INDEPENDENT AUDITOR'S REPORT

TO THE MEMBERS OF PC JEWELLER LiMiTED

Report on the Audit of the Standalone Financial Statements Qualified

opinion

1. We have audited the accompanying standalone financial
statements of Pc Jeweller limited ('the Company'), which
comprise the Standalone Balance Sheet as at 31 March 2023,
the Standalone Statement of Profit and Loss (including
Other Comprehensive Income), the Standalone Cash Flow
Statement and the Standalone Statement of Changes in
Equity for the year then ended and notes to the financial
statements including a summary of the significant accounting
policies and other explanatory information (hereinafter
referred to as "the standalone financial statements").

2. In our opinion and to the best of our information and
accordingto the explanations given to us, except for the
possible effectsof the matter described in the Basis for
Qualified Opinionsection of our report, the aforesaid
standalone financialstatements give the information required
by the CompaniesAct, 2013 (' the Act') in the manner so
required and give a trueand fair view in conformity with the
Indian Accounting Standards ("Ind AS") prescribed under
section 133 of the Act read with the Companies (Indian
Accounting Standards) Rules, 2015, as amended, and other
accounting principles generally accepted in India, ofthe state
of affairs of the Company as at 31 March 2023 and itsloss
(including other comprehensive income), its cash flowsand
the changes in equity for the year ended on that date.

3. Basis for Qualified opinion

(i) As explained in Note 51 to the accompanying standalone
financial statements, the Company during the financial
year ended 31 March 2019 had provided discounts of
? 513.65 crore to its export customers which had been
adjusted against the revenues for the said year. The
Company had initiated the process of complying with
the requirements of the Master Circular on Exports
of Goods and Services issued by the Reserve Bank of
India and had filed the necessary applications with the
appropriate authority for approval of such discounts,
which is a prerequisite, 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. For the remaining discounts
of ?183.16 crore, in the absence of requisite approvals

and material evidence related to such transactions, we
are unable to comment on the impact, if any, of the same
on the accompanying standalone financial statements.
Auditor's Opinion for the year ended 31 March 2019, 31
March 2020, 31 March 2021 and 31 March 2022 were also
modified in respect of this matter.

(ii) With respect to provision for the expected credit
loss/impairment relating to overdue overseas Trade
Receivables as required under Ind-AS 109, the
management has calculated an additional provision
of ? 11.96 crores during the year in respect of these
overdue receivables. However, no realization has been
made during the year against overdue trade receivables
towards export of goods aggregating to ? 1707.27 crores
(including unrealized foreign currency exchange gain
of ? 239.74 crores) as on 31 March 2023 out of which ?
1355.56 crores (including unrealized foreign currency
exchange gain of ? 197.04 crores) is outstanding from
more than 3 years. Also no export transactions have
been done with these overseas debtors during the
year. Further, as informed to us, legal notices have been
served to the overseas debtors and the company is in
process of finalizing legal counsel for initiating legal
proceedings. Upto 31 March 2023, the company has
made an ECL provision of only ? 262.59 crore based on
revised payment schedule as provided by the overseas
debtors.

Despite of no realization as per the scheduled expected
dates from the export receivables and considering the
initiation of legal route for recovery during the year, we
are unable to examine adequacy of the provision for
expected credit losses and its consequential impact and
adjustments on the accompanying standalone financial
statements.

(iii) As explained in Note 50 to the accompanying standalone
financial statements, due to rejection of the resolution
plan by the Lenders, the Lead Bank has initiated the
recovery proceedings through Debt Recovery Tribunal
(DRT) and obtained an order to seize, take control and
prepare an inventory of entire stocks of hypothecated
assets to the lenders. In response, the company has
moved to the Debts Recovery Appellate Tribunal (DRAT)
against the order of the DRT, and the matter is sub-judice.
Meanwhile some of the other consortium members have
also filed their recovery suit in DRT against the company.

