Reliance Industries Limited
Annual Report 1988

Plain-text annual report

Reliance Industries Limited Annual Report 1987-88 38 Reliance Industries Limited A N N U A L R E P O R T 1 9 8 7 - 8 8 12345678901234567890123456789012123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123 12345678901234567890123456789012123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123 12345678901234567890123456789012123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123 12345678901234567890123456789012123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123 12345678901234567890123456789012123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123 12345678901234567890123456789012123456789012345678901234567890121234567890123456789012345678901212345678901234567890123456789012123 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In crores 1770.74 905.48 733.14 622.01 520.35 421.03 312.22 214.58 1050 1000 950 900 850 800 750 700 650 600 550 500 450 400 350 300 250 200 150 100 50 0 CAPITAL & NET WORTH Rs. In crores 1980 1981 1982 1983 1984 1985 1986 87-88 1980 1981 1982 1983 1984 1985 1986 87-88 18 months Net Worth 31.79 57.09 91.54 129.88 246.39 311.12 311.53 1022.12 Equity Share 12.06 16.67 18.60 36.15 46.18 51.61 51.61 152.10 36 Reliance 14TH ANNUAL GENERAL MEETING BOARD OF DIRECTORS on Thursday, the 22nd December, 1988 at Sri Shanmukhananda Fine Arts & Sangeetha Sabha 292 Jayshankar Yagnik Marg, Sion (East) Bombay 400 022. at 4.00 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 distributeda t the Meeting. Contents Page No.(s) Dhirubhai H. Ambani, Chairman & Managing Director Ramniklal H. Ambani, Joint Managing Director K. Gopal Rao Natvar lal H. Ambani, Executive Director Mukesh D. Ambani, Executive Director Jayantilal R. Shah Mansingh L. Bhakta T. Ramesh U. Pai V.V. Divecha, Nominee Director - ICICI. B.D. Shah, Nominee Director - G.I.C. Anil D. Ambani, Executive Director Nikhil R. Meswani, Executive Director Financial Highlights Notice of Annual General Meeting Directors’ Report Auditors’ Report Balance Sheet Profit and Loss Account Schedules annexed to Balance Sheet and Profit & Loss Account Notes and Contingent Liabilities Statements pursuant to Section 212 of the Companies Act Annexure to Directors’ Report Documents of Subsidiary Company Registered Office: 3rd Floor, Maker Chambers IV 222 Nariman Point, Bombay 400 021. PLANTS AT: 1. Patalganga, Off Bombay-Pune Road Near Panvel, Dist. Raigad Maharashtra. 2. 103/106 Naroda Industrial Estate Naroda, Ahmedabad. Subsidiary Companies: Reliance Petrochemicals Limited Hazira, Dist. Surat Gujarat State Devti Fabrics Limited Plant at Sidhpur Dist. Mehsana Gujarat State. 2 3-7 8-10 11 12 13 14-18 18-22 23 .24-27 28-34 SECRETARY Vinod M. Ambani SOLICITORS & ADVOCATES Kanga & Co. Dave & Co. AUDITORS Rajendra & Co. Chaturvedi & Shah BANKERS Syndicate Bank State Bank of India Bank of Baroda Canara Bank Indian Bank Oriental Bank of Commerce Vijaya Bank Standard Char tered Bank Deutsche Bank (Asia) REGISTRARS & TRANSFER AGENTS Reliance Consultancy Ser vices Limited 56 Mogra Village Lane Off Old Nagardas Road Andheri (East) Bombay 400 069. Reliance FINANCIAL HIGHLIGHTS Sales Other Income (A) Manufacturing Expenses Gross Profit (A-B) Interest Depreciation (D) Net Profit (C-D) (B) (C) (E) WHAT THE COMPANY OWNED Fixed Assets Gross Block Less: Depreciation(Cumulative) Net Block Investments Current Assets Total Assets WHAT THE COMPANY OWED Long Term Funds Medium/Short Term Funds Current Liabilities 8 Provisions (Rs. in crores) 1987-88 (18 months) 1986 1985 1984 1983 1982 1981 1980 Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. 1770.74 7.45 1778.19 1495.27 282.92 110.74 91.41 202.15 80.77 905.48 5.73 911.21 781.82 129.39 54.24 60.98 115.22 14.17 733.14 4.94 738.08 604.83 133.25 24 45 37.46 61.91 71.34 622.01 7.11 629.12 511.23 117.89 22.61 34.18 56.79 61.10 520.35 4.68 525.03 433.61 91.42 21.52 31.38 52.90 38.52 421.03 2.51 423.54 361.28 62.26 18.93 14.17 33.10 29.16 312.22 3.63 315.85 268.39 47.46 16.79 10.97 27.76 19.70 214.58 2.55 217.13 187.91 29.22 11.13 6.88 18.01 11.21 1862.66 1137.55 188.09 278.58 1584.08 1.25 949.46 0.37 735.68 128.88 606.80 37.30 607.83 1052.83 402.10 2193.16 2002.66 1046.20 530.93 104.65 426.28 0.17 235.41 661.86 394.88 73.42 321.46 0.12 215.19 536.77 356.71 42.10 314.61 0.12 191.53 506.26 133.46 27.90 105.56 0.07 156.55 262.18 74.97 17.02 57.95 0.08 93.76 151.79 546.12 609.82 103.83 143.78 457.39 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 1171.04 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 152.10 5.80 864.22 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 Network 1022.12 311.53 311.12 246.39 129.88 91.54 16.67 0.30 40.12 57.09 12.06 0.30 19.43 31.79 2 Reliance DIRECTORS’ REPORT To the Members Your Directors present the 14th Annual Report together with the Audited Statement of Accounts for the Financial Year ended 30th June 1988. 1. FINANCIAL RESULTS: (Rs. in crores) Gross Profit before Interest and Depreciation Add: (a) Surplus balance brought forward from previous year (b) Investment Allowance (Utilised) Reserve written back Less: Provisions and/or appropriations (a) Interest (b) Depreciation (c) Taxation (d) Investment Allowance Reserve (e) Debenture Redemption (f) Reserve Interim Dividend on Equity Shares (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 (Final Dividend) (h) Transferred to General Reserve Balance carried to Balance Sheet 2. DIVIDENDS 1987-88 (18 months) Rs. 1986 (12 months) Rs. 282.92 129.39 1.93 14.52 3.15 25.00 110.74 91.41 2.00 –– 4.25 30.57 54.24 60.98 –– 36.00 –– –– 0.05 0.03 1.24 25.49 11.00 11.25 0.83 12.90 2.00 1.93 Your Directors had declared an interim dividend of Rs.3 per share (subject to deduction of tax at source) on the Equity Shares of Rs 10 each aggregating Rs.30.57 crores in June 1988 and the same was paid out of the profits of the current financial year. Your Directors have now recommended the following dividends (subject to deduction of tax at source) for the financial year ended 30th June 1988 to be paid, if approved by the Shareholders at the ensuing Annual General Meeting. 8 (Rs. in crores) ON PREFERENCE SHARES: (a) Dividend of Rs.11 per share on 30,000 Cumulative Redeemable Preference Shares of Rs.100 each fully paid up 0.05 (b) Dividend of Rs.15 per share on 5,50,000 Cumulative Redeemable Preference Shares of Rs.100 each fully paid up 1.24 ON EQUITY SHARES: Final Dividend of Rs.2.50 per share on the Equity shares of Rs. 1O each fully paid up (pro rata divi- dend wherever applicable) 1.29 25.49 26.78 3. CHANGE IN ACCOUNTING YEAR Your Company had commenced implementing projects relating to Purified Terephthalic Acid (PTA) and Linear Alkyl Benzene (LAB) of a licenced capacity of 1,00,900 tonnes and 60,000 tonnes per annum respectively in the previous financial year. As stated in the last year s report, due to unexpected delay in receiving certain clearances, the projects entailed delay in commissioning. With a view to synchronise the commissioning of these projects with the accounting year and reflect a consolidated position in respect of fixed assets, increase in equity capital with corresponding extinguishment of debt, and, achieving the product range envisaged, the Company extended the accounting period to 30th June 1988. Your Company has obtained approvals as are necessary from the requisite authorities for changing the financial year from calendar year to 30th June. The current financial year of the Company is, therefore, of 18 months as against 12 months in the previous year. 4. RESOURCE MOBILISATION 4.1 Your Company has always followed the Government policy of mobilising resources for all its capital intensive projects from the primary capital markets and has been approaching the investing public including its shareholders frequently with a view to set up a strong industrial base for itself as also to contribute its best to the national economy. in pursuit of this endeavour, your company has expended on fixed assets Rs.1,860 crores, (first in the private sector in India) in the last one decade, that is, ever since it went to public for resource mobilisation. Apart from contributing to the development of equity cult in the country, the Company has also gained the confidence of about 30 lacs investors, again the highest in the private sector and has thus established itself as a peoples company. 4.2 The Equity share capital of the Company increased during the financial year under review from Rs.51.61 crores to Rs.152.10 crores. The net worth of the Company scaled an all time peak of Rs.1,022.12 crores from Rs.311.53 crores in the previous year. The resounding success to the Rights Equity Issue of Rs.198 crores offered to the shareholders of the Company at a time when the capital market was sluggish, reflected the unflinching support its to be enjoyed by your Company continued shareholders and the investing public. These equity shares were offered at a premium of Rs.50 per share, thus from Reliance enabling the shareholders to increase their holdings in the Company and to share the increasing prosperity of the Company in future. 300%-400% in a short span of about 3-4 months, offset the aforesaid benefits. Further, the depreciating rupee also increased the cost of imported raw materials. 4.3 With a view to augment the long ter m resources, your Company. pursuant to the Consent Order received from the Controller of Capital Issues (CCI) issued 14% Non Convertible Secured Debentures of an aggregate nominal value of Rs.80 crores. Your Directors confirm that the funds raised through issue of Non Convertible Debentures were/will be utilised only for the purposes for which they were raised. 5 YEAR IN RETROSPECT 5.1 Overall Performance: The sales. during the financial year under review rose to Rs.1,771 crores (approx.) as compared to Rs.905 crores (approx) in the previous year, registering an increase of about 30.39% on an annual basis. The gross profit (after interest charges) jumped to Rs.172.15 crores against Rs.75.15 crores for the previous year. a rise of 52.73% on an annual basis. The net profit rose to Rs.80.77 crores as against Rs.14.17 crores in the previous year. Your Company contributed as much as Rs.801 crores (approx.) to the national exchequer in the form of various taxes during the period under review. With the declaration of final dividend on the equity shares, your company would have distributed a massive aggregate amount of Rs.56 crores which is 71 % of the after tax profit of the financial year under review to the large family of its shareholders aggregating to approximately 16 lacs spread tar and wide in the country and abroad. 