undefined share price Directors report


Dear Members,

Your Directors have pleasure in presenting the 18th Annual Report along with the audited financial statements of the Company for the financial year ended March 31, 2023.

FINANCIAL SUMMARY

The summary of standalone financial statements of the Company for the financial year ended March 31, 2023 and previous year are as under:

(Rs in crore, except earnings per share)

Particulars

2022-23 2021-22
Revenue from operations 2,359.46 1,574.05
Other income 147.85 59.51

Total income

2,507.31 1,633.56

Profit / (loss) before finance costs, depreciation and tax

272.70 (44.54)
Less: Finance cost 491.69 437.37

Less: Depreciation & amortisation expenses

25.85 26.24

Profit / (loss) before tax

(244.84) (508.15)
Less: Tax Expense 94.27 (118.55)

Net profit / (loss) after tax

(339.11) (389.60)

Other comprehensive income for the year, net of tax

0.46 0.37

Total comprehensive income / (loss) for the year

(338.65) (389.23)

Earnings per equity share (in Rs):

Basic (7.29) (8.37)
Diluted (7.29) (8.37)
Paid-up share capital 465.40 465.40
Other equity 3,079.65 3,418.39

THE COMPANYS PERFORMANCE AND STATE OF AFFAIRS

The 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. As on March 31, 2023, the Company has total of 81 showrooms including 12 franchisee showrooms and also has 4 manufacturing units in India.

The Company offers wide range and variety of jewellery to cater not only to wedding jewellery but party and daily wear also. In view of changing trends and customers preferences, the Company keeps on launching new jewellery designs and collections from time to time. It owns jewellery sub-brands Swarna Dharohar, Inayat and Mirosa and has launched a number of jewellery collections over the years. Some of the prominent jewellery collections of the Company are Wedding Collection, Folia Amoris, The Fluttering Beauty, Mens Collection, Diamond Mangalsutra, Watch Accessories etc.

During the year, the revenue from operations of your Company increased by almost 50% to Rs 2,359.46 crore from Rs 1,574.05 crore during previous year. As a result of increase in revenue, the Companys net loss decreased by almost 13% to Rs 339.11 crore as compared to Rs 389.60 crore during previous year.

Although the Company continues to remain loss making but its gross margins have improved to 15.62% as against 12.45% achieved during the previous year. Further, the Company has also turned EBIDTA positive as on March 31, 2023 with an EBIDTA of 11.56% vis a vis an EBIDTA of (2.83%) as on March 31, 2022.

During the previous year, the Companys Lenders classified its accounts Non-Performing Assets ("NPA") due to default / non-payment of debt / interest etc. on account of decline in the business and revenues of the Company caused by Covid-19 pandemic. However, the Company is contesting the classification of its accounts as NPA in various legal forums and the matter is currently sub-judice.

After NPA classification, the Company approached its Lenders with a resolution proposal under the appropriate Guidelines of Reserve Bank of India. However, due to non-receipt of requisite rating from one of the Rating Agencies, the Companys resolution plan could not proceed further and State Bank of India ("SBI") moved the Debt Recovery Tribunal, Delhi ("DRT") during the year under review. In response, the Company filed an appeal with Debt Recovery Appellate Tribunal, Delhi for relief and the matter is currently sub-judice. Subsequently, Union Bank of India (with seven other banks) as well as Indian Bank also separately moved DRT and their matters are also currently sub-judice.

The Company in addition to replying suitably to the Banks, has also approached the High Court of Delhi against SBI stating that that there is a non-compliance of the Principle of Natural Justice in as much as the Company was not given any opportunity to explain its case after January 2, 2023 and unilateral decision has been taken by SBI. The Honble Court has accepted the Companys prayer and issued a notice to SBI, which has been accepted by their learned counsel. The Company has also filed counter claims for Rs 10,034 crores, Rs 16,759 crores and Rs 2,956 crores against SBI, Union Bank (and seven other banks) and against Indian Bank respectively, before DRT and these matters are also currently sub-judice.

Although there is no certainty either on the time frame or the end result of these on-going legal proceedings, but the Company continues to remain confident about a positive outcome of the same as well as retaining its going concern status.

CAPITAL STRUCTURE

Authorised Share Capital: 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 RESERVES

The Boardhas not proposed transfer of any amount to the reserves.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Company has 7 Directors comprising of 2 Executive Directors and 5 Non-Executive Independent Directors including 1 Woman Director.

During the year Smt. Sannovanda Machaiah Swathi was re-appointed as an Independent Director of the Company for second term of 5 years with effect from January 19, 2023. In the opinion of the Board, she is a person of integrity, possesses relevant expertise / experience and fulfils the conditions as per applicable laws and is independent of the management of the Company.

