Reliance Industries Limited
Annual Report 1992

Plain-text annual report

Reliance Industries Limited Annual Report 1991-92 84 Board of Directors Dhirubhai H. Ambani Chairman & Managing Director Mukesh D. Ambani Vice Chairman Ramniklal H. Ambani Joint Managing Director Anil D. Ambani Joint Managing Director Natvarlal H. Ambani Executive Director Mansingh L. Bhakta T. Ramesh U. Pai Suresh S. Betrabet Nominee Director-ICICI Bhogilal D. Shah Nominee Director-GIC Nikhil R. Meswani Executive Director Secretary Yogendra P. Trivedi Solicitors & Advocates Auditors Vinod M. Ambani Solicitors & Kanga & Co. Bankers Rajendra & Co. Chaturvedi & Shah Bankers Syndicate Bank State Bank of India Bank of Baroda Canara Bank Indian Bank Oriental Bank of Commerce Vijaya Bank Central Bank of India Punjab National Bank Allahabad Bank 3rd Floor, Maker Chambers IV, 222, Nariman Point, Bombay 400 021 Registered Office Nineteenth Annual Report 1991-92 Contents Page No(s). Financial Highlights Notice of Annual General Meeting Directors’ Report Annexure to Directors’ Report Auditors’ Repor t Balance Sheet Profit and Loss Account Schedules annexed to Balance Sheet and Profit & Loss Account Notes on Accounts Statement pursuant to Section 212 of the Companies Act, 1956 Documents of Subsidiary Companies 4-5 6-10 12-15 15-21 22-23 24 25 26-35 36-41 42 43- 82 PLANTS 1. Petrochemical & Fibres Complex Patalganga, Off Bombay - Pune Road, Near Panvel, Dist. Raigad, Maharashtra - 410 207 2. Petrochemical and Plastics Complex Village Mora, P.O. Bhatha, Surat-Hazira Road Surat, Gujarat - 394 510 3. Yarn and Textiles Complex 103/106, Naroda Industrial Estate, Naroda, Ahmedabad, Gujarat - 382 330 SUBSIDIARY COMPANIES 1. Devti Fabrics Limited 3rd Floor, Maker Chambers IV, 222, Nariman Point, Bombay 400 021 2. Trishna Investments & Leasings Limited 3rd Floor, Maker Chambers IV, 222, Nariman Point, Bombay 400 021 3. Reliance Europe Limited Devonshire House, 148 Bishopsgate London EC2M 4JX 4. Redwood Investments Private Limited 3rd Floor, Maker Chambers IV, 222, Nariman Point, Bombay 400 021 5. Reliance Petroproducts Limited 201/202 Lalita Complex 352/3 Raisala Road, Navrangpura Ahmedabad 380 009 REGISTRARS & TRANSFER AGENTS Reliance Consultancy Services Limited 56, Mogra Village Lane, Off Old Nagardas Road Andheri (East). Bombay 400 069 (A) (B) (C) (D) (E) Reliance SALES & EARNINGS Sales Other Income Manufacturing & 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 Investments Current Assets WHAT THE COMPANY OWED Long Term Funds Medium/ Short Term Funds Current Liabilities and Provisions NET WORH OF THE COMPANY EquIty Share Capital Preference Share Capital Reserves and Surplus Earnings per Equity Share* (Rupees) Cash Earnings per Equity Share* (Rupees) Net worth per Equity Share (Rupees) Debt: Equity Ratio Number of Investors (in lakhs) Financial 1991-92 1990-91 Rs. 2298.02 42.15 2340.17 1765.56 574.61 218.65 192.64 411.29 163.32 4314.33 976.22 3338.11 61.95 1480.15 4880.21 1794.15 176.24 966.20 Rs. 2098.34 6.55 2104.89 1617.87 487.02 187.05 174.42 361.47 125.55 2186.42 703.85 1482.57 69.53 1160.22 2712.32 708.96 131.26 718.65 2936.59 1558.87 227.08 5.80 1710.74 1943.62 10.26 22.42 85.34 **0.92:1 0.38 152.12 5.80 955.53 1153.45 8.20 19.66 75.44 0.61:1 24 11666 Number of Employees * Annualised and based on weighted average Equity Share outstanding. ** After merger of RPL with the Company. 11935 4 Highlights 1989-90 (9 months) 1988-89 (18 months) 1987-88 1986 1985 1984 (Rs. in crores) Reliance Rs. 1840.66 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 2553.32 595.89 219.50 650.95 Rs. Rs. 1112.45 1770.74 7.88 1120.33 862.58 257.75 91.58 86.80 178.38 79.37 7.45 1778.19 1495.27 282.92 110.74 91.41 202.15 80.77 Rs. 905.48 5.73 911.21 781.82 129.39 54.24 60.98 115.22 14.17 1871.76 1862.66 1137.55 368.98 278.58 1502.78 1584.08 58.50 849.46 1.25 607.83 2410.74 2193.16 579.44 195.11 564.88 609.82 103.83 457.39 1466.34 1339.43 1171.04 152.12 5.80 929.06 1086.98 5.89 16.54 71.07 0.55 26 11355 152.11 5.80 913.40 152.10 5.80 864.22 1071.31 1022.12 6.91 14.52 70.05 5.19 11.21 66.82 0.54:1 0.60:1 31 10983 31 10697 188.09 949.46 0.37 1052.83 2002.66 546.12 143.78 1001.23 1691.31 51.61 5.80 254.12 311.53 2.58 14.39 59.24 1.75:1 18 9376 Rs. 733.14 4.94 738.08 604.83 133.25 24.45 37.46 61.91 71.34 735.68 128.88 606.80 37.30 402.10 1046.20 515.16 81.90 138.02 735.08 51.61 5.80 253.71 311.12 14.16 21.69 59.16 Rs. 622.01 7.11 629.12 511.23 117.89 22.61 34.18 56.79 61.10 530.93 104.65 426.28 0.17 235.41 661.86 276.96 44.83 93.68 415.47 46.18 5.80 194.41 246.39 15.62 24.47 52.10 1.66:1 1.12:1 17 9066 15 8914 5 Reliance NOTICE Notice is hereby given that the Eighteenth Annual General Meeting of the Members of RELIANCE INDUSTRIES LIMITED will be held on Thursday, the 10th December, 1992 at 10.30 a.m. at Bhaidas Maganlal Sabhagriha, U-1 Juhu Development Scheme, Vile Parle (W), Bombay 400 056, to transact the following business: ORDINARY BUSINESS: 01 To consider and adopt the Balance Sheet as at 31st March, 1992, Profit and Loss Account for the year ended on that date and the Repor ts of the Board of Directors and Auditors thereon. 02 To declare dividend on Preference and Equity Shares. 03 To appoint a Director in place of Shri N.H. Ambani who retires by rotation and being eligible, offers himself for re-appointment. 04 To appoint a Director in place of Shr i M.L. Bhakta who retires by rotation and being eligible, offers himself for re-appointment. 05 To appoint a Director in place of Shr i N.R. Meswani who retires by rotation and being eligible, offers himself for re-appointment. 06 To appoint Auditors who shall hold office f rom the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting and fix their remuneration and in this regard to consider, and if thought f it, to pass with or without modification, the following resolution as an Ordinary Resolution: ”RESOLVED THAT M/s. Rajendra & Co., Char tered Accountants, M/s. Chaturvedi & Shah, Chartered Accountants and M/s. Rajagopalan & Co., Chartered Accountants, be and are hereby appointed Auditors of the Company for holding the office from conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting of the Company on such remuneration as shall be fixed by the Board of Directors exclusive of travelling and other out of pocket expenses.’’ SPECIAL BUSINESS: 07 To c o n s i d e r a n d , i f t h o u g h t f i t , t o p a s s, w i t h o r w i t h o u t m o d i f i c a t i o n , t h e fo l l o w i n g r e s o l u t i o n a s a n O r d i n a r y Resolution:”RESOLVED THAT Shr i Y. P. Tr iv edi, who was appointed as an Additional Director of the Company by the Board of Directors and who ceases to hold office under Section 260 of the Companies Act, 1956 and in respect of whom the Company has received a notice in writing proposing his candidature for the office of Director, be and is hereby appointed as a Director of the Company, liable to retire by rotation.” 08 To consider and, if thought fit, to pass , with or without modifications the following resolution as an Ordinary Resolution: ”RESOLVED THAT in accordance with the provisions of Sections 198, 269, 309 read with Schedule XIII and all other applicable provisions of the Companies Act, 1956, the consent o f t h e C o m p a ny b e a n d i s h e r e b y a c c o r d e d t o t h e r e - appointment of Shri Nikhil R. Meswani, as a Wholetime Director of the Company, designated as Executive Director, for a period of 5 (five) years effective 1st July, 1993, on the terms and conditions including remuneration as are set out in the agreement to be entered into between the Company and Shri Nikhil R. Meswani, a draft whereof is placed before this meeting which agreement is hereby specifically sanctioned with liber ty to the Board of Directors to alter and var y the terms and conditions of the said appointment and /or agreement so as not to exceed the limits specified in Schedule XIII to the Companies Act 1956 or any amendments thereto as may be agreed to between the Board of Directors and Shri Nikhil R. Meswani or as may be var ied by the general meeting; RESOLVED FURTHER THAT in the event of loss or inadequacy of 6 profits in any financial year of the Company dur ing the term of his office. the salar y of Shri Nikhil R. Meswani be reduced by 10% and he shall be entitled to all other benefits and perquisites; RESOLVED FURTHER THAT the Board of Directors, be and is hereby authorised to take such steps as may be necessar y to give effect to this resolution.” 09. To consider and, if thought fit, to pass, with or without modification the following resolution as an Ordinary Resolution: ”RESOLVED THAT in supersession of the resolution passed at the Annual General Meeting of the Company held on 18th October 1991, the Board of Directors be and is hereby authorised, in accordance with Section 293(1)(d) of the Companies Act, 1956 and the Articles of Association of the Company, to borrow any sum or sums of money from time to time at their discretion, for the pur pose of the business of the Company, which together with the monies already borrowed by the Company (apart from temporary loans obtained from the Company’s Bankers in the ordinary course of business) may exceed at any time, the aggregate of the paid up capital of the Company and its free reser ves (that is to say, reserves not set apart for any specific purpose) by a sum not exceeding Rs.3,000 crores and that the Board of Directors be and is hereby empowered and authorised to arrange or fix the ter ms and conditions of all such monies to be borrowed from time to time as to interest, repayment, security or otherwise as they may think fit.” 10. To consider and, if thought f it, to pass, with or without modification the following resolution as an Ordinary Resolution: ”RESOLVED THAT pursuant to the pro visions of Section 293(1)(a) and all other applicable provisions of the Companies Act, 1956, the consent of the Company be and is hereby granted to the Board of Directors of the Company, to create mortgages/ charges in addition to the mor tgages/charges created/to be created by the Company, in such for m and manner and with such ranking and at such time and on such terms as the Board of Directors may deter mine, on all or any of the movable and/or immovable properties of the Company, both present and future and/or the whole or any par t of the under taking(s) of the Company, together with the power to takeover the management of the business and concern of the Company in cer tain events of default, to or in favour of the following: (a) The Industrial Credit and Investment Corporation of India L t d . , t o s e c u r e t h e Fo r e i g n C u r r e n c y L o a n o f U S $ 10,500,000 equivalent to Rs.2723 lacs; and (b) The Industrial Development Bank of India, to secure the Foreign Currency Loan of US$ 10,500,000 equivalent to Rs.2723 lacs; together with interest at the respective agreed rates, additional interest, liquidated damages, commitment charges, premia on prepayment, costs, charges, expenses i n c l u d i n g a ny i n c r e a s e a s a r e s u l t o f d eva l u a t i o n / revaluation/fluctuation in the rates of exchange and all other monies payable by the Company to the Industr ial Credit and Investment Cor poration of India Limited and Industrial Development Bank of India in terms of their respective Loan Agreement/Heads of Agreement or any other document, entered into/to be entered into by the Company, in respect of the said loans/borrowings. RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised to finalise with the said Lenders, documents for creating aforesaid mortgages and/or charges and to do all such acts, deeds and things as may be necessary for giving effect to the above resolution.” 11. To consider and. if thought fit, to pass , with or without m o d i f i c a t i o n , t h e fo l l ow i n g r e s o l u t i o n a s a n O rd i n a r y Resolution: ”RESOLVED THAT in accordance with the provisions of Section 372 and all other applicable provisions of the Companies Act. 1956, and subject to the approval of the Central Government, where required, the Board of Directors of the Company be and is hereby authorised to acquire from time to time by way of subscription, purchase or otherwise, shares of any body/bodies corporate, (existing or which may be promoted) whether under the same management or not upto a limit of 50% of the aggregate of the subscribed capital of the Company and its free reser ves, notwithstanding that such investment or investments. together with the existing investments of the Compan y and of its subsidiaries, in all other bodies corporate, -may exceed all or any of the percentages prescr ibed by the Government and as may be prescribed hereafter from time to time, under the provisions of Section 372(2) of the Companies Act, 1956 and the provisos thereto. RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised to determine the actual sum or sums to be so invested and to decide all or any other matter arising out of or incidental to the proposed investments and to do all such acts and things as may be necessary to implement this resolution.” 12. To consider and, if thought f it, to pass, with or without modification, the following resolution as a Special Resolution: ”RESOLVED THAT in supersession of the resolution passed at the adjourned 16th Annual General Meeting of the Company held on 13th November, 1990 and subject to the provisions of Section 370 and all other applicable provisions of the Companies Act, 1956 and subject to the approval of the Financial Institutions, if necessar y, the consent of the Company be and is hereby accorded to the Board of Directors of the Company to give any guarantee/ guarantee(s) and/or provide any security from time to time in connection with any loan or loans made by any other person to, or to any other person by any bodies cor porate, provided that the aggregate of the guarantees so given, or securities so provided shall not, at any time, exceed in the aggregate 30% of the aggregate of the subscribed Capital and free reser ves of the Company.” 13. To consider and, if thought fit, to pass , with or without modification, the following resolution as a Special Resolution: ”RESOLVED THAT in accordance with the provisions of Section 81 and all other applicable provisions of the Companies Act, 1956 and the enabling provisions in the Memorandum and A r ticles of Association of the Company and the Listing Agreements entered into by the Company with the Stock Exchanges where the shares of the Company are listed and subject to the approval of the Financial Institutions (FIs), Securities & Exchange Board of India (SEBI) and all other concerned authorities, if any, and to the extent necessar y and such other approvals, per missions and sanctions as may be necessar y and subject to such conditions and modifications as may be prescr ibed or imposed by any of them in granting such approvals, permissions and sanctions which may be agreed to by the Board of Directors of the Company at its sole discretion, consent of the Company be and is hereby accorded to the Board of Directors to issue/offer Non Conve r tible Secured Redeemable Debentures with or without detachable or non detachable warrant(s) carrying such rate of interest and fa c e va l u e a s m ay b e f i xe d by t h e B o a r d o f D i r e c t o r s aggregating Rs. 300 crores (Rupees three hundred crores) for cash at par by way of Rights and/or Private Placement, to the Financial Institutions/Mutual Funds/Banks and others as the Board of Directors may in its sole discretion think fit; Provided that the detachable warrant(s) to be attached to the Debenture Cer tificate(s) will entitle the holder of such debentures as on a date to be hereafter fixed by the Board to apply during a per iod to be hereafter decided by the Board, such number of equity share(s) per warrant at a price to be deter mined by the Board before the subject offer is made and to call upon all the Warrant holders to exercise their said entitlement to apply for such number of equity shares per warrant within such period and in such manner as may be decided by the Board and if Reliance such entitlement as to Equity Shares attached to the warrant is not exercised within such specified period, the Board will be entitled to deal with the same as it may, in its sole discretion, deem f it and most beneficial to the Company; RESOLVED FURTHER THAT for the purpose of giving effect to this Resolution, the Board be and is hereby authorised to do all such acts, deeds, matters and things as it may, in its sole discretion, deem necessary, proper or desirable and to settle any question, difficulty or doubt that may arise in giving effect to this resolution.” 14. To consider and, if thought fit, to pass, with or without modification, the following resolution as an Ordinary Resolution: ” RESOLVED THAT in accordance with the provisions of Section 293(1)(a) and all other applicable provisions, of the Companies Act, 1956, consent of the Company be and is hereby accorded to the Board of Directors to mor tgage and/or charge in addition to the mortgages/charges created/to be created by the Company in such for m and manner and with such ranking and at such time and on such terms as the Board of Directors may determine, all or any of the moveable and/or immoveable proper ties of the Company, both present and future and/or the whole or any part of the undertaking(s) of the Company together with the power to take over the management of the business and concer n of the Company in cer tain events of default in favour of the Agents and Tr ustees/Trustees for securing the Debentures referred to at Item No.13 of the Notice, together with interest, further interest thereof, compound interest in case of default, accumulated interest, remuneration of the Tr ustees, premium, if any, on redemption and all other costs, charges and expenses payable by the Company in ter ms of the Trust Deed to be finalised and executed between the Company and the Agents and Trustees/ Trustees and containing such specific ter ms and conditions and covenants in respect of enforcement of security as may be stipulated in that behalf and agreed to between the Board of Directors and the Trustees; RESOLVED FURTHER THAT the Board of Directors of the C o m p a ny b e a n d i s h e r e by a u t h o r i s e d t o f i n a l i s e s u c h documents for creating the aforesaid mortgages and/or charges and to do all such acts, deeds and things as may be necessar y for giving effect to the above resolution.” 15. To consider and, if thought fit, to pass, with or without modification, the following resolution as a Special Resolution: ”RESOLVED THAT in accordance with the provisions of Section 81 and all other applicable provisions, of the Companies Act, 1956, and enabling provisions in the Memorandum and Ar ticles of Association of the Company and the listing Agreements entered into by the Company with the Stock Exchanges where the shares of the Company are listed and subject to the approval of the Financial Institutions (FIs) Securities & Exchange Board of India (SEBI), Reserve Bank of india (RBI) and all other concerned authorities and departments, if any, and to the extent n e c e s s a r y a n d s u c h o t h e r a p p r o va l s, p e r m i s s i o n s a n d sanctions, as may be necessary, and subject to such conditions and modifications as may be prescribed or imposed by any of them in granting such approvals, permissions and sanctions, which may be agreed to, by the Board of Directors of the Company (hereinafter referred to as the “Board”) and/or duly authorised Committee thereof for the time being exercising the powers conferred by the Board, the consent of the Company be and is hereby accorded to the Board to issue/offer Equity Shares/Conver tible Debentures, fully or partly, and/or non- conver tible debentures with or without detachable or non- detachable warrants, Secured Premium Notes and/or other financial instruments (hereinafter for brevity’s sake referred to as “Securities”)as the Board at it’s sole discretion may at any time hereafter decide which securities when issued or allotted would ultimately result in an increase in the paid up equity share capital of the Company, by an amount not exceeding Rs. 60 crores, to the members, debentureholders, 7 Reliance employees, non-resident Indians, overseas bodies corporates (OBCs), foreign institutional investors (FIIs), companies, other entities and to such other persons, through public issue, rights issue, private placement or preferential allotment or conversion of term loans at the option of the term lenders or by any one or more or a combination of the above modes/methods or otherwise and at such time or times and in one or more branches, as the Board or Committee thereof may in its absolute discretion think fit, in consultation with the lead managers, underwriters or otherwise, and on such terms and conditions including the number of Equity Shares and/or Debentures to be issued, the face value, rate of interest, redemption period, manner of redemption, amount of premium on redemption, the number of equity shares to be allotted on redemption/conversion, the ratio, period of conversion, fixing of record date or book closure, provided that the issue price of the equity shares to be issued on conversion of debentures or upon excercising the rights of entitlement attached to the warrants or on conversion of term loan(s), shall be at a price not exceeding Rs. 250 per equity share; Provided further that the increase in the paid up equity share capital as aforesaid, shall be in addition to the increase in the paid up share capital which will take place in respect of securities already issued/committed to be issued by the Company and approved by the members earlier. RESOLVED FURTHER THAT such of these securities to be issued, as are not subscribed may be disposed of by the Board/ Committee thereof in its absolute discretion, in such manner and/ or on such terms as it may deem fit, including offering or placing them with Banks/Financial Institutions/Investment Institutions/ Mutual Funds or otherwise as the Board or Committee thereof may in its absolute discretion deem fit and proper. RESOLVED FURTHER THAT the consent of the Company be and is hereby also granted in terms of Section 293(1)(a) and all other applicable provisions of the Companies Act, 1956, to the Board of Directors to mortgage and/or charge, in addition to the mortgages/ charges created/to be created by the Company, in such form and manner and with such ranking and at such time and on such terms as the Board may determine, all or any of the moveable and/or immoveable properties of the Company, both present and future and/or the whole or any part of the undertaking(s) of the Company together with the power to take over the management of the business and concern of the Company in certain events of default in favour of the Agents and Trustees/Trustees for securing the Securities (if they compromise fully/partly Convertible Debentures and/or Non Conver tible Debentures with or without detachable or non- detachable Warrants or secured premium notes or other debt instruments) referred to herein together with interest, further interest thereon, compound interest in case of default, accumulated interest, remuneration of the Trustees, premium (if any) on redemption, all other costs, charges and expenses payable by the Company in terms of the Trust Deed to be finalised and executed between the Company and the Agents and Trustees/Trustees and containing such specific terms and conditions and covenants in respect of enforcement of security as may be stipulated in that behalf and agreed to between the Board of Directors or Committee thereof and the Trustees; RESOLVED FURTHER THAT for the purpose of giving effect to this resolution, the Board/Committee be and is hereby authorised to do all such acts, deeds, matters and things, as it may in its absolute discretion deem necessary, proper or desirable and to settle any question, difficulty or doubt that may arise in regard to the offer/ issue, allotment and utilisation of the proceeds of issue of the securities towards the Company’s projects/other corporate needs and finalise such documents for creating mortgages/charges as it may deem fit.” 16. To consider and, if thought fit, to pass, with or without modification, the following resolution as an Ordinary Resolution: ”RESOLVED THAT in accordance with the provisions of Section 293(1)(e) and all other applicable provisions of the Companies Act, 1956, the consent of the Company be and is hereby accorded to the Board of Directors to contribute to any institute, body, tr ust, society, association or person, funds for any charitable or other purposes, not directly relating to the business of the Company or the welfare of the employees, upto an amount not exceeding Rs.5 (five) crores per annum, notwithstanding that the said amount may exceed the limits laid down in Section 293(1)(e) of the Companies Act, 1956. By Order of the Board of Directors Rohit C. Shah Joint Secretary Registered Office: 3rd Floor, Maker Chambers IV, 222, Nariman Point, Bombay 400 021. Dated: 29th September, 1992 NOTES : 01 A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLE D TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER. 02 The Explanatory Statement setting out material facts, in respect of the business under item No.6 to 16 is annexed hereto. 