You are here » Home » Companies » Company Overview » PC Jeweller Ltd

PC Jeweller Ltd.

BSE: 534809 Sector: Consumer
NSE: PCJEWELLER ISIN Code: INE785M01013
BSE 00:00 | 30 Jul 24.55 0.55
(2.29%)
OPEN

24.40

HIGH

24.85

LOW

24.05

NSE 00:00 | 30 Jul 24.50 0.50
(2.08%)
OPEN

24.25

HIGH

24.90

LOW

24.00

OPEN 24.40
PREVIOUS CLOSE 24.00
VOLUME 155910
52-Week high
52-Week low
P/E 18.74
Mkt Cap.(Rs cr) 1,143
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 24.40
CLOSE 24.00
VOLUME 155910
52-Week high
52-Week low
P/E 18.74
Mkt Cap.(Rs cr) 1,143
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

PC Jeweller Ltd. (PCJEWELLER) - Auditors Report

Company auditors report

To the Members of PC Jeweller Limited

Report on the Audit of the Standalone Financial Statements

Qualified Opinion

1. We have audited the accompanying standalone financial statements ofPC Jeweller Limited ('the Company') which comprise the Balance Sheet as at 31 March 2020the Statement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information.

2. In our opinion and to the best of our information and according tothe explanations given to us except for the possible effects of the matter described inthe Basis for Qualified Opinion section of our report the aforesaid standalone financialstatements give the information required by the Companies Act 2013 ('Act') in the mannerso required and give a true and fair view in conformity with the accounting principlesgenerally accepted in India including Indian Accounting Standards ('Ind AS') specifiedunder section 133 of the Act of the state of affairs of the Company as at 31 March 2020and its profit (including other comprehensive income) its cash flows and the changes inequity for the year ended on that date.

Basis for Qualified Opinion

3. As explained in note 51 to the accompanying standalone financialstatements the Company during the previous year ended 31 March 2019 had provideddiscounts of Rs.513.65 crore to its export customers which had been adjusted against therevenues for the said year. The Company had initiated the process of complying with therequirements of the Master Circular on Exports of Goods and Services issued by the ReserveBank of india and had filed the necessary applications with the appropriate authority forapproval of such discounts which is a prerequisite under the Foreign Exchange ManagementAct 1999. Subsequently the Company has obtained the approvals from the authorized dealerbanks for reduction in receivables corresponding to discounts amounting to Rs.89.69 crore.For the remaining discounts of Rs. 423.96 crore in the absence of requisite approvals andmaterial evidence related to such transactions we are unable to comment on the impact ifany of the same on the accompanying financial statements. Our opinion for the year ended31 March 2019 was also qualified in respect of this matter.

4. We conducted our audit in accordance with the Standards on Auditingspecified under section 143(10) of the Act. Our responsibilities under those standards arefurther described in the Auditor's Responsibilities for the Audit of the FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of india ('ICAI') togetherwith the ethical requirements that are relevant to our audit of the financial statementsunder the provisions of the Act and the rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our qualified opinion.

Emphasis of Matters - Impact of COVID 19 on financial statements andcompliances with laws and regulations

5. We draw attention to note 50 to the accompanying standalonefinancial statements which describes the impact of COVID-19 pandemic on the Company'soperations. In view of the uncertainties in the economic environment due to the outbreakof COVID-19 pandemic the impact on the financial position and performance of the Companyis significantly dependent on the future developments as they evolve.

6. We draw attention to note 52 to the accompanying standalonefinancial statements regarding the delays in receipt of proceeds denominated in foreigncurrency against export of goods made by the Company to its overseas customers aggregatingto Rs. 794.07 crore outstanding as on 31 March 2020 beyond the timelines stipulated underthe Foreign Exchange Management Act 1999. The management of the Company has filed thenecessary applications with the appropriate authority for condonation of such delays toregularize the default. Pending condonation of such delay by the appropriate authoritymanagement is of the view that the possible penalties that may be levied are currentlyunascertainable but would not be material and accordingly no consequential adjustmentshave been made to the accompanying standalone financial statements with respect to suchdelay/default.

