Your Directors have pleasure in presenting their 11th Annual Report togetherwith the audited financial statements of the Company for the financial year ended March31 2016.
OVERVIEW OF FINANCIAL PERFORMANCE & BUSINESS
The highlights of the standalone and consolidated financial statements of the Companyfor the financial year ended March 31 2016 are as under:
| ||(Rs. in crores except earnings per share) |
| ||Standalone ||Consolidated |
|Particulars ||2015-16 ||2014-15 ||2015-16 ||2014-15 |
|Revenue from Operations ||7259.07 ||6348.52 ||7330.18 ||6361.28 |
|Other Income ||49.56 ||59.19 ||48.70 ||59.21 |
|Total Revenue ||7308.63 ||6407.71 ||7378.88 ||6420.49 |
|Profit before Finance Costs Depreciation and Tax ||775.93 ||783.21 ||774.12 ||782.43 |
|Less: Finance Cost ||214.65 ||220.87 ||214.95 ||219.89 |
|Less: Depreciation & Amortisation ||22.61 ||23.02 ||22.66 ||23.02 |
|Profit before Tax ||538.67 ||539.32 ||536.51 ||539.52 |
|Less: Tax Expense ||137.79 ||161.09 ||136.85 ||161.09 |
|Net Profit after Tax ||400.88 ||378.23 ||399.66 ||378.43 |
|Surplus in the Statement of Profit & Loss-Opening Balance ||1238.57 ||949.35 ||1238.76 ||949.34 |
|Amount available for appropriation ||1639.45 ||1327.58 ||1638.42 ||1327.77 |
|Appropriations: || || || || |
|Depreciation adjustment ||- ||0.80 ||- ||0.80 |
|Proposed Equity Dividend ||60.00 ||57.31 ||60.00 ||57.31 |
|Dividend Distribution Tax ||11.88 ||11.99 ||11.88 ||11.99 |
|Transfer to General Reserves ||- ||18.91 ||- ||18.91 |
|Surplus in the Statement of Profit & Loss-Closing Balance ||1567.57 ||1238.57 ||1566.54 ||1238.76 |
|Earnings per Share: || || || || |
|Basic ||22.38 ||21.12 ||22.32 ||21.13 |
|Diluted ||22.34 ||21.12 ||22.28 ||21.13 |
During the year under review revenue from operations on standalone basis increased toRs. 7259.07 crores as compared to Rs. 6348.52 crores during the previous yearrepresenting growth of more than 14%. The net profit after tax also increased to Rs.400.88crores as compared to Rs. 378.23 crores during the previous year representing growth ofapproximately 6%. The share of domestic and export sales in the revenue from operations onstandalone basis is Rs. 5166.13 crores (71.17%) and Rs. 2092.94 crores (28.83%)respectively.
Your Company continued its growth journey and opened 10 new showrooms includingremaining 4 showrooms out of the 20 showrooms earmarked to be opened from Initial PublicOffer ("IPO") proceeds and has completely utilized the net IPO proceeds.During the year the Company also took initiatives on small and franchisee showrooms andopened 1 small showroom and 1 franchise showroom. The Company has total 60 showrooms as onMarch 31 2016. After end of the year under review your Company has opened 4 newshowrooms and as on the date of this report your Company is having total 64 showroomslocated in 52 cities across India.
During the year under review the Company launched its Flexia jewellery collection andacquired AZVA brand Indias first branded gold jewellery from World GoldCouncil in one of its wholly owned subsidiary. In technical tie up with California basedleading tech firm Martian Inc. your Company is working on development of smart jewellery.
During the year under review the authorised share capital of the Company has beenincreased from Rs.200 crores to Rs. 225 crores. After the end of the year subject to theapproval of the Members the Company proposed to further increase its authorised sharecapital to Rs.500 crore comprising of 24 crores equity shares of Rs.10/- each and 26crores preference shares of Rs.10/- each. The paid-up share capital of the Companyremained unchanged during the year.
