Annual Report

2009 - 2010

RELIANCE DIGITAL MEDIA LIMITED

 Reliance Digital Media Limited 1

Directors’ Report

Dear Members, Directors’ Responsibility Statement

Pursuant to the requirement under Section 217(2AA) of the
Your Directors are pleased to present the Third Annual Report
Companies Act, 1956 with respect to Directors’ Responsibility
and the Audited Accounts for the year ended on March 31,
Statement, it is hereby confirmed that:
2010.
(i) in the preparation of the accounts for the year ended 31st
Financial Results: March, 2010, the applicable accounting standards have been
followed and there are no material departures from the same;
The financial performance of the Company for the year ended (ii) the Directors have selected such accounting policies and
on March 31, 2010 is summarized below: applied them consistently and made judgments and estimates
(Amount in Rupees) that are reasonable and prudent so as to give a true and fair
2009-2010 2008-2009 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
Profit / (Loss) before Depreciation, under review;
Interest and Tax (62 25 437) (90 79 462)
(iii) the Directors have taken proper and sufficient care for the
Less: Interest 6 386 1 813 maintenance of adequate accounting records in accordance
Depreciation 11 67 151 5 88 581 with the provisions of the Companies Act, 1956 for
safeguarding the assets of the Company and for preventing
Profit/(Loss) Before Tax (73 98 974) (96 69 856) and detecting fraud and other irregularities;
Less: Provision for (iv) the Directors have prepared the accounts for the year ended
Fringe Benefit Tax - 55 201 31st March, 2010 on a ‘going concern’ basis.
Deferred Tax (27 89 516) (28 37 112)
Auditors
Profit/(Loss) after Tax (46 09 458) (68 87 945)
During the year, Messrs S. R. Batliboi & Co., Chartered
Balance brought forward (1 00 83 152) (31 95 207) Accountants, resigned as joint statutory auditors of the Company.
from Previous Year Messrs Chaturvedi & Shah, Chartered Accountants, continue as
Balance carried to (1 46 92 610) (1 00 83 152) statutory auditor of the company. Messrs Chaturvedi & Shah,
Balance Sheet Chartered Accountants, Statutory Auditors of the Company, hold
office until the conclusion of the ensuing Annual General Meeting
Operational and Financial Review of the Company and are eligible for re appointment.
The Company offers in-store advertising opportunities to The Company has received letter from them to the effect that
advertisers, in respect of Reliance Mart, Reliance Super, Reliance their re-appointment, if made, would be within the prescribed
Fresh, Reliance Digital and other format stores of Reliance Retail limits under Section 224(1B) of the Companies Act, 1956 and
Limited and its subsidiaries. The Company has been able to that they are not disqualified for such re-appointment within the
create awareness through innovative approach and application meaning of Section 226 of the Companies Act, 1956.
of technology.
Particulars of Employees
The Company has incurred a loss of Rs. 46 09 458 for the financial
year ended March 31, 2010. With the optimisation of resources As required under the provisions of Section 217(2A) of the
and further scaling up of operations, the Company is confident Companies Act, 1956, read with the Companies (Particulars of
of posting better results in the future. Employees) Rules, 1975, as amended, the names and other
particulars of the employees are set out in the Annexure to this
Dividend Report.
Your Directors have not recommended any dividend on Equity Conservation of Energy, Technology Absorption and Foreign
Shares for the year under review. Exchange Earnings and Outgo
Directors The particulars relating to conservation of energy, technology
absorption and foreign exchange earnings and outgo, required to
In accordance with the provisions of the Companies Act, 1956,
be furnished pursuant to Section 217(1)(e) of the Companies
Shri Ramesh Kumar Damani retires by rotation and being eligible,
Act, 1956, read with Companies (Disclosures of Particulars in
offers himself for reappointment at the ensuing Annual General
the Report of Board of Directors) Rules, 1988, are as under:
Meeting.
2 Reliance Digital Media Limited

Directors’ Report

i. Part A and B of the Rules, pertaining to conservation of

energy and technology absorption, are not applicable to the
Company.
ii. Foreign Exchange Earnings and Outgo:
Foreign Exchange Earned: Rs. Nil
Foreign Exchange Used : Rs. Nil
Acknowledgement
Your Directors would like to express their grateful appreciation
for assistance and cooperation received from Reliance Industries
Limited, Reliance Retail Limited, Banks, Government Authorities,
Customers, Vendors, Employees and Members during the year
under review.

