45 Reliance Digital Media Limited

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RELIANCE DIGITAL MEDIA LIMITED

Annual Report 2009 - 2010



1Reliance Digital Media Limited

Directors’ Report

Dear Members,

Your Directors are pleased to present the Third Annual Report

and the Audited Accounts for the year ended on March 31,

2010.

Financial Results:

The financial performance of the Company for the year ended

on March 31, 2010 is summarized below:

(Amount in Rupees)

2009-2010 2008-2009

Profit / (Loss) before Depreciation,

Interest and Tax (62 25 437) (90 79 462)

Less: Interest 6 386 1 813

Depreciation 11 67 151 5 88 581

Profit/(Loss) Before Tax (73 98 974) (96 69 856)

Less: Provision for

Fringe Benefit Tax - 55 201

Deferred Tax (27 89 516) (28 37 112)

Profit/(Loss) after Tax (46 09 458) (68 87 945)

Balance brought forward (1 00 83 152) (31 95 207)

from Previous Year

Balance carried to (1 46 92 610) (1 00 83 152)

Balance Sheet

Operational and Financial Review

The Company offers in-store advertising opportunities to

advertisers, in respect of Reliance Mart, Reliance Super, Reliance

Fresh, Reliance Digital and other format stores of Reliance Retail

Limited and its subsidiaries. The Company has been able to

create awareness through innovative approach and application

of technology.

The Company has incurred a loss of Rs. 46 09 458 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

In accordance with the provisions of the Companies Act, 1956,

Shri Ramesh Kumar Damani retires by rotation and being eligible,

offers himself for reappointment at the ensuing Annual General

Meeting.

Directors’ Responsibility StatementPursuant to the requirement under Section 217(2AA) of the

Companies Act, 1956 with respect to Directors’ Responsibility

Statement, it is hereby confirmed that:

(i) in the preparation of the accounts for the year ended 31st

March, 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 themaintenance 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

31st March, 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, Statutory Auditors of the Company, hold

office until the conclusion of the ensuing Annual General Meetingof 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.

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 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:



2 Reliance Digital Media Limited

i. Part A and B of the Rules, pertaining to conservation of energy and technology absorption, are not applicable to the

Company.

ii. Foreign Exchange Earnings and Outgo:

Foreign Exchange Earned: Rs. Nil

Foreign Exchange Used : Rs. Nil

Acknowledgement

Your Directors would like to express their grateful appreciation

for assistance and cooperation received from Reliance Industries

Limited, Reliance Retail Limited, Banks, Government Authorities,

Customers, Vendors, Employees and Members during the year

under review.

For and on behalf of the Board of Directors

K. Sridhar Rajendra Kamath

Director Director

Place: Mumbai.

Date: April 20, 2010

Directors’ Report




Auditors’ Report

To the Members of RELIANCE DIGITAL MEDIA LIMITED

We have audited the attached Balance Sheet of RELIANCE

DIGITAL MEDIA 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 Company’s 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 audit

includes 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 (Auditor’s 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 of affairs 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

Jignesh Mehta

Partner

Membership No.: 102749

Place: Mumbai





Annexure referred to in paragraph 2 of our report of even dateRe: Reliance Digital Media 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, 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

(Auditor’s 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, 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 provisions of clause (v) (b) of theCompanies (Auditor’s 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 to us, 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 protection fund,

employees’ state insurance, income-tax, wealth-tax,

service tax, custom duty and other statutory dues

applicable to it. According to the information and

explanations given to us, no undisputed amounts

payable in respect of income tax, wealth tax, service

tax and customs duty were outstanding, as at March

31, 2010 for a period of more than six months from

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 ( Auditor’s Report ) Order

2003, (as amended) are not applicable to the company.

