Reliance Industries Limited
Annual Report 1990

Plain-text annual report

Reliance Industries Limited Annual Report 1989-90 64 Reliance Industries Limited S I X T E E N T H A N N U A L R E P O R T 1 9 8 9 –– 9 0 Board of Directors Dhirubhai H Ambani Chairman & Managing Director Ramniklal H. Ambani Joint Managing Director Natvarlal H. Ambani Executive Director Mukesh D. Ambani Executive Director Jayantilal R. Shah Mansingh L. Bhakta T. Ramesh U. Pal S. S. Betrabet 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 U.V. Rao Vinod M Ambani Rajendra & Co. and Chatur vedi & Shah Kanga & Co and Dave & Co. Syndicate Bank State Bank of India Bank of Baroda Canara Bank Punjab National Bank Indian Bank Oriental Bank of Commerce Vijaya Bank Standard Chartered Bank Deutsche Bank (Asia) Secretary Auditors Solicitors Bankers Registered Office 3rd Floor Maker Chambers IV. 222, Nariman Point Bombay 400 021 Sixteenth annual report 1989-90 Page No(s) 4-5 6-8 9-10 11-12 13-22 23 24 25 26-29 30-33 34 35-62 Contents Financial Highlights Graphs Notice of Annual General Meeting Directors’ Report Annexure to Directors’ Report 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 Documents of Subsidiary Companies PLANTS AT 1. Patalganga, Off Bombay- Pune Road, Near Panvel, Dist. Raigad, Maharashtra. 2. 103/106, Naroda Industrial 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. REGISTRARS & TRANSFER AGENTS Reliance Consultancy Services Limited 56, Mogra Village Lane, Off Old Nagardas Road, Andheri (East), Bombay 400 069. Reliance SALES OTHER INCOME Manufacturing and other expenses Gross Profit (A – B) Interest Depreciation Net Profit (C – D) WHAT THE COMPANY OWNED Fixed Assets Gross Block Less: Depreciation (Cumulative) Net Block Investment Current Assets WHAT THE COMPANY OWED Long Term Funds Medium/Short Term Funds Current Liabilities and Provisions NET WORTH OF THE COMPANY Equity Share Capital Preference Share Capital Reserves & Surplus 4 (A) (B) (C) (D) (E) Financial 1989-90 1988-89 (9 months) Rs. Rs. 1840.66 1112.45 15.64 1856.30 1432.10 424.20 171.73 161.97 333.70 90.50 1998.79 529.78 1469.01 58.05 1026.26 2553.32 595.89 219.64 650.81 7.88 1120.33 862.58 257.75 91.58 86.80 178.38 79.37 1871.76 368.98 1502.78 58.50 849.46 2410.74 579.44 195 11 564.88 1466.34 1339.43 152.12 5.80 929.06 152.11 5.80 913.40 1086.98 1071.31 Highlights 1987-88 (18 months) 1986 1985 1984 1983 1982 Rs. Rs. Rs. Rs. Rs. Rs. 1770.74 905.48 733.14 622.01 520.35 421.03 (Rs. in crores) Reliance 7.45 1778.19 1495.27 282.92 110.74 91.41 202.15 80.77 5.73 911.21 781.82 129.39 54.24 60.98 115.22 14.17 4.94 738.08 604.83 7.11 629.12 511.23 133.25 117.89 24.45 37.46 61.91 71.34 22.61 34.18 56.79 61.10 1862.66 1137.55 735.68 530.93 278.58 1584.08 1.25 188.09 949.46 0.37 607.83 1052.83 128.88 104.65 606.80 426.28 37.30 402.10 0.17 235.41 661.86 2193.16 2002.66 1046.20 609.82 103.83 546.12 143.78 457.39 1001.23 515.16 276.96 81.90 138.02 44.83 93.68 1171.04 1691.13 735.08 415.47 152.10 5.80 864.22 1022.12 51.61 5.80 254.12 311.53 51.61 5.80 46.18 5.80 253.71 194.41 311.12 246.39 129.88 4.68 525.03 433.61 91.42 21.52 31.38 52.90 38.52 394.88 73.42 321.46 0.12 215.19 536.77 239.99 35.46 131.44 406.89 36.15 5.80 87.93 2.51 423.54 361.28 62.26 18.93 14.17 33.10 29.16 356.71 42.10 314.61 0.12 191.53 506.26 260.60 22.85 131.27 414.72 18.60 5.80 67.14 91.54 5 DISTRIBUTION OF INCOME 1989-90 Manufacturing & other expenses Excise Duty Interest Depreciation Dividend Retained earnings Purchases & Raw Materials 29.60% 2.37% 2.51% 8.73% 23.57% 23.97% 9.25% 6 1200 1000 800 600 400 200 0 CAPITAL & NET WORTH 82 83 84 85 86 87-88 88-89 89-90 Net Worth 91.54 129.88 246.39 311.12 311.53 1022.12 1071.31 1086.98 Equity Capital 18.60 36.15 46.18 51.61 51.61 152.10 152.11 152.12 s e r o r c n i . s R 2 5 00 2 0 00 1 5 00 1 0 00 5 0 0 0 SALES 3 0 . 1 2 4 82 5 3 . 0 2 5 83 1 0 . 2 2 6 84 4 1 . 3 3 7 85 8 4 . 5 0 9 4 7 . 0 7 7 1 5 4 . 2 1 1 1 6 6 . 0 4 8 1 87-88 88-89 89-90 86 18 m ont hs 9m onths 7 500 400 300 s e r o r c n i 200 . s R 100 0 GROSS PR OFIT & N ET PROFIT 0 2 . 4 2 4 2 9 . 2 8 2 5 7 . 7 5 2 2 4 . 1 9 2 5 . 8 3 6 2 . 2 6 6 1 . 9 2 9 8 . 7 1 1 0 1 . 1 6 9 3 . 9 2 1 5 2 . 3 3 1 4 3 . 1 7 7 1 . 4 1 7 7 . 0 8 7 3 . 9 7 0 5 . 0 9 82 83 84 85 86 87-88 88-89 89-90 GROSS PROFIT NET PR OFIT EXPO RT S Rs. in crore s s e r o r c n i . s R 80 60 40 20 0 85 86 87-88 88-89 89-90 8 DIRECTORS’ REPORT To the Members Your Directors are pleased to present the 16th Annual Report together with the audited Statement of Accounts for the Financial Year ended 31st March, 1990. FINANCIAL RESULTS 1989-90 (12 months) 424.20 171.73 161.97 90.50 (Rs in crores) 1988-89 (9 months) 257.75 91.58 86.80 79.37 Gross Profit before interest and Depreciation Less: Interest Depreciation Profit for the year Less: Withdrawal of backward area incentives under 1979 package scheme of incentives availed of in prior years Less: Transferred from General Reserve 28.36 28.36 Add: Balance in Profit & Loss A/c Excess provision written back Investment Allowance Reserve written back Available for Appropriation Investment Allowance Reserve Appropriations: a. b. Taxation Reserve c. Debenture Redemption Reserve d. General Reserve e. 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 Balance Carried to Balance Sheet –– 19.36 –– 2.90 112.76 10.00 10.00 8.00 8.00 0.03 0.83 45.64 30.26 –– 11.25 16.03 –– 106.65 30.00 –– 6.00 5.00 0.03 0.62 45.64 19.36 DIVIDENDS Your Directors have recommended the following dividends to be paid (subject to deduction of tax at source) for the financial year ended 31st March, 1990, if approved by the Shareholders at the ensuing Annual General Meeting. 112.76 106.65 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 ON EQUITY SHARES (Rs in Crores) 0 03 0.83 Dividend of Rs.3.00 per share on the Equity shares of Rs.10 each fully paid up (pro rata dividend wherever applicable) 0.86 45.64 46.50 YEAR IN RETROSPECT Overall Performance of the Company during the year was satisfactory. The sales. and other income during the financial year under review rose to Rs.1356 crores (approx.) as compared to Rs.1120 crores (approx.) in the previous year, registering an increase of about 24% on an annualised basis. The gross profit (after interest charges) was Rs.252.47 crores against Rs.166 17 crores for the previous period. The net profit of Rs.90.50 Crores has been arrived at after providing Rs.44.01 Crores towards expenses and losses incurred due to floods St the Patalganga Plant in July, 1989. The break-up of this aggregate in respect of inventories. after adjusting the value of damaged stocks sold or consumed and those remaining unsold, a net loss of Rs.32.37 Crores has been charged to various heads in the profit and loss account; in Reliance respect of plant and machinery, the costs of repairing/reconditioning at d related expenses aggregating to Rs.11.64 Crores has been charged to various heads in the Profit and Loss account. The Company contributed as much as Rs.698.39 Crores to the exchequer in the form of various taxes. FIBRE DIVISION i. Polyester Staple Fibre (PSF) The Polyester Staple Fibre industr y is facing excess capacity; nevertheless, your Company optimised its capacity utilisation during the year. A substantial portion of the PSF production is being exported to developed countries where it has received favourable response in terms of market acceptance. The Company also proposes to take up manufacture of a wider variety of speciality fibres in the near future. ii. Polyester Filament Yarn (PFY) Production and sales registered an improved trend over the previous year inspite of the damage to the plant, machinery and inventories due to flash floods. The margins in the Polyester Industry will be under pressure owing to: (a) increase in Excise Duty on Polyester yarn; (b) introduction of Excise Duty on PTA; (c) increase in Custom Duty on MEG; and (d) reduction in Import Duty on Polyester yarn. The Company is maintaining its market leadership through upgradation of technology, modernisation and changes in product mix. FIBRE INTERMEDIATES DIVISION Purified Terephthalic Acid (PTA) PTA is basically used for the manufacture of PSF and PFY. The Company is a leading manufacturer of both these items. A large portion of the product is being used for captive consumption. Through the Company’s efforts, customer awareness has considerably increased for production of Polyester through the PTA route. This has substantially improved the market for PTA. In January. 1990, based on a report by the Cost Accounting Branch (CAB) of the Ministry of Finance, the Company was advised by the Ministry of Chemicals and Petrochemicals to reduce its PTA price from Rs. 32,625/- per tonne to Rs. 24,550/- per tonne i.e. a reduction of Rs.8,075/- per tonne. The Company has been making representations to the concer ned authorities to fix a fair price for the sale of PTA as well as for the cost of production of Paraxylene, an important raw material for the manufacture of PTA. The Company is hopeful that these arbitrary decisions would be corrected . Further, by the Finance Act, 1990, an excise duty of 15 % ad valorem per tonne was imposed on PTA. The arbitrary reduction in the price and the imposition of excise duty on PTA will have a substantial impact on this Division . DETERGENT & DETERGENT INTERMEDIATE DIVISION Linear Alkyl Benzene (LAB) LAB is an impor tant raw material used by synthetic detergents manufacturers. The total consumption of all types of detergents and washing soaps is growing at a good pace every year which is bound to reflect on the demand for LAB. Production and sales increased substantially during the year. Sales in terms of value and volume registered handsome gains. The Directors are hopeful of improving this trend. TEXTILE DIVISION The Company manufactures sophisticated, fashionable and high value fabrics. These are marketed under the brand name “Vimal”, through a large number of outlets all over India. Currently the Company is planning a major thrust to export these fabrics to various countries in the world including USA and EEC. The Company hopes to be one of the largest exporters of synthetic fabrics in the years to come. PROJECTS I. Minimum Economic Scale (MES) In terms of the policy announced by the Government, the Company has received necessary approvals for effecting substantial expansion under the MES of Production. After this expansion, the annual capacity of Purified Terephthalic Acid (PTA) would increase from 1,00,000 11 Reliance tonnes to 2,00,000 tonnes: of Polyester Staple Fibre (PSF) 45,000 tonnes to 60.000 tonnes; of Linear Alkyl Benzene 60,000 tonnes to 80,000 tonnes. The expansion of PTA plant under MES is being taken up. II. Broad Banding of Polyester Staple Fibre Plant The Company has received the approval under the broad banding scheme for the manufacture of Polyester Filament Yarn under the description Polyester Staple Fibre/Polyester Filament Yarn within the licensed capacity of Polyester Staple Fibre. The Company proposes to install appropriate spinning machines with a view to achieve maximum utilization of manufacturing facilities and providing flexibility of production. III. LAB Front-End Project The Company is using impor ted N-Paraffin as a raw material for manufacturing LAB. It is proposed to acquire cer tain additional machineries to enable the Company to manufacture LAB from Kerosene with N-Paraffin as intermediate raw material This backward integration project would lead to substantial savings of foreign exchange estimated at Rs.46 Crores per annum. IV. Joint Sector Project The Company has entered into a Memorandum of Understanding (MOU) with the West Bengal Industrial Development Corporation for setting up a joint sector project for the manufacture of 15,000 tons of Polyester Filament Yarn (PFY). This project will make ready-to-use Polyester Yarns available to more than 3700 existing powerlooms in the State and further encourage setting up of additional powerlooms in the State. This will also promote downstream units in small and medium sectors. On the implementation of this project, the cumulative direct and indirect employment that would be generated would benefit over 2 lakhs people in the State. V. Modernisation Of Polyester Division As part of the continuous process of upgradation and infusion of latest technology, the Company has drawn up modernisation plans. The implementation of these plans will improve profitability, reduce wastage, increase proportion of high grade products, increase in output. VI. Gas Cracker Project The Cracker Project for the manufacture of Ethylene, Propylene, Butadiene and other products is proposed to be located at Hazira, Gujarat. The project is based on utilisation of Natural Gas Liquids to the extent of one million tonnes per annum from the Gas Processing Complex of ONGC at Hazira. In addition, Naphtha will be used as a supplementary feedstock The project has been appraised by the Financial Institutions . EXPORTS During 1989 90, the Company exported Its products to leading customers in the sophisticated markets of USA, EEC. The Company’s exports have grown at a tremendous pace over the last five years, from Rs.5.64 Crores in 1985 to Rs.72.75 Crores in 1989-90 representing a massive growth of 1190%. Exports for the current year also are expected to register a substantial increase. The Directors have great pleasure in informing you that the Company has been a pioneer in exporting PSF and LAB in substantial quantities to developed countries. The Company has also pioneered in supplying of PSF in large quantities to exporters under intermediate advance licence scheme and of LAB to manufacturer exporters of detergents. These fall under the category of deemed exports. ESTABLISHMENT OF OVERSEAS SUBSIDIARY The Company proposes to establish a wholly owned subsidiary to step up the Company’s exports. The Directors are pleased to inform you that the Company has received various approvals required from the Government authorities for establishing a wholly owned subsidiary in the United Kingdom. The main objects of this venture inter alia, would be the promotion of exports of the Company’s products. ENERGY TECHNOLOGY AND FOREIGN EXCHANGE Information in accordance with the provisions of Section 217(1)(e) of the Companies Act. 1956, read with the Companies (Disclosure of Par ticulars in the Report of Board of Directors) Rules 1988, regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the Annexure. 12 SUBSIDIARY COMPANIES As required under Section 212 of the Companies Act, 1956, the audited statements of accounts along with the report of the Board of Directors of Messrs Devti Fabrics Limited, Reliance Petrochemicals Limited and Trishna Investments and Leasings Limited and the respective Auditors Repor t thereon for the year ended 31st March, 1990, are annexed. FIXED DEPOSITS Deposits of Rs.1.42 crores which became due for repayment on or before 31st March, 1990 were not claimed by 2272 depositors as on that date. Of these, deposits amounting to Rs.0.50 crores of 701 depositors have since been repaid/renewed. DEBENTURES The funds raised by the issues of debentures have been utilised for the approved objects. 