Reliance Industries Limited
Annual Report 1989

Plain-text annual report

Reliance Industries Limited Annual Report 1988-89 60 Reliance 15TH ANNUAL GENERAL MEETING BOARD OF DIRECTORS on Saturday, the 30th September, 1989 at Sri Shanmukhananda Fine Arts & Sangeetha Sabha 292 Jayshankar Yagnik Marg, Sion (East) Bombay 400 022. at 11.00 a.m. Contents Page No.(s) 2 3-4 5-7 8-9 10-11 12 13 14-17 18-21 22 23-29 30-60 Financial Highlights Graphs Notice of Annual General Meeting Directors’ Repor t Auditors’ Report Balance Sheet Profit and Loss Account Schedules annexed to Balance Sheet and Profit & Loss Account Notes and Contingent Liabilities Statement Pursuant to Section 212 of the Companies Act Annexure to Directors’ Repor t Documents of Subsidiar y Companies 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 Industr ial Estate Naroda, Ahmedabad. Subsidiary Companies: Devti Fabrics Limited Plant at Sidhpur Dist. Mehsana, Gujarat State. Reliance Petrochemicals Limited Village Mora, Bhatha P.O., Surat - Hazira Road Dist. Surat, Gujarat State Trishna Investments and Leasings Limited Maker Chamber IV 222, Nariman Point, Bombay 400 021. 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 - I.C.I.C.I. B. D. Shah, Nominee Director - G.I.C. Anil D. Ambani, Executive Director Nikhil R. Meswani, Executive Director 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 BankIndian 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. 1 Reliance FINANCIAL HIGHLIGHTS Sales Other Income 1988-89 1987-88 (9 months) (18 months) Rs. 1770.74 7.45 Rs. 1112.45 7.88 (A) Manufacturing and Other Expenses (B) Gross Profit (A–B) (C) Interest Depreciation 1120.33 862.58 257.75 91.58 86.80 1778.19 1495.27 282.92 110.74 91.41 Net Profit (C–D) (D) (E) 178.38 79.37 202.15 80.77 1986 1985 1984 1983 Rs. 905.48 5.73 911.21 781.82 129.39 54.24 60.98 115.22 14.17 Rs. 733.14 4.94 738.08 604.83 133.25 24.45 37.46 61.91 71.34 Rs. 622.01 7.11 629.12 511.23 117.89 22.61 34.18 56.79 61.10 Rs. 520.35 4.68 525.03 433.61 91.42 21.52 31.38 52.90 38.52 (Rs. in crores) 1981 1982 Rs. 421.03 2.51 423.54 361.28 62.26 18.93 14.17 33.10 29.16 Rs. 312.22 3.63 315.85 268.39 47.46 16.79 10.97 27.76 119.70 WHAT THE COMPANY OWNED Fixed Assets Gross Block Less: Depreciation (Cumulative) 1871.76 368.98 1862.66 278.58 1137.55 188.09 Net Block Investments Current Assets 1502.78 58.50 849.46 1584.08 1.25 607.83 949.46 0.37 1052.83 735.68 128.88 606.80 37.30 402.10 530.93 104.65 426.28 0.17 235.41 394.88 73.42 321.46 0.12 215.19 356.71 42.10 314.61 0.12 191.53 133.46 27.90 105.56 0.07 156.55 2410.74 2193.16 2002.66 1046.20 661.86 536.77 506.26 262.18 WHAT THE COMPANY OWED Long Ter m Funds Medium/Short Term Funds Current Liabilities & Provisions 579.44 195.11 564.88 609.82 103.83 457.39 546.12 143.78 1001.23 515.16 81.90 138.02 276.96 44.83 93.68 239.99 35.46 131.44 260.60 22.85 131.27 83.17 16.36 105.56 1339.43 1171.04 1691.13 735.08 415.47 406.89 414.72 205.09 NET WORTH OF THE COMPANY Equity Share Capital Preference Share Capital Reserves & Surplus 152.11 5.80 913.40 152.10 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 1071.31 1022.12 311.53 311.12 246.39 129.88 18.60 5.80 67.14 91.54 16.67 0.30 40.12 57.09 2 SALES Rs. in crores CAPITAL & NET WORTH Rs. in crores 18months 1770.74 9 months 1112.45 905.48 733.14 622.01 520.35 421.03 312.22 1981 1982 1983 1984 1985 1986 87-88 88-89 1981 Equity Share 16.67 Net Worth 57.09 1982 18.60 91.54 1983 36.15 1984 1985 1986 87-88 88-89 46.18 51.61 51.61 152.10 152.11 129.88 246.39 311.12 311.53 1022.12 1071.31 1100 1050 1000 950 900 850 800 750 700 650 600 550 500 450 400 350 300 250 200 150 100 50 0 3 GROSS PROFIT & NET PROFIT Rs. in crores NET PROFIT GROSS PROFIT 282.92 257.75 133.25 129.39 111.89 91.42 62.26 61.10 71.34 29.16 38.52 47.46 19.7 14.17 80.77 79.37 300 250 200 150 100 50 0 1981 1982 1983 1984 1985 1986 87-88 88-89 18 months 9 months DIST RIBUTION OF INCOME Purchases & Raw Materials Consumed Manufacturing & Other Expenses Excise Duty Interest Depreciation Dividend Retained Earnings 4.13% 2.95% 7.75% 8.17% 24.90% 26.94% 25.16% 4 Reliance NOTICE NOTICE is hereby given that the Fifteenth Annual General Meeting of the Members of Reliance Industries Limited will be held on Saturday the 30th September, 1989 at 11.00 a.m. at Sri Shanmukhananda Fine Arts & Sangeetha Sabha, 292, Jayashankar Yagnik Marg, Sion (East), Bombay 400 022 to transact the following business: ORDINARY BUSINESS: 1. To consider and adopt the Balance Sheet as at 31st March, 1989 and the Profit and Loss Account of the Company for the period from 1st July, 1988 to 31st March, 1989 and the reports of the Board of Directors and Auditors thereon. 2. To declare a dividend on equity and preference shares. 3. To appoint a Director in place of Shri M.D Ambani, who retires by rotation and being eligible, offers himself for reappointment. 4. To appoint a Director in place of Shri N R Meswani, who retires by rotation and being eligible, offers himself for reappointment. (Issue of Share Certificate) Rules, 1960 or any statutory modification thereof for the time being in force. (b) The Company shall also be at liberty to have an official seal in accordance with Section 50 of the Act for use in any territory, district or place outside India and such power shall accordingly be vested in the Directors or by or under the authority of the Directors granted, in favour of any person appointed for the purpose in that territory, district or place outside India. 9. To consider and if thought fit, to pass, with or without modification, the following resolution as a special resolution. “RESOLVED THAT subject to the confirmation by the Company Law Board under Section 17 of the Companies Act, 1956, the place of registered office of the Company be changed from the State of Maharashtra to the State of Gujarat.” RESOLVED FURTHER THAT Clause II of the Memorandum of Association of the Company be substituted by the following Clause II Clause Il: The Registered Office of the Company will be situate in the State of Gujarat. 5. To appoint a Director in place of Shri K. Gopal Rao, who retires by rotation 10. To consider and if thought fit, to pass, with or without modification, the following and being eligible, offers himself for reappointment. resolution as an ordinary resolution. 6. To appoint Auditors to hold office from the conclusion of this meeting until the conclusion of the next Annual General Meeting and to fix their remuneration. SPECIAL BUSINESS: 7. To consider and if thought fit, to pass, with or without modification, the following resolution as a special resolution. “RESOLVED THAT pursuant to the provisions of Section 314 and all other applicable provisions, if any, of the Companies Act 1956, consent of the Company be and is hereby accorded to Shri Rajendra J Shah, Proprietor of Messrs Rajendra & Co. Chartered Accountants, relative of Shri Jayantilal R Shah, a Director of the Company, to hold office from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting as Joint Auditor of the Company and/or for rendering any other professional services on such remuneration and on such ter ms as may be agreed by the Board of Directors”. 8. To consider and if thought fit, to pass with or without modification, the following resolution as a special resolution RESOLVED THAT pursuant to Section 31 and all other applicable provisions if any, of the Companies Act, 1956. the Articles of Association of the Company be and are hereby altered by deleting the existing Article 177 and substituting in its place and stead the following as new Article 177 Article t 77; (a) The Directors shall provide a Common Seal for the purpose of the Company and shall have power from time to time to destroy the same and substitute a new seal in lieu thereof and the Directors shall provide for the sale custody of the seal for the time being and the seal shall never be used except by or under the authority of the Directors or a Committee of Directors previously given and every deed or other instrument to which the seal of the Company is required to be affixed shall unless the same is executed by a duly Constituted Attorney or authorised person of the Company, be affixed in the presence of one Director and/or the Manager and/or the Secretary at the least who shall sign every instrument to which the seal Is so affixed in his presence: Provided that the certificates of shares or debentures shall be sealed in the manner and in conformity with the provisions of the Companies “RESOLVED THAT pursuant to the provisions of Section 372 and all other applicable provisions if any, of the Companies Act, 1956, and subject to the approval of the Central Government. the Reserve Bank of India and such other approvals as may be necessary, consent of the Company be and is hereby accorded to the Board of Directors of the Company to invest by subscribing to the entire share capital of an amount not more than Rupees 900 lacs equivalent in Pounds/United States Dollars by way of subscription, purchase or otherwise for cash at par in a new company to be promoted by the Company to be formed and registered in United Kingdom with an object to promote the exports of products manufactured and/or dealt in by the Company to other countries in the world” “RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised to determine the actual sum or sums to be so invested and to decide all or any other matters arising out of or incidental to the proposed investments and to sign and execute all deeds, applications, documents and writings that may be required to be signed on behalf of the Company in connection with such investment(s) and to do all acts, matters, deeds and things that may be necessary, proper, expedient or incidental, for the purpose of giving effect to the resolution.” 11. To consider and if thought fit, to pass, with or without modification, the following resolution as an ordinary resolution. “RESOLVED THAT in partial modification of the resolution passed at the Extra Ordinary Genera! Meeting of the Members of the Company held on 10th August, 1987 (adjourned) and in accordance with the provisions of Section 293(1) (a) and other applicable provisions, if any, of the Companies Act. 1956, the consent of the Company be and is hereby accorded to the Board of Directors of the Company to mortgage and/or charge all or any of the immovable and/or movable assets of the Company both present and future and situate at Patalganga, Dist Raigad, in the State of Maharashtra and at Naroda, Ahmedabad in the State of Gujarat, but specifically excluding the current assets, receivables, inventories, book debts, both present and future, residential quarters and such other specific items of machinery and equipments as are specifically charged and/or to be charged. 5 Reliance to any other lenders as the Board of Directors may decide in consultation with the Term Lenders/Debenture Trustees in such form and manner as the Board of Directors may determine to secure repayment by the Company of the Term Loans not exceeding a sum of Rs 24.25 Crores to and in favour of the Industrial Credit and Investment Cor poration of India Limited (ICICI), Industrial Development Bank of India (IDBI), Industrial Finance Corporation of India (IFCI), Unit Trust of India (UTI), Life Insurance Corporation of India (LIC), General Insurance Corporation of India (GIC), National Insurance Company Ltd. (NIC), New India Assurance Company Limited (NIA), Oriental Insurance Company Ltd. (Ol), United India Insurance Company Ltd. (Ul) and Industrial Reconstruction Bank of India (IRBI), who have provided the said Term Loans in participation, syndication or otherwise with power to take over the management and business and concern and undertaking of the Company at Patalganga and/or at Naroda in certain events of default together with interest thereon, further/additional interest, liquidated damages in case of default, premium on prepayment, cost, charges, expenses and other monies in terms of the Agreement(s) entered into/to be entered into between the Company and the said Term Lenders; Provided that the said mortgage and/ or charge shall rank pari passu inter se the said Term Lenders without any preference or priority of one over the other or others of them and also rank pari passu with the mortgages and/or charges created and/or to be created by the Company to secure the existing Rupee and Foreign Currency Term Loans and other financial facilities/borrowings availed of by the Company from the Financial Institutions/Banks and other lenders and the Debentures of Series I, II, III, IV, F and Debentures aggregating Rs.80 Crores privately placed/issued by the Company from time to time and ranking in priority to the mortgages and charges created by the Company to secure accumulated interest under the cumulative interest payment scheme of Debentures Series F and payment of principal, interest etc. of Debentures Series ‘E’. RESOLVED FURTHER THAT the various documents/agreements executed by the Company and the mortgages and charges and securities created by the Company in favour of the Financial Institutions/Banks and other lenders to secure their loans and facilities extended from time to time be and are hereby approved, ratified and confirmed. ‘‘RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby empowered to finalise and sign the inter se Agreement if required, the security and other documents and to do and execute all such acts, deeds, matters and things as may be necessary, proper or expedient for the purpose of giving effect to this resolution.’’ By Order of the Board of Directors K.Sethuraman Joint Secretary Registered Office: 3rd Floor, Maker Chambers IV, 222, Nariman Point, Bombay 400 021 Bombay Dated: 16th August, 1989 NOTES: 1. A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER. 2. The Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956 in respect of Special Business under items 7 to 11 as set out above is annexed hereto. 6 3. All documents referred to in the accompanying Notice and the Explanatory Statement are open for inspection at the Registered Office of the Company during office hours on all working days except Saturdays and Holidays between 11.00 a m. and 1.00 p.m. upto the date of Annual General Meeting. 4. Members/Proxies should bring the attendance Slip duly filled in for attending the meeting. 5. Dividend on shares as recommended by the Board of Directors, if declared, at the meeting will be paid to those Shareholders whose names appear in the Register of Members as on 30th September, 1989. 6. Shareholders seeking any information with regard to accounts are requested to write to the Company at an early date so as to enable the management to keep the information ready. 7. Any member of the Company on demand shall be entitled to be furnished free of cost a copy of Balance Sheet of the Company and every document required by law to be annexed or attached thereto including Profit & Loss Account and the Auditors Report. 8. No Income-tax is required to be deducted at source from dividend payable to resident individual shareholders if the amount of dividend does not exceed Rs.2,500 during a financial year. Such of the resident individual shareholders who are likely to receive dividend of more than Rs.2,500 and estimate their total income during the financial year to be less than the minimum amount liable to Income-tax and who wish to receive dividend payment without deduction of tax at source may file Tax Exemption Cer tificate or Form 15G (in duplicate), with M/s. Reliance Consultany Services Limited, the Registrars and Transfer Agents of the Company, at 56, Mogra Village Lane, Off Old Nagardas Road, Andheri (East), Bombay 400 069 or at any of the Investor Relation Centres of the Company so as to reach them on or before 14th September, 1989. 9. Those members who have so far not encashed their dividends for the financial year ended 31st December, 1986 may approach the Company for payment, as the same will be transferred to the General Revenue Account of the Central Government on or before 12th August, 1990. 