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Transcript of 12 Reliance Dairy Foods Limited
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RELIANCE DAIRY FOODS LIMITED
Annual Report2009 - 2010
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1Reliance Dairy Foods Limited
Directors Report
Dear Members,Your Directors are pleased to present the Fourth Annual Report
and the Audited Accounts for the year ended March 31, 2010.
Financial Results:
The performance of the Company for the financial year ended
March 31, 2010 is summarized below:
(Rupees in Lakh)
2009-2010 2008-2009
Profit/(Loss) before (386.31) (434.47)
Depreciation, Interest & Tax
Less: Interest 3.36 0.62
Depreciation 228.66 181.71
Profit/(Loss) before Tax (618.33) (616.80)
Less: Provision for Taxation
Fringe Benefit Tax - 10.14
Deferred Tax (203.04) (176.89)
Profit/(Loss) after Tax (415.29) (450.05)
Add: Balance brought
forward from previous year (763.39) (313.34)
Balance carried to (1,178.68) (763.39)
Balance Sheet
Operational Review:
The Company strengthened its presence in the milk retailing
business by launching Dairy Pure brand that are sold through
general milk retailers alongwith Reliance Fresh stores. The
Company presently operates in Andhra Pradesh, Haryana,
Tamil Nadu, Maharashtra, Delhi, Punjab, and Rajasthan and
is confident to further grow with the extension of product
portfolio.
The Company has incurred a loss of Rs. 415.29 Lakh for the
financial year ended March 31, 2010. With the optimisation
of resources and further scaling up of operations, the Company
is confident of posting better results in the future.
Dividend:
Your Directors have not recommended any dividend on Equity
Shares for the year under review.
Directors:
Pursuant to the provisions of Section 260 of the Companies
Act, 1956 and the Articles of Association, Shri Pankaj Pawar
was appointed as an Additional Director on the Board with
effect from March 31, 2010. He shall hold office upto the date
of the ensuing Annual General Meeting. The Company hasreceived a notice under Section 257 of the Companies Act, 1956
from a member proposing the candidature of Shri Pankaj Pawar
for the office of Director, liable to retire by rotation.
Shri Gunender Kapur resigned from the office of Director of
the Company with effect from March 31, 2010. The Board
wishes to place on record the valuable contribution made by
him during his tenure as Director of the Company.
Shri C.R. Srinath retires by rotation and being eligible, offers
himself for reappointment at the ensuing Annual General
Meeting.
Directors Responsibility Statement:
Pursuant to the requirement under Section 217(2AA) of the
Companies Act, 1956 with respect to Directors ResponsibilityStatement, it is hereby confirmed that:
(i) in the preparation of the accounts for the year ended
March 31, 2010, the applicable Accounting Standards have
been followed and there are no material departures from
the same;
(ii) the Directors have selected such accounting policies and
applied them consistently and made judgments and
estimates that are reasonable and prudent so as to give a
true and fair view of the state of affairs of the Company
at the end of the financial year and of the loss of the
Company for the year under review;
(iii) the Directors have taken proper and sufficient care for
the maintenance of adequate accounting records in
accordance with the provisions of the Companies Act,
1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
(iv) the Directors have prepared the accounts for the year
ended March 31, 2010 on a going concern basis.
Auditors:
During the year, Messrs S.R. Batliboi & Co., Chartered
Accountants, resigned as joint statutory auditors of the
Company. Messrs Chaturvedi & Shah, Chartered Accountants,
continue as statutory auditor of the company.
Messrs Chaturvedi & Shah, Chartered Accountants, Mumbai
hold office until the conclusion of the ensuing Annual General
Meeting of the Company and are eligible for re appointment.
The Company has received letter from them to the effect that
their re-appointment, if made, would be within the prescribed
limits under Section 224(1B) of the Companies Act, 1956 and
that they are not disqualified for such re-appointment within
the meaning of Section 226 of the Companies Act, 1956.
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2 Reliance Dairy Foods Limited
Particulars of Employees:As required under the provisions of Section 217(2A) of the
Companies Act, 1956, read with the Companies (Particulars
of Employees) Rules, 1975, as amended, the names and other
particulars of the employees are set out in the Annexure 1 to
this Report.
Conservation of Energy, Technology Absorption and
Foreign Exchange Earnings and Outgo:
The particulars relating to conservation of energy, technology
absorption and foreign exchange earnings and outgo, required
to be furnished pursuant to Section 217(1)(e) of the Companies
Act, 1956, read with Companies (Disclosures of Particulars
in the Report of Board of Directors) Rules, 1988, are as under:
i. Part A and B of the Rules, pertaining to conservation ofenergy and technology absorption, are not applicable to
the Company.
ii. Foreign Exchange Earnings and Outgo:
Foreign Exchange Earned - Nil
Foreign Exchange Used - Rs. 189.18 Lakhs
Acknowledgement:
Your Directors would like to express their grateful appreciation
for assistance and cooperation received from Holding Company,
Customers, Suppliers, Banks, Government Authorities and
Employees during the year under review.
