Annual Report 2009 - 2010

RELIANCE DAIRY FOODS LIMITED

Reliance Dairy Foods Limited

Directors Report
Dear Members, Your Directors are pleased to present the Fourth Annual Report and the Audited Accounts for the year ended March 31, 2010. Financial Results: The performance of the Company for the financial year ended March 31, 2010 is summarized below: (Rupees in Lakh) 2009-2010 Profit/(Loss) before Depreciation, Interest & Tax Less: Interest Depreciation Profit/(Loss) before Tax Less: Provision for Taxation Fringe Benefit Tax Deferred Tax Profit/(Loss) after Tax Add: Balance brought forward from previous year Balance carried to Balance Sheet Operational Review: The Company strengthened its presence in the milk retailing business by launching Dairy Pure brand that are sold through general milk retailers alongwith Reliance Fresh stores. The Company presently operates in Andhra Pradesh, Haryana, Tamil Nadu, Maharashtra, Delhi, Punjab, and Rajasthan and is confident to further grow with the extension of product portfolio. The Company has incurred a loss of Rs. 415.29 Lakh for the financial year ended March 31, 2010. With the optimisation of resources and further scaling up of operations, the Company is confident of posting better results in the future. Dividend: Your Directors have not recommended any dividend on Equity Shares for the year under review. Directors: Pursuant to the provisions of Section 260 of the Companies Act, 1956 and the Articles of Association, Shri Pankaj Pawar was appointed as an Additional Director on the Board with effect from March 31, 2010. He shall hold office upto the date (386.31) 3.36 228.66 (618.33) (203.04) (415.29) (763.39) (1,178.68) 2008-2009 (434.47) 0.62 181.71 (616.80) 10.14 (176.89) (450.05) (313.34) (763.39) (ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for the year under review; (iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (iv) the Directors have prepared the accounts for the year ended March 31, 2010 on a going concern basis. Auditors: During the year, Messrs S.R. Batliboi & Co., Chartered Accountants, resigned as joint statutory auditors of the Company. Messrs Chaturvedi & Shah, Chartered Accountants, continue as statutory auditor of the company. Messrs Chaturvedi & Shah, Chartered Accountants, Mumbai hold office until the conclusion of the ensuing Annual General Meeting of the Company and are eligible for re appointment. The Company has received letter from them to the effect that their re-appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for such re-appointment within the meaning of Section 226 of the Companies Act, 1956. of the ensuing Annual General Meeting. The Company has received a notice under Section 257 of the Companies Act, 1956 from a member proposing the candidature of Shri Pankaj Pawar for the office of Director, liable to retire by rotation. Shri Gunender Kapur resigned from the office of Director of the Company with effect from March 31, 2010. The Board wishes to place on record the valuable contribution made by him during his tenure as Director of the Company. Shri C.R. Srinath retires by rotation and being eligible, offers himself for reappointment at the ensuing Annual General Meeting. Directors Responsibility Statement: Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 with respect to Directors 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 are no material departures from the same;

Reliance Dairy Foods Limited

Particulars of Employees: As required under the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, the names and other particulars of the employees are set out in the Annexure 1 to this Report. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo: The particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo, required to be furnished pursuant to Section 217(1)(e) of the Companies Act, 1956, read with Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988, are as under: i. Part A and B of the Rules, pertaining to conservation 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 Holding Company, Customers, Suppliers, Banks, Government Authorities and Employees during the year under review. For and on behalf of the Board of Directors Nil Rs. 189.18 Lakhs

ii.

Pankaj Pawar Director Place: Mumbai Date: April 22, 2010

CR Srinath Director

Reliance Dairy Foods Limited

Auditors Report
To the Members of RELIANCE DAIRY FOODS LIMITED We have audited the attached Balance Sheet of RELIANCE DAIRY FOODS LIMITED as at March 31, 2010, the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. 1. We have conducted our audit in accordance with the Auditing Standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An 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; e) 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; 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;

f)

(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.

3.

Amit Chaturvedi Partner Membership No.: 103141 Place: Mumbai Date : April 22, 2010

b)

c)

d)

Reliance Dairy Foods Limited

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

Re: Reliance Dairy Foods 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. 9.

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. 6. 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 as explained, 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.

b)

7.

8. 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. 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. The Company has maintained proper records of inventory. As explained to us, there were no material discrepancies noticed on physical verification of inventory.

b)

c)

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 inventory and fixed assets and also for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. 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

b)

4.

