Goldkart Jewels Ltd Management Discussions

To,

GOLDKART JEWELS LIMITED

[FORMERLY KNOWN AS SONA HI SONA JEWELLERS (GUJARAT) LIMITED], AHMEDABAD

GLOBAL ECONOMY

The global economy is facing substantial headwinds, emanating largely from an increase in trade tensions and heightened global policy uncertainty. For emerging market and developing economies (EMDEs), the weak outlook limits their ability to boost job creation and reduce extreme poverty. This challenging context is compounded by subdued foreign direct investment into EMDEs. Global cooperation is needed to restore a more stable global trade environment and scale up support for vulnerable countries, including those in fragile and conflict situations. Domestic policy action is also critical to contain inflation risks and strengthen fiscal resilience. To unlock job creation and long-term growth, reforms should focus on raising institutional quality, attracting private investment, and strengthening human capital and labor markets. Global economic activity is experiencing a broad-based and sharper-than-expected slowdown, with inflation higher than seen in several decades. The global economy is continuing growing at a modest pace, according to the OECDs latest Economic Outlook. The Economic Outlook projects steady global GDP growth of 3.2% for both 2024 and 2025, with a slight uptick in 2026 to 3.1%.

Global growth is expected to weaken to 2.3 percent in 2025, marking a significant downgrade from previous forecasts, followed by a modest pickup to 2.5 percent in 2026-27. In the context of a more challenging external environment, growth in emerging market and developing economies (EMDEs) is forecast to be well below pre-pandemic averages and the pace that is needed to make significant progress in boosting job creation and closing large per capita income gaps with advanced economies. Risks to the outlook are tilted to the downside. In particular, renewed increases in trade tensions and prolonged intense uncertainty could substantially reduce global growth relative to the baseline. Without decisive policy efforts, global growth prospects are unlikely to materially improve. The restoration of predictable, transparent, and rules-based approaches to resolving trade disputes is a top priority. At the same time, policy makers need to retain focus on addressing debt distress, supporting vulnerable EMDEs, and combating climate change. In many EMDEs, central banks will need to tailor policy to balance inflation pressures against headwinds to growth. Meanwhile, the post-pandemic increase in EMDE fiscal deficits calls for renewed efforts to prioritize government expenditures and mobilize greater revenues. To enhance growth prospects and meet the challenge of creating jobs for rising workingage populations,

EMDEs will require better climates for private investment, dynamic labor markets, more skilled workforces, and in fragile EMDEs much reduced levels of conflict.

INDIAN ECONOMY

Indias economy shows robust expansion, with real GDP for FY25 estimated at Rs. 1,87,97,000 crore (US$2.20 trillion), from Rs. 1,76,51,000 crore (US$ 2.06 trillion) in FY24 with a growth rate of 6.5%. This growth is driven by rising employment and stronger private consumption, supported by improving consumer sentiment, which is expected to keep the momentum going in the near future.

Trade remains a critical pillar of Indias growth story with exports reaching Rs. 37,31,000 crore (US$ 436.6 billion) in FY25, led by Engineering Goods (26.88%), Petroleum Products (13.86%) and Electronic Goods (8.89%). These exports helped the economy stay resilient during the pandemic when other sectors slowed. Union Minister of Commerce and Industry, Mr. Piyush Goyal projects exports to reach Rs. 85,44,000 crore (US$ 1 trillion) by 2030.

Indias ability to attract Foreign Direct Investment (FDI) has also strengthened. The country received record FDI inflows amounting to Rs. 4,21,929 crore (US$ 49.3 billion) in FY25 a 15% increase over FY24, supported by a stable policy environment, a large domestic market and steady economic growth positioning the country as a key destination for global capital. This capital inflow also complements government plans for increased investment in infrastructure and asset-building projects to further boost economic growth.

Indias external economic position is improving. The current account deficit narrowed to Rs. 1,98,726 crore(US$ 23.30 billion), or 0.6% of GDP, in FY25 from Rs. 2,21,754 crore (US$ 26.00 billion), or 0.7% of GDP, in FY24. This improvement was due to higher net receipts from services and secondary income, according to the Reserve Bank of India (RBI).