12. In our opinion and according to the explanations given to

us and based on the information available, no loans and

advances have been granted on the basis of security by




Annexure referred to in paragraph 2 of our report of even dateRe: Reliance Digital Media Limited (‘the Company’)

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 (Auditor’s 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

(Auditor’s Report) Order 2003, (as amended) are not

applicable.

15. According to information and explanation given to us the

Company has not given any guarantee for loans taken by

others from bank or financial institutions. Therefore, theprovisions of Clause (xv) of Companies (Auditor’s

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 allotment

of 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 debentureduring 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

Jignesh Mehta

Partner

Membership No.: 102749

Place: Mumbai





In Rupees

Schedule 2009-10 2008-09

INCOME

Turnover 18 98 82 273 2 10 44 675

Less: Service Tax Recovered 1 84 65 416 21 07 675

17 14 16 857 1 89 37 000

17 14 16 857 1 89 37 000

EXPENDITURE

Operating and Other Expenses ‘H’ 17 76 42 294 2 80 16 462

Interest and Finance charges ‘I’ 6 386 1 813

Depreciation 11 67 151 5 88 581

17 88 15 831 2 86 06 856

Profit/ (Loss) before Tax (73 98 974) (96 69 856)

Provision for Fringe Benefit Tax - 55 201

Provision for Deferred Tax (27 89 516) (28 37 112)

Profit/ (Loss) after Tax (46 09 458) (68 87 945)

Add: Balance brought forward from Previous Year (1 00 83 152) (31 95 207)

Balance carried to Balance Sheet (1 46 92 610) (1 00 83 152)

Basic and Diluted Earnings per Share of face value

of Rs 10 each (in Rupees) ( 92.19) (137.76)

(Refer Note 5, Schedule “K”)

Significant Accounting Policies ‘J’

Notes on Accounts ‘K’

Reliance Digital Media 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 Rajendra Kamath

Chartered Accountants Director

Jignesh Metha K. Sridhar

Partner Director

Membership No. 102749

Mumbai

Dated : 20th April 2010




In Rupees2009-10 2008-09

A: CASH FLOW FROM OPERATING ACTIVITIES

Net Profit/ (Loss) before tax as per Profit & Loss Account ( 73 98 974) ( 96 69 856)

Adjusted for:

Miscellaneous Expenditure written off 2 400 2 400

(Profit)/ Loss on sale/ Discarding of Assets (net) 2 109 -

Depreciation 11 67 151 5 88 581

Interest and Finance Charges 6 386 1 813

11 78 046 5 92 794

Operating Profit before Working Capital Changes ( 62 20 928) ( 90 77 062)

Adjusted for:

Trade and Other Receivables (4 24 84 036) (1 83 03 290)

Inventories ( 6 80 631) -

Trade Payables ( 10 84 799) 1 90 39 255

(4 42 49 466) 7 35 965

Cash Generated from Operations (5 04 70 394) ( 83 41 097)

Taxes Paid ( 41 54 297) ( 39 492)

Net Cash used in Operating Activities (5 46 24 691) ( 83 80 589)

B: CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Fixed Assets ( 12 13 445) (1 74 29 151)

Sale of Fixed Assets 2 17 541 -

Net Cash used in Investing Activities ( 9 95 904) (1 74 29 151)

C: CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from Long Term Borrowings 22 95 36 579 2 53 83 597

Repayment of Long Term Borrowings (17 37 92 712) -

Interest Paid ( 6 386) ( 1 813)

Net Cash from Financing Activities 5 57 37 481 2 53 81 784

Net Increase/ (Decrease) in Cash and Cash Equivalents 1 16 886 ( 4 27 956)

Opening Balance of Cash and Cash Equivalents 2 803 4 30 759

Closing Balance of Cash and Cash Equivalents 1 19 689 2 803

Reliance Digital Media LimitedCash Flow Statement for the year 2009-10





Partner Director


Mumbai





SCHEDULE ‘A’