5.2 Textile Division Your Company has par tly completed its moder nisation programme at Ahmedabad during the year under review. With this, the Company has enhanced its very sophisticated product range to a high growth area of furnishing fabrics. The Company has successfully introduced these fabrics in the local market and has received encouraging trade and consumer response. The fact that this new product group has received large export orders from international quality conscious consumers bears testimony that the Company is and will continue to be on the leading edge of technology. The Company is currently examining var ious options for maintaining market leadership, in terms of technology, product development and marketing, and. hopes to implement the same in the coming years. 5.3 Fibre Division 5.3.1 Polyester Yarn Division The Company maintained its growth in annual production and sales in Polyester Yarn during the year under review. The industry had their long standing demand par tly accepted b y the Gover nment for rationalisation of excise duty on polyester filament yarn by a reduction in excise duty in the Central budget 1988-89 from Rs.83.75 to Rs.56.12 per kg. The entire benefit of excise duty reduction was passed on to the consumers. However, a multi fold increase in the input costs especially of MEG. a vital input where international prices soared over. The Company has under taken to explore expor t opportunities for this highly competitive product and has been able to make an international break-through by exporting substantial quantities to the EEC and Korea. 5.3.2 Polyester Staple Fibre Division During the year under review, the Company s polyester staple fibre plant was not operated to its capacity owing to low demand by industrial users. The industry was able to realise its long standing request for reduction in excise duty from Rs.25 to Rs.15.66 per kg. These benefits were passed on to the consumers. Severe r ise in input cost of the impor ted raw materials and the depreciating rupee-offset the benefit given to the industry. The Company s product has been accepted as the leading product in terms of quality in the Indian market. Your company has expor ted large quantities of polyester fibre to highly developed countries like USA where the Company s product quality has matched that of leading American producers. It would be interesting to note that Du Pont supplied the original technology and currently your company is working under a programme for marketing products made in India under Du Pont technology in the USA and other countries using the world wide market network of Du Pont under their brand name. You would appreciate that this is a very creditable achievement for your company. Your Company plans to expor t substantial quantity in the coming years. 5.4 Fibres Intermediate Division 5.4.1 Purified Terephthalic Acid (PTA) The Company has commissioned, in 1988, its single largest project at Patalganga with a licensed capacity of 100,000 tonnes per annum in collaboration with Messrs. Imper ial Chemical Industries plc U.K. and Messrs. UOP Processes International Inc. USA. With the commissioning of this facility, your Company will have access to its own raw material for manufacturing polyester and will also be able to supply this very efficient raw material for the manufacture of polyester to other quality conscious consumers in India.With the commissioning of this PTA plant, your company would be able to save foreign exchange to the tune of Rs.100 crores per annum. 5.5 Detergents Intermediate Division 5.5.1 Linear alkyl Benzene (LAB) Your Directors are pleased to further state that the project for manufacture of Linear Alkyl Benzene (LAB) was commissioned in the second quarter of 1988 with a licensed capacity of 60,000 tonnes per annum. With the help of Messrs. UOP Processes International Inc. USA, as the technical collaborator for the project, the company has been able to produce high quality LAB which has been accepted by brand leaders in India. However, due to bunching of impor ts, there was an excess supply of LAB. With the aggressive marketing policies adopted by the company, your company expects to perform better in the coming years. 6. RELIANCE PETROCHEMICALS LIMITED Your Directors after due considerations thought it fit to set up all Petrochemical Projects through another company inter-alia with 9 Reliance a view to speedily implement the Letters of, Intent/Industrial Licences as also to effect better control and avail of fiscal benefits/incentives. Fur thermore, in the light of the government consider ing opening of new vistas of gr owth in the petrochemicals sector, your Company decided that it will be in the interest of shareholders to have a subsidiary company. With this end in view, your Company promoted Reliance Petrochemicals Limited (RPL) to implement Letters of Intent/ Industrial Licences received for. the manufacture of Poly Vinyl Chloride (PVC), Mono Ethylene Glycol (MEG) and High Density Polyethylene (HDPE) at Hazira, Dist. Surat. It has obtained consents from the concerned authorities for endorsement of these Industrial Licences/Letters of Intent for implementation of the aforesaid projects in the name of RPL. After the close of the financial year, RPL, in accordance with the Consents received from the Controller of Capital Issues (CCI), Government of India, New Delhi has issued Equity Shares of an aggregate nominal value of Rs.57.50 crores for cash at par to your company as promoter. In conformity with the Consent Order issued by CCI, your Company has also made an unsecured interest free deposit of Rs.50 crores with RPL conferring a right of compulsory conversion of the said loan into Equity Shares in RPL for cash at par on the expiry of 36 months from the date of allotment of the debentures recently issued by it. Your Directors have placed on record their deep sense of appreciation of the faith reposed by the investing public in the Reliance Group by subscribing to the Convertible Debentures issued by RPL in large numbers. With the allotment of debentures, RPL enjoys the suppor t of about 23 lacs shareholders. 7. REDEMPTION OF DEBENTURES Your Company has refunded a sum of Rs.0.59 crore to the debentureholders of Debentures of Series I, II, III and IV who had surrendered their debentures upon redemption out of the outstanding value of the said Debentures of Rs.1.18 crores. Despite reminders to the Debentureholders, a sum of Rs.0.59 crore (approx.) is still payable and the same will be paid as and when requests are received from the debentureholders. 8. INVESTORS’ SERVICES Your directors are gratified to place on record the growth of its investor community over the years. In 1977, the total number of investors were about 50,000 and after five years i.e. in 1982, it was 5 lacs (approx.). It has after another five years risen to 30 lacs (approx.). Your Company had earlier innovated a few measures such as consolidation of folios, appointing centres for distributing certificates, etc. However, with the efflux of time, it was found that the pace of servicing was not matching with the growth of the investors’ strength. Therefore, during the year the Company appointed 14 Investor Relations Centres at important townships/cities in the countr y primarily to service the investors. These centres also serve the share broker frater nity in coordinating their requirements with Reliance Consultancy Services Limited, the Registrars and Transfer Agents of the Company at Bombay with regard to routine transfer of shares/ debentures and matters incidental thereto. Your Company is intending in due course of time to further strengthen these centres by installing speedier communication services. 9. SUBSIDIARY COMPANIES the Auditors thereon for the year ended 31st December 1987 are annexed . Although Devti Fabrics Limited has a carr y forward loss of Rs.1:23 crores upto 31st December 1987, your Directors are hopeful that it will be in a position to wipe off the losses in the near future. Since the first Accounting Year of Reliance Petrochemicals Limited is not yet over, the audited statement of account along with the reports of the Board of Directors of the Company will be annexed only along with the next year’s annual accounts. 10. INSURANCE 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 . 11. FIXED DEPOSITS Deposits of Rs.1.97 crores which became due for repayment on or before 30th June. 1988 were not claimed by the depositors as on that date. Of these, deposits of Rs.1.24 crores have since been repaid/renewed. 12. PERSONNEL 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. 13. DIRECTORS General Insurance Corporation of India has nominated Shri B D Shah, General Manager of the Cor poration as their Nominee on the Board of the Company in place of their ear lier nominee, Shri R.V. Madhava Rao. In accordance with the provisions of the Companies Act 1956 and the Articles of Association of the Company. Messrs. T. Ramesh U. Pai, Natvarlal H. Ambani and Anil D. Ambani retire by rotation and are eligible for reappointment. 14. AUDITORS Messrs. Rajendra & Company and Messrs. Chatur vedi & Shah. Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting and are recommended for reappointment. The Company has received Certificates from these Auditors to the effect that their reappointment if made would be within the prescribed limits under Section 224(1) of the Companies Act 1956. The notes to the Accounts Nos.4, 13(b) and 17 referred to in the Auditors Report are self explanatory and therefore, do not call for any further comments. 15. ACKNOWLEDGEMENT Your Directors would like to express their grateful appreciation of the abundant assistance and co-operation received from the Financial Institutions and Banks 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. For and on behalf of the Board As required under Section 212 of the Companies Act 1956, the Audited Statement of Accounts along with the Report of the Board of Directors of Devti Fabrics Limited and the Report of Bombay 400 021 Dhirubhai H. Ambani Dated: 31st October, 1988 Chairman & Managing Director 10 Reliance AUDITORS’ REPORT To The Members of Reliance Industries Limited We have audited the attached Balance Sheet of RELIANCE INDUSTRIES LIMITED as at 30th June. 1988 and also the annexed Profit & Loss Account of the Company for the period ended on that date and report that: 1. (a) For the reasons explained in Note No.4 of Schedule N the items of Income and Expenditure mentioned therein are continued to be accounted for on cash basis; (b) For the reasons explained in Note 13(b) of Schedule N provision for taxation (estimated at Rs.10 crores) has not been made in respect of a part of the profits assessable in the Assessment Year 1989-90. Had provision been made the profit for the financial year and reserves would have been lower by Rs.10 crores. (c) As explained in Note 17 of Schedule N no provision has been made for the possible losses which may arise in respect of investment of Rs.0.21 crore in Fans to and receivables of Rs.2.40 crores from and guarantee of Rs.3.00 crores issued on behalf of Devti Fabrics Limited a Wholly Owned Subsidiary Company. Had provision been made for these items the profit for the financial year and reserves would have been lower by Rs.5.61 crores. 