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 COMPANY'S 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 Company's 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 Company's 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 Company's
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 Hon'ble Court has accepted the Company's 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 Company's 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 arm's 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
Company's 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 Company's 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 Hon'ble 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 Company's 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 Company's 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 Company's 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 Hon'ble
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
Company's 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 Company's 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 Company's 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
Company's 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 Company's 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 Hon'ble Court has accepted the Company's 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 Auditor's 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 Company's 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 Company's 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 Company's 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 Company's 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
Company's 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 Company's
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 |
|