10. The Company has been registered for a period of less than five years and hence we are not required to comment on whether or not the accumulated losses at the end of the financial year is fifty per cent or more of its net worth and whether it has incurred cash losses in such financial year and in the immediately preceding financial year. 11. The company has not raised loans from Financial Institutions or Banks or by issue of Debentures and hence Clause 4 (xi) of the Companies (Auditors Report) Order 2003, (as amended) are not applicable to the Company. 12. In our opinion and according to the explanations given to

5.

Reliance Dairy Foods Limited

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

Re: Reliance Dairy Foods Limited (the Company)

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

Amit Chaturvedi Partner Membership No.: 103141 Place: Mumbai Date : April 22, 2010

Reliance Dairy Foods Limited

Reliance Dairy Foods Limited Balance Sheet as at 31st March, 2010

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

Schedule SOURCES OF FUNDS Shareholders Funds Share Capital Loan Funds Unsecured Loans TOTAL APPLICATION OF FUNDS Fixed Assets Gross Block Less: Depreciation Net Block Capital Work-in-Progress Deferred Tax Assets Current Assets, Loans and Advances Current Assets Inventories Sundry Debtors Cash and Bank Balances Loans and Advances Less : Current Liabilities and Provisions Current Liabilities Provisions Net Current Assets 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: 22nd April, 2010

As at 31st March, 2010

A B

5.00 8,970.87 8,975.87

5.00 6,484.08 6,489.08

C 2,570.18 454.00 2,116.18 1,582.81 3,698.99 528.83 D 4,976.53 1,002.99 342.28 6,321.80 658.91 6,980.71 3,913.95 532.69 141.78 4,588.42 548.13 5,136.55 2,121.96 225.34 1,896.62 863.77 2,760.39 325.79

F 3,368.56 42.78 3,411.34 3,569.37 1,178.68 8,975.87 K L For and on behalf of the Board C.R.Srinath Director Pankaj Pawar Director 2,410.49 86.55 2,497.04 2,639.51 763.39 6,489.08

Reliance Dairy Foods Limited

Reliance Dairy Foods Limited Profit and Loss Account for the year ended 31st March, 2010
(Rs. in lakh) Schedule INCOME Turnover Other Income Variation in Stocks G H 29,349.25 2.84 996.86 30,348.95 EXPENDITURE Purchases Manufacturing and Other Expenses Interest and Finance charges Depreciation I J 942.11 29,793.15 3.36 228.66 30,967.28 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 6, Schedule L) Significant Accounting Policies Notes on Accounts K L (618.33) (203.04) (415.29) (763.39) (1,178.68) (830.58) 527.86 20,104.79 0.62 181.71 20,814.98 (616.80) 10.14 (176.89) (450.05) (313.34) (763.39) (900.10) 17,804.99 0.16 2,393.03 20,198.18 2009-10 2008-09

As per our Report of even date For Chaturvedi & Shah Chartered Accountants Amit Chaturvedi Partner Membership No. 103141 Mumbai Dated: 22nd April, 2010

For and on behalf of the Board C.R.Srinath Director Pankaj Pawar Director

Reliance Dairy Foods Limited

Reliance Dairy Foods 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: Depreciation 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 Fixed Assets Purchase of Investments Sale of Investments Interest Income Dividend Income Net Cash from 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: 22nd April, 2010 (618.33) 228.66 (2.84) 3.36 229.18 (389.15) (580.29) (1,062.58) 874.25 (768.62) (1,157.77) (0.79) (1,158.56) (1,127.21) 2.84 (1,124.37) 27,271.26 (24,784.47) (3.36) 2,483.43 200.50 141.78 342.28 (229.73) (2,690.22) (129.04) (3,048.99) (3,483.61) (10.67) (3,494.28) (1,379.00) (0.09) 21.29 0.06 0.09 (1,357.65) 13,681.60 (8,780.26) (0.62) 4,900.72 48.79 92.99 141.78 181.71 (0.09) (0.06) 0.62 182.18 (434.62) 2008-09 (616.80)

For and on behalf of the Board C.R.Srinath Director Pankaj Pawar Director

Reliance Dairy Foods Limited

Schedules forming part of the Balance Sheet

SCHEDULE A SHARE CAPITAL As at 31st March, 2010 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. 5.00 5.00 5.00 5.00 5.00 5.00 5.00 5.00 (Rs. in lakh) As at 31st March, 2009