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 to the Directors’ Report in the full Balance Sheet and Profit and Loss Account . DIRECTORS The Industrial Credit & Investment Corporation of India Limited have nominated Shri S.S. Betrabet in place of their nominee Director, Shri V.V. Divecha. Shri U.V. Rao was appointed as an Additional Director during the year and holds office up to the date of the ensuing Annual General Meeting. He is not offering himself for election as Director at the ensuing Annual General Meeting. Shri K. Gopal Rao has resigned as a Director of the Company on health grounds. Shri Gopal Rao has been associated with the Company right from the inception and has rendered invaluable services during its growth years. The Board of Directors wish to place on record their grateful appreciation for the immense contribution made by the aforesaid Directors during their tenure as Directors of the Company. AUDITORS & AUDITORS’ REPORT Messrs. Rajendra & Co. and Messrs. Chaturvedi & Shah, Joint 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 prescribed limits under Section 224(1) of the Companies Act, 1956. The notes to the Accounts Nos. 4, 12, 16(c) and 17 referred to in the Auditors’ Report are self explanatory and therefore, do not call for any further comment. ACKNOWLEDGEMENT Yours Directors would like to express their grateful appreciation to the 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 to the devoted services of the executives, staff and workers of the Company for its success. Bombay 400 021 Dated 27th July, 1990 For and on behalf of the Board of Directors Dhirubhai H. Ambani Chairman & Managing Director ANNEXURE TO DIRECTORS’ REPORT PARTICULARS REQUIRED UNDER THE COMPANIES (DISCLOSURES OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988 Reliance A. CONSERVATION OF ENERGY (a) ENERGY CONSERVATION MEASURES TAKEN Some of the important measures taken in the year 1989-90 are given below. Modification of existing fuel gas burners for maximizing fuel gas utilisation in the plant. Oper ation of process air compressor at lower discharge pressure. Distillation columns operation optimised by bringing down reflux ratios. Burning of excess H2 gas in hot oil heater. Use of compression heat for drying instruments air. Conversion of oil fired steam boilers to natural gas fired system. (b) ADDITIONAL INVESTMENTS AND PROPOSALS BEING IMPLEMENTED FOR REDUCTION IN CONSUMPTION OF ENERGY (i) Cooling water recovery system is proposed (ii) Use of variable fan pitch blades and intermittent operation of some fin fans. (iii) Excess fuel gas from one plant in the complex proposed to be used as fuel in the other plant. (iv) Conversion of thermopacs to natural gas system. (v) Hot water to be produced by waste flash steam. 3. IMPACT OF MEASURES AT (a) AND (b) ABOVE FOR REDUCTION OF ENERGY CONSUMPTION AND ON THE COST OF PRODUCTION OF GOODS There is a continuous and systematic effort to optimise energy consumption and cost at all the plants through evaluation of perfo r mance and moder nisation and upgradation of equipments, pr actices and instrumentation,. Energy budgeting and auditing is being taken up at all the plants. FORM ‘A’ Form for disclosure of particulars with respect to conservation of energy: PART ‘A’ 1. Power and Fuel Consumption April, ’89 to July, ’88 to March, ’90 March, ’89 (9 Months) (12 Months) a. Purchased Units (Lakhs) Total Amount (Rs. Lakhs) Rate/Unit Rs. b. Own Generation i. ii. Through Diesel Generator Units (Lakhs) Unit per Ltr. of Diesel Cost/Unit Rs. Through Steam Turbine/Generator Units Units per Ltr. of Fuel Oil/Gas Cost/Unit Rs. 2. Coal Qnty. (Tonnes)10050 Total Cost (Rs. in Lakhs) Avg. Rate per M.T.(Rs.) Furnace Oil Qnty. (K. Ltrs.) Total Amount (Rs. in Lakhs) Avg. rate per Ltr. (Rs.) 4. Others: G a s Qnty. (1000M3) Total Cost (Rs. in Lakhs) Rate/Unit per 1000M3 (Rs.) 3017.46 4315.52 1.42 2761.29 3652.98 1.32 417.73 3.56 1.33 347.21 3.41 1.33 Nil Nil Nil 16609 108.11 1075.70 165915 5720.38 3.19 14760.00 271.39 1838.71 Nil Nil Nil 151.64 913.00 134418 4287.93 3.19 –– –– –– CONSUMPTION PER UNIT OF-PRODUCTION PART ‘B’ Electricity (kwh) Furnace 0il (Ltrs.) Coal (Kgs.) Gas (M3) FABRICS PFY PSF PTA LAB Current Year 1009 83.5 190.4 249 Previous Year 1027 292.4 399.8 –– Current Year 1440 200 –– –– Previous Year 1290 250 –– –– Current Year 600 220 –– –– Previous Year 890 310 –– –– Current Year 436 80 –– –– Previous Year 290 90 –– –– Current Year 505 474 –– –– Previous Year 527 488 –– –– NOTE: The above figures indicate only the direct consumption and exclude consumption of power and fuel in the supporting utilities. 13 Reliance FORM ‘B’ B. FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO TECHNOLOGY ABSORPTION 1. SPECIFIC AREAS IN WHICH R&D IS BEING CARRIED OUT BY THE COMPANY Research work is being carried out in Polyester Filament Yarn, Polyester Staple Fibre and Petrochemical Processes. The emphasis has been on product development, process modification for better yield and quality, optimization of process parameters, energy conservation, cost reduction etc. 2. BENEFITS DERIVED AS A RESULT OF THE ABOVE R&D a) PRODUCT DEVELOPMENT/IMPROVEMENT i. ii. iii. POY suitable for draw twisting and draw warping process. 1.0 Denier optically bright fibre. 1.2 Denier optically bright fibre for Open end spinning. b) IMPORT SUBSTITUTION i. Development of indigenous radial quench unit for low denier spinning machines. ii. Development of local vendors for electrical and electronic components. 3. 4. FUTURE PLAN OF ACTION Projects are proposed for the following: i. Evaluation of new types of slurry pumps for polymerisation plant. ii. Modification of finisher spray condenser system. iii. Evaluation of suitable polymer additive for producing bright POY material in batch polymerisation system. iv. Development of POY suitable for high speed draw texturing, v. warping and draw twisting. Development of Super High tenacity fibre for use as a sewing thread. vi. Development of spin finish for POY, SDY and Staple Fibre. (Rs. in Lakhs) EXPENDITURE ON R&D 105.95 A. Capital 883.01 B. Recurring C. Total 988.96 D. Total R&D expenditure as a percentage of total turnover 0.56% AND A DAPTATION ABSORPTION, TECHNOLOGY INNOVATION Efforts made towards technology absorption, adaptation and innovation, and benefits derived as a result thereof: 1. Higher recovery of Paraxylene on sustained basis. 2. Optimisation of raw Naphtha utilisation based on different C8 precursor availability. To develop desorbent manufacture. To develop uses for by-products generated in the manufacturing process. To improve yield and recovery of catalyst. 3. 4. 5. PRODUCT Polyester filament Polyester Staple Fibre Purified Terephthalic Acid Paraxylene Linear Alkyl Benzene Information regarding imported technology TECHNOLOGY FROM (a) Du Pont (USA) Du Pont (USA) ICI (UK) UOP (USA) UOP (USA) YEAR OF IMPORT (b) 1982 1985 1986 1985-86 1985 STATUS O F IMPLEMENTATION (c) TECHNOLOGY ABSORBED TECHNOLOGY ABSORBED TECHNOLOGY ABSORBED TECHNOLOGY ABSORBED TECHNOLOGY ABSORBED C. FOREIGN EXCHANGE EARNINGS AND OUTGO i) ii) Activities relating to exports, initiatives taken to increase exports. development of new export market for products and services and export plans Total foreign exchange used and earned Total foreign exchange used a. b. Total foreign exchange earned Mentioned in the main report. Rs. in Crores 239.69 72.75 We wish to state that the Year’s performance reflects savings in foreign exchange amounting to Rs.630 crores, through products manufactured by the Company. For and on behalf of the Board of Directors Dhirubhai H. Ambani Chairman & Managing Director 14 AUDITORS REPORT Reliance To the Members of Reliance Industries Limited We have audited the attached Balance Sheet of RELIANCE INDUSTRIES LIMITED as at 31st March 1990 and the Profit and Loss Account of the Company for the year 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 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 As stated in note No 16(c) and note No 17 of Schedule N to the accounts, as a result of the unprecedented floods at the Patalganga complex, and the fire at Byculla Godown, some of the books of account and other records of the Company were substantially damaged/destroyed The Company has recompiled the records to the extent possible which have been relied upon by us. (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) For the reasons explained in Note No 12 of Schedule N to the accounts no provision for taxation has been made for the year. (iii) 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 other notes thereon give the information required by the Companies Act 1956. in the manner so required and give a true and fair view: (a) in so far as it relates to the Balance Sheet of the state of affairs of the Company as at 31st March 1990; and (b) in so far as it relates to the Profit and Loss Account of the profit of the Company for the year ended on that date. for RAJENDRA & CO. Chartered Accountants R.J. SHAH Proprietor Bombay Dated: 27th July 1990 for CHATURVEDI & SHAH Chartered Accountants D. CHATURVEDI Partner 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. However in respect of records of fixed assets of the Patalganga complex the same were damaged due to floods at Patalganga; as stated above the same have been recompiled to whatever extent possible on the basis of available information. According to the information and explanations given to us most of the Fixed Assets have been physically verified by the management during the year The comparision of the results of such verification with the book records in case of the assets lying at Patalganga complex is in prog ress. According to the information and explanations given to us in case of the other assets of the Company no material discrepancies were noticed on physical verification as compared to the book records. In our opinion the frequency of such verification is reasonable having regard to the size of the company and the nature of its assets. 2. None of the Fixed Assets have been revalued during the year. 3. As explained to us the stock of stores spare parts raw materials and finished goods have been physically verified by the management at reasonable intervals during the year In our opinion the frequency of such verification is reasonable having regard to the size of the Company and the nature of its business. In our opinion and according to the information and 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. 4. 5. As explained to us there were no material discrepancies noticed on physical verification of the stocks of raw materials and finished goods having regard to the size of the operations of the Company and the same have been properly dealt with in the Books of Account We are informed that in respect of stores and spares. the reconciliation of the recompiled records with those of the physical verification is in progress. 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.10 of Schedule ‘N’ to the accounts, in our opinion, the valuation of stocks is fair and proper, is in accordance with the normally accepted accounting principles and is on the same basis as in the preceding year. 7. The Company has not taken any loan, secured or unsecured, from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act 1956 or from companies under the same management within the meaning of sub section (1B) of Section 370 of the Companies Act 1956. 8. The Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the registers maintained under Section 301 and/ or to the 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 subsidiary 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 terms and conditions of the above are not, prima facie, prejudicial to the interests of the Company. In respect of the loans and advances in the nature of loans given by the Company to parties other than subsidiary companies, they are generally repaying the principal amounts as stipulated and are also regular in the payment of interest, wherever applicable. 9. 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 for the 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 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 party. 12. As explained to us, the Company has a regular procedure for the determination of unserviceable 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. In our opinion and according to the information and explanations given to us the Company has complied with the provisions of Section 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the Public. 14. In our opinion reasonable records have been maintained by the Company for the sale and disposal of realisable by-products and scrap wherever significant. 15. In our opinion, the internal audit system of the Company is commensurate with its size and the nature of its business. 