CHANGE OF REGISTERED OFFICE
The registered office of the Company was shifted from 24/2708 Bank Street Karol BaghNew Delhi - 110005 to C 54 Preet Vihar Vikas Marg Delhi 110092 witheffect from July 21 2015.
Your Directors are pleased to recommend a dividend of Rs. 3.35 per equity share (i.e.@33.50% of face value of Rs.10/- each) for the financial year 2015-16 subject to theapproval of Members in the 11th Annual General Meeting.
TRANSFER TO GENERAL RESERVE
Your Directors do not propose to transfer any amount to the General Reserve.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mrs. Kusum Jain who was appointed as an Additional Director in the capacity ofNon-Executive Non-Independent Director on March 31 2015 was regularised in the 10thAnnual General Meeting of the Company held on September 19 2015. In the same meeting ShriSuresh Kumar Jain was appointed as Non-Executive Independent Director for a term of 3years w.e.f. September 19 2015.
Shri Padam Chand Gupta Director of the Company retires by rotation and being eligibleoffers himself for re-appointment at the 11th Annual General Meeting.
Shri Ramesh Kumar Sharma whose present term of appointment as Whole-time Director ofthe Company is expiring on February 6 2017 is proposed to be re-appointed as Whole-timeDirector of the Company for a further term of 5 years at the 11th AnnualGeneral Meeting.
Brief resumes of Shri Padam Chand Gupta & Shri Ramesh Kumar Sharma forms part ofthe Notice convening the Annual General Meeting.
No changes among Key Managerial Personnel took place during the year and Shri BalramGarg Managing Director Shri Sanjeev Bhatia Chief Financial Officer and Shri VijayPanwar Company Secretary continues to be Key Managerial Personnel of the Company.
SUBSIDIARY ASSOCIATES AND JOINT VENTURE COMPANIES
As on March 31 2016 your Company has three wholly owned non-material Indiansubsidiary companies:
(1) PC Universal Private Limited: It is engaged in the business of manufacturingand export of all kinds of gold silver diamond jewellery and ornaments. It has onemanufacturing unit located in Noida Special Economic Zone Noida (U.P.). Its turnover andnet profit for the year were Rs.6980.13 lakhs and Rs.90.61 lakhs respectively.
(2) Transforming Retail Private Limited: It is engaged in the business of tradingof all kinds of gold silver diamond jewellery and ornaments. Presently it sellsjewellery through its online sale portal www.wearyourshine.com. Its turnover for the yearwas Rs.1105.13 lakhs and it incurred a net loss of Rs.155.04 lakhs.
(3) Luxury Products Trendsetter Private Limited: It was incorporated as whollyowned subsidiary of the Company during the year under review. It is engaged in thebusiness of manufacture buy sell etc. of jewellery. During the year under review it hasacquired AZVA brand Indias first branded gold jewellery. It incurred anet loss of Rs.57.70 lakhs during the year.
In terms of proviso to sub-section (3) of Section 129 of the Act the salient featuresof the financial statements of the subsidiaries is set out in the Form AOC-1 which formpart of this Annual Report.
Your Company does not have any associate or joint venture company.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements of the Company and its subsidiaries prepared inaccordance with the Companies Act 2013 and Accounting Standard AS-21 form part of thisAnnual Report.
MANAGEMENT DISCUSSION & ANALYSIS
The Management Discussion and Analysis Report as stipulated under Regulation 34 of theSEBI (Listing Obligations And Disclosure Requirements) Regulations 2015 forms part ofthis Annual Report.
STATEMENT ON DECLARATION GIVEN BY THE INDEPENDENT DIRECTORS
Your Company has received declarations from all the Independent Directors confirmingthat they meet the criteria of independence as prescribed under the Companies Act 2013read with the Schedules and Rules issued thereunder as well as Regulation 16 of the SEBI(Listing Obligations And Disclosure Requirements) Regulations 2015.
