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Sr.
No
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Key audit matter
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How the key audit matter was addressed in our audit
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1.
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Revenue Recognition
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Our audit procedures with respect to this matter included, but
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(refer note 4.8 and 41 of the Standalone financial
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were not limited to, the following:
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statements)
The Company recognises revenue from grading and
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1.
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Evaluated the design, and testing the operative
effectiveness of controls over revenue recognition process.
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certification of diamonds, coloured stones and jewelry.
Revenue is recognised upon completion of identified
performance obligations in customer contracts in
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2.
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Assessed the compliance of the Group's revenue
recognition accounting policies against the requirements
of Ind AS 115.
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accordance with Ind AS 115, Revenue from Contracts
with Customers, and it is measured at transaction price,
which is the consideration, adjusted for discounts or
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3.
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On a sample basis, performed detailed testing of revenue
transactions, including testing of invoices, take-ins, pricing,
and completion of performance obligation.
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rebates, if any, as specified in the contract with the
customer. Revenue is recognised exclusive of taxes.
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4.
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Verified that pre and post year end cut-off had been
appropriately applied.
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We have considered revenue recognition as a key audit
matter since this has been identified as significant risk;
and additional disclosure are made in accordance with
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5.
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Examined journal entries (using statistical sampling)
posted to revenue to identify unusual or irregular items.
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the applicable accounting standards.
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6.
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Evaluated the adequacy and appropriateness of the
disclosures in the standalone financial statements.
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Sr.
No
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Key audit matter
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How the key audit matter was addressed in our audit
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2.
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Assessment of recoverability of the carrying value
of investments in subsidiaries (refer note 9 of the
Standalone financial statements)
The Company has made equity investments of Rs.
14,308.65 million in its wholly owned subsidiaries.
The Company assesses the recoverable amount of
each investment when impairment indicators exist by
comparing the value in use and carrying amount of the
investment as on the reporting date. Refer note 9 to the
standalone financial statements
The Company used the discounted cash flow model to
estimate recoverable values, which requires management
to make estimates and assumptions related to forecasts
of future revenues and operating margins, and discount
rates. Changes in these assumptions could have a
significant impact on either the recoverable value, the
amount of any impairment charge, or both.
Considering the materiality of amounts involved, and
the inherent subjectivity involved in estimating future
cash flows which required significant management
judgement, assessment of impairment losses to be
recognised, if any, on the carrying value of identified
investments has been considered to be a key audit
matter for the current period audit.
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Our audit procedures with respect to this matter included, but
were not limited to, the following:
1. Obtained an understanding of the impairment process
and evaluated the design, implementation and operating
effectiveness of internal controls over the Company's
review of impairment analysis.
2. Assessed reasonableness of management's forecasting
accuracy by comparing the estimated revenue and margin
projections, with the actuals achieved.
3. Assessed the competence, capability, independence and
objectivity of valuation expert engaged by management.
4. Involved our valuation experts to assist in examining
and challenging the reasonableness of the Company's
valuation model and reviewing the underlying basis for key
assumptions.
5. Performed sensitivity analysis of changes to key
assumptions and its impact on the recoverable amount.
6. Assessed the adequacy and appropriateness of the
disclosures made in the standalone financial statements.
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We have audited the accompanying standalone financial
statements of International Gemological Institute Limited
[formerly known as International Gemmological Institute
(India) Limited] ("the Company”), which comprise the Balance
Sheet as at March 31, 2026, the Statement of Profit and
Loss, including Other Comprehensive Income, Statement
of Changes in Equity and Statement of Cash Flows for
the fifteen-months financial year then ended, and notes to
the standalone financial statements, including material
accounting policy information and other explanatory
information (hereinafter referred to as the "standalone
financial statements”).
In our opinion and to the best of our information and
according to the explanations given to us, the aforesaid
standalone financial statements give the information
required by the Companies Act, 2013 ("the Act') in the manner
so required and give a true and fair view in conformity with
the Indian Accounting Standards prescribed under section
133 of the Act read with Companies (Indian Accounting
Standards) Rules, 2015, as amended ("Ind AS”) and other
accounting principles generally accepted in India, of the
state of affairs of the Company as at March 31, 2026, and
profit other comprehensive income, changes in equity and
its cash flows for the fifteen-months financial year ended on
that date.
