MANAGEMENT DISCUSSION AND ANALYSIS REPORT
INTRODUCTION:
As of February 2021, Indias gold and diamond trade contributed ~7.5% to Indias Gross
Domestic Product (GDP) and 14% to Indias total merchandise exports. The gems and
jewellery sector is likely to employ ~8.23 million persons by 2022, from ~5 million in
2020.
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.
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.
INVESTMENTS/ DEVELOPMENTS
Cumulative FDI inflows in diamond and gold ornaments in India stood at US$ 1,213.05
million between April 2000-March 2022, according to the Department for Promotion of
Industry and Internal Trade (DPIIT).
Some of the key developments in this industry are listed below:
• In September 2021, Malabar Group invested Rs. 750 crore (US$ 100 million) in a
gold refinery and jewellery unit in Hyderabad.
• In May 2021, GJEPC and Embassy of India, Morocco, co-hosted the ‘India
Global Connect to better understand the present business climate in the gems and
jewellery sector and seek trade prospects for manufacturers, exporters and importers from
both countries.
• The GJEPC will organise its first International Gems and Jewellery Show (IGJS)
outside the country, in Dubai, from August 14-16, 2021. It will also hold a five-day
physical exhibition—India International Jewellery show (IIJS-2021)—in Bengaluru
from September 15-19, 2021, in a first such event outside Mumbai. GJPEC sources said that
>250 buyers have registered and >95 stalls have been booked for Dubai IGJS 2021.
There will be 150 booths having products such as plain gold, gold- studded jewellery,
diamond-studded jewellery, silver jewellery, loose diamonds and gemstones.
• In June 2021, Tanishq launched antimicrobial jewellery in certain markets as a
pilot project. Currently, the range is available in stores across Chennai and Lucknow,
with further launches planned in Kolkata and Hyderabad followed by other key markets.
Antimicrobial jewellery is being offered in categories such as chains and rings, which
feature special-coated layers that self-disinfect the surface and impede any further
microbial growth.
• In June 2021, the World Gold Council and Gem and Jewellery Export Promotion
Council signed an agreement to promote gold jewellery in India. Under the agreement terms,
both partners will jointly fund a multi-media marketing campaign that would aim to
increase awareness, relevance and adoption of gold jewellery amongst Indian consumers,
especially in millennials and Gen Z.
• In April 2021, Malabar Gold & Diamonds announced to invest Rs. 1,600 crore
(US$ 214 million) in FY22 to launch 56 stores, of which 40 would be in India and 16 across
global markets. In India, stores will be opened in Tamil Nadu, Telangana, Andhra Pradesh,
Karnataka, Maharashtra, Delhi, West Bengal, Uttar Pradesh, Odisha and Kerala. In July
2021, the company announced hiring of >5,000 staff, across its retail operations, brand
headquarters and regional offices in the country.
• In March 2021, Joyalukkas collaborated with IBM Global Business Services to
design, develop and deploy a new cloud-native e-commerce platform across 11 countries
including India, the UAE, the US, the UK, Singapore, Malaysia, Bahrain, Qatar, Saudi
Arabia, Kuwait and Oman.
• In February 2021, Reliance expanded its e-commerce arm, JioMart, to jewellery
with silver coins of 5gm and10 gm, and gold coins of 1gm, 5gm and 10gm. 10gm.
o Reliances in-house jewellery brand, Reliance Jewels, which has ~93 flagship
showrooms and 110 shop-in-shops in 105 cities in the country, will fulfil the orders for
the new segment.
• Recently India & U.A.E had an agreement where the import duty of U.A.E. will
be waved off if the exports are done form India. Due to this agreement the export has
increase many foldly.
• IIJS Exhibition show which was recently had in Mumbai had an tremendous footfall
which has affected the company sales positively.
• Our online business has also increase many new users has joint are application
form all our India.
• We are also planning to participate in the further to exhibitions which will be
held in next calendar year.
MARKET SIZE:
Indias gems and jewellery market size was at US$ 78.50 I billion in FY21. Growth in
exports is mainly due to ? revived import demand in the export market of the US and
fulfilment of orders received by numerous Indian exhibitors during the Virtual
Buyer-Seller Meets (VBSMs) conducted by GJEPC.
Indias gems and jewellery exports reached US$ 39.14 billion in 2021-22, a 54.13% rise
from the previous year.
In April 2022, Indias overall gems and jewellery exports were at US$ 3.23 billion. The
Government of India is aiming at US$ 70 billion in jewellery export in the next five years
(until 2025), up from US$ 35 billion in 2020.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has in place adequate system of internal control. It has documented
procedures covering all financial and operating functions. These controls have been
designed to provide a reasonable assurance with regard to maintaining of proper accounting
controls, monitoring of operations, protecting assets from unauthorized use or losses,
compliances with regulations and for ensuring reliability of financial reporting. The
Company has continued its efforts to align all its processes and controls with global best
practices in these areas as well.
