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PC Jeweller Ltd.

BSE: 534809 Sector: Consumer
NSE: PCJEWELLER ISIN Code: INE785M01013
BSE 00:00 | 25 Nov 79.25 -2.25
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NSE 00:00 | 25 Nov 79.30 -2.05
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OPEN 81.00
PREVIOUS CLOSE 81.50
VOLUME 78005
52-Week high 104.90
52-Week low 18.65
P/E
Mkt Cap.(Rs cr) 3,688
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 81.00
CLOSE 81.50
VOLUME 78005
52-Week high 104.90
52-Week low 18.65
P/E
Mkt Cap.(Rs cr) 3,688
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

PC Jeweller Ltd. (PCJEWELLER) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting the 17th Annual Report along with theaudited financial statements of the Company for the financial year ended March 31 2022.

FINANCIAL HIGHLIGHTS

The highlights of standalone financial statements of the Company for the financial yearended March 31 2022 and previous year are as under:

(Rs in crore except earnings per share)

Particulars 2021-22 2020-21
Revenue from operations 1574.05 2669.34
Other income 59.51 30.67
Total income 1633.56 2700.01
Profit / (loss) before finance costs depreciation and tax (44.54) 431.35
Less: Finance cost 437.37 393.68
Less: Depreciation & amortisation expenses 26.24 33.26
Profit / (loss) before tax (508.15) 4.41
Less: Tax Expense (118.55) (56.43)
Net profit / (loss) after tax (389.60) 60.84
Other comprehensive income for the year net of tax 0.37 0.58
Total comprehensive income / (loss) for the year (389.23) 61.42
Earnings per equity share (in Rs):
Basic (8.37) 1.50
Diluted (8.37) 1.50

BUSINESS OVERVIEW AND THE COMPANY'S PERFORMANCE

Your Company is one of the leading jewellery companies in the organised jewelleryretail sector in India. It is engaged in the business of trade manufacture and sale ofgold diamond precious stone gold and diamond studded jewellery as well as silverarticles. It offers wide range and variety of jewellery including 100% hallmarked goldjewellery with a focus on certified diamond jewellery to cater not only to weddingjewellery but party and daily wear also.

To meet the choices and requirements of the customers your Company keeps on launchingnew designs and collections from time to time. The Company owns jewellery sub-brandsSwarna Dharohar Inayat and Mirosa. It has launched many new jewellery designs under itssub-brands and collections such as The Fluttering Beauty Mens Collection DiamondMangalsutra Animal Collection Dashavtar Watch Accessories etc.

As on March 31 2022 the Company has total of 82 showrooms including 11 franchiseeshowrooms and also has 4 manufacturing units in India.

During the year under review the Company's accounts with its Lenders turnedNon-performing Assets ("NPA") due to default / non-payment of debt / interest /installments etc. on account of decline in the business and revenues caused by Covid-19pandemic. The Company has since approached its Lenders with its resolution proposal underthe appropriate RBI Guidelines and the same is under their active consideration.

During the year the revenue from operations of your Company fell by 41% to Rs 1574.05crore from Rs 2669.34 crore during previous year mainly on account of restriction inoperations and liquidity constraints after the Company's accounts becoming NPA. As aresult of decline in revenue the Company incurred net loss of Rs 389.60 crore as comparedto net profit of Rs 60.84 crore during previous year.

IMPACT OF COVID_19

The financial year ended March 31 2022 marked the second year since the World HealthOrganisation declared the outbreak of Covid-19 as a pandemic. During the year underreview countries across the globe continued to face economic and social disruptions alongwith the loss of lives and livelihoods. Eruptions of new waves and variants of the virusnecessitated various restrictions and lockdown from time to time.

In April 2021 India witnessed a second wave of Covid-19 followed by another wave inthe fourth quarter which once again affected the revenue from operations of the Company.

Please refer Note 50 of the standalone financial statements for financial year endedMarch 31 2022 for further details in respect of impact of Covid-19 on the financialstatements of the Company.