10. The unclaimed dividend upto the financial year of the Company ended 31st December, 1985 has already been transferred to the General Revenue Account of the Central Government in terms of the provisions of Section 205 A of the Companies Act, 1956. Those shareholders who have so far not claimed or collected their dividend for the said financial year/s may claim their dividend from the Registrar of Companies, Maharashtra, Bombay, by submitting an application in the prescribed form. ANNEXURE TO NOTICE Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956. In conformity with the provisions of Section 173 of the Companies Act, 1956, the following Explanatory Statement sets out all the material facts relating to the Special Business mentioned in the accompanying Notice and should be taken as forming part of the Notice. ITEM NO. 7 : Shri Rajendra J. Shah, Proprietor of Rajendra & Co., Chartered Accountants, the retiring Joint Auditor of the Company is related to Shri Jayantilal R. Shah, a Director of the Company. Pursuant to the provisions of Section 314 of the Companies Act, 1956, the Shareholders consent is required to be accorded at the general meeting of the Company for his appointment. Messrs Rajendra & Co., Chartered Accountants have been one of the Auditors of the Company even prior to the appointment of Shri Jayantilal R. Shah, as a Director and it will be in the interest of the Company to reappoint them as Joint Auditor of the Company. Shri Rajendra J. Shah is related to Shri Jayantilal R. Shah, a Director of the Company and to that extent Shri Jayantilal R. Shah may be deemed to be concerned or interested in the resolution None of the other Directors of the Company is, in anyway, concerned or interested in the resolution. ITEM NO.8 Article 177 of the Articles of Association of the Company, inter alia, provides that the Common Seal of the Compan y shall not be affixed to any instrument except under the authority of a resolution of the Board or a Committee of the Board authorised by it in that behalf and in the presence of one Director at the least. Keeping in view the administrative convenience, consent of the shareholders is hereby sought for altering Article 177 of the Articles of Association of the Company, in the manner set out at item No.8 of the Notice convening the meeting. The Directors commend the resolution for your approval None of the Directors of the Company is. in any way, concerned or interested in the resolution. ITEM NO.9: The Registered Office of the Company is presently situate at 3rd Floor, Maker Chambers IV, 222 Nariman Point, Bombay 400 021 The Company, with a view to carry on its business more economically and efficiently, proposes that the registered Office be shifted to the State of Gujarat. As per the provisions of section 17 of the Companies Act, 1956, a Company may by a Special Resolution, alter the provisions of its Memorandum of Association so as to change the place of its Registered Office from one State to another and such alteration shall not take effect until it is confirmed by the Company Law Board. The Directors recommend the resolution set out at item No.9 of the notice for approval of the Shareholders. None of the Directors of the Company, is in any way concerned or interested, in the said resolution. ITEM NO.10: The Company is having a non trading branch office in United Kingdom (U.K.) which has a very limited operation. In view of the Company’s growing exports, your Directors propose to incorporate an overseas subsidiary having a separate legal entity This would enable the Company to have a proper base for its export operations and for the subsidiary to Independently conduct business abroad. The Company would own the entire capital of Rs 900 lacs equivalent in Pounds/ United States Dollars in the overseas company to be incorporated, subject to necessary approval as may be required to be obtained in this regard. The Directors commend the resolution for your approval. None of the Directors of the Company is, in any way, concerned or interested in the resolution. Reliance ITEM NO.11: The Company was earlier authorised to avail from the Industrial Credit and Investment Corporation of India Limited (iCICI), Industrial Development Bank of India (IDBI) and Industrial Finance Corporation of India (IFCI) and/or from other Financial Institutions/Banks in participation/syndication or otherwise, Te rm Loans not exceeding Rs.44 Crores to meet a par t of the capital expenditure to be incurred by the Company for modernising the Textile Division of the Company situate at Naroda, Ahmedabad, in the state of Gujarat. The resolution set out at Item 10 of the Notice, is to give effect to the reduction in the loan amount to Rs.24.25 crores and to also avail the aforesaid reduced loan, in participation with the following additional institutions viz. Unit Trust of India (UTI), Life Insurance Corporation of India (LIC), General Insurance Corporation of India (GIC), National Insurance Company Limited (NIC), New India Assurance Company Limited (NIA), Oriental Insurance Company Limited (Ol), United India Insurance Company Limited (Ul) and Industrial Reconstruction Bank of India (IRBI) as approved by ICICI, the lead Financial Institution. The Directors commend the resolution for your approval. None of the Directors of the Company is, in any way, concerned or interested in the resolution. By Order of the Board of Directors K. Sethuraman Joint Secretary Registered Office: 3rd Floor, Maker Chambers IV, 222, Nariman Point,Bombay 400 021. Bombay Dated: 16th August, 1989 7 Reliance DIRECTORS’ REPORT To the Members Your Directors present the 15th Annual Report together with the Audited Statement of Accounts for the Financial Year ended 31st March, 1989. FINANCIAL RESULTS: (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 (b) Dividend of Rs.15 per share on 5,50,000 Cumulative Redeemable Preference Shares of Rs.100 each fully paid up 0.03 0.62 1988-89 (9 months) (Rs. in crores) 1987-88 (18 months) 257.75 282.92 ON EQUITY SHARES: Dividend of Rs.3.00 per share on the Equity Shares of Rs.10 each fully paid up (pro rata dividend wherever applicable) 0.65 45.64 46.29 11.25 1.93 Your Company will be distributing the dividend, to the large family of its shareholders aggregating approximately 1.6 million spread far and wide in the Country and abroad. – 16.03 91.58 86.80 – 30.00 3.15 – 110.74 91.41 2.00 CHANGE IN ACCOUNTING YEAR The Accounts under review have been prepared for a period of nine months from 1st July, 1988 to 31st March, 1989 as against accounts of eighteen months for the previous year which ended on 30th June, 1988. This is with a view to ensure a uniform previous year as per the provisions of the Income Tax Act, 1961. – YEAR IN RETROSPECT 6.00 4.25 0.03 0.05 0.62 45.64 5.00 19.36 1.24 56.06 11.00 11.25 The sales, during the financial year under review, rose to Rs.1112 crores (approx.) as compared to Rs.1771 crores (approx.) in the previous year, registering an increase of about 26% on an annualised basis. The gross profit (after interest charges) was Rs.166.17 crores against Rs.172.18 crores for the previous year, a rise of 93% on an annual basis. The net profit was Rs.79.37 crores against Rs.80.77 crores in the previous year, a rise by almost 100% on an annual basis. Your Company has completed the on going modernisation programme at Ahmedabad. Polyester Filament Yarn (PFY) and Purified Terephthalic Acid (PTA) units of your Company are running to its full installed capacity. Your Compnay’s Polyester Staple Fibre (PSF) plant is manufacturing quality products and a major portion was expor ted in view of slack domestic market conditions. Your Company, produced Linear Alkyl Benzene (LAB) less than its licensed capacity considering the glut in the domestic market. Necessar y steps are being taken to step up the production of LAB in the current year as a number of small scale detergent industries are encouraged to improve their performance by Government policies. Your Company contributed as much as Rs.441 crores (approx.) to the exchequer in the form of various taxes such as Customs duty, Excise duty, Sales tax and other levies during the period under review. Gross Profit before Interest and Depreciation Add: (a) Surplus balance brought forward from previous year (b) Investment Allowance (Utilised) Reserve written back (c) Excess provision writtenback Less: Provisions and/or appropriations (a) Interest (b) Depreciation (c) Taxation (d) Investment Allowance Reserve (e) Debenture Redemption Reserve (f) 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 (g) Transferred to General Reserve Balance carried to Balance Sheet DIVIDENDS Your Directors have recommended the following dividends (subject to deduction of tax at source) for the financial year ended 31st March, 1989 to be paid, if approved by the Shareholders at the ensuing Annual General Meeting. 8 EXPORT DIRECTORS Reliance During 1988-89, the Company exported its products to leading customers in the sophisticated Markets of USA, EEC etc. The Company’s export for the period under review amounted to Rs.26.14 Crores posting an increase of over 147% over the previous years export. Your Company is endeavouring to step up the scale of exports and in this context, intends to form a subsidiar y company abroad. FUTURE PROJECTS Pursuant to an application submitted for setting up of a Cracker Complex in the State of Gujarat, your Company has received a Letter of Intent for manufacture of 3,20,000 tonnes per annum of Ethylene, 1,44,000 tonnes per annum of Propylene and 98,000 tonnes per annum of Butadiene and other products. The Cr ack er project upon commissioning will provide a captive source of raw materials required by Reliance Petrochemicals Limited, a subsidiary of your Company thus saving precious foreign exchange. Your Company has also applied for setting up a 100% Expor t Oriented Undertaking (EOU) for manufacture of Purified Terephthalic Acid and Paraxylene. The Company will be one of the largest exporters of manufactured products after commissioning of the EOU. SUBSIDIARY COMPANIES As required under Section 212 of the Companies Act,1956 the Audited statements of accounts alongwith the repor t of the Board of Directors of Messrs. Devti Fabrics Limited, Reliance Petrochemicals Limited and Trishna Investments and Leasings Limited and the respective Auditors Report thereon for the year ended 31st March, 1989 are annexed. FLOOD AT PATALGANGA Your Company’s Patalganga complex was one amongst the industrial units affected by the recent unprecedented cyclonic storm and floods which raised the water level of the Patalganga river on 24th July, 1989. As a result of this, the working of several industrial units in the neighbourhood of the Company’s plant was also affected. Your Company has taken on hand all out efforts to bring normalcy and restore production. The various records and books of accounts of the Company which were lying at the complex have been destroyed/ affected due to the floods. Your Company is in the process of reconstructing the records/registers. The Company has preferred applicable insurance claims. Your Directors are of the view that the business transactions and financial position of the Company will not be materially impaired by the loss caused by floods. FIXED DEPOSITS Deposit of Rs.1.09 crores which became due for repayment on or before 31st March, 1989 were not claimed by the depositors as on that date. Of these, deposits of Rs.0.56 crores have since been repaid/ renewed . PERSONNEL As required by the provisions of Section 217 (2A) of the Companies Act, 1956, read with 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. In accordance with the provisions of the Companies Act 1956, and the Ar ticles of Association of the Company, Messrs. M.D. Ambani, N.R. Meswani and K. Gopal Rao retire by rotation and are eligible for reappointment. AUDITORS & AUDITORS’ REPORT Messrs. Rajendra & Co. and Messrs. Chaturvedi & 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, 12, 13(b) and 17 referred to in the Auditors’ Report are self explanatory and therefore, do not call for any further comments. 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 ofthe Company for its success. Bombay 400 021 Dated: 10th August, 1989 For and on behalf of the Board Dhirubhai H. Ambani Chairman & Managing Director 9 Reliance AUDITORS’ REPORT To the Members of Reliance Industr ies LimitedWe have audited the attached Balance Sheet of RELIANCE INDUSTRIES LIMITED as at 31st March 1989 and the Profit and Loss Account of the Company for the period ended on that date annexed thereto and report that: 1. As required by the Manufacturing and Other Companies (Auditors Report) Order 1988 issued by the Company Law Board in ter ms of Section 227 (4A) of the Companies Act 1956 we give in the Annexure hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order. 2. Further to our comments in the Annexure referred to in paragraph 1 above we state that: (a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. (b) 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 such books. Subsequently as stated in note No 17 of Schedule N to the Accounts some of the books of accounts and other records of the Company which were lying at Patalganga Distr ict Raigad (Maharashtra) have been destroyed/affected due to floods on 24th July 1989. (c) The Balance Sheet and Profit and Loss Account referred to in this Repor t are in agreement with the Books of Account. (d) (i) For the reasons mentioned in note No.4 of Schedule N to the Accounts the items of income and expenditure mentioned therein continue to be accounted for on cash basis. (ii) As explained in note No. 12 of Schedule N to the accounts the Company during the financial year has changed the method of accounting in respect of d i f fe r e n c e a r i s i n g d u e t o f l u c t u a t i o n i n ra t e s o f exchange on repayment of loans and deferred payment liabilities with effect from 1st January 1982 by treating the same as capital expenditure which in the previous years was charged to the profit and loss account in the year of repayment Had the Company continued its past practice the profit for the year would have been lower by Rs.4.11 crores Reserves & Surplus and net Fixed Assets would have been lower by Rs .19.29 crores and Rs 20.66 crores respectively and the closing inventor y would have been higher by Rs 1.37 crores. (iii) For the reasons explained in note 13(b) of Schedule N to the accounts no provision for taxation has been made in respect of assessment year 1989-90. (iv) Subject to the above in our opinion and to the best of our information and according to the explanations given to us the said Balance Sheet and Profit and Loss Account read together with the notes thereon give the information required by the Companies Act 1956 in the manner so required and give a tr ue and fair view: 10 (a) (b) in so far as it relates to the Balance Sheet of the state of affairs of the Company as at 31st March 1989; and in so far as it relates to the Profit and Loss Account of the profit of the Company for the period ended on that date. For RAJENDRA & CO. Char tered Accountants for CHATURVEDI & SHAH Char tered Accountants R.J.SHAH Proprietor Bombay Dated: 10th August 1989 D. CHATURVEDI Par tner ANNEXURE TO AUDITORS’ REPORT Referred to in paragraph 1 of our Report of even date 1. The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets. According to the infor mation and explanations given to us the Fixed Assets have been physically ver ified by the management during the financial year In our opinion the frequency of such verification is reasonable and no material discrepancies were noticed on such physical verification as compared to the book records. 2. None of the Fixed Assets have been revalued dur ing the financial year. 3. As explained to us the stocks of finished goods have been physically ve rified b y the Management at the end of the financial year The stock of stores spare par ts and raw materials have also been physically ver ified by the Management during t h e f i n a n c i a l ye a r I n o u r o p i n i o n t h e f r e q u e n c y o f s u c h ver ification is reasonable. 4. I n o u r o p i n i o n a n d a c c o r d i n g t o t h e i n fo r m a t i o n a n d explanations given to us the procedures of physical verification of stocks followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business. 5. As explained to us there were no material discrepancies noticed on physical ver ification of the stocks having regard to the size of the operations of the Company and the same have been properly dealt with in the Books of Account. 6. On the basis of our examination of stock and other records and considering the method adopted for accounting of excise duty referred to in note No 11 of Schedule N to the accounts. in our opinion the valuation of stocks is fair and proper and is in accordance with the normally accepted accounting principles and is on the same basis as in the preceding year. Reliance of the same with a view to determining whether they are accurate or complete. 17. According to the records of the Company, Provident Fund and E m p l oy e e s ’ S t a t e I n s u r a n c e d u e s h av e b e e n r e g u l a r ly deposited with the appropr iate authorities. 18. According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, Wealth tax, Sales tax, Customs Duty and Excise Duty were outstanding as on 31st March, 1989 for a period of more than six months from the date they became payable. 19. According to the information and explanations given to us and on the basis of records examined by us, no personal expenses of employees or Directors have been charged to revenue a c c o u n t o t h e r t h a n t h o s e p ay a bl e u n d e r c o n t r a c t u a l obligations or in accordance with generally accepted business practice. 22. 21. 