Notes to Accounts of PC Jeweller Ltd.

Mar 31, 2025

s) Provisions, contingent assets and contingent liabilities

Provisions are recognised only when there is a present
obligation, as a result of past events, and when a reliable
estimate of the amount of obligation can be made at
the reporting date. These estimates are reviewed at each
reporting date and adjusted to reflect the current best
estimates. Provisions are discounted to their present values,
where the time value of money is material.

Contingent liability is disclosed for:

• Possible obligations which will be confirmed only
by future events not wholly within the control of the
Company; or

• Present obligations arising from past events where
it is not probable that an outflow of resources will be
required to settle the obligation or a reliable estimate of
the amount of the obligation cannot be made.

Contingent assets are not recognised. However, when inflow
of economic benefit is probable, related asset is disclosed.

t) Earnings per share

Basic earnings per share is calculated by dividing the
net profit or loss for the period attributable to equity
shareholders (after deducting attributable taxes) by the
weighted average number of equity shares outstanding
during the period. The weighted average number of equity
shares outstanding during the period is adjusted for events
including a bonus issue.

For the purpose of calculating diluted earnings per share,
the net profit or loss for the period attributable to equity
shareholders and the weighted average number of shares
outstanding during the period are adjusted for the effects
of all dilutive potential equity shares except for anti-dilutive
potential equity shares.

On and from the record date of 16th December 2024, the
face value of equity shares of the Company has been sub-
divided/splitted, such that 1 (one) equity share having face
value of '' 10/- (Rupees Ten Only) each, fully paid-up, stands
sub-divided into 10 (ten) equity shares having face value of ''
1/- (Rupee One Only) each, fully paid-up, ranking pari-passu
in all respects. The Earnings per share for the prior period
have been restated considering the face value of '' 1/- each
in accordance with Ind AS 33 - "Earnings per share".

u) Equity, reserves and dividend payment

Equity shares are classified as equity. Incremental costs
directly attributable to the issue of new shares are shown
in equity as a deduction, net of tax, from the proceeds.
Retained earnings include current and prior period retained
profits. All transactions with owners of the Company are
recorded separately within equity. The Board of Directors of
the Company have not recommended any dividend for the
year.

v) Significant management judgement in applying
accounting policies and estimation uncertainty

The preparation of the Company''s financial statements
requires management to make judgements, estimates and

assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities, and the related disclosures.

Significant management judgements and estimates

The following are significant management judgements
and estimates in applying the accounting policies of the
Company that have the most significant effect on the
financial statements:

Recognition of deferred tax assets - The extent to which
deferred tax assets can be recognised is based on an
assessment of the probability of the future taxable income
against which the deferred tax assets can be utilised.

Evaluation of indicators for impairment of assets - The

evaluation of applicability of indicators of impairment of
assets requires assessment of several external and internal
factors which could result in deterioration of recoverable
amount of the assets.

Recoverability of advances/receivables - At each balance
sheet date, based on historical default rates observed over
expected life, the management assesses the expected credit
loss on outstanding receivables and advances.

Defined benefit obligation (DBO) - Management''s
estimate of the DBO is based on a number of critical
underlying assumptions such as standard rates of inflation,
medical cost trends, mortality, discount rate and anticipation
of future salary increases. Variation in these assumptions
may significantly impact the DBO amount and the annual
defined benefit expenses.

Fair value measurements - Management applies valuation
techniques to determine the fair value of financial instruments
(where active market quotes are not available). This involves
developing estimates and assumptions consistent with how
market participants would price the instrument. Management
uses the best information available. Estimated fair values may
vary from the actual prices that would be achieved in an arm''s
length transaction at the reporting date.

Useful lives of depreciable/amortizable assets -

Management reviews its estimate of the useful lives of
depreciable/amortizable assets at each reporting date, based
on the expected utility of the assets. Uncertainties in these
estimates relate to technical and economic obsolescence.

* On and from the record date of 16th December 2024, the face value of equity shares of the Company has been sub- divided/splitted,
such that 1 (one) equity share having face value of '' 10/- (Rupees Ten Only) each, fully paid-up, stands sub-divided into 10 (ten) equity
shares having face value of '' 1/- (Rupee One Only) each, fully paid-up, ranking pari-passu in all respects.

^A During the financial year ended 31st March 2025, after receipt of 25% of the Issue Price of '' 56.20 per Fully Convertible Share Warrant
("Warrant") as subscription amount in accordance with the provisions of the SEBI (Issue of Capital and Disclosure Requirements)
Regulations, 2018, the Company made preferential allotment of 11,50,00,000 Warrants on 30th September 2024 and 36,58,02,500
Warrants on 11th October 2024 to Promoter Group and Non-Promoter, Public category entities. Subsequently, the Board of Directors
of the Company by means of resolutions passed by circulations on i) 15th October 2024 allotted 4,35,972 equity shares (face value ''
10/- each); ii) 30th October 2024 allotted 3,38,85,000 equity shares (face value '' 10/- each); iii) 12th November 2024 allotted 3,63,75,000
equity shares (face value '' 10/- each); iv) 29th November 2024 allotted 39,87,900 equity shares (face value '' 10/- each); and v) 19th
December 2024 allotted 43,72,91,800 equity shares (face value '' 1/- each), upon conversion of Warrants after receipt of balance 75%
of the Issue Price per Warrant.

$ During the financial year ended 31st March 2025, the Board of Directors of the Company vide a resolution passed by circulation on 17th
March 2025 made preferential allotment of 51,71,14,620 fully paid-up equity shares having face value of '' 1/- each at an issue price of
'' 29.20 per share to the Consortium Lenders comprising of 14 Banks, against part of their outstanding debts amounting to '' 1509.97
crores as per the Joint Settlement Agreement dated 30th September 2024 entered into amongst the Company and its Consortium
Lenders.

d) Terms and rights attached to equity shares

As at 31 March 2025, the Company has only one class of equity shares having a par value of '' 1/- each. Each holder of equity shares
is entitled to one vote per share. The Company declares and pays dividends, if any, in Indian Rupees. In the event of liquidation
of the Company, holders of equity shares will be entitled to receive 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 equity shareholders.

e) Shares reserved for issue under options

3,461,867 equity shares are reserved for the issue under the Employees'' Stock Option Plan of the Company. Information relating
to Employees'' stock option plan, including details of options granted, exercised and lapsed during the financial year and options
outstanding at the end of the reporting period, is set out in note 36.

Retained earnings

Retained earnings are created from the profit/loss of the Company, as adjusted for distributions to owners, transfers to other
reserves, etc.

General reserve

Under the Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in
accordance with Companies (Transfer of profits to Reserve) Rules,1975. Consequent to introduction of the Companies Act 2013, there is
no such requirement to mandatorily transfer a specified percentage of the net profit to general reserve.

Securities premium

Securities premium is used to record the premium on issue of shares. The premium will be utilised in accordance with provisions of the
Companies Act 2013.

Money received against convertible share warrants

Convertible share warrants refer to instruments issued by a company that give the holder the right to acquire equity shares at a future
date, at a pre-agreed price. This mechanism is often used by companies to raise capital commitments while deferring actual equity
dilution. As per the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, in the case of warrants, an amount equivalent
to at least 25% of the consideration shall be paid against each warrant on the date of allotment of warrants and the balance 75% of the
consideration shall be paid at the time of allotment of the equity shares pursuant to exercise of options against each such warrant by the
warrant holder. In case the warrant holder does not exercise the option for equity shares against any of the warrants held by the warrant
holder, the consideration paid in respect of such warrant shall be forfeited. Warrants are convertible into equity shares within a maximum
period of 18 months from the date of their allotment.

(ii) Liability towards consortium banks after settlement, cash credit facilities, funded interest term loans, demand loans and bank
overdrafts are secured against first pari passu charge on current assets, property, plant and equipment and fixed deposits of the
Company. These loans are further fully secured by personal guarantees of promoter director and other individuals alongwith
corporate guarantees and collateral securities of other companies.

(iii) During the financial year ended 31st March 2025, the outstanding bank borrowings and related obligations were settled through the One
Time Settlement (OTS) approval of Consortium Lenders comprising of 14 Banks. Accordingly, the Company made payments of the Cash
Consideration to the Consortium Lenders that it had to pay as per the timelines mentioned in the settlement agreement. Also, the Board
of Directors of the Company vide a resolution passed by circulation on 17th March 2025, made preferential allotment of 51,71,14,620 fully
paid-up equity shares having face value of '' 1/- each at an issue price of '' 29.20 per share to the Consortium Lenders, against part of their
outstanding debts amounting to '' 1509.97 crores. The outstanding financial liability as per books of accounts is recognized net of payments
made as per the terms of Joint Settlement Agreement and continues to be recognized pending final discharge in accordance with the
applicable accounting standards. Hence, there are no more defaults pending in payment to lender banks as on 31st March 2025. The Board
of the Company in its meeting held on 19th October 2024 approved the repayment of entire settlement amount to Consortium Lenders on
or before 31st March 2026 subject to conversion of all outstanding Fully Convertible Warrants into equity shares of the Company on or before
31st March 2026. Accordingly, the entire outstanding debt of Consortium Lenders has been classified as current liabilities.

Note:

(a) ''During the year ended 31st March 2025, the Company has accounted income-tax reversals '' 113.85 crore pertaining to prior
years arising due to income-tax refunds of '' 34.13 crores, '' 37.26 crores and '' 42.46 crores for the A.Y. 2015-16, A.Y. 2016-17
& A.Y. 2017-18 respectively , pursuant to orders received under section 250 of the Income-tax Act, 1961. The refund amount
has been adjusted against outstanding demand of A.Y. 2018-19. The interest on the aforementioned income-tax refunds
amounting to '' 51.39 crores have been duly recorded as other income during the year ended 31st March 2025.

(b) The Company is following the option exercised for reduced tax rate permitted under section 115BAA of the Income-tax Act,
1961 for the financial year ended 31st March 2025 as introduced by the Taxation Laws (Amendment) Ordinance 2019.

Defined contribution plans

The Company has certain defined contribution plans. Contributions are made to provident fund in India for employees at the rate of
12% of basic salary as per regulations. The contributions are made to registered provident fund administered by the Government. The
obligation of the Company is limited to the amount contributed and it has no further contractual or any constructive obligation. The
expense recognised during the period towards defined contribution plan is '' 0.63 crore (31 March 2024 : '' 0.90 crore). There are no
amounts outstanding of post employment benefits, other long-term benefits and share based payment for the current and previous
year.

Note 36: Employee Stock Option Plan

PC Jeweller Limited employee Stock option plan 2011

During the year ended 31 March 2012, the Company had formulated Employee Stock Option Scheme referred to as PC Jeweller Limited
Employee Stock Option Plan 2011 (the ''Plan'') for all eligible employees/directors of the Company and its subsidiaries.

The plan is implemented by the Nomination and Remuneration Committee constituted by the Company under the policy and framework
laid down by the Company and/ or the Board of Directors of the Company, in accordance with the authority delegated to the Nomination
and Remuneration 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 the Board of Directors in this regard. The issuance of the options are under the guidance, advice and
directions of the Nomination and Remuneration Committee. Each stock option entitles the grantee thereof to apply for and be allotted
one equity share of the Company upon vesting.

(a) Vesting schedule:

For eligible employees as identified by Nomination and Remuneration Committee, the Options granted under ESOP 2011 shall vest
not earlier than one year and not later than five years from the Grant Date. Within the aforesaid period, the Vesting Plan could be
different for different eligible employees as may be determined by Nomination and Remuneration Committee.

The options granted shall vest so long as the employee continues to be in employment with the Company, i.e., the options will
lapse if the employment is terminated prior to vesting. Even after the options are vested, un-exercised options may be forfeited if
the services of the employee are terminated for reasons specified in the Plan.

Notes :

(i) The Company has given loans to above entities for business purposes. All the loans given are unsecured loans.

(ii) As per the agreement, the rate of interest for the loan till 31st March 2025 is the prevailing 5 year government bond yield and w.e.f 1st April 2025,
the same shall be based on the prevailing 10 year government bond yield.

(iii) The loan is to be repaid within 5 years commencing from 1st January 2025 i.e on or before 31st December 2029.

(iv) As per the agreement, the rate of interest for the loan is the prevailing 10 year government bond yield.

(v) The loan is to be repaid on or before 1st October 2028.

(vi) The loan is to be repaid within 5 years commencing from 29th September 2024 i.e on or before 29th September 2029.

* Net of impairment

Note 39: Hedging activity and derivatives

The Company enters into foreign currency forward contracts to hedge against the foreign currency risk relating to payment of foreign
currency payables. The Company does not apply hedge accounting on such relationships. Further, the Company does not enter into any
derivative transactions for speculative purposes.

Fair value hedge of gold price risk in inventory

The Company enters into contracts to purchase gold wherein the Company has the option to fix the purchase price based on market
price of gold during a stipulated time period. The prices are linked to gold prices. Accordingly, these contracts are considered to have
an embedded derivative that is required to be separated. Such feature is kept to hedge against exposure in the value of inventory
of gold due to volatility in gold prices. The Company designates the embedded derivative in the payable for such purchases as the
hedging instrument in fair value hedging of inventory. The Company designates only the spot-to-spot movement of the gold inventory
as the hedged risk. The carrying value of inventory is accordingly adjusted for the effective portion of change in fair value of hedging
instrument. There is no ineffectiveness in the relationships designated by the Company for hedge accounting.

