MANAGEMENT DISCUSSION
A. INDUSTRY STRUCTURE AND DEVELOPMENTS AND OUTLOOK:
Indias gem and Jewellery industry has shown remarkable resilience and perseverance in
the face of global challenges. Despite inflation in the USA, the Russia-Ukraine war, and
the lockdown in China for almost 6 months, a key market, the industry has managed to put
up a commendable performance.
AS PER REPORT FROM GEM & JEWELLERY EXPORT PROMOTION COUNCIL
For FY 2022-23, the overall gem & Jewellery exports grew 2.48% to Rs 3,00,462.52
crores as compared Rs 2,93,193.19 crores for the same period previous year. In terms of US
dollars, the overall gem & Jewellery exports accounted for $37,468.66 million as
compared to $39,331.71 million for the same period last year.
In the month of March 2023, the overall gross exports of Gems & Jewellery at Rs.
21501.96 crores (US$ 2612.65 million), declined 23.75% (declined 29.39% in terms of US
dollars) compared to the same period in the previous year, which amounted to Rs. 28198.36
crores (US$ 3699.90 million).
For the period of April 2022 - March 2023, provisional gross export of all kinds of
Studded Gold jewellery at Rs. 42457.87 crores (US$ 5294.74 million) grew 6.79% (declined
0.72% in terms of US dollars) over the comparative figure of Rs. 39759.04 crores (US$
5333.01 million) for previous year.
Real estate segment is improving in India. Particularly Government spending is
increasing in infrastructure and public utility sector. Due to enactment of RERA, a better
transparency will lead to higher investment in real estate sector.
In the Union Budget 2023-24, a commitment of Rs. 79,000 Crores (US$ 9.64 billion) for
PM Awas Yojana has been announced, which represents a 66% increase compared to the last
year.
B. OPPORTUNITIES AND THREATS:
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. Moreover, India exports 75 per cent of the worlds
polished diamonds, as per statistics from the Gems and Jewellery Export promotion Council
(GJEPC). Indias Gems and Jewellery sector has been contributing in a big way to the
countrys foreign exchange earnings (FEEs). The Government of India has viewed the sector
as a thrust area for export promotion. The Indian government presently allows 100 per cent
Foreign Direct Investment (FDI) in the sector through the automatic route.
In the coming years, growth in Gems and Jewellery sector would be largely contributed
by the development of large retailers/brands. Established brands are guiding the organized
market and are opening opportunities to grow. Increasing penetration of organized players
provides variety in terms of products and designs. Online sales are expected to account
for 1-2 per cent of the fine Jewellery segment by 2022-23. 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
stabilization 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.
Real Estate Sector will have tremendous growth opportunity and company intend to take
initiative in the field of real estate and infrastructure sector.
C. SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE
A detail of segments is given in financial statement.
D. INITIATIVES
The initiatives are being taken by the Company for improving the quality standards and
reduction of costs at appropriate level. New machineries are imported to provide better
result and to cope up with changing requirement of the industry. The employees at all
levels are being made aware of the changing conditions and the challenges of the open
market conditions and to train the personnel to tackle the difficult situations which will
improve the overall productivity, profitability. Company is negotiating for export orders
with international buyers and management is hopeful to achieve higher export turnover
during the year. Company has entered in to Real Estate business along with existing
business. Company is negotiating for land at Ahmedabad for development.
E. RISKS AND CONCERNS:
Company is in the Gems and Jewellery business and real estate Business and fluctuation
in price of commodity in international markets as well as fluctuation of dollar price may
impact the entire industry. The unavailability of fund is also affecting Indias position
in the international market. Government has restricted import and now days most government
of policies are demotivating import of Gold. Today people have more faith in gold than
government bonds. Future unfavorable government policies may have impact on business of
the company.
While rising interest rates are a cause for concern, the desire for larger, more
luxurious homes will also see a surge. The popularity of WFH and hybrid working
arrangements has increased the Demand for vacation houses. We anticipate that these trends
will continue in 2023-24. To mitigate risk at all level company have experienced
management and staff.
F. INTERNAL CONTROL SYSTEM:
The Company has an Internal Control System, commensurate with the size, scale and
complexity of its operations. The scope and authority of the Internal Audit function is
defined by the Audit Committee. To maintain its objectivity and independence, the Internal
Audit function reports to the Chairperson of the Audit Committee of the Board/and to the
Chairperson.