For and on behalf of the Board of Directors

K. Sridhar Rajendra Kamath

Director Director

Place: Mumbai.
Date: April 20, 2010
 Reliance Digital Media Limited 3

Auditors’ Report

To the Members of e) On the basis of written representations received from

RELIANCE DIGITAL MEDIA LIMITED the Directors as on March 31, 2010 and taken on
record by the Board of Directors, we report that
We have audited the attached Balance Sheet of RELIANCE
none of the Directors is disqualified as on March 31,
DIGITAL MEDIA LIMITED as at March 31, 2010, the Profit
2010 from being appointed as a director in terms of
and Loss Account and also the Cash Flow Statement for the year
clause (g) of sub-section (1) of section 274 of the
ended on that date. These financial statements are the
Companies Act, 1956;
responsibility of the Company’s management. Our responsibility
is to express an opinion on these financial statements based on
f) In our opinion and to the best of our information
our audit.
and according to the explanations given to us, the
said accounts give the information required by the
1. We have conducted our audit in accordance with the Companies Act, 1956, in the manner so required, and
Auditing Standards generally accepted in India. Those present a true and fair view in conformity with the
standards require that we plan and perform the audit to accounting principles generally accepted in India:
obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit
(i) in the case of the Balance Sheet, of the state of
includes examining, on a test basis, evidence supporting
affairs of the Company as at March 31, 2010;
the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles
used and significant estimates made by the management, (ii) in the case of the Profit and Loss Account, of
as well as evaluating the overall financial statement the loss for the year ended on that date; and
presentation. We believe that our audit provides a
reasonable basis for our opinion. (iii) in the case of the Cash Flow Statement, of the
cash flows for the year ended on that date.
2. As required by the Companies (Auditor’s Report) Order
2003 (as amended) issued by the Central Government of For Chaturvedi & Shah
India in terms of sub-section (4A) of section 227 of the Firm Registration No: 101720W
Companies Act, 1956, we enclose in the Annexure a Chartered Accountants
statement on the matters specified in paragraphs 4 and 5
of the said Order.

3. Further to our comments in the Annexure referred to

above, we report that: Jignesh Mehta
Partner
a) We have obtained all the information and Membership No.: 102749
explanations, which to the best of our knowledge and
belief were necessary for the purposes of our audit; Place: Mumbai
Date: April 20, 2010
b) In our opinion, proper books of account as required
by law have been kept by the Company so far as
appears from our examination of those books;

c) The Balance Sheet, the Profit and Loss Account and

Cash Flow Statement dealt with by this report are
in agreement with the books of account;