According to the Order of DRT and DRAT, the appointed
agencies along with valuers have started necessary
implementation of the Order including inventorization
and valuation of inventory at some locations of the
company. Since, those locations were carrying major
inventory and were under process of inventorization
and valuation as per the order of DRT/DRAT as on
31 March 2023, the physical verification/inspection/
valuation of the inventory could not be conducted
by the management at these locations. This, being a
significant event, may have an adverse impact on the
Goodwill and the Brand image of the company which
may affect the Net Realisable Value of the Inventory.
Further, significant quantum of inventory was lying with
Third Parties (Karigars/Job-Workers) which could not be
physically verified/inspected by independent agency/
lenders. Such inventory lying with third parties is not
adequately insured.

Further, no valuation reports by the independent
Gemologist/valuer were made available to us for the
inventory as shown in accompanying standalone
financial statements.

In view of the above, we are unable to examine
and express an opinion on inventory value and
its consequential impact and adjustments on the
accompanying standalone financial statements.

4. We conducted our audit in accordance with the Standards
on Auditing ('SAs') specified under section 143(10) of the
Act. Our responsibilities under those standards are further
described in the Auditor's Responsibilities for the Audit of
the standalone financial statements section of our report.
We are independent of the Company in accordance with
the Code of Ethics issued by the Institute of Chartered
Accountants of India ('the ICAI') together with the ethical
requirements that are relevant to our audit of the standalone
financial statements under the provisions of the Act and the
Rules thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and
the ICAI's Code of Ethics. We believe that the audit evidence
obtained by us, is sufficient and appropriate to provide a
basis for our qualified opinion.

Material Uncertainty related to Going Concern

5. Rejection of proposed resolution plan in relation to
company's borrowing exposure, Order of DRT for initiation
of full recovery proceedings on application of lead bank (SBI)
and issuance of recall notices by the lenders, as explained
in Note 50 to the accompanying standalone financial

statements, indicates that a material uncertainty exists that
may cast significant doubt on the ability of the company to
continue as a going concern.

Our opinion is not modified in respect of this matter.

Emphasis of Matters

6. We draw attention to:

(i) Note 52 to the accompanying standalone financial
statements regarding the delays in receipt of proceeds
denominated in foreign currency against export of
goods made by the company to its overseas customers
aggregating to ? 1707.27 crores as on 31 March 2023,
beyond the timelines stipulated under the Foreign
Exchange Management Act, 1999. The management of
the company has filed the necessary applications with
the appropriate authority for condonation of such delays
to regularize the default. Pending condonation of such
delay by the appropriate authority, management is of
the view that the possible penalties that may be levied,
are currently unascertainable but would not be material
and accordingly, no consequential adjustments have
been made to the accompanying standalone financial
statements with respect to such delay/default.

(ii) Note 53 to the accompanying standalone financial
statements regarding impairment assessment of
company's total exposure in its subsidiaries. The
management of the company has carried out the
impairment assessment using the 'Discounted Cash Flow
Valuation Model', which is complex and involves the use
of significant management estimates and assumptions
that are dependent on expected future market and
economic conditions and accordingly recognized
additional provision for impairment amounting to ?
104.15 crores in respect of exposure in PC Universal
Private Limited in the standalone financial statements of
the company.

Our opinion is not modified in respect of the above
matters.

Key Audit Matters

7. Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the
standalone financial statements of the current period. These
matters were addressed in the context of our audit of the
standalone financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate
opinion on these matters.

Except for the matters described in the Basis for Qualified
Opinion section and material uncertainty related to the
going concern section, we have determined that there are no
other key audit matters to be communicated in our report.

information other than the Standalone Financial Statements

and Auditor's Report thereon

8. The Company's Management and Board of Directors are
responsible for the preparation of other information. The
other information comprises the information included in
the Company's annual report, but does not include the
standalone financial statements and our auditor's report
thereon. The annual report is to be made available to us after
the date of the auditor's report.

Our opinion on the standalone financial statements does not
cover the other information and we do not express any form
of assurance thereon.

In connection with our audit of the standalone financial
statements, our responsibility is to read the other information
identified above when it becomes available and, in doing
so, consider whether the other information is materially
inconsistent with the standalone financial statements or our
knowledge obtained during the course of audit, or otherwise
appears to be materially misstated.

When we read the other information identified above, if we
conclude thatthere is a material misstatement therein, weare
required to communicate the matter to those charged with
governance and take necessary actions as per applicable
laws and regulations.

