Golkunda Diamonds & Jewellery Ltd Management Discussions

The economy of India has transitioned from a mixed planned economy to a mixed middle-income developing social market economy with notable public sectors in strategic sectors. It is the worlds fifth-largest economy by nominal GDP and the third-largest by purchasing power parity (PPP).

Nearly 70% of Indias GDP is driven by domestic consumption; country remains the worlds fourth-largest consumer market. Apart from private consumption, Indias GDP is also fueled by government spending, investments, and exports. Indias economy grew at a faster-than-expected pace majorly helped by a strong performance in the manufacturing sector, and economists expect the momentum to continue this year.

The International Monetary Fund (IMF) has raised Indias growth forecast for 2024-25 to 6.8% from 6.5% on the back of strong domestic demand and a rising working-age population.

The Significant problems of India regarding inflation & unemployment needs to be addressed by the government body on high priority for ensuring overall growth of the nation.

GDP or "Gross Domestic Product" refers to the monetary value of all goods and services produced in a nation during a given year. A higher GDP indicates that the country is financially strong and growing at a stable rate. According to the World GDP Ranking 2024 list, India is the fifth largest economy in the world and the Central government has pledged to make it the 3rd largest by 2027. India is expected to be the fastest growing economy among the G-20 nations in 2024.

The global diamond market is poised for significant growth, with projections indicating an increase from USD 110.41 billion in 2023 to over USD 140 billion by the year 2029, driven by a CAGR of 4.85% from 2024 to 2029.

Industry Structure and Developments:

The Company is a part of an Industry, which largely operates through unorganized constituents. However, unlike the industry, the Company has attempted to operate through as systematic and organized manner as possible. However, since Diamonds and Jewellery is one industry, in which India holds, commendable position in the world, akin to the software industry, one can look forward to more international involvement coming up in this industry.

Opportunities and Threats:

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.

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

Outlook:

The Company has done reasonable in the current year and expects to achieve a really good percentage of market share in the Diamond manufacturing and Jewellery marketing fields. The outlook for the Company can therefore be termed as optimistic and expects higher growth then inflation and average grow thin the industry.

Growth of the Gems and Jewellery Industry is expected to be moderate to better in the years to come depending on the policies of the Government. However Gems and Jewellery Industry is seeing robust growth in the years to come. The Growth rate of the Gems and Jewellery Industry is closely related to the growth of the other Sector and hence movements and developments in the other sectors would also indirectly affect the future of Gems and Jewellery Industry.

Changes in Key Financial Ratios:

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:

S. NO.	Key Financial Ratio	FY 2023-24	*FY 2022-23
1.	Inventory Turnover Ratio	12.65	9.04
2.	Current Ratio	1.75	1.67
3.	Debt Equity Ratio	1.14	1.33
4.	Debt service coverage ratio	3.93	3.06
5.	Return on equity ratio	0.19	0.23
6.	Trade receivables turnover ratio	3.22	3.97
7.	Trade payables turnover ratio	11.20	13.16
8.	Net capital turnover ratio	5.04	5.81
9.	Net profit ratio	4.23	4.15
10	Return on capital employed	28.69	32.29
11.	Return on Investment	28.69	32.29

*Previous years Figures have been regrouped / rearranged wherever necessary

Risks and Concerns:

Following can be some of the risks and concerns the Company needs to be wary of:

• The largely unorganized structure of the market can affect the systematic functioning of the Company.

• Political instability, which has at tremendous impact on the capital markets.

• Likely opening up of the economy, which can be a double-edge sword.

• The Diamond market in India is heavily influenced by the US Markets.

• The major income component of the Company being exports, changes in economies or government policies of the countries to which the Company is exporting may also affect the operations of the Company.

• Increasing competition among the Indian Exporters in this industry.

• Internal Control Systems and their Adequacy:

The Company has adequate internal control procedures commensurate with the size of the Company and the nature of its business for purchase of stores, raw materials, components, plant and machinery, equipment and other assets, and for the sale of goods.

The Company also has in place an Audit Committee to have a periodic overview of the internal control procedures of the Company. The Audit committee is accessible at all times to the employees of the Company for any improvement to be recommended in the procedures in place.

Discussion on Financial Performance of the Company:

The financial performance of the Company has inclined in the year under review.

The sales were Rs.2,30,47,25,932 /- as compared to Rs. 2,33,44,40,217/- in the previous year. The Profit after tax in the current year was Rs. 9,61,89,169/- as compared to Rs. 9,42,64,854/- in the previous year.

Export performance and Foreign Exchange earnings:

The Company is making contribution towards foreign exchange through export and Foreign exchange earnings stood at Rs.2,26,67,35,438/- during the financial year under review.

Industrial Relations and Human Resources:

The Company considers that its relationship with its employees is vital and ensures that employees feel valued and is endeavoring to create an environment and culture within which every employee can put his best efforts and maximize his contribution.

The Company ensures that all its employees remain competent through education, skills, training and experience as necessary. The Company has had cordial relations between the management and employees and an atmosphere of harmonious working to achieve the business objectives of the Company throughout the year. The Company is poised to motivate each of its employees to perform to the fullest extent possible and to appropriately reward their excellence

Cautionary Note:

Statements in this report and Corporate Governance Report read together with the Directors Report and financial statement describing the Companys objectives, projections, estimates, expectations and predictions, may be "forward looking statements". Actual results may differ from those expressed or implied due to variations in prices of raw materials, seasonal demand and pricing in the Companys principal markets, changes in Government regulations, tax regimes, economic developments within India and other incidental factors.