(Rs. in lakh) SCHEDULE B UNSECURED LOANS Long Term Loan From holding company TOTAL 8,970.87 8,970.87 6,484.08 6,484.08 As at 31st March, 2010 As at 31st March, 2009

10

SCHEDULE C (Rs. in lakh) Gross Block As at 1st April, 2009 777.67 11.83 1,332.18 0.28 2,121.96 654.64 1,467.32 2,121.96 43.63 181.71 225.34 448.22 2,570.18 225.34 228.66 454.00 0.28 0.07 0.04 0.11 0.17 2,116.18 1,896.62 1,582.81 280.74 1,612.92 105.23 94.92 200.15 1,412.77 36.31 48.14 0.56 1.78 2.34 45.80 131.17 908.84 119.48 131.92 251.40 657.44 658.19 11.27 1,226.95 0.21 1,896.62 611.01 863.77 Additions Deductions/ As at Upto Adjustments 31st March, 2010 31st March, 2009 For the Deductions/ Upto As at As at year Adjustments 31st March, 2010 31st March, 2010 31st March, 2009 Depreciation Net Block

FIXED ASSETS

Description

Plant and Machinery

Electrical Installations

Reliance Dairy Foods Limited

Equipments

Furniture and Fixtures

Total

Previous year

Capital Work-in-Progress

Notes:

Capital Work-in-Progress includes:

Schedules forming part of the Balance Sheet

i)

Rs.0.05 lakh (Previous year Rs. 25.20 lakh) on account of Advance against Project Contracts.

ii)

Rs.1,444.47lakh (Previous year Rs.700.90 lakh) on account of construction materials at site.

Reliance Dairy Foods Limited

11

Schedules forming part of the Balance Sheet

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

SCHEDULE D CURRENT ASSETS INVENTORIES Stores and Packing Materials Raw Materials Finished Goods/ Traded Goods

As at 31st March, 2010

158.58 383.78 4,434.17 4,976.53

118.12 358.52 3,437.31 3,913.95

SUNDRY DEBTORS (Unsecured and Considered Good) Over six months Others

(1)

9.14 993.85 1,002.99

532.69 532.69

CASH AND BANK BALANCES Cash in Hand Balance with Scheduled Banks In Current Accounts In Fixed Deposit Accounts 342.18 0.10 342.28 TOTAL Note:
(1)

0.49

141.19 0.10 141.78 4,588.42

6,321.80

Includes Rs. 505.23 lakh (Previous Year Rs. 230.39 lakh) receivable from the following companies under same management: a Reliance Agri Product Distribution Limited

b Reliance Fresh Limited c Reliance Hypermart Limited

d Retail Concepts & Services ( India) Limited

12

Reliance Dairy Foods Limited

Schedules forming part of the Balance Sheet

(Rs. in lakh) SCHEDULE E 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 Deposits Balance with Service Tax/ Sales Tax Authorities, etc. TOTAL 1.48 639.46 0.62 17.35 658.91 0.69 529.26 3.69 14.49 548.13

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

CURRENT LIABILITIES AND PROVISIONS Current Liabilities Sundry Creditors - Micro enterprises and Small enterprises (1) - Others (2) 3,368.56 3,368.56 Provisions Provision for Leave Encashment/ Gratuity TOTAL Note:
(1)

2,410.49 2,410.49

42.78 3,411.34

86.55 2,497.04

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.45.60 lakh (Previous year Rs. 5.55 lakh) for capital expenditure.

(2)

Reliance Dairy Foods Limited

13

Schedules forming part of the Profit and Loss Account

(Rs. in lakh) SCHEDULE G OTHER INCOME Dividend From Current Investments Interest From Others TOTAL 2.84 2.84 0.07 0.16 (Rs. in lakh) SCHEDULE H VARIATION IN STOCKS STOCK-IN-TRADE (at close) Finished Goods/ Traded Goods STOCK-IN-TRADE (at commencement) Finished Goods/ Traded Goods TOTAL 3,437.31 996.86 1,044.28 2,393.03 4,434.17 3,437.31 2009-10 2008-09 0.09 2009-10 2008-09

