Reliance Industries Limited
Annual Report 1986
44
SALES
904.03
733.14
622.01
520.35
421.03
312.22
214.58
1980
1981
1982
1983
1984
1985
1986
1000
900
800
700
600
500
400
300
200
100
0
Purc has es & Raw
Materials Consumed
Manufac turing & other
expenses
Exc ise Duty
DISTR IB UTION OF IN COM E
1.5%0.1%
6.7%
5.9%
29.3%
40.8%
Interest
Depreciation
Dividend
15.7%
Retained earnings
41
Reliance
13TH ANNUAL GENERAL MEETING
BOARD OF DIRECTORS
on Wednesday, the 24th June, 1987
at Sri Shanmukhananda Fine Arts & Sangeetha Sabha
292 Jayashankar Yagnik Marg, Sion (East),
Bombay 400 022.
at 2.15 p.m.
Shareholders are requested to bring their copy of the
Annual Report along with them at the Annual General
Meeting, as copies of the Report will not be distributed at
the Meeting.
Contents
Notice of Annual General Meeting
Financial Highlights
Chairman’s Statement
Directors’ Report
Balance Sheet
Profit & Loss Account
Schedules annexed to Balance Sheet
and Profit & Loss Account
Notes and Contingent Liabilities
Auditors’ Report
Annexure to Directors’ Report
Statement pursuant to Section 212
of the Companies Act, 1956
Documents of Subsidiary Company
Page No. (s)
2-3
4
5-6
7-9
10
11
12-17
17-20
21
22-31
32
33-40
Registered Office
3rd Floor, Maker Chambers IV,
222 Nariman Point, Bombay 400 02 1.
PLANTS AT:
1.
Patalganga. Off Bombay-Pune Road,
Near Panvel. Dist. Raigad.
Maharashta.
2.
103/106 Naroda Industrial Estate,
Naroda, Ahmedabad.
Subsidiary Company:
Devti Fabrics Limited
Plant at Sidhpur
Dist. Mehsana,
Gujarat State.
Dhirubhai H. Ambani, Chairman & Managing Director
RamnikIal H. Ambani, Joint Managing Director
K. Gopal Rao
Natvarlal H. Ambani, Executive Director
Mukesh D. Ambani, Executive Director
Jayantilal R. Shah
Mansingh L. Bhakta
V.V. Divecha, Nominee Director- ICICI.
T. Ramesh U. Pai
Anil D. Ambani, Executive Director
Nikhil R. Meswani
SECRETARY
Vinod M. Ambani
SOLICITORS & ADVOCATES
Kanga & Co.
Dave & Co.
AUDITORS
Rajendra & Co.
Chaturvedi & Shah
BANKERS
Syndicate Bank
State Bank of India
Canara Bank
Bank of Baroda
Indian Bank
Standard Chartered Bank
Deutsche Bank (Asia)
REGISTRARS & TRANSFER AGENTS
Reliance Consultancy Services Limited
56 Mogra Village Lane. Off Old Nagardas Road,
Andheri (East),
Bombay 400 069.
1
Reliance
FINANCIAL HIGHLIGHTS
Sales
Other income
Manufacturing Expenses
Gross Profit (A-B)
Interest
Depreciation
Net Profit (C-D)
(A)
(B)
(C)
(D)
(E)
WHAT THE COMPANY OWNED
Fixed Assets
1986
Rs.
904.02
7.19
911.21
781.82
129.39
54.24
60.98
1985
Rs.
733.14
4.94
738.08
604.83
133.25
24.45
37.46
1984
Rs.
622.01
7.11
629.12
511.23
117.89
22.61
34.18
1983
Rs.
520.35
4.68
525.03
433.61
91.42
21.52
31.38
1982
Rs.
421.03
2.51
423.54
361.28
62.26
18.93
14.17
(Rs. in crores)
1981
Rs.
312.22
3.63
315.85
268.39
47.46
16.79
10.97
1980
214.58
2.55
217.13
187.91
29.22
11.13
6.88
115.22
14.17
61.91
71.34
56.79
61.10
52.90
38.52
33.10
29.16
27.76
19.70
18.01
11.21
Gross Block
Less: Depreciation (Cumulative)
1137.55
188.09
735.68
128.88
530.93
104.65
394.88
73.42
356.71
42.10
133.46
27.90
Net Block
Investments
Current Assets
949.46
0.37
1052.83
606.80
37.30
402.10
426.28
0.17
235.41
321.46
0.12
215.19
314,61
0.12
191.53
105.56
0.07
156.55
74.97
17.02
57.95
0.08
93.76
2002.66 1046.20
661.86
536.77
506.26
262.18
151.79
WHAT THE COMPANY OWED
Long Term Funds
Medium/Short Term Funds
Current Liabilities & Provisions
546.12
143.78
1001.23
515.16
81.90
138.02
276.96
44.83
93.68
239.99
35.46
131.44
260.60
22.85
131.27
83.17
16.36
105.56
38.56
9.03
72.41
1691.13
735.08
415.47
406.89
414.72
205.09
120.00
NET WORTH OF THE COMPANY
Equity Share Capital
Preference Share Capital
Reserves & Surplus
51.61
5.80
254.12
51.61
5.80
253.71
46.18
5.80
194.41
36.15
5.80
87.93
18.60
5.80
67.14
16.67
0.30
40.12
12.06
0.30
19.43
311.53
311.12
246.39
129.88
91.54
57.09
31.79
4
Reliance
CHAIRMAN(cid:146)S STATEMENT
To the Members,
Your Company, since it went public, has consistently shown growth in all key areas namely gross block, products, range
of production, turnover, profitability, etc. Though the Company continued to maintain its lead in the polyester industry,
for reasons enumerated in the Directors(cid:146) Report, the gross profit did not move up and amounted to Rs. 129.39 crores
against Rs. 133.25 crores in the previous year against a tur nover which rose by 23.3% i.e. in absolute terms Rs. 904
crores against Rs. 733 Crores in the previous year.
We hope the Government would take measures to reverse the adverse conditions affecting this industry.
CONTRIBUTION TO EXCHEQUER:
You will be pleased to note that your Company(cid:146)s contribution to the exchequer, rose in line with its tur nover. It paid to
the National Exchequer over Rs. 460 crores compared to Rs. 380 crores in 1985, an increase of 21% over the previous
year(cid:146)s contribution.
NET WORTH:
The Company(cid:146)s equity capital stood at Rs. 51.61 crores and the shareholders -reserves and surplus stood at Rs. 254.12
crores by the end of 1986. On conversion of (cid:145)G(cid:146) series debentures, the equity capital will rise by Rs. 69 crores and the
Share Premium Account by Rs. 431 crores. The net worth of Rs. 311.53 crores at the end of 1986 will rise to Rs.
811.53 crores upon conversion of Debenture Series (cid:145)G(cid:146) (excluding 1987 profits) a spectacular jump of over 260%.
GROSS BLOCK:
The Company added during the year to its fixed assets Rs. 402 crores taking the gross block to Rs. 1138 crores from
the previous year(cid:146)s Gross Block of Rs. 736 crores, an impressive rise of 55 per cent The depreciation fund amounted
to Rs. 188 crores against Rs. 129 crores at the end of the previous year. The debt: equity ratio on conversion of
Debenture Series (cid:145)G(cid:146) will be at 0.67:1. The Con my will have further borrowing power of Rs. 1100 Rs. 1200 crores
within the present debt: equity norms to take on hand further expansion and diversification plans.
SHOW CAUSE NOTICE FROM CUSTOMS AUTHORITIES:
After the close of the accounting year 1986, the Company received a Show Cause Notice under the Customs Act
1962, alleging basically that additional machines/lines have been found imported and installed.
The Company in its interim reply dated 25th February, 1987, pointed out that the contract for import of equipment or
expansion of plant capacity, proforma invoices in respect thereof and the concerned licence clearly indicated that what
was purchased, imported and installed by the Company did not violate any regulations.
The allegation in the Show Cause Notice of alleged misdeclaration of more than twice the declared capacity at Patalganga
and of the alleged unauthorised importation of spinning, machines and the consequential notice to show cause why a
claim should not be made on the Company for alleged differential duty/penalty of Rs. 119 crores was ex -facie unfounded.
The Company has also asked the Authorities to give inspection of the documents referred to in the Notice and to give
certain particulars of the allegations. These are still awaited from the Authorities.
According to the Company and as advised after due consideration, the Company is certain that it will not be faced with
any liability in respect of the Show Cause which is unfounded and legally untenable.
These are brought to the notice of the members as a matter of information.
5
Reliance
CURRENT YEAR OPERATIONS:
Operations of the current year of your Company are quite encouraging. It has achieved higher production. higher sales and
better realisation. The turnover for the first quarter of 1987 has touched Rs. 270 crores as against Rs. 210 crores for the
corresponding period of 1986 indicating an impressive growth of over 28% in sales. Your Company hopes to achieve much
higher turnover exceeding Rs. 1200 crores for the whole of the current year, apart from the results arising out of the
commissioning of PTA and LAB plants as well as higher capacity utilisation of PFY and PSF plants. Keeping in view of the
above. I am sure, the Company will show a better performance in the current year.
CONCLUSION:
I am grateful to the workers as well as to the Supervisors and Officers for their continued enthusiasm which has been the
main contribution towards our success. I would also like to thank the Shareholders and the Board of Directors for their
considered support, as well as the Government, Financial Institutions and Banks for their help whenever it was sought.
Dhirubhai H. Ambani
Chairman
Bombay,
29th April, 1987.
6
DIRECTORS(cid:146) REPORT
3.
ISSUE OF CONVERTIBLE DEBENTURES SERIES (cid:145)G(cid:146)
Reliance
To the Members,
Your Directors submit the 13th Annual Report together with the Audited
Statement of Accounts for the year ended 31st December, 1986.
FINANCIAL RESULTS:
Gross Profit before interest and depreciation
(a) Surplus Balance brought forward
Add:
(Rs in crores)
1985
Rs.
1986
Rs.
129.39
133.25
(b)
from previous year
Investment Allowance (Utilised)
Reserve written back
14.52
14.91
25.00
(cid:150)(cid:150)
Less: Provisions and or appropriations
(a)
Interest
(b) Depreciation
(c)
(d) Taxation Reserve
(e) Differential dividend pertaining to
Investment Allowance Reserve
previous year
(f) Net effect of reversal of
interest capitalised
(g) Recommended Dividend:
(subject to deduction of tax)
(i) On 11% Cumulative
Redeemable Preference
Shares
(ii) On 15% Cumulative
Redeemable Preference
Shares
(iii) On Equity Shares
(h) Transferred to General Reserve
Balance carried to Balance Sheet
54.24
60.98
36.00
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
24.45
37.46
22 80
10.00
0.05
8.13
0.03
0.03
0.83
12.90
2.00
1.93
0.83
24.89
5.00
14.52
2. DIVIDENDS:
Your Directors have recommended the following dividends (subject to
deduction of tax) for the year ended 31st December, 1886 to be paid, if
approved by the Shareholders at the ensuing Thirteenth Annual General
Meeting
(Rs in crores)
ON PREFERENCE SHARES:
(a) Dividend of Rs 11 per share on 30,000
Cumulative Preference Shares of Rs. 100
each fully paid up
(b) Dividend of Rs. 15 per share on
5,50,000 Cumulative Redeemable
Preference Shares of Rs. 100
each fully paid up
0.03
0.83
ON EQUITY SHARES:
Dividend of Rs. 2.50 per share on
5,16.09,318 Equity Shares of Rs 19 each
fully paid up
Total
0.86
12.90
13.76
Your Company issued 13.5 % Secured Fully Convertible Debentures
of Rs. 145 each for cash at par aggregating to Rs. 400 crores with a
right to retain 25 % of the issue in the event of oversubscription. the
largest issue made so far by a private sector company. in the country
The issue was made to part finance the capital expenditure of the
Company and for augmenting the long term resources of the Company
for meeting its working capital requirements.
The Company is the first company in India to file Prospectuses
both In United Kingdom and Hong Kong as per international
practice. Merrill Lynch & Co. . Inc., one of the lar gest
International Investment Bankers acted as Advisers to the
Issue.
The domestic issue mobilised application money of Rs. 494 crores.
7.5 times of the issue and the Non Resident Public Issue mobilised as
much as Rs. 150 crores against the issue of Rs. 88 crores, from over
17. 50 lakhs applicants, another record in the corporate sector in
terms of the number of applications received. Together with the Rights
Issue made to the Shareholders, your Directors alloted Debentures
(Series G ) of an aggregate nominal value of Rs. 500 crores to over
14.55 lakhs allottees. Arrangements are being made to list these
debentures on the Stock Exchanges at Bombay, Ahmedabad, Calcutta.
New Delhi, Bangalore, Pune, Kanpur, Cochin and Madras.
4. YEAR IN RETROSPECT:
4.1 Overall Performance:
The sales during the year under review reached Rs. 904 crores as
against Rs. 733 crores in the previous year with an increase of 23.3%.