SHARE CAPITAL In Rupees

As at As at

31st March, 2010 31st March, 2009

Authorised

50 000 Equity Shares of Rs. 10 each 5 00 000 5 00 000

(50 000)

TOTAL 5 00 000 5 00 000

Issued, Subscribed, Called up and Paid-up

Fully Paid-up

50 000 Equity Shares of Rs. 10 each 5 00 000 5 00 000

(50 000)

TOTAL 5 00 000 5 00 000

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

In Rupees

SCHEDULE B As at As at


UNSECURED LOANS

Long Term Loans

From holding company 8 11 34 279 2 53 90 412

TOTAL 8 11 34 279 2 53 90 412





S C H E D U L E ‘ C ’

F I X E D A S S E T S

I n R u p e e s

D e s c r i p t i o n

G r o s s B l o c k

D e p r e c i a t i o n

N e t B l o c k

A s a t

A d d i t i o n s

D e d u c t i o n s /

A s

a t

U p t o

F o r t h e

D e d u c t i o n s /

U p t o

A s a t

A s a t

1 s t A p r i l , 2 0 0 9

A d j u s t m e n t s

3 1 s t M a r c h ,

2 0 1 0

3 1 s t M a r c h

, 2 0 0 9

y e a r

A d j u s t m e n t s

3 1 s t M a r c h ,

2 0 1 0

3 1 s t M a r c h ,

2 0 1 0

3 1 s t M a r c h

, 2 0 0

9

E q u i p m e n t s

1 3 6 5 7 1 2 5

3 4 4 0 7 1 3

2 3 7 9 1 5

1

6 8 5 9 9 2 3

5 8 8 5 8 1

1 1 6 7 1 5 1

1 8 2 6 5

1 7 3 7 4 6 7

1 5 1 2 2 4 5 6

1 3 0 6 8 5 4

4

T o t a l

1 3 6 5 7 1 2 5

3 4 4 0 7 1 3

2 3 7 9 1 5

1

6 8 5 9 9 2 3

5 8 8 5 8 1

1 1 6 7 1 5 1

1 8 2 6 5

1 7 3 7 4 6 7

1 5 1 2 2 4 5 6

1 3 0 6 8 5 4 4

P r e v i o u s Y e a r

1 3 6 5 7 1 2 5

-

1

3 6 5 7 1 2 5

-

5 8 8 5 8 1

-

5 8 8 5 8 1

1 3 0 6 8 5 4 4

-

C a p i t a l W o r k - i n - P r o g r e s s

1 2 5 8 6 3 8

3 7 7 2 0 2

6

N o t e s :

C a p i t a l W o r k - i n - P r o g r e s s i n c l u d e s :

i )

R s . 3 7 8 7 ( P r e v i o

u s Y e a r R s . 2 6 4 0 8 5 6 ) o n a c c o u n t o f A d v a n c e a g a i n s t P r o j e c t C o n t r a c t s .

i i )

R s . 1 1 4 0 3 0 3 ( P r

e v i o u s Y e a r R s . 8 8 4 2 3 0 ) o n a c c o u n t o f c o n

s t r u c t i o n m a t e r i a l s a t s i t e .





SCHEDULE ‘D’

In Rupees

As at As at


CURRENT ASSETS

INVENTORIES

Stores and Packing Materials 6 80 631 -

SUNDRY DEBTORS (Unsecured and Considered Good)

Over six months 64 66 880 -

Others 4 66 39 810 1 54 02 046

5 31 06 690 1 54 02 046

CASH AND BANK BALANCES

Balance with Scheduled Banks

In Current Accounts 1 19 689 2 803

TOTAL 5 39 07 010 1 54 04 849

In Rupees

SCHEDULE ‘E’ As at As at


LOANS AND ADVANCES

Unsecured - (Considered good unless otherwise stated)

Advance Income Tax (net of Provision) 42 31 195 92 607

Advances Recoverable in Cash or in kind or for value to be received 53 321 4 45 994

