Reliance Industries Limited
Annual Report 1993

Plain-text annual report

Reliance 84 Reliance Industries Limited Annual Report 1992-93 Board of Directors Secretary Solicitors & Advocates Auditors Bankers Registered Office 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 Nikhil R. Meswani Executive Director Suresh S. Betrabet Nominee Director- ICICI Bhogilal D. Shah Nominee Director- GIC Mansingh L. Bhakta T. Ramesh U. Pai Yogendra P. Trivedi Vinod M. Ambani Kanga & Co. Chaturvedi & Shah Rajendra & Co. Rajagopalan & Co. Syndicate Bank Allahabad Bank American Express Bank Bank of America Bank of Baroda Canara Bank Central Bank of India Deutsche Bank Hongkong Bank Indian Bank Oriental Bank of Commerce Punjab National Bank State Bank of India Vijaya Bank 3rd Floor, Maker Chambers IV, 222, Nariman Point, Bombay 400 021. Tel Nos. 226070, 242384 Fax No. 022-204 2268 Nineteenth Annual Report 1992-93 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 11-13 13-23 24-25 26 27 28-37 38-43 44 45- 82 Manufacturing Facilities at: 1. Petrochemicals & Fibres Complex B-4, Industrial Area, Patalganga, Off Bombay-Pune Road, Near Panvel, Dist. Raigad 410 207 Maharashtra State, India. 2. Textiles Complex 103/106, Naroda Industrial Estate, Naroda, Ahmedabad 382 330 Gujarat State, India. 3. Plastics 8 Petrochemicals Complex Village Mora, P.O. Bhatha, Surat-Hazira Road Surat -394 510, Gujarat State, India. SUBSIDIARY COMPANIES 1. Devti Fabrics Limited 3rd Floor, Maker Chambers IV, 222, Nariman Point, Bombay 400 021 2. Reliance Industrial Investments and Holdings Limited 3rd Floor, Maker Chambers IV, 222, Nariman Point, Bombay 400 021 3. Redwood Investments Limited 3rd Floor, Maker Chambers IV, 222, Nariman Point, Bombay 400 021 4. Reliance Petroproducts Limited 201/202 Lalita Complex Near Vijaya Bank 352/3 Rasala 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, India Tel Nos. 836 7015-16-17-18 Fax No. 022-836 7019 Reliance (A) (B) (C) (D) (E) (F) (G) SALES & EARNINGS Sales Other Income Sub-Total Manufacturing & Other Expenses Inter-divisional Transfers Gross Profit (A -- B -- C) Interest Depreciation Sub Total Net profit [D -- (E + F)] WHAT THE COMPANY OWNED Fixed Assets Gross Block Less: Depreciation (Cumulative) Net Block Investments Current Assets Total WHAT THE COMPANY OWED Long Term Funds Medium/Short Term Funds Current Liabilities and Provisions Total NET WORTH OF THE COMPANY Equity Share Capital Preference Share Capital Reserves and Surplus Net Worth 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) Number of Employees Financial 1992-93 1991-92 1990-91 Rs. Rs. Rs. *4105.50 *2953.21 2098.34 68.46 4173.96 2295.43 997.62 880.91 279.35 279.81 559.16 321.75 4640.53 1272.69 3367.84 516.89 2198.28 6083.01 2193.42 156.25 1,120.57 3470.24 245.48 5.50 2361.79 2612.77 13.24 24.79 106.21 0.84:1 37 11,836 42.15 2995.36 1765.56 655.19 574.61 218.65 192.64 411.29 163.32 4314.33 976.22 3338.11 61.95 1480.15 4880.21 1794.15 176.24 966.20 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 38 11935 152.12 5.80 995.53 1153.45 8.20 19.66 75.44 0.61:1 24 11666 *Includes Inter-divisional Transfers. **Annualised and based on weighted average Equity Shares outstanding. 4 Highlights Reliance (Rs. in crores) 1989-90 1988-89 (9 months) 1987-88 (18 months) 1986 1985 1984 1983 Rs. Rs. Rs. Rs. 1840.66 1112.45 1770.74 905.48 Rs. Rs. 622.01 520.35 133.25 117.89 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 7.88 1120.33 862.58 -- 257.75 91.58 86.80 178.38 79.37 1871.76 368.98 1502.78 58.50 849.46 2410.74 579.44 195.11 564.88 1466.34 1339.43 152.12 5.80 929.06 1086.98 5.89 16.54 71.07 0.55:1 26 11355 152.11 5.80 913.40 1071.31 6.91 14.52 70.05 0.54:1 31 10983 7.45 1778.19 1495.27 -- 282.92 110.74 91.41 202.15 80.77 5.73 911.21 781.82 -- 129.39 54.24 60.98 115.22 14.17 1862.66 1137.55 278.58 1584.08 1.25 188.09 949.46 0.37 607.83 1052.83 Rs. 733.14 4.94 738.08 604.83 -- 24.45 37.46 61.91 71.34 735.68 128.88 606.80 37.30 402.10 2193.16 2002.66 1046.20 609.82 103.83 457.39 1171.04 152.10 5.80 864.22 1022.12 5.19 11.21 66.82 0.60:1 31 10697 546.12 143.78 1001.23 1691.13 51.61 5.80 254.12 311.53 2.58 14.39 59.24 1.75:1 18 9376 515.16 81.90 138.02 735.08 51.61 5.80 253.71 311.12 14.16 21.69 59.16 1.66:1 17 9066 7.11 629.12 511.23 -- 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 1.12:1 15 8914 4.68 525.03 433.61 -- 91.42 21.52 31.38 52.90 38.52 394.88 73.42 321.46 0.12 215.19 536.77 239.99 35.46 131.44 406.89 36.15 5.80 87.93 129.88 10.42 19.10 34.32 1.85:1 3 8440 5 Reliance NOTICE Notice is hereby given that the Nineteenth Annual General Meeting of the Members of RELIANCE INDUSTRIES LIMITED will be held on Thursday, the 23rd September, 1993 at 10.30 a.m. at Bhaidas Maganlal Sabhagriha, U-1 Juhu Development Scheme, Vile Parle (West), Bombay 400 056, to transact the following business: ORDINARY BUSINESS: agreement is hereby specifically sanctioned with liberty to the Board of Directors to alter and vary 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 including any statutory modification or re-enactment thereof, for the time being in force as above and/or modifications that may hereafter be made thereto by the Central Government in that behalf from time to time, or any amendments thereto as may be agreed to between the Board of Directors and Shri Anil D. Ambani or as may be varied by the general meeting. To consider and adopt the Balance Sheet as at 31st March, 1993, Profit and Loss Account for the year ended on that date and the Reports of the Board of Directors and Auditors thereon. 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.” 1. 2. 3. 4. 5. 6. To declare dividend on Preference and Equity Shares. To appoint a Director in place of Shri Mukesh D. Ambani who retires by rotation and being eligible, offers himself for re-appointment. To appoint a Director in place of Shri Anil D. Ambani who retires by rotation and being eligible, offers himself for re-appointment. To appoint a Director in place of Shri T.Ramesh U. Pai who retires by rotation and being eligible, offers himself for re-appointment. To appoint Auditors who shall hold off ice f rom the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting and fix their remuneration. SPECIAL BUSINESS: 7. 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 Sections 198, 269, 309 read with Schedule XIII and all other applicable provisions of the Companies Act, 1956 (including any statutory modification or re-enactment thereof, for the time being in force), the consent of the Company be and is hereby accorded to the reappointment of Shri Dhirubhai H. Ambani, as the Chairman and Managing Director of the Company, for a period of 5 (five) years with effect from 1st March, 1994, on the terms and conditions including remuneration as are set out in the agreement to be entered into between the Company and Shri Dhirubhai H. Ambani, a draft whereof is placed before this meeting which agreement is hereby specifically sanctioned with liberty to the Board of Directors to alter and vary 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 including any statutory modification or re-enactment thereof, for the time being in force or any amendments and/or modifications that may hereafter be made thereto by the Central Government in that behalf from time to time, or any amendments thereto as may be agreed to between the Board of Directors and Shri Dhirubhai H. Ambani or as may be varied by the general meeting. RESOLVED FURTHER THAT the Board of Directors be and is hereby authorised to take such steps as may be necessary to give effect to this resolution.” 8. 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 Sections 198, 269, 309 read with Schedule XIII and all other applicable provisions of the Companies Act, 1956 (including any statutory modification or re-enactment thereof, for the time being in force) and subject to the approval of the Central Government, the consent of the Company be and is hereby accorded to the re-appointment of Shri Anil D. Ambani, as Joint Managing Director of the Company, for a period of 5 (five) years with effect from 1st May, 1994, on the terms and conditions including remuneration as are set out in the agreement to be entered into between the Company and Shri Anil D. Ambani, a draft whereof is placed before this meeting which 6 9. To consider and, if thought fit, to pass, with or without modification, the following resolution as an Ordinar y Resolution: ”RESOLVED THAT pursuant to the provisions of Section 293(1)(a) and all other applicable provisions of the Companies Act, 1956 (including any statutory modification or re-enactment thereof, for the time being in force), the consent of the Company be and is hereby granted to the Board of Directors of the Company, to create mortgage/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 of Directors of the Company may determine, on all or any of the movable and/or immovable 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, to or in favour of Industrial Development Bank of India, to secure the Foreign Currency Loan of US$ 31,500,000 equivalent to Rs. 8169 lacs, (of which approval of shareholders was received for US $ 21,000,000 at the Eighteenth Annual General Meeting of the Company held on 10th December, 1992) together with interest at the respective agreed rates, additional interest, liquidated damages, commitment charges, premia on prepayment, costs, charges, expenses including any increase as a result of the devaluation/ revaluation/fluctuation in the rates of exchange and all other monies payable by the Company to Industrial Development Bank of India in terms of its 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 Industrial Development Bank of India, the documents for creating the aforesaid mortgage and/or charge and to do all such acts, deeds and things as may be necessary for giving effect to the above resolution.” 10. To consider and, if thought fit, to pass, with or without modification, the following resolution as an Ordinar y Resolution: ”RESOLVED THAT in accordance with the provisions of Section 293(1)(a) and all other applicable provisions of the Companies Act, 1956 (including any statutory modification or re-enactment thereof, for the time being in force), consent of the Company be and is hereby accorded to the Board of Directors of the Company, to create 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 of Directors of the Company may determine, on all or any of the movable and/or immovable properties of the Company, both present and future and/or the whole or any part of the under taking(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 Non-Convertible Debentures issued/to be issued by the Company on Pr ivate Placement basis to the Financial Institutions/Banks/others, upto an aggregate nominal value of Rs. 60 crores, together with interest, further interest thereof, compound interest in case of default, accumulated interest, remuneration of the Trustees, premium, if any, on redemption and 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 of the Company and the Trustees. RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised to finalise with the Agents and Trustees/ Trustees the documents for creating the aforesaid mor tgage and/or charge 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 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 (including any statutory modification or re-enactment thereof, for the time being in force), consent of the Company be and is hereby accorded to the Board of Directors of the Company, to create mor tgage 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 of Directors of the Company may determine, on all or any of the movable and/or immovable 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 Lenders/the Consortium of Lenders, who will provide External Commercial Borrowings (ECB) upto US$ 300 million in aggregate to the Company, together with interest, at the respective agreed rates, additional interest liquidated damages, commitment charges, premia on prepayment, costs, charges, expenses including any increase as a result of the devaluation/revaluation/fluctuation in the rates of exchange and all other monies payable by the Company to the Lenders/the Consortium of Lenders who will be providing ECB in terms of Loan Agreement(s)/Heads of Agreement(s) or any other agreement(s)/ document(s), 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 Lenders/the Consortium of Lenders providing ECB the documents for creating the aforesaid mortgage and/or charge and to do all such acts, deeds and things as may be necessary for giving effect to the above resolution.” 12. To consider and, if thought fit, to pass, with or without modification the following resolution as a Special Resolution:’ RESOLVED THAT in ter ms of Section 81 and other applicable provisions, if any, of the Companies Act, 1956, and in accordance with the provisions of the Articles 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 consent of all concerned authorities and departments if and to the extent necessary, and such other approvals, permission and sanctions as may be necessary, and subject to such conditions and modifications as may be prescribed 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”), at its sole discretion, the consent of the Company be and is hereby accorded to the Board to create, offer and issue, to or for the benefit of such person or persons (including Managing/ Wholetime Directors) as are at the time of issue in the permanent employment of the Company, such number of equity shares of the Company of the face value of Rupees ten each, not exceeding in Reliance number at any time, in the aggregate, 3% of the issued equity shares of the Company at that time, as the Board may deem fit, for subscriptionÜjÜfor cash, in one or more branches, on terms as may be fixed and determined by the Board prior to the issue and offer thereof in consultation with such authorities as may be prescribed or in accordance with such guidelines or other provision of law as may be prevailing at that time and otherwise ranking pari passu with the equity shares of the Company as then issued and in existence and on such other terms and conditions and at such time or times as Board may at its absolute discretion and in the best interest of the Company may deem fit; Provided that the issue price of such shares shall not be less than the Book value or market price of the Equity Shares whichever is less on the date of offer of the said shares as the Board may at its absolute discretion and in the best interest of the Company may deem fit; Provided further that the aforesaid issue of Equity Shares may instead be in the form of fully or partly convertible debentures, bonds, equity warrants or other securities as may be permitted in law, from time to time and which are generally regarded as an Employee Stock Option Instrument by the Board and the issuance of such securities in the aggregate will result in not more than 3% of the issued Equity Shares of the Company at that time; Provided also that the Board may in this behalf also make or formulate a scheme for the provision of monies by the Company for the purchase or subscription of the shares or other securities as above in such manner as may be permitted under law. ”RESOLVED FURTHER THAT for the purpose of giving effect to any issue or allotment of equity shares and/or fully or partly convertible debentures, bonds, equity warrants or other securities contemplated above, the Board be and is hereby authorised on behalf of the Company to do all such acts, deeds, matters and things as it may at its discretion deem fit or necessary or desirable for such purpose with power on behalf of the Company to settle any questions, difficulties, or doubts that may arise in regard to any such issue or allotment as it may in its absolute discretion deem fit. 13. To consider and, if thought fit, to pass, with or without modification the following resolution as a Special Resolution: ‘‘RESOLVED THAT pursuant to Section 31 and all other applicable provisions, if any, of the Companies Act, 1956, Article No. 128 of the Articles of Association of the Company be and is hereby deleted and the following Ar ticle be substituted in its place and stead as new Article 128: ‘ARTICLE 128 :- Unless otherwise determined by the Company in General Meeting, the number of Directors shall not be less than 3 (Three) and not more than such number as may be stipulated by Act for the time being in force. Shri Mukesh D. Ambani and Shri Anil D. Ambani shall be permanent Directors and any Nominee Director appointed under Article 131 shall not be liable to retire by rotation as provided under Section 255 of the Act.’ RESOLVED FURTHER THAT in accordance with the provisions of Section 268 and all other applicable provisions, if any, of the said Act the amendment to the Articles of Association as aforesaid shall not have any effect unless approved by the Central Government and that necessary application be made to the concer ned authorities for giving effect to this Resolution.” Registered Office: 3rd Floor, Maker Chambers IV 222, Nariman Point Bombay 400 021. Dated: 20th August, 1993 By Order of the Board of Directors Rohit C. Shah Joint Secretary 7 Reliance NOTES: 1. 2. 3. A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER. The Explanatory Statement setting out material facts in respect of the business under item Nos. 7 to 13 is annexed hereto. All documents referred to in the accompanying Notice and the Explanatory Statement are open for inspection at the Registered Office of the Company during office hours on all working days except Saturdays between 11.00 a.m. and 1.00 p.m. upto the date of the Annual General Meeting. 4. Members/Proxies should bring the Attendance Slip duly filled in for attending the meeting. 5. 6. 7. 8. 