Annual Report 2009 - 2010

RELIANCE TRENDS LIMITED

Reliance Trends Limited

Directors Report
Dear Members, Your Directors are pleased to present the Fourth 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: (Rupees in Lakh) 2009-2010 Gross Profit/(Loss) before Depreciation, Interest and Tax Less: Interest Depreciation Profit/(Loss) before Tax Less: Provision for Fringe Benefit Tax Deferred Tax Profit/(Loss) after Tax Balance brought forward from Previous Year Balance carried to Balance Sheet Operational and Financial Review During the year under review, the Company has maintained its growth by expanding its retail presence in new cities and towns in India. The Companys Reliance Trends stores offer wide collection covering more than 100 International and Indian brands including private label products at affordable prices for men, women and kids. The latest fashion and high quality products coupled with incredible price offering has been well received and appreciated by its customers. Apart from ready-to-wear garments, the stores also cater to consumers who prefer to shop for fabric and tailor their clothes. The Company has plans to expand aggressively, thereby strengthening its foothold over the Indian Apparel Industry. The Company has incurred a loss of Rs. 138.84 Lakh for the financial year ended March 31, 2010. With the optimisation of resources and further scaling up of retail store 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. 207.15 7.77 411.23 (211.85) (73.01) (138.84) (310.40) (449.24) 2008-2009 (251.13) 0.18 120.31 (371.62) 34.50 (114.45) (291.67) (18.73) (310.40) Directors In accordance with the provisions of the Companies Act, 1956, Shri Raghu Pillai 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 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 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 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 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. 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.

Reliance Trends Limited

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 of energy and technology absorption, are not applicable to the Company. Foreign Exchange Earnings and Outgo: Foreign Exchange Earned : Foreign Exchange Used : 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 Rs. 92.45 Lakh Rs. 38.61 Lakh

ii.

Arun Sirdeshmukh Director

Madhavan Ganesan Director

Place: Mumbai Date: April 20, 2010

Reliance Trends Limited

Auditors Report
To the Members of, RELIANCE TRENDS LIMITED We have audited the attached Balance Sheet of RELIANCE TRENDS 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 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. 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. 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; 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; The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account; In our opinion, the Balance Sheet, the Profit and Loss Account and the 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; On the basis of written representations received from the 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 Chartered Accountants Firm Registration No. 101720W

2.

Amit Chaturvedi Partner Membership No.: 103141 Place : Mumbai Date : April 20, 2010

3.

b)

c)

d)

e)

Reliance Trends Limited

Annexure referred to in paragraph 2 of our report of even date

Re: Reliance Trends Limited (the Company)

1.

a)

The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. 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. There are no substantial disposals of fixed assets during the year.

8.

b)

To the best of our knowledge and according to the information and explanation provided to us, the Central Government has not prescribed the maintenance of cost records under Section 209 (1) (d) of the Companies Act, 1956. 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, salestax, 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 months from the date they became payable. 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.

9.

c) 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. b)

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. 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 fixed assets and for the sale of services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. 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 provisions of clause (v) (b) of the Companies (Auditors Report) Order 2003, (as amended) is not applicable to the Company. The Company has not accepted any deposit from the public. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

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. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to banks. The Company has not borrowed any funds from financial institutions or debenture holders during the year under audit. 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 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.

4.

5.

6. 7.

Reliance Trends Limited

Annexure referred to in paragraph 2 of our report of even date

Re: Reliance Trends Limited (the Company)

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, the provisions of Clause (xv) of paragraph 4 the Order is 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 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 Chartered Accountants Firm Registration No. 101720W

Amit Chaturvedi Partner Membership No.: 103141 Place : Mumbai Date : April 20, 2010

Reliance Trends Limited

Reliance Trends Limited Balance Sheet as at 31st March, 2010

(Rs. in lakh) Schedule SOURCES OF FUNDS Shareholders Funds Share Capital Loan Funds Secured Loans Unsecured Loans TOTAL APPLICATION OF FUNDS Fixed Assets Gross Block Less: Depreciation Net Block Capital Work-in-Progress Investments Deferred Tax Assets Current Assets, Loans and Advances Current Assets Inventories Sundry Debtors Cash and Bank Balances Other Current Assets Loans and Advances Less : Current Liabilities and Provisions Current Liabilities Provisions Net Current Assets Miscellaneous Expenditure (To the extent not written off or adjusted) Profit and Loss Account TOTAL Significant Accounting Policies Notes on Accounts As per our Report of even date For Chaturvedi & Shah Chartered Accountants Amit Chaturvedi Partner Membership No: 103141 Mumbai Dated : 20th April, 2010 I As at 31st March, 2010 As at 31st March, 2009