(Rs. in lakh) SCHEDULE I MANUFACTURING AND OTHER EXPENSES RAW MATERIAL CONSUMED MANUFACTURING EXPENDITURE Stores and Packing Materials Processing Charges Machinery Repairs and Maintenance Building Repairs and Maintenance 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 Warehousing and Distribution Expenses Sales Tax 2009-10 25,063.82 653.48 1,524.30 21.54 0.16 2,199.48 481.05 975.27 9.12 11.87 1,477.31 2008-09 16,608.02

379.24

537.04

27.15 20.84 427.23 374.44 204.84 1,274.15 5.19 1,858.62

28.14 42.29 607.47 216.63 92.90 759.36 1,068.89

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Reliance Dairy Foods Limited

Schedules forming part of the Profit and Loss Account

SCHEDULE I (Contd.) 2009-10 OPERATING AND ESTABLISHMENT EXPENSES Other Repairs Rent Insurance Rates and Taxes Travelling and Conveyance Expenses Payment to Auditors Professional Fees Exchange Differences (Net) Security Expenses Electricity Expenses Telephone Expenses Printing and Stationery Hire Charges General Expenses 34.77 23.19 7.97 14.36 46.18 3.68 48.86 4.52 0.22 11.58 26.99 4.03 17.65 244.00 TOTAL 29,793.15 36.43 56.94 5.32 6.86 69.50 5.61 88.27 (0.23) 3.07 2.10 17.92 20.99 9.00 21.32 343.10 20,104.79 (Rs. in lakh) 2008-09

(Rs. in lakh) SCHEDULE J INTEREST AND FINANCE CHARGES Others TOTAL 3.36 3.36 0.62 0.62 2009-10 2008-09

Reliance Dairy Foods Limited

15

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 recognised in the period in which the results are known/ materialised. 3 Fixed Assets Fixed Assets are stated at cost net of CENVAT/ Value Added Tax less accumulated depreciation and impairment loss, if any. All costs attributable to Fixed Assets are capitalised. 4 Depreciation Depreciation on Fixed Assets is provided on Straight Line Method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 over their useful life except leasehold improvements are amortised over the lower of estimated useful life or lease period. 5 Impairment of Assets An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount. 6 Investments Current investments are carried at the lower of cost and quoted/ fair value, computed category wise. 7 Inventories Items of Inventories are measured at lower of cost and net realisable value, after providing for obsolescence, if any. Cost of Inventory comprises of all cost of purchase and other cost incurred in bringing them to the respective present location and conditions. Costs are determined on weighted average basis. 8 Turnover Turnover includes sale of goods, service and service tax, adjusted for discounts (net) and Value Added Tax (VAT), if any. 9 Employee Benefits i) 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.

10

Provision for Current and Deferred Tax Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961. Deferred tax resulting from timing difference between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the Balance Sheet date. The deferred tax asset is recognised and carried forward only to the extent that there is a virtual certainty that the asset will be realised in future.

16

Reliance Dairy Foods Limited

Schedules forming part of the Balance Sheet

SCHEDULE K (Contd.) 11 Provision, Contingent Liabilities and Contingent Assets Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements. SCHEDULE L NOTES ON ACCOUNTS 1 The previous years figures have been regrouped, rearranged and reclassified wherever necessary. Accordingly, amounts and other disclosures for the preceding year are included as an integral part of the current year financial statements and are to be read in relation to the amounts and other disclosures relating to the current year. The Company is mainly engaged in Organised Retail in India. All other activities of the Company revolve around with this main business. Accordingly, the Company has only one identifiable segment reportable under Accounting Standard 17 on 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 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. The Company operates post retirement benefit plans as follows: I) Reconciliation of opening and closing balances of Defined Benefit obligation (Rs. in lakh) Gratuity (Unfunded) 2009-10 Defined Benefit obligation at beginning of the year Current Service Cost Interest Cost Actuarial (gain)/ loss Benefits paid Defined Benefit obligation at year end 15.35 5.95 1.15 (1.29) 21.16 2008-09 18.88 5.62 1.51 (10.66) 15.35 Leave Encashment (Unfunded) 2009-10 71.20 4.17 3.59 (10.63) (46.71) 21.62 2008-09 44.13 13.94 3.19 18.43 (8.49) 71.20 13.69 5.19 2008-09 17.65 7.19 (Rs. in lakh)

