34 Reliance Trends Limited

RELIANCE TRENDS LIMITED

Annual Report2009 - 2010

1Reliance Trends Limited

Directors’ Report

Dear Members,

Your Directors are pleased to present the Fourth Annual Reportand the Audited Accounts for the year ended on March 31,2010.

Financial Results

The financial performance of the Company for the year endedon March 31, 2010 is summarized below:

(Rupees in Lakh)

2009-2010 2008-2009

Gross Profit/(Loss) beforeDepreciation, Interest and Tax 207.15 (251.13)

Less: Interest 7.77 0.18Depreciation 411.23 120.31

Profit/(Loss) before Tax (211.85) (371.62)

Less: Provision forFringe Benefit Tax - 34.50Deferred Tax (73.01) (114.45)

Profit/(Loss) after Tax (138.84) (291.67)

Balance brought forwardfrom Previous Year (310.40) (18.73)

Balance carried to Balance Sheet (449.24) (310.40)

Operational and Financial Review

During the year under review, the Company has maintained itsgrowth by expanding its retail presence in new cities and townsin India. The Company’s Reliance Trends stores offer widecollection covering more than 100 International and Indian brandsincluding private label products at affordable prices for men,women and kids. The latest fashion and high quality productscoupled with incredible price offering has been well receivedand appreciated by its customers. Apart from ready-to-weargarments, the stores also cater to consumers who prefer to shopfor fabric and tailor their clothes. The Company has plans toexpand aggressively, thereby strengthening its foothold overthe Indian Apparel Industry.

The Company has incurred a loss of Rs. 138.84 Lakh for thefinancial year ended March 31, 2010. With the optimisation ofresources and further scaling up of retail store operations, theCompany is confident of posting better results in the future.

Dividend

Your Directors have not recommended any dividend on EquityShares for the year under review.

Directors

In accordance with the provisions of the Companies Act, 1956,Shri Raghu Pillai retires by rotation and being eligible, offershimself for reappointment at the ensuing Annual GeneralMeeting.

Directors’ Responsibility Statement

Pursuant to the requirement under Section 217(2AA) of theCompanies Act, 1956 with respect to Directors’ ResponsibilityStatement, it is hereby confirmed that:

(i) in the preparation of the accounts for the year ended 31stMarch, 2010, the applicable accounting standards havebeen followed and there are no material departures fromthe same;

(ii) the Directors have selected such accounting policies andapplied them consistently and made judgments andestimates that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company atthe end of the financial year and of the loss of the Companyfor the year under review;

(iii) the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordancewith the provisions of the Companies Act, 1956 forsafeguarding the assets of the Company and for preventingand detecting fraud and other irregularities;

(iv) the Directors have prepared the accounts for the year ended31st March, 2010 on a ‘going concern’ basis.

Auditors

During the year, Messrs S. R. Batliboi & Co., CharteredAccountants, resigned as joint statutory auditors of theCompany. Messrs Chaturvedi & Shah, Chartered Accountants,continue as statutory auditor of the company. MessrsChaturvedi & Shah, Chartered Accountants, Statutory Auditorsof the Company, hold office until the conclusion of the ensuingAnnual General Meeting of the Company and are eligible for reappointment.

The Company has received letter from them to the effect thattheir re-appointment, if made, would be within the prescribedlimits under Section 224(1B) of the Companies Act, 1956 andthat they are not disqualified for such re-appointment withinthe meaning of Section 226 of the Companies Act, 1956.

Particulars of Employees

As required under the provisions of Section 217(2A) of theCompanies Act, 1956, read with the Companies (Particulars ofEmployees) Rules, 1975, as amended, the names and otherparticulars of the employees are set out in the Annexure to thisReport.

2 Reliance Trends Limited

Conservation of Energy, Technology Absorption andForeign Exchange Earnings and Outgo

The particulars relating to conservation of energy, technologyabsorption and foreign exchange earnings and outgo, required tobe furnished pursuant to Section 217(1)(e) of the CompaniesAct, 1956, read with Companies (Disclosures of Particulars inthe 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 tothe Company.

ii. Foreign Exchange Earnings and Outgo:

Foreign Exchange Earned : Rs. 92.45 Lakh

Foreign Exchange Used : Rs. 38.61 Lakh

Acknowledgement

Your Directors would like to express their grateful appreciationfor assistance and cooperation received from Reliance IndustriesLimited, Reliance Retail Limited, Banks, GovernmentAuthorities, Customers, Vendors, Employees and Membersduring the year under review.

For and on behalf of the Board of Directors

Arun Sirdeshmukh Madhavan GanesanDirector Director

Place: Mumbai

Date: April 20, 2010


Auditors Report

To the Members of,RELIANCE TRENDS LIMITED

We have audited the attached Balance Sheet of RELIANCETRENDS LIMITED as at March 31, 2010, the Profit and LossAccount and also the Cash Flow Statement for the year endedon that date. These financial statements are the responsibilityof the Company’s management. Our responsibility is to expressan opinion on these financial statements based on our audit.