A B C 46.39 16,517.52

5.00 84.95 8,707.01 16,563.91 16,568.91

5.00

8,791.96 8,796.96

D 7,367.39 529.98 6,837.41 6,788.21 E 13,625.62 0.98 191.65 4,520.86 120.31 4,400.55 6,510.77 10,911.32 0.98 118.64

F 6,371.90 531.53 48.12 0.08 6,951.63 1,660.60 8,612.23 3,319.83 1,047.78 22.02 4,389.63 1,426.07 5,815.70

H 6,188.09 122.76 6,310.85 2,301.38 0.04 449.24 16,568.91 N O For and on behalf of the Board Arun Sirdeshmukh Director Madhavan Ganesan Director 8,115.08 245.07 8,360.15 (2,544.45) 0.07 310.40 8,796.96

Reliance Trends Limited

Reliance Trends Limited Profit and Loss Account for the year ended 31st March, 2010
(Rs. in lakh) Schedule INCOME Turnover Less: Service Tax Recovered 18,421.20 1.27 18,419.93 Other Income Variation in Stocks J K 104.99 3,045.52 21,570.44 EXPENDITURE Purchases Operating and Other Expenses Interest and Finance charges Depreciation L M 15,910.30 5,452.99 7.77 411.23 21,782.29 Profit/ (Loss) before Tax Provision for Fringe Benefit Tax Provision for Deferred Tax Profit/ (Loss) after Tax Add: Balance brought forward from Previous Year Balance carried to Balance Sheet Basic and Diluted Earnings per Share of face value of Rs 10 each (in Rupees) [Refer Note 8, Schedule O] Significant Accounting Policies Notes on Accounts N O (277.68) (583.33) (211.85) (73.01) (138.84) (310.40) (449.24) 16,355.44 4,253.74 0.18 120.31 20,729.67 (371.62) 34.50 (114.45) (291.67) (18.73) (310.40) 17,238.77 138.75 17,100.02 28.65 3,229.38 20,358.05 2009-10 2008-09

As per our Report of even date For Chaturvedi & Shah Chartered Accountants Amit Chaturvedi Partner Membership No: 103141 Mumbai Dated : 20th April, 2010

For and on behalf of the Board Arun Sirdeshmukh Director Madhavan Ganesan Director

Reliance Trends Limited

Reliance Trends Limited Cash Flow Statement for the year 2009-10
(Rs. in lakh) 2009-10 A: CASH FLOW FROM OPERATING ACTIVITIES Net Profit/ (Loss) before tax as per Profit and Loss Account Adjusted for: Miscellaneous Expenditure written off (Profit)/ Loss on sale/ Discarding of Assets (net) Depreciation Effect of Exchange Rate Change Interest Income Interest and Finance Charges Operating Profit before Working Capital Changes Adjusted for: Trade and Other Receivables Inventories Trade Payables Cash Generated from Operations Taxes Paid Net Cash from/ (used in) Operating Activities B: CASH FLOW FROM INVESTING ACTIVITIES Purchase of Fixed Assets Sale/ Decapitalisation of Fixed Assets Purchase of Investments Interest Income Net Cash used in Investing Activities C: CASH FLOW FROM FINANCING ACTIVITIES Proceeds from Long Term Borrowings Repayment of Long Term Borrowings Interest Paid Net Cash from Financing Activities Net Increase/ (Decrease) in Cash and Cash Equivalents Opening Balance of Cash and Cash Equivalents Closing Balance of Cash and Cash Equivalents As per our Report of even date For Chaturvedi & Shah Chartered Accountants Amit Chaturvedi Partner Membership No: 103141 Mumbai Dated : 20th April, 2010 (211.85) 0.03 3.78 411.23 7.72 (10.66) 7.77 419.87 208.02 285.90 (3,052.07) (2,573.49) (5,339.66) (5,131.64) (4.83) (5,136.47) (2,628.65) 16.46 10.58 (2,601.61) 23,399.19 (15,627.24) (7.77) 7,764.18 26.10 22.02 48.12 For and on behalf of the Board Arun Sirdeshmukh Director Madhavan Ganesan Director (2,337.48) (3,250.35) 7,617.50 2,029.67 1,775.84 (34.50) 1,741.34 (8,879.34) (0.98) 2.55 (8,877.77) 9,856.26 (2,734.22) 7,122.04 (14.39) 36.41 22.02 0.03 120.31 (2.55) 117.79 (253.83) 2008-09 (371.62)

