Reliance Industries Limited
Annual Report 1995

Plain-text annual report

Reliance Industries Limited Annual Report 1994-95 Reliance Industries Limited Sales - Rs. 7,019 crores (US $ 2228 million) Operating Profit (PBIDT) - Rs. 1,457 crores (US $ 463 million) Cash Profit (PBDT) - Rs. 1,343 crores (US $ 426 million) Net Profit - Rs. 1,065 crores (US $ 338 million) Assets - Rs. 11,529 crores (US $ 3660 million) 2.6 million shareholders The largest private sector enterprise in India 1 Reliance Industries Limited Board of Directors Dhirubhai H. Ambani Chairman Mukesh D. Ambani Vice Chairman & Managing Director Anil D. Ambani Managing Director Nikhil R. Meswani Executive Director Suresh S. Betrabet Nominee Director- ICICI U. Mahesh Rao Nominee Director- GIC Ramniklal H. Ambani Natvarlal H. Ambani Mansingh L. Bhakta T Ramesh U. Pai Yogendra P. Trivedi Vinod M. Ambani Secretary Kanga & Co. Solicitors & Advocates Auditors Chaturvedi & Shah Rajendra & Co. Bankers Allahabad Bank American Express Bank Bank of America Bank of Baroda Canara Bank Central Bank of India Deutsche Bank Hong kong Bank Indian Bank Oriental Bank of Commerce Punjab National Bank State Bank of India Syndicate Bank Vijaya Bank Registered Office 3rd Floor, Maker Chamber IV, 222, Narirman Point. Bombay 400 021. India Tel Nos.2831633/16-2826070 Fax No. 022 - 204 2268 2 Manufacturing Facilities at Subsidiary Companies 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 & Petrochemicals Complex Village Mora, Bhatha PO. Surat Hazira Road Surat 394 510, Gujarat State, India 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 Chamber IV, 222, Nariman Point, Bombay 400 021 3 . Reliance Petroproducts Limited 201/202 Lalita Complex, Near Vijaya Bank, 352/3 Rasala Road, Navrangpura Ahmedabad 380 009. Registrars & Transfer Agent Reliance Consultancy Services Limited 56, Mogra Village Lane, Off. Old Nagardas Road, Andheri (East), Bombay 400 069, India Tel. Nos.8367015 16-17-18 Fax No 022-8367019 Reliance Industries Limited Contents Page No.(s) To our Family of Shareowners Financial Highlights Directors Report Annexure to Directors’ Report Auditors Report Balance Sheet Profit & Loss Account Schedules forming part of Balance Sheet and Profit & Loss Account Notes on Accounts Documents of Subsidiary Companies 5 27 29 31 31 36 37 38 50 55 3 Reliance Industries Limited Mukesh D. Ambani Vice Chairman & Managing Director Dhirubhai H. Ambani Chairman Anil D. Ambani Managing Director 4 Reliance Industries Limited To Our Family of Shareowners...... In terms of size, technology and performance The year 1994-95 will be remembered as a landmark in Indian Industry, Reliance rides the winds of in the history of Reliance Industries Ltd. The sales liberalisation and opportunity. of Rs.7019 crores (US $ 2228 million), represented an increase of 31% over the previous year. Net profit the Gearing Ratios moving down from 0.58:1 to 0.35:1 crossed the Rs.1000 crores mark [Rs.1065 crores - and from 20% to 16% respectively. India’s leading credit US $ 338 million], unparalleled in the history of the rating agency, CRISIL, has upgraded Reliance’s long Indian Private Sector. The taxes and duties paid to term debt rating from M+ to AAA, signifying the highest the Government of India stood at 202% of net profit safety and an extremely strong financial position. (Rs.2147 crores, US $ 682 million). Earning per share During the year under review, Reliance invested was up by 29% at Rs.23 on an equity capital of Rs.3263 crores (US $1036 million) for the creation of R s. 4 5 6 c r o r e s ( U S $ 1 4 5 m i l l i o n ) . N e t w o r t h increased from Rs. 4335 crores (US $1376 million) t o R s . 7 1 9 3 c r o r e s ( U S Rs . in crores Total Income $2283 million), an increase of over 66%. Return on s h a r e h o l d e r s ’ f u n d s improved to 18.5% from 16.6% in 1993-94. The financial position of the 8000 6000 4000 2000 0 Company became stronger 90-91 91-92 92-93 93-94 94-95 with both the Debt:Equity and new assets as against Rs.487 crores (US $1 55 million) during the previous ye a r. Fur ther, Reliance expects to invest about Rs.3000 crores (US $ 952 million) in the next 18-24 months period, with substantial increase in the manufacturing capacity by 300% from 1.5 million TPA to 6 million TPA . 1994-95 1994-95 Rs.(Crs) US $ MM Rs.(Crs) US $ MM Growth (%) Sales Gross Profit (PBIDT) Cash Profit (PBDT) Net Profit (PAT) 7,019 1,457 1,343 1,065 Shareholders’ Funds (Net Worth) 7,193 Total Assets 11,529 Earning Per Share (EPS-in Rs.) (EPS - in cents) Taxes/Duties paid to the Govt Foreign Exchange Savings Capital Expenditure (CAPEX) 23.4 2,147 3,770 3,263 2228 463 426 338 2283 3660 0.74 682 1197 1036 5,345 1,064 831 575 4,335 8,120 18.1 1,391 2,353 487 1697 338 264 183 1376 2578 0.57 442 906 155 31 37 62 85 66 42 29 54 32 570 5 Reliance Industries Limited Reliance accelerates performance in liberalised environment increased equity base, compared to 10% per annum in the pre-reforms period. The taxes and duties paid to The Government of India initiated reforms programme in the Government of India increased from Rs.2508 crores 1991 to liberalise the economy, paving the way for ar (US $ 796 million) for years 1989-92 to Rs.4656 crores intensively competitive environment. Reliance had achieve significant growth during the pre-reforms period and was thus poised to take full advantage of the (US $1478 million) for years 1992-95; keeping pace with its rapid growth. The total assets of Rs.11,529 crores (US $ 3660 million) as on March ’95 grew at 33% in the oppor tunities ahead. The post- reforms years posed new challenges Post Refor ms Pre Reforms in terms of increased competition and 1994-95 1992-93 CARG * % 1991-92 1989-90 CARG * % lower tariff protection. New opportunities were being created by greater consumer awareness and increasing purchasing power of the Sales 7019 4106 EBDIT 1457 Cash profit 1343 881 602 322 growing middle class. The Reliance Net profit 1065 philosophy of pursuing aggressive EPS 23.4 13.1 30.7 28.6 49.4 81.9 33.5 2953 1841 575 356 163 7.2 424 252 9 1 5.9 26.6 16.4 18.7 34.3 10.0 growth plans in the core businesses CEPS 29.5 24.5 9.6 15.7 16.6 -2.8* to sustain long term profitability and * Compounded Annual Rate of Growth achieve market leadership, became all the more relevant post-reforms years, from a larger base of Rs.4880 crores in this new environment. Reliance sharpened its business (US $ 1907 million) as on March ’92, in comparison strategy of maximising long term cash flows and enhancing shareholder value . The excellent financial performance thereafter substantiates this business strategy. The above table shows three years of the pre and post-reforms growth.Sales have increased at a compounded annual rate of 31% in the post-reforms years % 90 80 70 60 50 40 30 20 10 0 -10 Pre Reforms / Post Reforms Performance CARG % Sales EBDIT Cas h Profit Pre-Reforms EPS CEPS Net Profit Post Reform s with 26% in the pre-reforms years [Base Rs.2411 crores (US $ 810 million) as on March ’89]. Shareholders’ funds of R e l i a n c e g r e w a t 5 5 % p e r a n n u m i n t h e p o s t r e f o r m s years as compared to a growth rate of 22% in the pre reforms y e a r s a n d a r e c u r r e n t l y a t Rs.7193 crores (US $ 2283 million). Reliance has been proactive (1992-95) as compared to 27% in the pre reforms years (1989) A growth rate of 82% in net profits compared to 34% in the pre-reforms period clearly demonstrates that Reliance has been able to successfully cope with the reduction in customs duties from a peak level of over 200% to 50%. in taking full advantage of the opportunities arising from liberalisation while facing up successfully to a far more i n t e n s i v e c o m p e t i t i o n R e l i a n c e , w h i c h i s o n t h e threshold of rapid growth, has built a strong foundation for the post-reforms years of the future and will be able Shareholder value has been enhanced through a to fulfill the aspirations of shareholders, employees, compounded growth in EPS of 34% per annum, on an customers and other partners. 6 Reliance Industries Limited Review of Operations Fibres Business Polyester Staple Fibre (PSF) Polyester Filament Yarn (PFY) The fibres division has continued, till this day, to focus on providing high quality products and an excellent Reliance’s Polyester Staple Fibre (PSF) division has customer ser vice. This has helped Reliance establish consolidated its position during the year under review its product brand ‘RECRON’ amongst all segments of through a continued focus on customer service, supply customers and this is reflected in-j-growing market of high premium quality fibre, exploiting new avenues share. The production in the industr y grew at the rate of of growth and creation of new market segments This has helped Reliance increase its market share and production. Over a five year period from 1989-90 to 1994-95 14% compounded in the last five years from 156,000 MT to 295,000 MT per annum. During the same period Reliance’s production has increased from 66,000 MT to 90,000 MT. Currently the Company enjoys a 30% market share. In response to the needs of a niche market in fully drawn yarn, Reliance is setting up a 5000 TPA FDY plant at P a t a l g a n g a d u r i n g t h e c u r r e n t y e a r. W i t h t h e rationalisation of customs and excise tariffs and an increase in the per capita income, demand for polyester is expected to be strong till 2000 AD. However, polyester industry in India is likely to see excess capacity in the immediate future. With vertical integration, market leadership and economy size plants, Reliance has positioned itself as a low cost producer in the industry and is thus confident of meeting any situation which Reliance has increased its production from 45,000 MT may arise from excess capacity. to 90,000 MT, a compounded growth rate of 15%, while the industr y’s production grew at the rate of 12% per annum from 127,000 MT in 1989-90 to 220,000 MT in 1994-95. D u ring the year under revie w, Reliance alongwith Terene Fibres India Ltd. (TFIL) - whose entire production is available to Reliance produced over 90,000 MT which represents a growth of 23% over the previous year As a result the Company’s market share improved from 33% to 40%. Reliance has taken steps to debottleneck its existing facilities and modernise the control and automation systems so as to maintain a position of leadership both in quality as well as in productivity These measures are likely to be completed during the current year. With an eye on the potential demand. Reliance has already taken steps to set up 160,000 TPA plant at Hazira. The Fibre Intermediates Business Purified Terephthalic Acid (PTA) Reliance continues to be the largest producer of Purified Terephthalic Acid (PTA) and Paraxylene (PX). The PX Company’s mar ket share will increase from 40% to over produced is captively consumed by the Company. 50% by 1997. It produced over 257,000 MT of PTA, achieving over 100% 7 Reliance Industries Limited The MEG plant at Hazir 8 capacity utilisation. As a result, Reliance strengthened Reliance’s market share today stands at 56%. Reliance Reliance Industries Limited is setting up additional polyester facilities at Hazira and it plans to increase the MEG capacity by adding another plant of 120,000 TPA at the same site. its market share in the domestic DMT/PTA production to 58%. The industr y consumption increased from 290,000 MT in 1989 t o 5 5 0 , 0 0 0 M T i n 1994-95 Reliance’s production grew at a compounded rate of 1 5 % f r o m 1 2 5 , 0 0 0 M T i n 1 9 8 9 - 9 0 t o 257,000 MT in 1994- 9 5 . W i t h t h e c o n t i n u e d p r e f e r e n c e f o r t h e PTA route in the manufacture of polyester, the demand Polymers Business for PTA is expected to grow in excess of the available Polyvinyl Chloride (PVC) production thus necessitating additional capacity. Reliance continues to maintain its leadership position To meet the growing demand, Reliance is already in in the vibrant domestic PVC industry. While the industr y the process of implementing a w o r l d s i ze P TA p l a n t o f 350,000 T PA at Hazira This w o u l d p r i m a r i l y m e e t t h e needs of Reliance’s polyester complex at Hazira In order to meet the country’s requirement of filament capacity of over one million tonnes per year and fibre capacity of over half a million tonnes per year in the coming years. Reliance is 8000 7000 6000 5000 4000 3000 2000 1000 0 Equity Share Capital & Net Worth Rs. in crores r e c o r d e d a c o m p o u n d e d g r o w t h r a t e o f 2 7 % , f r o m 1 3 5 , 0 0 0 M T i n 1 9 8 9 - 9 0 t o 4 4 2 , 0 0 0 M T i n 1 9 9 4 - 9 5 , Reliance entered this industry in 1991-92 and registered a much higher compounded rate of 36%. Reliance’s production 90-91 91-92 92-93 93-94 94-95 increased to 187,000 MT, an planning to fur ther increase its PTA capacity. Mono Ethylene Glycol (MEG) Reliance is the largest producer of MEG It has achieved a capacity utilisation of nearly 100% during the year. Much of the MEG produced at Hazira is captively consumed by the polyester facility at Patalganga. The i n d u s t r y c a p a c i t y w i t n e s s e d a p h e n o m e n a l 6 6 % compounded growth over the period 1989-95 from 20,000 MT in 1989 to 250,000 MT in 1995. As a direct result of high capacity utilisation, increase of 10% over that of the previous year. Reliance’s PVC, marketed under the brand name ‘REON’, has met with an overwhelming response not only in the 9 Reliance Industries Limited domestic market, but also in international markets. It is From petrochemicals to textiles, Reliance is now popular in the Middle East, South East Asian, uniquely positioned as perhaps the only Company African and in the Latin American markets. The year saw a very steep increase in international prices of both the raw materials Ethylene and Ethylene Di-Chloride (EDC). In fact the prices nearly doubled, resulting in price adjustments of various products to in the world to have a level of total integration and value addition substantially enhancing long-term profitability and shareholder value. The increase in production over the previous year by 24% at 166,000 MT comprised of all required grades. r e d u c e t h e p r e s s u r e o n margins. Reliance adopted a customer friendly marketing approach and received good response f o r i t s r e s i n s T h e m a r ke t growth is slated to be in the r e g i o n o f 1 2 % p e r a n n u m , e n s u r i n g g o o d d e m a n d i n d i g e n o u s l y R e l i a n c e i s e x p a n d i n g i t s c a p a c i t y t o 1600 1400 1200 1000 800 600 400 200 0 Operating Profit & Profit After Tax (PAT) Rs. in crores Reliance increased its market share from 12% in 1992-93 to a healthy 40% in 1994-95. T h e C o m p a n y i n t r o d u c e d a d d i t i o n a l g r a d e s a n d c a p t u r e d n e w m a r k e t s r e s u l t i n g i n i m p o r t substitution. Reliance markets various grades of polyethylene 90-91 91-92 92-93 93-94 94-95 u n d e r t h e b r a n d n a m e ‘ R E L E N E ’ ( H D P E ) a n d ‘ R E C L A I R ’ ( L L D P E ) w h i c h 300,000 TPA, work on which is well under way and will s a t i s f i e d t h e r e q u i r e m e n t s o f t h e c u s t o m e r s. T h e be fully oper ational from next y ear. This will fur ther Company emerged as the market leader in the woven enhance Reliance’s competitive edge. Polyethylene (PE) With 55% of industry production, Reliance is now the largest producer of High Density Polyethylene in India in just three years While the industry saw a rapid growth in production from 35,000 MT in 1989-90 to 310,000 MT in 1994-95, a compounded growth rate of 55%, Reliance’s production grew from 47,000 MT in 1992- 93 to 166,000MT in 1994-95. sack industry serving Fertilizer and Cement units. One of the most significant developments during the year, was the introduction of Octene LLDPE grades; produced for the first time in the country It has been well received by the Indian industr y, will replace imports and lead to savings in precious foreign exchange. With the introduction of this grade, Reliance achieved a u n i q u e d i s t i n c t i o n o f b e i n g o n e a m o n g o n l y s i x producers in the world of Octene LLDPE. Chemicals Business Linear Alkyl Benzene (LAB) As a critical raw material for synthetic detergents, the co nsumpti on of LA B , depends on t he i ncr eas ing purchasing power and growing personal demands of the people. The industry capacity has increased from 150,000 MT in 1989 to 210,000 MT in 1995. Over the same period, consumption did not keep pace with the capacity addition 1 0 which now stands at 175,000 TPA ( 1994-95). Reliance has achieved near 100% capacity over the last three years and has maintained a 37% market share. For the period under r eview, Reliance produced about 80,000 MT of LAB. Reliance markets LAB under t h e b r and name ‘ R E L A B ’ 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Reliance Industries Limited Gross Fixed Assets & Net fixed Assets Rs. In crores Tri Ethylene Glycol (TEG) Gross Fixed Assets Net Fixed Assets R e l i a n c e i s s e t t i n g u p a production facility for TEG of 10,000 TPA which is expected t o s t a r t f u n c t i o n i n g d u r i n g 1995-96. This will substitute imports in the field of oil field c h e m i c a l s a n d s p e c i a l i t y surfactants. 