NUMBER OF BOARD MEETINGS
During the year five Board meetings were held on May 14 2015; July 21 2015; August13 2015; November 6 2015 and January 23 2016. The time gap between any two Boardmeetings does not exceed 120 days. For further details please refer to Report onCorporate Governance.
The Audit Committee of the Board comprises of four members namely Dr. Manohar LalSingla Shri Krishan Kumar Khurana Shri Miyar Ramanath Nayak and Shri Balram Garg. ExceptShri Balram Garg Managing Director all other members are Independent Directors. Dr.Manohar Lal Singla an Independent Director is the Chairperson of the Audit Committee.For further details please refer to Report on Corporate Governance.
INTERNAL FINANCIAL CONTROLS
Your Company has put in place adequate internal financial controls with reference tothe financial statements commensurate with the size and nature of operations of theCompany. During the year such controls were tested and no reportable material weaknessesin the design or operation were observed. The Company has appointed a professional firm asInternal Auditor to regularly carry out review of the internal control systems andprocedures. The internal Audit Reports are periodically reviewed by the Audit Committee.
Your Company through a Postal Ballot resolution got the approval of Members to invite /accept / renew from time to time unsecured/ secured deposits in the form of advances forthe Companys Jewellery Purchase Schemes from the Members of the Company and thePublic up to permissible limits. Thereafter the Company issued a Circular in the form ofAdvertisement inviting Deposits and started accepting deposits w.e.f. August 15 2015under its Jewellery Purchase Scheme "Jewel For Less".
The details relating to deposits covered under Chapter V of the Companies Act 2013are as under:
|(a) Accepted during the year ||: Rs. 30.97 crores |
|(b) Remained unpaid or unclaimed as at the end of the year ||: Rs. 30.71 crores |
(c) Whether there has been any default in repayment of deposits or payment of interestthereon during the year and if so number of such cases and the total amount involved-
|(i) at the beginning of the year ||: Nil |
|(ii) maximum during the year ||: Nil |
|(iii) at the end of the year ||: Nil |
The Company has not accepted any deposits which are not in compliance with therequirements of Chapter V of the Companies Act 2013.
STATUS OF UNCLAIMED / UNPAID AMOUNT
(A) As on March 31 2016 Rs. 216445/- were lying as unclaimed/ unpaid in theCompanys IPO refund account.
(B) As on March 31 2016 Rs. 473764.60 were lying as unclaimed / unpaid dividendas under:
|Financial Year ||Type of dividend ||Date of declaration of dividend ||Total dividend ||Unclaimed dividend ||Due date for transfer to IEPF* |
| || || ||(Rs.) ||(Rs.) ||(%) || |
|2012-13 ||Final ||September 18 2013 ||179100000 ||126688 ||0.07 ||October 24 2020 |
|2013-14 ||Interim ||January 20 2014 ||268650000 ||55767 ||0.02 ||February 25 2021 |
|2013-14 ||Final ||September 13 2014 ||268650000 ||35220 ||0.01 ||October 13 2021 |
|2014-15 ||Final ||September 19 2015 ||573120000 ||256089.60 ||0.04 ||October 24 2022 |
* Investor Education and Protection Fund
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
The details of loans / guarantees given and investments made form part of the notes tothe financial statements.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All related party transactions that were entered during the year were in the ordinarycourse of business and on arms length basis. During the year your Company had notentered into any contract / arrangement / transaction with related parties which could beconsidered as material in accordance with the Companys Policy on Materiality ofRelated Party Transactions & Dealing with Related Party. Hence disclosure in FormAOC-2 is not required. Details of related parties and transactions with them as requiredby the Accounting Standards (AS-18) have been disclosed in the Notes forming part of thefinancial statements.
CRISIL Limited vide its letter dated August 7 2015 has reaffirmed CRISIL A/Stable(Long-Term Rating) and CRISIL A1 (Short-Term Rating) to the total bank facilities(Rs.3850 crores).
India Ratings & Research Private Limited a Fitch Group Company vide its letterdated February 2 2016 has assigned IND A1+ rating to the additional commercial paperprogramme (Rs.100 crores) of the Company and also affirmed IND A1+ rating to the existingcommercial paper programme (Rs.100 crores).
