pc jeweller ltd Directors report

Dear Members,

Your Directors have pleasure in presenting the 17th Annual Report along with the audited 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 year ended March 31, 2022 and previous year are as under:

(Rs in crore, except earnings per share)

Particulars	2021-22	2020-21
Revenue from operations	1,574.05	2,669.34
Other income	59.51	30.67
Total income	1,633.56	2,700.01
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 COMPANYS PERFORMANCE

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

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

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

During the year under review, the Companys accounts with its Lenders turned Non-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-19 pandemic. The Company has since approached its Lenders with its resolution proposal under the 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 1,574.05 crore from Rs 2,669.34 crore during previous year mainly on account of restriction in operations and liquidity constraints after the Companys accounts becoming NPA. As a result of decline in revenue, the Company incurred net loss of Rs 389.60 crore as compared to 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 Health Organisation declared the outbreak of Covid-19 as a pandemic. During the year under review, countries across the globe continued to face economic and social disruptions along with the loss of lives and livelihoods. Eruptions of new waves and variants of the virus necessitated various restrictions and lockdown from time to time.

In April 2021, India witnessed a second wave of Covid-19 followed by another wave in the 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 ended March 31, 2022 for further details in respect of impact of Covid-19 on the financial statements of the Company.

CAPITAL STRUCTURE

Authorised Share Capital: During the year under review, the authorised share capital of the Company remained unchanged at Rs 760 crore comprising of 50 crore equity shares 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 remained unchanged at Rs 465,40,38,960/- comprising of 46,54,03,896 equity shares of Rs 10/- each.

DIVIDEND

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

TRANSFER TO GENERAL RESERVE

The Board has not proposed transfer of any amount to General Reserve. However, the Company has transferred an amount of Rs 1.64 crore from Share Options Outstanding Account to General Reserve, on account of 37,408 share options lapsed / forfeited in accordance with 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 Independent Directors including 1 Woman Director.

During the year Shri Balram Garg was re-appointed as Managing Director of the Company for a period of 5 years w.e.f. July 1, 2021 and Shri Ramesh Kumar Sharma was re-appointed as 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 the Company will expire on January 18, 2023 and it is proposed to re-appoint her for a further period of 5 years with effect from January 19, 2023. On the recommendation of Nomination and Remuneration Committee, the Board has recommended her re-appointment for the approval of 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 Company and 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 issued by the Institute of Company Secretaries of India, the details of Smt. Sannovanda Machaiah Swathi 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 Managerial Personnel of the Company.

SUBSIDIARY COMPANIES

As on March 31, 2022, your Company has following 5 wholly owned non-material subsidiaries:

i) PC Universal Private Limited: It is engaged in the business of manufacturing and export of gold jewellery and have a manufacturing unit at Noida Special Economic Zone, Noida (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 online retail trading of gold and diamond jewellery. During the year under review its revenue from 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 business of manufacturing / job working and trading of jewellery and have a manufacturing unit at Sitapura, Jaipur (Rajasthan). During the year under review its revenue from operations was Rs 12.13 crore and registered net profit of Rs 3.98 crore.

iv) PCJ Gems & Jewellery Limited: It is authorized to carry on the business of manufacturing and trading of all kinds of jewellery. However, it has not commenced business 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 in the business of jewellery trading. During the year under review its revenue from operations 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 owned subsidiary of PC Jeweller Global DMCC and step down subsidiary of the Company ceased to exist w.e.f. April 5, 2021. It had not commenced business operations till the date of cessation.

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 ended March 31, 2022 for the details of contribution of the subsidiaries to the overall performance of your Company. The financial statements of all the subsidiaries are available on the Companys 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 of Section 2(6) of the Act and during the year no company has become or ceased to be associate or joint venture company.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of the Company have been prepared in accordance with 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 and forms part of the Annual Report.

SECRETARIAL STANDARDS

The Company has complied with the applicable provisions of Secretarial Standards 1 and 2 issued by the Institute of Company Secretaries of India and notified by Ministry of Corporate Affairs.

COST RECORDS

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

STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS

All Independent Directors of the Company have confirmed their independence and submitted declaration of independence with the Company in accordance with the provisions of the Act and LODR Regulations. They have also confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and 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. Manohar Lal Singla, Independent Director, is the Chairman of the Committee. For further details, please refer to Report on Corporate Governance.

PUBLIC DEPOSITS

Your Company was accepting unsecured deposits from the public under jewellery purchase scheme ‘Jewel for Less. However, during financial year 2019-20, the Company stopped accepting fresh deposits from the public after credit rating of its deposit programme was downgraded below minimum investment grade by the rating agency. During the year under review, the Company has neither invited nor accepted any deposits. The requisite details relating 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 the year : Rs 7.06 crore c) Whether there has been any default in repayment of deposits or payment of interest thereon 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

There are no deposits that have been accepted by the Company that are not in compliance with 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 a period of 7 years from the date of transfer to unpaid dividend account, is required to be transferred 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 dividend remained unpaid / unclaimed for 7 consecutive years are also required to be transferred to the demat account of IEPF Authority. Accordingly, the Company has transferred unclaimed final dividend for financial year 2013-14 amounting to Rs 44,636/- and 972 equity shares to IEPF during the year under review.

