Reliancedigital Retail Limited
Annexure referred to in paragraph 2 of our report of even date
Re: Reliancedigital Retail Limited (‘the Company’)
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. No material discrepancies were noticed on such physical verification.
There are no substantial disposals of fixed assets during the year.
In respect of its inventories:
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.
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.
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, 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 (Auditor’s
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 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.
In respect of statutory dues:
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, sales-tax, 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.
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.
Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to banks. The Company has not borrowed any funds from financial institutions or debenture holders during the year under audit.
12. In our opinion and according to the explanations given to us and based on the information available, no loans and