16. The Central Government has prescribed maintenance of Cost Records under Section 209 (1)(d) of the Companies Act, 1956 in respect of cer tain 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 prescribed accounts and records have been made and maintained We have not, however made a detailed examination of the same. 17. According to the records of the Company, Provident Fund and Employees’ 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, 1990 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 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 trading activities, we are informed that the Company does not have damaged goods lying with it at the end of the year. Therefore, no provisions for any loss is required to be made in the accounts 22. In respect of processing activities we are informed that the Company has a reasonable system for recording receipts, issues and consumption of materials and stores commensurate with the size and nature of its business and the system provides for a reasonable allocation of materials and man-hours consumed to the relative jobs In our opinion, there is a reasonable system for authorisation at proper levels with necessary control on the issues and allocation of stores and labour to relative jobs. for RAJENDRA & CO. Chartered Accountants R.J. SHAH Proprietor Bombay Dated: 27th July 1990 for CHATURVEDI & SHAH Chartered Accountants D. CHATURVEDI Partner 23 Reliance BALANCE SHEET AS AT 31st MARCH, 1990 Schedule As at 31st March, 1990 Rs. Rs. (Rs. in crores) As at 31st March, 1989 Rs. Rs. SOURCE 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 ‘A’ ‘B’ ‘C’ ‘D’ ‘E’ ‘F’ ‘G’ ‘H’ ‘l’ 157.92 929.06 903.59 212.74 1,998.79 529.78 377.56 304.90 16.53 698.99 327.27 1,026.26 301.14 48.87 350.01 1,086.98 1,116.33 2,203.31 157.91 913.40 881.48 170.86 1,071.31 1,052.34 2,123.65 1,871.76 368.98 1,469.01 58.05 1,502.78 58.50 361.39 305.66 9.93 676.98 172.48 849.46 238.11 48.98 287.09 676.25 2,203.31 562.37 2,123.65 Notes and Contingent Liabilities ‘N’ As per our Repot 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: 27th July, 1990 24 J.R. Shah T. Ramesh U. Pai M.L. Bhakta B.D. Shah S.S. Betrabet N.H. Ambani M.D. Ambani A.D. Ambani N.R. Meswani V.M. Ambani Directors Executive Directors Secretary PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 1990 Reliance (Rs. in crores) As at (6 months) As at (12 months) Schedule Rs. Rs. Rs. Rs. ‘J’ ‘K’ ‘L’ ‘M’ INCOME Sales Other Income Variation in Stock EXPENDITURE Purchases Manufacturing and Other Expenses Interest Depreciation Profit for the year Less: Withdrawal of backward area incentives under 1979 Package Scheme of incentives availed of in prior years Less Transferred from General Reserve Add: Balance brought forward from last year Add: (i) Excess Provision in past written back on account of a) Doubtful Debts and Advances b) Net exchange difference on repayment of loans and deferred payment liabilities (ii)Investment Allowance (Utilised) Reserve written back Amount Available for Appropriations APPROPRIATIONS Taxation Reserve Investment Allowance Reserve Debenture Redemption Reserve General Reserve Proposed Dividend (subject to tax) Preference Shares Equity Shares Balance carried to Balance Sheet 1,840.66 15.64 3.32 20.94 1,414.48 171.73 161.97 28.36 28.36 –– –– 10.00 10.00 8.00 8.00 0.86 45.64 1,112.45 7.88 49.27 1,859.62 1,169.60 1,769.12 90.50 –– 90.50 19.36 109.86 –– 2.90 112.76 1,090.23 79 37 –– 79.37 11.25 90.62 16.03 –– 106.65 14.21 897.64 91.58 86.80 –– –– 0.85 15.18 –– 30.00 6.00 5.00 0.65 45.64 82.50 30.26 87.29 19.36 Notes and Contingent Liabilities ‘N’ As per our Repot 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: 27th July, 1990 J.R. Shah T. Ramesh U. Pai M.L. Bhakta B.D. Shah S.S. Betrabet N.H. Ambani M.D. Ambani A.D. Ambani N.R. Meswani V.M. Ambani Directors Executive Directors Secretary 25 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 Issued & Subscribed: 15,21,46,493 Equity Shares of Rs 10 each fully As at 31st March, 1990 Rs. Rs. (Rs in crores) As at 31st March, 1989 Rs. Rs. 200.00 200.00 0.30 5.50 44.20 250.00 0.30 5.50 44.20 250.00 Called-up Less - Calls unpaid - by Directors by others 152.14 –– 0.02 152.14 –– 0.03 Investment Allowance (Utilised) Reserve As per last Balance Sheet Add: Transferred from Investment Allowance Reserve Less:Transferred to Profit and Loss Account to the extent not required Taxation Reserve As per last Balance Sheet Add Transferred from Profit and Loss Account General Reserve As per last Balance Sheet Less Transferred to Profit and Loss Account 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) 152.12 152.11 Add: Amount transferred from Profit & Loss Account 0.30 0 30 Profit & Loss Account SCHEDULE ‘C’ 5.50 157.92 5.50 157.91 SECURED LOANS As at 31st March, 1990 Rs. 701.42 Rs. B/f (Rs in crores) As at 31st March, 1989 Rs. 713.40 Rs. 113.80 30.00 143.80 2.90 10.00 10.00 56.84 28.36 28.48 8.00 113.80 –– 113.80 –– 140.90 113 80 10.00 –– 20.00 10 00 51.84 –– 51.84 5.00 36.48 30.26 929.06 56.84 19.36 913.40 As at 31st March, 1990 Rs. Rs. (Rs in crores) As at 31st March, 1989 Rs. Rs. Of the above Equity Shares 1. (a) 1.56,78,440 Shares were allotted as fullypaid-upBonus Sharesby capitalisation of Share Premium and Reserves (b) 60,62,000 Share were allotted as fully paid-up pursuant toSchemes of Amalgama- (c) 9.44.78.433 Share were allotted as fully paid-up Shares onconversion/surrender of tion without payments being received in cash (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/purported 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. if the Court so decides. A) DEBENTURES: i) 13 5% Convertible Secured Debentures of Rs.150 each fully paid (Series ‘E’) Less: Converted 80.00 26.67 53.33* includes debentures of face value of (Rs.25.500) held by Directors ii) 15% Non-convertible Secured Debentures of Rs.100 each fully paid. (series ‘F’) Less Bought back (Net of re-issue) 270.00 3.33 266.67* * Includes debentures of face value of (Rs.35,000) held by Directors iii) 14% Non-Convertible Secured Redeemable 80.00 26.67 53.33 270.00 4.78 265.22 Debentures of Rs.100 each fully paid 80.00 80.00 SCHEDULE ‘B’ a) b) B) TERM LOANS 1. From Banks Foreign Currency Loans 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 RESERVES & SURPLUS Debenture Redemption Reserve As per last Balance Sheet Acid:- Transferred from Profit & Loss Account Share Premium Account As per last Balance Sheet Less:- Calls unpaid - by Directors 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 26 As at 31st March, 1990 Rs. Rs. (Rs in crores) As at 31st March, 1989 Rs. Rs. 18.25 4.25 6.00 673 29 –– 0.14 10.25 c) Rupee Loans 2. From Financial Institutions Foreign Currency Loans a) b) Rupee Loans 3. From Others: Housing Development Finance Corporation Ltd. 673.17 673 .15 C) WORKING CAPITAL LOANS –– –– –– 30.00 10.00 701.42 30.00 713.40 From Banks D ) WORKING CAPITAL TERM LOANS From Banks E) BRIDGE LOANS From Financial Institutions E) DEFERRED PAYMENT LIABILITIES To Foreign Machinery Suppliers (Guaranteed by Banks and Financial Institutions) 10.25 8.00 673.29 –– 0.12 30.00 30.00 –– 10.00 400.00 398.55 59.14 65.76 7.85 0.75 74.36 103.49 0.16 103.65 –– 0.37 59.51 95.53 19.16 114.69 4.11 1.46 178.31 300.80 24.48 –– –– 903.59 179.47 277.79 –– 24.25 1.42 881.48 SCHEDULE ‘C’ (Contd.) NOTES: Of the above 1. (a) Debentures referred in A(ii). Term Loans referred in B save and except B(l)(a) to the extent of Rs 17.53 crores and B(3) 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. (b) Debentures referred in A (iii) are secured by legal mortgage in English form on the properties situated at Naroda. District Ahmedabad in the state of Gujarat and by deposits of title deeds on the properties situated at Patalganga. District Raigad in the state of Maharashtra and are to be secured by hypothecation on the moveable properties situated at Patalganga. District Raigad in the state of Maharashtra These Debentures are redeemable at a premium of 5øo 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) 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 buyback 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. (i) (c) The Company can reissue at par such bought back Debentures (d) The Company received request for buy teach of Debentures after the end of the financial year of an aggregate nominal value of Rs 2.44 crores till date (Since paid Rs 1.63 crores) Term Loan referred in B(1)(a) to the extent of Rs 9.80 crores are secured exclusively by hypothecation of specific items of plant and machinery situated at Naroda and Patalganga. (ii) Term Loans referred in B(1)(a) to the extent of Rs 773 crores is secured by guarantee issued by one of the Bankers of the Company against hypothecation of all moveable assets both present and future situated at Naroda and Patalganga. 2. 3. 4. Reliance 5. 6. 7. 8. Term Loans referred in B(2)(a) secured against the Fixed Assets referred to para (i)(a) above. exclude Rs 6.50 crores availed for M.E.G. project which is being implemented by Reliance Petrochemicals Limited and is accordingly transferred and therefore excluded. Term Loans referred in B(3) are secured/to be secured by mortgage by deposit of title deeds of specified residential quarters situated at Panvel and Mohapada, District Raigad in the state of Maharashtra. The charges created on the Debentures and Term Loans referred to in A and B 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 of Rs.9.80 crores, and B(3). (i) 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. (ii) Working Capital Term Loan from Banks referred to in ‘D’ are to be 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,, of the company and are also to be secured by a second charge on the immovable assets of the company both situated at Naroda and Patalganga. 9. Secured Loans include Rs.46 57 crores repayable within one year excluding monies payable on surrender of debentures under buy-back scheme as mentioned in 3(b) above. SCHEDULE ‘D’ UNSECURED LOANS Fixed Deposits As at 31st March, 1990 Rs. Rs. (Rs in crores) As at 31st March, 1989 Rs. Rs. (including Cash Certificates of Rs.9 33 crores) 176.02 165.69 Short Term Loans from: Financial Institutions i ) ii) Banks iii) Deferred payment liabilities to indigenous machinery suppliers Interest tree Loans under Sales-tax deferral 1983 scheme * Includes Rs 35.81 crores repayable within one year 3.00 16.00 0.14 5.00 –– 0.17 19.14 17.58 5.17 –– 212.74* 170.86 SCHEDULE ‘E’ FIXED ASSETS Nature of Fixed Assets Goodwill Leasehold Land Freehold Land Buildings Plant 8 Machinery Electric Installation Factory Equipments Furniture & Fixtures Vehicles Capital Expenditure pending allocation and Advance against Capital Expenditure Previous Year NOTES: 151.48 1,871.76 1,862.66 GROSS BLOCK (AT COST) DEPRECIATION NET BLOCK As at 1.4.89 Rs. Additions Rs. Deductions Rs. As at 31.3.90 Rs. Total upto 31.3.90 Rs. As at 31.3.90 Rs. As at 31.3.89 Rs. (Rs in Crores) 1.23 4.83 0.11 90.47 –– 0.02 –– 8.69 1,557.75 164.38 37.80 6.78 13.53 2.78 8.68 0.24 5.34 1.68 79.72 268.75 204.48 –– –– –– 0.11 3.34 0.01 –– 0.02 0.24 138.00 141.72 195.38 1.23 4.85 0.11 99.05 1,718.79 46.47 7.02 23.85 4.22 93.20 1,998.79 1,871.76 –– –– –– 10.53 505.57 6.90 1.81 4.28 0.69 –– 529.78 368.98 1.23 4.85 0.11 88.52 1.23 4.83 0.11 82.17 1,213.22 1,207.23 39.57 5.21 19.57 3.53 93.20 1,469.01 1,502.78 32.84 5.33 15.30 2.26 151.48 1,502.78 (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 includes (i) under construction Rs 5 12 Crores (ii) Cost of ownership premises in Co-operative Housing Societies Rs 1.11 Crores. (c) Plant and Machinery includes Rs 30 66 Crores under installation. (d) Electric installation includes Rs 8.69 Crores under installation. (e) Furniture & fixtures includes Rs. 0.16 Crore being work-in-progress. (f) Capital Expenditure pending allocation consist of: i ) Rs. 37.04 Crores on account of advance against capital expenditure (Previous year Rs 11.22 Crores) ii) Rs 20 60 Crores on account of preoperative expenses (Previous year Rs 136.91 Crores) as per Note No 21 of Schedule ‘N’) and iii) Rs. 35 56 Crores on account of cost of construction materials at site (Previous year Rs 3.35 Crores) 27 Reliance SCHEDULE ‘F’ INVESTMENTS (At Cost) GOVERNMENT AND OTHER SECURITIES 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 Cooperative Society Ltd. of Rs 100 each fully paid up (Rs 16 500) (Previous year Rs 16.500) 225 Shares of Crimpers Industrial Co operative Society Ltd. of Rs 100 each Rs.25 per share paid up (Rs 5,625) (Previous year Rs 5.625) 20 Shares of The Bombay Market Art Silk Co-operative (Shops & Warehouses) Society Ltd. . of Rs 200 each. fully paid up (Rs 4,000) (Previous year Rs 4.000) –– –– –– –– –– IN SUBSIDIARY COMPANIES Unquoted Wholly owned 210070 Equity Shares of Devti Fabrics Ltd. of Rs 10 each. fully paid up 0.21 4400 Equity Shares of Trishna Investments and Leasings Ltd. of Rs 10 each fully paid up (Rs 44000) (Previous year Rs. 34000) –– 0.21 Quoted: 57600000 Equity Shares of Reliance Petrochemicals Ltd. of Rs 10 each fully paid up 57.60 OTHER INVESTMENTS Quoted 7530 Equity Shares of Housing Development and Finance Corporation Ltd. of Rs 100 each fully paid up 5622 Equity Shares of The Industrial Credit 0.08 and Investment Corporation of India Ltd of Rs.100 each fully paid up 0.06 Unquoted 49800 Equity Shares of Hindustan Oil Exploration Co Ltd. Rs.10 each fully paid up 1000 Equity Shares of Air Control & Chemicals Engineering Co. Ltd. of Rs. 100 each. fully paid up 0.05 0.01 IN DEBENTURES - Quoted 624 Fully Convertible Debentures of Industrial Credit & Investment Corporation of India Ltd. of Rs 650 each. fully paid up IN BONDS - Unquoted 5000 12% HDFC Corporate Bonds of Rs. 1000 each fully paid up 28 As at 31st March, 1990 Rs. Rs. (Rs in crores) As at 31st March, 1989 Rs. Rs. AGGREGATE VALUE OF Quoted Investments Unquoted Investments SCHEDULE ‘G’ CURRENT ASSETS As at 31st March, 1990 Market Book Value Value 164.58 57.78 –– 0.27 (Rs in crores) As at 31st March, 1989 Market Book Value Value 270.96 57.73 –– 0.77 As at 31st March, 1990 Rs. Rs. (Rs in crores) As at 31st March, 1989 Rs. Rs. –– –– INVENTORIES (at cost or market value whichever is lower except otherwise stated) (Certified and valued by the Management) –– –– –– –– –– –– –– 0.21 –– 0.21 Stores. spares. dyes. chemicals. etc. Raw materials Stock-in-transit Stock-in-process Finished goods Others (includes decommissioned machinery of Rs. 0 04 crore at written down value) 98.88 62.19 8.04 89.75 117.15 1.55 68.45 68.43 9.50 60.07 143.32 11.62 SUNDRY DEBTORS (Unsecured) Over six Months: Considered good Considered doubtful Less: Provision for doubtful debts Others considered good CASH AND BANK BALANCES 377.56 361.39 30.80 4.66 35.46 4.66 30.80 274.10* 24.81 2.92 27.73 2.92 24.81 280.85 304.90 305.66 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. (Rs.13 336) (Maximum balance during the year Rs.0.03 crore) 0.42 15.85 0.26 –– 0.56 8.65 0.71 0.01 16.53 698.99 9.93 676.98 * includes Rs.1.75 crores due from Devti Fabrics Ltd. (subsidiary company) and Rs.111.52 crores on account of Bills of Exchange SCHEDULE ‘H’ 57.60 57.81 57.81 LOANS AND ADVANCES UNSECURED - (CONSIDERED GOOD UNLESS STATED OTHERWISE) Loans to subsidiary companies Devti Fabrics Limited i) (Maximum debit balance at any time during the financial year Rs.3.87 crores) (Refer Note No.15) Trishna Investments and Leasings Ltd. (Maximum debit balance at any time during the financial year Rs 148.29 crores) (Refer Note No 15) ii) 148.29 iii) Reliance Petrochemicals Limited (Maximum debit balance at any time during the financial year Rs.50 00 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. As at 31st March, 1990 Rs. Rs. (Rs in crores) As at 31st March, 1989 Rs. Rs. 1.75 1.35 46.79 50.00 98.14 41.59 21.90 8.79 2.06 172.48 200.04 75.23* 24.65 22.59 4.76 327.27 * Includes (i) Rs 0.18 crore from Officers (Previous year Rs.0.23 crore) Maximum balance at any time during the year Rs.0.23 crore (Previous year Rs.0.23 crore). (ii) Rs.0 19 crore as contribution towards Equity Share Capital in Reliance Capital and Finance Trust Ltd. The Company has agreed to subscribe to 1800000 shares of Rs 10 each of the said company which have since been allotted. * Excludes Rs 0 03 crore considered doubtful and provided for. 0.08 0.05 0.14 0.13 0.05 0.01 0.06 0.06 0.04 –– 58.05 –– 0.50 58.50 SCHEDULE ‘I’ CURRENT LIABILITIES AND PROVISIONS As at 31st March, 1990 Rs. Rs. (Rs in crores) As at 31st March, 1989 Rs. Rs. SCHEDULE ‘L’ VARIATION IN STOCK CURRENT LIABILITIES Sundry Creditors Sundry Deposits Unclaimed Dividends Interest accrued but not due on loans Excess Share and Debenture Application monies refundable includes for Capital Expenditure Rs 63.12 crores Fixed Deposits matured but unclaimed Rs 1.19 crores and Acceptance of Rs 110.19 crores PROVISIONS Gratuity and Superannuation Provision for Taxation Proposed Dividend 245.48* 2.73 3.50 49.15 0.28 184.08 3.09 1.12 49.53 0.29 301.14 238.11 0.37 2.00 46.50 0.69 2.00 46.29 48.87 350.01 48.98 287.09 SCHEDULES FORMING PART OF THE PROFIT & LOSS ACCOUNT 1989-1990 (12 months) Rs. (Rs In Crores) 1988-1989 (9 months) Rs. 3.78 1.85 3.02 6.99 –– 15.64 1.38 1.35 0.01 5.13 0.01 7.88 As at 1989-1990 (12 months) Rs. Rs. (Rs in crores) As at 1988-1989 (9 months) Rs. Rs. SCHEDULE ‘J’ OTHER INCOME incentives assistance and drawbacks on Exports receivable Processing charges Dividend (Gross) On other investments (Includes Rs 3.00 crores from subsidiary company) Tax at source Rs 0.70 crore Miscellaneous Income Profit on Sale of Investments SCHEDULE ‘K’ VARIATION IN STOCK STOCK-IN-TRADE (at close) Finished goods Stock in process Others STOCK-IN-TRADE (at commencement) Finished goods Stock in process 60.07 Other RAW MATERIALS CONSUMED Stock at commencement Add: Purchases (including material 68.43 transferred out of Trial run production) 525.61 Less: Stock at close MANUFACTURING EXPENSES Carriage Inward Stores & spare parts Dyes & Chemicals Electric Power fuel and water Machinery repairs Building repairs Labour. Processing and machiner y 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 16 crore for Directors) Payment to Auditors Directors fees (Rs.20000) (Previous year Rs. 17,000) General Expenses Provision for doubtful recoveries Charity & Donation Loss on sale of Assets (Net) 117.15 89.75 1.51 143.32 1.70 143.32 60.07 1.70 208.41 205.09 SCHEDULE ‘M’ 100.28 50.70 4.84 205.09 3.32 155.82 49.27 INTEREST Debentures Fixed Loans Others (Net) Reliance As at 1989-1990 (12 months) Rs. Rs. (Rs in crores) As at 1988-1989 (9 months) Rs. Rs. 59.01 346.33 405.34 68.43 531.85 336.91 5.25 14.73 28.66 74.69 2.76 0.74 8.85 278.91 11.65 594.04 62.19 5.34 33.79 52.95 105.47 9.93 1.82 14.96 445.02 24.24 693.52 426.24 31.37 22.50 3.94 8.56 11.87 19.30 0.44 24.84 2.81 14.30 2.25 19.73 9.38 0.80 0.12 3.45 2.60 0.29 –– 30.63 1.75 0.61 0.07 2.23 4.88 43.87 29.61 8.70 11.73 0.12 17.85 1.28 5.09 1.71 21.16 95.54 67.64 2.95 1.12 0.03 1.55 1.26 0.20 –– 24.75 –– 0.32 5.06 49.70 1414.48 37.24 897.64 1989-1990 (12 months) Rs. 60.42 45.39 65.92 (Rs. in crores) 1988-1989 (9 months) Rs. 27.17 17.50 46.91 171.73 91.58 29 Reliance SCHEDULE ‘N’ NOTES AND CONTINGENT LIABILITIES 1. 