The Internal Audit Department monitor and evaluates the efficacy and adequacy of
internal control system in the Company, its compliance with operating systems, accounting
procedures and policies of the Company.
Based on their part of internal audit function, the company undertakes corrective
action in their respective areas and thereby strengthen the controls Significant audit
observations and recommendation along with corrective actions thereon are presented to the
Audit Committee of the Board.
G. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:
During the year under review revenue of a company Revenue from operation has been
decreased to 219.96 (Rs. in lakhs) as compared to previous years Revenue i.e. 164.54 (Rs.
in lakhs) Company has managed its operations on a same level but profit after tax has
decreased proportionately. Company is working hard to achieve good result in upcoming
years.
H. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING
NUMBER OF PEOPLE EMPLOYED.
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. Employees relations continue to be cordial. Training and development
activities are identified, organizes and progress monitored as part of human resource
development activities.
I. 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 THEREFOR, INCLUDING
During the year under review company had negative growth as total revenue decreased to
164.54 lakhs as compared to previous year revenue 219.96. Most of the financial ratios are
not comparable to previous year but major improvement shown to debt service coverage
ratio, current ratio etc. Main reason to improve debt service coverage ratio is Due to
final settlement of OTS scheme, full and final settlement is done and interest is paid.
Following are the details of ratios:
| Ratios |
Ratio (CY) |
Ratio (PY) |
Numerator and Denominator explanation |
Explanation of variation of more than 25% |
| (a) Debt service coverage ratio |
0.05 |
4.35 |
Net operating income - Revenue from operations - Cost of sales Debt
service - Total borrowings (Short + Long term) |
Due to final settlement of OTS scheme, full and final settlement is done
and interest is paid |
| (b) Return on equity ratio |
0.00 |
0.20 |
Net income and total equity is taken from balance sheet |
Due to no sales in Real estate segment and in PY there was reversal of
expense in the form of Stamp and franking charges |
| (c) Inventory turnover ratio |
0.02 |
0.01 |
COGS and Average inventory is directly taken from balance sheet |
Sale is comparatively decreased as compared to last year |
| (d) Trade receivable turnover ratio |
0.28 |
0.20 |
Current years turnover reduced in comparison to previous year turn over
hence ration are not comparable. |
Due to long term trade receivables and also sales was done in last month
of FY |
| (e) Net capital turnover ratio |
0.16 |
0.27 |
Net sales - From Profit and loss Working capital - Total current assets
- Total current liabilities |
Due to increase in working capital |
| (f) Net profit ratio |
3.23 |
-0.03 |
Net profit and sales directly taken from Profit and loss |
Due to no sales in Real estate segment and in PY there was reversal of
expense in the form of Stamp and franking charges |
| (g) Return on investment |
-53.06% |
-8.23% |
Current value of investment |
Due to change in market value of investment |
J. DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMIEDIATELY
PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF - During the year
there is not much change in return on net worth as compared to previous financial year,
the same has been mentioned in audited balance sheet.
2. DISCLOSURE OF ACCOUNTING TREATMENT
Appropriate accounting standards were followed in preparation of annual accounts, there
is no treatment different from that prescribed in Accounting Standard.
CAUTIONARY STATEMENT
Statements in the Directors Report & Management Discussion and Analysis describing
the Companys objectives, projections, estimates, expectations or predictions may be
forward looking statements.
Actual results could differ materially from those expressed or implied. Important
factors that could make difference to the Companys operations include cyclical demand,
changes in government regulations, tax regimes, economic development and other ancillary
factors.
| REGISTERED OFFICE: |
BY ORDER OF THE BOARD OF DIRECTORS |
| PANCHDHARA COMPLEX |
FOR SHUKRA JEWELLERY LIMITED |
| 3rd FLOOR NEAR THE GRAND BHAGAWATI HOTEL S.G. HIGHWAY BODAKDEV |
Sd/- |
| AHMEDABAD GUJARAT 380054 |
CHANDRAKANT SHAH |
| Place: AHMEDABAD |
Director |
| Date: 02.09.2023 |
(DIN: 01188001) |
+91-9892691696