2. Subject to the above: (a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of the audit; (b) In our opinion. proper books of Account as required by Law have been kept by the Company so tar as appears from our examination of the Books of Account; (c) The Balance Sheet and Profit & Loss Account dealt with by the report are in agreement with the Books of Account. (d) In our opinion and to the best of our information and according to the explanations given to us the accounts read with other notes thereon give the Information required by the Companies Act 1956 in the manner so required and give a true and fair view: i) ii) In the case of Balance Sheet of the state of affairs of the Company as at 30th June 1988: and In the case of Profit & Loss Account of the profit for the period ended on that date. As required by the Manufacturing and Other Companies (Auditor s 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 n accordance with the normally accepted accountingprinciples and is on the same basis as in the earlier years. 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. 5. Loans and Advances in the nature of loans have been given to the employees and the subsidiary companies tree of interest. The repayment of principal amount and interest wherever applicable in most of the cases are as stipulated. 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 purchase 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 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.10000/- in value for each type of item so purchased are reasonable as compared to the 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 loss arising on the items so determined. 9. In our opinion and according to the information and explanations given to us the Company has complied with the provisions of Section 58A of the Companies Act 1956 and rules made thereunder with regard to Fixed Deposits accepted from the public. 10. In our opinion the Company has maintained reasonable records for the sale and disposal of by-products and 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 facia, been maintained. We have not however made a detailed examination of the same. 13. Provident Fund dues have been regularly deposited 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 D. CHATURVEDI Partner Bombay Dated: 31st October 1988 11 Reliance BALANCE SHEET AS AT 30TH JUNE, 1988 Schedule (Rs. in crores) As at 30th June, 1988 Rs. Rs. As at 31st December, 1986 Rs. Rs. SOURCES OF FUNDS: Shareholders’ 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 Current Liabilities Provisions TOTAL Notes and Contingent Liabilities ‘A’ ‘B’ ‘C’ ‘D’ ‘E’ ‘F’ ‘G’ ‘H’ ‘I’ ‘N’ 311.53 825.81 1,137.34 949.46 0.37 1,022.12 934.57 1,956.69 1,584.08 1.25 157.90 864.22 854.99 79.58 1,862 66 278.58 261.15 209.95 33.33 –– 504.43 103.40 607.83 207.00 29.47 236.47 57.41 254.12 682.03 143.78 1,137.55 188.09 240.33 120.47 659.25 0.33 1,020.38 32.45 1,052.83 851.11 14.21 865.32 371.36 1,956.69 187.51 1,137.34 As per our Report of even date For and on behalf a. the Board For RAJENDRA & CO. Chartered Accountants R.J. Shah Proprietor For CHATURVEDI & SHAH Chartered Accountants D. Chaturvedi Partner Bombay Dated: 31st October, 1988 12 D.H. Ambani R.H. Ambani K. Gopal Rao J.R. Shah T. Ramesh U. Pai M.L. Bhakta V.V. Divecha B.D. Shah N.H. Ambani M.D. Ambani N.R. Meswani V.M. Ambani Bombay Dated: 31st October, 1988 Chairman & Managing Director Joint Managing Director Directors Executive Directors Secretary PROFIT & LOSS ACCOUNT FOR THE PERIOD ENDED 30TH JUNE 1988 Reliance (Rs. in crores) 1986 (12 months) 1987-88 (18 months) Schedule Rs. Rs. Rs. Rs. ‘J’ ‘K’ ‘L’ ‘M’ INCOME Sales Other Income Variation in Stock EXPENDITURE Purchases Manufacturing and Other Expenses Interest Depreciation Profit for the period before Tax Less: Provision for Taxation (Refer Note no. 13) Profit after Tax Add: Balance brought forward from last year Add: Investment Allowance (Utilised) Reserve written-back AMOUNT AVAILABLE FOR APPROPRIATIONS: APPROPRIATIONS Investment Allowance Reserve Debenture Redemption Reserve General Reserve Dividend (subject to tax): Interim - On Equity Shares (Paid) Final - Proposed on: Preference Shares Equity Shares Balance carried to Balance Sheet 1,770.74 7.45 (-)19.46 210.70 1,265.11 110.74 91.41 –– 4.25 11.00 30.57 1.29 25.49 905.48 5 73 (+)78.69 1,758.73 989.90 1,677.96 80.77 2.00 78.77 1.93 80.70 3.15 83.85 975.73 14.17 –– 14.17 14.52 28.69 25.00 53.69 205.60 654.91 54.24 60.98 36.00 2.00 –– 0.86 12.90 72.60 11.25 51.76 1.93 Notes and Contingent Liabilities ‘N’ As per our Report of even date For and on behalf a. the Board For RAJENDRA & CO. Chartered Accountants R.J. Shah Proprietor For CHATURVEDI & SHAH Chartered Accountants D. Chaturvedi Partner D.H. Ambani R.H. Ambani K. Gopal Rao J.R. Shah T. Ramesh U. Pai M.L. Bhakta V.V. Divecha B.D. Shah N.H. Ambani M.D. Ambani N.R. Meswani V.M. Ambani Bombay Dated: 31st October, 1988 Bombay Dated: 31st October, 1988 Chairman & Managing Director Joint Managing Director Directors Executive Directors Secretary 13 Reliance SCHEDULES FORMING PART OF THE BALANCE SHEET SCHEDULE ‘A’ SHARE CAPITAL Authorised: 20,00,00,000 Equity Shares of Rs.10 each 11,50,00,000) 30,000 11% Cumulative Redeemable (30,000) Preference Shares of Rs.100 each 5,50,000 15% Cumulative Redeemable (5,50,000) Preference Shares of Rs.100 each (––) Cumulative Redeemable (4,20,000) Preference Shares of Rs. 100 each 4,42,00,000 Unclassified Shares of Rs. 10 each (––) Issued & Subscribed: As at 30th June, 1988 Rs. 200.00 0.30 5.50 –– 44.20 (Rs in crores) As at 31st December, 1986 Rs. 115.00 0.30 5.50 4.20 –– 250.00 125.00 15,21,46,493 Equity Shares of Rs.10 each fully (5,16,09,318) Called-up . Less: Calls unpaid - by others 152.14 0.04 30,000 11% Cumulative Redeemable (30,000) Preference Shares of Rs. 100 each fully paid up (redeemable at any time after 16th March, 1990 but not later than 15th March, 1993) 5,50,000 15% Cumulative Redeemable (5,50,000) Preference Shares of Rs.100 each fully paid-up (redeemable at any time after 31st December, 1994 but not later than 31st December, 1997) RESERVES & SURPLUS B/t. Investment Allowance Reserve As per last Balance Sheet Less: Utilised for purchase of machinery during the year transferred to Investment Allowance (Utilised) Reserve Transferred from Profit & Loss Account Add: Investment Allowance (Utilised) Reserve As per last Balance Sheet Add: Transferred from Investment Allowance Reserve As at 30th June, 1988 Rs. Rs. 677.33 (Rs in crores) As at 31st December 1986 Rs. 84.40 Rs. 36.00 22.80 36.00 –– 80.95 36.00 116.95 22.80 36.00 –– 36.00 83.15 22.80 105.95 152.10 51.61 Less: Provision to the extent not re- quired transferred to Profit & Loss Account 3.15 25.00 0.30 0.30 5.50 157.90 5.50 57.41 Taxation Reserve As per last Balance Sheet General Reserve As per last Balance Sheet Add: Amount transferred from Profit & Loss Account Profit & Loss Account Of the above Equity Shares: 1. (a) 1,56,78,430 Shares were allotted as fully paid-upBonus Shares by capitalisation of Share Premium and Reserves (b) 60,62,000 Share were allotted as fully paid-up pursuant to Schemes of Amalgama tion without payments being received in cash. (c) 9,44,78,433 Share were alloted as fully paid-up Shares on conversion/surrender (d) (e) of Debentures. 13,24,000 Shares were issued on conversion of Term Loans 4,463 Shares (including 1,670 Shares by way of Bonus Shares by Capitalisation of Share Premium and Reserves) are reserved for allotment to some of the Shareholders/purporsed transferees of Shares of erstwhile The Sidhpur Mills Company Limited. 2. 3. 4. 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 Court so decide; Figures in brackets are of previous year. The figures in (a) and (b) of Note No 1 above have been reclassified. SCHEDULE ‘B’ RESERVES & SURPLUS Debenture Redemption Reserve Transferred from Profit & Loss Account Share Premium Account As per last Balance Sheet Add:Additions during the year As at 30th June, 1988 (Rs in crores) As at 31st December 1986 Rs. Rs. Rs. Rs. 4.25 –– 84.40 84.40 On Conversion of Debentures of ‘G’ Series On Issue of Right Equity Shares Less Calls unpaid by others 157.36 0.21 431.03 157.65 –– –– SCHEDULE ‘C’ SECURED LOANS A) DEBENTURES: i) ii) iii) iv) v) 11% Convertible Mortgage Debentures of Rs.500 each fully paid (Series I) Less: Converted/Surrendered/ Redeemed 12% Convertible Mortgage Debentures of Rs.125 each fully paid (Series II) Less: Converted/Surrendered/ Redeemed 13.5% Convertible Mortgage Debentures of Rs.125 each fully paid (Series III) Less: Converted/Surrendered/ Redeemed 13.5% Convertible Secured Debentures of Rs.125 each fully paid (Series IV) Less: Converted/Surrendered/ Redeemed 13,546 Convertible Secured Debentures of Rs. 150 each fully paid (Series ‘E’) (Refer Note no 3(b) below) Less: Converted 673.00 677.33 84.40 84.40 * includes debentures of face value of (Rs.36,500) held by Directors 14 113.30 10.00 51.84 11.25 864.22 80.95 10.00 40.84 1.93 254.12 38.84 2.00 40.84 11.00 As at 30th June, 1988 Rs. Rs. (Rs in crores) As at 31st December 1986 Rs. Rs. 7.00 7.00 –– 10.80 10.80 –– 24.00 24.00 –– 50.00 50.00 –– 80.00 26.67 53.33 * 7.00 6.89 0.11 10.80 10.69 0.11 24.00 23.49 0.51 50.00 49.55 0.45 80.00 26.67 53.33 SCHEDULE ‘C’ (Contd.) As at 30th June, 1988 Rs. Rs. (Rs in crores) As at 31st December 1986 Rs. Rs. vi) 15% Non-convertible Secured Debentures of Rs.100 each fully paid. (Series ‘F ) (Refer Note No.10 below) Less: Bought back (Net of re-issue) 270.00 0.32 * Includes debentures of face value of Rs.0.01 crore held by Directors vii) 13.5% Fully Secured Convertible Debentures of Rs.145 each fully paid (Series ‘G’ ) Less: Converted during the financial year 269.68 500.00 500.00 vii) 14% Non-Convertible Secured Redeemable Debentures of Rs.100 each fully paid Privately Placed (Refer Note No.2(b) below) 80.00 270.00 0.14 269.86 –– –– –– –– –– B) TERM LOANS 1. From Banks a) Foreign Exchange Loan in Euro Currency at floating rates 81.88 88.32 403.01 324.37 b) 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 11.19 1.36 94.43 2. 