Disclosure of effects of fair value hedge accounting on financial position:

Hedged item - Changes in fair value of inventory attributable to change in gold prices

Hedging instrument - Changes in fair value of the option to fix prices of gold purchases, as described above

Since there are no outstanding hedging instruments i.e. option to fix gold prices with respect to fair value hedge accounting as at 31
March 2024 & 31 March 2025, there is no impact of change in fair value of the hedged item i.e. inventory of gold.

Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments
to ensure that an economic relationship exists between the hedged item and hedging instrument. The Company enters into hedge
relationships where the critical terms of the hedging instrument match exactly with the terms of the hedged item, and so a qualitative
assessment of effectiveness is performed. If changes in circumstances affect the terms of the hedged item such that the critical terms no
longer match exactly with the critical terms of the hedging instrument, the Company uses the hypothetical derivative method to assess
effectiveness. There was no hedge ineffectiveness in any of the periods presented above.

note 40: financial instruments

i) Fair values hierarchy

Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three levels of
a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques
which maximise the use of observable market data and rely as little as possible on entity specific estimates;

Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The carrying value of trade receivables, securities deposits, loans given, cash and bank balances and other financial assets recorded
at amortised cost, is considered to be a reasonable approximation of fair value.

The carrying value of borrowings, trade payables and other financial liabilities recorded at amortised cost is considered to be a
reasonable approximation of fair value.

ii) Risk management

The Company''s activities expose it to market risk, liquidity risk and credit risk. This note explains the sources of risk which the entity
is exposed to and how the entity manages the risk and the related impact in the financial statements:

The Company''s board has approved a comprehensive Risk Management Policy as well as Forex & Commodity Risk Management
Policy. Taken together these two policies cover nearly the entire gamut of the Company''s operations.

A) Credit risk

Credit risk is the risk that a customer or counterparty to a financial instrument will fail to perform or pay amounts due to the
Company causing financial loss. It arises from outstanding trade receivables to whom the Company has either made direct sales or
sent the goods on consignment.

During the current as well as previous year, the Company''s sales are in the domestic segment in which no credit is involved. The
credit risk arises only from the export sales which are on a B2B basis and on a credit basis. The Company has been facing the issue of
overdues in its export receivables for the past six years and currently the entire lot of outstanding export receivables are overdue.
Though the Company has stopped its export business since September 2021, its position of overdue receivables has not improved.

The Company however, has old and existing relationship with its export debtors and continues to remain confident of realizing the
same in due course of time. The Company has therefore not classified any of its outstanding receivables as bad or unrecoverable.
However, at the same time, as a mark of adequate financial prudence, the Company has during the current financial year made
provision in the form of ECL to the tune of '' 1.42 crore, with the total amount of ECL at '' 265.10 crore as on 31 March 2025.

The Company had extended loans to Luxury ProductsTrendsetter Private Limited (wholly owned subsidiary) for business purposes.The
outstanding gross balance of loans (including accrued interest on loan) stands at '' 24.60 crores as on 31 March 2024 and '' 25.20 crores
as on 31 March 2025. An impairment to the tune of '' 2.19 crores has been considered on accrued interest on loan as on 31 March 2025.

The Company has also extended loans to two body corporates namely PC Universal Private Limited, which ceased to be a subsidiary
during the previous financial year and Shivani Sarees Private Limited for business purposes. Their outstanding gross balances of
loans (including accrued interest on loan) as on 31 March 2024 were '' 135.40 crores and '' 8.50 crores and as on 31 March 2025 are
'' 140.32 crores and '' 8.43 crores respectively. An impairment to the tune of '' 135.40 crores has been considered towards the loan
(including accrued interest on loan) extended to PC Universal Private Limited for the financial year ended 31st March 2024, which
stands enhanced to '' 140.32 crores for the financial year ended 31st March 2025.

B) Liquidity risk

The company has settled its legal disputes with banks by entering into Joint Settlement Agreement on 30th September 2024.
The Company has returned to normal business operations, as reflected in the improved performance during the third and fourth
quarters of the year. All operational expenditures, vendor obligations, OTS installments, and statutory liabilities have been serviced
in a timely manner, highlighting the Company''s renewed financial discipline and operational resilience.

C) Market risk - foreign exchange

The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to US Dollar.
Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the Company''s functional
currency. Despite being a net foreign exchange positive entity, the exposure to foreign exchange fluctuations can still pose material
risks to the company''s financial performance. These risks may arise from timing mismatches between foreign currency inflows and
outflows, revaluation of assets and liabilities, or broader macroeconomic volatility. To address these challenges, the Company has
adopted a structured and proactive foreign exchange risk management policy.

Sensitivity

The sensitivity to profit or loss from changes in the exchange rates arises mainly from financial instruments denominated
in USD. In case of a reasonably possible change in INR/USD exchange rates of /- 4 % (previous year /-4%) at the reporting
date, keeping all other variables constant, there would have been corresponding impact on losses/profits of '' 52.84 crore
(previous year '' 51.48 crore).

D) market risk - interest rate
i) Liabilities

Interest rate risk arises from borrowings at variable rates. In accordance with the terms of the Joint Settlement Agreement,
the Company has been diligently meeting all its financial obligations to the consortium of lender banks in a timely manner.
Additionally, the interest rate risk on bank borrowings has been significantly mitigated. As per the agreement, the applicable
interest rates on these borrowings are now lower than the average rates originally sanctioned by the consortium banks under
the previous sanction letters.

Sensitivity

The sensitivity to profit or loss in case of a reasonably possible change in interest rates of /- 50 basis points (previous year: /-
50 basis points), keeping all other variables constant, would have resulted in corresponding impact on losses/profits by '' 7.71
crore (previous year '' 15.28 crore).

ii) Assets

The Company''s financial assets are carried at amortised cost and are at fixed rate only. They are, therefore, not subject to
interest rate risk since neither the carrying amount nor the future cash flows will fluctuate because of a change in market
interest rates.

E) Market risk - security price

Exposure from investments in mutual funds:

The Company''s exposure to price risk arises from investments in mutual funds held by the Company and classified in the balance
sheet as current investments. However, as of 31st March 2025, the Company held no investments in mutual funds. Consequently,
the market risk associated with price fluctuations of market-traded mutual fund investments is no longer applicable.

F) market risk - gold prices:

The Company''s exposure to price risk also arises from trade payables of the Company that are at unfixed prices, and, therefore,
payment is sensitive to changes in gold prices. The Company''s sales performance has been notably impacted by heightened
market risk sensitivity associated with gold price volatility. Compared to the previous year, gold prices have exhibited significant
and unpredictable fluctuations. However, as of 31st March 2025, the Company does not have any unfixed trade payables linked to
gold prices. Accordingly, there is no outstanding market risk exposure related to gold price movements.

The lease liabilities are secured by the related underlying assets. The maturity analysis of lease liabilities are disclosed
in note 41(ii)(B).

The Company has leases for the factory, offices and showrooms. With the exception of short-term leases and leases
with variable lease payments, each lease is reflected on the balance sheet as a right-of-use asset and a lease liability.
Each lease generally imposes a restriction that, unless there is a contractual right for the Company to sublet the asset to
another party, the right-of-use asset can only be used by the Company. Leases are either non-cancellable or may only be
cancelled by incurring a substantive termination fee. Some leases contain an option to extend the lease for a further term.
The Company is prohibited from selling or pledging the underlying leased assets as security against the Company''s other
debts and liabilities. For leases over office buildings and factory premises the Company must keep those properties in a
good state and return the properties in their original condition at the end of the lease. Further, the Company must insure
items of property, plant and equipment and incur maintenance fees on such items in accordance with the lease contracts.
The Company has considered automatic extension option available for the property leases in lease period assessment since the
Company can enforce its right to extend the lease beyond the initial lease period as the Company is likely to be benefited by
exercising the extension option.

During the year ended 31st March 2025, the Company has shut down five owned stores and three franchisee stores located at
various cities. Now the Company has forty nine owned and three franchisee stores as on 31st March 2025.

Note 50: Discount to export customers

During the financial year ended 31st March 2019, the Company had provided discounts to its export customers aggregating to ''
513.65 crore and had submitted the requisite applications for approval from the Authorised Dealer Banks as stipulated by the FED
Master Direction No. 16/2015-16 dated 1st January 2016 under the Foreign Exchange Management Act, 1999. Subsequently, the
Company has obtained the approvals from the authorized dealer banks for reduction in receivables corresponding to discounts
amounting to '' 330.49 crore. However, for the remaining discounts of '' 183.16 crore approvals are still pending. The management
however, does not expect any material penalty to be levied on account of this matter and therefore no provision for the same has
been provided in the books of accounts.

Note 51: Delay in receipt of foreign currency against export

Trade receivables as at 31st March 2025, inter alia, include outstanding from export customers aggregating to '' 1512.03 crore. The export
receivables have been outstanding for more than 9 months and have been restated as per the RBI exchange rate as on 31st March 2025.
The Company had filed necessary applications with the requisite authority as per the regulations of the Foreign Exchange Management
Act, 1999 for condonation of delays in repatriation of funds by its export customers. The management is of the view that the possible
penalties that may be levied, are currently unascertainable and are not expected to be material and accordingly, no consequential
adjustments have been made in the books of accounts with respect to such default. However, as a mark of prudent accounting practices
the Company has computed and applied cumulative ECL (Expected Credit Loss) on the outstanding export receivables of '' 265.10 crore
as on 31st March 2025.

note 52: Recoverability of investments, loans and short-term financial assets, given to/due from
subsidiary companies

The Company has investments of '' 133.92 crore (previous year '' 133.92 crore) (excluding impairment) in its wholly-owned subsidiary
companies viz Luxury Products Trendsetter Private Limited, PC Jeweller Global DMCC and PCJ Gems & Jewellery Limited as at 31
March 2025. The Company has also given non current loans amounting to '' 9.12 crore (previous year '' 9.12 crore) (excluding
impairment) to Luxury Products Trendsetter Private Limited and has interest receivable amounting to '' 16.07 crore (previous year
'' 15.47 crore)(excluding impairment) which is classified under current financial assets.

note 53: Additional regulatory information

Additional Regulatory Information pursuant to Clause 6L of General Instructions for preparation of Balance Sheet as given in Part I of
Division II of Schedule III to the Companies Act, 2013, are given hereunder to the extent relevant and other than those given elsewhere
in any other notes to the Financial Statements.

$ Current assets has increased by 21 % (approx.) mainly due to increase in inventory and Current liability has decreased by
50% (approx.) mainly due to significant reduction in current borrowings from banks , which has contributed to increase in
this ratio.

£ Total debt has decreased by 49 % (approx.) and Total equity has also increased by 112% (approx.) mainly due to allotment
of equity shares, which has contributed to decrease in this ratio.

@ Earnings available for Debt Service has significantly increased by 619 % (approx.) mainly due to decrease in finance costs
as well as increase in profits. Debt service of the company has also increased by 918% due to repayment of borrowings
(including interest) to consortium banks during the year. These have contributed to an increase in this ratio.

#This increase is due to sharp increase in turnover by 1084% (approx.) which has resulted in increase in after tax profits by
189% (approx.) as compared to previous year .

##Turnover has significantly increased by 1084% (approx.) and Net working capital employed has increased by 236%
(approx.) , which has contributed to increase in this ratio.

###Turnover has significantly increased by 1084% (approx.) , which has contributed to increase in this ratio.

*There is a significant increase in total purchases of the company by 2213 % (approx.) as compared to previous year.

^AThere is a significant increase in EBIT by 445% as compared to last year, mainly because turnover of the company increased
by 1084% (approx.) , which has contributed to increase in this ratio.

b) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for
holding any Benami property.

c) The Company has not revalued any of its Property, Plant and Equipment (including Right-of-Use Assets) during the year.

d) The Company has submitted stock and debtors statements to the ASM appointed by the banks during the year except for the
quarter ended 31st March 2025. The quarterly statements filed by the Company with the ASM appointed by the banks are in
agreement with the books of account of the Company.

* 100 shares (face value of '' 1 each) were held by struck off company as on 31 March 2025

g) The Company does not have any charges or satisfaction which is yet to be registered with the Registrar of Companies beyond the
statutory period. No creation/modification/satisfaction of charges have taken place during the year.

h) The Company has compiled with the number of layers prescribed under section 2(87) of the Companies Act 2013 read with
Companies (Restrictions on number of Layers) Rules, 2017.

i) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding that the Intermediary shall: (a) directly or indirectly lend or invest in other persons or
entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or (b) provide any guarantee,
security or the like to or on behalf of the Ultimate Beneficiaries.

j) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the
understanding (whether recorded in writing or otherwise) that the Company shall: (a) directly or indirectly lend or invest in other
persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (b) provide
any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

k) The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered or disclosed
as income during the year in the tax assessments under the Income Tax Act, 1961.

l) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

m) The Company has the following balances against the loans granted or advances in the nature of loans wherein there is no specific
schedule of repayment of principal or payment of interest:

This is the Summary of significant accounting policies and other For and on behalf of the Board of Directors

explanatory information referred to in our report of even date

for a H p N & Associates Sd/- Sd/-

Chartered Accountants Ramesh Kumar Sharma Balram Garg

Firm''s Registration No.: 009452N Executive Director Managing Director

DIN-01980542 DIN-00032083

Sd/- Sd/- Sd/-

Navdeep Gupta Vijay panwar Vishan Deo

Partner Company Secretary Executive Director (Finance) &

Membership No. 091938 Membership No. A19063 Chief Financial Officer

DIN-07634994

Place: New Delhi
Date: 25 May 2025

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Mar 31, 2024

b) Terms and rights attached to equity shares

The Company has only one class of equity shares having a par value of ? 10 each. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends, if any, in Indian Rupees. In the event of liquidation of the Company, holders of equity shares will be entitled to receive 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 equity shareholders.

c) Shares reserved for issue under options

3,461,867 equity shares are reserved for the issue under the Employees'' stock option plan of the Company. Information relating to Employees'' stock option plan, including details of options granted, exercised and lapsed during the financial year and options outstanding at the end of the reporting period, is set out in note 36.