Reliance Trends Limited

Schedules forming part of the Balance Sheet

(Rs. in lakh) SCHEDULE A SHARE CAPITAL Authorised 50 000 Equity Shares of Rs. 10 each (50 000) TOTAL Issued, Subscribed and Paid-up Fully Paid-up 50 000 Equity Shares of Rs. 10 each (50 000) TOTAL 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. (Rs. in lakh) SCHEDULE B SECURED LOANS Term Loans from Banks Rupee Loans * TOTAL * Loans are secured by hypothecation of vehicles 46.39 46.39 84.95 84.95 As at 31st March, 2010 As at 31st March, 2009 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 As at 31st March, 2010 As at 31st March, 2009

(Rs. in lakh) SCHEDULE C UNSECURED LOANS Long Term Loans From holding Company TOTAL 16,517.52 16,517.52 8,707.01 8,707.01 As at 31st March, 2010 As at 31st March, 2009

10

SCHEDULE D (Rs. in lakh) Gross Block As at 1st April, 2009 104.29 805.22 1,971.00 821.90 105.81 712.64 2.47 603.97 13.75 94.53 1,316.61 13.56 10.19 71.10 1.21 8.98 84.66 85.55 1,231.95 2.63 111.65 845.64 626.71 675.26 8.05 2.63 215.94 1,650.86 2,589.66 1,497.16 3.18 14.26 51.86 37.45 2.63 30.47 67.88 141.60 87.36 0.35 2.63 33.65 82.14 193.11 124.81 182.29 1,568.72 2,396.55 1,372.35 101.11 790.96 1,919.14 784.45 105.81 699.08 Additions Deductions / As at Adjustments 31st March, 2010 Upto For the Year Deductions/ Upto 31st March, 2009 Adjustments 31st March, 2010 As at 31st March, 2010 As at 31st March, 2009 Depreciation Net Block

FIXED ASSETS

Reliance Trends Limited

Description

Building Plant and Machinery Electrical Installations Equipments Furniture and Fixtures Vehicles Leasehold Improvements 4,520.86 0.21 5,340.95 820.30 4,520.86 120.31 2,868.33 21.80 7,367.39 120.31 411.23 1.56 529.98 120.31 6,837.41 4,400.55 6,788.21

Total

4,400.55 0.21 6,510.77

Previous year

Schedules forming part of the Balance Sheet

Capital Work-in-Progress

Notes :

Capital Work-in-Progress includes:

i)

Rs. 296.14 lakh (Previous Year Rs. 328.43 lakh) on account of Advance against Project Contracts.

ii)

Rs. 5,290.36lakh (Previous Year Rs. 4138.16 lakh) on account of Project Development Expenditure.

iii)

Rs. 388.63 lakh (Previous Year Rs.207.98 lakh) on account of construction materials at site.

Reliance Trends Limited

11

Schedules forming part of the Balance Sheet

SCHEDULE E INVESTMENTS LONG TERM INVESTMENTS Government and other Securities -Unquoted 6 years National Savings Certificates (Pledged with Rajasthan VAT Authorities) TOTAL Aggregate Value of Unquoted Investments

As at 31st March, 2010

(Rs. in lakh) As at 31st March, 2009

0.98 0.98 Book value 0.98

0.98 0.98 Book value 0.98

(Rs. in lakh) SCHEDULE F CURRENT ASSETS INVENTORIES Stores and Packing Materials Traded Goods 27.52 6,344.38 6,371.90 SUNDRY DEBTORS ( Unsecured and Considered Good) Others CASH AND BANK BALANCES Cash in Hand Balance with Scheduled Banks In Current Accounts In Fixed Deposit Accounts OTHER CURRENT ASSETS Interest Accrued on Investments TOTAL
(1) (1)

