other incidental factors.

	By order of the Board of Directors
	For Equilateral Enterprises Limited
	Sd/-
	Pratikkumar Sharadkumar Mehta
	Managing Director
Date:04.09.2025	(DIN: 06902637)