xiii) Provisions, Contingent Liabilities and Contingent Assets
The company creates a provision when there is present obligation as a result of past event that probably requires an outflow of resources and a reliable
estimate can be made of the amount of the obligation. Provisions and liabilities are recognized in the period when it becomes probable that there will be a
future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and
quantification of the liability require the application of judgement to existing facts and circumstances, which can be subject to change. The carrying amounts of
provisions and liabilities are reviewed regularly and revised to take account of changing facts and circumstances.
A disclosure for a contingent liability is made when there is a possible obligation arising from past events the existence of which will be concompanyed only by
the occurrence or non-occurrence of one or more uncertain future events or a present obligation that arises from past events where it is either not probable
that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made.
Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is
Cmoandtein. gent assets are neither recognised nor disclosed in the Financial statements.
xiv) Employee Benefits:
(a) Short-Term Employee Benefits:
The distinction between short-term and long-term employee benefits is based on expected timing of settlement rather than the employee's entitlement
benefits. All employee benefits payable within twelve months of rendering the service are classified as short-term benefits. Such benefits include salaries,
wages, bonus, short-term compensated absences, awards, ex-gratia, performance pay etc. and are recognized in the period in which the employee renders the
related service. A liability is recognized for the amount expected to be paid as current employee benefit obligation in the balance sheet.
(b) Long-Term Employee Benefits:
The company's net obligation in respect of other long term employee benefits is the amount of future benefit that employees have earned in return for their
service in the current and previous periods. That benefit is discounted to determine its present value.
(c) Post-Employment Benefits:
The company operates the following post-employment benefits:
1. Defined benefit plans - Gratuity
The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation
involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate; future
the interest rates of government bonds where remaining maturity of such bond correspond to expected term of defined benefit obligation.
The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval in response to demographic changes.
Future salary increases and gratuity increases are based on expected future inflation rates.
The company operates one defined benefit plans for its employees, viz. gratuity. The present value of the obligation under such defined benefit plans is
determined based on the actuarial valuation using the Projected Unit Credit Method as at the date of the Balance sheet.
Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit
liability, are recognised immediately in the Balance Sheet with a corresponding debit or credit to retained earnings through other comprehensive income in the
period in which they occur.
2. Defined contribution plans - Provident fund
Retirement benefit in the form of provident fund is a defined contribution scheme. The company recognizes contribution payable to the provident fund scheme
as an expense, when an employee renders the related service. If the contribution payable to the scheme for service received before the period end date exceeds
the contribution already paid, the deficit payable to the scheme is recognised as a liability after deducting the contribution already paid. If the contribution
already paid exceeds the contribution due for services received before the period end date, then excess is recognised as an asset to the extent that the pre¬
payment will lead to, for example, a reduction in future payment or a cash refund.
xv) Earnings Per Share
(a) Basic Earnings Per Share
Basic earnings per share is computed by dividing the net profit for the period attributable to the equity shareholders of the company by the weighted average
number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period and for all periods
presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares that have changed the number of equity shares
outstanding, without a corresponding change in resources.
(b) Diluted Earnings Per Share
For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of
shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
xvi) Inventories
Inventory is valued at lower of cost and net realizable value. Inventory of the company includes stock physically present at its stores, head office and held with
craftsman and excludes customer's stock in the custody of the Company. Inventory includes gold, loose diamonds, ornaments purchased from vendors
including ornaments made to order.
Cost of inventories comprises of all costs of purchase and, other duties and taxes (other than those subsequently recoverable from tax authorities), costs of
conversion and all other costs incurred in bringing the inventory to its present location and condition. Cost is determined on weighted average price.
xvii) Fair value measurment
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
- In the principal market for the asset or liability, or
- In the absence of a principal market, in the most advantageous market for the asset or liability.
A number of assets and liabilities included in the financial statements require measurement at, and/or disclosure of, fair value. The fair value measurement of
the company's financial and non-financial assets and liabilities utilises market observable inputs and data as far as possible.
Inputs used in determining fair value measurements are categorised into different levels based on how observable the inputs used in the valuation technique
utilised are (the 'fair value hierarchy'):
Level 1: Quoted prices in active markets for identical items (unadjusted)
Level 2: Observable direct or indirect inputs other than Level 1 inputs
Level 3: Unobservable inputs (i.e. not derived from market data).
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the
asset or liability and the level of the fair value hierarchy as explained above.
xviii) Cash Flow Statement
Cash flows are reported using indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or
accruals of past or future cash receipts or payments. The cash flows from operating, investing andfinancing activities of the Company are segregated.
xix) New standards and amendments issued but not effective
There are no such standards which are notified but not yet effective.
xx) Critical accounting estimates and judgements
The company makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical
experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual
experience may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year are discussed below.
a) Defined benefit plans (post-employment gratuity)
The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation
involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate; future
salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive
to changes in these assumptions. All assumptions are reviewed at each reporting date. The parameter most subject to change is the discount rate. In
determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds where remaining
maturity of such bond correspond to expected term of defined benefit obligation. The mortality rate is based on publicly available mortality tables. Those
mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected
future inflation rates.
b) Leases
The Company evaluates if anarrangement qualifies to be a lease based on the requirements of Ind AS 116 Leases and identification of a lease requires
management judgment. Computation of the lease liabilities and right-of-use assets requires management to estimate the lease term (including anticipated
renewals) and the applicable discount rate. Management estimates the lease term based on past practices and reasonably estimated/ anticipated future events.
The discount rateis generally based on the incremental borrowing rate specific to the lease being evaluated.
(c) Determination of the estimated useful lives
Useful lives of property, plant and equipment are based on the life prescribed in Schedule II of the Companies Act, 2013. Incases, where the useful lives are
different from that prescribed in Schedule II and incase of intangible assets, these are estimated bymanagement taking into account the nature of the asset, the
estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes.
(d) Recognition of deferred tax assets
Deferred tax assets and liabilities are recognised for the future tax consequences of temporary differences between the carrying values of assets and liabilities
and their respective tax bases. Deferred tax assets are recognised to the extent that it is probable that future taxable income will be available against which the
deductible temporary differences and unused tax credits could be utilised.
xxi) Business Combination
Business combinations between entities under common control is accounted for at carrying value of the assets and liabilities in the Financial statements.
Transaction costs that is incurred in connection with a business combination are expensed as incurred.
xxii) Segment Reporting
An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, whose operating
results are regularly reviewed by the chief operating decision maker to make decisions about resources to be allocated to the segment and assess its
performance, and for which discrete financial information is available. Operating segments of the Company are reported in a manner consistent with the
internal reporting provided to the chief operating decision maker.
Nature and purpose of other equity
Securities premium
Securities premium is used to record the premium on issue of shares. It can be utilised only for limited purposes in accordance with the provisions of the Companies Act, 2013.
Retained earnings
Retained earnings represents the cumulative undistributed profits of the Company and can be utilised in accordance with the provisions of the Act.
Capital reserve
The deficit account pertains to the impact of accounting for common control business combinations as detailed in Note: 43. The same will be utilised for the purposes as permitted by the
Companies Act, 2013
The basic & diluted earnings per share for the period ended March 31, 2025 has been computed considering the
36,60,000 number of equity shares of INR 10 each, which has been issued to the partners of the erstwhile partnership
firm on conversion of company on December 20, 2024 and further issue of 11,99,200 equity shares of INR 10 each by
the company on March 24, 2025.
The weighted average number of shares are computed on day proportionate basis from the date of incorporation of the
company and applied to the profit for the period ended March 31, 2025.
The Company at its Board Meeting held on April 28, 2025 has approved the issue of bonus shares in the proportion of 350
new bonus equity shares of face value of K 10 for every 100 existing fully paid-up equity shares of face value of K 10 each.
The record date for the purposes of determining the entitlement for the bonus issue is May 16, 2025. This bonus issues is
subject to the approval of shareholders in the general meeting.
Accordingly, in the absence of pending approval of shareholders in the general meeting for issue of bonus share no
adjustments is made to the EPS reported herein.
The management assessed that the fair value of cash and cash equivalents, trade receivables, trade payables, other financial assets, other financial
liabilities, borrowings and lease liabilities, except as disclosed below, approximate their carrying amounts, largely due to the short term nature of
these balances.
The fair value of the financial assets and liabilities is the amount at which the instrument could be exchanged in a current transaction between
willing parties, other than in a forced or liquidation sale.
The management assessed that the carrying amounts of its financial instruments are reasonable approximations of fair values.
Level 1- Quoted prices unadjusted in active markets for identical assets or liabilties
Level 2- Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices).
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs)
There have been no transfers between Level 1, Level 2 and Level 3 during the current period.
The company’s activities expose it to a variety of financial risks. The company’s primary focus is to foresee the unpredictability of such risks and
seek to minimise potential adverse effects on its financial performance.
The company has a robust risk management process and framework in place. This process is coordinated by the Board, which meets regularly to
review risks as well as the progress against the planned actions.The Board seeks to identify, evaluate business risks and challenges across the
company through such framework. These risks include market risks, credit risk and liquidity risk.
The risk management process aims to:
- improve financial risk awareness and risk transparency
- identify, control and monitor key risks
- identify risk accumulations
- provide management with reliable information on the risk situation
- improve finanical returns
a) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Such
changes in the values of financial instruments may result from changes in interest rates, credit, liquidity and other market changes. The company
exposure to market risk is primarily on account of interest rate risk.
ii) Price Risk
The company is exposed to fluctuation in gold, diamond and platinum price arising from purchase and sale. The company’s objectives include
safeguarding its earnings against the adverse price fluctuations. The company intends to hedge the price fluctuation risk by entering into forward
contracts and is in the process of the hedging policy.
(b) Credit Risk
i) Trade receivables
The company does not generally give credit to the customers except in few cases where they are with the corporate customers. Accordingly, the
company’s customer credit risk is low.
Credit risk from balances with banks and financial institutions is managed by the company's treasury department in accordance with the company's
policy. Investments of surplus funds are made in accordance with the limits set by the management for various investment avenues. The limits are
set to minimise the concentration of risks and therefore mitigate financial loss through counterparty's potential failure to make payments.
The company's maximum exposure to credit risk for the components of the balance sheet at March 31, 2025 is the carrying amounts of each class of
financial assets.
The cash and cash equivalent and other bank balances are held with banks and financial institutions with good credit rating.
b) Liquidity risk
Liquidity risk is the risk that the company may encounter difficulty in meeting its present and future obligations associated with financial liabilities
that are required to be settled by delivering cash or another financial asset. The company's objective is to, at all times, maintain optimum levels of
liquidity to meet its cash and collateral obligations. The company requires funds both for short term operational needs as well as for long term
investment programs mainly in growth projects. The company closely monitors its liquidity position and deploys a robust cash management
system. It aims to minimise these risks by generating sufficient cash flows from its current operations, which in addition to the available cash and
cash equivalents, liquid investments and sufficient committed fund facilities which will provide liquidity.
The liquidity risk is managed on the basis of expected maturity dates of the financial liabilities. The other payables are with short term durations.
The carrying amounts are assumed to be reasonable approximation of fair value.
The table below summarises the maturity profile of the company’s financial liabilities based on contractual undiscounted payments:
33 Segment Information
An operating segment is a component of the company that engages in business activities from which it may earn revenues and incur expenses that
relate to transactions with any of the company’s other components. All operating segments’ operating results are reviewed regularly by the
company’s Board of Directors (BOD), which has been identified as being the Chief Operating Decision Maker (CODM), to make decisions about
resources to be allocated to the segments and assess their performance.
The company is engaged in the business of trading diamond jewellery, platinum jewellery and other precious stones. The CODM evaluates the
company's performance and allocates resources based on the analysis of the various performance indicator of the company as a single unit.
Therefore, there is no reportable segment for the company as per the requirements of Ind AS 108 "Operating Segments”.
• Information about geographical areas
The company has operations only in India; hence there are no separately reportable geographical segments for the company as per the
requirements of Ind AS 108 - "Operating Segments”.
• Information about major customers
There is no single customer or customer group who accounts for more than 10% of the total revenue of the company.
34 The company had no contingent liabilities or capital commitments as at the end of reporting period.
Gratuity:
The Company has an unfunded defined benefit gratuity plan. The Company provides for gratuity for its employees as per Payment of Gratuity Act, 1972.
Employees who are in continuous service for a period of 5 years or more are eligible for gratuity. The amount of gratuity is payable on retirement/termination of
the employee's last drawn basic salary per month computed proportionately for 15 days salary multiplied for the completed number of years of service. The
Company makes provision of such gratuity liability in the books of accounts on the basis of actuarial valuation as per the Projected Unit Credit method.
Risk analysis
A. Actuarial risk
It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons:
i. Adverse salary growth experience:
Salary hikes that are higher than the assumed salary escalation will result into an increase in obligation at a rate that is higher than expected.
ii. Variability in mortality rates:
If actual mortality rates are higher than assumed mortality rate assumption then the gratuity benefits will be paid earlier than expected. Since there is no
condition of vesting on the death benefit, the acceleration of cash flow will lead to an actuarial loss or gain depending on the relative values of the assumed salary
growth and discount rate.
iii. Variability in withdrawal rates:
If actual withdrawal rates are higher than assumed withdrawal rate assumption then the gratuity benefits will be paid earlier than expected. The impact of this
will depend on whether the benefits are vested as at the resignation date.
B. Liquidity Risk
Employees with high salaries and long durations or those higher in hierarchy, accumulate significant level of benefits. If some of such employees resign/retire
from the Company there can be strain on the cash flows.
C. Market Risk
Market risk is a collective term for risks that are related to the changes and fluctuations of the financial markets. One actuarial assumption that has a material
effect is the discount rate. The discount rate reflects the time value of money. An increase in discount rate leads to decrease in Defined benefit obligation of the
plan benefits and vice versa. This assumption depends on the yields on the corporate/government bonds and hence the valuation of liability is exposed to
fluctuations in the yields as at the valuation date.
D. Legislative Risk
Legislative risk is the risk of increase in the plan liabilities due to change in the legislation/regulation. The government may amend the Payment of Gratuity Act
thus requiring the companies to pay higher benefits to the employees. This will directly affect the present value of the Defined benefit obligation and the same
will have to be recognised immediately in the year when any such amendment is effective.
Notes:
1) Assumptions regarding future mortality rates are set in accordance with Indian Assured Lives Mortality Table (IALM) 2012-2014, as issued by Institute of
Actuaries of India
2) The assumed discount rate is determined by reference to market yields at the balance sheet date on Government bonds. The tenure has been considered
taking into account the past long term trend of employee's average remaining service life which reflects the average estimated term of the post- employment
benefit obligations.
3) The average rate of increase in compensation levels is determined by the Company, considering factors such as, the Company's past compensation revision
trends and management's estimate of future salary increases.
Sensitivity analysis
The key actuarial assumptions to which the defined benefit plans are particularly sensitive to are discount rate and full salary escalation rate. The sensitivity
analysis below, have been determined based on reasonably possible changes of the assumptions occurring at end of the reporting period, while holding all other
assumptions constant. The result of sensitivity analysis is given below:
37 Capital Management
The company's capital management objectives are
• to ensure the company's ability to continue as a going concern
• to create value for shareholders by facilitating the meeting of long term and short term goals of the company
The company determines the amount of capital required on the basis of annual business plan coupled with long term and short
term strategic expansion plans. The funding needs are met through equity, cash generated from operations, long term and
short term bank borrowings.
The company monitors the capital structure on the basis of net debt to equity ratio and maturity profile of the overall debt
portfolio of the firm.