1. We have conducted our audit in accordance with the AuditingStandards generally accepted in India. Those standardsrequire that we plan and perform the audit to obtainreasonable assurance about whether the financial statementsare free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amountsand disclosures in the financial statements. An audit alsoincludes assessing the accounting principles used andsignificant estimates made by the management, as well asevaluating the overall financial statement presentation. Webelieve that our audit provides a reasonable basis for ouropinion.

2. As required by the Companies (Auditor’s Report) Order2003 (as amended) issued by the Central Government ofIndia in terms of sub-section (4A) of section 227 of theCompanies Act, 1956, we enclose in the Annexure astatement on the matters specified in paragraphs 4 and 5of the said Order.

3. Further to our comments in the Annexure referred toabove, we report that:

a) We have obtained all the information and explanations,which to the best of our knowledge and belief werenecessary for the purposes of our audit;

b) In our opinion, proper books of account as requiredby law have been kept by the Company so far asappears from our examination of those books;

c) The Balance Sheet, the Profit and Loss Account andthe Cash Flow Statement dealt with by this report arein agreement with the books of account;

d) In our opinion, the Balance Sheet, the Profit and LossAccount and the Cash Flow statement dealt with bythis report comply with the mandatory AccountingStandards referred to in sub-section (3C) of section211 of the Companies Act, 1956;

e) On the basis of written representations received fromthe Directors as on March 31, 2010 and taken onrecord by the Board of Directors, we report that noneof the Directors is disqualified as on March 31, 2010from being appointed as a director in terms of clause(g) of sub-section (1) of section 274 of the CompaniesAct, 1956;

f) In our opinion and to the best of our information andaccording to the explanations given to us, the saidaccounts give the information required by theCompanies Act, 1956, in the manner so required, andpresent a true and fair view in conformity with theaccounting 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 theloss for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of thecash flows for the year ended on that date.

For Chaturvedi & ShahChartered AccountantsFirm Registration No. 101720W

Amit ChaturvediPartnerMembership No.: 103141

Place : MumbaiDate : April 20, 2010


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

1. a) The Company has maintained proper records showingfull particulars, including quantitative details andsituation of fixed assets.

b) Fixed assets have been physically verified by themanagement in a phased periodical manner as perregular programme of verification, which in our opinionis reasonable, having regard to the size of the Companyand nature of its assets. As informed, no materialdiscrepancies were noticed on such physicalverification.

c) There are no substantial disposals of fixed assets duringthe year.

2. In respect of its inventories:

(a) The inventory has been physically verified during theyear by the management. In our opinion, the frequencyof verification is reasonable.

(b) The procedures of physical verification of inventoriesfollowed by the management are reasonable andadequate in relation to the size of the Company andthe nature of its business.

(c) The Company has maintained proper records ofinventory. As explained to us, there were no materialdiscrepancies noticed on physical verification ofinventory.

3. The Company has neither granted nor taken any loan,secured or unsecured to/from companies, firms and otherparties covered in the Register maintained under Section301 of the Companies Act, 1956.Therefore, the provisionsof clause (iii) (b), (c), (d), (f), (g) of the Companies(Auditor’s Report) Order 2003, (as amended) are notapplicable to the Company.

4. In our opinion and according to the information andexplanations given to us, there is an adequate internal controlsystem commensurate with the size of the Company andthe nature of its business for the purchase of fixed assetsand for the sale of services. During the course of our audit,no major weakness has been noticed in the internal controlsystem in respect of these areas.

5. According to information and explanation given to us, weare of the opinion that there are no contracts orarrangements referred to in section 301 of the CompaniesAct. 1956 that needs to be entered into the registermaintained under section 301. Therefore, the provisions ofclause (v) (b) of the Companies (Auditor’s Report) Order2003, (as amended) is not applicable to the Company.

6. The Company has not accepted any deposit from thepublic.

7. In our opinion, the Company has an internal audit systemcommensurate with the size and nature of its business.

8. To the best of our knowledge and according to theinformation and explanation provided to us, the CentralGovernment has not prescribed the maintenance of costrecords 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 appropriateauthorities undisputed statutory dues includingprovident fund, investor education and protectionfund, employees’ state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, cess andother statutory dues applicable to it. According to theinformation and explanations given to us, noundisputed amounts payable in respect of providentfund, investor education and protection fund,employees’ state insurance, income-tax, wealth-tax,service tax, sales-tax, customs duty, cess and otherundisputed statutory dues were outstanding, as atMarch 31, 2010 for a period of more than six monthsfrom the date they became payable.

b) According to the information and explanation givento us, there are no dues of sales tax, income tax, wealthtax, service tax, custom duty, excise duty and cesswhich have not been deposited on account of anydispute.

10. The Company has been registered for a period of less thanfive years and hence we are not required to comment onwhether or not the accumulated losses at the end of thefinancial year is fifty per cent or more of its net worth andwhether it has incurred cash losses in such financial yearand in the immediately preceding financial year.

11. Based on our audit procedures and according to theinformation and explanations given to us, we are of theopinion that the Company has not defaulted in repaymentof dues to banks. The Company has not borrowed anyfunds from financial institutions or debenture holders duringthe year under audit.