CAPITAL STRUCTURE

Authorised Share Capital: During the year under review the authorised sharecapital of the Company remained unchanged at Rs 760 crore comprising of 50 crore equityshares of Rs 10/- each and 26 crore preference shares of Rs 10/- each.

Paid-Up Share Capital: The paid-up share capital of the Company also remainedunchanged at Rs 4654038960/- comprising of 465403896 equity shares of Rs 10/- each.

DIVIDEND

The Board of Directors ("Board") has not recommended any dividend forthe year.

TRANSFER TO GENERAL RESERVE

The Board has not proposed transfer of any amount to General Reserve. However theCompany has transferred an amount of Rs 1.64 crore from Share Options Outstanding Accountto General Reserve on account of 37408 share options lapsed / forfeited in accordancewith PC Jeweller Limited Employee Stock Option Plan 2011.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of your Company comprises of 2 Executive and 5 Non-Executive IndependentDirectors including 1 Woman Director.

During the year Shri Balram Garg was re-appointed as Managing Director of the Companyfor a period of 5 years w.e.f. July 1 2021 and Shri Ramesh Kumar Sharma was re-appointedas Whole-time Director for a period of 3 years w.e.f. February 7 2022.

The first term of Smt. Sannovanda Machaiah Swathi as an Independent Director of theCompany will expire on January 18 2023 and it is proposed to re-appoint her for a furtherperiod of 5 years with effect from January 19 2023. On the recommendation of Nominationand Remuneration Committee the Board has recommended her re-appointment for the approvalof Members by way of Special Resolution at the 17th Annual General Meeting (" AGM")of the Company.

Shri Ramesh Kumar Sharma is liable to retire by rotation at the 17th AGM of the Companyand being eligible offers himself for reappointment as a Director of the Company.

Pursuant to Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 ("LODR Regulations") and Secretarial Standard 2 issuedby the Institute of Company Secretaries of India the details of Smt. Sannovanda MachaiahSwathi and Shri Ramesh Kumar Sharma form part of the Notice convening the 17th AGM.

During the year under review no changes have taken place among Key ManagerialPersonnel of the Company.

SUBSIDIARY COMPANIES

As on March 31 2022 your Company has following 5 wholly owned non-materialsubsidiaries:

i) PC Universal Private Limited: It is engaged in the business of manufacturingand export of gold jewellery and have a manufacturing unit at Noida Special Economic ZoneNoida (U.P.). During the year under review it incurred net loss of Rs 5.11 crore.

ii) Transforming Retail Private Limited: It is engaged in the business of onlineretail trading of gold and diamond jewellery. During the year under review its revenuefrom operations was Rs 126.22 crore and registered net profit of Rs 0.40 crore.

iii) Luxury Products Trendsetter Private Limited: It is engaged in the businessof manufacturing / job working and trading of jewellery and have a manufacturing unit atSitapura Jaipur (Rajasthan). During the year under review its revenue from operations wasRs 12.13 crore and registered net profit of Rs 3.98 crore.

iv) PCJ Gems & Jewellery Limited: It is authorized to carry on the businessof manufacturing and trading of all kinds of jewellery. However it has not commencedbusiness operations during the year under review and incurred net loss of Rs 0.02 crore.

v) PC Jeweller Global DMCC: It was incorporated in Dubai (UAE) and is engaged inthe business of jewellery trading. During the year under review its revenue fromoperations was Rs 0.95 crore and incurred net loss of Rs 6.31 crore.

During the year under review no company has become subsidiary of your Company.Comercializadora Internacional PC Jeweller International S.A.S. the wholly ownedsubsidiary of PC Jeweller Global DMCC and step down subsidiary of the Company ceased toexist w.e.f. April 5 2021. It had not commenced business operations till the date ofcessation.

Pursuant to the provisions of Section 129(3) of the Companies Act 2013 (the "Act")a statement containing salient features of the financial statements of the subsidiaries(Form AOC – 1) is annexed as "Annexure – 1" to this Report.Please refer Note 56 of the consolidated financial statements for the financial year endedMarch 31 2022 for the details of contribution of the subsidiaries to the overallperformance of your Company. The financial statements of all the subsidiaries areavailable on the Company's website www.pcjeweller.com in Investor section.