d) In our opinion, the Balance Sheet, Profit and Loss

Account and Cash Flow statement dealt with by this
report comply with the mandatory Accounting
Standards referred to in sub-section (3C) of section
211 of the Companies Act, 1956;
4 Reliance Digital Media Limited
Annexure referred to in paragraph 2 of our report of even date
Re: Reliance Digital Media Limited (‘the Company’)
1. a) The Company has maintained proper records
showing full particulars, including quantitative details
and situation of fixed assets.
b) Fixed assets have been physically verified by the
management in a phased periodical manner, which in
our opinion is reasonable, having regard to the size
of the Company and nature of its assets. As
informed, no material discrepancies were noticed on
such physical verification.
c) There are no substantial disposals of fixed assets
during the year.
2. In respect of its inventories:
a) The inventory has been physically verified during
the year by the management. In our opinion, the
frequency of verification is reasonable.
b) The procedures of physical verification of inventories
followed by the management are reasonable and
adequate in relation to the size of the Company and
the nature of its business.
c) The Company has maintained proper records of
inventory. As explained to us, there were no material
discrepancies noticed on physical verification of
inventory.
3. The Company has neither granted nor taken any loan,
secured or unsecured to/from companies, firms and other
parties covered in the Register maintained under Section
301 of the Companies Act, 1956.Therefore, the provisions
of clause (iii) (b), (c), (d), (f), (g) of the Companies
(Auditor’s Report) Order 2003, (as amended) are not
applicable to the Company.
4. In our opinion and according to the information and
explanations given to us, there is an adequate internal
control system commensurate with the size of the
Company and the nature of its business for the purchase
of inventory and fixed assets and also for the sale of goods
and services. During the course of our audit, no major
weakness has been noticed in the internal control system
in respect of these areas.
5. According to information and explanation given to us, that
there are no contracts or arrangements referred to in
section 301 of the Companies Act. 1956 that needs to be
entered into the register maintained under section 301.
Therefore, the provisions of clause (v) (b) of the
Companies (Auditor’s Report) Order 2003, (as amended)
is not applicable to the Company.
6. The Company has not accepted any deposit from the
public.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. To the best of our knowledge and as explained to us, the
Central Government has not prescribed the maintenance
of cost records under Section 209 (1) (d) of the Companies
Act, 1956.
9. In respect of statutory dues:
a) According to the records of the Company, the
Company is regular in depositing with appropriate
authorities undisputed statutory dues including
provident fund, investor education protection fund,
employees’ state insurance, income-tax, wealth-tax,
service tax, custom duty and other statutory dues
applicable to it. According to the information and
explanations given to us, no undisputed amounts
payable in respect of income tax, wealth tax, service
tax and customs duty were outstanding, as at March
31, 2010 for a period of more than six months from
the date they became payable.
b) According to the information and explanation given
to us, there are no dues of sales tax, income tax,
wealth tax, service tax, custom duty, excise duty and
cess which have not been deposited on account of
any dispute.
10. The Company has been registered for a period of less than
five years and hence we are not required to comment on
whether or not the accumulated losses at the end of the
financial year is fifty per cent or more of its net worth
and whether it has incurred cash losses in such financial
year and in the immediately preceding financial year.
11. The company has not raised loans from Financial
Institutions or Banks or by issue of Debentures and hence
Clause 4 (xi) of the Companies ( Auditor’s Report ) Order
2003, (as amended) are not applicable to the company.
12. In our opinion and according to the explanations given to
us and based on the information available, no loans and
advances have been granted on the basis of security by
 Reliance Digital Media Limited 5

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

Re: Reliance Digital Media Limited (‘the Company’)

way of pledge of shares, debentures and other securities.
13. In our opinion, the Company is not a chit fund or a nidhi/
mutual benefit fund/ society. Therefore, the provisions of
clause 4(xiii) of the Companies (Auditor’s Report) Order
2003, (as amended) are not applicable to the Company.
14. In our opinion, the Company is not dealing or trading in
shares, securities, debentures and other investments and
therefore the provisions of clause (xiv) of the Companies
(Auditor’s Report) Order 2003, (as amended) are not
applicable.
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.

15. According to information and explanation given to us the For Chaturvedi & Shah
Company has not given any guarantee for loans taken by Firm Registration No: 101720W
others from bank or financial institutions. Therefore, the Chartered Accountants
provisions of Clause (xv) of Companies (Auditor’s
Report) Order 2003, (as amended) are not applicable.

16. The term loans raised by the company were applied for Jignesh Mehta
the purpose for which loans were obtained. Partner
Membership No.: 102749
17. According to the information and explanations given to
us and on an overall examination of the balance sheet of Place: Mumbai
the Company, we report that no funds raised on short- Date: April 20, 2010
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.
6 Reliance Digital Media Limited

Reliance Digital Media Limited

Balance Sheet as at 31st March, 2010

In Rupees
Schedule As at As at
31st March, 2010 31st March, 2009
SOURCES OF FUNDS
Shareholders’ Funds
Share Capital ‘A’ 5 00 000 5 00 000
Loan Funds
Unsecured Loans ‘B’ 8 11 34 279 2 53 90 412
TOTAL 8 16 34 279 2 58 90 412
APPLICATION OF FUNDS
Fixed Assets ‘C’
Gross Block 1 68 59 923 1 36 57 125
Less: Depreciation 17 37 467 5 88 581
Net Block 1 51 22 456 1 30 68 544
Capital Work-in-Progress 12 58 638 37 72 026
1 63 81 094 1 68 40 570
Deferred Tax Assets 72 71 913 44 82 397
Current Assets, Loans and Advances
Current Assets ‘D’
Inventories 6 80 631 -
Sundry Debtors 5 31 06 690 1 54 02 046
Cash and Bank Balances 1 19 689 2 803
5 39 07 010 1 54 04 849
Loans and Advances ‘E’ 1 20 26 796 31 08 816
6 59 33 806 1 85 13 665
Less :
Current Liabilities and Provisions ‘F’
Current Liabilities 2 12 16 802 2 10 01 863
Provisions 14 33 142 30 34 709
2 26 49 944 2 40 36 572
Net Current Assets 4 32 83 862 ( 55 22 907)
Miscellaneous Expenditure ‘G’ 4 800 7 200
(To the extent not written off or adjusted)
Profit and Loss Account 1 46 92 610 1 00 83 152
TOTAL 8 16 34 279 2 58 90 412
Significant Accounting Policies ‘J’
Notes on Accounts ‘K’
As per our Report of even date For and on behalf of the Board
For Chaturvedi & Shah Rajendra Kamath
Chartered Accountants Director