For and on behalf of the Board of Directors
Pankaj Pawar CR Srinath
Director Director
Place: Mumbai
Date: April 22, 2010
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Auditors Report
To the Members ofRELIANCE DAIRY FOODS LIMITED
We have audited the attached Balance Sheet of RELIANCE
DAIRY FOODS LIMITED as at March 31, 2010, the Profit
and Loss Account and also the Cash Flow Statement for the
year ended on that date. These financial statements are the
responsibility of the Companys management. Our
responsibility is to express an opinion on these financial
statements based on our audit.
1. We have conducted our audit in accordance with the
Auditing Standards generally accepted in India. Those
standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial
statements are free of material misstatement. An auditincludes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles
used and significant estimates made by the management,
as well as evaluating the overall financial statement
presentation. We believe that our audit provides a
reasonable basis for our opinion.
2. As required by the Companies (Auditors Report) Order
2003 (as amended) issued by the Central Government of
India in terms of sub-section (4A) of section 227 of the
Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5
of the said Order.
3. Further to our comments in the Annexure referred to
above, we report that:
a) We have obtained all the information and
explanations, which to the best of our knowledge and
belief were necessary for the purposes of our audit;
b) In our opinion, proper books of account as required
by law have been kept by the Company so far as
appears from our examination of those books;
c) The Balance Sheet, the Profit and Loss Account and
Cash Flow Statement dealt with by this report are
in agreement with the books of account;
d) In our opinion, the Balance Sheet, Profit and Loss
Account and Cash Flow statement dealt with by this
report comply with the mandatory Accounting
Standards referred to in sub-section (3C) of section
211 of the Companies Act, 1956;
e) On the basis of written representations received fromthe Directors as on March 31, 2010 and taken on
record by the Board of Directors, we report that
none of the Directors is disqualified as on March 31,
2010 from being appointed as a director in terms of
clause (g) of sub-section (1) of section 274 of the
Companies Act, 1956;
f) In our opinion and to the best of our information
and according to the explanations given to us, the
said accounts give the information required by the
Companies Act, 1956, in the manner so required, and
present a true and fair view in conformity with the
accounting principles generally accepted in India:
(i) in the case of the Balance Sheet, of the state ofaffairs of the Company as at March 31, 2010;
(ii) in the case of the Profit and Loss Account, of
the loss for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the
cash flows for the year ended on that date.
For Chaturvedi & Shah
Firm Registration No: 101720W
Chartered Accountants
Amit Chaturvedi
Partner
Membership No.: 103141
Place: Mumbai
Date : April 22, 2010
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4 Reliance Dairy Foods Limited
Annexure to referred to in paragraph 2 of our report of even dateRe: Reliance Dairy Foods Limited (the Company)
1. a) The Company ha s m aintaine d p rope r r ec or dsshowing full particulars, including quantitative details
and situation of fixed assets.
b) Fixed assets have been physically verified by the
management in a phased periodical manner as per
regular programme of verification, which in our
opinion is reasonable, having regard to the size of
the Company and nature of its assets. As informed,
no material discrepancies were noticed on such
physical verification.
c) There are no substantial disposals of fixed assets
during the year.
2. In respect of its inventories:
a) The inventory has been physically verified during
the year by the management. In our opinion, the
frequency of verification is reasonable.
b) The procedures of physical verification of inventories
followed by the management are reasonable and
adequate in relation to the size of the Company and
the nature of its business.
c) The Company has maintained proper records of
inventory. As explained to us, there were no material
discrepancies noticed on physical verification of
inventory.
3. The Company has neither granted nor taken any loan,
secured or unsecured to/from companies, firms and other
parties covered in the Register maintained under Section
301 of the Companies Act, 1956.Therefore, the provisions
of clause (iii) (b), (c), (d), (f), (g) of the Companies
(Auditors Report) Order 2003, (as amended) are not
applicable to the Company.
4. In our opinion and according to the information and
explanations given to us, there is an adequate internal
control system commensurate with the size of the
Company and the nature of its business for the purchase
of inventory and fixed assets and also for the sale of goods
and services. During the course of our audit, no major
weakness has been noticed in the internal control system
in respect of these areas.
5. According to information and explanation given to us, we
are of the opinion that there are no contracts or
arrangements referred to in section 301 of the Companies
Act. 1956 that needs to be entered into the register
maintained under section 301. Therefore, the provisionsof clause (v) (b) of the Companies (Auditors Report)
Order 2003, (as amended) is not applicable to the
Company.