Credit Analysis & Research Limited vide its letter dated February 1 2016 hasreaffirmed CARE A+ (FD) to the deposits programme (Rs.200 crores) of the Company.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN END OF THEFINANCIAL YEAR AND DATE OF REPORT
After end of the year under review your Company:
(1) Issued and allotted 4269984 Compulsorily Convertible Debentures having face valueof Rs.1000/- each at par by way of a preferential allotment on private placement basisto DVI Fund (Mauritius) Ltd.
(2) Subject to receipt of necessary approvals proposed to issue and allot 257372912Compulsorily Convertible Preference Shares having face value of Rs.10/- each by way ofpreferential allotment on private placement basis to certain Investors.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
(A) CONSERVATION OF ENERGY
In its endeavour towards conservation of energy your Company equipped all its officesshowrooms and manufacturing units with LED lights.
(B) TECHNOLOGY ABSORPTION
The Company has not carried out any research and development activities.
(C) FOREIGN EXCHANGE EARNINGS AND OUTGO
Foreign Exchange Earnings & Outgo during the year are as under:
|Earnings ||: Rs.2094.02 crores |
|Outgo ||: Rs.2.80 crores |
DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013
Your Company has zero tolerance for sexual harassment at workplace and has adopted aPolicy against Sexual Harassment in line with the provisions of Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013 and the rules framedthereunder. During the year the Company had not received any complaint on sexualharassment and no complaint was pending as on March 31 2016.
Your Company has put in place a Risk Management Policy to define a framework foridentification assessment and mitigation of risk. In the opinion of the Board there areno risks which may threaten the existence of the Company.
WHISTLE BLOWER POLICY / VIGIL MECHANISM
Your Company has formulated a Whistle Blower Policy / Vigil Mechanism which provides aformal mechanism for all employees and Directors of the Company to report about unethicalbehavior actual or suspected fraud or violation of the Companys code of conduct oran event he becomes aware of that could have a detrimental effect on the business orreputation of the Company and provides reassurance that they will be protected fromreprisals or victimization for whistle blowing. The Policy has been posted on theCompanys website. No person was denied access to the Chairperson of the AuditCommittee to report any concern.
In accordance with the Companies Act 2013 and Clause 49 of the Listing Agreement theBoard of your Company on the recommendation of Nomination and Remuneration Committee laiddown Criteria for evaluation of Board its Committees and individual Directors andaccordingly carried out the evaluation process. The process was based on evaluation formswhich include a rating mechanism. Independent Directors at their separate meeting alsoreviewed the performance of the Board as a whole Non-Independent Directors and theChairman.
The criteria for performance evaluation of Board and its Committees amongst othersincludes their structure and composition processes information and functioning terms ofreference of the Committees suggestions / recommendations by the Committees to the Boardetc.
The criteria for performance evaluation of Directors including Executive &Independent Directors amongst others includes their attendance and contribution atmeetings devotion of time and effort to understand the Company its business theirduties and responsibilities leadership qualities and effectiveness of communication withall stakeholders impact and influence on Board / Committees and adherence to the Code ofConduct etc.
SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS
There are no significant/material orders passed by the Regulators or Courts orTribunals impacting the going concern status of your Company and its operations in future.
CHANGE IN THE NATURE OF BUSINESS IF ANY
There was no change in the nature of business of the Company during the year underreview.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) of the Companies Act 2013 your Directors confirm that:
a) in the preparation of the annual accounts the applicable accounting standardshad been followed and there are no material departures from the same;
b) the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit and loss of the Company for that period;
c) the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors had prepared the annual accounts on a going concern basis;
e) the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
f) the Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
EMPLOYEES STOCK OPTION PLAN
Your Company has granted 726300 stock options to the eligible employees of theCompany on May 14 2015. Each option entitles the Grantee thereof to apply for and beallotted one equity share of the Company upon vesting. The necessary disclosure pursuantto Regulation 14 of the SEBI (Share Based Employee Benefits) Regulations 2014 is annexedas "Annexure 1."