Our opinion is not modified in respect of the above matters.

Key Audit Matters

7. Key audit matters are those matters that in our professionaljudgment were of most significance in our audit of the standalone financial statements ofthe current period. These matters were addressed in the context of our audit of thefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.

8. In addition to the matters described in the Basis for QualifiedOpinion section we have determined the matters described below to be the key auditmatters to be communicated in our report.

Key audit matter How our audit addressed the key audit matter
Existence and valuation of inventory Our audit work in relation to the existence and valuation of inventory included but was not limited to performing the following procedures:
The Company has an inventory balance of Rs. 5258.84 crore as at 31 March 2020 as disclosed in note 10 of the accompanying standalone financial statements. Refer note 3(j) for the corresponding accounting policy adopted by the management with respect to the inventory balance. • Obtained an understanding of the management's process for physical verification including the changes required thereto as a result of COVID-19 related restrictions and recognition and measurement of purchase cost of gold diamonds and manufactured jewellery items.
The Company purchases gold from nominated agencies prescribed by Reserve Bank of india. Further the Company also purchases gold and diamonds from institutional parties and from the customers as per the exchange schemes announced by the Company. • Evaluated the design and tested the operating effectiveness of controls implemented by the Company with respect to such process including controls around safeguarding the high value inventory items.
With respect to existence of inventory as at year end there is an inherent risk of loss from theft or possible malafide intent due to the high intrinsic value and portable nature of individual inventory items. • Inspected the instructions given by supervisory teams to the management count teams.
In addition to the physical verification performed by the management with the help of an independent professional gemologist the lenders of the Company also conduct stock counts with the help of their appointed independent gemologists. • Assessed the appropriateness of accounting policy and management valuation methodology adopted by the management.
Due to outbreak of the COVID-19 there has been a lockdown enforced in various geographies near year end and several restrictions were imposed by the government on travel which resulted into complexities for us to observe the physical verification of inventory conducted by the management. This was resolved by applying alternate audit techniques with the help of audio/video devices etc. as further described in our audit procedures. • Evaluated the professional competence objectivity and professional experience and competence of the gemologist used by the management.
Considering the complexities involved portable nature of diamonds high inherent risk and high level of estimation uncertainty involved in valuation of the inventory the existence and valuation of inventory has been determined as key audit matter for the current year audit. • On a sample basis tested invoices and other underlying records to validate the costs and characteristics basis which the inventory is categorized for inventory management and valuation.
Recoverability of investments loans and short-term financial assets given to/due from subsidiary companies • Obtained the management physical verification records and inventory reconciliation performed by the management as at the year end.
The Company has investments of Rs. 136.30 crore long-term loans amounting to Rs. 123.05 crore and short-term financial assets of Rs. 87.06 crore recoverable from five wholly-owned subsidiary companies as at 31 March 2020. • Inspected reports of physical verification done by gemologists appointed by the lenders of the Company for corroborative evidence.
The investment in the aforesaid subsidiaries are accounted for at cost in accordance with Ind AS 27 Separate Financial Statements. The Company assesses the recoverable amount of the investment when impairment indicators exist by comparing the fair value (less costs of disposal) and carrying amount of the investment as on the reporting date. • Performed independent test counts / observed live video feeds of inventory counts for certain locations subsequent to year-end and other safeguarding procedures and performed roll-back procedures to corroborate management counts and valuation based on management categorization with the help of an independent professional gemologist used as an auditor's expert.