6. The Company has not accepted any deposit from the
public.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. To the best of our knowledge and as explained, the Central
Government has not prescribed the maintenance of cost
records under Section 209 (1) (d) of the Companies Act, 1956.
9. In respect of statutory dues:
a) According to the records of the Company, the
Company is regular in depositing with appropriate
authorities undisputed statutory dues including
provident fund, investor education and protection
fund, employees state insurance, income-tax, sales-
tax, wealth-tax, service tax, customs duty, cess and
other statutory dues applicable to it. According to
the information and explanations given to us, no
undisputed amounts payable in respect of provident
fund, investor education and protection fund,
employees state insurance, income-tax, wealth-tax,
service tax, sales-tax, customs duty, cess and other
undisputed statutory dues were outstanding, as at
March 31, 2010 for a period of more than six monthsfrom the date they became payable.
b) According to the information and explanation given
to us, there are no dues of sales tax, income tax,
wealth tax, service tax, custom duty, excise duty and
cess which have not been deposited on account of
any dispute.
10. The Company has been registered for a period of less than
five years and hence we are not required to comment on
whether or not the accumulated losses at the end of the
financial year is fifty per cent or more of its net worth
and whether it has incurred cash losses in such financial
year and in the immediately preceding financial year.
11. The company has not raised loans from Financial
Institutions or Banks or by issue of Debentures and hence
Clause 4 (xi) of the Companies (Auditors Report) Order
2003, (as amended) are not applicable to the Company.
12. In our opinion and according to the explanations given to
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5Reliance Dairy Foods Limited
Annexure to referred to in paragraph 2 of our report of even dateRe: Reliance Dairy Foods Limited (the Company)
us and based on the information available, no loans andadvances have been granted on the basis of security by
way of pledge of shares, debentures and other securities.
13. In our opinion, the Company is not a chit fund or a nidhi/
mutual benefit fund/ society. Therefore, the provisions of
clause 4(xiii) of the Companies (Auditors Report) Order
2003, (as amended) are not applicable to the Company.
14. In our opinion, the Company is not dealing or trading in
shares, securities, debentures and other investments and
therefore the provisions of clause (xiv) of the Companies
(Auditors Report) Order 2003, (as amended) are not
applicable.
15. According to information and explanation given to us theCompany has not given any guarantee for loans taken by
others from bank or financial institutions. Therefore, the
provisions of Clause (xv) of Companies (Auditors
Report) Order 2003, (as amended) are not applicable.
16. The term loans raised by the company were applied for
the purpose for which loans were obtained.
17. According to the information and explanations given to
us and on an overall examination of the balance sheet of
the Company, we report that no funds raised on short-
term basis have been used for long-term investment.
18. The Company has not made any preferential allotmentof shares to parties and companies covered under Register
maintained under section 301 of the Companies Act, 1956.
19. The Company did not have any outstanding debenture
during the year.
20. The Company has not raised any monies by way of public
issue during the year.
21. Based upon the audit procedures performed for the
purpose of reporting the true and fair view of the financial
statements and as per the information and explanations
given by the management, we have not come across any
instance of material fraud on or by the Company, noted
or reported during the course of our audit.
For Chaturvedi & Shah
Firm Registration No. : 101720W
Chartered Accountants
Amit Chaturvedi
Partner
Membership No.: 103141
Place: Mumbai
Date : April 22, 2010
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6 Reliance Dairy Foods Limited
(Rs. in lakh)Schedule As at As at
31st March, 2010 31st March, 2009
SOURCES OF FUNDS
Shareholders Funds
Share Capital A 5.00 5.00
Loan Funds
Unsecured Loans B 8,970.87 6,484.08
TOTAL 8,975.87 6,489.08
APPLICATION OF FUNDS
