Devine Impex Ltd Management Discussions

I) INDUSTRY STRUCTURE & DEVELOPMENT:

Indias gems and jewellery sector is one of the largest in the world contributing 29 per cent to the global jewellery consumption. The market size of the sector is about US$ 75 billion as of 2018 and is estimated to reach US$ 100 billion by 2025. The sector is home to more than 300,000 gems and jewellery players, contributes about 7 per cent to India?s Gross Domestic Product (GDP) and employs ova- 4.64 million employees.

(II) OPPORTUNITIES, THREATS AND RISKS:

In the coming years, growth in Gems and Jewell ay sector would be largely contributed by the development of large retailas/brands. Established brands are guiding the organised market and are opening opportunities to grow. Increasing penetration of organised playas provides variety in tarns of products and designs. Online sales are expected to account for 1-2 pa 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 stabilisation of gold prices at lower levels is expected to drive volume growth for jewellers over short to medium term. The demand for j ewellery is expected to be significantly supported by the recent positive developments in the industry.

But of lately thae are few policies which have been introduced by the government because of which this sector was felt some unrest. Besides this, the rise in inflation has shrunk the purchasing powa of the consumer. The political uncertainty has also shown its advase impact on the industry.

Ill) OUTLOOK:

India is the largest consumer of gold in the world. Rising middle class population and increasing income levels are the key drivers for the demand of gold and otha jewellery in India. Gold demand in India rose 11 pa cent year-on-year to 760.40 tonnes during January-Decemba 2018. Also, the Govamrrent of India has permitted 100 pa cent Foreign Direct Investment (FDI) in the sector under the automatic route. The Bureau of Indian Standards (BIS) has revised the standard on gold hallmarking in India from January 2018, to include a BIS mark, purity in carat and fitness as well as the unit?s identification and the jeweller?s identification mark on gold jewellery. The move is aimed at ensuring a quality check on gold jewellery.

(V) INTERNAL CONTROL SYSTEM:

The company has effective and adequate internal control system. All the assets of the Company are properly safeguarded and used to their^- optimum capacity. The system is reviewed and updated by the management periodically. The finding and suggestions of internal control are reviewed by the Board of Directors & Audit Committee and they make sur e that internal controls are properly complied with.

(VI) HUMAN RESOURCES AND INDUSTRIAL RELATION:

The company is maintaining vay cordially relations with all concerned people. With the change in management, new faces have been inducted in the company. Recruitments have been done as pa the requirement. The relations with banks and otha statutory departments are also very cordial.