General reserve

Under the Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with Companies (Transfer of profits to Reserve) Rules,1975. Consequent to introduction of the Companies Act 2013, there is no such requirement to mandatorily transfer a specified percentage of the net profit to general reserve.

Securities premium

Securities premium is used to record the premium on issue of shares. The premium will be utilised in accordance with provisions of the Companies Act 2013.

Share options outstanding account

The reserve account is used to recognise the grant date fair value of options issued to employees under employee stock option plan, over the vesting period.

During the financial year ended 31 March 2022, all vehicle loans were closed due to prepayment of outstanding balance although the maturity was May 2024.

(ii) Cash credit facilities, Funded interest term loans, demand loans and bank overdrafts are secured against first pari passu charge on current assets, property, plant and equipment and fixed deposits of the Company. These loans are further fully secured by personal guarantees of promoter director and other individuals alongwith corporate guarantees and collateral securities of other companies.

(iii) The status of the Company''s borrowing accounts continues to remain ''Non Performing Assets'' (NPA) with all the banks (including the lead bank SBI, which is contested legally by the company). Total exposure outstanding with Banks/ FIs as on 31st March 2024 includes provision for interest upto 31st March 2024 (the company has however disputed the same legally) which has been calculated based on management''s estimates which stands accrued but not applied by banks post NPA downgradation. Some of the banks have provided confirmation of outstanding amount including interest upto 31st March 2024, whereas some of the banks have provided figures without applied interest. Therefore provision for unapplied interest for ? 308.03 crore for year ended 31st March 2024 has been made as per the best estimates of the management. The quantum of finance cost as incorporated in the financials is to comply with the Ind AS 109. The figures in relation to interest and other amounts shown in books of accounts and Balance Sheet of the company, pertaining to secured creditors/Banks are disputed amounts and interest charged by the banks are not payable by company or its directors, as the same are also disputed. Hence, these figures or amounts are not an admission of any liability of any alleged debt of secured creditors/banks.

The company is disputing the alleged default and/or classification of Non Performing Asset (NPA) by the State Bank of India and has filed a Civil Suit No. 243 of 2023 before Hon''ble District Judge (Commercial-03), Patiala House Courts, New Delhi which is sub-judice. . The Lead Bank (State Bank of India) moved the Debts Recovery Tribunal-III Delhi, on 15 January 2023 against the Company seeking full recovery of its outstanding exposure and DRT-III Delhi, passed an ex-parte order on 18th of January 2023. In response, the Company has gone into appeal against the aforesaid order dated 18 January 2023 of DRT-III Delhi before Hon''ble Debts Recovery Appellate Tribunal, Delhi. The secured creditor/SBI, UBI (with 7 other banks), Indian Bank, Punjab National Bank and IDFC First Bank have filed case no. 01/2023, case no. 08/2023, case no. 14/2023, case no. 49/2023 before Debts Recovery Tribunal No. III, Delhi and case no. 416/2023 before Debts Recovery Tribunal No. II, Delhi, respectively,

against the company which are disputed and also being contested by the company and its Directors/Alleged Guarantors/ Corporate Guarantors. All these matters continue to remain sub-judice as on date. Further, the company has also filed counter claims for ? 10,034 crores, ? 16,759 crores, ? 2,956 crores and ? 6,939 crores against SBI, Union Bank (and seven other banks) and against Indian Bank and Punjab National Bank respectively, before Debts Recovery Tribunal No. III, Delhi and against IDFC First Bank for ? 768 crores before Debts Recovery Tribunal No. II, Delhi. It is therefore again clarified that any amounts/ figures shown earlier in the Financial statements for half year and nine months of FY 2023-24, FY 2022-23, FY 2021-22 and FY 2020-21 are in dispute as there has been breach of contract/agreement by the banks, failure to adhere to the minutes of meetings in various JLM''s between banks and Company and hence cannot be termed as admission of any liability of any nature whatsoever in any court of law. The Company has also treated ? 17.00 crore debited by lead bank on various occasions arbitrarily as disputed receivable.

(a) ''During the previous year ended 31 March 2023, the Company has accounted income of ? 56.28 crore on account of reversal of outstanding provisions of Income-tax of ? 42.37 crore and ? 5.76 crore for the A.Y. 2020-2021 and A.Y. 2021-2022 respectively, and on account of booking income tax refund of ? 8.15 crore for the A.Y. 2020-2021, pursuant to assessment orders received under section 143(3) of the Income-tax Act, 1961. The refund amount has been adjusted against outstanding demand of A.Y. 2018-2019.

(b) The Company is following the option exercised for reduced tax rate permitted under section 115BAA of the Income-tax Act, 1961 for the financial year ended 31 March 2024 as introduced by the Taxation Laws (Amendment) Ordinance 2019.

(c) Considering the uncertainty w.r.t future taxable profits, the Company has not recognised the Deferred tax assets (on net basis) during the year ended 31st March 2024 in accordance with Ind AS-12. Further, during the previous year ended 31 March 2023, the existing Deferred Tax Assets of ? 150.55 crores were also derecognised . The same shall be reviewed and reassessed in future period.

These assumptions were developed by the management with the assistance of independent actuarial appraisers. Discount factors are determined close to each year end by reference to government bonds of relevant economic markets and that have terms to maturity approximating to the terms of the related obligation. Other assumptions are based on management''s historical experience.

Sensitivity analysis

The significant actuarial assumptions for the determination of the defined benefit obligation are the discount rate, the salary growth rate and the average life expectancy. The calculation of the net defined benefit liability is sensitive to these assumptions. The following table summarises the effects of changes in these actuarial assumptions on the defined benefit liability:

The present value of the defined benefit obligation is calculated as mentioned in note 3(n) of the financial statements. The sensitivity analysis is based on a change in one assumption while not changing all other assumptions. This analysis may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in the assumptions would occur in isolation of one another since some of the assumptions may be co-related.

Based on historical data, the Company expects contributions of ? 0.54 crore (31 March 2023 : ? 0.99 crore) in the next 12 months.

Compensated absences

The leave obligations cover the Company''s liability for sick and earned leaves. The Company does not have an unconditional right to defer settlement for the obligation shown as current provision balance. However, based on past experience, the Company does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months. Therefore, based on the independent actuarial report, provision for compensated absences has been bifurcated as current and non-current.

Defined contribution plans

The Company has certain defined contribution plans. Contributions are made to provident fund in India for employees at the rate of 12% of basic salary as per regulations. The contributions are made to registered provident fund administered by the Government. The obligation of the Company is limited to the amount contributed and it has no further contractual or any constructive obligation. The expense recognised during the period towards defined contribution plan is ? 0.90 crore (31 March 2023 : ? 1.42 crore). There are no amounts outstanding of post employment benefits, other long-term benefits and share based payment for the current and previous year.

NOTE 36: EMPLOYEE STOCK OPTION PLAN PC Jeweller limited employee Stock Option Plan 2011

During the year ended 31 March 2012, the Company had formulated Employee Stock Option Scheme referred to as PC Jeweller Limited Employee Stock Option Plan 2011 (the ''Plan'') for all eligible employees/directors of the Company and its subsidiaries.

The plan is implemented by the Nomination and Remuneration Committee constituted by the Company under the policy and framework laid down by the Company and/ or the Board of Directors of the Company, in accordance with the authority delegated to the Nomination and Remuneration 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 the Board of Directors in this regard. The issuance of the options are under the guidance, advice and directions of the Nomination and Remuneration Committee.

Each stock option granted entitles the grantee thereof to apply for and be allotted one equity share of the Company upon vesting. Vesting of the options have taken place over a period of 4 years with a minimum vesting period of 1 year from the grant date.

(a) Vesting schedule:

For eligible employees as identified by Nomination and Remuneration Committee, the Options granted under ESOP 2011 shall vest not earlier than one year and not later than five years from the Grant Date.

Within the aforesaid period, the Vesting Plan could be different for different eligible employees as may be determined by Nomination and Remuneration Committee.

The options granted shall vest so long as the employee continues to be in employment with the Company, i.e., the options will lapse if the employment is terminated prior to vesting. Even after the options are vested, un-exercised options may be forfeited if the services of the employee are terminated for reasons specified in the Plan.

The volatility used in the Black Scholes Option Pricing Model is the annualized standard deviation of the continuously compounded rate of return of the stock over a period of time. Informal tests and preliminary research tends to confirm that estimates of the expected long-term future volatility should be based on historical volatility for a period that approximates the expected life of the options being valued. The Company was listed on BSE Limited and National Stock Exchange of India Limited on 27 December 2012. The volatility is determined by taking into account the period since the listing of the Company.

NOTE 39: HEDGING ACTIVITY AND DERIVATIVES

(i) The Company enters into foreign currency forward contracts to hedge against the foreign currency risk relating to payment of foreign currency payables. The Company does not apply hedge accounting on such relationships. Further, the Company does not enter into any derivative transactions for speculative purposes.

Fair value hedge of gold price risk in inventory

The Company enters into contracts to purchase gold wherein the Company has the option to fix the purchase price based on market price of gold during a stipulated time period. The prices are linked to gold prices. Accordingly, these contracts are considered to have an embedded derivative that is required to be separated. Such feature is kept to hedge against exposure in the value of inventory of gold due to volatility in gold prices. The Company designates the embedded derivative in the payable for such purchases as the hedging instrument in fair value hedging of inventory. The Company designates only the spot-to-spot movement of the gold inventory as the hedged risk. The carrying value of inventory is accordingly adjusted for the effective portion of change in fair value of hedging instrument. There is no ineffectiveness in the relationships designated by the Company for hedge accounting.

Disclosure of effects of fair value hedge accounting on financial position:

Hedged item - Changes in fair value of inventory attributable to change in gold prices

Hedging instrument - Changes in fair value of the option to fix prices of gold purchases, as described above

Since there are no outstanding hedging instruments i.e. option to fix gold prices with respect to fair value hedge accounting as at 31 March 2023 & 31 March 2024, there is no impact of change in fair value of the hedged item i.e. inventory of gold.

Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging instrument. The Company enters into hedge relationships where the critical terms of the hedging instrument match exactly with the terms of the hedged item, and so a qualitative assessment of effectiveness is performed. If changes in circumstances affect the terms of the hedged item such that the critical terms no longer match exactly with the critical terms of the hedging instrument, the Company uses the hypothetical derivative method to assess effectiveness. There was no hedge ineffectiveness in any of the periods presented above.

note 40: financial Instruments

i) Fair values hierarchy

Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates;

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

A) Credit risk

Credit risk is the risk that a customer or counterparty to a financial instrument will fail to perform or pay amounts due to the Company causing financial loss. It arises from outstanding trade receivables to whom the Company has either made direct sales or sent the goods on consignment.

However, the majority of Company''s sales are in the domestic segment in which no credit is involved. The credit risk arises only from the export sales which are on a B2B basis and on a credit basis. The company has been facing the issue of overdues in its export receivables for the past five years and currently the entire lot of outstanding export receivables are overdue. Though the company has stopped its export business since September 2021, its position of overdue receivables has not improved.

The Company however, has old and existing relationship with its debtors and continues to remain confident of realizing the same in due course of time. The Company has therefore not classified any of its outstanding debt as bad or unrecoverable. However, at the same time, as a mark of adequate financial prudence, the Company has during the current financial year made provision in the form of ECL to the tune of ? 1.09 crore, with the total amount of ECL at ? 263.68 crore as on 31 March 2024.

The Company had extended loans to Luxury Products Trendsetter Private limited (wholly owned subsidiary) for business purposes. The outstanding balance of loans (including accrued interest on loan) stands at ? 24.45 crores as on 31 March 2023 and ? 24.60 crores as on 31 March 2024. An impairment to the tune of ? 1.59 crores has been considered on accrued interest on loan as on 31 March 2024.

The Company has also extended loans to two body corporates namely PC Universal Private Limited, which ceased to be a subsidiary during the year and Shivani Sarees Private Limited for business purposes. Their outstanding balances of loans (including accrued interest on loan) as on 31 March 2023 were ? 134.32 crores and ? 8.58 crores and as on 31 March 2024 are ? 135.40 crores and ? 8.50 crores respectively. An impairment to the tune of ? 134.32 crores has been considered towards the loan (including accrued interest on loan) extended to PC Universal Private Limited for the financial year ending 31st March 2023, which stands enhanced to ? 135.40 cr for the Financial year ending 31st March 2024.

B) Liquidity risk

The liquidity risk exposure arises from adjusting the operational expenditure, vendor payments, bank interest & other statutory liabilities etc with the incoming cash flows. The Company is locked in a legal dispute with its Lenders for more than a year now and its business operations have been declining. It is therefore facing liquidity constraints in meeting its operational expenditure, vendor

payments and other statutory liabilities. The Company is managing its liquidity by cost cutting and rationalising its expenses under all heads.

Contractual maturities of financial liabilities

The tables below analyses the Company''s financial liabilities into relevant maturity groupings based on their contractual maturities for all non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying amounts as the impact of discounting is not significant.

C) Market risk - foreign exchange

The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to US Dollar. Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the Company''s functional currency. However, the Company is a net foreign exchange positive unit and hence does not foresee any forex risk on its financials.