03 All documents referred to in the accompanying Notice and the Explanatory Statement are open for inspection at the Registered Office of the Company during office hours on all wor king days except Saturdays between 11.00 a.m. and 1.00 p.m. upto the date of Annual General Meeting. 04 Members/Proxies should bring the Attendance Slip duly filled in for attending the meeting. 05 The Register of Members shall remain closed from Fr iday, the 16th October, 1992 to Saturday, the 24th October, 1992, both days inclusive. 06 The Dividend when sanctioned, will be made payable on or after 10th December, 1992 to those Shareholders, whose name(s) will appear as Member in the Books of the Company on 24th October, 1992. 07 Shareholders seeking any information with regard to accounts are requested to write to the Company ear ly so as to enable the Management to keep the infor mation ready. 08 In view of the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956 as amended, only the Directors’ Repor t (except information under Section 217(2A) of the Companies Act, 1956), Auditors’ Repor t and Statement containing salient features of Balance Sheet and Profit and Loss Account are enclosed. However, any member of the Company will, on demand, be furnished free of cost with a copy of the Balance Sheet of the Company along with every other document required by law to be annexed or attached thereto. 09 The Company has already transferred, unclaimed dividend declared for the financial year ended 30th June, 1988 to the General Revenue Account of the Central Gove rnment as required by the Companies Unpaid Dividend (Transfer to the General Revenue Account of the Central Government) Rules, 1978. Those Shareholders who have so far not claimed their dividend for the said 8 financial year may claim their dividend from the Registrar of Companies, Maharashtra, Bombay, by submitting application in the prescribed form. The Unpaid Dividends that are due for transfer to Central Government are as follows: For the Financial Year 1988-89 1989-90 1990-91 Date of Dividend 30.09.1989 13.11.1990 18.10.1991 Due for Transfer 18.11.1992 01.01.1994 06.12.1994 Members who have not encashed their Dividend Warrants, may approach the Company’s Registrar & Transfer Agents Reliance Consultancy Services Limited at 56, Mogra Village Lane, Off Old Nagardas Road Andheri (E), Bombay 400 069, for obtaining duplicate Dividend Warrants. 10 Members are requested to inform the Company or its Registrars and Transfer Agents, Andheri, Income Tax Permanent Account Number (PAN), if any, allotted to them by the Income Tax Authorities and the designation, designation and address of the IncomeTax Authority by whom their income is assessed or assessable in case the same is not submitted to the Company as such par ticulars are statutorily required to be stated in the Tax Deduction Certificate issued to the Shareholders. EXPLANATORY STATEMENT: The Explanatory statement for item Nos. 6 to 16 set out hereinabove is as under: Item No.6 The assets of the Company have risen to about Rs.4880 crores as on 31st March, 1992. The Company has three main manufacturing complexes - one at Patalganga, producing Fibres, Petrochemical products, Fibre intermediates and Detergent intermediates, second at Naroda, producing Synthetic textiles; and third at Hazira, manufacturing Plastics and Petrochemical products. It has already begun building an NGL/Naptha Cracker at Hazira to be integrated with the Petrochemical Plants at Hazira The multiple products being manufactured at several locations will substantially increase the activities and operations of the Company. Keeping in view the foregoing, it is proposed to appoint an additional Auditor as Joint Auditor to conduct statutory audit, who shall hold office from the conclusion of the ensuing Annual General Meeting until the conclusion of the next Annual General Meeting subject to requisite approval being obtained from the Shareholders at the Annual General Meeting. The Directors commend the Resolution for your approval.None of the Directors of the Company is, in any way, concerned or interested in the said Resolution. Item No.7 Shri Y.P. Trivedi was appointed as an Additional Director of the Company with effect from 16th April, 1992. Pursuant to Section 260 of the Companies Act, 1956, Shri Y.P. Trivedi will hold office of Director upto the date of the ensuing Annual General Meeting. The Company has received a Notice in writing from a member (along with the deposit of Rs. 500/-) proposing the candidature of Shri Y.P. Trivedi for the office of Director under the provisions of Section 257 of the Companies Act, 1956. Shri Y.P. Trivedi is an Advocate of the Supreme Cour t and an eminent Tax Consultant. In view of his considerable experience, in the opinion of the Directors, it will be in the interest of the Company that Shri Y.P. Trivedi be appointed as a Director of the Company.The Directors commend the resolution for your approval.Other than Shri Y.P. Trivedi, none of the other Directors of the Company is, in any way, concerned or interested in this resolution. Item No.8 The Board of Directors seek approval of the Shareholders for the reappointment of Shri Nikhil R. Meswani as a Wholetime Director, designated as an Executive Director for a period of five years from 1st July, 1993. Reliance The draft Agreement to be entered into by the Company with Shri Nikhil R. Meswani, in respect of his re-appointment as Wholetime Director, inter alia, contains the following terms and conditions: I. Salary: Rs. 8,000 per month (in the grade of Rs. 8,000 1,000- 12,000) II. Commission: 1% commission on the net profits of the Company computed in the manner laid down in section 309(5) of the Companies Act, 1956, subject to a ceiling of 50% of the annual salary or Rs.90,000 per annum whichever is less; Perquisites shall be allowed, in addition to salary and/or commission or both. Perquisites shall be restricted to an amount equal to the annual salary or Rs.1,35,000/- per annum whichever is less. Perquisites are classified into three categories, Part A, B and C as under: III. Perquisites: PART A: (i) Housing: (b) to the (a) The expenditure by the Company on hir ing unfurnished accommodation will be subject fo l l ow i n g ceilings:Bombay, Calcutta, Delhi and Madras: 60% of the salar y, over and above 10% payable by the Wholetime Director.Other places: 50% of the salary, over and above 10% payable by the Wholetime Director. If the Company does not provide accommodation to the Wholetime Director, House Rent Allowance will be paid by the Company to the Wholetime Director as above. If accommodation in the Company owned house is provided, the Wholetime Director shall pay by way of rent 10% of the salary to the Company. Explanation: The expenditure incurred by the Company on gas, electricity and water and furnishings shall be valued as per Income Tax Rules, 1962. These shall, however, be subject to a ceiling of 10% of the salary of the Wholetime Director. (c) (ii) Medical reimbursement: Reimbursement of expenses incurred for self and family subject to a ceiling of one month’s salary in a year or three months’ salary over a period of three years. (iii) Leave travel Concession: Leave travel concession for self and family once in a year incurred in accordance with the rules of the Company. (iv) Club fees: Fees of clubs subject to a maximum of two clubs. No admission and life membership fees will be paid. (v) Personal Accident Insurance: Personal Accident Insurance of an amount, the Annual Premium of which shall not exceed Rs.1,000/- Note: For the purpose of perquisites stated in Part-A above, family means the spouse, the dependent children and dependent parents of the appointee. PART B: Contribution to Provident Fund and Superannuation Fund or Annuity shall not be included in the computation of the ceiling on perquisites to the extent these, either singly or put together, are not taxable under the Income Tax Act, 1961. (i) Company’s contribution towards Provident Fund as per the rules of the Company but not exceeding 10% of the salary. (ii) Company’s contribution towards Superannuation Fund as per the rules of the Company, but it shall not together with the Company’s contribution to Provident Fund, exceed 25% of the salary. (iii) Gratuity payable will not exceed half a month’s salary for each completed year of service, subject to a ceiling of Rs. 1,00,000. PART C: Provision of car for use on the Company’s business and telephone at residence will not be considered as perquisites. Personal long distance calls on telephone and use of car for personal purposes shall be billed by the Company. 9 Reliance Earned Leave On full pay and allowances as per the rules of the Company but not exceeding one month’s leave for every eleven months of service, subject to the further condition that leave accumulated but not availed of will not be allowed to be encashed. In the event of loss or inadequacy of profits during the period (1st July, 1993 to 30th June, 1998), salary payable to Shri Nikhil R. Meswani shall be reduced by 10% and he shall be entitled to all other benefits and perquisites. The terms and conditions set out for re-appointment and/or in the Agreement shall be altered and varied from time to time by the Board of Directors as it may, at its discretion, deem fit so as not to exceed the limits specified in Schedule XIII to the Companies Act, 1956 or any amendments made thereto. The Agreement may be terminated by either party by giving to other party six months’ notice. Shri Nikhil R. Meswani was appointed by virtue of his employment with the Company and his appointment is subject to the provisions of Section 283(1)(i) of the Companies Act, 1956. Shri Nikhil R. Meswani shall not be entitled to supplement his earnings under any Agreement with any buying or selling agency and shall also not be interested or concerned directly or indirectly through spouse or minor children in any Selling Agency of the Company without the prior approval of the Central Government. The draft Agreement to be entered into between the Company and Shri Nikhil R. Meswani is available for inspection at the Registered Office of the Company on any working day excluding Saturdays, upto the date of the Annual General Meeting between 11.00 a.m. and 1.00 p.m. The above may also be treated as an abstract of the terms of contract/ agreement between the Company and Shri Nikhil R. Meswani pursuant to Section 302 of the Companies Act, 1956. Shri Nikhil R. Meswani is concerned or interested in the resolution.None of the other Directors of the Company is, in any way, concerned or interested in the said resolution. Item No.9 As per the provisions of Section 293(1)(d) of the Companies Act, 1956, the Board of Directors of a Public Company cannot, except with the consent of such Public Company in General Meeting, borrow monies in excess of the aggregate of the paid-up capital of the Company and its free reserves. After the merger of Reliance Petrochemicals Limited (RPL) with the Company, all assets and rights as well as all debts and liabilities of the erstwhile RPL have been transferred to the Company, which, on the one hand, has increased its loans, on the other hand has increased its asset base to over Rs.4,880 crores. This has enhanced its credit rating and resources raising ability in the financial market and the Company is poised for further growth. This has necessitated the restructuring of the Company’s borrowing limit by authorising the Board of Directors to borrow monies which may exceed at any time the aggregate of the paid up capital of the Company and its free reserves by a sum not exceeding Rs.3000 crores. The Directors while exercising their powers shall however observe the Debt/ Equity norms as applicable. The Directors commend the resolution for approval. None of the Directors of the Company is, in any way, concerned or interested in this resolution. Item No.10 The Company has been sanctioned Foreign Currency Loans aggregating US$ 21 Million by The Industrial Credit and Investment Corporation of India Limited and Industrial Development Bank of India, which are to be secured by a suitable charge/mortgage on all or any of the movable and/or immovable properties of the Company in such form, manner and ranking as may be determined by the Board of Directors in consultation with the said Lenders. 10 The mortgage and/or charge by the Company of its movable and/or immovable proper ties and/or the whole or any part of the undertaking(s) of the Company, in favour of the aforesaid Lenders, with a power to take over the management of the business and concern of the Company, in certain events of default by the Company, may be regarded as disposal of the Company’s under taking(s) within the meaning of Section 293(1)(a) of the Companies Act, 1956. Hence, it is necessary for the members to pass a resolution under the said section. The Directors commend the resolution for your approval.None of the Directors of the Company is, in any way, concerned or interested in the resolution. Item No. 11 The Company alongwith its Subsidiaries and Group Companies is growing at a faster pace. The Company is proposing to invest in the Equity Shares and Optionally Fully Convertible Debentures of Reliance Polypropylene Limited and Reliance Polyethylene Limited aggregating Rs. 147.50 crores and a similar investment in Shares and Debentures is proposed to be made by Messrs. C. Itoh & Co. Ltd., Japan, which occupies the number r position in Sales on a world wide basis at Rs.480,000 crores. The Company has been approached by several leading international companies for establishing joint ventures. It becomes necessary for the Company to make investments in other bodies Corporate with which the Company is or may be associated in the future. It will also be advantageous if the Company invests in Shares of other Companies which are engaged in allied industries. In accordance with the provisions of Section 372 of the Companies Act, 1956, the Company cannot make any investment in the Equity Shares of any other body/bodies cor porate in excess of the percentages prescribed unless the investment is sanctioned by the Resolution by the Shareholders in General Meeting and unless previously approved by the Central Government where required. The enabling Resolution set out at item No. 11 of the Notice would empower the Board of Directors to invest its funds in the shares of other Companies as and when it deems fit. The Directors commend the resolution for your approval. None of the Directors of the Company is, in any way, concerned or interested in the said Resolution. Item No.12 As per the provisions of Section 370 of the Companies Act, 1956, the Board of Directors of a public limited company can be authorised to give any guarantee or provide any security if a special resolution is passed by the shareholders of the lending company fixing a limit for the purpose. In the course of the Company’s business, it becomes necessary for the Board of Directors from time to time to give guarantees or provide secur ities favour ing va rious personal author ities including customs,excise and other Government semi Government Authorities. In view of the increasing business operations of the Company as also of the associate companies, the Board is of the view that the limit for giving guarantees or providing securities to other bodies corporate, be increased upto a sum not exceeding 30% of the aggregate of the subscribed capital of the Company and its free reserves. The Directors commend the resolution for your approval. None of the Directors of the Company is, in any way, concerned or interested in the resolution. Item Nos.13 & 14 The Company had proposed to avail sanctioned Foreign Exchange loans aggregating US $ 113 million (Rs. 293 crores approximately) to par t finance the Cracker Project of the Company to be located at Hazira, Dist. Surat, in the State of Gujarat. Out of the aforesaid Foreign Exchange loans, the Company has availed US $ 21 million from the Industrial Credit and Investment Cor poration of India Limited (ICICI) and Industrial Development Bank of India (IDBI). Keeping in view the foreign exchange rates and fluctuation, the Company in consultation with the Financial Institutions, proposes to raise Rupee resources by issuing Non Convertible Secured Debentures with or without detachable warrants aggregating Rs. 300 crores in substitution of the balance Foreign Currency loan to be availed by the Company in the manner set out in the resolution at No. 13 of the Notice. This will greatly enable the Company to eliminate foreign exchange r isk and raise rupee resources at competitive rates. In terms of the Listing Agreements entered into by the Company with the various Stock Exchanges where the Company’s securities are listed, the Company in the first instance should offer all the securities to be issued for subscription pro rata to the equity shareholders unless the shareholders decide otherwise in a General Meeting. Further Section 81 of the Companies Act, 1956, provides, inter alia, that when it is proposed to increase the Issued Capital of the Company by allotment of further shares, such further shares shall be offered to the existing shareholders of the Company in the manner laid down in Section 81, unless the shareholders in a General Meeting decide otherwise. Since the Company proposes to issue the said Debentures with or without Warrants (entitling the Warrantholders to apply for equity shares) by private placement to the Financial Institutions/Mutual Funds/ Banks or others, consent of the Shareholders is being sought to authorise the Board of Directors to issue the securities. It is, therefore, necessary for the members to grant approval under Section 81 of the Companies Act, 1956, and under the listing agreement to the Resolution at Item 13 of the Notice. The Debentures will be secured by a suitable mortgage/charge on all or any of the moveable any/ or immoveable properties of the Company in such form, manner and ranking as may be determined by the Board of Directors in consultation with the Debenture Trustees. The mortgages and/or charges by the Company of its moveable and immoveable properties and/or the whole or any par t of the undertaking of the Company, in favour of the debenture trustees with a right to take over the management of the business and concern of the company in certain events of default by the Company may be regarded as disposal of the Company’s under takings within the meaning of Section 293(1)(a) of the Companies Act, 1956. It is therefore necessary for the members to pass the resolution at Item No. 14 of the Notice. The Board commends the resolutions at Item 13 and 14, for your approval. None of the Directors of the Company is, in any way, concerned or interested, in the said resolutions. Item No.15 The Company is the country’s largest Private Sector Industrial Company measured in terms of gross assets. The Company’s strategy has been to build modern world scale plants to establish market leadership in its major products. It has three main manufactur ing complexes - one at Patalganga, producing Fibres, Petrochemical products, Fibre Intermediates and Detergent Intermediaries; second at Naroda, producing Synthetic Textiles and Yarn; and third at Hazira, manufacturing Plastics and Petrochemical products. It has taken effective steps to implement an NGL/Naphtha Cracker at Hazira to be integrated with the Petrochemical plants at Hazira. Under the liberalised policy announced by the Government, globalisation, privatisation, market-led economy and competition are the hallmarks of the new economic policy. Keeping in view the foregoing and also to augment long term Working Capital requirements and other corporate needs, the Company proposes to raise finance, at appropriate time(s) as the Board may decide, by issue of Equity Shares and/or Fully/ Partly.Convertible Debentures and/or Non Convertible Debentures with or without Detachable/Non Detachable Warrants, secured premium notes and other Financial instruments whether by way of Rights issue to the Members, to the Debentureholders, to the Employees and/or by Private Placement and/or by Public Issue including to Non Resident Indians/ Overseas Corporate Bodies/Foreign Institutional Investors (FIIs) etc. Consent of the Shareholders is also sought to authorise the Board Reliance of Directors for issuing Equity Shares as may be mutually agreed between the Company and Financial Institutions who at their option are agreeable to convert their term loans into Equity Shares of the Company. As the Members are aware, as part of the liberalisation in the economic policies, the Government of India has permitted free pricing of Equity Issues. The Company, in consultation with its Merchant Bankers and Financial Institutions and other Advisors, will fix the detailed terms of the issue which will be in line with the requirements of guidelines issued by the Securities & Exchange Board of India (SEBI) and as permitted by Financial Institutions. The resolution set out in Item No.15 is an enabling resolution conferring authority on the Board to cover all contingencies and requirements. The Directors are of the view that the price at which Equity Shares will be available in case of issue of Equity Shares and the Issue of Shares on Conversion of Debentures and Shares against Equity Warrant and conversion of term loans at the option of the term lenders will not be exceeding Rs. 250 per Share, but this is only indicative. Section 81 of the Companies Act, 1956 provides, inter alia, that when it is proposed to increase the Issued Capital of a Company by allotment of further shares, such further shares shall be offered to the existing shareholders of the Company in the manner laid down in Section 81 unless the Shareholders in General Meeting decide otherwise. The Listing Agreement referred to above provides, inter alia, that the Company in the first instance should offer all the Shares and Debentures to be issued by the Company for subscription pro rata to the Equity Shareholders unless the Shareholders decide otherwise in a General Meeting.Under the said Special Resolution, consent of the Shareholders is being sought pursuant to the provisions of Section 81 and all other applicable provisions of the Companies Act, 1956 and in terms of the provisions of the Listing Agreement executed by the Company with the various Stock Exchanges in India where the Company’s securities are listed. The Directors commend the resolution for your approval. The Directors of the Company may be deemed to be concerned or interested to the extent they may be entitled to or that will be offered to them on Rights/Preferential basis or otherwise and applied for and allotted to them. Item No.16 As per the provisions of Section 293(1)(e) of the Companies Act, 1956, the Board of Directors of a public company shall not except with the consent of such public company contribute to Charitable and other funds not directly relating to the business of the Company or the welfare of it’s employees in excess of Rs. 50,000 or 5% of it’s average net profits as determined in accordance with the provisions of Section 349 and 350 of the Companies Act, 1956, during the three financial years, immediately preceding, whichever is greater. Acknowledging the Company’s increased responsibility towards social, philanthropic and other causes of public utility, your Directors recommend for approval by the Shareholders that the limit of contribution to charitable and other funds be fixed not exceeding Rs.5 (five) crores per annum. None of the Directors of the Company is, in any way, concerned or interested in the said resolution. By Order of the Board of Directors Rohit C. Shah Joint Secretary Registered Office: 3rd Floor, Maker Chambers IV, 222, Nariman Point, Bombay 400 021. Dated: 29th September, 1992 11 Reliance DIRECTORS’ REPORT INTERNATIONAL ISSUE OF GLOBAL DEPOSITARY RECEIPTS Dear Shareholders, Your Directors are pleased to present the 18th Annual Report together with the Audited Statement of Accounts for the Financial Year ended 31st March, 1992. FINANCIAL RESULTS (Rs.in crores) 1991-92 1990-91 Gross Profit before Interest and Depreciation Less: Interest Depreciation Profit for the year Add: Balance in Profit & Loss Account Add: Add: Add: Transfer from General Reserve Taxation Reserve written back Investment Allowance Reserve (utilized) written back Less: Prior year adjustments Available for Appropriation Appropriations: Investment Allowance Reserve Debenture Redemption Reserve General Reser ve Recommended Dividend on Preference and Equity shares Balance carried forward to Balance Sheet 574.61 218.65 192.64 163.32 27.73 49.00 --- 4.40 75.06 169.39 50.00 21.00 30.00 48.37 20.02 169.39 487.02 187.05 174.42 125.55 30.26 --- 10.00 --- 12.58 153.23 50.00 16.00 13.00 46.50 27.73 153.23 DIVIDENDS Your Directors are pleased to recommend the following dividends to be paid (subject to deduction of tax at source) for the financial year ended 31st March, 1992, if approved by the Shareholders at the ensuing Annual General Meeting. 