As at 31st March, 2010

As at 31st March, 2009

20.97 3,298.86 3,319.83

531.53

1,047.78

25.31

10.88

22.71 0.10 48.12

11.14 22.02

0.08 6,951.63

4,389.63

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

12

Reliance Trends Limited

Schedules forming part of the Balance Sheet

(Rs. in lakh) SCHEDULE G As at 31st March, 2010 As at 31st March, 2009

LOANS AND ADVANCES UNSECURED - (Considered good unless otherwise stated) Advance Income Tax (net of Provision) Advances Recoverable in Cash or in kind or for value to be received (1) Deposits Balance with Service Tax/ Sales Tax Authorities, etc. TOTAL
(1)

56.47 111.40 1,244.51 248.22 1,660.60

52.07 623.39 597.30 153.31 1,426.07

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

SCHEDULE H CURRENT LIABILITIES AND PROVISIONS Current Liabilities Sundry Creditors Micro enterprises and Small enterprises (1) Others (2) Provisions Provision for Fringe Benefit Tax (Net of Advance Tax) Provision for Leave Encashment/ Gratuity 6,188.09

As at 31st March, 2010

(Rs. in lakh) As at 31st March, 2009

8,115.08 6,188.09 8,115.08 0.43 244.64 122.76 6,310.85 245.07 8,360.15

122.76

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. Includes Rs. 533.96 lakh (Previous year Rs.16.84 lakh) for capital expenditure.

(2)

Reliance Trends Limited

13

Schedules forming part of the Balance Sheet

(Rs. in lakh) SCHEDULE I MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted) Preliminary Expenses As per last Balance Sheet Less : Written - off during the year TOTAL 0.07 0.03 0.04 0.10 0.03 0.07 As at 31st March, 2010 As at 31st March, 2009

Schedules forming part of the Profit and Loss Account

(Rs. in lakh) SCHEDULE J OTHER INCOME Interest From Others Miscellaneous Income TOTAL 10.66 94.33 104.99 2.55 26.10 28.65 (Rs. in lakh) SCHEDULE K VARIATION IN STOCKS STOCK-IN-TRADE (at close) Traded Goods STOCK-IN-TRADE (at commencement) Traded Goods TOTAL 3,298.86 3,045.52 69.48 3,229.38 6,344.38 3,298.86 2009-10 2008-09 2009-10 2008-09

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Reliance Trends Limited

Schedules forming part of the Profit and Loss Account

(Rs. in lakh) SCHEDULE L OPERATING AND OTHER EXPENSES PAYMENT TO AND PROVISIONS FOR EMPLOYEES Salaries, Wages and Bonus Contribution to Provident Fund, Gratuity Fund, Superannuation Fund, Employees State Insurance Scheme, Pension Scheme,Labour Welfare Fund etc. Employee Welfare and other amenities SALES AND DISTRIBUTION EXPENSES Samples, Sales Promotion and Advertisement Expenses Store Running Expenses Brokerage, Discount and Commission Warehousing and Distribution Expenses Sales Tax OPERATING AND ESTABLISHMENT EXPENSES Stores and Packing Materials Machinery Repairs Building Repairs and Maintenance Other Repairs Rent including Lease Rentals Insurance Rates and Taxes Travelling and Conveyance Expenses Payment to Auditors Professional Fees Loss on Sale/ Discarding of Assets Exchange Differences (Net) Security Expenses Electricity Expenses Telephone Expenses Printing and Stationery Hire Charges General Expenses Miscellaneous expenditure written off TOTAL 2009-10 2008-09

678.55

475.60

69.18 44.15 791.88 866.99 559.72 4.19 444.38 1.24 1,876.52 186.71 22.01 86.40 33.35 1,441.12 6.36 99.22 26.85 0.42 10.47 3.78 6.78 107.45 659.22 20.48 10.91 5.95 57.08 2,784.56 0.03 5,452.99

22.63 33.73 531.96 840.63 337.46 0.08 829.80 2.30 2,010.27 180.25 7.67 164.91 21.77 710.23 3.11 15.19 63.56 0.36 25.28 3.30 93.11 354.02 16.79 13.54 4.18 34.21 1,711.48 0.03 4,253.74 (Rs. in lakh)

SCHEDULE M INTEREST & FINANCE CHARGES Fixed Loans Others TOTAL

2009-10 7.62 0.15 7.77

2008-09 0.18 0.18

Reliance Trends Limited

15

Schedules forming part of the Balance Sheet

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 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 recognized in the period in which the results are known/ 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. All Costs attributable to Fixed Assets are capitalised. Improvement cost on Lease premises up to the date of commercial operation is 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 to the Companies Act, 1956 over their useful life except, leasehold improvements are amortised over the lower of estimated useful life or lease period; fire alarm system, signage and access control system are depreciated over the estimated useful life of five years; 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 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 7 Lease Rentals Operating lease: Rentals are expensed with reference to lease terms and other considerations. Foreign Currency Transactions i) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or 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 Profit and Loss Account except in case of long term liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted 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 are stated at cost. Provision for diminution in the value of Long Term Investments is made only if such a decline is other than temporary. 9 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 condition. 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.

16

Reliance Trends Limited

Schedules forming part of the Balance Sheet

SCHEDULE N (Contd.)
11 Employee Benefits i) ii) 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. 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.

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 rates and laws that are enacted or substantively enacted as on the Balance Sheet date. The deferred tax asset is recognized and carried forward 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 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.

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Schedules forming part of the Balance Sheet

SCHEDULE O
NOTES ON ACCOUNTS 1 The previous years figures have been reworked, regrouped, rearranged and reclassified wherever necessary. 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. The Company is in the process of setting up various facilities for conducting its business. The expenditure incurred during the implementation period for bringing the Project in the condition of its intended use, is treated as Project Development Expenditure pending capitalisation and included in Capital Work-in-Progress. Capitalisation is done in the ratio of phased implementation. 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 Opening Balance Add: (i) Payments to and Provisions for Employees - Salaries, Wages and Bonus - Contribution to Provident Fund, Gratuity Fund, Superannuation Fund, Pension Scheme etc. - Employee Welfare and other amenities Repairs and Maintenance: - Machinery - Building - Other (iii) Rent including Lease Rentals (iv) Insurance (v) Rates and Taxes (vi) Travelling and Conveyance Expenses (vii) Professional Fees (viii) Electricity Expenses (ix) (x) Telephone Expenses Printing and Stationery 1,288.74 62.44 58.75 1,409.93 (ii) 9.02 41.74 60.73 111.49 34.49 13.01 20.93 47.49 17.40 32.96 22.04 6.65 4.00 18.94 1,739.33 Less: Capitalised during the year Closing Balance 587.13 5,290.36 363.83 4,138.16 67.61 10.31 39.32 282.04 96.19 61.83 45.20 25.19 0.99 174.05 3,116.86 6.68 43.91 85.14 1,980.44 93.08 104.88 4,138.16 2008-09 1,385.13

(xi) Hire Charges (xii) General Expenses

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Reliance Trends Limited

Schedules forming part of the Balance Sheet

SCHEDULE O (Contd.) 3 4 Turnover Includes Income from Services for Rs 13.60 lakh (Previous year Rs 1234.80 lakh) The Company is mainly engaged in Organised Retail in India. All the activities of the Company revolve 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. 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/ capitalised for the year are as under: 2009-10 Employers Contribution to Provident Fund Employers Contribution to Pension Scheme 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.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 (Unfunded) 2009-10 2008-09 Defined Benefit obligation at beginning of the year Current Service Cost Interest Cost Contribution by the plan participants Actuarial (gain)/ loss Benefits paid Defined Benefit obligation at year end II. Reconciliation of fair value of assets and obligations Gratuity (Unfunded) 2009-10 2008-09 Fair value of plan assets as on 31st March, 2010 Present value of benefit obligation as on 31st March ,2010 Amount recognised in Balance Sheet 70.44 70.44 37.00 37.00 (Rs. in lakh) Leave Encashment (Unfunded) 2009-10 2008-09 52.32 52.32 208.06 208.06 37.00 24.94 2.78 5.72 70.44 54.15 18.37 4.33 (39.85) 37.00 Leave Encashment (Unfunded) 2009-10 2008-09 208.06 17.34 11.70 (80.66) (104.12) 52.32 120.48 55.06 9.12 36.36 ( 12.96) 208.06 72.79 15.85 2008-09 86.36 17.91 (Rs. in lakh)