12. In our opinion and according to the explanations given tous and based on the information available, no loans andadvances have been granted on the basis of security byway 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 ofclause 4(xiii) of the Companies (Auditor’s Report) Order2003, (as amended) are not applicable to the Company.

14. In our opinion, the Company is not dealing or trading inshares, securities, debentures and other investments andtherefore the provisions of clause (xiv) of the Companies(Auditor’s Report) Order 2003, (as amended) are notapplicable.


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

15. According to information and explanation given to us theCompany has not given any guarantee for loans taken byothers from bank or financial institutions. Therefore, theprovisions of Clause (xv) of paragraph 4 the Order is notapplicable.

16. The term loans raised by the company were applied forthe purpose for which loans were obtained.

17. According to the information and explanations given to usand on an overall examination of the balance sheet of theCompany, we report that no funds raised on short-termbasis have been used for long-term investment.

18. The Company has not made any preferential allotment ofshares to parties and companies covered under Registermaintained 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 publicissue during the year.

21. Based upon the audit procedures performed for the purposeof reporting the true and fair view of the financial statementsand as per the information and explanations given by themanagement, we have not come across any instance ofmaterial fraud on or by the Company, noted or reportedduring the course of our audit.

For Chaturvedi & ShahChartered AccountantsFirm Registration No. 101720W

Amit ChaturvediPartnerMembership No.: 103141

Place : MumbaiDate : April 20, 2010


(Rs. in lakh)Schedule As at As at

31st March, 2010 31st March, 2009SOURCES OF FUNDSShareholders’ Funds

Share Capital A 5.00 5.00Loan Funds

Secured Loans B 46.39 84.95Unsecured Loans C 16,517.52 8,707.01

16,563.91 8,791.96TOTAL 16,568.91 8,796.96

APPLICATION OF FUNDSFixed Assets D

Gross Block 7,367.39 4,520.86Less: Depreciation 529.98 120.31Net Block 6,837.41 4,400.55Capital Work-in-Progress 6,788.21 6,510.77

13,625.62 10,911.32Investments E 0.98 0.98Deferred Tax Assets 191.65 118.64Current Assets, Loans and AdvancesCurrent Assets F

Inventories 6,371.90 3,319.83Sundry Debtors 531.53 1,047.78Cash and Bank Balances 48.12 22.02Other Current Assets 0.08 -

6,951.63 4,389.63Loans and Advances G 1,660.60 1,426.07

8,612.23 5,815.70Less :Current Liabilities and Provisions H

Current Liabilities 6,188.09 8,115.08Provisions 122.76 245.07

6,310.85 8,360.15Net Current Assets 2,301.38 (2,544.45)Miscellaneous Expenditure I 0.04 0.07(To the extent not written off or adjusted)Profit and Loss Account 449.24 310.40

TOTAL 16,568.91 8,796.96Significant Accounting Policies NNotes on Accounts O

Reliance Trends LimitedBalance Sheet as at 31st March, 2010

As per our Report of even date For and on behalf of the BoardFor Chaturvedi & Shah Arun SirdeshmukhChartered Accountants Director

Amit Chaturvedi Madhavan GanesanPartner DirectorMembership No: 103141

MumbaiDated : 20th April, 2010


(Rs. in lakh)

Schedule 2009-10 2008-09INCOME

Turnover 18,421.20 17,238.77

Less: Service Tax Recovered 1.27 138.75

18,419.93 17,100.02

Other Income J 104.99 28.65

Variation in Stocks K 3,045.52 3,229.38

21,570.44 20,358.05

EXPENDITURE

Purchases 15,910.30 16,355.44

Operating and Other Expenses L 5,452.99 4,253.74

Interest and Finance charges M 7.77 0.18

Depreciation 411.23 120.31

21,782.29 20,729.67

Profit/ (Loss) before Tax (211.85) (371.62)

Provision for Fringe Benefit Tax - 34.50

Provision for Deferred Tax (73.01) (114.45)

Profit/ (Loss) after Tax (138.84) (291.67)

Add: Balance brought forward from Previous Year (310.40) (18.73)

Balance carried to Balance Sheet (449.24) (310.40)

Basic and Diluted Earnings per Share of face value

of Rs 10 each (in Rupees) (277.68) (583.33)

[Refer Note 8, Schedule “O”]

Significant Accounting Policies N

Notes on Accounts O

Reliance Trends LimitedProfit and Loss Account for the year ended 31st March, 2010





(Rs. in lakh)

2009-10 2008-09

A: CASH FLOW FROM OPERATING ACTIVITIESNet Profit/ (Loss) before tax as per Profit and Loss Account (211.85) (371.62)Adjusted for:Miscellaneous Expenditure written off 0.03 0.03(Profit)/ Loss on sale/ Discarding of Assets (net) 3.78 -Depreciation 411.23 120.31Effect of Exchange Rate Change 7.72 -Interest Income (10.66) (2.55)Interest and Finance Charges 7.77 -

419.87 117.79Operating Profit before Working Capital Changes 208.02 (253.83)Adjusted for:Trade and Other Receivables 285.90 (2,337.48)Inventories (3,052.07) (3,250.35)Trade Payables (2,573.49) 7,617.50