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 15,21,40,973 Equity Shares of Rs. 10 each fully paid up and a pro-rata dividend of Rs. 0.25 per Share on 7,49,26,428 Equity Shares to be allotted to the erstwhile Shareholders of Reliance Petrochemicals Limited (RPL) Total 12 0.86 47.51 48.37 The first ever Indian issue of Global Depositar y Receipts (GDRs) was made by your Company.This Issue evoked keen interest in the International Capital mar kets and the Company issued GDRs aggregating US $ 150.42 million (Rs. 462.48 crores). This equity capital was raised by issuing 9,200,000 GDRs in May, 1992 at a price of US $ 16.35. Each GDR represents one Global Depositary Share and each Global Depositary Share represents two underlying Equity Shares of the Company of Rs. 10 each. This resulted in an increase in equity of Rs. 18.40 crores and an addition to reserves of Rs. 444.08 crores. These GDRs are listed at Luxembourg Stock Exchange and are also traded on the OTC market in London as well as on a private placement basis in the United States. MERGER The largest ever merger in Indian Cor porate History - the merger of Reliance Petrochemicals Limited with your Company - was completed in a record time of five months. The merger is effective 1st March, 1992. The merger was aimed to enhance shareholders’ value by realising significant synergies of both the companies. Liberalisation of Government policy and the accompanying economic reforms created this opportunity for the Company’s shareholders. YEAR IN RETROSPECT The Company continued to perform well in the year under review. The turnover increased to Rs. 2298.02 crores recording an increase of Rs. 199.68 crores (10 %) over the preceding year. The Profit before tax increased to Rs.163.32 crores as compared to Rs.125.55 crores during the preceding year, recording a 29 % increase. The Company contributed nearly Rs. 984 crores to the national exchequer in the form of various taxes. FIBRE DIVISION Polyester Staple Fibre (PSF) Inspite of recession and poor off-take in the industry in general, the Company continued to operate at full capacity and sell its products. The Company was able to manufacture superior quality products, to meet the diverse requirements of quality conscious customers. The Company continued its export thrust by not only exporting its own production but also production based on conversion of company’s produced raw materials by other co-producers and thus maintained its leadership in market share. Polyester Filament Yarn (PFY) The Company continued to maintain its leadership position in this important product group in the domestic markets. The Company also undertook a strategy of selective exports keeping in mind the long term potential and competitive position of the company in this product. Inspite of a reduction in excise duty of Rs.6:90 per Kg., PFY continued to remain one of the highest exciseable product in the countr y. The industry has made several representations for the rationalisation of excise duty structure. FIBRE INTERMEDIATES DIVISION Purified Terepthalic Acid (PTA) PTA sales of the company registered 21% increase over the previous year. PTA continues to gain increased acceptance as the preferred raw material for the manufacture of Polyester. The Company completed expansion of its production capacity to 2,00,000 TPA from 1,00,000 TPA. Ethylene Oxide /Mono Ethylene Glycol(EO/MEG) The company commissioned its 1,00,000 TPA Ethylene Oxide and Mono Ethylene Glycol (MEG) plant at Hazira.The MEG plant has the largest capacity of five domestic producers. More than 50% of the production of MEG will be captively consumed at the Patalganga complex. The Principal raw material for the above products is ethylene which is currently being imported. Ethylene is highly flamable and potentially explosive,and hence presents risks in transportation and handling which cannot be eliminated entirely. The company has implemented a transportation system using specially designed lighterage vessels to offload ethylene from ocean- going ships offshore and transport it up river to the company’s plant. During the monsoon season or rough weather, transfer to the lighterage vessels is carried out at Bombay harbour. This is the first time in the world that the lighterage operation of ethylene has been undertaken highlighting a significant technological achievement for the company. The company is the single largest buyer of deep sea ethylene in,the world. PLASTICS DIVISION India has one of the world’s lowest per capita consumption of plastics.ln the past,demand for plastics was constrained by shor tages of basic polymers such as Poly Vinyl Chloride (PVC) and Polyethylene, which were imported in large quantities. The company believes that in the coming years there will be a growing demand in India for such plastics as a relatively cheap replacement for metal, timber, rubber, jute and other materials which have traditionally been used in the domestic market.This growing demand is expected from the general r ise in population,an expansion of the middle class, and an acceleration of economic growth due to recent refor ms. Plastics will be of core importance in the 1990’s as they represent a safer and more energy efficient alternative. The company seeks to establish itself as a market leader through a strong distribution network, support of downstream markets with the help of its Product Application Research Centre, worldscale production capacity and state-of-the-art technology.Towards this end, the company has reached a major milestone by completing the construction of its PVC and Polyethylene plants. This is a new business division of the company as a result of the merger of RPL with the Company. Polyvinyl Chloride(PVC) The company has completed the construction of its Polyvinyl Chloride (PVC) plant at the Hazira site. The plant has been built using the latest technology from B.F. Goodrich (USA) and will produce 1,00,000 TPA of PVC per year. PVC is used in pipes & conduits, fittings, profiles, wires & cables, leather cloth, footwear, films & foils. Polyethylene(PE) The company has completed the construction of its Polyethylene plant at Hazira site. The plant has been built using latest technology from DuPont (Canada) and will produce 1,60,000 TPA of Linear Low Density Polyethylene (LLDPE) and High Density Polyethylene (HDPE). LLDPE is used in films, extrusion coating, bags and packaging. HDPE is used in woven sacks, pipes, H.M.films,injection and blow moulding. TEXTILE DIVISION The Company continues to be India’s largest Synthetic Textile producer. The Company sells a wide range of Synthetic Textiles under the brand name “VIMAL” which is India’s largest, selling premium brand. Reliance DETERGENT INTERMEDIATES DIVISIO NLinear Alkyl Benzene (LAB) As a step towards backward integration the Company has commissioned a new facility to produce Normal paraffin using Kerosene. Thus, your company does not now depend any more on imported Normal paraffin as raw material. Indigenous feed stock has given its input price stability in production of LAB. The Company is a market leader in the domestic market. The Company has recently completed a de-bottlenecking programme to increase its LAB capacity from 60,000 to 80,000 TPA. EXPORTS The Company continued its export efforts throughout the year with satisfactory results.Exports jumped by 44% from Rs.56 Crores in 1990- 91 to Rs. 81 Crores during the financial year under review. Exports of LAB increased by 90% from 13,078 MTS in 1990-91, to 24,907 MTS in 1991-92. The Company also registered significant growth in expor ts of synthetic fibres. These are likely to contribute even more in the years to come. The Company emerges as the largest supplier of PSF and LAB under the Advance Intermediate Licensing Scheme.The Company has become the largest supplier of PSF and LAB which has resulted in net savings in foreign exchange to the country and facilitated domestic producers in improving their value addition. SHIPPING DIVISION The Company acquired three ships specially built to carry Ethylene and other liquefied gases at temperatures upto minus 104C. Operations of these ships demand high technical skills in view of the hazardous nature of Ethylene gas. The Company has successfully carried out all its lighterage operations safely. Approval was also received from Government of India to acquire a few more ships such as Oil Tankers, Product Carriers and Ethylene Carriers. The Company is in the process of identifying suitable opportunities for expansion in this field. PROJECTS: I. NGL/Naphtha Cracker The Company is implementing a worldscale NGL/Naphtha Cracker Unit at Hazira. This will be India’s fifth and largest Cracker project. The cracker when established will produce 4,00,000 TPA of Ethylene, 1,95,000 TPA of Propylene and 1,20,000 TPA of Mixed C4 Stream. The cracker will use mainly natural gas liquid as feed stock which is expected to be available through the pipeline f rom a nearby government owned gas complex and will help saving of foreign exchange. The ethylene to be produced by the cracker will be supplied to the company’s plastics division for the production of MEG, PVC & HDPE/LLDPE. Technology & assistance is being provided by Stone & Webster,one of the world leaders in cracker process licensing & contracting. The Company has a ten year technical collaboration agreement with Stone & Webster which provides for the transfer of technology, use of patent rights, procurement & supply of imported machinery,assistance during engineering, construction & commissioning stages,safety audit, certification of engineering & construction to international standards, sharing of technological improvements and a perfor mance guarantee. The company issued Debentures ser ies H & J aggregating Rs. 678 crores to part finance the cost of the cracker project. The company is extending the redemption per iod of non-convertible debentures 13 Reliance of series F for the pur pose of meeting additional outlay, interalia for financing the additional cost of increasing the capacity of the proposed cracker complex from 3,20,000 TPA to 4,00,000 TPA of ethylene for Minimum Economic Scale (MES).Site preparation, basic engineering & pre ordering for the cracker has been completed.Detailed engineering, procurement & construction are expected to start soon. II. Refinery The Company has received approval from the Government of India for India’s first private sector refinery project. The annual capacity of the refinery is 9 (nine) million tonnes per annum and will be the largest ever grass root refinery to be built in India. The Refinery project is proposed to be implemented in a new company. The Company has been approached by several international companies for equity participation in this project. Your company is currently evaluating the overall techno-commercial feasibility of this project to frame its implementation strategy. III. Joint Ventures with Japanese Collaborator The Company has taken the lead in promoting the Government of India’s new economic policy encouraging foreign investment. Towards this, the company has been able to obtain financial participation of C. Itoh & Co. Ltd., Japan, in two companies - Reliance Polypropylene Limited and Reliance Polyethylene Limited, - Copromoted by your Company. Reliance Polyethylene Limited is setting up a wor ld-scale Polyethylene Project with a capacity of 1,60,000 TPA at a total project cost of Rs. 500 Crores at Hazira in the State of Gujarat. Reliance Polypropylene Limited is setting up a world-scale Polypropylene Project with a capacity of 2,50,000 TPA at a total project cost of Rs. 525 Crores, also at Hazira in the State of Gujarat.Both the projects are co-promoted by the Company with Japanese Collaborator, C. Itoh & Co. Ltd., Japan. This is the largest Japanese investment in India. C. Itoh & Co. Ltd., Japan, is the world’s No. 1 trading cor poration (as of March, 1992) having a turnover of US $ 155 Billion (equivalent to Rs. 480,000 Crores). Both these companies will utilise the company’s products, namely, Ethylene and Propylene as principal raw material. The Equity Shareholders of your Company will get a ‘preferential offer’ in the proposed public issue of Equity Shares and Optionally Fully Convertible Debentures in the aforesaid Companies. RIGHTS ISSUE OF DEBENTURES The biggest ever Rights Debenture Issue of Series H, J and K aggregating Rs. 943.50 crores, made by the Company in December, 1991, pursuant to the Letter of Offer dated 30.11.1991 received an overwhelming response. Your Directors wish to place on record their deep sense of appreciation for the overwhelming support extended by the shareholders of the Company. AWARD ON SAFETY The Patalganga Plant of the Company received the Prestigious Safety Award from the British Safety Council for the year 1991, in recognition of its safety standards in the man-made fibre industry. ENERGY, TECHNOLOGY & FOREIGN EXCHANGE Information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956, read with Companies (Disclosure of Particulars 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 forming part of this report. 14 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 Devti Fabrics Limited, Trishna Investments and Leasings Limited, Reliance Europe Limited, Redwood Investments Private Limited and Reliance Petroproducts Limited and the respective Auditors’ Repor t thereon for the year ended 31st March, 1992, are annexed. FIXED DEPOSITS Deposits of Rs.1.22 crores due for repayment on or before 31st March, 1992, were not claimed by 2040 depositors as on that date. Of these, deposits amounting to Rs. 0.64 crores of 1075 depositors have since been repaid/renewed. DEBENTURES The funds raised through the issues of Debentures have been utilized for the approved objectives. PERSONNEL As required by the provisions of Section 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, as amended, 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. INDUSTRIAL RELATIONS The company continues its belief in preventive and predictive industrial relation and has developed each of its line supervisors to be an Industrial Relations Manager to his team.During the period the industrial relations have been extremely cordial and management thanks all the employees for their continued contribution towards the growth of the organization. DIRECTORS Since the last Report, Shri M.D. Ambani has been elected as the Vice Chairman of your Board and Shri A.D. Ambani has been redesignated as Joint Managing Director. Shri Y.P. Trivedi was appointed as an Additional Director of the Company on 16th April, 1992. Shri Trivedi will hold the office of Director upto the date of the ensuing Annual General Meeting and is eligible for appointment. The Company has received rom some of its members a notice under Section 257 of the Companies Act, 1956 proposing his appointment as a Director subject to retirement by rotation. Shri N.H. Ambani, Shri M.L. Bhakta and Shri N.R. Meswani retire by rotation and being eligible offer themselves for reappointment. AUDITORS & AUDITORS’ REPORT Messrs. Rajendra & Co. and Messrs. Chaturvedi & Shah, Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting. As stated at Item No. 6 of the Notice convening the Annual General Meeting, it is proposed to appoint an additional Auditor as Joint Auditor to conduct statutory audit. The Company has received Certificates from these Auditors to the effect that their appointment, if made, would be within the prescribed limits under Section 224(1) of the Companies Act, 1956. The notes to the Accounts referred to in the Auditors’ Report are self explanatory and, therefore, do not call for any further comment. ACKNOWLEDGMENT Your Directors would like to express their grateful appreciation for 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 for the devoted ser vices of the Executives, Staff and Workers of the Company for its success. For and on behalf of the Board of Directors c) Reliance iii) Heat recovery steam generator on DG set’s flue gas. iv) Retrofitting of boiler for utilising excess gas from Paraxylene plant. v) Revamping of dehydration column in PTA using Ion-exchange resins resulting in reduction of effluent load. vi) To undertake major modification to change the concept of cooling system conversion from existing chilled water Coil- plain air-washer system to chilled water air-washer system. Impact of measures at (a) and (b) above for reduction of energy consumption and on the cost of production of goods. DHIRUBHAI H. AMBANI Chairman & Managing Director i) Bombay Dated: 29th September, 1992 * Effective October 1, 1992, C. Itoh & Co. Ltd. will change its name to ITOCHU Corporation which is a direct transliteration of its Japanese name. ANNEXURE TO DIRECTORS’ REPORT PARTICULARS REQUIRED UNDER THE COMPANIES (DISCLOSURES OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988. A. CONSERVATION OF ENERGY: a) Energy conservation measures taken: Some of the important measures taken in the year 1991-92 are given below: i) Utilisation of excess low pressure steam for Captive Consumption. ii) Utilisation of low pressure steam to replace power driven conventional chillers by vapour absorption chillers. iii) Stoppage of vent condenser in dow system to conserve electrical as well as heat energy. iv) Steam recovery from boilers blow downs. v) Integration of steam system of two plants to avoid direct throttling of steam from high pressure to low pressure. vi) Automation of air supply to waste cut-down basket thereby eliminating air wastage. vii) Replacing oil fired thermopacs with high efficiency thermic fluid heaters thereby causing considerable increase in thermal efficiency. viii) Discarding number of old reciprocating compressor machines in Air-conditioning plant for new vapour absorption chillers. ix) Optimisation of insulation thickness of Piping system. b) A dditional investments and proposals, if an y, being i) ii) implemented for reduction in consumption of energy: Automatic control of cooling tower fans through PLC to maintain desired cooling water temperature. Back pressure turbine to drive one cooling water pump at energy centre. Replacement of electrically operated conventional R-22 compressor, Electric motors etc.,by V.A.C UNITS has reduce electrical power consumption by 1500 Kw/Hr. Thermal energy in form of Steam supplied by highly efficient gas fired steam Boilers to vapour absorption Chillers for refrigeration has replace electrical energy, thus reducing consumption of conventional R-22 Ercon gas & helping clean environment. ii) Reduction of consumption of energy by installing highly efficiency fully automatic modulating control steam boilers and thermic Fluid heaters has resulted in reduction of fuel cost and also reduction in consumption of Furnace Oil/coal. FORM ‘A’ Form for disclosure of particulars with respect to Conservation oEnergy: PART-A Power and Fuel consumption April 91 to April 90 to March 1992 March 1991 1. Electricity a) Purchased Units (lacs) Total Amount (Rs. in lacs) Rate/Unit (Rs) b) Own Generation 3102.67 5864.05 1.89 3183.94 5052.55 1.59 i) ii) Through Diesel Generator Units (lacs) Unit per Ltr. of Diesel Cost Unit (Rs) Through Steam Turbine/Generator Units (lacs) Unit per Ltr. of fuel oil/gas Cost/Unit (Rs) 512.66 3.54 1.55 483.26 3.52 1.43 N.A. N.A. 2. Coal Quantity (tonnes) Total cost (Rs. in lacs) Average Rate per MT (Rs) 3. Furnace Oil Quantity (K.Ltr.s) Total Amount (Rs. in lacs) Average Rate per Ltr. (Rs.) 4. Others GAS Quantity (1000M3) Total Cost (Rs.in lacs) Rate/unit per 1000 M3(Rs) 5. LDO Quantity (K.Ltrs) Total Cost (Rs.in lacs) Rate/Unit per K.Ltr.(Rs) 7232.00 101.34 1394.00 9756.00 119.37 1223.55 183649.00 166661.00 5850.60 3.51 8098.92 4.41 17319.00 337.60 1949.00 16671.00 319.00 1915.00 262.00 12.36 4.72 214.00 7.92 3.69 15 Reliance PART-B Consumption per unit of production FABRICS PER 1000 mtrs Current Year Previous Year PFY PER M.T. PSF PER M.T. PTA PER M.T. LAB PER M.T Current Year Previous Year Current Year Previous Year Current Year Previous Year Current Year Previous Year 935 36 134 278 5.2 980 48 146 277 4.3 1440 211 --- --- 4 9 1370 105 --- --- 139 639 212 --- --- 4 1 610 107 --- --- 133 402 161 --- --- 325 381 417 --- --- --- 500 228 --- --- 207 435 347 --- --- --- Electricity (KWH) Furnace Oil(Ltrs) Coal (Kgs) Gas (M3) LSHS (Kgs) --- Note: The above figures indicate only the direct consumption and exclude consumption of power and fuel in the supporting utilities. 3. Future plan of action B. TECHNOLOGY ABSORPTION: FORM ‘ B’ Form for disclosure of particulars with respect to: Research and Development (R&D) 1. Specific areas in which research and development (R&D) is being carried out by the Company. i) ii) An anti-static oil for yarn processing has been developed combining paraffin oil and an emulsifier with other additives. The oil thus produced also has anti-splash properties. Various non-apparel products have beer. developed using warp knitting technology. iii) Development of new fancy effects economically for apparel fabrics has been continued. iv) Research work is being carried out in Polyester Staple Fibre, Polyester Filament Yarn and Petrochemical Process. The stress has been on process modification,product development,for better yield and quality, optimisation of process parameters, energy conser vation, cost substitution & technology upgradation. 2. Benefits derived as a result of the above R&D a) i) Product Development improvement The anti-static oil reduces static generation considerably and helps in smooth running of yarn during subsequent processing. 