Fixed Assets C
Gross Block 2,570.18 2,121.96
Less: Depreciation 454.00 225.34
Net Block 2,116.18 1,896.62
Capital Work-in-Progress 1,582.81 863.77
3,698.99 2,760.39
Deferred Tax Assets 528.83 325.79
Current Assets, Loans and Advances
Current Assets D
Inventories 4,976.53 3,913.95
Sundry Debtors 1,002.99 532.69
Cash and Bank Balances 342.28 141.78
6,321.80 4,588.42
Loans and Advances E 658.91 548.13
6,980.71 5,136.55
Less :
Current Liabilities and Provisions F
Current Liabilities 3,368.56 2,410.49
Provisions 42.78 86.55
3,411.34 2,497.04
Net Current Assets 3,569.37 2,639.51
Profit and Loss Account 1,178.68 763.39
TOTAL 8,975.87 6,489.08
Significant Accounting Policies K
Notes on Accounts L
Reliance Dairy Foods LimitedBalance Sheet as at 31st March, 2010
As per our Report of even date For and on behalf of the Board
For Chaturvedi & Shah C.R.Srinath
Chartered Accountants Director
Amit Chaturvedi Pankaj Pawar
Partner Director
Membership No. 103141
Mumbai
Dated: 22nd April, 2010
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7Reliance Dairy Foods Limited
(Rs. in lakh)
Schedule 2009-10 2008-09
INCOME
Turnover 29,349.25 17,804.99
Other Income G 2.84 0.16
Variation in Stocks H 996.86 2,393.03
30,348.95 20,198.18
EXPENDITURE
Purchases 942.11 527.86
Manufacturing and Other Expenses I 29,793.15 20,104.79
Interest and Finance charges J 3.36 0.62
Depreciation 228.66 181.71
30,967.28 20,814.98
Profit/ (Loss) before Tax (618.33) (616.80)
Provision for Fringe Benefit Tax - 10.14
Provision for Deferred Tax (203.04) (176.89)
Profit/ (Loss) after Tax (415.29) (450.05)
Add: Balance brought forward from Previous Year (763.39) (313.34)
Balance carried to Balance Sheet (1,178.68) (763.39)
Basic and Diluted Earnings per Share of face valueof Rs 10 each (in Rupees) (830.58) (900.10)
(Refer Note 6, Schedule L)
Significant Accounting Policies K
Notes on Accounts L
Reliance Dairy Foods LimitedProfit and Loss Account for the year ended 31st March, 2010
As per our Report of even date For and on behalf of the Board
For Chaturvedi & Shah C.R.Srinath
Chartered Accountants Director
Amit Chaturvedi Pankaj Pawar
Partner Director
Membership No. 103141
Mumbai
Dated: 22nd April, 2010
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8 Reliance Dairy Foods Limited
(Rs. in lakh)2009-10 2008-09
A: CASH FLOW FROM OPERATING ACTIVITIES:
Net Profit/ (Loss) before tax as per Profit and Loss Account (618.33) (616.80)
Adjusted for:
Depreciation 228.66 181.71
Dividend Income - (0.09)
Interest Income (2.84) (0.06)
Interest and Finance Charges 3.36 0.62
229.18 182.18
Operating Profit before Working Capital Changes (389.15) (434.62)
Adjusted for:
Trade and Other Receivables (580.29) (229.73)
Inventories (1,062.58) (2,690.22)
Trade Payables 874.25 (129.04)
(768.62) (3,048.99)
Cash Generated from Operations (1,157.77) (3,483.61)
Taxes Paid (0.79) (10.67)
Net Cash used in Operating Activities (1,158.56) (3,494.28)
B: CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Fixed Assets (1,127.21) (1,379.00)
Purchase of Investments - (0.09)
Sale of Investments - 21.29
Interest Income 2.84 0.06
Dividend Income - 0.09
Net Cash from used in Investing Activities (1,124.37) (1,357.65)
C: CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from Long Term Borrowings 27,271.26 13,681.60
Repayment of Long Term Borrowings (24,784.47) (8,780.26)
Interest Paid (3.36) (0.62)
Net Cash from Financing Activities 2,483.43 4,900.72
Net Increase/ (Decrease) in Cash and Cash Equivalents 200.50 48.79
Opening Balance of Cash and Cash Equivalents 141.78 92.99
Closing Balance of Cash and Cash Equivalents 342.28 141.78
Reliance Dairy Foods LimitedCash Flow Statement for the year 2009-10
As per our Report of even date For and on behalf of the Board
For Chaturvedi & Shah C.R.Srinath
Chartered Accountants Director
Amit Chaturvedi Pankaj Pawar
Partner Director
Membership No. 103141
Mumbai
Dated: 22nd April, 2010
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9Reliance Dairy Foods Limited
SCHEDULE A
SHARE CAPITAL (Rs. in lakh)
As at As at
31st March, 2010 31st March, 2009
Authorised:
50 000 Equity Shares of Rs. 10 each 5.00 5.00
(50 000)
TOTAL 5.00 5.00
Issued, Subscribed and Paid-up:
Fully Paid-up
50 000 Equity Shares of Rs. 10 each 5.00 5.00
(50 000)
TOTAL 5.00 5.00
Note:
All the above 50 000 (Previous year 50 000) Equity Shares of Rs. 10 each are held by Reliance Retail Limited, the holding
company along with its nominees.