ASSOCIATE AND JOINT VENTURE COMPANIES

Your Company do not have any associate or joint venture company within the meaning ofSection 2(6) of the Act and during the year no company has become or ceased to beassociate or joint venture company.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of the Company have been prepared in accordancewith the accounting principles applicable in India including Indian Accounting Standards(IND AS) specified under Section 133 of the Act read with the rules made thereunder andforms part of the Annual Report.

SECRETARIAL STANDARDS

The Company has complied with the applicable provisions of Secretarial Standards 1 and2 issued by the Institute of Company Secretaries of India and notified by Ministry ofCorporate Affairs.

COST RECORDS

Your Company is not required to maintain cost records as specified under Section 148 ofthe Act.

STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS

All Independent Directors of the Company have confirmed their independence andsubmitted declaration of independence with the Company in accordance with the provisionsof the Act and LODR Regulations. They have also confirmed that they are not aware of anycircumstance or situation which exist or may be reasonably anticipated that could impairor impact their ability to discharge their duties with an objective independent judgementand without any external influence.

BOARD MEETINGS

During the year 5 meetings of the Board were held on May 27 2021; August 14 2021;October 28 2021 November 14 2021 and February 14 2022 respectively.

AUDIT COMMITTEE

Audit Committee comprises of 4 Directors including 3 Independent Directors. Dr. ManoharLal Singla Independent Director is the Chairman of the Committee. For further detailsplease refer to Report on Corporate Governance.

PUBLIC DEPOSITS

Your Company was accepting unsecured deposits from the public under jewellery purchasescheme ‘Jewel for Less'. However during financial year 2019-20 the Company stoppedaccepting fresh deposits from the public after credit rating of its deposit programme wasdowngraded below minimum investment grade by the rating agency. During the year underreview the Company has neither invited nor accepted any deposits. The requisite detailsrelating to deposits covered under Chapter V of the Act are as under:

a) Accepted during the year : Nil b) Remained unpaid or unclaimed as at the end of theyear : Rs 7.06 crore c) Whether there has been any default in repayment of deposits orpayment of interest thereon during the year and if so number of such cases and the totalamount involved:

i) at the beginning of the year : Nil
ii) maximum during the year : Nil
iii) at the end of the year : Nil

There are no deposits that have been accepted by the Company that are not in compliancewith the requirements of Chapter V of the Act.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND _"IEPF"_

As per Section 125 of the Act any dividend amount remaining unpaid / unclaimed for aperiod of 7 years from the date of transfer to unpaid dividend account is required to betransferred to IEPF. Further as per Section 124 of the Act read with IEPF Authority(Accounting Audit Transfer and Refund) Rules 2016 the shares on which dividendremained unpaid / unclaimed for 7 consecutive years are also required to be transferred tothe demat account of IEPF Authority. Accordingly the Company has transferred unclaimedfinal dividend for financial year 2013-14 amounting to Rs 44636/- and 972 equity sharesto IEPF during the year under review.

Those Members whose unclaimed dividends / shares have been transferred to IEPF areadvised to visit the weblink http://iepf.gov. in/IEPF/refund.html and claim the same bymaking an application to IEPF Authority in e-Form IEPF-5. No claim shall lie against theCompany in respect of unclaimed dividend and shares transferred to IEPF.

The details of year wise amount of unclaimed dividend as on March 31 2022 and the duedates for their transfer to IEPF are as under:

Financial year Date of declaration Unclaimed dividend Amount (Rs) Due date of transfer to IEPF
2014-15 September 19 2015 254918.40 October 24 2022
2015-16 September 19 2016 112147.95 October 26 2023
2016-17 September 8 2017 30848.00 October 13 2024
2017-18 September 29 2018 519801.00 November 2 2025

PARTICULARSOFLOANSGUARANTEESANDINVESTEMENTS

The details of loans given and investments made by your Company are disclosed in thenotes forming part of the financial statements. The Company has not provided anyguarantee.