2.5D trilobal fibre with excellent sparkle and lustre. ii) iii) Optimisation of process settings for all the deniers at maximum polymerisation capacity yarn strength and improved weaving efficiency. iv) Cutter reels with 40 mm and 54 mm cut length developed to get improvement in yarn strength. v) New application method of finish with recirculation mode developed for conservation of finish. vi) Uster improved for 80/34/SD/POY with new quench air profiles. vii) Development of quench air conditions to reduce yarn variations and bulk variations in textured yarn to minimum. viii) Process changes optimised to reduce bottoms generation in ‘ ix) POY. Installation of Combimax Boilers has reduced the cost of steam generation by saving fuels and installation of gas fired Thermic Fluid heaters has resulted in saving furnace oil. b) i) Import Substitution Indigenisation of antistatic component in spin finish & lubricating oil component in fibre finish. ii) Development of indigenous crimper discs, cutter reels, crimper spares, pack parts etc. iii) Development of Indigenous Sources of 1. S.S. powder for polymer filtration. 2. Silicone spray cans for pack wipe. 3. Silicone sponge rubber gasket for quench units. 16 Projects are proposed for the following- a) Micromotion flow meter for G-Monomer injection to improve uniformity and accuracy of injection leading to consistency in quality of yarns. b) New trilobal spinnerettes with 1710 holes to get better spinning performance and improved sparkle. c) Increased production of 1.0 denier by using spinnerettes with more number of holes. d) Total indigenisation of fibre finish components. e) Reduction in consumption of finish oils. f) Draw roll shafts with modified design to sustain the higher drawing stresses at draw machines. g) Use of different types of cutter blades to optimise the cost of cutting and improve the quality of cut fibre. h) i) j) k) l) Provision of constant bale weight system for existing bales. Introduction of mechanical seal for sealing agitators of finisher vessel for eliminating air leakage into the system. Replacement of existing screw pumps with gear pumps for better quality product. Introduction of continuous polymer filter to improve polymer quality, reduce spinning breaks. Modification of winders and introduction of auto doffing system for producing 18 kg POY packages. m) Upgradation of control systems in extruder, overload protection for drives on spinning machines for improved polymer quality and yields. n) Modification of winders on spin draw yarns to improve package formation and reduce unwinding breaks. o) Development of new universal quenching units for 86D, 126D and 235D yarns. p) Spin finish for POY and SDY Biocide in spin finish Indigenous development of i) ii) iii) Ceramic guides iv) Thread guides v) Spin draw steam jets 4. Expenditure on R&D a) Capital b) Recurring Total c) Total R & D expenditure as a d) percentage of total turnover (Rs. in lacs) 53.52 1058.13 1111.65 0.48 %* Technology absorption, adaptation and innovation Effor ts in brief, made towards technology absorption, adaptation andinnovation and benefits derived as a result thereof 1. Modification of quench units to improve air sealing thereby improving quality of spin draw yarns. 2. 3. Increasing spin pack filtration area by 50%. This will double pack life, also by adding finer filter media polymer quality will improve and spinning breaks will be reduced. Incorporation of solenoid valves in spin finish system to avoid finish overflow. Reliance 4. Various byproducts in Petrochemicals have been developed for different end uses. 5. Development of environment friendly process for LAB production. 6. 7. Trial runs for cost effective and better yielding chemicals & catalysts. Vapour Absorption Chillers have been installed replacing old, power consuming reciprocating compressors. 8. Highly efficient automatic, modulating, controlled Combimax Steam boilers and Thermic Fluid Heaters have been installed. Information regarding imported technology Product Technology from Year of import Status of implementation Mono Ethylene Glycol Poly Vinyl Chloride High Density Polyethylene Lummus Crest B.V (Holland) B.F Goodrich (USA) Du Pont (Canada) 1989 1988 1989 Under Implementation Under Implementation Under Implementation C. FOREIGN EXCHANGE EARNINGS AND OUTGO: i) Activities relating to exports, initiatives taken to increase exports, developments of new export market for products and services and export plan. ii) Total foreign exchange used and earned: Total foreign exchange earned. a) Total savings in Foreign Exchange through products manufactured by the Company and deemed expor ts. b) c) Total foreign exchange used Detailed information in main repor t (Rs. in crores) 80.56 922.00 1002.56 255.76 17 Reliance AUDITORS’ REPORT To the Members of Reliance Industries Limited We have audited the attached Balance Sheet of RELIANCE INDUSTRIES LIMITED as at 31st March, 1992 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: b) a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. In our opinion, proper books of account, as required by law have been kept by the Company, so far as appears from our examination of such books. The Balance Sheet and Profit and Loss Account referred to in this report are in agreement with the books of account. (i) For the reasons mentioned in Note No 1(G) of Schedule ‘N’ to the Accounts, the items of the income and expenditure mentioned therein continue to be accounted for on cash basis. c) d) (ii) The Company during the year has changed its method of accounting in respect of foreign currency fluctuation as explained in Note No.9 of Schedule ‘N’ to the Accounts. Consequently depreciation for the year is higher by Rs.28.40 crores and profit for the year is lower by Rs.28.40 crores, Reserve and Surplus are lower by Rs.90.51 crores, Net Block of Fixed Assets is higher by Rs.26.03 crores and Secured loans are higher by Rs.116.54 crores. (iii) Subject to the above, in our opinion and to the best of our information and according to 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: in so far as it relates to the Balance Sheet of the state of affairs of the Company as at 31st March, 1992, and 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. (b) (a) For RAJENDRA & CO. Chartered Accountants For CHATURVEDI & SHAH Chartered Accountants R. J. SHAH Proprietor D. CHATURVEDI Partner Bombay, Dated: 29th September, 1992 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 on the basis of information available except in respect of certain items of furniture and fixtures. According to the information and explanations given to us most 22 of the Fixed Assets were physically verified by the management during the year and no material discrepancies were noticed on such verification as compared to the available 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. 4. 5. As explained to us, the stock of stores, spare par ts, raw materials and finished goods have been physically ve rified b y 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. As explained to us there were no material discrepancies noticed on physical verification of the stocks of raw materials, stores and spares 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. 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.8 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. 8. 9. 10. 11. The Company has not taken any loans, secured or unsecured from companies, firms or other par ties 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. 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 ter m 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 stipulated except loan to a company terms of which are to be finalised as stated in Note No.15 of Schedule ‘N’ to the accounts. 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 purchase of stores, raw materials including components, plant and machinery, equipment and other assets and for the sale of goods. 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. According to the information and explanations given 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 inter nal 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 certain manufacturing activities of the Company. We have broadly reviewed the accounts and records of the Company in this connection and are of the opinion that prima facie, the 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 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 1992 for a period of more than six months from the date they became payable. Reliance Directors have been charged to Revenue Account other than those payable under contractual obligation 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. 22. In respect of trading activities, we are informed that the Company does not have damaged goods lying with it at the end of the year. Therefore, no provision for any loss is required to be made in the accounts. In respect of service activities of the Company, 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 For CHATURVEDI & SHAH Chartered Accountants R. J. SHAH Proprietor D. CHATURVEDI Partner 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 Bombay, Dated: 29th September, 1992 23 Reliance BALANCE SHEET AS AT 31st MARCH, 1992 Schedule As at 31st March, 1992 Rs. Rs. (Rs. in crores) As at 31st March, 1991 Rs. Rs. SOURCES OF FUNDS: Shareholders’ Funds Share Capital Share Capital Suspense Reserves and Surplus Loan Funds Secured Loans Unsecured Loans TOTAL APPLICATION OF FUNDS: Fixed Assets Gross Block Less: Depreciation Net Block Capital Work-in-Progress Investments Current Assets, Loans and Advances Current Assets Inventories Sundry Debtors Cash and Bank Balances Other Current Assets Loans and Advances Less: Current Liabilities and Provisions Current Liabilities Provisions TOTAL Notes on Accounts ‘A’ ‘B’ ‘C’ ‘D’ ‘E’ ‘F’ ‘G’ ‘H’ ‘I’ `N’ 157.94 74.94 1710.74 1878.19 277.99 2266.30 976.22 1290.08 2048.03 404.90 415.14 75.36 0.11 895.51 584.64 1480.15 730.90 49.51 780.41 157.92 --- 995.53 1943.62 1153.45 2156.18 4099.80 3338.11 61.95 1101.52 2254.97 1482.57 69.53 939.13 162.39 1960.50 703.85 1256.65 225.92 411.51 327.31 40.44 --- 779.26 380.96 1160.22 410.04 47.31 457.35 699.74 4099.80 702.87 2254.97 As per our Report of even date For RAJENDRA & CO. Chartered Accountants For CHATURVEDI & SHAH Chartered Accountants For and on behalf of the Board D.H. Ambani Chairman & Managing Director R.J. Shah Proprietor D. Chaturvedi Partner Bombay Dated: 29th September, 1992. 24 M.D. Ambani R.H. Ambani A.D. Ambani M.L. Bhakta T. Ramesh U. Pai S.S. Betrabet N.H. Ambani N.R. Meswani Vice Chairman Joint Managing Directors Directors Executive Directors V.M. Ambani Secretary PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 1992 Reliance (Rs. in crores) Schedule 1991-92 1990-91 Rs. Rs. Rs. Rs. ‘J’ ‘K’ ‘L’ ‘M’ INCOME Sales Other Income Variation in Stock EXPENDITURE Purchases Manufacturing and Other Expenses Interest Depreciation Less: Amounts Charged to Pre-operative expenses of Projects under Commissioning Profit for the year Less: Tax liability of prior years Less: Taxation Reserve written back Add: Balance brought forward from last year Add: Transfer from General Reserve Less: Prior years adjustments Add: Investment Allowance (Utilised) Reserve written back Amount Available For Appropriations: APPROPRIATIONS Investment Allowance Reserve Debenture Redemption Reserve General Reserve Proposed Dividend (subject to tax): Preference Shares Equity Shares Balance carried to Balance Sheet Notes on Accounts ‘N’ 2298.02 42.15 (---)51.75 12.82 1749.62 218.65 192.64 2173.73 48.63 --- --- 27.73 49.00 75.06 50.00 21.00 30.00 0.86 47.51 2,098.34 6.55 32.69 2288.42 2,137.58 2125.10 163.32 --- 163.32 1.67 4.40 169.39 57.69 1,592.87 187.05 174.42 2,012.03 --- 12.58 10.00 30.26 --- --- 50.00 16.00 13.00 0.86 45.64 2012.03 125.55 2.58 122.97 30.26 --- 153.23 149.37 20.02 125.50 27.73 As per our Report of even date For RAJENDRA & CO. Chartered Accountants For CHATURVEDI & SHAH Chartered Accountants For and on behalf of the Board D.H. Ambani Chairman & Managing Director R.J. Shah Proprietor D. Chaturvedi Partner Bombay Dated: 29th September, 1992. M.D. Ambani R.H. Ambani A.D. Ambani M.L. Bhakta T. Ramesh U. Pai S.S. Betrabet N.H. Ambani N.R. Meswani Vice Chairman Joint Managing Directors Directors Executive Directors V.M. Ambani Secretary 25 Reliance SUHEDULES FORMING PART OF THE BALANCE SHEET SCHEDULE `A’ SHARE CAPITAL Authorised: 20,00,00,000 Equity Shares of Rs. 10 each 30,000 5,50,000 11% Cumulative Redeemable Preference Shares of Rs. 100 each 15% Cumulative Redeemable Preference Shares of Rs.100 each 4,42,00,000 Unclassified Shares of Rs. 10 each Issued: Equity 15,21,46,493 Equity Shares of Rs. 10 each Subscribed: Equity 15,21,40,973 Equity Shares of Rs.10 each fully (15,20,97,285) paid up Shares forfeited Add: (Amount originally paid up on 5520 Equity Shares (Rs.27600) previous year on 49208 Equity Shares) Issued & Subscribed: Preference 30,000 5,50,000 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) 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) As at 31st March, 1993 Rs. Rs. (Rs. in crores) As at 31st March, 1992 Rs. Rs. 200.00 0.30 5.50 44.20 250.00 152.15 200.00 0 30 5.50 44.20 250.00 152. 15 152.14 --- 152.10 0.02 152.14 152.12 0.30 0.30 5.50 157.94 5.50 157.92 Of the above Equity Shares: 1. (a) (b) (c) (d) (e) 1,56,78,440 Shares were allotted as fully paid-up Bonus Shares by capitalisation of Share Premium and Reserves. 60,62,000 Shares were allotted as fully paid-up pursuant to Schemes of Amalgamationwithout payments being received in cash. 9,44,78,433 Shares were allotted as fully paid-up Shares on conversion/surrender of Debentures. 13,24,000 Shares were issued on conversion of Term Loans. 4,058 Shares (including 1,527 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 which merged with the Company 2. During the year, forfeiture of 13688 Equity Shares was annulled and 30000 Equity Shares were reissued at a premium of Rs.50 per share, out of Sharesforfeited last year. 26 SCHEDULE ‘B’ RESERVES & SURPLUS Capital Reserve As per last Balance Sheet Add: Balance in account of Reliance Petrochemicals Limited on amalgamation Credited during the year on re-issue of forfeited shares Amalgamation Reserve As per last Balance Sheet Add: Surplus resulting from amalgamation of Reliance Petrochemicals Limited (Refer note 3 (c) of schedule ‘N’) Share Premium Account As per last Balance Sheet Add: Received during the year Debenture Redemption Reserve As per last Balance Sheet Add: Transferred from Profit and Loss Account Investment Allowance Reserve As per last Balance Sheet Add: Transferred from Profit and Loss Account Less: Utilised for purchase of machinery during the year transferred to Investment Allowance (Utilised) Reserve 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 Less: Transferred to Profit and loss Account General Reserve As per last Balance Sheet Less: Transferred to Profit and Loss Account Add: Add: Balance in account of Reliance Petrochemicals Limited on amalgamation Transferred from Profit and Loss Account Profit and Loss Account Reliance (Rs. in crores) As at 31st March, 1993 Rs. Rs. As at 31st March, 1992 Rs. Rs. --- 0.28 0.01 674.34 673.17 0.19 34.25 21.00 50.00 50.00 100.00 50.00 150.90 50.00 200.90 4.40 10.00 --- 49.48 49.00 0.48 0.50 30.00 --- --- --- --- --- --- 0.29 674.34 673.17 --- 673.36 673.17 55.25 34.25 18.25 16.00 10.00 50.00 60.00 10.00 50.00 50.00 140.90 10.00 150.90 --- 196.50 150.90 20.00 10.00 36.48 --- 36.48 --- 13.00 10.00 30.98 20.02 1710.74 10.00 49.48 27.73 995.53 27 Reliance SCHEDULE ‘C’ SECURED LOANS A) DEBENTURES: i) ii) 13.5% Convertible Secured Debentures of Rs.150 each fully paid up (Series ‘E’) Less: Converted * Includes debentures of face value of (Rs.25000) held by Directors 15% Non-convertible Secured Debentures of Rs. 100 each fully paid up (Series ‘F’) Less: Bought back (Net of re-issue) * Includes debentures of face value of (Rs.35000) held by Directors iii) 12.5% Fully Convertible Secured Redeemable Debentures (Part ‘C’) of Rs. 150 each fully paid up 14% Non Convertible Secured Redeemable Debentures of Rs.100 each fully paid up 12.5% Partly Convertible Secured Redeemable Debentures of Rs.150 each, (Series ‘H’) * Includes debentures of face value of Rs.0.04 crore held by Directors 14% Non-Convertible Secured Redeemable Debentures of Rs.150 each, (Series ‘J’) with Detachable Warrant * Includes debentures of face value of (Rs.20650) held by Directors iv) v) vi) vii) 17.5% Non Convertible Secured Redeemable Debentures of Rs.100 each, (Series ‘K’) B) TERM LOANS 1. 2. From Banks Foreign currency Loans From Financial Institutions a) Foreign Currency Loans b) Rupee Loans 3. From Others: Housing Development Finance Corporation Ltd. C) WORKING CAPITAL LOANS From Banks D) WORKING CAPITAL TERM LOANS From Banks E) DEFERRED PAYMENT LIABILITIES F) BRIDGE LOANS FROM FINANCIAL INSTITUTIONS G) HIRE PURCHASE FINANCE H) INTEREST ACCRUED & DUE 28 As at 31st March, 1993 Rs. Rs. (Rs. in crores) As at 31st March, 1992 Rs. Rs. 80.00 26.67 53.33 * 270.00 15.49 254.51 * 1.13 162.50 142.30 * 33.26 * 66.62 49.76 549.32 38.15 587.47 3.19 80.00 26.67 53.33 270.00 12.42 257.58 --- 155.00 --- --- --- 713.65 465.91 45.19 116.23 27.48 143.71 3.10 640.42 185.79 --- 39.55 293.05 0.33 5.40 192.00 261.30 19.92 --- --- --- --- 1878.19 939.13 NOTES: 1. (a) Debentures referred in A(ii), Term Loans referred to in B save and except B(1) and B(2)(a) to the extent of Rs.27.49 crores and Rs. 232.64 crores respectively and B(3) are secured and Term Loans referred in B (2)(a) to the extent of Rs.65.58 crores are to be secured by mortgage of deposits of title deeds on the properties situate at Naroda, District Ahmedabad in the state of Gujarat and at Patalganga, District Raigad in the state of Maharashtra. The Term Loan referred in B (2) (a) to the extent of Rs.232.64 crores were obtained by the erstwhile Reliance Petrochemicals Limited (RPL) and are secured by first charge by way of hypothecation of movable assets and first mortgage/charge on all the immovable assets of the erstwhile RPL situateat Hazira, District Surat, in the state of Gujarat. Reliance (b) Debentures referred in A (iv) are secured / to be secured by legal mortgage in English form on the properties situate at Naroda, District Ahmedabad in the state of Gujarat and by deposit of title deeds on the properties situate at Patalganga, District Raigad in the State of Maharashtra and by hypothecation on the movable properties situate at Patalganga, District Raigad in the state of Maharashtra. Of this Debentures aggregating Rs.80.00 crores will be redeemed at a premium of 5% on the face value of the said Debentures on the expiry of 7th year from the date of allotment. The redemption will commence from November 1994. The Debentures aggregating Rs.82.50 Crores are to be redeemed at a premium of 5% on the face value of the Debentures between 6th year and 8th year from the date of allotment in equal instalments. The redemption will commence from March 1997. (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. These Debentures along with Cumulative interest payable on the Debentures referred to in A(ii) shall rank subsequent to the charges created / to be created by the Company in favour of: (i) (ii) Other Financial Institutions/Banks for their outstanding loans/guarantees. Trustees for the holders of Debentures referred in A (ii),(iv),(v),(vi) and (vii) 2. (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. 3. (a) The Debentures referred in A(ii) above are redeemable at a premium of 5% on the face value of each Debenture. Of the aforesaid Debentures, the Debentures issued under non-cumulative interest payment scheme are redeemable on 30th September, 1992 and the Debentures issued under cumulative interest payment scheme are redeemable in three yearly instalments commencing from 30th September, 1992 by draw of lots. (b) The Company is required to buy-back at par the said Debentures provided: (i) (ii) the face value of the total holdings of the Debentureholder in each case does not exceeded Rs.40,000 and the debentureholder has held the debentures for a period of not less than one year on the date of his offer. (c) The Company can re-issue at par such bought back Debentures (d) The Company received request for buy-back of Debentures after the end of financial year of an aggregate nominal value of Rs.1.15 crores till date (Since paid Rs.1.15 crores). (e) Pursuant to the resolutions passed by the shareholders and debentureholders (series F) at their respective meetings both held on 7th April, 1992, the redemption period of debenture series ‘F’ has been extended to 31st August, 1999. Debentureholder under cumulative interest payment scheme not opting for roll over of debentures shall be paid principal amount, premium and accumalated interest on 30.9.1992. Those debentureholders who exercise roll over option are entitled to be issued 2 detachable warrants for every 5 debentures held with a right to acquire shares of the Company at Rs.150/- per share with effect from 1st April 1993. Term Loan referred in B(1) to the extent of Rs.6.55 crores are secured exclusively by hypothecation of specific items of plant and machinery situate at Naroda and Patalganga. (i) (ii) Term loan referred in B(i) to the extent of Rs.20.94 Crores is secured by guarantee issued by one of the Bankers of the Company against hypothecation of all movable assets both present and future situate at Naroda and Patalganga. The Term Loans referred in B (2) (a) to the extent of Rs.79.36 crores and Term Loans referred in B(2) (b) to the extent of Rs. 19.00 crores for acquiring Ships are, inter alia, secured / to be secured by: (a) A first mortgage on the said Ships; (b) A mortgage / charge on all moveable properties of the Company, both present and future, pari passu with other lenders, subject to prior charges to be created in favour of the Company’s Bankers for borrowings for working capital requirements; (c) Hypothecation of its receivables and other current assets ranking after the charge in favour of Commercial Banks for the purpose of working capital. Term Loans referred in B(3) are secured / to be secured by mor tgage, by deposit of title deeds, of specified residential quarters situate at Panvel and Mohapada, District Raigad in the State of Maharashtra. The charges created /to be created on the Debentures and Term Loans referred to in A and Babove 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) to the extent of Rs.6.55 crores, and B(3). (a) Debentures referred in A (iii) issued by R PL, are secured by a legal mor tgage in English form by way of residual charge on the assets of the RPL situate at village Mora, Dist. Surat in State of Gujarat.The said debentures shall rank subservient and subordinate to all present mortgage/charge, created on the assets of the RPL. (b) The Debentures referred to in A (iii) issued by RPL will and compulsorily be converted into appropriate number of Equity Shares of the Company of Rs. 10 each at such premium as may be fixed by the appropriate authority after 26th October 1993, butbefore 27th October 1995, (a) Debentures referred to in A -(v),(vi) and (vii) are to be secured by legal mortagage in English form on the properties of the Company situate at Hazira, Dist. Surat / Naroda, Ahmedabad and by way of equitable mortgage on the immovable properties of Patalganga plant and machinery and hypothecation on movable properties situate at Patalganga, District Raigad in the state of Maharashtra. In terms of issue of the Debentures, an amount of Rs.55/- out of the face value of Rs.150/- of the Debentures referred to in A(v) above will stand converted effective 26th August, 1993 into one equity share of Rs. 10/- of the Company at a premium of Rs.45/- per share. Balance amount of Rs.95/ - per Debentures will be redeemed on expiry of 10 years i.e. on 26th February, 2002 with an option to the Board of Directors to redeem at any time after 26th February, 1999. (b) 4. 5. 6. 7. 8. 9. 