Shukra Jewellery Ltd Management Discussions

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. The industry Based on its potential for growth and value addition, the Government declared the Gems & Jewellery sector as a focus area for export promotion. Despite inflation in the USA, the three years long RussiaUkraine war, and the Israel Hamas Conflict in middle east for almost a year, a key market, the industry has managed to put up a commendable performance.

The Government has reduced custom duty on cut and polished diamond and coloured gemstones from 7.5% to 5% and NIL

Indias gold demand in 2025 is projected to remain robust, ranging between 700800 tonnes despite a 31 per cent increase valuewise in 2024 World Gold Council

In FY 2025, Indias Gems & Jewellery exports stood at Rs. 2,43,162 crore (US$ 28.50 billion). In March 2025, Indias Gems & Jewellery exports stood at Rs. 2,20,379 crore (US$ 25.82 billion).

India ranks first among the top exporters in cut & polished diamonds, and second in gold jewellery, silver jewellery and labgrown diamonds in the year 2022. The IndiaUK Free Trade Agreement is expected to more than double Indias gems and jewellery exports to the UK, reaching Rs. 21,183 crore (US$ 2.5 billion) within the next two years.

India is the worlds largest cutting and polishing center for diamonds, with the cutting and polishing industry being well supported by government policies. Indias Gems and Jewellery sector has been contributing in a big way to the countrys foreign exchange earnings (FEEs). In the coming years, growth in the Gems & Jewellery 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. Also, the relaxation of restrictions on gold import is likely to provide a fillip to the industry. The demand for jewellery is expected to be significantly supported by the recent positive developments in the industry. Indias Gems & Jewellery industry is expected to reach US$ 100 billion by 2027.

Despite the promising growth prospects, Indias Gems & Jewellery industry faces several significant threats. Intense global competition from emerging lowcost manufacturing hubs such as China and Thailand could undermine Indias dominant position in the diamond cutting and polishing market.

A detail of segments is given in financial statement.

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.

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 202425. To mitigate risk at all level company have experienced management and staff.

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.

During the year under review revenue of a company Revenue from operation has been increased to Rs. 505.83 (Rs. in lakhs) as compared to previous years Revenue i.e. 475.26 (Rs. in lakhs) Company has managed its operations and profit after tax has also increased proportionately. Management of company is working hard to achieve good result in upcoming years. Ratios are adequately explained at auditors report.

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.

During the year under review company had Positive growth as total revenue increased to 505.83 lakhs as compared to previous year revenue 475.26. Most of the financial ratios are not comparable to previous year but major improvement shown to debt service coverage ratio, current ratio etc. and main reason to improve debt service coverage ratio are given as under: