6. 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
confirmed 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 made.
Contingent assets are neither recognised nor disclosed in the financial statement. But it is required to disclose when inflow is probable
but virtually certain.
Provision for Expected Credit Loss:
The Company generally operates on a cash and carry model except in the case of franchisee partners where there are adequate
controls in place, and hence the expected credit loss allowance for trade receivables is insignificant. The concentration of credit risk is
also limited due to the fact that the customer base is large and unrelated.
7. Employee Benefits:
(i) 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.
(ii) 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.
(iii) Post-Employment Benefits:
The company operates the following post-employment benefits:
a. Defined benefit plans - Gratuity
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.
Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine settlements;
b. 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.
8. Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at
amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or
loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are
recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this
case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility
will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it
relates.
Borrowings are derecognized from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired.
The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the
consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other
gains/(losses). Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the
liability for at least 12 months after the reporting period.
9. Borrowing costs
Borrowing costs includes interest and ancillary costs incurred in connection with the arrangement of borrowings.
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial
period of time to get ready for its intended use or sale are capitalized as a part of the cost of the respective asset until such time that the
assets are substantially ready for their intended use. All other borrowing costs are expensed in the period in which they occur.
Borrowing cost is calculated as per the Effective Interest Rate (EIR) method. It is the rate that exactly discounts the estimated future
cash payments or receipts over the expected life of the financial liability or a shorter period, where appropriate, to the amortized cost
of a financial liability after considering all the contractual terms of the financial instrument.
10. Earnings Per Share
(i) 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.
(ii) 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.
11. Leases
A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration.
Company as a lessee:
The Company accounts for each lease component within the contract as a lease separately from non-lease components of the contract
and allocates the consideration in the contract to each lease component on the basis of the relative standalone price of the lease
component and the aggregate standalone price of the non-lease components.
The Company recognises right-of-use asset representing its right to use the underlying asset for the lease term at the lease
commencement date. The cost of the right-of-use asset measured at inception shall comprise of the amount of the initial measurement
of the lease liability adjusted for any lease payments made at or before the commencement date less any lease incentives received, plus
any initial direct costs incurred and an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset
or restoring the underlying asset or site on which it is located. The right-of-use asset is subsequently measured at cost less any
accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability. The right-
of-use asset is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of
right-of-use asset. The estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant and
equipment. Right-of-use assets are tested for impairment whenever there is any indication that their carrying amounts may not be
recoverable. Impairment loss, if any, is recognised in the statement of profit and loss.
The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the
lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate
cannot be readily determined, the Company uses incremental borrowing rate. For leases with reasonably similar characteristics, the
Company, on a lease-by-lease basis, may adopt either the incremental borrowing rate specific to the lease or the incremental
borrowing rate for the portfolio as a whole. The lease payments shall include fixed payments, variable lease payments, residual value
guarantees, exercise price of a purchase option where the Company is reasonably certain to exercise that option and payments of
penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease. The lease liability is
subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to
reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect
revised in-substance fixed lease payments. The Company recognises the amount of the re-measurement of lease liability due to
modification as an adjustment to the right-of-use asset and statement of profit and loss depending upon the nature of modification.
Where the carrying amount of the right-of-use asset is reduced to zero and there is a further reduction in the measurement of the lease
liability, the Company recognises any remaining amount of the re-measurement in statement of profit and loss.
A short term lease is the lease that at the at the date of commencement has a lease term of 12 months or less and does not include a
option to purchase the underlying asset in such cases the lessee shall recognise lease payment associated with such lease as expense on
straight line basis
Company as a lessor:
In case of sub-leasing, where the Company, being the original lessee and intermediate lessor, grants a right to use the underlying asset
to a third party, the head lease is recognised as lease liability and sub-lease is recognised as lease receivables in the Balance Sheet of
the Company. Interest expense is charged on the lease liability and finance income is recognised on lease receivables in the statement
of profit or loss account.
Notes Forming Part of Standalone Financial Statements,
12. Inventories
Inventory is valued at lower of cost and net realizable value. Inventory of the Company includes stock physically present at its sale
counters. 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.
Silver inventory is measured using the retail method in accordance with Ind AS 2 - Inventories Net realisable value represents
the estimated selling price for inventories less estimated costs of completion and costs necessary to make the sale.
Terms and rights attached to equity
J shares
Equity Shares:
The Company has only one class of Equity shares
- Ordinary shares Equity Shares of ^ 10 each. Each shareholder is eligible for for one vote.
- On winding up of the Company, the holders of equity shares will be entitled to receive residual assets of the Company,
remaining after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares
held by the shareholders.
e) Other Notes
- The Company completed the Initial Public Offer ('IPO')of its equity shares during the year ended 31 March 2023 and listed its
shares on BSE SME on 20th December 2022. Pursuant to IPO, the Company allotted 26,00,000 fresh equity shares of ^ 10/- each
to public. The total share premium arising on IPO amounting to ^ 520.00 lakhs has been accounted under securities premium
reserve and the IPO related expenses amounting to ^ 52.03 lakhs, being company's share of total IPO expense, has been adjusted
against the premium amount.
- During the year FY 2024-25, on 24-06-2024 Company has increased the authorised capital from ^ 1,000 Lakhs to ^2,000
Lakhs.
- The company had allotted 7,29,800 equity shares of ^ 10 each to Investors on preferential issue basis at a premium of ^ 565
per equity share on 26th August 2024.The total share premium arising through preferential allotment amounting to ^4123.37
Lakhs had been accounted under Securities Premium reserve and the amount related expenses amounting to ^ 10.69 Lakhs
had been adjusted against premium amount as above.
