Annual Report 2009 - 2010

RELIANCE RETAIL FINANCE LIMITED

Reliance Retail Finance Limited

Directors Report
Dear Members, Your Directors are pleased to present the 10 Annual Report and the Audited Accounts for the financial year ended March 31, 2010. Financial Results: The financial performance of the Company for the financial year ended March 31, 2010 is summarized below: (Amount in Rupees) 2009-10 Gross Profit / (Loss) before Interest Less: Interest Gross Profit / (Loss) before taxation Less: Provision for taxation Current Tax Fringe Benefit Tax Deferred Tax Profit after tax Add: Balance in Profit and Loss account Amount available for appropriations Appropriations: Transfer to Statutory Reserve Fund Balance carried forward to Balance Sheet Dividend: Your Directors have not recommended any dividend on the equity shares of the Company for the financial year under review. Directors: Shri Murlidhara Kadaba has ceased to be a Director of the Company with effect from 18th November, 2009. The Board placed on record its appreciation for the valuable advice and guidance of Shri Murlidhara Kadaba during his tenure as Director of the Company. Shri M.N. Bajpai, Director, retires by rotation and being eligible, offers himself for reappointment at the ensuing Annual General Meeting. 38 83 652 (36 96 068) (36 96 068) (24 78 154) (12 17 914) 2008-09 1 17 77 664 1 146 1 17 76 518 1 85 816 (78 27 557) 1 94 18 259 (ii)
th

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 March 31, 2010, the applicable accounting standards have been followed and there is no material departure from the same; 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 as at March 31, 2010 and of the loss of the Company for the year ended on that date;

(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; and (iv) the Directors have prepared the accounts for the year ended March 31, 2010 on a going concern basis. Auditors and Auditors Report: M/s 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 reappointment. The Company has received a letter from them to the effect that their reappointment, 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 reappointment within the meaning of Section 226 of the Companies Act, 1956. The Notes on Accounts referred to in the Auditors Report are self-explanatory and therefore do not call for any further comments. Audit Committee: The Board of Directors have constituted an Audit Committee comprising three Directors. The present Members of the Committee are Shri Rohit C. Shah, Shri M.N. Bajpai and Shri Atul Dayal. The role and functions of the Audit Committee are in conformity with the requirements of Section 292A of the Companies Act, 1956. The Committee met periodically during the year and had discussions with the Auditors on internal control systems and internal audit report.

81 55 08 692 79 99 74 085 81 42 90 778 819 392 344

81 42 90 778 81 55 08 692

Reliance Retail Finance Limited

Particulars of Employees: The Company has not paid any remuneration attracting the provisions of the Companies (Particulars of Employees) Rules, 1975 read with Section 217(2A) of the Companies Act, 1956. Hence, no information is required to be appended to this report in this regard. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo: Being an investment Company, there are no particulars furnished in this report as required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988 relating to conservation of energy and technology absorption. There were no foreign exchange earnings and outgo during the year. Compliance Certificate: The requisite Compliance Certificate from Dhoundiyal Atma & Associates, Company Secretaries in whole-time practice, in terms of the proviso to Section 383A read with the Companies (Compliance Certificate) Rules, 2001, is attached herewith. Acknowledgement: Your Directors would like to express their grateful appreciation for assistance and cooperation received from Government Authorities, Members and employees during the year under review. For and on behalf of the Board of Directors