2. 3. 4. 5. 6. 7. The current financial year is for a period of twelve months as against nine months in 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 continued to account the following items on 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 of Debentures. (iv) Interest on letters of credit outstanding, (v) Insurance and other claims (vi) Disposal of sundry items other than usable waste of POY/PSF. Sales is inclusive of Rs.10.61 crores and Rs.23.01 crores being the recovery of Sales Tax and Excise Duty respectively. Interest - Others(Net)’ is arrived at after deducting Rs 1.21 crores (Tax at source Rs 0.05 crore) being interest received/receivable. Income and Expenditure amounting to Rs 0.86 crore and Rs.2.22 crores respectively relating to the previous years have been suitably accounted for in respective heads. 8. (i) Auditors’ Remuneration: (a) Audit Fees (b) Tax Audit Fees (c) For Certification and Consultation in finance and Tax matters (d) Out-of-pocket expenses ( i i ) Cost Auditor 1989-1990 Rs. 0.17 0.07 (Rs. in crores) 1988-1989 Rs. 0.12 0.05 0.04 0.01 0.29 0.02 0.01 0.20 9. Audit Fees (Rs. Nil) (Previous year Rs.35,000) –– (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. Fixed monthly remuneration has been paid to the Directors as per the Schedule XIII to the Companies Act, 1956 and/or as per the approval of the Central Government wherever applicable. –– (b) Managing Directors’ and Executive Directors’ remuneration: Salaries i ) ii) Contribution to Provident Fund and Superannuation Fund iii) Provision for Gratuity (as per actuarial Value- tion) (Rs 47,200) (Previous year Rs.22,300) iv) Perquisites 1989-1990 Rs. 0.07 (Rs in crores) 1988-1989 Rs. 0.03 0.02 –– 0.03 0.01 –– 0.02 10. The Company has been accounting liability for Excise Duty in respect of finished products lying in factory/bonded premises as and when they are cleared/debonded Accordingly. estimated liability amounting to Rs 29.39 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 no impact 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. 11. (b) No effect has been given in the accounts to the increased liability of Rs.80 60 crores on account of fluctuations in the rates of exchange at the year end with regard to outstanding balances of foreign currency loans. (c) During the year. the Company has capitalised payments made on account of fluctuations in the rates of exchange on repayment of loans and deferred payment liabilities and the cost of rollover charges on forward contracts to respective fixed assets and depreciation thereon has accordingly been provided for in the accounts. (a) The Income-tax assessments of the Company have been completed upto Assessment Year 1987-88. Total tax demands raised by the Income Tax Department upto the said assessment years are Rs.18.56 crores. which are disputed The Company is advised that the Taxation Reserve created in past of Rs.10 crores. however, would be adequate enough to meet the liabilities, if any In terms of provisions of Section 115 J of the Income tax Act, 1961. and other relevant provisions of law the Company has, based on legal advice. prepared separate Profit and Loss Accounts of different Units. on the same lines as were followed last year. On the basis of such accounts. there is no liability for taxation. and hence no provision for taxation is considered necessary However, as a measure of abundant caution, an amount of Rs.10 00 crores has been transferred from Profit and Loss Account to the Taxation Reserve. (b) 12. 30 13. Guidelines dated 14th January, 1987 of the Government India require Companies raising resources through issue of Debentures to create a Debenture Redemption Reserve. The Company has been advised that this notification is not applicable to Debentures issued before the date of the said notification. In respect of Debentures issued subsequent to the date of the said notification, the Company, has transferred Rs. 8.00 crores during the financial year to the Debenture Redemption Reserve. 14. Depreciation on assets has been provided on straight-line 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 per records and as advised, has been made on the basis of the actual utilisation of respective eligible assets. 15. The Company has an investment of Rs.0.21 crore and Rs.44,000 in the Share Capitals of Devti Fabrics Limited, and Trishna investments & Leasings Ltd., wholly owned subsidiary companies. Loans to these subsidiary companies of Rs.1.75 crores and Rs.148.29 crores respectively, receivables on account of sale of goods, of Rs. 1.75 crores from Devti Fabrics Limited and guarantees to Banks and Financial Institutions of Rs.6.00 crores aggregate to Rs.157.79 crores. The losses of these companies exceed their paid up capital and reserves on 31st March, 1990. In view of the long term involvement of the Company in both the said companies, no provision has been made in the accounts for the probable loss that may arise. 16. Due to the unprecedented floods at the Patalganga Complex of the Company on 24th July, 1989. (a) Inventories having a total estimated value of Rs.85.03 crores were damaged or destroyed. After taking credit for the value of the damaged stocks which were either sold or consumed, and. considering provision made against stocks remaining unsold, as at 31st March. 1990. a net loss of Rs.32.37 crores has been charged to previous heads in the profit and loss account. (b) Plant and Machinery were damaged and had to be repaired and reconditioned. The cost of such repairs and other incidental expenses (including the cost of periodic shut down for overhauling and change of catalyst for which separate costs cannot be ascertained) aggregating to Rs.11.64 crores has been charged to various heads in the profit and loss account. (c) Books of Accounts and other records have been substantially damaged. Records, recompiled to the extent possible, have been considered while preparing the accounts. 17. Fire at Byculla godown premises on 12th May, 1990 has destroyed books of accounts and records of the Company which included records of the current financial year. On the basis of available information records have been recompiled to the extent possible and the same have been considered while preparing the accounts. 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 Deeds executed 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.3.85 crores 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 the Bombay High Court. The Company is advised 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 non-payment of duty aggregating Rs.27.23 crores. The liability has been disputed. The Company has been advised that there would be no liability on this account and accordingly. no provision has been made in respect thereof in the accounts. (b) The Company has made a payment of Rs.1.00 crores during the year to the Excise Authorities, Ahmedabad, for proceedings relating to 1983 which is disputed and accordingly not provided for. 20. (a) The Company has received show cause notice from customs authorities alleging import of PTA plant of higher capacity and consequently have claimed Rs.174.03 crores by way of differential customs duty. The Company is disputing the demand. The Company has been advised that there would be no liability on this account and accordingly no provision has been made in respect thereof in the accounts. (b) With regard to the show cause notice received from the customs authorities demanding differential duty/penalty of Rs.119.64 crores, the Company successfully challenged the said notice in adjudication proceedings before the Collector of Customs. The customs department has preferred an appeal to the Customs, Excise and Gold Control Appellate Tribunal against which the Company has filed a writ petition in the Honourable High Court at Delhi. The Company is advised that there would be no liability on this account and accordingly no provision has been made in respect thereof in the accounts. 21. Pre-operative expenses in respect of Projects upto 31st March, 1990 to be capitalised 1989-1990 (Rs in Crores) Upto Total upto 31st March 31st March 1990 1989 22. CONTINGENT LIABILITIES Reliance (Rs in Crores) As at 31st March 1990 Rs. As at 31st March 1989 Rs. 24.21 1.44 24.21 1.44 (a) Estimated amount of contracts remaining to be ex ecuted on capital account and not provided for 89.10 46.75 Raw material consumed (during trial run) Carriage inward Consumption of stores, chemicals and Catalysts Electric power. fuel and water Labour charges Excise duty Salaries Wages and Bonus Employees welfare and other amenities Insurance Rent Rates and taxes (Rs 42967) 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 –– –– –– –– –– –– –– –– 0.66 –– –– –– 0.06 13.40 –– –– –– 2.85 16.97 –– –– 16.97 0.24 10.10 0.26 0.05 1.60 0.78 0.93 0.49 — 0.13 0.63 26.52 9.96 66.71 21.80 7.88 173.73 35.98 0.84 136.91 The above items not forming par t of profit and loss account 23. LICENCED AND INSTALLED CAPACITY (a) Polyester Filament Yarn/Polyester Chips (b) Polyester Staple fibre/Polyester Chips (c) Man-made Fibre Spun Yarn on Worsted System (d) Man-made Fabrics (Spindles) (Looms) (Knitting M/c ) (e) Purified Terepthalic Acid (f) Linear Alkyl Benzene (g) Synthetic Filament Yarn including Industrial Yarn/Tyre Cord (h) Ethylene (i) Propylene (j) Butadiene & Other C4s (k) Acrylic Fibre (1) Polypropylene –– 0 .24 10.10 0.26 0.05 1.60 0.78 1.59 0.49 –– 0.13 0.69 39.92 9.96 66.71 21.80 10.73 190.70 35.98 0.84 153.88 133.28 20.60 Unit M.T. M.T. Nos. Nos. Nos. M.T. M.T. M.T. M.T. M.T. M.T. M.T. (m) Styrene (n) Polystyrene (o) Styrene Butadiene Rubber (p) Linear low Density Polyethylene (q) Acrylonitrile (r) Butyl Rubber (s) Export Oriented Unit (i) Para-xylene (ii) Purified Terephthalic Acid * + + Based on average Denier of 40 @ Approved under MES Installed Capacity based on Certificate of the Management Subject to automatic re-endorsement of capacity Further 15.000 tonnes p.a. A has been approved under applicable broad-banding scheme. On the basis of Letter of Intent received M.T. M.T. M.T. M.T. M.T. M.T. M.T. M.T. (b) Outstanding guarantees furnished to Banks and Financial Institutions including in respect of Letters of Credit opened by Bankers 304.59 140.46 (c) Bonds executed in favour of Excise and Custom Authorities 19.28 75.08 (d) Uncalled liability on partly paid shares (Rs 16,875) (Previous year Rs 16,875) — — (e) Claims against the company/disputed liabilities not acknowledged as debts including Rs 3.57 crores for excise duty Previous year Rs 4.17 crores) (f) Export bills discounted against irrevocable Letters of Credit (g) Indemnities towards expor t obligations against capital goods import (h) Guarantee to Banks and Financial Institutions against credit facilities extended to subsidiary companies (i) Import Duty on Raw Materials/Chemicals & catalysts imported under Advance Licences against fulfilment of export obligations 7.78 0.01 0.67 6.00 6.29 1.43 0.62 6.00 62.29 7.23 Licensed Capacity Installed Capacity A @ @ @ 1989-1990 32,300A 60,000 20,000 4 5 0 22 200,000 80,000 2,000 320,000 155,000 98,000 20,000 M.T. 80,000* 40,000* 80,000* 100,000* 70,000 25,000* 270 000* 200,000* 1988-1989 32,300 45,000 20,000 4 5 0 22 100,000 60,000 2,000 320,000 155,000 98,000 20,000 100,000 * –– –– –– –– –– –– –– –– ++ 1989-1990 25,125 45,000 12,494 4 5 0 20 100,000 60,000 –– –– –– –– –– –– ++ 1988-1989 25,125 45,000 12,494 4 5 0 20 100,000 60,000 –– –– –– –– –– –– –– –– –– –– –– –– –– –– –– –– –– –– –– –– –– –– 24. PRODUCTION OF FINISHED PRODUCTS MEANT FOR SALE Unit 1989-1990 1988-1989 Yarn (Polyester & Blended etc ) Polyester Chips Fabrics Polyester Staple fibre P.T.A L.A.B Paraxylene By-Products 25. VALUE OF IMPORTS ON C I F BASIS IN RESPECT OF: (a) Raw Materials (b) Dyes and Chemicals. Catalysts, Stores and Spare parts (c) Capital goods M.T. M.T. Mtrs. In lacs M.T. M.T. M.T. M.T. M.T. 61,189 5,239 492.03 53,120 39,306 48,394 10,402 31,456 1989-1990 Rs. 147.43 43.29 0.03 42,541 4,149 365.87 27,374 32.881 28,413 –– 3,201 (Rs in crores) 1988-1989 Rs. 115.85 20.32 5.64 31 Reliance 26. EXPENDITURE IN FOREIGN CURRENCY ON ACCOUNT OF interest on foreign currency loans Interest on Debentures held by Non-residents on repatriation basis (Gross) Other matters (including commitment charges (Rs nil) on foreign currency loans - Previous year Rs. 15625) Technical know-how & Engineering Fees 1989-1990 Rs. 23.88 2.26 13.24 9.56 (Rs. in crores) 1988-1989 Rs. 17.16 8.63 6.90 26.14 27. QUANTITATIVE INFORMATION IN RESPECT OF OPENING STOCK. CLOSING STOCK. PURCHASES. SALES AND CONSUMPTION OF RAW MATERIALS Unit Quantity Rs. in crores Quantity Rs. in crores 1989-1990 1988-1989 143.32 100.28 M.T. Mtrs. in lacs M.T. M.T. M.T. M.T. Mtrs. in lacs M.T. M.T. M.T. M T. 