3. From Financial Institutions a) Foreign Currency Loans b) Rupee Loans From Others: a) Lazard Brothers & Co. Ltd., London b) Housing Development Finance Corporation Ltd. 108.21 0.36 108.57 –– 1.69 1.69 C ) WORKING CAPITAL LOANS From Banks D) BRIDGE LOANS From Financial Institutions E) DEFERRED PAYMENT LIABILITIES To Foreign Machinery Suppliers (Guaranteed by Banks and Financial Institutions) 16.19 2.72 107.23 107.99 1.01 109.00 0.52 0.54 1.06 204.69 220.92 24.25 2.12 854.99 217.29 135.91 –– 4.46 682.03 NOTES: Of the above: 1. Working Capital Loans from Banks referred in ‘C are secured against hypothecation present and future stock of raw materials. stock-in-process finished goods spares and stores. book debts. outstanding monies and receivable claims. 2. (a) Debentures referred in A(vi). Term Loans referred in B save and except B(1)(a) to the extent of Rs 14.84 crores. B(1)(c) to the extent of Rs.0.38 crore. B(2)(a) to the extent of Rs 4.35 crores and B(3)(b) and Deferred Payment Liabilities referred in E are secured by mortgage of deposit of title deeds of the properties situate at Naroda, Dist Ahmedabad in the state of Gujarat and at Patalganga, District Raigad in the state of Maharashtra. Debentures referred in A(i), (ii), (iii) and (iv) were redeemed on 30th June. 1987. Reliance (b) Debentures referred in A (viii) are to be secured by mortgage of deposit of title deed Of the properties situate at Naroda, District Ahmedabad in the state of Gujarat and, at Patalganga, District Raigad in the state of Maharashtra. These Debentures will be redeemed at a premium of 5% on the face value of the said Debentures between the 5th year and 9th year from the date of allotment in equal instalments. The redemption of the Debentures will commence from November, 1992. (a) Debentures referred in A(v) are secured by a legal mortgage in English form on the properties situate at Naroda, District Ahmedabad in the state of Gujarat. The Debentures along with Cumulative interest payable on the Debentures referred to in A(vi), shall rank subsequent to the charges created by the company in favour of : (i) Agents & Trustees for the holders of Debentures referred in A(vi) and (viii) AND. (ii) Other Financial Institutions/Banks for their outstanding loans/guarantees. (b) Balance amount of Debentures referred in A (v) is redeemable at par by 10th December, 1996 with an option to repay these amount in one or more instalment by drawing lots at any time after 10th December, 1993. Term Loan referred in B(1)(a) to the extent of Rs.14.84 crores are secured (exclusively by hypothecation of specific items of plant and machinery situate at Naroda and Patalganga Term Loans referred in B(1)(c) to the extent of Rs 0.38 crore, 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 B(2)(a) to the extent of Rs.4.35 crores and Bridge Loan referred in D are to be secured by mortgage of the company’s properties situate at Naroda District Ahmedabad in the state of Gujarat and/or at Patalganga. District Raigad in the state Maharashtra. Term Loans referred in B(3)(b) are secured by mortgage by deposit of title deeds of specified residential quarters situate at Panvel, District Raigad in the state Maharashtra. Foreign Currency Loan from Banks referred in item B(1)(a) includes Rs. 9 58 crores pa’ to foreign machinery suppliers in connection with Mono Ethylene Glycol (MEG) Project now being implemented by Reliance Petrochemicals Limited (subsidiary company) The charges created on the Debentures, Term Loans and Deferred Payment Liabilities referred to in A, B, and E above rank pari passu. Inter-se, save and except. (i) Debentures referred to in A(v) and cumulative interest payment on Debentures refer red in A(vi) and 3. 4. 5. 6. 7. 8. 9. (ii) Term Loans referred in B(1)(a) to the extent of Rs.14.84 crore, B(1)(c) to the extent of Rs.0.38 crore and B(3)(b). 10. (a) The Debentures referred in A(vi) 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 re-issue at par such bought back Debentures (d) The company received request for buy back of Debentures after the end of the financial year of an aggregate nominal value of Rs.3.80 crores till date (Since paid Rs 2.29 crores) 11. Secured Loans include Rs.26.89 crores repayable within one year excluding monies payable on surrender of debentures under buy-back scheme as mentioned in 10(b) above. SCHEDULE ‘D’ As at 30th June, 1988 Rs. Rs. (Rs in crores) As at 31st December 1986 Rs. Rs. Fixed Deposits including Cash Certificates of Rs.18.29 crores) 74.58 110.71 Short Term Loans i) ii) From Banks From Financial Institutions –– 5.00 15.25 17.82 + + 5.00 79.58 * 33.07 143.78 * + Includes Rs. 47.34 crores repayable/adjustable within one year Includes Bridge Loans 15 Reliance SCHEDULE ‘E’ Fixed ASSETS Nature of Filed Assets GROSS BLOCK (AT COST) DEPRECIATION NET BLOCK As at 1 1.87 Rs. Additions Rs. Deductions Rs. As at 30.6.88 Rs. Total upto 30.6.88 Rs. As at 30.6.88 Rs. As at 31 12 86 Rs. (Rs in Crores) Goodwill Leasehold Land Freehold Land Buildings Plant & Machinery Electric Installation Factory Equipments Furniture & Fixtures Vehicles Capital Expenditure pending allocation and advance against Capital Expenditure Previous Year 1.23 4.83 0.11 63.48 879.76 36.77 5.22 12.55 2.15 131.45 1,137.55 735.68 –– –– –– 25.47 614.85 23.21 4.83 3.68 0.31 277.17 949.52 469.55 –– –– –– 0.36 8.78 6.21 0.20 0.04 0.25 208.57 224.41 67.68 1.23 4.83 0.11 88.59 1,485.83 53.77 9.85 16.19 7.21 200.05 1,862.66 1,137.55 –– –– –– 6.79 263.44 3.93 1.24 2.63 0.55 –– 278.58 188.09 1.23 4.83 0.11 81.80 1,222.39 49.84 8.61 13.56 1.66 200.05 1,584.08 949.46 1.23 4.83 0.11 59.08 701.14 34.61 4.39 10.87 1.75 131.45 949.46 NOTES: (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 (1) under construction Rs 8.81 crores and (ii) cost of ownership premises in Co-operative Housing Societies Rs 0.23 Crore. (c) Plant & Machinery includes (i) Rs.281.95 crores under installation and (ii) Rs 1.89 crores in transit. (d) Electric installation includes Rs. 4.04 crores under installation. (e) Factory Equipment includes Rs.0.38 crore under installation. (f) (g) Capital Expenditure pending allocation consist of: Furniture 8 Fixtures includes Rs.0.44 crore being work-in-progress. (i) Rs.96.26 crores on account of Advance against Capital Expenditure (Previous year Rs.58.47 crores). (ii) Rs.103.14 crores on account of Pre-operative Expenses (Previous year Rs.67.05 crores) as per Note No.20 of Schedule ‘N’, and (iii) Rs.0.65 crore on account of cost of construction materials at site (Previous year Rs.5.93 crores). SCHEDULE ‘F’ INVESTMENTS ‘(At Cost) GOVERNMENT AND OTHER SECURITIES Unquoted As at 30th June, 1988 Rs. Rs. (Rs in crores) As at 31st December, 1986 Rs. Rs. 7 Years National Savings Certificate (face value Rs.5000) (Deposited with Sales Tax Dept ) (Rs.5000) (Previous year Nil) TRADE INVESTMENTS - Unquoted –– –– 60 Equity Shares of New Piece Goods Bazar Co. Ltd. of. Rs.100 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 & Warehouse Society Ltd. of Rs.200 each fully paid up (Rs.1,000) (Previous year Rs. 1,000) 165 Shares of The Art Silk Co-operative 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) 4980 Shares of Hindustan Oil Exploration Co. Ltd. 0.05 of Rs. 100 each fully paid up IN SUBSIDIARY COMPANIES (WHOLLY OWNED) (Bodies Corporate under the same Management) 210070 Equity Shares of Devti Fabrics Ltd. of Rs.10 0.21 each fully paid up 100000 Equity Shares of Reliance Petrochemicals Ltd. of Rs.10 each fully paid up 0.10 C/f 16 –– –– –– –– 0.05 0.05 0.05 0.21 –– 0.31 0.21 0.26 B/f OTHER INVESTMENTS - Quoted As at 30th June, 1988 Rs. Rs. 0.36 (Rs in crores) As at 31st December, 1986 Rs. 0 26 Rs. 7530 Equity Shares of Housing Development & (5000) Finance Corporation Ltd. of Rs 100 each fully paid up 0.08 1000 Equity Shares of Air Control & Chemicals, Engineering Co Ltd. of Rs. 100 each fully paid up 0.01 4998 Equity Shares of The Industrial Credit Investment Corporation of India Ltd. of Rs.100 each fully paid up 0.05 In Bonds - Unquoted 12% HDFC Corporate Bonds of Rs 1000 each fully paid up 5000 Magnums of SBI Mutual Fund of Rs.500 each fully paid up 0.50 0.25 0.05 0.01 0.05 0.1 4 0.11 –– –– 0.75 1.25 –– 0.37 During the period, the company invested in 46,40,000 units of Rs.10 each of Unit Trust of India for Rs.6.62 crores which were sold off for Rs.6.72 crores. AGGREGATE VALUE OF Value Value Value Value Quoted Investments Unquoted Investments As at 30th June, 1988 Book Market As at 31st December, 1986 Market Book 0.14 1.11 0.19 –– 0.11 0 26 0.11 –– SCHEDULE ‘G’ CURRENT ASSETS INVENTORIES (at cost or market value 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 in previous year of Rs.0 05 crore at written down value ) As at 30th June, 1988 Rs. Rs. (Rs in crores) As at 31st December, 1986 Rs. Rs. 45.52 59.01 0.76 50.93 100.04 22.77 57.27 0.91 41.65 115.18 4.89 2.55 261.15 240.33 SUNDRY DEBTORS (unsecured) Over six Months: Considered good Considered doubtful . Less Provision for doubtful debts Others considered good 27.75 3.63 31.38 3.63 27.75 182.20 * 17.22 2.04 19.26 2.04 17.22 103.25 209.95 120.47 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) Balance in Current Account with Barclays Bank PLC U.K. (Maximum balance during the year Rs.0.02 crore) 0.48 31.62 1.21 0.02 Cost of Import Entitlements (Under Export Promotion Scheme) includes Rs 1.05 crores due from a subsidiary company 0.50 657.76 0.99 –– 33.33 –– 504.43 659.25 0.33 1,020.38 SCHEDULE ‘H’ LOANS AND ADVANCES As at 30th June, 1988 Rs. (Rs in Crores) As at 31st December, 1986 Rs. UNSECURED - CONSIDERED GOOD Loans to wholly-owned subsidiary companies (Maximum balance at any time during the financial year Rs.53 52 crores) (Previous year Rs.1.35 crores) (Since recovered Rs.52.17 crores) Advances recoverable in cash or in kind or for value to be received Deposits Prepaid expenses Balance with Customs. Central Excise Authorities, etc. 53.92 * 28.98 15.28 2.46 3.16 103.40 1.35 15.00 10.66 1.47 3.97 32.45 includes i) Rs 0.06 crore from Officers (Previous year Rs. 0.06 crore) Maximum balance at any time during the year Rs.0.06 crore (Previous year Rs.0.06 crore) ii) Rs.0.19 crore as Promoters contribution towards Equity Snare Capital in Reliance Capital & Finance Trust Ltd. for which allotment of shares is to be made. excludes Rs 0.16 crore considered doubtful and provided for Reliance (Rs in crores) As at 31st December, 1986 Rs. Rs. 1.97 119.62 0.41 36.60 SCHEDULE ‘I’ 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 ‘G’ Rs. As at 30th June, 1988 Rs. 2.35 162.47 0.35 39.40 * 2.43 –– 0.40 692.11 207.00 851.11 Includes for Capital Expenditure Rs.58.47 crores and Fixed Deposits matured but unclaimed Rs.1.97 crores. PROVISIONS