M.N. Bajpai Director

Rohit C. Shah Director

Mumbai April 21, 2010

Reliance Retail Finance Limited

DHOUNDIYAL ATMA & ASSOCIATES

Company Secretaries [CP No.3834] B-11, 2nd Floor, Satyam, M G Road, Ghatkopar (E), Mumbai 400 077. (M) 93222 72702 (O) 2102 8309/2102 7884 (R) 2867 4595 Compliance Certificate [See Rule 3] CIN :U17110MH2000PLC123731 Nominal Capital: Rs.4.50 Crores To: The Members RELIANCE RETAIL FINANCE LIMITED 3rd Floor, Maker Chambers IV, 222, Nariman Point, Mumbai 400 021. We have examined the registers, records, books and papers of Reliance Retail Finance Limited (the Company) as required to be maintained under the Companies Act, 1956, (the Act) and the Rules made there-under and also the provisions contained in the Memorandum and Articles of Association of the Company for the Financial Year ended on 31st March, 2010 (Financial Year). In our opinion and to the best of our information and according to the examinations carried out by us and explanations furnished to us by the Company, its officers and agents, we certify that in respect of the aforesaid Financial Year: 1. 2. The Company has kept and maintained all registers as stated in Annexure A to this Certificate, as per the provisions of the Act and the rules made there-under and all entries therein have been duly recorded. The Company has duly filed the forms and returns as stated in Annexure B to this certificate with the Registrar of Companies, Ministry of Corporate Affairs within the time prescribed under the Act and the rules made there-under, except some delay in filing eForm as mentioned at Sr. No. 1 of Annexure B. The Company, being a public limited company, has the minimum prescribed paid-up capital and minimum number of members during the said Financial Year. The Board of Directors duly met 4 times on 22.04.2009, 27.08.2009, 23.12.2009 and 15.02.2010 in respect of which meetings proper notices were given and the proceedings were properly recorded and signed in the minutes book maintained for the purpose. The Company has not closed its register of members or debenture-holders during the Financial Year. The Annual General Meeting for the Financial Year ended on 31.03.2009 was held on 30.09.2009 after giving due notice to the members of the Company and the resolutions passed thereat were duly recorded in minutes book maintained for the purpose. One Extraordinary General Meeting was held during the Financial Year after giving due notice to the members of the Company and the resolutions passed thereat were duly recorded in minutes book maintained for the purpose. The Company has not advanced any loans to its directors or persons or firms or companies referred to under Section 295 of the Act. The Company has not entered into any contracts falling within the purview of Section 297 of the Act.

3. 4.

5. 6. 7. 8. 9.

10. The Company has made necessary entries in the register maintained under Section 301(3) of the Act. 11. As there were no instances falling within the purview of Section 314 of the Act, the Company has not obtained any approvals from the board of directors, members or the central government. 12. The Company has not issued any duplicate share certificates during the Financial Year. 13. The Company (i) (ii) (iii) has delivered all the certificates of securities on lodgment for transfer in accordance with the provisions of the Act; and there was no allotment/transmission of securities during the Financial Year. has not deposited any amount in separate bank account, as no dividend was declared during the Financial Year; was not required to post warrants to any members of the Company, as no dividend was declared during the Financial Year;

Reliance Retail Finance Limited

(iv)

has no amount in unpaid dividend account, application money due for refund, matured deposits, matured debentures and the interest accrued thereon which have remained unclaimed or unpaid for a period of seven year during the Financial Year. has duly complied with the requirements of Section 217 of the Act.

(v)

14. The Board of Directors of the Company is duly constituted. There was no appointment of additional directors, alternate directors and directors to fill casual vacancy during the Financial Year. 15. The Company has not appointed any managing director / whole-time director / manager during the Financial Year. 16. The Company has not appointed any sole-selling agents during Financial Year. 17. The Company was not required to obtain any approvals of the Central Government, Company Law Board, Regional Director, Registrar and/or such authorities prescribed under the various provisions of the Act during the Financial Year. 18. The Directors have disclosed their interest in other firms / companies to the Board of Directors pursuant to the provisions of the Act and the rules made there-under. 19. The Company has not issued shares, debentures or other securities during the Financial Year. 20. The Company has not bought back any shares during the Financial Year. 21. There was no redemption of preference shares / debentures during the Financial Year. 22. There were no transactions necessitating the Company to keep in abeyance rights to dividend, rights shares and bonus shares pending registration of transfer of shares. 23. The Company has not invited / accepted any deposits including any unsecured loans falling within the purview of Sections 58A of the Act during Financial Year. 24. The amounts borrowed by the Company from bodies corporate and others are within the borrowing limits of the company and that necessary resolution as per Section 293 (1)(d) of the Act had been passed in duly convened Extraordinary General Meeting. 25. The Company has made loans and investment in other bodies corporate in compliance with the provisions of the Act. The Company being covered under Sub-Section (8) of Section 372A of the Act, it is not required to maintain the Registers of investments or loans made, guarantees given or securities provided under Section 372A of the Act. 26. The Company has not altered the provisions of the Memorandum with respect to situation of the Companys registered office from one state to another during the year under scrutiny. 27. The Company has not altered the provisions of the Memorandum with respect to the objects of the Company during the year under scrutiny. 28. The Company has not altered the provisions of the Memorandum with respect to name of the Company during the year under scrutiny. 29. The Company has not altered the provisions of the Memorandum with respect to share capital of the Company during the year under scrutiny. 30. The Company has not altered its Articles of Association during Financial Year. 31. There was no prosecution initiated against the Company or show cause notices received by the Company and no fines or penalties or any punishment was imposed on the Company during the Financial Year for offences under the Act. 32. The Company has not received any money as security from its employees during the Financial Year. 33. The Company has not constituted its own Provident Fund pursuant to Section 418 of the Act and hence the provisions of Section 418 of the Act, are not applicable to the Company.

