PC Jeweller Limited’s CSR initiatives are impacted due to NPA bank accounts and Covid-19 restrictions. Despite these challenges, the company is confident of meeting its CSR obligations through its resolution process with lenders
NEW DELHI: PC Jeweller Limited, a leading jewelry retailer, has faced challenges in fulfilling its Corporate Social Responsibility (CSR) initiatives due to a combination of several factors. The Company’s bank accounts with its consortium lenders turned Non-Performing Assets (NPA), which has resulted in restrictions on its banking transactions. This restriction, along with the liquidity issues caused by the Covid-19 pandemic and lockdowns, has prevented the Company from spending any amount towards its CSR activities.
The Company had identified projects for promoting education towards its CSR obligation, but due to the above-mentioned constraints, it has not been able to spend any amount towards these initiatives.
The Company’s liquidity position has become very constrained after March 2020, and a cheque for Rs. 6.50 crore issued towards CSR expenditure could not be cleared due to these constraints. As a result, the CSR expenditure for the financial years 2020-21 and 2021-22 remains unspent.
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“FY 2021-22 again remained a difficult one for all of us. The business which had started recovering after the first wave of Covid-19 pandemic once again got disrupted by the second wave and which proved to be as destructive as the first. The Company’s showrooms remained shut for long periods in the first quarter and thereafter their normal functioning remained disrupted due to local restrictions which continued almost till August end. These disruptions affected the operations and the liquidity of the Company.”, said Balram Garg, Managing Director, PC Jeweller Limited in company annual report 2021-22.
Despite these challenges, the Company is committed to fulfilling its CSR obligations. The Company has formed a CSR committee as per the Companies Act and has been examining and evaluating suitable proposals for deployment of funds towards CSR initiatives.
The committee is expected to finalize these proposals in due course. The Company’s CSR programs/projects focus on sectors and issues as mentioned in Schedule VII read with Section 135 of the Act.
In March 2022, the Company submitted a request to the State Bank of India for opening a special current account for unspent CSR funds under the nomenclature of “Unspent Corporate Social Responsibility Account”.
However, no action has been taken by the Bank yet. Despite this, the Company’s resolution process with its Lenders is under active consideration and it is confident of meeting the necessary compliances as per the law post-implementation of the resolution process. The Company is committed to ensuring that its CSR initiatives have a positive impact on the communities it serves.
(India CSR)