Reliance Dairy Foods Limited

17

Schedules forming part of the Balance Sheet

SCHEDULE L (Contd.) II) Reconciliation of fair value of assets and obligations (Rs. in lakh) Gratuity (Unfunded) 2009-10 Fair value of plan assets Present value of obligation Amount recognised in Balance Sheet III) Expenses recognized during the year (Rs. in lakh) Gratuity (Unfunded) 2009-10 Current Service Cost Interest Cost on benefit obligation Past service Cost Actuarial (gain)/ loss recognized in the year Net benefit expense/ (Income) Actual return on plan asset IV) Expenses recognized during the year Gratuity (Unfunded) 2009-10 Discount rate (per annum) Expected rate of return on assets (per annum) Rate of escalation in salary (per annum) 7.50% 6.00% 2008-09 8.00% 8.00% 4.00% Leave Encashment (Unfunded) 2009-10 7.50% 6.00% 2008-09 8.00% 8.00% 4.00% 5.95 1.15 (1.29) 5.81 2008-09 5.62 1.51 (10.66) (3.53) Leave Encashment (Unfunded) 2009-10 4.17 3.59 (10.63) (2.87) 2008-09 13.94 3.19 18.43 (35.56) 21.16 21.16 2008-09 15.35 15.35 Leave Encashment (Unfunded) 2009-10 21.62 21.62 2008-09 71.20 71.20

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary. 4 Payment to Auditors (excluding Service Tax, wherever applicable): 2009-10 (i) Audit Fees 2.50 0.50 3.00 (Rs. in lakh) 2008-09 3.00 0.60 3.60

(ii) Tax Audit Fees

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Reliance Dairy Foods Limited

Schedules forming part of the Balance Sheet

SCHEDULE L (Contd.) 5 The Deferred Tax Assets (net) comprise of the following: As at 31st March, 2010 (i) Deferred Tax Assets Disallowance under the Income Tax Act, 1961 Carried forward loss 22.03 777.37 20.69 453.32 (Rs. in lakh) As at 31st March, 2009

(ii) Deferred Tax Liability Related to Fixed Assets 270.57 528.83 Note: The virtual certainty is based on Agreements 6 Earnings Per Share (EPS) 2009-10 (i) Net Profit/ (Loss) after tax as per profit and loss account (Rs. in lakh) (415.29) 50 000 (830.58) 2008-09 (450.05) 50 000 (900.10) (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 9.15 10.15 (Rs. in lakh) 8 Expenditure in Foreign Currency: Travelling and Conveyance Expenses 9 Value of Imports on CIF basis in respect of: 2009-10 Capital goods 188.81 2009-10 0.37 2008-09 (Rs. in lakh) 2008-09 230.75 471.22 As at 31st March, 2009 148.22 325.79

(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) 7. Additional Information (to the extent applicable):

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Schedules forming part of the Balance Sheet

SCHEDULE L (Contd.) 10 Value of Stores and Packing Materials Consumed 2009-10 Rs. in lakh Indigenous 11 Value of Raw Materials Consumed 2009-10 Rs. in lakh Indigenous 12 25,063.82 % of Consumption 100% Rs. in lakh 16,608.02 2008-09 % of Consumption 100% 653.48 % of Consumption 100% Rs. in lakh 481.05 2008-09 % of Consumption 100%

As per Accounting Standard 18 Related Party Disclosures notified in the Companies (Accounting Standards) Rules 2006, the disclosures of transactions with the related parties as defined in Accounting Standard are given below : (i) List of related parties with whom transactions have taken place and relationships: Sr No 1 2 3 4 5 6 7 8 9 Name of the Related Party Reliance Industries Limited Reliance Retail Limited Reliance Agri Products Distribution Limited Reliance Fresh Limited Reliance Hypermart Limited Reliance Infosolutions Private Limited Reliance Supply Chain Solutions Limited Reliancedigital Retail Limited Retail Concepts & Services ( India) Limited Fellow Subsidiaries Relationship Ultimate Holding Company Holding Company

(ii) Transactions during the year with related parties (excluding reimbursements): (Rs. in lakh) Sr No 1 2 3 4 Nature of Transactions (excluding reimbursements) Unsecured Loans taken/ (repaid) Turnover Purchases Expenditure - Professional Fees 1.63 20.60 1.63 20.60 Holding Company 2,486.80 4,901.34 8.98 34.04 Fellow Subsidiaries 5,378.87 4,776.30 26.25 Total 2,486.80 4,901.34 5,378.87 4,785.28 60.29 -

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Reliance Dairy Foods Limited

Schedules forming part of the Balance Sheet

SCHEDULE L (Contd.) (Rs. in lakh) Sr No Nature of Transactions Holding Company Fellow Subsidiaries Total