Schedules forming part of the Balance Sheet
(Rs. in lakh)
SCHEDULE B As at As at31st March, 2010 31st March, 2009
UNSECURED LOANS
Long Term Loan
From holding company 8,970.87 6,484.08
TOTAL 8,970.87 6,484.08
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Schedules forming part of the Balance Sheet
(Rs. in lakh)SCHEDULE D As at As at
31st March, 2010 31st March, 2009
CURRENT ASSETS
INVENTORIES
Stores and Packing Materials 158.58 118.12
Raw Materials 383.78 358.52
Finished Goods/ Traded Goods 4,434.17 3,437.31
4,976.53 3,913.95
SUNDRY DEBTORS (Unsecured and Considered Good) (1)
Over six months 9.14 -
Others 993.85 532.69
1,002.99 532.69
CASH AND BANK BALANCES
Cash in Hand - 0.49
Balance with Scheduled Banks
In Current Accounts 342.18 141.19
In Fixed Deposit Accounts 0.10 0.10
342.28 141.78
TOTAL 6,321.80 4,588.42
Note:
(1) Includes Rs. 505.23 lakh (Previous Year Rs. 230.39 lakh) receivable from the following companies under same management:
a Reliance Agri Product Distribution Limited
b Reliance Fresh Limited
c Reliance Hypermart Limited
d Retail Concepts & Services ( India) Limited
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12 Reliance Dairy Foods Limited
Schedules forming part of the Balance Sheet
(Rs. in lakh)
SCHEDULE E As at As at
31st March, 2010 31st March, 2009
LOANS AND ADVANCES
Unsecured - (Considered good unless otherwise stated)
Advance Income Tax (net of Provision) 1.48 0.69
Advances Recoverable in Cash or in kind or for value to be received 639.46 529.26
Deposits 0.62 3.69
Balance with Service Tax/ Sales Tax Authorities, etc. 17.35 14.49
TOTAL 658.91 548.13
(Rs. in lakh)
SCHEDULE F As at As at
31st March, 2010 31st March, 2009
CURRENT LIABILITIES AND PROVISIONS
Current Liabilities
Sundry Creditors
- Micro enterprises and Small enterprises(1) - -
- Others(2) 3,368.56 2,410.49
3,368.56 2,410.49
Provisions
Provision for Leave Encashment/ Gratuity 42.78 86.55
TOTAL 3,411.34 2,497.04
Note:
(1) The Company has not received the required information from Suppliers regarding their status under the Micro, Small and
Medium Enterprises Development Act, 2006. Hence disclosures, if any, relating to amounts unpaid as at the year end togetherwith interest paid/ payable as required under the said Act have not been made.
(2) Includes Rs.45.60 lakh (Previous year Rs. 5.55 lakh) for capital expenditure.
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(Rs. in lakh)SCHEDULE G 2009-10 2008-09
OTHER INCOME
Dividend
From Current Investments - 0.09
Interest
From Others 2.84 0.07
TOTAL 2.84 0.16
(Rs. in lakh)
SCHEDULE H 2009-10 2008-09
VARIATION IN STOCKS
STOCK-IN-TRADE (at close)
Finished Goods/ Traded Goods 4,434.17 3,437.31
STOCK-IN-TRADE (at commencement)
Finished Goods/ Traded Goods 3,437.31 1,044.28
TOTAL 996.86 2,393.03
(Rs. in lakh)
SCHEDULE I 2009-10 2008-09
MANUFACTURING AND OTHER EXPENSES
RAW MATERIAL CONSUMED 25,063.82 16,608.02
MANUFACTURING EXPENDITURE
Stores and Packing Materials 653.48 481.05
Processing Charges 1,524.30 975.27
Machinery Repairs and Maintenance 21.54 9.12
Building Repairs and Maintenance 0.16 11.87
2,199.48 1,477.31
PAYMENT TO AND PROVISIONS
FOR EMPLOYEES
Salaries, Wages and Bonus 379.24 537.04
Contribution to Provident Fund, Gratuity Fund,
Superannuation Fund, Employees State Insurance Scheme,
Pension Scheme,Labour Welfare Fund etc. 27.15 28.14
Employee Welfare and other amenities 20.84 42.29
427.23 607.47SALES AND DISTRIBUTION EXPENSES
Samples, Sales Promotion and Advertisement Expenses 374.44 216.63
Store Running Expenses 204.84 92.90
Warehousing and Distribution Expenses 1,274.15 759.36
Sales Tax 5.19 -
1,858.62 1,068.89
Schedules forming part of the Profit and Loss Account
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14 Reliance Dairy Foods Limited
SCHEDULE I (Contd.)
(Rs. in lakh)
2009-10 2008-09
OPERATING AND ESTABLISHMENT EXPENSES
Other Repairs 34.77 36.43
Rent 23.19 56.94
Insurance 7.97 5.32
Rates and Taxes 14.36 6.86
Travelling and Conveyance Expenses 46.18 69.50
Payment to Auditors 3.68 5.61
Professional Fees 48.86 88.27
Exchange Differences (Net) 4.52 (0.23)
Security Expenses - 3.07
Electricity Expenses 0.22 2.10
Telephone Expenses 11.58 17.92
Printing and Stationery 26.99 20.99
Hire Charges 4.03 9.00
General Expenses 17.65 21.32
244.00 343.10
TOTAL 29,793.15 20,104.79
(Rs. in lakh)
SCHEDULE J 2009-10 2008-09
INTEREST AND FINANCE CHARGES
Others 3.36 0.62
TOTAL 3.36 0.62
Schedules forming part of the Profit and Loss Account
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15Reliance Dairy Foods Limited
SCHEDULE KSIGNIFICANT ACCOUNTING POLICIES
1 Basis of Preparation of Financial Statements
The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting
principles in India, Companies (Accounting Standards) Rules 2006 and the provisions of the Companies Act, 1956.