20. The Company is not a sick industrial Company within the meaning of clause (o) of sub section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985. In respect of trading activities, we are infor med that the Company does not have damaged goods lying with it at the end of the financial year. Therefore, no provision for any loss is required to be made in the accounts. In respect of processing activities, we are infor med that the Company has a reasonable system for recording receipts, i s s u e s a n d c o n s u m p t i o n o f m a t e r i a l s a n d s t o r e s 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 a reasonable system for authorisation at proper levels with necessar y control on the issues and allocation of stores and labour to relative jobs. For RAJENDRA & CO. Char tered Accountants for CHATURVEDI & SHAH Char tered Accountants R.J.SHAH Proprietor Bombay Dated: 10th August 1989 D. CHATURVEDI Par tner 7. 8. 9. 10. 11. The Company has not taken any loan, secured or unsecured. from companies, firm or other par ties listed in the register maintained under Section 30t of the Companies Act, 1956 or from companies under the same management within the meaning of subªsection (1 B) of Section 370 of the Companies Act, 1956. T h e C o m p a n y h a s n o t gr a n t e d a n y l o a n s, s e c u r e d o r unsecured, to companies, fir ms or other parties listed in the r e g i s t e r s m a i n t a i n e d u n d e r S e c t i o n 3 0 1 a n d / o r t o t h e Companies under the same management as defined under sub-section (1B) of Section 370 of the Companies Act, 1956, except interest free loans to its subsidiar y companies. In our opinion, having regard to the long term involvement with the subsidiary companies and considering the explanations given to us in this regard. the ter ms and conditions of the above loans are not, prima-facie, prejudicial to the interest of the Company. In respect of the loans and advances in the nature of loans g i ven by the Compan y to par ties other than subsidiar y companies, they are generally repaying the principal amounts as stipulated and are also regular in the payment of interest, wherever applicable. I n o u r o p i n i o n , a n d a c c o r d i n g t o t h e i n f o r m a t i o n a n d explanation given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchases of stores, raw m a t e r i a l s i n c l u d i n g c o m p o n e n t s p l a n t a n d m a c h i n e r y, equipment and other assets and for the sale of goods. I n o u r o p i n i o n a n d a c c o r d i n g t o t h e i n fo r m a t i o n a n d ex p l a n a t i o n s g i ve n t o u s, t h e r e a r e n o t ra n s a c t i o n s o f purchase of goods and materials and sale of goods, materials and ser vices made in pursuance of contracts or arrangements entered in the Register maintained under Section 301 of the Companies Act, 1956 and aggregating during the year to Rs.50,000 (Rupees Fifty Thousand only) or more in respect of any par ty. 13. 12. As explained to us, the Company has a regular procedure for the determination of unserviceable or damaged stores, raw mater ials and finished goods. Adequate provision has been made in the accounts for the loss arising on the items so deter mined. I n o u r o p i n i o n a n d a c c o r d i n g t o t h e i n fo r m a t i o n a n d explanations given to us, the Company has complied with the provisions of Section 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the Public. In our opinion, reasonable records have been maintained by the Company for the sale and disposal of realisable by - products and scrap wherever significant. In our opinion, the internal audit system of the Company iscommensurate with the size of the Company and the nature of its business. 14. 15. 16. The Central Government has prescribed maintenance of Cost Records under Section 209(1)(d) of the Companies Act, 1956 in respect of certain manufacturing activities of the Company. We have broadly reviewed the accounts and records of the Company in this connection and are of the opinion that prima facie, the prescr ibed accounts and records have been made and maintained. We have not, however, made a detailed examination 11 Reliance BALANCE SHEET AS AT 31ST MARCH, 1989 SOURCES OF FUNDS: Shareholders’ Funds Capital Reserves and 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 Loans and Advances Less:Current Liabilities and Provisions Current Liabilities Provisions TOTAL Notes and Contingent Liabilities Schedule ‘A’ ‘B’ ‘C’ ‘D’ ‘E’ ‘F’ ‘G’ ‘H’ ‘I’ ‘N’ As at 31st March, 1989 Rs. Rs. (Rs. in crores) As at 30th June, 1988 Rs. Rs. 157.91 913.40 881.48 170.86 157.90 864.22 1,071.31 1,022.12 854.99 79.58 1,052.34 2,123.65 934.57 1,956.69 1,871.76 368.98 1,862.66 278.58 1,502.78 58.50 1,584.08 1.25 361.39 305.66 9.93 676.98 172.48 849.46 238.11 48.98 287.09 261.15 209.95 33.33 504 43 103.40 607.83 207.00 29.47 236.47 562.37 2,123.65 371.36 1,956.69 As per our Report of even date For RAJENDRA & CO. Chartered Accountants For CHATURVEDI & SHAH Chartered Accountants For and on behalf of the Board D.H. Ambani R.H. Ambani Chairman & Managing Director Joint Managing Director R.J. Shah Proprietor D. Chaturvedi Partner Bombay Dated: 10th August, 1989 12 J.R. Shah T. Ramesh U. Pai M.L. Bhakta V.V. Divecha B.D. Shah N.H. Ambani M.D. Ambani A.D. Ambani N.R. Meswani V.M. Ambani Directors Executive Directors Secretary PROFIT & LOSS ACCOUNT FOR THE PERIOD ENDED 31ST MARCH, Reliance (Rs. in crores) 1987-88 (18 Months) 1988-89 (9 months) Schedule Rs. Rs. Rs. Rs. INCOME Sales Other Income Variation in Stock EXPENDITURE Purchases Manufacturing and Other Expenses Interest Depreciation Profit before Tax Less: Provision for Taxation Profit after Tax Add: Balance brought forward from last year ‘J’ ‘K’ ‘L’ ‘M’ Add: (i) Excess Provision in past written back in respect of: a) Doubtful Debts and Advances b) Net exchange difference on repayment of loans and deterred payment liabilities (Refer Note No.12) (ii)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 Notes and Contingent Liabilities ‘N’ 1,112.45 7.88 49.27 14.21 897.64 91.58 86.80 0.85 15.18 30.00 6.00 5.00 – 0.65 45.64 1,770.74 7.45 (-)19.46 1,169.60 1,758.73 210.70 1,265.11 110.74 91.41 1,090.23 1,677.96 79.37 – 79.37 11.25 90.62 16.03 – 106.65 87.29 19.36 – – – 4.25 11.00 30.57 1.29 25.49 80.77 2.00 78.77 1.93 80.70 – 3.15 83.85 72.60 11.25 As per our Report of even date For RAJENDRA & CO. Chartered Accountants For CHATURVEDI & SHAH Chartered Accountants For and on behalf of the Board D.H. Ambani R.H. Ambani Chairman & Managing Director Joint Managing Director R.J. Shah Proprietor D. Chaturvedi Partner Bombay Dated: 10th August, 1989 J.R. Shah T. Ramesh U. Pai M.L. Bhakta V.V. Divecha B.D. Shah N.H. Ambani M.D. Ambani A.D. Ambani N.R. Meswani V.M. Ambani Directors Executive Directors Secretary 13 Reliance SCHEDULES FORMING PART OF THE BALANCE SHEET SCHEDULE ‘A’ SHARE CAPITAL Authorised: 20,00,00,000 Equity Shares of Rs 10 each 30,000 11% Cumulative Redeemable Preference Shares of Rs 100 each 5,50,000 15% Cumulative Redeemable Preference Shares of Rs 100 each 4,42,00,000 Unclassified Shares of Rs 10 each As at 31st March, 1989 Rs. Rs. (Rs in crores) As at 30th June, 1988 Rs. Rs. 200.00 0.30 5.50 44.20 250.00 200.00 0.30 5.50 44.20 250.00 Issued & Subscribed: 15,21,46,493 Equity Shares of Rs 10 each fully Called-up Less: Calls unpaid-by others 152.14 0.03 152.14 0.04 30,000 11% Cumulative Redeemable 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 Preference Shares of Rs 100 each fully paid-up (redeemable at any time after 31st December, 1994 but not later than 31st December, 1997) 152.11 152.10 0.30 0.30 5.50 157.91 5.50 157.90 Of the above Equity Shares: 1. (a) 1,56,78,440 Shares were allotted as fully paid-up Bonus Shares by capitalisation of Share Premium and Reserves (b) 60,62,000 Share were allotted as fully paid-up pursuant to Schemes of Amalgamation without payments being received in cash. (c) 9,44,78,433 Share were allotted as fully paid-up Shares on conversion/surrender of (d) (e) Debentures 13,24,000 Shares were issued on conversion of Term Loans 4,453 Shares (including 1,660 Shares by way of Bonus Shares by Capitalisation of Share Premium and Reserves) are reserved for allotment to some of the Shareholders/purpor ted transferees of shares of erstwhile.The Sidhpur Mills Company Limited. 2. The Company will be required to issue and allot additional 18,667 Equity Shares of Rs 10 each at a premium of Rs 15/- per share to the shareholders of erstwhile The Sidhpur Mills Company Limited as Right Shares, il the Court so decides. B/f Investment Allowance (Utilised) Reserve As per last Balance Sheet Add: Transferred from Investment Allowance Reserve Less: Provision to the extent not required transferred to Profit & Loss Account Taxation Reserve As per last Balance Sheet General Reserve As per last Balance Sheet Add: Amount transferred from: Profit & Loss Account Profit & Loss Account SCHEDULE ‘C’ SECURED LOANS A) DEBENTURES: As at 31st March, 1989 Rs. 713.40 Rs. As at 30th June, 1988 Rs. 677.33 Rs. 113.80 – 113.80 – 51.84 5.00 80.95 36.00 116.95 3.15 40.84 11.00 113.80 10.00 51.84 11.25 864.22 113.80 10.00 56.84 19.36 913.40 As at 31st March, 1989 Rs. Rs. As at 30th June, 1988 Rs. Rs. i) 13 5% Convertible Secured Debentures of Rs. 150 each fully paid (Series ‘E’) (Refer Note no 2 below) Less: Converted 80.00 26.67 53.33* includes debentures of face value of (Rs 39,000) held by Directors ii) 15% Non-convertible Secured Debentures of Rs. 100 each fully paid (Series ‘F’) (Refer Note No 3 below) Less: Bought back (Net of re-issue) 270.00 4.78 265.22* * Includes debentures of face value of (Rs 35,000) held by Directors iii) 14% Non-Convertible Secured Redeemable Debentures of Rs 100 each fully paid (Refer Note No 1(b) below) 80.00 80.00 26.67 53.33 270.00 0.32 269.68 80.00 SCHEDULE ‘B’ RESERVES & SURPLUS Debenture Redemption Reserve As per last Balance Sheet Add: Transferred from Profit & Loss Account Share Premium Account As per last Balance Sheet Add: Additions during the year On Conversion of Debentures of ‘G’ Series On Issue of Right Equity Shares Less: Calls unpaid - by others Investment Allowance Reserve As per last Balance Sheet Less: Utilised for purchase of machinery dur- ing the year transferred to Investment Allowance (Utilised) Reserve Add: Transferred from Profit & Loss Account C/f 14 4.25 6.00 673.29 – – 673.29 0.14 – – – 30.00 As at 31st March, 1989 Rs. Rs. (Rs in crores) As at 30th June, 1988 Rs. Rs. B) TERM LOANS 1. From Banks a) Foreign Exchange Loan at floating rates 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 4.25 2. From Financial Institutions a) Foreign Currency Loans b) Rupee Loans 10.25 – 4.25 84.40 431.03 157.86 673.29 0.21 673.15 623.08 C) WORKING CAPITAL LOANS 36.00 36.00 – – 30.00 713.40 – 677.33 From Banks D) BRIDGE LOANS From Financial Institutions E) DEFERRED PAYMENT LIABILITIES To Foreign Machinery Suppliers (Guaranteed by Banks and Financial Institutions) 398.55 403.01 65.76 81.88 7.85 0.75 74.36 103.49 0.16 103.65 11.19 1.36 94.43 108.21 0.36 108.57 179.47 277.79 24.25 1.42 881.48 204.69 220.92 24.25 2.12 854.99 3. From Others: Housing Development Finance Corporation Ltd. 1.46 1.69 Reliance SCHEDULE ‘C’ (Contd.) NOTES : Of the above: 1. (a) Debentures referred in A(ii) Term Loans referred in B save and except B(1)(a) to the extent of Rs 13.16 crores B(2)(a) to the extent of Rs 4 35 crores and B(3) and Deferred Payment Liabilities referred in E are secured by mortgage of deposit of title deeds of the properties situated at Naroda Dist. Ahmedabad in the state of Gujarat and at Patalganga District Raigad in the state of Maharashtra. 2. 3. (b) Debentures referred in A (iii) are to be secured by mortgage of deposit of title deeds on the properties situated at Naroda District Ahmedabad in the state of Gujarat and/or 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(i) are secured by a legal mortgage in English form on the properties situated at Naroda District Ahmedabad in the state of Gujarat The Debentures along with Cumulative interest payable on the Debentures referred to in A(ii) shall rank subsequent to the charges created by the Company in favour of(i) Agents & Trustees for the holders of Debentures referred in A(ii) and (iii): and (ii) Other Financial Institutions/Banks for their outstanding loans/guarantees. (b) Balance amount of Debentures referred in A (i) is redeemable at par by 10th December 1996 with an option to repay these amounts in one or more instalments by drawing lots at any time after 10th December. 1993. (a) The Debentures referred in A(ii) 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 holdings 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 5.82 crores till date (Since paid Rs 4.63 crores) 4. 5. 6. 7. Term Loan referred in B(1)(a) to the extent of Rs 13 16 crores are secured exclusively by hypothecation of specific items of plant and machinery situated at Naroda and Patalganga. 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 situated at Naroda District Ahmedabad in the state of Gujarat and/or at Patalganga District Raigad in the State of Maharashtra and is exclusive of Foreign Currency Loan of Rs 8 36 crores availed for implementation of M E G Project to be implemented by Reliance Petrochemicals Limited which are duly secured against Fixed Assets referred herein above. Term Loans referred in B(3) are secured by mortgage by deposit of title deeds of specified residential quarters situated at Panvel District Raigad in the state of Maharashtra. 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(i) and cumulative interest payment on Debentures referred in A(ii) and (ii) Term Loans referred In B(1)(a) to the extent o! Rs 1316 crores and B(3) 8. Working Capital Loans from Banks referred to in C are secured against hypothecation of present and future stock of raw materials stock-in-process spares and stores. book debts outstanding monies and receivable claims trust receipts etc. 9. Secured Loans include Rs 32.94 crores repayable within one year excluding monies payable on surrender of debentures under buy back scheme as mentioned in 3(b) above. SCHEDULE ‘B’ UNSECURED LOANS Fixed Deposits As at 31st March, 1989 Rs. Rs. (Rs in crores) As at 30th June, 1988 Rs. Rs. (including Cash Certificates of Rs 19 20 crores) 165.69 74.58 Short Term Loans from: i) Financial Institutions ii) Deferred payment liabilities to Indigenous machinery suppliers 5.00 0.17 5.00 – 5.17 170.86* 5.00 79.58 * Includes Rs 47 08 crores repayable within one year SCHEDULE ‘E’ Fixed ASSETS Nature of Filed Assets As at 1.7.88 Rs. Additions Rs. Deductions Rs. As at 31.3.89 Rs. Total upto 31.3.89 Rs. As at 31.3.89 Rs. As at 30.6 88 Rs. GROSS BLOCK (AT COST) DEPRECIATION NET BLOCK (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 NOTES: 1.23 4.83 0.11 88.59 1,485.33 53.77 9.85 16.19 2.21 200.05 1,862.66 1,375.55 – – – 2.46 141.12 3.25 0.54 2.36 1.17 53.58 204.48 949.52 – – – 0.58 69.20 19.22 3.61 0.02 0.60 102.15 195.38 224.41 1.23 4.83 0.11 90.47 1,557.75 37.80 6.78 18.53 2.78 151.48 1,871.76 1,862.66 – – – 8.30 350.52 4.96 1.45 3.23 0.52 – 368.98 278.58 1.23 4.83 0.11 82.17 1,207.23 32.84 5.33 15.30 2.26 151.48 1,502.78 1,584.08 1.23 4.83 0.11 81.80 1,222.39 49.84 8.61 13.56 1.66 200.05 1,584.08 (a) Leasehold Land includes Rs.0.74 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 include| cost of ownership premises in Co operative Housing Societies Rs.0.23 Crore (c) Fixed Assets (Net Block) includes Capital Work-in-progress and Project under trial run aggregating to Rs.502.45 crores (Previous year Rs.495.67 crores) 15 Reliance SCHEDULE ‘F’ INVESTMENTS (At Cost) As at 31st March, 1989 Rs. Rs. (Rs in crores) As at 30th June, 1988 Rs. Rs. GOVERNMENT AND OTHER SECURlTIES Unquoted 7 Years National Savings Certificate (face value Rs 5000) (Deposited with Sales Tax Dept ) (Previous year Rs 5000) 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 Society Md 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) – – – – – AGGREGATE VALUE OF Quoted Investments Unquoted Investments 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 of Rs. 0.05 crore at written down value) SUNDRY DEBTORS (Unsecured) Over SIX Months: Considered good Considered doubtful Less: Provision for doubtful debts Others considered good CASH AND BANK BALANCES As at 31st March, 1989 Market Book Value Value 270.96 57.73 – 0.77 As at 31st March, 1989 Rs. Rs. As at 30th June, 1988 Market Book Value Value 0.19 0.14 – 1.11 (Rs in crores) As at 30th June, 1988 Rs. Rs. 68.45 68.43 9.50 60.07 143.32 11.62 24.81 2.92 27.73 2.92 24.81 280.85* 45.51 59.01 0.76 50.70 100.28 4.89 361.39 261.15 27.75 3.63 31.38 3.63 27.75 182.20 305.66 209.95 – – IN SUBSIDIARY COMPANIES (Bodies Corporate under the same Management) Unquoted: 210070 Equity Shares of Devti Fabrics Ltd of Rs.10 each. fully paid up 0.21 3400 Equity Shares of Trishna Investments and Leasings Ltd of Rs 10 each fully paid up (Rs.34000) (Previous year Rs Nil) – 0.21 0.21 – 0.21 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 03 crore) 0.56 8.65 0.71 0.01 0.48 31.62 1.21 0.02 9.93 676.98 33.33 504.43 * includes Rs 0.76 crores due from Devti Fabrics Ltd (subsidiary company) SCHEDULE ‘H’ Quoted: 57600000 Equity Shares of Reliance Petrochemicals Ltd of Rs 10 each fully paid up (Previous year 100000 Equity Shares - Unquoted) OTHER INVESTMENTS Quoted 7530 Equity Shares of Housing Development and Finance Corporation Ltd of Rs 100 each. fully paid up 4998 Equity Shares of The Industrial Credit and Investment Corporation of India Ltd. of Rs 100 each, fully paid up Unquoted 4980 Equity Shares of Hindustan Oil Exploration Co Ltd Rs 100 each fully paid up 1000 Equity Shares of Air Control & Chemicals Engineering Co Ltd of Rs. 100 each, fully paid up IN BONDS - Unquoted 5000 12% HDFC Corporate Bonds of Rs. 1000 each fully paid up – Magnums of SBI Mutual Fund of Rs 500 each fully paid up (5000) 16 57.60 0.10 LOANS AND ADVANCES 57.81 0.31 UNSECURED-CONSIDERED GOOD As at 31st March, 1989 Rs. Rs. (Rs in crores) As at 30th June, 1988 Rs. Rs. 0.08 0.05 0.05 0.01 0.50 – 0.08 0.05 0.13 0.13 0.05 0.01 0.50 0.25 0.06 0.75 1.25 0.06 0.50 58.50 Loans to subsidiary companies i) Devti Fabrics Limited (Maximum debit balance at any time during the financial year Rs 1.35 crores) ii) Trishna Investments and Leasings Ltd. 1.35 (Maximum debit balance at any time during the financial year Rs 46.79 crores) 46.79 iii) Reliance Petrochemicals Limited (Maximum debit balance at any time during the financial year Rs 52.17 crores) 50.00 Advances recoverable in cash or in kind or for value to be received Deposits Prepaid expenses Balance with Customs Central Excise Authorities, etc 1.35 – 52.17 98.14 41.59* 21.90 8.79 2.06 172.48 53.52 28.98 15.28 2.46 3.16 103.40 * Includes i) Rs 0 23 crore from Officers (Previous year Rs 0.06 crore) Maximum balance at any time during the year Rs 0 23 crore (Previous year Rs 0.06 crore) ii) Rs 0 19 crore as Promoters contribution towards Equity Share Capital in Reliance Capital and Finance Trust Ltd for which allotment of shares is to be made excludes Rs 0.02 crore considered doubtful and provided for. SCHEDULE ‘I’ CURRENT LIABILITIES AND PROVISIONS As at 31st March, 1989 Rs. Rs. (Rs in crores) As at 30th June, 1988 Rs. Rs. CURRENT LIABILITIES Sundry Creditors Sundry Deposits Unclaimed Dividends Interest accrued but not due on loans Excess Share and Debenture Application monies refundable 184.08 3.09 1.12 49.53 0.29 162.47 2.35 0.35 39.40 2.43 238.11 207.00 * Includes for Capital Expenditure Rs. 34.74 crores and Fixed Deposits matured but unclaimed Rs. 109 crores PROVISIONS Gratuity and Superannuation Provision for Taxation Proposed Dividend 0.69 2.00 46.29 0.69 2.00 26.78 48.98 287.09 29.47 236.47 SCHEDULES FORMING PART OF THE PROFIT & LOSS ACCOUNT SCHEDULE ‘J’ OTHER INCOME Incentives. assistance and drawbacks on Exports receivable Processing charges Dividend (Gross) On other Investments (Tax at source Rs 29129) Profit on Sales/Discard of assets (Net) Miscellaneous Income Profit on Sale of Investments 1988-1989 (9 months) Rs. (Rs in Crores) 1987-1988 (18 months) Rs. 1.38 1.35 0.01 – 5.13 0.01 7.88 0.66 1.25 0.03 0.25 5.14 0.10 7.45 SCHEDULE ‘K’ CURRENT LIABILITIES AND PROVISIONS STOCK-IN-TRADE (at close) Finished goods Stock-ln-process Others STOCK-IN-TRADE (at commencement) Finished goods Stock in-process Others Finished goods in stock at the end of Trial runs 1988-1989 (9 months) Rs. Rs. (Rs in crores) 1987-1988 (18 months) Rs. Rs. 143.32 60.07 1.70 100.28 50.70 4.84 155.82 – 100.28 50.70 4.84 205.09 155.82 115.18 41.65 2.48 159.31 15.97 155.82 49.27 175.28 (-)19.46 SCHEDULE ‘L’ MANUFACTURING & OTHER EXPENSES RAW MATERIALS CONSUMED Stock at commencement Add Purchases (including material transferred out of Trial run production) Less: Stock at close 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 Lease Rent 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 and Advertisement Expenses Brokerage and Commission Export Expenses Packing Expenses Warehousing Charges Freight and forwarding charges Octroi Expenses Sales Tax ESTABLISHMENT EXPENSES Insurance Rent Rates and taxes Other repairs Travelling expenses (including Rs 0.10 crore for Directors) Payment to Auditors Directors lees (Rs 17,000) (Previous year Rs 23,250) General Expenses Provision for doubtful recoveries Charity & Donation Loss on sale of Assets SCHEDULE ‘M’ INTEREST Debentures Fixed Loans Others (Net) Reliance 1988-1989 (9 months) Rs. Rs. (Rs in crores) 1987-1988 (18 months) Rs. Rs. 59.01 346.33 405.34 68.43 5.25 14.73 28.66 74.69 2.76 0.74 8.85 278.91 11.65 57.27 418.65 475.92 59.01 336.91 416.91 6.06 15.16 31.59 71.08 2.59 0.60 9.14 554.79 – 426.24 691.01 22.50 26.39 2.23 4.88 8.70 11.73 0.12 17.85 1.28 5.09 1.71 21.16 2.95 1.12 0.03 1.55 1.26 0.20 – 24.75 – 0.32 5.06 3.10 5.43 29.61 34.92 14.20 9.47 0.07 23.95 1.80 6.07 4.33 14.64 67.64 74.53 3.88 1.13 0.07 0.92 1.9 0.27 – 37.57 1.59 0.72 – 37.24 897.64 47.74 1,265.11 1988-1989 (9 months) Rs. 27.17 17.50 46.91 (Rs. in crores) 1987-1988 (18 months) Rs. 35.77 27.19 47.78 91.58 110.74 17 Reliance SCHEDULE ‘N’ NOTES AND CONTINGENT LIABILITIES 1. 4. 2. 3. The current financial year is for a period of nine months as against eighteen months for the previous financial year. The figures of the previous financial year to that extent are, therefore, not comparable. The previous financial 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 accounted export incentives during the year on accrual basis which hitherto, were accounted on Cash basis. As a result, profit for the year is higher by Rs. 1.15 Crores. However, the Company has continued to account following itemson Cash basis since it is not possible to ascertain with reasonable accuracy the quantum to be provided for in respect of: (i) Interest on overdue bills and delayed payment charges, (ii) Performance incentives on. sales, (iii) Premium on redemption ofDebentures. (iv) Disposal of sundry items other than usable waste of POY/PSF, (v) Exchange difference arising on repayment of foreign currency loans, deferred payment liabilities, etc. (vi) Interest on letters of credit outstanding and (vii) Insuranceand other claims. Sales is inclusive of Rs.6.43 crores and Rs.28.07 crores being the recovery of Sales Tax and Excise Duty respectively. ‘Interest - Others(Net)’ is arrived at after deducting Rs. 2.21 crores (Tax at source Rs. 0.03 crore) being interest received/receivable. Income and Expenditure amounting to Rs.3.81 crores and Rs.2.82 crores respectively relating to the previous financial year have been suitably accounted for in respective heads. 8. Research and Development Expenditure comprises of Revenue expenses amounting to Rs.6.89 crores and Capital Expenditure amounting to Rs.1.83 crores which have been included under the respective heads of accounts. 6. 5. 7. 1988-1989 Rs. (Rs. in crores) 1987-1988 Rs. 9. (i) Auditors’ Remuneration: (a) Audit Fees (b) Tax Audit Fees (c) For Certification and Consultation in Finance and Tax matters (d) Out-pocket expenses (e) For Report and Certification work (capitalized) 0.12 0.05 0.02 0.01 – 0.20 (ii) Cost Auditor Audit Fees (Rs.35,000) (Previous year Rs.20,000) – 0.15 0.06 0.02 0.01 0.03 0.30 – 10. (a) The Company has been advised that the computation of net profits for the purpose of Directors’ remuneration under section 349 of the Companies Act 1956 need not be enumerated since no commission is agreed to be paid to the Directors. Fixedmonthly remuneration has been paid to the Directors as per the Schedule XlIl to the Companies Act, 1956 and/or as per the approval of the Central Government wherever applicable. 1988-1989 Rs. (Rs. in crores) 1987-1988 Rs. (b) Managing Directors’ and Executive Directors’ remuneration*: i) ii) Contribution to Provident Fund and Salaries Superannuation Fund iii) Provision for Gratuity (as per actuarial Valuation) (Rs.22,300) (Previous year Rs. 36,796 ) iv) Perquisites 0.03 0.01 0.02 0.06 0.02 0.04 11. The Company has been accounting liability for Excise and Customs Duty in respect of finished products as well as raw materials, dyes and chemicals, stores and spares etc. lying in factory/bonded premises as and when they are cleared/debonded.Accordingly, estimated liability amounting to Rs.44.08 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. This accounting treatment has noimpact on profits of the current financial year. (a) The Company has been accounting foreign currency loans and deferred payment liabilities availed to acquire plant and machinery at the exchange rates prevailing on relevant dates. 12. 18 (b) No effect has been given in the Accounts to the difference on account of fluctuations in the rates of exchange at the year end amounting to Rs.86.00 crores with regard to outstanding balance of foreign currency loans and deferred paymentliabilities. (c) There has been a change in the method of accounting in the current financial year in respect of difference on account of fluctuation in rates of exchange on repayment of loans and deferred payment liabilities which in the previous years wascharged to the Profit 8 Loss account in the year of repayment. The company has decided to treat the same as capital expenditure with effect from 1st January, 1982, in view of various Court Judgements. Accordingly, the Company has adjusted the same andhas provided depreciation at applicable rates for the said relevant years. Consequently, effect on the accounts is, as under: Excess provision written back Less Provision for depreciation Net Credit to Profit and Loss account Rs.21.16 Crores Rs. 5.98 Crores Rs.15.18 Crores Had the Company continued its past practice, in respect of the above, the profit (net) for the year would have been lower by Rs.4.11 Crores and Reserve & Surplus and Net Fixed Assets would have been lower by Rs.19.29 crores and Rs.20.66 crores respectively, and the closing inventory would have been higher by Rs.1.37 crores. (b) (a) The Income-tax assessments of the Company have been completed upto Assessment Year 198687. Total tax demand raised by the Income-tax Department upto the said assessment year is Rs.22.68 crores which is disputed. The company is advised that theexisting Taxation reserve of Rs. 10 crores, however, would be adequate enough to meet the liability, it any. In respect of different units of the company, different previous years under Income Tax Act, 1961 had been followed for assessment years prior to the assessment year 1989-90. The amendment to the Income Tax Act, with effect from Assessment year1989-90 prescribes a uniform previous year for all, the units to end on 31st March. Section 115J of the said Act contemplates computation of book profits of the relevant previous year and hence separate profit and loss accounts have been prepared inrespect of POY Unit for seventeen months, Textile Unit, Export Division and Corporate office for fifteen months and other units for twelve months (being the respective previous years for these units for the assessment year 1989-90) in accordance withthe relevant provisions of the said Act, as legally advised, to determine the book profits. On this basis, there is no resulting book profits and therefore no provision for taxation has become necessary. 13. 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 notapplicable to Debentures issued before the said date of the notification. In respect of Debentures issued subsequent to the date of the said notification, the Company, during the financial year, has on a pro rata basis allocated Rs.6.00 crores towardscreating a Debenture Redemption Reserve. l5. Depreciation on assets has been provided on straightá-áline method as prescribed by Schedule XIV to the Companies Act, 1956 read with Section 205(2)(b) of the said Act. The provision for depreciation for multiple shifts wherever applicable as perrecords and as advised, has been made on the basis of the actual utilization of respective eligible assets. 16. The Company has an investment of Rs.0.21 crore in the Share Capital of Devti Fabrics Limited, a wholly owned subsidiary company. Loans to this subsidiary company of Rs.1.35 crores and receivables on account of sale of goods, of Rs.0.76 croreaggregate to Rs.2.11 crores. The losses of this Subsidiary Company upto 31st March, 1989 exceed its paid up capital and reserves. No provision has been made for possible loss which may arise on these accounts, in view of long term involvement of theCompany in it. 17. As a result of the floods on 24th July, 1989 some of the books of accounts and other records of the Company lying at Patalganga, district Raigad in the State of Maharashtra have been destroyed/affected. The Company is in the process ofreconstructing the records. 18. The Superintendent of Stamps, Central Stamp Office, Bombay had issued Demand Notices on the Company aggregating to Rs.15.40 crores being the alleged differential stamp duty payable under the Bombay Stamp Act, in respect of Debenture Trust Deedsexecuted in the State of Gujarat by the Company in favour of Debenture Trustees to secure Debentures of Series ‘F’ and Series ‘G’. Pursuant to the interim order of the Bombay High Court, the Company has furnished Bank Guarantees aggregating Rs.3.85crores in favour of the Prothonotary and Senior Master of the High Court, Bombay and has covenanted not to further encumber the immovable properties of the Company aggregating Rs.11.55 crores till the matter is disposed by a Division bench of theBombay High Court. The Company is adivsed that there would be no liability in this regard and accordingly, no provision has been made in respect thereof in the accounts. 19. (a) The Company has received a Show Cause Notice from Excise Authorities making various allegations in regard to noná-ápayment of duty aggregating Rs.27.23 crores. The liability has been disputed. The Company has been advised that there would be noliability on this account and accordingly, no provision has been made in respect thereof in the accounts. (b) The Company has paid in the earlier year a sum of Rs.1.17 crores to the Excise authorities, Ahmedabad, being short payment made in 1983 Actioninitiated by Excise Authorities are disputed. Liability, if any, is not ascer tainable and hence not provided for . 20. Pre-operative and trial run expenses in respect of Projects upto 31st March, 1989 to becapitalised Raw material consumed (during trial run) Carriage inward Consumption of stores, chemicals and catalysts Electric power, fuel and water Labour charges Excise duty Sales Tax Salaries, Wages and Bonus Employees welfare and other amenities Sales and distribution expenses Insurance Rent Rates and taxes Other repairs Travelling Expenses General expenses Debentures issue expenses Interest: Debentures Fixed loans Others (Net) Less: Sales/transfer/stock at end of Trial run Miscellaneous income Transferred/Capitalised by allocating to Building, Plant and machinery (Rs.in Crores) Total upto Upto 30th 31st March 1989 52.17 1.69 June, 1988 27.96 0.25 1988-89 24.21 1.44 0.04 5.49 0.03 0.05 – 0.63 0.11 – 0.45 - – 0.12 0.02 11.39 – 18.36 6.53 0.90 69.77 35.98 0.02 33.77 1.71 25.21 0.54 1.63 0.43 3.58 2.12 0.16 1.71 1.14 0.02 0.11 1.40 39.22 23.45 107.33 38.01 14.92 290.90 39.84 1.62 249.44 1.75 30.70 0.57 1.68 0.43 4.21 2.23 0.16 2.16 1.14 0.02 0.23 1.42 50.61 23.45 125.69 44.54 15.82 360.67 75.82 1.64 283.21 – 146.30 146.30 33.77 103.14 136.91 The above items are not forming part of profit and loss account. 22 LICENCED AND INSTALLED CAPACITY (a) (b) (c) (d) (e) (f) (9) (h) (i) (j) (k) Polyester Filament Yarn/Polyester Chips Polyester Staple Fibre/Polyester Chips Man-made Fibre Spun Yarn on Worsted System Man-made Fabrics Purified Terepthalic Acid Linear Alkyl Benzene Synthetic Filament Yarn including Industrial Yarn/Tyre Cord Ethylene Propylene Butadiene 8 Other C4s Acrylic Fibre * On the basis of Letter of Intent received + Based on average Denier of 40 Installed Capacity based on Certificate of the Management. (Spindles) (Looms) (Knitting M/c.) Reliance As at 31st March, 1989 Rs. As at 31st March, 1989 Rs. (Rs. in crores) As at 30th June, 19888 Rs. As at 30th June, 1988 Rs. 21. CONTINGENT LIABILITIES (a) Estimated amount of contract remaining to be executed on capital account and not provided for (b) Outstanding guarantees furnished and Letters of Credit opened by Bankers (c) Bonds executed in favour of Excise and Custom Authorities (d) Uncalled liability on partly paid shares(Rs. 16,875) 46.75 140.46 75.08 (Previous year Rs.16,875) (e) Claims against the company not acknowledged as debts including Rs.4.17 crores for excise duty (Previous year Rs.2.26 crores) (f) Export bills discounted against irrevocable Letters of Credit (9) Indemnities towards export obligations against capital goods import (h) Guarantee to Banks and Financial Institutions against credit facilities extended to subsidiary companies (Facilities utilised upto 31.3.89 Rs.5.40 crores) (i) Import Duty on Raw Materials/Chemicals & catalysts imported under Advance Licences against fulfilment of export obligations. 