Utssav CZ Gold Jewels Ltd Management Discussions

You should read the following discussion of our financial condition and results of operations together with our Restated Financial Information which have been included in this Draft Red Herring Prospectus. The following discussion and analysis of our financial condition and results of operations is based on our Restated Financial Information for the ten months period ended January 31, 2024 and for financial years ended March 31, 2023, 2022 and 2021 including the related notes and reports, included in this Draft Red Herring Prospectus prepared in accordance with requirements of the Companies Act and restated in accordance with the SEBI (ICDR) Regulations 2018, which differ in certain material respects from IFRS, U.S. GAAP and GAAP in other countries. Our Financial Statements, as restated have been derived from our audited financial statements for the respective period and years. Accordingly, the degree to which our Restated Financial Information will provide meaningful information to a prospective investor in countries other than India is entirely dependent on the readers level of familiarity with Indian GAAP, Companies Act, SEBI Regulations and other relevant accounting practices in India. This discussion contains forward-looking statements and reflects our current views with respect to future events and financial performance. Actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors such as those described under "Risk Factors" and "Forward Looking Statements" on pages 28 and 17 respectively, and elsewhere in this Draft Red Herring Prospectus. Our Financial Year ends on March 31 of each year. Accordingly, all references to a particular Financial Year are to the 12 months ended March 31 of that year.

Business Overview

We are in the business of designing, manufacturing, wholesaling and exporting of 18Karat 20Karat and 22Karat CZ Gold jewellery. Our Company specializes in light weight production of cubic zirconia (CZ) gold and rose gold casting jewellery, We manufacture and offer myriad collection of products such as Rings, Earrings, Pendants, Bracelets, Necklaces, Watches and Broches etc. Our Company was established in 2007 in the name of Utsav CZ Gold Jewels Private Limited. In 2008, we transitioned to a public limited company under the name Utsav CZ Gold Jewels Limited.

Our forte lies in crafting exquisite CZ casting gold jewellery and designer pieces, tailored to the preferences of todays youth. Whether for daily wear or special occasions, our meticulously designed rings, earrings, pendants, bracelets, and necklaces resonate with our target audience. We take immense pride in our ability to customize designs to accommodate diverse regional preferences, ensuring that we not only meet but exceed the unique needs of our clientele in every market we serve. Our companys key strengths lie in our focus on design and innovation, our deep understanding of consumer preferences and market dynamics, and the superior quality of our products. We cater to a wide range of customers by offering high-end, medium-range, and affordable CZ gold jewellery, all hallmarked by the Bureau of Indian Standards (BIS).

Key Performance Indicators

In evaluating our business, we consider and use certain key performance indicators that are presented below as supplemental measures to review and assess our operating performance. The presentation of these key performance indicators is not intended to be considered in isolation or as a substitute for the Restated Financial Information included in this Draft Red Herring Prospectus. We present these key performance indicators because they are used by our management to evaluate our operating performance. Further, these key performance indicators may differ from the similar information used by other companies, including peer companies, and hence their comparability may be limited. Therefore, these matrices should not be considered in isolation or construed as an alternative to AS measures of performance or as an indicator of our operating performance, liquidity, profitability or results of operation. A list of our KPIs for the ten months ended January 31, 2024 and Financial Years ended March 31, 2023, 2022 and 2021 is set out below

( in lakhs, unless stated otherwise)

Particular	For Ten months ended January 31, 2024*	Financial Year ended March 31, 2023	Financial Year ended March 31, 2022	Financial Year ended March 31, 2021
Revenue from Operations(1)	27,595.41	23,818.61	12,329.86	12,022.72
EBITDA(2)	1,907.69	1,388.52	662.51	361.95
EBITDA Margin(3) (in %)	6.91%	5.83%	5.37%	3.01%
Net Profit after tax(4)	1,073.76	714.96	333.95	161.87
Net Profit Margin(5) (in %)	3.89%	3.00%	2.71%	1.35%
Return on Net Worth(6) (in %)	38.71%	38.17%	24.88%	14.79%
Return on Capital Employed(7) (in %)	20.43%	21.72%	13.34%	9.93%
Debt-Equity Ratio(8)	2.33	2.22	2.39	2.57
Days Working Capital(9)	109	94	120	100
Interest Coverage Ratio(10)	4.40	3.58	3.12	3.00

*Not annualized

As certified by Jain V. & Co., Chartered Accountants pursuant to their certificate dated May 17, 2024.

Notes:

(1) Revenue from operations represents the revenue from sale of products and service of our Company as recognized in the Restated financial information. (2) EBITDA means Earnings before interest, taxes, depreciation and amortization expense, which has been arrived at by obtaining the profit before tax/ (loss) for the year / period and adding back finance costs, depreciation, and amortization expense. (3) EBITDA margin is calculated as EBITDA as a percentage of revenue from operations. (4) Net Profit after tax represents the restated profits of our Company after deducting all expenses. (5) Net Profit margin is calculated as restated net profit after tax for the year/period divided by revenue from operations. (6) Return on net worth is calculated as Net profit after tax, as restated, for the year/ period divided by Average Net worth. Average net worth means the average of the aggregate value of the paid-up share capital and reserves and surplus of the current and previous financial year/period. (7) Return on capital employed calculated as Earnings before interest and taxes divided by average capital employed (average capital employed calculated as average of the aggregate value of total equity, total debt and deferred tax liabilities less deferred tax assets of the current and previous financial year/period). (8) Debt- equity ratio is calculated by dividing total debt by total equity. Total debt represents long term and short term borrowings. Total equity is the sum of equity share capital and reserves and surplus. (9) Days Working Capital is arrived at by dividing working capital (current assets excluding cash and cash equivalents less current liabilities excluding short term borrowings) by revenue from operations multiplied by the number of days in the year/period (365/306). (10) Interest coverage ratio calculated as Earnings before interest and taxes divided by finance costs.

SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST FINANCIAL PERIOD

In the opinion of the Board of Directors of our Company, since the date of the last financial statements disclosed in this Draft Red Herring Prospectus, there have not arisen any circumstance that materially or adversely affect or are likely to affect the business activities or profitability of our Company or the value of its assets or its ability to pay its material liabilities within the next twelve months, except as disclosed below:

On March 9, 2024, the authorized share capital of the company was increased from 500.00 lakhs divided into 50,00,000 equity shares of 10/- each to 2,490.00 lakhs divided into 2,49,00,000 equity shares of 10/- each.

Pursuant to the approval of shareholders granted in the extra-ordinary General meeting held on March 9, 2024, the company issued and allotted fully paid up bonus shares on March 11, 2024, at par in proportion of three new equity shares of 10 each for every one existing fully paid up equity share of 10 each held.

The Board approved and passed resolution on February 16, 2024 to raise funds by making Initial Public Offering.

The shareholders approved and passed special resolution on March 9, 2024 to authorize the Board of Directors to raise funds by making Initial Public Offering.

Pursuant to the approval of shareholders granted in the extra-ordinary General meeting held on April 2, 2024, the company issued and allotted 7,00,000 equity shares fully paid up on April 18, 2024 at an issue price of 82.50 per equity share.

FACTORS AFFECTING OUR RESULTS OF OPERATIONS

Our business is subjected to various risks and uncertainties, including those discussed in the section titled "Risk Factors" on page 28. Our results of operations and financial conditions are affected by numerous factors including the following:

Significant portion of our revenues is concentrated from a limited number of clients. The loss of any of our significant clients may have an adverse effect on our business, financial condition and result of operations.

The unexpected loss, shutdown or slowdown of operations at our manufacturing plant could have a material adverse effect on our results of operations and financial condition

Our Company requires significant amount of working capital for continued growth. Our inability to meet our working capital requirements, on commercially acceptable terms, may have an adverse impact on our business, financial condition and results of operations.

Our business, operating performance, and financial situation could negatively impact our capacity to adapt quickly to shifts in consumer expectations and market trends, as well as by our failure to diversify our product offering.

We may face significant competition in our business. An inability to compete effectively may lead to loss of business or reduced operating margins.

We have entered into related party transactions in the past and may continue to do so in the future.

We have certain outstanding litigation against us, an adverse outcome of which may adversely affect our business, reputation and results of operations.

BASIS OF PREPARATION, MEASUREMENT AND SIGNIFICANT ACCOUNTING POLICIES

(i) BASIS OF ACCOUNTING AND PREPARATION OF FINANCIAL STATEMENTS

These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis pursuant to section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. These financial statements are presented in Indian Rupees, which is the companys functional currency.

(ii) APPLICABILITY OF ACCOUNTING STANDARDS

The company is a Medium Sized Company as per "SMC" as defined in the General Instructions of the Companies (Accounting

Standards) Rules, 2006 notified by the Central Government under the Companies Act, 2013. Accordingly, the Company has complied with the Accounting Standards as applicable to a Medium Sized company. Further, the company by virtue of being a SMC, requires to comply with the recognition and measurement principles prescribed by all accounting standards, but is given a relaxation in respect of certain disclosure related standards and certain disclosure requirements prescribed by other accounting standards.

(iii) USE OF ESTIMATES

The preparation of financial statements requires management to make judgments, estimates and assumptions, that affect the application of accounting policies and the reported amounts of assets, liabilities, income, expenses and disclosures of contingent liabilities at the date of these financial statements. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed at each balance sheet date. Revisions to accounting estimates are recognised in the period in which the estimate is revised and future periods affected.

(iv) PROPERTY, PLANT AND EQUIPMENT & INTANGIBLE ASSETS

(a) Property, Plant & Equipment

Property, Plant and Equipment are stated at cost net of recoverable taxes based on intended outward supplies and furtherance of business, trade discounts and rebates less accumulated depreciation and impairment loss, if any. The cost comprises its purchase price, borrowing cost and any other cost directly attributable in bringing the asset to its working condition for its intended use, net charges on foreign exchange, contracts and adjustments arising from exchange rate variations attributable the assets.

(b) Intangible assets

Identifiable intangible assets are recognized when it is probable that future economic benefits attributed to the asset will flow to the Company and the cost of the asset can be reliably measured.

(v) DEPRECIATION/AMORTISATION

Depreciation/Amortisation on Property, Plant and Equipment is provided based on Straight Line Method considering the useful life of asset and residual value as prescribed in Schedule II to the Companies Act, 2013. In respect of additions or extensions forming an integral part of existing asset depreciation is provided as aforesaid over the residual life of the respective Property, Plant and Equipment. Depreciation on assets acquired/sold during the year is recognized on a pro-rata basis to the statement of profit and loss till the date of acquisition / sale. Intangible assets are amortised over their respective estimated useful lives on a straight line basis, from the date that they are available for use. Intangible assets are stated at cost less accumulated amortisation and impairment.

(vi) INVESTMENT

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Non-current investments are carried at cost, less provision for diminution in value other than temporary. On disposal of investments, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

(vii) INVENTORIES

Inventories consist of raw materials, finished goods and consumables.

Inventories are valued as under:

(a) Raw Material: Gold and Polished diamonds (including colour stone) are valued at lower of cost or net realizable value. (b) Finished goods: Jewellery is valued at lower of cost or Net realisable value. The cost of material is determined on FIFO basis. Cost includes cost of conversion and other costs incurred in bringing the inventory to their present location and condition less input credit availed. (c) Designs & Moulds :- Designs and Moulds is valued at lower of cost or Net Realisable value. Cost Includes cost associated with creating and refining designs, Purchase cost, cost of conversion and other costs.

(viii) REVENUE RECOGNITION

The Company recognises revenues on the sale of products, net of discounts and sales incentive. when the products are delivered to the customer or when delivered to the carrier for export sales, which is when risks and rewards of ownership pass to the dealer / customer. Sale of products net of other indirect taxes. Revenues are recognised when collectability of the resulting receivables is reasonably assured. Dividend from investments is recognized when the right to receive the payment is established and when no Significant uncertainty as to measurability or collectability exists. Interest income is recognized on the time basis determined by the amount outstanding and the rate applicable and where no Significant uncertainty as to measurability or collectability exists.

(ix) EMPLOYEE BENEFITS

(a) Short-term employee benefits:- All employee benefits payable wholly within twelve months of rendering the services are classified as short-term employee benefits. These benefits include salaries and wages, bonus, ex-gratia and compensated absences such as paid annual leave.

(b) Post-employment benefits:- A defined contribution plan is a post-employment benefit plan under which the company pays specified contributions to a separate entity. The Company makes specified monthly contributions towards Provident Fund. Provision for gratuity is provided based on Actuarial Valuation.

(x) BORROWING COST

Borrowing costs that are attributable to the acquisition and construction of the asset which takes substantial period of time to get ready for its intended use are capitalized as part of cost of such asset. All other borrowing costs are charged to Statement of Profit and Loss in the period in which they are incurred or related.

(xi) ACCOUNTING FOR TAXES

Tax expense comprises current and deferred taxes.

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961. Current tax is net of credit for entitlement for Minimum Alternative Tax (MAT).

Deferred tax is recognised, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised if there is virtual certainty that there will be sufficient future taxable income available to realise such losses. Other deferred tax assets are recognised if there is reasonable certainty that there will be sufficient future taxable income to realize such assets. Deferred tax assets and liabilities are measured based on the tax rates that are expected to apply in the period when asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

(xii) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provision is recognised when the company has present obligation as a result of past event(s) and it is probable that an outflow of resources will be required to settle the obligation, in respect of the estimate made. Contingent liabilities are disclosed unless the possibility of outflow of resources is remote. Contingent asset is neither recognised nor disclosed in the financial statement.

(xiii) IMPAIRMENT OF ASSETS

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount. After impairment, depreciation is provided on the revised carrying amount of the asset over its useful life.

PRINCIPAL COMPONENTS OF STATEMENT OF PROFIT AND LOSS

Set forth below are the principal components of statement of profit and loss from our continuing operations:

Income

Our total income comprises of (i) revenue from operations and (ii) other income.

Revenue from Operations

Revenue from operations comprises of: (i) sale of products; (ii) sale of service.

Other Income

Other income includes (i) Interest Income; (ii) Dividend; (iii) Net gain on foreign currency transaction; (iv) Rent; (v) Profit on sale of Property, Plant and Equipment; (vi) Gain on sale of Property Rights; (vii) Miscellaneous income.

Expenses

Our expenses comprises of: (i) manufacturing cost; (ii) changes in inventories; (iii) employee benefits expenses; (iv) finance costs; (v) depreciation and amortization expense; and (vi) other expenses.

Manufacturing Cost

Manufacturing Cost denote the sum of opening stock, purchases of raw materials and direct expenses less closing stock of raw materials. Changes in Inventories

Changes in inventories denote the difference between opening and closing balance of finished goods.

Employee Benefits Expense

Employee benefits expenses include (i) Directors Remuneration, (ii) Salaries, (iii) Contributions to Provident Fund and Other Fund, (iv) Staff Welfare Expenses.

Finance Costs

Finance cost includes (i) Interest Expense of Financial Institution; (ii) Interest Expense of Others (iii) bank charges and (iv) loan processing charges.

Depreciation and Amortisation expenses

Depreciation and amortisation expenses primarily include depreciation expenses on our plant and machinery, computers, 3D printer and vehicles.

Other Expenses

Other expenses include (i) Insurance Premium; (ii) Rent, Rates & Taxes; (iii) Auditors remuneration; (iv) Selling and Distribution Expenses; (v) Miscellaneous Expenses; (vi) Legal & Professional Fees; (vii) Office & General Expenses; (viii) Printing & stationary Expenses; (ix) Power, Fuel and Water charges; (x) Repair & Maintenance (xi) Security Charges; (xii) Vehicle Expenses.

Our Results of Operations

The following table sets forth selective financial data from our restated statement of profit & loss for ten months ended January 31, 2024 and for the financial years ended March 31, 2023, 2022 and 2021, the components of which are also expressed as a percentage of revenue from operations for such periods:

( in Lakhs unless stated otherwise)

	Restated months 2024*	Results for the ten	Restated Results for the		Restated Results for the		Restated Results for the
		ended January 31,	Year ended 2023	March 31,	Year ended 2022	March 31,	Year ended 2021	March 31,
Particulars	Amount	% of revenue from operations	Amount	% of revenue from operations	Amount	% of revenue from operations	Amount	% of revenue from operations
Income:
Revenue from operations	27,595.41	100.00%	23,818.61	100.00%	12,329.86	100.00%	12,022.72	100.00%
Other income	137.79	0.50%	152.91	0.64%	12.66	0.10%	7.94	0.07%
Total Income	27,733.20	100.50%	23,971.52	100.64%	12,342.53	100.10%	12,030.66	100.07%
Expenses:
Manufacturing Cost	24,576.86	89.06%	23,173.53	97.29%	11,992.35	97.26%	11,961.69	99.49%
Changes in inventories	857.16	3.11%	(954.97)	-4.01%	(559.14)	-4.53%	(432.31)	-3.60%
Employee benefits expenses	161.17	0.58%	122.66	0.51%	85.43	0.69%	72.85	0.61%
Finance costs	421.84	1.53%	372.19	1.56%	198.22	1.61%	110.04	0.92%
Depreciation and amortization expense	50.95	0.18%	55.37	0.23%	43.43	0.35%	31.99	0.27%
Other expenses	230.32	0.83%	241.78	1.02%	161.38	1.31%	66.48	0.55%
Total Expenses	26,298.30	95.30%	23,010.56	96.61%	11,921.66	96.69%	11,810.74	98.24%
Profit before exceptional and extraordinary items and tax	1,434.90	5.20%	960.96	4.03%	420.86	3.41%	219.92	1.83%
Exceptional items	-	0.00%	-	0.00%	-	0.00%	-	0.00%
Profit before extraordinary items and tax	1,434.90	5.20%	960.96	4.03%	420.86	3.41%	219.92	1.83%
Extraordinary items	-	0.00%	-	0.00%	-	0.00%	-	0.00%
Profit before tax	1,434.90	5.20%	960.96	4.03%	420.86	3.41%	219.92	1.83%
Tax expense:			-		-
(1) Current tax	351.76	1.27%	255.20	1.07%	107.20	0.87%	54.15	0.45%
(2) Deferred tax	9.37	0.03%	(9.20)	-0.04%	(5.24)	-0.04%	20.69	0.17%
(3) MAT Credit	-	0.00%	-	0.00%	(15.05)	-0.12%	(16.79)	-0.14%
Total Tax Expense	361.14	1.31%	246.00	1.03%	86.91	0.70%	58.05	0.48%
Profit / (Loss) from the period	1,073.76	3.89%	714.96	3.00%	333.95	2.71%	161.87	1.35%

RESULTS OF OPERATIONS INFORMATION FOR THE FINANCIAL YEAR ENDED MARCH 31, 2023 COMPARED WITH FINANCIAL YEAR ENDED MARCH 31, 2022

( in Lakhs unless stated otherwise)

Particulars	Financial Year ended March 31, 2023	Financial Year ended March 31, 2022	Change in Lakhs	Change in %
Income:
Revenue from operations	23,818.61	12,329.86	11,488.75	93.18%
Other income	152.91	12.66	140.24	1107.47%
Total Income	23,971.52	12,342.53	11,628.99	94.22%
Expenses:
Manufacturing Cost	23,173.53	11,992.35	11,181.18	93.24%
Changes in inventories	(954.97)	(559.14)	(395.83)	70.79%
Employee benefits expenses	122.66	85.43	37.23	43.58%
Finance costs	372.19	198.22	173.97	87.77%
Depreciation and amortization expense	55.37	43.43	11.94	27.49%
Other expenses	241.78	161.38	80.40	49.82%
Total Expenses	23,010.56	11,921.66	11,088.89	93.01%
Profit before tax	960.96	420.86	540.10	128.33%
Tax expense:
(1) Current tax	255.20	107.20	148.00	138.06%
(2) Deferred tax	(9.20)	(5.24)	(3.96)	75.55%
(3) MAT Credit	-	(15.05)	15.05	-100.00%
Total Tax Expense	246.00	86.91	159.09	183.05%
Profit / (Loss) from the period	714.96	333.95	381.01	114.09%

Total Income

Our total income has increased by 94.22% to 23,971.52 Lakhs in Financial Year ended March 31, 2023 from 12,342.53 Lakhs in Financial Year ended March 31, 2022 due to overall increase in revenue from operations and other income. Revenue from Operations

Our revenue from operations increased significantly by 93.18% to 23,818.61 Lakhs in Financial Year ended March 31, 2023 from 12,329.86 Lakhs in Financial Year ended March 31, 2022 majorly due to increase in sale of products by 11,506.87 Lakhs. The increase in sale of products is on account of first time export sales in Financial Year ended March 31, 2023 amounting to 493.57 Lakhs and increase in domestic sales by 11,013.31 Lakhs. The increase in domestic sales is primarily attributable to increase in quantity of studded 18K rose gold jewellery sold from 59.06 kg in Financial Year ended March 31, 2022 to 278.47 kg in Financial Year ended March 31, 2023.

Other Income

Our other income was 152.91 Lakhs in Financial Year ended March 31, 2023 as compared to 12.66 lakhs in Financial Year ended March 31, 2022, which has increased by 1107.47% primarily because of income from profit on sale of Property, Plant and Equipment amounting to 130.56 lakhs in Financial Year ended March 31, 2023.

Total Expenses

Our total expenses have increased by 93.01 % from 11,921.66 lakhs in Financial Year ended March 31, 2022 to 23,010.56 lakhs in Financial Year ended March 31, 2023. This increase was due to 11,181.18 lakhs increase in Manufacturing Cost, 395.83 lakhs decrease in Changes in inventories, 37.23 lakhs increase in employee benefit expenses, 173,97 lakhs increase in finance costs, 11.94 lakhs increase in depreciation and amortization expense and 80.40 lakhs increase in other expenses.

Manufacturing Cost

Manufacturing Cost represents sum of consumption of raw material and packing material and direct expenses. Manufacturing Cost has increased by 93.24% from 11,992.35 lakhs in Financial Year ended March 31, 2022 to 23,173.53 lakhs in Financial Year ended March 31, 2023 due to the factors described below.

Consumption of raw material and packing material

Consumption of raw material and packing material increased by 93.70% from 11,725.51 lakhs in Financial Year ended March 31, 2022 to 22,712.35 lakhs in Financial Year ended March 31, 2023. This increase was primarily attributable to an increase in purchase of raw material and packing material in Financial Year ended March 31, 2023 for production of higher quantity of jewellery.

Direct Expenses

Direct expenses increased by 72.83% from 266.84 lakhs in Financial Year ended March 31, 2022 to 461.18 lakhs in Financial Year ended March 31, 2023. This increase was primarily due to increase in direct labour charges incurred for production of higher quantity of jewellery.

Changes in Inventories

Changes in inventories of Finished Goods increased from (559.14) lakhs in Financial Year ended March 31, 2022 to (954.97) lakhs in Financial Year ended March 31, 2023, primarily because of accumulation of inventory of finished goods at the close of Financial Year ended March 31, 2023.

Employee Benefit Expenses

Employee Benefit Expenses increased by 43.58% from 85.43 lakhs in Financial Year ended March 31, 2022 to 122.66 lakhs in

Financial Year ended March 31, 2023. This increase was primarily attributable to increase in salaries by 35.84 lakhs.

Finance Cost

Finance cost has increased by 87.77% from 198.22 lakhs in Financial Year ended March 31, 2022 to 372.19 lakhs in Financial Year ended March 31, 2023, majorly on account of increased availment of gold metal loan and cash credit facility to meet working capital requirement.

Depreciation and Amortization Expenses

Depreciation and amortisation expenses increased by 27.49% from 43.43 lakhs in Financial Year ended March 31, 2022 to 55.37 lakhs in Financial Year ended March 31, 2023.

Other Expenses

Other expenses increased by 49.82% from 161.38 lakhs in Financial Year ended March 31, 2022 to 241.78 lakhs in Financial Year ended March 31, 2023. This was primarily due to increase in rent, rates and taxes by 44.62 lakhs, increase in selling and distribution expenses by 17.77 lakhs and increase in travelling expenses by 12.50 lakhs.

Profit Before Tax

Profit before tax has significantly increased by 128.33% from 420.86 lakhs in Financial Year ended March 31, 2022 to 960.96 lakhs in Financial Year ended March 31, 2023.

Tax Expenses

Due to an increase in our profit before tax, our current tax expense increased by 138.06% from 107.2 lakhs in Financial Year ended March 31, 2022 to 255.20 lakhs in Financial Year ended March 31, 2023 and our deferred tax expense was (9.20) lakhs in Financial Year ended March 31, 2023, as compared to (5.24) lakhs in Financial Year ended March 31, 2022.

Profit After Tax

For the various reasons discussed above, we recorded an increase of 114.09% in profit after tax from 333.95 lakhs in Financial Year ended March 31, 2022 to 714.96 lakhs in Financial Year ended March 31, 2023.

RESULTS OF OPERATIONS INFORMATION FOR THE FINANCIAL YEAR ENDED MARCH 31, 2022 COMPARED WITH FINANCIAL YEAR ENDED MARCH 31, 2021

( in Lakhs unless stated otherwise)

Particulars	Financial Year ended March 31, 2022	Financial Year ended March 31, 2021	Change in Lakhs	Change in %
Income:
Revenue from operations	12,329.86	12,022.72	307.14	2.55%
Other income	12.66	7.94	4.73	59.53%
Total Income	12,342.53	12,030.66	311.87	2.59%
Expenses:
Manufacturing Cost	11,992.35	11,961.69	30.66	0.26%
Changes in inventories	(559.14)	(432.31)	(126.83)	29.34%
Employee benefits expenses	85.43	72.85	12.58	17.27%
Finance costs	198.22	110.04	88.18	80.14%
Depreciation and amortization expense	43.43	31.99	11.44	35.75%
Other expenses	161.38	66.48	94.89	142.73%
Total Expenses	11,921.66	11,810.74	110.92	0.94%
Profit before tax	420.86	219.92	200.95	91.37%
Tax expense:
(1) Current tax	107.20	54.15	53.06	97.99%
(2) Deferred tax	(5.24)	20.69	(25.93)	-125.33%
(3) MAT Credit	(15.05)	(16.79)	1.74	-10.36%
Total Tax Expense	86.91	58.05	28.86	49.73%
Profit / (Loss) from the period	333.95	161.87	172.08	106.31%

Total Income

Our total income has increased by 2.59% from 12,030.66 Lakhs in Financial Year ended March 31, 2021 to 12,342.53 Lakhs in

Financial Year ended March 31, 2022 primarily due to an increase in revenue from operations by 307.14 Lakhs.

Revenue from Operations

Our revenue from operations increased by 2.55% from 12,022.72 lakhs in Financial Year ended March 31, 2021 to 12,329.86 Lakhs in Financial Year ended March 31, 2022 primarily due to increase in selling prices of jewellery from Financial Year ended March 31, 2021 to Financial Year ended March 31, 2022.

Other Income

Our other income increased by 59.53% from 7.94 lakhs in Financial Year ended March 31, 2021 to 12.66 lakhs in Financial Year ended March 31, 2022.

Total Expenses

Our total expenses increased by 0.94% from 11,810.74 lakhs in Financial Year ended March 31, 2021 to 11,921.66 lakhs in Financial Year ended March 31, 2022. This increase was due to 30.66 lakhs increase in Manufacturing Cost, 126.83 lakhs decrease in Changes in inventories, 12.58 lakhs increase in employee benefit expenses, 88.18 lakhs increase in finance costs, 11.44 lakhs increase in depreciation and amortization expense and 94.89 lakhs increase in other expenses.

Manufacturing Cost

Manufacturing Cost represents sum of consumption of raw material and packing material and direct expenses. Manufacturing Cost has increased by 0.26% from 11,961.69 lakhs in Financial Year ended March 31, 2021 to 11,992.35 lakhs in Financial Year ended March 31, 2022 due to the factors described below.

Consumption of raw material and packing material

Consumption of raw material and packing material decreased by 0.54% from 11,789.10 lakhs in Financial Year ended March 31, 2021 to 11,725.51 lakhs in Financial Year ended March 31, 2022 mainly due to accumulation of closing inventory of raw material in the Financial Year ended March 31, 2022.

Direct Expenses

Direct expenses increased by 54.61% from 172.59 lakhs in Financial Year ended March 31, 2021 to 266.84 lakhs in Financial Year ended March 31, 2022, mainly due to increase in direct labour charges.

Changes in Inventories

Changes in inventories of finished goods increased by 29.34% from (432.13) Lakhs in Financial Year ended March 31, 2021 to (559.14) Lakhs in Financial Year ended March 31, 2022, due to accumulation of inventory at the close of Financial Year ended March 31, 2022.

Employee Benefit Expenses

Employee benefit expenses increased by 17.27% from 72.85 Lakhs in Financial Year ended March 31, 2021 to 85.43 Lakhs in Financial Year ended March 31, 2022.

Finance Cost

Finance cost increased by 80.14% from 110.04 Lakhs in Financial Year ended March 31, 2021 to 198.22 Lakhs in Financial Year ended March 31, 2022, primarily due to increased interest on short term borrowings.

Depreciation and Amortization Expenses

Depreciation and amortization expenses increased by 35.75% from 31.99 Lakhs in Financial Year ended March 31, 2021 to 43.44 Lakhs in Financial Year ended March 31, 2022. Other Expenses

Other expenses increased by 142.73% from 66.48 Lakhs in Financial Year ended March 31, 2021 to 161.38 Lakhs in Financial Year ended March 31, 2022. This was primarily on account of increase in rent, rates and taxes by 52.49 lakhs, increase in selling and distribution expenses by 17.64 lakhs and increase in repair and maintenance by 14.90 lakhs.

Profit Before Tax

Profit before tax has significantly increased by 91.37% from 219.92 lakhs in Financial Year ended March 31, 2021 to 420.86 lakhs in Financial Year ended March 31, 2022.

Tax Expenses

Due to an increase in our profit before tax, our current tax expense increased by 97.99% from 54.15 Lakhs in Financial Year ended

March 31, 2021 to 107.20 Lakhs in Financial Year ended March 31, 2022 and our deferred tax expense was (5.24) Lakhs in Financial Year ended March 31, 2022, as compared to 20.69 Lakhs in Financial Year ended March 31, 2021.

Profit After Tax

We recorded increase of 106.31% in profit after tax from 161.87 Lakhs in Financial Year ended March 31, 2021 to 333.95 Lakhs in Financial Year ended March 31, 2022 for the reasons described above.

Cash Flow

The table below summaries our cash flows from our Restated Financial Information for ten months ended January 31, 2024 and for the financial years ended March 31, 2023, 2022 and 2021: ( In lakhs)

Particulars	For ten months ended January 31, 2024	For year ended March 31,
		2023	2022	2021
Net cash flow generated from/ (utilized in) operating activities (A)	(2,271.35)	(1,153.37)	(207.39)	(1,444.66)
Net cash flow generated from/ (utilized in) investing activities (B)	(112.44)	128.52	(190.56)	3.15
Net cash flow generated from/ (utilized in) financing activities (C)	2,359.92	1,043.02	404.05	1,421.64
Net (decrease)/ increase in cash & cash equivalents
(A+B+C)	(23.87)	18.18	6.09	(19.87)
Cash and cash equivalents at the beginning of the period/ year	27.17	8.99	2.89	22.76
Cash and cash equivalents at the end of the period/ year	3.30	27.17	8.99	2.89

Cash flow from Operating Activities For ten months ended January 31, 2024

Net cash flow utilized in our operating activities was 2,271.35 lakhs for the ten months ended January 31, 2024. Our operating profit before working capital changes was 1,746.41 lakhs in the ten months ended January 31, 2024, which was the result of the profit before tax for the period of 1,434.90 lakhs adjusted primarily for depreciation and amortization of 50.95 lakhs, interest and finance charges of 377.26 lakhs, profit on sale of rights of 79.53 lakhs and interest income of 41.72 lakhs. Our movements in working capital primarily consisted of a decrease in trade payables of 8.59 lakhs, increase in trade receivables of 2481.76 lakhs, an increase in inventories of 645.33 lakhs, increase in other current liabilities 246.52 lakhs, an increase in other current assets of 698.62 lakhs and increase in loans and advances of 141.26 lakhs.

For the Financial year ended March 31, 2023

Net cash flow utilized in our operating activities was 1,153.37 lakhs for the financial year ended March 31, 2023. Our operating profit before working capital changes was 1,192.16 lakhs in the financial year ended March 31, 2023, which was the result of the profit before tax for the period of 960.96 lakhs adjusted primarily for depreciation and amortization of 55.37 lakhs, dividend income of 1.10 lakhs, profit on sale of property, plant and equipment of 130.56 lakhs, interest and finance charges of 321.00 lakhs and interest income of

14.09 lakhs. Our movements in working capital primarily consisted of an increase in trade payables of 0.35 lakhs, an increase in trade receivables of 885.54 lakhs, an increase in inventories of 476.13 lakhs, increase in other current liabilities 340.32 lakhs, an increase in other current assets of 1325.80 lakhs and a decrease in loans and advances of 81.22 lakhs.

For the Financial year ended March 31, 2022

Net cash flow utilised in our operating activities was 207.39 lakhs for the financial year ended March 31, 2022. Our operating profit before working capital changes was 639.91 lakhs in the financial year ended March 31, 2022, which was the result of the profit before tax for the period/year of 420.86 lakhs adjusted primarily for depreciation and amortization of 43.43 lakhs, interest and finance charges of 181.85 lakhs, and dividend income 2.15. Our movements in working capital primarily consisted of a decrease in trade payables of

8.25 lakhs, an increase in trade receivables of 121.76 lakhs, an increase in inventories of 912.53 lakhs, increase in other current liabilities 230.98 lakhs, an increase in other current assets of 33.71 lakhs and a decrease in loans and advances of 44.82 lakhs. For the Financial year ended March 31, 2021

Net cash flow utilised in our operating activities was 1,444.66 lakhs for the financial year ended March 31, 2021. Our operating profit before working capital changes was 368.91 lakhs in the financial year ended March 31, 2021, which was the result of the profit before tax for the period/year of 219.92 lakhs adjusted primarily for depreciation and amortization of 31.99 lakhs, interest and finance charges of 108.02 lakhs and interest income of 2.24 lakhs. Our movements in working capital primarily consisted of a decrease in trade payables of 65.04 lakhs, an increase in trade receivables of 1022.01 lakhs, an increase in inventories of 550.48 lakhs, a decrease in other current liabilities 68.26 lakhs and an increase in loans and advances of 72.48 lakhs.

Cash flow from Investing Activities For ten months ended January 31, 2024

Net cash flow utilized in investing activities was 112.44 lakhs for the ten months ended January 31, 2024. This reflected the capital expenditure made towards fixed assets for 285.76 lakhs offset by receipt of interest income of 41.72 lakhs, dividend income of 1.05 and sale of right 137.50 lakhs.

For the Financial year ended March 31, 2023

Net cash flow generated from our investing activities was 128.52 lakhs for the financial year ended March 31, 2023. This reflected the capital expenditure made towards fixed assets for 75.02 lakhs. These payments were offset by receipt of interest income of 14.09 lakhs, dividend income of 1.10 and sale of fixed assets of 191.00.

For the Financial year ended March 31, 2022

Net cash flow utilized in investing activities was 190.56 lakhs for the financial year ended March 31, 2022. This reflected the capital expenditure made towards fixed assets for 179.95 lakhs. These payments were partially offset by receipt of dividend income of 2.15. For the Financial year ended March 31, 2021

Net cash flow generated from our investing activities was 3.15 lakhs for the financial year ended March 31, 2021. This reflected the capital expenditure made towards fixed assets for 5.43 lakhs, offset by receipt of interest income of 2.24 lakhs.

Cash flow from Financing Activities For ten months ended January 31, 2024

Net cash flow generated from financing activities was 2,359.92 lakhs for the ten months ended January 31, 2024 consisting of proceeds from short term borrowings of 3,099.01 lakhs, repayment of long term borrowings of 361.83 lakhs, and interest paid of 377.25 lakhs. For the Financial year ended March 31, 2023

Net cash flow generated from financing activities was 1,043.02 lakhs for the financial year ended March 31, 2023 consisting of proceeds from short term borrowings of 1,593.14 lakhs, repayment of long term borrowings of 229.12 lakhs, and interest paid of 321.00 lakhs.