2 Use of Estimates
The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of the
assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the
reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known/
materialised.
3 Fixed Assets
Fixed Assets are stated at cost net of CENVAT/ Value Added Tax less accumulated depreciation and impairment loss, if any. All
costs attributable to Fixed Assets are capitalised.
4 Depreciation
Depreciation on Fixed Assets is provided on Straight Line Method at the rates and in the manner prescribed in Schedule XIV to
the Companies Act, 1956 over their useful life except leasehold improvements are amortised over the lower of estimated useful
life or lease period.
5 Impairment of Assets
An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to
the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognised in prior
accounting period is reversed if there has been a change in the estimate of recoverable amount.
6 Investments
Current investments are carried at the lower of cost and quoted/ fair value, computed category wise.
7 Inventories
Items of Inventories are measured at lower of cost and net realisable value, after providing for obsolescence, if any. Cost of
Inventory comprises of all cost of purchase and other cost incurred in bringing them to the respective present location and
conditions. Costs are determined on weighted average basis.
8 Turnover
Turnover includes sale of goods, service and service tax, adjusted for discounts (net) and Value Added Tax (VAT), if any.
9 Employee Benefits
i) Short term employee benefits are recognised as an expense at the undiscounted amount in the Profit and Loss Account of
the year in which the related service is rendered.
ii) Post employment and other long term employee benefits are recognised as an expense in the Profit and Loss Account for
the year in which the employee has rendered services. The expense is recognised at the present value of the amounts
payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment andother long term benefits are charged to the Profit and Loss Account.
10 Provision for Current and Deferred Tax
Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act,
1961. Deferred tax resulting from timing difference between taxable and accounting income is accounted for using the tax rates
and laws that are enacted or substantively enacted as on the Balance Sheet date. The deferred tax asset is recognised and carried
forward only to the extent that there is a virtual certainty that the asset will be realised in future.
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11 Provision, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result
of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are
disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.
SCHEDULE L
NOTES ON ACCOUNTS
1 The previous years figures have been regrouped, rearranged and reclassified wherever necessary. Accordingly, amounts and
other disclosures for the preceding year are included as an integral part of the current year financial statements and are to be read
in relation to the amounts and other disclosures relating to the current year.
2 The Company is mainly engaged in Organised Retail in India. All other activities of the Company revolve around with this
main business. Accordingly, the Company has only one identifiable segment reportable under Accounting Standard 17 onSegment Reporting, notified in the Companies (Accounting Standards) Rules 2006.
3 As per Accounting Standard 15 Employee Benefits notified in the Companies (Accounting Standards) Rules 2006, the
disclosures of employee benefits as defined in the Accounting Standard are given below:
Defined Contribution Plan (Rs. in lakh)
Contribution to Defined Contribution Plan, recognised are charged off for the year are as under:
2009-10 2008-09
Employers Contribution to Provident Fund 13.69 17.65
Employers Contribution to Pension Scheme 5.19 7.19
Defined Benefit Plan
The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which
recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unitseparately to build up the final obligation. The obligation for Leave encashment is recognised in the same manner as gratuity.
The Company operates post retirement benefit plans as follows:
I) Reconciliation of opening and closing balances of Defined Benefit obligation
(Rs. in lakh)
Gratuity (Unfunded) Leave Encashment
(Unfunded)
2009-10 2008-09 2009-10 2008-09
Defined Benefit obligation at beginning of the year 15.35 18.88 71.20 44.13
Current Service Cost 5.95 5.62 4.17 13.94
Interest Cost 1.15 1.51 3.59 3.19
Actuarial (gain)/ loss (1.29) (10.66) (10.63) 18.43
Benefits paid - - (46.71) (8.49)
Defined Benefit obligation at year end 21.16 15.35 21.62 71.20
SCHEDULE K (Contd.)