29 Reliance (c) The holders of detachable warrant attached to the debenture referred to in A(vi) are entitled to apply for one equity share of face value of Rs. 10/- each for cash at a price not exceeding Rs. 70/- per share for each warrant at the expiry of 24 months from the date of allotment i.e. on 26.2.1994. The Debentures will be redeemed on expiry of 10 years i.e. on 26th February, 2002 with an option to the Board of Directors to redeem at any time after 26th February, 1999. (d) The Debentures referred in A (vii) above will be redeemed on expiry of 10 years i.e. on 26th February, 2002 with an option to the Board of Directors to redeem at any time after 26th February, 1999. 10. Working Capital Loans from Banks referred to in C are secured by 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. 11. Liabilities referred in item E above are secured by first charge by way of hypothecation of specific items of machinery acquired under Deferred Payment Facility. 12. The Bridge Loans referred in item F above obtained RPL are secured by first charge by way of hypothecation of movable assets of RPL and rank paripassu with the charge created by way of hypothecation in respect of Term Loans referred to in B 2(a) to extent of Rs.232.64 crores. 13. Hire Purchase Finance referred in item G above obtained by RPL is secured by first charge by way of hypothecation of specific vehicles acquired 14. by RPL under the said facility. Interest accrued and due in item H represents Rs.0.70 crore on loans from Bank / Financial Institutions and Rs.4.70 crores on Debentures, both of RPL 15. Secured Loans include Rs.130.72 crores repayable within one year excluding monies payable on surrender of Debentures under buy-back scheme as mentioned in 3(b) above. 16. Particulars of Debentures Series H, J and K are as follows: (a) Series H comprises 35962462 Debentures of Rs. 37.50 paid up, 3771 Debentures of Rs. 75 paid up and 493767 Debentures of Rs.150 paid up (b) Series J comprises 8694107 Debentures of Rs. 37.50 paid up, 3691 Debentures of Rs. 75 paid up and 42202 Debentures of Rs. 150 paid up (c) Series K comprises 26420671 Debentures of Rs. 25 paid up, 886 Debentures of Rs. 50 paid up and 56276 Debentures of Rs. 100 paid up SCHEDULE ‘D’ UNSECURED LOANS Fixed Deposits (including Cash Certificates of Rs.0.16 crore) Short Term Loans from: i) ii) Financial Institutions Banks (Includes Commercial Paper Rs. 90.00 crores, maximum amount outstanding at any time during the year Rs.90.00 crores, previous year Rs.nil) Interest free Loans under Sales-tax deferral schemes As at 31st March, 1993 Rs. Rs. (Rs. in crores) As at 31st March, 1992 Rs. Rs. 41.33 62.30 + 38.65 90.53 --- 49.04 129.18 107.48 277.99 * 49.04 51.05 162.39 + * Includes Rs.33.65 crores received in advance to be adjusted against future call amount of ‘H’, ‘J’ and ‘K’ series of debentures. Includes Rs.145.98 crores repayable/adjustable within one year. SCHEDULE ‘E’ FIXED ASSETS Description Goodwill Leasehold Lands Freehold Lands Buildings Plant & Machinery Ships Electric Installation Factory Equipment Furniture & Fixture Vehicles Sub-Total Advance against Capital Expenditure Total As at 1.4.91 Rs. 1.23 4.85 0.11 122.24 1710.29 44.53 37.82 7.16 25.10 5.70 1959.03 1.47 1960.50 Previous Year Capital Work-in-Progress 1772.87 30 Gross Block Depreciation Net Block (Rs. in crores) Acquired On amalga- Mation Rs. --- 2.82 0.44 5.71 18.11 --- --- --- 7.52 1.62 36.22 39.85 76.07 --- Additions Deductions Rs. --- --- 0.01 4.30 162.03 82.45 0.17 0.12 3.26 2.89 255.23 --- 255.23 255.57 Rs. --- --- --- 0.54 0.96 --- --- --- 0.05 0.28 1.83 23.67 25.50 67.94 As at 31.3.92 Rs. 1.23 7.67 0.56 131.71 1889.47 126.98 37.99 7.28 35.83 9.93 2248.65 17.65 2266.30 1960.50 up to 31.3.92 Rs. --- --- --- 16.02 934.32 3.12 10.78 2.53 7.86 1.59 As at 31.3.92 Rs. 1.23 7.67 0.56 115.69 955.15 123.86 27.21 4.75 27.97 8.34 976.22 1272.43 --- 976.22 703.85 17.65 1290.08 1256.65 2048.03 As at 31.3.91 Rs. 1.23 4.85 0.11 109.25 1036.92 44.53 29.00 5.00 19.58 4.71 1255.18 1.47 1256.65 225.92 NOTE: (a) Leasehold Lands include Rs.1.64 crores in respect of which lease-deeds are pending execution. No write-off has been made in respect of lease- premium paid for leasehold lands since the grant of lease is for a long period. (b) Buildings include cost of ownership premises in Co-operative Housing Societies Rs. 1.11 crores (c) Capital Work-in-Progress includes: i) Rs.612.93 crores on account of pre-operative expenses (Previous year Rs.107.33 crores) including Rs.392.73 crores acquired on amalgamation to be capitalised (refer note 16 of Schedule ‘N’). ii) Rs.49.36 crores on account of cost of construction materials at site (Previous year Rs.38.72 crores). iii) Rs. 1022.51 crores acquired on amalgamation. Reliance SCHEDULE ‘F’ INVESTMENTS (At Cost) GOVERNMENT AND OTHER SECURITIES - Unquoted 7 Years National Savings Certificates (face value Rs.5000) (Deposited with Sales Tax Dept.) (Previous year Rs.5000) Indira Vikas Patra TRADE INVESTMENTS - Unquoted As at 31st March, 1991 Rs. Rs. --- 0.20 0.20 60 Equity Shares of New Piece Goods Bazar Co.Ltd. of Rs.100 each, fully paid up (Rs.17,000) (Previous year Rs.17,000) 5 Equity Shares of Bombay Gujarat Art Silk Vepari Mahajan Co-operative Shops & Warehouse Society Ltd. of Rs.200 each, fully paid up (Rs.1,000) (Previous year Rs.1,000) 165 Shares of The Art Silk Co-operative Society 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: 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) 2017000 Equity shares of Reliance Europe Limited of sterling pound 1 each fully paid up 10000 Equity Shares of Redwood Investments Private Ltd of Rs.10 each fully paid up 1300 Equity Shares of Reliance Petroproducts Ltd of Rs.10 each fully paid up (Rs.13000) 7.00 0.01 --- (Rs. in crores) As at 31st March, 1991 Rs. Rs. --- --- --- --- --- --- --- --- --- 0.21 7.00 --- --- Quoted:- (57600000) --- Equity Shares of Reliance Petrochemicals Ltd. of Rs.10 each fully paid up (During the year 100000000 Equity Shares of Rs.10 each fully paid-up were issued on conversion of unsecured loans given to Reliance Petrochemicals Limited) (See note below) C/F 7.22 7.21 --- 7.42 57.60 64.81 31 Reliance OTHER INVESTMENTS Quoted B/F --- Equity Shares of Housing Development and Finance (7530) Corporation Ltd. of Rs.100 each, fully paid up (See note below) 1248 Equity Shares of The Industrial Credit and Investment (5622) Corporation of India Ltd. of Rs.100 each, fully paid up (See note below) 1800000 Equity shares of Reliance Capital & Finance Trust Ltd of Rs.10 each fully paid up --- Equity shares of Hindustan Oil Exploration Company Ltd of Rs.10 each fully paid up (see note below) (49800) Unquoted 1000 Equity Shares of Air Control & Chemicals Engineering Co. Ltd. of Rs.100 each, fully paid up IN DEBENTURES - Quoted 624 Fully Convertible Debentures of The Industrial Credit & Investment Corporation of India Ltd, of Rs.450 each, fully paid up. (see note below) IN UNITS: Unquoted 1800000 Units of Unit Trust of India IN BONDS: Unquoted 515000 9% Tax free Bonds of Indian Railway Finance Corporation Ltd of Rs.1000 each fully paid up AGGREGATE VALUE OF Quoted Investments Unquoted Investments Notes: As at 31st March, 1993 Rs. Rs. 7.42 As at 31st March, 1992 Rs. Rs. 64.81 --- 0.01 1.80 --- Book Value 1.84 60.11 1.81 0.01 0.03 2.68 50.00 61.95 Market Value 48.93 --- 0.08 0.06 1.80 0.05 Book Value 59.63 9.90 1.99 0.01 0.04 2.68 --- 69.53 Market Value 226.68 --- (1) During the year Equity were alloted by the following companies. (a) 1248 Equity Shares of Rs.100 each by ICICI on part conversion of 624 Fully Convertible Debentures (b) 10,00,00,000 Equity Shares of Rs.10 each fully paid up by RPL on conversion of unsecured loan given to it. (2) During the year the Company sold Shares of the following companies at cost to Reliance Enterprises Private Limited when the later was a subsidiary of the Company Reliance Petrochemicals Limited Housing Development Finance Corporation Limited The Industrial Credit and Investment Corporation of India Ltd . Hindustan Oil Exploration Company Limited No of Shares. 15,76,00,000 7530 5622 49800 32 SCHEDULE ‘G’ CURRENT ASSETS INVENTORIES (at cost or market value whichever is lower except otherwise stated) (Cer tified and valued by the Management) Stores, spares, dyes, chemicals, etc. Raw materials Stock-in-transit Stock-in-process Finished goods Others SUNDRY DEBTORS Over six Months: Considered good Considered doubtful Less: Provision for doubtful debts Others considered good CASH AND BANK BALANCES Cash on hand Balance with Scheduled Banks In Current Accounts In Fixed Deposit Accounts In Portfolio Management Schemes with a Scheduled Bank OTHER CURRENT ASSETS Interest Accrued on Investment Reliance (Rs. in crores) As at 31st March, 1992 Rs. Rs. As at 31st March, 1991 Rs. Rs. 105.74 91.05 0.15 90.63 115.87 1.46 86.05 4.66 90.71 4.66 86.05 329.09 * 0.33 70.54 2.19 2.30 79.34 91.07 --- 93.93 145.42 1.75 404.90 411.51 29.01 4.66 33.67 4.66 29.01 298.30 415.14 327.31 0.23 40.01 0.20 --- 75.36 0.11 895.51 40.44 --- 779.26 * includes Rs.2.39 crores due from Devti Fabrics Ltd (refer note 13 of Schedule N) and Rs.25.29 crores from Reliance Europe Limited (subsidiary companies) and Rs.81.49 crores on account of Bills of Exchange SCHEDULE ‘H’ LOANS AND ADVANCES UNSECURED - (CONSIDERED GOOD) Loans to subsidiary companies Advances recoverable in cash or in kind or for value to be received Deposits Balance with Customs, Central Excise Authorities, etc. As at 31st March, 1992 Rs. 152.24 316.06 108.46 7.88 * 584.64 * Includes Rs.0.18 Crore due from an Officer (Previous year Rs.0.18 Crore) Maximum balance at anytime during the year Rs.0.18 Crore (Rs. in crores) As at 31st March, 1991 Rs. 250.04 79.23 45.59 6.10 380.96 33 Reliance SCHEDULE ‘I’ CURRENT LIABILITIES AND PROVISIONS CURRENT LIABILITIES Sundry Creditors Unclaimed Dividends Excess Debenture Application monies refundable/adjustable Interest accrued but not due on loans * Includes for Capital Expenditure of Rs.143.33 crores, Acceptance of Rs.191.84 crores and backward area incentive withdrawn of Rs. 14.18 crore (payable within one year Rs.5.67 crores) + includes interest of Rs.38.94 crores on cumulative “F” series Debentures payable on maturity and interest of Rs.1.86 crores on Cumulative Fixed Deposit payable on maturity. PROVISIONS Gratuity and Superannuation Proposed Dividend SCHEDULES FORMING PART OF THE PROFIT & LOSS ACCOUNT SCHEDULE ‘J’ OTHER INCOME Incentives, assistance and drawbacks on Exports received Dividends From Subsidiaries From Others (Tax at source Rs.1.65 crores) Income from Time Char ter Miscellaneous Income 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 Others Stock in trade of RPL as at 1.3.92 Finished goods Stock-in-process 34 As at 31st March, 1992 Rs. Rs. (Rs. in crores) As at 31st March, 1991 Rs. Rs. 575.40 5.03 64.39 86.08 * + 350 30 2.11 --- 57.63 730.90 410. 04 1.14 48.37 0.81 46.50 49.51 780.41 47.31 457.35 (Rs. in Crores) 1991 - 1992 Rs. Rs. 1990 - 1991 Rs. Rs. 7.08 0.51 Rs. 115.87 90.63 1.46 145.42 93.93 1.75 241.10 13.16 5.45 --- 0.27 3.74 7.59 20.35 10.47 42.15 4.70 0.27 --- 1.58 6.55 1991 - 1992 Rs. (Rs. in Crores) 1990 - 1991 Rs. Rs. 145.42 93.93 1.75 207.96 241.10 117.15 89.75 1.51 208.41 --- --- 259.71 (---)51.75 208.41 32.69 SCHEDULE ‘L’ MANUFACTURING & OTHER EXPENSES RAW MATERIALS CONSUMED Stock at commencement Stock taken over on amalgamation Add: Purchases Less: Stock at close MANUFACTURING EXPENSES Stores and Spare parts Dyes and Chemicals Electric Power, fuel and water Machinery repairs Building repairs Labour, Processing and machinery hire charges Excise Duty Lease Rent 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 AND DISTRIBUTION EXPENSES Samples, Sales Promotion and Advertisement Expenses Brokerage and Commission Packing Expenses Warehousing Charges Freight and fonwarding charges Octroi Expenses Sales Tax ESTABLISHMENT EXPENSES Insurance Rent Rates and taxes Other repairs Travelling expenses (including Rs.0.39 crore for Directors) Payment to Auditors General Expenses Loss on sale of Assets Preliminary Expenses written off SCHEDULE ‘M’ INTEREST Debentures Fixed Loans Others (Net) Reliance (Rs. in crores) 1991 - 1992 1990 - 1991 Rs. 91.07 34.77 389.62 515.46 91.05 41.46 55.76 140.56 6.01 3.47 20.27 751.17 25.24 45.87 5.74 14.17 12.90 25.20 35.03 1.49 16.90 4.93 40.24 15.84 4.12 0.39 4.49 4.02 0.31 49.60 0.01 0.02 Rs. Rs. Rs. 62.19 --- 447.60 509.79 91.07 424.41 418.72 83.58 55.94 115.18 5.12 2.49 17.73 628.51 24.16 1043.94 932.71 39.99 4.51 12.20 65.78 56.70 9.19 27.26 29.54 0.93 15.19 1.41 33.91 136.69 117.43 13.05 2.54 1.12 4.41 3.16 0.29 42.70 0.04 --- 67.31 592.87 (Rs. in crores) 1990-1991 Rs. 61.20 36.63 89.22 187.05 35 78.80 1749.62 1991-1992 Rs. 82.37 52.40 83.88 218.65 Reliance SCHEDULE ‘N’ NOTES ON ACCOUNTS 1. A. Basis of preparation of financial statements Significant Accounting Policies a) b) The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles, and the provisions of the Companies Act, 1956 as adopted consistently by the Company. Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles followed by the Company. B. Fixed Assets and Depreciation a) Goodwill represents the excess of consideration paid over the value of the net assets of the business taken over, and the same is not amortised. Technical know-how fees are capitalised in the year of payment. b) c) Other fixed assets are stated at cost of acquisition/construction less accumulated depreciation. d) Expenditure, including cost of financing incurred in the course of construction, installation and commissioning of projects, property, plant or equipment till the commencement of commercial production are capitalised and included in the cost of the respective fixed assets. e) Depreciation on fixed assets (other than goodwill, leasehold and freehold land) is provided on straight line method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956, save and except depreciation in respect of incremental liability on account of exchange fluctuations arising during the year which have been amortised over the residual life of the eligible assets commencing from 1st April, 1991. Capital work-in-progress includes assets under/awaiting installation, on site inventories, net pre-operative expenses, including difference between income and expenditure in respect of production during trial run and interest capitalised in respect of assets not yet commissioned. f) C. Accounting for Foreign Currency translations a) b) Transactions denominated in foreign currencies are normally recorded at the exchange rates prevailing at the time of the transactions. Foreign currency loans availed for acquiring fixed assets have been translated at the exchange rate prevailing at the end of the year or contract rates in case of forward cover. D. Investments Investments are stated at cost. E. Debtors F. Debtors are stated at book value after making provisions for doubtful debts. Inventories a) Raw Materials, Stores, Spares, Dyes, Chemicals, etc, and Stock-in-transit are valued at cost. b) c) Stock-in-process is valued at cost including related overheads. Finished Goods are valued at cost or market value whichever is lower. The cost includes cost of production and expenses incurred in putting the inventories in their present location and condition. d) Waste and Scrap are not separately valued e) By-products are valued at net realisable value. G. Basis of Accounting All income and expenditure items having a material bearing on the financial statements are recognised on accrual basis, save and except the following items which are accounted for on cash basis, as it is not possible to ascertainwith reasonable accuracy the quantum thereof a) Export Incentives; Income: i) ii) Miscellaneous Insurance and sundry claims receivable; and iii) Disposal of Sundry items including waste. b) Expenditure: Interest on overdue bills/letters of credit; Performance incentives on sales; and i) ii) iii) Premium on redemption of debentures. H. Sales I. J. Sales includes sale of by-products, waste, sale of products produced during trial run, excise duty and sales tax but excludes discount, commission, incentives and value of inter division transfer of finished products and other services. Excise Duty Excise Duty is accounted for as and when the same is paid, on the despatch of the goods from factory/bonded premises. No provision is made for excise duty in respect of finished products lying in the factory/bonded premises. Employee Retirement Benefits (a) Company’s contributions to Provident Fund, Superannuation Fund and other Funds for the year are charged to Profit and Loss Account. (b) Gratuity is charged to Profit and Loss Account on the basis of actuarial valuation. K. Research and Development Expenditure related to capital items is debited to fixed assets and depreciation provided as stated in Note 1B herein. Revenue expenditure is charged to Profit and Loss Account of the year in which they are incurred. L. Debenture Issue Expenses Debenture issue expenses to the extent pertaining to projects are capitalised. 36 M. Leases No distinction is made between finance leases and operating leases and lease rentals are expensed, except for rentals per taining to the periods upto the date of commissioning of the assets which are capitalised. (a) The previous year’s figures have been regrouped and reclassified wherever necessary. (b) The figures for the current year include figures of erstwhile Reliance Petrochemicals Limited (referred to as RPL) which is amalgamated with 2. the Company and are therefore not comparable with those of the previous year. (c) Figures have been presented in ‘crores’ of rupees with two decimals in accordance with the approval received from the Company Law Board. 3. (a) Figures less than Rs.50,000 have been shown at actuals in brackets. In terms of a Scheme.of Amalgamation and Order dated 29th July, 1992 and dated 11th August, 1992 of the Hon’ble Bombay High Court and Hon’ble Gujarat High Cour t respectively, RPL has been amalgamated with the Company with effect from 1st March, 1992. Pursuant to the said Scheme, the Company has taken over all the assets, liabilities and the obligations of RPL. (b) Pursuant to above, 7,49,26,428 Equity Shares of Rs.10/- each are to be issued as fully paid-up to the shareholders of RPL, without payment being received in cash, and pending allotment have been shown under the head “Share Capital Suspense”. (c) The amalgamation reserve represents excess of assets over liabilities taken over by the Company consequent on the amalgamation as Reliance reduced by the face value of the Equity Shares to be issued to the shareholders of RPL, arrived at as under: Value of Assets taken over as at 1st March, 1992: Net Fixed Assets (including Net Pre-operative Expenditure) Investments Current Assets Miscellaneous Expenditure (to the extent not written off) Less: Loans Current Liabilities Capital Reserve General Reser ve Less: Share Capital of the Company to be issued Surplus on Amalgamation (d) Share Capital Suspense includes Shares forfeited by RPL of Rs. 0.02 crore, representing 30,964Equity Shares. (Rs.in crores) 1,472.81 0.20 124.01 0.02 1,597.04 847.76 749.28 74.94 674.34 609.94 237.04 0.28 0.50 4. 5. 6. ‘Interest - Others (Net)’ is arrived at after deducting interest received/receivable of Rs. 10.10 crores (previous year Rs. 0.59 crore); Tax Deducted at Source of Rs.1.34 crores (previous year Rs. 0.07 crore). A sum of Rs.5.66 crores (net) included in other income, represents excess of income over expenditure relating to previous year(s). This excludes octroi amounting to Rs. 12.95 crores payable in terms of Order of the High Court of Gujarat dated 8th May, 1992 and depreciation amounting to Rs. 62.11 crores arising due to change in accounting policy for foreign currency translation relating to previous years’ being extraordinary items shown under the head Prior years adjustments in the Profit and Loss Account. (a) Auditors’ Remuneration: Audit Fees Tax Audit Fees i) ii) iii) For Certification and Consultation in finance and tax matters iv) Expenses reimbursed (Previous year Rs. 37,335) 1991-92 0.18 0.07 0.05 0.01 (Rs. in crores) 1990-91 0.17 0.07 0.05 --- (b) Cost Auditor: Audit Fees Rs. Nil. (Previous year Rs. 50,000) 7. (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 Schedule XIII to the Companies Act, 1956 and/or as per the approval of the Central Government, wherever applicable. 0.31 0.29 (b) Managing Directors’ and Executive Directors’ remuneration: Salaries i) ii) Contribution to Provident Fund and Superannuation Fund iii) Provision for Gratuity (as per actuarial Valuation Rs.26,600, previous year Rs.35,000) iv) Perquisites 1991-92 0.07 0.02 --- (Rs. in crores) 1990-91 0.08 0.02 --- 0.03 0.03 37 Reliance 8. In accordance with the accounting policy followed by the Company, the estimated liability as on 31st March, 1992 amounting to Rs. 36.32 crores for excise duty in respect of finished products lying in factory/bonded premises has not been providedfor 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. 9. During the year, the Company has restated liabilities in respect of foreign exchange loans availed to acquire fixed assets at the rate of exchange prevailing at end of the year or contract rate in case of forward cover, unlike in past when the Company used to (a) account such loans at the exchange rates prevailing on relevant dates; and (b) recognise such additional liabilities on the basis of payments thereto alongwith roll-over charges. Consequently, the liability has been increased by the translated difference of Rs. 116.54 crores with corresponding increase in carrying cost of the fixed assets. On account of this, deprecation upto 31st March, 1991 amounting to Rs. 62.11 crores has been included in Prior years adjustment in Profit and Loss Account. Depreciation for the year on such incremental liability is charged over the residual life of the relevant fixed assets. Had the Company followed its past practice, depreciation for the year would have been lower by Rs. 28.40 crores and profit for the year would have been higher by Rs. 28.40 crores. Consequently Reserves and Sur plus are lower by Rs. 90.51 crores, Net Block of Fixed Assets is higher by Rs.26.03 crores, and Secured Loans are higher by Rs.116 54 crores. 10. 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. 11. The income-tax assessments of the Company have been completed upto Assessment Year 1989-90. The total demand raised by the Income-tax Department up-to the said assessment year is Rs. 52.29 crores, which are disputed. Based on the decisions of the first Appellate Authorities and interpretation of other relevant provisions, the Company has been advised that no provision for taxation in respect thereof is required in the accounts. The taxation reserve created in past amounting to Rs.10.00 crores would be adequate enough to meet the liabilities, if any, in respect of pending assessments. The Company has been advised that no provision for taxation is necessary for the current financial year in view of various unabsorbed past reliefs. 12. Guidelines dated 14th January, 1987 of the Government of 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. The Company during the financial year, has transferred Rs.21.00 crores to the Debenture Redemption Reserve for debentures in respect whereof provision is required to be made and which have been issued subsequent to the date of the said notification. 13. The Company has an investment of Rs. 0.21 crore and Rs. 44,000 in the Share Capital of Devti Fabrics Limited and Trishna Investments & Leasings Limited respectively, wholly owned subsidiary companies. Loans to these subsidiary companies of Rs.3.39 crores and Rs. 147.50 crores respectively, receivables on account of sale of goods of Rs. 2.39 crores from Devti Fabrics Ltd. and guarantees to Banks and Financial Institutions of Rs. 2.50 crores aggregate to Rs.155.78 crores. The losses of these companies exceed their paid up capital and reserves as on 31st March, 1992. 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. 14. The Company had received demand notices in 1986 aggregating Rs.15.40 crores being the alleged differential stamp duty payable under the Bombay Stamp Act, 1958 in respect of Debenture Trust Deeds executed in the state of Gujarat. The matter is pending before the Hon’ble Bombay High Court. The Honourable High Court at Bombay has granted a stay of enforcement of these demands. The Company has been advised that there will be no liability in this regard and accordingly, no provision has been made in this respect in the accounts. 