Balance with Service Tax/ Sales Tax Authorities, etc. 77 42 280 25 70 215

TOTAL 1 20 26 796 31 08 816





In Rupees

SCHEDULE ‘F’ As at As at


CURRENT LIABILITIES AND PROVISIONS

Current Liabilities

Sundry Creditors

- Micro enterprises and Small enterprises (1) - -

- Others (2) 2 12 16 802 2 10 01 863

2 12 16 802 2 10 01 863

Provisions

Provision for Fringe Benefit Tax (Net of Advance Tax) - 15 709

Provision for Leave Encashment/ Gratuity 14 33 142 30 19 000

14 33 142 30 34 709

2 26 49 944 2 40 36 572

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 together with interest

paid/ payable as required under the said Act have not been made.

(2) Includes Rs.26792 (Previous Year Rs. 312912) for capital expenditure.

In Rupees

SCHEDULE ‘G’ As at As at

31st March 2010 31st March, 2009

MISCELLANEOUS EXPENDITURE

(to the extent not written off or adjusted)

Preliminary Expenses

As per last Balance Sheet 7 200 9 600

Less : Written - off during the year 2 400 2 400

TOTAL 4 800 7 200




In Rupees

SCHEDULE ‘H’ 2009-10 2008-09

OPERATING AND OTHER EXPENSES

PAYMENT TO AND PROVISIONS FOR EMPLOYEES

Salaries, Wages and Bonus 1 13 45 180 87 59 013

Contribution to Provident Fund, Gratuity Fund, 8 31 776 6 50 281

Superannuation Fund, Employee’s State Insurance Scheme,

Pension Scheme,Labour Welfare Fund etc.

Employee Welfare and other amenities 7 67 476 3 37 845

1 29 44 432 97 47 139

SALES AND DISTRIBUTION EXPENSES

Sales Promotion and Advertisement Expenses 3 27 725 -

Store Running Expenses 4 82 803 79 963

Warehousing and Distribution Expenses 65 090 19 240

8 75 618 99 203

OPERATING AND ESTABLISHMENT EXPENSES

Stores and Packing Materials 54 524 5 86 017

Other Repairs 7 53 372 8 37 910

Rent 16 25 78 337 1 62 85 938

Insurance 83 090 36 510

Rates and Taxes 43 203 1 29 427

Travelling and Conveyance Expenses 73 916 67 629

Payment to Auditors 60 343 28 800Professional Fees 36 100 19 686

Loss on Sale/ Discarding of Assets 2 109 -

Telephone Expenses 94 848 95 936

Printing and Stationery 3 761 5 211

Hire Charges - 45 916

General Expenses 36 241 28 740

16 38 19 844 1 81 67 720

Miscellaneous expenditure written off 2 400 2 400

TOTAL 17 76 42 294 2 80 16 462

In Rupees

SCHEDULE ‘I’ 2009-10 2008-09

INTEREST AND FINANCE CHARGES

Others 6 386 1 813

TOTAL 6 386 1 813

Schedules forming part of the Profit and Loss Account





SCHEDULE ‘J’

SIGNIFICANT 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.

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 Inventories

Items of Inventories are measured at lower of cost or 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

condition. Costs are determined on weighted average cost basis.

7 Turnover

Turnover includes sale of goods, services and service tax adjusted for discounts (net) and Value Added Tax (VAT) if any.

8 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 and other long term

benefits are charged to the Profit and Loss Account.

9 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.

10 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.

11 Miscellaneous Expenditure

Preliminary expenses and issue related expenses incurred are amortised over period of 5 years.




SCHEDULE ‘K’NOTES ON ACCOUNTS

1 The previous year’s 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 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

Contribution to Defined Contribution Plan, recognised are charged off for the year are as under:

In Rupees

2009-10 2008-09

Employer’s Contribution to Provident Fund 3 90 486 2 41 243

Employer’s Contribution to Pension Scheme 92 833 55 782

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 unit separately

to build up the final obligation. Obligation for levae encashment is recongised 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

In Rupees

Gratuity Leave Encashment

(Unfunded) (Unfunded)

2009-10 2008-09 2009-10 2008-09

Defined Benefit obligation at beginning of the year 3 23 000 - 26 96 000 -

Current Service Cost 1 39 753 3 23 000 1 00 043 26 96 000

Interest Cost 24 225 - -

Actuarial (gain)/ loss 1 35 755 - 6 19 464 (11 585)

Benefits paid - - (26 05 098) 11 585

Defined Benefit obligation at year end 6 22 733 3 23 000 8 10 409 26 96 000

II. Reconciliation of fair value of assets and obligations

In Rupees



2009-10 2008-09 2009-10 2008-09

Fair value of plan assets - - - -Present value of obligation 6 22 733 3 23 000 8 10 409 26 96 000

Amount recognised in Balance Sheet 6 22 733 3 23 000 8 10 409 26 96 000

III. Expenses recognized during the year





In Rupees



2009-10 2008-09 2009-10 2008-09

Current Service Cost 1 39 753 3 23 000 1 00 043 26 96 000

Interest Cost on benefit obligation 24 225 - - -

Actuarial gain/ (loss) recognized in the year 1 35 755 - 6 19 464 11 585

Past service Cost - - - -

Net benefit expense/ (Income) 2 99 733 3 23 000 7 19 507 27 07 585

Actual return on plan asset - - - -

IV. Actuarial assumptions

In Rupees



2009-10 2008-09 2009-10 2008-09

Discount rate (per annum) 7.50% 8.00% 7.50% 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.

3 Payment to Auditors (excluding Service Tax, wherever applicable) In Rupees

2009-10 2008-09

(i) Audit Fees 50 000 24 000

(ii) Tax Audit Fees 10 000 4 800

60 000 28 800

4 The Deferred Tax Assets (net) comprise of the following: In Rupees

As at As at

31st March, 2010 31st Mar, 2009

(i) Deferred Tax Assets

- Disallowance under the Income Tax Act,1961 - 9 32 871

- Carried forward loss 83 00 655 40 00 663

(ii) Deferred Tax Liability

- Related to Fixed Assets 8 36 282 4 51 137

- Disallowance under the Income Tax Act,1961 1 92 460 -

72 71 913 44 82 397

Note: The virtual certainty is based on agreements.

SCHEDULE ‘K’ (Contd.)





5 Earnings Per Share (EPS)

In Rupees

2009-10 2008-09

(i) Net Profit/ (Loss) after tax as per Profit and Loss Account ( In Rupees) (46 09 458) (68 87 945)

(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.) (92.19) (137.76)

6 The Company is mainly engaged in ‘Organised Retail’ in India. All the activities of the Company revolved around this main

business. Accordingly, the Company has only one identifiable segment reportable under Accounting Standard 17 “Segment

Reporting”, notified in the Companies (Accounting Standards) Rules 2006.

7 Turnover consists of Income from Services of Rs. 18 98 82 273. (Previous Year Rs.2 10 44 675).

8 Additional Information (to the extent applicable):

In Rupees

As at As at

31st March, 2010 31st Mar, 2009

Outstanding guarantees furnished to Banks and 3 75 000 3 75 000

Financial Institutions including in respect of Letters of credit

9 Value of Imports on CIF basis in respect of:

In Rupees

2009-10 2008-09

Capital goods - 82 15 324

10 Value of Stores and Packing Materials Consumed

2009-10 2008-09

% of % of

In Rupees Consumption InRuppes Consumption

Indigenous 54 524 100% 5 86 017 100%

11 Information as required under para 3, 4 and 4A to 4D of part II of Schedule VI of Companies Act, 1956 are given to the extent

applicable.