Jignesh Metha K. Sridhar

Partner Director
Membership No. 102749
Mumbai
Dated : 20th April 2010
 Reliance Digital Media Limited 7

Reliance Digital Media Limited

Profit and Loss Account for the year ended 31st March, 2010

In Rupees
Schedule 2009-10 2008-09
INCOME
Turnover 18 98 82 273 2 10 44 675
Less: Service Tax Recovered 1 84 65 416 21 07 675
17 14 16 857 1 89 37 000
17 14 16 857 1 89 37 000
EXPENDITURE
Operating and Other Expenses ‘H’ 17 76 42 294 2 80 16 462
Interest and Finance charges ‘I’ 6 386 1 813
Depreciation 11 67 151 5 88 581
17 88 15 831 2 86 06 856
Profit/ (Loss) before Tax (73 98 974) (96 69 856)
Provision for Fringe Benefit Tax - 55 201
Provision for Deferred Tax (27 89 516) (28 37 112)
Profit/ (Loss) after Tax (46 09 458) (68 87 945)
Add: Balance brought forward from Previous Year (1 00 83 152) (31 95 207)
Balance carried to Balance Sheet (1 46 92 610) (1 00 83 152)
Basic and Diluted Earnings per Share of face value
of Rs 10 each (in Rupees) ( 92.19) (137.76)
(Refer Note 5, Schedule “K”)
Significant Accounting Policies ‘J’
Notes on Accounts ‘K’

As per our Report of even date For and on behalf of the Board
For Chaturvedi & Shah Rajendra Kamath
Chartered Accountants Director

Jignesh Metha K. Sridhar

Partner Director
Membership No. 102749
Mumbai
Dated : 20th April 2010
8 Reliance Digital Media Limited

Reliance Digital Media Limited

Cash Flow Statement for the year 2009-10

In Rupees
2009-10 2008-09
A: CASH FLOW FROM OPERATING ACTIVITIES
Net Profit/ (Loss) before tax as per Profit & Loss Account ( 73 98 974) ( 96 69 856)
Adjusted for:
Miscellaneous Expenditure written off 2 400 2 400
(Profit)/ Loss on sale/ Discarding of Assets (net) 2 109 -
Depreciation 11 67 151 5 88 581
Interest and Finance Charges 6 386 1 813
11 78 046 5 92 794
Operating Profit before Working Capital Changes ( 62 20 928) ( 90 77 062)
Adjusted for:
Trade and Other Receivables (4 24 84 036) (1 83 03 290)
Inventories ( 6 80 631) -
Trade Payables ( 10 84 799) 1 90 39 255
(4 42 49 466) 7 35 965
Cash Generated from Operations (5 04 70 394) ( 83 41 097)
Taxes Paid ( 41 54 297) ( 39 492)
Net Cash used in Operating Activities (5 46 24 691) ( 83 80 589)
B: CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Fixed Assets ( 12 13 445) (1 74 29 151)
Sale of Fixed Assets 2 17 541 -
Net Cash used in Investing Activities ( 9 95 904) (1 74 29 151)
C: CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from Long Term Borrowings 22 95 36 579 2 53 83 597
Repayment of Long Term Borrowings (17 37 92 712) -
Interest Paid ( 6 386) ( 1 813)
Net Cash from Financing Activities 5 57 37 481 2 53 81 784
Net Increase/ (Decrease) in Cash and Cash Equivalents 1 16 886 ( 4 27 956)
Opening Balance of Cash and Cash Equivalents 2 803 4 30 759
Closing Balance of Cash and Cash Equivalents 1 19 689 2 803

As per our Report of even date For and on behalf of the Board
For Chaturvedi & Shah Rajendra Kamath
Chartered Accountants Director

Jignesh Metha K. Sridhar

Partner Director
Membership No. 102749
Mumbai
Dated : 20th April 2010
 Reliance Digital Media Limited 9

Schedules forming part of the Balance Sheet

SCHEDULE ‘A’

SHARE CAPITAL In Rupees

As at As at
31st March, 2010 31st March, 2009
Authorised
50 000 Equity Shares of Rs. 10 each 5 00 000 5 00 000
(50 000)
TOTAL 5 00 000 5 00 000
Issued, Subscribed, Called up and Paid-up
Fully Paid-up
50 000 Equity Shares of Rs. 10 each 5 00 000 5 00 000
(50 000)
TOTAL 5 00 000 5 00 000
Note:
All the above 50 000 (Previous Year 50 000) Equity Shares of Rs.10 each are held by Reliance Retail Limited, the holding company along
with its nominees.

In Rupees

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

UNSECURED LOANS

Long Term Loans

From holding company 8 11 34 279 2 53 90 412

TOTAL 8 11 34 279 2 53 90 412

 10

SCHEDULE ‘C’

FIXED ASSETS In Rupees

Description Gross Block Depreciation Net Block

As at Additions Deductions/ As at Upto For the Deductions/ Upto As at As at

1st April, 2009 Adjustments 31st March, 2010 31st March, 2009 year Adjustments 31st March, 2010 31st March, 2010 31st March, 2009
Equipments 1 36 57 125 34 40 713 2 37 915 1 68 59 923 5 88 581 11 67 151 18 265 17 37 467 1 51 22 456 1 30 68 544
Total 1 36 57 125 34 40 713 2 37 915 1 68 59 923 5 88 581 11 67 151 18 265 17 37 467 1 51 22 456 1 30 68 544
Previous Year 1 36 57 125 - 1 36 57 125 - 5 88 581 - 5 88 581 1 30 68 544 -
Capital Work-in-Progress 12 58 638 37 72 026
Reliance Digital Media Limited

Notes:

Capital Work-in-Progress includes:

i) Rs. 3 787 (Previous Year Rs. 26 40 856) on account of Advance against Project Contracts.

ii) Rs. 11 40 303 (Previous Year Rs. 8 84 230) on account of construction materials at site.
Schedules forming part of the Balance Sheet
 Reliance Digital Media Limited 11

Schedules forming part of the Balance Sheet

SCHEDULE ‘D’

In Rupees

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

CURRENT ASSETS

INVENTORIES

Stores and Packing Materials 6 80 631 -

SUNDRY DEBTORS (Unsecured and Considered Good)

Over six months 64 66 880 -

Others 4 66 39 810 1 54 02 046

5 31 06 690 1 54 02 046

CASH AND BANK BALANCES

Balance with Scheduled Banks

In Current Accounts 1 19 689 2 803

TOTAL 5 39 07 010 1 54 04 849

In Rupees

SCHEDULE ‘E’ As at As at
31st March, 2010 31st March, 2009

LOANS AND ADVANCES

Unsecured - (Considered good unless otherwise stated)

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

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

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

TOTAL 1 20 26 796 31 08 816

12 Reliance Digital Media Limited

Schedules forming part of the Balance Sheet

In Rupees

SCHEDULE ‘F’ As at As at
31st March, 2010 31st March, 2009

CURRENT LIABILITIES AND PROVISIONS

Current Liabilities
Sundry Creditors
- Micro enterprises and Small enterprises (1) - -
- Others (2) 2 12 16 802 2 10 01 863
2 12 16 802 2 10 01 863
Provisions
Provision for Fringe Benefit Tax (Net of Advance Tax) - 15 709
Provision for Leave Encashment/ Gratuity 14 33 142 30 19 000
14 33 142 30 34 709

2 26 49 944 2 40 36 572

Note:
(1)
The Company has not received the required information from Suppliers regarding their status under the Micro, Small and Medium
Enterprises Development Act, 2006. Hence disclosures, if any, relating to amounts unpaid as at the year end together with interest
paid/ payable as required under the said Act have not been made.
(2)
Includes Rs.26792 (Previous Year Rs. 312912) for capital expenditure.