Responsibilities of Management and those Charged with

Governance for the Standalone financial Statements

9. The accompanying standalone financial statements havebeen
approved by the Company's Board of Directors.The Company's
Board of Directors is responsible for thematters stated in
section 134(5) of the Act with respect tothe preparation of
these standalone financial statementsthat give a true and fair
view of the financial position,financial performance including
other comprehensiveincome, changes in equity and cash
flows of the Companyin accordance with the accounting
principles generallyaccepted in India, including the Ind AS
specified undersection 133 of the Act. This responsibility also
includes maintenance of adequate accounting records in
accordancewith the provisions of the Act for safeguarding of
the assetsof the Company and for preventing and detecting
frauds andother irregularities; selection and application of
appropriateaccounting policies; making judgments and
estimates thatare reasonable and prudent; and design,

implementationand maintenance of adequate internal
financial controls,that were operating effectively for ensuring
the accuracyand completeness of the accounting records,
relevant to thepreparation and presentation of the financial
statementsthat give a true and fair view and are free from
materialmisstatement, whether due to fraud or error.

10. In preparing the standalone financial statements,
management is responsible for assessing the company's
ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the
going concern basis of accounting unless management either
intends to liquidate the company or to cease operations, or
has no realistic alternative but to do so.

11. The Board of Directors are also responsible for overseeing the
company's financial reporting process.

auditor's Responsibilities for the audit of the Standalonefinancial Statements

12. Our objectives are to obtain reasonable assurance about
whether the standalone financial statements as a whole
are free from material misstatement, whether due to fraud
or error, and to issue an auditor's report that includes our
opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance
with SAs will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of these standalone
financial statements.

13. As part of an audit in accordance with SAs, we exercise
professional judgment and maintain professional skepticism
throughout the audit. We also:

• Identify and assess the risks of material misstatement
of the standalone financial statements, whether due
to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or
the override of internal control.

• Obtain an understanding of internal financial controls
relevant to the audit in order to design audit procedures
that are appropriate in the circumstances. Under
section 143(3)(i) of the Act, we are also responsible for

expressing our opinion on whether the company has
adequate internal financial controls with reference
to standalone financial statements in place and the
operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates
and related disclosures made by Management.

• Conclude on the appropriateness of Management's use
of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that
may cast significant doubt on the company's ability
to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw
attention in our auditor's report to the related disclosures
in the standalone financial statements or, if such
disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained
up to the date of our auditor's report. However, future
events or conditions may cause the company to cease to
continue as a going concern.

• Evaluate the overall presentation, structure and content
of the standalone financial statements, including the
disclosures, and whether the standalone financial
statements represent the underlying transactions and
events in a manner that achieves fair presentation.

14. We communicate with those charged with governance
regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including
any significant deficiencies in internal control that we identify
during our audit.

15. We also provide those charged with governance with a
statement that we have complied with relevant ethical
requirements regarding independence, and to communicate
with them all relationships and other matters that may
reasonably be thought to bear on our independence, and
where applicable, related safeguards.

16. From the matters communicated with those charged with
governance, we determine those matters that were of
most significance in the audit of the standalone financial
statements of the current period and are therefore the key
audit matters. We describe these matters in our auditor's
report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated
in our report because the adverse consequences of doing

so would reasonably be expected to outweigh the public
interest benefits of such communication.

Other Matter

17. Advance recoverable from Staff amounting to ? 2.12
crore (including ? 1.13 crore pertaining to Key Managerial
Personnel) has been written off during the year after taking
approvals from the board of directors as well as Audit
Committee.

18. As mentioned in the order of the DRAT, a special audit
has been ordered by bankers to audit the exchange sales
transactions without payment of cash/ transfer of money,
and to submit weekly details of Exchange Sales to Agency for
Specialized Monitoring (ASM) appointed by lenders for his
verification. As per the information furnished to us, including
the reports of ASM, the company has recorded exchange
sales of ? 1795.70 crore approx. (including GST) out of total
sales of ? 2424.32 crore (including GST) for the year ended 31
March 2023.