BASIS FOR OPINION
We conducted our audit of the standalone financial
statements in accordance with the Standards on Auditing
(SAs) specified under section 143(10) of the Act. Our
responsibilities under those Standards are further described
in the 'Auditor's Responsibilities for the Audit of the
standalone financial statements' section of our report. We
are independent of the Company in accordance with the Code
of Ethics issued by the Institute of Chartered Accountants of
India ("ICAI”) together with the ethical requirements that are
relevant to our audit of the standalone financial statements
under the provisions of the Act and the Rules thereunder,
and we have fulfilled our other ethical responsibilities in
accordance with these requirements and the Code of
Ethics. We believe that the audit evidence obtained by us is
sufficient and appropriate to provide a basis for our opinion.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the
standalone financial statements for the fifteen-months
financial year ended March 31, 2026. These matters were
addressed in the context of our audit of the standalone
financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these
matters. We have determined the matters described below to
be the key audit matters to be communicated in our report.
INFORMATION OTHER THAN THE STANDALONE
FINANCIAL STATEMENTS AND AUDITOR'S REPORT
THEREON
The Company's Board of Directors is responsible for the
other information. The other information comprises the
information included in the Management Discussion and
Analysis, Corporate Governance report, Director's report,
Business Responsibility and Sustainability Report, but does
not include the standalone financial statements and our
auditor's report thereon.
Our opinion on the standalone financial statements does not
cover the other information and we do not express any form
of assurance conclusion thereon.
In connection with our audit of the standalone financial
statements, our responsibility is to read the other
information and, in doing so, consider whether the other
information is materially inconsistent with the standalone
financial statements or our knowledge obtained in the audit
or otherwise appears to be materially misstated.
If, based on the work we have performed on the other
information that we obtained prior to the date of this auditor's
report, we conclude that there is a material misstatement of
this other information, we are required to report that fact. We
have nothing to report in this regard.
RESPONSIBILITIES OF BOARD OF DIRECTORS FOR THE
STANDALONE FINANCIAL STATEMENTS
The Company's Board of Directors is responsible for the
matters stated in section 134(5) of the Act with respect to
the preparation of these standalone financial statements
that give a true and fair view of the financial position,
financial performance, changes in equity and cash flows of
the Company in accordance with the accounting principles
generally accepted in India, including the Accounting
Standards specified under section 133 of the Act. This
responsibility also includes maintenance of adequate
accounting records in accordance with the provisions of
the Act for safeguarding of the assets of the Company and
for preventing and detecting frauds and other irregularities;
selection and application of appropriate accounting policies;
making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of
adequate internal financial controls, that were operating
effectively for ensuring the accuracy and completeness
of the accounting records, relevant to the preparation and
presentation of the standalone financial statement that give
a true and fair view and are free from material misstatement,
whether due to fraud or error.
In preparing the standalone financial statements, the
Management and Board of Directors is responsible for
assessing the Company's ability to continue as a going
concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting
unless the Board of Directors either intends to liquidate
the Company or to cease operations, or has no realistic
alternative but to do so.
The Board of Directors is also responsible for overseeing the
Company's financial reporting process.
AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE
STANDALONE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about
whether the standalone financial statements as a whole
are free from material misstatement, whether due to fraud
or error, and to issue an auditor's report that includes our
opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance
with SAs will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of these standalone
financial statements.
We give in "Annexure A” a detailed description of Auditor's
responsibilities for Audit of the standalone financial
statements.
REPORT ON OTHER LEGAL AND REGULATORY
REQUIREMENTS
1. As required by the Companies (Auditor's Report) Order,
2020 ("the Order”), issued by the Central Government of
India in terms of sub-section (11) of section 143 of the
Act, we give in "Annexure B” a statement on the matters
specified in paragraphs 3 and 4 of the Order, to the
extent applicable.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information
and explanations which to the best of our
knowledge and belief were necessary for the
purposes of our audit.
(b) In our opinion, proper books of account as
required by law have been kept by the Company
so far as it appears from our examination of those
books except for the matters stated in paragraph
2(h)(vi) below on reporting under Rule 11 (g) of the
Companies (Audit and Auditors) Rules, 2014.
(c) The Balance Sheet, the Statement of Profit and
Loss including other comprehensive income,
the Statement of Changes in Equity and the
Statement of Cash Flow dealt with by this Report
are in agreement with the books of account.
(d) In our opinion, the aforesaid standalone financial
statements comply with the Accounting
Standards specified under Section 133 of the Act.
(e) On the basis of the written representations
received from the directors as on March 31,2026
taken on record by the Board of Directors, none
of the directors are disqualified as on March 31,
2026 from being appointed as a director in terms
of Section 164 (2) of the Act.
