Gautam Gems Ltd Management Discussions.
The Company was originally incorporated as Gautam Gems Private Limited on February 18, 2014 under the Companies Act, 1956 vide certificate of incorporation issued by the Registrar of Companies, Gujarat, Dadra and Nagar Havelli. Subsequently, it was converted in to a public company and consequently name was changed to Gautam Gems Limited (GGL) vide fresh certificate of incorporation dated August 16, 2017 issued by Registrar of Companies, Gujarat, Dadra and Nagar Havelli.
The company has been principally incorporated as a Manufacturer & Trader of rough and polished diamonds. Its registered and corporate office is located in Surat, which is the diamond hub of India. It sells diamonds of multiple category, shape, cut, size and color. The range of diamonds it manufactures and trades in purely depends on the demand and supply of diamonds in the local markets. Primarily, Round Brilliant and All Fancy shape, 0.18 carats upto 15.00 carats Size and D to N color with all type of Fancy color diamonds are demanded by its customers. It maintains stock of its various shaped diamonds depending on the customer demand.
It procures its diamonds from suppliers based in the domestic market. It deals with only those suppliers who are reputed. Trust, reliability, quality and authenticity of diamonds is the upmost priority in diamond business. Further, the sales of its rough and polished diamonds depend on the kind of customer with whom they are dealing with. Such as its polished diamonds are majorly purchased by jewellery manufacturers, jewellery wholesalers, jewellery retailers, jewellery traders, diamond wholesalers, diamond retailers and its rough diamonds are majorly purchased by rough diamond traders and diamond manufacturers.
In order to compete in the diamond market, it has created and maintained an independent sales and distribution network for its products within the domestic markets. Further to ensure customer satisfaction, quality supply of diamonds, timely delivery of orders and purchase-sale of authentic diamonds, it deals with its suppliers and customers on mutually agreed terms. Further, it has developed and maintained long-term and stable relationships with its key suppliers and its key customers although it has not entered into any formal contracts with either of them.
Its promoters, Mr. Gautam P Sheth and Nidhi G Sheth have 15 years and 7 years of experience in diamond business, respectively.
The Companys Competitive Strengths are:
Well established relationship with our supplier
Strong & long-term relationship with our customers
Wide Varieties of diamonds
Rich domain experience of our Promoters
Increasing middle class population is expected to drive growth in the future and is expected to lead to an increase in demand for gold. Also, Indias population is increasingly becoming urbanised, which is expected to boost household income, thereby leading to higher demand for gold and other jewellery. The jewellery demand is also increasing steadily due to changes in its role from just being an item of adornment and as a store of value to a life style and fashion accessory. Rising quality awareness of customers has provided a fillip to the organized retail segment, which is banking on its reliability and quality to compete against the highly fragmented unorganized jewellers. The Gems and Jewellery sector is witnessing changes in consumer preferences due to adoption of western lifestyle.
The Government of India has also launched the Sovereign Gold Bond Scheme to reduce the countrys reliance on physical gold imports to meet the investment demand for gold by retail investors.
Some of the key challenges facing the retail jewellery industry are as follows: (a) Adapting to fast changing consumer preferences and buying patterns. (b) Volatility in the market prices of gold and diamonds. (c) Limited availability of high end retail space. (d) The retail jewellery is a working capital intensive business and currently there are Increasing restrictions by banks over lending in this sector.
HUMAN RESOURCES AND INDUSTRIAL RELATIONS:
The Company recognizes human resources as its biggest strength which has resulted in getting acknowledgement that the Company is the right destination where with the growth of the organization, value addition of individual employees is assured. The total number of employees as on 31st March, 2019 is 14.
The Company has an adequate internal control system for safeguarding the assets and financial transactions of the Company. The strong internal control systems have been designed in such a way that, not only it prevent fraud and misuse of the Companys resources but also protect shareholders interest.
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 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, 2019. There were no instances of fraud which necessitates reporting in the financial statements. Further, there have been no communications from regulatory agencies concerning noncompliance with or deficiencies in financial reporting practices.