Our opinion is not modified in respect of the above matters.

Report on Other Legal and Regulatory Requirements

19. As required by section 197(16) of the Act, based on our
audit and to the best of our information and according to
the explanations given to us, we report that the Company
has paid remuneration to its directors during the year in
accordance with the provisions of and limit prescribed under
Schedule V of the Act.

20. As required by the Companies (Auditor's Report) Order, 2020
("the Order"), issued by the Central Government of India in
terms of sub-section (11) of section 143 of the Act, we give
in the "Annexure A" a statement on the matters specified in
paragraphs 3 and 4 of the Order, to the extent applicable.

21. As required by Section 143(3) of the Act, we report that:

(a) we have sought and except for the matter described in
the Basis for Qualified Opinion section, obtained all the
information and explanations which to the best of our
knowledge and belief were necessary for the purpose
of our audit of the accompanying standalone financial
statements;

(b) except for the possible effects of the matter described
in the Basis for Qualified Opinion section, in our opinion,
proper books of account as required by law have been
kept by the Company so far as it appears from our
examination of those books;

(c) the standalone financial statements dealt with by this
report are in agreement with the books of accounts;

(d) except for the possible effects of the matter described
in the Basis for Qualified Opinion section, in our opinion,
the aforesaid standalone financial statements comply
with Ind AS specified under section 133 of the Act;

(e) on the basis of the written representations received
from the directors and taken on record by the Board of
Directors, none of the directors is disqualified as on 31
March 2023 from being appointed as a director in terms
of section 164(2) of the Act;

(f) the qualifications relating to the maintenance of
accounts and other matters connected therewith are as
stated in the Basis for Qualified Opinion section;

(g) we have also audited the internal financial controls
with reference to financial statements of the Company
as on 31 March 2023 in conjunction with our audit of
the standalone financial statements of the Company
for the year ended on that date and our report as per
"Annexure B" expressed unmodified opinion; and

(h) with respect to the other matters to be included
in the Auditor's Report in accordance with Rule 11
of the Companies (Audit and Auditors) Rules, 2014
(as amended), in our opinion and to the best of our
information and according to the explanations given to
us:

i. The company, as detailed in Note 44 to the
standalone financials statements, has disclosed
the impact of pending litigations on its financial
position as at 31 March 2023;

ii. The Company did not have any long-term contracts
including derivative contracts for which there were
any material foreseeable losses as at 31 March 2023.

iii. There has been no delay in transferring amounts,
required to be transferred, to the Investor Education
and Protection Fund by the company during the
year ended 31 March 2023.

iv. (a) The Management has represented that, to the

best of its knowledge and belief, no funds have
been advanced or loaned or invested (either
from borrowed funds or share premium or any
other sources or kind of funds) by the company
to or in any other person or entity, including
foreign entities ("Intermediaries"), with the
understanding, whether recorded in writing or
otherwise, that the Intermediary shall:

• 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")

• provide any guarantee, security or the like on
behalf of the Ultimate Beneficiaries;

(b) The management has represented, that, to
the best of it's knowledge and belief, no funds
have been received by the company from any
persons or entities, including foreign entities
("Funding Parties"), with the understanding,
whether recorded in writing or otherwise, that
the company shall:

• 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")

• provide any guarantee, security or the like on
behalf of the Ultimate Beneficiaries; and

(c) Based on the audit procedures that have been
considered reasonable and appropriate in
the circumstances, nothing has come to our
notice that has caused us to believe that the
representations under sub-clause (i) and (ii) of
Rule 11(e), as provided under (a) and (b) above,
contain any material mis-statement.

v. No dividend has been declared or paid during the
year by the company.

vi. Since applicability of maintenance of audit trail in
accounting software has been deferred to 1 April
2023, reporting under Rule 11(g) of Companies
(Audit and Auditors) Rules, 2014 is not applicable
for the financial year ended 31 March 2023.

For Arun K Agarwal & Associates

Chartered Accountants

(Firm's Registration No. 003917N)

Sd/-

Arun Kumar Agarwal

(Partner)

M. No. 082899

UDIN: 23082899BGXXGO6293

Place: New Delhi

Date: 30.05.2023