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II) Reconciliation of fair value of assets and obligations
(Rs. in lakh)
Gratuity (Unfunded) Leave Encashment
(Unfunded)
2009-10 2008-09 2009-10 2008-09
Fair value of plan assets - - - -
Present value of obligation 21.16 15.35 21.62 71.20
Amount recognised in Balance Sheet 21.16 15.35 21.62 71.20
III) Expenses recognized during the year
(Rs. in lakh)
Gratuity (Unfunded) Leave Encashment
(Unfunded)
2009-10 2008-09 2009-10 2008-09
Current Service Cost 5.95 5.62 4.17 13.94
Interest Cost on benefit obligation 1.15 1.51 3.59 3.19
Past service Cost - - - -
Actuarial (gain)/ loss recognized in the year (1.29) (10.66) (10.63) 18.43
Net benefit expense/ (Income) 5.81 (3.53) (2.87) (35.56)
Actual return on plan asset - - - -
IV) Expenses recognized during the year
Gratuity Leave Encashment
(Unfunded) (Unfunded)
2009-10 2008-09 2009-10 2008-09
Discount rate (per annum) 7.50% 8.00% 7.50% 8.00%
Expected rate of return on assets (per annum) - 8.00% - 8.00%
Rate of escalation in salary (per annum) 6.00% 4.00% 6.00% 4.00%
The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion
and other relevant factors including supply and demand in the employment market. The above information is certified by the
actuary.
4 Payment to Auditors (excluding Service Tax, wherever applicable): (Rs. in lakh)
2009-10 2008-09
(i) Audit Fees 2.50 3.00
(ii) Tax Audit Fees 0.50 0.60
3.00 3.60
SCHEDULE L (Contd.)
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5 The Deferred Tax Assets (net) comprise of the following: (Rs. in lakh)
As at As at
31st March, 2010 31st March, 2009
(i) Deferred Tax Assets
- Disallowance under the Income Tax Act, 1961 22.03 20.69
- Carried forward loss 777.37 453.32
(ii) Deferred Tax Liability
- Related to Fixed Assets 270.57 148.22
528.83 325.79
Note: The virtual certainty is based on Agreements
6 Earnings Per Share (EPS)
2009-10 2008-09
(i) Net Profit/ (Loss) after tax as per profit and loss account (Rs. in lakh) (415.29) (450.05)
(ii) Weighted Average number of equity shares used as denominator for calculating EPS 50 000 50 000
(iii) Basic and Diluted Earnings/ (Loss) per share of face value of Rs. 10 each (Rupees) (830.58) (900.10)
7. Additional Information (to the extent applicable): (Rs. in lakh)
As at As at
31st March, 2010 31st March, 2009
(i) Capital Commitments:
Estimated amount of contracts remaining to be executed on capital
accounts (net of advances) and not provided for 471.22 -
(ii) Contingent Liabilities
Outstanding guarantees furnished to Banks and Financial Institutions
including in respect of Letters of Credit 9.15 10.15
(Rs. in lakh)
8 Expenditure in Foreign Currency: 2009-10 2008-09
Travelling and Conveyance Expenses 0.37 -
9 Value of Imports on CIF basis in respect of: (Rs. in lakh)
2009-10 2008-09
Capital goods 188.81 230.75
SCHEDULE L (Contd.)
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10 Value of Stores and Packing Materials Consumed
2009-10 2008-09
Rs. in lakh % of Rs. in lakh % of
Consumption Consumption
Indigenous 653.48 100% 481.05 100%
11 Value of Raw Materials Consumed
2009-10 2008-09
Rs. in lakh % of Rs. in lakh % of
Consumption Consumption
Indigenous 25,063.82 100% 16,608.02 100%
12 As per Accounting Standard 18 Related Party Disclosures notified in the Companies (Accounting Standards) Rules 2006,
the disclosures of transactions with the related parties as defined in Accounting Standard are given below :
(i) List of related parties with whom transactions have taken place and relationships:
Sr No Name of the Related Party Relationship
1 Reliance Industries Limited Ultimate Holding Company
2 Reliance Retail Limited Holding Company
3 Reliance Agri Products Distribution Limited
4 Reliance Fresh Limited
5 Reliance Hypermart Limited
6 Reliance Infosolutions Private Limited Fellow Subsidiaries
7 Reliance Supply Chain Solutions Limited
8 Reliancedigital Retail Limited
9 Retail Concepts & Services ( India) Limited
(ii) Transactions during the year with related parties (excluding reimbursements):
(Rs. in lakh)
Sr Nature of Transactions Holding Fellow Total
No (excluding reimbursements) Company Subsidiaries
1 Unsecured Loans taken/ (repaid) 2,486.80 - 2,486.80
4,901.34 - 4,901.34
2 Turnover - 5,378.87 5,378.87
8.98 4,776.30 4,785.28
3 Purchases 34.04 26.25 60.29
- - -
4 Expenditure
- Professional Fees - 1.63 1.63
- 20.60 20.60
SCHEDULE L (Contd.)
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SCHEDULE L (Contd.)(Rs. in lakh)
Sr Nature of Transactions Holding Fellow Total
No Company Subsidiaries
Balance as at 31st March, 2010
5 Unsecured Loan 8,970.87 - 8,970.87
6,484.06 - 6,484.06
6 Sundry Debtors - 505.23 505.23
14.78 215.61 230.39
7 Sundry Creditors - - -
- 0.07 0.07
8 Financial Gurantees taken 9.15 - 9.1510.15 - 10.15
Note: Figures in Italics represents previous years amount.
