Radiant Industries Limited (RIL) a multi-sector Indian corporation based in Chennai, has steadily grown over the past 20 years in fields ranging…

Radiant Industries Limited (RIL) a multi-sector Indian corporation based in Chennai, has steadily grown over the past 20 years in fields ranging from textiles and specialty chemicals to IT services and health insurance. Led by Ms. Rathod, the company recently shifted part of its strategic focus toward consumer-driven ventures by exploring new verticals beyond its legacy businesses. RIL's Vision is “To become India's most trusted and affordable retail brand by expanding our footprint across the country, owning our infrastructure, and continuously innovating to meet evolving customer needs.” RIL's Mission is “To make shopping economical for everyone by consistently offering the lowest prices on essential goods without compromising on quality or service.” Rather than expanding through existing product lines, RIL began exploring the rapidly growing lifestyle and wellness centres in India, marked by changing urban lifestyles and increased health awareness. This opportunity led to discussions with Symphony Inc., a Canada based wellness brand known for its high-end boutique stores in countries like Spain, Vietnam, Chile, and the UAE. Though Symphony had no previous presence in India, it had been conducting product trials via third-party e-commerce platforms without establishing physical stores. After months of negotiations, Symphony Inc. decided to start a partially owned subsidiary company with RIL. Accordingly, a new company, Radiant Symphony Private Limited (RSPL) is formed by Symphony Inc. as its largest shareholder holding 75% of the paid up share capital. RSPL will have its head office and registered office in Chennai (Tamil Nadu). This partnership was designed not as a market entry experiment for Symphony but as a scalable retail chain model across India. Headquartered in Chennai, RSPL's first strategic move will be to develop an urban concept store in Chennai, chosen over traditional launch cities like Delhi or Mumbai to test tier-1 cities with slightly lower cost bases. All the arrangements are being made to ensure that first visit of the customer in its first store should be a memorable one. The company's commitment to ethical business conduct, as reflected in its operational decisions, is also evident in a recent development outlined in ANNEXURE I. To support its store operations, RSPL decided to implement a retail operations management system (ROMS) designed to integrate inventory tracking, customer data, sales analytics, and billing into one platform. The software aimed to enhance the customer experience by streamlining backend processes and improving staff efficiency and accordingly, new software has been purchased with the following details: The company acquired software at a total cost of 7,50,000, with - 5,00,000 payable immediately and the remaining 2,50,000 due after one year. In addition to the software cost, the company incurred related expenses including legal fees of 36,000 and consultancy fees for implementation amounting to 75,000. The cost of capital for the company is 10%. The launch of the first center was successful and encouraging for the management. RSPL emerged as a one-stop lifestyle and wellness retailer, offering a wide range of health, fitness, and personal care products under one roof. Each RSPL center features a curated selection of wellness supplements, organic food products, skincare and beauty essentials, fitness equipment, and lifestyle accessories. The company provides value-added services such as nutrition consultations, fitness assessments, and wellness workshops to complement its product offerings. These are all made available at competitive pricing that customers value and trust. With its mission to be the lowest priced retailer in the regions it operates, RSPL business continues to grow with new locations planned in more cities. As per plans, three new stores were opened in Coimbatore, Ranchi, and Jodhpur. It was decided that RSPL will buy all the immovable properties and no rent expenditure will be incurred. Given the significant capital outlay required for opening new stores amounting to several crores, RSPL borrowed - 17.5 crore from its holding company, Symphony Inc., at an interest rate of 8% per annum. During the financial year 2024–25, RSPL successfully opened a total of 25 stores throughout India. For the same period, the company reported a net profit before tax of 3 crore, while the EBITDA stood at 4.5 crore. Interest paid/ payable to Symphony Inc. on the borrowed funds amounted to 1.40 crore. For the same period Profit after tax was 2.25 Crore (Tax Rate 25%). RSPL has decided to open a new store in Pune in April 2025. Land was purchased