Reliance Industries Limited Annual Report 1988

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FY1988 Annual Report · Reliance Industries Limited

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Reliance Industries Limited

Annual Report 1987-88

Reliance Industries Limited

A N N U A L

R E P O R

1 9 8 7

- 8 8

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SALES
Rs. 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

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

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.

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

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.

(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

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.

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.

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

Reliance

AUDITORS’ REPORT

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:

(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;

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:

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.

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

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

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.

‘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

Chairman & Managing Director
Joint Managing Director

Directors

Executive Directors

Secretary

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

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.

(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.

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.

4.25

––

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:

ii)

iii)

iv)

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

* includes debentures of face value
of (Rs.36,500) held by Directors

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

––

24.00

––

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

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

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

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

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.

(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

(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 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

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

––

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

26.39

15.48

(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.

2.
3.

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)

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

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.

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

––

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.
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

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

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

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

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

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

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

The Financial Year of the subsidiar y company ended on

2. Date from which it became subsidiary

(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%

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

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

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.

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.

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.

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:

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.

DEVTI FABRICS LIMITED

BALANCE SHEET AS AT 31ST DECEMBER, 1987

Schedule

Page

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.

PROFIT & LOSS ACCOUNT FOR THE PERIOD ENDED 31ST DECEMBER, 1987

Schedule

Page

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

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

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

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

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.

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.

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

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.

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

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

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).

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

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
––

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

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

––
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

(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

2.54

0.60
0.66

1.40

0.31
0.23

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.

300

250

200

150

100

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%