There was a pressure on margins partly because of unrestricted
smuggling of Polyester Fabrics as well as unrestricted imports of
Polyester Staple Fibre and Yarn and partly due to the higher levy on
Purified Terephthalic Acid (PTA) compared to Dimethyl Terephthalate
(DMT). though both are alternative raw materials of the polyester
industry and PTA being a superior raw material for the Polyester
Industry. But (or these factors, the gross profit would have smartly
risen in consonance with the turnover.
4.2 Textile Division:
During the year under review, this Division started taking steps to
implement a program of re-adjusting its product-mix to synchronise
with the changes in the consumers demand for high value high quality
products. The Company further strengthened its marketing net work
to meet the changing competitive scenerio.
4.3 Fibres Division:
4.3.1. Polyester Yarn Division:
The Company maintained its growth both in annual production and
sales in polyester yarn in the year under review However. profit margins
were under pressure mainly due to unrestricted imports. removal of
anti dumping duty of Rs. 15 per kg. on imports and the discriminating
policy of levying a higher import duty on PTA, a superior raw material
for the polyester industry. The reduction in excise duty on polyester
staple fibre and not on polyester filament yarn was yet another
discriminating policy to the disadvantage of polyester filament industry.
This resulted in a further pressure on the realisation of this division.
The division during the year introduced several new products such as
flat yarn, bright yarn and fancy yarn to enhance the product range.
thus making the Company a highly diversified producer in the polyester
industry.
4.3.2 Polyester Staple Fibre Division:
The Polyester Staple Fibre plant encountered several teething problems
and stablised its production as well as quality only during the later part
of the year under review The staple fibre demand was restricted owing
to the policy of free imports.The polyester staple fibre of your Company
has now been accepted as one of the best quality fibres in the market.
7
Reliance
The Company hopes that suitable measures will be taken by the
concerned authorities to reverse the import duty on PTA to restrict
imports of polyester fibre and yarn and to reduce the exorbitant excise
duty. This will lead to fuller capacity utilisation and increased
consumption and enhance revenue to the exchequer
4.4
Show Cause Notice from Excise Authorities:
Your attention is drawn to the Auditors(cid:146) Report dated 29th April, 1987,
on the subject. You may be aware, that in the notes to Accounts of
1985, it was, inter alia, shown as a contingent liability a sum of Rs.
27.23 crores in the matter of a Show Cause Notice issued by Excise
Authority in respect of Polyester Yarn and contested by the Company.
This amount was the subject matter of a Show Cause Notice to which
the Company has filed a detailed reply raising therein certain basic
preliminary contentions. In the preliminary contentions the very
maintainability of the substantial part of the Show Cause Notice was
challenged as the alleged excise duty was sought to be demanded not
on goods which have been actually produced or manufactured but on
goods which ought to or must be deemed to have been manufactured
on the basis of certain chemical formula set out in the Show Cause
Notice. The Collector of Central Excise heard the preliminary
contentions and decided that the Show Cause Nonce was maintainable
and deferred the consideration of the Show Cause Notice on merits.
In an appeal before the Central-Excise & Gold (Control) Appellate
Tribunal (CEGAT) against the Order on the preliminary contentions,
differing judgements were given. one member holding that the appeal
was not maintainable whilst the other member held that the appeal
was maintainable, but held that CEGAT, unlike a Writ Court, had no
jurisdiction to quash the Show Cause Notice.
The Company thereafter held a Writ Petition under Article 226 of the
Constitution of India after the Order of CEGAT in the High Court of
Judicature at Bombay. After hearing Counsel for the Department
Government, the Hon(cid:146)ble Court admitted the Writ Petition and issued
rule nisi. The Order of the High Court also directed that the Collector
should not pass any final order on the Show Cause Notice till the
disposal of the Writ Petition The matter is, therefore. sub-judice and
no order of adjudication has been or can be passed till the disposal of
the Writ Petition. The Company has also contended that even on merits
there is no basis or foundation in the Show Cause Notice and that
there is no liability of whatsoever nature for excise duty or penalty
arising therefrom.
In the light of the above and since the maintainability of the Show
Cause Notice itself is the question in issue before the High Court in
the Writ Petition which has been admitted and is pending. and, the
Show Cause Notice is totally unfounded your Directors are of the view
that any consideration of the sum of Rs. 27.23 crores in the financial
working of the Company for the year ended 31st December, 1986 or
in the Notes of Accounts thereto does not arise at all.
5. PROJECTS UNDER IMPLEMENTATION:
5.1
Textile Division:
The modernisation of twisting and knitting divisions taken on hand by
the Company with a capital outlay of Rs. 67 crores at Ahmedabad is
expected to be completed in the current year Upon completion, your
Company will not only attain the status of being the largest twisting
installation in the world under one roof but will also produce
sophisticated furnishing fabrics of international quality to meet the
quality conscious consumers in India and abroad.
5.2
Fibres Intermediate Division:
Purified Terepthalic Acid (PTA):
Chemical Industries, plc, U K.. Messrs. UOP Processes International Inc.,
U.S.A. and Messrs. John Brown Engineers & Constructors Ltd.. U. K. It
will be heartening to note that in the history of your Company. this project
is the single largest project, so far to be implemented.
The Company(cid:146)s industrial licence has been re-endorsed for the enlarged
capacity of 100,000 tonnes per annum. This is the minimum economic
capacity. The PTA plant is the first of its type in India and there are only
27 other plants existing in the world. With the commissioning of the PTA
plant, the Company will have adequate source to meet its growing raw
material requirement apart from meeting the demand of the producers of
polyester in India. This project will save over Rs 80 crores per annum
(based on current imports) in foreign exchange for the country.
5.3
Detergent Intermediate Division:
Linear Alkyl Benzene (LAB) Project:
The Company has taken up the LAB project by way of further
diversification in the held of Petro Chemicals, in order to meet the fast
growing requirements of synthetic detergents in the country. Currently.
the projected demand for LAB is 120,000 tonnes per annum This is met
by importing LAB at a foreign exchange expenditure of Rs. 70 crores.
The Company has got its industrial licence re-endorsed for a higher capacity
of 60,000 tonnes per annum. On account of the delay in obtaining certain
clearances the commissioning of LAB plant has also been delayed. It is
now expected that with all equipments at site this project will also be
commissioned in the second-half of 1987 with the guidance of UOP
Processes International Inc., U.S.A., the Technical Collaborators associated
with the project.
6. NEW GROWTH CENTRE PETRO CHEMICAL COMPLEX:
Your Company has decided to enter the rapidly growing held of Plastic
Resins and has obtained a Letter of Intent for the manufacture of 50,000
tonnes of High Density Polyethylene (HDPE) and 1()0,(K)() tonnes of Poly
Vinyl Chloride (PVC) per annum.
For setting up these projects, the Company has acquired lands at Hazira,
in the State of Gujarat. The Company has signed Agreements with the
Technical Collaborators. viz. Messrs. Du Pont, Canada for HDPE and
Messrs. B.F. Goodrich & Co., the world leaders in PVC technology.
The Company has also taken up steps to set up a project for the
manufacture of Mono Ethylene Glycol (MEG), a basic raw material required
for the Polyester Industry Permission of the Government authorities for
endorsement in the licensed capacity to 60.000 tonnes per annum, which
is the minimum economic capacity, is awaited. The Company has also
entered into collaboration agreement with Messrs. Scientific Design
Company. New York, for this project.
Recruitment of key engineering personnel required for these projects is
underway. Implementation of the aforesaid projects will entail a capital
outlay of over Rs. 500 crores (approx.)
7. DIVERSIFICATION INTO ELECTRONICS:
Your Company has received a clearance from the Government to
manufacture 15,00.000 Colour Glass Shells and 5,00,000 Colour Picture
Tubes annually involving a capital outlay of over Rs. 200 crores. The
Company has initiated action to identify collaborators to implement this
project. Diversification in this held by the Company is yet another project
in the series of projects of import substitution taken up by the Company
to reduce dependence on imported items by the country.
8. RESEARCH & DEVELOPMENT:
Due to unexpected delay in receiving certain clearances, the
commissioning of your PTA Plant has been delayed. However, requisite
permissions have now been received and all equipment is at the site.
The Company is hopeful of commissioning the plant in the second-
half of 1987 with the guidance of technical collaborators. Messrs. Imperial
Research & Development Division at Ahmedabad worked on various
projects associated with textile production and introduced various schemes
and measures in dyeing, printing and processing of fabrics. At Patalganga,
the Research and Development Wing achieved a major breakthrough in
developing and implementing the waste recovery process.
8
9. REDEMPTION OF DEBENTURES:
14. FIXED DEPOSITS:
Reliance
In accordance with the approval by the Debentureholders of Series II. III
and IV, at their Class Meetings held on 28th August, 1986 your Company
has received the final permission of the Controller of Capital Issues,
Government of India, New Delhi, for redeeming the outstanding face value
of the said debentures aggregating Rs. 1.28 crores.
Requisite notices until be sent shortly by the Company requesting the
debentureholders to surrender the debenture certificates to redeem the
said debentures not later than 30th June, 1987.
10. INVESTORS(cid:146) SERVICES:
The total strength of investors of your Company has now reached almost
28 lacs. To cope with the increasing volume of transfers, many areas of
the transfer system have been computerised and mechanised. Further,
special counters have been additionally opened in South Bombay and
Ahmedabad to receive transfer documents. The Company hopes to extend
this facility to other metropolises very shortly.
Your Company planned a unique scheme to refund excess application
money to the investors in respect of its recent debenture issue Series (cid:145)G(cid:146)
whereby the refund amounts were deposited in the investors(cid:146) account
automatically. The Company with the co-operation of the head offices of
certain banks identified over 4200 branches in 29 towns to credit the
excess application money to the investors(cid:146) account. In a matter of seven
days. a sum of Rs. 90 crores was actually credited to the respective investors
accounts. Since this was the first exercise (involving massive analysis and
processing of application forms and deployment of various agencies) there
have been cases where the banks could not cope with the scheme which
resulted in some complaints. They have been since attended to most
expeditiously. In view of the experience, the Company avoided this scheme
for the Rights Issue in refunding excess application money to the
shareholders.
Keeping in view the investors convenience and to expedite despatch of
Debenture Certificate Debenture Series (cid:145)G(cid:146), your Company has opened
78 delivery centres at all major towns to deliver over 30 lakhs certificates.
11. RELIANCE CUP 1987:
The Company is pleased to inform that the next World Cup Cricket is
being sponsored by your Company and the Cup is to be known as (cid:145)Reliance
Cup(cid:146). The Company has attained this status in the face of both odds and
international competition. In fact, this is the first time a world series has
been sponsored by an Indian Company.
The Reliance Cup 1987 is jointly hosted by India and Pakistan in a series
of 27 matches to be played during October November 1987 The winners
of the (cid:145)Reliance Cup(cid:146) will be the world champions of cricket. The Company
is extremely proud of being associated with this event which will create a
tremendous amount of national and inter national awareness for the
Company.
12. SUBSIDIARY COMPANY:
As required under Section 212 of the Companies Act, 1950, the audited
statement of accounts along with the report of its Board of Directors of
Devti Fabrics Limited and the report of the Auditors thereon for the year
ended 30th September, 1986 are annexed.
Devti Fabrics Limited has turned the corner and has achieved a moderate
profit for the year ended 30th September, 1986.
13. INSURANCE:
Deposits of Rs. 0.77 crore which became due for repayment on or before
31st December, 1986 were not claimed by the depositors as on that date.
Of these deposits of Rs. 0.26 crore have since been repaid/renewed.
15. PERSONNEL:
Your Company values human resources as its most important asset and
continuously thrives to upgrade the quality of the staff and their morale.
Towards this, the Company proposes to set up a centralised Training
Centre with latest training aids and equipments.
The Company, in keeping with its policy of recruiting eminently qualified
professionals for all its new projects, have already recruited staff in
important position for its PTA and LAB projects.
As required by the provisions of Section 217 (2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules. 1975.
the names and other particulars of the employees are set out in the
Annexure forming part of the Report.
16. DIRECTORS
General Insurance Corporation of India has intimated the Company of
the resignation of Shri R.V. Madhava Rao, their nominee, from the Board
of the Company. The Board of Directors have placed on record their
grateful appreciation for the invaluable contributions made by Shri R.V.
Madhava Rao during his tenure as a Director of the Company.
In accordance with the provisions of the Companies Act, 1956 and the
Company(cid:146)s Articles of Association. Messrs. K. Gopal Rao, J.R. Shah and
M.L. Bhakta. Directors retire by rotation and are eligible for re-
appointment.
17. AUDITORS:
Messrs Rajendra & Company and Messrs. Chaturvedi & Shah. Statutory
Auditors of the Company hold office until the conclusion of the ensuing
Annual General Meeting and are recommended for re appointment. The
Company has received Certificates from these Auditors to the effect that
their re-appointment, if made, would be with the prescribed limits under
Section 224 (1) of the Companies Act. 1956.
The Notes to the Accounts Nos. 13 and 14 referred to in the Auditors
Report are self explanatory and therefore do not call for any further
comments.