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. M.T. Mtrs in lacs M.T. M.T. /K.L. 4,675 85.70 5,362 3,408 6,009 3,524 64.15 8,410 1,234 4,414 1,595 1,013 1.50 41 –– 63,566 507.59 50,288 7,463 44,146 49,895 8,807 –– 178,523 4,677 25,017 41,705 1,774 5,986 126.05 44,368 18,719 –– 60.07 1.70 117.15 89.75 1.51 20.94 1,019.90 230.73 238.24 36.49 130.34 129.85 18.51 36.60 1,840.66 78.31 13.50 42.79 140.20 17.21 120.69 18.25 57.97 15.33 27.60 531.85 –– 531.85 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 –– –– –– 67,968 3.13 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 –– 121.41 0.40 95.32 13.28 43.27 13.68 24.68 7.63 18.00 337.67 0.76 336.91 Rs. in crores 342.29 189.56 531.85 1989-1990 % of total Consumption 64.36 35.64 100.00 1988-1989 Rs. in crores 221.93 114.98 336.91 % of total Consumption 65.87 34.13 100.00 (a) Opening Stock i) Finished Stocks Yarn Fabrics Polyester Staple Fibre Polyester Chips L.A.B ii) Stock-in-process iii) Others (b) Closing Stock: i) Finished Stocks Yarn Fabrics Polyester Staple Fibre Polyester Chips LAB Paraxylene Stock in process ii) iii) Others (c) Purchases Yarn Fabrics Fibre Others (d) Sales Yarn (Polyester & Blended) Fabrics Polyester Staple Fibre Polyester Chips P T A L.A.B. Paraxylene Others (e) Raw Material consumed Naptha Paraxylene (including own production during trial run) PTA. M.E.G. Fibre Yarn Fabrics (Grey) N. Paraffin Benzene Others Less - Difference in Stock of Useable Waste Excluding during trial run 28. VALUE OF RAW MATERIALS CONSUMED Imported (including import duty Rs 129 10 crores) Indigenous 32 29. VALUE OF DYES CHEMICALS. CATALYSTS. STORES AND SPARE PARTS CONSUMED Imported Indigenous 30. EARNINGS IN FOREIGN EXCHANGE Export of goods on FOB basis 31. 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 – Final dividend Number of Equity Shares held by them – Final dividend (i) Amount of dividend paid (Gross) Tax at source Rs 0.59 crore (Previous year Rs.0 32 (b) (c) crore) – Final dividend (ii) Year to which dividend relates Reliance Rs. in crores 41.77 44.97 86.74 1989-1990 1988-1989 % of total Consumption 48.16 51.84 100.00 Rs. in crores 21.30 22.09 43.39 % of total Consumption 49.08 50.92 100.00 1989-1990 Rs. 72.75 1989-1990 Rs. (Rs. In crores) 1988-1989 Rs. 26.14 (Rs. In crores) 1988- 1989 Rs. 22,152 12,997,292 23,237 15,529,421 3.90 Final Div. 1988-89 1.96 final Div.1987-88 32. (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 ( i i ) Salaries and Bonus (iii) Contribution to Provident Fund & Superannuation Fund (iv) Other Perquisites (b) Break-up of expenditure incurred on employees who were employed for a part of the year and were in receipt of remuneration for any part of the year at a rate which in aggregate was not less than Rs 6.000 per month (i) Number of employees (ii) Salaries and Bonus (iii) Contribution to Provident Fund & Superannuation Fund (iv) Other Perquisites 1989-1990 (Rs. in Crores) 1988-1989 Rs. 4.29 0.81 1.36 0.37 0.07 0.11 436 60 Rs. 2.09 0.46 1.01 0.17 0.04 0.09 568 93 As per our Repot 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: 27th July, 1990 J.R. Shah T. Ramesh U. Pai M.L. Bhakta B.D. Shah S.S. Betrabet N.H. Ambani M.D. Ambani A.D. Ambani N.R. Meswani V.M. Ambani Directors Executive Directors Secretary 33 Reliance STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956 RELATING TO COMPANY’S INTEREST IN TF1E SUBSIDIARY COMPANIES 1. The Financial Year of the subsidiary companies ended on 31st March, 1990 31st March, 1990 31st March, 1990 Devti Fabrics Ltd. Reliance Petrochemicals Ltd.: Trishna Investments and Leasings Ltd. 2. Date from which they became subsidiary companies 30th September, 1985 11th January, 1988 30th December 1988 3. (a) No. of shares held by Reliance Industries Limited (holding 2,10,070 Equity Shares 5,76,00,000 Equity Shares 44,000 Equity Shares company) with its nominees in the subsidiaries at the end of the face value of of the face value of of the face value of of the financial year of the subsidiary companies Rs.10/- each fully paid up Rs.10/- each fully paid up Rs.10/- each fully paid-up (b) Extent of interest of holding company at the end of the 100% 66% 100% financial year of subsidiary companies 4. The net aggregate amount of the subsidiary companies profit/(losses) so far as it concerns the members of the holding company (a) Not dealt with the holding company’s accounts i) ii) For the financial year ended 31st March 1990 (Rs.100.89 lacs) For the previous financial years of the subsidiary (Rs.74.06 lacs) Rs. Nil Rs.313.33 lacs (Rs.760.77 lacs) Rs.47.29 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, 1990 Nil For the previous financial year of the subsidiary companies since they became the holding company’s Nil subsidiaries Nil Nil Nil Nil For and on behalf of the Board D.H. Ambani R.H. Ambani Chairman 8iManaging Director Joint Managing Director J.R. Shah T. Ramesh U. Pai M.L. Bhakta B.D. Shah S.S. Betrabet N.H. Ambani M.D. Ambani A.D. Ambani N.R. Meswani V.M. Ambani Directors Executive Directors Secretary Bombay Dated: 27th July, 1990 34 RELIANCE PETROCHEMICALS LIMITED Regd. Office : Village Mora, Batha, P.O. Surat - Hazira Road, Dist. Surat, PIN 394 510 Gujarat State. 35 36 DIRECTORS’ REPORT To the Members Your Directors present the Second Annual Report together with the Audited Statement of Accounts for the year ended 31st March, 1990. 1. FINANCIAL RESULTS Dur ing the year under review, your Company has been implementing the construction of the Petrochemicals Projects in Hazira. As on 31st March, 1990, your Company has incurred an expenditure of Rs.532.35 Crores. A significant event of this year was the announcement of Minimum Economic Capacities by the Government of India’ to which your Company responded by taking steps to enhance the project capacities in the case of MEG from 60.000 TPA to 100 000 TPA and of HDPE. from 50,000 TPA to 100.000 TPA, there being no change in the capacity of PVC at 100 000 TPA. The project costs were further updated to provide for additional investments in construction of a Jetty and setting up of a captive gas-based Power Plant. The Financial Institutions, led by ICICI, have approved the additional project costs as well as the incremental means of finance. In view of the said increase in project costs during the year under review, the Company’s funds were entirely indentified with the revised costs. Therefore, unlike the previous year, no Profit and Loss Account for the year 198990 has been prepared, there being no Revenue operations. A statement of net pre-operative expenditure has been presented, in accordance with the prescribed accounting guidelines on the subject. In the absence of a revenue profit during the year, your Directors do not propose payment of any Dividend for the year under review. This has become possible due to the dedicated and intensive efforts put in by an about 10,000strong workforce which is engaged at Hazira, along with the active support and guidance of the foreign collaborators. As per the revised schedule, the plant for manufacture of MEG would be commissioned in the first quarter of 1991 and for achieving this target, your Company has been able to deploy most of the equipment at site, as of the date of this report and is all set to mechanically complete the MEG plant by end of 1990. Simultaneously, most of the engineering in respect of the PVC and HDPE plants has been completed and erection of all necessary equipments has also commenced. Your Directors expect that, barring unforeseen circumstances, the plants for manufacture of HDPE and PVC would be mechanically completed in the first quarter of 1991. Your Company has also recruited most of the plant personnel required for operations and maintenance. Intensive training is imparted to all the technical personnel. In order to ensure dedicated work force, your Company has provided housing for the labour as well as for the permanent staff at Surat. Your Company has commenced taking effective steps for implementing the project for manufacture of Caustic Soda and Chlorine. 3. 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. 4. PERSONNEL: As required by the provisions of Section 217 (2A) of the Companies Act 1956. read with the Companies (Particulars of Employees) Rules. 1975. the names and other particulars of the employees are set out in the Annexure forming part of this report. 2. PROGRESS OF IMPLEMENTATION OF PROJECTS: 5. DIRECTORS: As you are aware, your Company is setting up the projects at Hazira where your Company has been allotted around 275 Hectares of land. The entire land filling work and piling work have been completed. Your Company has also completed the engineering for the common utility systems for the three projects. These utility systems would be commissioned during the last quarter of 1990. Your Directors had stated in the first Directors’ Report for the per iod upto 31st March, 1989, that barr ing unforseen circumstances the projects would be commissioned in the second half of 1990. However in order to instal capacities based on the revised Government policy of Minimum Economic Size it became necessary to instal additional facilities to cater to the larger capacities. Additionally construction of a captive gas based power plant for assured power supply and construction of a jetty for handling Ethylene and other products have compelled your Company to re-schedule commissioning of the three projects in phases. Your Directors are pleased to inform you that inspite of having to instal additional facilities for the enhanced capacities and the requirement of constructing a Captive Power Plant and a Jetty, your Company has been successful in containing the time overrun to only a few months beyond the or iginal schedule. The Industrial Credit and Investment Corporation of India Limited (ICICI) has nominated Shri C. Chandrasekhar as their Nominee Director on the Board of Directors of your Company. Shri C. Chandrasekhar joined the Board of your Company on 27th March, 1990. In terms of the provisions of Section 255 of the Companies Act, 1956' read with Article 155 of the Articles of Association of the Company, Shri K.K. Pai and Dr. R. Rajagopalan retire by rotation and. being eligible, offer themselves for re-appointment. Shri Suresh A. Shroff, a Director of the Company, resigned from the Board. Your Directors wish to place on record their sense of appreciation of the guidance provided by Shri Suresh A. Shroff. 6. AUDITORS & THEIR REPORT: Messrs Chaturvedi & Shah and Messrs Rajendra & Co.. 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 re-appointment if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956. 37 8. ACKNOWLEDGEMENT Your Directors would like to express their grateful appreciation of the 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 ser vices rendered by the Executives and Staff of the holding Company (Reliance Industries Limited) and also the Executives and Staff of the Company. For and on behalf of the Board of Directors Dhirubhai H. Ambani Chairman Bombay: Dated: 30th June, 1990 7. In terms of Section 217 (1) or the Companies Act, 1956 (as amended) and the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, your Directors furnish 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 this report, there is nothing to be disclosed in respect of conservation of energy. However, the project envisages captive gas turbo generators with cogeneration of waste heat steam. Additionally, in designing and engineering of all three process plants, energy optimisation schemes and pollution control features have been incorporated. B. TECHNOLOGY ABSORPTION: Arrangements have been made with licensors to provide technology for the manufacture of products under the Projects. Collaboration Agreements have been entered into with M/s. B.F. Goodrich Co. (USA) for PVC, M/s . Lummus Crest BV (Netherlands) for MEG and M/s. Du Pont Canada Inc. (Canada) for HDPE. The Technology agreements include provision for training, which will assist the Company in absorption of the technology from the respective licensors. The technology agreements also provide for exchange of infor mation on improvements in technology for manufacture of MEG, HDPE and PVC. C. FOREIGN EXCHANGE EARNINGS AND OUTGO: As at 31.03.1990 (Rs. in Crores) As at 31.03.1989 1. 2. b. Earnings in Foreign Currency: Miscellaneous income (Previous Year Rs. 16,753) Expenditure in Foreign Currency a. Interest on foreign currency loans Interest on Debentures held by Non Residents on repatriation basis (Gross) Technical know-how & Engineering Fees d. Other matters [including commitment charges Rs 1.75 crores (Previous Year Rs Nil) on foreign currency loans] c. 0.00 0.00 4.31 0.00 2.25 47.35 0.00 3.91 13.77 0.16 It would be pertinent to note that the products to be manufactured by your Company are impor t substitution products. which would save for the Country. Foreign Exchange of the equivalent of around Rs 400 crores per annum (at current inter national prices) when the plants operate at full rated capacity. 38 39 40 AUDITORS’ REPORT To The Members of Reliance Petrochemicals Limited We have audited the attached Balance Sheet of RELIANCE PETROCHEMICALS LIMITED as at 31st March, 1990. The Company has not carried out any revenue operations during the year and has therefore, not prepared a Profit and Loss Account for the year ended on that date. 1. As required by the Manufacturing and Other Companies (Auditors’ Repor t) 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 necessary for the purposes of our audit. (b) In our opinion, proper books of account as required by law have been kept by the Compan y so far as appears from our examination of such books. (c) The Balance Sheet referred to in this report is in agreement with the books of account. (d) (i) As mentioned in note No.5, interest on unpaid calls continues to be accounted for as and when received. (ii) As stated in Note No.4, funds deployed through Scheduled Banks under their Portfolio Management Schemes have been shown as par t of Bank Balances and Income ear ned therefrom has been shown as “Other Income”. (iii) 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 read together with the notes thereon gives the information required by the Companies Act, 1956, in the manner so required and gives a true and fair view of the state of affairs of the Company as at 31st March, 1990. For CHATURVEDI & SHAH Chartered Accountants For RAJENDRA & CO. Chartered Accountants D. Chaturvedi Partner Bombay Dated: 30th June, 1990. 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. According to the information and explanations given to us, the fixed assets have been physically verified by the management during the year. In our opinion the frequency of such ver ification is reasonable and no material discrepancies were noticed on such verification. 2. None of the Fixed Assets have been revalued during the year. 3. The Company has not taken any loan, secured or unsecured, (except for an interest free loan from the holding company), 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(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. 5. 