6.29 1.43 0.62 6.00 7.23 113.09 30.93 89.44 4.65 0.87 0.65 3.00 16.48 Unit M.T. M.T. Nos. Nos. Nos. M.T. M.T. M.T. M.T. M.T. M.T. M.T. Licensed Capacity Installed Capacity 1988-89 32,300 45,000 20,000 4 5 0 22 100,000 60,000 2,000 320,000* 155,000* 98,000* 20,000* 1987-88 25,125 45,000 12,500 4 5 0 22 100,000 60,000 2,000 – – – – + 1988-89 25,125 45,000 12,494 4 5 0 20 100,000 60,000 – – – – – + 1987-88 25,125 45,000 12,494 4 5 0 20 100,000 60,000 – – – – – 19 Reliance 23. PRODUCTION OF FINISHED PRODUCTS MEANT FOR SALE Yarn (Polyester, Cotton, Blended etc ) Polyester Chips Fabrics Polyester Staple Fibre P.T.A. L.A.B. By Products 24. VALUE OF IMPORTS ON C.l.F. BASIS IN RESPECT OF: (a) Raw Materials (b) Dyes and Chemicals, Catalysts. Stores and Spare par ts (c) Capital goods 25. EXPENDITURE IN FOREIGN CURRENCY ON ACCOUNT OF Unit M.T. M.T. Mtrs. in lacs M.T. M.T. M.T. M.T. Interest on foreign currency loans Interest on Debentures held by Non-residents on repatriation basis (Gross) Other matters (including commitment charges (Rs.15,625, on foreign currency loans - Previous year Rs.0.03 crore) Technical know-how & Engineering Fees 1988-89 42,541 4,149 365.87 27,374 32,881 28,413 3,201 1988-89 Rs. 115.85 20.32 5.64 1988-89 Rs. 17.16 8.63 6.90 26.14 1987-88 64,068 1,952 587.72 38,004 25,748 28,022 2,798 (Rs. in crores) 1987-88 Rs. 105.91 43.85 38.80 1987-88 Rs. 34.44 28.13 7.81 24.45 26. QUANTITATIVE INFORATION IN RESPECT OF OPENING STOCK, CLOSING STOCK, PURCHASES, SALES AND CONSUMPTION OF RAW MATERIALS (a) Opening Stock Finished Stocks Yarn Fabrics Polyester Staple Fibre Polyester Chips L.A.B. Stock-in-process ii) iii) Others (b) Closing Stock: i) i) Finished Stocks Fabrics Polyester Staple Fibre Polyster Chips L.A.B. Stock-in-process ii) iii) Others (c) Purchases Yarn Fabrics Sea Foods Others (d) Sales Yarn (Polyester & Blended) Fabrics Polyester Staple Fibre Polyester Chips P.T.A. L.A.B Sea Foods Others (e) Raw Material consumed PTA (including own production during trial run) Paraxylene (including own production during trial run) M.E.G Fibre Yarn Fabrics (Grey) N. Paraffin Benzene Others Less/Add: Difference in stock of useable waste * Excluding during trial run 20 Unit Quantity Rs. in crores Quantity Rs. in crores 1988-89 1987-88 100.28 115.28 M.T. Mtrs. in lacs M.T. M.T. M.T. M.T. Mtrs. in lacs M.T. M.T. M.T. M.T. Mtrs. in lacs M.T. M.T. Mtrs in lacs M.T. M.T. M.T. M.T. M.T. M.T. M.T. M.T. M.T. M.T. Mtrs. in lacs M.T. K.L. 3,619 83.59 3,664 1,529 4,811 4,675 85.70 5,362 3,408 6,009 590 3.92 – 42,556 367.68 25,697 2,222 31,199 27,215 – 313 67,968 26,613 1,926 2,414 89.81 23,527 11,096 – 50.70 4.84 143.32 60.07 1.70 14.21 621.76 161.80 128.57 11.15 103.90 69.77 – 15.50 1,112.45 0.4 121.41 95.32 13.28 43.27 13.68 24.68 7.63 18.00 337.67 (–) 0.76 336.91 5,382 104.22 6,417 324 – 3,619 83.59 3,664 1,529 4,811 632 326.62 71 65,922 927.19 40.772 747 3,866 16,968 71 80,843 14,311 36,726 2,086 7,385 143.21 6,509 2,906 – 41.65 2.48 100.28 50.70 4.84 210.70 951 27 508.59 235.02 3.33 9.47 41.89 0.67 20.50 1,770.74 138.59 17.58 55.06 16.18 145.92 20.72 6.14 1.98 3.94 406.11 10.80 416.91 27. VALUE OF RAW MATERIALS CONSUMED Imported (including import duty Rs.101.68 crores) Indigenous 28. VALUE OF DYES CHEMICALS, CATALYSTS, STORES AND SPARE PARTS CONSUMED: Imported Indigenous 29. EARNINGS IN FOREIGN EXCHANGE Export of goods on FOB basis 30. REMITTANCE IN FOREIGN CURRENCY ON ACCOUNT OF DIVIDEND The Company has paid dividend in respect of shares held by Non-Residents on repatriation basis. This inter-alia includes portfolio investment and direct investment, where the amount is also credited to Non-Resident External Account (NRE A/c). The exact amount of dividend remitted in foreign currency cannot be ascertained. The total amount remittable in this respect is given herein below: (a) Number of Non-resident shareholders – Year ended 31-12-86 – Final/lnterim dividend 1987/88 (b) Number of Equity Shares held by them – Year ended 31-12-86 – Final/lnterim dividend 1987/88 (i) Amount of dividend paid (Gross)-Tax at source Rs.0.32 crore (Previous year Rs.0.95 (c) crore) – Year ended 31-12-86 – Final/lnterim dividend 1987/88 (ii) Year to which dividend relates Reliance 1987-88 % of total Consumption 55.05 44.95 100.00 1987-88 % of total Consumption 42.37 57.63 100.00 (Rs. in crores) 1987-88 Rs. 21.13 (Rs. in crores) 1987-88 Rs. Rs. in Crores 221.93 114.98 336.91 1988-89 % of total Consumption 65.87 34.13 100.00 1988-89 Rs. in Crores 229.53 187.38 416.91 Rs. in Crores % of total Rs. in Crores Consumption 49.08 50.92 100.00 21.30 22.09 43.39 19.81 26.94 46.75 1988-89 Rs. 26.14 1988-89 Rs. – 23,237 – 15,529,421 105 24,791 3,504,369 21,345,661 – 1.96 Final Div. 1987-88 0.88 3.78 Final Div. 1986 & Interim Div. 1987-88 (Rs. in Crores) 1987-88 Rs. 1988-89 Rs. 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 (i) Number of employees (ii) Salaries and Bonus (iii) Contribution to Provident Fund & Superannuation Fund (iv) Other Perquisites (b) Break-up of expenditure incurred on employees who were employed tor 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 (i) Number of employees (ii) Saiaries and Bonus (iii) Contribution to Provident Fund & Superannuation Fund (iv) Other Perquisites 436 212 2.09 0.46 1.01 0.17 0.04 0.09 1.95 0.46 0.72 0.46 0.11 0.21 99 60 As per our Report of even date For RAJENDRA & CO. Chartered Accountants For CHATURVEDI & SHAH Chartered Accountants For and on behalf of the Board D.H. Ambani R.H. Ambani Chairman & Managing Director Joint Managing Director R.J. Shah Proprietor D. Chaturvedi Partner Bombay Dated: 10th August, 1989 J.R. Shah T. Ramesh U. Pai M.L. Bhakta V.V. Divecha B.D. Shah N.H. Ambani M.D. Ambani A.D. Ambani N.R. Meswani V.M. Ambani Directors Executive Directors Secretary 21 Reliance STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956 RELATING TO COMPANY’S INTEREST IN THE SUBSIDIARY COMPANIES 1. The Financial Year of the subsidiar y companies ended on 31st March, 1989 31st March, 1989 31stMarch, 1989 2. Date from which they became subsidiary companies 30th September, 1985 11th January, 1988 30thDecember, 1988 Devti Fabrics Ltd. Reliance Petrochemicals Ltd. Trishna Investments and Leasings Ltd. 3. 4. (a) No. of shares held by Reliance Industries Limited (holding company) with its nominees in the subsidiaries at the end of the financial year of the subsidiary companies (b) Extent of interest of holding company at the end of the 2,10,070 Equity Shares of the face value of Rs.10/- each fully paid up 100% 5,76,00,000 EquityShares of the face value of Rs.10/- each fully paid up 66% 3,400 Equity Shares of the facevalue of Rs.10/-each fully paid-up 77% financial year of subsidiary companies The net aggregate amount of the subsidiary companies’ pro fit/(losses) so far as it coricerns the members of the holding company (a) Not dealt with the holding company’s accounts i) ii) For the financial year ended 31st March, 1989 For the previous financial years of the subsidiary (Rs.74.06 lacs) (Rs.122.49 lacs) companies since they became the holding company’s subsidiaries (b) Dealt with in holding company’s accounts: i) ii) For the financial year ended 31st March, 1989 For the previous financial year of the subsidiar y companies since they became the holding company’s subsidiaries Nii Nil Rs.331.33 lacs Rs.47.29 lacs – Nil Nil – Nil Nil For and on behalf of the Board D.H. Ambani R.H. Ambani Chairman & Managing Director Joint Managing Director J.R. Shah T. Ramesh U. Pai M.L. Bhakta V.V. Divecha B.D. Shah N.H. Ambani M.D. Ambani A.D. Ambani N.R. Meswani V.M. Ambani Directors Executive Directors Secretary Bombay Dated: 10th August, 1989 22 RELIANCE PETROCHEMICALS LIMITED Regd. Office : Village Mora, Batha, P.O. Surat - Hazira Road, Dist. Surat, PIN 394 510 Gujarat State. 31 32 DIRECTORS’ REPORT To the Members Your Directors have pleasure in presenting the first Annual Repor t together with the Audited Statement of Accounts for the period from 11th January, 1988 (the date of incor poration) to 31st March 1989. 1. FINANCIAL RESULTS Profit before tax Less: Provisions and/or appropriations (Rs. in crores) 5.96 (a) Taxation 0.94 (b) Recommended dividend (subject to deduction of tax) 4.54 on Equity Shares 0.25 0.23 Transfer to General Reserve Balance carried to Balance Sheet 2. DIVIDEND: Your Directors have recommended a maiden dividend, of 15%, pro rata, (subject to deduction of tax) payable on the equity shares for the period commencing from the date of incorporation till 31st March 1989, aggregating Rs.4.54 crores, to be paid, if approved. by the shareholders at the ensuing Annual General Meeting. 3. FIRST ACCOUNTING YEAR: Your Directors have fixed the first Accounting Year of the Company from 11 th January 1 988, the date of incorporation, upto 31 st March 1989 and accordingly the accounts reflected herein are for the said period. 4. PROMOTION AND INCORPQRATION : Your Company was promoted by Reliance Industries Limited for implementing the projects for manufacture of Poly Vinyl Chloride (PVC), Mono Ethylene Glycol (MEG) and High Density Polyethylene (HDPE). Reliance Industries Limited has invested in the equity capital of the Company to the extent of Rs.57.60 Crores and an interest free non refundable loan of Rs.50 crores to be converted into equity shares, at par, on 26th October 1991. Your Company continues to be a subsidiary of Reliance Industries Limited. In order to raise finance for implementing the three projects, Your Company had made an issue of Conve rtible Debentures aggregating Rs.516 crores. This issue was the largest ever issue of convertible debentures made by a company in the private sector. The issue was heavily oversubscribed. In terms of the consent order of the Controller of Capital Issues (CCI), the Company retained 15% of the over subscription amounting to Rs.84.9 crores. The securities of the Company have been enlisted on the Stock Exchanges at Ahmedabad and Bombay. 5. PROJECT IMPLEMENTATION: Your Directors are pleased to inform you that the Industrial Licences for manufacture of PVC and HDPE and Letter of Intent for manufacture of MEG issued in favour of Reliance Industries Limited, the holding company, have been endorsed in favour of your Company. RELIANCE PETROCHEMICALS LIMITED Reliance Industries Limited, had been allotted land admeasuring 245 hectares from Gujarat Industrial Development Corporation (GIDC) at Viliage Moral Dist. Surat, Gujarat for the purpose of setting up the three projects. Out of the above, your company has obtained transfer/possession of 122.5 hectares and requisite actions are being taken for acquiring the balance land. Your Company has taken all necessary steps for purchase, supply and import of equipments and your Directors expect that barring unforeseen circumstances the projects would be commissioned in the second half of 1990 as per schedule. 6. VERDICT OF HON’BLE SUPREME COURT: Your Directors are pleased to state that the serious challenge posed by the Writ Petitions and Suits filed against the Company and the Controller of Capital Issues challenging the Consent Orders issued by the latter relating to the Public Issue of Fuliy Convertible Debentures on various grounds, has been totally negatived by the Hon’ble Supreme Court by dismissing these proceedings. The Hon’ble Supreme Cour t has confirmed that there was no discrimination or non-compliance of statutor y requirements or non-observance of guidelines or creation of illusory securities in favour of the Debenture Trustees or illegality, impropriety or irrationality attached in respect of the said Public Issue. The Hon’ble Supreme Court on the contrary observed that the proceedings were not genuine or properly motivated out of public interest but were malafide or borne out of grudge. Hon’ble Supreme Court also observed that having regard to the principles of comity of Cour t in a federal structure, due regard to self restraint and self conception should be observed where an injunction affects an all India issue or has ramification all over the countr y. This has been a land mark Judgement in the Corporate history. 7. FIXED DEPOSITS: Since your company has not accepted any deposits from the public, no information is required to be furnished in respect of outstanding deposits. 8. PERSONNEL: As required by the provisions of Section 21 7(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 par t of the report. 9. DIRECTORS: Shri Mukesh D. Ambani, Shri Anil D. Ambani and Shri Atul S. Dayal were the first Directors of the Company as stated in the Ar ticles of Association of the Company. By virtue of the Articles of Association of the Company, Shri Mukesh D. Ambani and Shri Anil D. Ambani are per manent Directors of the Company and are not liable to retire by rotation. Shri Atul S. Dayal retires by rotation and being eligible offers himself for reappointment. Shri Dhirubhai H. Ambani, Shri K.K. Pai, Dr. R. Rajagopalan, Shri Suresh A. Shroff and Shri Y.P. Tr ivedi were appointed as Additional Directors. In terms of Section 257 of the Companies 33 RELIANCE PETROCHEMICALS LIMITED Act 1956, the Company has received notices from some shareholders signifying their intention to propose the above Directors for appointment as Directors retiring by rotation at the ensuing Annual General Meeting. 10. AUDITORS & THEIR REPORT: and Staff of the holding Company (Reliance Industri e s Limited) and also the Executives and Staff of the Company. Your Directors place on record their appreciation of the w h o l e h e a r t e d a n d c o n t i n u e d s u p p o r t ex t e n d e d by t h e investors to make the fully conver tible secured debenture issue a great success. For and on behalf of the Board of Directors Dhirubhai H. Ambani Chair man. Bombay 400 021 Dated: 16th May, 1989 Messrs. Chaturvedi & Shah and Messrs. Rajendra & Company, Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting and are recommended for reappointment. The Company has received Cer tificates from these Auditors to the effect that their reappointment, if made, would be within the prescr ibed limits under Section 224(1) of the Companies Act 1956. Regarding the note referred to in the Auditors’ Repor t, your Directors clar ify that a large number of bank branches were authorised to refund excess applacation money and collect calls in arrears of shares and debentures. In deference to the requests received from shareholders, the Directors having extended the last date for payment of call money due from them upto 30th Apr il. 1989, the reconcilation of the bank accounts will be completed during the current year. 11. In terms of Section 217(1 ) of the Companies Act 1956 (as amended) and the Companies (Disclosure of Particulars in the Repor t of Board of Directors) Rules 1988, your Directors fur nish hereunder the additional information as required: A. Conservation of Energy: Since the projects for the manufacture of MEG, PVC and HDPE are still in the implementation stage and no manufacturing activities have commenced till the date of the repor t, there is nothing to be disclosed in respect of conser vation of energy. However, the project envisages captive gas turbo generators with cogeneration of waste heat steam. B. Technology Absor ption: Arrangements have been made with licensors to provide technology for the manufacture of products, under the Project. The Technology agreements include provision for training, which will assist the Company ~n absorption of the technology from the respective licensors. C. Foreign Exchange Ear nings and Outgo (Rs. in Crores) 1. 2. Foreign Exchange earnings (Tender fees received equivalent to U.S.$ 1,125 Rs. 16,753) Foreign Exchange Outgo: (i) Technical Fees (ii) Travelling Expenses (iii) Debenture Issue expenses – Rs.3.91 Rs.0.05 Rs.0.11 12. ACKNOWLEDGEMENT: Your Directors would like to express their grateful appreciation of the assistance and cooperation received from the Financial Institutions and Banks dur ing the period under review. Your Directors wish to place on record their deep sense of appreciation of the devoted services rendered by the Executives 34 AUDITORS’ REPORT To The Members of Reliance Petrochemicals Limited V Ve have audited the attached Balance Sheet of RELIANCE PETROCHEMICALS LIMITED as at 31st March. 1989 and the Profit & Loss Account for the period from 11th January 1988 to 31st March. 1989 annexed thereto and report that: 1. As required by the Manufacturing and Other Companies (Auditors’ Report) Order 1988, issued by the Company Law Board in terms of Section 227(4A) of the Companies Act 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order. 2. Further to our comments in the Annexure referred to in paragraph 1 above, we report that: (a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessar y for the purposes 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 such books. (b) (d) (c) The Balance Sheet and Profit and Loss Account referred to in this report are ~n agreement with the books of account. In our opinion and to the best of our infor mation and according to the explanat~ons given to us. the said Balance Sheet and Profit & Loss Account read together with the notes thereon. subject to the note relating to interest on callsin- arrears being accounted by the Company as and when receivea and the refund of the excess application money received and unpaid calls on shares/debentures are under reconciliation’ give the infor maticn required under the Companies Act 1956 in the manner so required and give a Irue and fair view (i) in so far as it relates to the Balance Sheet of the state of affairs of the Company as at 31st March, 1989 and in so far as it relates to the Profit and Loss Account of the “profit’’ of the Company for the period ended on that date. (ii) For CHATURVEDI & SHAH Chartered Accountants For RAJENDRA & COMPANY Chartered Accountants D. Chaturvedi Partner Bombay Dated: 16th May, 1989 R.J. Shah Proprietor ANNEXURE TO AUDITORS’ REPORT Re: Reliance Petrochemicals Limited Referred to in pare (1) of our report of even date. 1. The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets. All the assets have been physically verified by the management during the period and no material discrepancies were noticed on such verification. 2. None of the Fixed Assets have been revalued during the period. The Company has received, in accordance with the consent of 3. the Controller of Capital Issues, an interest free loan from the holding company which shall be converted into Equity Shares at par on 26th October, 1991. It has not taken any other loan secured or unsecured from companies, firms or other parties as listed in the register maintained under Section 301 of the Companies Act, 1956 or from companies under the same management within the meaning of Section 370(1 B) of the Companies Act, 1956. The terms and conditions of the above loan are not in our opinion prima facie prejudicial to the interest of the Company. RELIANCE PETROCHEMICALS LIMITED 4. 5. 6. 7. 8. 9. The Company has not granted any loans, secured or unsecured to companies fir ms or other parties listed in the Register maintained under Section 301 of the Companies Act. 1956 or to companies under the same management within the meaning of Section 370(1 B) of the Companies Act. 1956. The terms and conditions of advances in the nature of loans given by the Company provide for repayment of principal amount and interest periodically. No instalment of principal or interest has fallen due during the period. In our opinion 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 with regard to the purchases of plant and machinery and equipment and for the sale of goods. In our opinion and according to the information and explanations given to us, there are no transactions of purchases of goods and material and sales of goods/material and ser vices made in pursuance of contracts or arrangements required to be entered in the registers maintained under Section 301 of the Companies Act,1 956. The Company has not accepted any deposits from the Public and consequently the provision of Section 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 are not applicable. In our opinion the Company has an Internal Audit system commensurate with the size and nature of its business. 10. Dur ing the period under review we are infor med that the provisions of Employees, Provident Fund and Employees’ State Insurance Scheme Fund are not applicable. The Company has voluntarily implemented the scheme of Provident Fund and deposited a part of the dues with the Trust of the holding company and the balance has been deposited with Provident Fund Commissioner after getting necessary approvals. 11. According to the information and explanations given to us, no undisputed amounts payable in respect of income tax’ wealth tax, sales tax, customs duty and excise duty were outstanding as at 31st March, 1989 for a period of more than six months from the date they became payable. 12. According to the information and explanations given to us. no personal expenses of employees or directors have been charged to revenue account, other than those payable under the contractual obligations or in accordance with generally accepted business practice. 13. The Company is not a sick industrial company within the meaning of clause (0) of sub section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act 1985. 14. The Company is in the process of setting up projects for manufacture of Petrochemicals and no manufacturing operations have commenced Para 4A(iii). (iv) (v). (vi). (xii). (xiv) and (xvi). 4B, 4C and 4D of the aforesaid order are therefore not applicable. For CHATURVEDI & SHAH Chartered Accountants For RAJENDRA & COMPANY Chartered Accountants D. Chaturvedi Partner Bombay Dated: 16th May, 1989 R.J. Shah Proprietor 35 RELIANCE PETROCHEMICALS LIMITED BALANCE SHEET AS AT 31ST MARCH, 1989 Schedule SOURCES OF FUNDS: Shareholders’ Funds Share Capital Reserves and Sur plus Loan Funds Secured Loans Unsecured Loans TOTAL APPLICATION OF FUNDS: Fixed Assets Gross Block Less: Depreciation Net Block Capital Work-in-progress Investments Current Assets, Loans and Advances Current Assets interest accrued on Investments Cash and Bank Balances Loans and Advances Less: Current Liabilities and Provisions Current Liabilities Provisions Miscellaneous Expenditure (to the extent not written-off or adjusted) Preliminary Expenses TOTAL Notes and Contingent Liabilities ‘A’ ‘B’ ‘C’ ‘D’ ‘E’ ‘F’ ‘G’ ‘H’ ‘I’ ‘J’ ‘N’ Rs. 86.47 0.48 632.03 50.00 23.01 0.85 22.16 163.29 7.07 379.45 22.51 409.03 44.50 5.52 50.02 (Rs in crores) Rs. 86.95 682.03 768.98 185.45 224.49 359.01 0.03 768.98 As per our Report of even date For and on behalf of the Board For CHATURVEDI & SHAH For RAJENDRA & CO. Director Chartered Accountants Chartered Accountants D.H. Ambani Chairman D. Chaturvedi Partner R.J. Shah Proprietor Bombay Dated: 16th May, 1989 36 M.D. Ambani A.D. Ambani A.S. Dayal Dr. R. Rajagopalan S.A. Shroff Y.P. Trivedi Rohit C. Shah Bombay Dated: 16th May, 1989 Directors Assistant Company Secretary RELIANCE PETROCHEMICALS LIMITED PROFIT AND LOSS ACCOUNT FOR THE PERIOD FROM 11.1.1988 TO 31.3.1989 Schedule ‘K’ ‘L’ ‘M’ INCOME Sales Other Income EXPENDITURE Purchases Establishment and other expenses Interest Depreciation Less: Net Pre-operative expenditure on implementation of Projects pending allocation (See also Note no.10) Profit before Tax Provision for Taxation Profit after Tax APPROPRIATIONS: General Reserve Dividend on Equity Shares (Subject to Tax) Balance carried to Balance Sheet Notes and Contingent Liabilities ‘N’ Rs. 0.01 26.63 0.01 22.19 32.90 0.85 55.95 35.27 0.25 4.54 (Rs in crores) Rs. 26.64 20.68 5.96 0.94 5.02 4.79 0.23 As per our Report of even date For and on behalf of the Board For CHATURVEDI & SHAH For RAJENDRA & CO. Director Chartered Accountants Chartered Accountants D.H. Ambani Chairman D. Chaturvedi Partner R.J. Shah Proprietor Bombay Dated: 16th May, 1989 M.D. Ambani A.D. Ambani A.S. Dayal Dr. R. Rajagopalan S.A. Shroff Y.P. Trivedi Rohit C. Shah Bombay Dated: 16th May, 1989 Directors Assistant Company Secretary 37 RELIANCE PETROCHEMICALS LIMITED SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 1989 (Rs. in crores) SCHEDULE ‘A’ SHARE CAPITAL Authorised: 10,00,00,000 8,72,70,000 Rs. Rs. Equity Shares of Rs.10/- each Issued and Subscribed: Equity Shares of Rs.10/- each fully called up Less: Calls unpaid - by others (Refer note 9) 87.27 0.80 Of the above Equity Shares: (i) 5,76,00,000 (ii) 2,96,70,000 Shares are held by Reliance Industries Limited, the holding Company Shares were allotted at par on first conversion of Debentures SCHEDULE ‘B’ RESERVES AND SURPLUS General Reserve Transferrep trom Profit and Loss Account Profit and Loss Account SCHEDULE ‘C’ SECURED LOANS A. Debentures 12.5% Secured Fuily Convertible Debentures of Rs.200/- each tully called up Less: Converted Less: Calls unpaid - by others (Refer note 9) B. Loan Irom a Bank C. Term loan in Foreign Currencies from (i) Banks (ii) Financial Institutions 593.40 29.67 563.73 15.18 9.16 36.82 548.55 37.50 45.98 632.03 NOTES: 1. The Convertible Debentures referred to in ‘A above alongwith interest are secured by a legal mortgage in English form in favour of the Debenture Trustees by way of a residual charge on all or any of the immoveable and/or moveable assets and properties other than the current assets both present and future.situated at village Mora, District Surat in the State of Gujarat and/or at any other location and that such residual mortgage and charge shall rank expressly subject to subservient and subordinate to the mortgages to be created for item ‘C’ above ana tuture mortgages/charges as may hereinafter be created by the Company in favour of any existing or future lenders in respect of borrowings of the company as provided in the debenture trust deed. 38 2. The face value of each Debenture (Part B of Rs.40/- and Part C of Rs.150/-) will be automatically and compulsorily converted into appropriate number of equity shares of Rs.10 each at a premium, it any, as may be fixed by the Controller of Capitai Issues, after 27th October,1991 but before 26th October, 1992 and atter 27th October, 1993 but before 26th October. 1995 respectively 3. The loan referred to in ‘B’ above is secured by pledge of Fixed Deposit Receipts of Rs.50 crores. 4. (i) The Term Loan referred to in C (i) above represents Foreign Currency Loan availed by Reliance Industries Limited, the holding company, for implementation of Mono Ethylene Glycol Project. Pending necessary approvals, the Company has taken over the said loan which is secured against the Fixed Assets of Reliance Industries Limited. (ii) The Term Loan in Foreign Currencies referred to in C (ii) above is secured by hypothecation of moveable assets and would also be secured by a mortgage to be created on immoveable assets at village Mora, District Surat in the State of Guiarat. and/or at any other location, both present and future. The Company has pledged fixed deposit receipts of a Scheduled Bank aggregating to Rs,42.75 crores as an interim security for the aforesaid loan. 5. Debentures include Rs.0.66 crores held by Directors. 6. Secured Loans include Rs.39.16 crores repayable within a period of one year. SCHEDULE ‘D’ UNSECURED LOANS From Reliance Industries Limited, the holding Company (Rs. in Crores) Rs. 50.00 NOTE: The above loan is free of interest and shall be converted into Equity Share Capital, at par, on 26th October, 1991 in accordance with the consent of the Controller of Capital Issues. 100.00 86.47 Rs. 0.25 0.23 0.48 Rs. Rs. SCHEDULE ‘E’ FIXED ASSETS (Rs. in Crores) Grose Block (at cost) Depreciation Net Block Nature ot Assets Additions Rs. 0.63 3.92 18.11 0.23 0.12 23.01 Leasehold Land Buildings Plant and Machinery Furniture and Fixtures Vehicles Capital Work-in-Progress NOTES: As at 31.3.1989 Rs. upto 31.3.1989 Rs. As at 31.3.1989 Rs. 0.63 3.92 18.11 0.23 0.12 23.01 – 0.01 0.82 0.01 0.01 0.85 0.63 3.91 17.29 0.22 0.11 22.16 163.29 1. No amortisation has been made in respect of lease premium paid tor leasehold land since the grant of lease is tor a long period. 2. Capital Work in Progress: a) b) includes Rs.128.02 crores on account ot advances against Capital Expenditure. includes Rs.35 27 crores on account ot Pre-operativ e expenditure on implementation of projects pending allocation. 3. Depreciation has been provided as under: a) b) In respect ot Plant and Machinery amounting to Rs.18.10 crores and given on lease, 95% of the cost has been divided by the primary lease period ot two years and pro rated in accordance with Schedule XIV to the Companies Act, 1956 In respect of other assets, on straight line method at the rates prescribed In Schedule XIV to the Companies Act,1956. 4. Building includes Shares in a Cooperative housing society of the face value of Rs 250. RELIANCE PETROCHEMICALS LIMITED (Rs. in Crores) Rs. Rs. SCHEDULE ‘J’ PROVISIONS SCHEDULE ‘F’ INVESTMENTS (At Cost) Other Investments Government Securities Quoted 11.5% Government of India Loan 2008 (old series) Unquoted Indira Vikas Patra Other investments (Unquoted) 12,75,66,550 Units of The Unit Trust of India (1964 Scheme) 39.48 0.20 39.68 184.81 224.49 NOTES: 1. The Company purchased 13,84,16,450 units of Unit Trust of India (1964 scheme) tor Rs 190 99 crores and sold the same during the period. 2. Aggregate value of Cost Market Value Quoted investments Unquoted Investments Rs. 39.48 185.01 Rs. 39.48 – SCHEDULE ‘L’ Gratuity Superannuation and Provident Funds Provision for Taxation Proposed Dividend SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT FOR THE PERIOD SCHEDULE ‘K’ OTHER INCOME Interest Profit on sale of Investments Lease Income Other Income (Rs. in Crores) Rs. Rs. 0.04 0.94 4.54 5.52 Rs. 12.63 8.59 5.39 0.02 26.63 Rs. Rs. 3 The above investments are held by the bankers of the Company in their name wherever applicable in a fiduciary capacity. SCHEDULE ‘G’ CURRENT ASSETS Cash and Bank Balances Cash on hand (Rs.31466) Balances with Scheduled Banks i) ii) In Current Accounts In Fixed Deposit Accounts SCHEDULE ‘H’ LOANS AND ADVANCES (Unsecured considered good) Advances recoverable in cash or in kind or for value to be received Advance payment of Income Tax Deposits Rs. Rs. 69.10 310.35 – 379.45 379.45 Rs. 5.15* 1.25 16.11 22.51 Include Rs 0.01 crore due from an officer of the company (Maximum balance due at any time during the period Rs 0.01 crore ESTABLISHMENT AND OTHER EXPENSES Payment to and Provision for employees Salary. Wages and Bonus Contribution to Provident Fund and other funds Staff Welfare Expenses 0.24 0.04 0.05 Service Charges insurance (Rs.3,189) Lease Rent Rent Rates and Taxes Other repairs (Rs 1,089) Travelling Expenses Audit Fees Directors Fees (Rs 26,500) Debenture Issue Expenses Commitment Charges General Expenses SCHEDULE ‘M’ INTEREST On Debentures On fixed Loans On Other Loans 0.33 0.73 – 0.02 0.61 0.02 – 0.39 0.02 – 18.17 0.40 1.50 22.19 Rs. 29.15 3.57 0.18 32.90 SCHEDULE ‘I’ CURRENT LIABILITIES Sundry Creditors Interest accrued but not due on loans Other Liabilities Unclaimed excess debenture application money (Refer Note no.9) Rs. 2.40 29.77 0.01 12.32 44.50 SCHEDULE ‘N’ NOTES AND CONTINGENT LIABILITIES 1. 2. The Company was incorporated on 11th January 1988 and the Accounts are therefore from 11th January 1988 to 31st March 1989 This being the first financial year of the company. there are no corresponding figures for the previous year. figures are shown in crores of rupees in accordance with the approval from the Company Law Board Western Region Bombay figures less than Rs.50 000 have been shown at actuals in brackets. 39 RELIANCE PETROCHEMICALS LIMITED 3. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) as at 31st March, 1989. 202.66 (Rs. in crores) 4. Auditor’s Remuneration a) Audit Fees b) For Certification matters (included under the head Debenture Issue expenses). 5. Ouantitative information in respect of: a) Purchases b) Sales ITEM Linear Alkyl Benzene Linear Alkyl Benzene M.T. 5 5 6. Expenditure in foreign currency: Technical Fees Travelling Expenses a) b) c) Debenture Issue Expenses 7. Earnings in foreign currency: 0.02 0.04 0.01 0.01 3.91 0.05 0.11 8. Miscellaneous Income (Rs.16,753) Particulars of expenditure incurred on employees who were in receipt of remuneration which in the aggregate was not less than Rs.0.72 lacs per annum or Rs.0.06 Iacs per month. For part ot the period _ Number of employees a) Salaries and Bonus b) Contribution to Provident Fund and Other Funds c) Other Perquisites 38 0.15 0.03 0.03 10. 9. Refund of excess application money and unpaid calls on shares and debentures are under reconcilation. The interest on calls-in-arrears will be accounted for as and when received. Income earned out of funds received to the extent pertaining to the Projects has been adjusted against preoperative expenditure pending allocation. The Company has been advised that such income does not form part ot income liable to tax. Accordingly, the same has been excluded while determining provision tor taxation. 11. Licensed and Installed Capacity: Licensed Capacity Installed Capacity *60000 Tonnes Under Implementation Mono Ethylene Glycol (MEG) High Density Polyethylene (HDPE) Poly Vinyl Chloride (PVC) * Based on Letter ot Intent. 12. As the company has not commenced any manufacturing activity, the information required under paragraph 3, 4C and 4D ot Part II of Schedule Vl to the Companies Act, 1956, has been given to the extent applicable. Under Implementation Under Implementation 100000 Tonnes 50000 Tonnes As per our Report of even date For and on behalf of the Board For CHATURVEDI & SHAH For RAJENDRA & CO. Director Chartered Accountants Chartered Accountants D.H. Ambani Chairman D. Chaturvedi Partner R.J. Shah Proprietor Bombay Dated: 16th May, 1989 M.D. Ambani A.D. Ambani A.S. Dayal Dr. R. Rajagopalan S.A. Shroff Y.P. Trivedi Rohit C. Shah Bombay Dated: 16th May, 1989 Directors Assistant Company Secretary 40 RELIANCE PETROCHEMICALS LIMITED 41 42 DEVTI FABRICS LIMITED Regd. Office: 3rd Floor, Maker Chambers IV 222 Nariman Point Bombay 400 021 43 44 DEVTI FABRICS LIMITED DIRECTORS REPORT DIRECTORS: To The Members, Your Directors present the Fifth Annual Report together with the Audited Statement of Accounts for the financial year ended 31st March, 1989 (15 months) OPERATIONS: Your Company has incurred a loss of Rs.74.06 lakhs during the financial year under review as against the loss of Rs.123.96 lakhs last year. Your Company has cur tailed avoidable expenditure and due to intensified marketing it was able to achieve better results. DIVIDEND: In view of the carr ied forward losses, your Directors have not proposed any Dividend for the Financial Year under review. ACCOUNTING YEAR In order to facilitate compliance with requirement of Direct Tax Laws Amendment Act 1987, the Company s accounting year has been changed to 31st March, 1989. The accounts under review have been prepared for a period of 15 months ended on 31st March, 1989. EXPANSION/MODERNISATION SCHEME: Your Company s modernisation programme is progressing. Out of the plan outlay of Rs.494 lakhs, the Company has spent Rs.432 lakhs uptil now and renovated the Spinning Department. The modernisation would be completed during the current financial year. Shri Natubhai M. Sanghavi and Shri Kirti V 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. Chaturvedi & 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. DEPOSITS: The Company has not accepted any deposit from the public. Hence, no information is required to be appended to this report. 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 March, 1989 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. ANNEXURE TO DIRECTORS’ REPORT STATEMENT OF PARTICULARS OF EMPLOYEES UNDER SECTION 217(2-A) OF THE COMPANIES ACT, 1956 AND FORMING PART OF THE DIRECTORS REPORT. Sr. Name of the No. Age Employee Designation (Years) Gross Remuneration Rs. Qualification Experience (Years) Date of Joining Lest Employment held Designation & period for which post held 1. Shri H.N.R. Iyengar 2. Shri Sunil Shaw 3. Shri M.M. Mishra 59 42 57 Chief Manager 90,539 B.Sc., D.T.T. Chief Engineer cum Factory Manager 1,00,473 D.E. (Elec.) 1st Class Spg. Supdt. 96,360 Matric 33 17 31 9.7.87 1.10.85 1.10.85 Textile Consultant Chef Manager 1 year Reliance Inds. Ltd, Sidhpur. Chief Engineer 3 year 10 month Reliance Inds. Ltd., Sidhpur Spg. Master 3 years 9 months NOTES: 1. All appointments are non-contractual and terminable by notice on either side. 2. Remuneration includes Salary, Allowances, Contribution to Provident Fund, Superannuation Fund, Taxable value of perquisites and ex-gratia payment. 3. None of the employees is related to any Director of the Company. 4. Information about qualification and previous employment is based on particulars furnished by the concerned employee. 5. All the employees except Mr. H.N.R Iyengar were employees of Reliance Industries Limited, the Holding Company and their services have been transferred to the Company w.e.f. 1.10.1985 togather with all their past accumulated privileges. 6. * Denotes for part of the year. Registered Office : 3rd floor, Maker Chambers IV, 222 Nariman Point, Bombay 400 021. Dated: 28th July.1989 For and on behalf of the Board S. Natarajan Vinod M. Ambani Directors 45 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 March, 1989 and the Profit & Loss Account of the Company for the period ended on that date annexed thereto and report that: 1. As required by the Manufacturing and Other Companies (Auditors Report) Order, 1988, issued by the Company Law Board in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. 2. Further to our comments in the Annexure referred to in paragraph 1 above, we state that: a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. In our opinion proper books of accounts as required by law have been kept by the Company, so far as appears from our examination of such books. b) c) The Balance Sheet and Profit and Loss Account referred to in this Report d) are in agreement with the books of account. In our opinion and to the best of our information and according to the explanations given to us, the said Balance Sheet and Profit and Loss Account read together with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view: i) in so far as it relates to the Balance Sheet of the state of affairs of the Company as at 31st March, 1989 and in so far as it relates to the Profit and Loss Account of the Loss of the Company for the period ended on that date. ii) For RAJENDRA & CO. Chartered Accountants For CHATURVEDI & SHAH Chartered Accountants R.J. SHAH Proprietor Bombay Dated: 28th July, 1989. D. CHATURVEDI Partner ANNEXURERE RE: DEVTI FABRICS LIMITED Referred to in Paragraph 1 of our Report of even datel 1. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. We are informed that all the assets have been physically verified by the Management during the period and that no material discrepancies were noticed On such verification In our opinion, the frequency of such physical verification is reasonable. 46 2. None of the fixed assets have been revalued during the period. 3. The stocks of finished goods, stores, spare parts and raw materials have been physically verified by the Management during the period. In our opinion, the frequency of such verification is reasonable. 4. In our opinion, the procedures of physical verification of stocks followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business. 5. As explained to us, there were no material discrepancies noticed on physical verification of the stocks and the same have been properly dealt with in the books of account. 6. In our opinion and on the basis of our examination of stock and other records and after considering the method adopted for accounting of excise duty referred to in Note No.7 of Schedule K to the accounts. In our opinion the valuation of stocks is fair and proper and is in accordance with the normally accepted accounting principles and is on the same basis as in the preceding year. 7. The Company has taken an interest-free unsecured loan from the Holding Company. It has not taken any other loan, secured or unsecured, from companies, firms or other par ties as listed in the register maintained under section 301 of the Companies Act, 1956 or from companies under the same Management within the meaning of section 370(1B) of the Companies Act.1956. The terms and conditions of the above loan are not, in our opinion, prima facie, prejudicial to the interest of the Company. 8. The Company has not granted any loans, secured or unsecured to companies, firms or other parties listed in the Register maintained under section 301 of the Companies Act, 1956 or to companies under the same Management within the meaning of section 370(1B) of the Companies Act, 1956. 9. In respect of loans and advances in the nature of loans given by the Company, the parties have generally repaid the principal amounts as stipulated and have also been regular in the payment of interest wherever applicable. 10. In our opinion 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 with regard to purchases of stores, raw materials including components plant and machinery, equipment and other assets and for the sale of goods. 11. In our opinion and according to the information and explanations given to us, there are no transactions of purchase of goods and materials and sale of goods, materials and services made in pursuance of contracts or arrangements entered in the registers maintained under section 301 and aggregating during the year to Rs 50,000/- or more in respect of each party. 12. As explained to us, the company has a regular procedure for the determination of unser viceable or damaged stores, raw materials and finished goods. Adequate provision has been made in the accounts for the loss arising on the items so determined. 13. The Company has not accepted any deposit from the public and consequently the provisions of Section 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 are not applicable to the Company. 14. the Company has no by-products and in our opinion reasonable records have been maintained by the Company for the sale and disposal of realisable scrap wherever significant. 15. The Company has not formally introduced an internal audit system. Its procedures, however, involve reasonable checking of its internal records. DEVTI FABRICS LIMITED 16. 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 have broadly reviewed the records in this connection and are of the opinion that the prescribed accounts and records have been made and maintained. However, no detailed examination of the same has been carried out. 17. According to the records of the Company, Provident Fund and Employee State Insurance dues have been regularly deposited with the appropriate authorities . 18. According to the information and explanations given to us, no undisputed amounts payable in respect of income-tax, wealth-tax, sales-tax, customs duty and excise duty were outstanding as on 31st March, 1989 for a period of more than six months from the date they became payable. 19. According to the information and explanations given to us, no personal expenses of employees or Directors have been charged to revenue account other than those payable under contractual obligations or in accordance with generally accepted business practice. 20. The Company is not a sick industrial company within the meaning of clause(o) of sub-section (1) of section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985. 21. In respect of the service activities of the Company: (a) The Company has a reasonable system of recording receipts, issues and consumption of stores commensurate with its size and the nature of its business. (b) The Company does not have any significant allocation of material in respect of the processing activities carried out on job work basis. (c) The Company has a reasonable system of allocating man-hours utilised to the relative jobs commensurate with its size and nature of its business. (d) There is a reasonable system of authorisation at proper levels and an adequate system of internal control commensurate with the size of the Company and the nature of its business on the issue of stores and allocation of stores and labour to relative jobs. 22. In respect of the trading activities of the Company there were no goods in damaged conditions at the end of Period, the value of which was significant. For RAJENDRA & CO. Chartered Accountants For CHATURVEDI & SHAH Chartered Accountants R.J. SHAH Proprietor D. CHATURVEDI Partner Bombay Dated: 28th July, 1989. 47 DEVTI FABRICS LIMITED BALANCE SHEET AS AT 31ST MARCH, 1989 Schedule Rs. Rs. Rs. Rs. As at 31.3.1989 (Rs. in lacs) As at 31.12.1987 ‘A’ ‘B’ ‘C’ ‘D’ ‘E’ ‘F’ SOURCES OF FUNDS: Shareholders’ Funds Capital Loan Funds Secured Loans Unsecured Loans (from Holding Company) TOTAL APPLICATION OF FUNDS: Fixed Assets Gross Block Less: Depreciation Current Assets, Loans & Advances Current Assets Inventories Sundry Debtors Cash & Bank Balances Loans & Advances Less: Current Liabilities a Provisions Liabilities Provisions Miscellaneous expenditure (to the extent not written off or adjusted) Profit & Loss Account TOTAL 21.01 21.01 21.01 21.01 556.08 135.00 451.40 126.63 213.00 19.09 103.33 335.42 28.55 363.97 172.40 0.92 173.32 691.08 712.09 448.61 135.00 384.83 70.48 583.61 604.62 324.77 314.35 158.79 60.83 17.13 236.75 10.96 247.71 77.85 2.22 80.07 190.65 167.64 0.12 196.55 712.09 0.14 122.49 604.62 Notes and Contingent Liabilities ‘K As per our Report of even date For and on behalf of the Board For RAJENDRA & CO. Chartered Accountants For CHATURVEDI & SHAH Chartered Accountants R.J. Shah Proprietor Bombay Dated: 28th July, 1989. 48 D. Chaturvedi Partner S. Natarajan Vinod M. Ambani Directors PROFIT & LOSS ACCOUNT FOR THE PERIOD ENDED 31ST MARCH, 1989 Schedule ‘G’ ‘H’ ‘I’ ‘J’ INCOME Sales (Net) Other Income Variation in stock EXPENDITURE Purchases Manufacturing & Other Expenses Interest Depreciation Profit/(Loss) for the period Add: Balance brought forward from last year Profit/(Loss) Balance carried to Balance Sheet Notes and Contingent Liabilities ‘K’ DEVTI FABRICS LIMITED For the period ended 31.3.1989 Rs. Rs. (Rs. in Lacs) For the period ended 31.12.1987 Rs. Rs. 1307.23 235.46 13.82 79.52 1402.91 91.64 56.50 1343.81 43.14 (29.08) 1556.51 1357.87 51.24 1315.52 65.99 49.10 1630.57 (74.06) (122.49) (196.55) 1481.85 (123.98) 1.49 (122.49) As per our Report of even date For and on behalf of the Board For RAJENDRA & CO. Chartered Accountants For CHATURVEDI & SHAH Chartered Accountants R.J. Shah Proprietor Bombay Dated: 28th July, 1989. D. Chaturvedi Partner S. Natarajan Vinod M. Ambani Directors 49 DEVTI FABRICS LIMITED SCHEDULES FORMING PART OF THE BALANCE SHEET SCHEDULE ‘A’ SHARE CAPITAL Authorised: As at 31.3.1989 Rs. (Rs In lacs) As at 31.12.1987 Rs. 2,50,000 Equity Shares of Rs 10/- each 25.00 25.00 Issued & Subscribed: 2,10,070 Equity Shares of Rs 10/- each fully paid-up (All the share are held by Reliance Industries Limited the Holding Company) 21.01 21.01 SCHEDULE ‘B’ SECURED LOANS Working Capital Loan from a Bank Working Capital Term Loan from a Bank Rupee Term Loan from Financial Institutions Deterred Payment Liabilities Interest accrued and due on above loans As at 31.3.1989 Rs. 115.06 128.25 297.16 10.11 5.50 556.08 (Rs in lacs) As at 31.12.1987 Rs. 121.85 135.00 172.00 14.28 5.48 448.61 NOTES: 1. Working Capital Loan and Working Capital Term Loan from Bank of Baroda are secured against hypothecation of present and future stock of raw material, stocks-in-process, finished goods, book debts, movable 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 modernisation scheme from the financial institutions referred to in 2 below and are further guaranteed by Reliance Industries Ltd., the Holding Company. 2. Rupee Term Loans from financial institutions are secured by an exclusive first charge on the plant and machinery purchased under the modernisation scheme. 3. Deferred Payment Liabilities guaranteed by Bank of Baroda are secured against hypothecation of moveable machinery including all stock 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 2 above and are further guaranteed by Reliance Industries Limited. the Holding Company. The figures of secured loans include Rs 93.61 lacs repayable within one year. 4. SCHEDULE ‘C’ FIXED ASSETS Nature of Filed Assets Buildings Railway siding Plant & Machinery Electric installation Factory equipments Furniture & Fixtures Vehicles Advance against Capital Expenditure As at 1.1.88 Rs. 15.93 0.38 324.32 17.01 2.96 2.83 1.03 20.37 TOTAL 384.83 Previous year 209.37 179.56 SCHEDULE ‘D’ CURRENT ASSETS As at 31.3.1989 Rs. Inventories (Valued at cost or market value whichever is lower as certified by the Management) Rs. Stores spares dyes. chemicals etc. Raw materials Stock in process Finished goods Others (includes stock of discarded machinery Rs. 1 27 lacs at Book Value) 17.72 75.44 46.54 71.71 1.59 (Rs In lacs) As at 31.12.1987 Rs. Rs. 15.87 36.89 69.75 34.34 1.94 213.00 158.79 Sundry Debtors (Unsecured considered good) Over six months: Others 4.26 14.83 0.91 59.92 C/f 19.09 232.09 60.83 219.62 50 GROSS BLOCK (AT COST) DEPRECIATION NET BLOCK (Rs in lacs) Additions Deductions Rs. 1.68 – 81.07 0.03 – 0.15 – 5.17 88.10 Rs. – 0.38 0.78 – – – – 20.37 21.53 4.10 As at 31.3.89 Rs. 17.61 – 404.61 17.04 2.96 2.98 1.03 5.17 451.40 384.83 Total upto 31.3.89 Rs. 1.48 – 120.98 3.03 0.54 0.34 0.26 – 126.63 70.48 As at 31.3.89 Rs. 16.13 – 283.63 14.01 2.42 2.64 0.77 5.17 324.77 314.35 As at 31.12.87 Rs. 15.14 0.34 257.32 15.08 2.61 2.62 0.87 20.37 314.35 B/f Cash & Bank Balances Cash on Hand Balances with Scheduled Banks In Current Accounts In Fixed Deposit Accounts (Lodged with Central Excise Authorities) As at 31.3.1989 Rs. Rs. 232.09 (Rs In lacs) As at 31.12.1987 Rs. Rs. 219.62 0.72 102.43 0.18 0.82 16.13 0.18 103.33 335.42 17.13 236.75 SCHEDULE ‘E’ SCHEDULE ‘I’ DEVTI FABRICS LIMITED 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 31.3.1989 Rs. 26.50 0.21 1.79 0.05 28.55 (Rs In lacs) As at 31.12.1987 Rs. 8.52 0.21 0.50 1.73 10.96 SCHEDULE ‘F’ (Rs In lacs) CURRENT LIABILITIES & PROVISIONS Rs. Rs. As at 31.3.1989 As at 31.12.1987 Rs. Rs. CURRENT LIABILITIES Sundry deposits Sundry Creditors Interest accrued but not due on loans – 168.52 3.88 0.11 75.25 2.49 PROVISIONS Gratuity & Superannuation funds SCHEDULE ‘G’ OTHER INCOME Processing charges Profit on sale of assets (net) Miscellaneous Income SCHEDULE ‘H’ VARIATION IN STOCK STOCK IN TRADE (at close) Furnished Goods Stock in process Others STOCK IN TRADE (at commencement) Finished goods Stock in-process Others 172.40 0.92 173.32 77.85 2.22 80.07 For the period ended 31.3.1989 Rs. (Rs In lacs) For the period ended 31.12.1987 Rs. 216.76 1.85 16.85 235.46 31.88 0.13 11.13 43.14 For the period ended 31.3.1989 Rs. Rs. For the period ended 31.12.1987 Rs. Rs. 71.71 46.54 0.32 34.34 69.75 0.66 34.34 69.75 0.66 118.57 104.75 71.93 61.80 0.10 104.75 13.82 133.83 (29.08) MANUFACTURING AND OTHER EXPENSES Raw Material Consumed Stock at commencement Add: Purchases Less: Sales Less: Stock at close MANUFACTURING EXPENSES For the period ended 31.3.1989 Rs. Rs. (Rs In lacs) For the period ended 31.12.1987 Rs. Rs. 36.89 732.21 769.10 9.23 759.87 75.44 44.91 711.62 756.53 8.45 748.08 36.89 684.43 711.19 2.02 Carriage inward 48.30 Stores and spare parts 14.48 Dyes and chemicals 162.81 Electric power, fuel and water 4.31 Machinery repairs Building repairs 1.36 Labour, processing and machinery hire charges 31.68 76.72 Excise duty 2.01 43.06 14.25 123.15 8.41 0.92 34.96 43.21 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 341.68 269.97 309.62 266.06 25.20 14.92 23.25 13.87 349.74 303.18 SALES & DISTRIBUTION EXPENSES Samples, Sales Promotion and Advertisement expenses Brokerage and Commission Packing expenses Freight and forwarding charges Octroi expenses Sales Tax ESTABLISHMENT EXPENSES Insurance Rent Rates & Taxes Other repairs Travelling Expenses Payment to Auditors Directors Fees General expenses Charily & Donation SCHEDULE ‘J’ INTEREST Fixed Loans Others (Net) 0.02 1.48 3.98 0.35 2.38 0.57 3.32 6.26 0.37 0.71 0.96 0.44 0.04 6.13 0.05 0.05 3.08 3.88 0.11 3.77 0.47 8.78 11.36 3.35 6.26 0.36 0.70 1.51 0.44 0.05 7.06 0.09 18.28 1402.91 19.82 1315.52 For the period ended 31.3.1989 Rs. (Rs In lacs) For the period ended 31.12.1987 Rs. 68.41 23.23 91.64 49.70 16.29 65.99 51 DEVTI FABRICS LIMITED SCHEDULE ‘K’ NOTES AND CONTINGENT LIABILITIES 1. During the year the Company has changed its financial year from 31st December to 31st March 1989 Accordingly the current financial year is also for a period of 15 months. 