SJ Corporation Ltd Management Discussions

(I) INDUSTRY STRUCTURE AND DEVELOPMENT: GEMS & JEWELLERY AND RUBBER BUSINESS:

The Gems & Jewellery (G & J) sector is one of the very important sectors of the Indian economy with a significant share of the Gross Domestic Product (GDP). One of the fastest growing sectors, it is extremely exporting oriented and labor intensive. The Indian jewelry industry has been evolving over the past few years. Traditionally a gold dominated industry, it is now showing a greater acceptance towards diamond and other precious stones jewellery as well. The new age consumers, who are well travelled, prefer frequenting the modern retail formats like malls and departmental stores. A relatively higher affinity towards branded products coupled with higher disposable incomes and a preference for trusted fine quality products are also significant contributors to the growth of the branded jewellery segment. The branded retail jewellery market is growing at a robust rate and going forward, many domestic and international brands would capture substantial market size given number of factors like increased urbanizations and changing demographics. As a matter of on- going practice, the masses still prefer to purchase jewellery from their tried and trusted jewellers but the constant exercise of branding through advertising and other sales promotional activities has ensured steady inflow of new customers in this segment of organized retailing. Indias small and independent jewellers are starting to organize themselves and expand in size to share a common brand identity and marketing strategy.

Jewellery consumption in India has been traditionally driven by the strong cultural affinity for gold, with it being the preferred form of jewellery worn. Gold jewellery is an integral part of weddings in India, and is considered as a necessity, with wedding related demand accounting for substantial portion of overall jewellery demand, especially in the South. Jewelry demand has also been supported by the increasing appetite for gold jewelry from rural and non-urban markets. Gold has also served as a means of savings especially for the rural sector, owing to the lack of any major alternative investment options supported by its anti-inflationary characteristics. However, in the past few years the demand for diamond jewelers has also been showing an increasing trend, especially in the Metros and Tier-I cities.

Lab grown diamonds are mostly high in terms of quality than mined diamonds. This is because they are created in controlled circumstances with continual monitoring and quality control. They are sustainable and environmentally friendly as they are not extracted from the ground.

Lab grown diamonds are made by using techniques such as chemical vapor deposition (CVD) and high pressure and high temperature (HPHT). They are identical to natural diamonds in their appearance and composition. These diamonds are also called as cultured diamonds and synthetic diamonds.

In the last two years, nearly half of the units that were in the cutting and polishing of natural diamonds have partly shifted their business to lab-grown diamonds. This has already led to a slowdown, and prices have already slumped

The lab-grown industry Supply has skyrocketed and prices have dropped drastically, with wholesale prices down drastically.

Surats lab-grown diamond industry, already grappling with oversupply issues after a shift from natural diamonds. The prices of diamonds have been on a constant decline in the last two years.

India exports lab-grown diamonds to the USA, Hong Kong, UAE, Israel, and Belgium, with the USA accounting for nearly 70% of Indias exports. With a majority of the natural diamond cutting and polishing companies in Surat starting to parallelly produce lab-grown diamonds.

REAL ESTATE BUSINESS:

The Indian economy is getting bigger and better. Going with the estimates that Asias third largest economy will become the worlds third largest by 2050; a need for more robust and vast infrastructure is inevitable. Indian real estate sector faces several threats, risks and concerns. The rising interest rates and scanty land availability in India, and the subsequent global turmoil are creating pressure on the Indian real estate sector.

Due to slowdown in the market condition and price rise it was very difficult for the company to go in a big way in the new business arena.

There are several factors which may affect our results of operations, financial condition and cash flows. These factors may include:

Economic conditions, business cycles

Ability to control cost and attain high productivity

Pricing Pressure due to competition / competitive bidding.

Human Resource Management

Our relationship with clients - companies, banks, institutions, individuals, etc.

Capital expansion and capital expenditure

Industry Structure and Development

Key Strategic Highlights

Risk and Concerns

Internal Control Systems and Adequacy

Outlook Opportunities and Threats

Cautionary Statement

As a Company is optimistic about the future as well as its growth path. The Company is confident in its ability to grow its business organically enhancing the production by adopting new technologies. The Company constantly looks at margin improvement and risk mitigation initiatives through specific projects and global support.

The prices of our services, real estate are determined principally by market forces of supply and demand. We feel that over a period of time there might be increase in competition and it might affect the profitability of our Company. Our Company has been concentrating on receiving the orders from the Government Registered Companies. These Companies generally follow the system of tenders, wherein the contracts will be granted to lowest bidder. This may affect the profit margins of our Company in percentage terms.

Rubber Business:

We are building a world-class recovered carbon black (rCB) facility with a capacity of 50 MT/day, engineered to meet the demanding specifications of the global tire, rubber, plastics, and ink industries. Powered by state-of-the-art jet milling technology from Germany ensuring ultra-fine precision and consistent rCB quality, our process delivers ultra-fine rCB (D97 < 10 µ m) with unparalleled particle size uniformity, purity, and consistency all aligned with ASTM and REACH compliance goals. Global Standard rCB, Driven by Purpose to Promote Circular Economy and ESG Principles Our rCB facility is more than a plant its a statement of intent. A bold move to position India as a reliable hub for sustainable, high-quality rCB, catering to the worlds top manufacturers. Designed for performance consistency, regulatory readiness, and material versatility, our plant is built to support OEMs, tier-1 suppliers, and circular value chains across continents.

(II) OPPORTUNITIES AND THREATS:

Some of the opportunities for the retail jewelry industry are as follows: (a) Growing consciousness amongst customers for branded jewelry. (b) Limited penetration of organized jewelry in the country. (c) Increase in purchasing power of the customers in the Tier I & II locations. (d) Increasing demand for diamond jewelry, which is a high margin product as compared to the gold jewelry. (e) Favorable demographics leading to increasing demand for jewelry in the country. Some of the key challenges facing the retail jewelry industry are as follows:

(a) Adapting to fast changing consumer preferences and buying patterns. (b) Volatility in the market prices of gold and diamonds. (c) Limited availability of high-end retail space.

As of for Real Estate business of the Company, our vision is to achieve leadership position in the state of Gujarat and explore the opportunities out of India. We committed to building long term relationships based on performance and value, as well as client satisfaction. To be one of the premier infrastructure companies in Gujarat, executing various vertical of development activities.

(III) SEGMENT WISE OR PRODUCT-WISE PERFORMANCE: The Company is in the business of Jewelry and Real Estate trading and Rubber Business. The Jewelry, Real Estate and Rubber Business segments have shown different performance trends.

(IV) OUTLOOK: The company is optimistic about the key factors contributing to positive outlook which include market expansion, product diversification and technology advancement. Looking ahead to 2025 and 2026, the outlook for jewelry gold demand is closely tied to price trends and economic sentiment. Should gold prices stabilize or retreat from current highs, a rebound in volume is likely, particularly in emerging markets where gold jewelry is deeply embedded in cultural and financial practices. However, if prices remain elevated, the sector may continue to see a bifurcation: affluent consumers will drive demand for high value, designer pieces, while mass-market demand could remain subdued. Sustainability and ethical sourcing are also becoming increasingly important, with more consumers seeking assurances that their gold jewelry is responsibly produced. As a result, brands that prioritize transparency and traceability in their supply chains may gain a competitive edge in the years ahead.

(V) RISKS AND CONCERNS:

The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Key business risks and mitigation strategy are highlighted below:

1) Business Risk: To mitigate the risk of high dependence on any one business for revenues, the Company has adopted a strategy of launching new products / services.

2) Legal & Statutory Risk: The Company Secretary, Compliance and Legal Functions advices the Company on issues relating to compliance with law and to pre-empts violations of the same. The Company Secretary submits a quarterly report to the Board on the Companys initiatives to comply with the laws of various jurisdictions. The Company also seeks independent legal advice wherever necessary.

3) Human Resource Attrition Risk: The Companys key assets are its employees and in a highly competitive market, it is a challenge to address attrition. The Company continues to accord top priority to manage employee attrition by talent retention efforts and offering a competitive salary and growth path for talented individuals.

4) Others: The Company is exposed to risks and fluctuations of foreign exchange rates, raw material prices and overseas investments exposures.

(VI) INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company maintains a proper and adequate system of internal controls, which provides for automatic checks and balances. The Companys resilience and focus is driven to a large extent by its strong internal control systems for financial reporting. The Company follows strict procedures to ensure high accuracy in recording and providing reliable financial and operational information, meeting statutory compliances. The Companys internal team and Audit Committee closely oversee business operations. These responsibilities include the design, implementation and maintenance of adequate internal financial controls to ensure an orderly and efficient conduct of its business. The Committees also ensure adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. Any deviations are promptly reported to the management. Various risk mitigation measures are then devised to bring risk exposure levels in line with risk appetite. Timely and adequate measures are undertaken to ensure undisrupted functioning the business.

(VII) DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

The Standalone Financial performance of the Company for the year ended 31st March, 2026 is summarized as follows:

Rs. In lakhs

Particular	Year Ended On 31st March, 2026	Year Ended On 31st March, 2025
Income	2193.30	1543.24
Less: Expenditure	2115.22	1565.50
Profit/(Loss) Before Depreciation and Taxes	91.68	-3.59
Less: Depreciation	13.60	18.67
Net Profit/(Loss)Before Tax	78.08	-22.26
Less: Provision for Tax	4.77	3.10
Less: Current Tax	0.78	00
Deferred Tax	1.32	5.18
Profit/(Loss) After Tax	71.21	-20.18

(VIII) MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING

NUMBER OF PEOPLE EMPLOYED:

Human Resources play a critical role in driving the Companys strategies and growth. The Company endeavors to become the best place to work for its employees and to provide them with a nurturing environment that is essential for their growth. The Company has implemented comprehensive and well-structured HR Policies to ensure employee growth both at personal and professional levels. The Companys talent pool comprises a diverse set of experienced and skilled people who play key roles in enhancing business efficiency, devising strategies, setting up systems and evolving business as per industry requirements. The Company provides a safe, conducive and productive work environment to its people. Overall, the Company provides a nurturing work environment to a diverse set of workforces. The total number of employees as on 31st March, 2026 was 3 (three).

(IX) FINANCIAL RATIO ANALYSIS:

Particulars		2026		2025
	Standalone	Consolidated	Standalone	Consolidated
Debtors Turnover	4211.5	1.68	21.09	21.09
Inventory Turnover	10	1.33	4.24	4.24
Interest Coverage Ratio	-	1.62	-	-
Current Ratio	2.62	1.32	7.74	7.74
Debt Equity Ratio	-	3.23	-	-
Operating Profit Margin (%)	-	-	-	-
Net Profit Margin (%) details of any change in Return on	0.03 -	-0.01 -	-0.01 --	-0.01 -
Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof.]

DISCLOSURE OF ACCOUNTING TREATMENT: During the preparation of Financial Statements of F.Y. 2025-26 the treatment as prescribed in Indian Accounting Standards have been followed by the Company. There are no significant changes in Accounting Treatment as followed by the Company in current financial year as compared to previous financial year.

(X) AUTIONARYSTATEMENT:

Statement in this Managements Discussion and Analysis detailing the Companys objectives, projections, estimates, expectations or predictions are forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied.

Important factors that could make a difference to the Companys operations include global and Indian demand-supply conditions, finished goods prices, feedstock availability and prices, cyclical demand and pricing in the Companys principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries within which the Company conducts business and other factors such as litigation and labor negotiations.

DISCLOSURE WITH RESPECT TO DEMAT SUSPENSE ACCOUNT/ UNCLAIMED SUSPENSE ACCOUNT

As per Regulation 34(3) read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the company hereby discloses the details of unpaid/unclaimed dividend and the respective share thereof and shares in demat suspense account or unclaimed suspense account: NIL

DISCLOSURE OF CERTAIN TYPES OF AGREEMENTS BINDING LISTED ENTITIES

Information disclosed under clause 5A of paragraph A of Part A of Schedule III of these regulations as follows;

Sr. No. Particulars	Details
1. Name(s) of parties with whom the agreement is entered	The Existing Promoters of the Company i.e. Savjibhai Patel, Ushaben Savjibhai Patel and, Prashant Kanjibhai Kalavadia (Acquirer No. 1), and Pintu Kanjibhai Kalavadia (Acquirer No. 2), Kalpesh Patel (Acquirer No.3), Umang Kantilal Savani (Acquirer No. 4)
2. Purpose of entering into the agreement	To record the terms of sale and purchase of 49,20,000 (Forty-Nine Lakhs Twenty Thousand) equity shares of the Target Company which represents 58.89% of the present paid-up equity share capital of the Target Company (as on 30th January, 2026) held by the Existing
	Promoters to the Acquirers for a consideration of INR 12.00/- (Indian Rupees Twelve Only) per equity share of the Target Company which aggregates to 5,90,40,000 (Indian Rupees Five Crore Ninety Lakhs Forty Thousand Only), subject to customary conditions precedent stated in the Promoters SPA and subject to requisite approval including from Securities and Exchange Board of India.
3. Shareholding, if any, in the entity with whom the agreement is executed	The parties to the Promoters SPA are individual, hence it is not applicable
4. Significant terms of the agreement (in brief) special rights like right to appoint directors, first right to share subscription in case of issuance of shares, right to restrict any change in capital structure etc.	NIL
5. Whether, the said parties are related to promoter/promoter group/ group companies in any manner. If yes, nature of relationship	NO
6. Whether the transaction would fall within related party transactionsRs If yes, whether the same is done at arms length	NO
7. In case of issuance of shares to the parties, details of issue price, class of shares issued	Not applicable under the Promoters SPA
8. Any other disclosures related to such agreements, viz., details of nominee on the board of directors of the listed entity, potential conflict of interest arising out of such agreements, etc.	Upon consummation of the Promoters SPA and subject to regulatory approvals and conditions, including applicable requirements of the SEBI SAST Regulations, the current promoters shall cease to exercise control over the Target Company and the Acquirers herein shall be classified as promoters of the Target Company.
9. In case of termination or amendment of agreement, listed entity shall disclose additional details to the stock exchange(s):	Not applicable
i. Name of parties to the agreement
ii. Nature of the agreement
iii. Date of execution of the agreement
iv. Details of amendment and impact thereof or reasons of termination and impact thereof