Mumbai Dated: 21.04.2010

Atma K. Dhoundiyal C.P. No. 3834

Reliance Retail Finance Limited

Reliance Retail Finance Limited Annexure A

Statutory records / registers maintained by the Company 1. Register of Charges [including Debentures] u/s 143 2. Register of Members u/s 150 3. Minutes Book of Board Meetings u/s 193 4. Minutes Book of Members Meetings u/s 193 5. Books of Accounts u/s 209 6. Register of Contracts u/s 301(1) 7. Register of Companies & Firms in which Directors are interested u/s 301(3) 8. Register of Directors, Managing Director, Secretary and Manager u/s 303 9. Register of Directors Share and Debenture holdings u/s 307

Other registers / records maintained by the Company 1. Register of Share Transfers (see Sec.108) 2. Directors attendance records 3. Register of application and allotment of shares 4. Minutes of Committees Meetings viz. Audit Committee, Asset and Liability Management Committee, Nomination Committee and Risk Management Committee

Annexure B Forms and Returns as filed by the Company with Registrar of Companies, Ministry of Corporate Affairs during the Financial Year: Sr. No. e-Form No./ Return Filed Under Section For Date of Filing Whether filed within prescribed time Yes/No If delay in filing whether requisite additional fee paid Yes/No Yes NA NA NA NA NA

1 2 3 4 5 6

32 23AC & 23ACA 66 20B 32 22B

303 220 383A 159 303 187C

Resignation of Secretary w.e.f. 30.04.2009 FY ended - 31.03.2009 FY ended - 31.03.2009 AGM 30.09.2009 Resignation of Director w.e.f. 18.11.2009 Declaration of beneficial interest on 20.01.2010

18.06.2009 30.10.2009 30.10.2009 16.11.2009 18.12.2009 05.02.2010

No Yes Yes Yes Yes Yes

Note: eForms/Returns mentioned above were filed and requisite filing fees/additional fees were paid.

Mumbai Dated: 21.04.2010

Atma K. Dhoundiyal C.P. No. 3834

Reliance Retail Finance Limited

Auditors Report
To The Members of RELIANCE RETAILFINANCE LIMITED
We have audited the attached Balance Sheet of RELIANCE RETAIL FINANCE 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 Cash Flow Statement dealt with by this report are in agreement with the books of account; 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; 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, f) 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956; 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

2.

Amit Chaturvedi Partner Membership No.: 103141 Place: Mumbai Date : April 21, 2010

3.

b)

c)

d)

e)

Reliance Retail Finance Limited

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

Re: Reliance Retail Finance Limited (the Company)

1.

As the company had no fixed assets during the year, clause (i) of paragraph 4 of the Order is not applicable to the company. As the Company had no Inventories during the year, clause (ii) of paragraph 4 of the Order is not applicable to the company. 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 investments. 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, there are no contracts or arrangements referred to in section 301 of the Companies Act. 1956 that need 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. 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, b)

2.

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.

3.

4.

10. The Companys accumulated losses at the end of the financial year are less than fifty per cent of its net worth. The Company has incurred cash loss in the current financial year but not incurred cash loss in the preceding financial year. 11. The Company has not raised loan from Financial Institution or Banks or by issue of debenture and hence clause (xi) of paragraph 4 of the order requiring comment on repayment of dues is not applicable. 12. According to the information and explanations given to us and based on the documents and records provided to us, the company has not granted loans and advances 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. The Company has maintained proper records of transactions and contracts in respect of dealing and trading in shares, securities, debentures and other investments and timely entries have been made therein. All the shares, securities, debentures and other investments have been held by the Company in its own name. 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 Companies (Auditors Report) Order 2003, (as amended) are not applicable. 16. The term loans raised by the company were applied for the purpose for which loans were obtained. 17. According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on shortterm 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.

5.

6. 7. 8.

9.