90-91 91-92 92-93 93-94 94-95 which is used by all the leading domestic manufacturers of soaps and detergents and is exported to international Textile Business Market Leader - ‘VIMAL' leaders like Henkel, Unilever, Procter and Gamble etc. Reliance contin ues to lead India’s premium suitings Backward integration to the stage of Normal Paraffin industr y with its largest premium brand “VIMAL”. It will has further helped Reliance improve margins Reliance also continue to play a pivotal role in the textile industry believes that the demand for LAB would improve during and will fur ther improve its present market share. The t h e c o m i n g y e a r s a n d t o m e e t t h i s d e m a n d , t h e Company is expanding its retail channels to strengthen Company plans further capacity additions. the marketing network and to deliver quality fabrics all over the countr y. Ethylene Oxide (EO) Reliance continued to lead the domestic market with a 36% mar ket share. The cost reduction programme undertaken during the year has started bringing rich dividends. Paraffins R e l i a n c e l e a d s t h e P a r a f f i n m a r k e t i n I n d i a f o r Expansion chlor ination with a 41% market share The market for Reliance has successfully increased the Worsted Chlorinated Paraffin is growing, led by increasing Spinning plant capacity from 12,500 spindles to 24,000 conversion of PVC into flexible products. The Company intends to increase the market share. spindles and has simultaneously enhanced the weaving capacity by nearly 7 million sq. mtrs. of high quality Worsted Suitings and balancing equipment in the processing section. This, combined with other blended s u i t i n g s , h a s h e l p e d t h e C o m p a n y m a i n t a i n i t s leadership as the largest producer of premium suitings. A project initiated to manufacture Polyester/ Viscose Spun Ya r n b y i n s t a l l i n g 2 3 , 0 0 0 s p i n d l e s w a s successfully commissioned dur ing the year. This is again an exercise in backward integration, reducing the dependence on spun yarn and further adding to the profitability. 1 1 Reliance Industries Limited The Panna and Mukta Oil & Gas fields off Bombay High 1 2 Harmony-Furnishing Fabrics Naroda to ensure uninterrupted power and reduce Reliance has maintained its leading edge and has been overall costs. Reliance Industries Limited t h e l a r g e s t m a n u f a c t u r e r o f upmarket furnishing f a b r i c s m a r k e t e d u n d e r t h e b r a n d name “Har mony”. To cater to the growing d e m a n d o f h o m e t e x t i l e s , C o m p a n y t h e h a s increased its manufacturing capacity by over 3 million sq. mtrs per annum. This has been achieved by installing 10 highly sophisticated weaving machines and upgrading the existing jacquard machines. For intricate designing, these machines are Further Expansion Reliance has already spent over Rs. 200 crores (US $ 63 million) and plans to enhance its existing capacities for all its textile products. With this, the total capital expenditure will be Rs.300 crores (US $ 95 million), which is one of the largest investments by a single textile Compan y. Oil and Gas Business As part of the economic liberalisation programme, the Government of India (GOI) invited private sector part ic ipat ion in t he e xplorat ion and p rod uct ion of Petroleum, Oil & Gas. Reliance won three of the four suppor ted by the most advanced CAD technology. medium sized oil and gas offshore projects awarded to the private sector in an international competitive SlumbeRel - New Sleep Products b i d d i n g . T h e p r o j e c t i s b e i n g i m p l e m e n t e d by a n In line with its strategy of value addition through u n i n c o r p o r a t e d j o i n t v e n t u r e a m o n g R e l i a n c e integration, Reliance has diversified into marketing Industries Ltd. (30% Working Interest), Enron Oil & Gas o f s l e e p p r o d u c t s . U n d e r l i c e n c e f r o m E . l . India Ltd (30% Working Interest) and Oil & Natural Gas DuPont De Nemours and Co., USA, it has introduced Corporation Limited (ONGC) (40% Working Interest). “ S l u m b e R e l ” , D a c r o n I f i b r e - f i l l e d p i l l o w s . Manufactured to DuPont quality standards, they are made from specially engineered hollow fibres. This is Reliance has already signed the Production Sharing Contract. The development of the proven Panna, Mukta and Tapti fields will give recoverable oil reserves of 145 million barrels, condensate reserves of 12 million barrels and gas reserves of 40 billion cubic meters. Reliance is proceeding with firm plans for developing these fields. This venture has provided Reliance with a foundation for the expansion of E & P (Exploration and Production) initiative. It has been actively evaluating opportunities in subsequent rounds of bidding initiated by the Government of India for the development of discovered the first time that a scientifically developed pillow with oil and gas fields. unique features is released in the Indian market. This will be followed by a range of decorative cushions, comforters, quilts and mattresses. Captive Power Reliance has also successfully commissioned a combined cycle gas-based cogeneration Captive Power Plant at Bus ines s Mix 3 4 .1% 2 7 .8% 6 .1 % 9 .3 % 2 2 .7% Fib re In te rm id ia te s Te xtile s Pla s tics Po lye s te r C he m i ca ls 1 3 Reliance Industries Limited New Projects polyester capacity being set up at Hazira is 360,000 The measures introduced in 1991 to stabilise and turn TPA. The PTA and MEG capacities would primarily meet around the economy helped with a real GDP growth of 4.3% and 5.3% in the years 1994 and 1995 respectively. With fiscal deficit of only around 6% over the last three years coupled with a favourable balance of payments (BOP) position, the country is poised to enter a period of rapid growth. As a precursor to the future, industrial the feedstock needs of the Hazira polyester complex. Purified Terephthalic Acid Project (PTA) Reliance is setting up a world-scale PTA plant with a capacity of 350,000 TPA at Hazira The project is now at growth which has been above 8% in 1994 and is an advanced stage of completion. e x p e c t e d t o a c c e l e r a t e t o double digits by 1996, at par with the levels achieved in the Asian Tiger Countries. With the Government determined t o c o n t r o l i n f l a t i o n , t h e benefits of liberalisation will eventually percolate down to all levels of our population and result in an increase in the purchasing power. 160 140 120 100 80 60 Book Value In Rs. Mono Ethylene Glycol Project (MEG) Implementation of this project i s b e i n g c a r r i e d o u t o n a priority basis keeping in view the feedstock requirements of the new polyester facility 90-91 91-92 92-93 93-94 94-95 at Hazira. All critical equipment with long-delivery schedules has T h e c a s c a d i n g e f f e c t o f t h e r e a l G D P g r o w t h i n been ordered and piling work is in progress. With the developing countries immensely benefits producers of completion of this project, Reliance will achieve self- m a s s c o n s u m p t i o n i t e m s a n d R e l i a n c e i s w e l l sufficiency in raw materials for polyester. Partially Oriented Yarn Project (POY) Construction work and equipment installation for the country’s largest (120,000 TPA) POY plant is in an advanced stage of completion. This will be India’s first fully positioned to tak e advantage of this situation. The Company is well entrenched in synthetic textiles, p o l y e s t e r s a n d p l a s t i c s w h i c h a r e s u b s t i t u t e s f o r c o n ventional mater ials T h e c o n s u m p t i o n o f t h e s e products goes up with the increase in real income growth. The capacity expansions of the late ’80s helped Reliance to fully exploit the growing market of the early ’90s-j-The Company has already invested Rs.3263 crores (US$ 1036 millions) during the last 12 months in fixed assets and plans to invest another Rs 3000 crores (US$ 952 million) in the next 18 to 24 months. New Polyester Complex Construction work at the second polyester complex at Hazir a is in full s wing. This is one of the w o r l d ’s l a r g e s t e x p a n s i o n s i n v o l v i n g a f u l l y i n t e g r a t e d manufacturing complex. New plants are being built to manufacture PTA and MEG, which are the pr incipal r a w m a t e r i a l s f o r p o l ye s t e r. T h e t o t a l n e w 1 4 Reliance Industries Limited a u t o m a t e d p l a n t , i n c o r p o r a t i n g p r o v e n D u Po n t NGL / Naphtha Cracker Project technology, perfected by Reliance’s vast experience and Representing a crucial link in the backward integration state-of-the-art improvements with modern computerised c o n t r o l s a n d a u t o m a t i o n systems. PET Polymer Project Reliance is installing India’s only grass root PET bottle g r a d e r e s i n p l a n t w i t h a n installed capacity of 80,000 TPA This would be amongst the 10 largest plants in the World. It would be at least 30 25 20 15 10 5 0 c h a i n o f t h e p e t r o c h e m i c a l b u s i n e s s i s t h e EPS & CEPS In Rs. 90-91 91-92 92-93 93-94 94-95 implementation of the NGL/ N a p h t h a C r a c k e r p r o j e c t w h i c h i s f a s t p r o g r e s s i n g . M e c h a n i c a l e r e c t i o n a n d CEPS EPS construction activities are in full swing. When completed this will eliminate the imports of Ethylene valued at over R s . 1 2 0 0 c r o r e s ( U S $ 3 7 5 m i l l i o n ) , r e q u i r e d f o r t h e Polymer and MEG plants. four times larger than the existing combined capacities of all the other plants in India The know-how for solid state polymerisation which is the heart of the PET plant is from SINCO plc. The modern trend is to move away from glass bottles to much more hygienic, environment friendly and less expensive PET bottles. Reliance foresees tremendous growth potential for this product. Polyester Staple Fibre (PSF) Project Construction w o rk on the countr y ’s largest polyester staple fibre plant is fast progressing The plant with an installed capacity of 160,000 TPA of high tenacity polyester staple is being built with DuPont technology a n d m e c h a n i s e d b y G e r m a n d r a w i n g a n d b a l i n g equipment. In this fully automated plant, computers will Captive Power Plants (CPP) Project Reliance is in the process of expanding the Captive P ow e r C a p a c i t y a t H a z i r a a n d h a s a l r e a d y commissioned successfully new Captive Power Plants a t N a r o d a a n d Patalganga T h i s w i l l e n s u r e s e l f - control ail processes starting from feeding of raw sufficiency, reliability and stability of power supply and material to the loading of final products into the trucks optimum utilisation of steam 1 5 Reliance Industries Limited Ship at Hazira jetty 1 6 Reliance Industries Limited generated at low cost. It will increase the total captive different grades of PP. An exhaustive survey of all PP power generation at Reliance to 350 MW. users has been completed and regular follow-up visits Paraxylene Project-Jamnagar the very first year of production. Reliance has decided to build a new Paraxylene facility To maintain its leadership position Reliance plans to of 1.2 million TPA, a critical feedstock for PTA. This will build an additional 350,000 TPA PP plant at Jamnagar. are made to ensure that our products are accepted in be the largest in the world and w i l l r e c e i v e f e e d s t o c k f r o m R e l i a n c e P e t r o l e u m L t d , a C o m p a n y p r o m o t e d b y R e l i a n c e I n d u s t r i e s L t d . I t proposes to use UOP Inter- Amer icana technology. % 20 18 16 14 12 10 Return on Net Worth % The plant will use Propylene as feedstock from the Reliance Petroleum refinery. With a PP capacity of 350,000 T PA a t Hazira and an additional plant o f s a m e s i ze a t J a m n a g a r, Reliance will be one of the five largest world producers of Polymer Projects 90-91 91-92 92-93 93-94 94-95 this versatile polymer in just 3 With liberalisation, there has b e e n a s t r o n g d e m a n d heralding an era of explosive years’ time. Polyethylene (PE) - Hazira growth for all plastic products. Reliance is in the forefront Reliance is implementing an additional 200,000 TPA t o d e r i v e b e n e f i t s o f t h i s g r o w t h b y s u b s t a n t i a l PE plant at Hazira in order to meet the growing demand. expansion/implementation of new world class facilities. The plant will use Sclair Tech Process for High Density The new polymer projects being set up include 350,000 P o l y e t h y l e n e ( H D P E ) a n d L i n e a r L ow D e n s i t y T PA p o l y p r o py l e n e p l a n t a t H a z i ra, 200,000 T PA Polyethylene (LLDPE). Major ity of the piling wor k has p o l y e t h y l e n e p l a n t a t H a z i r a, 350,000 T PA b e e n c o m p l e t e d . T h e e n g i n e e r i n g a n d t e c h n i c a l polypropylene plant at Jamnagar and a new 300,000 specifications for all the critical equipment with long TPA PVC plant. With the completion of these facilities delivery lead time have been finalised and the orders Reliance’s polymer capacity will cross 1.7 million TPA. have been placed. Polypropylene (PP) - Hazira / Jamnagar Polyvinyl Chloride (PVC) D u r i n g t h e y e a r u n d e r r ev i ew, R e l i a n c e a c h i eve d The global market has recorded a strong demand and satisfactory progress in building the state-of-the-art the Asia Pacific region is expected to see high growth w o r ld scale 350,000 T PA PP plant at Hazira . T h e r a t e s f o r P V C . R e l i a n c e i s w e l l p o s i t i o n e d , technology is based on UNIPOL p r o c e s s o f U n i o n C a r b i d e Chemicals & Plastics Company (USA) with John Brown Engineers a n d C o n s t r u c t o r s L t d . ( U K ) a s e n g i n e e r i n g c o n t r a c t o r s A n i m p o r t a n t l i n k i n t h e Po l y m e r g r o u p , t h e P P p r o j e c t i s f a s t nearing completion. Product Application and Research activities are underway to cater to g e o g r a p h i c a l l y a n d t e c h n o l o g i c a l l y, t o m e e t t h e surging demand in this region and i s p l a n n i n g t o - j - s e t u p a n e w 300,000 TPA PVC plant. With the post expansion PVC capacity of 300,000 T PA at Hazira and an a d d i t i o n a l s i m i l a r s i z e p l a n t , Reliance will be among the top 10 PVC producers in the world with a total capacity of about 600,000 TPA 1 7 Reliance Industries Limited 1 8 Reliance Industries Limited Emerging Global Ranks With the completion of the Phase II projects at Hazira l The Cracker project of Reliance will be the wor ld’s largest multi-feed cracker with a capacity of 2.2 and the third petrochemicals complex at Jamnagar, million TPA of various Petrochemical products. Reliance will not only maintain its market leadership in each of its products but will further enhance it by l Reliance will be the 10th largest Polyeth ylene creating substantial capacities. With the implementation