Those Members, whose unclaimed dividends / shares have been transferred to IEPF are advised to visit the weblink http://iepf.gov. in/IEPF/refund.html and claim the same by making an application to IEPF Authority in e-Form IEPF-5. No claim shall lie against the Company 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 due dates 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	2,54,918.40	October 24, 2022
2015-16	September 19, 2016	1,12,147.95	October 26, 2023
2016-17	September 8, 2017	30,848.00	October 13, 2024
2017-18	September 29, 2018	5,19,801.00	November 2, 2025

PARTICULARSOFLOANS,GUARANTEESANDINVESTEMENTS

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

PARTICULARS OF CONTRACTS / ARRANGEMENTS WITH RELATED PARTIES

All the related party transactions entered into by your Company during the year under review were on arms length basis and in the ordinary course of business. The Company had not entered into any contract / arrangement / transaction with related parties, which could be considered as material in accordance with the Companys Policy on Materiality of and Dealing with Related Party Transactions. Hence, disclosure in Form AOC - 2 is not required. The details of transactions with related parties during the year have been disclosed in Note 37 of the financial statements.

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

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

	(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 Risk Management Committee. As on March 31, 2022, the Committee comprises of 3 Directors including 1 Independent Director. For further details, please refer to Report on Corporate Governance.

The Company has also put in place a Risk Management Policy to define a framework for identification, assessment and mitigation of risks. In the opinion of the Board, there are no risks which may threaten the existence of the Company.

INTERNAL CONTROL SYSTEMS

Your Company undergoes a rigorous audit process at stipulated intervals for stock, cash etc. along with other items by statutory and internal auditors. The Company has effective internal control systems in place, which ensures that all the assets of the Company are safeguarded and protected against any loss from unauthorized use or disposition. Internal auditor also periodically carried out review of the internal control systems and procedures and their reports are placed before Audit Committee for its review. There were no significant comments / findings in the reports of Internal auditor during the year under review.

Your Company has also put in place adequate internal controls with reference to the financial 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 key controls shown effective controls prevailing within the Company.

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

There have been no material changes and commitments affecting financial position of the Company 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 of energy and avoid wastages.

B) TECHNOLOGY ABSORPTION

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

C) FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Companys foreign exchange earnings and outgo were Rs 195.83 crore and Rs 0.69 crore respectively.

DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE _PREVENTION, PROHIBITION AND REDRESSAL_ ACT, 2013

Your Company has adopted a policy against sexual harassment in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder. The Company has constituted Internal Complaints Committee for redressal of complaints on sexual harassment. During the year under review, the Company had not received any complaint on sexual harassment and no complaint was pending as on March 31, 2022.

WHISTLE BLOWER POLICY

Your Company has in place a Whistle Blower Policy, which provides a formal mechanism for all the employees and Directors of the Company to report about unethical behaviour, actual or suspected fraud or violation of the Companys code of conduct and leak of unpublished price sensitive information etc. and provides reassurance that they will be protected from reprisals or victimization for whistle blowing.

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

BOARD EVALUATION

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

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

The criteria for performance evaluation of the Board and its Committees amongst others include their composition, processes, information and functioning, terms of reference of the Committees, etc. The criteria for performance evaluation of the Directors including Independent Directors amongst others include their contribution at the meetings, devotion of time and efforts to understand the Company, its business, their duties and responsibilities and adherence to the code of conduct, etc.

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

SIGNIFICANT / MATERIAL ORDERS PASSED BY THE REGULATORS

There were no significant / material orders passed by the regulators or courts or tribunals 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 under review.

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 had been followed and there were no material departures from the same; b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial 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 of adequate accounting records in accordance with the provisions of the Act for safeguarding the 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 the Company and that such internal financial controls are adequate and were operating effectively; and f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

EMPLOYEE STOCK OPTION PLAN

With the objective of retaining talent and reward loyalty, your Company has in place PC Jeweller Limited Employee Stock Option Plan 2011 ("ESOP 2011"). ESOP 2011 is 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 Employee Benefits and Sweat Equity) Regulations, 2021 is available on the Companys website www.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 2011 will be available for inspection by Members during the 17th AGM.

POLICY ON DIRECTORS APPOINTMENT & REMUNERATION AND CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES & INDEPENDENCE OF A DIRECTOR

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

The objective of Policy on Criteria for determining Qualifications, Positive Attributes and Independence of a Director is to determine qualifications, positive attributes and independence of a Director.

Both the policies are available on the Companys website www. pcjeweller.com in Investor section.

MANAGEMENT DISCUSSION AND ANALYSIS

As per LODR Regulations, Management Discussion and Analysis Report forms part of the Annual Report.

