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Directors Report of PC Jeweller Ltd.

Mar 31, 2016

Dear Members,

The Directors have pleasure in presenting their 11th Annual Report together with the audited financial statements of the Company for the financial year ended March 31, 2016.

OVERVIEW OF FINANCIAL PERFORMANCE & BUSINESS

The highlights of the standalone and consolidated financial statements of the Company for the financial year ended March 31, 2016, are as under:

(Rs. in crores, except earnings per share)

Standalone Consolidated

Particulars 2015-16 2014-15 2015-16 2014-15

Revenue from Operations 7,259.07 6,348.52 7,330.18 6,361.28

Other Income 49.56 59.19 48.70 59.21

Total Revenue 7,308.63 6,407.71 7,378.88 6,420.49

Profit before Finance Costs, Depreciation and Tax 775.93 783.21 774.12 782.43

Less: Finance Cost 214.65 220.87 214.95 219.89

Less: Depreciation & Amortisation 22.61 23.02 22.66 23.02

Profit before Tax 538.67 539.32 536.51 539.52

Less: Tax Expense 137.79 161.09 136.85 161.09

Net Profit after Tax 400.88 378.23 399.66 378.43

Surplus in the Statement of Profit & Loss- Opening Balance 1,238.57 949.35 1,238.76 949.34

Amount available for appropriation 1,639.45 1,327.58 1,638.42 1,327.77

Appropriations:

Depreciation adjustment - 0.80 - 0.80

Proposed Equity Dividend 60.00 57.31 60.00 57.31

Dividend Distribution Tax 11.88 11.99 11.88 11.99

Transfer to General Reserves - 18.91 - 18.91

Surplus in the Statement of Profit & Loss-Closing Balance 1,567.57 1,238.57 1,566.54 1,238.76

Earnings per Share:

Basic 22.38 21.12 22.32 21.13

Diluted 22.34 21.12 22.28 21.13

During the year under review, revenue from operations on standalone basis increased to Rs. 7,259.07 crores as compared to Rs. 6,348.52 crores during the previous year, representing growth of more than 14%. The net Profit after tax also increased to Rs.400.88 crores as compared to Rs. 378.23 crores during the previous year, representing growth of approximately 6%. The share of domestic and export sales in the revenue from operations on standalone basis is Rs. 5,166.13 crores (71.17%) and Rs. 2,092.94 crores (28.83%) respectively.

Your Company continued its growth journey and opened 10 new showrooms, including remaining 4 showrooms out of the 20 showrooms earmarked to be opened from Initial Public Offer ("IPO") proceeds and has completely utilized the net IPO proceeds. During the year the Company also took initiatives on small and franchisee showrooms and opened 1 small showroom and 1 franchise showroom. The Company has total 60 showrooms as on March 31, 2016. After end of the year under review, your Company has opened 4 new showrooms and as on the date of this report, your Company is having total 64 showrooms located in 52 cities across India.

During the year under review, the Company launched its Flexia jewellery collection and acquired ''AZVA'' brand, India''s first branded gold jewellery from World Gold Council, in one of its wholly owned subsidiary. In technical tie up with California based leading tech firm Martian Inc., your Company is working on development of smart jewellery.

SHARE CAPITAL

During the year under review, the authorised share capital of the Company has been increased from Rs.200 crores to Rs. 225 crores. After the end of the year, subject to the approval of the Members, the Company proposed to further increase its authorised share capital to Rs.500 crore comprising of 24 crores equity shares of Rs.10/- each and 26 crores preference shares of Rs.10/- each. The paid-up share capital of the Company remained unchanged during the year.

CHANGE OF REGISTERED OFFICE

The registered office of the Company was shifted from 24/2708, Bank Street, Karol Bagh, New Delhi - 110005 to C – 54, Preet Vihar, Vikas Marg, Delhi – 110092 with effect from July 21, 2015.

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 3.35 per equity share (i.e. @33.50% of face value of Rs.10/- each) for the financial year 2015-16, subject to the approval of Members in the 11th Annual General Meeting.

TRANSFER TO GENERAL RESERVE

Your Directors do not propose to transfer any amount to the General Reserve.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mrs. Kusum Jain, who was appointed as an Additional Director in the capacity of Non-Executive Non-Independent Director on March 31, 2015, was regularised in the 10th Annual General Meeting of the Company held on September 19, 2015. In the same meeting Shri Suresh Kumar Jain was appointed as Non-Executive Independent Director for a term of 3 years w.e.f. September 19, 2015.

Shri Padam Chand Gupta, Director of the Company retires by rotation and being eligible, offers himself for re-appointment at the 11th Annual General Meeting.

Shri Ramesh Kumar Sharma, whose present term of appointment as Whole-time Director of the Company is expiring on February 6, 2017, is proposed to be re-appointed as Whole-time Director of the Company for a further term of 5 years at the 11th Annual General Meeting.

Brief resumes of Shri Padam Chand Gupta & Shri Ramesh Kumar Sharma forms part of the Notice convening the Annual General Meeting.

No changes among Key Managerial Personnel took place during the year and Shri Balram Garg, Managing Director, Shri Sanjeev Bhatia, Chief Financial Officer and Shri Vijay Panwar, Company Secretary continues to be Key Managerial Personnel of the Company.

SUBSIDIARY, ASSOCIATES AND JOINT VENTURE COMPANIES

As on March 31, 2016, your Company has three wholly owned non-material Indian subsidiary companies:

(1) PC Universal Private Limited: It is engaged in the business of manufacturing and export of all kinds of gold, silver, diamond jewellery and ornaments. It has one manufacturing unit located in Noida Special Economic Zone, Noida (U.P.). Its turnover and net Profit for the year were Rs.6980.13 lakhs and Rs.90.61 lakhs respectively.

(2) Transforming Retail Private Limited: It is engaged in the business of trading of all kinds of gold, silver, diamond jewellery and ornaments. Presently, it sells jewellery through its online sale portal www.wearyourshine.com. Its turnover for the year was Rs.1105.13 lakhs and it incurred a net loss of Rs.155.04 lakhs.

(3) Luxury Products Trendsetter Private Limited: It was incorporated as wholly owned subsidiary of the Company during the year under review. It is engaged in the business of manufacture, buy, sell etc. of jewellery. During the year under review, it has acquired ''AZVA'' brand, India''s frst branded gold jewellery. It incurred a net loss of Rs.57.70 lakhs during the year.

In terms of proviso to sub-section (3) of Section 129 of the Act, the salient features of the financial statements of the subsidiaries is set out in the Form AOC-1, which form part of this Annual Report.

Your Company does not have any associate or joint venture company.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of the Company and its subsidiaries, prepared in accordance with the Companies Act, 2013 and Accounting Standard AS-21, form part of this Annual Report.