15. The Company had given unsecured loan of Rs. 157.85 crores to Reliance Enterprises Private Limited (Amount outstanding as on 31st March, 1992 Rs. 155.69 crores appearing in Schedule ‘H’), when it was a subsidiar y of the Company. The terms of interest and repayment of the said loan are subject to mutual agreement and approval by financial institution(s). 16. Pre-operative expenses in respect of projects upto 31st March, 1992 to be capitalised: Net Pre-operative expenditure of RPL taken over on amalgamation. Pre-operative expenditure of projects under commissioning transferred from Profit and Loss Account. Transpor tation Lease Expenses Insurance Travelling Expenses General Expenses Interest Debenture Issue Expenses Less: Income Interest (Tax Deducted at Source Rs. Nil (Previous Year Rs. 0.01 crore) Lease Income (Rs. 36,000) Income from funds placed under Portfolio Management SchemeOther Income Capitalised by allocating to Building and Plant & Machinery Total upto 31st March 1992 392.73 (Rs. in crores) Total upto 31st March 1991 --- 48.63 0.74 59.84 2.82 0.54 92.70 24.95 5.03 --- 0.28 8.71 1.58 0.16 84.34 14.21 --- 627.98 109.28 0.91 0.03 14.11 --- * --- --- --- 1.95 612.93 107.33 The above items do not form part of Profit and Loss Account, except to the extent amount transferred from Profit and Loss Account. *represents income in respect of power supplied to Gujarat Electricity Board on estimated tariff, pending execution of agreement. 38 17. CONTINGENT LIABILITIES (a) Estimated amount of contracts remaining to be executed on capital accounts and not provided for (b) Outstanding guarantees furnished to Banks and Financial Institutions including in respect of Letters ofCredit opened by Bankers (c) Guarantees to Banks and Financial Institutions against credit facilities extended to third parties (d) Liablility in respect of bills discounted with banks (e) Bonds executed in favour of Excise and Custom Authorities (f) Uncalled liability on partly paid shares (Rs. 16,875, previous year Rs. 16,875) (g) Claims against the Company/disputed liabilities not acknowledged as debts (h) Export bills discounted against irrevocable Letters of Credit (i) (j) Indemnities towards export obligations against capital goods import Import Duty on Raw Materials/ Chemicals & catalysts imported under Advance Licences against fulfilment of expor t obligations Licensed Capacity Installed Capacity Reliance (Rs. in crores) As at 31st March, 1991 216 24 As at 31st March, 1992 399.39 309.90 342.93 49.50 --- 26.64 19.97 1.69 --- 14.28 38.25 32.30 2.71 9.11 0.93 0.67 38.86 Licensed Capacity Installed Capacity 18. LICENCED AND INSTALLED CAPACITY Unit 1991-92 1990-91 Linear Alkyl Benzene M.T. (a) Polyester Filament Yarn /Polyester Chips M.T. (b) Polyester Staple Fibre/Polyester Chips (c) Man-made Fibre spun yarn on worsted system (Spindles)Nos. Nos. (d) Man-made Fabrics (Looms) Nos. (Knitting M/c) M.T. (e) Purified Terepthaiic Acid (f) M.T. (g) Synthetic Filament Yarn Including Industrial yarn/tyre cordM.T. M.T. (h) Ethylene M.T. (i) M.T. (j) M.T. (k) M.T. (I) M.T. (m) Styrene M.T. (n) Polystyrene M.T. (o) Styrene Butadiene Rubber M.T. (p) M.T. (q) Acrylonitrile M.T. (r) (s) Propylene Butadiene & Other C4s Acrylic Fibre Polypropylene Linear low Density Polyethylene Butyl Rubber Export Oriented Unit (i) (ii) Para-xylene Purified Terephthalic Acid (t) Mono Ethylene Glycol (MEG) (u) Higher Ethylene Glycol (HEG) (By Products) (v) High Density Polyethylene (HDPE) (w) Poly Vinyl Chloride (PVC) (x) Chlorine (y) Caustic Soda (By Product) (z) Hydrogen (By Product) M.T. M.T. M.T. M.T. M.T. M.T. M.T. M.T. M.T. 32300 A 60000@ 20000 A 450 A 22 A 200000@ 80000@ 2000F * 320000F * 155000F * 98000F * 20000F * 100000F * 80000F * 40000F * 100000@ 100000F * 70000F * 25000F * 270000F * 200000F * 32300 A 60000@ 20000 A 450 A 22 A 200000@ 80000@ 2000F * 400000F * 195000F * 120000F * 20000F * 100000F * 80000F * 40000F * 100000@ 100000F * 70000F * 25000F * 270000F * 200000F * 100000F * 5000F * 160000F * 100000F * 66000F * 78000F * 1950F * 1991-92 25125 45000 12494 450 2 0 100000 60000 --- ++ ++ Under Implementation Under Implementation Under Implementation --- --- --- --- --- --- --- --- Under Implementation Under Implementation Under Implementation Under Implementation Under Implementation Under Implementation Under Implementation *On the basis of Letter of Intent received and items stated under (t) to (z) stand in the name of RPL, acquired on amalgamation. ++ Based on average Denier of 40 @ Approved under MES. Installed Capacity based on Certificate of the Management. A B Subject to automatic re-endorsement of capacity further 15000 M.T. has been approved under broad-banding scheme and under implementation. MES capacity of 200000 M T. of PTA under implementation. ++ ++ 1990-91 25125 45000 12494 450 2 0 100000 60000 --- --- --- --- --- --- --- --- --- --- --- --- 39 Reliance 19. PRODUCTION OF FINISHED PRODUCTS MEANT FOR SALE Unit M.T. M.T. M.T. Mtrs. in lacs M.T. M.T. M.T. M.T. M.T. Yarn a) Polyester Staple Fibre b) Polyester Chips c) Fabrics d) Paraxylene e) f) P.T.A. h) MEG HEG i) PVC j) 20. VALUE OF IMPORTS ON C.l.F. BASIS IN RESPECT OF (a) Raw Materials (b) Dyes and Chemicals Catalysts, Stores and Spare parts (c) Capital goods 21. 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 Technical know-how & Engineering Fees 1991-92 61,428 55,119 9,923 518.00 -- 59,343 62,739 1,200 7,432 1991-92 Rs. 132.88 58.46 22.35 1991-92 Rs. 31.98 1.98 3.21 2.08 1990-91 67,653 48,485 13,739 505.81 3,400 58,576 66,950 --- --- (Rs. in crores) 1990-91 Rs. 167.77 23.66 13.65 (Rs. in crores) 1990-91 Rs. 20.05 2.57 18.53 3.00 22. QUANTITATIVE INFORMATION IN RESPECT OF OPENING STOCK, CLOSING STOCK.PURCHASES, SALES AND CONSUMPTION OF RAW MATERIALS (a) Opening Stock: Unit 1991-92 Quantity Rs. in Crores 158.58* 1990-91 Quantity Rs. in Crores 117.15 * Including stock-in-trade of RPL as on 1.3.1992. (b) Closing Stock: Finished Goods Yarn a) Polyester Staple Fibre b) Polyester Chips c) Fabrics d) Paraxylene e) PTA f) g) L.A.B. h) HEG PVC Stock-in-process i) ii) iii) Others i) i) Finished Goods Yarn a) Polyester Staple Fibre b) Polyester Chips c) Fabrics d) Paraxylene e) PTA f) g) L.A.B. h) HEG i) PVC. Stock-in-process ii) iii) Others (c) Purchases Yarn PTA (d) Sales a) b) c) d) e) f) g) Yarn Polyester Staple Fibre Polyester Chips Fabrics Paraxylene P.T.A. L.A.B. 40 M.T. M.T. M.T. Mtrs. in lacs M.T. M.T. M.T. M.T. M.T. M.T. M.T. M.T. 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. M.T. M.T. M.T. 7,645 6,583 2,371 65.24 161 163 6,873 1,751 4,733 4,293 4,168 817 57.58 --- 29 2,122 2,168 8,980 402 --- 64,959 57.442 10,980 525.66 --- 59,669 67,364 * 99.38 1.75 115.87 90.63 1.46 12.82 1,111.40 383.97 70.06 258.29 --- 212.83 184.72 3,524 8,410 1,234 64.15 1,595 --- 4,414 --- --- 7,645 6,583 2,371 65.24 161 163 6,873 --- --- 3970 1000 66,692 52,813 11,149 506.60 3,697 48,908 64,142 89.75 1.51 145.42 93.93 1.75 57.69 1,138.49 274.54 56.22 247.94 7.72 175.29 166.34 h) MEG HEG i) PVC j) Others k) (e) Raw Material Consumed Naptha Paraxylene PTA M.E.G. Fibre Yarn Fabrics (Grey) N. Paraffin Benzene Others Ethylene VCM Unit M.T. M.T. M.T. M T. Unit M.T. M.T. M.T. M.T. M.T. M.T. Mtrs in lacs M.T. M.T./K.L. M.T. M.T. 1991-92 1990-91 Quantity 3,202 783 3,185 --- 199,640 6,843 6,032 40,252 1,590 2,662 145.03 55,830 23,934 --- 5,539 6,654 Rs. in Crores 8.79 3.69 10.11 54.16 2,298.02 107.13 12.18 8.85 54.25 13.84 38.45 26.68 102.97 26.05 17.32 8.88 7.81 424.41 Quantity --- --- --- --- 168,091 --- 21,370 45,317 1,531 2,790 151.56 61,398 25,493 --- --- --- 23. VALUE OF RAW MATERIAL CONSUMED 1991-92 1990-91 Imported Indigenous 24. VALUE OF DYES, CHEMICALS, CATALYSTS, STORES & SPARE PARTS CONSUMED: 23. VALUE OF RAW MATERIAL CONSUMED Imported Indigenous Rs. in Crores 61.86 362.55 424.41 Rs. in Crores 36.07 61.15 97.22 % of total Consumption 14.58 85.42 100.00 1991-92 % of total Consumption 37.10 62.90 100.00 Rs. in Crores 119.76 298.96 418.72 Rs. in Crores 60.38 79.14 139.52 25. EARNINGS IN FOREIGN EXCHANGE: Export of goods on FOB basis 26. REMITTANCE IN FOREIGN EXCHANGE ON ACCOUNT OF DiVIDEND 1991-92 Rs. 80.56 1991-92 Rs. 1990-91 % of total Consumption 43.28 56.72 100.00 (Rs. in Crores) 1990-91 Rs. 55.95 1990-91 Rs. Reliance Rs. in Crores --- --- --- 31.80 2,098.34 69.67 --- 65.63 74 57 12.57 31.76 25.02 103.05 22.04 14.41 --- --- 418.72 % of total Consumption 28.60 71.40 100.00 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 exchange cannot be ascertained. The total amount remittable in this respect is given hereinbelow: (a) Number of Non-resident shareholders (b) Number of Equity Shares held by them (c) (i) Amount of dividend paid (Gross)-Tax at source Rs. 0.51 Crore (Previous year Rs. 0.54 crore) Dividend Year to which dividend relates (II) As per our Report of even date For RAJENDRA & CO. Chartered Accountants For CHATURVEDI & SHAH Chartered Accountants R.J. Shah Proprietor D. Chaturvedi Partner Bombay Dated: 29th September, 1992. 18,917 9,416,634 21,102 11,789,082 2.82 1990-91 3.54 1989-90 For and on behalf of the Board D.H. Ambani Chairman & Managing Director M.D. Ambani R.H. Ambani A.D. Ambani M.L. Bhakta T. Ramesh U. Pai S.S. Betrabet N.H. Ambani N.R. Meswani Vice Chairman Joint Managing Directors Directors Executive Directors V.M. Ambani Secretary 41 Reliance STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956, RELATING TO COMPANY’S INTEREST IN THE SUBSIDIARY COMPANIES Devti Fabrics Ltd.* Trishna Investments and Leasings Ltd. Reliance Europe Limited Reliance Petroproducts Limited Redwood Investments Private Limited 1. The Financial Year of 31st March, 1992 31st March, 1992 31st December, 1991 31st March,1992 31st March, 1992 the Subsidiary companies ended on 2. Date from which they became subsidiary companies 3. a. No of shares held by Reliance Industries Limited (holding company) with its nominees in the subsidiaries at the end of the financial year of the subsidiary companies. b. Extent of interest of holding company at the end of the financial year of subsidiary companies 4. The net aggregate amount of the subsidiary companies profit/(loss) so far as it concerns the members of the holding company a. Not dealt with in the holding company’s accounts i) For the financial year ended 31st March, 1992 30th September. 1985 30th December, 1988 14th August, 1990 11th February, 1992 15th October, 1991 2,10.070 Equity Shares of the face value of Rs. 10 each fully paid-up 4,400 Equity Shares of the face value of Rs. 10 each fully paid-up 20,17,000 Equity Shares of the face value of£ 1 each fully paid-up 1,300 EquityShares of the face value of Rs. 10 each fully paid-up 10,000 Equity Shares of the face value of Rs. 10each fully paid-up 100% 100% 100% 100% 100% (Rs.129.45 Lakhs) Rs. 50.60 Lakhs US$3,11,077 (Rs.6,110) (Rs.12,024) ii) For the previous (Rs. 318 21 Lakhs) (Rs. 585.13 Lakhs) US $ 9,792 financial years of the subsidiary companies since they became the holding company’s subsidiaries b. Dealt with in holding company’s accounts: For the financial i) year ended 31st March, 1992 NIL ii) For the previous NIL financial years of the subsidiary companies since they became the holding company’s subsidiaries NIL NIL NIL NIL NIL NIL NIL NIL * Devti Fabrics Limited has become a potentially Sick Company under Section 3(1) of the Sick Industrial Companies (Special Provision) Act. 1985 For and on behalf of the Board D.H. Ambani Chairman & Managing Director M.D. Ambani R.H. Ambani A.D. Ambani M.L. Bhakta T. Ramesh U. Pai S.S. Betrabet N.H. Ambani N.R. Meswani Vice Chairman Joint Managing Directors Directors Executive Directors V.M. Ambani Secretary Bombay Dated: 29th September, 1992. 42 DEVTI FABRICS LIMITED Regd. Office : 3rd Floor, Maker Chambers IV 222, Nariman Point, Bombay 400 021. 43 DIRECTORS REPORT To the Members. Your Directors present the Eighth Annual Report together with the Audited Statement of Accounts for the Financial year ended 31st March, 1992. OPERATIONS: The Company has incurred a loss of Rs.129.45 Lakhs during the year under review as against loss of Rs.20.77 Lakhs in the previous year. Sales declined marginally to Rs.988.01 Lakhs as against Rs.1004.78 Lakhs for the previous year. Inspite of all the adverse market conditions, the Company was able to contain the losses. The weaving activity. which is no more a profitable venture, is being reduced gradually. However the spinning unit is doing well Efforts are being made to increase the production and performance of this Unit. POTENTIAL SICKNESS: In view of the accumulated losses of the company for the preceding five financial years, its net worth has eroded and as such, the Company has become a potentially sick industrial company pursuant to the provisions of Section 23 of the Sick IndustrialÜjÜCompanies (Special Provisions) Act, 1985 Therefore, the Company will have to report the fact of such erosion to the Board for Industrial and Financial Reconstruction (BIFR) within a period of 60 days from the date hereof and also to hold a general meeting of the Shareholders of the Company, for considering such erosion in net worth. 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 K.V. Ambani and Shri N.M. Sanghvi retire by rotation and being eligible offer themselves for re-appointment. AUDITORS: M/s Rajendra & Co. and M/s. Chaturvedi & Shah, Chartered 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 re-appointment. DEPOSITS: The Company has not accepted any deposits 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 (1) of the Companies Act 1956, read with Companies (Disclosure of Par ticulars in the Report of Board of Directors) Rules, 1988 are given in the Annexure which forms part of the Directors Report. PERSONNEL: Information as per Section 217(2A) of the Companies Act.1956. read with the Companies (Par ticulars of Employees) Rules. 1975, is not given as no employee is drawing more than Rs.12,000/- per month. APPRECIATION: Your Directors wish to place on record their appreciation of the devoted services rendered by the Executives, Staff and Workers of the Company For and on behalf of the Board S. Natarajan Vinod M. Ambani Bombay Dated: 28th September, 1992 Directors ANNEXURE TO DIRECTORS REPORT Particulars required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988. A. CONSERVATION OF ENERGY Water bore pumps motors are re-arranged so that pumping of water to staff quarters is regulated through the Over-head tank and stopping the motors for more than 10 hours per day thereby Electrical Power is saved In loomshed total 12 line shafts (15 hp and 20 hp motors) stopped and 144 looms conver ted to individual drive. DEVTI FABRICS LIMITED Further cotton tapes of 7 ring frames and 10 doubling are replaced with synthetic tapes thereby consumption of energy reduced by 4 to 5% on these machines. Lighting of the departments is put-off during third shift after re-arranging and providing individual control switches so that lights can be switched off as and when not required. By adopting above energy conservation measures, a sum of Rs.1.73 lakhs was saved during the year. FORM-A (Form for disclosure of particulars with respect to conservation of energy) PART - A A. POWER AND FUEL CONSUMPTION 1. ELECTRICITY a. PurchasedUnits Total Amount Rate/Unit b. Own Generationi. i. Through Diesel Generator Units Units per Ltr. of Diesel Oil Cost/Unit Current Year Previous Year 1990-91 1991-92 69,65,805 1,34,62,453 1.93 84,34,672 1,25,80,355 1.49 1,48,458 4,320 ii. Through Steam Turbine/Generator Units Unit per Ltr. of Fuel Oil/Gas cost/unita 2.4 --- --- 2.4 --- --- 2. COAL Quantity(Tonnes) Total cost Average rate 3. FURNACE OIL Quantity (Kilo Ltrs.) Total Amount Average rate 4. OTHERS/INTERNAL GENERATION Quantity Total Cost Average Rate 1765 22,82,951 1,293.46 1905 22,41,008 1,176.383. --- --- --- --- --- --- --- --- --- --- --- --- PART - B B. CONSUMPTION PER UNIT OF PRODUCTION Previous year 1990-91 Current Year 1991-92 YARN FABRICS YARN FABRICS (P. MTR) (Kgs) (P. MTR) (Kgs) 0.41 5.34 0.60 7.89 ELECTRICITY(UNITS) FURNACE OIL --- --- --- --- COAL** --- --- --- --- OTHERS --- --- --- --- ** Coal is used for steaming and heating the yarn for the purpose o’ 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 EARNING AND OUTGO i. Activities relating to exports Company is making a study to explore the foreign market for export of Company’s products. ii. Foreign Exchange used and earned... .... NIL 45 DEVTI FABRICS LIMITED AUDITORS REPORT To The Members of Devti Fabrics Limited We have audited the attached Balance Sheet of DEVTI FABRICS LIMITED as at 31st March, 1992 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 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 purpose 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 f rom 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, 1992 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 Bombay Dated: 28th September 1992 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 We are informed that most of the assets have been physically verified by the Management during 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. 2. None of the fixed assets have been revalued during the year. 4. 5. 6. 7. 8. 9. 10. 11. 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. 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. In our opinion and 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.4 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 same basis as in the preceding year. 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 primafacie prejudicial to the interest of the Company. 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, the parties have generally repaid the principal amounts as stipulated and have also been regular in the payment of interest, wherever applicable. 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. 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 arrangement entered in the register 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. 13. The company has not accepted any deposit from the public and consequently the provisions of Sections 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 maintaned by the Company for the sale and disposal of realisable scrap wherever significant. 15. In our opinion the Company has an inter nal audit system commensurate with its size and the nature of its business. According to the information and explanations 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. 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 3. 46 DEVTI FABRICS LIMITED prescribed accounts and records have been made and maintained. However, no detailed examination of the same has been carried out by us. (b) The Company does not have any significant allocation of material in respect of the processing activities carried out on ‘job work’ basis. 17. According to the records of the Company, Provident Fund and Employee’s 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, customs duty, sales tax and excise duty were outstanding as on 31st March, 1992 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: (c) The Company has a reasonable system of allocating manhours 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, 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. For RAJENDRA & CO. Chartered Accountants For CHATURVEDI & SHAH Chartered Accountants R.J. SHAH Proprietor D.CHATURVEDI Partner (a) The Company has a reasonable system of recording receipts, issues and consumption of material and stores commensurate with its size and the nature of its business. Bombay Dated: 28th September 1992 47 DEVTI FABRICS LIMITED BALANCE SHEET AS AT 31st MARCH, 1993 SOURCES OF FUNDS: Shareholders’ Funds Capital Loan Funds Secured Loans Unsecured Loans (From Holding Company) APPLICATION OF FUNDS: Fixed Assets Gross Block Less: Depreciation Net Block Current Assets, Loans and Advances Current Assets Inventories Sundry Debtors Cash and Bank Balances Loans and Advances Less: Current Liabilities and Provisions Current Liabilities Provisions Miscellaneous Expenditure (to the extent not written off or adjusted) Profit & Loss Account Notes and Contingent Liabilities Schedule ‘A’ ‘B’ TOTAL ‘C’ ‘D’ ‘E’ ‘F’ TOTAL ‘K’ As at 31st March, 1992 Rs. Rs. (Rs. in crores) As at 31st March, 1991 Rs. Rs. 289.65 339.00 586.74 299.87 184.65 34.68 7.09 226.42 38.97 265.39 338.74 11.58 350.32 21.01 21.01 628.65 649.66 561.27 582.28 386.27 175.00 577.08 237.76 286.87 339.32 146.24 4.10 10.65 160.99 55.48 216.47 280.35 11.45 291.80 (84.93) 0.06 447.66 649.66 (75.33) 0.08 318.21 582.28 As per our Report of even date For and on behalf of the Board For RAJENDRA & CO. Chartered Accountants For CHATURVEDI & SHAH Chartered Accountants S. Natarajan Vinod M. Ambani Directors R.J. Shah Proprietor D. Chaturvedi Partner Bombay Dated: 28th September, 1992. 48 PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 1992 Schedule Rs. Rs. Rs. Rs. 1991-92 (Rs. in crores) 1990-91 DEVTI FABRICS LIMITED INCOME Sales (Net) Other Income Variation in Stock EXPENDITURE Purchases Manufacturing and Other Expenses Interest Depreciation ‘G’ ‘H’ ‘I’ ‘J’ Profit /(Loss) for the year Add: Balance brought forward from last year Profit /(Loss) Balance carried to Balance Sheet Notes and Contingent Liabilities ‘K’ 988.01 213.11 39.25 49.29 1,205.54 52.88 62.11 1,004.78 291.46 41.52 1,240.37 1,337.76 63.56 1,172.13 61.56 61.28 1,369.82 (129.45) (318.21) (447.66) 1,358.53 (20.77) (297.44) (318.21) As per our Report of even date For and on behalf of the Board For RAJENDRA & CO. Chartered Accountants For CHATURVEDI & SHAH Chartered Accountants S. Natarajan Vinod M. Ambani Directors R.J. Shah Proprietor D. Chaturvedi Partner Bombay Dated: 28th September, 1992. 49 DEVTI FABRICS LIMITED SCHEDULES FORMING PART OF THE BALANCE SHEET SCHEDULE ‘A’ SHARE CAPITAL Authorised: 2,50,000 Equity Shares of Rs.10/- each Issued & Subscribed: 2,10,070 Equity Shares of Rs.10/- each fully paid up (All the Shares are held by Reliance Industries Limited, the holding company) SCHEDULE ‘B’ SECURED LOANS Working Capital Loan from a Bank Working Capital Term Loan from a Bank Rupee Term Loan from Financial Institutions Deferred Payment Facilities As at 31.3.1992 Rs. 25.00 21.01 As at 31.3.1992 Rs. 89.03 40.50 160.12 --- 289.65 (Rs. in Lacs) As at 31.3.1991 Rs. 25.00 21.01 (Rs. in Lacs) As at 31.3.1991 Rs. 107.72 70.45 205.80 2.30 386.27 NOTES: 1. Working Capital Loan and Working Capital Term Loan from a Scheduled Bank are secured against Hypothecation of present and future stock of the materials stock in process, finished goods, book debts, moveable machineries including all stock and spare par ts belonging to the Company at Sidhpur in the State of Gujarat save and except Plant & Machineries purchased under the Modernisation Scheme from the Financial Institutions referred to in Note 2 below and are further guaranteed by Reliance Industries Limited, the holding company. 