producer in the world, increasing its production from of the projects at the Hazira and Jamnagar complexes, 166,000 TPA to 400,000 TPA. Reliance will emerge as a global player in a majority of its product lines. l Reliance will be the 4th largest Polypropylene producer in the world having a total capacity of l Reliance will be the 8th largest Polyester producer 700,000 TPA. in the world, increasing its production from 200,000 TPA to 580,000 TPA. l R e l i a n c e w i l l b e t h e 2 n d l a r g e s t P u r i f i e d Terephthalic Acid producer in the world, increasing its production from 257,000 TPA to 1.6 million TPA. l R e l i a n c e w i l l b e t h e 4 t h l a r g e s t P a r a x y l e n e producer in the world, increasing its production from 150,000 TPA to 1.35 million TPA. l Reliance will be the 10th largest Polyvinyl Chloride producer in the world, increasing its production from 187,000 TPA to 600,000 TPA. The Hazira and Jamnagar complexes, when completed, will see Reliance emerge as a major Global player in all its products. This is tr uly an enviable achievement for an Indian Company within a short span of 20 years. The World’s best process technologies converge at Reliance to drive its global scale plants at peak performance year after year. Technology Partners Reliance has accessed the best of contemporary technologies from world over. Products manufactured by the Company in India meet the same stringent quality standards as those of its technology partners anywhere in the world. Business Groups Technology Partners Products Polyester Fibre, Yarn & PET El DuPont, USA Fibre Intermediates El DuPont, USA Sinco, Italy ICI, UK UOP, USA Polyester Staple Fibre (PSF) Partially Oriented Yarn (POY) Polyethylene Terephthalate (PET) Purified Terephthalic Acid (PTA) Paraxylene ABB Lummus Crest. Netherlands Shell Process Mono Ethylene Glycol (MEG) Detergent Intermediates UOP, USA Linear Alkyl Benzene (LAB) Polymers & Plastics B.F. Goodrich, USA Presently Geon Company, USA Polyvinyl Chloride (PVC) DuPont, Canada Presently Novacor, Canada Polyethylene Plant I Novacor, Canada DuPont Process Polyethylene Plant II John Brown, UK UNIPOL Process Polypropylene Plastic Intermediates Stone & Webster, USA . Ethylene & co-products Oil & Gas Enron Oil & Gas, USA Oil & Gas 1 9 Reliance Industries Limited Exports retains its leadership position in foreign exchange Reliance has emerged as one of the top private sector savings through indigenous production of polyester, manufacturer-expor ters in India. The Company’s foreign polymers, fibre intermediates and petrochemicals. exchange earning through exports during the year Foreign Exchange savings by the Company are the 1994-95 was Rs. 174 crores (US $ 55 million), a highest in the country today. Reliance’s major thrust was phenomenal g rowth of 190% over the last year’s expor t always on building global size plants, accessing the earning of Rs. 60 crores (US $ 19 million). best technology in the world, wide product range, prompt customer service and vertical integration. In staple fibre exports Reliance has become a force The Company’s operations have helped the nation save to reckon with in international markets. valuable foreign exchange to the tune of Rs.3770 crores In the developed world, the Company has made a mark over the previous year’s figure of Rs.2853 crores (US $ by consistently delivering products of outstanding quality. 906 million). (US $ 1197 million) during the year; a growth of 32% Forex Saving Rs . in crores 4200 3200 2200 1200 200 90-91 91-92 92-93 93-94 94-95 Forex Earning Rs . in crores 250 200 150 100 50 90-91 91-92 92-93 93-94 94-95 Reliance has developed new export markets for various Taxes paid to Government products as follows. l Development of new markets such as Italy, Kenya, Malaysia, Hongkong and Brazil for marketing of Reliance continues to be one of the highest contributors to the exchequer in the form of various levies like Excise ‘REON’ brand PVC product . duty and Customs duty etc. The Company contributed Exports of premium quality staple fibre to USA, UK, Rs.2147 crores (US $ 682 million) in the form of various Kenya and Indonesia. Exports of value added polyester yarn to UK, Spain, France and Ger many. taxes and duties in comparison with Rs.1391 crores (US $ 442 million) paid last year, showing a growth of 54% Exports of LAB to quality conscious customers in Taxes & duties paid to the Goverment l l l l Netherlands, UK, Japan and Spain. Expor ts of premium brand ‘VIMAL’ worsted fabrics to UK, France and Netherlands. Foreign Exchange Savings Majority of the products produced by Reliance would h a v e b e e n i m p o r t e d t o I n d i a i f t h e y w e r e n o t manufactured locally. The Company commenced local production and today it 2 0 Rs . in crores 2500 2000 1500 1000 500 90-91 91-92 92-93 93-94 94-95 Employment Reliance is one of the biggest job creators in the countr y. The more we produce, the more jobs we create in ancillaries, transport, units engaged in conversion of goods i.e. plastic processors and handloom/powerloom sectors. Economists say that each ton produced by Reliance creates 10 new jobs throughout the nation - an impressive number by any standard. Research & Development Reliance’s spirit of innovation and quest for knowledge has constantly encouraged it to explore uncharted terrains. The spirit of inquiry, research and development h a s h e l p e d t h e C o m p a n y e x c e l i n p i o n e e r i n g internationally recognised products. R & D facilities of the Company are recognised by the Department of Science and Technology, Government of India Reliance has the most modern well equipped R & D laboratories for all its product lines. The Company has put Reliance Industries Limited R & D activity is mainly focused in the field of polyester f i l a m e n t y a r n , p o l y e s t e r s t a p l e f i b r e , p u r i f i e d terephthalic acid and linear alkyl benzene. The stress h a s b e e n o n p r o c e s s d e v e l o p m e n t , p r o c e s s m o d i f i c a t i o n , p r o d u c t d e v e l o p m e n t , e n e r g y conservation, pollution control, import substitution and technology upgradation. Some of the important areas in which R & D is being carried out by the Company are worth mentioning here: l Development of new and finer deniers for better performance and improvement of fabric texture. l Production of octene grade LLDPE having superior strength properties suited for liquid packaging for the first time in India. l In-house process development and design for manufacture of poly-coating chemical used in PVC plant. Lab scale production was successful. Full scale erection is in progress. l Pilot plant with non-HF alkylation catalyst for LAB up a pilot plant in Patalganga to manufacture LAB using production was commissioned National Chemical Laboratory (NCL) patented eco- l M i c r o f i l a m e n t a n d M u l t i f i l a m e n t p r o d u c t s a r e friendly technology. This is a joint development effort developed and commercialised. with NCL The process promises to yield increased LAB l Dual finish system commissioned in PSF plant leading production with better characteristics The present to a saving in finish consumption by 3 kgs/ton. technology worldwide uses hydrofluoric acid as a l Finishing of menswear leading to improved fabric catalyst, which is highly corrosive. Once proven on a hand and feel. commercial scale, there is excellent potential for global l Development of new anti-static finish for upholstery expor t of this NCL Reliance technology, besides the fabrics fact that by 2000 AD India itself is projected to be the l Development of various automotive textiles with biggest global player in LAB high light fastness 2 1 Reliance Industries Limited Energy Conservation The Patalganga facility is the first integrated Indian Reliance is well aware of the fact that energy, like food Petrochemicals and Fibres complex to be awarded and water is a basic necessity of man’s very existence. an ISO 9002 certificate. For achieving greater energy conservation and higher assessed during the same period. efficiency, Reliance has used advanced technology A t H a z i r a , i m p l e m e n t a t i o n o f I S O 9 0 0 2 Q u a l i t y right from its inception and has built-in energy saving M a n a g e m e n t S y s t e m i s u n d e r p r o g r e s s a n d t h e concepts and schemes at the time of plant design. certification by the accreditation agency is expected in The Ministr y of Power, Govt of India awarded the First the current year With the stringent quality measures, Prize to RIL, Patalganga, for Energy Conservation in the Petrochemical sector for the year 1994. B y u s i n g n o n - c o n v e n t i o n a l e n e r g y a n d a d o p t i n g measures for reduction of energy consumption, the Company will be in a position to further reduce costs. l Due to modifications in existing machinery systems, the Yar n Division at Naroda Unit could save an overall 8 to 10% energy during the year 1994. l Co-generation plant for power generation and s t e a m f r o m w a s t e h e a t o f G a s Tu r b i n e wa s commissioned in a record time of less than l 2 months. Quality Quality is the key word at Reliance It is reflected not only in the products but in the attitudes and operations that contribute to the success of the Company Reliance is committed to integ rating ‘ Total Quality’ in all its activities. In the year under review, the Patalganga c o m p l e x b e c a m e t h e f i r s t i n t e g r a t e d I n d i a n Petrochemicals and Fibres complex to be aw arded s e v e n I S O 9 0 0 2 c e r t i f i c a t e s . I n a u n i q u e a n d exhaustive audit, 11 auditors worked 54 mandays at all the seven plants simultaneously, a record effor t b y an y cer tifying body These ISO cer tificates for our processes cover largest volumes in terms of turnover 2 2 production of prime quality PVC increased to 98% and the production of MEG reached the level of 100% on specification. The Te xtile Division under took impor tant steps to improve the quality of products as well as range with a special focus on suitings and home furnishings. As a result of the intensive product development efforts, many new high value range of products were introduced during the year and distributed through the marketing network. Quality star ts at the design stage The design studio at the Textile Division is considered to be the most modern in this part of the world. It is equipped with state-of-the- art textile CAD computers, scanners, plotters both for printed and weaving designs. Reliance Industries Limited Customer Satisfaction In the end, one human life is more important than Reliance always tries to understand the needs of its all the riches of the world. customers and upgrades the quality of its products for increased customer satisfaction. It ensures that the customer gets the best out of its top ranking products. It is always anticipating the needs of customers and preparing to meet them. l Gujarat State Safety Award for the Naroda complex for the lowest disability injury index. l ATMA Safety Award (Award of Honour) from the Ahmedabad Textile Mills Association for the Lowest D i s a b l i n g I n j u r y I n d e x i n A u g u s t 1 9 9 4 . I t i s The best test of customer satisfaction is through repeat worthwhile to mention that we have been the sole sales to existing customers and minimising the number of lost customers. On both these benchmarks the Company has achieved more than 97% performance. w i n n e r o f t h i s a w a r d s i n c e 1 9 8 8 w h e n i t w a s instituted. Reliance’s Patalganga complex has completed more than 20 million man-hours without losing time in injuries and accidents. Health & Safety Reliance is in tune with man’s ever y need. Its main aim is to create a better and safer environment for all It has Environment a clear and committed policy on Health & Safety. It keeps itself abreast of the latest international standards and practices in the field. Per iodic medical check-ups are carried out at all the Reliance believes that man is the trustee of nature. It is our heritage and therefore it is our duty to preserve it improve it and bequeath it to our children as a treasure. The Company believes that prevention is better than c u r e . T h e C o m p a n y ’s c o n c e r n f o r e n v i r o n m e n t i s plants and offices Efforts are being made to create reflected in its constant endeavour to eliminate pollution awareness amongst employees about killer diseases a n d c r e a t e a h e a l t h i e r e n v i r o n m e n t . E n v i r o n m e n t like Cancer and AlDS. R e l i a n c e I n d u s t r i e s L t d i s o n e o f t h e 3 0 s a f e s t companies in the world The Company has won many protection is an integral feature in all plant designs and a comprehensive environment management includes continuous monitoring of air and water pollution noise pollution the disposal of industrial waste and the n a t i o n a l a n d i n t e r n a t i o n a l a w a r d s f o r t h e s a f e t y protection of local ecology measures taken in their industrial complexes - a record of sor ts for any Indian Company. l The Hazira Manufacturing Division has been awarded l British Safety Council - 5 Star rating for Hazira and the Indian Merchants’ Chamber “Diamond Jubilee” Award Patalganga sites. l British Safety Council - Sword of Honour for Hazira and Patalganga sites. l National Safety Council USA - Award of Honour (the highest award for safety) to Patalganga site. l National Safety Award to Hazira complex for the l o n g e s t a c c i d e n t f r e e p e r i o d a w a r d e d b y t h e Ministry of Labour, Gover nment of India. l G u j a r a t S t a t e S a f e t y C o u n c i l S t a t e Fa c t o r y Inspectorate Safety Award for Hazira Complex for Best Safety Perfor mance - Petrochemicals categor y. for outstanding contribution towards Control of Air and 2 3 Reliance Industries Limited Water Pollution in Industr y for the y ear 1994. Reliance is the only Company to receive this all- India award. l Company has invested substantial resources for the pretreatment of waste water at MEG and PVC plants, leading to improved efficiency of effluent treatment operation and reduced pollution load on receiving bodies. l All sur prise sample checks done by the Pollution Control Board were found to be well within the quality standards. l Unique Oxygen dosing system in the aeration tank to take care of effluent loads during “process upsets” was commissioned . World class eco-friendly clean technologies for each plant process incorporates features like maximum recycle, reuse and reduction of pollutants at source. This reduces pollution and helps to recover valuable raw materials. Effluents are treated through physio-chemical and biological steps and the treated water is utilized for irrigation / horticulture, thus conserving fresh water Exhaustive monitoring schedules are followed for safety, health and protection of air quality, ground water and noise level. Citation: Indian Merchants’ Chamber Award. Reliance continues to ensure that the air, water and other environmental standards are not only achieved as per the norms but exceed prescribed norms by the l Continuous efforts to conserve process water State Pollution Control Boards. Monitoring of plant and t h r o u g h r e c y c l i n g . F i v e p e r c e n t r e d u c t i o n i n ambient environment, as well as, of various effluents - consumption has been achieved in 1994-95. l Changeover to improved b u r n e r s fo r l o w N OX generation. At Reliance, responsible care is a public commit- ment. Because the welfare of humanity concerns us all. l I n s t a l l a t i o n o f Va p o u r % 60 50 40 30 20 Equity Dividend % 90-91 91-92 92-93 93-94 94-95 l i q u i d , g a s a n d s o l i d - t o maintain a clean and safe environment in and around t h e p l a n t s i s d o n e continuously. The Company has initiated a comprehensive, internationally r e n o w n e d “ R e s p o n s i b l e C a r e ” P r o g r a m m e a n d i s committed to adhere to it. Absor ption Chillers (VAC) thereby achieving a Environment audits are being carried out at all the