Disclosure in respect of material Related Party Transactions during the year:
1 Unsecured Loan taken includes Rs. 2,486.80 lakh (Previous Year Rs. 4,901.34 lakh) from Reliance Retail Limited.
2 Turnover includes to Reliance Retail Limited Rs. Nil (Previous Year 8.98 lakh); Reliance Fresh Limited Rs. 5,138.92
lakh (Previous Year 4,703.67 lakh); Reliance Hypermart Limited Rs. 86.49 lakh (Previous Year 34.87 lakh); Reliance
Food Processing Solutions Limited Rs. Nil (Previous Year Rs. 33.42 lakh) and Retail Concepts & Service (India) Limited
Rs. 0.03 lakh (Previous Year Rs. 4.35 lakh).
3 Purchases from Reliance Fresh Limited Rs. 18.73 lakh (Previous Year Rs. Nil) and Reliancedigital Retail Limited
Rs. 6.51 lakh (Previous Year Rs. Nil)
4 Professional fees include to Reliance Infosolutions Private Limited Rs. 1.62 lakh (Previous Year Rs. Nil) and to Reliance
Supply Chain Solutions Limited Rs.Nil (Previous Year Rs.20.60 lakh).
13 Quantitative Details
A Raw Material Consumed In lakh
Particulars Unit Qty Amount
1 SMP Kg. 19.19 2,370.91
10.46 1,100.33
2 FAT Kg. 68.02 11,747.60
167.69 8,051.19
3 SNF Kg. 94.47 10,945.31
223.34 7,456.50
Total 181.68 25,063.82
401.49 16,608.02
Note: Figures in Italics represents previous years amount.
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SCHEDULE L (Contd.)B Finished Goods/ Traded Goods (Rs. in lakh)
Particulars Opening Stock Produced Purchased Sale Closing Stock
Qty * Amount Qty * Qty * Amount Qty * Amount Qty * Amount
Dairy Products 3,437.31 942.11 29,349.25 4,434.17
1,044.28 599.03 17,804.99 3,437.31
Total 3,437.31 942.11 29,349.25 4,434.17
1,044.28 599.03 17,804.99 3,437.31
Note: Figures in Italics represents previous years amount.
* In view of the heterogeneous nature and non-uniform units of measurement of items produced, purchased and sold,
details have been furnished to the extent practicable and giving meaningful information.
14 Information as required under para 3, 4 and 4A to 4D of part II of schedule VI of Companies Act, 1956 are given to theextent applicable.
As per our Report of even date For and on behalf of the Board
For Chaturvedi & Shah C.R.Srinath
Chartered Accountants Director
Amit Chaturvedi Pankaj Pawar
Partner Director
Membership No. 103141
Mumbai
Dated: 22nd April, 2010
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I. Registration Details:
Registration No. U 1 5 4 1 9 M H 2 0 0 6 P L C 1 6 5 8 2 6
Balance Sheet Date: 3 1 - 0 3 - 2 0 1 0 State Code: 1 1
II. Capital raised during the year (Rupees in Thousands):
Public Issue: N I L Rights Issue: N I L
Bonus Issue: N I L Private Placement: N I L
Share Application Money: N I L
III. Position of mobilisation and deployment of funds (Rupees in Thousands):
Total Liabilities: 1 2 3 8 7 2 1 Total Assets: 1 2 3 8 7 2 1
Sources of Funds: Application of Funds:
Paid up Capital: 5 0 0 Fixed Assets: 3 6 9 8 9 9
Share Application Money: N I L Investments: N I L
Reserves and Surplus: N I L Deferred Tax Assets: 5 2 8 8 3
Secured Loans: N I L Current Assets: 6 9 8 0 7 1
Unsecured Loans: 8 9 7 0 8 7 Miscellaneous Expenditure: N I L
Current Liabilities: 3 4 1 1 3 4 Accumulated Losses 1 1 7 8 6 8
IV. Performance of the Company (Rupees in Thousands):
Turnover: 2 9 3 4 9 2 5 Total Expenditure: 3 0 9 6 7 2 8
Profit/Loss Before Tax: ( 6 1 8 3 3 ) Profit/Loss After tax: ( 4 1 5 2 9 )
Earnings per Share in Rs:
- Basic ( 8 3 0 . 5 8 ) Dividend Rate: N I L
- Diluted ( 8 3 0 . 5 8 )
V. Generic Names of principal products of the Company:
Item Code number N A
Product Description N A
Additional information as required under part IV of the Schedule VI to the Companies Act, 1956
Balance Sheet Abstract and Companys General Business Profile: