Shukra Bullions Ltd Management Discussions.

INDUSTRIAL OUTLOOK : GEM & JEWELLERYINDUSTRY OVERVIEW

The gems and jewellery industry can be classified into various sub segments like diamonds, colored stones, gold and silver jewellery, pearls, etc. However, the two major segments in India are gold and diamonds India dominates the diamond processing trade with 11 out of 12 diamonds being cut and polished in India. India also dominates the gold and silver consumption globally. The industry holds prominent significance as it is a net exporter and provided employment to 1.3 million people directly and indirectly.

Gem and jewellery exports in financial year 2016-17, recorded 9.09% growth of value terms.

The diamond exports growth by 10.24% during financial year 2016-17 while gold jewellery exports growth by 1.92%.

Gold and diamond exports in aggregate accounted for about 93% of Indias gems and jewellery exports.

The reasons attributed for the sale are (1) The majority of working women in rural India do not invest in stocks and shares of use other investment instruments and they usually invest their surplus money in jewellery (2) The rural families allocate fixed budgets to buy jewellery for weddings and they buy jewellery at this time irrespective of whether gold prices are high or not. (3) Rural markets are less affected by the global meltdown as they are agriculture-based.

OPPORTUNITIES AND THREATS

India is the largest diamond cutting and polishing center in the world the industry enjoys 60% value share, 82% carat share and 95% share of the world market in terms of number of pieces. In other world, nearly 9 out of 10 diamonds sold world wide are cut and polished in India.

Company is operating in the fields of gold and jewellaries and Trading in diamonds, government policies have material impact on the business and currently government is promoting Gold Bond scheme which may have effect in future but in India most of saving in the field of jewellaries are in unorganized form. International market is very much volatile and import of gold is mainly depend on dollar market volatility.

INITIATIVES

The Company is planning to participate/visit various jewellery shows domestic and aboard.

Being unforeseen circumstance the management is hopeful of achieving higher turnover during the year.

Company intends to entered in to Real Estate development business along with existing business. Company is intending to buy land at Ahmedabad for commercial and industrial project.

RISK AND CONCERNS

Company is in the Gems and Jewellery business and fluctuation in price of commodity in international markets as well as fluctuation of dollar price may impact the entire industry. Government has restricted import and now a days most government of policies are demotivating import of Gold. But even today people have more faith in gold than government bonds. Future unfavorable government policies may have impact on business of the company.

To mitigate risk at all level company have experience management and staff.

INTENAL CONTROL SYSTEM:

The Company has adequate system of control implemented by the management towards achieving efficiency in the operation, optimum utilization of resources and effective monitoring thereof and compliance with applicable laws.

FINANCIAL PERFORMANCE

Income

The Company has recorded a Total Income of 55.25 Million (Previous year Rs. 77.57 Million) for the year ended March 31, 2017 primarily due to income from sale of Diamonds and Diamond Studded Gold Jewellery. The Company also received other income of Rs. 0.03 Million (Previous year 0.05 Million).

Expenditure

The Company has recorded a total expenditure (excluding depreciation) 54.86 Million (Previous year Rs. 77.06 Million) for the year ended March 31, 2017.

• Cost of goods Sold 53.44 Million (Previous year Rs. 75.82 Million).

• The Company also recorded other expenditure of Rs. 1.42 Million (Previous year 1.24 Millions). This is on account of administrative expenses and selling and administrative expenses.

Depreciation & amortization

For the year ended March 31, 2017 the Company has incurred depreciation charges of Rs. 0.31 Million (Previous year Rs. 0.44 Million).

Deferred Tax Assets

The Deferred tax Asset for the year Rs 0.06 Million (Previous Year Rs. 0.07 Million)

Net Profit before Taxes

Due to reasons discussed above, the Company has recorded net profit before taxes and extraordinary items of. Rs. 0.12 Million (Previous year Rs. 0.12 Million) for the year ended 31st March 2017.

TAXES

The Provision for taxes for the year is Rs. 0.10 Million (Previous Year Rs. 0.10 Million).

NET PROFIT

The Company has recorded Net Profit Rs. 0.07 Million (Previous year Rs. 0.09 Million).

SHARE CAPITAL

At present, the Company has only one class of share i.e. Equity share of face value of Rs. 10/- each. As on 31st March 2017 the issued subscribed and paid up capital was Rs. 50.15 Million divided into 50,15,300 equity shares of Rs. 10 each.

HUMAN RESOURCES

The Company believes investing in people though creating an environment where people are valued as individuals and are given equal opportunities for achieving professional and personal goal.