s i g n i f i c a n t r e d u c t i o n i n C h l o r o f l u o r o C a r b o n s plants of the company on a regular basis by recognised (CFCs). l Substitution of sulphur rich fuel with cleaner fuel in the heaters to reduce particulate matters and SO2 in gaseous effluents. i n d e p e n d e n t a g e n c i e s l i k e N E E R I . A u d i t p r o c e s s commences during the plant design stage. All these efforts lead to continuous improvements, wherever l Integrated energy management to reduce overall necessary to maintain some of the best environment e n e r g y c o n s u m p t i o n l e a d i n g t o r e d u c t i o n i n management practices. gaseous effluent generation . The responsibility rests on each one of us to preserve the world for our children. And their children to follow...... Social Responsibility and Community Development R e l i a n c e i s w e l l a w a r e o f i t s s o c i a l r e s p o n s i b i l i t y a n d d e v o t e s i t s r e s o u r c e s t o w a r d s t h e c a u s e o f Tree plantation and development of green belt in c o m m u n i t y d e v e l o p m e n t . R e l i a n c e h a s c r e a t e d a and around Patalganga industrial area. f o u n d a t i o n w h i c h h a s i n i t i a t e d c o m m u n i t y Twenty percent of the treated effluents are used for horticulture. d e v e l o p m e n t p r o g r a m m e m o d e l s i n r u r a l a r e a s l l 2 4 Reliance Industries Limited through people’s par ticipation development of these strategic assets. A number of l Community awareness programmes are organised in nearby villages based on APELL developed by UNEP in order to inculcate awareness amongst development opportunities are provided within and outside the country to ensure that our managers are villagers on household safety electrical safety road prepared for more challenging tasks in our emerging safety and emergency preparedness. complex business environment. l l l Drinking water is supplied in tankers to people in nearby villages. Training classes are conducted to improve various skills. A part of the road which was severely damaged by the flood has been reconstructed which not only serves Reliance employees and employees of nearby industries but also the villagers. The Company has been helping to improve areas of health education culture environment sports etc thus raising the quality of life of its people through its Trust. R e l i a n c e h a s a l s o b e e n h e l p i n g r e s t o r e I n d i a ’s archaeological treasures in some areas. Along with o t h e r i n d u s t r i e s f r o m p u b l i c a n d p r i v a t e s e c t o r s Reliance has participated in a scheme of constructing a w eir at Singanpur in Tapti. On completion of this scheme during this year the city of Surat will meet its increased requirement of drinking water. Industries will receive water from the weir which is a more reliable source than from the existing canal. Our People Today Reliance is truly considered an integrated society where people from all walks of life and from every corner of the countr y contribute to the Company’s growth. The Company in turn nurtures and prepares them for creating further inroads into the global village. It is fast emerging as one of the best companies to work for in the country Sri Harikumar Madhusudan (a workman in Reliance today has human resource assets of around the Yarn Division) received the Shram Bhushan award 12 500 people; 34000 of whom constitute the scientific promoted by the Gujarat State Government comprising and technical manpower. Ever y year we add over 450 a Shram Bhushan Certificate and a Cash Award. young professionals who include engineers chartered accountants management graduates and professionals f r o m o t h e r d i s c i p l i n e s T h e av e r a g e a g e o f o u r employees is 38 years. The Reliance team is young in spirit, conscious of its responsibilities and committed to creating assets that the country can be proud of. New Companies Reliance Petroleum Ltd. R e l i a n c e Pe t r o l e u m L t d . h a s a l r e a d y o b t a i n e d Gover nment’s approval to expand the refiner y capacity from the existing 9 million TPA to 15 million TPA When completed this will be the largest grassroot refinery in India and will be among the Wo r ld’s top 20 single T h e s e m o t i v a t e d a n d w e l l t r a i n e d p e o p l e a r e t h e stream refiner ies The products of this refinery will meet b a c k b o n e o f o u r b u s i n e s s s u c c e s s . R e l i a n c e i s and supplement the feedstock requirements of Reliance investing in a big way in the training and Industries thus adding value to the integration chain. 2 5 Reliance Industries Limited Power Sector The demand for power has been steadily increasing during the last four decades. Reliance envisages a huge potential for power generation by private sector in view of the estimated shortage of 30,000 MW of power by the year 2000. Reliance is the first Private Sector Company to be selected by the Maharashtra State Electricity Board (MSEB), for setting up a 410 MW Gas Based Power Plant on a competitive bid basis. Similarly Reliance has been shortlisted by the Delhi Electric % 90 80 70 60 50 40 30 20 10 0 Compounded annual rate of growth % 12 Years 5 Years 3 Years Sales % Net Profit % Supply Undertaking (DESU) for implementing 400-450 management of the resources. The compounded annual MW Gas Turbine based Power Project at Bawana. rate of growth (CARG) of the Company over the last 12 Reliance has also signed a MOU with Gujarat Electricity years, 5 years and 3 years provides ample evidence of this. Board (GEB) for setting up a 500 MW Power Plant at Jamnagar, Gujarat, using feedstock from Reliances’s refinery - another step in integration. N e c e s s a r y a g r e e m e n t s w i t h t h e r e s p e c t i v e S t a t e CARG 12 years 5 years 3 years Sales % Net Profit % 24.0 32.0 24.0 63.7 30.7 81.9 Electricity Boards and State Governments are being Looking ahead finalised and clearances are being obtained. Reliance Assam Petrochemicals Ltd. Reliance signed a Memorandum of Understanding with the Government of Assam for the implementation of When we look at the exceptional financial performance, it is apparent that Reliance’s str ategy of ve r tical integration, world size capacities and access to leading technologies is paying dividends. We must serve our the Assam Gas Cracker Project. Reliance has promoted customers’ needs and help them succeed too. As the a new Company called Reliance Assam Petrochemicals demand continues to g r ow, the four fold capacity Limited (RAPL) for this. When completed it will produce increase in the next 2-3 years will serve us well, in terms 300,000 TPA of Ethylene, 300,000 TPA of Polyethylene and 65,000 TPA of Oxoalcohols, based on ethylene and propylene products from the gas cracker. The project utilises associated gas available from the oil fields in upper Assam. The availability of ver y competitively priced feedstock is the major criteria for locating the of strong cashflow and earnings, through all phases of business cycles. We believe that Reliance today is a Company that brings value to customers, increases the long-term networth of shareowners and respects the quality of life in all our project in the State. The project is also eligible for a locations. We look to the future with confidence and Central subsidy besides all other benefits of industrially thank you for shar ing that conviction with us. The future backward areas. RAPL will also provide the group a augurs well as the Company will scale new heights in manufacturing base in eastern India for its polyolefins the years to come, undoubtedly with the support and business. encouragement of our shareowners. Reliance - Consistent Performer Reliance enjoys a unique distinction among the Indian Corporates as a very consistent performer in terms of growth, asset creation and profitability through efficient 28.04.95 Bombay 2 6 Dhirubhai H. Ambani Chairman Reliance Industries Ltd. Financial Highlights Rs. in Crores 1994-95 1993 - 94 1992 - 93 1991 - 92 1990 - 91 1989 - 90 1985 1980 Reliance Industries Limited * US $ Rupees Sales 2 2 2 8 7 0 1 9 5 3 4 5 4 1 0 6 2 9 5 3 2 0 9 8 1 8 4 1 7 3 3 2 0 8 Total Income 2 2 7 5 7 1 6 6 5 4 6 1 4 1 7 4 2 9 9 5 2 1 0 5 1 8 5 6 7 3 8 2 1 0 Operating Profit 4 6 3 1 4 5 7 1 0 6 4 8 8 1 5 7 5 4 8 7 4 2 4 1 3 3 Depreciation 8 8 2 7 8 2 5 5 2 8 0 1 9 3 1 7 4 1 6 2 Profit After Tax 3 3 8 1 0 6 5 5 7 6 3 2 2 1 6 3 1 2 6 9 1 3 7 7 1 Taxes & Duties Paid to the Govt 6 8 2 2 1 4 7 1 3 9 1 1 1 1 8 9 8 4 8 2 6 6 9 8 3 7 3 Equity Dividend % Dividend Payout 5 5 6 3 5 5 5 1 1 9 9 1 3 8 3 5 8 5 3 0 4 8 3 0 4 6 3 0 4 6 Equity Share Capital 1 4 5 4 5 6 3 1 8 2 4 6 2 2 7 1 5 2 1 5 2 5 0 2 5 5 2 Reserves and Surplus 2 1 3 7 6 7 3 1 4 0 1 1 2 3 6 2 1 7 1 1 9 9 6 9 2 9 2 5 4 Net Worth 2 2 8 3 7 1 9 3 4 3 3 5 2 6 1 3 1 9 4 4 1 1 5 4 1 0 8 7 3 1 1 Gross Fixed Assets 2 6 6 4 8 3 9 0 5 1 3 2 4 6 4 1 4 3 1 4 2 1 8 6 1 9 9 9 7 3 6 Net Fixed Assets 2 0 9 0 6 5 8 5 3 6 0 0 3 3 6 8 3 3 3 8 1 4 8 3 1 4 6 9 6 0 7 Market Capitalisation 3 8 1 8 12027 10718 4 3 8 8 6 6 5 6 1 8 2 5 9 9 7 9 0 6 2 9 7 1 1 7 4 2 5 3 1 2 1 9 3 2 7 5 5 8 7 8 Ear ning Per Share-Rs. Cash Earning per Equity Share Rs. .74+ .94+ 23.4 18.1 13.1 7.2 8.3 6.9 13.8 9.3 29.5 26.1 24.5 15.7 19.7 16.6 21.1 15.0 Book Value - Rs. 5+ 1 5 8 1 3 6 1 0 6 8 5 7 5 7 1 5 9 2 6 Debt: Equity Ratio 0.35:1 0.35:1 0.58:1 0.84:1 0.92:1 0.61:1 0.55:1 1.66:1 1.51:1 Number of Investors 4.3t 4 3 4 1 3 7 3 8 2 4 2 6 1 7 2.7 (In Lakhs) Number of Employees 12500 12500 11873 11836 11935 11666 11355 9 0 6 6 6 6 4 6 * US $ in Millions + US $. 1 US $ = Rs. 31.5 (Reserve Bank of India rate as on 31.3.95) + In Millions 2 7 Reliance Industries Limited India’s Largest Selling brands in their category 2 8 Directors’ Report The Directors have pleasure in presenting the 21st Annual Report and the audited accounts for the financial year ended 31st March,1995. Reliance Industries Limited Financial Results Gross profit before interest and depreciation Less: Depreciation Interest Profit for the year Add: Balance in Profit & Loss A/c. Add: Investment Allowance (utilised) Reserve written back 1994-95 1994-95 Rs. Crs. US$ Mn* Rs. Crs. US$ Mn* 1457.41 278.24 114.32 1064.85 62.24 462.6 88.3 36.3 338.0 19.8 1064.26 255.19 233.58 575.49 54.40 27.75 337.9 81.0 74.2 182.7 17.3 8.8 Surplus available for Appropriation 1127.09 357.8 657.64 208.8 Appropriations: Capital Redemption Reserve Investment Allowance Reserve Debenture Redemption Reserve General Reserve Recommended Dividend on Preference and Equity Shares 5.50 --- 30.50 800.00 200.17 1.7 --- 9.7 254.0 63.5 --- 6.70 30.50 419.02 139.18 Balance carried to Balance Sheet 90.92 28.9 62.24 1127.09 357.8 657.64 Dividends --- 2.1 9.7 133.0 44.2 19.8 208.8 The Directors recommend the following dividends (Subject to deduction of tax at source) for the financial year ended 31st March,1995, which if approved at the forthcoming Annual General Meeting will be paid out of profits of the Company for the said year to all those Preference Shareholders whose names appear on the Register of Preference Shareholders, as on 6th February, 1995 and Equity Shareholders whose names appear on the Register of Members as on 30th June, 1995. On Preference Shares Dividends Rs. CrsDividend of Rs.15 per share on 5,50,000 Cumulative Redeemable Preference Shares of Rs.100 each fully paid up. On Equity Shares i) Dividend of Rs. 5.50 per Share on 31,99,45,057 Equity Shares of Rs.10 each fully paid up. ii) Pro-rata Dividend on 14,04,16,837 Equity Shares of Rs.10 each fully paid. 175.97 23.37 Rs. Crs 0.83 199.34 200.17 Private placement of equity with Indian Financial Institutions During the year under review your Company made a private placement of equity with the three leading Indian Financial Institutions, Unit Trust of India (UTI), Life Insurance Corporation of India (LIC) & General Insurance Corporation (GIC) and its subsidiaries, to part finance your Company’s share in the Oil and Gas projects of Panna, Mukta & Tapti awarded to the RIL - Enron - ONGC Consortium by the Gover nment of India. The private placement was completed at Rs.385 per share (US $12.2 per share). The Private Placement of Rs.945 crores (US $300 million) has added Rs.24 crores (US $7.6 million) to the Equity Capital and Rs. 921 crores (US $292.4 million) to the reserves. Amalgamation of Reliance Polypropylene Ltd. (RPPL) and Reliance Polyethylene Ltd. (RPEL) with Reliance Industries Ltd. In November 1994, a decision was taken to amalgamate RPPL and RPEL with your Company. The Board of Directors accepted the valuation reports from two independent valuers, Messrs S.B.Billimoria & Co. Chartered Accountants, and Messrs Haribhakti & Co. Chartered Accountants. The scheme of amalgamation was approved by the shareholders and creditors of all the three companies in the month of December,1994 and was sanctioned by the Hon’ble High Court of the Judicature of Bombay in the month of January,1995. Your Company will benefit from the two projects which are funded with equity and have a short gestation period. The amalgamation will create synergies and help maintain your Company’s leading position in the polymer business. The amalgamation has resulted in increase in Equity Share Capital of your Company by Rs.99 crores (US $ 31.4 million) and increase in reserves by Rs.603 crores (US $ 191.4 million). The commissioning of Polypropylene plant based on UNIPOL process of Union Carbide Chemicals and Plastics Company, USA and the Polyethylene plant based on Sclair Tech process of Novacor, Canada, have been synchronized with the start-up of world’s largest multifeed cracker project scheduled to be commissioned in 1996. 2 9 Reliance Industries Limited Promise vs Performance (In Terms of Clause 43 of Listing Agreement) Your Company has given following profitability projections in the Letter of Option dated 8th September, 1992 issued to the Debentureholders - Series F for rollover of the debentures. Particulars Sales* Gross Profit Wtd.Ave. Equity EPS (Rs.)** 1994 - 95 Projections 6,292 1,293 301 16.2 Rs. Crs. Actual 7,019 1,457 362 29.4* * Sales includes inter-divisional transfers. ** Based on weighted average equity share capital. Reason EPS has improved due to better margins and reduction in interest and depreciation charges. 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 Repor t 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, alongwith the report of the Board of Directors of Devti Fabrics Limited, Reliance Industrial Investments and Holdings Limited and Reliance Petroproducts Limited and the respective Auditors’ Report thereon for the year ended 31st March, 1995, are annexed. Fixed Deposits Deposits of Rs.1.29 crores due for repayment on or before 31st March, 1995 were not claimed by 2140 depositors as on that date. Of these, deposits amounting to Rs.0.48 crore of 776 depositors have since been repaid. Personnel As required by the provisions of Section 21 7(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the Annexure to the Directors’ Report. However, as per the provisions of Section 219(1 ) (b) (iv) of the Companies Act, 1956, the Report and Accounts is being sent to all shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining such particulars may write to the Secretary at the Registered Office of the Company. Directors Shri M.L. Bhakta, Shri.N.R.Meswani and Shri.Y.P.Trivedi 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 organisation. Auditors and Auditors’ Report Messrs Chatur vedi & Shah and Messrs Rajendra & Co. Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting. The Company has received letters from them to the effect that their appointment, if made, would be within the prescribed limits under Section 224 (1-B) of the Companies Act, 1956. Accordingly, the said auditors will be appointed as auditors of the Company at the ensuing Annual General Meeting. The notes to the accounts referred to in the Auditors’ Report are self explanatory and, therefore do not call for any further comments. Acknowledgement Your Directors would like to express their grateful appreciation for the assistance and co-operation received from the Financial Institutions and the 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 Bombay Dated: 28th April, 1995 3 0 Dhirubhai H. Ambani Chairman Reliance Industries Limited 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. Reduction in boiler blow down rates. 