18. ACKNOWLEDGEMENT:
Your Directors would like to express their grateful appreciation of the
abundant assistance and co-operation received from the Financial
Institutions, Banks and especially from the investors during the year under
review.
Your Directors wish to place on record their deep sense of appreciation
of the devoted services by the Executives, Staff and workers of the
Company for its success.
All the properties and insurable interest of the Company including buildings,
plant and machinery, stocks, wherever necessary and to the extent required
have been adequately insured.
Bombay-400021.
Dated: 29th April. 1987
For and on behalf of the Board,
Dhiruhhai H. Ambani
Chairman & Managing Director
9
Reliance
BALANCE SHEET AS AT 3lST DECEMBER, 1986.
Schedule
1986
(Rs. in crores)
1985
Rs.
Rs.
Rs.
Rs.
SOURCES OF FUNDS:
Shareholders(cid:146) Funds
Capital
Reserves & Surplus
Loan Funds
Secured Loans
Unsecured Loans
TOTAL
APPLICATION OF FUNDS :
Fixed Assets
Gross Block
Less : Depreciation
Net Block
Investments
Current Assets, Loans & Advances
Current Assets
Inventories
Sundry Debtors
Cash and Bank Balances
Other Current Assets
Loans & Advances
Less : Current Liabilities & Provisions
Liabilities
Provisions
TOTAL
Notes and Contingent Liabilities
(cid:145)A(cid:146)
(cid:145)B(cid:146)
(cid:145)C(cid:146)
(cid:145)D(cid:146)
(cid:145)E(cid:146)
(cid:145)F(cid:146)
(cid:145)H(cid:146)
(cid:145)I(cid:146)
(cid:145)N(cid:146)
311.12
635.64
946.76
606.80
37.30
311.53
825.81
1137.34
949.46
0.37
57.41
254.12
682.03
143.78
1137.55
188.09
240.33
120.47
659.25
0.33
1020.38
32.45
1052.83
851.11
14.21
865.32
57.41
253.71
553.74
81.90
735.68
128.88
147.59
109.41
126.35
0.46
383.81
18.29
402.10
73.55
25.89
99.44
187.51
1137.34
302.66
946.76
As per our Report of even date
For and on behalf of the Board
For RAJENDRA & CO.
Chartered Accountants
R.J. Shah
Proprietor
For CHATURVEDI & SHAH
Chartered Accountants
D. Chaturvedi
Partner
Bombay
Dated : 29th April, 1987
10
D.H. Ambani
R.H. Ambani
K. Gopal Rao
J. R. Shah
T. Ramesh U. Pai
N. H. Ambani
M.D. Ambani Executive
A. D. Ambani
V.M. Ambani
Chairman & Managing Director
Joint Managing Director
Directors
Directors
Secretary
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 3lST DECEMBER, 1986
Schedule
1986
Reliance
(Rs. in crores)
1985
Rs.
Rs.
Rs.
Rs.
INCOME
Sales
Other Income
Increase in Stocks
EXPENDITURE
Purchases
Manufacturing and Other Expenses
Interest
Depreciation
Profit for the year
Add: Balance brought forward from last year
(cid:145)J(cid:146)
(cid:145)K(cid:146)
(cid:145)L(cid:146)
(cid:145)M(cid:146)
Add : Excess provision for Directors(cid:146) Remuneration (Rs. Nil)
(Previous year Rs. 42,493) written back
Investment Allowance (Utilised) Reserve written-back
Less : Net effect of reversal of capitalisation
of interest on Fixed Assets
Less : Transfer to :
Investment Allowance Reserve
Taxation Reserve
Amount available for Appropriations:
APPROPRIATIONS
General Reserve
Differential Dividend pertaining to Previous year
Proposed Dividend (subject to tax) on :
Preference Shares
Equity Shares
Balance carried to Balance Sheet
Notes and Contingent Liabilities (cid:145)N(cid:146)
904.02
7.19
78.69
205.60
654.91
54.24
60.98
36.00
(cid:150)(cid:150)
2.00
(cid:150)(cid:150)
0.86
12.90
733.14
4.94
13.50
989.90
751.58
975.73
14.17
14.52
28.69
(cid:150)(cid:150)
25.00
53.69
(cid:150)(cid:150)
53.69
36.00
17.69
680.24
71.34
14.91
86.25
(cid:150)(cid:150)
(cid:150)(cid:150)
86.25
8.13
78.12
32.80
45.32
53.25
565.08
24.45
37.46
22.80
10.00
5.00
0.05
0.86
24.89
15.76
1.93
30.80
14.52
As per our Report of even date
For and on behalf of the Board
For RAJENDRA & CO.
Chartered Accountants
R.J. Shah
Proprietor
For CHATURVEDI & SHAH
Chartered Accountants
D. Chaturvedi
Partner
Bombay
Dated : 29th April, 1987
D.H. Ambani
R.H. Ambani
K. Gopal Rao
J. R. Shah
T. Ramesh U. Pai
N. H. Ambani
M.D. Ambani Executive
A. D. Ambani
V.M. Ambani
Chairman & Managing Director
Joint Managing Director
Directors
Directors
Secretary
11
Reliance
SCHEDULES FORMING PART OF THE BALANCE SHEET
SCHEDULE (cid:145)A(cid:146)
SHARE CAPITAL
Authorised
11,50,00,000 Equity Shares of Rs. 10 each
30,000 11% Cumulative Redeemable Preference
(Rs. in crores)
1985
Rs.
1986
Rs.
115.00
75.00
Shares of Rs. 100 each
0.30
0.30
5,50,000 15% Cumulative Redeemable Preference
Shares of Rs. 100 each
4,20,000 Cumulative Redeemable Preference
Shares of Rs. 100 each
5.50
5.50
B/f
Investment Allowance Reserve
As per last Balance Sheet
Less : Utilised for purchase of machinery during
the year - transferred to Investment
Allowance (utilised) Reserve
4.20
4.20
Add : Transferred from Profit & Loss Account
125.00
85.00
Issued & Subscribed
5,16,09,318 Equity Shares of Rs. 10 each fully paid-up
30,000 11% Cumulative Redeemable Preference
51.61
51.61
Investment Allowance (Utilised) Reserve
As per last Balance Sheet
Add : Transferred from
Investment Allowance Reserve
Shares of Rs. 100 each fully paid-up
(Redeemable at any time after
l6th March, 1990 but not later than
l5th March, 1993)
5,50,000 15% Cumulative Redeemable Preference
Shares of Rs. 100 each fully paid-up
(Redeemable at any time after
3lst December, 1994 but not later than
3lst December, 1997)
0.30
0.30
Less : Excess provision to the extent not required
transferred to Profit & Loss Account
5.50
5.50
57.41
57.41
Taxation Reserve
As per last Balance Sheet
Add : Transferred from Profit & Loss Account
Of the above Equity Shares:
1. (a) 1,56,62,923 Shares were allotted as fully paid-up Bonus Shares by
capitalisation of Share Premium and Reserves.
(b)
60.33,372 Shares were allotted as fully paid-up pursuant to Scheme
(c) 2.55,12,953 Shares were allotted as fully paid-up Shares on conversion/
of Amalgamation without payments being received in cash.
General Reserve
As per last Balance Sheet
Add : Amount transferred from :
Development Rebate Reserve
Profit & Loss Account
(d)
(e)
surrender of Debentures.
13,24,000 Shares were issued on conversion of Term Loans.
4,657 Shares (including shares by way of Bonus) are reserved for
allotment to some of the Shareholders/purported transferees
of shares of erstwhile The Sidhpur Mills Company Limited.
Profit & Loss Account
2.
The Company will be required to issue and allot additional 18.667 Equity Shares
of Rs. 10 each at a premium of Rs. 15 per share to the Shareholders of erstwhile
The Sidhpur Mills Company Limited as Right Shares, if the High Court of Bombay
so decides.
SCHEDULE (cid:145)C(cid:146)
SECURED LOANS
SCHEDULE (cid:145)B(cid:146)
RESERVES & SURPLUS
Capital Reserve
As per last Balance Sheet
Less : Adjusted against Goodwill Account
Share Premium Account
As per last Balance Sheet
Add : Additions during the year
On Conversion of Debentures of (cid:145)E(cid:146) Series
On Surrender of Debentures
Development Rebate Reserve
As per last Balance Sheet
Less v Transferred to General Reserve
Rs.
(cid:150)(cid:150)
(cid:150)(cid:150)
84.40
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
1986
(Rs. in crores)
1985
Rs.
Rs.
0.03
0.03
(cid:150)(cid:150)
(cid:150)(cid:150)
62.48
21.33
0.59
84.40
84.40
0.10
0.10
(cid:150)(cid:150)
(cid:150)(cid:150)
A. WORKING CAPITAL LOANS
(cid:150) From Banks
B. WORKING CAPITAL TERM LOANS
(cid:150) From a Bank
C. DEBENTURES :
i) 11% Privately Placed Debentures of
Rs. 1000 each fully paid
Less : Converted/Redeemed
ii) 11% Privately Placed Debentures of
Rs. 1000 each fully paid
Less : Converted/ Redeemed
iii) 11% Convertible Mortgage Debentures
of Rs. 500 each fully paid (Series I)
(Refer Note No. 8 below)
Less : Converted/Surrendered
1986
(Rs. in crores)
1985
Rs.
84.40
Rs.
84.40
Rs.
22.80
29.15
22.80
(cid:150)(cid:150)
36.00
83.15
22.80
105.95
25.00
10.00
(cid:150)(cid:150)
29.15
(cid:150)(cid:150)
22.80
36.00
22.80
54.O0
29.15
83.15
(cid:150)(cid:150)
80.95
83. 15
(cid:150)(cid:150)
10.00
10.00
10.00
38.84
33.74
(cid:150)(cid:150)
2.00
0.10
5.00
40.84
38.84
1.93
14.52
254.12
253.71
1986
Rs.
(Rs. in crores)
1985
Rs.
Rs.
135.91
38.01
(cid:150)(cid:150)
0.5 7
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
7.00
6.89
0.11
0.35
0.35
(cid:150)(cid:150)
0.55
0.55
(cid:150)(cid:150)
7.00
6.89
0.11
C/f
84.40
84.40
C/f
0.11
135.91
38.58
12
SCHEDULE (cid:145)C(cid:146) (Contd.)
1986
Rs.
(Rs. in crores)
1985
Rs.
Rs.
B/f
0.11
135.91
38.58
iv)
v)
vi)
12% Convertible Mortgage Debentures
of Rs. 125 each fully paid (Series II)
(Refer Note No. 8 below)
Less : Converted/Surrendered
13.5% Convertible Mortgage Deben-
tures of Rs. 125 each fully paid (Series III)
(Refer Note No. 8 below)
Less : Converted/Surrendered
13.5% Convertible Secured Debentures
of Rs. 125 each fully paid (Series N)
(Refer Note No. 8 below)
Less : Converted/Surrendered
vii) 13.5% Convertible Secured Debentures
of Rs. 150 each fully paid (Series (cid:145)E(cid:146))
(cid:150) Balance amount is redeemable at par
at the end of 10th December. 19% with
an option to repay these amounts in one
or more instalments by drawing lots
at any time after the end of 10th
December. 1993.
Less : Converted.
* includes debentures of face value
(Rs. 36,000) held by Directors
viii) 15% Non-convertible Secured Deben-
tures of Rs. 100 each (Series (cid:145)F )
(Refer Note No. 9 below)
Less : Bought back and eligble for reissue
10.80
10.69
0.11
24.00
23.49
0.51
50.00
49.55
0.45
80.00
26.67
53.33
*
270.00
0.14
269.86
*
10.80
10.69
0.11
24.00
23.49
0.51
50.00
49.55
0.45
80.00
26.67
53.33
270.00
(cid:150)(cid:150)
270.00
* includes debentures of face value
Rs. 0.02 crore held by Directors
324.37
324.51
D. TERM LOANS
l.
From Banks
(a)
(b)
Foreign Exchange Loan in Euro-
Currency at Floating Rates
loan from State Bank of India,
New York Exim Bank. U.S.A., Line of
Credit Private Export Funding
Corporation of U.S.A. and Sanwa
Bank Ltd., Tokyo. Japan.
(c) Rupee Loans
88.32
61.72
16.19
2.72
107.23
19.97
2.78
84.47
C/f
107.23
460.28
363.09
2.
3.
From Financial Institutions
(a)
(b) Rupee Loans
Foreign Currency Loans
B/f.
From Others:
(a)
(b) Housing Development Finance
Lazard Brothers & Co. Ltd., London
Corporation Ltd.
E. DEFERRED PAYMENT LIABILITIES
To Foreign Machinery Suppliers
(Guaranteed by Banks and Financial
Institutions)
Reliance
1986
Rs.
Rs.
107.23 460.28
(Rs. in crores)
1985
Rs.