Reliance Retail Finance Limited

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

Re: Reliance Retail Finance Limited (the Company)

19. The Company did not have any outstanding debenture during the year. 20. The Company has not raised any monies by way of public issue during the year. 21. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we have not come across any instance of material fraud on or by the Company, noted or reported during the course of our audit. For Chaturvedi & Shah Firm Registration No. 101720W Chartered Accountants

Amit Chaturvedi Partner Membership No.: 103141 Place: Mumbai Date : April 21, 2010

Reliance Retail Finance Limited

Reliance Retail Finance Limited Balance Sheet as at 31st March, 2010

In Rupees Schedule SOURCES OF FUNDS Shareholders Funds Share Capital Reserves and Surplus Loan Funds Unsecured Loans TOTAL APPLICATION OF FUNDS Investments Deferred Tax Assets Current Assets, Loans and Advances Current Assets Cash and Bank Balances Loans and Advances Less : Current Liabilities and Provisions Current Liabilities Provisions Net Current Assets TOTAL Significant Accounting Policies Notes on Accounts K L As at 31st March, 2010 As at 31st March, 2009

A B

2 02 00 000 101 84 82 153 103 86 82 153

2 02 00 000 101 97 00 067 103 99 00 067 3 69 49 203 107 68 49 270

103 86 82 153

101 78 31 339 1 91 28 775

106 00 00 000 1 66 50 621

E 2 84 489 2 84 489 19 82 098 22 66 587 3 87 121 3 87 121 28 89 208 32 76 329

G 5 44 548 5 44 549 17 22 039 103 86 82 153 12 65 680 18 12 000 30 77 680 1 98 649 107 68 49 270

As per our report of even date For Chaturvedi & Shah Chartered Accountants

For and on behalf of the Board Rohit Shah Director Atul Dayal Director M.N. Bajpai Director

Amit Chaturvedi Partner Membership No : 103141 Mumbai Dated : 21st April, 2010

10

Reliance Retail Finance Limited

Reliance Retail Finance Limited Profit and Loss Account for the year ended 31st March, 2010
In Rupees Schedule INCOME Other Income H 2009-10 2 01 133 2 01 133 2008-09 4 03 98 296 4 03 98 296

EXPENDITURE Operating and Other Expenses Interest and Finance charges

I J

38 97 201 38 97 201 ( 36 96 068) ( 24 78 154) ( 12 17 914) 81 55 08 692 81 42 90 778

2 86 20 632 1 146 2 86 21 778 1 17 76 518 1 85 816 ( 78 27 557) 1 94 18 259 79 99 74 085 81 93 92 344

Profit/ (Loss) before Tax Provision for Fringe Benefit Tax Provision for Deferred Tax Profit/ (Loss) after Tax Add: Balance brought forward from Previous Year Amount Available for Appropriations APPROPRIATIONS Statutory Reserve

38 83 652 38 83 652 81 55 08 692

Balance carried to Balance Sheet Basic and Diluted Earnings per Share of face value of Rs 10 each (in Rupees) (Refer Note 5, Schedule L) Significant Accounting Policies Notes on Accounts K L

81 42 90 778

(0.60)

9.61

As per our report of even date For Chaturvedi & Shah Chartered Accountants

For and on behalf of the Board Rohit Shah Director Atul Dayal Director M.N. Bajpai Director

Amit Chaturvedi Partner Membership No : 103141 Mumbai Dated : 21st April, 2010

Reliance Retail Finance Limited

11

Reliance Retail Finance Limited Cash Flow Statement for the year 2009-10
In Rupees 2009-10 A: CASH FLOW FROM OPERATING ACTIVITIES Net Profit/ (Loss) before tax as per Profit and Loss Account Adjusted for: Profit on Sale of Investments (net) Dividend Income 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 used in Operating Activities B: CASH FLOW FROM INVESTING ACTIVITIES Purchase of Investments Sale of Investments Interest Income Dividend Income Net Cash from Investing Activities C: CASH FLOW FROM FINANCING ACTIVITIES Proceeds from Long Term Borrowings Repayment of Long Term Borrowings Interest Paid Net Cash from/ used in 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 94 62 943 (4 64 12 146) (3 69 49 203) (1 02 632) 3 87 121 2 84 489 For and on behalf of the Board Rohit Shah Director Atul Dayal Director M.N. Bajpai Director 3 33 04 389 (88 38 274) (1 146) 2 44 64 969 3 87 121 3 87 121 (78 00 000) 5 00 00 000 1 69 794 4 23 69 794 (110 03 86 507) 106 60 40 041 5 180 4 03 86 507 60 45 221 6 27 235 (25 33 132) (19 05 897) (58 03 098) 2 79 875 (55 23 223) ( 5 51 695) ( 7 35 848) (12 87 543) (2 99 06 265) (2 16 804) (3 01 23 069) (31 339) (1 69 794) ( 2 01 133) ( 38 97 201) (4 699) (4 03 86 507) (5 180) 1 146 (4 03 95 240) (2 86 18 722) (36 96 068) 1 17 76 518 2008-09

Amit Chaturvedi Partner Membership No : 103141 Mumbai Dated : 21st April, 2010

12

Reliance Retail Finance Limited

Schedules forming part of the Balance Sheet

SCHEDULE A SHARE CAPITAL As at 31st March, 2010 Authorised: 45 00 000 Equity Shares of Rs. 10 each (45 00 000) TOTAL Issued, Subscribed and Paid-up: Fully Paid-up 20 20 000 Equity Shares of Rs. 10 each (20 20 000) TOTAL 2 02 00 000 2 02 00 000 2 02 00 000 2 02 00 000 4 50 00 000 4 50 00 000 4 50 00 000 4 50 00 000 In Rupees As at 31st March, 2009

Note: All the above 20 20 000 (Previous Year 20 20 000) Equity Shares Rs. 10 each are held by Reliance Retail Limited, the holding company along with its nominees.

Reliance Retail Finance Limited

13

Schedules forming part of the Balance Sheet

SCHEDULE B In Rupees As at 31st March, 2010 RESERVES AND SURPLUS Statutory Reserve Fund * As per last Balance Sheet Add: Transferred from Profit and Loss Account 20 41 91 375 20 41 91 375 Profit and Loss Account TOTAL * Created pursuant to Section 45-IC of Reserve Bank of India Act,1934 81 42 90 778 101 84 82 153 20 03 07 723 38 83 652 20 41 91 375 81 55 08 692 101 97 00 067 As at 31st March, 2009

SCHEDULE C In Rupees As at 31st March, 2010 UNSECURED LOANS Long Term Loans From holding company TOTAL 3 69 49 203 3 69 49 203 As at 31st March, 2009

14

Reliance Retail Finance Limited

Schedules forming part of the Balance Sheet

SCHEDULE D INVESTMENTS As at 31st March, 2010 A. LONG TERM INVESTMENTS Other Investments In Preference Shares - Unquoted,Fully paid up 5 05 000 9 % Non Cumulative Optionally Convertible Preference (5 30 000) Shares of Reliance Industrial Investments and Holding Limited of Rs. 10 each TOTAL (A) B. CURRENT INVESTMENTS Other Investments In Units - Unquoted 78296 ICICI Prudential Liquid Super Institutional Plan - Daily (-) Dividend of Rs. 100 each TOTAL (B) TOTAL (A +B) 78 31 339 101 78 31 339 106 00 00 000 78 31 339 101 00 00 000 106 00 00 000 101 00 00 000 106 00 00 000 In Rupees As at 31st March, 2009

Notes : Aggregate Value of Book value Unquoted Investments

Book value 101 78 31 339

Book value 106 00 00 000

SCHEDULE E As at 31st March, 2010 CURRENT ASSETS CASH AND BANK BALANCES Balance with Scheduled Banks In Current Accounts TOTAL 2 84 489 2 84 489 3 87 121 3 87 121 In Rupees As at 31st March, 2009

Reliance Retail Finance Limited

15

Schedules forming part of the Balance Sheet

SCHEDULE F In Rupees As at 31st March, 2010 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 Balance with Service Tax/ Sales Tax Authorities, etc. TOTAL 13 06 429 4 13 834 2 61 835 19 82 098 15 86 304 10 75 975 2 26 929 28 89 208 As at 31st March, 2009

SCHEDULE G In Rupees As at 31st March, 2010 CURRENT LIABILITIES AND PROVISIONS Current Liabilities Sundry Creditors - Micro enterprises and Small enterprises (1) - Others 5 44 548 5 44 548 Provisions Provision for Leave Encashment/ Gratuity TOTAL 5 44 548 18 12 000 30 77 680 12 65 680 12 65 680 As at 31st March, 2009

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.

16

Reliance Retail Finance Limited

Schedules forming part of the Profit and Loss Account

SCHEDULE H In Rupees 2009-10 OTHER INCOME Dividend Current Investments Interest From Others Profit on Sale of Current Investments (Net) Miscellaneous Income TOTAL 2 01 133 4 699 1 910 4 03 98 296 31 339 1 69 794 4 03 86 507 5 180 2008-09

Reliance Retail Finance Limited

17

Schedules forming part of the Profit and Loss Account

SCHEDULE I In Rupees 2009-10 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 3 76 360 33 80 219 OPERATING AND ESTABLISHMENT EXPENSES Other Repairs Insurance Rates and Taxes Travelling and Conveyance Expenses Payment to Auditors Professional Fees Telephone Expenses Printing and Stationery Hire Charges General Expenses 2 36 761 60 174 28 461 68 862 52 322 10 000 25 412 34 990 5 16 982 TOTAL 38 97 201 11 88 338 36 751 39 976 9 37 535 2 40 000 11 92 295 3 00 508 1 698 60 281 48 402 40 45 784 2 86 20 632 In Rupees SCHEDULE J INTEREST AND FINANCE CHARGES Others TOTAL 1 146 1 146 2009-10 2008-09 7 94 654 2 45 74 848 30 96 886 ( 93 027) 2 26 36 903 11 43 291 2008-09

18

Reliance Retail Finance Limited

Schedules forming part of the Balance Sheet

SCHEDULE K 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 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. 4 Revenue recognition: Revenue is recognized to the extent that right to receive the probable economic benefit to the Company is established and can be reliably measured. 5 Employee Benefits: i) ii) Short term employee benefits are recognized 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 recognized as an expense in the Profit and Loss Account for the year in which the employee has rendered services. The expense is recognized 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.

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 Accounting and taxable 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.

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.

Reliance Retail Finance Limited

19

Schedules forming part of the Balance Sheet

SCHEDULE L NOTES ON ACCOUNTS 1 The previous years figures have been regrouped, rearranged and reclassified wherever necessary. Accordingly, amounts and other disclosures for the preceding year are included as an integral part of the current year financial statements and are to be read in relation to the amounts and other disclosures relating to the current year. 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: 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 Company operates post retirement benefit plans as follows: I) Reconciliation of opening and closing balances of Defined Benefit obligation In Rupees 1 25 734 28 883 2008-09 8 55 091 1 50 503 In Rupees

2 3.

Gratuity (Unfunded) 2009-10 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 2 67 000 (2 67 000) 2008-09 7 27 712 1 42 248 58 217 (6 61 177) 2 67 000

Leave Encashment (Unfunded) 2009-10 15 45 000 (15 45 000) 2008-09 15 23 000 4 65 111 1 09 352 (2 40 275) (3 12 188) 15 45 000

In Rupees Gratuity (Unfunded) 2009-10 Fair value of plan assets Present value of obligation Amount recognised in Balance Sheet 2 67 000 2 67 000 15 45 000 15 45 000 2008-09 Leave Encashment (Unfunded) 2009-10 2008-09

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Reliance Retail Finance Limited

Schedules forming part of the Balance Sheet

SCHEDULE L (Contd.) III. Expenses recognized during the year In Rupees Gratuity (Unfunded) 2009-10 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 In Rupees Gratuity (Unfunded) 2009-10 Discount rate (per annum) Expected rate of return on plan assets (per annum) Rate of escalation in salary (per annum) 3) Payment to Auditors (excluding Service Tax, wherever is appliacable) In Rupees 2009-10 (i) (ii) Audit Fees Tax Audit Fees 50 000 2 322 52 322 4) The Deferred Tax Assets (net) comprise of the following: In Rupees As at 31st March, 2010 (i) Disallowance under the Income Tax Act, 1961 (ii) Carried forward loss 78 1 91 28 697 1 91 28 775 Note : The virtual certinity is based on agreements. As at 31st March, 2009 4 28 494 1 62 22 127 1 66 50 621 2008-09 2 00 000 40 000 2 40 000 2008-09 8.00% 8.00% 4.00% Leave Encashment (Unfunded) 2009-10 2008-09 8.00% 4.00% (2 67 000) (2 67 000) (4 60 712) 2008-09 1 42 248 58 217 (6 61 177) Leave Encashment (Unfunded) 2009-10 (15 45 000) (15 45 000) 3 34 188 2008-09 4 65 111 1 09 352 (2 40 275)

(iii) Expenses Reimbursed

Reliance Retail Finance Limited

21

Schedules forming part of the Balance Sheet

SCHEDULE L (Contd.) 5) Earnings Per Share (EPS) In Rupees 2009-10 (i) (ii) Net Profit/ (Loss) after tax as per Profit and Loss Account (in Rupees) 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) 6 The Company is mainly engaged in the business of Investments in Shares and Securities in India. All the activities of the Company revolve around this main business. Accordingly, the Company has only one identifiable segment namely Investments in Shares and Securities, reportable under Accounting Standard 17 Segment Reporting, notified in the Companies (Accounting Standards) Rules 2006. 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 Accounting Standard are given below : (a) List of related parties with whom transactions have taken place and relationships: Sr Name of the Related Party No 1 2 3 4 Reliance Industries Limited Reliance Retail Limited Reliance Industrial Investments And Holdings Limited Reliance Infosolutions Private Limited } } Fellow Subsidiaries Ultimate Holding Company Holding Company Relationship (0.60) 9.61 ( 12 17 914) 20 20 000 2008-09 1 94 18 259 20 20 000