In Rupees
SCHEDULE ‘G’ As at As at
31st March 2010 31st March, 2009
MISCELLANEOUS EXPENDITURE
(to the extent not written off or adjusted)
Preliminary Expenses
As per last Balance Sheet 7 200 9 600
Less : Written - off during the year 2 400 2 400
TOTAL 4 800 7 200
 Reliance Digital Media Limited 13

Schedules forming part of the Profit and Loss Account

In Rupees
SCHEDULE ‘H’ 2009-10 2008-09

OPERATING AND OTHER EXPENSES

PAYMENT TO AND PROVISIONS FOR EMPLOYEES
Salaries, Wages and Bonus 1 13 45 180 87 59 013
Contribution to Provident Fund, Gratuity Fund, 8 31 776 6 50 281
Superannuation Fund, Employee’s State Insurance Scheme,
Pension Scheme,Labour Welfare Fund etc.
Employee Welfare and other amenities 7 67 476 3 37 845
1 29 44 432 97 47 139
SALES AND DISTRIBUTION EXPENSES
Sales Promotion and Advertisement Expenses 3 27 725 -
Store Running Expenses 4 82 803 79 963
Warehousing and Distribution Expenses 65 090 19 240
8 75 618 99 203
OPERATING AND ESTABLISHMENT EXPENSES
Stores and Packing Materials 54 524 5 86 017
Other Repairs 7 53 372 8 37 910
Rent 16 25 78 337 1 62 85 938
Insurance 83 090 36 510
Rates and Taxes 43 203 1 29 427
Travelling and Conveyance Expenses 73 916 67 629
Payment to Auditors 60 343 28 800
Professional Fees 36 100 19 686
Loss on Sale/ Discarding of Assets 2 109 -
Telephone Expenses 94 848 95 936
Printing and Stationery 3 761 5 211
Hire Charges - 45 916
General Expenses 36 241 28 740
16 38 19 844 1 81 67 720
Miscellaneous expenditure written off 2 400 2 400
TOTAL 17 76 42 294 2 80 16 462

In Rupees
SCHEDULE ‘I’ 2009-10 2008-09
INTEREST AND FINANCE CHARGES
Others 6 386 1 813
TOTAL 6 386 1 813
14 Reliance Digital Media Limited

Schedules forming part of the Balance Sheet

SCHEDULE ‘J’
SIGNIFICANT ACCOUNTING POLICIES
1 Basis of Preparation of Financial Statements
The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting
principles in India, Companies (Accounting Standards) Rules 2006 and the provisions of the Companies Act,1956.
2 Use of Estimates
The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of the
assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting
period. Difference between the actual results and estimates are recognised in the period in which the results are known/ materialised.
3 Fixed Assets
Fixed Assets are stated at cost net of CENVAT/ Value Added Tax less accumulated depreciation and impairment loss, if any. All
costs attributable to Fixed Assets are capitalised.
4 Depreciation
Depreciation on Fixed Assets is provided on straight line method at the rates and in the manner prescribed in Schedule XIV to the
Companies Act,1956 over their useful life.
5 Impairment of Assets
An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the
Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting
period is reversed if there has been a change in the estimate of recoverable amount.
6 Inventories
Items of Inventories are measured at lower of cost or net realisable value, after providing for obsolescence, if any. Cost of
Inventory comprises of all cost of purchase and other cost incurred in bringing them to the respective present location and
condition. Costs are determined on weighted average cost basis.
7 Turnover
Turnover includes sale of goods, services and service tax adjusted for discounts (net) and Value Added Tax (VAT) if any.
8 Employee Benefits
i) Short term employee benefits are recognised as an expense at the undiscounted amount in the Profit and Loss Account of the
year in which the related service is rendered.
ii) Post employment and other long term employee benefits are recognised as an expense in the Profit and Loss Account for the
year in which the employee has rendered services. The expense is recognised at the present value of the amounts payable
determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term
benefits are charged to the Profit and Loss Account.
9 Provision for Current and Deferred Tax
Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act,
1961. Deferred tax resulting from “timing difference” between taxable and accounting income is accounted for using the tax rates
and laws that are enacted or substantively enacted as on the Balance Sheet date. The deferred tax asset is recognised and carried
forward only to the extent that there is a virtual certainty that the asset will be realised in future.
10 Provision, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result
of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are
disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.
11 Miscellaneous Expenditure
Preliminary expenses and issue related expenses incurred are amortised over period of 5 years.
 Reliance Digital Media Limited 15

