Parshva Enterprises Ltd Management Discussions

OVERVIEW

The company is in the business of cutting and polishing of diamonds and trading of diamond jewellery. Consistent supply of rough or cut & polished diamonds of desired quality, at a competitive price is one of the critical success factors of the companys business. The company supplies the polished diamonds primarily to wholesalers, jewellery manufacturers, traders and retailers based in India.

INDUSTRY STRUCTURE AND DEVELOPMENTS

India is deemed to be the hub of the global Jewellery market because of its low costs and availability of high-skilled labour. India is the worlds largest cutting and polishing center for diamonds, with the cutting and polishing industry being well supported by government policies. India is the worlds second largest gold consumer. The gems and jewellery industry majorly includes sourcing, processing, manufacturing and selling of precious metals and gemstones such as gold, platinum, silver, diamond, ruby, sapphire, among others. The Gems and Jewellery sector are witnessing changes in consumer preferences due to adoption of western lifestyle. Consumers are demanding new designs and varieties in jewellery, and branded jewellers are able to fulfil their changing demands better than the local unorganized players. Moreover, increase in per capita income has led to an increase in sales of jewellery, as jewellery is a status symbol in India.

INDUSTRY TREND DIAMOND JEWELLERY

? Increasing demand for precious gem stones: Changing preferences of young people from gold to coloured gemstone, platinum and palladium jewellery.

? Multiple occasions for purchase: Women are buying diamond jewellery for occasions other than marriage.

? Changing demographics impacting demand: Bridal diamond jewellery is the foundation of industry, but product popular with millennial is helping to spur growth.

? Growth of lab created diamonds: Also known as synthetic diamonds, artificial diamonds, cultivated diamonds or cultured diamonds.

OUTLOOK

Based on its potential for growth and value addition, the Government declared the gems and jewellery sector as a focus area for export promotion. The future growth of the gems and jewellery sector is expected to be led by the development of large retailers/brands which are supporting in increasing the share of the organised market.

Indias gems and jewellery export sector which is one of the largest in the world contributed 4.3% to global jewellery consumption in 2022. In FY24, the exports of gold jewellery stood at US$ 26.35 billion whereas the imports of gold jewellery stood at US$ 17.85 billion. During January 2024, the total gross exports of gold jewellery stood at US$ 437.91 million. Indias gems and jewellery exports are expected to reach US$ 100 billion by 2027.

OPPORTUNITIES AND THREATS

(a) Opportunities/Strength

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

? 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 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.

(b) Threats

? Fast-changing Fashion Trends

Jewellery being a vital fashion and lifestyle statement, demands the players to be more agile, and responsive to the constantly evolving trends and consumer preferences.

RISK AND CONCERNS

Looking at the scenario in India in case of gems and jewellery industry, Risks associated with operating in a particular industry and include risks arising from demand changes, changes in customers choice and industry changes. It could have adverse impact on earnings.

The Company manages monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives. The Companys management systems, organizational structures, processes standards, code of conduct and behaviors govern how the company conducts the business and manages associated trade risks.

FACTORS AFFECTING OUR OPERATIONS ? Gems and Jewellery Industry

The Gems and Jewellery Industry is one of the key growth drivers for the Indian economy and effectively contribute to the countrys GDP. The jewellery sector attracts huge competition owing to significant presence of unorganised players. In gems and jewellery industry, sluggish sales of products due to seasonal changes may affect profitability of the Company. The Gems and Jewellery sector play a significant role in the Indian economy.

? High Working Capital Intensive Industry vis-a-vis Low Priority Sector for Bankers

In the diamond industry, there is a norm of longer credit period and high inventory levels, considering which it becomes high working capital intensive industry, whereas it is a low priority sector from the perspective of bankers.

? Global Economic Scenario

There is uncertainty in the Global Economy for Diamond Industry which affects the business operations of the Company.

? Human Resources & Industrial Relation:

The company considers human resources as one of the vital and important factors for sustained growth. The human resources strategy is to attract talent in the industry, develop and upgrade their skill and competence on the job and ensure employee satisfaction through reward, appreciation and development of environment based on culture and values nurtured by the Group over the years. The industrial relations within the Company have remained harmonious throughout the year.

? Internal Controls

The Company has devised strong internal financial reporting and control system for appropriate and accurate recording of financial and operational information and safeguarding its assets. The company adheres to the internal control and procedures laid down in respective policies of the company. The system supervises its internal business processes to ensure operational efficiency, cost reduction, accountability, compliance with internal policies, applicable laws and regulation, optimum resources and assets utilization and accurate reporting of financial transactions. These transactions are well authorized, recorded and reported to the management. The company follows all Indian Accounting Standard for maintaining the books of accounts and reporting of financial statements.

Financial Performance with respect to Operational Performance

On a consolidated basis, The Total Turnover of the Company is Rs. 2512.82 (In Lacs) in current year and Rs. 1829.53 (In Lacs) in previous year indicating increment by 27.19%. The Company has earned a Profit of Rs. 25.60 (In Lacs) as compared to Rs. 21.44 (In Lacs) in the previous year.

Details of significant changes in key financial ratios

In accordance with the amended SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, the Company is required to give details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations thereof: The Company has identified following ratios as key financial ratios:

Particulars	FY 2023-24	FY 2022-23	% Change	Reason for change of 25% or more as compared to the immediately previous financial year
Trade Receivable Turnover Ratio	3.13	4.01	-21.94%	NA
Inventory Turnover	9.13	2.57	71.85%	Inventory turnover ratio increased because of increase in inventory as compared to previous year.
Interest Coverage Ratio	3.93	7.37	-46.67%	Due to increase in Interest expense on debt.
Current Ratio	24.17	11.71	51.55%	Due to higher increase in current Asset compare to Current Liabilities during the year
Debt Equity Ratio	0.04	0.09	-55.55%	During the year the company issued new equity share to shareholder therefor decrease in debt equity ratio
Net Profit Margin	1.02	1.55	-34.19%	During the year, decrease in net profit margin is due to an increase in costs.
Return on Capital Employed	2.93	3.24	-9.56%	N.A

Cautionary Statement

Statements in this report on Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions are within the meaning of applicable laws or regulations. These statements are based on certain assumptions and reasonable expectation of future events. Actual results could however differ materially from those expressed or implied. Important factors that could make a difference to the

Companys operations include changes in the government regulations, tax laws, statues and other incidental factors as applicable to the company.

Acknowledgement

Your directors take this opportunity to express their deep sense of gratitude to the vendors, business associates, employees, investors and banks for their continued support and co-operation during the year under review.

For and on behalf of the Board of Directors
Parshva Enterprises Limited
Sd/-	Sd/-
Prashant Vora	Harsh Vora
Managing Director	Whole-time Director
DIN: 06574912	DIN: 07861487
Date: June 25, 2024
Place: Mumbai