9. The Register of Members shall remain close from 27th August, 1993 to 11th September, 1993, both days inclusive for the purpose of Dividend. The Dividend, when sanctioned, will be made payable after 24th September, 1993. Shareholders seeking any information with regard to accounts are requested to write to the Company early so as to enable the management to keep the information ready. In view of the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956 (including any statutory modification or re-enactment thereof, for the time being in force), only the Directors’ Report (except information under Section 217 (2A) of the Companies Act, 1956) (including any statutory modification or re- enactment thereof, for the time being in force), Auditors’ Report 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. The Company has already transferred, unclaimed dividend declared for the financial year ended 31st March, 1989 to the General Revenue Account of the Central Government as required by the Companies Unpaid Dividend (Transfer to the General Revenue Account of the Central Gove rnment) Rules, 1978. Those Shareholders who have so far not claimed or collected their dividend for the said 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: Financial Year Due for Transfer on 1989-90 1990-91 1991-92 01.01.1994 06.12.1994 28.01.1996 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, at Andheri, Bombay, their Income Tax Permanent Account Number (PAN), if any, allotted to them by the Income Tax Authorities and the designation, district/circle and address of the Income Tax Authority by whom their income is assessed or assessable in case the same is not submitted to the Company as such particulars are statutorily required to be stated in the Tax Deduction Certificate issued to the Shareholders. 8 EXPLANATORY STATEMENT: The Explanatory Statement for item Nos. 7 to 13, of the accompanying notice set out hereinabove is as under: Item Nos. 7 and 8 The present term of office of Shri Dhirubhai H. Ambani and of Shri Anil D. Ambani expires on 28th Februar y, 1994 and 30th April, 1994 respectively. The Board of Directors has at its meeting held on 20th August, 1993, re-appointed the aforesaid Directors for a period of five years from the expiry of their present term of office. The draft Agreements to be entered into by the Company with Shri Dhirubhai H. Ambani and Shri Anil D. Ambani in respect of their respective re-appointments for a further period of five years, inter alia, contain the following terms and conditions: 1. NAME & DESIGNATION PERIOD Shri Dhirubhai H. Ambani Chairman & Managing Director Shri Anil D. Ambani Joint Managing Director From 1.3.1994 to 28.2.1999 From 1.5.1994 to 30.4.1999 2. REMUNERATION (a) Salary Shri Dhirubhai H. Ambani Rs.50,000 per month including Shri Anil D. Ambani (b) Perquisites: dearness and all other allowances Rs.50,000 per month including dearness and all other allowances Perquisites shall be allowed, in addition to salary. Perquisites shall be restricted to an amount equal to the annual salar y or Rs. 4,50,000/- per annum, which ever is less. Perquisites are classified into three categories, Part A, B and C as under: PART A: (i) Housing: (a) The expenditure by the Company on hiring fur nished accommodation will be subject to the following ceilings: (b) (c) 60% of the salary, over and above 10% payable by the Managing Director and Joint Managing Director. If the Company does not provide accommodation to the Managing Director and Joint Managing Director, they shall be entitled to house rent allowance subject to the ceiling laid down in (a) above. If accommodation in the Company owned house is provided to the Managing Director and Joint Managing Director a deduction @ 10% shall be made from the salary of the said Directors. Explanation: The expenditure incurred by the Company on gas, electricity, water and furnishings shall be valued as per Income Tax Rules, 1962. This shall, however, be subject to a ceiling of 10% of the salary of the Managing Director and Joint Managing Director. (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.4,000/. Note: For the purpose of perquisites stated in Part- A above, ‘family’ means the spouse, the dependent children and dependent parents of the respective appointee(s). PART B: (1) Contribution to Provident Fund and Superannuation Fund or Annuity Fund will 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. Gratuity payable shall not exceed half a month’s salary for each completed year of service. (2) 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. Encashment of leave at the end of the tenure will not be included in the computation of the ceiling on perquisites. 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 private pur pose shall be billed by the Company. (c) Commission: Remuneration by way of commission will be allowed in addition to salary or perquisites or both or in lieu thereof. The amount of it, based on the net profits of the Company in a particular year, shall be subject to the overall ceilings laid down in Section 198 and 309 of the Companies Act, 1956. 3. Notwithstanding the above where in financial year during the currency of tenure of the Chairman and Managing Director and Joint Managing Director, the Company has no profits or its profits are inadequate it may pay them remuneration by way of salary and perquisites not exceeding the limits specified hereinabove. 4. 5. 6. 7. The terms and conditions set out for re-appointment herein and/or in the Agreement shall be altered and varied from time to time by the Board of Directors of the Company as it may, at its discretion, deem fit so as not to exceed the limits specified in Schedule XIII to the Companies Act, 1956 (including any statutory modification or reenactment thereof, for the time being in force), or any amendments made thereto. The Agreement may be terminated by either party by giving to other party six months’ notice. The Managing Director and Joint Managing Director were appointed by virtue of their employment with the Company and their appointments are subject to the provisions of Section 283(1)(1) of the Companies Act, 1956 (including any statutory modification or re- enactment thereof, for the time being in force). The Managing Director and Joint Managing Director shall not be entitled to supplement their 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 Agreements to be entered into between the Company and Shri Dhirubhai H. Ambani and Shri Anil D. Ambani are available for inspection at the Registered Office of the Company on any working day excluding Saturdays upto the date of the 19th Annual General Meeting between 11.00 a.m. and 1.00 p.m. Shri Anil D. Ambani has been appointed as Managing Director of Reliance Petroleum Limited (RP), a Reliance Group Company. RP Reliance has been formed for setting up a 9 million tonnes grass root refinery project at Jamnagar in the State of Gujarat. Shri Anil D. Ambani does not draw any remuneration from RP and as a matter of fact he has been appointed as Managing Director without any remuneration by the shareholders of RP. The appointment of Shri Anil D. Ambani and remuneration payable to him as set out at Item No. 8 of the Notice require approval of the Central Government as Shri Anil D. Ambani is a Managing Director of RP. Your Directors commend the resolutions set out at Item Nos.7 and 8 of the Notice for your approval. The above may also be treated as an abstract of the terms of contract/agreement between the Company and Shri Dhirubhai H. Ambani, and Shri Anil D. Ambani pursuant to Section 302 of the Companies Act, 1956. Shri Dhirubhai H. Ambani and Shri Anil D. Ambani may be deemed to be concerned or interested in the resolution which pertains to their respective reappointment and remuneration payable to each of them. Further Shri Mukesh D. Ambani may be deemed to be concerned or interested in the resolutions pertaining to re-appointment and remuneration payable to Shri Dhirubhai H. Ambani and Shri Anil D. Ambani. Further Shri R.H. Ambani and Shri N.H. Ambani may be deemed to be concerned or interested in the resolution pertaining to the reappointment and remuneration payable to Shri Dhirubhai H. Ambani. None of the other Directors of the Company is, in any way, concerned or interested in the said resolutions. Item No.9 The Company has been sanctioned an additional Foreign Currency Loan aggregating US$ 10.5 Million by Industrial Development Bank of India, which is to be secured by a suitable mortgage/charge 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 of the Company in consultation with the Lender. 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 Lender, 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 undertaking(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.10 The Company has issued/ proposes to issue Non Conver tible Debentures to Financial Institutions/Banks/others on Private Placement basis, upto an aggregate nominal value of Rs. 60.00 crores, for augmenting resources for long term working capital requirements of the Company, which are to be secured by a suitable mortgage/charge 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 of the Company in consultation with the Agents and Trustees/ Trustees. 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 Agents and Trustees/ Trustees, 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 undertaking(s) within the 9 Reliance 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 proposes to avail External Commercial Borrowings (ECB) upto US$ 300 Million from Lenders/Consortium of Lenders in one or more branches to meet the cost for importing the machinery/equipment and other services required for Naphtha Cracker Project, PTA/POY Expansion Project, PET, Captive Power Plants, other plants/equipments for modernisation/expansion/debottlenecking and other corporate purposes. The said ECB facility will be secured by a suitable mortgage / charge 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 of the Company in consultation with the Lenders or Consortium of Lenders. The Mortgage and/or Charge by the Company of its movable and/or immovable properties and/or whole or any part of the undertakings of the Company in favour of the 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 undertaking(s) within the meaning of Section 293(1)(a) of the Companies Act, 1956, including any statutory modification or reenactment thereof for the time being in force. Hence, it is necessary to pass a resolution under the said Section by the Members. The Directors commend the resolution for shareholders’ approval. None of the Directors of the Company is, in any way, concerned or interested in the resolution. Item No. 12 The business environment in our country is becoming increasingly competitive thanks to abolition of various controls, liberalisation and opening of the economy. It is, therefore, necessary that the Company adopts requisite measures for attracting and retaining qualified, talented and competent personnel. Stock Option Schemes. designed to foster a sense of ownership and belonging amongst personnel, are a well accepted approach to employee motivation. It is, therefore, appropriate to consider introducing a Stock Option Scheme for the employees of the Company. The shares may be allotted directly to employees or in accordance with a scheme framed in that behalf, through a special trust, which may be set up in that behalf in accordance with the provisions of law The scheme may also envisage the provision of monies by the Company to enable the Employees Trust to acquire, purchase or subscribe for the shares of the Company. The proposed resolution is designed to enable achievement of these objectives. 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 the said Section unless the shareholders in General Meeting decide otherwise. The listing agreement with the Stock Exchanges provide inter alia, that the Company in the first instance should offer all the securities 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 the said Section 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. Your Directors recommend the resolution for adoption. The Directors who would be eligible/qualified to join the scheme may be deemed to be concerned or interested in the resolution to the extent of offer of securities which may be issued to them and benefit which may accrue to them. Item No. 13 It is proposed to amend ‘Article 128’ of the Articles of Association of the Company to the effect that Shri Mukesh D. Ambani, Vice Chairman and Shri Anil D. Ambani, Joint Managing Director of the Company be appointed as permanent Directors, not liable to retire by rotation. In terms of the provisions of Section 268 of the Companies Act, 1956. the aforesaid proposal for amending the Articles of Association of the Company requires approval of the Central Government besides obtaining approval of the shareholders by a Special Resolution. The amendment as aforesaid shall not have any effect unless approved by the Central Government. Shri Mukesh D. Ambani, Shri Anil D. Ambani and Shri Dhirubhai H. Ambani may be deemed to be concerned or interested in the resolution. None of the other Directors of the Company is, in any way, concerned or interested in the resolution. By Order of the Board of Directors Rohit C. Shah Joint Secretary Registered Office: 3rd Floor, Maker Chambers IV 222, Nariman PointBombay 400 021. Dated: 20th August, 1993 10 DIRECTORS’ REPORT YEAR IN RETROSPECT Dear Shareholders, Your Directors are pleased to present the 19th Annual Report together with the Audited Statement of Accounts for the Financial Year ended 31st March, 1993. The Company performed well in the year under review. The turnover increased to Rs.4105 crores (including Inter-divisional transfers of Rs. 998 crores), recording an increase of 39%over the preceding year. The profit before tax increased to Rs. 322 crores as compared to Rs.163 crores during the preceding year, recording a 97% increase. The Company contributed nearly Rs.1118 crores to the national exchequer in terms of various taxes. FINANCIAL RESULTS (Rs.in crores) OPERATIONS 1992-93 1991-92 FIBRES DIVISION: Reliance Gross Profit before Interest and Depreciation Less: Interest Depreciation Profit for the year Add: Balance in Profit & Loss Account Add: Add: Transfer from General Reserve Investment Allowance (utilised) Reserve written back Less: Prior year adjustments Amount available for Appropriation Appropriations: Capital Redemption Reserve Investment Allowance Reserve Debenture Redemption Reserve General Reserve Recommended Dividend on Preference and Equity shares Balance carried to Balance Sheet 880.91 279.35 279.81 321.75 20.02 --- 16.10 --- 357.87 0.30 92.00 25.50 100.00 85.67 54.40 574.61 218.65 192.64 163.32 27.73 49.00 4.40 75.06 169.39 --- 50.00 21.00 30.00 48.37 20.02 357.87 169.39 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, 1993, if approved by the Shareholders at the ensuing Annual General Meeting. On Preference Shares (Rs. in crores) (a) Dividend of Rs. 11 per Share on 30,000 Cumulative Redeemable Preference Shares of Rs.100 each fully paid up. 0.03 0.83 0.86 (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 Dividend of Rs. 3.50 per Share on 22,70,81,348 Equity Shares of Rs. 10 each fully paid up and a pro-rata dividend of Rs.2.90 per Share on 1,84,00,000 Equity Shares allotted as fully paid up against Global Depository Shares Polyester Staple Fibre (PSF) Your Company operated at over 100% capacity as against the industry’s capacity utilization of 60%. The Company produced almost one-third (among 10 producers) of the industry’s production. Your Company continues to lay emphasis on achieving consistently high quality and ensuring good customer ser vice. Steps have been taken for the improvement of the product mix as well as the production of speciality products for a better average realization. Given the prevailing competitive conditions, active marketing efforts were pursued to maintain your Company’s position in the polyester industry. Polyester Filament Yarn (PFY) Your Company produced 31% of the total industry’s production (among 22 producers) during the year under review. The production achieved during the year was in excess of 17% over the previous year. During the year, the Company changed its product mix suitably to meet the market requirements. Apart from the increase in production, there was an allround quality improvement and your Company offered a wide range of products to the market. The value added products included textured, twisted, high twisted dyed yarns as well as bright yarns. The superior quality of these yarns enabled consumers to increase production of high value fabrics for local sales and for the export mar ket. The Company is continuously making efforts to increase production by debottlenecking/ expansion and also by upgrading quality and developing new products. FIBRE INTERMEDIATES DIVISION: Purified Terephthalic Acid (PTA) Your Company produced 65% of the combined DMT and PTA industry’s production during the year under review. The Company achieved over 100% capacity utilization. With the increased acceptance of the PTA route for the manufacture of polyester in India, the demand for PTA is expected to grow much faster in the coming few years. However, with the reduction in import duties, the prices remained under constant pressure. Ethylene Glycol (EG) In the very first year of its operation. EG production recorded 86% capacity utilization at Hazira which was over 50% of the industry’s production during the year under review. Most of the MEG production at Hazira is used captively in the production of polyester at Patalganga. The balance of about 42,000 MT was sold to the other polyester producers who are also the consumers of PTA produced by your Company. POLYMERS DIVISION: 84.81 Polyvinyl Chloride (PVC) Your Company started the commercial production of PVC, producing about 37% of the industry’s production capacity during the year under review. After the initial star t-up problem, the Company has been able to achieve over 100% capacity utilization. The entire production has been successfully marketed. The major reason for this success is superior product quality, on par with international standards. 