363.09
107.99
1.01
109.00
0.52
0.54
1.06
96.02
1.82
97.84
1.70
0.62
2.32
217.29
184.63
4.46
6.02
682.03
553.74
NOTES :
Of the above :
1. Working Capital Loans from Banks are secured against hypothecation of present and
future. stock of raw materials, stock-in-process, finished goods. spares and stores,
book debts, outstanding monies and receivable claims.
2. Debentures referred in C(iii), (iv), (v), (vi) and (viii), Term Loans referred in D save and
except D(1)(a) to the extent of Rs. 18.19 crores. D(I)(c) to the extent of Rs. I.14
crores and D(3)(b) and Deferred Payment Liabilities referred in E are secured by
mortgage of deposit of title deeds on the properties situate at Naroda, District
Ahmedabad, in the State of Gujarat and at Patalganga, District Raigad, in the State of
Maharashtra.
3. Debentures referred in C (vii) are secured by a legal mortgage in English form on the
properties situate at Naroda, District Ahmedabad, in the State of Gujarat. These
Debentures alongwith cumulative interest payable on the Debentures referred to in C
(viii) shall rank subsequent to the charges created by the Company in favour of:
(i)
Trustees/Agents & Trustees for the holders of Debentures referred in C (iii), (iv),
(v). (vi) and (viii) and
4.
5.
6.
7.
8.
9.
(ii) Other Financial Institutions/Banks for their outstanding loans/guarantees.
Term Loans referred in D(I)(a) to the extent of Rs. 18.19 crores are secured exclusively
by hypothecation of specified items of plant and machinery situate at Naroda and
Patalganga.
Term Loans referred in D(I)(c) to the extent of Rs. 1.14 crores are to be secured
exclusively by mortgage of the assets of the Company situate at Sidhpur, in the State
of Gujarat.
Term Loans referred in D(3)(b) are secured by mortgage by deposit of title deeds of
specified residential quarters situate at Panvel, Dist. Raigad in the State of Maharashtra.
The charges created on the Debentures, Term Loans and Deferred Payment Liabilities
referred to in C, D and E above would rank pari passu, inter se, save and except:
(i)
Debentures referred to in C(vii) and cumulative interest payment on Debentures
referred in C(viii) and
(ii) Term Loans referred in D(1)(a) to the extent of Rs. 18.19 crores D(I)(c) to the
extent of Rs. 1.14 crores and D(3)(b).
The balance amount of Debentures of Series I, II, III and IV are redeemable at par not
later than 30th June, 1987 in terms of resolution passed by the Debertureholders in
their respective class meetings held on 28th August, 1986 and the subsequent consent
received from the Controller of Capital Issues, Government of India
(a) The Debentures referred in C (vii) above are redeemable at a premium of 5% of
the face value of each debenture. Of the aforesaid debentures, the debentures
issued under non-cumulative interest payment scheme are redeemable on 30th
September. 1992 and the debentures issued under cumulative interest payment
scheme are redeemable in three yearly instalments commencing from 30th
September 1992 by draw of lots.
(b) The Company is required to buy back at par the said debentures provided:
(i)
(ii)
the face value of the total holding of the debentureholder in each case does
not exceed Rs. 40.000 and
the debentureholder has held the debentures for a period of not less than
one year on the date of his offer
(c) The Company can reissue at par such bought back debentures.
(d) The Company received request for buy-back of debentures of an aggregate
nominal value of Rs. 11.46 crores till date (since paid Rs. 9.57 crores)
10. The figures of secured loans include Rs. 13.86 crores repayable within one year.
13
Reliance
SCHEDULE (cid:145)D(cid:146)
UNSECURED LOANS
Fixed Deposits
(including Cash Certificates of Rs. 21.19 crores
and Rs. 14.49 crores from Companies)
Short Term Loans (Bridge Loans)
i)
ii)
From Banks
From Financial Institutions
* includes Rs. 72.04 crores repayable/adjustable within one year.
1986
Rs.
Rs.
(Rs. in crores)
1985
Rs.
110.71
69.79
15.25
17.82
33.07
l43.78
*
(cid:150)(cid:150)
12.11
12.11
81.90
SCHEDULE (cid:145)E(cid:146)
FIXED ASSETS
Nature of
Fixed Assets
goodwill
Leasehold Land
Freehold Land
Buildings
Plant & Machinery
Electric Installation
Factory Equipments
Furniture & Fixture
Vehicles
Capital Expenditure
pending allocation
and advance against
Capital Expenditure
Previous Year
NOTES :
GROSS BLOCK (AT COST)
DEPRECIATION
NET BLOCK
As at 1.1.86
Rs.
Additions
Rs.
Deductions
Rs.
As at 31.12.86 Total upto 31.12.86
Rs.
Rs.
As at 31.12.86
Rs.
As at 31.12.85
Rs.
(Rs. in crores)
1.23
4.71
0.11
50.71
534.50
17.05
3.89
9.63
1.89
111.96
735.68
530.93
(cid:150)(cid:150)
0.12
(cid:150)(cid:150)
12.77
347.08
19.72
1.33
2.93
0.44
85.16
469.55
346.68
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
1.82
(cid:150)(cid:150)
(cid:150)(cid:150)
0.01
0.18
1.23
4.83
0.11
63.48
879.76
36.77
5.22
12.55
2.15
65.67
67.68
131.45
1137.55
141.93
735.68
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
4.40
178.62
2.16
0.83
1.68
0.40
(cid:150)(cid:150)
188.09
128.88
1.23
4.83
0.11
59.08
701.14
34.61
4.39
10.87
1.75
131.45
949.46
606.80
1.23
4.71
0.11
47.46
412.39
15.75
3.27
8.37
1.55
111.96
606.80
(a) Leasehold Land includes Rs. 0.82 crore in respect of which lease-deeds are pending execution. No write-off has been made in respect of lease-premium
paid for leasehold land since the grant of lease is for a long period.
(b) Buildings includes (i) under construction Rs. 14.75 crores and (ii) cost of ownership premises in Cooperative Societies Rs. 0.23 crore.
(c) Plant & Machinery includes (i) Rs. 196.89 crores under installation and (ii) Rs. 50.59 crores in transit.
(d) Electric installation includes Rs. 17.21 crores under installation.
(e) Factory Equipments includes Rs. 0.48 crore under installation.
(f)
Furniture & Fixtures includes Rs. 0.34 crore against work-in-progress.
(g) Depreciation is provided in accordance with the provisions of Section 205(2)(b) of the Companies Act, 1956. Depreciation in respect of fixed assets
installed and put to use during the year is charged on pro rata basis with reference to the period of use.
(h) Additions during the year includes assets acquired of Rs. 0.50 crore for Research & Development.
(i) Capital Expenditure pending allocation consists of
(i) Rs. 58.47 crores on account of Advance against Capital Expenditure (Previous year Rs. 73.76 crores).
(ii) Rs. 67.05 crores on account of Pre-operative Expenses (Previous year Rs. 29.86 crores) as per Note No.l5 of Schedule (cid:145)N(cid:146), and
(iii) Rs. 5.93 crores on account of cost of construction and fabrication materials at site (Previous year Rs. 8.34 crores).
14
SCHEDULE (cid:145)F(cid:146)
INVESTMENTS (At Cost)
GOVERNMENT AND OTHER SECURITIES
3% Conversion Loan of 1946 (face
Unquoted
value Rs. 47,000) (Deposited
with Central Excise Collectorate)
(Rs. Nil) (Previous year
Rs. 28.000)
7 Years National Savings Certifi-
cate (face value Rs. 20,000)
(Deposited with Central Excise
Collectorate) (Rs. Nil) (Previous
year Rs. 20,100)
TRADE INVESTMENTS - Unquoted
6 Equity Shares of New Piece
Goods Bazar Co. Ltd. of
Rs. 1.000 each fully paid-up
(Rs. 17,000)
(Previous year Rs. 17,000)
5 Equity Shares of Bombay
Gujarat Art Silk Vepari Mahajan
Co-operative Shops & Ware-
houses Society Ltd. of Rs. 200
each fully paid-up (Rs. 1,000)
(Previous year Rs. 1,000)
165 Shares of The Art Silk Co-
oparative Ltd. of Rs. 100 each
fully paid-up (Rs. 16,500)
(Previous year Rs. 16,500)
225 Shares of Crimpers Industrial
Co-operative Society Ltd. of
Rs. 100 each, Rs. 25 per share
paid-up (Rs 5,625) (Previous
year Rs. 5,625)
20 Shares of The Bombay Market
Art Silk Co-operative (Shops &
Warehouses) Society Ltd. of
Rs. 200 each fully paid-up
(Rs. 4,000) (Previous year
Rs. 4,000)
4.980 Shares of Hindustan Oil Explora-
tion Co. Ltd. of Rs. 100 each
fully paid-up
IN SUBSIDIARY COMPANY
Body Corporate under the same Management)
1986
Rs.
(Rs. in crores)
1985
Rs.
Rs.
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
B/f
Rs.
In Units - Unquoted
2,82.50,000 Units of Unit Trust of India of
Rs. 10 each
In Debentures-Quoted
1.666 14% Unsecured Convertible
Debentures of The Industrial
Credit & Investment Corporation
of India Ltd. of Rs 100 each
fully paid-up (converted into
equity shares during the year)
Reliance
1986
(Rs. in crores)
1985
Rs.
0.35
Rs.
0.37
(cid:150)(cid:150)
36.93
(cid:150)(cid:150)
0.02
0.37
37.30
During the year, the Company invested in 4,14,50.000 Units of Rs. 10 each of Unit Trust
of India for Rs. 58.28 crores. The Company sold 6,97,00,000 Units for Rs. 95.49 crores.
AGGREGATE VALUE OF
Quoted Investments
Unquoted Investments
1986
Book Market
Value
Value
0.11
0.11
(cid:150)(cid:150)
0.26
Book
Value
0.11
37.19
1985
Market
Value
0.11
(cid:150)(cid:150)
SCHEDULE (cid:145)G(cid:146)
CURRENT ASSETS
INVENTORIES (at cost or market value 1986 1985
whichever is lower. except otherwise stated)
(Certified and valued by the Management)
Stores. Spares, Dyes, Chemicals etc.
Raw Materials
Stock-in-transit
Stock-in-process
Finished Goods
Others (includes decommissioned machinery
Rs. 0.02 crore at written down value and Trial run
stock of Rs. 0.05 crore at the net estimated
realisable value)
22.77
57.27
0.91
41.65
115.18
1986
Rs.
(Rs. in crores)
1985
Rs.
Rs.
16.14
50.65
0.07
40.65
36.83
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
0.05
0.05
0.05
0.05
SUNDRY DEBTORS (Unsecured)
Over Six Months:
Considered Good
Considered Doubtful
Less : Provision for doubtful debts
2,10,700 Equity Shares of Devti Fabrics
Ltd. of Rs. 10 each fully paid-up
0.21
0.21
Others, considered good
OTHER INVESTMENTS
5,000 Equity Shares of Housing
Development & Finance
Corporation Ltd. of Rs. 100 each,
fully Paid-up
1.000 Equity Shares of Air Control &
Chemicals Engineering Co. Ltd.,
of Rs. 100 each fully paid-up
4.998 Equity Shares of the Industrial
Credit & Investment Corporation
of India Ltd., of Rs. 100 each
fully paid-up
0.05
0.01
0.05
C/f
0.11
0.37
CASH AND BANK BALANCES
Cash on hand
Balance With Scheduled Banks
In Current Accounts
In Fixed Deposit Accounts (includes Rs. 0.01
crore lodged with Central Excise Authorities
and Rs. 0.01 crore endorsed in favour
of the Bankers)
Cost of import Entitlements
(Under Export Promo6on Scheme)
0.05
0.01
0.03
0.09
0.35
2.55
3.25
240.33
147.59
17.22
2.04
19.26
2.04
17.22
103.25
0.50
657.76
8.86
1.68
10.54
1.68
8.86
100.55
120.47
109.41
0.26
3.81
0.99
122.28
659.25
126.35
0.33
0.46
1020.38
383.81
15
Reliance
SCHEDULE (cid:145)H(cid:146)
LOANS AND ADVANCES
SCHEDULES FORMING PART OF THE
PROFIT & LOSS ACCOUNT
(Rs. in crores)
1985
Rs.
1986
Rs.
SCHEDULE (cid:145)J(cid:146)
OTHER INCOME
UNSECURED - CONSIDERED GOOD
Loan to a wholly-owned subsidiary Company Devti Fabrics
Limited (maximum balance at any time during the year
Rs. 1.35 crores) (Previous year Rs. 1.00 crore)
Advances recoverable in Cash or in Kind or for value to be
received
Deposits
Prepaid Expenses
Balance with Customs, Central Excise Authorities etc.
1.35
1.00
*
15.00
10.66
1.47
3.97
8.67
6.24
0.30
2.08
32.45
18.29
* includes i)
ii)
* excludes
Rs. 0.06 crore from Officers (Previous year
Rs. 0.01 crore) maximum balance at any time
during the year Rs. 0.06 crore (Previous year
Rs. 0.02 crore)
Rs. 0.19 crore as Promoters contribution to-
wards equity Share Capital in Reliance Capital
& Finance Trust Ltd., for which allotment of
shares is to be made.