Shri Ramesh Kumar Sharma is liable to retire by rotation at the 18th AGM of the Company and being eligible, offered 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 Shri Ramesh Kumar Sharma form part of the Notice convening the 18th AGM.

During the year under review, no changes have taken place among Key Managerial Personnel of the Company.

SUBSIDIARY COMPANIES

During the year under review, the Company had following wholly owned non-material subsidiaries:

i) PC Universal Private Limited: It is engaged in the business of manufacturing and export of gold jewellery. It has not carried out any business operations during the year under review. However, due to other income, mainly net gain on foreign currency transactions and translations, it registered net profit of Rs 12.55 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 139.70 crore and it incurred net loss of Rs 2.64 crore. It ceased to be a subsidiary of the Company in March 2023.

iii) Luxury Products Trendsetter Private Limited: It is engaged in the business of manufacturing / job working and trading of jewellery. During the year under review its revenue from operations was Rs 11.83 crore and it registered net profit of Rs 5.61 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.

v) PC Jeweller Global DMCC: It is engaged in the business of jewellery trading. During the year under review its revenue from operations was Rs 43.70 crore and it registered net profit of Rs 9.92 crore.

During the year under review, no company has become subsidiary of the Company.

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 57 of the consolidated financial statements for the financial year ended March 31, 2023 for the details of contribution of the subsidiaries to the overall performance of the Company. The financial statements of all the subsidiaries are available on the Companys website www. pcjeweller.com in Investors section.

ASSOCIATE AND JOINT VENTURE COMPANIES

The 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

The 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 Board meetings were held on May 30, 2022; July 23, 2022; August 9, 2022; October 27, 2022 and February 14, 2023 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

The 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. Since then the Company has neither invited nor accepted any fresh deposits but has only been redeeming the same mainly by the Company has repaid / redeemed all the existing outstanding deposits.

During the year under review, the Company has not accepted any deposits and nothing remained unpaid or unclaimed as at the end of the year. There was no default in repayment of deposits or payment of interest thereon during the year.

PARTICULARS OF LOANS, GUARANTEES AND INVESTEMENTS

The details of loans given and investments made by the 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 the 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, 2023

Rent paid:

Shri Balram Garg 0.01
Smt. Krishna Devi 0.10

RISK MANAGEMENT

The Company has put in place a Risk Management Policy to define a framework for identification, assessment, categorisation and treatment of risks and selecting appropriate risk management approach. The Companys outlook in dealing with various risks associated with the business includes the decision on acceptance of risks, avoidance of risks, transfer of risks and risks tolerance level. Pursuant to Regulation 21 of LODR Regulations, the Company has constituted a Risk Management Committee, which comprises of 3 Directors including 1 Independent Director. For further details on Risk Management Committee, please refer to Report on Corporate Governance.

INTERNAL CONTROL SYSTEMS

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.

The 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 during the year under review.

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. However, after end of the financial year, State Bank of India ("SBI") filed a petition with National Company Law Tribunal ("NCLT") alleging default of an amount of Rs 1,180.20 crores as on April 30, 2023, which has been denied by the Company. The Company has also taken necessary steps to oppose the petition filed by SBI before Honble NCLT.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

A) CONSERVATION OF ENERGY

The Company is committed towards conservation of energy.

In its efforts towards conservation of energy, the Company is having a solar energy plant at one of its manufacturing units as a source of renewable energy and emphasises on optimal use of energy and avoid wastages.

B) TECHNOLOGY ABSORPTION

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

C) FOREIGN EXCHANGE EARNINGS AND OUTGO

The Companys foreign exchange earnings and outgo during the year were Nil.

DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Pursuant to the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder, the Company has adopted a policy against sexual harassment. 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, 2023.

WHISTLE BLOWER POLICY

The 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 Whistle Blower Policy and no complaint was pending as on March 31, 2023. The Policy is available on the Companys website www.pcjeweller.com in Investors section.

BOARD EVALUATION

The 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 Committee of the Board 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 at their separate meeting.

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 OR COURTS OR TRIBUNALS

During the year under review and thereafter State Bank of India ("SBI") and some other consortium member banks moved the Debt Recovery Tribunal ("DRT") for recovery of their outstanding amounts. In response, the Company has filed an appeal with Debt Recovery Appellate Tribunal against petition filed by SBI with DRT for relief and the matter is currently sub-judice.

The Company has also filed a claim for Rs 10,034 crores against SBI before DRT and this matter is also currently sub-judice.

Further, after end of the year, SBI also filed a petition with National Company Law Tribunal ("NCLT") alleging default of an amount of Rs 1,180.20 crores as on April 30, 2023, which has been denied by the Company. The Company has already taken necessary steps to oppose the petition filed by SBI before Honble NCLT.