For the Financial year ended March 31, 2022

Net cash flow generated from financing activities was 404.05 lakhs for the financial year ended March 31, 2022 consisting of proceeds from short term borrowings of 924.14 lakhs, repayment of long term borrowings of 338.24 lakhs, and interest paid of 181.85 lakhs.

For the Financial year ended March 31, 2021

Net cash flow generated from financing activities was 1,421.64 lakhs for the financial year ended March 31, 2021 consisting of proceeds from short term borrowings of 1562.40 lakhs, repayment of long term borrowings of 32.74 lakhs, and interest paid of 108.02 lakhs. Financial Indebtedness

As on January 31, 2024 the total outstanding borrowings of our Company was 7,703.16 lakhs. The following table sets out the details of the total borrowings outstanding as on January 31, 2024.

( in Lakhs)

Particulars	As at January 31, 2024
Secured
(a) Term Loans	400.00
(b)Working Capital Facilities	6,946.35
Unsecured
(a) Loans from Related Parties/Others	356.81
Total Borrowings	7,703.16

In the event, any of our lenders declare an event of default, such current and any future defaults could lead to acceleration of our repayment obligations, termination of one or more of our financing agreements or force us to sell our assets, any of which could adversely affect our business, results of operations and financial condition.

Contingent Liabilities

The following table sets forth our contingent liabilities as at January 31, 2024 and as at March 31, 2023, March 31, 2022 and March 31, 2021 as per the Restated Financial Information:

( In Lakhs)

Particulars	As at January 31, 2024	As at March 31, 2023	As at March 31, 2022	As At March 31, 2021
(i) Contingent liabilities
(a) Claims against the company not acknowledged as debt;
VAT & CST in dispute	6.33	6.33	6.33	6.33

It is not practical for our Company to estimate the timings of cash outflow, if any in respect of above pending resolutions of the respective proceedings.

Off-Balance Sheet Items

We do not have any other off-balance sheet arrangements, derivative instruments or other relationships with any entity that have been established for the purposes of facilitating off-balance sheet arrangements.

Effect of Inflation

We are affected by inflation as it has an impact on the material cost, wages, etc. in line with changing inflation rates; we rework our margins so as to absorb the inflationary impact.

Reservations, Qualifications and Adverse Remarks

Except as disclosed in chapter titled "Restated Financial Information" on page 163, there have been no reservations, qualifications and adverse remarks.

Material Frauds

There are no material frauds, as reported by our statutory auditor, committed against our Company, in the last three Financial Years.

Unusual or Infrequent Events or Transactions

As on date, there have been no unusual or infrequent events or transactions including unusual trends on account of business activity, unusual items of income, change of accounting policies and discretionary reduction of expenses.

Significant Economic Changes that Materially Affected or are Likely to Affect Income from Continuing Operations

Indian rules and regulations as well as the overall growth of the Indian economy have a significant bearing on our operations. Major changes in these factors can significantly impact income from continuing operations. There are no significant economic changes that materially affected our Company‘s operations or are likely to affect income from continuing operations except as described in chapter titled "Risk Factors" on page 28.

Known Trends or Uncertainties that have had or are expected to have a Material Adverse Impact on Sales, Revenue or Income from Continuing Operations

Other than as described in the section titled "Risk Factors" on page 28 and in this chapter, to our knowledge there are no known trends or uncertainties that are expected to have a material adverse impact on revenues or income of our Company from continuing operations. Future Changes in Relationship between Costs and Revenues, in Case of Events Such as Future Increase in Labour or Material Costs or Prices that will Cause a Material Change are known

Other than as described in chapter titled "Risk Factors" on page 28 and in this section, to our knowledge there are no known factors that might affect the future relationship between cost and revenue.

Extent to which Material Increases in Net Sales or Revenue are due to Increased Sales Volume, Introduction of New Products or Services or Increased Sales Prices

Our business has been affected and we expect that it will continue to be affected by the trends identified above and the uncertainties described in the section "Risk Factors" on page 28. Changes in revenue in the last three Financial Years are as described in "Results of Operations Information for the Financial Year ended March 31, 2023 compared with Financial Year ended March 31, 2022" and "Results of Operations Information for the Financial Year ended March 31, 2022 compared with Financial Year ended March 31, 2021" mentioned above.

Total Turnover of Each Major Industry Segment in Which the Issuer Operates

We operate in only one major segment.

Status of any Publicly Announced New Products or Business Segments

As on the date of the Draft Red Herring Prospectus, there are no new products or business segments that have or are expected to have a material impact on our business prospects, results of operations or financial condition.

Significant Dependence on a Single or Few Customers

The percentage of revenue from operations derived from our top customers is given below:

(in Lakhs)

Sr. No.	Particulars	As at 2024	January 31,	FY 2022-23		FY 2021-22		FY 2020-21
		Revenue	%	Revenue	%	Revenue	%	Revenue	%
1	Revenue from Top 5 customers	11,902.76	43.13	8,588.63	36.06	4,151.08	33.67	4,858.27	40.41
2	Revenue from Top 10 customers	15,338.37	55.58	12,690.23	53.28	6,600.37	53.53	7,424.01	61.75

As certified by Jain V. & Co., Chartered Accountants vide certificate dated May 17, 2024.