and establishment work was completed. Separate GST registration for Pune was taken in April 2025 and stock purchase for new store has also been done. As per management projections, the new store at Pune will achieve good sales and accordingly it was decided to transfer some part of GST credit outstanding in electronic credit ledger of Chennai to electronic credit ledger of separate Pune registration. Further details regarding the company's assets and the accumulated Input Tax Credit (ITC) in the electronic credit ledger have been obtained from the GST portal and are presented in the form of a bar chart in Annexure II. Accounts department has drafted a letter stating that credit of 1.25 Crore (on the basis of ratio of current assets) can be transferred to Pune registration. Further, Accounts department of RSPL is also filing GSTR 3B for the month of September 2024 wherein total Taxable supplies reported are 25 Crore with output GST liability of 3.125 Crores. Input tax available in electronic credit ledger is 3.75 Crore and balance in electronic cash ledger is 37.5 Lakh. Total current assets of RSPL as at 31.03.2025 were 250 Crore which included inventories amounting to 150 Crore. The carrying amount of inventories is after considering allowances for inventory shrinkages of 7.25 Crore. These inventories are held at the stores and distribution centres of the Company. Allowance for inventory shrinkage was an audit focus area since inventory counts were carried out at periodical intervals during the year and further judgmental factors are involved in identifying the amount of provision for shrinkages. Audit team of the company addressed the issue by obtaining an understanding, evaluating the design and testing the operating effectiveness of controls that the company has in relation to allowance for inventory shrinkage. In order to improve its profitability, RSPL is looking to buy securities of MNC Limited which is near bankruptcy. When the proposal came up for discussion in the meeting of board of directors, they unanimously decided to seek professional consultancy on investment in such securities. The appointed consultant did agree that such transactions can be profitable provided the strategy of investment followed involves the proper allocation of amount to be invested between debt and equity securities. ANNEXURE I DAILY NEWS RIL Drops Major Client to Safeguard Employee Well-Being, Reinforces Ethical Business Values Chennai, June 21: Radiant Industries Limited (RIL), a diversified company with interests in textile manufacturing, specialty chemicals, IT services, and health insurance, has ended its business relationship with a major client that accounted for approximately 30% of the revenue in its textile division. According to statements issued by the company, the decision was based on operational challenges arising from the client's frequent placement of last-minute bulk orders with tight delivery deadlines, forcing extended shifts and weekend operations on RIL's factory floor. "They treated our production lines like an on-demand switch," said Ms. Rathod, Chairperson of RIL. "We value our clients, but we value our people more. No order is worth exhausting our workforce.” The company acknowledged the revenue impact but noted that it had taken steps to adjust operations and onboard new clients with what it described as “more structured engagements.” "Sustainable partnerships are built on respect, not pressure," Ms. Rathod emphasized. “This was a tough call, but it reaffirmed who we are as an organization." Subsequent to the termination, RIL stated that the former client has returned with two new project proposals under fairer and more structured terms. Industry analysts have noted the development as part of a broader conversation around operational practices and business-client dynamics but have not issued any consensus on its long-term implications. ANNEXURE II Summary report on RSPL's Assets and Input Tax credit This is a summarized report outlining the details of the company's assets and the accumulated Input Tax Credit (ITC) balance, on the date of Pune Store's GST registration, both at the entity level and specifically for the Pune Store. The report has been prepared by the Accounts Department with the purpose to determining the quantum of ITC to be transferred to the Pune Store in accordance with the applicable provisions of the GST laws. It is intended to serve as a reference document to facilitate compliance and ensure accurate allocation of credit between the company's units. Reported Assets and Input Tax Credit Entire Business Pune Value of Fixed Assets 200 11 Value of Current Assets 250 25 Value of Assets on which ITC of GST has been taken (out of fixed assets and current assets reported above) 80 20 Unutilised ITC 12.5 1