(f) The reservation relating to the maintenance of
accounts and other matters connected therewith
are as stated in paragraph 2(b) above on reporting
under Section 143(3)(b) and paragraph 2(h)(vi)
below on reporting under Rule 11 (g).
(g) With respect to the adequacy of the internal
financial controls with reference to standalone
financial statements of the Company and the
operating effectiveness of such controls, refer to
our separate Report in "Annexure C”.
(h) With respect to the other matters to be included in
the Auditor's Report in accordance with Rule 11 of
the Companies (Audit and Auditors) Rules, 2014,
in our opinion and to the best of our information
and according to the explanations given to us:
i. The Company has disclosed the impact of
pending litigations on its financial position
in its standalone financial statements -
Refer Note 39 to the standalone financial
statements;
ii. The Company did not have any long-term
contracts including derivative contracts for
which there were any material foreseeable
losses;
iii. There has been no delay in transferring
amounts, required to be transferred, to the
Investor Education and Protection Fund by
the Company.
iv. (1) The Management has represented
that, to the best of its knowledge and
belief, no funds have been advanced
or loaned or invested (either from
borrowed funds or share premium or
any other sources or kind of funds)
by the Company to or in any other
person(s) or entity(ies), including
foreign entities ("Intermediaries”), with
the understanding, whether recorded
in writing or otherwise, 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 on behalf of the
Ultimate Beneficiaries.
(2) The Management has represented,
that, to the best of its knowledge and
belief, no funds have been received
by the Company from any person(s)
or entity(ies), including foreign
entities (Funding Parties), with the
understanding, whether recorded in
writing or otherwise, as on the date
of this audit report, 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.
(3) Based on the audit procedures
performed that have been considered
reasonable and appropriate in the
circumstances, and according to the
information and explanations provided
to us by the Management in this
regard nothing has come to our notice
that has caused us to believe that the
representations under sub-clause (i)
and (ii) of Rule 11(e) as provided under
(1) and (2) above, contain any material
mis-statement.
The final dividend paid by the Company during
the year in respect of the same declared
for the previous year is in accordance with
Section 123 of the Act to the extent it applies
to payment of dividend.
The interim dividend declared and paid by
the Company during the year and until the
date of this audit report is in accordance with
Section 123 of the Act.
vi. a. Based on our examination, which
included test checks, the Company has
used two accounting software systems
to maintain its books of account,
both managed and maintained by
third-party service providers. These
software systems have features for
recording audit trails (edit logs) facility,
except that the audit trail feature at the
application level for one of the software
systems was enabled only from June
20, 2025. Further, no audit trail feature
was enabled at the database level in
respect of one accounting software to
capture direct data changes. In respect
of the other software, we are unable
to comment on the audit trail at the
database level due to the absence of a
SOC report or inadequate coverage in
the available SOC report, as explained
in Note 50.1 to the standalone financial
statements.
Further, where enabled, audit trail
feature has operated throughout the
period for all relevant transactions
recorded in the accounting softwares.
Also, during the course of our audit,
we did not come across any instance
of audit trail feature being tampered
with in respect of such accounting
softwares. Additionally, the audit trail
has been preserved by the Company
as per the statutory requirements for
record retention to the extent it was
enabled and recorded in respective year.
b. Based on our examination which
included test checks, the Company
has used an accounting software for
maintaining its books of accounts
from September 01, 2025 (managed
and maintained by a third-party
software service provider) which has
a feature of recording audit trail (edit
log) facility and the same has been
operated throughout the period for all
the relevant transactions recorded in
the software as explained in Note 50.1
to the standalone financial statements.
Further, during the course of our audit
and considering SOC report, we did
not come across any instance of audit
trail feature being tampered with.
Additionally, the said software was not
maintained in the previous year and
accordingly reporting under Rule 11(g)
of the Companies (Audit and Auditors)
Rules, 2014 on preservation of audit
trail of such records as per the statutory
requirements for record retention is not
applicable for the prior year.
3. In our opinion, according to information,
explanations given to us, the
remuneration paid by the Company
to its directors is within the limits laid
prescribed under Section 197 read with
Schedule V of the Act and the rules
thereunder.
For M S K A & Associates LLP
(Formerly known as M S K A & Associates)
Chartered Accountants
ICAI Firm Registration No. 105047W/W101187
Ankush Agrawal
Partner
Membership No. 159694
UDIN: 26159694NILDWY2307
Place: Mumbai
Date: May 20, 2026
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