Balance as at 31st March, 2010 5 6 7 8 Unsecured Loan Sundry Debtors Sundry Creditors Financial Gurantees taken 8,970.87 6,484.06 14.78 9.15 10.15 505.23 215.61 0.07 8,970.87 6,484.06 505.23 230.39 0.07 9.15 10.15

Note: Figures in Italics represents previous years amount. Disclosure in respect of material Related Party Transactions during the year: 1 2 Unsecured Loan taken includes Rs. 2,486.80 lakh (Previous Year Rs. 4,901.34 lakh) from Reliance Retail Limited. Turnover includes to Reliance Retail Limited Rs. Nil (Previous Year 8.98 lakh); Reliance Fresh Limited Rs. 5,138.92 lakh (Previous Year 4,703.67 lakh); Reliance Hypermart Limited Rs. 86.49 lakh (Previous Year 34.87 lakh); Reliance Food Processing Solutions Limited Rs. Nil (Previous Year Rs. 33.42 lakh) and Retail Concepts & Service (India) Limited Rs. 0.03 lakh (Previous Year Rs. 4.35 lakh). Purchases from Reliance Fresh Limited Rs. 18.73 lakh (Previous Year Rs. Nil) and Reliancedigital Retail Limited Rs. 6.51 lakh (Previous Year Rs. Nil) Professional fees include to Reliance Infosolutions Private Limited Rs. 1.62 lakh (Previous Year Rs. Nil) and to Reliance Supply Chain Solutions Limited Rs.Nil (Previous Year Rs.20.60 lakh).

3 4 13

Quantitative Details A Raw Material Consumed Particulars 1 2 3 SMP FAT SNF Total Note: Figures in Italics represents previous years amount. Unit Kg. Kg. Kg. Qty 19.19 10.46 68.02 167.69 94.47 223.34 181.68 401.49 In lakh Amount 2,370.91 1,100.33 11,747.60 8,051.19 10,945.31 7,456.50 25,063.82 16,608.02

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Schedules forming part of the Balance Sheet

SCHEDULE L (Contd.) B Finished Goods/ Traded Goods Particulars Opening Stock Qty * Dairy Products Total Amount 3,437.31 1,044.28 3,437.31 1,044.28 Produced Qty * Purchased Qty * Amount 942.11 599.03 942.11 599.03 Qty * Sale Amount 29,349.25 17,804.99 29,349.25 17,804.99 (Rs. in lakh) Closing Stock Qty * Amount 4,434.17 3,437.31 4,434.17 3,437.31

Note: Figures in Italics represents previous years amount. * In view of the heterogeneous nature and non-uniform units of measurement of items produced, purchased and sold, details have been furnished to the extent practicable and giving meaningful information. 14 Information as required under para 3, 4 and 4A to 4D of part II of schedule VI of Companies Act, 1956 are given to the extent applicable.

As per our Report of even date For Chaturvedi & Shah Chartered Accountants Amit Chaturvedi Partner Membership No. 103141 Mumbai Dated: 22nd April, 2010

For and on behalf of the Board C.R.Srinath Director Pankaj Pawar Director

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Reliance Dairy Foods Limited

Additional information as required under part IV of the 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 5 4 1 9 M H 2 0 0 6 P L C 1 6 5 8 2 6 3 1 - 0 3 - 2 0 1 0 State Code: 1 1

II. Capital raised during the year (Rupees in 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 (Rupees in 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 N I L 8 9 7 0 8 7 3 4 1 1 3 4 1 2 3 8 7 2 1 Total Assets: Application of Funds: Fixed Assets: Investments: Deferred Tax Assets: Current Assets: Miscellaneous Expenditure: Accumulated Losses 3 6 9 8 9 9 N I L 5 2 8 8 3 6 9 8 0 7 1 N I L 1 1 7 8 6 8 1 2 3 8 7 2 1

IV. Performance of the Company (Rupees in Thousands): Turnover: Profit/Loss Before Tax: Earnings per Share in Rs: - Basic - Diluted V . ( 8 3 0 . 5 8 ) ( 8 3 0 . 5 8 ) Dividend Rate: N I L 2 9 3 4 9 2 5 ( 6 1 8 3 3 ) Total Expenditure: Profit/Loss After tax: 3 0 9 6 7 2 8 ( 4 1 5 2 9 )

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