PARTICULARS OF CONTRACTS / ARRANGEMENTS WITH RELATED PARTIES

All the related party transactions entered into by your Company during the year underreview were on arm's length basis and in the ordinary course of business. The Company hadnot entered into any contract / arrangement / transaction with related parties whichcould be considered as material in accordance with the Company's Policy on Materiality ofand Dealing with Related Party Transactions. Hence disclosure in Form AOC - 2 is notrequired. The details of transactions with related parties during the year have beendisclosed in Note 37 of the financial statements.

PARTICULARS OF TRANSACTIONS WITH ANY PERSON OR ENTITY BELONGING TO PROMOTER / PROMOTERGROUP HOLDING 10% OR MORE SHAREHOLDING

Shri Balram Garg and Smt. Krishna Devi hold more than 10% shares in the Company. Thedetails of transactions of the Company with them during the year under review are asunder:

(Rs in crore)
Particulars Year ended March 31 2022
Adjustment towards loan:
Shri Balram Garg 0.08
Adjustment towards rent:
Shri Balram Garg 0.06
Rent paid:
Shri Balram Garg 0.03
Smt. Krishna Devi 0.37

RISK MANAGEMENT

Pursuant to Regulation 21 of LODR Regulations your Company has constituted a RiskManagement Committee. As on March 31 2022 the Committee comprises of 3 Directorsincluding 1 Independent Director. For further details please refer to Report on CorporateGovernance.

The Company has also put in place a Risk Management Policy to define a framework foridentification assessment and mitigation of risks. In the opinion of the Board there areno risks which may threaten the existence of the Company.

INTERNAL CONTROL SYSTEMS

Your Company undergoes a rigorous audit process at stipulated intervals for stock cashetc. along with other items by statutory and internal auditors. The Company has effectiveinternal control systems in place which ensures that all the assets of the Company aresafeguarded and protected against any loss from unauthorized use or disposition. Internalauditor also periodically carried out review of the internal control systems andprocedures and their reports are placed before Audit Committee for its review. There wereno significant comments / findings in the reports of Internal auditor during the yearunder review.

Your Company has also put in place adequate internal controls with reference to thefinancial statements commensurate with the size and nature of operations of the Company.Such controls were tested and test results summary of the testing done based on keycontrols shown effective controls prevailing within the Company.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN END OF THEFINANCIAL YEAR AND DATE OF THE REPORT

There have been no material changes and commitments affecting financial position of theCompany between end of the financial year and the date of the report.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

A) CONSERVATION OF ENERGY

Your Company in its endeavour towards conservation of energy ensures optimal use ofenergy and avoid wastages.

B) TECHNOLOGY ABSORPTION

Your Company has not carried out any research and development activities.

C) FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company's foreign exchange earnings and outgo were Rs 195.83 crore and Rs 0.69crore respectively.

DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE _PREVENTION PROHIBITION ANDREDRESSAL_ ACT 2013

Your Company has adopted a policy against sexual harassment in line with the provisionsof Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013 and the rules framed thereunder. The Company has constituted Internal ComplaintsCommittee for redressal of complaints on sexual harassment. During the year under reviewthe Company had not received any complaint on sexual harassment and no complaint waspending as on March 31 2022.

WHISTLE BLOWER POLICY

Your Company has in place a Whistle Blower Policy which provides a formal mechanismfor all the employees and Directors of the Company to report about unethical behaviouractual or suspected fraud or violation of the Company's code of conduct and leak ofunpublished price sensitive information etc. and provides reassurance that they will beprotected from reprisals or victimization for whistle blowing.

During the year under review the Company had not received any complaint under thepolicy and no complaint was pending as on March 31 2022. The policy is available on theCompany's website www.pcjeweller.com in Investor section.

BOARD EVALUATION

Your Company has in place the Board approved criteria for evaluation of performance ofthe Board its Committees and individual Directors. The annual performance evaluation ofthe Board its Committees and the Directors is carried out on the basis of evaluationforms which include a rating mechanism.

