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Notes to Accounts of PC Jeweller Ltd.

Mar 31, 2016

1. COMPANY OVERVIEW

PC Jeweller Limited (the ''Company'') was incorporated on 13 April 2005. The Company is engaged in the business of manufacturing, sale and trading of gold jewellery, diamond studded jewellery and silver items.

2. BASIS OF ACCOUNTING

The financial statements are prepared under historical cost convention on an accrual basis, in accordance with the generally accepted accounting principles in India and including the Accounting Standards specified under section 133 of the Companies Act, 2013 (the ''Act'') read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended) and the guiding principles of the Accounting Standard 30, Financial Instruments- Recognition and Measurement issued by the Institute of Chartered Accountants of India (''ICAI'') in respect of certain derivative instruments. These financial statements have been prepared on a going concern basis and the accounting policies have been consistently applied by the Company.

3. Related party transactions

Related party disclosures, as required by Accounting Standard 18 - Related Party Disclosures, notified under the Act are given below:

(i) Names of related parties where control exists

Mr. Balram Garg and Mr. Padam Chand Gupta

PC Universal Private Limited - wholly owned subsidiary *

Transforming Retail Private Limited - wholly owned subsidiary with effect from 24 September 2014 *

Luxury Products Trendsetter Private Limited - wholly owned subsidiary with effect from 11 December 2015 *

* Certain directors of the Company are also directors in these entities.

(ii) Key management personnel

Mr. Padam Chand Gupta : Chairman

Mr. Balram Garg : Managing Director

(iii) Relatives of Key management personnel **

Ms. Kusum Jain : Sister of Mr. Padam Chand Gupta and Mr. Balram Garg

Mr. Nitin Gupta : Son of Mr. Padam Chand Gupta

Mr. Sachin Gupta : Son of Mr. Padam Chand Gupta

Smt. Krishna Devi : Wife of Mr. Padam Chand Gupta

Ms. Pooja Garg : Wife of Mr. Balram Garg

(iv) Other entities in which key management personnel has signifcant infuence **

Onyx Townships Private Limited (till 10 June 2014) Padam Chand, Hindu Undivided Family Balram Garg, Hindu Undivided Family ** where transactions have occurred during the year.

4. Employees'' stock option Plan :

PC Jeweller Limited Employee Stock Option Plan 2011

i) During the year ended 31 March 2012, the Company had formulated Employee Stock Option Scheme referred to as PC Jeweller Limited Employees'' Stock Option Plan 2011 (the ''Plan'') for all eligible employees/directors of the Company except an employee who is a promoter or belongs to the promoter group or a director who either by himself or through his relatives or through and body corporate, directly or indirectly, holds more than 10% of outstanding equity shares of the Company.

The plan is to be implemented by the Compensation Committee under the policy and framework laid down by the Company and/ or Board of Directors of the Company, in accordance with the authority delegated to the Compensation Committee in this regard from time to time and subject to the amendments, modifications and alterations to the plan made by the Company and/or Board of Directors in this connection. The issuance of the shares will be under the guidance, advice and directions of the Compensation Committee constituted under this Plan.

ii) The Company has granted stock options on 14 May 2015, details of which are as follows:

iii) The details of activity under the plan has been summarised below

iv) The fair value of the options granted was estimated on the date of grant using the Black-Scholes valuation model with the following assumptions:

v) Impact of the employee share-based payment plan on the Statement of Profit and Loss and on its financial position

vi) In March 2005, the ICAI has issued a guidance note on ''Accounting for Employees Share Based Payments'' applicable to employee based share plan, the grant date in respect of which falls on or after 1 April 2005. The said guidance note requires the proforma disclosures of the impact of the fair value method of accounting of employee stock compensation accounting in the financial statements. As the Company has used the intrinsic value method and the management has obtained fair value of the options at the date of grant from an independent valuer, using the ''Black Scholes Valuation Model'' at Rs. 318.22 per option vis a vis the intrinsic value of Rs. 318.50 per option, hence there is no significant impact on the reported Profits and earnings per share.

5. The Company uses forward contracts to hedge its risks associated with fluctuations in foreign currency and interest rates. The use of forward contracts is covered by Company''s overall strategy. The Company does not use forward covers for speculative purposes.