MANAGEMENT DISCUSSION & ANALYSIS

The Management Discussion and Analysis Report as stipulated under Regulation 34 of the SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015 forms part of this Annual Report.

STATEMENT ON DECLARATION GIVEN BY THE INDEPENDENT DIRECTORS

Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the Companies Act, 2013 read with the Schedules and Rules issued thereunder as well as Regulation 16 of the SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015.

NUMBER OF BOARD MEETINGS

During the year five Board meetings were held on May 14, 2015; July 21, 2015; August 13, 2015; November 6, 2015 and January 23, 2016. The time gap between any two Board meetings does not exceed 120 days. For further details, please refer to Report on Corporate Governance.

AUDIT COMMITTEE

The Audit Committee of the Board comprises of four members, namely Dr. Manohar Lal Singla, Shri Krishan Kumar Khurana, Shri Miyar Ramanath Nayak and Shri Balram Garg. Except Shri Balram Garg, Managing Director, all other members are Independent Directors. Dr. Manohar Lal Singla, an Independent Director, is the Chairperson of the Audit Committee. For further details, please refer to Report on Corporate Governance.

INTERNAL FINANCIAL CONTROLS

Your Company has put in place adequate internal financial controls with reference to the financial statements commensurate with the size and nature of operations of the Company. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed. The Company has appointed a professional firm as Internal Auditor to regularly carry out review of the internal control systems and procedures. The internal Audit Reports are periodically reviewed by the Audit Committee.

PUBLIC DEPOSITS

Your Company through a Postal Ballot resolution got the approval of Members to invite / accept / renew from time to time unsecured/ secured deposits in the form of advances for the Company''s Jewellery Purchase Schemes, from the Members of the Company and the Public, up to permissible limits. Thereafter, the Company issued a Circular in the form of Advertisement inviting Deposits and started accepting deposits w.e.f. August 15, 2015 under its Jewellery Purchase Scheme "Jewel For Less".

The details relating to deposits, covered under Chapter V of the Companies Act, 2013 are as under:

(a) Accepted during the year : Rs. 30.97 crores

(b) Remained unpaid or unclaimed as at the end of the year : Rs. 30.71 crores

(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

The Company has not accepted any deposits which are not in compliance with the requirements of Chapter V of the Companies Act, 2013.

STATUS OF UNCLAIMED / UNPAID AMOUNT

(A) As on March 31, 2016, Rs. 2,16,445/- were lying as unclaimed/ unpaid in the Company''s IPO refund account.

(B) As on March 31, 2016, Rs. 4,73,764.60 were lying as unclaimed / unpaid dividend as under:

Financial Type of Date of declaration of Total dividend Year dividend dividend (Rs.)

2012-13 Final September 18, 2013 17,91,00,000

2013-14 Interim January 20, 2014 26,86,50,000

2013-14 Final September 13, 2014 26,86,50,000

2014-15 Final September 19, 2015 57,31,20,000

Financial Year Unclaimed dividend Due date for transfer to (Rs.) (%) IEPF*

2012-13 1,26,688 0.07 October 24, 2020

2013-14 55,767 0.02 February 25, 2021

2013-14 35,220 0.01 October 13, 2021

2014-15 2,56,089.60 0.04 October 24, 2022

* Investor Education and Protection Fund

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The details of loans / guarantees given and investments made form part of the notes to the financial statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All related party transactions that were entered during the year were in the ordinary course of business and on arm''s length basis. During the year, your 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 Related Party Transactions & Dealing with Related Party. Hence, disclosure in Form AOC-2 is not required. Details of related parties and transactions with them, as required by the Accounting Standards (AS-18) have been disclosed in the Notes forming part of the financial statements.

CREDIT RATING

CRISIL Limited vide its letter dated August 7, 2015, has reaffirmed CRISIL A/Stable (Long-Term Rating) and CRISIL A1 (Short-Term Rating) to the total bank facilities (Rs.3,850 crores).

India Ratings & Research Private Limited, a Fitch Group Company, vide its letter dated February 2, 2016, has assigned IND A1 rating to the additional commercial paper programme (Rs.100 crores) of the Company and also affirmed IND A1 rating to the existing commercial paper programme (Rs.100 crores).

Credit Analysis & Research Limited vide its letter dated February 1, 2016, has reaffirmed CARE A (FD) to the deposits programme (Rs.200 crores) of the Company.

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

After end of the year under review, your Company:

(1) Issued and allotted 42,69,984 Compulsorily Convertible Debentures having face value of Rs.1,000/- each, at par, by way of a preferential allotment on private placement basis to DVI Fund (Mauritius) Ltd.

(2) Subject to receipt of necessary approvals proposed to issue and allot 25,73,72,912 Compulsorily Convertible Preference Shares having face value of Rs.10/- each, by way of preferential allotment on private placement basis to certain Investors.

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

(A) CONSERVATION OF ENERGY

In its endeavour towards conservation of energy your Company equipped all its offices, showrooms and manufacturing units with LED lights.

(B) TECHNOLOGY ABSORPTION

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

(C) FOREIGN EXCHANGE EARNINGS AND OUTGO

Foreign Exchange Earnings & Outgo during the year are as under:

Earnings : Rs.2,094.02 crores

Outgo : Rs.2.80 crores

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

Your Company has zero tolerance for sexual harassment at workplace and 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. During the year, the Company had not received any complaint on sexual harassment and no complaint was pending as on March 31, 2016.

RISK MANAGEMENT

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

WHISTLE BLOWER POLICY / VIGIL MECHANISM

Your Company has formulated a Whistle Blower Policy / Vigil Mechanism, which provides a formal mechanism for all employees and Directors of the Company to report about unethical behavior, actual or suspected fraud or violation of the Company''s code of conduct or an event he becomes aware of that could have a detrimental effect on the business or reputation of the Company and provides reassurance that they will be protected from reprisals or victimization for whistle blowing. The Policy has been posted on the Company''s website. No person was denied access to the Chairperson of the Audit Committee to report any concern.

BOARD EVALUATION

In accordance with the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board of your Company on the recommendation of Nomination and Remuneration Committee, laid down Criteria for evaluation of Board, its Committees and individual Directors and accordingly carried out the evaluation process. The process was based on evaluation forms, which include a rating mechanism. Independent Directors at their separate meeting also reviewed the performance of the Board as a whole, Non- Independent Directors and the Chairman.

The criteria for performance evaluation of Board and its Committees amongst others includes their structure and composition, processes, information and functioning, terms of reference of the Committees, suggestions / recommendations by the Committees to the Board etc.

The criteria for performance evaluation of Directors including Executive & Independent Directors amongst others includes their attendance and contribution at meetings, devotion of time and effort to understand the Company, its business, their duties and responsibilities, leadership qualities and effectiveness of communication with all stakeholders, impact and influence on Board / Committees and adherence to the Code of Conduct etc.

SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS

There are 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 Companies Act, 2013, your Directors confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed and there are 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 this 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.

EMPLOYEES STOCK OPTION PLAN

Your Company has granted 7,26,300 stock options to the eligible employees of the Company on May 14, 2015. Each option entitles the Grantee thereof to apply for and be allotted one equity share of the Company upon vesting. The necessary disclosure pursuant to Regulation 14 of the SEBI (Share Based Employee Benefits) Regulations, 2014 is annexed as "Annexure –1."

AUDITORS AND THEIR REPORT STATUTORY AUDITORS

M/s Walker Chandiok & Co LLP, Chartered Accountants (Firm Registration No. 001076N/N500013) and M/s Sharad Jain Associates, Chartered Accountants (Firm Registration No. 015201N), were appointed as Statutory Auditors of the Company for 5 years and 2 years respectively in the 10th Annual General Meeting of the Company held on September 19, 2015, subject to ratification by the Members at every Annual General Meeting. The Company has received their consent letters and eligibility certificates under Sections 139 and 141 of the Companies Act, 2013. As required under Regulation 33 of the Listing Regulations, the auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. The Board of Directors recommends their appointment for ratification in the 11th Annual General Meeting.

The notes to the financial statements referred to in the Auditors'' Report are self-explanatory and do not call for any further explanations or comments. The Auditors'' Report does not contain any qualification, reservation or adverse remark.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company has appointed Shri Randhir Singh Sharma, Practicing Company Secretary, New Delhi to conduct the Secretarial Audit of the Company for the financial year 2015-16. The Secretarial Audit Report is annexed herewith as "Annexure - 2" to this Report. The Secretarial Audit Report does not contain any qualification, observation or adverse remarks.

CORPORATE GOVERNANCE REPORT

Your Company believes in the principle of corporate governance and is committed to maintain the highest standards of Corporate Governance. The detailed Report on Corporate Governance as stipulated under SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015 forms part of this Annual Report. The Certificate from the Practicing Company Secretary confirming compliance with the conditions of Corporate Governance is annexed as "Annexure–3" to this report.

PARTICULARS OF EMPLOYEES

The information required under Section 197(12) of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees of the Company, is annexed as"Annexure–4" to this Report.

CORPORATE SOCIAL RESPONSIBILITY

Social responsibility has always been at the forefront of your Company''s operating philosophy. As a responsible corporate citizen, the Company tries to contribute towards social causes on a regular basis. The Corporate Social Responsibility Policy of the Company is placed on its website www.pcjeweller.com. CSR programs or projects to be undertaken by the Company in terms of this Policy, shall relate to one or more activities listed in Schedule VII of the Companies Act, 2013, at present or as may be amended from time to time. The CSR Committee comprises of Dr. Manohar Lal Singla, Independent Director (Chairman), Shri Krishan Kumar Khurana, Independent Director (Member) and Shri Ramesh Kumar Sharma, Executive Director (Member). The Annual Report on CSR activities as per the Companies (Corporate Social Responsibility Policy) Rules, 2014, in the prescribed format, is annexed as "Annexure – 5" to this Report.

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

The Company''s Policy on Directors'' appointment & remuneration and Criteria for determining qualifications, positive attributes & independence of a Director are annexed as "Annexure – 6" and "Annexure –7" to this Report.

EXTRACT OF ANNUAL RETURN

Extract of Annual Return in Form No. MGT-9 is annexed as "Annexure –8"to this report.

ACKNOWLEDGEMENT

Your Directors wish to convey their gratitude and place on record their appreciation for all the employees at all levels for their hard work, cooperation and dedication during the year. Your Directors also sincerely convey their appreciation to customers, shareholders, vendors, bankers, regulatory and government authorities for their continued support.

For and on behalf of the Board

PC Jeweller Limited

Sd/-

Date: August 18, 2016 (PADAM CHAND GUPTA)

Place: New Delhi Chairman

DIN: 00032794


Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting their 10th Annual Report together with the audited financial statements for the financial year ended March 31, 2015.

FINANCIAL HIGHLIGHTS

The highlights of the standalone financial statements of the Company for the financial year ended March 31, 2015, are as under:

(Rs. in lacs, except earnings per share)

Particulars 2014-15 2013-14

Revenue from Operations 6,34,851.64 5,32,482.91

Other Income 5,918.90 4,723.54

Total Revenue 6,40,770.54 5,37,206.45

Profit before Finance Costs, Depreciation and Tax 78,319.92 62,898.28

Less: Finance Cost 22,086.61 14,728.23

Less: Depreciation & Amortisation 2,301.69 1,231.78

Profit before Tax 53,931.62 46,938.27

Less: Tax Expense 16,108.99 11,306.94

Net Profit after Tax 37,822.63 35,631.33

Surplus in the Statement of Profit & Loss — Opening Balance 94,935.22 69,153.16

Amount available for appropriation 1,32,757.85 1,04,784.49

Appropriations:

Depreciation adjustment 79.54 -

Interim Dividend - 2,686.50

Proposed Equity Dividend 5,731.20 2,686.50

Dividend Distribution Tax 1,199.25 913.14

Transfer to General Reserves 1,891.13 3,563.13

Surplus in the Statement of Profit & Loss — Closing Balance 1,23,856.73 94,935.22

Earnings per Share:

Basic 21.12 19.89

Diluted 21.12 19.89

OVERVIEW OF BUSINESS & FINANCIAL PERFORMANCE

Your Company''s growth journey continued during the year under review also. The Company opened 9 new showrooms during the year, taking the tally of its total number of showrooms to 50 as on March 31, 2015. The Company opened its Golden Jubilee showroom at Jaipur (Rajasthan). The Company entered into the field of fast growing online space by launching its e-commerce website wwwWearYourShine.com. The Company also launched a unique detachable jewellery collection, Flexia, wherein one jewellery set can be worn in 5-6 different unique ways.

During the year under review, revenue from operations on standalone basis increased to Rs. 6,34,851.64 lacs as compared to Rs. 5,32,482.91 lacs in the previous year, representing growth of more than 19%. The profit before tax also increased to Rs. 53,931.62 lacs compared to Rs. 46,938.27 lacs in the previous year, representing growth of approximately 15%. The share of domestic and export sales in the revenue from operations is Rs. 4,53,869.91 lacs & Rs. 1,80,981.73 lacs respectively. The share of diamond jewellery in the revenue from domestic operations increased to 31.52% as against 26.45% in the previous year, which shows that your Company is focusing on sale of high margin diamond jewellery.

RECENT DEVELOPMENTS

After the end of the year, your Company opened remaining 4 new showrooms (one each at Bhagalpur, Durgapur, Siliguri and Yamuna Nagar) out of the 20 showrooms earmarked to be opened from the net Initial Public Offer ("IPO") proceeds of the Company. With this, the Company achieved its IPO objects of opening 20 new retail showrooms and has completely utilized the net IPO proceeds. As on the date of this Report, your Company is having 54 showrooms under ''PC Jeweller1 brand located in 45 cities across India.