Rs. 0.16 crore considered doubtful and provided
for.
Incentives, Assistance & Drawbacks on Exports received
Processing Charges
Dividend (Gross)
On other Investments (Tax at source Rs. 16.319)
Profit on sale/discard of Assets (Net)
Miscellaneous Income
Profit on Sale of Investments
SCHEDULE (cid:145)K(cid:146)
INCREASE IN STOCKS
STOCK-IN-TRADE {at close)
Finished Goods
Stock-in-process
Others
STOCK-IN-TRADE (at commencement)
Finished Goods
Stock-in-process
Others
SCHEDULE (cid:145)L(cid:146)
MANUFACTURING & OTHER EXPENSES
1986
Rs.
(Rs. in crores)
1985
Rs.
Rs.
RAW MATERIALS CONSUMED
Stock at commencement
Add : Purchases
SCHEDULE (cid:145)I(cid:146)
CURRENT LIABILITIES & PROVISIONS
CURRENT LIABILITIES
Sundry Deposits
Sundry Creditors
Unclaimed Dividends
Interest accrued but not due on loans
Excess Share and Debenture Application Monies
refundable
Application Money received towards issue of
Debenture Series (cid:145)G(cid:146)
1.97
119.62
*
0.41
36.60
0.40
1.78
38.87
0.88
31.84
0.18
(Refer Note No. 12 of Schedule (cid:145)N(cid:146) )
692.11
**
(cid:150)(cid:150)
851.11
73.55
* includes For Capital Expenditure Rs. 67. 12
crores and Fixed Deposits matured but
unclaimed Rs. 0.77 crore and Rs. 1.27
crores due to subsidiary company
** includes Rs. 1.48 crores received from
Directors
PROVISIONS
Gratuity, Superannuation and Provident Funds
Proposed Dividends
0.45
13.76
0.14
25.75
14.21
25.89
865.32
99.94
16
Less: Stock at close
MANUFACTURING EXPENSES
Carriage Inward
Stores & Spare parts
Dyes & Chemicals
Electric Power. Fuel & Water
Machinery Repairs
Building Repairs
Labour, Processing & Machinery Hire Charges
Excise Duty
Sales Tax
PAYMENTS TO AND PROVISION
FOR EMPLOYEES
Salaries, Wages & Bonus
Contribution to Provident Fund, Gratuity Fund,
Superannuation Fund, Employees(cid:146) State
Insurance Scheme, Pension Scheme, Labour
Welfare Fund etc.
Employees(cid:146) Welfare and other amenities
(Rs. in crores)
1985
Rs.
0.60
(cid:150)(cid:150)
0.01
1986
Rs.
0.54
0.23
0.01
0.33
6.07
0.01
7.I9
(cid:150)(cid:150)
4.20
0.13
4.94
1986
Rs.
(Rs. in crores)
1985
Rs.
Rs.
115.18
41.65
2.48
36.83
40.65
3.14
36.83
40.65
3.14
159.31
80.62
32.96
34.14
0.02
80.62
67.12
78.69
13.50
1986
Rs.
(Rs. in crores)
1985
Rs.
Rs.
50.65
251.60
302.25
57.27
2.44
8.76
22.45
32.99
1.01
0.57
6.02
267.35
3.57
46.95
227.11
274.06
50.65
244.98
223.41
1.88
8.37
17.39
24.50
0.97
0.49
7.80
217.52
1.29
345.16
280.21
15.48
14.42
2.04
2.20
2.15
2.69
19.72
19.26
C/f
609.86
522.88
1986
Rs.
(Rs. in crores)
1985
Rs.
Rs.
7. Auditors(cid:146) Remuneration
(a) Audit Fees
(b) Tax Audit Fees
(c)
For certification and consultation in Finance and
Tax matters
(d) Out-of-pocket expenses
Reliance
(Rs. in crores)
1985
Rs.
0.07
0.05
I986
Rs.
0.09
0.03
0.02
0.01
0.15
0.02
0.01
0.15
B/f
609.86
522.88
SALES & DISTRIBUTION EXPENSES
Samples, Sales Promotion &
Advertisement Expenses
Brokerage & Commission
Export Expenses
Packing Expenses
Warehousing Charges
Freight and Forwarding Charges
Octroi Expenses
ESTABLISHMENT EXPENSES
Insurance
Rent
Rates and Taxes
Other Repairs
Travelling Expenses (including Rs. 0.04 crore
for Directors)
Payment to Auditors
Directors(cid:146) Fees (Rs. 12,250)
(Previous year Rs. 7,000)
General Expenses
Provision for doubtful recoveries
Charity & Donation
Loss on Sale/Discard of Assets
SCHEDULE (cid:145)M(cid:146)
INTEREST
Debentures
Fixed Loans
Others (Net)
26.79
3.64
4.62
0.01
13.00
1.11
3.01
1.40
2.19
0.22
0.07
0.50
0.91
0.15
(cid:150)(cid:150)
13.36
0.35
0.51
(cid:150)(cid:150)
2.61
4.69
0.01
11.62
0.70
1.64
0.77
22.04
1.69
0.43
0.16
0.64
1.34
0.15
(cid:150)(cid:150)
14.06
0.65
0.58
0.46
18.26
20.16
654.91
565.08
(Rs. in crores)
1985
Rs.
6.78
17.37
0.30
I986
Rs.
20.57
21.25
12.42
54.24
24.45
SCHEDULE (cid:145)N(cid:146)
NOTES AND CONTINGENT LIABILITIES
1.
2.
The previous year s figures have been regrouped wherever necessary.
Figures are shown in crores of rupees in accordance with the approval from the
Company Law Board. Figures less than Rs. 50,000 have been shown at actuals in
brackets.
3.
The Company is accounting the following on cash basis :
(a) Export incentives and other claims (b) Claims for refunds of custom duty. Sales
tax, insurance, Octroi etc. (c) Interest on overdue bills and delayed payment charges
on loans (d) Drawback on return of cops (e) Income on investments and on disposal of
sundry items other than usable waste of POY/PSF (f) Excise duty set off (g) Performance
incentives of sales (h) Liability in respect of maturity value in excess of initial investment
of Cash Certificates issued by the Company under Fixed Deposit Scheme (i) premium
on redemption of Debentures.
4.
5.
Sales is inclusive of Rs 25.62 crores being the recovery of Sales Tax and Excise duty.
interest - Others (Net) is arrived at after deducting Rs. 7.13 crores (Tax at source Rs. 0.14
crore) being interest received/receivable.
6. Revenue expenses amounting to Rs. 1.26 crores on Research & Development have
been included under the respective heads of accounts.
8.
(a) The Company has been advised that the computation of net profit (for the purpose
of calculation of Directors(cid:146) remuneration under Section 349 of the Companies
Act, 1956) need not be enumerated since no commission has been paid to the
Directors and only minimum remuneration has been paid to the Directors as per
the approval of the Central Government received under Section 198 and 5ection
309 of the Companies Act, 1956.
(b) Managing Directors(cid:146) and *Executive Directors(cid:146)
Remuneration:
i)
ii)
Salaries
Contribution to Provident Fund and
Superannuation Fund
iii) Provision for Gratuity (as per actuarial valuation )
(Rs. 8,980) (Previous year Rs. 17,815)
iv) Perquisites
* Includes remuneration to Shri M.D. Ambani,
Executive Director, of Rs. 0.02 crore and is subject
to the approval of Central Government.
(Rs. in crores)
1985
Rs.
1986
Rs.
0.03
0.03
0.01
0.01
(cid:150)(cid:150)
0.02
(cid:150)(cid:150)
0.02
9.
10.
The Company has been providing liability for Excise Duty in respect of finished products
lying in factory premises/bond as and when they are removed on the footing that
duty becomes payable only at the time of removal of goods. Accordingly, estimated
liability amounting to Rs. 61.06 crores in respect of such product at year end has not
been provided in the accounts and not included in the inventory of finished products.
Foreign Currency Loans availed of during the year to acquire plant and machinery
(a)
have been accounted for in terms of Indian Rupees at the exchange rates
prevailing on relevant dates.
(b) No effect has been given in the Accounts to the fluctuations in rates of exchange
on outstanding balance of foreign exchange loans.
(c) The Company has consistently been treating difference on account of fluctuations
in exchange rates on payments of instalments of loans, deferred credit facilities,
etc. as a revenue expenditure and the same amounting to Rs 4.32 crores (Previous
year Rs. 3.39 crores) has been included under the head (cid:147)General Expenses(cid:148).
11. The Company has been advised that there will be no tax liability for the year ending
31st December, 1986, in view of various reliefs claimed in tax proceedings. The
Company is of the opinion that Taxation Reserve of Rs. 10 crores created in the
previous year is adequate to take care of tax liability. if any, for pending assessments.
12. The Company allotted 13.5% Secured Fully Convertible Debentures of Rs. 145 each
(Series (cid:145)G(cid:146)) for an aggregate nominal value of Rs. 500 crores after the close of the
year. The said debentures have been subsequently secured by way of second and
subservient charge in favour of the Trustees for the holders of the said debentures by
mortgaging immovable and moveable assets and properties of the Company situate
at Naroda, in the State of Gujarat
The face value of each Debenture shall be converted into two equity shares of Rs. 10
each credited as fully paid up at a premium of Rs. 62.50 per share at the expiry of 12
months from the date of allotment of the said Debentures. Amount disbursed against
the above issue expenses till the year end amounting to Rs. 3.94 crores have been
shown under the head Advances Recoverable in cash or kind, pending allocation and
finalisation.
13. The Company until last year used to account for disposal of waste generated in the
course of production on cash basis. During the year, one of the Waste Recovery
Plants was commissioned for recycling of Polyester yarn and Fibre waste as raw
material: Therefore, such usable waste lying with the Company to the extent of 4040
tonnes at the end of the year has been booked at the price equivalent to cost of raw
materials after deducting recycling cost. Had this not been done, the figures of raw
materials consumption would have been higher by Rs. 11.72 crores and
correspondingly the Profits for the year would have been lower by the said amount.
17
Reliance
SCHEDULE (cid:145)N(cid:146) (Contd.)
14. Until last year inventories were valued at cost. During the current year. The Company
has changed the method of valuation of inventories and accordingly. these are valued
at cost or market value whichever is lower. Had the same method been continued
inventories and profit would have been higher by Rs. 5.10 crores.
15. Pre-operative expenses in respect of Projects upto December, 1986 capitalised/to
be capitalised
Salaries, Wages & Bonus
Employees(cid:146) Welfare and Other Amenities
insurance
Rent
Rates & Taxes
Other Repairs
Travelling Expenses
General Expenses
Raw Material consumed (during trial run)
Labour Charges
Electric Power, Fuel and Water
Debenture Issue Expenses
Interest:
Debentures
Fixed Loans
Others (Net)
Less: Miscellaneous Income
Less: Capitalised by allocating to
Buildings, Plant & Machinery
(Rs. in crores)
Upto
1985
0.02
0.02
0.32
(cid:150)(cid:150)
(cid:150)(cid:150)
0.07
0.20
3.79
0.05
0.16
0.24
9.43
Total
0.93
0.46
1.15
0.50
0.01
0.07
0.80
12.15
5.21
0.43
7.31
9.76
24.08
7.00
(3.58)
41.80
1.05
52.84
15.13
(0.62)
106.13
1.67
1986
0.91
0.44
0.83
0.50
0.01
(cid:150)(cid:150)
0.60
8.36
5.16
0.27
7.07
0.33
28.76
8.13
2.96
64.33
0.62
63.71
40.75
104.46
26.52
37.19
10.89
29.86
37.41
67.05
16. CONTINGENT LIABILITIES
(a)
Estimated amount of contracts remaining to be
executed on capital account and not provided for
(Rs. in crores)
1985
Rs.
1986
Rs.
301.78
683.08
(b) Outstanding guarantees furnished by Bankers
34.52
23.77
(c) Bonds executed in favour of Excise and Customs
Authorities
22.53
53.50
(d) Uncalled liability on partly paid shares (Rs. 16,875)
(Previous year Rs. 16,875)
(cid:150)(cid:150)
(cid:150)(cid:150)
(e) Claims against the Company not acknowledged
as debts including Rs. 2.11 crores
for excise (Previous year Rs. 27.23 crores)
2.79
27.62
Export bills discounted against irrevocable Letters of
Credit
0.02
0.03
Indemnities towards export obligations against
capital goods import
(h) Disputed Income Tax Liability
(i) Guarantee to a Bank against credit facilities
extended to Devti Fabrics Ltd., a wholly owned
subsidiary company (Facilities utilised
upto 31.12.86 Rs. 2.80 crores)
0.98
6.10
3.04
2.03
3.00
(cid:150)(cid:150)
(f)
(g)
17. Licensed and Installed Capacity
(a) Polyester Yarn
(b) Polyester Staple Fibre
implementation
(c) Cotton/Blended Yarn (Spindles)
(d) Cotton/Man-made Fabrics
(e) Purified Terepthalic Acid
(Looms)
(Knitting M/c)
(f) Linear Alkyl Benzene
(g) High Density Polyethylene*
(h) Poly Vinyl Chloride*
(i) Mono Ethylene Glycol*
(j)
(k) Spandex Fibre/Yarn (surrendered during the year)
* On the basis of Letter of Intent received
+ Based on average Denier of 40
Installed Capacity based on Certificate of the Management.