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. In respect of loans and advances in the nature of loans given by the Company, they are generally repaying the principal amount as stipulated and are also regular in the payment of interest, wherever applicable. In our opinion and according to the information and explanations given to us, there are inter nal control procedures (commensurate with the size of the Company and the nature of its business) with regard to the purchases of components, plant and machiner y, equipment and other assets. In our opinion and according to the information and explanations given to us, there are no transactions of purchases of goods and material and sale of goods/material and services made in pursuance of contracts or arrangements required to be entered in the registers maintained under Section 301 of the Companies Act, 1956. 6. 7. 8. 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 Inter nal Audit System commensurate with its size and the nature of its business. 9. 10. The Company has been regularly depositing the Provident Fund and Employees’ State insurance dues with the appropriate authorities. 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, 1990 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 (O) of sub-section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985. 14. Since, 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 not applicable. For CHATURVEDI & SHAH Chartered Accountants For RAJENDRA & CO. Chartered Accountants D. Chaturvedi Partner Bombay Dated: 30th June, 1990. R.J. Shah Proprietor 41 BALANCE SHEET AS AT 31st MARCH, 1990 Schedule As at 31st March, 1990 Rs. Rs. (Rs. in crores) As at 31st March, 1989 Rs. Rs. 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 Net Pre-operative Expenditure on implementation of Projects pending allocation Investments Current Assets, Loans and Advances Interest accrued on Investments Cash and Bank Balances Loans and Advances Less: Current Liabilities and Provisions Current Liabilities Provisions Net Current Assets 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’ ‘K’ ‘L’ 87.23 0.52 670.78 50.00 30.15 9.63 20.52 418.56 93.27 0.03 131.60 77.79 209.42 75.34 1.12 76.46 86.47 0.48 632.03 50.00 23.01 0.85 22.16 128.04 35.27 7.06 379.45 22.48 408.99 44.50 5.50 50.00 86.95 682.03 768.98 185.47 224.49 358.99 003 768.98 87.75 720.78 808.53 532.35 143.19 132.96 0.03 808.53 As per our report of even date. For Chaturvedi & Shah Chartered Accountants For Rajendra & Co. Chartered Accountants For and on behalf of the Board D.H. Ambani Chairman D. Chaturvedi Partner R.J. Shah Proprietor Bombay Dated 30th June, 1990. 42 M.D. Ambani A.D. Ambani A.S. Dayal K.K. Pai Y.P. Trivedi C. Chandrasekhar J.S. Bakshi President (Commercial) P.M. Rao Dy. Company Secretary Bombay Dated 30th June, 1990. Directors Duleep Singh President (Hazira Site) SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 1990 (Rs in crores) SCHEDULE ‘A’ SHARE CAPITAL Authorised: As at 31-03-1990 Rs. Rs. As at 31-03-1989 Rs. Rs. 10,00,00,000 Equity Shares of Rs.10 each 100.00 100.00 Issued and Subscribed: 8,72,70,000 Equity Shares of Rs.10 each fully Called-up Less: Calls unpaid - by others 87.27 0.04 87.27 0.80 87.23 86.47 3. after 27th October, 1991 but before 28th October, 1992 and after 27th October, 1993 but before 26th October, 1995 respectively. (i) The Term Loan referred to in O(i) above represents foreign currency ban availed by Reliance Industries Ltd., the kidding Company for implementation of Mono Ethylene Glycol Project. Subject to necessary approvals, the Company has taken over the said loan which is secured against the fixed assets d Reliance Industries Ltd. (ii) The Term Loans referred to in C(ii) above are secured by (a) hypothecation of movable assets and (b) mortgage on all the immovable assets of the company both present and future. 4. Debentures include Rs 0.05 crores held by Directors. (Previous Year Rs.0.66 crores). 5. Secured loans include Rs 2.91 crores repayable within a period of one year. (Previous Year Rs.39 16 crores) SCHEDULE ‘D’ UNSECURED LOANS From Reliance Industries Ltd., holding Company As at 31-03-1990 Rs. 50.00 50.00 (Rs. in Crores) As at 31-03-1989 Rs. 50.00 50.00 Of the above Equity Shares: (i) 5,76,00,000 Shares are held by Reliance Industries Ltd., the holding Company. (ii) 2,96,70,000 Shares were allotted at par on first conversion of Debentures SCHEDULE ‘B’ RESERVES AND SURPLUS General Reserve As per last Balance Sheet Add: Transfer from Profit & Loss Account Profit and Loss Account As per last Balance Sheet Add: Profit for the year Excess provision of earlier year written back 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. As at 31-03-1990 Rs. Rs. As at 31-03-1989 Rs. Rs. SCHEDULE ‘E’ FIXED ASSETS Gross Block (at cost) Depreciation Net Block (Rs. in crores) 0.25 0.00 0.23 0.00 0.04 0.00 0.25 0.00 0.23 0.00 Nature of Assets 0.25 0.23 0.48 1. Leasehold Land 2. Buildings 3. Plant and Machinery 4. Furniture, Fixtures and Other Equipments 5. Vehicles Total Previous Year As at 01.04.1989 Rs. 0.63 3.92 18.11 0.23 0.12 23.01 0.00 Additions Rs. 2.19 1.54 0.00 2.80 0.61 7.14 23.01 0.25 0.27 0.52 As at Up to As at 31.03.1990 31.03.1990 31.03.1990 31.03.1989 Rs. As at Rs. Rs. Rs. 2.82 5.46 18.11 3.03 0.73 30.15 23.01 0.00 0.10 9.42 0.08 0.03 9.63 0.85 2.82 5.36 8.69 2.95 0.70 20.52 22.16 0.63 3.91 17.28 0.22 0.12 22.16 0.00 SCHEDULE ‘C’ SECURED LOANS A. Debentures: As at 31-03-1990 As at 31-03-1989 Rs. Rs. Rs. Rs. 12.5% Secured Fully Convertible Deben tures of Rs.200/- each fully called up Less: Converted Less: Calls unpaid -by others B. Loan from a Bank C. Term Loans 593.40 29.67 563.73 0.78 (i) (ii) From Banks in Foreign Currencies From Financial Institutions in Foreign Currencies 8.04 99.79 593.40 29.67 563.73 15.18 9.16 36.82 562.95 0.00 107.83 670.78 548.55 37.50 45.98 632.03 Capital Work-in-Progress 418.56 128.04 NOTES: 1. No amortization has been made in respect of Lease Premium paid for the lease hold land since the grant of lease is for a long period. 2. Leasehold Land includes Rs.1.64 Crores (Previous Year Rs. nil) in respect of which necessary documents are yet to be executed. 3. Capital Work in Progress includes. i) Rs.95.62 crores on account of Advances against Capital Expenditure (Previous Year Rs. 111.93 crores) ii) Rs.36.35 crores in respect of construction materials in stock. 4. Depreciation has been provided as under: a) b) in respect of Plant and Machinery given on lease, 95% of the cost has been amortized over the primary lease period of two years. in respect of other assets, on straight line method at the rates prescribed by Schedule XIV to the Companies Act, 1956. 5. Buildings include shares in co-operative housing societies of the face value of Rs.750 (Previous Year Rs.250). NOTES: 1. 2. 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 residual charge on all or any of the immovable and/or movable 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 such residual mortgage and charge shall rank subservient and subordinate to the mortgages created for item C(ii) above and future mortgages/charges as may hereafter be created by the Company in favour of existing or future lenders in respect of borrowings of the Company as provided in the Debenture Trust Deed 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, if any, as may be fixed by the Controller of Capital Issues, SCHEDULE ‘F’ Net Pre-operative Expenditure on implementation of Projects pending allocation Amount Brought forward Establishment and Other Expenses Payment to and Provision for employees Salary, Wages and Bonus Contribution to Provident fund and other funds Staff Welfare expenses C/F Rs. Rs. 35.27 Rs. Rs. 0.00 1.42 0.27 0.29 0.25 0.04 0.05 1.98 37.25 0.34 0.34 43  B/F 37.25 0 34 Service Charges Insurance (previous year Rs.3189) Rent Rates and Taxes (Rs.18,188) Telephones Travelling Expenses Auditors’ Remuneration Directors Fees [(Rs.26,000 (Previous year Rs.21200)] Printing and Stationery Advertisement Debenture Issue Expenses Commitment Charges Power Registrar and transfer agent fees General Expenses Excess provision of earlier year written off (Rs.1529) 0.00 0.01 1.11 0.00 0.62 1.74 0.04 0.00 0.54 0.27 0.00 1.88 0.32 3.17 2.50 0.00 Interest On Debentures On Fixed Loans On others [Rs.2248 (Previous year Rs. Nil)] 70.18 12.48 0.00 Depreciation Less: Income Interest (Tax Deducted at Source) Rs.0.04 Crores (Previous Year Rs. Nil} Profit on Sale of Investments Lease Income Other Income 16.73 4.86 10.43 15.60 0.73 0.00 0.63 0.01 0.05 0.39 0.02 0.00 0.02 0.01 17.60 0.41 0.00 0.00 1.41 0 00 12.20 21.28 29.06 0.02 50.70 25.32 3.74 0.00 12.63 2.79 0.00 0.01 82.66 8.78 140.89 47.62 93.27 SCHEDULE ‘H’ As at 31-03-1990 Cash and Bank Balances Rs. Cash on hand (Previous year Rs.31,466) Balance with scheduled Banks In Current Accounts i) In Fixed Deposit Accounts ii) In Portfolio Management Schemes iii) (Refer Note No.4 of Schedule ‘L’) 3.62 2.96 125.00 Rs. 0.02 131.58 131.60 (Rs in crores) As at 31-03-1989 Rs. Rs. 0.00 69.10 310.35 0.00 379.45 379.45 SCHEDULE ‘I’ LOANS AND ADVANCES (Unsecured, except otherwise stated, considered good) Advances recoverable in cash or in kind or for value to be received Bills of Exchange Interest Accrued on Fixed Deposits Advance payment of Income-tax Deposit with Custom Other Deposits (Secured Rs.1.62 Crores (Previous year Rs.nil)] As at 31.03.1990 As at 31.03.1989 Rs. Rs. 4.16* 30.11 3.48 2.27 0.51 37.26 77.79 5.07* 0.00 0.00 1.25 0.00 16.16 22.48 * include Rs.0.04 crores (Previous year Rs.0.01 crores) due from officers of the Company. (Maximum Balance due at any time during the year: Rs.0.06 Crores) (Previous year Rs.0.01 Crores) 15.43 35.27 SCHEDULE ‘J’ CURRENT LIABILITIES SCHEDULE ‘G’ INVESTMENTS (At Cost) Other Investments Government Securities Quoted 11.5% Government of India Loan 2008 (Old Series) Unquoted Indira Vikas Patra Other Investments (Unquoted) 106123950 Units (Previous Year 127566550 units) of Unit Trust of India (1964 Scheme) As at 31-03-1990 Rs. Rs. (Rs in crores) As at 31-03-1989 Rs. Rs. Acceptances Sundry creditors Interest Accrued out not due on loans Unclaimed Dividend Other Liabilities 0.00 0.20 39.48 0.20 142.99 184.81 143.19 143.19 224.49 224.49 SCHEDULE ‘K’ PROVISIONS Gratuity, Superannuation and Provident Funds Provision for Taxation Proposed Dividend As at 31.03.1990 As at 31.03.1989 Rs. 25.74 22.06 26.27 0.11 1.16 75.34 Rs. 0.00 2.41 29.77 0.00 12.32 44.50 As at 31.03.1990 As at 31.03.1989 Rs. 0.18 0.94 0.00 1.12 Rs. 0.02 0.94 4.54 5.50 1. During the year the Company also purchased: Rs. (i) 182012870 units of Unit Trust of India (1964 Scheme) (ii) 11.5% Government of India Loan 2015 (iii) 11% Government of India Loan 2002 (iv) 11.5% Government of India Loan 2008 (v) 94t IDBI Bonds 1999 246.58 88.68 48.25 48.65 13.00 2. Aggregate value of Market Value Rs. Cost Rs. Market Value Rs. Cost Rs. SCHEDULE ‘L’ (Rs. in crores) NOTES AND CONTINGENT LIABILITIES 1. Figures are shown in crores d 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. The Previous period’s figures have been regrouped/recast wherever necessary. 2. During the year under review, as a result of increase in project cost as explained in the Directors’ Report, the company’s funds were entirely identified with the activities conducted by the company for setting up the project on hand. There being no revenue operations, a Profit and Loss Account for the year has not been prepared and instead the net expenditure has been shown in the schedule of “Net Pre-operative Expenditure on implementation of Projects pending allocation” (Schedule ‘F’). The figures for the previous period to the extent not adjusted against pie-operative expenditure and not shown in Schedule ‘F’ are as follows: Quoted Investments Unquoted Investments 0.00 143.19 0.00 –– 39.48 185.01 39.48 –– 3. The above investments are held by the Bankers of the Company in their name, wherever applicable in a fiduciary capacity. Income: Sales Other income 0.01 11.20 11.21 44 Expenditure: Purchases Establishment and other expenses Interest Depreciation Profit before Tax Provision for Taxation Profit after Tax Appropriations : General Reserve Dividend on Equity Shares (Subject to Tax) Balance carried to Balance Sheet 0 01 0.58 3.83 0.83 0.25 4.54 (Rs. in crores) 9. Earnings in Foreign Currency: Miscellaneous Income (Previous Year Rs.16,753) As at (Rs. in crores) As at 31.03.1990 31.03.1989 Rs 0.00 Rs. 0.00 10. a. b. 5.25 5.96 0.94 5.02 4.79 0.23 Number of Employees Salaries and Bonus 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.0.72 lacs per annum. i. ii. iii. Contribution to Provident & other Funds iv. Other Perquisites Break-up of expenditure incurred on employees who were employed for pan of the year and were in receipt of remuneration for any part of the year which in aggregate was not less than Rs.6000 per month i. ii. iii. Contribution to Provident & other Funds iv. Other Perquisites Number of Employees Salaries and Bonus 40 0.40 0.07 0.07 137 0.65 0.12 0.07 –– 0.00 0.00 0.00 38 0.15 0.03 0.03 3 4 5. Income arising out of deployment of funds available with the company has been reduced from the Pre-operative Expenditure pending allocation The company has been advised that such income does not form a part of the income liable to tax and hence no provision for taxation has been made. During the year under review, the Company has placed sums aggregating to Rs. 125 crores (previous year Rs. Nill with Scheduled banks under Portfolio Management Schemes. These sums have been shown under ‘Balances with Scheduled Banks’. The Company has been given to understand by concerned banks that the said sums have been deployed by the banks in the undermentioned securities, as on 31st March, 1990. Units of Unit Trust of India (1964 Scheme) Government of India securities Bills of Exchange 38.00 62.00 25.00 TOTAL 125.00 Income earned on the said sums aggregating to Rs.12.96 crores (previous year Rs. Nil) has been included in ‘Other Income’ Interest on unpaid calls is accounted as and when received. As at As at 31.03.1990 31.03.1989 11. Licenced and Installed Capacity: Licensed Capacity (M.T.) Installed Capacity (M.T.) 1989-90 1988-89 1989-90 1988-89 60000 5000 50000 * * + 5000 100000 100000 Mono Ethylene Glycol (MEG) Higher Ethylene Glycols(HEG) High Density Polyethylene (HDPE) Poly Vinyl Chloride (PVC) Chlorine Caustic Soda (By-Product) Hydrogen (By-Product) * Based on letter of Intent. + Includes 50000 M.T. based on Letter of Intent. 100000 66000 78000 1950 * * * 100000 66000 78000 1950 * * * * * Under Implementation Under Implementation Under Implementation Under Implementation Under Implementation Under Implementation Under Implementation Under Implementation Under Implementation Under Implementation Under Implementation Under Implementation Under Implementation Under Implementation 6. Contingent Liabilities: a. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) as on 31st March, 1990. b. Outstanding guarantees furnished and letters of credit opened by bankers Bonds executed in favour of Customs Authority c. 7. Auditors Remuneration: a. Audit Fees b. c. For Tax Audit (including Rs.0.01 crore for earlier period) For certification matters (included under the head Deben ture Issue Expenses) 8. Expenditure in Foreign Currency: a. Interest on Debentures held by Non-residents on repatriation basis (gross) Technical know-how & Engineering Fees b. c. Other matters 683.56 202.66 57.48 12.17 0.02 0.02 0.00 0.04 0.42 47.35 12.02 0.00 0.00 0.02 0.00 0.04 0.06 0.00 3.91 0.16 12. As the Company has not commenced any manufacturing ac- tivity, the information required under paragraph 3, 4C, and 4D of Part II of Schedule VI to the Companies Act, 1956 has been given to the extent applicable. 13. Remittance in foreign currency on account of dividend Number of Non-resident shareholders Amount of dividend Year to which dividend relates 14. Quantitative information in respect of: a. b. Purchases Sales 15. Value of Imports on CIF Basis in respect of: a. Capital goods Samples b. As at As at 31.03.1990 31.03.1989 Rs. Rs. 12074 0.05 1988-89 –– 0.00 –– M.T. Rs. M.T. –– 0.00 –– 0.00 Rs. 5 0.01 5 0.01 27.82 0.08 0.00 0.00 As per our report of even date. For Chaturvedi & Shah Chartered Accountants For Rajendra & Co. Chartered Accountants For and on behalf of the Board D.H. Ambani Chairman D. Chaturvedi Partner R.J. Shah Proprietor Bombay Dated 30th June, 1990. M.D. Ambani A.D. Ambani A.S. Dayal K.K. Pai Y.P. Trivedi C. Chandrasekhar J.S. Bakshi President (Commercial) P.M. Rao Dy. Company Secretary Bombay Dated 30th June, 1990. Directors Duleep Singh President (Hazira Site) 45 46 DEVTI FABRICS LIMITED Regd. Office: 3rd Floor, Maker Chambers IV 222 Nariman Point Bombay 400 021 47 DEVTI FABRICS LIMITED DIRECTORS REPORT To The Members, Your Directors present the Sixth Annual Report together with the Audited Statement of Accounts for the financial year ended 31st March, 1990 OPERATIONS: Your Company has incurred a loss of Rs.100 lacs during the year under review as against the previous loss of Rs.74.06 lacs for the period of 15 months. The loss is mainly due to the weaving activity attributed to the existing looms. The Company’s spinning unit is doing well and the modernisation of the spinning unit is now complete, after having incurred a capital expenditure of Rs.126 lacs. The Company is hopeful of better performance in the coming year. DIVIDEND: In view of the carried forward losses, your Directors have not proposed any Dividend for the Financial Year under review. DIRECTORS: In accordance with the provisions of the Companies Act, 1956, Shri S. Natarajan and Shri Vinod M. Ambani retire by rotation and are eligible for reappointment. AUDITORS: Messrs Rajendra & Company and Messrs Chatur vedi & Shah, Char tered Accountants, retire at the ensuing Annual General Meeting and are recommended for reappointment. The Auditors have, under Section 224(1) of the Companies Act, 1956, furnished a Certificate of their eligibility for reappointment. DEPOSITS: The Company has not accepted any deposit from the public Hence! no information is required to be appended to this report. CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: The particulars as prescribed under Sub-section (e) of Section 217 of the Companies Act, 1956, read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988, are given in the Annexure-A which forms part of the Directors’ Report. PERSONNEL: Information as per Section 217(2) 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, 1990 is given in Annexure B. APPRECIATION: Your Directors wish to place on record their appreciation of the devoted services rendered by the Executives, Staff and workers of the Company. Registered Office: 3rd floor, Maker Chambers IV, 222, Nariman Point, Bombay 400 021. Dated: 23rd July, 1990. For and on behalf of the Board S. Natarajan Vinod M. Ambani Directors ANNEXURE ‘A’ TO DIRECTORS’ REPORT Particulars required under the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988. A. CONSERVATION OF ENERGY: (a) Energy Conservation Measures taken: 01 Group drive Motor of Higher H.P. has been replaced by lower H.P. Motor, thereby reducing the consumption of electrical energy. 02 Modification was done under distribution system so that requirement of electrical pump motor was reduced which has resulted in reducing electrical power consumption. (b) Additional Investments and proposals being implemented for (c) reduction of consumption of energy: A study is being made to find the measures to further reduce the consumption of energy. Impact of Measures (a) and (b) for reduction of energy Consumption and consequent impact on the cost of production of goods: Reduction of electrical energy and electrical power. The cost is reduced by Rs.90,000 approximately. 48 FORM - A Form for disclosure of particulars with respect to conservation of Energy Part - A A. POWER & FUEL CONSUMPTION: Description 01 ELECTRICITY a) Purchased Units Total Amount Rate/Unit b) Own Generation Current Year Previous Year 01.04.89 to 31.03.90 (12 months) 01.01.88 to 31.03.89 (15 months) 7827093 11312090 1.45 9897280 14066369 1.42 i) Thru Diesel Generator : Unit Units per Ltr. of diesel-oil Cost/unit ii) Thru Steam Turbine/Generator: Units Unit per Ltr of fuel oil gas Cost/unit 02 COAL Quantity (tonnes) Total Cost Average rate 03 FURNACE OIL Quantity (Kilo Ltrs.) Total Amount Average rate 04 OTHERS/INTERNAL GENERATION Quantity Total Cost Rate/Unit 2420 2.4 –– –– 1780 1984594 1114.94 –– –– –– –– –– –– 81990 2.4 –– –– 2145 2095515 976.93 –– –– –– –– –– –– B. CONSUMPTION PER UNIT OF PRODUCTION: Part - B YARN (per Kg.) FABRICS (per metre) Current Year Previous Year Current Year Previous Year 5.27 –– –– –– 5.34 –– –– –– 0.41 –– –– –– 0.42 –– –– –– Electricity: Units Furnace Oil Coal* Others * Coal is used for steaming and healing the yarn for the purpose of sizing. It has no link with the production. FORM - B (form for disclosure of particulars with respect to Technology Absorption) The Company has no specific Research and Development Department, hence information to be given in Form-B are not relevant for the Company. However, the Company has a quality control department to check the quality of the products manufactured. C. FOREIGN EXCHANGE EARNINGS AND OUTGO i) Activities relating to exports - Company is making a study to explore the foreign market for expor t of Company’s products: ii) Foreign Exchange used and earned: Nil DEVTI FABRICS LIMITED 49 DEVTI FABRICS LIMITED AUDITORS’ REPORT To The Members of Devti Fabrics Limited 2. None of the fixed assets have been revalued during the year. 3. According to the information and explanation given to us, the stocks of finished goods, stores, spare parts and raw materials have been physically verified by the Management during the year. In our opinion, the frequency of such verification is reasonable. We have audited the attached Balance Sheet of DEVTI FABRICS LIMITED as at 31st March, 1990 and the Profit and Loss Account of the Company for the year ended on that date annexed thereto and report that: 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. 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. (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. (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 the Company as at 31st March, 1990; and in so far as it relates to the Profit and Loss Account of the Loss of the Company for the year ended on that date. For RAJENDRA & CO. Chartered Accountants For CHATURVEDI & SHAH Chartered Accountants R.J. SHAH Proprietor D. CHATURVEDI Partner Bombay Dated: 23rd July, 1990. ANNEXURE RE: DEVTI FABRICS LIMITED Referred to in Paragraph 1 of our Report of even date 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.5 of Schedule K, to the accounts, 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 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(1B) of the Companies Act’ 1956. The terms and conditions of the above loan are not, in our opinion prima facie prejudicial to the interests 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 or 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 unserviceable 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. 1. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. We are informed that most of the assets have been physically verified by the Management during the year and that no material discrepancies were noticed on such verification. In our opinion, the frequency of such physical verification is reasonable having regard to the size of the company and the nature of its assets. 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. 50 DEVTI FABRICS LIMITED 15. In our opinion the company has an internal audit system 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. 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, 1990 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. (c) The Company has a reasonable system of allocating man hours utilised to the relative jobs commensurate with its size and the 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 the year, 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: 23rd July, 1990. 51 DEVTI FABRICS LIMITED BALANCE SHEET AS AT 31ST MARCH, 1990 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 & Provisions Liabilities Provisions Miscellaneous expenditure (to the extent not written off or adjusted) Profit 8 Loss Account TOTAL Notes and Contingent Liabilities Schedule Rs. Rs. Rs. Rs. As at 31.3.1990 (Rs. in lacs) As at 31.3.1989 ‘A’ ‘B’ ‘C’ ‘D’ ‘E’ ‘F’ ‘K’ 21.01 21.01 21.01 21.01 492.43 175.00 571.32 176.75 127.13 1.05 8.42 136.60 112.52 249.12 251.59 1.20 252.79 556.08 135.00 451.40 126.63 213.00 19.09 103.33 335.42 28.55 363.97 172.40 0.92 173.32 667.43 688.44 394.57 (3.67) 0.10 297.44 688.44 691.08 712.09 324.77 190.65 0.12 196.55 712.09 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: 23rd July, 1990. 52 D. Chaturvedi Partner S. Natarajan Vinod M. Ambani Directors DEVTI FABRICS LIMITED PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 1990 Schedule Rs. Rs. Rs. Rs. 1989-90 (12 months) (Rs. in lacs) 1988-89 (15 months) 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 ‘G’ ‘H’ ‘I’ ‘J’ ‘K’ 1217.30 232.57 (68.35) 1307.23 235.46 13.82 1381.52 1556.51 164.12 1197.43 70.39 50.47 79.52 1402.91 91.64 56.50 1432.41 (100.89) (196.55) (297.44) 1630.57 (74.06) (122 49) (196.55) 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: 23rd July, 1990. D. Chaturvedi Partner S. Natarajan Vinod M. Ambani Directors 53 DEVTI FABRICS LIMITED SCHEDULES FORMING PART OF THE BALANCE SHEET SCHEDULE ‘B’ SCHEDULE ‘A’ SHARE CAPITAL Authorised: As at 31.3.1990 Rs. (Rs. in lacs) As at 31.3.1989 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 shares are held by Reliance Industries Limited, the Holding Company) 21.01 21.01 SECURED LOANS Working Capital Loan from a Bank Working Capital Term Loan from a Bank Rupee Term Loan from Financial Institutions Deferred Payment Liabilities Interest accrued and due As at 31.3.1990 Rs. 120.82 113.92 251.48 6.21 –– 492.43 (Rs. in lacs) As at 31.3.1989 Rs. 115.06 128.25 297.16 10.11 5.50 556.08 2. NOTES: 1. Working Capital Loan and Working Capital Term Loan from Bank are secured against hypothecation of present and future stock of raw materials. stock-in-process. finished goods. book debts. moveable machineries Including all stock and spare parts belonging to the company at Sidhpur in the State of Gujarat save and except plant and machinery purchased under the modernisation scheme from the financial institutions referred to in 2 below and are further guaranteed by Reliance industries Ltd., the Holding Company Rupee Term Loans from financial institutions are secured b y an exclusive first charge on the plant and machinery purchased under the modernisation scheme. Deterred 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.8S 32 lacs repayable within one year 4. 3. SCHEDULE ‘C’ FIXED ASSETS Nature of Filed Assets Buildings Plant & Machinery Electric Installation Factory equipments Furniture & Fixtures Vehicles Advance against Capital Expenditure TOTAL Previous year (Rs in lacs) GROSS BLOCK (AT COST) DEPRECIATION NET BLOCK As at 1.4.89 Rs. 17.61 404.61 17.04 2.96 2.98 1.03 5.17 451.40 384.83 Additions Deductions Rs. 8.09 111.86 191 –– 1.14 _ 3.06 126.06 88.10 Rs. –– 0.67 –– –– –– 0.30 5.17 6.14 21.53 As at 31.3.90 Rs. 25.70 515.80 18.95 2.96 4.12 0.73 3.06 571.32 451.40 Total upto 31.3.90 Rs. 2.34 169.39 3.62 0.69 0.50 0.21 –– 176.75 126.63 As at 31.3.90 Rs. 23.36 346.41 15.33 2.27 3.62 0.52 3.06 394.57 324.77 As at 31.3.89 Rs. 16.13 283.63 14.01 2.42 2.64 0.77 5.17 324.77 SCHEDULE ‘D’ CURRENT ASSETS As at 31-03-1990 Rs. Rs. (Rs in lacs) As at 31-03-1989 Rs. Rs. As at 31-03-1990 Rs. Rs. (Rs in lacs) As at 31-03-1989 Rs. Rs. Inventories (Valued at cost or market value whichever is lower as certified by the Management) 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) 17.61 58.03 29.56 19.56 2.37 B/f 128.18 232.09 Cash & Bank Balances Cash on Hand Balances with Scheduled Banks In Current Accounts In Fixed Deposit Accounts (Lodged with Central Excise Authorities) 2.24 6.00 0.18 0.72 102.43 0.18 17.72 75.44 46.54 71.71 1.59 Sundry Debtors Over six months: Considered Good Considered Doubtful Others Considered Good Less: Provision for doubtful debts 127.13 213.00 –– 0.36 1.05 1.41 0.36 4.26 _ 14.83 19.09 –– C/f 1.05 128.18 19.09 232.09 54 8.42 136.60 103.33 335.42 SCHEDULE ‘E’ SCHEDULE ‘I’ DEVTI FABRICS LIMITED LOANS & ADVANCES (Unsecured considered good) Bill of Exchange Advances recoverable in Cash or in Kind or for value to be received Deposits Prepaid Expenses Balance with Central Excise Authorities As at 31.3.1990 Rs. 83.25 24.93 0.21 3.07 1.06 112.52 (Rs. in lacs) As at 31.3.1989 Rs. _ 26.50 0.21 1.79 0.05 28.55 SCHEDULE ‘F’ CURRENT LIABILITIES & PROVISIONS CURRENT LIABILITIES As at 31-03-1990 Rs. Rs. (Rs in lacs) As at 31-03-1989 Rs. Rs. Sundry Creditors Interest accrued but not due on loans 248.78 2.81 168.52 3.88 251.59 1.20 252.79 1989-90 (12 months) Rs. 220.71 1.79 10.07 232.57 172.40 0.92 173.32 (Rs. in lacs) 1988-89 (15 months) Rs. 216.76 1.85 16.85 235.46 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) Finished Goods Stock-in-process Others STOCK IN TRADE (at commencement) Finished goods Stock-in-process Others MANUFACTURING AND OTHER EXPENSES Raw Material Consumed Stock at commencement Add: Purchases Less: Sales Less: Stock at close MANUFACTURING EXPENSES Carriage inward Stores and spare parts Dyes and chemicals Electric power, fuel and water Machinery repairs Building repairs Labour, processing and machinery hire charges Excise duty PAYMENTS TO AND PROVISIONS FOR EMPLOYEES Salaries. wages and bonus Contribution to Provident Fund, Gratuity Fund, Superannuation Fund, Employees State Insurance Scheme, Pension Scheme, Labour Welfare Fund etc. Employees Welfare and Other Amenities SALES & DISTRIBUTION EXPENSES Samples. Sales Promotion and Advertisement expenses Brokerage and Commission Packing expenses Freight and forwarding charges Octroi expenses Sales Tax 1989-90 (12 months) Rs. Rs. (Rs. in lacs) 1988-89 (15 months) Rs. Rs. 19.56 29.56 1.10 71.71 46.54 0.32 71.71 46.54 0.32 50.22 118.57 34.34 69.75 0.66 ESTABLISHMENT EXPENSES Insurance Rent Rates & Taxes Other repairs Travelling Expenses Payment to Auditors Directors’ fees Provision for Doubtful Debts General expenses Charity & Donation 118.57 (68.35) 104.75 13.82 SCHEDULE ‘J’ INTEREST fixed Loans Others (Net) 1989-90 (12 months) Rs. Rs. (Rs. in lacs) 1988-89 (15 months) Rs. Rs. 75.44 555.26 630.70 1.07 629.63 58.03 1.16 43.67 13.60 132.97 9.53 2.14 24.81 87.43 36.89 732.21 769. 