85.67 11 Reliance Enthused by the positive response to the product, your Company has taken up debottlenecking/expansion plans which would almost double the PVC capacity in the near future. PROJECTS: NGL/NAPHTHA CRACKER The period under review was significant, as for the first time in this country, action was taken against foreign suppliers by imposing an anti dumping duty. The Indian PVC Industry which suffered the consequences of large scale dumping during the first three quarters of the year under review got relief from the government by way of a provisional anti dumping duty. Submissions are being made by the PVC Resin Manufacturers Association seeking permanent relief against dumping. The implementation of the NGL/Naphtha Cracker Project has made good progress. A majority of detailed engineering work has already been completed. Procurement activities and construction work at the site have also commenced. The Company has received permission from the Government of India to increase the capacity of the proposed cracker to 7,50,000 TPA of ethylene and 3,65,000 TPA of propylene and to produce 2,35,000 TPA of benzene, 1,97,000 TPA of toluene and 1,00,000 TPA of xylene. Polyethylene (PE) POY/PET PROJECT The Company commenced trial run production of polyethylene at Hazira. The plant has a rated capacity which is 55% of the combined capacities of the three domestic producers. Your Company has established a strong distribution network consisting of consignment agents and product promoters all over the country. With the help of Product Application and Research Centre, the Company will be able to give strong technical support to the downstream manufacturers. CHEMICALS DIVISION: Linear Alkyl Benzene (LAB) Your Company produced almost 38% of the total industry’s production during the year under review. The capacity utilization was nearly 100%. With the start-up of the Normal Paraffin manufacturing facilities using kerosene, the Company was able to achieve a better contribution during the year under review. Ethylene Oxide (EO) Your Company produced EO and captured a sizeable market share. The Company has plans to expand its EO manufacturing facilities through debottlenecking/expansion. TEXTILE DIVISION: The Company improved its position as India’s largest synthetic textile producer under the brand name VIMAL. This Division is formulating an overall modernisation and expansion plan to maintain its leading position. EXPORTS The focussed efforts of your Company to establish itself in the expor ts market yielded good results. Exports in the year under review totalled Rs. 121 crores - an increase of 50% over the last year (Rs. 81 crores). The Company exported most of its products and has established quality standards in the international market. SHIPPING DIVISION During the year, the Company acquired 2 Tugs, having a Bollard Pull of 14 Tons each, from an Indian yard. Approval has also been received from the Government of India towards the acquisition of 2 Suez-Max crude oil tankers. To ensure the efficient and safe supply of ethylene to the Hazira plant, the Company has successfully carried out its lighterage operations by deploying its own fleet of 3 LEG Carriers. Having gained the necessary expertise to handle ethylene, attention is now being focussed on evolving a system for transporting other raw materials like EDC and VCM by the ocean route which is inherently safer and more economical. The acquisition of suitable vessels is on hand and work relating to the enhancement of berthing facilities is also progressing apace with the objective of providing an economic and environmentally safe mode of transporting captive cargoes. The Company proposes to set up a project for the manufacture of 70,000 TPA of polyester yarn and 30,000 TPA of bottle grade PET chips in Hazira at a total cost of Rs. 736 crores. The proposed project will be the largest in the country and will enjoy considerable economies of scale. With the implementation of this project, the Company will be doubling its existing capacity in polyester yarn. The raw materials for the project, namely PTA and MEG, will also be produced by the Company. The project is expected to meet the fast-growing demand for these products in India and abroad. The project cost of Rs.736 crores has been appraised by ICICI. Discussions are in progress with various Indian and multinational lending institutions to meet the necessary foreign exchange requirement. The polyester project will be based on DuPont technology which is currently in use at the company’s Patalganga Complex. PURIFIED TEREPHTHALIC ACID (PTA) The Company has plans to set up a new 3,50,000 tons PTA plant also at Hazira. The Company has already submitted its proposal to the financial institutions. The project is estimated to cost about Rs. 850 crores. The project is being set up to meet the raw material requirements of the Polyester/PET project being proposed at Hazira as well as to meet the needs of quality conscious customers who consider PTA as the preferred feedstock for polyester. CAPTIVE POWER PLANT (CPP) Your Company has set up large manufacturing complexes at Naroda, Patalganga and Hazira. To ensure quality and maintain stable operations, the Company proposes to set up Captive Power Plants. at all the three manufacturing sites. 5. CHLORALKALI PROJECT As a step in backward integration, the Company is in the process of setting up manufacturing facilities for ethylene di-chloride (EDC), a feedstock for PVC. The Company has received permission to set up a 500 TPD Caustic Soda-cum-Chlorine project. This will fulfil the need for chlorine, which is required in the manufacture of EDC. The Company is taking steps to implement this project. NEW COMPANIES RELIANCE PETROLEUM LIMITED The Company has made substantial progress towards the implementation of one of the largest ever grass root refineries in India. This refinery will have an annual capacity of 9 (nine) million tonnes. The project will be implemented through a newly formed company in the name of Reliance Petroleum Limited. The location for the refinery which has been selected, is at village Motikhavdi, (District Jamnagar) in the State of Gujarat. The location is very close to Jamnagar city and is linked by road, rail and air. It offers 12 some distinct advantages such as proximity to Arabian gulf countries the largest source of crude; accessibility to the gulf of Kutch which is a sheltered port with adequate water depth to handle crude carriers throughout the year; proximity to the Kandla-Bhatinda oil pipeline; and the advantage of being close to areas where demand far outstrips the supply of petroleum products. The project has already been appraised by the Industrial Development Bank of India (IDBI) for techno-commercial viability. IDBI, along with other leading financial institutions, has consented to take up financial participation in the project. The project is estimated to cost Rs. 5142 crores. An MOU has been signed with Bharat Petroleum Corporation Limited (BPCL) for marketing the products, by using its existing strong marketing network. JOINT VENTURES WITH ITOCHU Your company has set up Reliance Polypropylene Limited (RPPL) and Reliance Polyethylene Limited (RPEL) - two joint ventures with ITOCHU Corporation, Japan. The public issue of Equity Shares and the Optionally Fully Convertible Debentures for these companies which was made in November 1992, received an overwhelming response. Over 1 crore individual investor applications were received for a total commitment of Rs. 3443 crores. The equity shares offered to the public was oversubscribed by 106 and 90 times for RPPL & RPEL respectively. RELIANCE POLYPROPYLENE LIMITED Your Company has co-promoted Reliance Polypropylene Limited, with I TOCHU Cor poration, Japan to manu facture 2,50,000 TPA of polypropylene. The plant is being set up at the existing complex of the Company at Hazira and is estimated to cost Rs.525 crores. The Company expects to commission this plant by the last quarter of 1994. RELIANCE POLYETHYLENE LIMITED Your company has co-promoted Reliance Polyethylene Limited, with I TOCHU Cor poration, Japan to manu facture 1,60,000 TPA of polyethylene. The Project is being set up at the existing complex of the Company at Hazira and is expected to cost Rs. 500 crores. Work on the project has commenced and it is expected to be commissioned by the last quar ter of 1994. ENERGY, TECHNOLOGY & FOREIGN EXCHANGE: Information in accordance with the provisions of Section 217 (1) (e) of the Companies Act, 1956, read with Companies (Disclosures 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. 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, Reliance Industrial Investments & Holdings Limited (formerly known as Trishna Investments and Leasings Limited), Redwood Investments Limited and Reliance Petroproducts Limited and the respective Auditor’s Report thereon for the year ended 31st March, 1993, are annexed. FIXED DEPOSITS Deposits of Rs. 0.92 crore due for repayment on or before 31st March, 1993, were not claimed by 1551 depositors as on that date. Of these, deposits amounting to Rs.0.37 crore of 614 depositors have since been repaid/renewed. DEBENTURES The funds raised through the issue of Debentures have been utilized for the approved objectives. Reliance 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’ Repor t in the full Balance Sheet and Profit and Loss Account. DIRECTORS Shri Mukesh D. Ambani, Shri Anil D. Ambani and Shri T. Ramesh U. Pai retire by rotation and being eligible offer themselves for reappointment. INDUSTRIAL RELATIONS The Company continues its belief in preventive and predictive industrial relations and has developed each of its line supervisors to be an Industrial Relations Manager to his team. During the period, industrial relations have been extremely cordial and the management thanks all the employees for their continued contribution towards the growth of the organization. AUDITORS & AUDITORS’ REPORT Messrs. Chaturvedi & Shah, Messrs. Rajendra & Co. and Messrs. Rajagopalan & Co., Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting. The Company has received a certificate from these Auditors to the effect that their appointment, if made, would be within the prescribed limits under Section 224 (1-B) 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. ACKNOWLEDGEMENT 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 services of the Executives, Staff and Workers of the Company for its success. For and on behalf of the Board of Directors DHIRUBHAI H. AMBANI Chairman & Managing Director Bombay Dated: 20th August, 1993. 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: 1. Replacement of metal fans of fin fan coolers by FRP fans thereby reducing power consumption. 2. Integration of fuel gas system for the entire complex resulting in saving in fuel oil consumption. 3. Detection of faulty steam traps on line by using a portable electronic device. 4. Interconnection of existing individual compressed air headers leading to stopping of a compressor in the nitrogen plant. 5. Reduction of excess air in boilers to optimum level by utilising sophisticated instrumentation. 13 Reliance 6. Six numbers coal-fired Thermic Fluid Heaters were replaced by highly efficient fully automatic modulating controlled gas fired thermopacs. 7. Double effect Two stage Steam Absorption Heat Pump (VAC) of 380 TR capacity was installed in place of electrically operated reciprocating compressors. 8. Conversion of existing chilled water coil plain air-washer system to chilled water air-washer system in 1090 TR Air Conditioning Plant. 9. Reduction in pot diameter from 220 mm to 140 mm of 40 no. of Twisting Machine Type MT-307. 10. DM Water used in Water Jet Loom is recovered and used as Boiler Feed. b) A dditional investments and proposals, if an y, being implemented for reduction in consumption of energy: 1. 2. 3. 4. Simulation package utilisation for optimising distillation column operation in all plants. Installation of vapour absorption chiller using low pressure steam, which otherwise is being vented. Installation of heat recovery steam generator on DG sets’ flue gas system. Installation of steam turbo generator for additional power generation utilising the waste heat from the gas turbine exhaust gases. 5. Order is already placed for one number highly efficient modulating gas fired combimax steam boiler against existing old boiler. Process initiated for introducing gas based combined cycle co-generation Power Plant of 32 MW. 6. (c) Impact of measures at (a) and (b) above for reduction of energy consumption and on the cost of production of goods: 1. Integration of fuel gas system for the entire complex resulted in a saving of 3.86 million kilo calories per tonne of paraxylene and 2.30 million kilo calories per tonne of linear alkyl benzene. This in turn reduced cost of production of finished products, paraxylene and linear alkyl benzene respectively. 2. Replacement of metal fans with FRP fans on finfan coolers resulted in 20% saving in power consumption. 3. Detection and repairing of faulty steam traps and excess air reduction in boilers contributed to 1570 tons of fuel/annum. 4. Stopping of one compressor in nitrogen plant resulted in a saving of 6320 mw per annum. 5. Consumption of Furnace Oil has reduced from 2117 KL in 1991- 92 to 482 KL in 1992-93. 6. Consumption of coal is reduced from 7232 MT in 1991-92 to 7. 3083 MT in 1992-93. Techno-economic programme for augmentation of power and steam was worked out, during which three units of vapour 8. Absorption Chiller 600 TR capacity each were installed in 1991- 1992, replacing electr ically operated conventional compressors, thereby saving electrical power consumption by 133.55 lac units per year. Energy consumption has reduced after installation of (a) highly efficient fully automatic modulating controlled gas fired steam boilers (b) three pass fully automatic modulating controlled gas fired thermopacs replacing old coal-fired low efficient thermopacs (c) recycling of condensate and flash steam and used DM water. FORM ‘A’ Form for disclosure of particulars with respect to Conservation ofEnergy: PART - A Power and Fuel consumption April 92 to April 91 to March 1993 March 1992 1. Electricity a) Purchased Units (lacs) Total Amount (Rs. in lacs) Rate/Unit (Rs) 3518.14 8110.55 2.31 3102.67 5864.05 1.89 b) Own Generation i) ii) Through Diesel Generator Units (lacs) Units per Ltr. of Diesel Cost/Unit (Rs) 414.89 3.47 1.94 Through Steam Turbine/Generator Units (lacs) Unit per Ltr. of fuel oil/gas Cost/Unit (Rs) 6270.94 3.07 1.18 512.66 3.54 1.55 N.A. 2. Coal Quantity (tonnes) Total Cost (Rs. in lacs) Average Rate per MT (Rs) Furnace Oil Quantity (K. Lts) Total Cost (Rs. in lacs) Average Rate per Ltr. (Rs.) LDO Quantity (K. Ltrs) Total Cost (Rs. in lacs) Rate/Unit per Ltr. (Rs) 3. 4. 5. Others GAS Quantity (1000M3) Total Cost (Rs.in lacs) Rate/unit per 1000 M3(Rs) 3083.00 54.88 1780.08 7232.00 101.34 1394.00 219078.07 10184.14 4.65 183649.00 8098.92 4.41 79.00 3.84 4.86 262.00 12.36 4.72 41612.00 848.41 2038.86 17319.00 337.60 1949.00 PART ‘B’ CONSUMPTION PER UNIT OF PRODUCTION Electricity (KWH) Furnace Oil (Ltrs.) Coal (Kgs.) Gas (SM3) LSHS (Kgs.) FABRICS PER 1000 Mtr. PFY PER M.T. PSF PER M.T. PTA PER M.T. LAB PER M.T. MEG PER M.T. PVC PER M T. HDPE PER M.T. Current Year Previous Year Current Year Previous Year Current Year Previous Year Current Year Previous Year Current Year Previous Year Current Year Previous Year Current Year Previous Year Current Year Previous Year 945 7 63 343 4 935 36 134 278 5 1446 110 --- --- 100 1440 211 --- --- 49 709 108 --- --- 99 639 212 --- --- 41 405 126 --- --- 32 402 161 --- --- 325 373 140 --- --- 240 500 228 --- --- 207 1,244 --- --- --- 1 Being Comm. --- --- 602 --- --- --- 124 Being Comm. --- --- Being Comm. --- --- Being Comm. --- --- Note: The above figures indicate only the direct consumption and exclude Consumption of power and fuel in the supporting utilities. 14 Reliance B. TECHNOLOGY ABSORPTION 3. Future plan of action FORM ‘B’ Projects are proposed for the following:- Form for disclosure of particulars with respect to: Research & Development (R & D) 1. Specific areas in which research & development (R & D) is being carried out by the Company. i) Development of micro denier polyester yarn to have better processibility at texturising stage. ii) Development of speciality staple fibre suitable for sanitary napkins. iii) Development of suitable material for treatment of heavy alkyl benzene in LAB plant. i) Indigenisation of spin-finish oils in filament and staple fibre processing. ii) Reduction in consumption of spin-finish through optimisation of spin-finish application system. iii) System development for achieving constant bale weight in polyster staple fibre. iv) Winder replacement for production of higher weight POY package to reduce waste generation and higher productivity. v) Improvement of polymer quantity by introducing continuous polymer filter device. iv) Development of fire retardant finish on 100% polyester vi) Development of furnishing fabrics on Raschel Knitting M/c using substrate for car upholstery. core-spun yarns with jute fibre. v) Investigation on special requirements of automotive textiles and development of dyeing technique with disperse dyes having superior light fastness properties. vi) Development of techniques of weaving low dpf microfibre zero twist warps for shuttleless looms. vii) Development of processes in textile finishing to minimise environmental pollution. 