(Source : World Bank)

INDIA GEMS & JEWELLER Y

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 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.

MARKET SIZE

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).

GOLD DEMAND

India is the largest consumer of gold in the world. Rising middle class population and increasing income levels are key drivers behind the demand of gold and other jewellery in India. 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.

(Source: IBEF Report on Gems & Jewellery Sector)

OPPORTUNITIES & THREATS

Demand for gold and diamond jewellery has been steadily rising, driven by a combination of factors, including expanding urbanisation, higher affluence, growing aspirations and burgeoning income levels. Gold jewellery has been a central part of the Indian culture, and is considered a store of value, a symbol of wealth and status and a fundamental part of several rituals and festivals. Gold has historically proved to be a safe haven and a stable asset-class, providing maximum returns over the long term, despite investing not leading to steady income generation. India is poised for robust economic growth and is home to one of the worlds youngest populations. Increasing aspirations and changing preferences of young demographics, coupled with rising disposable incomes, will propel demand for fashion jewellery. The jewellery industry is highly capital intensive due to its long working capital and realisation cycle. A few recent incidents of financial defaults have created a liquidity squeeze in the industry, prompting banks and financial institutions to reduce their exposure to industry players. This liquidity crunch has caused a blip in profitability and growth of the jewellery industry. The jewellery industry is susceptible to continuous changes in the regulatory framework and market conditions. Adverse economic factors, regulatory upheavals and unfavourable Government policies can lead to disruptions in the industry performance.

INDUSTRY OUTLOOK

In the coming years, growth in gems and 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. Online sales are expected to account for 1 2% of the fine jewellery segment by 2023-24. 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 to drive volume growth for jewellers over short to medium term. The demand for jewellery is expected to be significantly supported by the recent positive developments in the industry.

(Source: IBEF Report on Gems & Jewellery Industry)

RISKS AND CONCERNS

The Indian economy is on a high growth trajectory, with several favourable macroeconomic indicators supporting the growth momentum. The jewellery industry is expected to benefit from the recent developments in the economy. Higher income in the hands of farmers and rural population, driven by normal monsoon forecast, will translate into robust spending and consumption, thus fuelling the demand for jewellery. Frequent regulatory changes and fluctuations in gold and commodity prices may pose a challenge to the Companys margins. Presence of unorganised players and expansion of regional players results in intense competition in the jewellery industry.

FINANCIAL PERFORMANCE

The Companys financial performance for the year ended on March 31, 2025 is as below:

Particulars	2024-25			2023-24
Total Revenue	82,35,46,311			68,21,02,703
Total Expenditure	77,76,17,118			66,88,92,860
Profit /(Loss) Before Tax	4,59,29,193			1,32,03,957
Less: Current Tax	(12500000)			(34,50,000)
Deferred Tax	(264549)			(13,2314
Profit /(Loss) after Taxation	3,31,64,644			97,40,726
Balance carried to Balance Sheet		3,31,64,644	97,40,726

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The company has implemented proper system for safeguarding the operations/business of the company, through which the assets are verified and frauds, errors are reduced and accounts, information connected to it are maintained such, so as to timely completion of the statements. The Company has adequate systems of Internal Controls commensurate with its size and operations to ensure orderly and efficient conduct of business. These controls ensure safeguarding of assets, reduction and detection of fraud and error, adequacy and completeness of the accounting records and timely preparation of reliable financial information. The company gets internal audit and verification done at regular intervals. The requirement of having internal auditor compulsory by statue in case of listed and other classes of companies as prescribed shall further strengthen the internal control measures of company.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES AND INDUSTRIAL RELATIONS FRONT

Your Company has undertaken employees development initiatives, which have very positive impact on the morale and team spirit of the employees. The company has continued to give special attention to human resources and overall development.

CAUTIONARY STATEMENT

Certain statements in the reports of the Board of Directors and Managements discussions and analysis may be forward looking statements within the meaning of applicable securities laws and regulations.

Actual results could differ materially from those expressed or implied since Companys operations are influence by many external and internal factors beyond the control of the Company. The Company assumes no responsibility to publicly amend, modify or revise any of these statements on the basis of any subsequent developments, information or events.