7 8

(b) Transactions during the year with Related Parties (Excluding Reimbursements) In Rupees Sr Nature of Transactions (excluding No reimbursements) 1 2 3 Unsecured loan taken/ (repaid) Purchase of Investments Sale/ redemption of Investments Holding Companies (3 69 49 203) 2 44 66 114 Fellow Subsidiaries 106 00 00 000 5 00 00 000 Total

(3 69 49 203) 2 44 66 114 106 00 00 000 5 00 00 000 -

Balances as at 31st March,2010 4 Share Capital 2 02 00 000 2 02 00 000 2 02 00 000 2 02 00 000

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Reliance Retail Finance Limited

Schedules forming part of the Balance Sheet

SCHEDULE L (Contd.) In Rupees Sr Nature of Transactions (excluding No reimbursements) 5 6 7 Unsecured Loans Investments Sundry Creditors Holding Companies 3 69 49 203 Fellow Subsidiaries 101 00 00 000 106 00 00 000 105 Total 3 69 49 203 101 00 00 000 106 00 00 000 105

Note : Figures in italic represent previous years amount. Disclosure in respect of material Related Party Transactions during the year: 1 2 3 9 Unsecured loan taken consist of Rs. Nil (Previous Year Rs.2 44 66 114 ) from Reliance Retail Limited. Loan repaid consist of Rs. 3 69 49 203 (Previous Year Rs. Nil) to Reliance Retail Limited. Purchase of Investment includes Rs. Nil (Previous 106 00 00 000) of Reliance Industrial Investments and Holdings Limited. Sale/ redemption of Investement includes Rs 5 00 00 000 (Previous year Nil) of Reliance Industrial Investments and Holdings Limited.

Disclosures of details as required by Para 13 of Non Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007, are given to the extent applicable. Given below all balances are as on 31st March, 2010. Liabilities side: Amount Outstanding In Rupees Amount Overdue

Loans and advances availed by the NBFCs inclusive of interest accrued thereon but not paid a) Debentures : Secured : Unsecured (other than falling within the meaning of public deposits) b) c) d) e) f) Deferred Credits Term Loans Inter-corporate loans and borrowing Commercial Paper Other Loans (specify nature) NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL

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Schedules forming part of the Balance Sheet

SCHEDULE L (Contd.) Assets side: In Rupees Amount Outstanding

II

Break-up of Loans and Advances including bills receivables (other than those included in (IV) below) (a) Secured (b) Unsecured NIL NIL NIL

III

Break up of Leased Assets and stock on hire and other assets counting towards AFC activities (i) Lease assets including lease rentals under sundry debtors :

(a) Financial lease (b) Operating lease (ii) Stock on hire including hire charges under sundry debtors : (a) Assets on hire (b) Repossessed Assets (iii) Other loans counting towards AFC activities (a) Loans where assets have been repossessed (b) Loans other than (a) above IV Break-up of Investments Current Investments 1 Quoted

NIL NIL

NIL NIL

NIL NIL

i) Shares : (a) Equity (b) Preference ii) Debentures and Bonds iii) Units of mutual funds iv) Government Securities v) 2 Others (please specify Unquoted

NIL NIL NIL NIL NIL NIL

i) Shares : (a) Equity (b) Preference (ii) Debentures and Bonds (iii) Units of mutual funds (iv) Government Securities (v) Others (please specify

NIL NIL NIL 78 31 339 NIL NIL

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Reliance Retail Finance Limited

Schedules forming part of the Balance Sheet

SCHEDULE L (Contd.) Assets side: Long Term investments 1 Quoted i) Shares : (a) Equity (b) Preference (ii) Debentures and Bonds (iii) Units of mutual funds (iv) Government Securities (v) Others (please specify) 2 Unquoted i) Shares : (a) Equity (b) Preference (ii) Debentures and Bonds (iii) Units of mutual funds (iv) Government Securities (v) Others (please specify V Borrower group-wise classification of assets financed as in (II) and (III) above : Category 1 Related Parties (a) Subsidiaries (b) Companies in the same group (c) Other related parties 2 Other than related parties Total VI Investor group-wise classification of all investments (current and long term) in shares and securities (both quoted and unquoted) Category Market value / Break up or fair value or NAV Book value (net of provisions) NIL NIL NIL NIL NIL NIL NIL NIL NIL NIL In Rupees NIL 101 00 00 000 NIL NIL NIL NIL In Rupees Amount (net of provision) Unsecured Total NIL NIL NIL NIL NIL NIL In Rupees Amount Outstanding