Schedules forming part of the Balance Sheet

SCHEDULE ‘K’
NOTES ON ACCOUNTS
1 The previous year’s figures have been regrouped, rearranged and reclassified wherever necessary. Accordingly, amounts and other
disclosures for the preceding year are included as an integral part of the current year financial statements and are to be read in
relation to the amounts and other disclosures relating to the current year.
2 As per Accounting Standard 15 “Employee Benefits”, notified in the Companies (Accounting Standards) Rules 2006, the
disclosures of employee benefits as defined in the Accounting Standard are given below:
Defined Contribution Plan
Contribution to Defined Contribution Plan, recognised are charged off for the year are as under:
In Rupees
2009-10 2008-09
Employer’s Contribution to Provident Fund 3 90 486 2 41 243
Employer’s Contribution to Pension Scheme 92 833 55 782
Defined Benefit Plan
The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which
recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately
to build up the final obligation. Obligation for levae encashment is recongised in the same manner as gratuity.
The Company operates post retirement benefit plans as follows:

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

In Rupees
Gratuity Leave Encashment
(Unfunded) (Unfunded)
2009-10 2008-09 2009-10 2008-09

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

Current Service Cost 1 39 753 3 23 000 1 00 043 26 96 000
Interest Cost 24 225 - -
Actuarial (gain)/ loss 1 35 755 - 6 19 464 (11 585)
Benefits paid - - (26 05 098) 11 585
Defined Benefit obligation at year end 6 22 733 3 23 000 8 10 409 26 96 000
II. Reconciliation of fair value of assets and obligations
In Rupees
Gratuity Leave Encashment
(Unfunded) (Unfunded)
2009-10 2008-09 2009-10 2008-09
Fair value of plan assets - - - -
Present value of obligation 6 22 733 3 23 000 8 10 409 26 96 000
Amount recognised in Balance Sheet 6 22 733 3 23 000 8 10 409 26 96 000
III. Expenses recognized during the year
16 Reliance Digital Media Limited

Schedules forming part of the Balance Sheet

SCHEDULE ‘K’ (Contd.)

In Rupees
Gratuity Leave Encashment
(Unfunded) (Unfunded)
2009-10 2008-09 2009-10 2008-09
Current Service Cost 1 39 753 3 23 000 1 00 043 26 96 000
Interest Cost on benefit obligation 24 225 - - -
Actuarial gain/ (loss) recognized in the year 1 35 755 - 6 19 464 11 585
Past service Cost - - - -
Net benefit expense/ (Income) 2 99 733 3 23 000 7 19 507 27 07 585
Actual return on plan asset - - - -
IV. Actuarial assumptions
In Rupees
Gratuity Leave Encashment
(Unfunded) (Unfunded)
2009-10 2008-09 2009-10 2008-09
Discount rate (per annum) 7.50% 8.00% 7.50% 8.00%
Rate of escalation in salary (per annum) 6.00% 4.00% 6.00% 4.00%

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and
other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.
3 Payment to Auditors (excluding Service Tax, wherever applicable) In Rupees
2009-10 2008-09
(i) Audit Fees 50 000 24 000
(ii) Tax Audit Fees 10 000 4 800
60 000 28 800

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

As at As at
31st March, 2010 31st Mar, 2009
(i) Deferred Tax Assets
- Disallowance under the Income Tax Act,1961 - 9 32 871
- Carried forward loss 83 00 655 40 00 663
(ii) Deferred Tax Liability
- Related to Fixed Assets 8 36 282 4 51 137
- Disallowance under the Income Tax Act,1961 1 92 460 -
72 71 913 44 82 397
Note: The virtual certainty is based on agreements.
 Reliance Digital Media Limited 17

Schedules forming part of the Balance Sheet

SCHEDULE ‘K’ (Contd.)