Sensitivity

The sensitivity to profit or loss from changes in the exchange rates arises mainly from financial instruments denominated in USD. In case of a reasonably possible change in INR/USD exchange rates of /- 4 % (previous year /-4%) at the reporting date, keeping all other variables constant, there would have been corresponding impact on losses/profits of ? 51.48 crore (previous year ? 50.76 crore).

D) market risk - interest rate i) Liabilities

Interest rate risk arises from borrowings at variable rates. However, the company is not paying any interest on its borrowings at present on account of ongoing litigation. It has however submitted an One Time Settlement Proposal (OTS) to its Lenders which has been approved by three of the consortium member banks and the same is under consideration with other consortium member banks. The OTS proposal includes repayment of borrowings at a specific rate of interest.

Sensitivity

The sensitivity to profit or loss in case of a reasonably possible change in interest rates of /- 50 basis points (previous year: /- 50 basis points), keeping all other variables constant, would have resulted in corresponding impact on losses/profits by ? 15.28 crore (previous year ? 13.57 crore).

However, the Company is under legal dispute with its Lenders and the issue of quantum of interest payable, if any, and at what rate is subject to future judicial judgement.

ii) Assets

The Company''s financial assets are carried at amortised cost and are at fixed rate only. They are, therefore, not subject to interest rate risk since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

E) Market risk - security price

Exposure from investments in mutual funds:

The Company''s exposure to price risk arises from investments in mutual funds held by the Company and classified in the balance sheet as current investments. However, the Company''s investments in mutual funds is non material vis a vis its balance sheet size. Sensitivity:

The sensitivity to profit or loss in case of an increase in price of the instrument by 5% keeping all other variables constant would have resulted in corresponding impact on (losses)/profits by ? 0.09 crore (previous year ? 0.08 crore).

F) market risk - gold prices:

The Company''s exposure to price risk also arises from trade payables of the Company that are at unfixed prices, and, therefore, payment is sensitive to changes in gold prices. However, the Company does not have any unfixed trade payables linked to gold prices as on 31 March 2024. Hence, there is no market risk linked to gold prices.

note 42: cAPiTAl management

The Company'' s capital management objectives are:

- to ensure the Company''s ability to continue as a going concern

- to provide an adequate return to shareholders

The Company monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented on the face of balance sheet.

*''This total exposure includes provision for interest upto 31st March 2024, and the Company has disputed the above amounts in various legal fora including DRT/DRAT and various courts as referred in Note-19 and Note-50.

NOTE 43: MiCRO, SMALL AND MEDiUM ENTERPRiSES

Information as required to be furnished as per section 22 of the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 as at the balance sheet date is given below. This information has been determined to the extent such parties have been identified on the basis of information available with the Company.

NOTE 44: CONTiNGENT LiABiLiTY				(T in crore)
		31 march 2024		31 March 2023
a)	Claims against the Company not acknowledged as debts*#	5.21		0.54
b)	Demand from the income-tax authorities*	0.19		0.19
c)	Demands from the Custom authorities against which appeals have been filed (amounts paid under protest ? 2.43 crore)	5.12		5.12
d)	Demands from the sales tax authorities against which appeals have been filed*	8.24		8.24
e)	Demands from the HGST authorities against which Company is in the process of filing appealA	0.82		-
*Excluding interest, if any, which is not ascertainable #Company has furnished bank guarantees amounting to ? 0.46 crore for ongoing litigations A including interest and penalty as on the date of oder

The Company''s lease asset primarily consist of leases for buildings for factory, showrooms and offices having various lease terms.

The lease liabilities are secured by the related underlying assets. The maturity analysis of lease liabilities are disclosed in note 41(ii)(B).

The Company has leases for the factory, offices and showrooms. With the exception of short-term leases and leases with variable lease payments, each lease is reflected on the balance sheet as a right-of-use asset and a lease liability.

Each lease generally imposes a restriction that, unless there is a contractual right for the Company to sublet the asset to another party, the right-of-use asset can only be used by the Company. Leases are either non-cancellable or may only be cancelled by incurring a substantive termination fee. Some leases contain an option to extend the lease for a further term. The Company is prohibited from selling or pledging the underlying leased assets as security against the Company''s other debts and liabilities. For leases over office buildings and factory premises the Company must keep those properties in a good state of repair and return the properties in their original condition at the end of the lease. Further, the Company must insure items of property, plant and equipment and incur maintenance fees on such items in accordance with the lease contracts.

The Company has considered automatic extension option available for the property leases in lease period assessment since the Company can enforce its right to extend the lease beyond the initial lease period as the Company is likely to be benefited by exercising the extension option.

The company has a right to extend/terminate its leasing arrangements beyond the initial agreement/lock in period. For the assessment of lease term as per Ind AS 116, the management of the Company has considered the extension options and not considered the early termination options wherever available for its property leases in its lease period assessment since the Company is likely to be benefited from a longer lease tenure.

Note: The Company was not required to spend any amount towards CSR activities during FY 2023-24 because average net profit of the Company as per section 135(5) of the Companies Act, 2013 was negative. The shortfall in CSR expenditure relates to FY 2021-22 and FY 2020-21 which was caused by strained liquidity position of the Company after March 2020 on account of lockdowns and disruptions in business due to Covid-19 pandemic as well as the Company''s accounts turning non-performing asset since June 2021 with its bankers, which resulted into restriction on banking transactions as well as heavy reduction in the business operations and revenue generation.

In the absence of export revenues, there has been no separate reporting or reviews by the Chief Operating Decision Maker (''CODM'') with respect to the export segment. Accordingly, the export segment has ceased to qualify as operating segment for reporting purposes as per Ind AS 108 ''Operating Segments'' The CODM examines the performance from the perspective of the Company as a whole viz. ''Jewellery business'' and hence there are no separate reportable segments as per Ind AS 108.

NOTE 49: iND AS 115 - REVENUE FROM CONTRACTS WiTH CUSTOMERS

Ind AS 115: Revenue from Contracts with Customers, establishes a framework for determining whether, how much and when revenue is recognised and requires disclosures about the nature, amount, timing and uncertainty of revenues and cash flows arising from customer contracts. Under Ind AS 115, revenue is recognised through a 5-step approach:

(i) Identify the contract(s) with customer;

(ii) Identify separate performance obligations in the contract;

(iii) Determine the transaction price;

(iv) Allocate the transaction price to the performance obligations; and

(v) Recognise revenue when a performance obligation is satisfied.

NOTE 50: EXISTENCE OF UNCERTAINTY CASTING SIGNIFICANT DOUBT ON THE COMPANY''S ABILITY TO CONTINUE AS A GOING CONCERN

''In addition to civil suits mentioned in sub note (iii) of note 19, a majority of the Lenders have also issued notices to the Company under Section 13(2) of the SARFAESI Act 2002 which have been replied to by the Company. In addition to replying suitably to the Banks, the Company has also approached the High Court of Delhi vide its writ petition W.P.(c) No 3982 of 2023 against the SBI on various grounds including the non-compliance of the Principle of Natural Justice in as much as the Company was not given any opportunity to explain its case after 02 January 2023 and unilateral decision has been taken by the respondent (SBI). This matter is also currently pending adjudication. State Bank of India had also filed a petition (now withdrawn) before Hon''ble NCLT , Delhi seeking initiation of Corporate Insolvency Resolution Process of the Company.

The company however wants to settle all these legal issues amicably and hence has offered a One Time Settlement Proposal to all its Bankers. The company has received ''In-principle'' approval of its One Time Settlement Proposal from the consortium of banks, subject to acceptance from their competent authority/board and upfront payment for the furtherance of the proposal was deposited in a no lien account with SBI by a promoter group entity. So far, the proposal has been accepted by the competent authorities of State Bank of India

(Lead Bank), Axis Bank as well as Karur Vysya Bank and the same is under active consideration of the remaining consortium member banks and in view of the same SBI had submitted an application under section 60(5) of the Insolvency and Bankruptcy Code, 2016 ("IBC 2016") dated April 29, 2024, before the Hon''ble National Company Law Tribunal, Principal Bench, New Delhi seeking withdrawal of its petition CP(IB) No. 421 (PB) of 2023 filed against PC Jeweller Limited under section 7 of the IBC 2016 on account of settlement terms agreed between SBI and the Company. Hon''ble National Company Law Tribunal, Principal Bench, New Delhi ("NCLT") vide its order dated April 30, 2024, has allowed State Bank of India ("SBI"),Financial Creditor to withdraw the petition (IB)-421(PB)/2023 filed by it against PC Jeweller Limited under section 7 of the Insolvency & Bankruptcy Code, 2016. Accordingly, NCLT dismissed petition (IB)-421(PB)/2023 as withdrawn and all other IA''s pending in this matter were also disposed of accordingly.

Though there is no certainty either on the time frame or the end result of this ongoing judicial process, the Company continues to remain confident about a positive outcome of the same, especially its proactive action in approaching its Lenders to resolve the issue of unpaid debt with a One Time Settlement Proposal as well as withdrawal of the CIRP petition by the SBI. The Company is therefore confident that its status as a going concern will continue to remain intact in spite of the current adversities. The Management is also confident that, considering the net asset position of the company, it will be able to realize the assets and meet the liabilities and commitments of the company in the normal course of business 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 and accordingly, the accompanying statement has been prepared considering Going Concern assumption.

NOTE 51: DISCOUNT TO EXPORT CUSTOMERS

During the financial year ended 31 March 2019, the Company had provided discounts to its export customers aggregating to ? 513.65 crore and had submitted the requisite applications for approval from the Authorised Dealer Banks as stipulated by the FED Master Direction No. 16/2015-16 dated January 1,2016 under the Foreign Exchange Management Act, 1999. Subsequently, the Company has obtained the approvals from the authorized dealer banks for reduction in receivables corresponding to discounts amounting to ? 330.49 crore. However, for the remaining discounts of ? 183.16 crore approvals are still pending. The management however, does not expect any material penalty to be levied on account of this matter and, therefore, no provision for the same has been provided in the books of accounts.

NOTE 52: DELAY IN RECEIPT OF FOREIGN CURRENCY AGAINST EXPORT

Trade receivables as at 31 March 2024, inter alia, include outstanding from export customers aggregating to ? 1467.61 crore. The export receivables have been outstanding for more than 9 months and have been restated as per the RBI exchange rate as on 31 March 2024. The Company has filed necessary applications with the requisite authority as per the regulations of the Foreign Exchange Management Act, 1999 for condonation of delays in repatriation of funds by its customers. The management is of the view that the possible penalties that may be levied, are currently unascertainable and are not expected to be material and accordingly, no consequential adjustments have been made in the books of accounts with respect to such default. However, as a mark of prudent accounting practices the company has computed and applied cumulative ECL (expected credit loss) on the outstanding export receivables of ? 263.68 crore as on 31 March 2024.

NOTE 53: Recoverability Of Investments, Loans And Short-Term Financial Assets, GIVEN TO/DUE From subsidiary COMPANIES

The Company has investments of ? 133.92 crore (previous year ? 133.97 crore) (excluding impairment) in its wholly-owned subsidiary companies viz Luxury Products Trendsetter Private Limited, PC Jeweller Global DMCC and PCJ Gems & Jewellery Limited as at 31 March 2024. The Company has also given non current loans amounting to ? 9.12 crore (previous year ? 9.62 crore) (excluding impairment) to Luxury Products Trendsetter Private Limited and has interest receivable amounting to ? 15.47 crore (previous year ? 14.82 crore)(excluding impairment) which is classified under current financial assets. PC Universal Private Limited and Transforming Retail Private Limited ceased to be subsidiaries during the current year ended 31 March 2024 and previous year ended 31 March 2023 respectively.

Additional Regulatory Information pursuant to Clause 6L of General Instructions for preparation of Balance Sheet as given in Part I of Division II of Schedule III to the Companies Act, 2013, are given hereunder to the extent relevant and other than those given elsewhere in any other notes to the Financial Statements.

£ Total debt has increased by 13 % due to unpaid interest on bank borrowings and Total equity has also reduced by 18% due to heavy losses , which has contributed to increase in this ratio.

$Earning available for Debt Service has decreased by 170 % due to decrease in the company''s EBID vis a vis the debt service has also reduced, which has contributed to decrease in this ratio. The debt service amount includes only the finance cost paid and not the total finance cost.

#This decrease is due to sharp decrease in turnover as compared to previous year which has resulted in heavy losses.

*There is decrease in purchases from customers by 95 % as compared to previous year.

^AThere is decrease in EBIT by 160% as compared to last year, mainly because total income decreased by 90%, as turnover of the company decreased in this year.

**Due to share market factors.

b) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

g) The Company does not have any charges or satisfaction which is yet to be registered with the Registrar of Companies beyond the statutory period. No creation/modification/satisfaction of charges have taken place during the year.

h) The Company has compiled with the number of layers prescribed under section 2(87) of the Companies Act 2013 read with Companies (Restrictions on number of Layers) Rules, 2017.

i) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall: (a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or (b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

j) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall: (a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

k) The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

l) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

m) The Company has the following balances against the loans granted or advances in the nature of loans wherein there is no specific schedule of repayment of principal or payment of interest:

This is the summary of significant accounting policies and other explanatory information referred to in our report of even date

---

Mar 31, 2023

Provisions, contingent assets and contingent liabilities

Provisions are recognised only when there is a present
obligation, as a result of past events, and when a
reliable estimate of the amount of obligation can
be made at the reporting date. These estimates are
reviewed at each reporting date and adjusted to reflect
the current best estimates. Provisions are discounted

to their present values, where the time value of money
is material.

Contingent liability is disclosed for:

• Possible obligations which will be confirmed only
by future events not wholly within the control of
the Company; or

• Present obligations arising from past events where
it is not probable that an outflow of resources will
be required to settle the obligation or a reliable
estimate of the amount of the obligation cannot
be made.