Gratuity, Superannuation and Provident Funds Provision for Taxation Proposed Dividend 0.69 2.00 26.78 0.45 –– 13.76 29.47 236.47 14.21 865.32 SCHEDULES FORMING PART OF THE PROFIT & LOSS ACCOUNT SCHEDULE ‘J’ OTHER INCOME Incentives, assistance & drawbacks on Exports received Processing charges Dividend (Gross) On other Investments (Tax at source Rs.0.01 crore) Profit on Sale/discard of assets (Net) Miscellaneous Income Profit on Sale of Investments SCHEDULE ‘K’ VARIATION IN STOCK STOCK-IN-TRADE (at close) finished goods Stock-in-process Others By Product STOCK-IN-TRADE (at commencement) Finished goods Stock-in-process Others Finished goods in stock at the end of Trial runs 1987-88 (18 months) Rs. (Rs. in Crores) 1986 ( 12 months) Rs. 0.68 1.25 0.03 0.25 5.14 0.10 7.45 0.54 0.23 0.01 0.33 4.61 0.01 5.73 1987-88 (18 months) Rs. Rs. (Rs in crores) 1986 (12 months) Rs. Rs. 100.04 50.94 4.66 0.18 115.18 41.65 2.48 159.31 15.97 115.18 41.65 2.48 –– 155.82 159.31 36.83 40.65 3.14 80.62 –– 175.28 (–)19.46 80.62 (+)78.69 17 26.39 15.48 9. (i) Auditors’ Remuneration: Reliance SCHEDULE ‘L’ MANUFACTURING & OTHER EXPENSES RAW MATERIALS CONSUMED Stock at commencement Add Purchases (including consumption of PTA out of Trial run production) Less: Stock at close 1987-88 (18 months) Rs. Rs. (Rs in crores) 1986 (12 months) Rs. Rs. 57.27 418.78 476.05 59.01 50.65 251.60 302.25 57.27 417.04 244.98 MANUFACTURING EXPENSES Carriage inward Stores & spare parts Dyes & Chemicals Electric Power, fuel and water Machinery repairs Building repairs Labour, Processing & machinery hire charges Excise Duty Sales Tax 6.06 15.16 31.59 71.08 2.59 0.60 9.14 554.66 14.64 2.44 8.76 22.45 32.99 1.01 0.57 6.02 267.35 3.57 705.52 345.16 PAYMENTS TO AND PROVISIONS FOR EMPLOYEES Salaries, Wages & 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, 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.0.11 crore for Directors) Payment to Auditors Directors’ fees (Rs.23,250) (Previous year Rs.12,250) General Expenses Provision for doubtful recoveries Charity & Donation SCHEDULE ‘M’ INTEREST Rs. Rs. Debentures Fixed Loans Others (Net) 3.10 5.43 14.20 9.47 0.07 23.95 1.80 6.07 4.33 3.88 1.13 0.07 0.92 1.59 0.27 –– 37.57 1.59 0.72 2.04 2.20 34.92 19.72 3.64 4.62 0.01 13.00 1.11 3.01 1.40 59.89 26.79 2.19 0.22 0.07 0.50 0.91 0.15 –– 13.36 0.35 0.51 47.74 1,265.11 18.26 654.91 (18 month.) (Rs. in crores) 1986 35.77 27.19 47 78 110.74 20.57 21.25 12.42 54.24 SCHEDULE ‘N’ NOTES AND CONTINGENT LIABILITIES 1. The Company has changed its financial year from calendar year to 30th June from the current year and therefore, the current financial year is of eighteen months as against twelve months of the previous financial year. The figures of previous year to that extent are therefore not comparable with those of the current financial year. 18 2. 3. 4. 5. 6. 7. 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. The Company has, during the financial year, in line with the recent amendment to section 209(3) of the Companies Act, 1956, accounted on ‘accrual basis’ (a) liability in respect of maturity value in excess of initial investment of Cash Certificates issued by the Company under Fixed Deposit Scheme (b) income on investments and (c) Excise Duty set-off, which, as per the accepted practice, were hitherto accounted for on cash basis. As a result, the profit for the year is lower by Rs.1.19 crores. Since it is not possible to ascertain with reasonable accuracy, the quantum to De provided for in respect of (i) Export incentives and other claims (ii) Claims for refunds of custom duty, sales tax, insurance, octroi, etc. (iii) Interest on overdue bills and delayed payment charges. (iv) Performance incentives on sales, (v) Premium on redemption of Debentures (vi) disposal of sundry items other than usable waste of POY/PSF (vii) Exchange difference arising on repayment of foreign currency loans, deferred credit facilities, and (ix) Interest on letters of credit outstanding till the end of accounting period, the same are continued to be accounted on Cash basis. Sales is inclusive of Rs.1.60 crores and Rs.20.73 crores being the recovery of Sales Tax and Excise Duty respectively. It is exclusive of Sales during Trial runs of P.T.A. & L.A.B. ‘Interest - Others(Net)’ is arrived at after deducting Rs. 6.48 crores (Tax at source Rs. 0.09 crore being interest received/receivable. Expenses/adjustments amounting to Rs. 1.52 crores and income/credits amounting to Rs.0.28 crores relating to previous year have been suitably accounted for in respective heads. 8. Research and Development Expenditure comprises of Revenue expenses amounting to Rs. 3.40 crores and Capital Expenditure amounting Rs.4.35 crores which have been included under the respective heads of accounts. (a) Audit Fees (b) Tax Audit Fees (c) For Certification and Consultation in Finance and Tax matters (d) Out-of-pocket expenses (e) For Report and Certification work (capitalised) (ii) Cost Auditor Audit Fees (Rs.20,000) (Previous year Re. Nil) 1987-88 Rs. 0.15 0.06 (Rs. in crores) 1986 Rs. 0.09 0.03 0.05 0.01 0.03 0.30 –– 0.02 0.01 –– 0 15 –– 10. (a) The Company has been advised that the computation of net profit (for the Purpose of Directors’ 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 Section 309 of the Companies Act. 1956. (b) Managing Directors’ and Executive Directors remuneration i) Salaries ii) Contribution to Provident Fund and Superannuation Fund iii) Provision for Gratuity (as per actuarial Valuation) (Rs.36.796) (Previous year Rs.8.980) iv) Perquisites includes net remuneration to Managing Directors and Executive Directors Rs.0.01 crores pertaining to previous year consequent to approval of Central Government. (Rs. in crores) 1986 Rs. 1987-88 Rs. 0.06 0.02 –– 0.04 0.03 0.01 –– 0.02 11. The Company has been accounting liability for Excise and Custom Duty in respect of finished products. as well as raw materials lying in factory/bonded premises as and when they are cleared/debonded. Accordingly. estimated liability amounting to Rs.18.79 crores in respect of such items at the end of the financial year has not been provided for in the accounts and hence not included in the valuation of inventory. (a) Foreign Currency loans availed of during the period to acquire plant and machinery have been accounted for in Indian Rupees at the exchange rates prevailing on relevant dates. 12. (b) No effect has been given in the Accounts to the fluctuations in rates of exchange with regard to outstanding balance of foreign currency loans. (c) The Company. after the commencement of commercial production has consistently been treating difference on account of fluctuation in exchange rates on payments of instalments of loans, deferred credit facilities, etc., as a revenue expenditure and the same amounting to Rs.10.25 crores (Previous year Rs.4.32 crores) has been included under the head General Expenses; 13. (a) The Income tax assessments of the Company have been completed upto Assessment Year 1985-86. Total tax demand raised by Income-tax Department upto the said assessment year is of Rs. 13.88 crores which is disputed. The company is advised (b) that the existing Taxation Reserve of Rs. 10 crores however’ would be adequate enough to meet the liability. if any, upto Assessment year 1987-88. i) Provision for Taxation has been made in the accounts in respect of such part of the profits of the current financial year which are assessable in the Assessment Year 1988-89. Balance of profits of the current financial year together with those for the subsequent period upto 31st March, 1989 will be assessable in assessment year 1989-90 as one composite income in view of the amended provisions of section 3 of the Income Tax Act, 1961. Since the Company is expecting substantial reliefs on account of Investment Allowance and Export Incentives promised by Government for Assessment Year 1989-90, the liability towards income Tax cannot reasonably be quantified. Hence liability for taxation if any in respect of the profit of the balance period taxable in Assessment Year 1989- 90 will be accounted for in the next year. If provision for taxation had been made only in respect of profits upto 30th June, 1988, the same would have amounted to Rs. 10 crores, in view of provision of section 115J of Income Tax Act, 1961 . ii) iii) iv) However, the balance in General Reserve is adequate enough to cover estimated liabilities on this account, if any. 14. The Government of India has issued guidelines dated 15th January, 1987 which requires Companies raising resources through issue of Debentures to create a Debenture Redemption Reserve. The Company has been advised that the notification is not applicable to Debentures issued before the said date of the notification. In respect of debentures issued during the financial year pursuant to the guide lines, the Company has on a pro rata basis, allocated Rs.4.25 crores towards creating a Debenture Redemption Reserve as would accumulate the reserve to 50% of the total face value Of such debentures at the time of redemption. (a) Depreciation on assets has been provided for the entire financial year on straight-line method at the rates prescribed by Schedule XIV to the Companies (Amendment) Act 1988 read with Section 205(2)(b) of the Companies Act 1956. Depreciation in respect of additions to and deductions from assets has been charged on pro-rata basis with reference to the period of use of such assets. The provision for depreciation for multiple shifts wherever applicable as per records and as advised, has been made on the basis of the actual utilisation of respective eligible assets. 15. 16. (b) Upto last year. depreciation was provided in accordance with the provisions of Section 205(2)(b) of Companies Act. 1956, after considering extra shift allowance for all units of the Company as a whole and not in respect of individual asset. (c) Had the Company continued the same practice during the current financial year. depreciation would have been higher by Rs,28.91 crores and the closing inventory would have been higher by Rs.4.37 crores and the net profits would have been lower by Rs.24.54 crores. (a) During the financial year, the Company had applied for endorsement of Industrial Licences/Letters of Intent for manufacture of HDPE, PVC, MEG, Chlorine and Caustic Soda in favour of its Subsidiary Company, viz. Reliance Petrochemicals Limited. The requisite endorsements have since been accorded by the concerned authorities. (b) The Company has. subsequent to the end of the financial year subscribed for 5,75,00,000 Equity Shares of Rs.10/- each of Reliance Petrochemicals Limited. at par. and has placed interest-free non-refundable deposit of Rs.50 crores to be compulsorily converted into 5,00,00,000 Equity Share of Fls.10/- each, at par. or, the expiry of thirty six months from the date of allotment of debentures issued by the said Company. 