1 Related Parties (a) Subsidiary company (b) Other related parties 2 Other than related parties Total NIL 101 00 00 000 78 31 339 101 78 31 339 NIL 101 00 00 000 78 31 339 101 78 31 339

Reliance Retail Finance Limited

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Schedules forming part of the Balance Sheet

SCHEDULE L (Contd.) VII Other information Particulars i) Gross Non-Performing Assets (a) Related parties (b) Other than related parties ii) Net Non-Performing Assets (a) Related parties (b) Other than related parties iii) Assets acquired in satisfaction of debt 10 NIL NIL NIL NIL NIL In Rupees

Additional Disclosures as required by RBI Notification No. DNBS. 200 / CGM (PK) 2008 dated August 1, 2008 are given to the extent applicable. i) CRAR Items i) CRAR (%) ii) CRAR Tier I capital (%) iii) CRAR Tier II Capital (%) ii) Exposure to Real Estate Sector In Rupees Category a) Direct exposure (i) Residential Mortgages Lending fully secured by mortgages on residential property that is or will be occupied by the borrower or that is rented; (Individual housing loans up to Rs.15 lakh may be shown separately) Commercial Real Estate Lending secured by mortgages on commercial realestates (office buildings, retail space, multipurpose commercial premises, multifamily residential buildings, multi-tenanted commercial premises, industrial or warehouse space, hotels, land acquisition, development and construction, etc.). Exposure would also include non-fund based (NFB) limits; NIL NIL Current Year Previous Year Current Year 12.17% 12.17% Previous Year 65.67% 65.67% -

(ii)

NIL

NIL

(iii)

Investments in Mortgage Backed Securities (MBS) and other securitised exposures a. Residential b. Commercial Real Estate NIL NIL NIL NIL

b) Indirect Exposure Fund based and non-fund based exposures on National Housing Bank (NHB) and Housing Finance Companies (HFCs). NIL NIL

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Reliance Retail Finance Limited

Schedules forming part of the Balance Sheet

SCHEDULE L (Contd.) iii) Asset Liability Management Maturity pattern of certain items of assets and liabilities Rs. in crore 1 day to 30/31 days (one month Liabilities Borrowings from banks Market Borrowings Over one month to 2 months Over 2 months upto 3 months Over 3 months to 6 months Over 6 months to 1 years Over 1 year to 3 years Over 3 year to 5 years Over 5 years Total

Assets Advances Investments 0.04 0.78 0.04

101 101.78

As per our report of even date For Chaturvedi & Shah Chartered Accountants

For and on behalf of the Board Rohit Shah Director Atul Dayal Director M.N. Bajpai Director

Amit Chaturvedi Partner Membership No : 103141 Mumbai Dated : 21st April, 2010

Reliance Retail Finance Limited

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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 1 7 1 1 0 M H 2 0 0 0 P L C 1 2 3 7 3 1 3 1 - 0 3 - 2 0 1 0 State Code 1 1

II. Capital raised during the year: (Rupees in Thousand) 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: (Rupees in Thousand) Total Liabilities: Sources of Funds: Paid up Capital: Share Application Money: Reserves and Surplus: Secured Loans: Unsecured Loans: Current Liabilities 2 0 2 0 0 N I L 1 0 1 8 4 8 2 N I L N I L 5 4 5 1 0 3 9 2 2 7 Total Assets: Application of Funds: Net Fixed Assets: Investments: Deferred Tax Assets Current Assets: Miscellaneous Expenditure: Profit and Loss Account: N I L 1 0 1 7 8 1 9 1 2 2 3 1 2 9 6 7 1 0 3 9 2 2 7

N I L N I L

IV. Performance of the Company: (Rupees in Thousand) Net Turnover: Profit / (-) Loss before tax: Earnings per Share in Rs: - Basic V . ( 0 . 6 0 ) Dividend Rate: N I L N I L ( 3 6 9 6 ) Total Expenditure: Profit / (-) Loss after tax: 3 8 ( 1 2 1 9 7 8 )

Generic Names of principal products of the Company: Item Code number Product Description Item Code number Product Description N A N A N A NA