Synthetic Filament Yarn including industrial yarn/tyre cord*
Unit
M.T.
M.T.
Nos.
Nos.
Nos.
M.T.
M.T.
M.T.
M.T.
M.T.
M.T.
M.T.
18. PRODUCTION
Yarn (Polyester, Cotton and Blended)
Fabrics
Polyester Staple Fibre
* Including for captive use/trial run production
Unit
M.T.
Mtrs. in lacs
M.T.
19. VALUE OF IMPORTS ON C.I.F. BASIS IN RESPECT OF
(a) Raw Materials
(b) Dyes and chemicals, stores and spare parts
(c) Capital goods
18
Licensed Capacity
Installed Capacity
1986
25125
45000
12500
450
22
100000
60000
50000
100000
40000
2000
(cid:150)(cid:150)
1985
25125
45000
1986
25125
45000
+
1985
25125
Under
+
12500
450
22
75000
50000
50000
100000
40000
2000
300
12494
450
16
Under
12494
450
18
Under
implementation implementation
- do -
- do -
- do -
- do -
- do -
- do -
- do -
- do -
- do -
- do -
- do -
(cid:150)(cid:150)
1986
33445*
550.50*
13185*
1986
Rs.
48.58
8.48
119.42
1985
30345*
582.69*
(cid:150)(cid:150)
(Rs. in crores)
1985
Rs.
44.98
4.20
117.94
20. EXPENDITURE IN FOREIGN CURRENCY ON ACCOUNT OF
Interest on Foreign Currency Loans
Interest on Debentures held by Non-residents on repatriation basis (Gross)
Other matters (including commitment charges Rs. 0.11 crore on Foreign
Currency Loans - Previous year Rs. 0.19 crore)
Technical Knowhow & Engineering Fees
Reliance
1986
Rs.
24.57
16.79
4.94
14.87
(Rs. in crores)
1985
Rs.
17.02
0.40
0.84
21.13
21. QUANTITATIVE INFORMATION IN RESPECT OF OPENING STOCK. CLOSING STOCK. PURCHASES, SALES AND CONSUMPTION OF RAW MATERIALS
(a) Opening Stock
Yarn
Fabrics
Stock-in-process (Yarn)
Stock-in-process (Fabrics)
Others
(b) Closing Stock
Yarn
Fabrics
Polyester Staple Fibre
Stock-in-process (Yarn)
Stock-in-process (Fabrics)
Stock-in-process (PSF)
Stock-in-process (Polyester chips)
Others
(c) Purchases:
Yarn
Fabrics
Fibre
Sea foods
D.M.T.
(d) Sales :
Yarn (Polyester, Cotton and Blended)
Fabrics
Polyester Staple Fibre
Sea foods
D.M.T.
(e) Raw Materials consumed :
P.T.A./Poly. Chips
M.E.G.
Useable Waste
Cotton
Fibre
Yarn
Fabric (Grey)
Less : Stock of useable waste (Refer Note No. 13 above)
Unit
M.T.
Mtrs. in lacs
M.T.
Mtrs. in lacs
M.T.
Mtrs. in lacs
M.T.
M.T.
Mtrs. in lacs
M.T.
M.T.
M.T.
Mtrs. in lacs
M.T.
M.T.
M.T.
M.T.
Mtrs. in lacs
M.T.
M.T.
M.T.
M.T.
M.T.
M.T.
M.T.
M.T.
M.T.
Mtrs. in lacs
1986
Quantity Rs. in crores
1985
Quantity
Rs. in crores
1470.00
74.84
1864.00
99.50
(cid:150)(cid:150)
5382.00
104.22
6417.00
1059.00
64.50
309.00
324.00
(cid:150)(cid:150)
2781.00
243.30
(cid:150)(cid:150)
495.00
(cid:150)(cid:150)
29630.00
764.42
6666.00
495.00
(cid:150)(cid:150)
42827.00
17802.00
74.00
(cid:150)(cid:150)
1418.00
4233.00
133.06
1426.00
49.11
1572.00
63.01
(cid:150)(cid:150)
1470.00
74.84
(cid:150)(cid:150)
1864.00
99.50
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
1796.00
35.12
45.00
875.00
1398.00
27068.00
592.08
0.45
875.00
1398.00
21409.00
8411.00
(cid:150)(cid:150)
437.00
1602.00
6625.00
129.57
15.21
21.62
18.58
22.07
3.14
36.16
46.08
32.94
12.87
26.61
0.89
1.28
2.48
64.68
138.06
(cid:150)(cid:150)
2.86
(cid:150)(cid:150)
509.69
340.36
51.11
2.86
(cid:150)(cid:150)
115.41
23.27
0.20
(cid:150)(cid:150)
11.54
82.45
23.83
256.70
11.72
244.98
17.74
15.22
18.07
16.07
0.02
15.21
21.62
(cid:150)(cid:150)
18.58
22.07
(cid:150)(cid:150)
(cid:150)(cid:150)
3.14
35.59
10.22
0.35
4.94
2.15
483.20
242.26
0.36
4.94
2.39
45.71
12.27
(cid:150)(cid:150)
0.72
15.44
120.38
28.89
223.41
(cid:150)(cid:150)
223.41
19
Reliance
22. VALUE OF RAW MATERIALS CONSUMED
1986
Imported
(including import duty Rs. 102.29 crores)
23. VALUE OF DYES AND CHEMICALS, STORES AND
SPARE PARTS CONSUMED
Imported
Indigenous
24. EARNING IN FOREIGN EXCHANGE
Export of goods on F.O.B. basis
Interest received on call deposit
25. REMITTANCES IN FOREIGN CURRENCY ON ACCOUNT OF DIVIDEND
Rs. in crores
138.97
106.01
244.98
10.59
20.62
31.21
% of total
consumption
56.73
43.27
100.00
53.93
66.07
100.00
1986
Rs.
6.79
0.05
1985
Rs. in crores
122.28
101.13
223.41
7.58
18.18
25.76
% of total
consumption
54.73
45.27
100.00
29.41
70.59
100.00
(Rs. in crore)
1985
Rs.
5.64
(cid:150)(cid:150)
The Company has not made any remittance in Foreign Currencies on account
of dividend and does not have information as to the extent to which remittances
in foreign currencies on account of dividend have been made by or on behalf of
non-resident shareholders held on repatriation basis. The particulars as
required are given hereinbelow as at the end of the year.
(a) Number of Non-resident shareholders
(b) Number of Equity Shares held by them
(c)
(i) Amount of dividend paid (Gross) Tax at source Rs. 0.43 crore
72
36,00,403
(Previous year Rs. 0.30 crore)
(ii) Year to which dividend relates
26. (a) Break-up of expenditure incurred on employees who were employed
throughout the year and were in receipt of remuneration for the year which
in aggregate was not less than Rs. 36.000 per annum
(i) Number of employees
(ii) Salaries and Bonus
(iii) Contribution to Provident Fund & Superannuation Fund
(iv) Other perquisites
(b) Break-up of expenditure incurred on employees who were employed for
a part of the year and were in receipt of remuneration for any part of the year
at a rate which in aggregate was not less than Rs. 3.000 per month
(i) Number of employees
(ii) Salaries and Bonus
(iii) Contribution to Provident Fund & Superannuation Fund
(iv) Other perquisites
555
138
As per our Report of even date
For and on behalf of the Board
43
31,73,181
431
63
1.73
1985
2.16
0.47
0.77
0.33
0.07
0.08
1.21
1984
1.67
0.37
0.59
0.14
0.03
0.05
For RAJENDRA & CO.
Chartered Accountants
R.J. Shah
Proprietor
For CHATURVEDI & SHAH
Chartered Accountants
D. Chaturvedi
Partner
Bombay
Dated : 29th April, 1987
20
D.H. Ambani
R.H. Ambani
K. Gopal Rao
J. R. Shah
T. Ramesh U. Pai
N. H. Ambani
M.D. Ambani Executive
A. D. Ambani
V.M. Ambani
Chairman & Managing Director
Joint Managing Director
Directors
Directors
Secretary
AUDITORS(cid:146) REPORT
To
The Members of Reliance Industries Limited
We have audited the attached Balance Sheet of RELIANCE INDUSTRIES
LIMITED as at 31st December, 1986 and also the annexed Profit & Loss
Account of the Company for the year ended on that date. We report that:
1. We have obtained all the information and explanations which to the best
of our knowledge and belief were necessary for the purpose of our audit.
2.
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 the
Books of Account.
3. The Balance Sheet and Profit & Loss Account dealt with by the report are
in agreement with the Books of Account.
4. Attention is invited to:
(a) Para 4 of Directors(cid:146) Report dealing with show cause notice of Excise
Authorities bearing No. V(18)15-54/85/6773 dated 28.10.85 in
regard to claim of Rs. 27.23 crores and shown as contingent liability
in the previous year. The Company has challenged the validity of the
said Notice and obtained a stay order from Bombay High Court. On
reconsideration of the matter and in the light of an independent legal
opinion, the Company has not shown the same as Contingent Liability
in this year.
In our opinion and to the best of our information and according to the
explanations given to us, the Accounts read with the Notes thereon and
subject to:
i) Note No. 13 regarding valuation of useable waste and its consequential
effects on Profits and Reserves:
ii) Note No. 14 regarding change in method of valuation of inventories
and its consequential effects on Profits and Reserves.
give the information required by the Companies Act. 1956 in the manner
so required and give a true and fair view
i)
in the case of Balance Sheet of the state of affairs of the Company as
at 31st December. 1986:
in the case of Profit & Loss Account of the Profit for the year ended
on that date
ii)
As required by the Manufacturing and Other Companies (Auditors(cid:146) Report)
Order. 1975 issued by the Company Law Board in terms of Section 227 (4A)
of the Companies Act. 1956 and on the basis of such checks as we considered
appropriate we further report that:
1. The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets except furniture
and fixtures and factory equipments in respect of which proper records
are maintained only from 1st January, 1979 onwards. The fixed assets
have been physically verified by the Management during the year and no
serious discrepancies were noticed on such verification as compared with
the available records.
2. None of the Fixed Assets have been revalued during the year.
3. Physical verification was conducted by the Management at reasonable
intervals during the year in respect of finished goods, stores, spare parts
and raw materials save and except goods lying with third parties. The
discrepancies noticed on such verification as compared with the book
records were not significant and the same have been properly dealt with
in the Books of Account. The valuation of these stocks is fair and proper
and is in accordance with the normally accepted accounting principles
and is on the same basis as in the earlier years except as otherwise stated
in Note No. 13 of Notes to Accounts regarding valuation of useable waste
and Note No 14 of Notes to Accounts regarding change in method of
valuation of inventories.
4. The Company has not taken any loans from companies. firms or other
parties listed in the registers maintained under Sections 301 and 370 (1-
C) of the Companies Act. 1956.
Reliance
5. Loans and Advances in the nature of bans have been given to the
employees free of interest and with interest to the subsidiary company.
The repayment of principal amount and interest, wherever applicable. in
most of the cases are as stipulated.
6. On the basis of selective check carried out during the course of audit and
according to the information and explanations; given to us. there are
adequate internal control procedures, commensurate with the size of the
Company and the nature of its business for purchases of stores, raw
materials including components. plant and machinery, equipments and
other assets.
7. There are no purchases during the year of stores, raw materials or
components from the firms or companies or other parties in which
Directors are interested, save and except from a subsidiary company as
listed in the register maintained under Section 301 of the Companies
Act. 1956. The prices paid in respect of purchases made from the
subsidiary company in excess of Rs. 10,000/- in value for each type of
item so purchased are reasonable as compared to price quoted by others
or as per information available with the Company.
8. As explained to us the Company has a regular procedure for the
determination of unserviceable or damaged stores and raw materials.
Adequate provision has been made in the accounts for the loss arising on
the items so determined.
9.
In our opinion and according to the information and explanations given
to us. the Company has compiled with the provisions of Section 58-A of
the Companies Act. 1956 and rules made thereunder with regard to Fixed
Deposits accepted from the Public.
10. The Company has no by-products and in our opinion reasonable records
have been maintained by the Company for sale and disposal of realisable
scrap wherever significant.
11. The Company has an internal audit system commensurate with the size
and nature of its business.
12. The Central Government has prescribed maintenance of cost records under
Section 209(1 )(d) of the Companies Act. 1956. in respect of the
manufacturing activities of the Company. We are informed that such
accounts and records have, prima facie, been maintained. We have not,
however, made a detailed examination of the same.
13. Provident Fund dues have been regularly deposited during the year with
the appropriate authorities.
14. In respect of trading activities. we are informed that the Company does
not have damaged goods lying with it at the end of the year. Therefore no
provision for any loss is required to be made in the accounts.