As per the strategy of the Company, foreign currency loans are covered by comprehensive hedge, considering the risks associated with the hedging of such loans, which effectively fixes the principal and interest liability of such loans and further there is no additional risk involved post hedging of these loans.

(i) The following are the outstanding forward contracts/derivative contracts in respect of foreign currency loans/export sales:

(ii) The detail of foreign currency exposure that are not hedged by derivative instrument or otherwise is as mentioned below:-

6. Disclosure for segment information as required by Accounting Standard 17 - Segment Reporting, notified under the Act has been provided in the Consolidated Financial Statements of the Group comprising the Company and its wholly owned subsidiaries.

7. Details of amounts due from entities pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

8. In accordance with the provisions of section 135 of the Act, the Board of Directors of the Company had constituted a Corporate Social Responsibility (CSR) Committee. In terms, with the provisions of the said Act, the Company was to spend a sum of Rs. 9.48 crores towards CSR activities during the year ended 31 March 2016. The CSR Committee has been examining and evaluating suitable proposals for deployment of funds towards CSR initiatives, however, the committee expects finalization of such proposals in due course. During the period ended 31 March 2016, the Company has contributed the following sums towards CSR initiatives.

9. Excise duty has become applicable on certain jewellery manufactured and sold by the Company from the midnight of 29 February 2016. The Company has not recovered any excise duty from its customers on sales being made till 31 March 2016. However, it has recorded provision in respect of its excise duty liability, amounting to Rs. 0.29 crores, on aforesaid sales.

10. Details of guarantee given covered under section 186 (4) of the Act

11. Subsequent to the year end, the Company has allotted 42,69,984 compulsorily convertible debentures of face value Rs 1,000 each by way of a preferential allotment on private placement basis.

12. reclassifications

Previous year amounts have been regrouped/rearranged wherever considered necessary to make them comparable with those of the current year.


Mar 31, 2015

1. COMPANY OVERVIEW

PC Jeweller Limited (the ''Company) was incorporated on 13 April 2005. The Company is engaged in the business of manufacturing, sale and trading of gold jewellery, diamond studded jewellery and silver items. The registered office of the Company is located in New Delhi.

2. BASIS OF ACCOUNTING

The financial statements are prepared under historical cost convention on an accrual basis, in accordance with the generally accepted accounting principles in India and including the Accounting Standards specified under section 133 of the Companies Act, 2013 (the ''Act'') read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended) and the guiding principles of the Accounting Standard 30, Financial Instruments- Recognition and Measurement issued by the Institute of Chartered Accountants of India in respect of certain derivative instruments. These financial statements have been prepared on a going concern basis and the accounting policies have been consistently applied by the Company.

3. SHARE CAPITAL

a) Details of shares issued pursuant to contract without payment being received in cash, allotted as fully paid up by way of bonus issues and bought back during the last 5 years to be given for each class of shares

During the year ended 31 March 2012, the Company had issued two bonus shares for each share held by the shareholders per record on the 16 September 2011. Consequently, 89,311,000 bonus shares of Rs. 10 each had been issued by utilising the securities premium balance and accumulated profits. Other than the aforementioned bonus issue, the Company has not issued any other shares pursuant to a contract without payment being received in cash nor has there been any buy-back of shares in the current year and preceding five years.

b) Terms and rights attached to equity shares

1) The Company has only one class of equity shares having a par value of Rs. 10 each. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General meeting of the Company. In the event of liquidation of the Company, holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential payments. The distribution will be in proportion to the number of equity shares held by the shareholders.

2) During the year ended 31 March 2015, the amount of proposed final dividend recognised as distribution to equity shareholders is Rs. 3.20 per share (31 March 2014 Rs. 1.5 per share) and interim dividend paid was nil per share (previous year Rs. 1.5 per share).

4. BORROWINGS

a) Details of security for each type of borrowings

* These are secured by way of hypothecation of assets, thus purchased

** Secured against first pari passu charge on current assets, fixed assets of the Company, fixed deposits of the company, personal guarantees of promoter directors and corporate guarantees and collateral securities of other companies.

b) Terms of repayment

Vehicle loans are repayable in maximum 60 equal monthly instalments over the tenure of the loans and the final instalments are due for repayment in April 2017.

6. CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for)

Claims against the Company not acknowledged as debt

Legal case * 55.00 55.00

Income-tax matters 59.01 38.17

Guarantee given, on behalf of a body corporate - 100.00

Corporate guarantee for loan taken by wholly owned subsidiary company, PC 1,400.00 - Universal Private Limited **

Estimated amount of contracts remaining to be executed on capital account and not 152.00 69.51 provided for

* excluding interest which is not ascertainable.

** Guarantees provided to the lender of the wholly owned subsidiary company are for availing banking facilities for business purpose.

7. RELATED PARTY TRANSACTIONS

Related party disclosures, as required by Accounting Standard 18 - Related Party Disclosures, notified under the Act are given below:

(i) Names of related parties where control exists

Mr. Balram Garg and Mr. Padam Chand Gupta

PC Universal Private Limited - wholly owned subsidiary *

Transforming Retail Private Limited - wholly owned subsidiary with effect from 24 September 2014 *

* Certain directors of the Company are also directors in these entities.

(ii) Key management personnel

Mr. Padam Chand Gupta : Chairman

Mr. Balram Garg : Managing Director

(iii) Relatives of Key management personnel **

Ms. Kusum Jain : Sister of Mr. Padam Chand Gupta and Mr. Balram Garg

Mr. Nitin Gupta : Son of Mr. Padam Chand Gupta

Mr. Sachin Gupta : Son of Mr. Padam Chand Gupta

Smt. Krishna Devi : Wife of Mr. Padam Chand Gupta

Ms. Pooja Garg : Wife of Mr. Balram Garg

(iv) Other entities in which key management personnel has significant influence **

Onyx Townships Private Limited (till 10 June 2014)

Padam Chand, Hindu Undivided Family

Balram Garg, Hindu Undivided Family

** where transactions have occurred during the year.

8. The Company uses forward contract to hedge its risks associated with fluctuations in foreign currency and interest rates. The use of forward contracts is covered by Company''s overall strategy The Company does not use forward covers for speculative purposes.

As per the strategy of the Company, foreign currency loans are covered by comprehensive hedge, considering the risks associated with the hedging of such loans, which effectively fixes the principal and interest liability of such loans and further there is no additional risk involved post hedging of these loans.

9. Disclosure for segment information required by Accounting Standard 17 - Segment Reporting, notified under the Act has been provided in the Consolidated Financial Statements of the Company and its wholly owned subsidiaries.

10. RECLASSIFICATIONS

Previous year amounts have been regrouped/rearranged wherever considered necessary to make them comparable with those of the current year.


Mar 31, 2014

COMPANY OVERVIEW

PC Jeweller Limited (the ''Company'') was incorporated on 13 April 2005. The Company is engaged in the business of manufacturing, sale and trading of gold jewellery, diamond studded jewellery and silver items. The registered office of the Company is located in New Delhi.

1) Terms and rights attached to equity shares

i) The Company had only one class of equity shares having a par value of Rs. 10 each. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The Dividend proposed by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General meeting of the Company. In the event of liquidation of the Company, holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential payments. The distribution will be in proportion to the number of equity shares held by the shareholders.

ii) During the year ended 31 March 2014, the amount of proposed final dividend recognised as distribution to equity shareholders is Rs. 1.5 per share (31 March 2013 Rs. 1 per share) and interim dividend paid was Rs. 1.5 per share (previous year nil)

2) Details of security for each type of borrowings

* These are secured by way of hypothecation of assets, thus purchased

** Secured against first pari passu charge on current assets and fixed assets of company , personal guarantees of directors, corporate guarantees of promoter group companies , other companies and fixed deposits.

3) Contingent liabilities and commitments (to the extent not provided for)

Claims against the company not acknowledged as debt

Value added tax - 1,852,894

Legal case * 5,500,000 5,500,000

Income tax 3,817,460 -

Guarantees 10,000,000 10,000,000

Estimated amount of contracts remaining to be executed on capital 6,950,560 12,590,885 account and not provided for

* excluding interest which is not ascertainable


Mar 31, 2013

1. COMPANY OVERVIEW

PC Jeweller Limited (the ''Company'') was incorporated on April 13, 2005. The Company is engaged in the business of manufacturing, sale and trading of gold jewellery, diamond studded jewellery and silver items. The registered office of the Company is located in New Delhi.