5 Earnings Per Share (EPS)
In Rupees
2009-10 2008-09
(i) Net Profit/ (Loss) after tax as per Profit and Loss Account ( In Rupees) (46 09 458) (68 87 945)
(ii) Weighted Average number of equity shares used as denominator for calculating EPS 50 000 50 000
(iii) Basic and Diluted Earnings/ (Loss) per share of face value of Rs. 10 each (Rupees.) (92.19) (137.76)
6 The Company is mainly engaged in ‘Organised Retail’ in India. All the activities of the Company revolved around this main
business. Accordingly, the Company has only one identifiable segment reportable under Accounting Standard 17 “Segment
Reporting”, notified in the Companies (Accounting Standards) Rules 2006.
7 Turnover consists of Income from Services of Rs. 18 98 82 273. (Previous Year Rs.2 10 44 675).
8 Additional Information (to the extent applicable):
In Rupees
As at As at
31st March, 2010 31st Mar, 2009
Outstanding guarantees furnished to Banks and 3 75 000 3 75 000
Financial Institutions including in respect of Letters of credit
9 Value of Imports on CIF basis in respect of:
In Rupees
2009-10 2008-09
Capital goods - 82 15 324
10 Value of Stores and Packing Materials Consumed
2009-10 2008-09
% of % of
In Rupees Consumption InRuppes Consumption
Indigenous 54 524 100% 5 86 017 100%
11 Information as required under para 3, 4 and 4A to 4D of part II of Schedule VI of Companies Act, 1956 are given to the extent
applicable.
12 As per Accounting Standard 18 “Related Party Disclosures’ notified in the Companies (Accounting Standards) Rules 2006, the
disclosures of transactions with the related parties as defined in Accounting Standard are given below :
a) List of related parties with whom transactions have taken place and relationships:
SrNo Name of the Related Party Relationship
1 Reliance Industries Limited Ultimate Holding Company
2 Reliance Retail Limited Holding Company
3 Delight Proteins Limited }
4 Reliance Corporate IT Park Limited }
5 Reliance Fresh Limited }
6 Reliance Home Store Limited } Fellow Subsidiaries
7 Reliance Hypermart Limited }
8 Reliance Leisures Limited }
18 Reliance Digital Media Limited

Schedules forming part of the Balance Sheet

SCHEDULE ‘K’ (Contd.)

9 Reliance People Serve Limited }
10 Reliance Supply Chain Solutions Limited }
11 Reliance Trends Limited }
12 Reliance Wellness Limited } Fellow Subsidiaries
13 Reliancedigital Retail Limited }
14 RESQ Limited }
(b) Transactions during the year with related parties (Excluding reimbursements):
In Rupees
Sr No Nature of Transactions Holding Fellow Total
(excluding reimbursements) Company Subsidiaries
1 Unsecured Loans 5 57 43 866 - 5 57 43 866
2 53 83 597 - 2 53 83 597
2 Expenditure
- Rent - 17 96 63 017 17 96 63 017
- 1 55 80 148 1 55 80 148
- Warehousing and Distribution Expenses - 9 072 9 072
- - -
- Other Repairs - 3 78 741 3 78 741
- - -
Balances as on 31st March, 2010
3 Unsecured loan 8 11 34 279 - 8 11 34 279
2 53 90 412 - 2 53 90 412
4 Sundry Creditors - 1 00 531 1 00 531
- 1 32 83 101 1 32 83 101
5 Financial Guarantees received 3 75 000 - 3 75 000
3 75 000 - 3 75 000
Note: Figure in italics represents previous year’s amount.
Disclosure in respect of material Related Party Transactions during the Year:
1 Unsecured loan consists of Rs. 5 57 43 866 (Previous Year Rs. 2 53 83 597) loan taken from Reliance Retail Limited.
2 Rent includes Rs. 13 25 76 809 (Previous Year Rs.1 43 77 820) Reliance Fresh Limited and Rs. 4 64 39 207 (Previous Year Rs. Nil)
paid to Reliance Hypermart Limited.

As per our Report of even date For and on behalf of the Board
For Chaturvedi & Shah Rajendra Kamath
Chartered Accountants Director

Jignesh Metha K. Sridhar

Partner Director
Membership No. 102749
Mumbai
Dated : 20th April 2010
 Reliance Digital Media Limited 19

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

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

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

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

Public Issue: N I L Rights Issue: N I L

Bonus Issue: N I L Private Placement: N I L

Share Application Money: N I L

III. Position of mobilisation and deployment of funds: (Amount in Rs. Thousand )

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

Sources of Funds: Application of Funds:

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

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

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

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

Unsecured Loans: 8 1 1 3 4 Miscellaneous Expenditure 5

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

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

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

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

Earnings per Share in Rs:

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

- Diluted ( 9 2 . 1 9 )

V. Generic Names of principal products of the Company:

Item Code number N A

Product Description N A

Item Code number N A

Product Description N A