Your Company has granted 7,26,300 stock options to the eligible employees of the Company on May 14, 2015. Each option entitles the Grantee thereof to apply for and be allotted one equity share of the Company upon vesting.

On August 12, 2015, your Company has issued a Circular in the form of Advertisement inviting unsecured deposits from the Public upto Rs. 20,000 lacs, in the form of advances for its Jewellery Purchase Scheme "Jewel For Less". The scheme has been rated by Credit Analysis & Research Limited with a rating of CARE A (FD), indicating adequate degree of safety regarding timely servicing of financial obligations.

With effect from July 21, 2015, the registered office of the Company was shifted within the local limits of city i.e. from 24/2708, Bank Street, Karol Bagh, New Delhi — 110005 to C — 54, Preet Vihar, Vikas Marg, Delhi — 110092.

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

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 3.20/- per equity share (i.e. @32% of face value Rs. 10/- each) for the financial year 2014-15, subject to the approval of Members in the ensuing Annual General Meeting.

TRANSFER TO GENERAL RESERVE

Your Company proposes to transfer Rs. 1,891.13 lacs to the General Reserve.

SHARE CAPITAL

During the year under review, the authorised and paid-up share capital of the Company remained unchanged.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Ms. Kusum Jain was appointed as an Additional Director in the capacity of Non-Executive Director with effect from March 31, 2015. She has wide experience in retail. With her appointment your Company has also complied with the requirement of appointing a women director, according to the Listing Agreement and the Companies Act, 2013. She holds office upto the date of ensuing Annual General Meeting of the Company. The Company has received a notice from a Member proposing her appointment as Director, along with the requisite deposit amount.

Shri Ramesh Kumar Sharma, Executive Director & Chief Operating Officer of the Company retires by rotation and being eligible, offers himself for re-appointment at the ensuing Annual General Meeting.

Brief resumes of the aforesaid Directors form part of the Notice convening the Annual General Meeting.

During the year Shri Balram Garg, Managing Director, Shri Sanjeev Bhatia, Chief Financial Officer and Shri Vijay Panwar, Company Secretary, were designated as Key Managerial Personnel of your Company, in compliance with the requirement of the Companies Act, 2013.

SUBSIDIARY, ASSOCIATES AND JOINT VENTURE COMPANIES

As on March 31, 2015, your Company has two wholly owned non-material Indian subsidiary companies:

(1) PC Universal Private Limited: It is engaged in manufacturing, trading, import, export of all kinds of gold, silver, diamond jewellery and ornaments. Its turnover and net profit for the year were Rs. 1276.70 lacs and Rs. 20.86 lacs, respectively.

(2) Transforming Retail Private Limited: It was incorporated as wholly owned subsidiary during the year. It is authorised to carry on in India or elsewhere the business to manufacture, buy, sell, distribute or otherwise deal in jewellery, watches, accessories, clothes, gift items etc. through various channels like retail store, online stores, e-commerce, etc. It has not commenced any business activity during the year under review However, on account of incorporation and ancillary expenses it incurred net loss of Rs. 0.31 lacs.

In terms of proviso to sub section (3) of Section 129 of the Act, the salient features of the financial statement of the subsidiaries is set out in the Form AOC-1, which forms part of this Annual Report.

Your Company does not have any associate or joint venture company.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of the Company and its subsidiaries, prepared in accordance with the Companies Act, 2013 and Accounting Standard AS-21, form part of this Annual Report.

MANAGEMENT DISCUSSION & ANALYSIS

The Management Discussion and Analysis Report as stipulated under Clause 49 of the Listing Agreement forms part of this Annual Report.

STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS

Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the Companies Act, 2013 read with the Schedules and Rules issued thereunder as well as Clause 49 of the Listing Agreement.

NUMBER OF BOARD MEETINGS

During the year seven Board meetings were held on May 22, 2014; July 28, 2014; August 8, 2014; September 13, 2014; November 12, 2014; February 6, 2015 and March 31, 2015. For further details, please refer to Report on Corporate Governance.

AUDIT COMMITTEE

The Audit Committee of the Board comprises of four members, namely Dr. Manohar Lal Singla, Shri Krishan Kumar Khurana, Shri Miyar Ramanath Nayak and Shri Balram Garg. Except Shri Balram Garg, Managing Director, all other members are Independent Directors. Dr. Manohar Lal Singla, an Independent Director, is the Chairperson of the Audit Committee. For further details, please refer to Report on Corporate Governance.

INTERNAL FINANCIAL CONTROLS

Your Company has put in place adequate internal financial controls with reference to the financial statements commensurate with the size and nature of operations of the Company. The Company has appointed an external professional firm as Internal Auditor to regularly carry out review of the internal control systems and procedures. The internal Audit Reports are periodically reviewed by the Audit Committee.

JEWELLERY PURCHASE SCHEME

Your Company had been successfully operating two jewellery purchase schemes, namely Jewel for Less and Swam Manjusha (here-in-after collectively referred to as "Schemes"), which were not covered within the definition of ''Deposits'' under the Companies Act, 1956 read with Companies (Acceptance of Deposit) Rules, 1975. However, under the Companies Act, 2013 read with The Companies (Acceptance of Deposits) Rules, 2014, the Schemes fall within the definition of Deposits. In view of this and as an abundant precaution your Company withdrew the Schemes and stopped enrollment of new customers under the Schemes w.e.f. April, 2014. Rs. 113.22 lacs received as advance under the Schemes and remaining unclaimed / unpaid as on March 31, 2015, was transferred to an escrow account, which is utilized only for repayment to the existing customers of the Schemes and not for Company''s business purposes.

Your Company through a Postal Ballot resolution, whose result was declared on March 30, 2015, got the approval of Members to invite / accept / renew from time to time unsecured / secured deposits in the form of advances for the Company''s Jewellery Purchase Schemes, from the Members of the Company and the Public, up to permissible limits. However, during the year, the Company has not issued any Circular or Circular in the form of Advertisement inviting Deposits.

PARTICULARS OF LOANS, GUARANTEES AND INVESTEMENTS

The details of loans / guarantees given and investments made form part of the notes to the financial statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All related party transactions that were entered during the year were in the ordinary course of business and on arm''s length basis. During the year, your 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 Related Party Transactions & Dealing with Related Party. Hence, disclosure in Form AOC - 2 is not required. Details of related parties and transactions with them, as required by the Accounting Standards (AS-18) have been disclosed in the Notes forming part of the financial statements.

