sky gold ltd share price Management discussions

INDUSTRY STRUCTURE AND DEVELOPMENT Indian Jewelry Market

Gold jewellery demand has experienced a steady and consistent upward trend for several reasons. Firstly, most of the demand can be attributed to weddings, where gold holds great cultural and sentimental value. As weddings remain an integral part of many societies, the demand for gold jewellery continues to rise. Secondly, gold is considered a reliable store of value, especially in times of economic uncertainty, making it an attractive investment option for individuals. The growth in disposable income across various regions has also played a crucial role in boosting demand, as people have more financial capacity to invest in gold jewellery. Thirdly, gold jewellery holds strong linkages to traditions and customs, further driving its popularity. Lastly, evolving fashion trends and styles have increased the demand for gold jewellery as consumers seek innovative and contemporary designs.

The jewellery market in India is a sizeable and attractive industry, propelled by several favourable factors. These include shifting Company, customer behaviours, superior organisational capabilities,and supportive regulatory and legislative changes. These combined prosperity of the jewellery sector in India. elementscreate This India jewelry market report extensively covers market segmentation by type (gold, diamond, and others), and distribution channel (specialist retailers and online). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.

Global Jewelry Market

The global jewelry market size was valued at USD 340.69 billion in 2022 and is expected to expand at a compound annual growth rate (CAGR) of 4.6% from 2023 to 2030. Increasing disposable income and innovative jewelry designs offered by manufacturers are expected to drive product demand. Changing lifestyles and perceptions of jewelry as a status symbol are expected to boost growth. COVID-19 has had a positive effect on jewelry sales, with 30% of consumers in a recent poll reporting they purchased more jewelry during the pandemic, according to a study from the supplier group the Plumb Club. The survey entitled "The Plumb Club Industry & Market Insights 2021," also noticed that 49% of consumers bought as much jewelry as they always did, while 21% purchased less. The increasing acceptance of jewelry among men is also propelling the market. Products such as cufflinks, bars, cartography necklaces, and signet rings are some of the products commonly in demand among men.

A vast client base makes it possible for manufacturers to cater to a large market and earn profits. The introduction of new designs and emerging fashion trends are attracting customers and manufacturers are leveraging this frequent unique products to attract customers.

Bridal jewelry also plays a significant role in driving the market. In countries like India, high expenditure on wedding ceremonies and celebrations are expected to positively impact market growth. Women are focusing on the latest trends when it comes to jewelry and accessories. The availability of customization for such products is an important factor among consumers and is likely to bode well for the market.

Additionally, rising awareness about the authenticity of the metals and gems used in the jewelry pieces is driving the market. Manufacturers are not only adhering to authenticity and quality standards but also educating consumers through advertising campaigns.

Diamonds are becoming increasingly popular due to an increase in consumer disposable income and spending capacity. Diamonds are considered to be one of the earths most impressive natural materials due to their stunning attributes and are perceived as a reflection of ones financial status.

The jewelry market is also expected to witness significant growth via the online channel as major players are focusing on using their websites to announce product launches, sales, and other relevant information. However, rising e-commerce frauds and a lack of knowledge about the hallmarks on jewelry are expected to hinder market growth.

Material Insights

The market for gold jewelry held the largest market share as the material is the most popular metal used in the making of all sorts of jewelry across the world. The segment was valued at USD 185.83 billion in 2022 and is expected to exhibit a CAGR of 4.9% during the forecast period to maintain its leading position during the forecast period.

Depending on the product type of alloy used, jewelry made with yellow, white, rose, and green gold is available in various designs and shapes. For instance, yellow gold is alloyed with silver, copper, and zinc. White gold is an alloy of gold and at least one white metal, usually nickel, silver, or palladium. Rose gold is a mixture of gold, copper, and silver, and green gold is a mixture of gold and silver, with traces of copper and other metals.

Global Jewelry Market Segmentation

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the global diamond jewelry market report based on product, material, and region:

The Companys growth considering the past few years performance has increased. The Company is taking necessary steps for increasing profits from year to year. The Company delivered a stupendous all-round performance in the financialyear 2022-23 with the economy opening up and no lockdowns during the year. The total revenue from the operations for the year ended March 31, 2023, amounted to Rs. 1,15,380.07 (In Lacs) as against Rs. 78,570.20 /- (In Lacs) in the previous Financial Year 2021-22.

OUTLOOK

Despite central banks raising interest rates and declining food and energy prices, underlying price pressures remain stubborn, economies. The rapid increase in policy rates have led to visible side effects, including highlighted vulnerabilities in the banking sector and growing concerns of contagion across the broader financial industry, including non-banking financial institutions. Despite declining headline inflation, core inflation has yet to reach its peak. Owing to ongoing inflationary pressures, interest rates are expected to remain elevated.

Indias economy has displayed remarkable resilience amidst global challenges, positioning itself as the frontrunner in growth among major economies. The latest economic survey anticipates a substantial GDP growth rate of 6.5% in FY24, further consolidating Indias impressive growth trajectory.