The loans given to and the short-term financial assets recoverable from such subsidiary companies are accounted for as per Ind AS 109 Financial Instruments. • Obtained the category-wise inventory reconciliation from the management and tested the same on sample basis.
Refer note 3(h) for the accounting policy disclosed in the accompanying financial statements. • On a sample basis tested samples of inventory sold before year-end and subsequent to year-end to corroborate management's assessment of net realizable value of closing inventory balance.
Owing to the current operations of three of the subsidiary companies with aggregate carrying value of investments long-term loans and short-term financial assets amounting to Rs. 212.50 crore as at 31 March 2020 the management has performed an impairment assessment and has estimated the recoverable amount of its investment in the subsidiaries using 'Discounted Cash Flow valuation model' which is complex and involves the use of significant management estimates and assumptions that are dependent on expected future market and economic conditions. The key assumptions underpinning management's assessment of the fair valuation include but are not limited to projections of future cash flows growth rates discount rates estimated future operating and capital expenditure. • Evaluated disclosures made in the accompanying financial statements for appropriateness and adequacy in accordance with the requirements of the accounting standards.
Basis the valuation performed as above during the year the Company has recorded Rs.6.81 crore as provision for impairment in the short-term financial assets of the subsidiary PC Universal Private Limited as disclosed in note 53 to the accompanying financial statements. As at 31 March 2020 the provision for impairment in the value of investments and short-term financial assets amounts to Rs.0.05 crore and Rs. 21.05 crore respectively. Our audit procedures in relation to the valuation of the investments loans and short-term financial assets given to/due from subsidiary companies included but were not limited to the following:
Changes to assumptions could lead to material changes in estimated recoverable amounts resulting in either impairment of the investments or the loans given to these subsidiaries. • Obtained an understanding of management's processes and controls for determining the fair valuation of long term loans investments and short term financial assets.
Accordingly considering the materiality complexity and significance of judgement involved the fair valuation of aforesaid investments has been considered to be a key audit matter for current year's audit. • Evaluated the design of and tested the operating effectiveness of the key controls around the fair valuation of the loan and investment including controls around cash flow projections.
• Evaluated the professional competence expertise and objectivity of the valuation specialist used by the management.
• Assessed the appropriateness of the valuation methodology used to arrive at the estimated fair value of the investments using an auditor's expert;
• Tested the accuracy of the input data provided by the management to the valuation specialist by reconciling the projected cash flows to approved business plans of the investee company.
• Tested the reasonableness of the key assumptions used in the cash flow projections and fair valuation such as growth rates targeted savings discount rate etc. considering our understanding of the business industry and relevant market factors including the possible impact of COVID -19 pandemic on such assumptions.
• Obtained and evaluated the reasonableness of sensitivity analysis performed by the management on aforesaid key assumptions and performed further independent sensitivity analysis to determine impact of estimation uncertainty on the fair valuation.
• Tested the mathematical accuracy of the cash flow projections fair valuation computation and resulting impairment recorded in the current year.
• Evaluated the appropriateness and adequacy of disclosures made in the financial statement in relation to such investments and their fair valuation as required by applicable accounting standards.