2. Benefits derived from the above R & D: a) Product Development/Improvement i) 50/34/round/flat yarn with better performance and physical properties has been achieved. ii) iii) 60/34 trilobal/bright/flat spin draw yarn specially developed for warp sizing end use. Low denier per filament yarns have been produced viz. 235/68/POY, 80/68 Bright/POY, 80/68/Semidull/POY, 50/ 27/bright/POY, 30/27/trilobal/bright/flat. Performance is well accepted. iv) Speciality staple fibre - 1.5/bright/tr ilobal and 2.5/bright/ trilobal - with good sparkle developed and commercialised. v) Process developed for producing filament yarn using 10% higher spinning machine speed for better yield. vi) Changing draw roll shaft design to sustain higher stresses during production of high tenacity fibres. vii) Development of finer denier less than 1.0 for staple fibre to improve fabric feel. viii) Computerised simulation of process through Simsci package for improving quality and yield for paraxylene and linear alkyl benzene plants. ix) Replacement of isomerisation catalyst by suitable catalyst to reduce C8 aromatics ring losses in paraxylene process. x) Developed high quality car upholstery. xi) Increased productivity of low dpf microfibre sero-twist warps on shuttleless looms. xii) Easier effluent treatment and less environment pollution. b) Import Substitution i) Indigenisation of a number of engineering spares in polyester and petrochemical areas. ii) Development of three inch diameter chucks with indigenous components. iii) Use of indigenous alumina in place of imported alumina. iv) v) Indigenisation of solvent being pursued. Indigenisation trial of Emulsifier being done. Reduction in buffer addition done. vi) HDPE Raffia grade polymer made for the first time in the country. vii) Development of new thickener for printing hydrophobic susbstrates. viii) Improvement of special effect yar ns by thermomechanical and friction methods. 4. Expenditure on R & D a) Capital b) Recurring Total c) Total R & D expenditure as a percentage d) of total turnover (Rs. in lacs) 70.60 860.61 931.21 0.2% Technology absorption, adaptation and innovation efforts in brief, made towards technology absorption, adaptation and innovation and benefits derived as a results thereof- i) ii) Regeneration of spent catalyst in LAB plant. In-situ regeneration facility for de-hydro sulphur isation catalystin LAB plant. iii) Use of plate heat exchanger to improve heat transfer efficiency and product processing in Paraxylene and LAB plants. iv) Use of new catalyst in isomerisation section for reduction in ring losses. v) Improved quench air system for better uster value and minimizing bulk variation in textured yarn. vi) Development of new cutter reels 40 mm. and 54 mm. to improve crimp retention proper ty is staple fibre. vii) Improved performance of stripper of pre-fractionation section of paraxylene. viii) Improved G-monomer injection system. ix) Alternate catalyst development for improving life and yield in linear alkyl benzene plant. x) Old electricity operated reciprocating compressors of Air Conditioning Plants were discarded and new vapour absorption chillers, steam based, were installed having new concept of technology, discarding CFC based compressor chilling changed to Ozone friendly Absorption Chilling. xi) Auto-controlled modulating steam boilers having high efficiency were installed. Also auto-controlled modulating thermic fluid heaters were installed replacing coal fired thermopacs. xii) Change over of ballast gas from Nitrogen to Methane in EO Reactor for capacity increase, in progress. xiii) Debottlenecking of EO column for higher EO production, in progress. xiv) Change over of poly reactor cooling medium f rom cooling water to chilled water being studied with trial runs. xv) Mechanical Seals’ ‘O’ rings material changed from Kalrez to Viton. 15 Reliance INFORMATION REGARDING IMPORTED TECHNOLOGY Product Technology from Year of Import Status of implementation/absorption Mono Ethylene Glycol Shell, (Lummus Crest B.V., Holland) Poly Vinyl Chloride B.F. Goodrich (USA) High Density Polyethylene Dupont(Canada) C. FOREIGN EXCHANGE EARNINGS AND OUTGO: 1989 1988 1989 Full Full Full i) ii) Activities relating to expor ts, initiatives to increase expor ts, developments of new export market for products and services and export plan. Total foreign exchange used and earned a) b) Total foreign exchange earned Total savings in foreign exchange through products manufactured by the Company and deemedexports c) Total foreign exchange used (Rs. in crores) 147.13 1669.00 1816.13 700.25 16 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, 1993 and the Profit and Loss Account of the Company 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 give in the Annexure hereto 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 state that: a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. In OUI 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. For the reasons mentioned in note No. 1(F) of Schedule ‘N’ to the Accounts, the items of Income and Expenditure mentioned therein continue to be accounted for on cash basis. 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: a) b) in so far as it relates to Balance Sheet of the state of affairs of the Company as at 31st March, 1993 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 CHATURVEDI & SHAH Chartered Accountants D. CHATURVEDI Partner Bombay Dated: 20th August, 1993 For RAJENDRA & Co. Chartered Accountants R.J. SHAH Proprietor For RAJAGOPALAN & CO. Chartered Accountants Dr. R. RAJAGOPALAN 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 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 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. As explained to us, the stock of stores, spare parts, raw materials and finished goods have been physically verified by the management at reasonable inter vals during the year. In our opinion, the 24 frequency of such verification is reasonable having regard to the size of the Company and the nature of its business. 4. 5. 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.7 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. Attention is invited to Note No. 9 of Schedule ‘N’ to the accounts. In our opinion, having regard to the long term involvement with the subsidiary companies and considering the explanations given to us in this regard the terms and conditions of the above are not, prima-facie, prejudicial to the interests of the Company. In respect of the loans and advances in the nature of loans given by the Company to parties other than subsidiary companies mentioned above, they are generally repaying the pr incipal amounts as stipulated and are also regular in the payment of interest. 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 realizable by-products and scrap wherever significant. 15. In our opinion the internal audit system of the Company is commensurate with its size and the nature of its business. 16. The central Government has prescribed maintenance of Cost Records under Section 209(1)(d), of the Companies Act, 1956 in respect of 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 1993 for a period of more than six months from the date of becoming payable. 19. According to the information and explanations given to us and on the basis of records examined by us, no personal expenses of employees or Directors have been charged to Revenue Account other than those payable under contractual obligation or in accordance with generally accepted business practice. Reliance 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 CHATURVEDI & SHAH Chartered Accountants For RAJENDRA & Co. Chartered Accountants For RAJAGOPALAN & CO. Chartered Accountants D. CHATURVEDI Partner R.J. SHAH Proprietor Dr. R. RAJAGOPALAN Partner Bombay Dated: 20th August, 1993 25 Reliance BALANCE SHEET AS AT 31ST MARCH, 1993 Schedule As at 31st March, 1993 Rs. Rs. (Rs. in crores) As at 31st March, 1992 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 ‘A’ ‘B’ ‘C’ ‘D’ ‘E’ ‘F’ ‘G’ ‘H’ Less: Current Liabilities and Provisions ‘I’ Current Liabilities Provisions TOTAL Notes on Accounts ‘N’ 1,943.62 2,156.18 4,099.80 3,338.11 61.95 2,612.77 2,697.41 5,310.18 3,367.84 516.89 250.98 --- 2,361.79 2,391.94 305.47 3,961.03 1,272.69 2,688.34 679.50 523.10 555.10 505.72 --- 1,583.92 614.36 2,198.28 683.41 89.42 772.83 157.94 74.94 1,710.74 1,878.19 277.99 2,248.65 976.22 1,272.43 2,065.68 404.90 415.14 75.36 0.11 895.51 584.64 1,480.15 730.90 49.51 780.41 1,425.45 5,310.18 699.74 4,099.80 For CHATURVEDI & SHAH Chartered Accountants As per our Report of even date For RAJENDRA & CO. Chartered Accountants For RAJAGOPALAN & CO. Chartered Accountants For and on behalf of the Board D.H. Ambani Chairman & Managing Director D. Chaturvedi Partner R.J. Shah Proprietor Dr. R. Rajagopalan Partner Bombay Dated : 20th August, 1993. 26 M.D. Ambani Vice Chairman R. H. Ambani A.D. Ambani N.R. Meswani S.S. Betrabet B.D. Shah M.L. Bhakta T. Ramesh U. Pai } } Joint Managing Directors Executive Director Directors V.M. Ambani Secretary PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 1993 Reliance (Rs. in crores) Schedule Rs. Rs. Rs. Rs. 1992-93 1991-92 INCOME Sales and Inter-divisional Transfers: Sales Inter-divisional Transfers (as per Contra) Other Income Variation in Stock EXPENDITURE Purchases Inter-divisional Transfers (as per Contra) Manufacturing and Other Expenses Interest Depreciation ‘J’ ‘K’ `L’ ‘M’ Less: Pre-operative expenses of Projects under Commissioning Profit for the year Add: Balance brought forward from last year Add: Transferred from General Reserve Less: Prior year adjustments Add: Investment Allowance (Utilised) Reserve written back Amount Available For Appropriations: APPROPRIATIONS Capital Redemption Reserve nvestment 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’ 2,953.21 42.15 (51.75) 2,943.61 2,780.29 163.32 1.67 4.40 169.39 4,105.50 68.46 34.12 4,208.08 3,886.33 321.75 20.02 16.10 357.87 3,107.88 997.62 33.96 997.62 2,333.83 279.35 279.81 3,924.57 38.24 20.02 --- --- 0.30 92.00 25.50 100.00 0.86 84.81 2,298.02 655.19 12.82 655.19 1,749.62 218.65 192.64 2,828.92 48.63 27.73 49.00 75.06 --- 50.00 21.00 30.00 0.86 47.51 303.47 54.40 149.37 20.02 For CHATURVEDI & SHAH Chartered Accountants As per our Report of even date For RAJENDRA & CO. Chartered Accountants For RAJAGOPALAN & CO. Chartered Accountants For and on behalf of the Board D.H. Ambani Chairman & Managing Director D. Chaturvedi Partner R.J. Shah Proprietor Dr. R. Rajagopalan Partner Bombay Dated : 20th August, 1993. M.D. Ambani Vice Chairman R. H. Ambani A.D. Ambani N.R. Meswani S.S. Betrabet B.D. Shah M.L. Bhakta T. Ramesh U. Pai } } Joint Managing Directors Executive Director Directors V.M. Ambani Secretary 27 Reliance SCHEDULES FORMING PART OF THE BALANCE SHEET SCHEDULE ‘A’ SHARE CAPITAL Authorised: 35,00,00,000 Equity Shares of Rs. 10 each (20,00,00,000) 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 24,54,89,256 Equity Shares of Rs. 10 each (15,21,46,493) Subscribed: Equity 24,54,81,348 Equity Shares of Rs.10 each fully paid up (15,21,40,973) Add: Shares forfeited (Amount originally paid up on 7,908 Equity Shares (Rs.39,540) previous year on 5,520 Equity Shares, Rs.27,600) Issued & Subscribed: Preference --- (30,000) 5,50,000 11% Cumulative Redeemable Preference Shares of Rs. 100 each fully paid up 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) Of the above Equity Shares: As at 31st March, 1993 Rs. Rs. (Rs. in crores) As at 31st March, 1992 Rs. Rs. 350.00 0.30 5.50 44.20 400.00 245.49 245.48 245.48 --- 152.14 --- 200.00 0.30 5.50 44.20 250.00 152.15 152.14 --- 0.30 5.50 250.98 5.50 157.94 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. 8,10,02,375 Shares were allowed as fully paid-up pursuant to Schemes of Amalgamation without 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 amalgamated with the Company. (f) 1,84,00,000 Shares were allotted as fully paid-up against 92,00,000 Global Depository Shares(GDS). 2. During the year forfeiture of 708 (Previous Year 13,688) Equity Shares was annulled. 3. As per the terms of the issues of Debentures Series “F” (Rolled over) and Series “J”, the holders of Warrants are entitled to apply upto 1,95,40,000 Equity Shares of Rs.10 each. 28 SCHEDULE ‘B’ RESERVES & SURPLUS Capital Reserve Balance from Reliance Petrochemicals Limited As per las. Balance Sheet Add: on amalgamation (RPL). Add/Less: on re-issue of forfeited Shares Capital Redemption Reserve Transferred from Profit and Loss Account Amalgamation Reserve As per last Balance Sheet Add: Surplus resulting from amalgamation of Reliance Petrochemicals Limited Share Premium Account As per last Balance Sheet Add: Received during the year Less: GDS Issue Expenses 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 General Reserve As per last Balance Sheet Add: Balance in account of Reliance Petrochemicals Limited on amalgamation Transferred from Profit and Loss Account Add: Less: Transferred to 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. 0.29 --- (0.05) 674.34 0.13 673.36 438.80 1,112.16 23.91 55.25 25.50 50.00 92.00 142.00 50.00 196.50 50.00 246.50 16.10 30.98 --- 100.00 130.98 --- 0.24 0.30 674.47 --- 0.28 0.01 --- 674.34 673.17 0.19 673.36 --- 0.29 --- 674.34 1,088.25 673.36 34.25 21.00 80.75 55.25 50.00 50.00 100.00 50.00 150.90 50.00 200.90 4.40 49.48 0.50 30.00 79.98 49.00 92.00 230.40 10.00 130.98 54.40 2,361.79 50.00 196.50 10.00 30.98 20.02 1,710.74 29 Reliance SCHEDULE ‘C’ SECURED LOANS A) DEBENTURES: i) ii) iii) iv) v) vi) 13.5% Convertible Secured Debentures of Rs.150 each fully paid up (Series ‘E’) Less: Converted * Includes debentures of face value of (Rs.25,000) 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.35,000) held by Directors 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.0.16 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. 0.01 crore held by Directors vii) 17.5% Non Convertible Secured Redeemable Debentures of Rs.100 each, (Series `K’) B) TERM LOANS 1. 2. 3. From Banks Foreign currency Loans From Financial Institutions a) b) Rupee Loans Foreign Currency Loans From Others: Housing Development Finance Corporation Ltd. C) WORKING CAPITAL LOANS From Banks D) DEFERRED PAYMENT LIABILITIES E) BRIDGE LOANS FROM FINANCIAL INSTITUTIONS F) HIRE PURCHASE FINANCE G) INTEREST ACCRUED & DUE 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 --- 270.00 * 1.13 162.50 277.17 * 65.87 * 132.67 47.27 620.21 379.64 999.85 1.86 80.00 26.67 53.33 270.00 15.49 254 51 1.13 162.50 142.30 33.26 66.62 962.67 713.65 49.76 549.32 38.15 587.47 3.19 1,048.98 347.74 29.27 --- 0.21 3.07 2,391.94 640.42 185.79 39.55 293.05 0.33 5.40 1878.19 NOTES: 1. (a) Term Loan referred to in B, save and except B(1), B(2)(a) & B(2)(b) to the extent of Rs. 24 85 crores Rs.388.55 crores and Rs. 367 47 crores respectively and B(3), are secured and Term Loans referred in B(2)(a) the extent of Rs. 54.69 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. (b) The Term Loans referred to in B(2)(a) above, to the extent of Rs.20.25 crores are secured by an exclusive charge by way of Hypothecation of specific items of machinery. (c) The term Loan referred in B(2)(a) to the extent of Rs.280.72 crores were obtained for the Plastic & Petrochemicals Division of the Company and are secured by first charge by way of hypothecation of movable assets first mortgage/charge on all the immovable assets of the Plastics & Petrochemical Division of the Company situate at Hazira, District Surat, in the State of Gujarat. 30 Reliance (d) Term Loans referred to in B(2)(a) & B(2)(b) to the extent of Rs.87.58 crores and Rs.17.64 crores respectively are secured by mortgage of deposit of title deeds on the properties situated at Patalganga, District Raigad in the State of Maharashtra and are to be secured by mortgage of deposit of title deeds in the properties situated at Naroda, District Ahmedabad in the State of Gujarat. (e) Term Loans referred to in B(i) to the extent of Rs. 22.81 crores is secured by guarantee issued by one of the Bankers of the company against (f) hypothecation of all movable assets both present and future situate at Naroda and Patalganga. Term Loans referred in B(3) are secured mortgage, by deposit of title deeds, of specified residential quarters situate at Panvel and Mohapada, District Raigad in the State of Maharashtra. 