The Board carried out annual performance evaluation of its own performance on the basisof evaluation forms received from all the Directors. The performance of each BoardCommittee was evaluated by the Board based on evaluation forms received from members ofthe respective Committee. Further performance of individual Directors was evaluated byNomination and Remuneration Committee as well as the Board on the basis of evaluationforms received from all the Directors except the Director being evaluated. IndependentDirectors also reviewed the performance of the Board and Non-Independent Directors.

The criteria for performance evaluation of the Board and its Committees amongst othersinclude their composition processes information and functioning terms of reference ofthe Committees etc. The criteria for performance evaluation of the Directors includingIndependent Directors amongst others include their contribution at the meetings devotionof time and efforts to understand the Company its business their duties andresponsibilities and adherence to the code of conduct etc.

Based on the feedbacks received the consolidated report on the performance of theBoard its Committees and individual Directors was placed before the Board. The Boardexpressed satisfaction over the performance of the Board its Committees and theDirectors.

SIGNIFICANT / MATERIAL ORDERS PASSED BY THE REGULATORS

There were 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 Act your Directors confirm that:

a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed and there were no material departures from the same; b) the Directors hadselected such accounting policies and applied them consistently and made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company at the end of the financial year and of the profit and loss ofthe Company for that period; c) the Directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities; d) the Directors had prepared the annual accounts on a going concernbasis; 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.

EMPLOYEE STOCK OPTION PLAN

With the objective of retaining talent and reward loyalty your Company has in place PCJeweller Limited Employee Stock Option Plan 2011 ("ESOP 2011"). ESOP 2011is in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity)Regulations 2021. During the year under review no changes were made in ESOP 2011.

The disclosure relating to ESOP 2011 as required under the SEBI (Share Based EmployeeBenefits and Sweat Equity) Regulations 2021 is available on the Company's websitewww.pcjeweller.com and can be accessed through the link https://corporate.pcjeweller.com/wp-content/uploads/2015/06/investors/downloads/FY-2023/Others/ESOP-Disclosure-under-the-SEBI-SBEB-and-SE-Regulations-2021.pdf.The certificate of secretarial auditor with respect to the implementation of ESOP 2011will be available for inspection by Members during the 17th AGM.

POLICY ON DIRECTORS' APPOINTMENT & REMUNERATION AND CRITERIA FOR DETERMININGQUALIFICATIONS POSITIVE ATTRIBUTES & INDEPENDENCE OF A DIRECTOR

Nomination & Remuneration Policy of the Company is designed to identify the personsfor appointment as Director(s) and who may be appointed in Senior Management including KeyManagerial Personnel ("KMP") as well as determining the remuneration ofthe Director KMP and other employees and to attract motivate and retain manpower bycreating a congenial work atmosphere encouraging initiatives personal growth and teamwork by creating a sense of belonging and involvement besides offering appropriateremuneration packages.

The objective of Policy on Criteria for determining Qualifications Positive Attributesand Independence of a Director is to determine qualifications positive attributes andindependence of a Director.

Both the policies are available on the Company's website www. pcjeweller.com inInvestor section.

MANAGEMENT DISCUSSION AND ANALYSIS

As per LODR Regulations Management Discussion and Analysis Report forms part of theAnnual Report.

BUSINESS RESPONSIBILITY REPORT

As per LODR Regulations Business Responsibility Report forms part of the AnnualReport.

DIVIDEND DISTRIBUTION POLICY

The Company has in place a Dividend Distribution Policy in terms of Regulation 43A ofLODR Regulations. The policy is available on the Company's website www.pcjeweller.com andcan be accessed through the link https://corporate.pcjeweller.com/wp-content/uploads/2015/06/investors/corporate-governance/Dividend-Distribution-Policy.pdf

ANNUAL RETURN

InaccordancewithSection92(3)oftheActreadwiththeCompanies (Management andAdministration) Rules 2014 the Annual Return has been placed on the Company's websitewww.pcjeweller.com and can be accessed through the link https://corporate.pcjeweller.com/wp-content/uploads/2015/06/investors/downloads/FY-2023/Others/Draft-Annual-Return-2021-22.pdf

AUDITORS AND THEIR REPORTS

STATUTORY AUDITORS

M/s Arun K. Agarwal & Associates Chartered Accountants (Firm Registration No.003917N) were appointed as statutory auditors of the Company for 5 years from theconclusion of the 15th AGM of the Company held on August 7 2020.