15. In respect of processing activities, we are informed that the Company has
a reasonable system of recording receipts. issues and consumption of
materials and stores commensurate with the size and nature of its business
and the system provides for a reasonable allocation of materials and man
hours consumed to the relative jobs. In our opinion, there is reasonable
system for authorisation at proper levels with necessary control on the
issues and allocation of stores and labour to relative jobs.
For RAJENDRA & CO.
Chartered Accountants
For CHATURVEDI & SHAH
Chartered Accountants
R.J. SHAH
Proprietor
Bombay,
Dated: 29th April 1987
D. CHATURVEDI
Partner
21
Reliance
STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956, RELATING TO COMPANY(cid:146)S INTEREST IN THE SUBSIDIARY
COMPANY VIZ. DEVTI FABRICS LIMITED
1. The Financial Year of the subsidiary company ended on
2. Date from which it became subsidiary
3.
(a) No. of shares held by Reliance Industries Limited (holding company) with its
nominees in the subsidiary at the end of the financial year of the subsidiary
:
:
:
30th September, 1986.
30th September. 1985.
2,10,070 Equity Shares of the face value of Rs. 10
each fully paid-up
(b) Extent of interest of holding company at the end of the financial year of the subsidiary . 100%
4. The net aggregate amount of the subsidiary(cid:146)s profits, less losses, so far as it concerns
the members of the holding company
(a) Not dealt with the holding company(cid:146)s accounts: ,
i)
ii)
For the financial year ended 30th September, 1986
For the previous financial years of the subsidiary since it became the
holding company(cid:146)s subsidiary
(b) Dealt with in holding company(cid:146)s accounts:
i)
ii)
For the financial year ended 30th September, 1986
For the previous financial years of the subsidiary since it became the
holding company(cid:146)s subsidiary
5. Changes in the holding company(cid:146)s interest in the subsidiary between the end of the
financial year of the subsidiary and the end of the holding company(cid:146)s financial year
6. Material changes between the end of the financial year of the Subsidiary and the end of the
Holding Company(cid:146)s financial year in respect of:
(a)
the Subsidiary(cid:146)s Fixed Assets:
(b)
(c)
(d)
its investments:
the moneys lent by it: and
the moneys borrowed by it for any purpose other than that of meeting current liabilities.
:
:
:
:
:
:
:
:
:
Rs. 1.63 lacs
Rs. 14,250 (Loss)
Nil
Nil
None
Nil
Nil
Nil
Nil
For and on behalf of the Board
D.H. Ambani
R.H. Ambani
K. Gopal Rao
J. R. Shah
T. Ramesh U. Pai
N. H. Ambani
M.D. Ambani Executive
A. D. Ambani
Chairman & Managing Director
Joint Managing Director
Directors
Executive Directors
Bombay
Dated : 29th April, 1987
V.M. Ambani
Secretary
32
DIRECTORS(cid:146) REPORT
To the Members,
The Directors have pleasure in presenting the Third Annual Report together
with the Audited Statement of Accounts for the year ended 30th September.
1986.
OPERATIONS :
During the year under review, your Company commenced production and
effected sales of Rs. 11.32 crores (previous year: Nil) and earned a net profit
of Rs. 1.63 lacs (previous year loss of Rs. 0.07 lac) after providing depreciation
of Rs. 21.84 lacs (previous year: Nil). After adjusting carry forward losses of
Rs. 0.14 lac, a sum of Rs. 1.49 lacs has been carried to Balance Sheet.
DIRECTORS :
Shri Susheel C. Kothari and Shri Natubhai M. Sanghvi retire by rotation in
accordance with the provisions of the Companies Act. 1956 and being eligible
offer themselves for re-appointment.
AUDITORS :
Messrs. Rajendra & Company and Messrs. Chaturvedi & Shah. Chartered
Accountants. retire at the ensuing Annual General Meeting and are
recommended for re-appointment.
PERSONNEL:
Information as per Section 217(2-A) of the Companies Act. 1956 read with
the Companies (particulars of employees) Rules. 1975 forming part of the
Directors(cid:146) Report for the year ended 30th September. 1986 is annexed.
DIVIDEND :
In order to conserve the resources of the Company for future working. Your
Directors have proposed that no dividend be declared for the year under review.
APPRECIATION :
Your Directors wish to place on record their appreciation of the devoted services
rendered by the Executives. Staff and workers of the Company for its success.
EXPANSION/MODERNISATION SCHEME :
Your Company has taken on hand a scheme for modernising the Company(cid:146)s
plant at Sidhpur involving a capital outlay of Rs. 494 lacs and has obtained
sanction from The Industrial Credit and Investment Corporation of India Limited
(ICICI). Industrial Development Bank of India (IDBI). Indus- trial Finance
Corporation of India iIFC1), and Industrial Reconstruction Bank of India (IRBI)
for Rupee Term Loans aggregating Rs. 32U lacs.
INSURANCE :
The Company(cid:146)s assets have been adequately insured.
Registered Office :
3rd Floor, Maker Chambers (V)
222, Nariman Point,
Bombay 400 021.
Dated : 27th February, 1987.
For and on behalf of the Board of Directors
S. Natarajan
Kirti V. Ambani
V. M. Ambani
Directors
33
DEVTI FABRICS LIMITED
34
AUDITORS(cid:146) REPORT
The Members of Devti Fabrics Limited
We have audited the attached Balance Sheet of DEVTI FABRICS LIMITED as
at 30th September, 1986 and also the annexed Profit & Loss Account of the
Company for the year ended on that date. We report that :
l. We have obtained all the information and explanations which to the best
of our knowledge and belief were necessary for the purpose of our audit.
2.
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 the
Books of Account.
3. The Balance Sheet and Profit & Loss Account dealt with by the report are
in agreement with the Books of Account.
4.
In our opinion and to the best of our information and according to the
explanations given to us, the Accounts read with the notes thereon give
the information required by the Companies Act, 1956. in the manner so
required and give a true and fair view:
in the case of Balance Sheet of the state of affairs of the Company as
at 30th September, 1986;
i)
ii)
DEVTI FABRICS LIMITED
6. On the basis of selective checks carried out during the course of audit and
according to the information and explanations given to us, there are
adequate internal control procedures, commensurate with the size of the
Company and the nature of its business for purchases of stores, raw
materials including components, plant and machinery. equipments and
other assets.
7. There are no purchases during the year of stores, raw materials or
components from the firms or companies or other parties in which
Directors are interested.
8. As explained to us, the Company has a regular procedure for the
determination of unserviceable or damaged stores and raw materials.
Adequate provision has been made in the accounts for the loss arising on
the items so determined.
9. The Company has not accepted any deposits from the Public and hence
the provisions of Section 58A of the Companies Act, 1956 and rules
made thereunder are not applicable.
10. The Company has no by-products and in our opinion reasonable records
have been maintained by the Company for sale and disposal of realisable
scrap wherever significant.
11. Since the paid-up capital of the Company is less than Rs. 25 lacs, internal
in the case of Profit and Loss Account of the (cid:145)profit(cid:146) for the year
ended on that date.
Audit is not required statutorily.
As required by the Manufacturing and Other Companies (Auditors(cid:146) Report)
Order, 1975 issued by the Company Law Board in terms of Section 227 (4A)
of the Companies Act, 1956 and on the basis of such checks as we considered
appropriate, we further report that :
1. The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets. The fixed assets
have been physically verifiedd by the Management during th year and no
serious discrepancies were noticed on such verification as compared with
the available records.
2. None of the Fixed Assets have been revalued during the year.
12. The Central Government has prescribed maintenance of cost records under
Section 209( 1 )(d) of the Companies Act, 1956, in respect of the
manufacturing activities of the Company. We are informed that such
accounts and records have, prima facie, been maintained. We have not,
however, made a detailed examination of the same.
13. Provident Fund dues have been regularly deposited during the year with
the appropriate authorities.
14. In respect of trading activities, we are informed that the Company does
not have damaged goods lying with it at the end of the year. Therefore no
provision for any loss is required to be made in the accounts.
3. Physical verification was conducted by the Management at reasonable
intervals during the year in respect of finished goods, stores, spare parts
and raw materials save and except goods lying with third parties. The
discrepancies noticed on such verification as compared with the book
records were not significant and the same have been properly dealt with
in the Books of Account- The valuation of these stocks is fair and proper
and is in accordance with the normally accepted accounting principles.
15. (n respect of processing activities, we are informed that the Company has
a reasonable system of recording receipts, issues and consumption of
materials and stores commensurate with the size and nature of its business
and the system provides for a reasonable allocation of materials and man-
hours consumed to the relative jobs. In our opinion, there is reasonable
system for authorisation at proper levels with necessary control on the
issues and allocation of stores and labour to relative jobs.
4. The Company has taken unsecured loan from the Holding Company in
respect of which rate of interest and the terms and conditions of such
loan are not prima facie prejudicial to the interest of the Company. The
Company has not taken any other loans from companies, firms or other
parties as listed in the registers maintained under Section 301 of the
Companies Act, 1956.
For RAJENDRA & CO.
Chartered Accountants
For CHATURVEDI & SHAH
Chartered Accountants
R.J. SHAH
Proprietor
D. CHATURVEDI
Partner
5. Loans and Advances in the nature of loans have been given to the
employees free of interest. The repayments of principal amount in most
of the cases are as stipulated.
Bombay.
Dated : 27th February. 1987.
35
DEVTI FABRICS LIMITED
BALANCE SHEET AS AT 3lST DECEMBER, 1986.
SOURCES OF FUNDS:
Shareholders(cid:146) Funds
Capital
Reserves & Surplus
Loan Funds
Secured Loans
Unsecured Loan (from Holding Company)
TOTAL
APPLICATION OF FUNDS :
Fixed Assets
Gross Block
Less : Depreciation
Net Block
Current Assets, Loans & Advances
Current Assets
Inventories
Sundry Debtors
Cash and Bank Balances
Loans & Advances
Less : Current Liabilities & Provisions
Liabilities
Provisions
Miscellaneous expenditure
(to the extent not written off or adjusted)
Profit & Loss Account
TOTAL
Schedule
As at
30.9.1986
(Rs. in crores)
As at
30.9.85
Rs.
Rs.
Rs.
Rs.
(cid:145)A(cid:146)
(cid:145)B(cid:146)
(cid:145)C(cid:146)
(cid:145)D(cid:146)
(cid:145)E(cid:146)
(cid:145)F(cid:146)
(cid:145)G(cid:146)
21.01
1.49
275.51
135.00
209.37
21.84
194.69
106.35
27.50
328.54
6.25
334.79
82.37
7.11
89.48
22.50
410.51
433.01
0.01
0.18
0.19
0.01
(cid:150)(cid:150)
(cid:150)(cid:150)
0.18
(cid:150)(cid:150)
(cid:150)(cid:150)
187.53
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
0.01
0.01
(cid:150)(cid:150)
0.01
0.15
(cid:150)(cid:150)
0.15
245.31
0.17
(cid:150)(cid:150)
433.01
(0.14)
0.19
0.14
0.19
Notes and Contingent Liabilities
(cid:145)L(cid:146)
For CHATURVEDI & SHAH
Chartered Accountants
D. Chaturvedi
Partner
For and on behalf of the Board
S. Natarajan
Kirti V. Ambani
Vinod M. Ambani
Directors
As per our Report of even date
For RAJENDRA & CO.
Chartered Accountants
R.J. Shah
Proprietor
Bombay
Dated 27th February, 1987.
36
DEVTI FABRICS LIMITED
(Rs. in crores)
For the Year
ended 30.9.85
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 3OTH SEPTEMBER, 1986.
INCOME
Sales (Net)
Other Income
Inventories at close
EXPENDITURE
Purchases
Manufacturing and Other Expenses
Interest
Depreciation
Profit/(Loss) for the year
Add : Balance brought forward from last year (Loss)
Balance carried to Balance Sheet
Schedule
For the year
ended 30.9.1986
Rs.
Rs.
(cid:145)H(cid:146)
(cid:145)I(cid:146)
(cid:145)J(cid:146)
(cid:145)K(cid:146)
1132.05
12.94
133.83
34.07
1178.01
43.27
21.84
1278.82
1277.19
1.63
(0.14)
1.49
Notes and Contingent Liabilities
(cid:145)L(cid:146)
Rs.
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
0.07
(cid:150)(cid:150)
(cid:150)(cid:150)
As per our Report of even date
For RAJENDRA & CO.
Chartered Accountants
R.J. Shah
Proprietor
Bombay
Dated 27th February, 1987.
For CHATURVEDI & SHAH
Chartered Accountants
D. Chaturvedi
Partner
For and on behalf of the Board
S. Natarajan
Kirti V. Ambani
Vinod M. Ambani
Directors
Rs.