2. (a) Debentures referred to in A(ii), (iv), (v), (vi) & (vii) are 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 proper ties situate at Patalganga, District Raigad in the State of Maharashtra and by hypothecation of the movable properties situate at Patalganga, District Raigad in the State of Maharashtra. (i) Debentures referred to in A(ii) (both under Cumulative & Non-Cumulative Interest Payment Scheme) were rolled over for a further period of 7 (seven) years i.e. upto 31st August, 1999. The Company had received request for buy-back of Debentures upto 31st August, 1992 amounting to Rs.16.64 crores which were paid in full. Those Debentureholders who have not opted for Roll over have been paid the Principal Amount, Premium of Rs.5/- per Debenture and interest upto 30th September, 1992 on surrender of Debenenture Certificates. (b) (ii) Debentures with an extended period of redemption are on the following terms: Interest payment on Non Cumulative basis; A) B) Redemption at par; C) No buy back facility; and D) Issue of 2 detachable Warrants for every 5 Debentures Rolled over. The holders of warrants are entitled to apply for 1 equity share per warrant, of face value Rs.10/- for cash at a price of Rs. 150/- (inclusive of premium Rs.140/-) per share as on 1st April, 1993. (c) Debentures referred to in A(iv) above aggregating Rs.80.00 crores will be redeemable at a premium of 5% on the face value of the said debentures on the expiry of seventh year from the date of allotment. The redemption will commence from November 1994 and Debentures aggregating to Rs.82.50 crores are to be redeemed at a premium of 5á°á./0 on the face value of the Debentures between 6th & 8th year from the date of allotment in equal instalments. The redemption will commence from March, 1997. In terms of issue of Debentures referred to in A(v) above, an amount of Rs. 55/-out of the face value of Rs.150/- of the Debentures 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 26 the February, 2002 with an option to the Board of Directors to redeem at any time after 26th February, 1999. (d) (e) The Debentureholders of detachable warrants attached to the Debentures 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 26th February, 1994. The Debentures will be redeemed on the expiry of 10 years i.e. on 26th February,2002 with an option to Board of Directors to redeem at any time after 26th February, 1999. The Debentures referred to in A(vii) above will be redeemed at the expiry of 10 years i.e. 26th February, 2002 with an option to the Board of Directors to redeem the same at any time after 20th February, 1999. (f) 3. (a) Debentures referred to in A(i) are secured by a legal mortgage in English form on the properties situate at Naroda, District Ahmedabad in the State of Gujarat. These Debentures 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 to in A(ii), (iv), (v), (vi) and (vii); and (b) The balance amount of Debentures referred in A (i) was due for redemption in one or more instalments by draw of lots at any time after on 10th December, 1996. The Company has now decided to redeem the same on 10th December, 1996. 4. 5. The charges created /to be created on the Debentures and Term Loans referred to in A and B above rank pari passu, inter-se, save and except debentures referred to in A(i) and B(3). (a) The Debentures referred to in A(iii) issued by erstwhile Reliance Petrochemicals Limited (RPL), are secured by a legal mortgage in English form by way of residual charge on the assets of erstwhile Reliance Petrochemicals Limited situate at village Mora, District Surat in the State of Gujarat. The said debentures shall rank subservient and subordinate to all present mortgage/charge, created on the assets of the erstwhile RPL. (b) The Debentures referred to in A (iii) issued by erstwhile RPL will 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, but before 27th October, 1995. 6. 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. 7. Liabilities referred in item D above are secured by first charge by way of hypothecation of specific items of machinery acquired under Deferred Payment Facility. 8. Hire Purchase Finance referred in item F above is obtained by the Plastics & Petrochemicals Division of the Company and is secured by first charge by way of hypothecation of specific vehicles acquired by the erstwhile RPL under the said facility. Secured Loans include Rs.281.29 crores repayable within one year. 9. 10. Particulars of Debentures Series H, J and K are as follows: (a) Series-H comprises Nil Debentures (Previous Year 3,59,62,462) of Rs.37.50 paid up, 3,59,64,184 Debentures (Previous Year 3,771) of Rs.75 paid up and 4,95,816 Debentures (Previous Year 493,767) of Rs. 150 paid up. (b) Series J comprises Nil Debentures (Previous Year 86,94,107) of Rs. 37.50 paid up, 86,97,642 Debentures (Previous Year 3,691) of Rs. 75 paid up and 42,358 Debentures (Previous Year 42,202) of Rs.150 paid up. (c) Series-K comprises Nil Debentures (Previous Year 2,64,20,671) of Rs. 25 paid up,2,64,21,145 Debentures (Previous Year 886) Debentures of Rs.50paid up and 56,688 Debentures (Previous Year 56,276) of Rs. 100 paid up. 31 Reliance SCHEDULE ‘D’ UNSECURED LOANS Fixed Deposits (including Cash Certificates of Rs.0.12 crore) 31.78 41.33 Short Term Loans from: i) ii) Financial Institutions Banks [Includes Commercial Paper Rs.Nil, (Previous Year Rs. 90.00 crores), maximum amount outstanding at any time during the year Rs.90.00 crores, (previous year Rs.90.00 crores)] 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. 71.19 + 50.00 38.65 + 90.53 121.19 152.50 305.47 * 129.18 107.48 277.99 * + * Includes Rs.33.19 crores (Previous Year Rs. 33.65 crores) pending adjustment against amount payable in respect of ‘H’, ‘J’ and ‘K’ series of debentures. Includes Rs.130.88 crores (Previous Year 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 (Rs. in crores) As at 1.4.92 Rs. 1.23 7.67 0.56 131.71 1,889.47 126.98 37.99 7.28 35.83 9.93 Gross Block Depreciation Net Block Additions Rs. Deductions Rs. --- 39.06 0.04 164.50 1,392.04 23.52 85.80 6.17 8.94 3.33 --- 3.31 --- 3.31 3.84 --- --- --- 0.10 0.46 As at 31.3.93 Rs. 1.23 43.42 0.60 292.90 3,277.67 150.50 123.79 13.45 44.67 12.80 up to 31.3.93 Rs. --- --- --- 23.44 1,204.04 9.52 18.60 3.19 11.59 2.31 As at 31.3.93 Rs. 1.23 43.42 0.60 269.46 2,073.63 140.98 105.19 10.26 33.08 10.49 As a 31.3.92 Rs. 1.23 7.67 0.56 115.69 955.15 123.86 27.21 4.75 27.97 8.34 Total 2,248.65 1,723.40 11.02 3,961.03 1,272.69 2,688.34 1,272.43 Previous Year 1,942.85 331.30 25.50 2,248.65 976.22 1,272.43 Capital Work-in-Progress 679.50 2,065.68 NOTE: (a) Leasehold Lands include Rs. 1.43 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. 97.84 crores on account of pre-operative expenses (Previous year Rs.612.93 crores). ii) Rs.26.43 crores on account of cost of construction materials at site (Previous year Rs.49.36 crores). iii) Rs.4 30 crores on account of advance against Capital Work-in-progress, (Previous Year Rs.17 65 crores) 32 SCHEDULE ‘F’ INVESTMENTS Reliance (Rs. in crores) As at 31st March, 1993 Rs. Rs. As at 31st March, 1992 Rs. Rs. GOVERNMENT AND OTHER SECURITIES - Unquoted: 7 Years National Savings Certificates (face value Rs.5,000) (Deposited with Sales Tax Dept.) (Previous year Rs.5,000) Indira Vikas Patra TRADE INVESTMENTS IN EQUITY SHARES - Quoted, fully paid up: 83,31,500 Equity Shares of Reliance Capital & Finance Trust Ltd. (18,00,000) of Rs. 10 each Un-Quoted, fully paid up: 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 Ar t 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 (Rs.16,500) (Previous year Rs.16,500) 20 Shares of The Bombay Market Art Silk Co-operative (Shops & Warehouses) Society Ltd., of Rs.200 each, (Rs.4,000) (Previous year Rs.4,000) 11,08,500 Equity Shares of Reliance Europe Ltd. (20,17,000) 2,10,00,000 Equity Shares of Reliance Polypropylene Ltd. of Rs.10 each sterling pound 1 each 2,10,00,000 Equity Shares of Reliance Polyethylene Ltd. of Rs.10 each Unquoted, Partly paid up: 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) 76,92,000 Equity Shares of Reliance Polypropylene Ltd. of Rs.10 each, Rs.2.50 paid up 76,92,000 Equity Shares of Reliance Polyethylene Ltd. of Rs.tO each, Rs.2.50 paid up IN DEBENTURES Unquoted, fully paid up: 1,00,00,000 75,00,000 16% Optionally Fully Convertible Debentures of Reliance Polypropylene Ltd. Of Rs.50 each. 16% Optionally Fully Convertible Debentures of Reliance Polyethylene Ltd. Of Rs.50 each. IN SUBSIDIARY COMPANIES - Unquoted, fully paid up: 2,10,070 Equity Shares of Devti Fabrics Ltd. of Rs.10 each 4,400 Equity Shares of Reliance Industrial Investments and Holdings Ltd of Rs.10 each (Rs.44,000) 1,300 Equity Shares of Reliance Petroproducts Ltd of Rs.10 each fully paid up (Rs.13,000) 10,000 Equity Shares of Redwood Investments Ltd of Rs.10 each C/F --- 0.20 34.84 34.84 --- --- --- --- 3.93 21.00 21.00 45.93 --- 32.23 32.23 64.46 50.00 37.50 87.50 0.21 --- --- 0.01 --- 0.20 0.20 0.20 1.80 1.80 --- --- --- --- * 7.00 --- --- 7.00 --- --- --- --- --- --- --- 232.73 8.80 0.21 --- --- 0.01 0.22 233.15 0.22 9.22 33 Reliance As at 31st March, 1993 Rs. Rs. (Rs. in crores) As at 31st March, 1992 Rs. Rs. B/F 233.15 9.22 OTHER INVESTMENTS IN EQUITY SHARES: Quoted, fully paid up: 3,798 Equity Shares of The Industrial Credit & Investment (1248) Corporation of India Ltd. of Rs. 100 each Unquoted fully paid up: 1,000 Equity Shares of Air Control & Chemicals Engineering Co. Ltd. of Rs.100 each, fully paid up IN DEBENTURES: Quoted: 3,174 Fully Convertible Debentures of The Industrial Credit & Investment (624) Corporation of India Ltd., of Rs.450 each, fully paid up IN UNITS: & BONDS Unquoted 18,06,64,830 Units of Unit Trust of India (18,00,000) --- 9% Tax free Bonds of Indian Railway Finance (515,000) Corporation Ltd., of Rs.1,000 each fully paid up * Ceased to be Subsidiary Company during the year. AGGREGATE VALUE OF Quoted Investments Unquoted Investments 0.06 0.01 0.07 0.13 0.13 283.54 --- 0.20 283.54 516.89 0.01 0.01 0.02 0.03 0.03 2.68 50.00 0.05 52.68 61.95 Book Value 35.03 481.86 Market Value 34.78 --- Book Value 1.84 60.11 Market Value 48.93 --- MOVEMENT DURING THE YEAR: The Company purchased and sold 71,00,000 Units of GIC Rise I, 3,25,00,000 Units of GIC Rise II and 3,00,00,000 Units of Unit Trust of India (1964 Scheme) 34 SCHEDULE ‘G’ CURRENT ASSETS INVENTORIES (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 (Unsecured) 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 Asset Management Schemes with a: Scheduled Bank Non-Scheduled Bank + OTHER CURRENT ASSETS Interest Accrued on Investment Reliance (Rs. in crores) As at 31st March, 1993 Rs. Rs. As at 31st March, 1992 Rs. Rs. 158.06 122.96 --- 31.44 210.64 --- 79.11 4.66 83.77 4.66 79.11 475.99 * 0.33 28.40 2.84 1.92 472.23 105.74 91.05 0.15 29.38 177.12 1.46 523.10 404.90 86.05 4.66 90.71 4.66 86.05 329.09 555.10 415.14 0.33 70.54 2.19 31.57 73.06 2.30 --- 2.30 0.11 895.51 474.15 --- 1,583.92 * + includes Rs. 3.21 crores due from Devti Fabrics Ltd (refer note 9 of Schedule N) a subsidiar y of the Company and Rs.125.65 crores on account of Bills of Exchange. with Union Bank of Switzerland (maximum balance outstanding during the year Rs.472.23 crores) at Net Asset Value. 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, 1993 Rs. * 146.47 360.73 100.12 7.04 614.36 (Rs. in crores) As at 31st March, 1992 Rs. 152.24 316.06 108.46 7.88 584.64 * Includes Rs. 0.21 Crore from Officers (Previous year Rs. 0.18 Crore), Maximum balance outstanding at any time during the year Rs. 0.21 Crore. 35 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 As 107.65 crores, Acceptance of Rs. 45.53 crores and and Rs. 8.51 crores of backward area incentives withdrawn (payable within one year Rs. 2.84 crores) PROVISIONS Gratuity and Superannuaton Provision for Wealth Tax Proposed Dividend SCHEDULES FORMING PART OF THE PROFIT & LOSS ACCOUNT SCHEDULE ‘J’ OTHER INCOME Export Incentives Dividends: From Subsidiaries From Others (Tax Deducted at Source Rs. 13.12 crores, Previous Year Rs. 1.65 crores) Income from Time Charter Miscellaneous Income SCHEDULE ‘K’ VARIATlON IN STOCK STOCK-IN-TRADE (at close) Finished goods Stock-in-process Others STOCK-IN-TRADE (at commencement) Finished goods Stock-in-process Others 36 As at 31st March, 1993 Rs. Rs. (Rs. in crores) As at 31st March, 1992 Rs. Rs. * 598.94 1.17 0.69 82.61 575.40 5.03 64.39 86.08 683.41 730.90 3.50 0.25 85.67 Rs. 0.13 56.96 Rs. 210.64 31.44 --- 177.12 29.38 1.46 1.14 --- 48.37 89.42 772.83 49.51 780.41 1992-1993 Rs. 0.74 57.09 --- 10.63 68.46 1992-1993 Rs. (Rs. in crores) 1991-1992 Rs. Rs. 3.74 7.08 0.51 7.59 20.35 10.47 42.15 (Rs. in Crores) 1991-1992 Rs. Rs. 177.12 29.38 1.46 242.08 207.96 159.55 98.41 1.75 207.96 34.12 259.71 (51.75) SCHEDULE ‘L’ MANUFACTURING & OTHER EXPENSES RAW MATERIALS CONSUMED Stock at commencement 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 & DISTRIBUTION EXPENSES Samples, Sales Promotion and Advertisement Expenses Brokerage and Commission Packing Expenses Warehousing Charges Freight and forwarding charges Octroi Expenses Sales Tax ESTABLISHMENT EXPENSES Insurance Rent Rates and taxes Other repairs Travelling expenses (including Rs.0.42 crore for Directors) Payment to Auditors General Expenses Wealth Tax Charity & Donations Loss on sale of Assets Preliminary Expenses written off SCHEDULE `M INTEREST Debentures Fixed Loans Others (Net) Reliance (Rs. in crores) 1992 - 1993 1991 - 1992 Rs. 91.05 659.37 750.42 122.96 92.96 118.85 159.86 8.62 4.09 24.37 861.43 61.81 61.27 8.48 17.67 13.72 32.32 49.79 1.98 20.96 5.23 47.80 23.12 9.42 0.59 7.64 7.13 0.47 63.54 0.25 1.18 1.82 --- Rs. Rs. Rs. 125.84 389.62 515.46 91.05 627.46 424.41 41.46 55.76 140.56 6.01 3.47 20.27 751.17 25.24 1,331.99 1,043.94 45.87 5.74 14.17 2.90 25.20 35.03 1.49 16.90 4.93 40.24 15.84 4.12 0.39 4.49 4.02 0.31 47.76 --- 1.84 0.01 0.02 65.78 136.69 78.80 1749.62 (Rs.in crores) 1991-1992 Rs. 82.37 52.40 83.88 218.65 37 87.42 171.80 115.16 2,333.83 1992-1993 Rs. 149.33 102.95 27.07 279.35 Reliance SCHEDULE ‘N’ NOTES ON ACCOUNTS Significant Accounting Policies 1. A. Basis of preparation of financial statements B. C. D. E. F. a) 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 with generally accepted accounting principles followed by the Company. b) Fixed Assets and Depreciation a) Fixed Assets are stated at cost of acquisition or construction less accumulated depreciation All costs. including financing costs till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations relating to specific borrowings attributable to the fixed assets are capitalised. b) Depreciation on fixed assets (other than goodwill and leasehold land. which are not amortised) is provided on the straight line method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956 except depreciation on incremental cost arising on account of translation of foreign currency liabilities for acquisition of fixed assets. which have been amortised over the residual life of the respective assets. Foreign Exchange Transactions a) b) Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction. (i) Assets and liabilities relating to foreign currency transactions remaining unsettled at the end of the year are translated at contracted rates, when covered by foreign exchange contracts and at year end rates in all other cases. (ii) Gains and losses on foreign exchange transactions/translation other than those relating to fixed assets are recognized to the respective accounts in the Profit and Loss Account. Gain or loss on translation of long term liabilities incurred to acquire fixed assets is treated as an adjustment to the carrying cost of such fixed assets. Investments Investments are stated at cost Inventories a) Raw Materials, Stores, Spares, Dyes. Chemicals. etc., and Stock-in-transit are valued at cost b) Stock-in-process is valued at cost including related overheads. c) Finished Goods are valued at cost or market value whichever is lower. 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. By products are valued at net realisable value. e) Basis of Accounting All income and expenditure items having a material bearing on the financial statements are recognised on accrual basis. except the following items which are accounted for on cash basis, as it is not possible to ascertain with reasonable accuracy the quantum thereof: a) Income: i) ii) iii) Export incentives; Disposal of sundry items including waste; and Interest on calls-in-arrears. b) Expenditure: i) ii) Interest on overdue bills/letters of credit: Performance incentives on sales; and iii) Premium on redemption of debentures. G. Sales Sales include sale of by products, waste, sales during trial run, excise duty and sales tax but exclude discount, commission and incentives. H. Excise Duty I. J. Excise Duty is accounted for as and when paid on the clearance of the goods from bonded premises No provision is made for excise duty in respect of finished products lying in the bonded premises. Employee Retirement Benefits (a) Company’s contributions to Provident Fund. Superannuation Fund and other Funds during the year are charged to Profit and Loss Account, (b) Gratuity is charged to Profit and Loss Account on the basis of actuarial valuation Research and Development Expenses Expenditure related to capital items is debited to fixed assets and depreciated at applicable rates Revenue expenditure is charged to Profit and Loss Account of the year in which they are incurred. K. Debenture/Share Issue Expenses and Debenture Redemption Reserve. (a) Debenture issue expenses, to the extent pertaining to projects, are capitalised (b) Issue expenses are adjusted against the Share Premium Account. (c) Debenture Redemption Reserve has been created pursuant to the Guidelines dated 14th January, 1987 of the Government of India only in respect of Debentures issued after the said date. 38 Reliance L. M. 2. 3. 4. 5. Leases No distinction is made between finance leases and operating leases and lease rentals are expensed, except for rentals pertaining to the periods upto the date of commissioning of the assets which are capitalised. Inter-divisional Transfers Inter-divisional transfers of goods and ser vices for internal use as captive consumption in vertically integrated multi-plants are shown as contra items in the Profit and Loss Account to reflect the true economic value of the production inter-se the divisions. Any unrealised profit on unsold stocks is ignored while valuing inventories. This accounting treatment has no impact on the profits of theE Company. (a) The previous year’s figures have been reworked, regrouped and reclassified wherever necessary including inter-alia to give effect to inter- divisional transfers. (b) Figures have been presented in crores’ of rupees with two decimals in accordance with the approval received from the Company Law Board Figures less than Rs.50,000 have been shown at actuals in brackets. ‘Interest - Others (Net)’ is arrived at after deducting interest received/receivable of Rs. 47 69 crores (Previous Year Rs. 10.10 crores) Tax Deducted atSource of Rs.3.83 crores (Previous Year Rs. 1.34 crores) A sum of Rs.10.30 crores (net) included in ‘Manufacturing and Other expenses’ represents excess of expenditure over income relating to previous year(s) (a) Auditors’ Remuneration: Audit Fees Tax Audit Fees i) ii) iii) For Certification and Consultation in finance and tax matters iv) Expenses reimbursed (b) Cost Auditor: (Rs.in crores) 1992-93 0.30 0.07 0.08 0.02 0.47 1991-92 0.18 0.07 0.05 0.01 0.31 6. Audit Fees Rs. 30,000 (Previous Year Rs. NIL) (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. (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. 