The notes to the financial statements referred to in statutory auditors' report areself-explanatory and do not call for any further explanations or comments. However theexplanations or comments of the Board on the qualification reservation or adverse remarkor disclaimer in statutory auditors' report are as under:

1) Para 3 of Independent Auditors' Report regarding discount to export customersduring the financial year ended March 31 2019

The Company had filed requisite applications with AD Category - 1 Banks for seekingapproval of the aforesaid discount as per Master Circular on Exports of Goods and Services(Master Circular No.14/2014-15) issued by Reserve Bank of India. Subsequently the Companyhas obtained approvals from Authorized Dealer Banks for reduction in receivablescorresponding to discounts amounting to Rs 323.07 crore and approval for the balanceamount is under process. The discount extended was in accordance with the aforesaid MasterCircular and the management does not expect any material penalty to be levied andtherefore no provision for the same has been recognized in the financials.

2) Para ii (b) of Annexure - A to Independent Auditors' Report regardingvariances in quarterly returns or statements filed with the banks with the books ofaccounts

The variance in the value of inventory for the quarter ended June 2021 was on accountof a clerical error. For the remaining quarters the variances are less than 0.15% and havearisen only due to minor corrections during finalization of the financial results.Similarly the variances in the values of sundry receivables is less than 1% for the firstthree quarters. The variance for the last quarter is on account of foreign exchangerestatement and ECL provisions at the end of the financial year.

3) Para iii (c) (d) and (e) of Annexure - A to Independent Auditors' Reportregarding loans / advances granted by the Company

The Company has granted loans for business purposes to its two subsidiaries as they donot enjoy any credit facility from any bank / financial institution. There is no increasein the quantum of these loans during the year. The staff advances have been extended topermanent employees of the Company in the normal course for their personal requirements.

4) Para v of Annexure - A to Independent Auditors' Report regarding balance indeposit repayment reserve account is short by Rs 1.39 crore as at March 31 2022

The Company had set aside adequate fixed deposits for the purpose.

5) Para vii (a) of Annexure - A to Independent Auditors' Report regardingarrears of undisputed statutory dues outstanding for more than six months at the year end

The Company will do the needful to make the payment in due course.

6) Para ix (a) of Annexure - A to Independent Auditors' Report regarding defaultin repayment of loans (including interest) to its Bankers

The Company's accounts with its Lenders turned NPA as on June 30 2021 on account ofdecline in the business and subsequent liquidity constraints. The Company has sinceapproached its Lenders with its resolution proposal under the appropriate RBI Guidelinesand the same is under their active consideration.

7) Para xvii of Annexure - A to Independent Auditors' Report regarding cashlosses incurred

The cash losses are the result of decline in the turnover and business operationsduring the year.

8) Para xix of Annexure - A to Independent Auditors' Report regarding payment ofoverdue portion of Company's borrowing accounts

The Company has already submitted its resolution plan detailing its plans towardssettlement of overdues and the plan is under active consideration of the Company'sLenders.

9) Para xx (b) of Annexure - A to Independent Auditors' Report regarding unspentCSR amount pursuant to ongoing project has not been transferred to special account

The Company's liquidity position had become very constrained after March 2020 onaccount of lockdowns and disruptions in business due to spread of Covid-19 pandemic.During FY 2020-21 a cheque for Rs 6.50 crore was issued by the Company towards CSRexpenditure to an implementing agency as approved by Corporate Social ResponsibilityCommittee and the Board which however could not get cleared subsequently due to liquidityconstraints. Thereafter the Company's accounts with its Lenders turned NPA as on June 302021 and its banking transactions got highly restricted. Therefore the CSR expenditurefor FY 2020-21 and 2021-22 remains unspent. Further the Company submitted a request toits Lead Bank (State Bank of India) for opening a special current account under thenomenclature of "Unspent Corporate Social Responsibility Account" in March 2022on which no action was taken by the Bank. However the Company's resolution process isunder active consideration with its Lenders and it is confident of meeting the necessarycompliances as per the law post implementation of the resolution process.