40 Other Statutory Information :
a. No proceedings have been initiated or are pending against the company for holding any benami property under the Benami
Transactions (Prohibitions) Act, 1988 and the rules made thereunder.
b. The Company has borrowings secured against current assets and statements of current assets filed by the Company with
banks are in agreement with the books of accounts.
c. The company has not been declared as a wilful defaulter by any bank or financial institution or other lender.
d. The company does not have any relationship with companies struck off under Section 248 of the Companies Act, 2013 or
Section 560 of the Companies Act, 1956.
e. The Company has complied with the number of layers prescribed under section 2(87) of the Companies Act, 2013 read with
Companies (Restriction on Number of Layers) Rules, 2017.
f. There company does not have any transactions which are not recorded in the books of accounts that have been
surrendered or disclosed as income in the tax assessments under the Income Tax Act, 1961 during the current year and
previous year.
g. The company has not traded or invested in crypto currency or virtual currency during the current or previous year.
h. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding that the Intermediary shall, directly or indirectly lend or invest in other persons
or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or provide any
guarantee, security or the like to or on behalf of the ultimate beneficiaries.
i. The Company has not received any funds from any persons or entities, including foreign entities (Funding Party) with the
understanding (whether recorded in writing or otherwise) that the Company shall directly or indirectly lend or invest in
other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries)
or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
j. The company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
k During the periods/years, the borrowed funds were utilised for the purpose which they were obtained and as per the terms
k. specified in the sanction letter.
41 This being the first year of the Company, no corresponding figures for the previous year have been mentioned.
42 The Code on Social Security, 2020:
The Code on Social Security, 2020 ('Code') relating to employee benefits during employment and post employment benefits
received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which
the Code will come into effect has not been notified and the final rules/interpretation have not yet been issued. The Group will
assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes
effective.
43 Common control business combination during the period ended March 31, 2025
Acquisition of Diamond business of P. N. Gadgil and Sons Limited
On January 31, 2025, PNGS Reva Diamond Jewellery Limited (Converted into companyfrom erstwhile partnership firm named as Gadgil Metals and Commodities) (Transferee)
and P.N. Gadgil and Sons Limited (Transferor) entered into a Business Transfer Agreement (''BTA'') under which the Transferor agreed to transfer the operations relating to
diamond business on slump sale basis to the Transferee.
The acquisition was executed through a BTA for a consideration of INR 1,623.00 million plus applicable taxes amounting to INR 47.95 million. The purchase consideration is
fully discharged along with applicable taxes as on March 31, 2025. The expenses on business transfer including stamp duty and registration charges are borne and paid by the
Transferor and Tranferee in equal proportion. The expenses on business transfer is charged to profit and loss account during the period ended March 31, 2025 relating to its
share in the books of Transferee.
PNGS Reva Diamond Jewellery Limited (formerly known as Gadgil metals and commodities, a partnership firm) and P.N. Gadgil and Sons Limited were under common control
considering the contractual arrangement between the common shareholders of the Transferor and Transferee who collectively have power to govern the financial and
operating policies so as to obtain benefits from the activities for these entities and the ultimate collective power is not transitory.
This common control Business Combination is accounted for using pooling of interest method and the difference in the net assets relating to Diamond Business for the earliest
periods and the consideration payable/paid is considered as capital reserves.
For M S K A & Associates For and on behalf of the Board of Directors
Chartered Accountants PNGS Reva Diamond Jewellery Limited
ICAI Firm Registration No.: 105047W
Nitin Manohar Jumani Govind Gadgil Amit Modak
Partner Director Director
Membership No.: 111700 DIN No: 00616617 DIN No: 00396631
Place: Pune Place: Pune Place: Pune
Date: May 05, 2025 Date: May 05, 2025 Date: May 05, 2025
Kirti Suryakant Vaidya Kisan Shendkar
Company Secretary Chief Financial Officer
Membership No.: A31430
Place: Pune Place: Pune
Date: May 05, 2025 Date: May 05, 2025
| 