40,300, Previous Year Rs. 26,600) IV) Perquisites (Rs.in crores) 1992-93 0.07 0.01 --- 0.03 0.11 1991-92 0.07 0.02 --- 0.03 0.12 7. 8. 9. In accordance with the accounting policy followed by the Company, the estimated liability as on 31st March, 1993 amounting to Rs.54.35 crores for excise duty in respect of finished products lying in bonded premises has not been provided for in the accounts and hence not included in the valuation of inventory. This accounting treatment has no impact on profits of the current financial year. The income-tax assessments of the Company have been completed upto Assessment Year 1990-91. The total demand raised by the Income-tax Department upto the said assessment year is Rs.78.46 crores which are disputed. Based on the decisions of the First Appellate Authorities and interpretation of other relevant provisions. the Company has been legally advised that provision for taxation made in respect thereof aggregating to Rs.15.52 crores is sufficient and no further provision for taxation in respect thereof is required in the accounts The taxation reserve created in the past amounting to Rs.10.00 crores would be adequate enough to meet the liabilities, if any, in respect of disputed matters which are pending in appeals. The Company has been advised that no provision for taxation is necessary for the current financial year in view of various unabsorbed past reliefs. The Company has an investment of Rs. 0.21 crore in the Share Capital, loan of Rs. 6.76 crores and receivables on account of sale of goods of Rs.3.21 crores from Devti Fabrics Ltd (DFL), a wholly owned subsidiary company and furnished guarantees to Banks and Financial Institutions of Rs. 2.50 crores on behalf of DFL. The losses of DFL exceed its paid Up capital and reserves as on 31st March, 1993. In view of the long term involvement of the Company in said company, no provision has been made in the accounts for the probable loss that may arise. 10. The provision for depreciation for multiple shifts, wherever applicable, has been made on the basis of actual utilisation of respective eligible assets. 11. 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. 39 Reliance 12. Pre-operative expenses Net Pre-operative expenditure at the time of amalgamation. Pre-operative expenditure of projects under commissioning Transportation Lease Expenses Insurance Travelling Expenses General Expenses Interest Debenture Issue Expenses Less: Income Interest (Tax Deducted at Source Rs. 0.23 crore (Previous Year Rs.Nil) Income from funds placed under Portfolio Management Scheme Other Income Capitalised by allocating to Building and Plant & Machinery (Rs.in crores) Total Upto 31st March 1993 Total Upto 31st March 1992 392.73 86.88 0.74 76.64 3.33 1.31 159.21 96.81 12.45 830.10 2.33 0.03 14.17 715.73 * 97.84 392.73 48.63 0.74 59.84 2.82 0.54 92.70 24.95 5.03 627.98 0.91 0 03 14.11 * --- 612.93 * represents income in respect of power supplied co Gujarat Electricity Board on estimated tariff, pending execution of agreement. 13. 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 of Credit opened by Bankers (c) Guarantees to Banks and Financial institutions against credit facilities extended to third parties (d) Liability in respect of bills discounted with banks (e) Bonds executed in favour of Excise and Custom Authorities (f) Uncalled liability on partly paid shares (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) Import Duty on Raw Materials/chemicals & catalysts imported under Advance Licences against fulfilment of export obligations. (Rs.in crores) As at 31st March, 1993 As at 31st March, 1992 267.89 208.20 58.50 4.08 31.00 11.54 19.45 6.68 2.30 399.39 309.90 49.50 --- 26.64 --- 19.97 1.69 14.28 40 14. LICENSED AND INSTALLED CAPACITY (a) Polyester Filament Yarn /Polyester Chips (b) Polyester Staple Fibre/Polyester Chips (c) Man-made Fibre spun yarn on worsted system (Spindles) (d) Man-made Fabrics (Looms) (Knitting M/c) (e) Purified Terepthalic Acid Linear Alkyl Benzene (f) (i) (g) (ii) Propylene (iii) Butadiene & Other C4s Ethylene (h) Polypropylene Styrene (i) Polystyrene (j) (k) Styrene Butadiene Rubber Linear Low Density Polyethylene (I) (m) Acrylonitrile (n) Butyl Rubber (o) (i) Mono Ethylene Glycol (MEG) (ii) Ethylene Oxide (iii) Higher Ethylene Glycol (HEG) (By Product) (p) High Density Polyethylene (HDPE) (q) Poly Vinyl Chloride (PVC) (r) (i) Chlorine (ii) Caustic Soda (By Product) (iii) Hydrogen (By Product) Reliance Licensed Capacity Installed Capacity UNIT M.T. M.T. Nos. Nos. Nos. 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. M.T. M.T. M.T. M.T. M.T. M.T. 1992-93 N.A. N.A. N.A. N.A. N.A. N.A. N.A. 400,000 195,000 120,000 N.A. N.A. N.A. N.A. N.A. N.A. N.A. 100,000 10,000 5,000 N.A. N.A. 66,000 78,000 N.A. 1991-92 N.A. N.A. N.A. N.A. N.A. N.A. N.A. 400,000 195,000 120,000 N.A. N.A. N.A. N.A. N.A. N.A. N.A. 100,000 --- 5,000 N.A. N.A. 66,000 78,000 N.A. ++ + 1992-93 25,125 45,000 12,494 450 20 200,000 60,000 U.I. U.I. U.I. U.I. --- --- --- ++ U.I. --- --- 60,000 10,000 5,000 U.I. 100,000 U.I. U.I. U.I. + 1991-92 25,125 45,000 12,494 450 20 100,000 60,000 U.I. U.I. U.I --- --- --- --- --- --- --- U.I. --- U.I. U.I. U.I. U.I. U.I. U.I. N.A + U.I. U.I. ++ Delicensed vide Notitication No. 477(E) dated 27th July, 1991. Based on average Denier of 40 Installed Capacity based on Cer tificate of the Management. Under Implementation Projects Under Implementation by Reliance Polypropylene Ltd. and Reliance Polyethylene Ltd. respectively Co-promoted by the Company. 15. PRODUCTION OF FINISHED PRODUCTS MEANT FOR SALE UNIT Mtrs. in Lacs M .T. M.T. M.T. M.T. M.T. M.T. M.T. Fabrics Polyester Filament Yarn Polyester Staple Fibres PTA LAB Ethylene Glycol PVC PE 16. 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 17. EXPENDITURE IN FOREIGN CURRENCY ON ACCOUNT OF Interest in rupees on foreign currency loans Interest on Debentures held by Non-residents on repatriation basis (Gross) Other matters Technical Know how & Engineering Fees 1992-93 491.26 75,983 62,230 106,403 79,241 48,366 103,714 46,422 1992-93 Rs. 280.49 58.10 59.44 1991-92 518.00 64,994 61,476 59,343 62,739 4,402 7,432 --- (Rs.in crores) 1991-92 Rs. 132.88 58.46 22.35 (Rs.in crores) 1992-93 1991-92 Rs. 76.04 3.75 2.75 63.30 Rs. 31.98 1.98 3.21 2.08 41 Reliance 18. QUANTITATIVE INFORMATION (a) Opening Stock: i) ii) iii) Others (b) Closing Stock: i) i) Finished Goods Fabrics a) Polyester Filament Yarn b) Polyester Staple Fibre c) Paraxylene d) PTA e) LAB f) Ethyelene Glycol g) h) PVC PE Stock-in-process Finished Goods Fabrics a) Polyester Filament Yarn b) Polyester Staple Fibre c) Paraxylene d) PTA e) LAB f) Ethyelene Glycol g) PVC h) i) PE Stock-in-process ii) iii) Others (c) Purchases: Polyester Filament Yarn Polyester Staple Fibre Others (d) Sales: a) b) c) d) e) f) g) h) i) j) Fabrics Polyester Filament Yarn Polyester Staple Fibre PTA LAB Ethyelene Glycol PVC PE Power Others (e) Raw material consumed: Fibre Intermediates Fibre/Yarn Fabrics (Grey) a) Naptha b) c) d) e) Detergent Intermediates f) Olefins g) Chloro olefins h) Others 42 UNIT Quantity Rs. in Crores Quantity Rs. in Crores 1992 - 1993 1991 - 1992 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. Mtrs in Lacs M. T. M .T. M .T. M.T. M.T. M.T. M.T. --- --- M.T. M.T. M.T. Mtrs. in Lacs M.T./K.L. M.T. M.T. --- 177.12 57.58 4,634 4,644 14,462 9,030 2,122 2,168 8,980 --- 37.50 5,988 4,787 2,384 13,744 5,598 8,405 3,938 10,442 27 1253 --- 511.34 74,656 63,340 106,432 75,765 42,129 108,756 35,980 --- --- 234,298 52,999 4,482 61.80 136,993 134,279 94,344 --- 159.55 65.24 9,298 7,301 591 163 6,873 1,751 4,733 --- 57.58 4,634 4,644 14,462 9,030 2,122 2.168 8,980 --- 402 --- --- 525.66 69,372 64,009 59,669 67,364 3,985 3,185 --- --- --- 199,640 53,127 4,252 145.03 79,764 5,539 6,654 --- 98.41 1.75 177.12 29.38 1.46 12 82 --- 258.29 1139.56 425.87 212.83 184.72 12.48 10.11 --- --- 54.16 2 298 02 107.13 75.28 52.29 26.68 129.02 8.88 7.81 17.32 424.41 29.38 1.46 210.64 31.44 --- 9.04 24.92 287.44 1,047.96 397.43 400.96 236.81 130.65 349.87 146.98 5.55 104.23 3,107.88 139.31 67.06 64.41 11.50 110.77 150.77 83.64 --- 627.46 19. VALUE OF RAW MATERIALS CONSUMED 1992 - 1993 1991 - 1992 Reliance Imported Indigenous Rs. in crores 294.14 333.32 627.46 % of total Consumption 46.88 53.12 100.00 20. VALUE OF DYES, CHEMICALS, CATALYSTS, STORES AND SPARE PARTS CONSUMED: Imported Indigenous 21. EARNINGS IN FOREIGN EXCHANGE Export of goods on FOB basis Dividend Interest Others 22. REMITTANCE IN FOREIGN CURRENCY ON ACCOUNT OF DIVIDEND Rs. in crores 90.94 120.87 211.81 1992 - 1993 % of total Consumption 42.93 57.07 100.00 1992-93 Rs. 121.00 3.12 16.87 6.14 1992-93 Rs. 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 - 1992 % of total Consumption 37.10 62.90 100.00 (Rs. in crores) 1991-92 Rs. 80.56 --- --- --- (Rs. in crores) 1991-92 Rs. The Company has paid dividend in respect of shares held by Non Residents on repatriation basis. This inter-alia includes portfolio investment and direct investment, where the amount is also credited to Non-Resident External Account (NRE A/c) The exact amount of dividend remitted in foreign currency cannot be ascertained. The total amount remittable in this respect is given herein below: (a) Number of Non-resident shareholders (b) Number of Equity Shares held by them (c) Amount of dividend paid (Gross)-Tax at source Rs.0.45 crore (Previous Year Rs.0.51 crore) Dividend (i) (ii) Year to which dividend relates 20,941 10,094,141 18,917 9,416,634 2.59 1991-92 2.82 1990-91 For CHATURVEDI & SHAH Chartered Accountants As per our Report of even date For RAJENDRA & CO. Chartered Accountants For RAJAGOPALAN & CO. Chartered Accountants For and on behalf of the Board D.H. Ambani Chairman & Managing Director D. Chaturvedi Partner R.J. Shah Proprietor Dr. R. Rajagopalan Partner Bombay Dated : 20th August, 1993. M.D. Ambani Vice Chairman R. H. Ambani A.D. Ambani N.R. Meswani S.S. Betrabet B.D. Shah M.L. Bhakta T. Ramesh U. Pai } } Joint Managing Directors Executive Director Directors V.M. Ambani Secretary 43 Reliance STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956, RELATING TO COMPANY’S INTEREST IN THE SUBSIDIARY COMPANIES Devti Fabrics Ltd. Investments and Holdings Ltd. Reliance Industrial Investments Limited Limited Redwood Petroproducts Reliance 1. The Financial Year of the 31st March. 1993 31st March, 1993 31st March, 1993 31st March, 1993 Subsidiary Companies ended on 2. Date from which they become 30th September. 1985 30th December, 1988 15th October, 1991 11th February, 1992 subsidiary companies 3. a. 4. b. a. Number of shares held by Reliance Industries Limited with its nominees in the subsidiaries at the end of the financial year of the subsidiary companies. Extent of interest of holding Company at the end of the financial year of the subsidiary companies The net aggregate amount of the subsidiary companies Profit/(Loss) so far as it concerns the members of the holding Company. Not dealt with in the holding company’s accounts. i) For the financial year ended 31st March, 1993 ii) For the previous financial years of the subsidiary companies since they became the holding company’s subsidiaries 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 10,000 Equity Shares of the face value of Rs. 10 each fully paid-up 1.300 Equity Shares of the face value of Rs.10 each fully paid-up 100% 100% 100% 100% (Rs. 372.18 Lakhs) Rs. 1079.83 Lakhs (Rs. 11,556) (Rs.11,169) (Rs.447.66 Lakhs) (Rs.547.73 Lakhs) (Rs.12,024) (Rs. 6,110) b. Dealt with in holding company’s accounts: i) For the financial year ended 31st March, 1993 ii) For the previous financial years of the subsidiary Companies since they became the holding Company’s subsidiaries. NIL NIL NIL NIL NIL NIL NIL NIL For and on behalf of the Board D.H. Ambani Chairman & Managing Director M.D. Ambani Vice Chairman R. H. Ambani A.D. Ambani N.R. Meswani S.S. Betrabet B.D. Shah M.L. Bhakta T. Ramesh U. Pai } } Joint Managing Directors Executive Director Directors V.M. Ambani Secretary Bombay Dated : 20th August, 1993. 44 DEVTI FABRICS LIMITED Regd. Office : 3rd Floor, Maker Chambers IV 222, Nariman Point, Bombay 400 021. Reliance 45 DIRECTORS’ REPORT To the Members, Your Directors present the Nineth Annual Report together with the Audited Statement of Accounts for the Financial Year ended 31st March, 1993. OPERATIONS The Company has incurred a loss of Rs.372.78 lakhs during the year under review as against loss of Rs.129.45 lakhs in the previous year. Sales declined to Rs.764.19 lakhs as against Rs.988.01 lakhs for the previous year. During the year under review the company has closed the weaving section which was incurring losses and has retrenched 511 workers. The loss for the current year includes compensation paid to the employees Rs.22.89 lakhs and contribution paid to the Gratuity Trust Fund Rs.69.95 lakhs. All efforts are being made to make the spinning unit more profitable. DIVIDEND In view of the carried forward losses, your Directors have not recomended any Dividend for the Financial Year under review. DIRECTORS Shri H N. Arora and Shri J.B. Dholakia were appointed as additional directors of the Company from 16th August 1993. They will hold office of directors upto the date of the ensuing Annual General Meeting of the Company and are eligible for re-appointment. The directors record their appreciation for the valuable services rendered by Shri Sushilbhai Kothari, Shri S Natarajan and Shri K.V Ambani who had resigned from the Board of Directors of the Company with effect from 16th August, 1993. As per the provisions of the Companies Act, 1956, Shri V.M. Ambani and Shri N.M. Sanghavi 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 re-appointment. The Auditors have, under Section 224(1B) of the Companies Act, 1956, furnished a certificate of their eligibility for reappointment. 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 Particulars 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 (Particulars 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 DEVTI FABRICS LIMITED Reliance 2. Cotton tapes of all Ring Frames has been replaced by Synthetic tapes.Saving of 4 to 5%. By adopting the above energy conser vation measures a sum of Rs. 0.75 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. Purchased Units Total Amount Rate/Unit b. Own Generation Current Year Previous Year 1991-92 1992-93 56,32,405 1,29,14,660 2.29 69,65,805 1,34,62,453 1.93 i. Through Diesel Generator Units Units per Ltr. of Diesel Oil Cost/Unit 2,640 2.40 2.40 1,48,458 2.40 2.86 ii. Through Steam Turbine/Generator Units Unit per Ltr. of Fuel Oil/Gas cost/unit --- --- --- --- 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 PART - B 738 11,28,848 1,529.60 1765 22,82,951 1,293.46 --- --- --- --- --- --- --- --- --- --- --- --- B. CONSUMPTION PER UNIT OF PRODUCTION Previous year 1991-92 Current Year 1992-93 YARN FABRICS YARN FABRICS (P. MTR) (Kgs) (P. MTR) (Kgs) 0.60 3.61 0.75 4.09 ELECTRiCITY(UNITS) --- --- --- --- FURNACE OIL --- --- --- --- COAL ** OTHERS --- --- --- --- ** Coal is used for steaming and heating the yarn for the purpose of sizing.It has no link with the production. FORM - B VINOD M. AMBANI N. M. SANGHAVI DIRECTORS (Form for disclosure of particulars with respect to Technology Absorption). Bombay Dated: 16th August, 1993. 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 1. Water Bore Pumps motor of 55 HP has been replaced by 35 HP motor there by saving of 20 HP. The Company has no specific Research and Development Department, hence information to be given in Form-B are not relevant for the Company. However, the Company has a quality control department to check the quality of the products manufactured. C. FOREIGN EXCHANGE EARNINGS AND OUTGO i. Activities relating to exports - Company is making a study to explore the foreign market for export of Company’s products ii. Foreign Exchange used and earned .... . NIL 47 DEVTI FABRICS LIMITED Reliance AUDITORS’ REPORT TO The Members of Devti Fabrics Limited We have audited the attached Balance Sheet of DEVTI FABRICS LIMITED as at 31st March, 1993 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 Manutacturing and Other Companies (Auditor’s Report) order, 1988, issued by the Company Law Board in ter ms of Section 227 (4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order. 4. 5. 6. 2. Further to our comments in the Annexure referred to in Paragraph 1 above, we state that: 7. (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 from our examination of such books. (c) The Balance Sheet and Profit and Loss Account referred to in this Report are an agreement with the books of account. (d) Although the Company has incurred substantial losses resulting in the erosion of its net worth, the accounts of the Company are prepared on going concern basis, in view of the long term profitability expected by the management consequent to a substantial restructuring of operations including closure of weaving division of the Company. Subject to the above, in our opinion and to the best of our information and according to the explanations given to us, the said Balance Sheet and Profit and Loss Account read together with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a 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, 1993 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. 