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 :

a) List of related parties with whom transactions have taken place and relationships:

SrNo Name of the Related Party Relationship

1 Reliance Industries Limited Ultimate Holding Company

2 Reliance Retail Limited Holding Company

3 Delight Proteins Limited }

4 Reliance Corporate IT Park Limited }

5 Reliance Fresh Limited }

6 Reliance Home Store Limited } Fellow Subsidiaries

7 Reliance Hypermart Limited }

8 Reliance Leisures Limited }






9 Reliance People Serve Limited }

10 Reliance Supply Chain Solutions Limited }

11 Reliance Trends Limited }

12 Reliance Wellness Limited } Fellow Subsidiaries

13 Reliancedigital Retail Limited }

14 RESQ Limited }

(b) Transactions during the year with related parties (Excluding reimbursements):

In Rupees

Sr No Nature of Transactions Holding Fellow Total

(excluding reimbursements) Company Subsidiar ies

1 Unsecured Loans 5 57 43 866 - 5 57 43 8662 53 83 597 - 2 53 83 597

2 Expenditure

- Rent - 17 96 63 017 17 96 63 017

- 1 55 80 148 1 55 80 148

- Warehousing and Distribution Expenses - 9 072 9 072

- - -

- Other Repairs - 3 78 741 3 78 741

- - -

Balances as on 31st March, 2010

3 Unsecured loan 8 11 34 279 - 8 11 34 279

2 53 90 412 - 2 53 90 412

4 Sundry Creditors - 1 00 531 1 00 531

- 1 32 83 101 1 32 83 101

5 Financial Guarantees received 3 75 000 - 3 75 000

3 75 000 - 3 75 000

Note: Figure in italics represents previous year’s amount.

Disclosure in respect of material Related Party Transactions during the Year:

1 Unsecured loan consists of Rs. 5 57 43 866 (Previous Year Rs. 2 53 83 597) loan taken from Reliance Retail Limited.

2 Rent includes Rs. 13 25 76 809 (Previous Year Rs.1 43 77 820) Reliance Fresh Limited and Rs. 4 64 39 207 (Previous Year Rs. Nil)paid to Reliance Hypermart Limited.






Partner Director


Mumbai






Additional Information as required under Part IV of Schedule VI to the Companies Act, 1956

Balance Sheet Abstract and Company’s General Business Profile:

I. Registration Details:

Registration No. U 5 1 9 0 9 M H 2 0 0 7 P L C I 7 5 6 5 2

Balance Sheet Date: 3 1 - 0 3 - 2 0 1 0 State Code: 1 1

II. Capital raised during the year: (Amount in Rs. Thousand )

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: (Amount in Rs. Thousand )

Total Liabilities: 1 0 4 2 8 4 Total Assets: 1 0 4 2 8 4

Sources of Funds: Application of Funds:

Paid up Capital: 5 0 0 Net Fixed Assets: 1 6 3 8 1

Share Application Money: N I L Investments: N I L

Reserves and Surplus: N I L Deferred Tax Assets 7 2 7 2

Secured Loans: N I L Current Assets 6 5 9 3 4

Unsecured Loans: 8 1 1 3 4 Miscellaneous Expenditure 5

Current Liabilities 2 2 6 5 0 Profit and Loss Account: 1 4 6 9 2

IV. Performance of the Company: (Amount in Rs. Thousand )

Net Turnover: 1 7 1 4 1 7 Total Expenditure: 1 7 8 8 1 6

Profit / (-) Loss before tax: ( 7 3 9 9 ) Profit / (-) Loss after tax: ( 4 6 0 9 )

Earnings per Share in Rs:

- Basic ( 9 2 . 1 9 ) Dividend Rate: N I L

- Diluted ( 9 2 . 1 9 )

V. Generic Names of principal products of the Company:

Item Code number N A

Product Description N A

Item Code number N A

Product Description N A

45 Reliance Digital Media Limited

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