Source: Economic Survey of India, 2022-2023

The Indian jewellery retail sector is currently valued at approximately $76.3 billion in FY23 and is expected to grow substantially. This market is expected to grow at a CAGR of 5.54% by 2027. This projection signifies the sectors potential for significant expansion and economic impact in the coming years.

India traditionally boasts a deep-rooted affinity for gold jewellery, capturing a substantial share of the market, an intriguing trend is emerging. With its sparkling allure, studded jewellery is gaining momentum and attracting growing participation in the jewellery retail landscape. The prominence of gold jewellery stems from its profound cultural and religious significance, intertwined with a legacy of trust and reliability that gold embodies.

Gold jewellery demand in India is primarily driven by weddings significant role in the culture. Weddings in India holds immense importance and is marked by grand celebrations and traditions. Gold jewellery is essential to Indian weddings, representing prosperity, blessings, and the eternal bond between couples. The demand for gold jewellery remains resilient in India due to the enduring wedding demand. Families consider gold jewellery as a valuable asset, both financially and emotionally, and often pass it down through generations. This cultural significance and belief in the auspiciousness of gold ensure its continued demand in the Indian market.

RISKS AND CONCERNS

The cost of borrowing for the industry has gone up in the last few months which is nothing but direct risk-and- reward relationship at which banks do the pricing. The more important aspect is the perception of risk which has a bearing of past experience. Improvementintheprofile and practices - will have to be seen on ofthesector financial, ground, and only then will the banks get the confidence to provide further support to the sector.

It is essential to correctly assess the risk in each segment so that the risk is mitigated before it becomes a possible threat. General risk segments are statutory compliances, economy, Financials, Government policies, market related, operational, products and technology etc.

OPPORTUNITIES & THREATS Opportunities

1. Growing preference for online platform

2. Rural development

3. Customer ‘s preference in choosing hallmarked products over products made by un-organized manufacturers.

4. Concentrating in one sector makes the company mature in the industry and gain efficiency in operations.

5. Scaling of economy resultant out of Brand/ Advertisement & Publicity/ Procurement of Gold, Product Mix, designs, etc.

6. Increasing disposable income in Tier II and III locations as well as growing consciousness of branded jewellery in these locations which is shifting demand toward organized players.

Threats

1. Presence of Small and un-organized industry players affect a sustained growth in the industry.

2. Depending on bank finance and customer advances.

3. Existing competitors.

4. wn margins. do Penetration oflargecorporatesJewellerytraderscutting

5. Macro-economic factors such as Rupee fluctuations, enactment of new laws such as GST, KYC norms and global demand.

6. Recession affects the industry growth in general.

7. Acute shortage of skilled labourincreasestheproductioncost significantly.

8. Highly fluctuating gold price movement acts as a hamper.

9. Increasing duties and cess following GST implementation

SEGMENT WISE OPERATIONAL PERFORMANCE

It is single segment and the product is gold jewellery performance depends upon the competition, gold price movement, customer satisfaction and the general demand and supply position and also government regulations.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

During the year, the Company has reviewed its Internal Financial Control (IFC) systems and has continually contributed to the establishment of a more robust and effective IFC framework, prescribed under the ambit of Section 134(5) of Companies Act, 2013.

The control criteria ensures the orderly and efficient conduct of the Companys business, including adherence to its policies, the safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and in. thetimelypreparation ofreliablefinancial

Based on the assessment carried out by the Management and the evaluation of the results of the assessment, the Board of Directors are of the opinion that the Company has an adequate Internal Financial Controls system, operating effectively as at 31st March 2023.

As part of the efforts to evaluate the effectiveness of internal control systems, the internal audit department reviews control measures on a periodic basis and recommends improvements, wherever appropriate. The Internal Audit department is staffed by qualified and experienced personnel and reports directly to the Audit Committee of the Board.

HUMAN RESOURCES & INDUSTRIAL RELATIONS

With the changing and turbulent business scenario, the Company‘s basic focus is to upgrade the skill and knowledge level of the existing human assets to the required level by providing appropriate leadership at all levels motivating them to face the hard facts of business, inculcating the attitude for speed of action and taking responsibilities. In order to keep the knowledge and business facilities updated, ongoing in house and external training is provided to the employees effort to rationalize and streamline the work force is a continuous process. The industrial relations scenario remained harmonious throughout the year.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE RESULTS OF OPERATIONS:

1. Net Revenue from Operations:

Particulars	FY 2022-23	FY 2021-22	Change	% of Change
Sale of Products	1,15,380.07	78,570.20	36,809.87	46.84

2. Other Income

Particulars	FY 2022-23	FY 2021-22	Change	% of Change
Other Income	95.56	1,056.09	(960.53)	90.95

3. Gross Profit

Particulars	FY 2022-23	FY 2021-22	Change	% of Change
Revenue from Operations	1,15,380.07	78,570.20	36,809.87	46.84
Less: Cost of Consumption	1,11,488.78	77,402.98	34,085.8	44.03
Gross Profit	3,891.29	1167.22	2,724.07	233.38
Changes in Inventory	(1,085.02)	(1,690.03)	(605.01)	35.79

4. Profit before Tax

Particulars	FY 2022-23	FY 2021-22	Change	% of Change
Profit Before Tax	2,503.22	2,171.16	332.06	15.29

5. Total Comprehensive Income (After Taxation)

Particulars	FY 2022-23	FY 2021-22	Change	% of Change
Total Comprehensive Income (After Taxation)	2,247.18	1,772.73	474.45	26.76

KEY FINANCIAL RATIOS

Sr. No Particulars of Ratio	31.03.2023	31.03.2022
1. Debtors Turnover Ratio	20.88 Times	23.49 Times
2. Inventory Turnover Ratio	13.94 Times	10.69 Times
3. Interest Coverage Ratio	3.68 Times	4.16 Times
4. Current Ratio	1.29 Times	1.57 Times
5. Debt Equity Ratio	1.49 Times	1.20 Times
6. Operating Profit Margin (%)	3.15%	3.83%
7. Net Profit Margin (%)	1.61%	2.16%

DETAILS PERTAINING TO NET-WORTH OF THE COMPANY

Particulars	31.03.2023	31.03.2022
Net-worth	9,813.45	7,673.71

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: Inventory Turnover Ratio is increased by 30.39% as company was able to achieve high turnover by maintaining inventory at low level. This implies efficient use of inventory in growing business. skill, Net Profit Ratio is decreased by 25.24% as compared to previous year this is because in previous year company has earned major . The profit from non-recurring income in form of capital gain on sale of Investments. Net profit from operational during the year.

CAUTIONARY STATEMENT

Statements in the Management Discussion & Analysis Report describing the Companys expectations, opinion, and predictions may please be considered as forward-looking statements only. Actual results could differ from those expressed or implied. Companys operations should be viewed in light of changes in market conditions.

1. BRIEF OUTLINE ON CSR POLICY OF THE COMPANY

The CSR activities carried out by the Company are in accordance with the CSR Policy, as formulated approved by the Board & the policy outlines the Companys strategy to bring a positive impact on society through programs relating to healthcare, poverty, the environment, and lowering its resource footprint.

2. COMPOSITION OF CSR COMMITTEE

According to section 135(9) of the Companies Act, 2013. "Where theamounttobespentbyaCompanyundersub-section(5) does not exceed fifty lakh rupees,constitutionof the Corporate Social Responsibility requirementundersub-section(1) for

Committee shall not be applicable and the functionsof such Committee provided under this section shall, in such cases, be discharged by the Board of Directors of such Company." According to this section the Companys CSR expenditure does not exceed Rs. Fifty lakhs and therefore the company with the consent of its Board of Directors dissolved the CSR Committee in the board meeting held on 28-02-2022

3. Provide the web link where the Composition of the CSR committee, CSR Policy, and CSR projects approved by the board are disclosed on the website of the Company: https://skygold.co.in/wp-content/uploads/2023/06/06.-Corporate-Social-Policy.pdf

4. Provide the details of the Impact assessment of CSR projects carried out in pursuance of sub-rule (3) of rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, if applicable (attach the report): Not Applicable

5. (a) Average net profits of the Company for the last three financial years: Rs. 7,62,23,065/-(b) Two percent of the average net profit of the company as per section 135(5): Rs. 15,24,461/-

(c) Surplus arising out of the CSR projects or programs or activities of the previous financial Not Applicable years: (d) Amount required to be set off for the financial year, if any: Rs. 657/-(e) Total CSR obligation for the financial year: Rs. 15,23,804/-

6. (i) Amount spent on CSR Projects (including actual spent (Rs. 15,50,000/-) and amount transferred to unspent account for ongoing projects (both Ongoing Project and other than Ongoing Project): Rs. 15,50,000/-(ii) Amount spent in Administrative Overheads: Nil Management of (iii) Amount spent on Impact Assessment, if applicable: Nil is neither an assurance as to the (iv) Total amount spent for the Financial Year (i+ii+iii): Rs. 15,50,000/-

7. (a) CSR amount spent or unspent for the financial year 2022-23:

Spent for the Financial Year. (in Rs.)	Total Amount transferred to Unspent CSR Account as per section 135(6)		The amount transferred to any fund specified under Schedule VII as per the second proviso to section 135(5).
	Amount.	Date of Transfer	Name of the Fund	Amount.	Date of transfer.
15,50,000	NA	NA	NA	NA	NA

8. (b) Excess amount for set off, if any:

Sl. No. Particular	Amount (in Rs.)
f the company (i) Twopercentoftheaveragenetprofit as per section 135(5)	15,24,461
(ii) Total amount spent for the Financial Year	15,50,000
(iii) Excess amount spent for the financial year [(ii)-(i)]	25,539
(iv) Surplus arising out of the CSR projects or programmes or activitiesof the previousfinancial	657
if any
(v) The amount available for set off in succeeding financial years [(iii)-(iv)]	24,882

9. Details of Unspent CSR amount for the preceding three financial years: Not Applicable

10. Whether any capital assets have been created or acquired through Corporate Social Responsibility amount spent in the Financial Year: Not Applicable 11. Specify the reason(s), if the company has failed to spend two percent of the average net profit as per section 135(5): Not Applicable