2. BASIS OF ACCOUNTING

The financial statements have been prepared to comply with the Accounting Standards referred to in the Companies (Accounting Standards) Rules, 2006 issued by the Central Government in exercise of the power conferred under sub-section (1) (a) of section 642 and the relevant provisions of the Companies Act, 1956 (the ''Act'') and the guiding principles of the Accounting Standard 30, Financial Instruments- Recognition and Measurement issued by the Institute of Chartered Accountants of India in respect of certain derivative instruments. The financial statements have been prepared on a going concern basis under the historical cost convention on accrual basis. The accounting policies have been consistently applied by the Company.

3 Related party transactions

Related party disclosures, as required by Accounting Standard 18 - Related Party Disclosures, notified under the Companies Act, 1956 are given below:

(i) Subsidiary Company

Shivani Sarees Private Limited (Upto April 14, 2012)

PC Universal Private Limited (with effect from February 28, 2013)

(ii) Key management personnel

Mr. Padam Chand Gupta :Chairman

Mr. Balram Garg :Managing Director

Mr. R.K. Sharma (upto September 22, 2011) : Executive Director

Mr. Amar Chand Garg (upto September 22, 2011) : Vice Chairman

(iii) Relatives of Key management personnel

Ms. Kusum Jain : Sister of Mr. Padam Chand Gupta, Mr. Amar

Chand Garg and Mr. Balram Garg Mr. Nitin Gupta :Son of Mr. Padam Chand Gupta

Mr. Sachin Gupta :Son of Mr. Padam Chand Gupta

Ms. Gazal Garg : Daughter-in-law of Mr. Padam Chand Gupta

Smt. Pooja Garg :Wife of Mr. Balram Garg

Smt. Payal Lila :Daughter of Mr. Amar Chand Garg

Smt. Krishna Devi :Wife of Mr. Padam Chand Gupta

Ms. Santosh Sharma :Wife of Mr. R. K. Sharma

Ms. Manju Garg :Wife of Mr. Amar Chand Garg

Ms. Ritu Gupta :Daughter of Mr. Padam Chand Gupta

Ms. Shivani Gupta : Daughter-in-law of Mr. Padam Chand Gupta

(iv) Other entities in which key management personnel is having significant influence P C Jewellers (Exports) P C Mangal Vasan Private Limited Onyx Townships Private Limited Quick Developers Private Limited Amar Chand HUF Padam Chand HUF Trigun Infrastructure Private Limited. PC Charitable Society (Regd.) PC Education Society (Regd.) Shivani Sachin Education Society (Regd.) Balram Garg, HUF Balkishan Das, HUF

4 The Company uses forward contracts to hedge its risks associated with fluctuations in foreign currency and interest rates. The use of forward contracts is covered by Company''s overall strategy. The Company does not use forward covers for speculative purposes.

As per the strategy of the Company, foreign currency loans are covered by comprehensive hedge, considering the risks associated with the hedging of such loans, which effectively fixes the principal and interest liability of such loans and further there is no additional risk involved post hedging of these loans.

(i) The following are the outstanding forward contracts/derivative contracts in respect of foreign currency loans/ export sales as at March 31, 2013:

5 During the year, the company has made an Initial Public Offer (IPO) and allotted 4,51,33,500 equity shares of face value Rs. 10 . Out of these, 1,59,88,722 equity shares of face value Rs. 10 at a premium of Rs. 120 per equity share were alloted to retail investors and eligible employees of the Company and the balance equity shares of face value Rs. 10 at a premium of Rs. 125 per equity share were alloted to qualified institutional buyers and non- institutional investors. Consequently, the paid up Equity Share Capital and Securities Premium Account have been increased by Rs. 451,335,000 and Rs. 5,561,743,890 respectively. The Company''s Shares have been listed on BSE Limited and National Stock Exchange of India Limited (NSE) on December 27, 2012.

6 Pursuant to the provisions of Clause 43 of the listing Agreement with the exchanges, the utilization of the net proceeds is as follows:

7 Reclassifications

Previous year figures have been regrouped/rearranged wherever considered necessary to make them comparable with those of the current year.

 
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