2. Metallic fans replacement by hollow FRP blade fans for process and cooling towers. 3. Impeller tripping for pumps in prefractionation section resulted in powersaving in LAB plant. 4 Simulation package utilised for optimising distillation column operations in the petrochemical plants. 5. Replacement of LSHS with byß-ßproducts having higher calorific value as fuel for the boilers leading to higher efficiency and reduction of NOX from boiler exhaust. 6. Reorientation of steam traps to save steam. 7. Detection of faulty steam traps on line by using portable electronic device and rectifying the same. 8. Recovery of ejector condensate to dirty condensate vessel. 9. 10. Ethylene terminal refrigeration system installed to utilise waste cold. 11. Reduction of polymerisation cycle time to improve production rates thereby reducing specific consumption of power. 12. Debottlenecking of steam condensate tank piping system to save steam/condensate loss. 13. Optimisation of air conditioning and humidification plants during monsoon and winter, major overhauling of chilling refrigeration Insulation of polymeriser jacket/chilled water lines to conserve power. compressors and air washers to get designed output of refrigeration capacity. 14. Modification of dyeing cycle timing to reduce steam consumption. 15. 16. All the steam boilers and thermopacks burners tuned to achieve best combustion and designed thermal efficiency. Improvement in water management system. ( b ) Additional Investments and Proposals, if any, being implemented for reduction in consumption of Energy Installation of a back pressure turbine. Installation of advance process control system. LAB plant prefractionation stripper side cut recovery operation for better heat integration. Installation of air preheaters for hot oil heaters. Steam condensate preheating by integration with process plants leading to reduced steam consumption in deaerators. Flash steam recovery from boiler blow downs. Installation of vapour absorption chiller utilising waste LP steam. 1. 2. Replacement of conventional shell and tube type combined feed exchanger in LAB plant by plate type exchanger. 3. Optimization of recycle paraffin pumping system. 4. 5. 6. 7. 8. 9. 10. Lube oil recovery from gas turbine oil console vent. 11. Advanced simulation package for optimising distillation column operations. 12. Usage of low pressure steam in dehydrator reboiler of MEG plant. 13. Provision of demister pad in CO2 stripper and recycle of overhead water. 14. Provision of restriction orifice in nitrogen consumption lines to minimise LP N2 consumption. 15. Changeover from trap system to condensate pot system for product flasher reboiler. 16. Gas firing system in dryer installed. 17. Plant air compressor installation to reduce power consumption by keeping spare instrument air compressor as standby. 18. Installation of common onß-ßline gas chromatograph for four distillation columns’ top/bottom product analysis so as to minimise utility consumption while maintaining product specification. 19. Installation of an onß-ßline O2 and CO analyser for EDC furnace stack which will facilitate monitoring the furnace efficiency. 20. Change in steam generation pressure in incinerator from medium pressure(16 kg/cm2(g)) to intermediate pressure (7.5 kg/cm (9)). 21. Local pneumatic controller in refrigeration compressor to be brought to DCS for optimal control. 22. FRP fans for air conditioning, air cooling and cooling towers is proposed to be installed for major power saving in addition to installation of additional air curtains for saving in electrical energy. 23. Use of flash steam in jiggers and open winches through flash vessel. 24. Inter departmental steam and water line distribution system modifications for optimum flow and minimum pressure drop. 25. Optimisation of electrical power consumption through detailed study of motors, drives and installation of capacitors to improve power factor. 26. Temperature controllers for stenters and jiggers. 27. Solar hot water system for guest house. (Utilisation of non conventional energy.) (c) Impact of Measures at (a) and (b) above for reduction of Energy consumption and on the Cost of Production of Goods 1. Optimised boiler blow down would result in saving of Rs.30 lakhs p.a. 2. Replacement of aluminium blades by hollow FRP blades would lead to savings of Rs.40 lakhs p.a 3. Steam integration through backß-ßpressure turbine would lead to saving of Rs.560 lakhs p.a. 4. Replacement of existing combined feed exchanger in LAB plant would result in saving of Rs.220 lakhs p.a. in terms of fuel only. 5. 6. Prefactionation stripper side cut recovery operation for better heat integration will save Rs.90 Iakhs p.a. The air preheater for dow heater would lead to savings of Rs.10 lakhs p.a.-j-î 7 Preheating of steam condensate by integration with process plant would save low pressure steam requirement to the tune of Rs.374 lakhs p.a. Flash steam recovery from boiler blow down would result in savings of Rs.166 lakhs p.a. Vapour absorption chillers using waste low pressure steam would saveRs.250 lakhs p.a. in ter ms of electrical power. 8. 9. 10. Steam saving as a result of optimal distillation columns’.operation is estimated at Rs.7 lakhs p.a. 11. Fuel gas saving as result of onß-ßline O2 and CO analyser estimated at Rs.2.5 lakhs p.a. 3 1 Reliance Industries Limited Insulation of polymeriser jacket/chilled water lines resulted in power savings of 2.8 lakh units p.a. 12. Savings due to steam generation level change in incinerator is estimated at Rs.3 lakhs p.a. 13. 14. Recovery of waste cold in ethylene terminal results in power saving to the tune of 27 lakh units p.a. 15. Installation of new plant air compressor as substitute to the existing air compressor will result in power savings of 9.4 lakh units p.a. 16. Debottlenecking of steam condensate tank piping system resulted in saving of about 3MT/h of LP steam and 5MT/h of 17. condensate. Improvement in water management system including recover,v resulted in conserving 70 M3/Hr of water and electrical power of 50 KWh. This resulted in saving of Rs.29 lakhs p.a. B. Technology Absorption Form - ‘B’ Form for Disclosure of particulars with respect to Research and Development(R & D) 1.Specific Areas in which Research and Development (R&D) is being carried out by the Company i) Development of new and finer deniers for better performance and improve fabric texture. ii) Development of special staple fibre with specific denier and high luster with good tensile properties. iii) iv) Substitution of catalysts and chemicals with new or from alter nate source without affecting quality, yield and other related Improvement in specific consumption of catalyst, additives in petrochemicals processes. parameters. v ) Research and development activity is mainly focused in the field of polyester filament yarn, polyester staple fibre, purified terephthalic acid,and linear alkyl benzene. The stress has been on process development,process modification, product development, energy conservation, pollution control, import substitution and technology upgradation. vi) Production of octene grade LLDPE having superior strength properties suited for liquid packaging for the first time in India. vii) Production of UV stabilised injection moulding grades suitable for manufacturing crates. viii) Production of oriented structure grade HDPE suited for monofilament applications. ix) Superior additive package for improved HDPE processing. x ) Antiß-ßfoaming agent for emulsifier and ATSC indigenised by vendor development. xi) Finishing of menswear leading to improved fabric hand and feel. xii) Development of worsted fabrics with speciality fibres like Angora,Mohair and Camel Hair etc. xiii) Development of new antiß-ßstatic finish for upholstery fabrics. xiv) Development of various automotive textiles with high light fastness. 2. Benefits derived as a result of the above R&D ( a ) Product Development improvement i) New deniers like ß-ß 100/54/TL/BR/FLAT, 470/68/POY, 150/68/TLBX/FLAT, 155/34/SD/POY, 310/68/SD/POY, 255/34/POY, 30/27/ TL/BR/FLAT, 50/27/TL/BR/FLAT have been developed for achieving better performance and modified texture of the fabric. ii) Process developed for 260/68/POY for specific export requirement. iii) Development of low denier per filament viz.68/68/SD/POY,115/108/SD/POY have been successfully completed. Performance at texturiser/draw twister end has been found satisfactory. iv) Modification of spinß-ßfinish application system to optimise the finish pick up. v ) Quench system modification for better and uniform yarn properties and ultimately improving the performance of yarn runability at users end. vi) Reduction in frictional behaviour with respect to yarn to guide friction by introducing additional ‘O’ guide to improve quality of polyester staple fibre. Introduction of superheated steam chest to improve crimps per centimetre property of the staple fibre. vii) viii) Conversion to D.C drive on feed module for consistent fibre properties. ix) Recovery of solids from PTA mother liquor to improve effluent characteristic and recover PTA from it. x ) Pilot plant trials and studies to establish performance of ecoß-ßfriendly catalyst. xi) Use of different spin finishes to improve polyester staple fibre quality so as to give improved performance at down stream processing in textile mills. xii) Improvement of hand and feel of menswear. xiii) Produced high value fabrics for menswear. xiv) Wider acceptance of automotive textiles. ( b ) Import Substitution i) ii) iii) Indigenous silicon spray cans for spinnerette wiping. Indigenous development of a new draw steam jet. Indigenously developed cutter blades to replace imported blades. Performance of these blades found satisfactory. 3. Future Plan of Action Projects Proposed for the following Increase in acid regeneration capacity to improve LAB quality. Improvement of polymer quality by introduction of continuous polymer filter. i) Development of fully drawn yarn for direct use in weaving or knitting. ii) iii) Replacement of mechanical seal .for finisher to avoid air leaks and to improve polymer quality. iv) Development of multilobal profile filament yarn for fancy effects. v) Modification in kerosene stripper column to improve the return kerosene quality. vi) vii) Recovery of high value normal pentane from low value byß-ßproduct of paraxylene. viii) Pilot scale reactor installation to study oxidation reaction in PTA plant. ix) Water recycle and recovery from treated effluent to be used in cooling tower. x ) xi) Recycle of low value glycols to convert to high value glycols. xii) DEG to TEG conversion scheme under implementation. Introduction of specially~designed quench system for filament yarn. 3 2 Reliance Industries Limited xiii) New EO column proposed for enhanced capacity of pure EO. xiv) Debottlenecking of plant for increase in productivity. x v ) Utilisation of ethylene vent from HDPE plant as feed to oxyß-ßreactor. xvi) Use of a new catalyst oxy-III for enhancing efficiency of EDC production. xvii) Further reduction in EDC losses in wet and dry by-products. xviii) Optimisation of furnace cracking severity to maximise throughput while reducing undesired by-product formation by using furnace modelling software. xix) Using an on - line simulator-optimizer for complete plant which will maximise throughput and minimise specific consumption while taking into account the constraints in various sections. xx) Use of frontß-ßend catalyst, injection water chilling and other debottlenecking measures to achieve higher production levels. xxi) Optimisation of catalyst, deactivator, alumina consumption and reduction of same by using alternate co-catalyst. xxii) Development of more efficient grades of alumina through vendors for improved product quality. xxiii) Development of high flow HDPE grades suited for thin - walled containers for food grade packaging. xxiv) Implementation of world class manufacturing strategies through Computer Integrated Manufacturing (CIM), Advanced Process Control (APC) etc.would result in higher productivity, improved product qualities, reduced cost of production and increased overall business efficiency. x x v ) Development of new process to produce silk - like finish on polyester dress material fabrics. xxvi) xxvii) Instrumental evaluation of menswear fabrics to improve tailor ibility. Improvement of stability of warp knitted velours. 4. Expenditure on R&D ( a ) Capital Recurring Total ( b ) Total R&D expenditure as percentage of total turnover 0.4% Technology absorption, adaptation and innovation Rs. Crs 1.42 27.42 28.84 Efforts in brief, made towards technology absorption adaptation and innovation and benefits derived as a result thereof FDY for direct use at weaving and knitting. Continuous polymer filter introduced for better polymer quality. Fancy effects with multilobal profile filament yarn. New finish oils for specific end uses of PFY & PSF. Kerosene stripper column introduced to improve return stream quality. Improvement in LAB quality through increase in acid regeneration capacity. Installation of pilot scale reactor to study oxidation reaction in PTA plant. Specially designed quench system to be introduced for filament yarn. Cooling media in jackets of plant poly reactors of both the lines converted to chilled water to increase productivity. Components of slurry stripping column changed to increase the efficiency. DEG to TEG conversion scheme being implemented. Low value gycols for recycle to convert to high value gycols. (i) (ii) (iii) (iv) ( v ) (vi) (vii) (viii) (ix) ( x ) (xi) (xii) (xiii) New oxyß-ßIII catalyst used for enhancing production efficiency. (xiv) Computer integrated manufacturing and advanced process control systems being implemented for higher productivity, improved product qualities, cost control and increased business efficiency. ( x v ) New process being developed to produce silkß-ßlike finish on polyester dress material. Information regarding imported technology Product Technology from Mono Ethylene Glycol Poly Vinyl Chloride High Density Polyethylene Shell (Lummus Crest B.V. Holland) B.F. Goodrich (USA) (Presently Geon Co., (USA) DuPont (Canada) (Presently Novacor, Canada) C. Foreign Exchange Earnings and Outgo Year of import 1989 1988 1989 Status of implementation/ absorption Full Full Full 1. Activities relating to Exports, initiatives to increase Exports,Developments of new Exports Market for Products and Services and Export Plan. The Company has significantly increased expor ts from Rs.60 crores (US $ 19 million) to Rs.174 crores (US $ 55 million) during the year by focussing on value added quality exports. a. Development of new markets such as Italy, Kenya, Malaysia, Hongkong,Brazil for marketing of ‘REON’ brand PVC product b. c. d. e. Exports of premium quality staple fibre to USA, UK, Kenya, Indonesia. Exports of value added polyester yarn to U.K., Spain, France, Germany. Exports of LAB to quality conscious customers in Netherland, U.K. Japan,Spain. Export of premium brand ‘VIMAL’ worsted fabrics to U.K., France,Netherland. 