Contingent assets are not recognised. However, when
inflow of economic benefit is probable, related asset is
disclosed.

t) Earnings per share

Basic earnings per share is calculated by dividing the
net profit or loss for the period attributable to equity
shareholders (after deducting attributable taxes)
by the weighted average number of equity shares
outstanding during the period. The weighted average
number of equity shares outstanding during the
period is adjusted for events including a bonus issue.

For the purpose of calculating diluted earnings per
share, the net profit or loss for the period attributable
to equity shareholders and the weighted average
number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity
shares except for anti-dilutive potential equity shares.

u) Equity, reserves and dividend payment

Equity shares are classified as equity. Incremental costs
directly attributable to the issue of new shares are
shown in equity as a deduction, net of tax, from the
proceeds. Retained earnings include current and prior
period retained profits. All transactions with owners of
the Company are recorded separately within equity.
The Board of Directors of the Company have not
recommended any dividend for the year.

v) Significant management judgement in applying
accounting policies and estimation uncertainty

The preparation of the Company''s financial statements
requires management to make judgements, estimates
and assumptions that affect the reported amounts

of revenues, expenses, assets and liabilities, and the
related disclosures.

Significant management judgements and estimates

The following are significant managementjudgements
and estimates in applying the accounting policies of
the Company that have the most significant effect on
the financial statements:

Recognition of deferred tax assets - The extent to
which deferred tax assets can be recognised is based
on an assessment of the probability of the future
taxable income against which the deferred tax assets
can be utilised.

Evaluation of indicators for impairment of assets

- The evaluation of applicability of indicators of
impairment of assets requires assessment of several
external and internal factors which could result in
deterioration of recoverable amount of the assets.

Recoverability of advances/receivables - At each
balance sheet date, based on historical default
rates observed over expected life, the management
assesses the expected credit loss on outstanding
receivables and advances.

Defined benefit obligation (DBo) - Management''s
estimate of the DBO is based on a number of critical
underlying assumptions such as standard rates of
inflation, medical cost trends, mortality, discount rate
and anticipation of future salary increases. Variation in
these assumptions may significantly impact the DBO
amount and the annual defined benefit expenses.

Fair value measurements - Management applies
valuation techniques to determine the fair value of
financial instruments (where active market quotes are
not available). This involves developing estimates and
assumptions consistent with how market participants
would price the instrument. Management uses the
best information available. Estimated fair values may
vary from the actual prices that would be achieved in
an arm''s length transaction at the reporting date.

Useful lives of depreciable/amortizable assets -

Management reviews its estimate of the useful lives
of depreciable/amortizable assets at each reporting
date, based on the expected utility of the assets.
Uncertainties in these estimates relate to technical and
economic obsolescence.

---

Mar 31, 2018

1. Corporate information Nature of operations

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 Company’s shares are listed on the National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange (BSE).

General information and statement of compliance with Ind AS

These standalone financial statements have been prepared in accordance with the Indian Accounting Standards (‘Ind AS’) notified under section 133 of the Companies Act, 2013 (‘the Act’) Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time and other pronouncements/ provisions of applicable laws.

The standalone financial statements for the year ended 31 March 2018 were authorised and approved for issue by the Board of Directors on 25 May 2018. Revisions to standalone financial statements is permitted by the Board of Directors after obtaining necessary approvals or at the instance of regulatory authorities as per provisions of the Act.

2. Application of new and revised Indian Accounting Standard (Ind AS)

All the Ind AS issued and notified by the Ministry of Corporate Affairs (‘MCA’) under the Companies (Indian Accounting Standards) Rules, 2015 (as amended) till the standalone financial statements are authorised have been considered in preparing these standalone financial statements.

Standards issued but not effective

On 28 March 2018, the Ministry of Corporate Affairs (MCA) issued the Companies (Indian Accounting Standards) Amendment Rules, 2018, notifying Ind AS 115, ‘Revenue from Contracts with Customers’ and Appendix B, Foreign Currency Transactions and Advance Consideration to Ind AS 21, ‘The Effects of Changes in Foreign Exchange Rates’. The effective date for adoption is financials periods beginning on or after 01 April 2018.

Ind AS 115 - Revenue from Contracts with Customers

Ind AS 115 establish the principles whereby an entity shall recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The entity shall be required to report useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from a contract with a customer.

The standard permits two possible methods of transition:

(a) Retrospective approach- The standard shall be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors.

(b) Retrospective with cumulative effect of initial application of the standard recognised at the date of initial application (Cumulative catch-up transition method)

The Company is examining the methods of transition to be adopted. The effect on adoption of Ind AS 115 is expected to be insignificant.

Appendix B, Foreign currency transactions and advance consideration to Ind AS 21:

Appendix B to Ind AS 21 clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency.

The amendment will be effective on financials periods beginning on or after 01 April 2018. The Company is evaluating the requirements of the aforementioned amendment/standard and does not expect the impact to be material.

Note

During the year, the Company has converted compulsorily convertible debentures (CCDs) into equity earlier than its due date of conversion and therefore, the deferred tax on the outstanding liability portion of CCDs, amounting to Rs. 6.21 crores has been transferred to retained earnings.

*During the previous year, the Company had issued compulsorily convertible preference shares (‘CCPS’). CCPS are compound financial instruments and in accordance with Ind AS, the Company had bifurcated amount so received into equity and liability components. The liability component amounting to Rs. 28.48 crores was reflected in borrowings and equity component (net of transaction cost of Rs. 2.57 crores) amounting to Rs. 226.32 crores was reflected in other equity

An amount of Rs. 2.40 crore (previous year Rs. 2.15 crore) has been recorded as finance cost on the liability component. In the current year, the aforementioned Compulsorily Convertible Preference Shares (CCPS) have been converted into 13,456,000 equity shares as per terms of the agreement.

b) Terms and rights attached to equity shares

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 in the ensuing Annual General Meeting. 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 equity shareholders.

Terms and rights attached to preference shares

During the year, the entire CCPS got converted into 13,456,000 equity shares of the company having face value of Rs.10 each per terms of the agreement. However, the preference shareholders shall receive a mandatory dividend of 13% per annum which shall be paid on 30 September 2018 as per terms agreed.

c) Shares reserved for issue under options

(i) 3,461,867 equity shares are reserved for the issue under the Employees’ stock option plan of the Company. Information relating to Employees’ stock option plan, including details of options issued, exercised and lapsed during the financial year and options outstanding at the end of the reporting period, is set out in note 36.

(ii) During the previous year, the Company had issued compulsorily convertible debentures to be converted to equity shares within stipulated time. Per terms of the agreement, the same got converted to 22,473,600 equity shares of the Company having face value of Rs.10 each during the current year.

*As per the records of the Company, including its register of shareholders/members and other declarations, if any, received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.

**Stake reduced to less than 5% of the shares of the Company.

e) The shareholders of the Company approved the issue of 179,212,800 equity shares as bonus shares which were subsequently alloted on 10 July 2017. Further the Company has allotted 11,236,800 equity shares as bonus shares on 19 August 2017 on conversion of compulsorily convertible debentures. Other than this, the Company has not issued any shares pursuant to contract without payment being received in cash, or allotted as fully paid up by way of bonus shares or bought back any shares during the period of five years immediately preceding the date of balance sheet.

Retained earnings

Retained earnings are created from the profit / loss of the Company, as adjusted for distributions to owners, transfers to other reserves, etc. General reserve

Under the Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with Companies (Transfer of profits to Reserve) Rules,1975. Consequent to introduction of the Act, there is no such requirement to mandatorily transfer a specified percentage of the net profit to general reserve.

Securities premium reserve

Securities premium reserve is used to record the premium on issue of shares. The reserve will be utilised in accordance with provisions of the Act.

Share options outstanding account

The reserve account is used to recognise the grant date fair value of options issued to employees under employee stock option plan, over the vesting period.

Equity component of compulsorily convertible debenture

During the previous year, the Company had issued 4,269,984 compulsorily convertible debentures (CCDs) having face value of Rs. 1,000 each and in accordance with Ind AS, the Company had bifurcated amount so received into equity and liability components. The aforementioned CCDs has been converted into 22,473,600 equity shares having face value of Rs. 10 each during the current year.

Equity component of compulsorily convertible preference shares

During the previous year, the Company had issued 257,372,912 Compulsorily Convertible Preference Shares (CCPS) having face value of Rs. 10 each and in accordance with Ind AS, the Company had bifurcated amount so received into equity and liability components. The aforementioned CCPS have been converted into 13,456,000 equity shares of the Company as per terms of the agreement.

(i) Vehicle loans are secured by way of hypothecation of assets, thus purchased.

(ii) Term loans from banks (including current maturities) aggregating to Rs. 74.24 crores (31 March 2017: Rs. 86.75 crores) are secured against first and exclusive registered mortgage charge on immovable properties belonging to the body corporate. These loans are further fully secured by personal guarantees of promoter directors and corporate guarantees of the said body corporate.

(iii) Liability component of CCPS represents the mandatory payments required under the terms of the CCPS, discounted at the effective interest rate. Mandatory dividend is payable at the rate of 13% per annum. Such dividend is payable on 30 September for the preceding financial year.

(iv) Liability component of CCDs represented the mandatory payments required under the terms of the CCD, discounted at the effective interest rate. Interest was payable on the aforementioned CCDs at the rate of 13% per annum (16.25% per annum inclusive of tax deducted at source) and such payments had commenced from 4 July 2016 and were paid every quarter thereafter upto the conversion of these CCDs.

(i) Cash credit facilities, packing credit facilities, post shipment credit facilities, demand loans and commercial papers are secured against first pari passu charge on current assets, fixed assets and fixed deposits of the Company. These loans are further fully secured by personal guarantees of promoter directors and their relatives and corporate guarantees and collateral securities of other companies.

Note:

The Company has three manufacturing units located in Noida Special Economic Zone, namely, unit I, unit II and unit III. Unit III is fully exempt from income tax till 31 March 2021. Remaining units, i.e., unit I and unit II are partially exempted till 31 March 2022 and 31 March 2025 respectively under the provisions of Section 10AA of the Income-tax Act, 1961.

The Company’s manufacturing unit located in Dehradun is eligible for the deduction of 100% of the profits and gains of the unit for the first 5 consecutive years and 30% for the next 5 consecutive years under Section 80 IC of the Income - tax Act, 1961 till 31 March 2019.

During the year, the shareholders of the Company approved and subsequently alloted the issue of bonus equity shares in proportion of one bonus equity share for each equity share held which got duly allotted within the year. Accordingly, the basic and diluted earnings per share have been adjusted for the previous years presented in accordance with Ind AS 33 ‘Earnings per Share’.

These assumptions were developed by the management with the assistance of independent actuarial appraisers. Discount factors are determined close to each year end by reference to government bonds of relevant economic markets and that have terms to maturity approximating to the terms of the related obligation. Other assumptions are based on management’s historical experience.

Sensitivity analysis

The significant actuarial assumptions for the determination of the defined benefit obligation are the discount rate, the salary growth rate and the average life expectancy. The calculation of the net defined benefit liability is sensitive to these assumptions. The following table summarises the effects of changes in these actuarial assumptions on the defined benefit liability:

The present value of the defined benefit obligation calculated with the same method (projected unit credit) as the defined benefit obligation recognised in the balance sheet. The sensitivity analysis is based on a change in one assumption while not changing all other assumptions. This analysis may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in the assumptions would occur in isolation of one another since some of the assumptions may be co-related.

Based on historical data, the Company expects contributions of Rs. 1.76 crores in the next 12 months.

Compensated absences

The leave obligations cover the Company’s liability for sick and earned leaves. The Company does not have an unconditional right to defer settlement for the obligation shown as current provision balance above. However, based on past experience, the Company does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months. Therefore, based on the independent actuarial report, provision for compensated absences has been bifurcated as current and non-current.

Defined contribution plans

The Company has certain defined contribution plans. Contributions are made to provident fund in India for employees at the rate of 12% of basic salary as per regulations. The contributions are made to registered provident fund administered by the Government. The obligation of the Company is limited to the amount contributed and it has no further contractual or any constructive obligation. The expense recognised during the period towards defined contribution plan is Rs. 2.90 crores (31 March 2017 Rs. 2.96 crores).

Note 3: Employee Stock Option Plan

PC Jeweller Limited Employee Stock Option Plan 2011

During the year ended 31 March 2012, the Company had formulated Employee Stock Option Scheme referred to as PC Jeweller Limited Employee Stock Option Plan 2011 (the ‘Plan’) for all eligible employees/directors of the Company.

The plan is implemented by the Nomination and Remuneration Committee constituted by the Company under the policy and framework laid down by the Company and/ or the Board of Directors of the Company, in accordance with the authority delegated to the Nomination and Remuneration 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 the Board of Directors in this regard. The issuance of the shares are under the guidance, advice and directions of the Nomination and Remuneration Committee.

Each stock option entitles the grantee thereof to apply for and be allotted one equity share of the Company upon vesting. Vesting of the options shall take place over a period of 4 years with a minimum vesting period of 1 year from the grant date.

The options granted shall vest so long as the employee continues to be in employment with the Company, i.e., the options will lapse if the employment is terminated prior to vesting. Even after the options are vested, un-exercised options may be forfeited if the services of the employee are terminated for reasons specified in the Plan.

The volatility used in the Black Scholes Option Pricing Model is the annualized standard deviation of the continuously compounded rate of return of the stock over a period of time. Informal tests and preliminary research tends to confirm that estimates of the expected long-term future volatility should be based on historical volatility for a period that approximates the expected life of the options being valued. The Company was listed on BSE Limited and National Stock Exchange of India Limited on 27 December 2012. The volatility is determined by taking into account the period since the listing of the Company.