2. Rupee Term Loan from Financial Institutions are secured by an exclusive first charge on the plant and machiner y purchased under modernisation scheme. The figure of secured loans include Rs.72.68 lacs repayable within one year. 3. SCHEDULE ‘C’ FIXED ASSETS DESCRIPTION Buildings Plant & Machineries Electric Installations Factory Equipments Furniture & Fixtures Vehicles Previous Year 50 GROSS BLOCK (AT COST) DEPRECIATION NET BLOCK (Rs. in Lacs) As at 1.4.91 Rs. 25.83 525.44 17.99 2.96 4.13 0.73 577.08 571.32 Addition Deduction As at 31.3.92 Rs. 27.48 531.34 17.99 2.96 4.13 2.84 586.74 Rs. --- --- --- --- --- --- --- 4.13 577.08 Total upto 31.3.92 Rs. 4.10 288.81 4.65 1.00 0.86 0.45 299.87 237.76 As at 31.3.91 Rs. As at 31.3.91 Rs. 23.38 242.53 13.34 1.96 3.27 2.39 286.87 339.32 22.63 296.67 13.94 2.11 3.50 0.47 339.32 Rs. 1.65 5.90 --- --- --- 2.11 9.66 9.89 SCHEDULE ‘D’ CURRENT ASSETS INVENTORIES (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 SUNDRY DEBTORS (Unsecured) Over six Months: Considered good Considered doubtful Others: considered good Less: Provision for Doubtful Debts CASH AND BANK BALANCES Cash on hand Balance with Scheduled Banks: In Current Accounts In fixed Deposit Accounts SCHEDULE ‘E’ LOANS AND ADVANCES (Unsecured, Considered Good) Advances recoverable in cash or in kind or for value to be received Deposits Prepaid expenses Balance with customs, Central Excise authorities etc. SCHEDULE ‘F’ CURRENT LIABILITIES & PROVISIONS CURRENT LIABILITIES Sundry Creditors Interest accrued but not due on loans PROVISIONS Gratuity, Superannuation and Provident Funds DEVTI FABRICS LIMITED As at 31.3.1992 Rs. Rs. (Rs. in Lacs) As at 31.3.1991 Rs. Rs. 20.78 32.88 31.49 98.74 0.76 34.68 0.55 --- 35.23 0.55 1.63 2.04 3.42 19.02 32.64 46.97 43.53 4.08 184.65 146.24 --- 0.55 4.10 4.65 0.55 1.36 9.29 --- 4.10 10.65 160.99 (Rs. in Lacs) As at 31.3.1991 Rs. 51.57 0.23 3.58 0.10 55.48 34.68 7.09 226.42 As at 31.3.1992 Rs. 37.59 0.20 0.57 0.61 38.97 As at 31.3.1992 Rs. Rs. (Rs. in Lacs) As at 31.3.1991 Rs. Rs. 336.31 2.43 277.15 3.20 338.74 11.58 350.32 280.35 11.45 291.80 51 DEVTI FABRICS LIMITED SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT SCHEDULE ‘G’ OTHER INCOME Processing charges Profit on sale of assets (Net) Miscellaneous Income SCHEDULE `H’ STOCK-IN-TRADE (at close) finished goods Stock-in-process Others STOCK-IN-TRADE (at commencement) Finished goods Stock-in-process Others SCHEDULE `I’ MANUFACTURING AND OTHER EXPENSES RAW MATERIALS CONSUMED Stock at commencement Add: Purchases Less: Stock at close MANUFACTURING EXPENSES Carriage Inward Stores and spare parts Dyes & Chemicals Electric Power, fuel and water Machinery repairs Building repairs Labour, Processing and machinery hire charges Excise Duty 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 C/F 52 1992-1992 Rs. 196.17 --- 16.94 213.11 1992-1992 Rs. 130.99 91.74 39.25 Rs. 98.74 31.49 0.76 43.53 46.97 1.24 (Rs. in Lacs) 1991-1991 Rs. 279.68 2.05 9.73 291.46 (Rs. in Lacs) 1991-1991 Rs. 91.74 50.22 41.52 Rs. 43.53 46.97 1.24 19.56 29.56 1.10 1992-1992 (Rs. in Lacs) 1991-1991 Rs. Rs. Rs. Rs. 32.64 565.52 598.16 32.88 0.34 38.45 11.20 161.70 2.36 1.10 23.45 15.90 308.47 33.85 11.37 565.28 254.50 353.69 1173.47 58.03 502.15 560.18 32.64 0.31 35.29 12.80 148.76 2.49 1.72 19.63 63.76 287.68 32.99 10.78 527.54 284.76 331.45 1143.75  B/F SALES AND DISTRIBUTION EXPENSES Samples. Sales Promotion and Advertisement Expenses Brokerage and Commission Packing Expenses Freight and fonwarding charges Octroi Expenses Sales Tax ESTABLISHMENT EXPENSES Insurance Rent Rates and taxes Other repairs Travelling expenses Payment to Auditors Directors Fees Provision for Doubtful Debts General Expenses Charity & Donation SCHEDULE ‘J’ INTEREST Fixed Loans Others (Net) DEVTI FABRICS LIMITED 0.06 0.47 4.01 2.07 0.53 0.03 4.60 5.01 1.77 2.32 0.59 0.35 0.02 0.55 5.87 0.13 (Rs. in Lacs) 1991-1991 Rs. 1143.75 7.17 21.21 1,172.13 (Rs. in Lacs) 1991-1991 Rs. 42.79 18.77 61.56 1992-1992 Rs. 1173.47 11.31 0.09 1.19 6.56 2.69 0.56 0.22 4.73 5.01 1.16 1.07 0.52 0.35 --- --- 7.02 0 90 20.76 1,205.54 1992-1992 Rs. 41.31 11.57 52.88 SCHEDULE ‘ K ’NOTES AND CONTINGENT LIABILITIES 1. SIGNIFICANT ACCOUNTING POLICIES 1. Basis of preparation of Financial Statements The Financial Statements have been prepared under the historical cost convention in accordance with the normally accepted accounting principles and the provisions of the Companies Act, 1956 as adopted consistently by the Company The same are prepared on a going concern concept. Fixed Assets and Depreciation Fixed assets are stated at acquisition cost less accumulated depreciation Expenditure incurred in the course of construction, installation and commissioning of property, plant or equipment are capitalised and included in the cost of the respective fixed assets. Depreciation on fixed assets is provided pro-rata on a straight line basis at the rates prescribed in Schedule XIV to the Companies Act, 1956. Debtors Debtors are stated at book value after making provisions for doubtful debts Inventories Raw Materials are valued at cost. Cost is determined on the First in First out (FIFO) method Stock-in-process is valued at raw material cost including related overheads Finished Goods are valued at cost or market value, whichever is lower. Costs include cost ofproduction and expenses incurred in putting the inventories in their present location and condition. The cost is determined on the average cost method. Stores, Spares, Dyes, Chemicals etc. are valued at cost. The cost is determined on a First in First Out (FIFO) basis. Waste and scrap are not separately valued. Basis of Accounting All income and expenditure items having a material bearing on the financial statements are recognised on the accrual basis. Employee/Retirement Benefits (a) Company’s contributions to Provident Fund, Superannuation Fund and other Funds for the year are charged to Profit and Loss Account. (b) Gratuity is charged to Profit and Loss Account on the basis of actuarial valuation. 2. 2.1 2.2 2.3 3. 4. 4.1 4.2 4.3 4.4 4.5 5. 6. 53 DEVTI FABRICS LIMITED 2. 3. Figures of the previous year have been regrouped, wherever necessary to confirm to this year’s figures. Auditor’s Remuneration: (a) Audit tees (b) Tax audit tees 1991-1992 Rs. 0.25 0.10 0.35 (Rs. in Lacs) 1990-1991 Rs. 0.25 0.10 0.35 4. The company has been accounting liability for Excise Duty in respect of finished products lying in factory premises as and when the same are cleared/ debonded. Accordingly estimated liability amounting to Rs.0.46 lacs in respect of such products 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 the loss of the Current Financial Year. Expenditure amounting to Rs.0.54 lacs respectively relating to Previous Year have been suitably accounted for in the respective heads. 5. 6. Contingent Liabilities a) Guarantees given by the Bank of Baroda for DPG Scheme b) Claims against the company not acknowledged as debts 7. Licenced & installed Capacity (As certified by the Management) Spindles Looms 8. Production of finished products meant for sale Blended Yarn Fabrics 9. Value of imports on CIF basis. 10. Expenditure in foreign currency 11. quantitative information (a) Opening stock Finished Stock Yarn Fabrics Stock in process (yarn) ii) iii) Others (b) Closing stock i) i) Finished Stock Yarn Fabrics Stock in process (yarn) ii) iii) Others (c) Purchases Fabrics (d) Sales Yarn Fabrics (e) Raw Material consumed Cotton Fibres Yarn Viscose 54 M .T. Mtrs in lacs M.T. Mtrs. in Lacs M.T. Mtrs in Lacs Mtrs. in Lacs M.T. Mtrs. in Lacs M.T. M.T. M.T. M.T. 1991-1992 --- 1.90 (Rs. in lacs) 1990- 1991 0.16 1.43 Licensed Capacity Installed Capacity 1991-92 38368 490 1990-91 38368 490 1992-92 37536 490 1991-91 37536 490 1991-1992 1990-1991 229.00 53.96 Rs. in Lacs 43.53 46.97 1.24 98.74 31.49 0.76 49.29 241.40 746.61 71.78 215.22 229.53 48.75 52.00 63.40 Rs. in Lacs 19.56 29.56 1.10 43.53 46.97 1.24 63.56 54.27 950.51 57.18 163.60 287.76 19.00 --- --- 1991-92 Quantity 3.00 1.06 7.00 2.36 4.83 48.00 66.93 211.00 225.00 143.00 42.00 --- --- 1992-93 Quantity 7.00 2.36 4.00 7.31 3.60 232.00 52.61 175.00 267.00 115.00 101.00 12. Value of Raw Material Consumed. Imported Indigenous 13. Value of dyes & chemicals, Stores and spare parts consumed Imported Indigenous 14. Earnings in foreign exchange DEVTI FABRICS LIMITED 1991-1992 Rs. in % of total Lacs Consumption --- 100.00 --- 565.28 1990-1991 Rs. in % of of total Lacs Consumption --- 100.00 --- 527.54 --- 49.65 --- --- 100.00 --- 100.00 --- 48.09 --- As per our Report of even date For and on behalf of the Board For RAJENDRA & CO. Chartered Accountants For CHATURVEDI & SHAH Chartered Accountants S. Natarajan Vinod M. Ambani Directors R.J. Shah Proprietor D. Chaturvedi Partner Bombay Dated: 28th September, 1992. 55 TRISHNA INVESTMENTS & LEASINGS LIMITED Regd. Office: 3rd Floor, Maker Chambers IV 222, Nariman Point, Bombay 400 021 57 TRISHNA INVESTMENTS & LEASINGS 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 on 31st March, 1992 FINANCIAL RESULTS Profit before tax Less: Provision for taxation Profit after tax Less: a. Transfer to General 1991-92 382.01 32.21 349.80 (Rs. in Lacs) 1990-91 498.59 4.00 494.59 Reserve b. Interim Dividend c. Proposed Final 35.00 299.20 49.46 --- Dividend 13.20 347.40 319.00 368.46 Balance carried forward to Balance Sheet 2.40 126.13 INCOME: During the year, the Company received dividend income of Rs.400.67 Lacs from the investments. DIVIDEND: Your Directors had declared an interim dividend of Rs.6,800 per Equity Share (subject to deduction of tax at source) aggregating to Rs.299.20 lacs. Now your Directors are pleased to recommend a final dividend of Rs.300.00 per Equity Share (subject to deduction of Tax at source) for the financial year ended 31st March, 1992 aggregating Rs.13.20 lacs. DEPOSITS: The Company has not accepted any deposit from the public. Hence no information is required to be appended to this report in terms of Non Banking Financial Companies (Reserve Bank) Directions, 1977. PERSONNEL: The Company has not paid any remuneration attracting the provisions of Companies (Particulars of Employees) Rules, 1975 read with Section 217(2A) of the Companies Act, 1956. Hence, no information is required to be appended to this report in this regard. 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 under Section 217(1)(e) of the Companies Act, 1956, relating to conservation of energy and technology absor ption. There was no foreign exchange earnings or outgo during the year. DIRECTORS: As per the provisions of the Articles of Association, Shri B.K. Bhandary and Shri R.P. Mehta, Directors of the Company, retire by rotation and being eligible offer themselves for re-appointment. AUDITORS: The Auditors of the Company, M/s. Rajendra & Co. and M/s. Chaturvedi & Shah hold office until the conclusion of the ensuing Annual General Meeting and are recommended for re-appointment. The Company has received Certificates from these Auditors to the effect that their reappointment, if made, would be within the prescribed limits under Section 224(1) of the Companies Act, 1956. For and on behalf of the Board F.N. Vajifdar V.P. PaI Directors B.K. Bhandary Bombay Dated: 30th June, 1992. 58 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, 1992 and the Profit & Loss Account 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 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 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, 1992 and 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 For CHATURVEDI & SHAH Chartered Accountants R.J.SHAH Proprietor BOMBAY DATED: 30TH JUNE, 1992 D.CHATURVEDI Partner ANNEXURE TO AUDITORS’ REPORT Referred to in Paragraph 1 of our report of even date TRISHNA INVESTMENTS & LEASINGS LIMITED 3. 4. 5. 6. 7. 8. 9. The Company has received an interest free loan from the holding company. According to the information and explanations given to us, and in our opinion, the terms and conditions of the above loan are not prima facie prejudicial to the interest of the Company. 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. The Company has not given any loans or advances in the nature of loans during the year. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits as defined under Section 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 during the year under review. Since the paid up capital of the Company ks less than Rs.25 lacs and as it has not commenced any trading or manufacturing activity, internal audit is not required statutorily. According to the information and explanations given to us, the provisions of the Provident Fund Act and the Employees State Insurance Act, 1948 are not applicable to the Company. 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, 1992 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 not dealt or traded in Shares, Securities, Debentures and other investments. The Company’s investments are held in its own name. For RAJENDRA & CO. Chartered Accountants For CHATURVEDI & SHAH Chartered Accountants 1. 2. As the Company had no Fixed Assets during the year, Clauses 4(A) (i) and (ii) of the said Order are not applicable. Since the Company has nol 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 not applicable. R.J.SHAH Proprietor BOMBAY DATED: 30TH JUNE, 1992 D.CHATURVEDI Partner 59 TRISHNA INVESTMENTS & LEASINGS LIMITED BALANCE SHEET AS AT 31ST MARCH, 1992. SOURCES OF FUNDS: Shareholders’ Funds Capital Reserves & Surplus General Reserve At the beginning of-the year Add: Transferred from Profit & Loss Account Less: Adjusted against Profit & Loss Account (as per contra) LOAN FUNDS Unsecured Loans (From Holding Company) APPLICATION OF FUNDS: Investments Current Assets, Loans & Advances Debtors Cash & Bank Balances Loans & Advances Less: Current Liabilities & Provisions Current Liabilities Provisions Proposed Dividend Net Current Assets Profit & Loss Account Less: Adjusted against General Reserve (as per contra) Notes and Contingent Liabilities Schedule Rs. 1991 - 92 Rs. (Rs. in thousands) 1990 - 91 Rs. Rs. 4946 3500 8446 8446 55836 1746 19139 76721 280 3621 1320 5221 63219 8446 44 --- 1475000 1475044 1348771 71500 54773 1475044 --- 4946 4946 4946 55836 223 60362 116421 138 400 31900 32438 63459 4946 44 --- 1482900 1482944 1340448 83983 58513 1482944 `A’ TOTAL `B’ ‘C’ ‘D’ TOTAL ‘F’ As per our Report of even date For and on behalf of the Board For RAJENDRA & CO. Chartered Accountants For CHATURVEDI & SHAH Chartered Accountants F.N. Vajifdar R.J. Shah Proprietor D. Chaturvedi Partner V.P. Pai Directors B.K. Bhandary Bombay Dated: 30th June, 1992. 60 PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 1992 Schedule Rs. 1991 - 92 Rs. (Rs. in thousands) 1990 - 91 Rs. Rs. TRISHNA INVESTMENTS & LEASINGS LIMITED INCOME Dividend Income (Tax deducted at Source (TDS) Rs.9864 thousands, previous year Rs.6194 thousands) Interest Received on Securities (Previous year TDS Rs.1045 thousands) Interest Received from other Profit on Sale of Investment (Net) EXPENDITURE Establishment& Other Expenses ‘E’ Profit before tax Less: Provision for taxation Profit after tax Less: Transferred to General Reserve Less: Interim Dividend (Subject to Tax) Proposed Final Dividend (Subject to Tax) Add/Less: Provision for tax written back Balance brought forward from last year Balance carried to balance Sheet Notes and Contingent Liabilities ‘F’ 40067 132 582 --- 40781 2580 38201 3221 34980 3500 31480 31240 240 --- (-)63459 (-)63219 29920 1320 --- 31900 As per our Report of even date For and on behalf of the Board For RAJENDRA & CO. Chartered Accountants For CHATURVEDI & SHAH Chartered Accountants F.N. Vajifdar R.J. Shah Proprietor D. Chaturvedi Partner Bombay Dated: 30th June, 1992. V.P. Pai Directors B.K. Bhandary 32640 2447 --- 17148 52235 2376 49859 400 49459 4946 44513 --- 31900 12613 5 (-)76077 (-)63459 61 As at 1991 - 92 Rs. (Rs. in thousands) As at 1990 - 91 Rs. 400 100 500 44 44 400 100 500 44 44 1991-92 Rs. (Rs. in thousands) 1990-91 Rs. 1340366 1340013 1340366 1340013 435 7970 8405 1348771 1340366 5210093 435 --- 435 1340448 1340013 1502911 TRISHNA INVESTMENTS & LEASINGS LIMITED SCHEDULES FORMING PART OF THE BALANCE SHEET 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 4400 Equity Shares of Rs.10/- each) All the above shares are held by Reliance Industries Limited the holding Company SCHEDULE ‘B’ INVESTMENT: (A) QUOTED: Investment-At cost 13359212 Equity Shares of Larsen & Toubro Limited of Rs.10/- each fully paid up (Previous year 13359212 Equity Shares of Rs.10/- each.) (B) UNQUOTED: 26400 Equity Shares of Observer (India) Limited of Rs.10/- each fully paid up (Previous year 26400 Equity Shares of Rs.10/- each) 11385 16% Partly Convertible Debentures of Kothari Sugars and Chemicals Ltd. of Rs.700/- each fully paid up (Previous year Nil) Total Investment A + B Quoted Investment - Book Value Market Value 62 SCHEDULE ‘C’ CURRENT ASSETS, LOANS & ADVANCES Current Assets: Sundry Debtors (Unsecured and considered good) Over Six months Others Cash and Bank Balances:Cash on hand Balance with a Scheduled bank:In Current Accounts Loans and Advances Advances recoverable in cash or in kind or for value to be received Advance Payment of tax SCHEDULE ‘D’ CURRENT LIABILITIES & PROVISIONS Current Liabilities Other Liabilities Provisions For Taxation Proposed Dividend SCHEDULE FORMING PART OF THE PROFIT & LOSS ACCOUNT SCHEDULE ‘E’ Establishment & Other Expenses Salary and wages Conveyance Printing and Stationery Other Administrative Expenses Finance Charges Commission Auditors’ Remuneration: Audit Fees Legal & Professional charges TRISHNA INVESTMENTS & LEASINGS LIMITED 1991 - 92 Rs. (Rs. in thousands) 1990 - 91 Rs. 55836 --- 55369 467 55836 1 1745 756 18383 76721 55836 85 138 50537 9825 116421 1991 - 92 (Rs. in thousands) 1990 - 91 280 3621 1320 5221 1991-92 Rs. 480 202 455 228 --- --- 25 1190 2580 138 400 31900 32438 (Rs. in thousands) 1990-91 Rs. 59 10 --- 168 80 1143 25 891 2376 63 TRISHNA INVESTMENTS & LEASINGS LIMITED SCHEDULE ‘F’ Notes forming part of Balance Sheet and Profit & Loss Account for the year ended 31st March 1992. 1. Significant Accounting Policies. a) Basis of Accounting: The financial statements have been prepared under the historical cost convention on accrual basis. b) Investments: Investments are stated at cost 2. 3. 4. Previous year’s figures have been regrouped and/or rearranged wherever necessary. Interim & Proposed Final Dividend have been paid/recommended for the year out of current year’s profit. As the company is not a manufacturing company, information in respect of manufacturing activities required under para 3 and 4 of Schedule Vl of the Companies Act, 1956 is not given. As per our Report of even date For and on behalf of the Board For RAJENDRA & CO. Chartered Accountants For CHATURVEDI & SHAH Chartered Accountants F.N. Vajifdar R.J. Shah Proprietor D. Chaturvedi Partner V.P. Pai Directors B.K. Bhandary Bombay Dated: 30th June, 1992. 64 RELIANCE EUROPE LIMITED Regd. Office: Devonshire House 146, Bishopsgate London EC2M 4JX 65 RELIANCE EUROPE LIMITED REPORT OF THE DIRECTORS The Directors have pleasure in submitting their Report and the Audited Financial Statement for the period from 1st April 1991 to 31st December 1991. Principal Activities and Business Review The principal activity during the period was that of selling, marketing and distribution of petrochemical products and the related technology to manufacture such products. The results of the period and the financial position at the period end were considered satisfactory by the Directors who expect continued growth in the foreseeable future. Results and Dividend The results of the Company for the period are set out on page three and are reported in US Dollars which is the currency in which the company conducts its trade. The Directors recommend that a final dividend of 15.42 cents (31.3.91 - 0.4855 cents) per share (in issue at the balance sheet date) be paid for the period under review which, in total, equates to 50% of the company s after tax profits. It is proposed that the retained profit of $311,077 be transferred to reserves. Fixed Assets The movements in fixed assets are shown in Note 10 to the Financial statements. Directors and their Interests The Directors who served the company throughout the period together with their interests in the shares of the company at the beginning and end of the period were as follows: Ordinary Shares of £ 1 each REPORT OF THE AUDITORS TO THE MEMBERS OF RELIANCE EUROPE LIMITED We have audited the financial statements set out on pages three to ten in accordance with Auditing Standards. In our opinion the financial statement give a true and fair view of the state of affairs of the Company at 31st December 1991 and of its Profit and Cash Flow Statement for the period ended on that date and have been properly prepared in accordance with the Companies Act 1985. Kingston Smith Chartered Accountants and Registered Auditor Devonshire House, 146 Bishopsgate. London, EC2M 4JX. 11th June 1992 Dhirubhai Ambani Mukesh Ambani Anil Ambani Mathew Panikar (appointed on 14.10.91) Kenneth Ridehalgh Held as nominee for Reliance Industries Limited Post Balance Sheet Event 31.12.1991 --- 31.3.1991 --- --- 1* --- --- --- 1* --- --- Since the Balance Sheet date the Company has allotted fur ther share Capital, and has also entered into the lease arrangement as stated in Note 17 to the Financial Statements. Auditors Kingston Smith have indicated their willingness to continue in office and in accordance with the provisions of the Companies Act 1985 it is recommended that they be re-appointed auditors to the company for the ensuing year By Order of the Board M.K. Shetty Secretary Devonshire House, 146 Bishopsgate, London EC2M 4JX. 11th June 1992 66 PROFIT AND LOSS ACCOUNT FOR THE PERIOD ENDED 31ST DECEMBER 1991 Note 1 (d),3 4 7 8 9 Note 10 11 12 TURNOVER Cost of Sales GROSS PROFIT Administrative Expenses OPERATING PROFIT Interest Receivable and Similar Income PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION Taxation PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION Dividend RETAINED PROFIT FOR THE FINANCIAL PERIOD RETAINED PROFIT BROUGHT FORWARD RETAINED PROFIT CARRIED FORWARD BALANCE SHEET AT 31ST DECEMBER 1991 FIXED ASSETS CURRENT ASSETS Stocks Debtors Cash at Bank and in Hand CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR NET CURRENT ASSETS NET ASSETS CAPITAL AND RESERVES Called up Share Capital Profit and Loss Account Aprroved by the Board on 11th June 1992 P.J.M. PANIKAR - Director RELIANCE EUROPE LIMITED 9 Months Ended 31.12.1991 US$ 28,934,099 26,831,220 2,102,879 1,437,631 665,248 309,081 974,329 352,175 622,154 311,077 311,077 9,792 320,869 Period Ended 31.3.1991 US$ 9,307,250 9,075,406 231,844 220,215 11,629 23,307 34,936 15,352 19,584 9,792 9,792 --- 9.792 31.12.1991 US$ 31.3.1991 US$ 107,261 --- 3,427,687 7,272,542 4,543,709 15,243,938 6,821,996 2,574,865 2,608,427 12,005,288 13 11,097,180 8,062,346 14 4,146,758 4,254,019 3,933,150 320,869 4,254,019 3,942,942 3,942,942 3,933,150 9,792 3,942,942 67 RELIANCE EUROPE LIMITED CASH FLOW STATEMENT FOR THE PERIOD ENDED 31ST DECEMBER 1991 NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES (Note a) 9 Months Ended 31.12.1991 US $ Period Ended 31.3.1991 US $ 1,761,612 (1,348,030) RETURNS ON INVESTMENTS AND SERVICING OF FINANCE Interest Received Dividends Paid 309,081 (9,792) 23,307 --- Net Cash Inflow from Returns on Investments and Servicing of Finance TAXATION Corporation Tax Paid INVESTING ACTIVITIES Payment to Acquire Tangible Assets FINANCING Issue of Ordinary Share Capital INCREASE IN CASH AND CASH EQUIVALENTS (Note b) NOTES TO THE CASH FLOW STATEMENT a. RECONCILIATION OF OPERATING PROFIT TO NET CASH IN FLOW FROM OPERATING ACTIVITIES Operating Profit Depreciation Charge Decrease/(Increase) in Stocks (Increase) in Debtors Increase in Creditors Net Cash Inflow/(Outflow)from Operating Activities b. ANALYSIS OF CHANGE IN CASH AND CASH EQUIVALENTS DURING THE PERIOD Balance at 1st April 1991 Net Cash Inflow Balance at 31st December 1991 299,289 (15,352) (110,267) --- 1,935,282 665,248 3,006 3,394,309 (4,361,133) 2,060,182 1,761,612 2,608,427 1,935,282 4,543,709 23,307 --- --- 3,933,150 2,608,427 11,629 --- (6,821.996) (2,571,601) 8,033,938 (1,348,030) --- 2,608,427 2,608,427 68 NOTES TO THE FINANCIAL STATEMENT FOR THE PERIOD ENDED 31ST DECEMBER 1991 1. ACCOUNTING POLICIES (a) Accounting Basis and Standards The financial statements have been prepared under the historical cost convention and in accordance with applicable accounting standards. (b) Depreciation Depreciation on fixed assets is provided at rates estimated to write off the cost or revalued amounts, less estimated residual value, of each assets over its expected useful life as follows: RELIANCE EUROPE LIMITED 4. OPERATING PROFIT The Operating Profit is stated after charging: Auditor’s Remuneration Depreciation of Tangible Fixed Assets 15,293 3,006 6,458 --- 5. EMPLOYEE INFORMATION The average number of employees during the period was 5 (31.3.1991 - 3). Due to the size of the company there is no formal classification of duties. Their total remuneration (including Director) was:US $ Wages and Salaries Social Security Costs 155,070 15,813 US $ 70,925 7,288 7. INTEREST RECEIVABLE AND SIMILAR INCOME Derived from Group Undertakings on letters of Credit Bank Interest Less: Interest charges incurred on discounting Letters of credit 170,883 78,213 US $ 26,571 15,905 42,476 US $ --- --- --- US$ US$ 867,094 120,117 --- 23,307 987,211 23,307 (678,130) --- 309,081 23,307 31.12.1991 31.3.1991 US$ US$ Corporation Tax based on the results for the period at the rate of 33% (31.3.1991-26.21%) The taxation charges for the period has been affected by the disallowance of certain expenditure, and the taxation liability has been provided at the period end rate of exchange. 