1.  The financial statements as on 31st March, 2010 have been prepared
 by the Management on a going concern basis taking into account the
 present operations of the company.
 
 2.  Contingent liabilities
 
                                               (Amount in Rs.)
 
  Particulars                 31st March 2010      31st March 2009
 
 a.  Outstanding Bank 
     Guarantees                    1,225,000           6,263,297
 
 b.  Disputed Sales Tax
  Demands-matter underappeal       4,687,235           4,687,235
 
 c.  Disputed Excise Duty 
 demands-matter under appeal         500,000           3,201,968
 
 d.  Disputed Liability in 
 respect of Income Tax 
 demands-matter under appeal     127,166,302           3,323,879
 
 e.  Claims againstthe Company
  not acknowledged as debts      296,461,235         134,613,270
 
 f.  Claims by Provident Fund 
 Department                      113,929,006          Nil 
 
 Total                            5437968778         152,089,649
 
 The Company has made provision in the books of account in the current
 year with respect to amount payable to Labour Welfare Fund. The
 liability on account of the same was not provided for in the earlier
 years and the same cannot be ascertained, which in the view of the
 management is not likely to be material.
 
 3.  There is a lien on Fixed Deposits of Rs. 8,556,525 (Rs. 9,708,297)
 towards Bank Guarantee provided by Banks for the company.
 
 4.  Securities for Loans.
 
 Bank
 
 State Bank of India, HSBC & HDFC Bank
 
 Security 
 
 - First charge on pari passu basis on all the fixed assets of the
 company.
 
 - First pari passu charge over all the receivables and stocks and current
 assets of the company.
 
 - First Pari passu charge by way of equitable mortgage of property in the
 name of Vishal Water World Pvt. Ltd. situated at Kouchapukur, PO
 Hatgachia ,dist 24 Parganas (West Bangal) *
 
 - First pari passu charge by way of equitable mortgage of property in the
 name of VRL situated at Khasra No. 122/43,122/44, Mouza Central Hope
 town (Selakui), Paragana Pachwodopon, Tehsil Vikas Nagar, district
 Dehradun.
 
 - First pari passu charge by way of equitable mortgage of property in the
 name of VRL situated at Krishnanagar Village, TaluqHubli, District
 Dharwad.
 
 - First pari passu charge by way of equitable mortgage of property in the
 name of VRL situated at PJE Plaza, deg No.77-78,81,82 Khasra B
 no.655-11-5-12, Mauza -Kyenjara, VIP road .Kolkata (except ground floor
 which is exclusively mortgaged to HDFC Bank)
 
 - Personal Guarantee of Mr. Ram Chandra Agarwal, Mr. Surendra Kumar
 Agarwal , Mrs.  UmaAgarwal
 
 - Corporate Guarantee of Vishal World Pvt. Limited.
 
 Bank
 
 HDFC Bank
 
 Security
 
 - Loan against property )also available for HDFC Term Loans
 
 - First charge on the basement and ground floor of property at 52/6 VIP
 Road, Kolkata, West Bengal in the name of VRL.
 
 - First charge on property at 896,Golbazar, Wright Town, Jabalpur
 
 Bank
 
 Bank of India
 
 Security
 
 - Exclusive charge of property at industrial land Khata no.329, Khasra
 No. 122/43,122/44 Mouza Central Hope town, (Saelakui), Paragna
 Pachwodopon, Tehsil Vikas Nagar, District Dehradun (Note: this is a
 small piece of land measuring 0.57 acres distinct from the other
 property at Dehradun over which SBI.HDFC and HSBC have a charge)
 
 - Subservient charge on Current Assets
 
 - Personal Guarantee of Mr. Ram Chandra Agarwal and Mrs. UmaAgarwal.
 
 - Pledge of 953,770 shares of VRL.
 
 - Corporate Guarantee of Unicorn Marketing Private Limited.(Liability
 limited to the extent of shares pledged( 7,70,000 shares of VRL)
 
 - Post dated Cheaues for Principal Amount + FITL
 
 Bank
 
  ICICIBank
 
 Security
 
 - Vehicle Loan
 
 - First Charge on Vehicle under finance and Personal guarantee of
 Promoters
 
 Bank
 
  Kotak Mahindra Bank
 
 Security
 
 - venicie Loan
 
 - Charge on Vehicle under finance and Personal guarantee of Promoters
 
 Bank
 
 ICICIBank
 
 Security
 
 - Equipment Loan
 
 - Charge on Fixed Assets under finance, and Personal Guarantee of
 Promoters
 
 5.  Secured Loan repayable within a year is Rs. 592,081,863 (P. Y.
 Rs.352,357,918).
 
 6.  Unsecured Non-convertible Debentures issued to LIC Mutual Fund
 Asset Management Company Limited are redeemable on monthly basis from
 30th June, 2009 to 31st May, 2011 as per the agreed schedule. Unsecured
 Non-convertible Debentures issued to Deutsche Trustee Services (I)
 Private Limited were repayable on 25th August, 2009. These debentures
 have not been redeemed/ repaid as per terms of the related debentures.
 
 7.  During the year, the Company has submitted its proposal under
 Corporate Debt Restructuring (CDR) mechanism to CDR cell for
 restructuring its secured as well as unsecured debts. SBI, HDFC, HSBC,
 ING Vyasa, UCO Bank and BOI are participating banks under the CDR
 mechanism.
 