Information other than the Financial Statements and Auditor's Reportthereon

9. The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Report on Corporate Governance and Directors' Report but doesnot include the standalone financial statements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Asdescribed in the Basis for Qualified Opinion section above in the absence of requisiteapprovals and material evidence related to discount to export customers we are unable tocomment on the impact if any of the same on the accompanying standalone financialstatements. We have concluded that the other information is materially misstated for thesame reason with respect to the amounts or other items in the Management Discussion andAnalysis and Directors' Report affected by the absence of requisite approvals and materialevidence relating to the aforementioned transaction.

Responsibilities of Management and Those Charged with Governance forthe Standalone Financial Statements

10. The accompanying standalone financial statements have been approvedby the Company's Board of Directof The Company's Board of Directors is responsible for thematters stated in section 134(5) of the Act with respect to the preparation of thesestandalone financial statements that give a true and fair view of the financial positionfinancial performance including other comprehensive income changes in equity and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the Ind AS specified under section 133 of the Act. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

11. In preparing the financial statements management is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

12. Those Board of Directors is also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

13. Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith Standards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.

14. As part of an audit in accordance with Standards on Auditing weexercise professional judgment and maintain professional skepticism throughout the audit.We also:

• Identify and assess the risks of material misstatement of thefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol;

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls with reference to financialstatements in place and the operating effectiveness of such controls;

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management;

• Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern;

• Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

15. We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

16. We also provide those charged with governance with a statement thatwe have complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

17. From the matters communicated with those charged with governancewe determine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

18. As required by section 197(16) of the Act based on our audit wereport that the Company has paid remuneration to its directors during the year inaccordance with the provisions of and limits laid down under section 197 read withSchedule V to the Act.

19. As required by the Companies (Auditor's Report) Order 2016 ('theOrder') issued by the Central Government of india in terms of section 143(11) of the Actwe give in the Annexure A a statement on the matters specified in paragraphs 3 and 4 ofthe Order.

20. Further to our comments in Annexure A as required by section143(3) of the Act based on our audit we report to the extent applicable that:

a) we have sought and except for the matter described in the Basis forQualified Opinion section obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit of theaccompanying standalone financial statements;

b) except for the possible effects of the matter described in the Basisfor Qualified Opinion section in our opinion proper books of account as required by lawhave been kept by the Company so far as it appears from our examination of those books;

c) the standalone financial statements dealt with by this report are inagreement with the books of account;

d) except for the possible effects of the matter described in the Basisfor Qualified Opinion section in our opinion the aforesaid standalone financialstatements comply with Ind AS specified under section 133 of the Act;

e) on the basis of the written representations received from thedirectors and taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2020 from being appointed as a director in terms of section164(2) of the Act;

f) the qualification relating to the maintenance of accounts and othermatters connected therewith are as stated in the Basis for Qualified Opinion section;

g) we have also audited the internal financial controls with referenceto financial statements of the Company as on 31 March 2020 in conjunction with our auditof the standalone financial statements of the Company for the year ended on that date andour report dated 29 June 2020 as per Annexure B expressed unmodified opinion; and

h) with respect to the other matters to be included in the Auditor'sReport in accordance with rule 11 of the Companies (Audit and Auditors) Rules 2014 (asamended) in our opinion and to the best of our information and according to theexplanations given to us:

i. the Company as detailed in note 44(b) 44(c) and 44(d) to thestandalone financial statements has disclosed the impact of pending litigations on itsfinancial position as at 31 March 2020;

ii. the Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses as at 31 March2020;

iii. there has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company during the yearended 31 March 2020; and

iv. the disclosure requirements relating to holdings as well asdealings in specified bank notes were applicable for the period from 8 November 2016 to 30December 2016 which are not relevant to these standalone financial statements. Hencereporting under this clause is not applicable.

For Walker Chandiok & Co LLP

Chartered Accountants

Firm's Registration No.: 001076N/N500013

Sd/-

Rajni Mundra

Partner

Membership No.: 058644

UDIN: 20058644AAAABI8453

Place: New Delhi

Date: 29 June 2020

Annexure A to the Independent Auditor's Report of even date to themembers of PC Jeweler Limited on the standalone financial statements for the year ended31 March 2020

Annexure A

Based on the audit procedures performed for the purpose of reporting atrue and fair view on the financial statements of the Company and taking intoconsideration the information and explanations given to us and the books of account andother records examined by us in the normal course of audit and to the best of ourknowledge and belief we report that:

(i) (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of property plant and equipment('PPE').

(b) The PPE have been physically verified by the management during theyear and no material discrepancies were noticed on such verification. In our opinion thefrequency of verification of the PPE is reasonable having regard to the size of theCompany and the nature of its assets.

(c) The title deeds of all the immovable properties (which are includedunder the head 'Property plant and equipment') are held in the name of the Company.

(ii) In our opinion the management has conducted physical verificationof inventory at reasonable intervals during the year except for stocks lying with thirdparties. For stocks lying with the third parties at the year-end written confirmationshave been obtained by the management. No material discrepancies were noticed on theaforesaid verification.