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 has taken pragmatic steps for strengthening organizational competency through
involvement and development of employees as well as installing effective systems for
improving the productivity, equality and accountability at functional levels. With the
changing and turbulent business scenario, the Companys basic focus is to upgrade the
skill and knowledge level of the existing human assets to the required level by providing
appropriate leadership at all levels motivating them to face the hard facts of business,
inculcating the attitude for speed of action and taking responsibilities. In order to keep
the employees skill, knowledge and business facilities updated, ongoing in house and
external training is provided to the employees at all levels. The effort to rationalize
and streamline the workforce is a continuous process. The industrial relations scenario
remained harmonious throughout the year.
RISKS AND CONCERNS:
It is essential to correctly assess the risk in each segment so that the risk is
mitigated before it becomes a possible threat. General risk segments are statutory
compliances, economy, financials, Government policies, market related, operational,
products and technology etc., The management has a rapid review of likely risk areas with
the objective to define a framework for identification, evaluation and mitigating the risk
in the decision making process and to encourage proactive management and not reactive
management.
OUR BUSINESS STRATEGIES:
INNOVATION IN DESIGNING
Our Company intends to strengthen its product development effort by creating customer/
product range/ market-specific teams, helping them focus and create innovative and
acceptable designs that will help to increase the sales.
CONTINUE TO FOCUS ON OUR EXISTING CUTOMERS
We believe that we have established ourselves in the domestic market and have developed
a marketing network with major retail chains during the past few years. We intend to
continue to cater to our existing customers comprising of retail chains and to capitalize
on our credentials to add new customers in the domestic market.
ENHANCING OPERATING EFFECTIVENESS AND EFFICIENCY
We believe that we have established ourselves in the domestic market and have developed
a marketing network with major retail chains during the past few years. We intend to
continue to cater to our existing customers comprising of retail chains and to capitalize
on our credentials to add new customers in the domestic market.
GOVERNMENT INITIATIVES
• India has signed an FTA with the UAE which will further boost exports and is
expected to reach the target of US$ 52 billion.
• The Government has reduced custom duty on cut and polished diamond and colored
gemstones from 7.5% to 5% and NIL.
• Revised SEZ Act is also expected to boost exports of gems and jewellery.
• In September 2021, Ms. Anupriya Patel, Minister of State for Commerce and
Industry said that reforms such as the revamped gold monetisation scheme, reduction in
import duty of gold, hallmarking and others would help the industry grow. The market
export target is US$ 43.75 billion for 2021.
• The government has reduced import duty for Gold & Silver (from 12.5% to
7.5%) and Platinum & Pallidum (from 12.5% to 10%) to bring down the prices of precious
metals in the local market.
• Indian Government made hallmarking mandatory for Gold Jewellery and Artefacts. A
period of one year is provided for implementation i.e. till January 2021.
o In December 2020, All India Gem and Jewellery Domestic Council (GJC) welcomed the
decision to make hallmarking compulsory from June 2021 in a phased manner; urged the
government to examine the key concerns of the industry for smooth implementation of the
initiative. o Hallmarking of gold jewellery is set to begin from June 15, 2021. In view of
the COVID-19 pandemic, the government accepted request of stakeholders to provide
jewellers some more time to prepare for implementation and resolve issues. Earlier, the
date of implementation was June 01, 2021.
• In December 2020, the Finance Ministry notified that the amendment under
Prevention of Money Laundering Act (PMLA), notifying dealers in precious metals and
stones, will maintain records of cash transactions worth Rs. 10 lakh (US$ 13.61 thousand)
or more cumulatively with a single customer.
GROWTH DRIVERS OF MEDIA AND ENTERTAINMENT SECTOR IN INDIA:
GROWING DEMAND
• Indias gems and jewellery exports reached US$ 39.14 billion in 2021-22, a
54.13% rise from the previous year.
• India ranks first among the top exporters in cut & polished diamonds, and
second in gold jewellery, silver jewellery and lab-grown diamonds.
INCREASING INVESTMENTS
• Cumulative FDI inflows in diamond and gold ornaments stood at US$ 1,213.05
million between April 2000-March 2022.
• In September 2021, Malbar Group invested Rs. 750 crore (US$ 100 million) in a
gold refinery and jewellery unit in Hyderabad.
POLICY SUPPORT
• The Government of India has increased the FDI limit from 74% to 100%.
• In November 2021, the government announced that it is working towards creating a
National Centre of Excellence for AVGC (animation, visual effects, gaming and comics).
POLICY SUPPORT
• India has signed an FTA with the UAE which will further boost exports and is
expected to reach the target of US$ 52 billion.
• The Government has reduced custom duty on cut and polished diamond and colored
gemstones from 7.5% to 5% and NIL.
ATTRACTIVE OPPORTUNITIES
• Indias gold demand stood at 797.30 tonnes in 2021 and is expected to be in a
range of 800-850 tonnes by 2022.
• In the fourth quarter of 2021 demand for gold rose by 93% YoY to 265 tonnes.
ROAD AHEAD .
In the coming years, growth in the gems and jewellery I 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 2021-22. 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 and jewellery industry is
expected to reach US$ 100 billion by 2027.
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