EMPLOYEES STOCK OPTION SCHEME

Your Company with the objective of introducing a long term incentive tool to attract, motivate, retain talent and reward loyalty, formulated PC Jeweller Limited Employee Stock Option Plan 2011 ("ESOP 2011"), for grant of a maximum of 26,79,330 stock options to the eligible employees of the Company. The ESOP 2011 was initially approved by the Members in Extra-ordinary General Meeting held on September 26, 2011 and subsequent to the listing of the Company further ratified by them in the 8th Annual General Meeting of the Company held on September 18, 2013. During the year under review, no options were granted, hence, no disclosure as stipulated under the SEBI Guidelines is made.

CREDIT RATING

CRISIL Limited vide its letter dated August 4, 2014, has reaffirmed CRISIL A/Stable (Long-Term Rating) and CRISIL A1 (Short-Term Rating) to the total bank facilities (Rs. 3,65,000 lacs) of the Company and also reaffirmed CRISIL A1 ratings to the Commercial Paper Programme (Rs. 5,000 lacs) of the Company.

India Ratings & Research Private Limited, a Fitch Group Company, vide its letter dated January 8, 2015, has assigned IND A1 rating to the Commercial Paper Programme (Rs. 5,000 lacs ) of the Company.

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

(A) CONSERVATION OF ENERGY

In its endeavour towards conservation of energy your Company equipped all its offices, showrooms and manufacturing units with LED lights. The Company is also exploring use of solar energy for its manufacturing units.

(B) TECHNOLOGY ABSORPTION

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

(C) FOREIGN EXCHANGE EARNINGS AND OUTGO Foreign Exchange Earnings & Outgo during the year are as under:

Earnings : Rs. 181098.51 lacs Outgo : Rs. 67.68 lacs

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

Your Company has zero tolerance for sexual harassment at workplace and 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. During the year, the Company had not received any complaints on sexual harassment and no complaints were pending as on March 31, 2015.

RISK MANAGEMENT

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

WHISTLE BLOWER POLICY / VIGIL MECHANISM

Your Company has formulated a Whistle Blower Policy / Vigil Mechanism, which provides a formal mechanism for all employee and Directors of the Company to report about unethical behavior,actual or suspected fraud or violation of the Company''s code of conduct or an event he becomes aware of that could have a detriment effect on the business or reputation of the Company and provides reassurance that they will be protected from reprisals or victimization for whistle blowing. The Policy has been posted on the Company''s website. No Whistle Blower was denied access to the Audit Committee of the Company.

BOARD EVALUATION

In accordance with the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board of your Company on the recommendation of Nomination and Remuneration Committee, laid down Criteria for evaluation of Board, its Committees and individual Directors and accordingly carried out the evaluation process. The process was based on evaluation forms, which include a rating mechanism. Independent Directors at their separate meeting also reviewed the performance of the Board as a whole, Non-Independent Directors and the Chairman. Ms. Kusum Jain, being appointed as Additional Director on March 31, 2015, was excluded from the process of evaluation.

The criteria for performance evaluation of Board and its Committees amongst others includes their structure and composition, processes, information and functioning, terms of reference of the Committees, suggestions / recommendations by the Committees to the Board etc.

The criteria for performance evaluation of Directors including Executive & Independent Directors amongst others includes their attendance and contribution at meetings, devotion of time and effort to understand the Company, its business, their duties and responsibilities, leadership qualities and effectiveness of communication with all stakeholders, impact and influence on Board / Committees and adherence to the Code of Conduct etc.

SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS

There are 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 Companies Act, 2013,your Directors confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed and there are 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 this 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.

AUDITORS & AUDITORS REPORT

STATUTORY AUDITORS

M/s Walker Chandiok & Co LLP, Chartered Accountants (Firm Registration No. 001076N/N500013) and M/s Sharad Jain Associates, Chartered Accountants (Firm Registration No. 015201N), Joint Statutory Auditors of the Company, are retiring at the conclusion of the ensuing Annual General Meeting and being eligible, offered themselves for re-appointment. The Company has received their consent letters and certificates to the effect that their appointment, if made, would be within the limits prescribed under Section 141 of the Companies Act, 2013 and that they are not disqualified from being appointed as the Joint Statutory Auditors of the Company.

The notes to the financial statements referred to in the Auditors'' Report are self-explanatory and do not call for any further explanations or comments. The Auditors'' Report does not contain any qualification, reservation or adverse remark.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company has appointed Shri Randhir Singh Sharma, Proprietor M/s R S Sharma & Associates, Company Secretaries, New Delhi to conduct the Secretarial Audit of the Company for the financial year 2014-15. The Secretarial Audit Report is annexed herewith as "Annexure - 1" to this Report. The Secretarial Audit Report does not contain any qualification, observation or adverse remarks.

CORPORATE GOVERNANCE REPORT

Your Company believes in the principle of corporate governance and is committed to maintain the highest standards of Corporate Governance. The detailed Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of this Annual Report. The Certificate from the Practicing Company Secretary confirming compliance with the conditions of Corporate Governance is annexed as "Annexure — 2" to this report.

PARTICULARS OF EMPLOYEES

The information required under Section 197(12) of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees of the Company, is annexed as "Annexure — 3", to this Report.

CORPORATE SOCIAL RESPONSIBILITY

Social responsibility has always been at the forefront of your Company''s operating philosophy. As a responsible corporate citizen, the Company tries to contribute towards social causes on a regular basis. On the recommendation of Corporate Social Responsibility Committee ("CSR Committee"), the Board of the Company at its meeting held on November 12, 2014, approved the Corporate Social Responsibility Policy, which is also placed on the Company''s website wwwpcjeweller.com. CSR programs or projects to be undertaken by the Company in terms of this Policy, shall relate to one or more activities listed in Schedule VII the Companies Act, 2013, at present or as may be amended from time to time. The CSR Committee comprises of Dr. Manohar Lal Singla,Independent Director (Chairman), Shri Krishan Kumar Khurana, Independent Director (Member) and Shri Ramesh Kumar Sharma, Executive Director (Member).

The Annual Report on CSR activities as per the Companies (Corporate Social Responsibility Policy) Rules, 2014, in the prescribed format, is annexed as "Annexure — 4" to this Report.

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

The Company''s Policy on Directors'' appointment & remuneration and Criteria for determining qualifications, positive attributes & independence of a Director are annexed as "Annexure — 5" and "Annexure — 6" to this Report.

EXTRACT OF ANNUAL RETURN

Extract of Annual Return in Form No. MGT-9 is annexed as "Annexure — 7" to this report.

ACKNOWLEDGEMENT

Your Directors wish to convey their gratitude and place on record their appreciation for all the employees at all levels for their hard work, cooperation and dedication during the year.

Your Directors sincerely convey their appreciation to customers, shareholders, vendors, bankers, regulatory and government authorities for their continued support.