(cid:150)(cid:150)
0.07
(0.07)
(0.07)
(0.14)
37
DEVTI FABRICS LIMITED
SCHEDULES FORMING PART OF THE BALANCE SHEET
SCHEDULE (cid:145)A(cid:146)
SHARE CAPITAL:
Authorised :
2.50,000 Equity Shares of Rs. 10 each
Issued & Subscribed :
2,10,070 Equity Shares of Rs. 10 each fully
paid up (All the shares are held by
Reliance Industries Limited. the
Holding Company)
SCHEDULE (cid:145)B(cid:146)
RESERVES & SURPLUS
As at
30.9.1986
Rs.
(Rs. in crores)
As at
30.9.1985
Rs.
25.00
25.00
21.01
0.01
As at
30.9.1986
As at
30.9.1985
Profit & Loss Account
1.49
(cid:150)(cid:150)
SCHEDULE (cid:145)C(cid:146)
SECURED LOANS
Working Capital Loan from a Bank
Working Capital Term Loan from a Bank
Deferred Payment Liabilities
As at
30.9.1986
Rs.
115.06
140.95
19.50
(Rs. in lacs)
As at
30.9.1985
Rs.
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
275.51
(cid:150)(cid:150)
NOTES:
1. Working Capital Loan and Working Capital Term Loan from Bank of Baroda are
secured against hypothecation of present and future. stock of raw materials. stock-in-
process. finished goods. book debts. moveable machineries including all stock and
spare parts belonging to the Company at Sidhpur in the State of Gujarat and are
further guaranteed by Reliance Industries Limited. the Holding Company.
2. Deferred Payment Liabilities guaranteed by Bank oof Baroda. are secured against
hypothecation of moveable machinery including all stocks and spare parts. Both present
and future. belonging to the Company at Sidhpur in the State of Gujarat and are
further guaranteed by Reliance Industries Limited. the Holding Company.
SCHEDULE (cid:145)D(cid:146)
FIXED ASSETS
Nature of Fixed Assets
Buildings
Railway Siding
Plant & Machinery
Electric Installation
Factory Equipments
Furniture & Fixture
Vehicles
TOTAL
Previous year
Taken over
from RIL
Rs.
(cid:150)(cid:150)
0.38
45.87
16.50
2.45
2.18
0.18
67.56
(cid:150)(cid:150)
GROSS BLOCK (AT COST)
Additions
Deductions
As at
30.9.1986
Rs.
As at
30.9. 985
Rs.
4.33
(cid:150)(cid:150)
135.89
0.08
0.07
0.52
1.02
141.91
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
0.10
0.10
(cid:150)(cid:150)
4.33
0.38
181.76
16.57
2.53
2.70
1.10
209.37
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
Depreciation
As at
30.9.1986
Rs.
0.14
0.02
20.56
0.83
0.13
0.09
0.07
21.84
(cid:150)(cid:150)
NOTE : Depreciation has been provided on Straight Line Method in accordance with the provisions of Section 205(2)(b) of the Companies Act. 1956.
(Rs. in lacs)
Net Block
As at
30.9.1986
Rs.
As at
30.9.1985
Rs.
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
4.19
0.36
161.20
15.74
2.40
2.61
1.03
187.53
(cid:150)(cid:150)
As at
30.9.1986
Rs.
(Rs. in crores)
As at
30.9.1985
Rs.
Rs.
SCHEDULE (cid:145)E(cid:146)
CURRENT ASSETS :
As at
30.9.1986
(Rs. in crores)
As at
30.9.1985
Rs.
Rs.
Inventories (Certified and valued at cost
by the Management)
Stores, Spares, Dyes. Chemicals etc.
Raw Materials
Stock-in-process
Finished Goods
Others
Sundry Debtors (Unsecured)
Over Six Months
Considered Good
Rs.
15.95
44.91
61.80
71.93
0.10
1.38
194.69
C/f
1.38
194.69
38
Others :
Considered good (including
Rs. 39. 73 lacs outstanding from
Holding Company)
Cash and Bank Balances
Cash on Hand
Balances with Scheduled Banks
In Current Accounts
In Fixed Deposit Accounts Lodged with
Central Excise Authorities)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
B/f
1.38
194.69
104.97
0.39
26.93
0.18
106.35
27.50
328.54
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
0.01
(cid:150)(cid:150)
(cid:150)(cid:150)
0.01
0.01
SCHEDULE (cid:145)F(cid:146)
LOANS & ADVANCES
Unsecured, considered good
Advances recoverable in Cash or in Kind or
for value to be received
Prepaid Expenses
Balance with Central Excise Authorities
SCHEDULE (cid:145)G(cid:146)
CURRENT LIABILITIES & PROVISIONS:
CURRENT LIABILITIES :
Sundry Deposits
Sundry Creditors
PROVISIONS :
Gratuity & Superannuation Funds
As at
30.9.1986
Rs.
(Rs. in crores)
As at
30.9.1985
Rs.
4.25
0.21
0.42
1.37
6.25
Rs.
0.48
81.89
7.11
89.48
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
Rs.
(cid:150)(cid:150)
0.15
(cid:150)(cid:150)
0.15
SCHEDULES FORMING PART OF THE
PROFIT & LOSS ACCOUNT
SCHEDULE (cid:145)H(cid:146)
For the year
(Rs. in crores)
For the year
ended 30.9. 1986 ended 30.9.1985
Rs.
Rs.
Rs.
OTHER INCOME :
Processing Charges
Profit on Sale of Assets
Miscellaneous Income
SCHEDULE (cid:145)I(cid:146)
INVENTORIES AT CLOSE :
STOCK-IN-TRADE AT CLOSE :
Finished Goods
Stock-in-process
Others
2.76
0.20
9.98
12.94
Rs.
71.93
61.80
0.10
133.83
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
Rs.
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
SCHEDULE (cid:145)J(cid:146)
MANUFACTURING & OTHER EXPENSES :
Rs.
Rs.
Raw Material Consumed
Stock at commencement
Add : Purchases/taken over from
Holding Company
Less : Stock at close
(cid:150)(cid:150)
770.74
770.74
44.91
725.83
C/f
725.83
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
SCHEDULE (cid:145)K(cid:146)
INTEREST:
Fixed Loans
Others (Net)
DEVTI FABRICS LIMITED
For the year
(Rs. in lacs)
For the year
ended 30.9. 1986 ended 30.9.1985
Rs.
Rs.
Rs.
B/f
725.83
MANUFACTURING
EXPENSES
Carriage Inward
Stores and Spare Parts
Dyes & Chemicals
Electric power, fuel and water
Machinery repairs
Building repairs
Labour, processing and machinery
hire charges
Excise duty
Sales Tax
1.98
41.83
22.88
77.74
9.85
3.49
20.92
24.94
0.39
PAYMENTS 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.
Employees Welfare and
Other Amenities
SALES & DISTRIBUTION
EXPENSES :
Samples. 5ales Promotion and
Advertisement Expenses
Brokerage & Commission
Packing Expenses
Freight and Forwarding charges
ESTABLISHMENT EXPENSES
Insurance
Rent
Rates & Taxes
Other repairs
Travelling expenses
Payment to Auditors
Directors fees
General expenses
Charity and donation
188.09
23.56
9.59
0.10
3.21
4.98
0.70
1.40
5.01
0.28
0.65
1.40
0.35
0.08
8.66
0.10
204.02
221.24
8.99
17.93
1178.01
Rs.
6.69
36.58
43.27
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
0.02
0.04
0.01
(cid:150)(cid:150)
0.07
0.07
Rs.
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
39
DEVTI FABRICS LIMITED
SCHEDULE (cid:145)L(cid:146)
NOTES AND CONTINGENT LIABILITIES
1.
The Company has become a wholly owned subsidiary of Reliance Industries Limited
with effect from 30th September, 1985 and has taken over running business of Sidhpur
Unit of the Holding Company as a going concern with effect from 1st October,
1985. Previous year(cid:146)s figures therefore are not comparable.
2.
The Holding Company has transferred/leased some of the assets and liabilities of the
Sidhpur Unit to the Company with effect from 1.10.1985.
3. Necessary applications have been made to the concerned authorities for transfer of
various licenses and permits in favour of the Company.
4.
The Company is accounting the following on cash basis: claims for refund of Sales
Tax, Insurance, Octroi, etc.
5. No provision for taxation is necessary in view of various claims for higher reliefs
admissible under the Income Tax Act, 1961 and investment Allowance Reserve will
be created out of future Taxable Profits.
6.
Interest on other accounts (net) is arrived at after adjusting Rs. 2.66 lacs being interest
received/receivable (Tax at source Rs. 0.26 lac).
7. Auditors(cid:146) Remuneration :
(a) Audit Fees
(b) Tax Audit Fees
(Rs. in lacs)
30.9.1986
30.9.1985
Rs.
0.25
0.10
0.35
Rs.
0.01
0.01
0.02
8.
The Liability for Excise Duty in respect of finished yarn lying in factory premises/
12. Value of Imports on
CIF Basis
13. Expenditure in
Foreign Currency
14. Quantitative information
(a) Opening Stock
(b) Closing Stock
30.9.1986
Rs.
(Rs. in Lacs)
30.9.1985
Rs.
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
30.9.1986
Quantity Rs. in lacs
(cid:150)(cid:150)
(cid:150)(cid:150)
30.9.1985
Quantity
(cid:150)(cid:150)
Rs. in lacs
(cid:150)(cid:150)
MT
Mtrs. in lacs
Yarn
Fabrics
Stock-in-process
(Yarn)
Others
MT
MT
3
4.90
73
2
(c) Purchases
Yarn.
Fabrics
(d)
Sales
Yarn
Fabrics
MT
Mtrs. in lacs
10
2.27
MT
276
Mtrs. in lacs 60.93
268.01
864.04
2.17
69.76
61.80
0.10
9.68
24.39
(e) Raw Materials
consumed
Fibre
Yarn
MT
MT
15. Value of Raw
Materials consumed
Imported
Indigenous
750
173
396.07
329.76
30.9.1986
Rs. % of total
in lacs consumption
(cid:150)(cid:150)
100.00
(cid:150)(cid:150)
725.83
(cid:150)(cid:150)
64.71
(cid:150)(cid:150)
100.00
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
30.9.1985
Rs. % of total
in lacs consumption
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
2.79
0.57
0.42
0.64
0.05
0.04
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
bond is provided by the Company as and when it is removed from such premises/
bond on the footing that duty becomes payable only at the time of removal of goods.
Accordingly, estimated liability amounting to Rs. 0. 19 lac in respect of such products
at year end has not been provided in the accounts and not included in the inventory
16. Value of Dyes and Chemicals,
Stores and Spare Parts
consumed
Imported
Indigenous
of finished products.
9. Contingent Liabilities
17. Earning in foreign exchange
(cid:150)(cid:150)
(Rs. in lacs)
30.9.1986
30.9.1985
18.
Estimated amount of contracts remaining to be
Rs.
executed on Capital Account and not provided for
358.11
Outstanding guarantees furnished by Bankers
6.91
Bonds executed in favour of Excise &
Customs Authorities
Rs.
(cid:150)(cid:150)
(cid:150)(cid:150)
(cid:150)(cid:150)
10. Licensed & Installed Capacity
(As certified by the Management)
Licensed
Capacity
Installed
Capacity
Spindles
Looms
Nos.
Nos.
38,368
490
(cid:150)(cid:150)
(cid:150)(cid:150)
36,443
490
(cid:150)(cid:150)
(cid:150)(cid:150)
30.9.1986 30.9.1985 30.9.1986 30.9.1985
I1. Production
Blended Yarn
30.9.1986
30.9.1985
(including for captive use)
MT
Fabrics
Mtr in lacs.
663
63.55
(cid:150)(cid:150)
(cid:150)(cid:150)
who were employed throughout the year and
were in receipt of remuneration for the year
which in aggregate was not less than
Rs. 36,000 per annum.
Number of employees
Salaries and Bonus
Contribution to Provident Fund &
Superannuation Fund
Other Perquisites
6
(b) Break-up of expenditure incurred on employees
who were employed for a part of
the year and were in receipt of remuneration
for any part of the year at a rate which in aggregate
was not less than Rs. 3.000 per month :
Number of employees
Salaries and Bonus
Contribution to Provident Fund &
Superannuation Fund
Other Perquisites
3
(Rs. in lacs)
(a) Break-up of expenditure incurred on employees 30.9. 1986 30.9. 1985
Rs.
Rs.
For CHATURVEDI & SHAH
Chartered Accountants
D. Chaturvedi
Partner
For and on behalf of the Board
S. Natarajan
Kirti V. Ambani
Vinod M. Ambani
Directors
As per our Report of even date
For RAJENDRA & CO.
Chartered Accountants
R.J. Shah
Proprietor
Bombay
Dated 27th February, 1987.
40
CAPITAL & NET WORTH
Rs. in crores
1980 1981 1982 1983 1984 1985 1986
Equity Capital Net Worth
GROSS PROFIT & NET PROFIT
GROSS PROFIT NET PROFIT
Rs. in crores
91.42
62.26
47.46
29.22
133.25 129.39
117.89
11.21
1980
19.7
1981
29.16
1982
38.52
1983
61.10
1984
71.34
1985
14.17
1986
42