(5,339.66) 2,029.67Cash Generated from Operations (5,131.64) 1,775.84Taxes Paid (4.83) (34.50)Net Cash from/ (used in) Operating Activities (5,136.47) 1,741.34

B: CASH FLOW FROM INVESTING ACTIVITIESPurchase of Fixed Assets (2,628.65) (8,879.34)Sale/ Decapitalisation of Fixed Assets 16.46 -Purchase of Investments - (0.98)Interest Income 10.58 2.55Net Cash used in Investing Activities (2,601.61) (8,877.77)

C: CASH FLOW FROM FINANCING ACTIVITIESProceeds from Long Term Borrowings 23,399.19 9,856.26Repayment of Long Term Borrowings (15,627.24) (2,734.22)Interest Paid (7.77) -Net Cash from Financing Activities 7,764.18 7,122.04Net Increase/ (Decrease) in Cash and Cash Equivalents 26.10 (14.39)Opening Balance of Cash and Cash Equivalents 22.02 36.41Closing Balance of Cash and Cash Equivalents 48.12 22.02

Reliance Trends LimitedCash Flow Statement for the year 2009-10





(Rs. in lakh)

SCHEDULE A As at As at31st March, 2010 31st March, 2009

SHARE CAPITAL

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 companyalong with its nominees.

(Rs. in lakh)

SCHEDULE B As at As at31st March, 2010 31st March, 2009

SECURED LOANS

Term Loans from Banks

Rupee Loans * 46.39 84.95

TOTAL 46.39 84.95

* Loans are secured by hypothecation of vehicles

(Rs. in lakh)

SCHEDULE C As at As at31st March, 2010 31st March, 2009

UNSECURED LOANS

Long Term Loans

From holding Company 16,517.52 8,707.01

TOTAL 16,517.52 8,707.01

Schedules forming part of the Balance Sheet



SCH

ED

UL

E

D

FIX

ED

ASS

ET

S(R

s. in

lakh

)

Descr

iption

Gross

Bloc

kDe

preci

ation

Net B

lock

As at

Addit

ions

Dedu

ction

s /As

atUp

toFo

r the

Year

Dedu

ction

s/Up

toAs

atAs

at1st

Apri

l, 20

09Ad

justm

ents

31st

March

, 201

031

st Ma

rch, 2

009

Adjus

tmen

ts31

st Ma

rch, 2

010

31st

March

, 201

031

st Ma

rch, 2

009

Build

ing

-2.

63-

2.63

-2.

63-

2.63

--

Plan

t and

Mac

hine

ry10

4.29

111.

65-

215.

943.

1830

.47

-33

.65

182.

2910

1.11

Elec

trica

l Ins

talla

tions

805.

2284

5.64

-1,

650.

8614

.26

67.8

8-

82.1

41,

568.

7279

0.96

Equi

pmen

ts1,

971.

0062

6.71

8.05

2,58

9.66

51.8

614

1.60

0.35

193.

112,

396.

551,

919.

14Fu

rnitu

re a

nd82

1.90

675.

26-

1,49

7.16

37.4

587

.36

-12

4.81

1,37

2.35

784.

45Fi

xtur

esVe

hicl

es10

5.81

2.47

13.7

594

.53

-10

.19

1.21

8.98

85.5

510

5.81

Leas

ehol

d71

2.64

603.

97-

1,31

6.61

13.5

671

.10

-84

.66

1,23

1.95

699.

08 Im

prov

emen

ts

Tota

l4,

520.

862,

868.

3321

.80

7,36

7.39

120.

3141

1.23

1.56

529.

986,

837.

414,

400.

55

Prev

ious

yea

r0.

215,

340.

9582

0.30

4,52

0.86

-12

0.31

-12

0.31

4,40

0.55

0.21

Cap

ital W

ork-

in-P

rogr

ess

6,78

8.21

6,51

0.77

Not

es :

Cap

ital W

ork-

in-P

rogr

ess i

nclu

des:

i)R

s. 29

6.14

lakh

(Pre

viou

s Yea

r Rs.

328.

43 la

kh) o

n ac

coun

t of A

dvan

ce a

gain

st P

roje

ct C

ontra

cts.

ii)R

s. 5,

290.

36la

kh (P

revi

ous Y

ear R

s. 41

38.1

6 la

kh) o

n ac

coun

t of P

roje

ct D

evel

opm

ent E

xpen

ditu

re.

iii)

Rs.

388.

63 la

kh (P

revi

ous Y

ear R

s.207

.98

lakh

) on

acco

unt o

f con

stru

ctio

n m

ater

ials

at s

ite.