2. Total Foreign Exchange used and earned. a) b) c ) Total foreign exchange earned Total savings in foreign exchange through products manufactured by the Company and deemed exports (US $1197 million) Sub total (a+b) Total foreign exchange used Rs. Crs 205.81 3770.00 3975.81 1710.82 3 3 Reliance Industries Limited Form ‘A ’Form for disclosure of par ticulars with respect to Conservation of Energy. April ’94 to March’95 April ’93 to March’94 3722.76 107.44 2.89 561.78 3.57 2.57 6306.45 3.78 1.05 --- --- --- 252928.40 136.97 5.42 28493.81 19.40 6.81 192934.00 36.35 1884.31 3621.18 94.15 2.60 506.75 3.51 2.66 6487.78 3.63 1.32 --- --- --- 229437.29 115.34 5.03 14693.78 8.30 5.65 190545.00 32.78 1720.52 Part ‘A’ Power & Fuel Consumption 1. Electricity a) Purchased Units (Lakhs) Total Cost (Rs. in crores) Rate/Unit (Rs.) b) Own Generation 1 ) Through Diesel Generator Units (Lakhs) Units per Lts. of fuel Cost/Unit (Rs.) 2) Through Steam Turbing/Generator Units (Lakhs) Units per unit of fuel Cost/Unit (Rs.) 2. Coal Quantity (tonnes) Total Cost (Rs. in crores) Average Rate per MT (Rs.) 3. Furnace Oil Quantity (K. Ltrs.) Total cost (Rs. in crores) Average Rate per Ltr. (Rs.) 4. Diesel Oil Quantity (K. Ltrs) Total cost (Rs. in crores) Rate/Unit per Lts. (Rs.) 5. Others Gas Quantity (1000M3) Total cost (Rs. in crores) Rate/Unit per 1000M3 (Rs.) Part ‘B’ Consumption per Unit of Production FABRICS Per 1000 Mtrs. Current Previous Year Year PFY Per MT Current Previous Year Year PSF Per MT Current Previous Year Year PTA Per MT Current Previous Year Year LAB Per MT Current Previous Year Year MEG Per MT Current Previous Year Year PVC Per MT Current Previous Year Year HDPE Per MT Current Previous Year Year Electricity (KWH) 049 1010 1309 1317 Furnace Oil (Ltrs) Coal (Kgs) Gas (SM3) LSHS (Kgs) 6 --- 388 4 6 --- 406 6 138 169 --- --- 37 --- --- 24 699 155 --- --- 42 700 177 --- --- 26 374 375 28 --- --- 11 --- --- 325 115 --- --- 126 145 219 348 336 --- --- 32 899 893 450 454 217 252 --- --- 18 --- --- --- 18 --- --- --- 121 --- --- --- 126 --- --- --- 36 --- --- --- 41 --- Note: The above figures indicate only the direct consumption and exclude consumption of power and fuel in the supporting utilities. 3 4 Auditors’ Report To the Members of Reliance Industries Limited Reliance Industries Limited 2. We have audited the attached Balance Sheet of Reliance Industries Limited as at 31st March, 1995 and the Profit and Loss Account of the Company for the year ended on that date annexed thereto and report that: 1. As required by the Manufacturing and Other Companies (Auditors’ Report)Order, 1988, issued by the Company Law Board in terms of Section 227 (4A) of the Companies Act, 1956 we give in the Annexure hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order. Further to our comments in the Annexure referred to in paragraph 1 above, we state that: a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. In our opinion, proper books of 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 explanations given to us, the said Balance Sheet and Profit and Loss Account read d) together with the Significant Accounting Policies and other notes thereon give the information required by the Companies Act 1956, in the manner so required and give a true and fair view: in so far as it relates to Balance Sheet of the state of affairs of the Company as at 31st March, 1995; 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. i) ii) Bombay Dated: 28th April, 1995 Annexure to Auditors’ Report Referred to in paragraph 1 of our report of even date For Chaturvedi & Shah Chartered Accountants D. Chaturvedi Partner For Rajendra & Co. Chartered Accountants R.J. Shah Partner 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 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. None of the fixed assets have been revalued during the year. As explained to us, the stock of stores, spare parts, raw materials and finished goods have been physically verified by the management at reasonable intervals during the year. In our opinion, the frequency of such verification is reasonable having regard to the size of the Company and the nature of its business. In our opinion and according to the information and explanations given to us, the procedures of physical verification of stocks followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business. 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 beenß-ßjß-ßproperly dealt with in the books of account. The valuation of stocks is fair and proper and is in accordance with the normally accepted accounting principles and is on the same basis as in the preceding year except as stated in note no. “G” of Schedule ‘N’ to accounts. The Company has not taken any loans, secured or unsecured from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956, or from companies under the same management within the meaning of sub section (1 B) 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 register maintained under Section 301 and/ or to the companies under the same management as defined under sub-section (1 B) of Section 370 of the Companies Act, 1956, except interest free loans to its subsidiary companies. Attention is invited to Note No. 10 of Schedule ‘O’ 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, primaßß-ßßfacie, 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 principal 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 purchases 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, 13. raw materials and finished goods. Adequate provision has been made in the accounts for the loss arising on the items so determined. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 58A of the Companies Act,1956 and the Companies (Acceptance of Deposits) Rules,1975 with regard to the deposits accepted from the Public. In our opinion reasonable records have been maintained by the Company for the sale and disposal of realisable by products and scrap wherever significant. In our opinion the internal audit system of the Company is commensurate with its size and the nature of its business. 14. 15. 16. The Central Government has prescribed maintenance of Cost Records under Section 209(1)(d) of the Companies Act, 1956 in respect of certain manufacturing activities of the Company. We have broadly reviewed the accounts and records of the Company in this connection and are of the opinion that prima facie, the 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,1995, 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. 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 21. Provisions) Act, 1985. 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. For Chaturvedi & Shah Chartered Accountants For Rajendra & Co. Chartered Accountants Bombay Dated: 28th April,1995 D. Chaturvedi Partner R.J. Shah Partner 3 5 Reliance Industries Limited Balance Sheet as at 31st March, 1995 Sources of Funds Shareholders’ Funds Share Capital Reserves and Surplus Loan Funds Unsecured Loans Total Application of Funds Fixed Assets Gross Block Less: Depreciation Net Block Capital Work-in-Progress Investments Current Assets, Loans and Advances Current Assets Interest accrued on Investments Inventories Sundry Debtors Cash and Bank Balances Loans and Advances Schedule ‘A’ ‘B’ ‘C’ ‘D’ ‘E’ ‘F’ ‘G’ ‘H’ Less : Current Liabilities and Provisions ‘I’ Current Liabilities Provisions Net Current Assets Total Significant Accounting Policies Notes on Accounts ‘N’ ‘O’ As at 31st March, 1995 Rs. Rs. Rs. Crs As at 31st March, 1994 Rs. Rs. 461.36 6,731.29 2,117.25 822.67 5,315.40 1,805.78 3,509.62 3,075.09 8.76 662.56 541.20 366.79 1,579.31 1,371.61 2,950.92 1,194.90 201.57 1,396.47 323.82 4,011.07 7,192.65 4,334.89 1,898.39 761.11 2,939.92 10,132.57 2,659.50 6,994.39 4,737.72 1,532.68 3,205.04 394.60 6,584.71 1,993.41 3,599.64 1 ,990.18 11.35 584.64 593.53 96.34 1,285.86 1,244.59 2,530.45 986.25 139.63 1,125.88 1,554.45 10,132.57 1,404.57 6,994.39 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.H. Ambani Chairman M.D. Ambani Vice Chairman & Managing Director D. Chaturvedi Partner R.J. Shah Partner Bombay Dated: 28th April, 1995 3 6 A.D. Ambani Managing Director N.R. Meswani Executive Director S.S. Betrabet U. Mahesh Rao R.H. Ambani N.H. Ambani M.L. Bhakta T. Ramesh U. Pai Y.P. Trivedi Nominee Directors Directors V.M. Ambani Secretary Profit and Loss Account for the year ended 31st March, 1995 Reliance Industries Limited 1994-95 1993-94 Rs. Rs. Rs. Rs. Rs. Crs Income Sales Other Income Variation in Stock Expenditure Purchases Manufacturing and Other Expenses Depreciation Schedule ‘J’ ‘K’ `M’ Less: Pre-operative expenses of projects under commissioning 23.68 5,726.16 278.24 6,142.40 36.89 Profit for the year Add: Balance brought forward from last year Add: Investment Allowance (Utilised) Reserve Written Back 62.24 --- Amount available for Appropriations Appropriations Capital Redemption Reserve Investment Allowance Reserve Debenture Redemption Reserve General Reserve Proposed Dividend (subject to tax): Preference Shares Equity Shares Balance carried to Balance Sheet Significant Accounting Policies Notes on Accounts ‘N’ 'O' 5.50 --- 30.50 800.00 0.83 199.34 7,018.78 147.40 4.18 7,170.36 6,105.51 1,064.85 62.24 1,127.09 5,345.18 116.00 25.65 5,486.83 4,911.34 575.49 82.15 657.64 53.65 4,373.44 255.19 4,915.86 4.52 54.40 27.75 --- 6.70 30.50 419.02 0.83 138.35 1,036.17 90.92 595.40 62.24 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.H. Ambani Chairman M.D. Ambani Vice Chairman & Managing Director D. Chaturvedi Partner R.J. Shah Partner Bombay Dated: 28th April, 1995 A.D. Ambani Managing Director N.R. Meswani Executive Director S.S. Betrabet U. Mahesh Rao R.H. Ambani N.H. Ambani M.L. Bhakta T. Ramesh U. Pai Y.P. Trivedi Nominee Directors Directors V.M. Ambani Secretary 3 7 Reliance Industries Limited Schedules forming part of the Balance Sheet Schedule’A’ Share Capital Authorised: 55,00,00,000 (35,00,00,000) (30,000) 5,50,000 3,00,00,000 14,45,00,000 (4,42,00,000) Equity Shares of Rs. 10 each 11% Cumulative Redeemable Preference Shares of Rs. 100 each 15% Cumulative Redeemable Preference Shares of Rs. 100 each Preference Shares of Rs. 100 each Unclassified Shares of Rs. 10 each Issued: Equity 46,03,69,802 (31 ,99,52,965) Subscribed: Equity Equity Shares of Rs. 10 each 46,03,61,894 (31,99,45,057) Equity Shares of Rs. 10 each fully paid up Less: Calls in arrears - by others Add: Shares forfeited (Amount originally paid on 7,908 Equity Shares Rs. 39,540) Issued & Subscribed: Preference 5,50,000 15% Cumulative Redeemable Preference Shares of Rs. 100 each fully paid up (Redeemed on 1st April, 1995) As at 31st March, 1995 Rs. Rs. Rs. Crs As at 31st March, 1994 Rs. Rs. 550.00 --- 5.50 300.00 144.50 1 ,000.00 460.37 350.00 0.30 5.50 --- 44.20 400.00 319.95 460.36 4.50 455.86 --- 319.95 1.63 318.32 --- 455.86 318.32 5.50 461.36 5.50 323.82 Of the above Equity Shares: 1. ( a ) 1,56,80,100 ( b ) 18,05,78,290 (8,10,02,375) ( c ) 20,31 ,22,664 Shares were allotted as Bonus Shares by capitalisation of Premium and Reserves Shares were allotted pursuant to Schemes of Amalgamation without payments being received in cash. Shares were allotted on conversion/surrender of Debentures, conversion of Term Loans, exercise of (18,68,27,192) Warrants and against Global Depository Shares (GDS). ( d ) 4,060 Shares (including 2,475 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 was amalgamated with the Company. 2. Refer Note 2(c)(vii) of Schedule C and Note 1 of Schedule D in respect of option on unissued share capital. 3 8 Schedules forming part of the Balance Sheet Schedule ’B’ Reserves & Surplus Capital Reserve As per last Balance Sheet Add: On Redemption of Debentures Capital Redemption Reserve As per last Balance Sheet Add: Transferred from Profit and Loss Account Amalgamation Reserve As per last Balance Sheet Add: Net Surplus resulting from amalgamation of Reliance Polyethylene Limited (RPEL) and Reliance Polypropylene Limited (RPPL) Less: Transferred to Share Premium Account Share Premium Account As per last Balance Sheet Add:Received during the year Acquired on Amalgamation of RPEL and RPPL Transferred from Amalgamation Reser ve Less: GDS Issue Expenses Less: Calls in arrears 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 and 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 Taxation Reserve As per last Balance Sheet General Reserve As per last Balance Sheet Add:Acquired on Amalgamation of RPEL and RPPL Transferred from Profit and Loss Account Profit and Loss Account Reliance Industries Limited As at 31st March, 1995 Rs. Rs. Rs. Crs As at 31st March, 1994 Rs. Rs. 0.24 0.34 0.30 5.50 674.47 244.78 919.25 919.25 2,312.62 1,266.42 325.42 919.25 4,823.71 --- 4,823.71 25.31 111.25 30.50 6.70 --- 6.70 6.70 294.65 6.70 301.35 --- 550.00 32.49 800.00 0.58 5.80 0.24 --- 0.30 --- 674.47 --- 674.47 --- 0.24 0.30 --- 674.47 1,088.25 1,253.30 --- --- 2,341.55 28.93 2,312.62 11.40 4,798.40 2,301.22 80.75 30.50 92.00 6.70 98.70 92.00 230.40 92.00 322.40 27.75 130.98 --- 419.02 141.75 --- 301.35 10.00 1,382.49 90.92 6,731.29 111.25 6.70 294.65 10.00 550.00 62.24 4,011.07 3 9 Reliance Industries Limited Schedules forming part of the Balance Sheet Schedule ‘C’ Secured Loans A) Debentures 1. Convertible Debentures 2. Non-Convertible Debentures Less Calls in arrears B) Term Loans 1. 2. From 8anks a) b) Rupee Loans Foreign Currency Loans From Financial Instutions a) b) Rupee Loans Foreign Currency Loans C) Working Capital Loans From Banks D) Deferred Payment Liabilities As at 31st March, 1995 Rs. Rs. Rs. Crs As at 31st March, 1994 Rs. Rs. --- 1,273.04 1,273.04 6,48 17.47 142.80 1 60.27 275.43 9.36 284.79 1.13 1,220.98 1,222.11 18,61 1,266.56 1,203.50 26.53 --- 26.53 515.28 11.44 526.72 445.06 553.25 405.63 --- 2,117.25 134.79 685 1,898.39 Notes : 1. ( a ) Term Loans referred to in B(2) (a) to the extent of Rs 92.33 crores are secured/to be secured by mortgage of deposits of title deeds on the properties situated in naroda, District Ahmedabad in the State of Gujarat and at Patalganga, District Raigad in the State of Maharashtra. ( b ) Term Loans referred to in B(2)(a) to the extent of Rs 52.67 crores and term loans referred to in B(2)(b) are secured by mortgage a deposit of the title deeds on the properties situated at Patalganga, District Raighad in the State of Maharashtra and are to be secured by mortgage of deposit of the title deeds on the properties situated at Naroda, District Ahmedabad in the State of Gujarat. ( c ) Term Loans referred to in B(1)(a) are secured by guarantee issued by one of the Bankers of the Company against hypothecation of all movable assets both present and future situated at Naroda and Patalganga and B(1)(b) are secured by pledge of units. ( d ) Term Loans referred to in B(2)(a) to the event of Rs 13.16 crores are secured by an exclusive charge by way of hypothecation of specific items of machinery (e) Term Loans referred to in B(2) (a) to the extent of Rs 117.27 crores are secured by first charge by way of hypothecation of movable assets and first mortgage / charge on all the immovable assets of the Plastics and Petrochemicals Division of the Company situated at Hazira, District Surat, in the State of Gujarat . 2. ( a ) Debentures referred to in A(2) to the extent of Rs 1,219.71 crores are secured/to be secured on the properties of the Company situated at Naroda, District Ahmedabad in the State of Gujarat and at Patalganga, District Raigad in the State of Maharashtra. ( b ) Debentures referred to in A(2) to the extent of Rs 53.33 crores are secured by way of second and subsequent charge created by legal mortgage in English form on the properties situated at Naroda, District Ahmedabad in the State of Gujarat. ( c ) Debentures referred to in A(2) consists as under: (i) 15% Debentures of Rs. 100 each aggregating Rs 269.75 crores are redeemable at par on 31st August 1999. (ii) 13.5% Debentures of Rs 100 each aggregating Rs 53.33 crores are redeemable at par on 10th December 1996 (iii) 14% Debentures of Rs 100 each aggregating Rs 11.50 crores are redeemable at a premium of 5% of the face value of the said debentures on 19th June, 1995 (iv) 14% Debentures of Rs.100 each aggregating Rs.82.50 crores are redeemable at a premium of 5% on the face value of Debentures between sixth and eighth year from the date of allotment in equal instalments. The redemption will commence from March,1997 (v) 12.5% Debentures of Rs.95 each aggregating Rs. 345.12 crores, 14%Debentures of Rs.150 each aggregating Rs. 130 67 crores and 17.5% Debentures of Rs. 100 each aggregating Rs. 132.67 crores will be redeemed at the expiry of 10 years from the date of allotment i.e. 2002 with an option to the Board to redeem at anyß-ßjß-ßtime after 26th February 1999. (vi) 18% Debentures of Rs.100 each aggregating Rs. 60 crores will be redeemed in 3 equal annual instalments on the expiry of sixth, seventh and eighth year from the date of allotment. The redemption will commence from July, 1999. (vii) 14%Debentures of Rs.100 each, aggregating Rs 75 crores will be redeemed on the expiry of sixth year from the date of allotment i.e. on 11th January, 2000.Warrants issued with the debentures entitle the holders thereof to apply at the option of the warrant holders for six crores Equity Shares of Rs.10 each of the Company. (viii) 14.08% Debentures of Rs.100 each, aggregating Rs.112.50 crores will be redeemed in three equal instalments, commencing from the expiry of fifth year from the date of allotment i.e. 24th February, 2000. (ix) Debentures of Rs. 0.11 crore held by Directors. The Debentures referred to in Note 2(a) and Loans referred to in Notes 1(a) (b) and (c) above, are also to be secured by mor tgage/charge on movable/immovable properties of the Company situated at Hazira, District Surat in the State of Gujarat. The charges created/ to be created on the debentures referred to in Note 2 (a) and term loans referred to in Notes 1(a) (b) and (c) above, rank pari passu, inter-se. (a) Working Capital Loans from Banks referred to in C are secured by hypothecation of present and future stock of raw materials, stockßß-ßßinßß-ßßprocess, stores and spares, book debts, outstanding monies, receivable claims, trust receipts etc. (b) Secured Loans include, loans of Rs.118.14 crores and debentures of Rs. 11.50 crores repayable/redeemable within one year. 3. 