However, as on date no significant / material orders have been passed by the regulators or courts or tribunals impacting the going concern status of your Company and its operations in future.

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, the 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 and can be accessed through the link https://corporate.pcjeweller.com/wp-content/ uploads/2015/06/investors/downloads/FY-2024/Others/ ESOP-Disclosure-under-the-SEBI-SBEB-&-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 18th 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 define the criteria for determining the qualifications, positive attributes and independence of a Director.

No changes have been made in both the policies during the year. The policies are available on the Companys website and can be accessed through the link https://corporate.pcjeweller.com/ codes-policies/

MANAGEMENT DISCUSSION AND ANALYSIS

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

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

As per LODR Regulations, Business Responsibility and Sustainability 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 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

In accordance with Section 92(3) of the Act read with the Companies (Management and Administration) Rules, 2014, Annual Return is available on the Companys website and can be accessed through the link https://corporate.pcjeweller.com/ annual-return/

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 till the conclusion of the 20th AGM of the Company.

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 made in statutory auditors report are as under:

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

The management had extended the discounts as on March 31, 2019 in view of the genuine business problems and operational issues being faced by its overseas buyers. The discount extended amounted to one-time discount of 25% of the export value of outstanding receivables as on March 31, 2019. The discount extended was in accordance with the FED Master Direction No. 16/2015-16 dated January

1, 2016 issued by the Reserve Bank of India. Subsequently, the Company has obtained approvals from Authorized Dealer Banks for reduction in the receivables corresponding to discounts amounting to Rs 330.49 crore and approval for the balance amount i.e. Rs 183.16 crore is under process. The discount extended was in accordance with the aforesaid Master Direction and the management does not expect any material penalty to be levied and therefore, no provision for the same has been recognized in the financial statements.

2) Para 3 (ii) of Independent Auditors Report regarding adequacy of the provision for expected credit loss / impairment and its consequential impact and adjustments on the standalone financial statements

The Company has made a provision for expected credit loss as on March 31, 2023 based on revised payment schedule as provided by its overseas buyers and the same is in accordance with the laid down accounting norms. The Company is exploring various options, including legal recourse for recovery of its overseas trade receivables and is confident of the recovery of the same.

3) Para 3 (iii) of Independent Auditors Report regarding inventory value and its consequential impact and adjustments on the standalone financial statements

Debt Recovery Appellate Tribunal, Delhi has already stayed the ex-parte order of seizing the inventory passed by Debt Recovery Tribunal, Delhi and the matter is sub-judice. Given the nature of the Companys inventory, it does not envisage any adverse impact of the on-going legal process on the net realizable value of the inventory. Inventory with the Karigars is a part of the routine business operations since long and the Company does not envisage any losses on account of a portion of its inventory lying with the karigars.

4) Para 5 of Independent Auditors Report regarding material uncertainty related to going concern

During the year under review, State Bank of India ("SBI") moved Debt Recovery Tribunal, Delhi ("DRT") for recovery of its outstanding dues. In response, the Company filed an appeal with Debt Recovery Appellate Tribunal, Delhi for relief and the matter is currently sub-judice. Subsequently, Union Bank of India (with seven other banks) as well as Indian Bank also separately moved DRT and their matters are also currently sub-judice.

The Company in addition to replying suitably to the Banks, has also approached the High Court of Delhi against SBI stating that that there is a non-compliance of the Principle of Natural Justice in as much as the Company was not given any opportunity to explain its case after January 2, 2023 and unilateral decision has been taken by SBI. The Honble Court has accepted the Companys prayer and issued a notice to SBI, which has been accepted by their learned counsel. The Company has also filed counter claims for Rs 10,034 crores,

Rs 16,759 crores and Rs 2,956 crores against SBI, Union Bank (and seven other banks) and against Indian Bank respectively, before DRT and these matters are also currently sub-judice.

Although there is no certainty either on the time frame or the end result of these ongoing legal proceedings, yet the Company continues to remain confident about a positive outcome of the same and is taking appropriate steps to ensure that its status as a going concern remains intact in spite of the current adversities. The Management is confident that it will be able to realize its assets and meet its liabilities and commitments in the normal course of business considering the net assets position of the Company irrespective of the final conclusion of decision in the ongoing legal process. Hence, the current position of the events does not raise any concern on its going concern status. In view of the above the management is confident that the Company will continue as a going concern.

5) Para ii (a) of Annexure - A to Independent Auditors Report regarding physical verification of inventory lying at some locations

The Auditors observation is a statement of fact and the management does not have anything further to comment on the same.