352,175 15,352 9. DIVIDEND Proposed US $ 311,077 US $ 9,792 Fixtures, Fittings and Equipment Motor Vehicles (c) Stocks - - 20% straight line 20% straight line 6. DIRECTOR’S REMUNERATION Emoluments - Salary Benefits in kind Stocks are stated at the lower of cost and net realisable value. Cost includes all direct costs incurred in bringing the,stocks to their present location and condition. (d) Turnover Turnover represents the invoiced value of goods sold net of Value Added Tax. (e) Deferred Taxation Deferred Taxation is accounted for under the liability method in respect of the taxation effects of all timing differences which are expected to reverse in the future,calculated at the rate at which it is estimated that tax will be payable. Profit and Loss Account transactions denominated in foreign currencies are translated into US Dollars at the average monthly rate of exchange appropriate to the month in which the transaction is recognised. Assets and liabilities in foreign currencies are translated into US Dollars at rates of exchange ruling at the end of the financial period. All exchange differences are dealt with in the Profit and Loss Account. (g) Leasing (f) Foreign currencies 8. TAXATION Rentals paid under operating leases are charged to income on a straight line basis over the lease term, in an accounting period where a liability exists for the period. 10. TANGIBLE ASSETS 2. CORRESPONDING AMOUNTS The comparative figures are for the period from incorporation on 16th July 1990 to 31st March 1991. 3. TURNOVER Turnover is attributable to the principal activities of the Company which arose as shown below: Payments on account and Fixtures, Fittings and assets in course of Motor Construction Equipment Vehicles Total Cost Additions US$ 50,141 US$ 10,293 US$ 49,833 US$ 110,267 At 31st December 1991 50,141 10,293 49,833 110,267 Geographical Analysis: United Kingdom Rest of Europe North America Asia 31.12.1991 31.3.1991 US $ 2,139,616 12,824,887 2,789,906 11,179,690 US $ 2,835,393 6,471,857 --- --- Depreciation Charge for the period At 31st December 1991 Net Book Value At 31st December 1991 --- --- 515 515 2,491 2,491 3,006 3,006 50,141 9,778 47,342 107,261 28,934,099 9,307,250 At 31st March 1991 --- --- --- --- 69 RELIANCE EUROPE LIMITED 11. STOCKS Goods for Resale Goods in Transit 31.12.1991 US$ 932,559 2,495,128 31.3.1991 US$ 5,761,004 1,060,992 3,427,687 6,821,996 15. FUTURE FINANCIAL COMMITMENTS At 31st December, 1991 the company had annual commitments under operating leases as set out below: Land and Building 31.12.1991 Other 31.12.1991 31.3.1991 The value of Goods in Transit includes transactions where the Company has made arrangements to sell products to customers where the products have been accepted by the Company from the supplier but delivery to the Company’s customer has not been completed until after the accounting reference date. 12. DEBTORS Trade Creditors Amounts owed by Group Undertakings Others Debtors Prepayments and Accrued Income US$ 3,587,820 3,384,342 116,781 183,599 US$ 2,566,892 7,973 --- --- Expiring within one year 49,777 550,000 US $ US $ US $ --- The Company’s total future financial commitments under these leases are $599,777 (31.3.1991 - $NIL). 16. DIRECTOR S INTERESTS The Company has traded with Beachcroft stanleys, solicitors, a firm of which Mr.K.Ridehalgh is a Panner, on normal arms-length trading terms for the provision of legal services. These services amounted to $1,607 (31.3.1991 - $2,030). 7,272,542 2,574,865 17. POST BALANCE SHEET EVENTS 13. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR Trade Creditors Amounts owed to Group Undertakings Corporation Tax Advance Corporation Tax on Dividends Social Security and Other Taxes Accruals and Deferred Income Proposed Dividend US$ 3,980,294 6,092,278 348,753 107,114 --- 257,664 311,077 US$ 271,349 7,709,301 15,352 3,264 4,930 48,358 9,792 11,097,180 8,062,346 14. CALLED UP SHARE CAPITAL Authorised: 3,000,000 Ordinary Shares of £ 1 each Called Up Allotted and Fully paid: 2,017,000 Ordinary shares of £ 1 each £3,000,000 £ 3,000,000 £ 2,017,000 £ 2,017,000 An exchange rate of $1.95: £ 1 was used to re-state the above Called Up, Allotted and fully paid shares to the balance sheet equivalent of $ 3,933,150. A further issue of shares has been made since the balance sheet date as disclosed in Note 17 of the Financial Statements. (a) On 1st April 1992 the Company issued 200,000 £ 1 Ordinary Shares at par to Reliance Industries Limited. The funds will be used to provide additional working capital. (b) Since the Balance Sheet date the Company has entered into an operating lease agreement in respect of Office Premises. The annual commitment under this lease is $125,153 with payments commencing in January 1994.The total commitment under this operating lease amounts to $500,612. 18. CAPITAL COMMITMENTS 31.12.1991 US$ 31.3.1991 US$ Expenditure contracted for not provided 183,706 --- 19. ULTIMATE PARENT COMPANY The Company’s Ultimate Parent Company is Reliance Industries Limited, a Company incorporated in India. The address from which the financial statement of the Ultimate Parent company can be obtained is: 3rd Floor, Maker Chambers IV, 222 Nariman Point, Bombay 400 021, Post Box 11717, India. 70 REDWOOD INVESTMENTS LIMITED Regd. Office: 3rd Floor, Maker Chambers IV 222, Nariman Point, Bombay 400 021 71 REDWOOD INVESTMENTS PRIVATE LIMITED DIRECTORS’ REPORT To the Members Your Directors present the First Annual Report together with the Audited Statement of Accounts for the period ended on 3tst March, 1992. FINANCIAL RESULTS: The Company during the year under review has incurred a loss of Rs. 12,024/-. DIVIDEND: In view of the loss, the Directors have not recommended any dividend for the period ended 31st March, 1992. FIRST ACCOUNTING YEAR: Your Directors have fixed the first accounting year of the Company from 10th April, 1991 the date of incorporation, upto 31st March, 1992 and accordingly, the accounts reflected herein are for the said period. INVESTMENTS: During the year the Company, has acquired 1,35,10,000 Equity Shares of Rs.1/- each of Reliance Enterprises Private Limited for Rs.1,35,10,000/-. DEPOSITS: The Company has not accepted any deposit from the public. Hence, no information is required to be appended to this report in terms of Non-Banking Financial Companies (Reserve Bank) Directions, 1977. PERSONNEL: The Company has not paid any remuneration attracting the provisions of Companies (Particulars of Employees) Rules, 1975 read with Section 217(2A) of the Companies Act, 1956. Hence, no information is required to be appended to this report in thisregard. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS 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 and outgo during the year. DIRECTORS: Shri Mohan Patel and Shri Parag Parikh were the first Directors of the Company, who resigned from the Board on 9.9.91 and Shri V.R. Mohan and Shri Tushar B. Sarda were appointed as Additional Directors on the same day. Shri V.R. Mohan and Shri Tushar B. Sarda, the Additional Directors, resigned from the Board on 14.1.92 and Shri V.M. Ambani, Shri B.R. Jaju and Shri Manoj H. Modi were appointed as Additional Directors. Their appointment expire at the ensuing Annual General Meeting. However, the Company has received notices under Section 257 of the Companies Act, 1956,proposing their appointment as Directors of the Company. AUDITORS: The first Auditors of the Company, M/s. Rajendra & Co. and M/s. Chaturvedi & Shah, hold office until the conclusion of the ensuing Annual General Meeting and are recommended for re- appointment. The Company has received certificate from the 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 V. M. AMBANI B.R. JAJU Directors MANOJ H. MODI Bombay Dated : 30th June, 1992 72 REDWOOD INVESTMENTS PRIVATE LIMITED AUDITORS’ REPORT ToThe Members of Redwood Investments Private Limited We have audited the attached Balance sheet of Redwood investments Private Limited as at 31st March, 1992 and the Profit & Loss Account for the period 1. 2. ended on that date annexed thereto and report that: 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. 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. In our opinion proper books of account as required by law have been kept by the Company, so far as appears from our examination of such books. b) The Balance Sheet and Profit and Loss Account referred to in this Report are in agreement with the books of account. c) 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 d) 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 1992 and in so far as it relates to the Profit and Loss Account of the Loss of the Company for the period ended on that date. For RAJENDRA & CO. Chartered Accountants R.J. SHAH Proprietor Bombay Dated: 30th June 1992 ANNEXURE TO AUDITORS’ REPORT Referred to in Paragraph 1 of our report of even date For CHATURVEDI & SHAH Chartered Accountants D.CHATURVEDI Partner 1. 2. 3. 4. 5. 6. 7. 8. 9. As the Company had no Fixed Assets during the period, clauses 4(A)(i) and (ii) of the said Order are not applicable. 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 not applicable. The Company has received an interest free loan from the holding Company. According to the information and explanations given to us, and in our opinion, the terms and conditions of the above loan are not primafacie prejudicial to the interest of the Company. 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. The Company has not given any loans or advances in the nature of loans during the period. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits as defined under Section 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 during the period under review. According to the information and explanations given to us and in our opinion, internal audit is not required statutorily. According to the information and explanations given to us, the provisions of the Provident Fund Act and the Employees State Insurance act, 1948 are not applicable to the Company 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, 1992 for a period of more than six months from the date they became payable. In our opinion and according to the information and explanations given to us, no personal expenses have been charged to revenue account. 10. 11. The Company is not a sick Industrial Company within the meaning of clause (0) of sub-section (1) of section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985. 12. The Company has not granted any loans, 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 not dealt or traded in Shares, Securities, Debentures and other investments. The Company’s investments are held in its own name. For RAJENDRA & CO. Chartered Accountants R.J. SHAH Proprietor Bombay Dated: 30th June 1992 For CHATURVEDI & SHAH Chartered Accountants D.CHATURVEDI Partner 73 REDWOOD INVESTMENTS PRIVATE LIMITED BALANCE SHEET AS AT 31ST MARCH, 1992 SOURCES OF FUNDS: Shareholders’ Funds Capital Reserves and Surplus Loan Funds Unsecured Loans (from Reliance Industries Limited, the holding company) TOTAL APPLICATION OF FUNDS: Investments Current Assets, Loans and Advances Cash and Bank Balances Less: Current Liabilities and provisions Current Liabilities: Sundry Creditors Miscellaneous Expenditure (To the extent not written off or adjusted) Profit & Loss Account Notes and Contingent Liabilities PROFIT & LOSS FOR THE PERIOD 10TH APRIL, 1991 TO 31ST MARCH, 1992 TOTAL INCOME EXPENDITURE Audit Fees General Expenses Miscellaneous expenditure Written off Loss for the period Balance carried to Balance Sheet Notes and Contingent Liabilities Schedule Rs. Rs. As at 31st March, 92 5,04,000 9,000 1,35,00,000 4,88,770 10,000 ‘A’ ‘B’ ‘C’ ‘D’ ‘E’ ‘F’ 5,13,000 1,35,00,000 1,40,13,000 1,35,10,000 4,78,770 12,206 12,024 1,40,13,000 Schedule For the period Ended 31st March, 1992 Rs. --- 10,000 668 1,356 Rs. --- 12,024 12,024 12,024 ‘F’ As per our Report of even date For and on behalf of the Board For RAJENDRA & CO. Chartered Accountants For CHATURVEDI & SHAH Chartered Accountants Vinod M. Ambani R.J. Shah Proprietor D. Chaturvedi Partner B.R. Jaju Directors Manoj H. Modi Bombay Dated: 30th June, 1992. 74 SCHEDULES FORMING PART OF THE BALANCE SHEET SCHEDULE ‘A’ As at 31st March 1992 REDWOOD INVESTMENTS PRIVATE LIMITED SHARE CAPITAL Authorised: 59,600 Equity Shares of Rs.10 each 40,400 11% Cumulative Redeemable Preference Shares of Rs.10 each. Issued, Subscribed & Paid up: 10,000 Equity Shares of Rs.10 each fully paid up. 40,400 (held by Reliance Industries Limited, the Holding company) 11% cumulative Redeemable Preference Shares of Rs.10 each fully paid up. (Redeemable at at any time after 19th October, 2000 but not later than 19th October, 2001.) SCHEDULE ‘B’ RESERVES AND SURPLUS Capital Reserves (Share Application Money @ Rs.5/- per Share on 1800 Equity Shares forfeited.) SCHEDULE ‘C’ INVESTMENTS (At cost) OTHER INVESTMENTS: Unquoted: 1,35,10,000 Equity Shares of Reliance Enterprises Private Limited of Rs.1/- each, fully paid up. SCHEDULE ‘D’ CASH AND BANK BALANCES Cash on hand Balance with a Scheduled Bank In a current Account. SCHEDULE ‘E’ MISCELLANEOUS EXPENDITURE Preliminary Expenses Less: Written Off during the year Rs. 5,96,000 4,04,000 1,00,000 4,04,000 Rs. 2 4,88,768 Rs. 13,562 1,356 Rs. 10,00,000 5,04,000 5,04,000 As at 31st March 1992. Rs. 9,000 9,000 As at 31st March 1992 Rs. 1,35,10,000 1,35,10,000 As at 31st March 1992 Rs. 4,88,770 4,88,770 As at 31st March 1992 Rs. 12,206 12,206 75 REDWOOD INVESTMENTS PRIVATE LIMITED SCHEDULE ‘F’ NOTES AND CONTINGENT LIABILITIES 1) 2) 3) The company was incorporated on 10th April, 1991 and the Accounts are therefore prepared for the period from 10th April, 1991 to 31st March, 1992. This being the first financial year of the Company, there are no corresponding figures for the previous year. In view of loss for the year no Dividend on 11% cumulative Redeemable preference shares is proposed amounting to Rs.14,303/ As the Company is not a Manufacturing company, information in respect of manufacturing activities required under para 3 and 4 of Schedule Vl of the Companies Act, 1956 is not given. 4) DISCLOSURE OF SIGNIFICANT ACCOUNT POLICIES: a) GENERAL The financial statements are prepared in accordance with the normally accepted accounting principles and the provisions of the Companies Act, 1956. b) REVENUE RECOGNITION: Income and Expenditure are accounted for on accrual basis. c) INVESTMENTS: Investments are stated at cost. As per our Report of even date For and on behalf of the Board For RAJENDRA & CO. Chartered Accountants For CHATURVEDI & SHAH Chartered Accountants Vinod M. Ambani R.J. Shah Proprietor D. Chaturvedi Partner B.R. Jaju Directors Manoj H. Modi Bombay Dated: 30th June, 1992. 76 RELIANCE PETROPRODUCTS LIMITED Regd. Office: 3rd Floor, Maker Chambers IV 222, Nariman Point, Bombay 400 021 77 RELIANCE PETROPRODUCTS LIMITED DIRECTORS REPORT To the Members Your Directors present the Second Annual Report together with the Audited Statement of Accounts for the Financial Year ended on 31st March, 1992. FINANCIAL RESULTS: The expenses incurred during the year under review were Rs.6110/- (amounting to loss for the year) as against loss of Rs.1832/- for the last year. DIVIDEND: In view of the carried forward losses, your Board of Directors has not proposed any dividend for the financial year under review. DIRECTORS: Shri M.N. Chaini and Shri K.K. Malhotra resigned from the Board and Shri A.D. Ambani, Shri S.R. Vengsarkar and Shri P.S. Balasubramaniam were appointed as Additional Directors of the Company on 13.2.1992. Shri A.D. Ambani and Shri S.R. Vengsarkar resigned from the Board on 30.4.1992. As per the provisions of the Companies Act, 1956, Shri J.S. Bakshi retires by rotation and being eligible offers himself for re-appointment. The appointment of Shri P.S. Balasubramaniam as an Additional Director expires at the ensuing Annual General Meeting. However, the Company has received a notice under Section 257 of the Companies Act, 1956, regarding his re-appointment as a Director of the Company. AUDITORS: The Company has received a special notice under Section 225 of the Companies Act, 1956 from a member proposing a resolution for appointment of M/s Rajendra & Co., Chartered Accountants, Bombay, as Joint Auditors of the Company for the Financial Year 1992-93. The Company has received a certificate from M/s Rajendra & Co., Chartered Accountants, Bombay, to the effect that their appointment, if made, would be within the prescribed limits under Section 224 (1) of the Companies Act, 1956. M/s. Chaturvedi & Shah, Chartered Accountants, retire at the ensuing Annual General Meeting and are recommended for re- appointment. 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: As no manufacturing activities have commenced till the date of this report, there is nothing to be disclosed in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo. PERSONNEL: The Company has not paid any remuneration attracting the provisions of the Companies (Particulars of Employees) Rules, 1975 read with Section 217(2A) of the Companies Act, 1956. Hence, no information is required to be appended to this report in this regard. Bombay Dated : 30th June, 1992 For and on behalf of the Board J.S. Bakshi P.S. Balasubramaniam Directors For and on behalf of the BoardJ.S. BakshiDirectorsP.S. BalasubramaniamBOMBAYDATED: 30th June, 1992 79 RELIANCE PETROPRODUCTS LIMITED AUDITORS’ REPORT To The Members of Reliance Petroproducts Limited We have audited the attached Balance sheet of Reliance Petroproducts Limited as at 31st March, 1992 and the Profit & Loss Account for the year ended on that date annexed thereto and report that: 1. 2. 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. 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. In our opinion proper books of account as required by law have been kept by the Company, so far as appears from our examination of such books. b) c) d) The Balance Sheet and Profit and Loss Account referred to in this report are in agreement with the books of account. In our opinion and to the best of our information and according to the explanations given to us, the said Balance Sheet and Profit and Loss Account read together with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view. i) in so far as it relates to the Balance Sheet of the state of affairs of the Company as at 31st March 1992 and ii) 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. Bombay Dated: 30th June 1992 For CHATURVEDI & SHAH Chartered Accountants D.CHATURVEDI Partner ANNEXURE TO AUDITORS’ REPORT Referred to in Paragraph 1 of our report of even date 1. 2. 3. 4. 5. 6. 7. 8. 9. As the Company had no Fixed Assets during the year, clauses 4(A)(i) and (ii) of the said Order are not applicable. 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 not applicable. The Company has not taken/or granted any loan, secured or unsecured from /to companies, firms, or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956, or from/to Companies under the same management within the meaning of section (1B) of Section 370 of the Companies Act, 1956. The Company has not given any loans or advances in the nature of loans during the year. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits as defined under Section 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 during the year under review. According to the information and explanations given to us and in our opinion, internal audit is not required statutorily. According to the information and explanations given to us, the provisions of the Provident Fund Act and the Employees State Insurance act, 1948 are not applicable to the Company. 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, 1992 for a period of more than six months from the date they became payable. In our opinion and according to the information and explanations given to us, no personal expenses have been charged to revenue account. 10. The Company is not a sick industrial Company within the meaning of clause (0) of sub-section (1) of section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985. Bombay Dated: 30th June 1992 80 For CHATURVEDI & SHAH Chartered Accountants D.CHATURVEDI Partner BALANCE SHEET AS AT 31ST MARCH, 1992 Schedule As at 31st March, 1992 Rs. Rs. As at 31st March, 1991 Rs. Rs. RELIANCE PETROPRODUCTS LIMITED TOTAL ‘B’ TOTAL Schedule SOURCES OF FUNDS: Shareholders’ Funds Capital Loan Funds Unsecured Loans (From Directors) APPLICATION OF FUNDS: Current Assets, Loans and Advances Cash and Bank Balances Less: Current Liabilities and Provisions Current Liabilities Sundry Creditors Miscellaneous Expenditure (To the extent not written off or adjusted) Profit & Loss Account Notes on Accounts: ‘C’ PROFIT AND LOSS ACCOUNT FOR YEAR ENDED 31ST MARCH, 1992 INCOME EXPENDITURE Audit Fees General Expenses Miscellaneous Expenditure written off Loss for the year Add: Balance brought forward from last year Balance carried to Balance Sheet Notes on Accounts: ‘C’ As per our Report of even date For CHATURVEDI & SHAH Chartered Accountants D. Chaturvedi Proprietor Bombay Dated: 30th June, 1992. ‘A’ 13,000 --- 5,626 6,000 13,000 --- 13,000 (374) 5,432 7,942 13,000 3,000 3,000 1,697 3,640 3,000 3,000 6,000 (1,943) 6,111 1,832 6,000 For the period ended 31st March, 1992 For the period ended 31st March, 1991 Rs. --- 1,000 153 679 Rs. --- 5,000 431 679 Rs. --- 6,110 6,110 1,832 7,942 For and on behalf of the Board J.S. Bakshi P.S. Balasubramanian Directors Rs. --- 1,832 1,832 --- 1,832 81 RELIANCE PETROPRODUCTS LIMITED SCHEDULES FORMING PART OF THE BALANCE SHEET SCHEDULE ‘A’ SHARE CAPITAL Authorised: 50,000 Equity Shares of Rs.10 each. Issued, Subscribed & Paid up: 1,300 Equity Shares of Rs.10/- each fully paid up. (300) (held by Reliance Industries Limited, the Holding Company) SCHEDULE ‘B’ CASH AND BANK BALANCES Cash on hand Balance with a scheduled Bank in a Current Account As at 31st March, 1992 Rs. As at 31st March, 1991 Rs. 500,000 13,000 13,000 As at 31st March, 1992 Rs. Rs. 500,000 3,000 3,000 As at 31st March, 1991 Rs. Rs. 1,070 4,556 1,697 --- 5,626 5,626 1,697 1,697 SCHEDULE ‘C’ NOTES ON ACCOUNTS: 1) The current financial year is for the period of twelve months whereas the previous year was for a period from 4th January, 1991 to 31st March, 1991. The current financial year’s figures to that extent are not comparable. 2) During the year the company became a Public Limited Company by virtue of Section 43A of the Companies Act, 1956. 3) As no manufacturing and/or Trading activities were carried out during the year, information required under para 3 and 4 of Schedule Vl of the Companies Act, 1956 are not applicable. 4) Figures of the previous year have been regrouped/rearranged wherever necessary. 5) DISCLOSURE OF SIGNIFICANT ACCOUNTING POLICIES: a) GENERAL: The financial statements are prepared in accordance with the normally accepted accounting principles and the provisions of the Companies Act, 1956 as adopted consistently by the Company. b) REVENUE RECOGNITION: Income and Expenditure are accounted for on accrual basis. As per our Report of even date For CHATURVEDI & SHAH Chartered Accountants D. Chaturvedi Proprietor Bombay Dated: 30th June, 1992. 82 For and on behalf of the Board J.S. Bakshi P.S. Balasubramanian Directors 

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