8. 9. 10. 11. For CHATURVEDI 8 SHAH Chartered Accountants For RAJENDRA & CO. Chartered Accountants D.CHATURVEDI Partner Bombay Dated: 16th August, 1993 R.J. SHAH Proprietor 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. 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. 3. 48 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, prima-facie prejudicial to the interests 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 maintained by the Company for the sale and disposal of realisable scrap wherever significant. 15. In our opinion the Company has an internal audit system 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 the manufacturing activities of the Company We have broadly reviewed the records in this connection and are of the opinion that the prescribed accounts and records have been made and maintained. However, no detailed examination of the same has been carried out by us. DEVTI FABRICS LIMITED Reliance 17. According to the records of the Company, Provident Fund and Employee’s State Insurance dues have been regularly deposited with the appropriate authorities. (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. 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, 1993 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. According to the information and explanations given to us and in our opinion the Company has become a sick industrial Company within the meaning of clause (O) of sub-section(1) of section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985. 21. In respect of the service activities of the Company. (a) The Company has a reasonable system of recording receipts, issues and consumption of material and stores commensurate with its size and the nature of its business. (b) The Company does not have any significant allocation of material in respect of the processing activities carried out on ‘job work’ basis. (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 infor med 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 CHATURVEDI 8 SHAH Chartered Accountants For RAJENDRA & CO. Chartered Accountants D.CHATURVEDI Partner Bombay Dated: 16th August, 1993 R.J. SHAH Proprietor 49 DEVTI FABRICS LIMITED Reliance 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 on Accounts Schedule ‘A’ ‘B’ TOTAL ‘C’ ‘D’ ‘E’ ‘F’ TOTAL ‘K’ As at 31st March, 1993 Rs. Rs. (Rs. in crores) As at 31st March, 1992 Rs. Rs. 227.60 676.00 560.51 343.18 185.79 48.48 66.30 300.57 9.99 310.56 410.51 13.25 423.76 21.01 21.01 903.60 924.61 289.65 339.00 586.74 299.87 628.65 649.66 217.33 286. 87 184.65 48.38 7.09 240.12 25.27 265.39 338.74 11.58 350.32 (113.20) 0.04 820.44 924.61 (84.93) 0.06 447.66 649.66 As per our Report of even date For and on behalf of the Board For CHATURVEDI & SHAH Chartered Accountants For RAJENDRA & CO. Chartered Accountants D. Chaturvedi Partner R.J. Shah Proprietor Bombay Dated: 16th August, 1993. 50 Vinod M. Ambani N.M. Sanghav H.N. Arora J.B. Dholakia Directors PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 1993 DEVTI FABRICS LIMITED Reliance (Rs. in crores) Schedule 1992-93 1991-92 Rs. Rs. Rs. Rs. INCOME Sales (Net) Other Income Variation in Stock EXPENDITURE Purchases Manufacturing and Other Expenses Interest Depreciation `G’ `H’ ‘I’ ‘J’ Loss for the year Add: Balance brought forward from last year Balance carried to Balance Sheet Notes on Accounts ‘K’ 764.19 195.93 (28.64) 0.17 1,200.30 44.61 59.18 988.01 213.11 39.25 931.48 1,240.37 49.29 1,205.54 52.88 62.11 1,304.26 1,369.82 (372.78) (447.66) (820.44) (129.45) (318.21) (447.66) As per our Report of even date For and on behalf of the Board For CHATURVEDI & SHAH Chartered Accountants For RAJENDRA & CO. Chartered Accountants D. Chaturvedi Partner R.J. Shah Proprietor Bombay Dated: 16th August, 1993. Vinod M. Ambani N.M. Sanghav H.N. Arora J.B. Dholakia Directors 51 DEVTI FABRICS LIMITED Reliance 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 (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 Term Loans from Financial Institutions NOTES: As at 31.3.1993 Rs. 25.00 21.01 21.01 As at 31.3.1993 Rs. 99.66 13.50 114.44 227.60 (Rs. in Lacs) As at 31.3.1992 Rs. 25.00 21.01 21.01 (Rs. in Lacs) As at 31.3.1992 Rs. 89.03 40.50 160.12 289.65 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 parts 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. Term Loans from Financial Institutions are secured by an exclusive first charge on the plant and machinery purchased under modernisation scheme. 3. The figure of secured loans include Rs.72.68 lacs repayable within one year. SCHEDULE ‘C’ FIXED ASSETS DESCRIPTION Buildings Plant & Machinery Electric Installation Factory Equipment Furniture & Fixture Vehicles Previous Year 52 GROSS BLOCK (AT COST) DEPRECIATION NET BLOCK (Rs. in Lacs) As at 31.3.93 Rs. 27.48 505.88 17.99 2.97 4.07 2.12 Total upto 31.3.93 Rs. 5.02 330.40 5.25 1.15 1.07 0.29 As at 31.3.93 Rs. As at 31.3.92 Rs. 22.46 175.48 12.74 1.82 3.00 1.83 23.38 242.53 13.34 1.96 3.27 2.39 Addition Deduction Rs. Rs. --- 25.46 --- --- 0.05 0.72 --- --- --- --- --- --- --- As at 1.4.92 Rs. 27.48 531.34 17.99 2.97 4.12 2.84 586.74 577.08 26.23 560.51 343.18 217.33 286.87 9.66 586.74 299.87 286.87 SCHEDULE ‘D’ CURRENT ASSETS INVENTORIES (at cost or market value whichever is lower except otherwise stated). Stores, spares, dyes, chemicals, etc. Raw materials Stock-ln-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 Reliance (Rs. in Lacs) As at 31.3.1992 Rs. Rs. As at 31.3.1993 Rs. Rs. 18.66 64.78 28.87 72.60 0.88 7.33 0.55 41.15 49.03 0.55 0.49 62.39 3.42 185.79 48.48 66.30 300.57 As at 31.3.1993 Rs. 7.85 0.20 0.69 1.25 9.99 20.78 32.88 31.49 98.74 0.76 --- 0.55 48.38 48.93 0.55 1.63 2.04 3.42 184.65 48.38 7.09 240.12 (Rs. in Lacs) As at 31.3.1992 Rs. 23.89 0.20 0.57 0 61 25.27 As at 31.3.1993 Rs. Rs. (Rs. in Lacs) As at 31.3.1992 Rs. Rs. 409.07 1.44 336 31 2.43 410.51 13.25 423.76 338.74 11.58 350.32 53 DEVTI FABRICS LIMITED Reliance SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT SCHEDULE ‘G’ OTHER INCOME Processing charges Profit on sale of assets (Net) Miscellaneous Income Excess provision for expenses no longer required SCHEDULE `H’ VARIATION IN STOCK STOCK-IN-TRADE (at close) Finished Goods Stock-in-process Others STOCK-IN-TRADE (at commencement) Finished goods Stock-in-process Others 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 Funds Employees State Insurance Scheme, Pension Scheme, Labour Welfare Fund etc. Employees’ Welfare and other amenities Retirement Compensation C/F 54 1992-1993 Rs. 164.01 19.38 8.60 3.94 195.93 (Rs. in Lacs) 1991-1992 Rs. 196.17 --- 16.94 --- 213.11 1992-1993 (Rs. in Lacs) 1991-1992 Rs. Rs. Rs. Rs. 72.60 28.87 0.88 98.74 31.49 0.76 102.35 130.99 (28.64) 98.74 31.49 0.76 43.53 46.97 1.24 130.99 91.74 39.25 1992-1993 (Rs. in Lacs) 1991-1992 Rs. Rs. Rs. Rs. 32.88 514.89 547.77 64.78 0.38 29.07 3.48 140.57 1.04 0.22 18.75 11.86 234.85 102.19 15.75 112.89 482.99 205.37 465.68 1154.04 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 B/F SALES AND DISTRIBUTION EXPENSES Samples. Sales Promotion and Advertisement Expenses Brokerage and Commission Packing Expenses Freight and forwarding charges Octroi Expenses Sales Tax ESTABLISHMENT EXPENSES Insurance Rent Rates and taxes Other repairs Travelling expenses Payment to Auditors General Expenses Charity & Donation SCHEDULE ‘J’ INTEREST Fixed Loans Others (Net) 0.01 5.53 13.29 2.07 0.35 2.09 4.57 5.01 1.67 0.41 0.72 0.35 8.40 1.79 DEVTI FABRICS LIMITED Reliance (Rs. in Lacs) 1991-1992 Rs. 1173.47 1992-1993 Rs. 1154.04 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 23.34 22.92 1,200.30 1992-1993 Rs. 38.17 6.44 44.61 11.31 20.76 1,205.54 (Rs. in Lacs) 1991-1992 Rs. 41.31 11.57 52.88 SCHEDULE ‘ K’ NOTES ON ACCOUNTS 1. SIGNIFICANT ACCOUNTING POLICIES A. Basis of preparation of Financial Statements 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 The same are prepared on a going concern basis. Fixed Assets and Depreciation a) b) Fixed assets are stated at acquisition cost less accumulated depreciation. Expenditure incurred in the course of construction, installation and commissioning of proper ty, plant or equipment are capitalised and included in the cost of the respective fixed assets. c) Depreciation on fixed assets is provided on the straight line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956. C. Debtors D. Debtors are stated at book value after making provision for doubtful debts Inventories a) Raw Materials, Stores, Spares. Dyes, Chemicals etc. 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. Costs include 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. Basis of Accounting F. 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. 55 DEVTI FABRICS LIMITED Reliance 1992-1993 Rs. (Rs. in Lacs) 1991-1992 Rs. 2. 3. Figures of the previous year have been regrouped, wherever necessary to confirm to this year’s figures. Auditor’s Remuneration: (a) Audit fees (b) Tax audit fees 0.25 0.10 0.35 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.9.22 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 for the year. 5. Contingent Liabilities Claims against the company not acknowledged as debts As at 31st March, 1993 3.99 (Rs. in lacs) As at 31st March, 1992 1.90 6. Licenced & Installed Capacity (As certified by the Management) Licensed Capacity Installed Capacity 7. Spindles Looms Production of finished products meant for saleBlended Yarn Fabrics Value of imports on CIF basis. Expenditure in foreign currency 8. 9. 10. Quantitative information (a) Opening stocki ii) iii) Others (b) Closing stock i) i) Finished Stock Yarn Fabrics Stock in process (yarn) 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 56 1992-93 38368 490 1992-1993 --- --- 1992-93 Quantity 4 7.31 69 --- 0.01 356 28.75 164 343 37 157 1991-92 38368 490 421 21.43 1992-93 23336 --- 1991-92 37536 490 1991-1992 229 53.96 --- --- 1991-92 Quantity 7 2.36 4 7.31 3.60 232 52.61 175 267 115 101 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 Rs. in Lacs 98.74 31.49 0.76 72.60 28.87 0.88 0.17 379.58 384.61 56.45 266.31 71.70 88.53 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. 11. Value of Raw Material Consumed. DEVTI FABRICS LIMITED Reliance 1992-1993 Rs. in % of total Lacs Consumption 1991-1992 Rs. in % of of total Lacs Consumption Indigenous 482.99 100.00 565.28 100.00 12. Value of dyes & chemicals. Stores and spare parts consumed Indigenous 1992-1993 1991-1992 32.55 100.00 49.65 100.00 13. Earnings in foreign exchange --- --- As per our Report of even date For and on behalf of the Board For CHATURVEDI & SHAH Chartered Accountants For RAJENDRA & CO. Chartered Accountants D. Chaturvedi Partner R.J. Shah Proprietor Bombay Dated: 16th August, 1993. Vinod M. Ambani N.M. Sanghav H.N. Arora J.B. Dholakia Directors 57 RELIANCE INDUSTRIAL INVESTMENTS AND HOLDINGS LIMITED Regd. Office: 3rd Floor, Maker Chambers IV 222, Nariman Point, Bombay 400 021 Reliance 59 RELIANCE INDUSTRIAL INVESTMENTS AND HOLDINGS LIMITED DIRECTORS’ REPORT To the Members, Your Directors present the Seventh Annual Report together with the Audited Statement of Accounts for the year ended on 31st March, 1993. 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. Reliance FINANCIAL RESULTS Profit before tax Less: Provision for taxation Profit after tax Add: Balance in Profit & (Rs. in Lacs) 1992-93 1150.33 70.50 1079.83 1991-92 PERSONNEL 382.01 32.21 349.80 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. Loss Account (632.19) (634.59) Less: Shor t provision of tax for the earlier year 0.12 Balance available for appropriation 447.52 --- (284.79) Less: a. Transfer to General Reserve 108.00 b. Interim Dividend c. Proposed Final --- Dividend 338.80 35.00 299.20 13.20 Balance carried forward to Balance Sheet 446.80 0.72 347.40 (632.19) INCOME 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 absorption. There was no foreign exchange earnings or outgo during the year. DIRECTORS Shri Alok Agarwal, Shri Manoj H Modi and Shri Satish S. Seth were appointed as additional directors of the company from 16th April 1993. They will hold office of directors upto the date of the ensuing Annual General Meeting of the Company and are eligible for reappointment. The directors record their appreciation for the valuable services rendered by Shri V.T. Pai, Shri B.K. Bhandari, Shri F.N. Vazifdar, Shri R.P. Mehta, and Shri A.J. Joshi, who had resigned from the Board of Directors of the Company with effect from 16th April, 1993. During the year, the Company received dividend income of Rs.467.57 Lakhs from the investments. AUDITORS DIVIDEND Your Directors are pleased to recommend a dividend of Rs.7700/- per Equity Share (subject to deduction of tax at source) for the Financial Year ended 31st March, 1993 aggregating to Rs.338.80 Lakhs. CHANGE OF NAME The Company has changed its name from “Trishna Investments and Leasings Limited” to “Reliance Industrial Investments and Holdings Limited”, pursuant to the Special Resolution passed at the Extraordinary General Meeting of the Company, held on 6th August, 1993. The Company has received the fresh Certificate of Incor poration consequent on change of name, from the Registrar of Companies, Maharashtra, Bombay. The Auditors of the Company, Messrs. Rajendra & Co. and Messrs. Chaturvedi & Shah hold office until the conclusion of the ensuing Annual General Meeting and are recommended for reappointment. The Company has received certificates from these Auditors to the effect that their reappointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956. For and on behalf of the Board Alok Agarwal Manoj H. Modi Directors Bombay Dated: 16th August, 1993. 61 RELIANCE INDUSTRIAL INVESTMENTS AND HOLDINGS LIMITED Reliance BALANCE SHEET AS AT 31ST MARCH, 1993. Schedule Rs. As at 31.3.1993 SOURCES OF FUNDS: Shareholders’ Funds Capital Reserves & Surplus General Reserve At the beginning of the year Add: Transferred from Profit & Loss Account ‘A’ Less: Adjusted against Profit & Loss Account (as per contra) Profit & Loss Account 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 Net Current Assets Profit & Loss Account Less: Adjusted against General Reserve (as per contra) Notes on Accounts TOTAL ‘B’ ’ C’ ‘D’ TOTAL ‘F’ Rs. 44 8446 10800 19246 --- 19246 72 57 879 34430 35366 285 44151 44436 --- --- 19318 1384000 1403362 1412432 (9,070) --- 1403362 (Rs. in thousands) As at 31.3.1992 Rs. 4946 3500 8446 8446 --- --- 55836 1746 19139 76721 280 4941 5221 63219 8446 Rs. 44 --- 1475000 1475044 1348771 71500 54773 1475044 As per our Report of even date For and on behalf of the Board For CHATURVEDI & SHAH Chartered Accountants For RAJENDRA & CO. Chartered Accountants D. Chaturvedi Partner R.J. Shah Proprietor Bombay Dated: 16th August, 1993. 62 Alok Agarwal Manoj H. Modi Directors Satish S. Seth RELIANCE INDUSTRIAL INVESTMENTS AND HOLDINGS LIMITED PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 1993 Schedule Rs. Rs. As at 31.3.1993 Reliance (Rs. in thousands) As at 31.3.1992 Rs. Rs. INCOME Dividend Income (Tax deducted at Source Rs.11,505 thousands, previous year Rs.9,864 thousands) Interest Received (Tax deducted at source Rs.100 thousands previous year Rs.Nil) 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 Reser ve Less: Interim Dividend (Subject to Tax) Proposed Final Dividend (Subject to Tax) --- 33880 Less: 1, Short provision of tax for the earlier year 2, Balance brought forward from last year Balance carried to balance Sheet Notes on Accounts ‘F’ 46757 3320 65112 115189 156 115033 7050 107983 10800 97183 33880 63303 (12) (63,219) 72 40067 714 --- 40781 2580 38201 3221 34980 3500 31480 --- 31240 240 --- (63459) (63219) 29920 1320 As per our Report of even date For and on behalf of the Board For CHATURVEDI & SHAH Chartered Accountants For RAJENDRA & CO. Chartered Accountants D. Chaturvedi Partner R.J. Shah Proprietor Bombay Dated: 16th August, 1993. Alok Agarwal Manoj H. Modi Directors Satish S. Seth 63 RELIANCE INDUSTRIAL INVESTMENTS AND HOLDINGS LIMITED Reliance 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: 13359212 Equity Shares of Larsen & Toubro Limited of Rs.10/- each fully paid up 284625 Equity shares of Kothari Sugars and chemicals Ltd . (---) of each fully paid up (B) UNQUOTED: 26400 Equity Shares of Observer (India) Limited of Rs.10/- each fully paid up --- 16% Partly Convertible Debentures of Kothari (11385) Sugars and Chemicals Ltd. of Rs. 700/- each fully paid up 30,000 (---) 10,000 9% (tax free) Secured Redeemable Non-Convertible Bonds of Indian Railway Finance Corporation Ltd. 3A Series of Rs. 1,000/- each fully paid up 9% (tax free) Secured Redeemable Non Convertible Bonds of Indian Railway Finance Corporation Ltd 3 A Series of Rs. 1000/- each fully paid up (---) 9%n (tax free)Secured Redeemable Bond of Rural Electrification Corporation Ltd. 15th Series (Face Value Rs. 15,000 thousands) --- --- 9% (tax free) Secured Redeemable Bond of Rural Electrification Corporation Ltd 17th Series (Face Value Rs. 15,000 thousands) 9% (tax free) Secured Redeemable Bond of Rural Electrification Corporation Ltd. 19th Series (Face Value Rs. 11,000 thousands) Quoted Investment - Book Value Market Value 64 As at 31st March, 1993 Rs. (Rs. in thousands) As at 31st March, 1992 Rs. 400 100 500 44 44 400 100 500 44 44 As at 31st March, 1993 Rs. (Rs. in thousands) As at 31st March 1992 Rs. 1340366 1340366 6831 435 --- 24000 8000 12000 12000 8800 1412432 1347197 2384638 --- 435 7970 --- --- --- --- --- 1348771 1340366 5210093 RELIANCE INDUSTRIAL INVESTMENTS AND HOLDINGS LIMITED SCHEDULES FORMING PART OF THE BALANCE SHEET SCHEDULE ‘C’ CURRENT ASSETS, LOANS & ADVANCES Current Assets: Sundry Debtors(Unsecured, Considered Good) Over Six months Cash and Bank Balances: Cash on hand 1 Balance with a Scheduled bank: in Current Account 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 Auditors’ Remuneration Audit Fees Legal & Professional charges Reliance (Rs. in thousands) As at 31st March, 1992 Rs. 55836 1745 756 18383 76721 As at 31st March, 1993 Rs. 57 878 6631 27799 35366 As at 31st March, 1993 Rs. (Rs. in thousands) As at 31st March, 1992 Rs. 10271 33880 285 44151 44436 1992-93 Rs. 72 18 --- 4 25 37 156 3621 1320 280 4941 5221 (Rs. in thousands) 1991-92 Rs. 480 202 455 228 25 1190 2580 65 RELIANCE INDUSTRIAL INVESTMENTS AND HOLDINGS LIMITED Reliance SCHEDULE ‘F’ NOTES ON ACCOUNTS 1. 