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

As compared to the total value of the Companys inventory, the variance in the value of inventory for the quarters ended

June 2022 and September 2022 are almost negligible and have arisen only due to minor corrections during finalization of the financial results. The variances in the values of sundry receivables for the quarters ended June 2022 and September 2022 are on account of foreign exchange restatement and expected credit loss provisions at the end of the financial year.

Statements for the quarters ended December 2022 and March 2023 were not submitted by the company on account of initiation of legal action by its Lenders. Currently all the legal proceedings are sub-judice, hence, submission of any information by the Company, which was being done in a routine manner earlier, is now subject to court orders.

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

The Company has in earlier years granted loans for business purposes to its two subsidiaries as they do not enjoy any credit facility from any bank / financial institution. However, during the year, the Company has not granted any fresh loans to them. Also there is a reduction in the quantum of these loans during the year. Although there is no specific schedule of repayment, yet loan is to be repaid by them within specified period from the date of the receipt of each tranche of loan and also carries agreed rate of interest. The provision for impairment of loan to subsidiaries has been made in accordance with the laid down accounting norms.

The staff advances have been extended to permanent employees of the Company in the normal course for their personal requirements. The staff advances amounting to

Rs 2.12 crore have been written off during the year in view of the fact that those employees stood by the Company in its difficult times and instead of expecting any increments since long time or other benefits some of them actually taken a cut in their salary. Hence, to reward their loyalty and devotion to duty their advances have been written off after taking approvals from Audit Committee and the Board of the Company.

8) 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 liquidity constraints being faced by the Company have delayed the payment. However, the Company has already received some refunds which have reduced its liability and as on date has filed appeals with the Authorities which may result in a refund of an amount which is more than the liability of outstanding statutory dues.

9) Para ix (a) of Annexure - A to Independent Auditors Report regarding default in repayment of loans (including interest) to Bankers

The Company is contesting the matter of so called "default" in various legal fora and this matter is currently sub-judice.

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

The cash losses are the result of less revenue as compared to the expenses incurred during the year.

11) Para xix of Annexure - A to Independent Auditors Report regarding Companys capacity of meeting its liabilities existing as on Balance Sheet date

The management is confident that it will be able to realize its assets and meet its liabilities and commitments in the normal course of business considering the net assets position of the Company irrespective of the final conclusion of decision in the ongoing legal process.

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

The Companys liquidity position had become very constrained after March 2020 on account of lockdowns and frequent disruptions in business due to spread of Covid-19 pandemic. Although, the Company had identified an ongoing project for making requisite CSR expenditure during FY 2020-21 and 2021-22 but its banking transactions got highly restricted during 2021-22 causing further liquidity constraints for the Company. Further, the Companys lenders have frozen its bank accounts and have started legal proceedings for recovery of their dues during the year. Hence, the Company could neither spend nor transfer the unspent amount to Unspent CSR Account. However, the Company is committed to meet its CSR obligations after resolution of the banking issues and improvement in the liquidity position.

SECRETARIAL AUDITOR

In accordance with Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company appointed M/s Kirti Dureja & Co., Company

Secretaries, a peer reviewed firm, as a 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, reservation or adverse remark or disclaimer made 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

Please refer to point no. 12 of the explanations or comments of the Board on the qualification etc. in statutory auditors report.

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

The Corporate Social Responsibility Policy of the Company 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. The Policy is available on the Companys website and can be accessed through the link https://corporate.pcjeweller.com/codes-policies/. Annual Report on CSR activities pursuant to Section 135 of the Act and

Rules made thereunder is annexed as "Annexure – 5" to this Report.

OTHER DISCLOSURES

During the year under review:

There was no change in the nature of business of the

Company.

No issue of equity shares with differential rights as to dividend, voting or otherwise, was made.

No issue of sweat equity shares to directors or employees was made.

No Whole-time Director received remuneration from any of the subsidiary(ies) of the Company.

No application was made or any proceeding is pending under the Insolvency and Bankruptcy Code, 2016.

There was no instance of one time settlement with any Bank or Financial Institution.

The equity shares of the Company have not been suspended from trading by SEBI.

ACKNOWLEDGEMENT

Your Directors would like to convey their sincere gratitude and place on record appreciation for the continued support and co-operation of the Companys customers, suppliers, investors and regulatory authorities. Your Directors also appreciate the commendable efforts, teamwork and professionalism of the employees of the Company at all levels.

For and on behalf of the Board
Sd/- Sd/-
Place: New Delhi (RAMESH KUMAR SHARMA) (BALRAM GARG)
Date: August 14, 2023

Executive Director

Managing Director

DIN: 01980542 DIN: 00032083