BUSINESS RESPONSIBILITY REPORT

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

DIVIDEND DISTRIBUTION POLICY

The Company has in place a Dividend Distribution Policy in terms of Regulation 43A of LODR Regulations. The policy is available on the Companys website www.pcjeweller.com and can 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 and Administration) Rules, 2014, the Annual Return has been placed on the Companys website www.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 the conclusion of the 15th AGM of the Company held on August 7, 2020.

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

1) Para 3 of Independent Auditors Report regarding discount to export customers during the financial year ended March 31, 2019

The Company had filed requisite applications with AD Category - 1 Banks for seeking approval 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 Company has obtained approvals from Authorized Dealer Banks for reduction in receivables corresponding to discounts amounting to Rs 323.07 crore and approval for the balance amount is under process. The discount extended was in accordance with the aforesaid Master Circular and the management does not expect any material penalty to be levied and therefore, no provision for the same has been recognized in the financials.

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

The variance in the value of inventory for the quarter ended June 2021 was on account of a clerical error. For the remaining quarters the variances are less than 0.15% and have arisen 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 first three quarters. The variance for the last quarter is on account of foreign exchange restatement and ECL provisions at the end of the financial year.

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

The Company has granted loans for business purposes to its two subsidiaries as they do not enjoy any credit facility from any bank / financial institution. There is no increase in the quantum of these loans during the year. The staff advances have been extended to permanent employees of the Company in the normal course for their personal requirements.

4) Para v of Annexure - A to Independent Auditors Report regarding balance in deposit 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 regarding arrears 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 default in repayment of loans (including interest) to its Bankers

The Companys accounts with its Lenders turned NPA as on June 30, 2021 on account of decline in the business and subsequent liquidity constraints. The Company has since approached its Lenders with its resolution proposal under the appropriate RBI Guidelines and the same is under their active consideration.

7) Para xvii of Annexure - A to Independent Auditors Report regarding cash losses incurred

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

8) Para xix of Annexure - A to Independent Auditors Report regarding payment of overdue portion of Companys borrowing accounts

The Company has already submitted its resolution plan detailing its plans towards settlement of overdues and the plan is under active consideration of the Companys Lenders.

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

The Companys liquidity position had become very constrained after March 2020 on account 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 CSR expenditure to an implementing agency as approved by Corporate Social Responsibility Committee and the Board which however, could not get cleared subsequently due to liquidity constraints. Thereafter, the Companys accounts with its Lenders turned NPA as on June 30, 2021 and its banking transactions got highly restricted. Therefore, the CSR expenditure for FY 2020-21 and 2021-22 remains unspent. Further, the Company submitted a request to its Lead Bank (State Bank of India) for opening a special current account under the nomenclature of "Unspent Corporate Social Responsibility Account" in March 2022 on which no action was taken by the Bank. However, the Companys resolution process is under active consideration with its Lenders and it is confident of meeting the necessary compliances 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 and Remuneration of Managerial Personnel) Rules, 2014 your Company has appointed M/s Kirti Dureja & Co., Company Secretaries as secretarial auditor of the Company for the year under review.

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

1) Regarding the composition of the Board did not have sufficient number of directors 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 pursuant to ongoing project(s) are not transferred to special account

The Companys liquidity position had become very constrained after March 2020 on account 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 CSR expenditure to an implementing agency as approved by Corporate Social Responsibility Committee and the Board which however, could not get cleared subsequently due to liquidity constraints. Thereafter, the Companys accounts with its Lenders turned NPA as on June 30, 2021 and its banking transactions got highly restricted. Therefore, the CSR expenditure for FY 2020-21 and 2021-22 remains unspent. Further, the Company submitted a request to its Lead Bank (State Bank of India) for opening a special current account under the nomenclature of "Unspent Corporate Social Responsibility Account" in March 2022 on which no action was taken by the Bank. However, the Companys resolution process is under active consideration with its Lenders and it is confident of meeting the necessary compliances as per the law post implementation of the resolution process.

3) Regarding balance in deposit 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.

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

Due to start of the third wave of Covid-19 in Delhi during second half of December 2021, which disrupted the normal operations, the second meeting of Risk Management Committee got delayed. The Company is now more careful and vigilant and endeavor to ensure that this lapse do not occur again.

DETAILS IN RESPECT OF FRAUDS

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

REPORT ON CORPORATE GOVERNANCE

As per LODR Regulations, Report on Corporate Governance forms part of the Annual Report. The Corporate Governance Compliance Certificate from Practicing Company Secretary is 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 annexed as "Annexure - 4" to this Report.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility Policy is placed on the Companys website www.pcjeweller.com in Investor section. The Policy lays down the guidelines and mechanism for undertaking socially useful programs for welfare and sustainable development of the community, in the local area and around areas of operations of the Company including other parts of the Country.

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

ACKNOWLEDGEMENT

Your Directors would like to convey their sincere gratitude and place on record appreciation for the support and co-operation of the Companys employees, lenders, customers, suppliers and shareholders, who have reposed their continued trust, faith and confidence 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