(iii) The Company has not granted any loan secured or unsecured tocompanies firms Limited Liability Partnerships (LLPs) or other parties covered in theregister maintained under Section 189 of the Act. Accordingly the provisions of clauses3(iii)(a) 3(iii)(b) and 3(iii)(c) of the Order are not applicable.

(iv) In our opinion the Company has complied with the provisions ofSections 185 and 186 of the Act in respect of loans and investments. Further in ouropinion the Company has not entered into any transaction covered under Section 185 andSection 186 of the Act in respect of guarantees and security.

(v) In our opinion the Company has complied with the directives issuedby the Reserve Bank of india the provisions of Sections 73 to 76 and other relevantprovisions of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended)as applicable with regard to the deposits accepted except for the compliance of therequirements of section 73(2)(c) of the Act where the amount maintained by the Company ina separate Deposit Repayment Reserve Account with a scheduled bank as at 31 March 2020 isshort by Rs. 4.85 crores. According to the information and explanations given to us noorder has been passed by the Company Law Board or National Company Law Tribunal or ReserveBank of india or any Court or any other Tribunal in this regard.

(vi) The Central Government has not specified maintenance of costrecords under sub-section (1) of Section 148 of the Act in respect of Company's products.Accordingly the provisions of clause 3(vi) of the Order are not applicable.

(vii) (a) Undisputed statutory dues including provident fundemployees' state insurance income-tax goods and services tax sales tax service taxduty of customs duty of excise value added tax cess and other material statutory duesas applicable have generally been regularly deposited to the appropriate authoritiesthough there has been a slight delay in a few cases. Undisputed amounts payable in respectthereof which were outstanding at the year-end for a period of more than six months fromthe date they became payable are as follows:

Statement of arrears of statutory dues outstanding for more than sixmonths

Name of the statute Nature of the dues Amount (Rs. in crore) Period to which the amount relates Due Date Date of Payment
Income-tax Act 1961 Income-tax (including interest) 100.92 Financial year 2017-18 15 March 2018 Not yet paid
Income-tax Act 1961 Income-tax (including interest) 5.11 Financial year 2018-19 15 March 2019 Not yet paid

Annexure A to the Independent Auditor's Report of even date to themembers of PC Jeweler Limited on the standalone financial statements for the year ended31 March 2020

(b) The dues outstanding in respect of income-tax sales-taxservice-tax duty of customs duty of excise and value added tax on account of anydispute are as follows:

Statement of disputed dues

Name of the statute Nature of dues Amount (Rs. in crores) Amount paid under Protest (Rs. in crores) Period to which the amount relates Forum where dispute is pending
Income-tax Act 1961 Income-tax 0.19 Assessment Year ('AY) 2009-10 Income-tax Appellate Tribunal ('ITAT')
Income-tax Act 1961 Income-tax 0.85 - AY 2013-14 ITAT
Income-tax Act 1961 Income-tax 4.43 - AY 2014-15 ITAT
Customs Act 1962 Custom duty 2.43 2.43 Financial year ('FY') 2010-11 Principal

Commissioner of Customs New Delhi

Rajasthan Value Added Tax Act 2003 Value added tax 0.05 FY 2010-11 The Rajasthan High Court
Rajasthan Value Added Tax Act 2003 Value added tax 0.44 FY 2011-12 The Rajasthan High Court
Rajasthan Value Added Tax Act 2003 Value added tax 0.50 FY 2012-13 The Rajasthan High Court
Rajasthan Value Added Tax Act 2003 Value added tax 2.73 FY 2013-14 The Rajasthan High Court
Rajasthan Value Added Tax Act 2003 Value added tax 2.31 FY 2014-15 The Rajasthan High Court
Rajasthan Value Added Tax Act 2003 Value added tax 2.21 FY 2015-16 The Rajasthan High Court

(viii) The Company has not defaulted in repayment of loans orborrowings to any financial institution or bank during the year. The Company did not haveany loans or borrowings payable to government and further did not have any outstandingdebentures during the year.