Note 4: Related party transactions:

In accordance with the requirement of Indian Accounting Standard (Ind AS) 24 “Related Party Disclosures”, name of the related parties, related party relationships, transactions and outstanding balances including commitments where control exist and with whom transactions have taken place during the reported period are as follows:

During the year, the Company has paid short-term employee benefits (including sitting fee) amounting Rs. 7.24 crores (previous year Rs. 6.95 crores) included in Key management personnel’s compensation. As the liability for gratuity and leave encashment are provided on acturial basis for the Company as a whole, amounts accrued pertaining to key management personnel are not included. There are no amounts outstanding of post-employment benefits, other long-term benefits, termination benefits and share-based payment for the current and previous year.

Note:

(i) The Company has given loans to above entities for business purposes. All the loans given are unsecured loans.

(ii) As per the agreement, the rate of interest for the loan is the average cost of working capital facilities obtained by the lender i.e. 31 March 2018: 11.25% (31 March 2017:11.50%).

(iii) The loan is to be repaid after 5 years from the date of the receipt of loan.

(iv) The loan is to be repaid in 10 installments commencing from 1 January 2019.

Note:

(i) The Company has given loans to above entities for business purposes. All the loans given are unsecured loans.

(ii) As per the agreement, the rate of interest for the loan is the average cost of working capital facilities obtained by the lender i.e. 31 March 2018: 11.25% (31 March 2017:11.50%).

(iii) The loan is to be repaid after 5 years from the date of the receipt of loan.

(iv) The loan is to be repaid in 10 installments commencing from 1 January 2019.

Note 5: Hedging activity and derivatives

(i) The Company enters into foreign currency forward contracts to hedge against the foreign currency risk relating to payment of foreign currency payables. The Company does not apply hedge accounting on such relationships. Further, the Company does not enter into any derivative transactions for speculative purposes.

Fair value hedge of gold price risk in inventory

The Company enters into contracts to purchase gold wherein the Company has the option to fix the purchase price based on market price of gold during a stipulated time period. The prices are linked to gold prices. Accordingly, these contracts are considered to have an embedded derivative that is required to be separated. Such feature is kept to hedge against exposure in the value of inventory of gold due to volatility in gold prices. The Company designates the embedded derivative in the payable for such purchases as the hedging instrument in fair value hedging of inventory. The Company designates only the spot-to-spot movement of the gold inventory as the hedged risk. The carrying value of inventory is accordingly adjusted for the effective portion of change in fair value of hedging instrument. There is no ineffectiveness in the relationships designated by the Company for hedge accounting.

Disclosure of effects of fair value hedge accounting on financial position:

Hedged item - Changes in fair value of inventory attributable to change in gold prices

Hedging instrument - Changes in fair value of the option to fix prices of gold purchases, as described above

Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging instrument. The Company enters into hedge relationships where the critical terms of the hedging instrument match exactly with the terms of the hedged item, and so a qualitative assessment of effectiveness is performed. If changes in circumstances affect the terms of the hedged item such that the critical terms no longer match exactly with the critical terms of the hedging instrument, the Company uses the hypothetical derivative method to assess effectiveness. There was no hedge ineffectiveness in any of the periods presented above.

(ii) Exposure in foreign currency- Hedged

The Company enters into forward exchange contracts to hedge against its foreign currency exposures relating to the underlying transactions and firm commitments. The Company does not enter into any derivative instruments for trading or speculative purposes.

(iii) Exposure in foreign currency- Unhedged

The Company enters into forward exchange contracts to hedge against its foreign currency exposures relating to the underlying transactions and firm commitments. The Company does not enter into derivative intruments for trading or speculation purposes.

Outstanding overseas exposure not being hedged against adverse currency fluctuation:

Note 6: Financial instruments i) Fair values hierarchy

Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates;

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

(ii) Valuation process and technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

(a) The use of quoted market prices for investments in mutual funds.

(b) Use of market available inputs such as gold prices and foreign exchange rates for option to fix prices of gold in purchase contracts and foreign currency forward contracts.

* Trade payables includes value of the option to fix prices on gold purchases (embedded derivative) that is carried at FVTPL. The value of such embedded derivative which is financial liability of Rs. 20.27 crores as at 31 March 2018 (31 March 2017: financial asset Rs. 8.43 crores) is added to value of the trade payables (as discussed further below).

(a) The carrying value of trade receivables, securities deposits, insurance claim receivable, loans given, cash and bank balances and other financial assets recorded at amortised cost, is considered to be a reasonable approximation of fair value.

(b) The carrying value of borrowings, trade payables and other financial liabilities recorded at amortised cost is considered to be a reasonable approximation of fair value.

The following table presents the option to fix prices on gold purchases that are added to/offset with trade payables, as at 31 March 2018 and 31 March 2017:

Option to fix prices on gold purchases is an embedded derivative that will be settled together with the trade payables. Accordingly, such amounts are either added to or offset with but are shown separately in the table above.

ii) Risk management

The Company’s activities expose it to market risk, liquidity risk and credit risk. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements:

The Company’s risk management is carried out by a central treasury department of the Company under policies approved by the Board of Directors. The Board of Directors provide written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, market risk, credit risk and investment of excess liquidity.

A) Credit risk

Credit risk is the risk that a customer or counterparty to a financial instrument will fail to perform or pay amounts due to the Company causing financial loss. It arises from cash and cash equivalents, deposits with banks and financial institutions, security deposits, loans given and principally from credit exposures to customers relating to outstanding receivables. The Company’s maximum exposure to credit risk is limited to the carrying amount of financial assets recognised at reporting date.

The Company continuously monitors defaults of customers and other counterparties, identified either individually or by the Company, and incorporates this information into its credit risk controls. Where available at reasonable cost, external credit ratings and/or reports on customers and other counterparties are obtained and used. The Company’s policy is to deal only with creditworthy counterparties.

In respect of trade and other receivables, the Company is not exposed to any significant credit risk exposure to any single counterparty or any company of counterparties having similar characteristics. Trade receivables consist of a large number of customers in various geographical areas. The Company has very limited history of customer default, and considers the credit quality of trade receivables that are not past due or impaired to be good.

The credit risk for cash and cash equivalents, mutual funds, bank deposits, loans and derivative financial instruments is considered negligible, since the counterparties are reputable organisations with high quality external credit ratings.

Company provides for expected credit losses on financial assets by assessing individual financial instruments for expectation of any credit losses. Since the assets have very low credit risk, and are for varied natures and purpose, there is no trend that the Company can draw to apply consistently to entire population. For such financial assets, the Company’s policy is to provide for 12 month expected credit losses upon initial recognition and provides for lifetime expected credit losses upon significant increase in credit risk. The Company does not have any expected loss based impairment recognised on such assets considering their low credit risk nature, though incurred loss provisions are disclosed under each sub-category of such financial assets.

Concentration of financial assets

Concentration of credit risk with respect to trade receivables are limited, due to the Company’s consumer base being large and diverse. All trade receivable are reviewed and assessed for default on a quarterly basis.

Our historical experience of collecting receivables is that credit risk is low. The Group’s exposure to credit risk for trade receivables is presented below:

B) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the business, the Company maintains flexibility in funding by maintaining availability under committed facilities.

Management monitors rolling forecasts of the Company’s liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates. In addition, the Company’s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

Financing arrangements

The Company had access to the following undrawn borrowing facilities at the end of the reporting period:

Contractual maturities of financial liabilities

The tables below analyses the Company’s financial liabilities into relevant maturity groupings based on their contractual maturities for all non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying amounts as the impact of discounting is not significant.

C) Market risk - foreign exchange

The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to US Dollar. Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the Company’s functional currency. The Company, as per its overall strategy, uses forward contracts to mitigate its risks associated with fluctuations in foreign currency, and such contracts are not designated as hedges under Ind AS 109. The Company does not use forward contracts and swaps for speculative purposes.

Sensitivity

The sensitivity to profit or loss from changes in the exchange rates arises mainly from financial instruments denominated in USD. In case of a reasonably possible change in INR/USD exchange rates of /- 4 % (previous year /-4%) at the reporting date, keeping all other variables constant, there would have been corresponding impact on profits of Rs. 31.81 crores (previous year Rs. 28.03 crores).

D) Interest rate risk

i) Liabilities

The Company’s policy is to minimise interest rate cash flow risk exposures on long-term financing. At 31 March 2018, the Company is exposed to changes in market interest rates through bank borrowings at variable interest rates.

Sensitivity

The sensitivity to profit or loss in case of a reasonably possible change in interest rates of /- 50 basis points (previous year: /-50 basis points), keeping all other variables constant, would have resulted in corresponding impact on profits by Rs. 2.59 crores (previous year Rs. 1.24 crores).

ii) Assets

The Company’s financial assets are carried at amortised cost and are at fixed rate only. They are, therefore, not subject to interest rate risk since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

E) Price risk

Exposure from investments in mutual funds:

The Company’s exposure to price risk arises from investments in mutual funds held by the Company and classified in the balance sheet as fair value through profit or loss. To manage its price risk arising from investments in mutual funds, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company.

Sensitivity:

The sensitivity to profit or loss in case of an increase in price of the instrument by 5% keeping all other variables constant would have resulted in corresponding impact on profits by Rs. 0.61 crores (previous year Rs. 0.31 crores).

Exposure from trade payables:

The Company’s exposure to price risk also arises from trade payables of the Company that are at unfixed prices, and, therefore, payment is sensitive to changes in gold prices. The option to fix gold prices are classified in the balance sheet as fair value through profit or loss. The option to fix gold prices are at unfixed prices to hedge against potential losses in value of inventory of gold held by the Company.

The Company applies fair value hedge for the gold purchased whose price is to be fixed in future. Therefore, there will no impact of the fluctuation in the price of the gold on the Company’s profit for the period.

Note 7: Capital management

The Company’ s capital management objectives are:

- to ensure the Company’s ability to continue as a going concern

- to provide an adequate return to shareholders

The Company monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented on the face of balance sheet.

The Management assesses the Company’s capital requirements in order to maintain an efficient overall financing structure while avoiding excessive leverage. This takes into account the subordination levels of the Company’s various classes of debt. The Company manages the capital structure and makes adjustments to it in the light of changes in the economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

Note 8: Micro, Small and Medium Enterprises

Information as required to be furnished as per section 22 of the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 for the year ended 31 March 2018 is given below. This information has been determined to the extent such parties have been identified on the basis of information available with the Company.

Note 9: Disclosures in respect of non-cancellable operating leases

The Company leases various offices and retail stores under non-cancellable operating leases with different periods. The leases have varying terms, escalation clauses and renewal rights. On renewal, the terms of the leases are renegotiated. Contractual lease expense are summarised as below.

Note 10: Corporate social responsibility

The Company’s CSR programs/projects focuses on sectors and issues as mentioned in Schedule VII read with Section 135 of the Act. The CSR committee has been formed by the Company as per the Act. A CSR committee has been examining and evaluating suitable proposals for deployment of funds towards CSR initiatives, however, the committee expects finalisation of such proposals in due course.

a) Gross amount required to be spent by the Company during the year is Rs. 10.94 crores (previous year Rs. 10.32 crores)

b) Amount spent during the year on CSR (excluding 5% administrative expenses)

Note 11: Disclosure on specified bank notes (SBN)

During the previous year, the Company had specified bank notes or other denomination as defined in the MCA notification G.S.R. 308(E) dated 30 March 2017, on the details of specified bank notes (SBN) held and transacted during the period from 8 November 2016 to 30 December 2016, the denomination wise SBNs and other notes as per the notification is given below:

Note 12: Reconciliation of liabilities arising from financing activities pursuant to Ind AS -7 Cash flows

The changes of the Company’s liabilties arising from financing activities can be classified as follows:

Note 13: Segment information

Disclosure for segment information as required by Ind AS 108 ‘Operating Segment’, notified under the Act has been provided in the consolidated financial statements of the Company comprising the Company and its wholly owned subsidiaries.

Note 14: Post reporting date events

No adjusting or significant non-adjusting events have occurred between 31 March 2018 and the date of authorisation of the Company’s standalone financial statements. However, the Board of Directors have recommended a dividend of Rs.0.55 (previous year Rs.0.75 ) on preference shares of Rs. 10 each, subject to approval of shareholders at the ensuing Annual General Meeting. Also, the Board of Directors have recommended a final dividend of 5%, i.e., Rs.0.50 (previous year Rs.1) on equity shares of Rs. 10 each for the year ended 31 March 2018, subject to approval of shareholders at the ensuing annual general meeting.

Note 15: Buyback of shares

On 10 May 2018, the Board of Directors of the Company approved a buyback proposal for the purchase by the Company of upto 12,114,285 Equity shares of Rs. 10/- each (being 3.07 % of total paid up equity capital of the Company) at a price of Rs. 350 per equity share, for an aggregate amount not exceeding Rs. 424 crore from the shareholders of the Company on a proportionate basis through the tender offer route in accordance with the provisions contained in the SEBI (Buy Back of Securities) Regulations, 1988 and the Act subject to applicable statutory/other requisite approvals.

This is the summary of significant accounting policies and other explanatory information referred to in our report of even date

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Mar 31, 2017

1. Corporate information Nature of operations

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 Company’s shares are listed on the National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange (BSE).