2. 3. Significant Accounting Policies. a) 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. Investments: Investments are stated at cost. b) Previous year’s figures have been regrouped and/or rearranged wherever necessar y. As the company is not a manufacturing company, information required under para 3 and 4 of Schedule Vi of the Companies Act, 1956 is not given. 4. Consequent to fresh Cer tificate of Incor poration Dated 6th August, 1993 received from Registrar of Companies Maharastra, name of the Company has been changed from ‘Tr ishna Investments and Leasings Limited’ to Reliance Industr ial Investments and Holdings Limited’. As per our Report of even date For and on behalf of the Board For CHATURVEDI & SHAH Chartered Accountants For RAJENDRA & CO. Chartered Accountants D. Chaturvedi Partner R.J. Shah Proprietor Bombay Dated: 16th August, 1993. 66 Alok Agarwal Manoj H. Modi Directors Satish S. Seth RELIANCE INDUSTRIAL INVESTMENTS AND HOLDINGS LIMITED AUDITORS REPORT To, The Members of Reliance Industrial Investments and Holdings Limited. (Formerly known as Trishna Investments and Leasings Limited). We have audited the attached Balance Sheet of RELIANCE INDUSTRIAL INVESTMENTS AND HOLDINGS LIMITED as at 31st March, 1993. 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 repor t 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 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, 1993 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 CHATURVEDI & SHAH Chartered Accountants For RAJENDRA & CO. Chartered Accountants D. CHATURVEDI Partner R.J. SHAH Proprietor BOMBAY DATE: 16th August, 1993 ANNEXURE TO AUDITORS’ REPORT Referred to in Paragraph 1 of our Report of even date 1. 2. 3. As the Company had no Fixed Assets during the year, Clauses 4(A)(i) and (ii) of the said Older are not applicable. Since the Company has not commenced any manufacturirg 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 had received an interest free loan from the holding Company According to the information and explanations given to us. Reliance and in our opinion, the terms and conditions of the above loan are prima-facie not prejudicial to the interest of the Company The Company has not received any other loan from the companies, firms or other parties listed in the Register maintained under section 301 of the Companies Act. 1956, or from companies under the same management within the meaning of section 370(1B) of the Companies Act 1956 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 and directives issued by the Reserve bank of India are not applicable. 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 Employees Provident Fund and Miscellaneous Provisions Act, 1952 and the Employee s 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. 1993 for a period of more than six months from the date they became payable 4. 5. 6. 7. 8. 9. 10. In our opinion and according to the information and explanations given to us no personal expenses have been charged to revenue account11. 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. According to the information and explanations given to us, 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. In our opinion the Company has maintained proper records and made timely entries in respect of investments dealt in or traded by the Company The Company s investments are held in its own name. For CHATURVEDI & SHAH Chartered Accountants For RAJENDRA & CO. Chartered Accountants D. CHATURVEDI Partner R.J. SHAH Proprietor BOMBAY DATE: 16th August, 1993 67 REDWOOD INVESTMENTS LIMITED Regd. Office: 3rd Floor, Maker Chambers IV 222, Nariman Point, Bombay 400 021 Reliance 69 REDWOOD INVESTMENTS LIMITED DIRECTORS’ REPORT To the Members Your Directors present the Second Annual Report together with the Audited Statement of Accounts for the year ended on 31st March, 1993. FINANCIAL RESULTS The Company during the year under review has incurred a loss of Rs. 11556/- as against loss of Rs.12024/- for the previous year. DIVIDEND In view of the loss, the Directors have not recommended any dividend for the year ended 31st March, 1993. DIRECTORS Shri K. Sethuraman was appointed as an Additional Director with effect from 1st April, 1993. He holds the office of Director upto the date of the ensuing Annual General Meeting and is eligible for reappointment. The Company has received a notice under Section 257 of the Companies Act, 1956, proposing his appointment as a Director of the Company subject to retirement by rotation. As per the provisions of the Companies Act, 1956, Shri V.M Ambani retires by rotation and being eligible offers himself for reappointment.Shri B.R. Jaju resigned from the Board with effect from 1st April, 1993. DEPOSITS The Company has not accepted any deposits from the public. Hence, no information is required to be appended to this repor t in terms of NonBanking Financial Companies (Reserve Bank) Directions, 1977. Reliance 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 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. AUDITORS The Auditors of the Company, Messrs. Rajendra & Co. and Messrs. Chaturvedi & Shah, hold office until the conclusion of the ensuing Annual General Meeting and are recommended for reappointment. The Company has received certificates from the Auditors to the effect that their reappointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956. For and on behalf of the Board Alok Agarwal Manoj H. Modi Directors Bombay Dated: 16th August, 1993. 71 REDWOOD INVESTMENTS LIMITED Reliance BALANCE SHEET AS AT 31ST MARCH, 1993. SOURCES OF FUNDS: Shareholders’ Funds Capital Reserves and Surplus Loan Funds Unsecured Loans (from Reliance Industries Limited, the holding company) 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 Schedule Rs. Rs. As at 31.3.1993 (Rs. in thousands) As at 31.3.1992 Rs. Rs. ‘A’ `B’ 5,04,000 9,000 5,04,000 9,000 5,13,000 5,13,000 1,31,00,000 1,35,00,000 TOTAL ‘C’ ‘D’ 1,31,00,000 1,36,13,000 1,35,00,000 1,40,1300 1,35,09,650 1,35,10,000 78,920 10,000 4.88,770 10,000 68,920 10,850 23,580 TOTAL 1,36,13,000 4,78770 12,206 12,024 1,40,13,000 Notes and Contingent Liabilities ‘E’ As per our Report of even date For and on behalf of the Board For CHATURVEDI & SHAH Chartered Accountants For RAJENDRA & CO. Chartered Accountants D. Chaturvedi Partner R.J. Shah Proprietor Bombay Dated: 16th August, 1993. 72 Vinod M. Ambani Manoj H. Modi Directors K. Sethuraman REDWOOD INVESTMENTS LIMITED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 1993 Reliance Schedule For the Year Ended 31st March, 1993 Rs. Rs. For the Year Ended 31st March, 1992 Rs. Rs. INCOME --- --- --- --- EXPENDITURE Audit Fees General Expenses Miscellaneous Expenditure Written Off Loss for the year/period Add: Balance brought forward from last per iod Balance carried to Balance Sheet Notes and Contingent Liabilities ‘E’ 10,000 200 1,356 10,000 668 1,356 11,556 (11,556) (12,024) (23,580) 12,024 (12,024) --- (12,024) As per our Report of even date For and on behalf of the Board For CHATURVEDI & SHAH Chartered Accountants For RAJENDRA & CO. Chartered Accountants D. Chaturvedi Partner R.J. Shah Proprietor Bombay Dated: 16th August, 1993. Vinod M. Ambani Manoj H. Modi Directors K. Sethuraman 73 REDWOOD INVESTMENTS LIMITED Reliance SCHEDULES FORMING PART OF THE BALANCE SHEET SCHEDULE ‘A’ SHARE CAPITAL Authorised: As at 31st March, 1993 As at 31st March, 1992 Rs. Rs. Rs. Rs. 59,600 Equity Shares of Rs. 10 each 40,400 11%, Cumulative Redeemable Preference Shares 5,96,000 4,04,000 5,96,000 4,04,000 of Rs.10 each Issued, Subscribed & Paid up: 10,000 Equity Shares of Rs. 10 each fully paid up (held by Reliance Industries Limited, the Holding company) 11% cumulative Redeemable Preference Shares 40,400 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 As per last Balance Sheet Added during the year SCHEDULE ‘C’ INVESTMENTS (At Cost) OTHER INVESTMENTS Unquoted: 1,35,09,650 Equity Shares of Reliance Enterprises (1,35,10,000) Limited of Rs.1, each. fully paid up. SCHEDULE `D’ CASH AND BANK BALANCES 10,00,000 10,00,000 1,00,000 1,00,000 4,04,000 4,04,000 5,04,000 5,04,000 5,04,000 5,04 000 As at 31st March, 1993 As at 31st March, 1992 Rs. Rs. 9,000 --- 9,000 Rs. Rs. --- 9,000 9,000 As at 31st March, 1993 As at 31st March, 1992 Rs. Rs. Rs. Rs. 1,35,09,650 1,35,10,000 1,35,09,650 1,35,10,000 As at 31st March, 1993 Rs. Rs. As at 31st March, 1992 Rs. Rs. Cash on hand Balance with a Scheduled Bank In a current Amount 352 78,568 2 4,88,768 78,920 78,920 4,88,770 4.88,770 74 REDWOOD INVESTMENTS LIMITED SCHEDULE ‘ E’ NOTES AND CONTINGENT LIABILITIES Reliance 1) 2) 3) The Current financial year is for the period of twelve months whereas the previous financial year was for a period from 10th April, 1991 to 31st March, 1992. The Current Financial year’s figures to that extent are not comparable. Arrears of Fixed Cumulative Dividend on Preference Shares is Rs. 58,743 (Previous Year Rs.14,303) As the Company is not a Manufacturing Company, information required under para 3 and 4 of Schedule VI of the Companies Act, 1956 is not given. 4) During the year the Company became a Public Company by vir tue of Section 43A of the Companies Act, 1956. 5) Figures of the Previous Year have been regrouped/rearranged wherever necessary. 6) DISCLOSURE OF SIGNIFICANT ACCOUNT POLICIES: a) GENERAL The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting policies, 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. c) INVESTMENTS: Investments are stated at cost. As per our Report of even date For and on behalf of the Board For CHATURVEDI & SHAH Chartered Accountants For RAJENDRA & CO. Chartered Accountants D. Chaturvedi Partner R.J. Shah Proprietor Bombay Dated: 16th August, 1993. Vinod M. Ambani Manoj H. Modi Directors K. Sethuraman 75 Reliance AUDITORS’ REPORT To The Members of Redwood Investments Limited REDWOOD INVESTMENTS LIMITED 2. We have audited the attached Balance Sheet of Redwood Investments Limited as at 31st March, 1993, 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. 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 purpose of our audit. In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of 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 d) 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, 1993 and in so far as it relates to the Profit and Loss Account of the ‘Loss’ of the Company for the year ended on that date. For CHATURVEDI 8 SHAH Chartered Accountants For RAJENDRA & CO. Chartered Accountants D.CHATURVEDI Partner R.J. SHAH Proprietor Bombay Dated: 16th August, 1993 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 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 prima-facie not prejudical to the interest of the Company. The Company has not taken any other loan. 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 and the directions issued by the Reserve Bank of India are not applicable. 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 Employees’ Provident Fund and Miscellaneous Provisions Act 1952, and the Employee’s 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, 1993 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 or 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 CHATURVEDI & SHAH Chartered Accountants For RAJENDRA & CO. Chartered Accountants D.CHATURVEDI Partner R.J.SHAH Proprietor Bombay Dated: 16th August, 1993 76 RELIANCE PETROPRODUCTS LIMITED Regd. Office: 210/202 Lalita Complex Near Vijaya Bank 352/3, Rasala Road, Navrangpura, Ahmedabad 380 009. Reliance 77 RELIANCE PETROPRODUCTS LIMITED DIRECTORS’ REPORT To the Members Your Directors present the Third Annual Report together with the Audited Statement of Accounts for the Financial Year ended 31st March, 1993. FINANCIAL RESULTS The expenses incurred during the year under review were Rs.11,169/ (amounting to loss for the year) as against loss of Rs.6,110/- for the previous year. DIVIDEND Reliance 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. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO. As no manufacturing activities have commenced till the date of this report, no information is required to be disclosed in respect of conser vation of energy, technology absorption and foreign exchange earnings and outgo. In view of the loss, the Board of Directors has not recomended any dividend for the Financial Year under review. AUDITORS DIRECTORS Shri K.K. Seth was appointed as Additional Director of the Company with effect from 23rd February, 1993. Shri P.S. Balasubramaniam resigned from the Board with effect from 1st April, 1993. Shri J.S. Bakshi retires by rotation and being eligible offers himself for reappointment. Shri K.K. Seth who was appointed as an Additional Director holds office of director upto the date of the ensuing Annual General Meeting. However, the Company has received a notice under Section 257 of the Companies Act, 1956, proposing his appointment as a Director of the Company subject to retirement by rotation. DEPOSITS The company has not accepted any deposit from the public. Hence, no information is required to be appended to this report. 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 reappointment. The Company has received cer tificates from the Auditors to the effect that their reappointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956. For and on behalf of the Board J.S. BAKSHI K.K. SETH Directors BOMBAY DATED: 16th August, 1993 79 RELIANCE PETROPRODUCTS LIMITED Reliance BALANCE SHEET AS AT 31ST MARCH, 1993 SOURCES OF FUNDS: Shareholders’ Funds Capital Loan Funds Unsecured Loans (From Reliance Industries Limited, Holding Company) 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: Schedule As at 31st March, 1993 Rs. Rs. As at 31st March, 1992 Rs. Rs. ‘A’ 13,000 10,000 TOTAL ‘B’ 9,136 10,000 TOTAL ‘C’ 13,000 10,000 23,000 (864) 4,753 19,111 23,000 13,000 --- 5,626 6,000 13,000 --- 13,000 (374) 5,432 7,942 13,000 PROFIT AND LOSS ACCOUNT FOR YEAR ENDED 31ST MARCH, 1993 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: As at 31st March, 1993 As at 31st March, 1992 Rs. --- 10,000 490 679 Rs. --- 11,169 (11,169) (7,942) (19,111) Rs. --- 5,000 431 679 Rs. --- 6,110 (6,110) (1,832) (7,942) Schedule `C’ As per our Report of even date For and on behalf of the Board For CHATURVEDI & SHAH Chartered Accountants For RAJENDRA & CO. Chartered Accountants D. Chaturvedi Partner R.J. Shah Proprietor Bombay Dated: 16th August, 1993. 80 J.S. Bakshi K.K. Seth Directors 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. (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 RELIANCE PETROPRODUCTS LIMITED Reliance As at 31st March, 1993 Rs. Rs. As at 31st March, 1992 Rs. Rs. 5,00,000 5,00,000 13,000 13,000 13,000 13,000 As at 31st March, 1993 Rs. Rs. As at 31st March, 1992 Rs. Rs. --- 9,136 1,070 4,556 9,136 9,136 5,626 5,626 SCHEDULE ‘ C’ NOTES ON ACCOUNTS: 1) 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. 2) Figures of the previous year have been regrouped/rearranged wherever necessar y. 3) DISCLOSURE OF SIGNIFICANT ACCOUNTING POLICIES: a) GENERAL: 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. b) REVENUE RECOGNITION: income and Expenditure are accounted for on accrual basis. As per our Report of even date For and on behalf of the Board For CHATURVEDI & SHAH Chartered Accountants For RAJENDRA & CO. Chartered Accountants D. Chaturvedi Partner R.J. Shah Proprietor Bombay Dated: 16th August, 1993. J.S. Bakshi K.K. Seth Directors 81 Reliance AUDITORS’ REPORT To The Members of Reliance Petroproducts Limited RELIANCE PETROPRODUCTS LIMITED We have audited the attached Balance Sheet of Reliance Petroproducts Limited as at 31st March, 1993 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. Further to our comments in the Annexure referred to in paragraph 1 above, we report that: 2. 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. 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) ii) in so far as it relates to the Balance Sheet of the state of affairs of the Company as at 31st March 1993, and in so far as it relates to the Profit and Loss Account of the ‘Loss’ of the Company for the year ended on that date. For CHATURVEDI & SHAH Chartered Accountants For RAJENDRA & CO. Chartered Accountants D.CHATURVEDI Partner R.J.SHAH Proprietor Bombay Dated : 16th August, 1993 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 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 prima-facie not prejudical to the interest of the Company. The Company has not taken any other loan. The Company has not granted any loan, 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 sub-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. According to the information and explanation 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 Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 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, 1993 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 (o) of sub-section (1) of section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985. For CHATURVEDI & SHAH Chartered Accountants For RAJENDRA & CO. Chartered Accountants D.CHATURVEDI Partner R.J.SHAH Proprietor Bombay Dated : 16th August, 1993 82 

Continue reading text version or see original annual report in PDF format above