 The CDR Empowered Group has considered the proposal of the Company.
 
 8.  The Company had initiated the process of identifying non- moving,
 slow moving, obsolete, damaged inventory, shortages due to pilferage in
 all the categories i.e. Raw material and finished goods for all the
 stores and warehouses across India during the previous year, which is
 now completed. The company has recognized an aggregate amount of Rs.
 3,417,159,919 as write off on account of the above, which is charged to
 Profit & loss account for the year ended 31st March 2010 and is
 included in Cost of Goods Sold in Schedule 15.
 
 9.  The company has recognized Rs. 507,897,976 as Extra-ordinary item
 during the year on account of Loss of Inventory due to fire in
 distribution centre at Gurgaon, on 4th June, 2009.
 
 10.  In the opinion of the management, sundry debtors, loans and
 advances and other current assets are approximately of the value stated
 if realized in the ordinary course of business. The provisions for all
 known liabilities are adequate and not in excess of the amount
 reasonably necessary.
 
 11.  Inventory valued at Rs.2,199,612,291 lying at various stores and
 warehouses of the Company spread across the country are as physically
 verified by other Chartered Accountants and relied upon by the auditors
 of the Company.
 
 12.  During the year the company shut down 15 stores and added 11 new
 stores across various locations.
 
 13.  Preferential Issue of Warrants
 
 In order to meet the fund requirement of the company, the company has
 come out with preferential allotment of 3,910,000 Warrants to the
 promoters during the year at an issue price of Rs. 60/- calculated
 under SEBI (DIP) Guidelines, 2000 on preferential basis duly approved
 by Shareholders and Board of Directors of the company. These warrants
 issued on 30th October, 2009 are convertible into equity shares on or
 before 18 months from the date of issue.
 
 The above managerial remuneration does not include expense towards
 gratuity since the same is based on actuarial valuations carried out
 for the company as a whole.
 
 Remuneration amounting Rs.2,623,572 paid during the year has been
 subsequently reversed. The unrecovered amount of Rs. 1,600,333 has been
 shown as recoverable from directors underthe head Loans SAdvances.
 
 14. The company has provided for interest amounting Rs. 3,652,688
 (Previous Year Rs. 3,181,680) on delayed payments and outstanding
 balance of MSME Creditors as on 31st March, 2010. This information is
 required to be disclosed under Micro, Small and Medium Enterprises
 Development Act, 2006 has been determined to the extent such parties
 have been identified on the basis of information available with the
 company. In terms of notification no. G.S.R. 719(E) dated November 16,
 2007 issued by the Central Government of India, the disclosure of
 payments due to any supplier as at March 31,2010 are as follows:
 
 15.  The Company is engaged in the business of retail sales of
 garments, textiles, accessories and FMCG in India and there are no
 separate reportable segments as perAS-17 Segment reporting notified
 by Companies (Accounting Standards) Rules, 2006.
 
 16.  Disclosures Pursuant to Accounting Standard 15 Employee
 Benefits: a) Defined Contribution Plans
 
 i.  Provident Fund
 
 ii.  State Defined Contribution Plans
 
 17.  The Disclosure as required by the Accounting Standard -18 (Related
 Party Disclosure) are given below:- Names of related parties with whom
 transactions have taken place and relationship
 
 Name                         Designation          Relationship
 
 Mr. Ram Chandra Agarwal      Director       Key Managerial Personnel
 
 Mr. Surendra Kumar Agarwal   Director       Key Managerial Personnel
                                             (upto 30,h September, 2009)
 
 Mrs. Uma Agarwal             Director       Key Managerial Personnel
 
 Mr. Jai Prakash Shukla       Director       Key Managerial Personnel
                                             (from 30* September, 2009)
 
 VRL Infrastructure Limited                  Subsidiary Company
 
 VRL Consumer Goods Limited                  Subsidiary Company
 
 VRL Movers Limited                          Subsidiary Company
 
 VRL Fashions Limited                        Subsidiary Company
 
 VRL Retailer Business                        
 Solutions Pvt. Limited                      Joint Venture Company
 
 VRL Retailer Ventures
  Limited                                    Subsidiary Company
 
 VRL Knowledge Process
 Limited                                     Subsidiary Company
 
 VRL Foods Limited                           Subsidiary Company
 
 Unicon Marketing Pvt. Ltd.                  Two directors of Vishal 
                                             Retail Limited are
                                             directors in the Company.
 
 Ricon Commodities Pvt. Ltd.                 Two directors of Vishal 
                                             Retail Limited are
                                             directors in the Company.
 
 Vishal Water World 
 Private Ltd.                                Two directors of Vishal
                                             Retail Limited are directors
                                             in the Company.
 
 18.  Lease
 
 The company has taken premises for showroom for 12 years lease/license
 period with lock in period of one to three year. The escalation clause
 is variable between 12% to 15% after every three years and the company
 generally takes three month rent free time from the date of possession
 given by the landlord.
 
 * Lease rental for the year includes contingent rent amounting Rs.
 4,869,084 calculated on the basis of sales.
 
 In respect of residential premises taken on lease on short term basis,
 relevant agreement had not been executed as per the practice prevalent
 in that area. The relevant disclosure for future lease commitments, if
 any in respect of such leases is not ascertainable.
 
 19.  Previous years figures have been regrouped where necessary to
 conform to this years classification.