17. The Company has an investment of Rs.0.21 crores in Share Capital of Devti Fabrics Limited. a wholly owned subsidiary company. Further loans to this subsidiary aggregate Rs.1.35 crores and Receivables on account of sale of goods etc. aggregate Rs.1.05 crores. The losses of the Company upto 31st December, 1987 exceed its paid up Capital and reserves. No provision has been made for possible losses which may arise on these accounts. 18. The Superintendent of Stamps, Central Stamp Office, Bombay has issued Demand Notices on the Company aggregating to Rs.15.40 crores being the alleged differential stamp duty payable under the 80mbay Stamp Act in respect of Debenture Trust Deeds executed in the State of Gujarat by the Company in favour of Debenture Trustees to secure Debentures of Series ‘F’ and `G’. The Bombay High Court, has granted a stay in the Writ Petitions filed by the Company. The Company has been advised that there would be no liability on this account and accordingly no provision has been made in this regard in the accounts of the current financial year. 19. a) b) The Company has received a show cause Notice under the Customs Act. 1962, alleging import and installation of additional machines/lines unauthorised and also alleging misdeclaration of more than twice the declared capacity They have claimed alleged differential duty/penalty of Rs. 119 crores. The company has challenged the proceedings. The company has been advised that there would be no liability on this account and accordingly no provision has been made in respect thereof in the accounts. The company had received show cause Notice from Excise Authorities making various allegations ,n regard to non-payment of proper duty amounting in aggregate to Rs 27.23 crores. The liability has been disputed. The company has been advised that there would be no liability on this account and accordingly no provision has been made In respect thereof in the accounts. Reliance c) The Company has paid during the current financial year a sum of Rs.1.17 crores to Excise Authority, Ahmedabad being short payment made in 1983. Action initiated by Excise authorities are disputed. Liability if any, is not ascertainable and hence not provided for. 20. Pre-operative and trial run expenses in respect of project upto 30th June, 1988 capitalised/to be capitalised: Raw material consumed (during trial run) Carriage inward Consumption of stores chemicals and catalysts Electric power, fuel & water Labour charges Excise duty Sales Tax Salaries Wages & Bonus Employees welfare & other amenities Sales & distribution expenses Insurance Rent Rates & taxes Other repairs Travelling Expenses General expenses Debenture issue expenses Interest: Debentures Fixed loans Others (Net) 1.00 Less: Sates/transfer/stock at end of Trial run Miscellaneous income Transferred/Capitalised by allocation to Building, Plant & machinery (Rs.in Crores) Total upto Upto 31st 30th June 1988 Dec. 1986 33.12 5.16 0.25 –– 1.71 –– 27.72 7.08 0.62 0.27 1.63 –– 0.43 –– 3.59 1.14 2.12 0.44 –– 0.16 1.83 0.48 –– –– 0.64 10.96 8.64 1.14 0.02 0.11 1.43 41.84 25.70 47.49 14.67 (2.56) 95.24 –– 1.67 93.57 26.52 67.05 114.47 42.80 17.05 317.74 39.84 1.94 275.96 172.82 103.14 1987-88 27.96 0.25 1.71 20.64 0.35 1.63 0.43 2.45 1.68 0.16 0.83 0.66 0.02 0.11 0.79 30.88 17.06 66.98 28.13 19.61 222.50 39.84 0.27 182.39 146.30 36.09 NOTES: 1. During the year, the Linear Alkyl Benzene (LAB) and Purified Terepthalic Acid (PTA) projects have commenced commercial production from 27th April 1988 and 7th May, 1988 respectively Accordingly net expenditure incurred on the above Projects upto the respective dates have been capitalised. Pre-operative expenses incurred on Mono Ethylene Glycol (MEG) Project have been transfered to Reliance Petrochemicals Limited in view of the said project now being implemented by them. The above items are not forming part of Profit & Loss Account. 2. 3. 21. CONTINGENT LIABILITIES As at 30th June, 1988 Dec Rs. (Rs. in crores) As at 31st 1986 Rs. (a) Estimated amount of contracts remaining to be executed on capital account and not provided for (b) Outstanding guarantees furnished by Bankers (c) Bonds executed in favour of Excise and Custom Authorities (d) Uncalled liability on partly paid shares (Rs 16,875) (Previous year Rs.16,875) (e) Claims against the company not acknowledged as debts including Rs.2 26 crores for excise (Previous year Rs.2 11 crores) (f) Export bills discounted against irrevocable (g) Letters of Credit indemnities towards export obligations against capital goods import (h) Guarantee to Banks against credit facilities (l) extended to subsidiary companies (Facilities utilised upto 30.6.88 Rs 2.57 crores) Import Duty on Raw Materials/Chemicals & catalysts imported under Advance Licences against fulfilment of export obligations. 113.09 30.93 89.44 –– 4.65 0.87 0.65 3.00 16.48 301.78 34.52 22.53 –– 2.79 0.02 0.98 3.00 –– 19 Reliance 22. LICENCED AND INSTALLED CAPACITY (a) (b) (c) (d) Polyester Yarn Polyester Staple Fibre Man-made Fibre Spun Yarn on Worsted System Man-made Fabrics (e) Purified Terepthalic Acid (f) Linear Alkyl Benzene (Spindles) (Looms) (Knitting M/c) (9) (h) (i) (j) (k) (l) (m) High Density Polyethylene [see note 16 (a)] Poly Vinyl Chloride [see note 16 (a)] Mono Ethylene Glycol [see note 16 (a)] Synthetic Filament Yarn Including Industrial yarn/tyre cord Colour TV Glass Shells Colour TV Picture Tubes [i] [ii] [iii] (see note 16 (a)) * On the basis of Letter of Intent received + Based on average Denier of 40 Installed Capacity based on Certificate of the Management Chlorine Caustic Soda (By-product) Hydrogen (By-product) 23. PRODUCTION Yarn (Polyester & Blended etc.) Polyester Chips Fabrics Polyester Staple Fibre P.T.A. L.A.B. By-Products including for captive use/trial run production 24. VALUE OF IMPORTS ON C.I.F. BASIS IN RESPECT OF: (a) Raw Materials (b) Dyes and Chemicals, Catalysts, Stores and Spare parts (c) Capital goods 25. EXPENDITURE IN FOREIGN CURRENCY ON ACCOUNT OF Unit M.T. M.T Nos. Nos. Nos. M.T. M.T. M.T. M.T. M.T. M.T. Nos. Nos. M.T. M.T. M.T. Licensed Capacity Installed Capacity 1987-88 25,125 45,000 12,500 4 5 0 22 100,000 1986 25,125 45,000 12,500 4 5 0 22 100,000 60,000 60,000 Not Applicable Since Endorsed Not Applicable Since Endorsed Not Applicable Since Endorsed 2,000 1,500,000 500,000 66,000 78,000 1,950 Since Endorsed 50,000 100,000 40,000 2,000 –– –– –– –– –– + 1987-88 25,125 45,000 12,494 4 5 0 20 100,000 60,000 –– –– –– –– –– –– –– –– –– 1986 25,125 45,000 12,494 4 5 0 16 Under Implementation Under Implementation Under Implementation Under Implementation Under Implementation –– –– –– –– –– –– Unit M.T. M.T. Mtrs in !acs M.T. M.T. M.T. M.T. 1987-88 68,332* 1,965 587.72 38,325 37,514 28,022 3,378 1987-88 (Rs.) 105.91 43.85 38.50 1987-88 (Rs.) 34.44 28.13 7.81 24.45 1986 33,445 –– 550.50 13,185 –– –– –– (Rs In crores) 1986 (Rs ) 48.58 8.48 129.42 1986 (Rs) 24.57 16.79 4.94 14.87 Interest on foreign currency loans Interest on Debentures held by Non-residents on repatriation basis (Gross) Other matters (including commitment charges Rs.0 03 crore on foreign currency loans - Previous year Rs.0.11 crore) Technical know-how & Engineering Fees 26. QUANTITATIVE INFORATION IN RESPECT OF OPENING STOCK, CLOSING STOCK, PURCHASES, SALES AND CONSUMPTION OF RAW MATERIALS (a) Opening Stock Yarn Fabrics Polyester Staple Fibre Stock-in-process (Yarn) Stock-in-process (Fabrics) Stock-in-process (P.S.F.) Stock-in-process (Polyester Chips) Others 20 Unit Quantity Rs. in crores Quantity Rs. in crores 1987-88 1986 M.T. Mtrs. in lacs M.T. M.T M T. M T M T 5,382 104.22 6,417 1,059 64.50 309 324 –– 36.16 46.08 32.94 12.87 26.61 0.89 1.28 2.48 1 59.31 1,470 74 84 –– 1,864 99.50 –– –– 15.21 21.62 –– 18.58 22.07 –– 3.14 80.62 (b) Closing Stock: Yarn Fabrics Polyester Staple Fibre P.T.A. L.A.B. D.M.T. Stock-in-process (Yarn) Stock-in-process (Fabrics) Stock-in-process (P.S.F.) Stock-in-process (Polyester Chips) Stock-in-process (PTA) Stock-in-process (LAB) By-products Others (c) Purchases Yarn Fabrics Sea Foods D.M.T (d) Sales Yarn (Polyester & Blended) Fabrics Polyester Staple Fibre Polyester Chips P.T.A L.A.B. Sea Foods D.M.T. By-products’ Other Excluding during Trial run (e) Raw Materials consumed 1987-88 1986 Quantity 3,619 83.59 3,664 3,116 4,811 2,548 2,115 46.80 363 1,529 1,454 753 293 –– 1987-88 Quantity 632 326.62 71 4,500 1987-88 Quantity 65,922 927.19 40,772 747 3,866 16,968 71 1,952 937 9,057 Rs. in crores 29.73 40.42 16.10 5.89 7.90 4.63 21.47 19.40 0.70 6.13 2.55 0.69 0.18 0.03 155.82 Rs. in crores 10.44 190.07 0.67 9.52 210.70 Rs. in crores 951.27 508.59 235.02 3.33 9.47 41.89 0.67 5.05 0.62 14.83 1,770.74 Quantity 5,382 104.22 6,417 –– –– –– 1,059 64.50 309 324 –– –– –– –– 1986 Quantity 2781 243.30 495 –– 1986 Quantity 29,630 764.42 6,666 –– –– –– 495 –– –– –– Reliance Rs. in crores 36.16 46.08 32.94 –– –– –– 12.87 26.61 0.89 1.28 –– –– –– 2 48 159.31 Rs in crores 64.68 138.06 2.86 –– 205.60 Rs. in crores 509.69 340.36 51.11 –– –– –– 2.86 –– –– 1.46 905.48 Unit Unit M.T. Mtrs in lacs M.T M.T. M.T. M.T. M.T. Mtrs. in lacs M.T M.T. M.T. M.T. M. T. Unit M.T. Mtrs in lacs M.T. M.T. Unit M.T. Mtrs in lacs M.T M T. M.T. M.T. M.T. M.T. M.T. M.T. Unit 1987-88 1986 Quantity Rs. in crores Quantity Rs. in crores PTA/Polyester Chips (including own production during trial run) M.E.G. Useable Waste Fibre Yarn Fabrics (Grey) Paraxylene N. Paraffin Benzene Others M.T. M.T. M.T M.T. M.T. Mtrs. in lacs M.T. M.T K.L. 80,843 36,726 10,597 2,086 7,385 143.21 14,311 6,509 2,906 –– 42,827 17,802 74 1,418 4,233 133.06 –– –– –– –– 138.59 55.06 10.80 16.18 145.92 20.72 17.58 6.14 2.11 3.94 417 .04 –– 417.04 Rs. in Crores 229.66 187.38 417.04 Rs. in Crores 19.81 26.94 46.75 1987-88 % of total Consumption 55.07 44.93 100.00 1987-88 % of total Consumption 42.37 57.63 100.00 Rs. in Crores 138.97 106.01 244.98 Rs. in Crores 10.59 20.62 31.21 115.41 23.27 0.20 11.54 82.45 23.83 –– –– –– –– 256.70 11.72 244.98 1986 % of total Consumption 56.73 43.27 100.00 1986 % of total Consumption 33.93 66.07 100.00 21 Less: Stock of useable waste Excluding during trial run 27. VALUE OF RAW MATERIALS CONSUMED Imported (including import duty Rs.122.47 crores) Indigenous .28. VALUE OF DYES CHEMICALS. CATALYSTS. STORES AND SPARE PARTS CONSUMED: Imported Indigenous Reliance 29. EARNINGS IN FOREIGN EXCHANGE Export of goods on FOB basis interest received on call deposit 30. REMITTANCE IN FOREIGN CURRENCY ON ACCOUNT OF DIVIDEND 