2. Previous year s figures have been regrouped/rearranged wherever necessary. 3. 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. 4. No provision for taxation has been made in view of losses incurred by the Company 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 Pro/its. 5. Interest on other accounts (net) is arrived at after adjusting Rs 0 41 lacs being interest received/receivable (Tax al source Rs 0.0 lacs) 6. Auditors Remuneration: (a) Audit lees (b) Tax Audit lees 31.3.1989 Rs. 0.31 0.13 0.44 (Rs in lacs) 31.12.1987 Rs. 0.31 0.13 0.44 7. The company has been accounting liability for excise duty in respect of finished products lying in factory premises as and when the same are cleared/debonded Accordingly, estimated liability amounting to Rs 0 40 lacs in respect of such items at the end of financial year has not been provided for in the accounts and hence not included in the valuation of inventory. 8. 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 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 Upto last year depreciation was provided in accordance with the provisions of section 205(2)(b) of the Companies Act 1956 Had the Company continued the same practice during the current financial year depreciation and the loss for the period would have been higher by Rs 7.23 lacs. 9. Contingent Liabilities: 31.3.1989 Rs. (Rs. in lacs) 31.12.1987 Rs. 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 10. Licenced & Installed Capacity (As certified by the Management) Licenced Capacity 31.3.89 31.12.87 211.63 130.72 4.19 2.19 3.00 3.00 0.61 1.50 Installed Capacity 31.3.89 31.12.87 Spindles Looms Nos. Nos. 38368 490 38368 490 36456 490 35496 490 11. Production of finished Products meant for sale Blended yarn Fabrics MT Mtrs in lacs 12. Value of imports on CIF basis 13. Expenditure in foreign currency 31.3.89 119 86.89 Nil Nil 31.12.87 244 78.28 Nil Nil 31.3.1989 31.12.1987 14. Quantitative information: (a) Opening stock i) Finished Stocks Yarn Fabrics Mtrs in lacs ii) Stock-in-process (Yarn) iii) Others MT Quantity Rs. in Quantity lacs 34.34 69.75 0.66 18 1.91 3 4.90 Rs. in lacs 71.93 61.80 0.10 (b) Closing Stock: i) Finished Stocks Yarn Fabrics Stock-in-process (Yarn) ii) iii) Others MT Mtrs in lacs 4 5.15 18 1.91 71.71 34.34 46.54 0.32 69.75 0.66 (c) Purchases: Fabrics (d) Sales: Yarn Fabrics (e) Raw material consumed: Mtrs in lacs 6.62 79.52 4.14 51.24 MT Mtrs. in lacs 133 90.27 134.63 1168.80 229 85.41 217.61 1126.20 Cotton Fibre Yarn MT MT MT – 729 190 80.93 279.96 323.54 – 846 165 60.07 357.00 294.12 15. Value of raw materials consumed: imported Indigenous 16. Value of dyes & chemicals. stores and spare parts consumed: Imported Indigenous 17. Earning in foreign exchange 31.3.1989 31.12.1987 Rs. in lacs % of total Rs in lacs % of total consumption consumption – 684.43 – 100.00 – 711.19 – 100.00 – 62.78 – 100.00 – 57.31 – 100.00 31.3.1989 Rs. (Rs in lacs) 31.12.1987 Rs. 18.(a) Wreak-up of expenditure incurred on employees who were employed throughout the period and were in receipt of remuneration for the period which in aggregate was not less than Rs.72 000 per annum (previous year Rs 36,000) Number of employees 2 Salaries and Bonus Contribution to Provident Fund & Superannuation Fund Other Perquisites (b) Break-up of expenditure incurred on employees who were employed for a pan of the period and were in receipt of remuneration for any pan of the year at a rate which in aggregate was not less than Rs.6,000 per month (Previous year Rs.3,000) Number of employees 1 1.30 0.32 0.35 Salaries and Bonus Contribution to Provident Fund a Superannuation Fund Other Perquisites 0.67 0.11 0.12 4 6 2.54 0.60 0.66 1.40 0.31 0.23 As per our Report of even date For and on behalf of the Board For RAJENDRA & CO. Chartered Accountants For CHATURVEDI & SHAH Chartered Accountants R.J. Shah Proprietor Bombay Dated: 28th July, 1989. 52 D. Chaturvedi Partner S. Natarajan Vinod M. Ambani Directors TRISHNA INVESTMENTS & LEASINGS LIMITED Regd. Office: 3rd Floor, Maker Chambers IV 222 Nariman Point Bombay 400 021 53 54 TRISHNA INVESTMENT AND LEASINGS LIMITED DIRECTORS REPORT CHANGE IN ACCOUNTING YEAR To The Members, Your Directors have pleasure in presenting the 3rd Annual Report together with the Audited Statement of Accounts for the financial year ended on 31st March 1989. FINANCIAL RESULTS: Profit before tax Less: Provision for Tax Earlier years’ loss written off Profit carried to Balance Sheet (Rs. in thousand) 8183 2063 8 2071 6112 Dividend income received during the financial year amounted to Rs.8190 thousands. In order to facilitate compliance with the requirement of Direct Tax Laws Amendment Act 1987, the Company’s accounting year has been changed to 31st March, 1989. The accounts under review have therefore been prepared for a period of seven months ended on 31st March, 1989. DEPOSITS: The Company has not accepted any deposit from the public. Hence, no information is required to be appended to this report in terms of Non-Banking Financial Companies (Reserve Bank) Directions, 1977. PERSONNEL : The Company has not paid any remuneration attracting the provisions of Companies (Particulars of Employees) Rules, 1975 read with Section 217(2A) of the Companies Act, 1956. Hence no information is required to be appended to this report in this regard. DIRECTORS: DIVIDEND: With a view to conserve the resources of the Company, the Board of Directors have not recommended any dividend for the period ended 31st March, 1989. As per the provisions of the Articles of Association, Shri V.T. Pai and Shri B.K. Bhandary retire by rotation and being eligible offer themselves for reappointment. AUDITORS: The Auditors of the Company, Messrs. Chaturvedi & Shah and Messers. Rajendra & Co. 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. For and on behalf of the Board V.T. Pai B.K. Bhandary Directors F.N. Vajifdar Bombay Dated: 2nd August, 1989. 55 TRISHNA INVESTMENT AND LEASINGS LIMITED BALANCE SHEET AS AT 31ST MARCH, 1989 Schedule Rs. Rs. Rs. Rs. As at 31.3.1989 (Rs. in thousands) As at 31.8.1988 SOURCES OF FUNDS: Shareholders’ Funds Capital Reserves & Surplus Loan Funds Unsecured Loan TOTAL APPLICATION OF FUNDS: Investments Current Assets, Loans & Advances Cash 8 Bank Balances Loans and Advances Less: Current Liabilities & Provisions Current Liabilities Provisions Net Current Assets Miscellaneous Expenditure (to the extent not written off or adjusted) Profit & Loss Account TOTAL ‘A’ ‘B’ ‘C’ ‘D’ ‘E’ ‘F’ Notes and Contingent Liabilities ‘H’ 44 6112 467900 474056 474571 (519) 4 – 474056 51 1849 1900 356 2063 2419 11 – – 11 – (1) 4 8 11 2 – 2 3 – 3 As per our Report of even date For and on behalf of the Board For RAJENDRA & CO. Chartered Accountants R.J. Shah Proprietor V.T. Pai B.K. Bhandary F.N. Vajifdar Directors For CHATURVEDI & SHAH Chartered Accountants D. Chaturvedi Partner Bombay Dated: 2nd August, 1989. 56 PROFIT & LOSS ACCOUNT FOR THE PERIOD 1ST SEPTEMBER, 1988 TO 31ST MARCH, 1989 TRISHNA INVESTMENT AND LEASINGS LIMITED For the period ended 31.3.1989 Rs. Rs. (Rs. in thousands) For the period ended 31.8.1988 Rs. Rs. Schedule ‘G’ INCOME Dividend Income 8190 (Tax deducted at Source Rs.1849 thousands) EXPENDITURE Profit before tax Less: Provision for taxation Profit after tax Add/Less: Balance brought forward from last year Balance carried to Balance Sheet Notes and Contingent Liabilities ‘H’ 7 8183 2063 6120 (8) 6112 As per our Report of even date For and on behalf of the Board For CHATURVEDI & SHAH Chartered Accountants D. Chaturvedi Partner Bombay Dated: 2nd August, 1989. For RAJENDRA & CO. Chartered Accountants R.J. Shah Proprietor V.T. Pai B.K. Bhandary F.N. Vajifdar Directors 3 (3) – (3) (5) (8) 57 TRISHNA INVESTMENT AND LEASINGS LIMITED SCHEDULES FORMING PART OF THE BALANCE SHEET SCHEDULE ‘E’ SCHEDULE ‘A’ SHARE CAPITAL Authorised: 40,000 Equity Shares of Rs 10/- each 10,000 11% Non-Cumulative Redeemable Preference Shares of Rs.10/- each Issued & Subscribed & Paid-up 4,400* Equity Shares of Rs.10/- each fully paid-up (Previous year 1,100 Equity Shares of Rs 10/- each) * of the above, 3,400 Shares are held by Reliance Industries Limited, the holding Company. SCHEDULE ‘B’ RESERVES AND SURPLUS Profit and Loss Account SCHEDULE ‘C’ UNSECURED LOANS From Holding Company SCHEDULE ‘D’ OTHER INVESTMENTS: (QUOTED) Investments - At Cost 39,00,000 Equity Shares of Rs.10/- each fully paid up of Larsen & Toubro Limited Quoted Investments - Cost Market Value As at 31.3.1989 Rs. (Rs. in thousands) As at 318.1988 Rs. 400 100 500 44 400 100 500 11 44 11 As at 31.3.1989 Rs. (Rs. in thousands) As at 31.8.1988 Rs. 6112 6112 – – As at 31.3.1989 Rs. 467900 467900 (Rs in thousands) As at 31.8.1988 Rs. – – As at 31.3.1989 Rs. (Rs. in thousands) As at 31.8.1988 Rs. 474571 474571 474571 395850 – – – – CURRENT ASSETS, LOANS AND ADVANCES Current Assets Cash and Bank Balances: Cash on hand 4 Balance with a Scheduled Bank: In Current Account Loans and Advances Tax Deducted at Source SCHEDULE ‘F’ CURRENT LIABILITiES & PROVISIONS Current Liabilities Sundry Creditors Other Liabilities Provisions For Taxation As at 31.3.1989 Rs. (Rs. in thousands) As at 31.8.1988 Rs. 1 47 1849 1900 1 – 2 As at 31.3.1989 Rs. (Rs in thousands) As at 31.8.1988 Rs. 350 6 2063 2419 – 3 – 3 SCHEDULE FORMING PART OF THE PROFIT AND LOSS ACCOUNT SCHEDULE ‘G’ EXPENDITURE Printing & Stationery Directors’ Sitting Fees Auditors’ Remuneration Audit Fees Certification and Consultation Fees For the period ended 31.3.1989 Rs. 1 1 (Rs. in thousands) For the period ended 31.8.1988 Rs. – 1 5 – 7 1 1 3 SCHEDULE ‘H’ Notes forming part of the Balance Sheet and Profit and Loss Account for the period ended on 31st March, 1989 1. During the year the Company became a public limited company by virtue of Section 43-A of the Companies Act, 1956. 2. 3. 4. 5. The current financial year is for a period of seven months whereas the previous year was for a period of ten months The current year’s figures are to that extent not comparable. Previous period figures have been regrouped and/or rearranged wherever necessary. (a) Employees who are employed throughout the year and were in receipt of remuneration for a period which in aggregate was not less than Rs.72,000/- per annum Rs. NIL (b) 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/- NIL As the Company is not a manufacturing company, information in respect of manufacturing activities required under para 3 and 4 of Schedule Vl of the Companies Act, 1956 is not given. As per our Report of even date For and on behalf of the Board For CHATURVEDI & SHAH Chartered Accountants D. Chaturvedi Partner Bombay Dated: 2nd August, 1989. 58 For RAJENDRA & CO. Chartered Accountants R.J. Shah Proprietor V.T. Pai B.K. Bhandary F.N. Vajifdar Directors TRISHNA INVESTMENT AND LEASINGS LIMITED AUDITORS’ REPORT The Members of Trishna Investments and Leasings Limited. We have audited the attached Balance Sheet of TRISHNA INVESTMENTS AND LEASINGS LIMITED as at 31st March, 1989 and the Profit & Loss Account of the Company for the period from 1st September, 1988 to 31st March, 1989 annexed thereto and report that: 1. As required by the Manufacturing and Other Companies (Auditors’ Report) Order, 1988, issued by the Company Law Board in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified inÜjÜparagraphs 4 and 5 of the said Order. 2. Further to our comments in the Annexure referred to in paragraph 1 above, we report that: a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. b) In our opinion proper books of accounts as required by law have been kept by the Company, so far as appears from our examination of such books. c) The Balance Sheet and Profit and Loss Account referred to in this Report are in agreement with the books of account. d) In our opinion and to the best of our information and according to the explanations given to us, the said Balance Sheet and Profit and Loss Account read together with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view. i) ii) in so far as it relates to the Balance Sheet of the state of affairs of theCompany as at 31st March, 1989 and in so far as it relates to the Profit and Loss Account of the Profit of theCompany for the period ended on that date. 3. The Company has received an interest free loan from the holding company. According to the information and explanations given to us, and in our opinion, the terms and conditions of the above loan are not prima-facie prejudicial to the interest of the Company. 4. The company has not granted any loans, secured or unsecured to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 or to companies under the same management within the meaning of Section 370(1B) of the Companies Act, 1956. 5. The Company has not given any loans or advances in the nature of loans during the period. 6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits as defined under section 58-A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules 1975 during the period under review. 7. Since the paid up capital of the Company is less than Rs.25 lacs and as it has not commenced any trading or manufacturing activity, internal audit is not required statutorily. 8. In our opinion, the provisions of the Provident Fund Act and other relevant Acts including Employees State Insurance Act, 1948 are not applicable to the Company. 9. According to the information and explanations given to us, no undisputed amounts payable in respect of Income-tax, Wealth-tax, Sales-tax, Excise Duty and Customs Duty were outstanding as at 31st March, 1989 for a period of more than six months from the date they became payable. 10. In our opinion and according to the information and explanations given to us, no personal expenses have been charged to revenue account. 11. The Company is not a sick industrial company within the meaning of clause (O) of sub-section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985. 12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. 13. According to the information and explanations given to us, the provisions of any special statute applicable to Chit Fund, Nidhi or Mutual Benefit Society are not applicable to the Company. For CHATURVEDI & SHAH Chartered Accountants For RAJENDRA & CO. Chartered Accountants 14. The Company has not dealt or traded in Shares, Securities, Debentures and other Investments The Company’s investments are held in its own name. D. CHATURVEDI Partner R.J. SHAH Proprietor For CHATURVEDI & SHAH Chartered Accountants For RAJENDRA & CO. Chartered Accountants Bombay Dated: 2nd August, 1989. D. CHATURVEDI Partner R.J. SHAH Proprietor ANNEXURE Bombay Dated: 2nd August, 1989. RE: TRISHNA INVESTMENTS AND LEASINGS LIMITED Referred to in Paragraph 1 of our Report of even date 1. As the Company had no Fixed Assets during the period, clauses 4(A) (i) and (ii) of the said Order are not applicable. 2. Since the Company has not commenced any manufacturing and/or trading activity, items (iii), (iv), (v), (vi), (x), (xi), (xii), (xiv) and (xvi) of clause A of paragraph 4 of the aforesaid Order are not applicable. 59 

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