General information and statement of compliance with Ind AS

The standalone financial statements of the Company have been prepared in accordance with Ind AS notified by the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016. Accordingly, the standalone financial statements for the year ended 31 March 2017 are the Company’s first Ind AS standalone financial statements. For periods up to and including the year ended 31 March 2016, the Company prepared its standalone financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013 (the ‘Act’), read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP). Refer note 43 for the explanation of transition from previous GAAP to Ind AS.

The standalone financial statements for the year ended 31 March 2017 were authorised and approved for issue by the Board of Directors on 25 May 2017.

2. Application of new and revised Indian Accounting Standard (Ind AS)

All the Ind AS issued and notified by the Ministry of Corporate Affairs under the Companies (Indian Accounting Standards) Rules, 2015 (as amended) till the standalone financial statements are authorised have been considered in preparing these standalone financial statements.

3. Standards issued but not effective

In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7 ‘Statement of cash flows’ and Ind AS 102 ‘Share-based payment’. These amendments are in accordance with the recent amendments made by International Accounting Standards Board (‘IASB’) to IAS 7 ‘Statement of cash flows’ and IFRS 2 ‘Share-based payment’, respectively. The amendments are applicable to the Company from 1 April 2017.

a) Amendment to Ind AS 7: The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement.

b) Amendment to Ind AS 102: The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of cash-settled awards and awards that include a net settlement feature in respect of withholding taxes. It clarifies that the fair value of cash-settled awards is determined on a basis consistent with that used for equity-settled awards. Market-based performance conditions and non-vesting conditions are reflected in the “fair values”, but non-market performance conditions and service vesting conditions are reflected in the estimate of the number of awards expected to vest. Also, the amendment clarifies that if the terms and conditions of a cash-settled share-based payment transaction are modified with the result that it becomes an equity-settled share-based payment transaction, the transaction is accounted for as such from the date of the modification. Further, the amendment requires the award that include a net settlement feature in respect of withholding taxes to be treated as equity-settled in its entirety. The cash payment to the tax authority is treated as if it was part of an equity settlement. This amendment does not have a material impact on the Company

The Company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated.

Note 4: Equity share capital

a) Authorised share capital

* The Company has issued compulsorily convertible preference shares (‘CCPS’) in the current year. CCPS are compound financial instruments and in accordance with Ind AS, the Company has bifurcated amount so received into equity and liability component. The liability component amounts to Rs.28.48 crores, which is reflected in borrowings (refer note 17) and equity component (net of transaction cost of Rs.2.57 crores) amounts to Rs.226.32 crores, which is reflected in other equity (refer note 16).

b) Terms and rights attached to equity shares

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 in the ensuing Annual General Meeting. 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 equity shareholders.

Terms and rights attached to preference shares

Each CCPS has a par value of Rs.10 and would be converted into equity shares of the Company within 12 months from the date of issuance. The conversion shall happen at the price of Rs.382.54 per share. As such, the preference shares will get converted into 6,728,000 equity shares of the Company. The preference shareholders shall receive a mandatory dividend of 13% per annum, which shall be paid on 30 September, for each preceding financial year. The voting rights of the investors holding CCPS shall be in accordance with the provisions of Section 47 of the Companies Act, 2013 (including any statutory amendments thereto or reenactments thereof for the time being in force). The preference shares will rank ahead of equity shares in case of liquidation.

c) Shares reserved for issue under options

(i) 2,679,330 equity shares are reserved for the issue under the Employees’ stock option plan of the Company. Information relating to Employees’ stock option plan, including details of options issued, exercised and lapsed during the financial year and options outstanding at the end of the reporting period, is set out in note 36.

(ii) Company has issued compulsorily convertible debentures (‘CCD’) in the current financial year. The conversion shall happen at the price of Rs.380 per share. As such, the debentures will get converted into 11,236,800 equity shares of the Company within 18 months from the date of issuance.

d) Details of shareholders holding more than 5% of the shares of the Company¹

*As per the records of the Company, including its register of shareholders/members and other declarations, if any, received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.

e) The Company has not issued any shares pursuant to contract without payment being received in cash, or allotted as fully paid up by way of bonus shares or bought back any shares during the period of five years immediately preceding the date of balance sheet.

Note 5: Non-current financial liabilities - borrowings

(i) Vehicle loans are secured by way of hypothecation of assets, thus purchased.

(ii) Term loans from banks (including current maturities) aggregating to Rs.86.75 crores (31 March 2016: Rs.86.73 crores; 1 April 2015: nil) are secured against first and exclusive registered mortgage charge on immovable properties belonging to a body corporate. These loans are further fully secured by personal guarantees of promoter directors and their certain relatives and corporate guarantees of the said body corporate.

(iii) Liability component of compulsorily convertible preference shares (‘CCPS’) represents the mandatory payments required under the terms of the CCPS, discounted at the effective interest rate. Mandatory dividend is payable at the rate of 13% per annum. Such dividend is payable on 30 September for the preceding financial year.

(iv) Liability component of compulsorily convertible debentures (‘CCD’) represents the mandatory payments required under the terms of the CCD, discounted at the effective interest rate. Interest is payable on CCD at the rate of 13% per annum (16.25% per annum inclusive of tax deducted at source). The interest payments commenced from 04 July 2016 and are payable every quarter thereafter till conversion date of the CCD.

Note 5: Current Financial Liabilities - Borrowings

(i) Cash credit facilities, packing credit facilities, post shipment credit facilities, demand loans and commercial papers are secured against first pari passu charge on current assets, fixed assets and fixed deposits of the Company. These loans are further fully secured by personal guarantees of promoter directors and their relatives and corporate guarantees and collateral securities of other companies.

The Company has three factory units which are located in Special Economic Zone, namely, unit I, unit II and unit III. Unit III is fully exempt from income tax till 31 March 2021. Remaining units, i.e., unit I and unit II are partly exempted till 31 March 2022 and 31 March 2025 respectively under the provisions of Section 10AA of the Income-tax Act, 1961.

The Company’s manufacturing unit located in Dehradun is eligible for the deduction of 100% of the profits and gains of the unit for the first 5 consecutive years and 30% for the next 5 consecutive years under Section 80 IC of the Income - tax Act, 1961 till 31 March 2019.

These assumptions were developed by the management with the assistance of independent actuarial appraisers. Discount factors are determined close to each year end by reference to government bonds of relevant economic markets and that have terms to maturity approximating to the terms of the related obligation. Other assumptions are based on management’s historical experience.

Sensitivity analysis

The significant actuarial assumptions for the determination of the defined benefit obligation are the discount rate, the salary growth rate and the average life expectancy. The calculation of the net defined benefit liability is sensitive to these assumptions. The following table summarises the effects of changes in these actuarial assumptions on the defined benefit liability at 31 March 2017.

The present value of the defined benefit obligation calculated with the same method (projected unit credit) as the defined benefit obligation recognised in the balance sheet. The sensitivity analysis is based on a change in one assumption while not changing all other assumptions. This analysis may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in the assumptions would occur in isolation of one another since some of the assumptions may be co-related.

Based on historical data, the Company expects contributions of Rs.2.13 crores in the next 12 months.

The weighted average duration of the defined benefit obligation at 31 March 2017 is 15 years (31 March 2016: 13 years).

Compensated absences

The leave obligations cover the Company’s liability for sick and earned leaves. The Company does not have an unconditional right to defer settlement for the obligation shown as current provision balance above. However, based on past experience, the Company does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months, therefore, based on the independent actuarial report, only a certain amount of provision has been presented as current and balance as non-current.

Defined contribution plans

The Company has certain defined contribution plans. Contributions are made to provident fund in India for employees at the rate of 12% of basic salary as per regulations. The contributions are made to registered provident fund administered by the Government. The obligation of the Company is limited to the amount contributed and it has no further contractual or any constructive obligation. The expense recognised during the period towards defined contribution plan is Rs.2.96 crores (31 March 2016 Rs.2.63 crores).

Note 6: Employee Stock Option Plan

PC Jeweller Limited Employee Stock Option Plan 2011

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 Nomination and Remuneration Committee constituted by the Company under the policy and framework laid down by the Company and/ or the Board of Directors of the Company, in accordance with the authority delegated to the Nomination and Remuneration 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 the Board of Directors in this regard. The issuance of the shares will be under the guidance, advice and directions of the Nomination and Remuneration Committee.

The Company has granted 726,300 stock options to the eligible employees of the Company on 14 May 2015. Each stock option entitles the grantee thereof to apply for and be allotted one equity share of the Company upon vesting. Vesting of the options shall take place over a period of 4 years with a minimum vesting period of 1 year from the grant date.

(a) The vesting schedule is set forth as follows:

The options granted shall vest so long as the employee continues to be in employment with the Company, i.e., the options will lapse if the employment is terminated prior to vesting. Even after the options are vested, un-exercised options may be forfeited if the services of the employee are terminated for reasons specified in the Plan.

(b) Set out below is a summary of options granted under the Plan:

*No options have lapsed or forfeited during the period covered in the table above.

(c) Exercise price and expiry dates of share options outstanding at the end of the year:

(d) The fair value of the options granted has been calculated on the date of grant using Black Scholes option pricing model with the following assumptions:

The volatility used in the Black Scholes Option Pricing Model is the annualized standard deviation of the continuously compounded rate of return of the stock over a period of time. Informal tests and preliminary research tends to confirm that estimates of the expected long-term future volatility should be based on historical volatility for a period that approximates the expected life of the options being valued. The Company was listed on BSE & NSE stock exchanges on 27 December 2012. The volatility is determined by taking into account the period since the listing of the Company.

Note 7: Related party transactions:

In accordance with the requirement of Indian Accounting Standard (Ind AS) 24 “Related Party Disclosures”, name of the related parties, related party relationships, transactions and outstanding balances including commitments where control exist and with whom transactions have taken place during the reported period are as follows:

Note 8: Hedging activity and derivatives

The Company enters into foreign currency forward contracts to hedge against the foreign currency risk relating to payment of foreign currency payables. The Company does not apply hedge accounting on such relationships. Further, the Company does not enter into any derivative transactions for speculative purposes.

Fair value hedge of gold price risk in inventory

The Company enters into contracts to purchase gold wherein the Company has the option to fix the purchase price based on market price of gold during a stipulated time period. The prices are linked to gold prices. Accordingly, these contracts are considered to have an embedded derivative that is required to be separated. Such feature is kept to hedge against exposure in the value of inventory of gold due to volatility in gold prices. The Company designates the embedded derivative in the payable for such purchases as the hedging instrument in fair value hedging of inventory. The Company designates only the spot-to-spot movement of the gold inventory as the hedged risk. The carrying value of inventory is accordingly adjusted for the effective portion of change in fair value of hedging instrument. There is no ineffectiveness in the relationships designated by the Company for hedge accounting.

Disclosure of effects of fair value hedge accounting on financial position:

Hedged item - Changes in fair value of inventory attributable to change in gold prices

Hedging instrument - Changes in fair value of the option to fix prices of gold purchases, as described above

Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging instrument. The Company enters into hedge relationships where the critical terms of the hedging instrument match exactly with the terms of the hedged item, and so a qualitative assessment of effectiveness is performed. If changes in circumstances affect the terms of the hedged item such that the critical terms no longer match exactly with the critical terms of the hedging instrument, the Company uses the hypothetical derivative method to assess effectiveness. There was no hedge ineffectiveness in any of the periods presented above.

Note 9: Financial instruments i) Fair values hierarchy

Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates.

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

(ii) Valuation process and technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

(a) The use of quoted market prices for investments in mutual funds.

(b) Use of market available inputs such as gold prices and foreign exchange rates for option to fix prices of gold in purchase contracts and foreign currency forward contracts.

Note 10: Financial risk management

i) Financial instruments by category

* Trade payables include value of the option to fix prices on gold purchases (embedded derivative) that is carried at fair value through P&L. The value of such embedded derivative which is financial asset of Rs.8.43 crores as at 31 March 2017 (31 March 2016: Rs.2.00 crores; 1 April 2015: Rs.2.63 crores) is offset against the value of the trade payables (as discussed further below).

(a) The carrying value of trade receivables, securities deposits, insurance claim receivable, loans given, cash and bank balances and other financial assets recorded at amortised cost, is considered to be a reasonable approximation of fair value.

(b) The carrying value of borrowings, trade payables and other financial liabilities recorded at amortised cost is considered to be a reasonable approximation of fair value.

The following table presents the option to fix prices on gold purchases that are offset with trade payables, as at 31 March 2017, 31 March 2016 and 1 April 2015.

Option to fix prices on gold purchases is an embedded derivative that will be settled together with the trade payables. Accordingly, such amounts are offset but are shown separately in the table above.

ii) Risk management

The Company’s activities expose it to market risk, liquidity risk and credit risk. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements:

The Company’s risk management is carried out by a central treasury department of the Company under policies approved by the Board of Directors. The Board of Directors provide written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, market risk, credit risk and investment of excess liquidity.

A) Credit risk

Credit risk is the risk that a customer or counterparty to a financial instrument will fail to perform or pay amounts due to the Company causing financial loss. It arises from cash and cash equivalents, deposits with banks and financial institutions, security deposits, loans given and principally from credit exposures to customers relating to outstanding receivables. The Company’s maximum exposure to credit risk is limited to the carrying amount of financial assets recognised at reporting date.

The Company continuously monitors defaults of customers and other counterparties, identified either individually or by the Company, and incorporates this information into its credit risk controls. Where available at reasonable cost, external credit ratings and/or reports on customers and other counterparties are obtained and used. The Company’s policy is to deal only with creditworthy counterparties.

In respect of trade and other receivables, the Company is not exposed to any significant credit risk exposure to any single counterparty or any company of counterparties having similar characteristics. Trade receivables consist of a large number of customers in various geographical areas. The Company has very limited history of customer default, and considers the credit quality of trade receivables that are not past due or impaired to be good.