For and on behalf of the Board

Sd/- (PADAM CHAND GUPTA) Date: August 13, 2015 Chairman Place: New Delhi DIN: 00032794


Mar 31, 2014

Dear Members,

The directors are pleased to present their 9th Annual Report together with the audited financial statements for the financial year ended March 31, 2014.

FINANCIAL HIGHLIGHTS

The highlights of the standalone financial statements of the Company for the financial year ended March 31, 2014, are as under:

(Rs. in crores, except earnings per share)

Particulars 2013-14 2012-13

Revenue from Operations 5,324.83 4,018.42

Changes in inventories of finished goods and W.I.P. 22.67 574.44

Other Income 47.23 20.21

Total Revenue 5,394.73 4,613.07

Operating Expenses 4,761.15 4,111.08

EBITDA 633.58 501.99

Depreciation & Amortisation 12.32 9.99

EBIT 621.26 492.00

Interest & Finance Cost 151.88 127.47

EBT 469.38 364.53

Tax Expense 113.07 73.87

Net Profit after Tax 356.31 290.66

Surplus in the Statement of Profit & Loss - Opening Balance 691.53 421.82

Amount available for appropriation 1,047.84 712.48

Appropriations:

Interim Dividend 26.87 -

Proposed Equity Dividend 26.87 17.91

Dividend Distribution Tax 9.13 3.04

Transfer to General Reserves 35.63 -

Surplus in the Statement of Profit & Loss - Closing Balance 949.34 691.53

Earnings per Share:

Basic 19.89 19.86

Diluted 19.89 19.86

BUSINESS OVERVIEW & PERFORMANCE REVIEW

Your Company is engaged in the business of manufacture, retail and export of jewellery and offers a wide range of products including gold jewellery, diamond jewellery and other jewellery including silver articles.

During the year under review, your Company has opened 11 new showrooms, taking the tally of its total number of showrooms operating under the ''PC Jeweller'' brand to 41 as on March 31, 2014.

The Company is also having four jewellery manufacturing units. One unit is located at Sector - 62, Noida (U.P.), one at Selaqui Industrial Area, Dehradun (U.K.) and two units are located at Noida Special Economic Zone, Noida (U.P.).

During the year under review, despite several regulatory steps taken by the government in relation to jewellery industry for minimizing current account deficit, your Company continued its growth journey and registered an impressive increase of more than 32% in revenue from operations, which increased to Rs. 5,324.83 crores as against Rs. 4,018.42 crores in the previous year. The net profit after tax stood at Rs. 356.31 crores as compared to Rs. 290.66 crores in the previous year, representing growth of more than 22%.

The share of domestic and export sale in the revenue from operations is Rs. 4,002.08 crores & Rs. 1,322.75 crores respectively, implying that 75% of Company''s revenue from operations is from domestic sale, indicating that the Company is consciously concentrating on domestic sale.

RECENT DEVELOPMENTS

After the closure of year under review your Company has opened 4 new showrooms one each at Ranchi, Guwahati, Jammu and Patna. As on the date of this Report, the Company is operating 45 showrooms under the ''PC Jeweller'' brand located in 36 cities across 15 States and 1 Union Territory throughout the India.

DIVIDEND

During the year under review, your Company paid an interim dividend of Rs. 1.50 per equity share of face value of Rs. 10 each and also recommended a final dividend of Rs. 1.50 per equity share of face value of Rs. 10 each for the financial year 2013-14, subject to the approval of Members at the ensuing Annual General Meeting of the Company.

The total outgo towards dividend (including dividend distribution tax) for the year under review amounts to Rs. 62,86,14,135 as against Rs. 20,95,38,045 for the previous year.

STATUS OF UNCLAIMED / UNPAID DIVIDEND AMOUNT

Your Company at its 8th Annual General Meeting held on September 18, 2013 declared dividend of Rs. 1.00 per equity share. An amount of Rs. 1,30,208 has remained unclaimed and unpaid as on March 31, 2014 towards the same.

The Company also declared and paid an interim dividend of Rs. 1.50 per equity share in February, 2014. An amount of Rs. 87,129 has remained unclaimed and unpaid as on March 31, 2014 towards the same.

The shareholders who have not claimed their dividend are requested to contact the Company or its Registrar & Transfer Agent for claiming the same.

TRANSFER TO GENERAL RESERVE

The Company transferred Rs. 35.63 crores to the General Reserve out of amount available for appropriation and an amount of Rs. 949.35 crores is retained in the Statement of Profit and Loss on Standalone basis.

SHARE CAPITAL

During the year under review, the authorised and paid-up share capital of the Company remained unchanged.

DIRECTORS

On the recommendation of Remuneration & Compensation Committee, the Board appointed Shri Miyar Ramanath Nayak and Shri Ramesh Kumar Sharma as Additional Directors of the Company with effect from February 7, 2014. The Board has also appointed Shri Ramesh Kumar Sharma as Whole-time Director designated as Executive Director & Chief Operating Officer of the Company, with effect from February 7, 2014, for a period of 3 years, subject to the approval of Members.

In terms of Section 149 of the Companies Act, 2013 read with The Companies (Appointment and Qualification of Directors) Rules, 2014, it is proposed to appoint Dr. Manohar Lal Singla, Shri Krishan Kumar Khurana and Shri Miyar Ramanath Nayak, as Independent Directors of the Company, not liable to retire by rotation, for 5 consecutive years with effect from September 13, 2014 to September 12, 2019. These Directors have given declarations to the Board that they meet the criteria of independence as provided under Section 149(6) of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges. The Company has received requisite notices in writing from Member(s) proposing the appointment of above-said persons as directors of the Company.

Shri Padam Chand Gupta, Chairman of the Company retires by rotation and being eligible, offers himself for re-appointment at the ensuing Annual General Meeting.

The brief resumes of aforesaid directors form part of the notice convening the Annual General Meeting.

SUBSIDIARY COMPANIES

As on March 31, 2014, your Company has only one non-material Indian subsidiary company namely ''PC Universal Private Limited''.

In accordance with the General Circular No. 2/2011 dated February 8, 2011, issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary company for the year ended March 31, 2014, are not being attached with the Balance Sheet of the Company. The statement pursuant to Section 212(8) of the Companies Act, 1956, containing brief financial details of PC Universal Private Limited for the year ended March 31, 2014, forms part of this Annual Report.

The financial statements of the subsidiary company, along with related information will be made available to the Members of the Company upon request and are also available for their inspection at the Company''s Corporate Office.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of the Company and its subsidiary PC Universal Private Limited, prepared in accordance with Accounting Standards AS-21 "Consolidated Financial Statements" notified pursuant to the Companies (Accounting Standard) Rules, 2006, form part of this Annual Report.

PARTICULARS OF EMPLOYEES

The statement of particulars of employees of the Company pursuant to Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, is attached as Annexure-1 to this report.