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 the end of the year (a) Number of Non-resident shareholders – Year ended 31-12-86 – Interim dividend 1987188 (b) Number of Equity Shares held by them – Year ended 31-12-86 – Interim dividend 1987/88 (i) Amount of dividend paid (Gross)-Tax at source Rs.0.95 crore (Previous year Rs 0.43 crore) (c) – Year ended 31-12-86 – Interim dividend 1987/88 (ii) Year to which dividend relates 31. (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.72,000 per annum (Previous year figure Rs.36,000 per annum) (i) Number of employees (ii) Salaries and Bonus (iii) Contribution to Provident Fund & Superannuation Fund (iv) Other Perquisites 212 (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 6,000 per month (Previous year figure Rs 3,000 per month) (i) Number of employees (ii) Salaries and Bonus (iii) Contribution to Provident Fund & Superannuation Fund (iv) Other Perquisites 99 1987-88 Rs. 1.95 0.46 0.72 0.46 0.11 0.21 1987-88 Rs. 21.13 –– 1987-88 Rs. (Rs. in crore) 1986 Rs. 6.79 0.05 (Rs. in crores) 1988 Rs. 105 24,791 1,504,369 21,345,661 72 –– 3,600,403 –– 0.88 3.78 1986 & Interim Div. 1987-88 1.73 –– 1985 –– (Rs. in Crores) 1986 000 Rs. 2.16 0.47 0 77 0.33 0 07 0.08 555 138 As per our Report of even date For and on behalf a. the Board For RAJENDRA & CO. Chartered Accountants R.J. Shah Proprietor For CHATURVEDI & SHAH Chartered Accountants D. Chaturvedi Partner Bombay Dated: 31st October, 1988 22 D.H. Ambani R.H. Ambani K. Gopal Rao J.R. Shah T. Ramesh U. Pai M.L. Bhakta V.V. Divecha B.D. Shah N.H. Ambani M.D. Ambani N.R. Meswani V.M. Ambani Bombay Dated: 31st October, 1988 Chairman & Managing Director Joint Managing Director Directors Executive Directors Secretary Reliance STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956 RELATING TO COMPANY’S INTEREST IN THE SUBSIDIARY COMPANY, VIZ. DEVTI FABRICS LIMITED 1. The Financial Year of the subsidiar y 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 subsidiar y at the end of the financial year of the subsidiary (b) Extent of interest of holding company at the end of the financial year of subsidiary : : : : 31st December, 1987 30th September, 1985 2,10,070 Equity Shares of the face value of Rs.10/ each fully paid-up 100% 4. The net aggregate amount of the subsidiar y’s profits, (losses) so far as it concerns the members of the holding company (a) Not dealt with the holding company’s accounts i) ii) For the financial year ended 31st December, 1987: Rs.123 98 lacs (loss) For the previous financial years of the subsidiary since it became the holding company ’s subsidiary : Rs.1.49 lacs (b) Dealt with in holding company’s accounts: i) ii) For the financial year ended 31st December, 1987 For the previous financial years of the subsidiary since it became the holding company ’s subsidiary : Nil : Nil 5. Changes in the holding company’s interest, in the subsidiary between the end of the financial year of the subsidiary and the end of the holding company’s financial year : None 6. Material changes between the end of the financial year of the subsidiar y and the end of the holding company’s financial year in respect of: (a) the subsidiary’s fixed assets (b) its investments (c) the money lent by it, and (d) the moneys borrowed by it for any purpose other than that of meeting current liabilities : Nil : Nil : Nil : Nil NOTE: The Company has acquired 1,00,000 equity shares of Rs 10/- each fully paid-up in Reliance Petrochemicals Ltd.(RPL) before 30th June 1988. By acquiring these shares RPL has become a wholly owned subsidiary of the company. Since the first accounting year of RPL has not ended before 30th June 4388 infor mation required under section 212 of the Companies Act, 1956 is not furnished. Bombay Dated: 31st October, 1988 For and on behalf a. the Board D.H. Ambani R.H. Ambani K. Gopal Rao J.R. Shah T. Ramesh U. Pai M.L. Bhakta V.V. Divecha B.D. Shah N.H. Ambani M.D. Ambani N.R. Meswani V.M. Ambani Chairman & Managing Director Joint Managing Director Directors Executive Directors Secretary 23 DEVTI FABRICS LIMITED DIRECTORS REPORT To the Members, Your Directors present the Fourth Annual Report together with the Audited Statement of Accounts for the financial year ended 31st December. 1987 (15 months) OPERATIONS: Your Company has incurred a loss of Rs.123.98 lacs (as against Rs.1.63 lacs profit for last year) during the financial year under review due to adverse market conditions prevailing in the Textile Industry and steep rise in the major inputs like labour, power and coal. After adjusting last year’s balance of Rs.1.49 lacs, the loss of Rs.122.49 lacs is being carried to Balance Sheet. DIVIDEND: In view of the carried forward losses, your Directors have not proposed any dividend for the financial year under review. ACCOUNTING YEAR Your Company’s Accounting period has been extended by a period of three months, consequent upon the change in the accounting period of your holding Company (Reliance. Industries Limited) and to bring in line with the provisions of the Companies Act, 1956. EXPANSION/MODERNISATION SCHEME: Your Company has progressed well in modernisation programme. Out of total plan of capital outlay of Rs.494 lacs, the Company has spent Rs.344 lacs uptil now and renovated the Spinning Department. The balance machinery is being installed. Your Directors have decided to go step by step looking to the present conditions prevailing in Textile Industry and they are hopeful to come out from the losses in the very near future as the partial modernisation of Spinning Unit is almost over. INSURANCE The Company’s assets have been adequately insured. DIRECTORS: Shri Kirti V. Ambani and Shri Vinod M. Ambani retire by rotation in accordance with the provisions of the Companies Act, 1956 and being eligible offer themselves for reappointment. AUDITORS: Messrs. Rajendra & Company and Messrs. Chatur vedi & Shah, Char tered Accountants, retire at the ensuing Annual General Meeting and are recommended for reappointment. The Auditors have, under Section 224(1) of the Companies Act, 1956, furnished a Certificate of their eligibility for reappointment. 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’ Report for the financial year ended 31st December, 1987 is annexed. APPRECIATION: Your Directors wish to place on record their appreciation of the devoted ser vices rendered by the Executives, Staff and workers of the Company. 28 DEVTI FABRICS LIMITED AUDITORS’ REPORT The Members of Devti Fabrics Limited We have audited the attached Balance Sheet of DEVTI FABRICS LIMITED as at 31st December. 1987 and also the annexed Profit & Loss Account of the Company for the period 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. In our opinion and to the best of our information and according to the explanations giver, 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: i) ii) in the case of balance sheet of the state of affairs of the Company as at 31St December. 1987. in the case of profit and loss account of the Loss for the period ended on that date. As required by the Manufacturing and Other Companies (Auditors’ 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 verified by the Management during the period 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 period. 3. Physical verification was conducted by the Management at reasonable intervals during the period in respect of finished goods stores, spare par ts, 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. 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. 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 period 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 audit is not required statutorily. 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 period 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 period. 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 manhours consumed to the relative jobs. In our opinion, there is a 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 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: 3rd June, 1988. 29 DEVTI FABRICS LIMITED BALANCE SHEET AS AT 31ST DECEMBER, 1987 Schedule Page Rs. Rs. Rs. Rs. As at 31.12.1987 (Rs. in crores) As at 30.9.1986 SOURCES OF FUNDS: Shareholders’ Funds Capital Reserves & Surplus Loan Funds 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 & Bank Balances Loans & Advances Less: Current Liabilities & Provisions Current Liabilities Provisions Miscellaneous expenditure (to the extent not written off or adjusted) Profit & Loss Account TOTAL ‘A’ ‘B’ ‘C’ ‘D’ ‘E’ ‘F’ ‘G’ 21.01 –– 448.61 135.00 384.83 70.48 158.79 60.83 17.13 236.75 10.96 247.71 77.85 2.22 80.07 21.01 1.49 21.01 22.50 583.61 604.62 275 51 135.00 209.37 21.84 410.51 433 01 314.35 187 53 194.69 106.35 27.50 328.54 6.25 334.79 82.37 7.11 89.48 167.64 0.14 122.49 604.62 245.31 0.17 –– 433.01 Notes and Contingent Liabilities ‘L’ As per our Report of even date For and on behalf of the Board For CHATURVEDI & SHAH Chartered Accountants D. Chaturvedi Partner S. Natarajan Kirti V. Ambani Vinod M. Ambani Directors For RAJENDRA & CO. Chartered Accountants R.J. Shah Proprietor Bombay Dated: 3rd June, 1988. 30 PROFIT & LOSS ACCOUNT FOR THE PERIOD ENDED 31ST DECEMBER, 1987 Schedule Page Rs. Rs. Rs. Rs. For the period ended 31.12.1987 (15 months) (Rs. in Lacs) For the period ended 30.9.1986 (12 months) DEVTI FABRICS LIMITED INCOME Sales(Net) Other Income Increase/(Decrease) in Stock EXPENDITURE Purchases Manufacturing & Other Expenses Interest Depreciation Profit/(Loss) for the period ‘H’ ‘I’ ‘J’ ‘K’ Add: Balance brought forward from last year Profit/(Loss) Balance carried to Balance Sheet Notes and Contingent Liabilities ‘L’ 1355.32 31.63 (29.08) 51.24 1315.52 65.99 49.10 1132.05 12.94 133.83 1357.87 1278.82 34.07 1,178.01 43.27 21.84 1481.85 (123.98) 1.49 (122.49) 1277.19 1.63 (0.14) 1.49 As per our Report of even date For and on behalf of the Board For RAJENDRA & CO. Chartered Accountants R.J. Shah Proprietor Bombay Dated: 3rd June, 1988. For CHATURVEDI & SHAH Chartered Accountants D. Chaturvedi Partner S. Natarajan Kirti V. Ambani Vinod M. Ambani Directors 31 DEVTI FABRICS LIMITED SCHEDULES FORMING PART OF THE BALANCE SHEET SCHEDULE ‘A’ SHARE CAPITAL Authorised: As at 31.12.1987 Rs. (Rs In lacs) As at 30.9.1986 Rs. 2.50.000 Equity Shares of Rs 10 each 25.00 25.00 Issued & Subscribed: 2,10,070 Equity Shares o! Rs.10 each fully paid-up (All the share are held by Reliance In dustries Limited. the holding company) 21.01 21.01 SCHEDULE ‘B’ RESERVE & SURPLUS As at 31.12.1987 As at 30.9.1986 Profit & Loss Account –– 1.49 SCHEDULE ‘C’ SECURED LOANS Working Capital Loan from a Bank Working Capital Term Loan from a Bank Rupee Term Loans from Financial Institutions Deferred Payment Liabilities Interest accrued and due on above loans As at 31.12.1987 Rs. 121.85 135.00* 172.00 14.28 5.48 448.61 (Rs In lacs) As at 30.9.1986 Rs. 115.00 135.00 –– 19.50 6.01 275.51 2. NOTES: 1. Working Capital Loan and Working Capital Term Loan from Bank or 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 save and except plant and machinery purchased under the modernisation scheme from the financial institutions referred to in note 2 below and are further guaranteed by Reliance Industries Ltd. the Holding Company. Rupee Term Loans from financial institutions are secured by an exclusive first charge on the plan and machinery purchased under the modernisation scheme. Deferred Payment Liabilities guaranteed by Bank of 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 save and except plant and machinery purchased under the modernisation scheme from the financial institutions referred to in note 2 above and are further guaranteed by Reliance Industries Limited the Holding Company. The figures of secured loans include Rs 6.4O lacs repayable within, one year. 3. 