The credit risk for cash and cash equivalents, mutual funds, bank deposits, loans and derivative financial instruments is considered negligible, since the counterparties are reputable organisations with high quality external credit ratings.

Company provides for expected credit losses on financial assets by assessing individual financial instruments for expectation of any credit losses. Since the assets have very low credit risk, and are for varied natures and purpose, there is no trend that the company can draws to apply consistently to entire population. For such financial assets, the Company’s policy is to provides for 12 month expected credit losses upon initial recognition and provides for lifetime expected credit losses upon significant increase in credit risk. The Company does not have any expected loss based impairment recognised on such assets considering their low credit risk nature, though incurred loss provisions are disclosed under each sub-category of such financial assets.

B) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the business, the Company maintains flexibility in funding by maintaining availability under committed facilities.

Management monitors rolling forecasts of the Company’s liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates. In addition, the Company’s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

Contractual maturities of financial liabilities

The tables below analyse the Company’s financial liabilities into relevant maturity groupings based on their contractual maturities for all non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying amounts as the impact of discounting is not significant.

C) Market risk - foreign exchange

The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to US Dollar. Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the Company’s functional currency. The Company, as per its overall strategy, uses forward contracts to mitigate its risks associated with fluctuations in foreign currency, and such contracts are not designated as hedges under Ind AS 109. The Company does not use forward contracts and swaps for speculative purposes.

Sensitivity

The sensitivity to profit or loss from changes in the exchange rates arises mainly from financial instruments denominated in USD. In case of a reasonably possible change in INR/USD exchange rates of /- 4% (previous year /-5%) at the reporting date, keeping all other variables constant, there would have been an impact on profits of Rs.28.03 crores (previous year Rs.61.48 crores).

D) interest rate risk

i) Liabilities

The Company’s policy is to minimise interest rate cash flow risk exposures on long-term financing. At 31 March 2017, the Company is exposed to changes in market interest rates through bank borrowings at variable interest rates.

Interest rate risk exposure

Below is the overall exposure of the Company to interest rate risk:

Sensitivity

The sensitivity to profit or loss in case of a reasonably possible change in interest rates of /- 50 basis points (previous year: /- 50 basis points), keeping all other variables constant, would have resulted in an impact on profits by Rs.1.24 crores (previous year Rs.2.41 crores).

ii) Assets

The Company’s financial assets are carried at amortised cost and are at fixed rate only. They are, therefore, not subject to interest rate risk since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

E) Price risk

Exposure from investments in mutual funds:

The Company’s exposure to price risk arises from investments in mutual funds held by the Company and classified in the balance sheet as fair value through profit or loss. To manage its price risk arising from investments in mutual funds, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company.

Sensitivity:

The sensitivity to profit or loss in case of an increase in price of the instrument by 5% keeping all other variables constant would have resulted in an impact on profits by Rs.0.31 crores (previous year Rs.0.26 crores).

Exposure from trade payables:

The Company’s exposure to price risk also arises from trade payables of the Company that are at unfixed prices, and, therefore, payment is sensitive to changes in gold prices. The option to fix gold prices are classified in the balance sheet as fair value through profit or loss. The option to fix gold prices are at unfixed prices to hedge against potential losses in value of inventory of gold held by the Company.

The Company applies fair value hedge for the gold purchased whose price is to be fixed in future. Therefore, there will no impact of the fluctuation in the price of the gold on the Company’s profit for the period.

Note 11: Capital management

The Company’ s capital management objectives are:

- to ensure the Company’s ability to continue as a going concern

- to provide an adequate return to shareholders

The Company monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented on the face of balance sheet.

The Management assesses the Company’s capital requirements in order to maintain an efficient overall financing structure while avoiding excessive leverage. This takes into account the subordination levels of the Company’s various classes of debt. The Company manages the capital structure and makes adjustments to it in the light of changes in the economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

Note 12: First time adoption of ind AS

These standalone financial statements, for the year ended 31 March 2017, are the first financial statements prepared by the Company in accordance with Ind AS. For periods up to and including the year ended 31 March 2016, the Company prepared its standalone financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (‘Indian GAAP’ or ‘Previous GAAP’).

Accordingly, the Company has prepared standalone financial statements which comply with Ind AS applicable for periods ending on 31 March 2017, together with the comparative period data as at and for the year ended 31 March 2016, as described in the summary of significant accounting policies. In preparing these standalone financial statements, the Company’s opening Ind AS balance sheet was prepared as at 1 April 2015, the Company’s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Previous GAAP standalone financial statements, including the balance sheet as at 1 April 2015 and the standalone financial statements as at and for the year ended 31 March 2016.

The Company has applied Ind AS 101 in preparing these first standalone financial statements. The effect of transition to Ind AS on equity, total comprehensive income and reported cash flows are presented in this section and are further explained in the notes accompanying the tables.

A. Exemptions and exceptions availed

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from Previous GAAP to Ind AS.

A.1 ind AS optional exemptions:

A1.1 Deemed cost for property, plant and equipment

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the Previous GAAP and use that as its deemed cost as at the date of transition. Accordingly, the Company has elected to measure all of its property, plant and equipment at their Previous GAAP carrying value.

A.2 ind AS mandatory exceptions: A2.1 Estimates

An entity’s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with Previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Ind AS estimates as at 1 April 2015 are consistent with the estimates as at the same date made in conformity with Previous GAAP.

A2.2 Classification and measurement of financial assets

The classification and measurement of financial assets will be made considering whether the conditions as per Ind AS 109 are met based on facts and circumstances existing at the date of transition.

Financial assets can be measured using effective interest method by assessing its contractual cash flow characteristics only on the basis of facts and circumstances existing at the date of transition and if it is impracticable to assess elements of modified time value of money, i.e., the use of effective interest method, fair value of financial asset at the date of transition shall be the new carrying amount of that asset. The measurement exemption applies for financial liabilities as well.

Applying a requirement is impracticable when the entity cannot apply it after making every reasonable effort to do so. It is impracticable to apply the changes retrospectively if:

a) The effects of the retrospective application are not determinable;

b) The retrospective application requires assumptions about what management’s intent would have been in that period;

c) The retrospective application requires significant estimates of amounts and it is impossible to distinguish objectively information about those estimates that existed at that time.

A2.3 De-recognition of financial assets and liabilities

Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the derecognition requirements in Ind AS 109 retrospectively from a date of the entity’s choice, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions.

The Company has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.

B. Reconciliation between Previous GAAP and ind AS

Ind AS 101, First time adoption of Indian Accounting Standards, requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.

B.1 Effect of ind AS adoption on the balance sheet as at 1 April 2015

B.5 There is no impact of Ind AS adoption on the statements of cash flows for the year ended 31 March 2016.

Note-1 Proposed dividend

Under Previous GAAP, proposed dividend is recognised as liability in the period to which they relate irrespective of the approval of shareholders.

Under Ind AS, proposed dividend is recognised as liability in the period in which it is declared (approval of shareholders in general meeting) or paid.

Note - 2 Measurement of rental expense

Under Previous GAAP, any escalation in operating lease rentals were straight-lined over the lease term.

Under Ind AS, operating lease rentals are not straight lined over the lease term if the payments to the lessor are structured to increase in line with expected general inflation. Further, under Ind AS, rental expense is also attributed to operating lease incentives, like rent free period.

Note - 3 Option to fix prices of gold purchases

Under Previous GAAP, in respect of purchase of goods at prices that are yet to be fixed at the period end, adjustments to the provisional amounts invoiced by the vendor were recognised in the cost of inventory based on the closing gold rate. Further, in respect of purchase of goods whose prices are fixed at forward rates, cost of inventory was measured at such forward rates.

Under Ind AS, in respect of purchase of goods at prices that are fixed subsequent to the date of purchase, the Company has applied hedge accounting wherein the option to fix prices is designated as a hedging instrument and change in fair value of inventory attributable to change in prices between the date of purchase and the date of fixing prices or reporting date (as applicable) is designated as hedged item.

The hedging relationship is considered a fair value hedge. The gain or loss on the hedging instrument is recognised in statement of profit and loss and the corresponding gain or loss on the hedged item is adjusted in the carrying amount of the hedged item and recognised in statement of profit and loss.

Under Ind AS, financial liabilities in respect of purchase of goods whose prices are fixed at forward rates, are measured at amortised cost, as explained in note 5 below.

Note - 4 Measurement of financial assets at fair value

Under Previous GAAP, current investments were stated at lower of cost and fair value.

Under Ind AS, these financial assets have been classified as Fair Value Through Profit and Loss (‘FVTPL’) on the date of transition to Ind AS and fair value changes after the date of transition have been recognised in the statement of profit and loss.

Note - 5 Measurement of financial assets and liabilties at amortised cost

Under Previous GAAP, the financial assets and financial liabilities were typically carried at the contractual amount receivable or payable.

Under Ind AS, certain financial assets and financial liabilities are initially recognised at fair value and subsequently measured at amortised cost which involves the application of effective interest method. The effective interest rate is the rate that discounts estimated future cash payments or receipts through the expected life of the financial asset or financial liability to the gross carrying amount of the financial asset or financial liability.

For certain financial assets and financial liabilities, the fair value thereof at the date of transition to Ind AS has been considered as the new amortised cost of that financial asset and financial liability at the date of transition to Ind AS. The application of effective interest method results in adjustment to carrying amount of Loans, Other Financial Assets, Borrowing and Other Financial Liabilities.

Note - 6 Fair valuation of derivatives

Under Previous GAAP, foreign exchange derivatives used for hedging purposes were restated at each balance sheet date and the premium was amortised over the term of the forward contract.

Under Ind AS, all derivatives are measured at FVTPL and mark-to-market gains or losses are recorded in the period when incurred.

Note - 7 Remeasurements of post-employment benefit obligations

Under the Previous GAAP, these remeasurements were forming part of the profit or loss for the year.

Under Ind AS, remeasurements i.e. actuarial gains and losses, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of the statement of profit and loss.

Note - 8 Deferred tax

Under Previous GAAP, deferred tax was accounted as per the income statement approach which required creation of deferred tax asset/ liability on timing differences between taxable income and accounting income. Under Ind AS, deferred tax is accounted as per the Balance Sheet approach which requires creation of deferred tax asset/ liability on temporary differences between the carrying amount of an asset/ liability in the Balance Sheet and its corresponding tax base. The adjustments in equity and net profit, as discussed above, resulted in additional temporary differences on which deferred taxes are calculated.

Note - 9 Business promotion and discount expenditure

On certain sale transactions, if a particular threshold is met, the Company gives a free gift. Under Previous GAAP, revenue is recorded at the total amount received and the cost of the free gift is recognised as an expense.

Under Ind AS, the value of the free gift is adjusted from revenue.

Note 10: Other comprehensive income

Under Ind AS, all items of income and expense recognised in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in the statement of profit and loss but are shown in the statement of profit and loss as ‘other comprehensive income’ includes remeasurements of defined benefit plans. The concept of other comprehensive income did not exist under Previous GAAP.

Note 13: Disclosure on specified bank notes (SBN)

During the year, the Company had specified bank notes or other denomination as defined in the MCA notification G.S.R. 308(E) dated 30 March 2017, on the details of specified bank notes (SBN) held and transacted during the period from 8 November 2016 to 30 December 2016, the denomination wise SBNs and other notes as per the notification is given below:

The Company does not maintain independent records of denomination of currency in its books of accounts.

Note 14: Micro, Small and Medium Enterprises

Information as required to be furnished as per section 22 of the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 for the year ended 31 March 2017 is given below. This information has been determined to the extent such parties have been identified on the basis of information available with the Company.

Note 15: Disclosures in respect of non-cancellable operating leases

The Company leases various offices and retail stores under non-cancellable operating leases with different period. The leases have varying terms, escalation clauses and renewal rights. On renewal, the terms of the leases are renegotiated. Contractual lease expense are summarised as below:

Note 16: Corporate social responsibility

As per Section 135 of the Companies Act, 2013, a company, meeting the eligibility criteria, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The Company’s CSR programs/projects focuses on sectors and issues as mentioned in Schedule VII read with Section 135 of the Act. A CSR committee has been formed by the Company as per the Act. A CSR committee has been examining and evaluating suitable proposals for deployment of funds towards CSR initiatives, however, the committee expects finalisation of such proposals in due course.

a) Gross amount required to be spent by the Company during the year is Rs.10.32 crores (previous year Rs.9.48 crores)

b) Amount spent during the year on CSR (excluding 5% administrative expenses)

Note 17: Segment information

Disclosure for segment information as required by Ind AS 108 ‘Operating Segment’, notified under the Act has been provided in the consolidated financial statements of the Company comprising the Company and its wholly owned subsidiaries.

Note 18: Post reporting date events

No adjusting or significant non-adjusting events have occurred between 31 March 2017 and the date of authorisation of the Company’s standalone financial statements. However, the Board of Directors have recommended a dividend of Rs.1.30 (previous year nil) on preference shares of Rs.10 each for the period 02 Semptember 2016 to 31 March 2017, subject to approval of shareholders at the ensuing Annual General Meeting. Also, the Board of Directors have recommended a final dividend of 10%, i.e., Rs.1 (previous year Rs.3.35) on equity shares of Rs.10 each for the year ended 31 March 2017, subject to approval of shareholders at the ensuing annual general meeting.

Note 19: Authorization of financial statements

The standalone financial statements for the year ended 31 March 2017 (including comparatives) were approved by the Board of Directors on 25 May 2017.

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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.

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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.

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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

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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.