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

A. CONSERVATION OF ENERGY

The disclosure of particulars with respect to conservation of energy pursuant to Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are not applicable to your Company. However, the Company makes its best efforts for conservation of energy.

B. TECHNOLOGY ABSORPTION

The Company has not carried out any research and development activities. Accordingly, the information related to technology absorption is not applicable to your Company.

FIXED DEPOSITS

Your Company has neither accepted nor invited any fixed deposits during the year.

AUDITORS

M/s Walker Chandiok & Co LLP, Chartered Accountants (Firm Registration No. 001076N/N500013) and M/s Sharad Jain Associates, Chartered Accountants (Firm Registration No. 015201N), Joint Statutory Auditors of the Company, are retiring at the conclusion of the ensuing Annual General Meeting and being eligible, offered themselves for re-appointment. The Company has received their consent letters and certificates to the effect that their appointment, if made, would be within the limits prescribed under Section 141 of the Companies Act, 2013 and that they are not disqualified from being appointed as the Joint Statutory Auditors of the Company.

AUDITORS'' REPORT

The notes to the financial statements referred to in the Auditors'' Report are self-explanatory and do not call for any further clarification under section 217(3) of the Companies Act, 1956.

COST AUDITOR

The Board of Directors of your Company has appointed M/s M K Singhal & Co., Cost Accountants (Firm Registration No. 00074) as the Cost Auditor to conduct audit of Company''s cost accounting records for the financial year ending March 31, 2015, on the recommendations made by the Audit Committee. The remuneration proposed to be paid to them, subject to the ratification by the Members at the ensuing Annual General Meeting, would be Rs. 2,00,000 plus service tax.

MANAGEMENT DISCUSSION & ANALYSIS

The Management Discussion and Analysis Report as stipulated under Clause 49 of the Listing Agreement with Stock Exchanges forms part of this Annual Report.

CORPORATE GOVERNANCE REPORT

Your Company believes in the principle of corporate governance and is committed to maintain the highest standards of Corporate Governance. The detailed report on Corporate Governance in terms of Clause 49 of the Listing Agreement with Stock Exchanges forms part of this Annual Report. The Certificate from the Practicing Company Secretary confirming compliance with the conditions of Corporate Governance is attached as Annexure-2 to this report.

EMPLOYEES STOCK OPTION PLAN

Your Company vide special resolution passed in its 8th Annual General Meeting held on September 18, 2013, ratified ''PC Jeweller Limited Employee Stock Option Plan 2011 (ESOP 2011)'', for grant of a maximum of 26,79,330 options to the eligible employees of the Company. However, till date no options have been granted by the Company.

AWARDS

During the year under review, your Company won following awards:

* ''Century International Gold Quality Era Award'' in the realm of customer satisfaction, leadership, strategic planning and benchmarking as established in the QC100 TQM system, by BID, Business Initiative Directions, Spain;

* ''Precious Metal Jewellery Plain (Large)'' award at the 40th Indian Gem and Jewellery Awards;

* ''Regional Retail Chain of the Year'' at 9th Annual Gemfields & Nazraana Retail Jeweller India Awards 2013;

Shri Balram Garg, Managing Director of the Company, received Business Sphere award for 2012-13 for being Numero Uno in Hallmark Gold Jewellery & Certified Diamond Jewellery.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, your directors confirm that: -

* in the preparation of the annual accounts for the financial year ended March 31, 2014, the applicable accounting standards have been followed and there are no material departures from the applicable accounting standards;

* the accounting policies have been selected and applied consistently and such judgments and estimates have been made as are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2014 and of the profit of the Company for the year ended on that date;

* proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for prevention and detection of fraud and other irregularities;

* the annual accounts have been prepared on a going concern basis.

ACKNOWLEDGEMENT

Your directors wish to thank all the shareholders, promoters, bankers, vendors, customers and government departments / agencies for their continued support. The directors also place on record their appreciation for the contribution made by the employees of the Company at all levels.

Statement of particulars of employees pursuant to section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975

For and on behalf of the Board

Sd/- Date: July 28, 2014 (PADAM CHAND GUPTA) Place: New Delhi Chairman DIN: 00032794


Mar 31, 2013

Dear Shareholders,

The directors have pleasure in presenting their 8th Annual Report together with the audited financial statements for the financial year ended March 31, 2013.

BUSINESS OVERVIEW

The Company''s operations include manufacture, retail and export of jewellery and it offers a wide range of products including gold jewellery, diamond jewellery and other jewellery including silver articles, with a focus on diamond jewellery and jewellery for weddings.

FINANCIAL HIGHLIGHTS

A brief overview on the standalone financial statements for the financial year ended March 31, 2013, are as follows:

(Rs.in crores)

Particulars 2012-13 2011-12

Revenue from Operations 4018.42 3041.93

Changes in inventories of finished goods and W.I.P. 574.44 613.73

Other Income 20.21 17.56

Total Revenue 4613.07 3673.22

Operating Expenses 4111.08 3324.42

EBITDA 501.99 348.80

Depreciation & Amortisation 9.99 6.59

EBIT 492.00 342.21

Interest & Finance Cost 127.47 77.21

EBT 364.53 265.00

Tax Expense 73.87 33.71

Net Profit after Tax 290.66 231.29

Profit brought forward from previous year 421.82 257.34

Utilised for issue of Bonus Shares 0.00 66.81

Profit available for appropriation 712.48 421.82

Appropriations:

Proposed Equity Dividend 17.91 0.00

Dividend Distribution Tax 3.04 0.00

Net Surplus in the Statement of Profit & Loss 691.53 421.82

PERFORMANCE REVIEW

During the year under review, the revenue from operations of the Company increased to Rs.4018.42 crores as compared to Rs.3041.93 crores in the previous year, representing a growth of more than 32%. The net profit after tax has also gone up by more than 25% from Rs.231.29 crores to Rs.290.66 crores, as compared to the previous year.

Your Company is present in both domestic as well as export markets. During the year under review the Company made an export sale amounting to Rs.1030.77 crores. The share of export turnover in the revenue from operations has declined to approximately 26% as on March 31, 2013 as against 33% as on March 31, 2012.

Your Company continued to move ahead to achieve its growth objectives and in the process opened six more new showrooms during the year. Thus, as of March 31, 2013, your Company had 30 showrooms under the "PC Jeweller" brand, located across 23 cities in north and central India.

RECENT DEVELOPMENTS

Your Company has opened 6 more new showrooms after the closure of year under review. Hence, as on the date of this Report the Company operates 36 showrooms under the ''PC Jeweller'' brand located in 28 cities across 9 States and 1 Union Territory throughout India.

A manufacturing unit of the Company located at G – 54, Selaqui, Dehradun (Uttarakhand), having a covered area of 2300 sq.ft. has been shut down w.e.f. May 31, 2013.