(Rs. in lakh)SCHEDULE E As at As at

31st March, 2010 31st March, 2009

INVESTMENTS

LONG TERM INVESTMENTSGovernment and other Securities -Unquoted

6 years National Savings Certificates 0.98 0.98(Pledged with Rajasthan VAT Authorities)

TOTAL 0.98 0.98

Aggregate Value of Book value Book value

Unquoted Investments 0.98 0.98

(Rs. in lakh)SCHEDULE F As at As at

31st March, 2010 31st March, 2009CURRENT ASSETS

INVENTORIES

Stores and Packing Materials 27.52 20.97

Traded Goods 6,344.38 3,298.86

6,371.90 3,319.83

SUNDRY DEBTORS ( Unsecured and Considered Good) (1)

Others 531.53 1,047.78

CASH AND BANK BALANCES

Cash in Hand 25.31 10.88

Balance with Scheduled Banks

In Current Accounts 22.71 11.14

In Fixed Deposit Accounts 0.10 -48.12 22.02

OTHER CURRENT ASSETS

Interest Accrued on Investments 0.08 -

TOTAL 6,951.63 4,389.63

(1) Includes Rs 453.27 lakh (Previous Year Rs 968.87 lakh) recievable from the following companies under the same management.(a) Reliance Hypermart Limited(b) Reliancedigital Retail Limited



(Rs. in lakh)

SCHEDULE G As at As at31st March, 2010 31st March, 2009

LOANS AND ADVANCES

UNSECURED - (Considered good unless otherwise stated)

Advance Income Tax (net of Provision) 56.47 52.07

Advances Recoverable in Cash or in kind or for value to be received (1) 111.40 623.39

Deposits 1,244.51 597.30

Balance with Service Tax/ Sales Tax Authorities, etc. 248.22 153.31

TOTAL 1,660.60 1,426.07

(1) Includes Rs. 14.94 lakh (Previous Year Rs. Nil) recievable from the following companies under the same management.Maximumbalance receivable during the year Rs.14.94 lakh (Previous Year Rs. Nil)(a) Reliance Hypermart Limited(b) Reliance Retail Limited

(Rs. in lakh)SCHEDULE H As at As at

31st March, 2010 31st March, 2009CURRENT LIABILITIES AND PROVISIONSCurrent Liabilities

Sundry Creditors- Micro enterprises and Small enterprises (1) - -- Others (2) 6,188.09 8,115.08

6,188.09 8,115.08Provisions

Provision for Fringe Benefit Tax (Net of Advance Tax) - 0.43Provision for Leave Encashment/ Gratuity 122.76 244.64

122.76 245.07

6,310.85 8,360.15Note:(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. 533.96 lakh (Previous year Rs.16.84 lakh) for capital expenditure.


(Rs. in lakh)

SCHEDULE I As at As at31st March, 2010 31st March, 2009

MISCELLANEOUS EXPENDITURE(to the extent not written off or adjusted)

Preliminary Expenses

As per last Balance Sheet 0.07 0.10

Less : Written - off during the year 0.03 0.03

TOTAL 0.04 0.07

Schedules forming part of the Profit and Loss Account(Rs. in lakh)

SCHEDULE J 2009-10 2008-09

OTHER INCOME

Interest

From Others 10.66 2.55

Miscellaneous Income 94.33 26.10

TOTAL 104.99 28.65

(Rs. in lakh)

SCHEDULE K 2009-10 2008-09

VARIATION IN STOCKS

STOCK-IN-TRADE (at close)

Traded Goods 6,344.38 3,298.86

STOCK-IN-TRADE (at commencement)

Traded Goods 3,298.86 69.48

TOTAL 3,045.52 3,229.38



(Rs. in lakh)

SCHEDULE L 2009-10 2008-09

OPERATING AND OTHER EXPENSES

PAYMENT TO AND PROVISIONSFOR EMPLOYEES

Salaries, Wages and Bonus 678.55 475.60Contribution to Provident Fund, Gratuity Fund,Superannuation Fund, Employee’s State Insurance Scheme,Pension Scheme,Labour Welfare Fund etc. 69.18 22.63Employee Welfare and other amenities 44.15 33.73

791.88 531.96SALES AND DISTRIBUTION EXPENSES

Samples, Sales Promotion and Advertisement Expenses 866.99 840.63Store Running Expenses 559.72 337.46Brokerage, Discount and Commission 4.19 0.08Warehousing and Distribution Expenses 444.38 829.80Sales Tax 1.24 2.30

1,876.52 2,010.27OPERATING AND ESTABLISHMENT EXPENSES

Stores and Packing Materials 186.71 180.25Machinery Repairs 22.01 7.67Building Repairs and Maintenance 86.40 164.91Other Repairs 33.35 21.77Rent including Lease Rentals 1,441.12 710.23Insurance 6.36 3.11Rates and Taxes 99.22 15.19Travelling and Conveyance Expenses 26.85 63.56Payment to Auditors 0.42 0.36Professional Fees 10.47 25.28Loss on Sale/ Discarding of Assets 3.78 -Exchange Differences (Net) 6.78 3.30Security Expenses 107.45 93.11Electricity Expenses 659.22 354.02Telephone Expenses 20.48 16.79Printing and Stationery 10.91 13.54Hire Charges 5.95 4.18General Expenses 57.08 34.21

2,784.56 1,711.48Miscellaneous expenditure written off 0.03 0.03

TOTAL 5,452.99 4,253.74

(Rs. in lakh)SCHEDULE M 2009-10 2008-09

INTEREST & FINANCE CHARGESFixed Loans 7.62 -Others 0.15 0.18

TOTAL 7.77 0.18

Schedules forming part of the Profit and Loss Account


SCHEDULE N

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 accountingprinciples 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 theassets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during thereporting period. Difference between the actual results and estimates are recognized in the period in which the results areknown/ materialised.

3 Own Fixed Assets

Fixed Assets are stated at cost net of CENVAT/ Value Added Tax less accumulated depreciation and impairment loss, if any. AllCosts attributable to Fixed Assets are capitalised. Improvement cost on Lease premises up to the date of commercial operationis capitalised as “Leasehold Improvements”.

4 Depreciation

Depreciation on Fixed Assets is provided on Straight Line Method at the rates and in the manner prescribed in Schedule XIV tothe Companies Act, 1956 over their useful life except, leasehold improvements are amortised over the lower of estimated usefullife or lease period; fire alarm system, signage and access control system are depreciated over the estimated useful life of fiveyears; baskets are depreciated over the estimated useful life of three years.

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 tothe Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognised in prioraccounting period is reversed if there has been a change in the estimate of recoverable amount.

6 Lease Rentals

Operating lease: Rentals are expensed with reference to lease terms and other considerations.

7 Foreign Currency Transactions

i) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transactionor that approximates the actual rate at the date of transaction.

ii) Monetary items denominated in foreign currencies at the year end are restated at year end rates.

iii) Non monetary foreign currency items are carried at cost.

iv) Any income or expense on account of exchange difference either on settlement or on translation is recognised in the Profitand Loss Account except in case of long term liabilities, where they relate to acquisition of fixed assets, in which case they areadjusted to the carrying cost of such assets.

8 Investments

Current Investments are carried at the lower of cost and quoted/ fair value, computed category wise. Long Term Investments arestated at cost. Provision for diminution in the value of Long Term Investments is made only if such a decline is other thantemporary.

9 InventoriesItems of Inventories are measured at lower of cost and net realisable value, after providing for obsolescence, if any. Cost ofInventory comprises of all cost of purchase and other cost incurred in bringing them to the respective present location andcondition. Costs are determined on weighted average basis.

10 Turnover

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



11 Employee Benefits

i) Short term employee benefits are recognised as an expense at the undiscounted amount in the Profit And Loss account ofthe 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 forthe year in which the employee has rendered services. The expense is recognised at the present value of the amountspayable 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.

12 Miscelleaneous Expenditures

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

13 Provision for Current Tax 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 ratesand laws that are enacted or substantively enacted as on the Balance Sheet date. The deferred tax asset is recognized and carriedforward only to the extent that there is a virtual certainty that the asset will be realised in future.

14 Provision, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a resultof past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but aredisclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.

SCHEDULE N (Contd.)



SCHEDULE O

NOTES ON ACCOUNTS

1 The previous year’s figures have been reworked, regrouped, rearranged and reclassified wherever necessary. Amounts and otherdisclosures for the preceding year are included as an integral part of the current year financial statements and are to be read inrelation to the amounts and other disclosures relating to the current year.

2 The Company is in the process of setting up various facilities for conducting its business. The expenditure incurred during theimplementation period for bringing the Project in the condition of its intended use, is treated as “Project DevelopmentExpenditure” pending capitalisation and included in Capital Work-in-Progress. Capitalisation is done in the ratio of phasedimplementation. Necessary details as per part II of Schedule VI to the Companies Act, 1956 have been disclosed below:

Project Development Expenditure Account (included under Capital Work-in-Progress) :

(Rs. in lakh)

2009-10 2008-09

Opening Balance 4,138.16 1,385.13

Add:

(i) Payments to and Provisions for Employees- Salaries, Wages and Bonus 1,288.74 1,980.44- Contribution to Provident Fund, Gratuity Fund, 62.44 93.08Superannuation Fund, Pension Scheme etc.- Employee Welfare and other amenities 58.75 104.88

1,409.93(ii) Repairs and Maintenance:

- Machinery 9.02 6.68

- Building 41.74 43.91

- Other 60.73 85.14

111.49

(iii) Rent including Lease Rentals 34.49 67.61

(iv) Insurance 13.01 10.31

(v) Rates and Taxes 20.93 39.32

(vi) Travelling and Conveyance Expenses 47.49 282.04

(vii) Professional Fees 17.40 96.19(viii) Electricity Expenses 32.96 61.83

(ix) Telephone Expenses 22.04 45.20(x) Printing and Stationery 6.65 25.19

(xi) Hire Charges 4.00 0.99

(xii) General Expenses 18.94 174.05

1,739.33 3,116.86

Less:

Capitalised during the year 587.13 363.83Closing Balance 5,290.36 4,138.16



3 Turnover Includes Income from Services for Rs 13.60 lakh (Previous year Rs 1234.80 lakh)

4 The Company is mainly engaged in ‘Organised Retail’ in India. All the activities of the Company revolve around this mainbusiness. Accordingly, the Company has only one identifiable segment reportable under Accounting Standard 17 “SegmentReporting”, notified in the Companies (Accounting Standards) Rules 2006.

5 As per Accounting Standard 15 “Employee Benefits”, notified in the Companies (Accounting Standards) Rules 2006, thedisclosures 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/ capitalised for the year are as under:

2009-10 2008-09

Employer’s Contribution to Provident Fund 72.79 86.36

Employer’s Contribution to Pension Scheme 15.85 17.91

Defined Benefit Plan

The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, whichrecognises 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.

I. Reconciliation of opening and closing balances of Defined Benefit obligation

(Rs. in lakh)Gratuity Leave Encashment

(Unfunded) (Unfunded)2009-10 2008-09 2009-10 2008-09

Defined Benefit obligation at beginning of the year 37.00 54.15 208.06 120.48

Current Service Cost 24.94 18.37 17.34 55.06

Interest Cost 2.78 4.33 11.70 9.12

Contribution by the plan participants - - - -

Actuarial (gain)/ loss 5.72 (39.85) (80.66) 36.36

Benefits paid - - (104.12) ( 12.96)

Defined Benefit obligation at year end 70.44 37.00 52.32 208.06

II. Reconciliation of fair value of assets and obligations



Fair value of plan assets as on 31st March, 2010 - - - -

Present value of benefit obligation as on 31st March ,2010 70.44 37.00 52.32 208.06

Amount recognised in Balance Sheet 70.44 37.00 52.32 208.06

SCHEDULE O (Contd.)



III. Expenses recognized during the year



Current Service Cost 24.94 18.37 17.34 55.06

Interest Cost on benefit obligation 2.78 4.33 11.70 9.12

Actuarial (gain)/ loss recognized in the year 5.72 ( 39.85) (80.66) 36.36

Past service cost - - - -

Net benefit expense /( income) 33.44 ( 17.15) (51.62) 100.54

Actual return on plan asset - - - -

IV. Actuarial assumptionsGratuity Leave Encashment


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

Rate of escalation in salary (per annum) 6.00% 6.50% 6.00% 8.00%

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 iscertified by the actuary.

6 Payment to Auditors (excluding Service Tax, wherever applicable):

(Rs. in lakh)

2009-10 2008-09

(i) Audit Fees 0.30 0.30

(ii) Tax Audit Fees 0.06 0.06

0.36 0.36

7 The Deferred Tax Assets (net) comprises of the following:(Rs. in lakh)

As at As at31st March, 2010 31st March, 2009

(i) Deferred Tax Assets

- Disallowance under the Income Tax Act 1961 36.04 58.40

- Carried forward loss 2,417.91 1517.42

(ii) Deferred Tax Liability

- Related to Fixed Assets 2,262.30 1457.17

191.65 118.64Note: The virtual certainity is based on agreeements

SCHEDULE O (Contd.)



8 Earnings Per Share (EPS)

2009-10 2008-09

(i) Net Profit/ (Loss) after tax as per Profit And Loss account (Rs. in lakh) (138.84) (291.67)

(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) (277.68) (583.33)

9 General description of lease terms:

(i) Lease rentals are charged on the basis of agreed terms.

(ii) Assets are taken on lease over a period of 8 to 15 years .

10 Additional Information (to the extent applicable):

(Rs. in lakh)

As at As at31st March, 2010 31st March, 2009

(i) Capital Commitments:

Estimated amount of contracts remaining to be executed on 457.15 119.84capital accounts (net of advances) and not provided for.

(ii) Contingent Liabilities

Outstanding guarantees furnished to Banks and 35.15 5.15Financial Institutions including in respect of Letters of Credit.

11 Value of Imports on CIF basis in respect of:

(Rs. in lakh)

2009-10 2008-09

(i) Traded Goods - 22.32

(ii) Capital goods 33.60 907.74

(Rs. in lakh)

12 Expenditure in Foreign Currency: 2009-10 2008-09

Other matters 5.01 -

13 Value of Exports on FOB Basis in respect of (Rs. in lakh)

2009-10 2008-09

Traded Goods 92.45 46.40

14 Value of Stores and Packing Materials Consumed

2009-10 2008-09

% of % ofRs. in lakh Consumption Rs. in lakh Consumption

Indigenous 186.71 100% 180.25 100%

SCHEDULE O (Contd.)



SCHEDULE O (Contd.)

15 The Ministry of C\orporate Affairs, Government of India vide its order No 46/57/2010 - CL-III dated 21-02-2010 issued underSection 211(4) of the Companies Act,1956 has exempted the Company from disclosure of quantitative details in the Profit andLoss Account under paras 3(i) (a) and 3(ii) (b) of Part II, Schedule VI to the Companies Act ,1956.

16 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 extentapplicable.

17 As per Accounting Standard 18 ‘Related Party Disclosures’ notified in the Companies (Accounting Standards) Rules 2006, thedisclosures of transactions with the related parties as defined in the Accounting standard are given below :

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

Sr Name of the Related Party RelationshipNo1 Reliance Industries Limited Ultimate Holding Company

2 Reliance Retail Limited Holding Company

3 Reliance Corporate IT Park Limited }4 Reliance Digital Media Limited }5 Reliance Financials Distribution and Advisory Services Limited }6 Reliance Footprint Limited }7 Reliance Fresh Limited }8 Reliance Hypermart Limited }9 Reliance Infosolutions Private Limited } Fellow Subsidiaries10 Reliance Leisures Limited }11 Reliance People Serve Limited }12 Reliance Supply Chain Solutions Limited }13 Reliancedigital Retail Limited }14 Retail Concepts & Services (India) Limited }15 Strategic Manpower Solutions Limited }

(ii) Transactions during the year with related parties (excluding reimbursements):(Rs. in lakh)

SrNo Nature of Transactions Ultimate Holding Fellow TotalHolding Company Subsidiaries

Company

1 Unsecured Loan taken/ (repaid) - 7,810.49 - 7,810.49

- 7,037.09 - 7,037.09

2 Turnover 94.21 1.29 3,788.62 3,884.12

- 765.24 7,209.90 7,975.14

3 Purchases 172.36 25.55 675.73 873.64

- 2,995.88 1,059.19 4,055.07

4 Expenditure

- Store Running Expenses - - 443.60 443.60

- - 719.79 719.79

- Warehousing and Distribution expenses - - 210.47 210.47



SCHEDULE O (Contd.)

- - 310.73 310.73

Balance as at 31st March, 2010

5 Share Capital - 5.00 - 5.00

- 5.00 - 5.00

6 Unsecured Loan - 16,517.52 - 16,517.52

- 8,707.03 - 8,707.03

7 Loans and Advances - 10.21 4.73 14.94- - - -

8 Sundry Debtors - - 453.27 453.27

- 197.02 771.85 968.87

9 Sundry Creditors 17.39 5.03 41.00 63.42

- 3,110.02 200.14 3,310.16

10 Financial Guarantees taken - 35.15 - 35.15- 5.15 - 5.15

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

Disclosure in respect of material Related Party transactions during the year:

(i) Unsecured Loan taken includes Rs 7810.49 lakh (Previous Year Rs 7037.09 lakh) from Reliance Retail Limited.

(ii) Turnover includes transactions of Rs. 94.21 lakh (Previous Year Rs. Nil) with Reliance Industries Limited, Rs. 1.29 lakh(Previous Year Rs. 765.24 lakh) with Reliance Retail Limited, Rs. Nil (Previous Year Rs.5.83 lakh) with Retail Conceptsand Services ( India) Limited, Rs. 293.11 lakh (Previous Year Rs.1697.13 lakh) with Reliance Fresh Limited, Rs. 3457.64lakh (Previous Year Rs.5485.40 lakh) with Reliance Hypermart Limited, Rs 17.66 lakh (Previous Year Rs. 10.04 lakh) withReliance Footprint Limited, Rs.10.55 lakh (Previous Year Rs. 3.23 lakh) with Reliance Leisures Limited.

(iii) Purchases include Rs. 172.36 lakh (Previous Year Rs. Nil), Rs 25.55 lakh (Previous Year Rs.2995.88 lakh) from RelianceRetail Limited, Rs. 87.82 lakh (Previous Year Rs.3.34 lakh) from Reliance Fresh Limited, Rs. 0.30 lakh (Previous YearRs. 1.62 lakh) from Reliance Digital Retail Limited, Rs. 377.91 lakh (Previous Year Rs. 969.12 lakh) from RelianceHypermart Limited, Rs. 162.92 lakh (Previous Year Rs 63.37 lakh) from Reliance Leisures Limited and Rs. Nil (PreviousYear Rs 4.81 lakh) from Reliance Supply Chain Solution Limited.

(iv) Store Running Expenses includes Rs. 443.60 lakh (Previous Year Rs. 310.73 lakh) to Strategic Manpower SolutionsLimited

(v) Warehousing and Distribution Expenses Rs. 210.47 lakh (Previous Year Rs. 719.79 lakh) to Reliance Supply ChainSolution Limited.






I. Registration Details:

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

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

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

Total Liabilities: 2 2 8 7 9 7 6 Total Assets: 2 2 8 7 9 7 6

Sources of Funds: Application of Funds:

Paid up Capital: 5 0 0 Net Fixed Assets: 1 3 6 2 5 6 2

Share Application Money N I L Investment: 9 8

Reserves and Surplus: N I L Deferred Tax Assets: 1 9 1 6 5

Secured Loans: 4 6 3 9 Current Assets: 8 6 1 2 2 3

Unsecured Loans: 1 6 5 1 7 5 2 Miscellaneous Expenditure: 4

Current Liabilities: 6 3 1 0 8 5 Accumulated Losses: 4 4 9 2 4

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

Net Turnover: 1 8 4 1 9 9 3 Total Expenditure: 2 1 7 8 2 2 9

Profit / (-) Loss before tax: ( 2 1 1 8 5 ) Profit / (-) Loss after tax: ( 1 3 8 8 4 )

Earnings per Share in Rs:- Basic ( 2 7 7 . 6 8 ) Dividend Rate: N I L

- Diluted ( 2 7 7 . 6 8 )

V. Generic Names of principal services of the company:

Item Code number N A

Product Description N A

Item Code number N A

Product Description N A

Additional Information as required under Part IV of Schedule VI to the Companies Act, 1956Balance Sheet Abstract and Company’s General Business Profile:

34 Reliance Trends Limited

Documents

Transcript of 34 Reliance Trends Limited