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Schedules forming part of the Balance Sheet

SCHEDULE O (Contd.) III. Expenses recognized during the year Gratuity (Unfunded) 2009-10 2008-09 Current Service Cost Interest Cost on benefit obligation Actuarial (gain)/ loss recognized in the year Past service cost Net benefit expense /( income) Actual return on plan asset IV. Actuarial assumptions Gratuity (Unfunded) 2009-10 2008-09 7.50% 8.00% 6.00% 6.50% Leave Encashment (Unfunded) 2009-10 2008-09 7.50% 8.00% 6.00% 8.00% 24.94 2.78 5.72 33.44 18.37 4.33 ( 39.85) ( 17.15) (Rs. in lakh) Leave Encashment (Unfunded) 2009-10 2008-09 17.34 11.70 (80.66) (51.62) 55.06 9.12 36.36 100.54 -

Discount rate (per annum) Rate of escalation in salary (per annum)

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. 6 Payment to Auditors (excluding Service Tax, wherever applicable): (Rs. in lakh) 2009-10 (i) Audit Fees 0.30 0.06 0.36 7 The Deferred Tax Assets (net) comprises of the following: (Rs. in lakh) As at 31st March, 2010 (i) Deferred Tax Assets - Disallowance under the Income Tax Act 1961 - Carried forward loss (ii) Deferred Tax Liability - Related to Fixed Assets Note: The virtual certainity is based on agreeements 2,262.30 191.65 1457.17 118.64 36.04 2,417.91 58.40 1517.42 As at 31st March, 2009 2008-09 0.30 0.06 0.36

(ii) Tax Audit Fees

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Reliance Trends Limited

Schedules forming part of the Balance Sheet

SCHEDULE O (Contd.) 8 Earnings Per Share (EPS) 2009-10 (i) Net Profit/ (Loss) after tax as per Profit And Loss account (Rs. in lakh) (138.84) 50,000 (277.68) 2008-09 (291.67) 50,000 (583.33)

(ii) Weighted Average number of equity shares used as denominator for calculating EPS (iii) Basic and Diluted Earnings/ (Loss) per share of face value of Rs. 10 each ( Rupees) 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 31st March, 2010 (i) Capital Commitments: Estimated amount of contracts remaining to be executed on capital accounts (net of advances) and not provided for. (ii) Contingent Liabilities Outstanding guarantees furnished to Banks and Financial Institutions including in respect of Letters of Credit. 11 Value of Imports on CIF basis in respect of: (Rs. in lakh) 2009-10 (i) Traded Goods 33.60 2008-09 22.32 907.74 (Rs. in lakh) 12 Expenditure in Foreign Currency: Other matters 13 Value of Exports on FOB Basis in respect of 2009-10 Traded Goods 14 Value of Stores and Packing Materials Consumed 2009-10 Rs. in lakh Indigenous 186.71 % of Consumption 100% Rs. in lakh 180.25 2008-09 % of Consumption 100% 92.45 2009-10 5.01 2008-09 (Rs. in lakh) 2008-09 46.40 35.15 5.15 457.15 119.84 As at 31st March, 2009

(ii) Capital goods

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Schedules forming part of the Balance Sheet

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 under Section 211(4) of the Companies Act,1956 has exempted the Company from disclosure of quantitative details in the Profit and Loss Account under paras 3(i) (a) and 3(ii) (b) of Part II, Schedule VI to the Companies Act ,1956. 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. 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 the Accounting standard are given below : (i) List of related parties with whom transactions have taken place and relationships: Sr No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Name of the Related Party Reliance Industries Limited Reliance Retail Limited Reliance Corporate IT Park Limited Reliance Digital Media Limited Reliance Financials Distribution and Advisory Services Limited Reliance Footprint Limited Reliance Fresh Limited Reliance Hypermart Limited Reliance Infosolutions Private Limited Reliance Leisures Limited Reliance People Serve Limited Reliance Supply Chain Solutions Limited Reliancedigital Retail Limited Retail Concepts & Services (India) Limited Strategic Manpower Solutions Limited } } } } } } } } } } } } } Fellow Subsidiaries Relationship Ultimate Holding Company Holding Company