FUTURE PROSPECTS

Your Company plans to further expand its showroom network across India, including in southern and western parts of India. The Company plans to have total 50 showrooms under the "PC Jeweller" brand, by the end of March, 2014.

INITIAL PUBLIC OFFERING

During the year under review your Company had successfully carried out its Initial Public Offering (IPO) of 4,51,33,500 equity shares of face value of Rs.10 each, which was opened for public subscription on December 10, 2012 & closed on December 12, 2012. The price band for the issue was Rs.125 to Rs.135.

The IPO got overwhelming response from the investors and was over-subscribed to the extent of 6.01 times, before technical rejections (including the Anchor Investor portion). The Issue price was finalized at Rs.135 (discount of Rs.5 to the Issue Price offered to Retail Individual Bidders and Eligible Employees) per equity share.

The Company''s equity shares got listed on BSE Limited (the Designated Stock Exchange) and National Stock Exchange of India Limited on December 27, 2012.

SHARE CAPITAL

During the year under review, the authorised share capital of the Company remained unchanged at Rs.2,00,00,00,000.

However, after successful completion of the IPO, the paid-up share capital of the Company increased from Rs.1,33,96,65,000 to Rs.1,79,10,00,000.

DIRECTORS

During the year no changes have taken place amongst the directors.

Dr. Manohar Lal Singla, director of the Company retires by rotation and being eligible, offers himself for re-appointment at the ensuing Annual General Meeting. A brief resume of Dr. Manohar Lal Singla forms part of the notice convening the Annual General Meeting.

DIVIDEND

Your directors are pleased to recommend maiden dividend of Rs.1 (Rupee One Only) per Equity Share of Rs.10 each (i.e. @10%) for the year ended March 31, 2013, subject to approval of the Members at the ensuing Annual General Meeting. The total outgo for the current year amounts to Rs.20,95,38,045 (Rupees Twenty Crore Ninety Five Lacs Thirty Eight Thousand Forty Five only), including dividend distribution tax of Rs.3,04,38,045 (Rupees Three Crore Four Lac Thirty Eight Thousand Forty Five only).

SUBSIDIARY COMPANIES

As on March 31, 2013, your Company has one non-material Indian subsidiary company namely PC Universal Private Limited, incorporated on February 28, 2013, as wholly owned subsidiary of the Company.

During the year under review your Company disposed off 100% shareholding of its erstwhile non-material Indian subsidiary company, Shivani Sarees Private Limited on April 14, 2012.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of the Company and its subsidiary company(ies), prepared in accordance with Accounting Standards AS-21 "Consolidated Financial Statements" prescribed by the Institute of Chartered Accountants of India, form part of the Annual Report and Accounts.

Pursuant to General Circular No. 2/2011 dated February 8, 2011 issued by the Ministry of Corporate Affairs, Government of India, the Board of Directors have consented for not attaching the balance sheet, statement of profit & loss and other documents as set out in section 212 of the Companies Act, 1956 in respect of its subsidiary company(ies) for the year ended March 31, 2013. However, the requisite information in aggregate for subsidiary company(ies) has been disclosed in the consolidated financial statements of the Company.

The annual accounts of the subsidiary company(ies), along with related information are available for inspection at the Company''s Registered/Corporate Office. Copies of the annual accounts of the subsidiary company(ies) will also be made available to the Company''s investors upon request.

PARTICULARS OF EMPLOYEES

The information required under section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, in respect of employees of the Company, is provided in Annexure-1, forming part of this report.

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

Form A pertaining to Conservation of Energy and Form B pertaining to Technology Absorption, are not applicable to your Company.

Foreign Exchange Earnings & Outgo during the year are as under:

Earnings : Rs.1031.15 crore

Outgo : Rs.1.46 crore

FIXED DEPOSITS

Your Company has neither accepted nor invited any fixed deposits during the year.

MANAGEMENT DISCUSSION & ANALYSIS

The Management Discussion and Analysis Report as stipulated under clause 49 of the Listing Agreement with Stock Exchanges forms part of the Annual Report.

CORPORATE GOVERNANCE REPORT

The detailed report on Corporate Governance as stipulated under clause 49 of the Listing Agreement with Stock Exchanges forms part of the Annual Report. The Certificate from the Practicing Company Secretary confirming the compliance of Corporate Governance is attached as Annexure-2 and forms part of this report.

AUDITORS

The Joint Auditors M/s Walker, Chandiok & Co., Chartered Accountants and M/s Sharad Jain Associates, Chartered Accountants, are retiring at the conclusion of the ensuing Annual General Meeting of the Company and being eligible, offer themselves for re-appointment.

AUDITORS'' REPORT

The notes to the accounts referred to in the Auditors'' Report are self-explanatory and therefore, do not call for any further clarification under section 217(3) of the Companies Act, 1956.

EMPLOYEES STOCK OPTION PLAN

Your Company vide special resolution passed in its Extra-Ordinary General Meeting dated September 26, 2011, approved ''PC Jeweller Limited Employee Stock Option Plan 2011 (ESOP 2011)'', for grant of a maximum of 26,79,330 options to the eligible employees of the Company.

However, your Company has not granted any options till date.

UNCLAIMED REFUND AMOUNT (IPO)

As on March 31, 2013 your Company has ?11,97,445 lying as unclaimed in the refund account with the State Bank of India and ?25,200 in escrow account with the IndusInd Bank.

The Company/Registrar & Transfer Agent has been taking necessary steps to make refund to the respective shareholders/applicants of the IPO, whose amounts are lying as unclaimed/unpaid in the refund/escrow account.

AWARDS

During the year your Company was awarded "Niryat Shree Silver Trophy" in the Gems & Jewellery non-MSME category, by the Federation of Indian Export Organisations, set up by the Ministry of Commerce and Industry, Government of India, for the year 2009-2010.

DIRECTORS'' RESPONSIBILITY STATEMENT

Your directors assure you that the financial statements for the year under review conform in their entirety to the requirement of the Companies Act, 1956.

Pursuant to section 217(2AA) of the Companies Act, 1956, your directors confirm that: -

- in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures from the applicable accounting standards;

- such accounting policies have been selected and applied them consistently and such judgments and estimates have been made as 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 of the Company for that period;

- proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for prevention and detection of fraud and other irregularities;

- the annual accounts have been prepared on a going concern basis.

ACKNOWLEDGEMENT

Your directors would like to express their sincere thanks to all valued customers, vendors, Government Departments/ Agencies and other business associates for their support and confidence in the Company. The directors also recognise, commend and thank all the employees for their dedication and commitment. The directors are also grateful to the Company''s shareholders, promoters and bankers for their continued support.

For and on behalf of the Board

Sd/-

Date: July 25, 2013 (PADAM CHAND GUPTA)

Place: New Delhi Chairman

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