SECRETARIAL AUDITOR

In accordance with Section 204 of the Act read with the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 your Company has appointed M/s KirtiDureja & Co. Company Secretaries as secretarial auditor of the Company for the yearunder review.

Secretarial Audit Report is annexed herewith as "Annexure - 2" to thisReport. The explanations or comments of the Board on the qualification observation orother remarks in Secretarial Audit Report are as under:

1) Regarding the composition of the Board did not have sufficient number ofdirectors liable to retire by rotation

The Company will do the needful to ensure necessary compliance in due course.

2) Regarding unspent CSR amounts for financial year 2020-21 and 2021-22 pursuantto ongoing project(s) are not transferred to special account

The Company's liquidity position had become very constrained after March 2020 onaccount of lockdowns and disruptions in business due to spread of Covid-19 pandemic.During FY 2020-21 a cheque for Rs 6.50 crore was issued by the Company towards CSRexpenditure to an implementing agency as approved by Corporate Social ResponsibilityCommittee and the Board which however could not get cleared subsequently due to liquidityconstraints. Thereafter the Company's accounts with its Lenders turned NPA as on June 302021 and its banking transactions got highly restricted. Therefore the CSR expenditurefor FY 2020-21 and 2021-22 remains unspent. Further the Company submitted a request toits Lead Bank (State Bank of India) for opening a special current account under thenomenclature of "Unspent Corporate Social Responsibility Account" in March 2022on which no action was taken by the Bank. However the Company's resolution process isunder active consideration with its Lenders and it is confident of meeting the necessarycompliances as per the law post implementation of the resolution process.

3) Regarding balance in deposit repayment reserve account is short by Rs 1.39crore as at March 31 2022

The Company had set aside adequate fixed deposits for the purpose.

4) Regarding gap between two consecutive meetings of Risk Management Committeeexceeding 180 days

Due to start of the third wave of Covid-19 in Delhi during second half of December2021 which disrupted the normal operations the second meeting of Risk ManagementCommittee got delayed. The Company is now more careful and vigilant and endeavor to ensurethat this lapse do not occur again.

DETAILS IN RESPECT OF FRAUDS

During the year under review statutory and secretarial auditors have not reported anyfraud under Section 143(12) of the Act.

REPORT ON CORPORATE GOVERNANCE

As per LODR Regulations Report on Corporate Governance forms part of the AnnualReport. The Corporate Governance Compliance Certificate from Practicing Company Secretaryis annexed as "Annexure - 3" to this Report.

PARTICULARS OF EMPLOYEES

The information required under Section 197(12) of the Act read with the Companies(Appointment and Remuneration of

Managerial Personnel) Rules 2014 in respect of the employees of the Company is annexedas "Annexure - 4" to this Report.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility Policy is placed on the Company's websitewww.pcjeweller.com in Investor section. The Policy lays down the guidelines and mechanismfor undertaking socially useful programs for welfare and sustainable development of thecommunity in the local area and around areas of operations of the Company including otherparts of the Country.

Annual Report on CSR activities pursuant to Section 135 of the Act and Rules madethereunder is annexed as "Annexure – 5" to this Report.

ACKNOWLEDGEMENT

Your Directors would like to convey their sincere gratitude and place on recordappreciation for the support and co-operation of the Company's employees lenderscustomers suppliers and shareholders who have reposed their continued trust faith andconfidence in the Company.

For and on behalf of the Board
Sd/- Sd/-
Place: New Delhi (RAMESH KUMAR SHARMA) (BALRAM GARG)
Date: August 9 2022 Executive Director Managing Director
DIN: 01980542 DIN: 00032083

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