AUDITORS AND THEIR REPORT
M/s Walker Chandiok & Co LLP Chartered Accountants (Firm Registration No.001076N/N500013) and M/s Sharad Jain Associates Chartered Accountants (Firm RegistrationNo. 015201N) were appointed as Statutory Auditors of the Company for 5 years and 2 yearsrespectively in the 10th Annual General Meeting of the Company held onSeptember 19 2015 subject to ratification by the Members at every Annual GeneralMeeting. The Company has received their consent letters and eligibility certificates underSections 139 and 141 of the Companies Act 2013. As required under Regulation 33 of theListing Regulations the auditors have also confirmed that they hold a valid certificateissued by the Peer Review Board of the Institute of Chartered Accountants of India. TheBoard of Directors recommends their appointment for ratification in the 11thAnnual General Meeting.
The notes to the financial statements referred to in the Auditors Report areself-explanatory and do not call for any further explanations or comments. TheAuditors Report does not contain any qualification reservation or adverse remark.
Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 your Companyhas appointed Shri Randhir Singh Sharma Practicing Company Secretary New Delhi toconduct the Secretarial Audit of the Company for the financial year 2015-16. TheSecretarial Audit Report is annexed herewith as "Annexure - 2" to thisReport. The Secretarial Audit Report does not contain any qualification observation oradverse remarks.
CORPORATE GOVERNANCE REPORT
Your Company believes in the principle of corporate governance and is committed tomaintain the highest standards of Corporate Governance. The detailed Report on CorporateGovernance as stipulated under SEBI (Listing Obligations And Disclosure Requirements)Regulations 2015 forms part of this Annual Report. The Certificate from the PracticingCompany Secretary confirming compliance with the conditions of Corporate Governance isannexed as "Annexure3" to this report.
PARTICULARS OF EMPLOYEES
The information required under Section 197(12) of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respectof employees of the Company is annexed as"Annexure4" to thisReport.
CORPORATE SOCIAL RESPONSIBILITY
Social responsibility has always been at the forefront of your Companys operatingphilosophy. As a responsible corporate citizen the Company tries to contribute towardssocial causes on a regular basis. The Corporate Social Responsibility Policy of theCompany is placed on its website www.pcjeweller.com. CSR programs or projects to beundertaken by the Company in terms of this Policy shall relate to one or more activitieslisted in Schedule VII of the Companies Act 2013 at present or as may be amended fromtime to time. The CSR Committee comprises of Dr. Manohar Lal Singla Independent Director(Chairman) Shri Krishan Kumar Khurana Independent Director (Member) and Shri RameshKumar Sharma Executive Director (Member). The Annual Report on CSR activities as per theCompanies (Corporate Social Responsibility Policy) Rules 2014 in the prescribed formatis annexed as "Annexure 5" to this Report.
POLICY ON DIRECTORS APPOINTMENT & REMUNERATION AND CRITERIA FOR DETERMININGQUALIFICATIONS POSITIVE ATTRIBUTES & INDEPENDENCE OF A DIRECTOR
The Companys Policy on Directors appointment & remuneration andCriteria for determining qualifications positive attributes & independence of aDirector are annexed as "Annexure 6" and "Annexure 7"to this Report.
EXTRACT OF ANNUAL RETURN
Extract of Annual Return in Form No. MGT-9 is annexed as "Annexure 8"tothis report.
Your Directors wish to convey their gratitude and place on record their appreciationfor all the employees at all levels for their hard work cooperation and dedication duringthe year. Your Directors also sincerely convey their appreciation to customersshareholders vendors bankers regulatory and government authorities for their continuedsupport.
| ||For and on behalf of the Board |
| ||PC Jeweller Limited |
| ||Sd/- |
|Date: August 18 2016 ||(PADAM CHAND GUPTA) |
|Place: New Delhi ||Chairman |
| ||DIN: 00032794 |