(ix) The Company did not raise moneys by way of initial public offer orfurther public offer (including debt instruments). In our opinion the term loans wereapplied for the purposes for which the loans were obtained.

(x) No fraud by the Company or on the Company by its officers oremployees has been noticed or reported during the period covered by our audit.

(xi) Managerial remuneration has been paid and provided by the Companyin accordance with the requisite approvals mandated by the provisions of Section 197 ofthe Act read with Schedule V to the Act.

(xii) In our opinion the Company is not a Nidhi Company. Accordinglyprovisions of clause 3(xii) of the Order are not applicable.

(xiii) In our opinion all transactions with the related parties are incompliance with Sections 177 and 188 of Act where applicable and the requisite detailshave been disclosed in the financial statements etc. as required by the applicable IndAS.

(xiv) During the year the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures.

(xv) In our opinion the Company has not entered into any non-cashtransactions with the directors or persons connected with them covered under Section 192of the Act.

(xvi) The Company is not required to be registered under Section 45-IAof the Reserve Bank of india Act 1934.

For Walker Chandiok & Co LLP

Chartered Accountants

Firm's Registration No.: 001076N/N500013

Sd/-

Rajni Mundra

Partner

Membership No.: 058644

UDIN: 20058644AAAABI8453

Place: New Delhi

Date: 29 June 2020

Annexure B to the Independent Auditor's Report of even date to themembers of PC Jeweller Limited on the standalone financial statements for the year ended31 March 2020

Annexure B

Independent Auditor's Report on the internal financial controls withreference to the standalone financial statements under Clause (i) of Sub-section 3 ofSection 143 of the Companies Act 2013 ('the Act')

1. In conjunction with our audit of the standalone financial statementsof PC Jeweller Limited ('the Company') as at and for the year ended 31 March 2020 we haveaudited the internal financial controls with reference to financial statements of theCompany as at that date.

Responsibilities of Management and Those Charged with Governance forInternal Financial Controls

2. The Company's Board of Directors is responsible for establishing andmaintaining internal financial controls based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of internalFinancial Controls over Financial Reporting ('the Guidance Note') issued by the Instituteof Chartered Accountants of india ('ICAI'). These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of the Company's businessincluding adherence to the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditor's Responsibility for the Audit of the Internal FinancialControls with Reference to Financial Statements

3. Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to financial statements based on our audit. Weconducted our audit in accordance with the Standards on Auditing issued by the ICAIprescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to financial statements and the Guidance Noteissued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls with reference to financial statements wereestablished and maintained and if such controls operated effectively in all materialrespects.

4. Our audit involves performing procedures to obtain audit evidenceabout the adequacy of the internal financial controls with reference to financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to financial statements includes obtaining an understanding of suchinternal financial controls assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedures selected depend on the auditor's judgement includingthe assessment of the risks of material misstatement of the financial statements whetherdue to fraud or error.

5. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the Company's internalfinancial controls with reference to financial statements.

Meaning of internal Financial Controls with Reference to FinancialStatements

6. A company's internal financial controls with reference to financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. A company's internalfinancial controls with reference to financial statements include those policies andprocedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the company's assets that could have a material effecton the

Annexure B to the Independent Auditor's Report of even date to themembers of PC Jeweller Limited on the standalone financial statements for the year ended31 March 2020 financial statements.

Inherent Limitations of internal Financial Controls with Reference toFinancial Statements

7. Because of the inherent limitations of internal financial controlswith reference to financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to financial statements to future periods are subject to the riskthat the internal financial controls with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

8. In our opinion the Company has in all material respects adequateinternal financial controls with reference to financial statements and such controls wereoperating effectively as at 31 March 2020 based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note issued by the ICAI.

For Walker Chandiok & Co LLP

Chartered Accountants

Firm's Registration No.: 001076N/N500013

Sd/-

Rajni Mundra

Partner

Membership No.: 058644

UDIN: 20058644AAAABI8453

Place: New Delhi

Date: 29 June 2020

.