4. SCHEDULE ‘D’ FIXED ASSETS Nature of Filed Assets Buildings Railway Siding Plant & Machinery Electric Installation Factory Equipments Furniture & Fixtures Vehicles Advance against Capital expenditure TOTAL Previous year NOTES: (a) (b) (Rs in lacs) GROSS BLOCK (AT COST) DEPRECIATION NET BLOCK Additions Deductions As at 31.12.87 Total upto 31.12.87 As at 31.12.87 Rs. 11.60 –– 146.58 0.44 0.43 0.13 0.01 20.37 179.56 141.91 Rs. –– –– 4.02 –– –– –– 0.08 –– 4.10 0.10 Rs. 15.93 0.36 324.32 17.01 2.96 2.83 1.03 20.37 384.93 209.37 Rs. 0.79 0.04 67.00 1.93 0.35 0.21 0.16 –– 70.48 21.84 Rs. 15.14 0.34 257.32 15.08 2.61 2.62 0.87 20.37 314.35 187.53 As at 30.9.86 Rs. 4.19 0.30 161.20 15.34 2.40 2.61 1.03 –– 187.53 As at 1.10.86 Rs. 4.33 0.38 181.76 16.57 2.53 2.70 1.10 –– 209.37 67.56 Depreciation has been provided on straight line method in accordance with the provisions of Section 205(2)(b) of the Companies Act 1956. Depreciation on additions to Fixed Assets has been provided at the increased rates specified under the Income-tax Rules and an all other assets in accordance with Circular No 1/86 dated 21.5.86 issued by the Department of Company Affairs at the rates corresponding to the rates applicable under Income-tax Rules as in force at the relevant time of acquisition of assets. SCHEDULE ‘E’ CURRENT ASSETS As at 31.12.1987 Rs. Rs. (Rs. In lacs) As at 30.9.1986 Rs. Rs. Inventories (Certified and valued at cost by the Management) Stores, Spares Dyes. Chemicals etc. Raw Materials Stock-in-process Finished Goods Others (including stock of discarded machinery Rs. 1.28 lacs at Book Value) 15.87 36.89 69.75 34.34 1.94 15.95 44.91 61.80 71.93 0.10 Sundry Debtors (Unsecured) Over Six Months: Considered Good 0.91 1.38 158.79 194.69 C/f. 0.91 158.79 1.38 194.69 B/f Others: Considered Good (including Rs.37.94 lacs outstanding from Holding Company) (Previous Year Rs.39.73 lacs) Cash & Bank Balances Cash on Hand Balances with Scheduled Banks in Current Accounts In Fixed Deposit Accounts (lodged with Central Excise Authorities) As at 31.12.1987 Rs. 0.91 Rs. 158.79 (Rs. In lacs) As at 30.9.1986 Rs. 1.38 Rs. 194.69 59.92 0.82 16.13 0.18 104.97 60.83 106.35 0.39 26.93 0.1 8 17.13 236.75 27.50 328.54 32 SCHEDULE ‘F’ LOANS & ADVANCES Unsecured Considered good Advances recoverable in Cash or in Kind or for value to be received Deposits Prepaid Expenses Balance with Central Excise Authorities As at 31.12.1987 Rs. 8.52 0.21 0.50 1.73 10.96 (Rs. In lacs) As at 30.9.1986 Rs. 4.25 0.21 0.42 1.37 6.25 SCHEDULE ‘G’ As at 31.12.1987 (Rs. In lacs) As at 30.9.1986 CURRENT LIABILITIES & PROVISIONS Rs. Rs. Rs. Rs. CURRENT LIABILITIES: Sundry Deposits Sundry Creditors Interest accrued but not due on loans 0.11 75.25 2.49 0.48 81.89 –– PROVISIONS: Gratuity & Superannuation Funds 77.85 2.22 80.07 82.37 7.11 89.48 SCHEDULES FORMING PART OF THE PROFIT & LOSS ACCOUNT SCHEDULE ‘H’ OTHER INCOME: Processing Charges Profit on Sale of Assets {Net) Miscellaneous Income SCHEDULE ‘I’ INCREASE/(DECREASE) IN STOCK STOCK IN TRADE (at close) Finished Goods Stock-in-process Others STOCK IN TRADE (at commencement) Finished Goods Stock-in-process Others For the period ended 31.12.1987 (15 months) Rs. (Rs. in lacs) For the year ended 30.9.1986 (12 m0nths) Rs. 20.37 0.13 11.13 31.83 2.76 0.20 9 98 12.94 For the period ended 31.12.87 (15 months) Rs. Rs. (Rs. in lacs) For the year ended 30.9.86 (12 months) Rs. Rs. 34.34 69.75 0.66 71.93 61.80 0.10 71.93 61.80 0.10 104.75 133.83 –– –– –– 133.83 (29.08) –– 133.83 DEVTI FABRICS LIMITED SCHEDULE ‘J’ MANUFACTURING AND OTHER EXPENSES Raw Material Consumed Stock at commencement Add: Purchases taken over from Holding Company Less: Sales Less: Stock at close For the period ended 31.12.87 (15 months) Rs. Rs. (Rs. in lacs) For the year ended 30.9.86 (12 months) Rs. Rs. 44.91 711.82 758.53 8.45 748.08 36.89 –– 772.29 772.29 1.55 770.74 44.91 711.19 725.83 MANUFACTURING EXPENSES Carriage Inward Stores and Spare parts Dyes and Chemicals Electric Power, Fuel and Water Machinery Repairs 8uilding Repairs Labour, Processing and Machinery Hire Charges Excise Duty Sales Tax 2.01 43.06 14.25 123.15 8.41 0.92 34.96 43.21 0.47 1.98 41.83 22.88 77.74 9.85 3.49 20.92 24.94 0.39 270.44 204.02 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 266.06 188.09 23.25 13.87 23.56 9.59 303.18 221.24 SALES 8 DISTRIBUTION EXPENSES Samples, Sales Promotion and advertisement expenses Brokerage and Commission Packing Expenses Freight and forwarding charges Octroi expenses ESTABLISHMENT EXPENSES Insurance Rent Rates & Taxes Other Repairs Travelling Expenses Payment to Auditors Directors’ Fees General Expenses Charity & Donation SCHEDULE ‘K’ ‘ INTEREST Fixed Loans Others (Net) 0.05 3.08 3.88 0.11 3.77 3.35 6.26 0.36 0.70 1.51 0.44 0.05 7.06 0.09 0.10 3.21 4.98 0.70 1.42 10.89 10.41 1.40 5.01 0.28 0.65 1.40 0.35 0.08 7.24 0.10 19.82 1315.52 16.51 1178.01 For the period ended 3t.12.1987 (15 months) Rs. 49.70 16.29 (Rs. in lacs) For the year ended 30.9.1986 (12 months) Rs. 24.91 18.36 65.99 43.27 33 DEVTI FABRICS LIMITED SCHEDULE ‘L’ NOTES AND CONTINGENT LIABILITIES 1. During the year the Company has changed its financial year from 30th September to 3lst December, 1987. Accordingly the current financial year is for 15 months whereas previous financial year was for 12 months. The previous year’s figures are therefore not 5trictly comparable with those of the current financial year. Previous year’s figures are regrouped/rearranged wherever necessary. The Company is a wholly owned subsidiary of Reliance Industries Limited. Necessary applications have been made by the company to the concerned authorities for transfer of various licences and permits in its favour. 2. 3. 4. No provision for taxation is necessary in view of various claims for higher reliefs admissible under the Income Tax Act, 1961. No provision for Investment Allowance Reserve at present is made in the absence of taxable Profits. The same will be created out of future taxable Profits. Interest on other accounts (net) is arrived at after adjusting Rs.6.27 lacs being interest received/receivable (Tax at source Rs.0.30 lacs). 5. 6. Auditors Remuneration: (a) Audit fees (b) Tax Audit fees 31.12.1987 Rs. 0.31 0.13 (Rs in lacs) 30.9.1986 Rs. 0.25 0.10 0.44 0.35 7. The liability for excise duty in respect of finished yarn lying in factory/bonded premises is provided by the Company as and when it is cleared/debonded on the footing that duty becomes payable only at the time of removal of goods. Acccordingly, estimated liabilit amounting to Rs.1.16 lacs in respect of such products at year end has not been provided for in the accounts and not included in the inventory of finished products. 8. Contingent Liabilities: Estimated amount of contracts remaining to be executed on Capital Account and not provided for Outstanding guarantees furnished by Bankers Bonds executed in favour of Excise & Customs Authorities Claims against company not acknowledged as debt 31.12.1987 Rs. (Rs. in lacs) 30.9.1986 Rs. 211.63 4.19 3.00 1.50 358.11 6.91 3.00 –– 9. Licenced & Installed Capacity (As certified by the Management) Spindles Looms 10. Production Nos. Nos. Blended yarn (including for captive use) Fabrics MT Mtrs. in lacs 11. Value of imports on CIF basis 12. Expenditure in foreign currency Licenced Capacity 30.9.86 31.12.87 38368 38388 490 490 31.12.87 Installed Capacity 30.9.86 31.12.87 36448 35496 490 490 30.9.86 736 78.28 –– –– 663 63.55 –– –– 31.12.1987 30-9-1986 Quantity Rs. in Quantity 13. Quantitative information: (a) Opening stock Yarn Fabrics Stock-in-process: Yarn Others MT Mtrs. in lacs MT MT 3 4.90 73 2 lacs 2.17 69.76 61.80 0.10 –– –– –– –– Rs. in lacs –– –– –– –– (b) Closing Stock: Yarn Fabrics Stock-in-proce5s (Yarn) MT Others MT (c) Purchases: Yarn Fabrics (d) Sales: MT Mtrs. in lacs MT Mtrs. in lacs 18 1.91 93 12 –– 4.14 10.63 23.71 69.75 0.66 –– 51.24 3 4.90 73 2 10 2.27 2.17 69.76 61.80 0.10 9.68 24.39 Yarn Fabrics MT Mtrs. in lacs 229 85.41 229.12 1126.20 276 60.93 268.01 864.04 (e) Raw materials consumed: Fibre Yarn MT MT 846 165 417.07 294.12 750 173 396.07 329.76 14. Value of raw materials consumed: Imported Indigenous 15. Value of dyes & chemicals, stores and spare parts consumed: imported Indigenous 16. Earning in foreign exchange 31.12.1987 30-9-1986 Rs. in lacs % of total Rs in lacs % of total consumption consumption –– 711.19 –– 100.00 –– 725.83 –– 100.00 –– 100.00 –– 57.31 –– –– 64.71 –– –– 100.00 31.12.1987 Rs. (Rs in lacs) 30.9.1986 Rs. 17. (a) Break-up 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 Number of employees Salaries and Bonus Contribution to Provident Fund & Superannuation Fund Other Perquisites 4 (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 8 Superannuation Fund Other Perquisites 6 2.54 0.60 0.66 1.40 0.31 0.23 6 3 2.79 0.57 0.42 0.64 0.05 0.04 As per our Report of even date For and on behalf of the Board For CHATURVEDI & SHAH Chartered Accountants D. Chaturvedi Partner S. Natarajan Kirti V. Ambani Vinod M. Ambani Directors For RAJENDRA & CO. Chartered Accountants R.J. Shah Proprietor Bombay Dated: 3rd June, 1988. 34 300 250 200 150 100 50 0 GROSS PROFIT & NET PROFIT Rs. In crores 282.92 GROSS PROFIT NET PROFIT 91.42 38.52 62.26 29.16 111.89 61.10 133.25 129.39 71.34 80.77 14.17 29.22 11.21 47.46 19.7 1980 1981 1982 1983 1984 1985 1986 87-88 Purchases & Raw Materials Consumed Manufacturing & other expenses Excise Duty Interest Depreciation Dividend Retained earnings DISTRIBUTION OF INCOME 3.2% 1.3% 5.2% 6.2% 31.2% 36.4% 16.5% 37 

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