10 9.23 759.87 75.44 571.60 684.43 2.02 48.30 14.48 162.81 4.31 1.36 31.68 76.72 315.31 341.68 250.15 309.62 23.56 12.23 25.20 14.92 285.94 349.74 8.78 6.90 0.02 1.42 2.62 1.23 1.42 0.19 3.76 5.02 0.75 0.34 0.68 0.35 0.02 0.36 6.40 –– 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 17.68 1197.43 18.28 1402.91 1989-90 (12 months) Rs. (Rs. in lacs) 1988-89 (15 months) Rs. 52.44 17.95 68.41 23.23 70.39 91.64 55 DEVTI FABRICS LIMITED SCHEDULE ‘K’ NOTES AND CONTINGENT LIABILITIES (b) Closing Stock: i) Finished Stocks 19.56 71.71 1. Figures of the previous year have been regrouped, wherever necessary to confirm to this year’s figures. Yarn Fabrics M. T. Mtrs in lacs 3 1.06 4 5.15 2. The current financial year is for period of 12 months as against 15 months in the previous ii) Stock-in-process (Yarn) financial year. The figures of the previous financial year are therefore not comparable. iii) Others 3. Interest on other accounts (net) is arrived at after adjusting Rs.0.89 lacs being interest (c) Purchases 29.56 1.10 46.54 0.32 received/receivable (Tax at source Rs.0.08 lace). 4. Auditors’ Remuneration: 31.3.1990 (Rs. in lacs) 31.3.1989 (a) Audit fees (b) Tax Audit fees Rs. 0.25 0.10 0.35 Rs. 0.31 0.13 0.44 Fabrics (d) Sales: Yarn Fabrics Mtrs. in lacs 12.13 164.12 6.62 79.52 M.T. 98 113.17 133 134.63 Mtrs. in lacs 80.64 1076.83 90.27 1168.80 (e) Raw material consumed: Cotton Fibre Yarn M.T. M.T. 234 259 170 53.19 198.98 319.43 318 729 190 80.93 279.96 323.54 5. The company has been accounting inability 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.0.10 Lacs in respect of such products at the end of financial year has not been provided for in the accounts and hence not included in the valuation of inventory. This accounting treatment has no impact on the loss of the current financial year 6. Depreciation on assets has been provided on straight-line method for the financial year in accordance with the method and at the rates prescribed by Schedule XIV to the 13. Value of raw material consumed: Imported Indigenous Companies Act. 1956. 7. Contingent Liabilities: Estimated amount of contracts remaining to be executed on Capital Account and not provided for Guarantees given by Bank of Baroda for DPG Scheme Bonds executed in favour of Excise 8 Customs Authorities Claims against the company not acknowledged as debts (Rs. in lacs) 14. Value of dyes & chemicals, 31.3.1990 31.3.1989 Rs. Rs. 0.06 0.90 3.00 1.01 130.72 2.19 3.00 0.61 stores and spare parts consumed: Imported Indigenous 15. Earning in foreign exchange 8. Licenced & Installed Capacity Licenced Capacity Installed Capacity (As certified by the Management) 31.3.90 31.3.89 31.3.90 31.3.89 Spindles Looms Nos. Nos. 38368 38368 37536 36456 490 490 490 490 31.3.1990 31.3.1989 Rs. in lacs % of total Rs in lacs % of total –– –– –– –– 571.60 100.00 684.43 100.00 57.27 100.00 62.78 100.00 31.3.1990 RS. (Rs. in lacs) 31.3.1989 Rs. 31.3.90 31.3.89 16.(a) Break-up of expenditure incurred on employees who 9. Production of finished Products meant for sale Blended yarn Fabrics M.T. Mtrs. in lacs 10. Value of imports on CIF basis 11. Expenditure in foreign currency 97 64.42 Nil Nil 119 86.89 Nil Nil 31.3.1990 31.3.1989 Quantity Rs. in Quantity lacs Rs. in lacs 12. Quantitative information: (a) Opening stock i) Finished Stocks 71.71 34.34 Yarn Fabrics M.T. Mtrs. in lacs 4 5.15 18 1.91 ii) Stock-in-process (Yarn) iii) Others 46.54 0.32 69.75 0.66 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 Number of employees Salaries and Bonus Contribution to Provident Fund & Superannuation Fund Other Perquisites (b) Break-up of expenditure incurred on employees who were employed for a part of the period 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 Number of employees Salaries and Bonus Contribution to Provident Fund & Superannuation Fund Other Perquisites 3 2 1.30 0.32 0.35 1.63 0.39 0.35 1 –– –– –– 0.67 0.11 0.12 As per our Repor t 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: 23rd July, 1990. 56 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 57 TRISHNA INVESTMENT AND LEASINGS LIMITED DIRECTORS REPORT To the Members. Your Directors present the 4th Annual Repor t together with the Audited Statement of Accounts for the financial year ended on 31st March. 1990. FINANCIAL RESULTS: The Company during the year under review has incurred a loss of Rs.821.89 lacs as against the previous years’ profit of Rs.61.20 lacs. During the year 1988, your Company had acquired 39,00,000 Equity Shares of Rs.10/- each of M/s. Larsen & Toubro Limited. As the acquisition of the said shares was the subject matter of dispute in the Appeal pending before the Hon’ble Supreme Court with a view to show the Company’s complete bonafides in the matter and put to an end to the entire controversy and the campaign of calumny and unseemly virulent attack on the Company and Financial Institutions the Company sold back the said 39,00,000 equity shares alongwith accretions to the Financial Institutions incurring a loss of Rs.1021.36 lacs in the process. Dividend income received during the financial year amounted to Rs.35.10 lacs. INVESTMENTS: During the year, the Company has acquired shares/debentures of various companies resulting in a net increase in its investments of Rs.10224.31 lacs. DIVIDEND: In view of the loss, the Board of Directors have not recommended any dividend for the period ended 31st March. 1990. Bombay Dated: 25th April, 1990 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(2 A) of the Companies Act, 1956. Hence no information is required to be appended to this report in this regard. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: Being an investment company, there are no particulars furnished in this report as required by Section 217(1)(e) of the Companies Act, 1956 relating to conservation of energy and technology absorption. There was no foreign exchange earnings or outgo during the year. DIRECTORS: As per the provisions of the Articles of Association, Shri F.N. Vazifdar and Shri R.P. Mehta, Directors of the Company 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 re-appointment if made, would be within the prescribed limits under Section 224(1) of the Companies Act. 1956. For and on behalf of the Board F.N. Vazifdar V.T. Pai B.K. Bhandary Directors 58 TRISHNA INVESTMENT AND LEASINGS LIMITED AUDITORS’ REPORT To 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, 1990 and also the Profit & Loss Account for the year ended on that date annexed thereto and report that: 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 ban are not prima-facie prejudicial to the interest of the Company. The Company has not taken any other loans secured or unsecured from companies, firms, or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956, or from Companies under the same management as defined by subsection (1B) of Section 370 of the Companies Act, 1956. 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. 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. 2. Further to our comments in the Annexure referred in paragraph 1 above, we report that: 5. The Company has not given any loans or advances in the nature of loans during the year. 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. c) The Balance Sheet and Profit and Loss Account referred to in this Repor t 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 the Company as at 31st March, 1990 and in so far as it relates to the Profit and Loss Account of the Loss of the Company for the year ended on that date. For CHATURVEDI & SHAH Chartered Accountants For RAJENDRA & CO. Chartered Accountants O. CHATURVEDI Partner R.J. SHAH Proprietor Bombay Dated: 25th April, 1990. RE: TRISHNA INVESTMENTS AND LEASINGS LIMITED Referred to in Paragraph 1 of our Report of even date ANNEXURE 6. 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 year 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, 1990 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. 14. The Company has maintained proper records of transactions and contracts in respect of trading in shares and debentures and timely entries have been made therein. All the shares and debentures are held by the Company in its own name or have been lodged for transfer. For CHATURVEDI & SHAH Chartered Accountants For RAJENDRA & CO. Chartered Accountants 1. As the Company had no Fixed Assets during the year, clauses 4(A) (i) and (ii) of the said Order are not applicable. O. CHATURVEDI Partner R.J. SHAH Proprietor 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 the clause A of paragraph 4 of the aforesaid Order are also not applicable. Bombay Dated: 25th April, 1990. 59 TRISHNA INVESTMENT AND LEASINGS LIMITED BALANCE SHEET AS AT 31ST MARCH, 1990 SOURCES OF FUNDS: Shareholders’ Funds Capital Reserves 8 Surplus Loan Funds Unsecured Loan TOTAL APPLICATION OF FUNDS: Investments Current Assets, Loans & Advances Debtors Cash & 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 Schedule Rs. Rs. Rs. Rs. 1989-90 (12 months) (Rs. in thousands) 1988-89 (7 months) ‘A’ ‘B’ ‘C’ ‘D’ ‘E’ ‘F’ 44 –– 1498475 1498519 44 6112 467900 474056 1497002 474571 107749 2146 14677 124572 197073 2063 199136 –– 51 1849 1900 356 2063 2419 (74564) 4 76077 1498519 (519) 4 –– 474056 Notes and Contingent Liabilities ‘H’ As per our Report of even date For and on behalf of the Board For RAJENDRA & CO. Chartered Accountants R.J. Shah Proprietor F.N. Vajifdar V.T. Pai B.K. Bhandary Directors For CHATURVEDI & SHAH Chartered Accountants D. Chaturvedi Partner Bombay Dated: 25th April, 1990. 60 TRISHNA INVESTMENT AND LEASINGS LIMITED PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 1990 Schedule Rs. Rs. Rs. Rs. 1989-90 (12 months) (Rs. in thousands) 1988-89 (7 months) 3510 8190 INCOME Dividend Income (Tax deducted at Source Rs.815 thousand, Previous year Rs.1849 thousands) Interest received on securities (Tax deducted at Source Rs.772 thousand) Commission EXPENDITURE Establishment & Other Expenses Loss on sale of Investment (Net) Profit before tax Less: Provision for taxation Profit after tax Add/Less: Balance brought forward from last year Balance carried to Balance Sheet ‘G’ 18263 752 3334 101380 (82189) –– (82189) 6112 (76077) Notes and Contingent Liabilities ‘H’ As per our Report of even date For and on behalf of the Board For CHATURVEDI & SHAH Chartered Accountants D. Chaturvedi Partner Bombay Dated: 25th April, 1990. For RAJENDRA & CO. Chartered Accountants R.J. Shah Proprietor F.N. Vajifdar V.T. Pai B.K. Bhandary Directors –– –– 7 –– 8183 2063 6120 (8) 6112 61 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 4,400 Equity Shares of Rs.10/ each) All the above Shares are held by Reliance Industries Limited, the holding Company. As at 31.3.1990 Rs. (Rs. in thousands) As at 318.1989 Rs. 400 100 500 44 400 100 500 44 CURRENT ASSETS, LOANS AND ADVANCES Current Assets: Sundry Debtors Cash and Bank Balances: Cash on hand Balance with a Scheduled Bank. In Current Account Loans and Advances Advance recoverable Advance payment of Tax SCHEDULE ‘F’ 44 44 CURRENT LIABILITIES & PROVISIONS SCHEDULE ‘B’ RESERVES AND SURPLUS Profit and Loss Account SCHEDULE ‘C’ UNSECURED LOANS From Holding Company Short Term Loan from Bank SCHEDULE ‘D’ OTHER INVESTMENTS: (QUOTED) As at 31.03.1990 Rs. –– (Rs. in thousands) As at 31.03.1989 Rs. 6112 –– 6112 As at 31.03.1990 Rs. 1482900 15575 (Rs. in thousands) As at 31.8.1989 Rs. 467900 –– 1498475 467900 As at 31.03.1990 Rs. (Rs. in thousands) As at 31.03.1989 Rs. CURRENT LIABILITIES Sundry Creditors Other Liabilities PROVISIONS For Taxation SCHEDULE FORMING PART OF THE PROFIT AND LOSS ACCOUNT SCHEDULE ‘G’ EXPENDITURE Administrative Expenses Finance Charges Commission Directors Sitting Fees Auditors Remuneration: Audit Fees Legal & Professional Charges As at 31.3.1990 Rs. (Rs. in thousands) As at 31.8.1989 Rs. 107749 4 2142 10989 3688 124572 –– 4 47 1849 1900 As at 31.03.1990 Rs. (Rs. in thousands) As at 31.03.1989 Rs. 196080 993 2063 199136 350 6 2063 2419 1989-90 (12 months) Rs. 6 1326 27 –– (Rs. in thousands) 1988-89 (7 months) Rs. 1 –– –– 1 10 1965 3334 5 –– 7 Investment - At Cost 13320355 Equity Shares of Larsen & Toubro Limited of 1336788 474571 Rs.10/- each fully paid up’ (Previous year 3900000 Equity Shares of Rs.10/- each) 175 Equity Shares of The Bombay Burmah 100 Trading Corporation Ltd. of Rs.100/- each fully paid up 38857 Debentures Series III of Larsen & Toubro 3225 Limited of Rs.65/- each fully paid up 1321778 Debentures Series IV of Larsen & Toubro 131966 Limited of 360185 Rs.300/- each partly paid up Rs.75/- per Debenture & 961593 of Rs.290/- each partly paid up Rs.72.50 per Debenture 8744 Debentures Part B of Reliance Petrochemicals Ltd. of Rs 40/- each fully paid up 192474 Debentures Part C of Reliance Petrochemicals Ltd. of Rs 150/- each fully paid up 352 24571 –– –– –– –– –– Quoted Investment - Book Value Market Value 1497002 1238786 474571 395850 1497002 474571 SCHEDULE ‘H’ Notes forming part of the Balance Sheet and Profit and Loss Account for the year ended on 31st March, 1990 1. The current financial year is for period of twelve months whereas the previous year was for a period of seven months. The current year’s figures are to that extent not comparable. 2. Previous period figures have been regrouped and/or rearranged wherever necessary. 3. The acquisition of certain shares of Larsen & Toubro Limited by the Company was challenged in some legal proceedings. The matter was decided by the Honourable Bombay High Court in favour of the Company. While these matters were pending before the Honourable Supreme Court, the Company, with a view to put and end to the litigations agreed to sell the shares alongwith the accretions thereto to Financial Institutions. This transaction resulted in a loss of Rs. 1021.36 lacs to the Company. 4. CONTINGENT LIABILITIES Guarantees given on behalf of others (a) Employees who are employed throughout the year and were in receipt of 5. (Rs. in lacs) 6420.00 Rs. remuneration for a period which in aggregate was not less than Rs.72,000/ per annum (b) Employees who are employed for a part of the year and were in receipt of remuneration for any part of the year at a rate which in aggregate was not less than Rs.6,000/- per month. NIL NIL 6. As the Company is not a manufacturing company, information in respect of manufacturing activities required under pares 3 and 4 of Schedule VI 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: 25th April, 1990. 62 For RAJENDRA & CO. Chartered Accountants R.J. Shah Proprietor F.N. Vajifdar V.T. Pai B.K. Bhandary Directors 

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