-The details regarding the utilisation of funds raised through the said preferential allotment, including the amount utilised and
the balance unutilised as at the reporting date, have been disclosed separately in Note 44
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 experience are set in accordance with Indian Assured Lives Mortality Table
(IALM) 2012-2014 Ultimate, 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 Govt. bonds. The
tenure has been considered taking into account the past longterm trend of employees’ 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:
The management assessed that the fair value of cash and cash equivalents, trade receivables, trade payables and other
current financial assets and liabilities 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.
38 Financial Risk Management
The Company's principal financial liabilities comprise loans and borrowings, trade payable and other payables. The main
purpose of these financial liabilities is to finance the Company's operations and to provide guarantees to support its
operations. The Company's principal financial assets include loans given, investments, trade and other receivables, and
cash and cash equivalents that derive directly from its operations.
The Company is exposed to market risk, credit risk and liquidity risk. The Company's senior management oversees the
management of these risks. The Company's financial risk activities are governed by appropriate policies and procedures
and financial risks are identified, measured and managed in accordance with the Company's policies and risk objectives.
The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below.
(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 the foreign currency
exchange rates, interest rates, credit, liquidity and other market changes. The company's exposure to market risk is
primarily on account of Interest rate fluctuations
(i) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Company's policy is to minimise interest rate cash flow risk exposures on long-term
financing. At the balance sheet date, the Company is exposed to changes in market interest rates through bank borrowings
at variable interest rates.
(ii) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in
foreign exchange rates. The Company has no outstanding exposure as at reporting period.
(iii) Price risk
The Company is exposed to fluctuations in silver & gold prices arising from the purchase and sale of silver & gold. To
manage this variability, the Company enters into derivative financial instruments to hedge the risk associated with silver &
gold price fluctuations relating to the inventory held by the Company.These derivative financial instruments primarily
comprise future commodity contracts. As the value of the derivative instruments generally changes in response to the
value of the hedged item, an economic relationship is established between the hedging instrument and the hedged item. As
at the reporting date, the Company did not have any outstanding derivative contracts for silver and gold.
(b) Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract,
leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables)
and from its financing activities, including deposits with banks and financial institution and other financial instruments.
i. Trade receivables
Customer credit risk is managed by the Company subject to the established policy, procedures and control relating to
customer credit risk management. Outstanding customer receivables are regularly monitored.
An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large
number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The
assessment is based on historical information of defaults. The maximum exposure to credit risk at the reporting date is the
carrying value of each class of financial assets. The Company does not hold collateral as security. The Company evaluates
the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and
operate in largely independent markets.
39 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 costume jewellery, articles of silver and other articles. 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.
41 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 Company.
-The company has no debt obligation for repayment as on 31st March 2025 (Previous year 173.13 Lakhs)
* Gross Debt Includes Short term and long term borrowings
** Cash and cash marketable securities includes the cash in hand FY 2024-25^ 6.46 (^ in lakhs) FY 23-24 ^ 9.63(^ in lakhs), balances with current
accounts FY 2024-25 ^ 1127.1 (^ in lakhs) FY 23-24 ^ 60.46(^ in lakhs) and Fixed deposits having original maturity ofless than 3 months FY 2024-25 ^
853.04C? in lakhs) FY 23-24 ^ 0(? in lakhs)
-A decline in the Net gearing ratio indicates reduced reliance on debt financing relative To equity. This often signifies improved financial stability, lower financial risk,
and enhanced Capacity to withstand economic uncertainties.
45 The comparative figures of March 31st, 2024 are reclassified and regrouped wherever necessary.
46 With reference to the relevant statutory dues to government, annual returns are yet to be filled with the respective authorities (being due dates are after reporting
dates), hence the statutory balance payable are as per books of accounts which are subject to reconciliation with the returns.
47 There are no contingent liabilities and commitments as on March 31,2025 and as on March 31, 2024.
48 The value of inventory as reported in the financial statements differs from the value disclosed in the inventory statement submitted to the bank. This variance is
primarily due to the inclusion of costume jewellery, non-silver and direct expenses items in the financial statement inventory valuation, which have not been
considered in the inventory statement submitted to the bank, as the company does not offer these items as collateral.
49 Other Statutory Information :
a. The Company does not have any Benami property and there are no proceeding initiated or pending against the Company for holding any benami property
under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.
b. The Company has not traded or invested in crypto currency or virtual currency during the current year and previous year.
c. 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.
d. There are no Schemes of Arrangements which are either pending or have been approved by the Competent Authority in terms of Sections 230 to 237 of the
Companies Act, 2013 during the current year and previous year.
e. No funds have been received by the Company from any persons or entities, including foreign entities (“Funding Parties"), 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.
50 The Company has used accounting software for maintaining its books of account for the year ended March 31, 2025 which has a feature of recording audit trail
(edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software except that audit trail feature was not
enabled at the database level to log any direct data changes. The management is evaluating different options to comply with the requirements.
51 Approval of financial statements:
The standalone financial statements were approved for issue by the board of directors on 9 May 2025.
The accompanying notes form an integral part of financial statements.
As per our report of an even date For and on behalf of the Board of Directors of
For Khandelwal Jain & Associates PNGS Gargi Fashion Jewellery Limited
Chartered Accountants CIN: L36100PN2009PLC133691
FRN No.: 139253W
R. G. Nahar Govind Gadgil Amit Modak
Partner Director Director
Membership No.: 031177 DIN: 00616617 DIN: 00396631
Place : Pune Place: Pune Place: Pune
Date : 09-05-2025 Date : 09-05-2025 Date : 09-05-2025
Vishwas Honrao Neha Boid
Chief Financial Officer Company Secretary
Place : Pune Membership No: A54111
Date : 09-05-2025 Place : Pune
Date : 09-05-2025
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