16 17

(ii) Transactions during the year with related parties (excluding reimbursements): SrNo Nature of Transactions Ultimate Holding Company 2 Turnover 94.21 3 Purchases 172.36 4 Expenditure - Store Running Expenses - Warehousing and Distribution expenses 443.60 719.79 210.47 443.60 719.79 210.47 Holding Company 7,810.49 7,037.09 1.29 765.24 25.55 2,995.88 Fellow Subsidiaries 3,788.62 7,209.90 675.73 1,059.19 (Rs. in lakh) Total

Unsecured Loan taken/ (repaid)

7,810.49 7,037.09 3,884.12 7,975.14 873.64 4,055.07

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Reliance Trends Limited

Schedules forming part of the Balance Sheet

SCHEDULE O (Contd.)
Balance as at 31st March, 2010 5 Share Capital 6 Unsecured Loan 7 8 Loans and Advances Sundry Debtors 9 Sundry Creditors 17.39 10 Financial Guarantees taken Note: Figures in italics represents previous years 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. 5.00 5.00 16,517.52 8,707.03 10.21 197.02 5.03 3,110.02 35.15 5.15 4.73 453.27 771.85 41.00 200.14 5.00 5.00 16,517.52 8,707.03 14.94 453.27 968.87 63.42 3,310.16 35.15 5.15 310.73 310.73

(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 Concepts and Services ( India) Limited, Rs. 293.11 lakh (Previous Year Rs.1697.13 lakh) with Reliance Fresh Limited, Rs. 3457.64 lakh (Previous Year Rs.5485.40 lakh) with Reliance Hypermart Limited, Rs 17.66 lakh (Previous Year Rs. 10.04 lakh) with Reliance 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 Reliance Retail Limited, Rs. 87.82 lakh (Previous Year Rs.3.34 lakh) from Reliance Fresh Limited, Rs. 0.30 lakh (Previous Year Rs. 1.62 lakh) from Reliance Digital Retail Limited, Rs. 377.91 lakh (Previous Year Rs. 969.12 lakh) from Reliance Hypermart Limited, Rs. 162.92 lakh (Previous Year Rs 63.37 lakh) from Reliance Leisures Limited and Rs. Nil (Previous Year 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 Solutions Limited (v) Warehousing and Distribution Expenses Rs. 210.47 lakh (Previous Year Rs. 719.79 lakh) to Reliance Supply Chain Solution Limited.

As per our Report of even date For Chaturvedi & Shah Chartered Accountants Amit Chaturvedi Partner Membership No: 103141 Mumbai Dated : 20th April, 2010

For and on behalf of the Board Arun Sirdeshmukh Director Madhavan Ganesan Director

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

Balance Sheet Abstract and Companys General Business Profile:

I. Registration Details: Registration No. Balance Sheet Date: U 5 1 9 0 9 M H 2 0 0 6 P L C 1 6 6 1 6 5 3 1 . 0 3 . 2 0 1 0 State Code: 1 1

II. Capital raised during the year (Amount in Rs. Thousands): Public Issue: Bonus Issue: Share Application Money: N I L N I L N I L Rights Issue: Private Placement: N I L N I L

III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands): Total Liabilities: Sources of Funds: Paid up Capital: Share Application Money Reserves and Surplus: Secured Loans: Unsecured Loans: Current Liabilities: 5 0 0 N I L N I L 4 6 3 9 1 6 5 1 7 5 2 6 3 1 0 8 5 2 2 8 7 9 7 6 Total Assets: Application of Funds: Net Fixed Assets: Investment: Deferred Tax Assets: Current Assets: Miscellaneous Expenditure: Accumulated Losses: 1 3 6 2 5 6 2 9 8 1 9 1 6 5 8 6 1 2 2 3 4 4 4 9 2 4 2 2 8 7 9 7 6

IV. Performance of the Company (Amount in Rs. Thousands): Net Turnover: Profit / (-) Loss before tax: Earnings per Share in Rs: - Basic - Diluted V . ( 2 7 7 . 6 8 ) ( 2 7 7 . 6 8 ) Dividend Rate: N I L 1 8 4 1 9 9 3 ( 2 1 1 8 5 ) Total Expenditure: Profit / (-) Loss after tax: 2 1 7 8 2 2 9 ( 1 3 8 8 4 )

Generic Names of principal services of the company: Item Code number Product Description Item Code number Product Description N A N A N A N A