4. 4 0 Schedules forming part of the Balance Sheet Schedule ‘D’ Unsecured Loans A) B) 3.5% Euro Convertible Bonds due 1999 16% Nonß-ßConvertible Redeemable Debentures of Rs. 16,040 each, Rs. 4,010 paid up C) Fixed Deposit (including Cash Certificates of Rs.0.06 crore; Previous Year Rs. O.O9 crore) D) Short Term Loans Banks [includes commercial paper Rs. NIL (Previous Year Rs.NIL), maximum amount outstanding at any time during the year Rs. 300 crores (Previous Year Rs. 172.50 crores)] Interestß-ßfree Loans under Salesß-ßtax Deferral Scheme E) Reliance Industries Limited 31st March, 1995 Rs. Rs. 31st March, 1994 Rs. Rs. Rs. Crs 442.43 --- 8.04 137.16 235.04 822.67 439.57 74 99 23.07 --- 223.48 761.11 Notes 1. The Bonds referred to in (A) are convertible into 1,52,49,305 Equity Shares of Rs. 10 each of the Company at the option of the bondholders. The Debentures referred to in (B) have been redeemed on 10th March, 1995. Fixed Deposits include Rs. 6.75 crores repayable within one year. 2. 3. Schedule ‘E’ Fixed Assets Description Goodwill Leasehold Lands Freehold Lands Development Rights Buildings Plant & Machinery Electrical Installations Factory Equipments Furniture.& Fixtures Vehicles Ships Aircraft & Helicopter Total Previous Year Capital Workß-in-Progress Notes : Gross Block D e p r e c i a t i o n N e t B l o c k Rs. Crs As At Assets 01 . 04.94 Acquired on Amalgamation Rs . Rs . 1.23 46.00 0.57 --- 320.11 3,979.78 141.02 13.75 52.84 15.82 150.78 15.82 --- 3.34 0.15 --- 8.80 --- --- --- 0.14 2.52 --- --- Additions Deductions As At 31.03.95 Upto 31 .03 .95 As At 31.03.95 As At 31 .03 .94 Rs . --- 4.39 0.27 38.65 28.60 441.45 1.69 18.64 17.68 10.29 2.01 15.24 Rs. 1.23 1.29 --- --- 0.60 4.86 --- --- 0.55 2.00 --- 5.65 R s . --- 52.44 0.99 38.65 356.91 4,416.37 142.71 32.39 70.11 26.63 152.79 25.41 Rs . --- 0.95 --- O.12 40.54 1,675.43 31.98 4.70 20.63 4.63 25.09 1.71 R s . Rs. --- 51.49 0.99 38.53 316.37 2,740.94 110.73 27.69 49.48 22.00 127.70 23.70 1.23 46.00 0.57 --- 288.12 2,543.95 1 15.75 9.92 37.70 12.47 133.52 15.81 4,737.72 14.95 578.91 16.18 5,315.40 1,805.78 3,509.62 3,205.04 3,961.26 778.29 1.83 4,737.72 1,532.68 3,205.04 3,075.09 394.60 ( a ) Buildings include cost of shares in Coß-ßoperative Societies Rs. 44,150 (Previous Year Rs. 1,250). ( b ) Capital Work-in-Progress includes: (i) Rs. 195.40 crores on account of preß-ßoperative expenses (Previous Year Rs. 82.65 crores). (ii) Rs. 148.22 crores on account of cost of construction materials at site (Previous Year Rs. 60.72 crores). (iii) Rs. 1432.66 crores on account of advance against Capital Workß-ßinß-ßProgress (Previous Year Rs. 65.58 crores). (iv) Rs. 77.27 crores acquired on amalgamation of RPEL and RPPL. ( c ) Goodwill has been written off against Amalgamation Reserve. 4 1 Reliance Industries Limited Schedules forming part of the Balance Sheet Schedule ‘F’ Investments Government and other Securities Quoted 6.25% Government of India Loan, 1995 (Previous Year Rs. 38,766, Face Value Rs. 40,000) Unquoted 7 Years National Savings Certificates (Face Value Rs.5,000) (Deposited with Sales Tax Dept) (Previous Year Rs.5,000) Post Office Time Deposit Government of India Zero Coupon Bonds, 1999 (Previous Year; Face Value Rs.10 crores) Trade Investments In Equity Shares Quoted, fully paid up As at 31st March, 1995 Rs. Rs. Rs. Crs As at 31st March, 1994 Rs. Rs. --- --- --- 0.20 --- 0.20 --- --- --- 0.20 5.39 5.59 0.20 5.59 5,30,55,150 (83,31,500) 69,80,000 (---) (2,10,00,000) (2,10,00,000) Quoted, partly paid up --- (76,92,000) --- (76,92,000) Unquoted, fully paid up 60 (60) 5 ( 5 ) 165 (165) 20 (20) 11,08,500 (11,08,500) Reliance Capital Ltd. of Rs. 10 each 443.95 * Reliance Industrial Infrastructure Ltd. of Rs. 10 each 16.58 Reliance Polyethylene Ltd. of Rs.10 each Reliance Polypropylene Ltd. of Rs.10 each Reliance Polyethylene Ltd. of Rs.10 each, Rs. 5 paid up Reliance Polypropylene Ltd. of Rs. 10 each, Rs. 5 paid up New Piece Goods Bazar Co. Ltd. of Rs.100 each, (Rs.17,000; Previous Year Rs.17,000) Bombay Gujarat Art Silk Vepari Mahajan Co-operative Shops & Warehouse Society Ltd. of Rs. 200 each, (Rs.1,000; Previous Year Rs.1,000) The Art Silk Co-operative Society Ltd. of Rs. 100 each, (Rs.16,500; Previous Year Rs.16,500) The Bombay Market Art Silk Co-operative (Shops & Warehouses) Society Ltd. of Rs. 200 each, (Rs. 4,000; Previous Year Rs. 4,000) Reliance Europe Ltd. of Sterling Pound 1 each Unquoted, partly paid up 225 (225) 73,82,781 (---) Crimpers Industrial Co-operative Society Ltd. of Rs.100 each, Rs. 25 paid up (Rs.5,625; Previous Year Rs. 5,625) Reliance Capital Ltd. of Rs.10 each, Rs.5 paid up In Preferences Shares Unquoted, fully paid up 86,00,000 (86,00,000) 6% Cumulative Redeemable Preference Shares of Reliance Enterprises Limited of Rs. 100 each In Debentures Quoted, fully paid up --- (75,00,000) 16% (1,00,00,000) 16% Optionally Fully Convertible Debentures of Reliance Polyethylene Ltd. of Rs. 50 each Optionally Fully Convertible Debentures of Reliance Polypropylene Ltd. of Rs. 50 each --- --- 460.53 --- --- --- --- --- --- --- 3.93 3.93 --- 21.71 21.71 86.00 86.00 --- --- --- 34.84 --- 21.00 21.00 76.84 34.15 34.15 68.30 --- --- --- --- 3.93 3.93 --- --- --- 86.00 86.00 37.50 50.00 87.50 4 2 572.17 322.57 Schedules forming part of the Balance Sheet Schedule ‘F’ (Contd.) In Equity Shares of Subsidiary Companies Unquoted, fully paid up 2,10,070 (2,10 070) (1,300) 14,75,04,400 (14,75,04,400) Devti Fabrics Ltd. of Rs.10 each 1,300 Reliance Petroproducts Ltd. of Rs.10 each (Rs.13,000; Previous Year Rs.13,000) Reliance Industrial Investments and Holdings Ltd. of Rs.10 each Other Investments In Equity Shares Quoted, fully paid up 14,86,700 (---) 11,000 (---) 5,98,250 54,980 (3,798) --- (15,000) --- (6,25,000) --- (1 0,000) 2,75,000 (10,00,000) BSES Ltd. of Rs.10 each Delta Industries Ltd. of Rs.10 each Larsen & Toubro Ltd. of Rs.10 each Industrial Credit and Investment Corporation of India Ltd. of Rs.10 each Bharat Petroleum Corporation Ltd. of Rs.10 each Bongaigaon Refineries & Petrochemicals Ltd. of Rs.10 each Hindustan Petroleum Corporation Ltd. of Rs.10 each State Bank of India of Rs.10 each Unquoted, fully paid up --- (2 90 000) 34,42,600 --- 4,80,000 (---) 1 000 (1,000) Equity Shares of Sandoz Textiles and Trading Ltd. of Rs.10 each Equity Shares of Container Corporation of India Ltd. of Rs.10 each Equity Shares of Him Teknoforge Ltd. of Rs.10 each Air Control & Chemical Engineering Co. Ltd. of Rs.100 each In Debentures Quoted, fully paid up 624 (624) (---) (2,550) 17% (83,525) 12.5% Fully Convertible Debentures of Industrial Credit and Investment Corporation of India Ltd. of Rs.450 each 14% Fully Convertible Debentures of Industrial Credit and Investment Corporation of India Ltd. of Rs.400 each Secured Redeemable Nonß-ßConvertible Debentures of ITC Hotels Ltd. of Rs.250 each Unquoted, fully paid up --- (2,38,839) --- (18,50,000) 16% Secured Redeemable Non-Convertible Debentures of CESC Ltd. of Rs.100 each 17.5% Secured Redeemable Non-Convertible Debentures of Synthetics & Chemicals Ltd. of Rs.100 each 0.21 --- 147.50 32.28 0.08 14.98 0.17 --- --- --- 6.30 53.81 --- 25.13 1.20 0.01 26.34 0.03 --- --- 0.03 In Bonds Taxfree, quoted, fully paid up --- (5,14,000) 9% --- (1,40,000) --- (50,000) --- (1,10,000) --- 9% Secured Redeemable, Indian Railway Finance Corporation Ltd. of Rs.1,000 each Secured Reedemable, Power Finance Corporation Ltd. (Previous Year: Face Value Rs. 2 crores) 9% Secured Redeemable, Neyveli Lignite Corporation Ltd. of Rs.1,000 each 9% Secured Redeemable, National Hydroelectric Power Corporation Ltd. of Rs.1,000 each 9% Secured Redeemable, Housing and Urban Development Corporation Ltd. of Rs.1,000 each 9% Secured Redeemable, Rural Electrification CorporationLtd. (Previous Year : Face Value Rs.2 crores) --- --- --- --- --- --- --- --- --- --- Reliance Industries Limited As at 31st March, 1995 Rs. Rs. Rs. Crs As at 31st March, 1994 Rs. Rs. 0.21 --- 147.50 147.71 147.71 --- --- --- 0.06 1.99 2.50 1.23 22.88 28.66 0.01 --- --- 0.01 0.02 0.03 0.10 1.92 2.05 2.34 16.53 18.87 43.05 1.67 11.20 4.00 8.87 1.68 70.47 4 3 As at 31st March, 1995 Rs. Rs. Rs. Crs As at 31st March, 1994 Rs. Rs. Reliance Industries Limited Schedules forming part of the Balance Sheet Schedule ‘F’ (Contd.) Taxfree , unquoted, fully paid up 9.5% India Development Bonds (Face Value US $1,39,72,000; Previous Year US $14,65,000) Taxable, quoted, fully paid up 13% Secured Redeemable, Hindustan Zinc Ltd. of Rs. 1,000 each 13% Secured Redeemable, National Thermal Power Corporation Ltd. of Rs.1,000 each Secured Redeemable, National Hydroelectric Power Cor poration Ltd. of Rs. 1,000 each 13% Secured Redeemable, Neyveli Lignite Corporation Ltd. of Rs. 1,000 each 15.5% Secured Redeemable, Nuclear Power Corporation of India Ltd. of Rs. 1,000 each 17.5% Secured Redeemable, Nuclear Power Corporation of India Ltd. of Rs. 1,000 each Taxable, unquoted, fully paid up 15% Unsecured, The Industrial Credit & Investment Corpn. of India Ltd. (Previous year: Face Value Rs.5 crs.) 15% Secured, Redeemable Bonds of Steel Authority of India Limited of Rs.1,000 each 17% Secured, Redeemable Bonds of Mahanagar Telephone Nigam Limited of Rs.1,000 each Unsecured Redeemable Floating Interest Rate, State Bank of India of Rs. 1,000 each Taxable, unquoted, partly paid up 17.5% Secured Redeemable, Sardar Sarovar Narmada Nigam Ltd. of Rs.5,000 each, Rs.2,500 paid up Master Plus 1991, Unit Trust o.f India of Rs. 10 each Master Gain ’92, Unit Trust of India of Rs. 10 each Master Share, Unit Tr ust of India of Rs. 10 each Morgan Stanley Growth Fund of Rs. 10 each Kothari Bluechip Fund of Rs.10 each SBI Magnum Multiplier Plus of Rs. 10 each GIC RISE-II of Rs.10 each Units (1964 scheme), Unit Trust of India of Rs. 10 each The Alliance ’95 Fund of Rs.10 each 2,00,00,000 JM Mutual Fund (Liquid Fund) of Rs.10 each 18.98 10,00,000 Units of Unit Scheme 1995, Unit Trust of India of Rs.100 each Taurus The Star Share, Taurus Mutual Fund of Rs. 10 each 10.00 --- Kothari Pioneer Prima Fund of Rs.10 each 208.68 242.66 --- (5,30,000) --- (3,40,000) 13% (4,50,000) --- (2,70,000) --- (2,50,000) --- (9,00,000) --- 1,00,000 (---) 20,000 (5,68,000) 10,000 (10,000) --- (10,000) In Units Quoted --- (6,25,000) --- (50,00,000) --- (2,40.000) --- (50,00,000) 70,00,000 (70,00,000) 3,65,800 (---) 3,75,00,000 (2,50,00,000) 52,34,25,310 (28,03,74,240) Unquoted 50,00,000 (---) (---) (---) --- (1 ,00,00,000) 15,79,57,680 (10,64,72,353) 4 4 54.16 54.16 --- --- --- --- --- --- --- --- 10.53 2.32 1.00 13.85 --- --- --- --- --- --- 7.00 0.40 40.17 834.91 882.48 5.00 5.39 5.39 51.44 32.76 43.23 26.57 25.00 98.98 277.98 5.35 --- 52.47 1.00 58.82 2.63 2.63 0.97 5.20 0.59 4.36 7.00 --- 38.25 449.41 505.78 --- --- --- 10.00 108.68 118.68 Schedules forming part of the Balance Sheet Schedule ‘F’ (Contd.) Reliance Industries Limited As at 31st March, 1995 Rs. Rs. Rs. Crs As at 31st March, 1994 Rs. Rs. In Certificate Of Deposits Unquoted The Industrial Finance Corporation of India Ltd. (Previous Year: Face Value Rs.25 crores) In Asset Management Scheme With Union Bank of Switzerland --- --- * Includes 2,57,12,100 shares having a lock-in period up to 5 years. Aggregate Value of Quoted Investments Unquoted Investments Movements during the year (Purchased & Sold) Government Securities Treasur y Bills Bonds 9% Housing & Urban Development Corporation Ltd. 13% Housing & Urban Development Corporation Ltd. 14% Housing & Urban Development Corporation Ltd. 11.5% The Industrial Credit & Investment Corporation of India Ltd. 13% The Industrial Credit & Investment Corporation of India Ltd. 13.5% The Industrial Credit & Investment Corporation of India Ltd. 15% The Industrial Credit & Investment Corporation of India Ltd. The Industrial Development Bank of India Ltd. (Floating Rate Bonds) 13% The Industrial Development Bank of India Ltd. 9% Indian Railway Finance Corporation Ltd. 13% Mahanagar Telephone Nigam Ltd. 17% Mahanagar Telephone Nigam Ltd. 9% National Hydroelectric Power Corporation Ltd. 13% National Hydroelectric Power Corporation Ltd. 13% Neyveli Lignite Corporation Ltd. 13% Nuclear Power Cor poration of India Ltd. 17.5% Nuclear Power Corporation of India Ltd. 13% National Thermal Power Corporation Ltd. 17% National Thermal Power Corporation Ltd. 17% Power Finance Corporation Ltd. 12.5% Small Industries Development Bank of India Ltd. Certificate of Deposits The Industrial Development Bank of India Ltd. The Industrial Finance Cor poration of India Ltd. Debentures BSES Ltd. Reliance Filaments Ltd. 17% Synthetic & Chemicals Ltd. Reliance Petroleum Ltd. (Triple Option Convertible Debentures) --- --- --- --- Book Value 1396.85 596.56 Face Value Rs. 1,273.33 1,993.41 Market Value 1738.56 --- Nos. 22.41 22.41 402.55 402.55 Book Value 1117.58 872.60 Cost Rs.Crs 375.00 --- 343.80 110000 10000 32500 --- --- 1000000 --- 3500 --- 430000 650000 560000 40000 1050000 490000 295000 1240000 970000 100000 250000 10000 1000 1000 1000 1.00 * 50.00 * 1000 6.50 100000 150.00 * 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 55.50 * 9.25 * 70 100 100 50 4098750 30000000 150000 196200 9.19 0.99 3.50 0.99 50.00 100.00 6.87 35.89 150.00 39.17 66.55 64.17 3.39 105.62 48.49 30.10 148.59 98.43 12.01 28.96 1.00 49.97 8.49 86.76 339.35 1.38 0.19 1,514.31 1,990.18 Market Value 1387.96 --- 4 5 Reliance Industries Limited Schedules forming part of the Balance Sheet Schedule ‘F’ (Contd.) Shares State Bank of India Ltd. Delta Industries Ltd. Global Trust Bank Ltd. Padmini Polymers Ltd. Indian Petrochemicals Corporation Ltd. BSES Ltd. Larsen & Toubro Ltd. Reliance Capital Ltd. Ashoka Mills Ltd. Mutual Fund Units CRB Arihant Mangal GIC Fortune ’94 LIC Dhansamridhi Units’64 UTI Master Growth 1993 UTI Grand Master 1993 * Represents Rs. in crores Schedule ‘G’ Current Assets Interest accrued on Investments Inventories (Cer tified and Valued by the Management) Stores. spares, dyes, chemicals, etc. Raw Materials Stock-in-Process Finished Goods 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 Scheme with a Non Scheduled Bank Face Value Rs. Nos. Cost Rs.Crs 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 579500 50400 34500 100000 1377000 2292700 5956850 500000 4190 20000000 5000100 10000000 601896400 2299500 34700 12.59 0.38 0.03 4.85 25.14 51.58 174.71 8.00 0.04 20.00 5.00 10.00 1033.99 3.13 0.05 * As at 31st March, 1995 Rs. Rs. Rs. Crs As at 31st March, 1994 Rs. Rs. 8.76 11.35 168.48 222.17 48.42 223.49 83.67 6.66 90.33 6.66 83.67 457.53 0.38 139.93 2.41 142.72 224.07 * 173.13 143.78 41.65 226.08 662.56 584.64 82.47 6.66 89.13 6.66 82.47 511.06 541.20 593.53 0.25 18.84 3.68 22.77 73.57 366.79 1,579.31 96.34 1,285.86 * With Union Bank of Switzerland (Maximum amount outstanding at any time during the year Rs 224.07 crores). 4 6 Schedules forming part of the Balance Sheet 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. Reliance Industries Limited As at 31st March, 1995 Rs. Rs. Rs. Crs As at 31st March, 1994 Rs. Rs. 592.64 568.95 * 125.18 84.84 1,371.61 322.09 837.49 69.89 15.12 1,244.59 Includes Rs. 0.22 crore from Officers (Maximum amount outstanding at any time during the year Rs. 0.22 crore). Schedule ‘I’ Current Liabilities and Provisions Current Liabilities Sundry Creditors Unclaimed Dividends Excess Debentures Application monies refundable/adjustable Interest accrued but not due on loans 1,118.23 * 10.74 3.07 62.86 940.01 0.03 0.35 45.86 Provisions Provision for Wealth Tax (includes acquired on amalgamation of RPEL and RPPL) Proposed Dividend 1,194.90 986.25 1.40 200.17 0.45 139.18 201.57 1,396.47 139.63 1,125.88 * Includes for capital expenditure Rs. 286.34 crores (Previous Year Rs. 26.82 crores) and Acceptances of Rs. 91.31 crores (Previous Year Rs. 3.40 crores). Schedules forming part of the Profit and Loss Account Schedule ‘J’ Other Income Export Incentives Dividends: From Subsidiaries From Others [Tax Deducted at Source Rs.7.37 crores (Previous Year Rs.9.58 crores)] Profit on Sale of Investments (net) Profit on Sale of Assets (net) Miscellaneous Income Rs. 4.79 79.20 1994-1995 Rs. 0.27 83.99 56.05 0.24 6.85 147.40 Rs. Crs 1993-1994 Rs. Rs. 0.01 3 39 35.15 38.54 70.29 --- 7.16 116.00 4 7 Reliance Industries Limited Schedules forming part of the Profit and Loss Account Schedule ‘K’ Variation In Stock Stock-ln-Trade (at close) Finished goods Stock-in-process Stock-ln-Trade (at commencement) Finished goods Stock-in-ßprocess Schedule ‘L’ Manufacturing 8 Other Expenses Raw Materials Consumed Stock at commencement Add: Purchases Less:Stock at close Inter-Divisional Transfers 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 Payment to Auditors General Expenses Wealth Tax Charity & Donations Loss on Sale of Assets (Net) Provision for Doubtful Debts Schedule ‘M’ Interest Debentures Fixed Loans Others (Net) 4 8 1994-1995 1993-1994 Rs. Rs. Rs. Rs. Rs. Crs 223.49 48.42 226.08 41.65 143.78 1,275.93 1,419.71 222.17 107.72 137.01 289.59 14.18 10.84 92.96 1,517.13 142.97 95.22 12.37 29.22 27.39 57.56 67.26 2.92 48.52 4.33 7.38 27.53 15.23 29.66 12.65 22.05 0.72 120.81 0.60 4.17 --- --- 226.08 41.652 271.91 267.73 210.64 31.44 267.73 4.18 242.08 25.65 1,197.54 1,630.63 1,062.25 1,167.20 122.96 1,083.07 1,206.03 143.78 105.04 126.73 236.23 17.83 5.19 36.43 1,090.78 80.23 2,312.40 1,698.46 75.53 8.83 22.00 21.55 37.90 58.21 1.78 13.04 6.00 37.70 30.87 12.72 0.65 8.02 8.91 0.63 95.37 0.20 3.60 0.02 2.00 106.36 176.18 162.99 4.373.44 158.29 141.26 (65.97) 233.58 136.81 215.36 233.42 5,726.16 183.26 21.24 (90.18) 114.32 Reliance Industries Limited Significant Accounting Policies Schedule ‘N’ Significant Accounting Policies A. Basis of Preparation of Financial Statements a) b) The financial statements have been prepared under the historical cost convention, in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956 as adopted consistently by the Company. The Company generally follows mercantile system of accounting and recognises significant items of income and expenditure on accrual basis. B. Fixed Assets and Depreciation a) Fixed Assets are stated at cost, net of Modvat, 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 borrowings attributable to the fixed assets are capitalised. b) Depreciation on fixed assets is provided on straight line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 except, depreciation on incremental cost arising on account of translation of foreign currency liabilities for acquisition of fixed assets, which has been amortised over the residual life of the respective assets and depreciation on development rights which has been provided in proportion of oil production achieved. c ) During the year, the Company has amor tised the premium on leasehold lands over the remaining life of the lease, hence depreciation for the year is higher by Rs. 0.49 crore. C. Foreign Exchange Transactions a) b) Transactions denominated in foreign currencies are nor mally recorded at the exchange rate prevailing at the time of the transaction. 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. Gains and losses on foreign exchange transactions/ translations other than those relating to fixed assets and investments are recognised 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. D. Investments Investments are stated at cost. E. Inventories Inventories are valued at cost except for finished goods and byß-ßproducts. Finished goods are valued at lower of cost or market value and byß-ßproducts are valued at net realisable value. F. Sales Sales include, inter-divisional transfers, sales during trial-run and are net of discounts. G. Excise Duty Excise Duty has been accounted on the basis of both payments made in respect of goods cleared as also provision made for goods lying in bonded warehouses. Although, in the past, such provision was not made in the accounts, the change in accounting treatment is consistent with the guidelines issued by the Institute of Chartered Accountants of India and has no impact on the profits for the year and net current assets of the Company. H. Employee Retirement Benefits Company’s contributions to Provident Fund and Superannuation Fund are charged to Profit and Loss Account. Gratuity is charged to Profit and Loss Account on the basis of actuarial valuation. I. Research and Development Expenses Expenditure relating 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. J. Leases Lease rentals are expensed with reference to lease terms and other considerations, except for rentals pertaining to the period up to the date of commissioning of the assets which are capitalised. K. Accounting for Oil and Gas Activity Assets and Liabilities as well as income and expenditure in respect of the joint venture with Oil and Natural Gas Commission Ltd. and Enron Oil and Gas Ltd. are accounted, on the basis of available information, on line by line basis with similar items in the Company’s financial statements, according to the participating interest of the Company. L. Issue Expenses Issue Expenses pertaining to the projects are capitalised. 4 9 Reliance Industries Limited Notes on Accounts Schedule ‘O’ Notes on Accounts 1. ( a ) The previous year’s figures have been reworked, regrouped and reclassfied wherever necessary. 2. 3. 4. 5. 6. ( 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. As in the past, sales include interß-ßdivisional transfers of Rs 1630.63 crores (Previous Year Rs 1167.20 crores) ( a ) In ter ms a Schemes of Amalgamation and Orders passed by the Hon’ble Bombay High Cour t, Reliance Polyethylene Limited (RPEL) and Reliance Polypropylene Limited (RPPL) have been amalgamated with the Company with effect from 1st January, 1995 Pursuant to the said Scheme, the Company has taken over all the assets, liabilities and obligations of both the amalgating companies. ( b ) Pursuant to above 9,95,75,915 Equity Shares of Rs. 10/ß-ß each are to be issued to the shareholders of RPEL and RPPLwithout payment being received in cash. ( c ) The excess of value of the assets (including calls in arrears) over liabilities of RPEL and RPPL as appearing in the books of account of those two amalgamating companies over the paid-up value of the shares of the Company issued to the shareholders of those two companies has been accounted as under : The amount standing to the credit of Share Premium and General Reserve in the books of RPEL and RPPL as on 31st December 1994 has been credited to the respective accounts in the books of the Company and the balance has been transferred to Amalgamation Reserve. Interest - Others (net) is arrived at after deducting interest received/receivable of Rs 165.19 crores (Previous Year Rs 94.33) crores L Tax Deducted at Source of As 9 88 crores (Previous Year Rs 8 28 crores). A sum of Rs 0.14 crore (net) included in ‘Manufacturing and Other Expenses’ represents net prior period adjustments ( a ) Auditors’ Remuneration : Audit Fees Tax Audit Fees i) ii) iii) For Certification and Consultation in finance and tax matters iv) Expenses reimbursed Rs. Crs 1994-95 1993-94 0.45 0.14 0.08 0.05 0.72 0.36 0.09 0.16 0.02 0.63 ( b ) Cost AuditorAudit Fees Rs 0.02 crore (Previous Year Rs 0 02 crore). 7. ( a ) The Company has been advised that the computation of net profits for the purpose of Directors’ remuneration under Section 349 of the Companies Act, 1956 need not be enumerated since no commission has been paid to the Directors. Fixed monthly remuneration has been paid to the Directors as per Schedule XIII to the Companies Act 1956. ( b ) Directors’ Remuneration. Salaries i) ii) Contribution to Provident Fund and Superannuation Fund iii) Provision for Gratuity (as per Actuarial Valuation) (Previous Year Rs 37,400) iv) Perquisites Rs. Crs 1994-95 1993-94 0.35 0.02 0.06 0.03 0.46 0.12 0.02 --- 0.02 0.16 8. The Incomeß-ßtax assessments of the Company have been completed up to Assessment Year 1992-93. The total demandraised by the Income-Tax Department up to the said Assessment Year is Rs 160 66 crores which is disputed. Based on the decisions of the Appellate Orders and the inter pretations of other relevant provisions, the Company has been legallyadvised that the Taxation Reserve created in the past 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. 5 0 Notes on Accounts Schedule ‘O’ (Contd) 9. Preß-ßOperative Expenses (in respect of Projects up to 31st March, 1995, to be capitalised) Pre-operative expenditure of projects under commissioning, transfered from Profit and Loss Account Net pre-operative expenditure of RPEL and RPPL Lease Expenses Insurance Travelling Expenses General Expenses Interest Depreciation Debenture Issue Expenses Less: Income Income from funds placed under Portfolio Management Scheme Other Income Capitalised by allocating to Buildings and Plant & Machinery Reliance Industries Limited Rs Crs Total up to 31st March, 1995 Total up to 31st March, 1994 41.41 31.20 4.56 0.27 3.15 37.67 114.52 13.10 8.00 4.52 --- 16.30 1.27 3.49 64.18 26.34 17.43 8.00 253.88 141.53 0.03 0.02 58.43 195.40 0.03 0.03 58.82 82.65 10. 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. 1.96 crores from Devti Fabrics Ltd (DFL), a wholly owned subsidiary company and furnished guarantees to Banks of Rs 3 00 crores on behalf of DFL. The losses of DFL exceeds its paidß-ßup Capital and Reserves as on 31st March, 1995 In view of the long term involvement of the Company in the said Company, no provision has been made in the accounts for the probable loss that may arise. 11. The Department of Company Affairs Government of India vide its Order No 46/34/95-CL-III dated 30-03-1995 & issued under Section 211(4) of the Companies Act, 1956 has exempted the Company from publication of certain information in the Profit and Loss Account under paras 3(i)(a) 3(ii)(a) and 3(ii)(b) of Schedule Vl to the Companies Act, 1956 12. 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 ) Uncalled liability on partly paid Shares/Debentures (f) Claims against the Company/disputed liabilities not acknowledged as debts Rs Crs As at 31st March, 1995 As at 31st March, 1994 706.73 1,047.18 1342.09 483.24 14.27 14.27 15.60 37.71 120.60 42.00 10.19 38.81 5 1 Reliance Industries Limited Notes on Accounts 13. Licensed and Installed Capacity Licensed Capacity Installed Capacity UNIT 1994-95 1993-94 1994-95 1993-94 ( a ) Polyester Filament Yarn/Polyester Chips ( b ) Polyester Staple Fibre/Polyester Chips ( c ) Manß-ßmade Fibre spun yarn on worsted system (Spindles) ( d ) Man-made Fibre on cotton system (Spindles) ( e ) (i) Man-made Fabrics (Looms) (ii) Knitting M/c (f) Purified Terephthalic Acid ( g ) Linear Alkyl Benzene ( h ) (i) Ethylene (ii) Propylene (iii) Butadiene & Other C4s (iv) Benzene ( v ) Toluene (vi) Xylene (i) Mono Ethylene Glycol (ii) Ethylene Oxide (iii) Higher Ethylene Glycol (By-product) (i) Ethylene Oxide (ii) Ethylene Glycol (Non-Fibre) (iii) Carbon Dioxide (i) (j) ( k ) High/Linear Low Density Polyethylene (Swing Plant) (I) Poly Vinyl Chloride (m) (i) Chlorine (ii) Caustic Soda (By product) (iii) Hydrogen (By Product) (i) Paraxylene (ii) Benzene (By Product) (i) Mono Ethylene Glycol (ii) Higher Ethylene Glycol (By Product) (i) Mono Ethylene Glycol (ii) Ethylene Oxide (iii) Higher Ethylene Glycol (By Product) (i) Ethylene (ii) Propylene (iii) Butadiene & Other C4s (i) Paraxylene (ii) Benzene ( n ) ( o ) ( p ) ( q ) ( r ) M.T. M.T. Nos. 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. M.T. M.T. M.T. M.T. M.T. M.T. M.T. M.T. M.T. M.T. M.T. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. 750,000 365,000 225,000 235,000 197,000 165,000 100,000 10,000 12,500 100,000 18,000 30,000 N.A. N.A. 396,000 468,000 11,700 600,000 24,000 100,000 12,500 200,000 25,000 25,000 800,000 390,000 240,000 800,000 32,000 N.A. N.A. 32,300+ 45,000 N.A. N.A. N.A. N.A. N.A. N.A. 750,000 365,000 225,000 235,000 197,000 165,000 100,000 10,000 12,500 100,000 18,000 30,000 N.A. N.A. 198,000 234,000 5,850 --- --- --- --- --- --- --- --- --- --- --- --- 24,094 23,040 712 28 200,000 80,000 U.l. U.l. U.l. U.l. U.l. U.l. 60,000 10,000 5,000 --- --- --- 160,000 135,000 U.l. U.l. U.l. --- --- --- --- --- --- --- --- --- --- --- --- 25,125+ 45,000 12,494 --- 450 20 200,000 80,000 U.l. U.l. U.l. --- --- --- 60,000 10,000 5,000 --- --- --- 160,000 100,000 U.l. U.l. U.l. --- --- --- --- --- --- --- --- --- --- --- --- N.A. ß-ß Delicensed vide Notification No.477 (E) Dated 27th July, 1991. + Based on average Denier of 40. Installed Capacities are based on Certificate of the Management. U.l. - Under implementation. 14. Production of Finished Products Meant For Sale Fabrics Polyester Filament Yarn Polyester Staple Fibres PTA LAB Ethylene Glycol PVC M .T. 186597 170304 PE Crude Oil Unit Mtrs. in Lacs M.T. M.T. M.T. M.T. M.T. M .T. M.T. 1994-95 474.95 94380 92556 86335 80508 54811 166250 43719 993-94 448.76 93397 76484 106380 77004 62972 132496 --- 15. 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 5 2 Rs.Crs 1994-95 1993-94 808.58 67.80 386.30 553.18 57.31 121.20 Notes on Accounts 16. 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) Technical Knowß-ßhow & Engineering Fees FCCB expenses and other matters Reliance Industries Limited Rs.Crs 1994-95 1993-94 54.38 2.64 318.62 53.97 64.36 9.02 30.51 50.41 17. Value of raw materials consumed Imported Indigenous 18. Value of dyes, chemicals, catalysts, stores and spare parts consumed Imported Indigenous 19. Earnings in Foreign Exchange Export of goods on FOB basis Interest Others 20. Remittance in Foreign Currency on Account of Dividend 1993-94 % of total Consumption Rs.in % Crores 885.76 311.78 1.197.54 83.08 161.65 244.73 1994-95 of total Consumption 73.96 26.04 100.00 33.95 66.05 100.00 Rs.in Crores 676.43 385.82 1,062.25 107.96 123.81 231.77 63.68 36.32 100.00 46.58 53.42 100.00 Rs.Crs 1993-94 59.91 16.91 0.29 Rs.Crs 1993-94 1994-95 174.45 24.62 6.74 1994-95 The Company has paid dividend in respect of shares held by Non-residents on repatriation basis. This interalia includes portfolio investment and direct investment, where the amount is also credited to Nonß-ßResident 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 ) (i) Amount of dividend paid (Gross) Tax deducted at source: Rs.2.51 crores (Previous Year: Rs.1.20 crores) (ii) Year to which dividend relates 19,726 5,95,82,568 18.53 21,481 2,72,11,983 8.53 1993-94 1992-93 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.H. Ambani Chairman M.D. Ambani Vice Chairman & Managing Director D. Chaturvedi Partner R.J. Shah Partner Bombay Dated: 28th April, 1995 A.D. Ambani Managing Director N.R. Meswani Executive Director S.S. Betrabet U. Mahesh Rao R.H. Ambani N.H. Ambani M.L. Bhakta T. Ramesh U. Pai Y.P. Trivedi Nominee Directors Directors V.M. Ambani Secretary 5 3 Reliance Industries Limited Statement pursuant to Section 212 of the Companies Act, 1956, relating to Company’s Interest in the Subsidiary Companies Name of Subsidiary Company Devti Fabrics Ltd. Reliance Industrial Investments and Holdings Ltd. Reliance Petroproducts Limited 1. The financial year of the Subsidiary Companies ended on 31st March, 1995 31st March, 1995 31st March, 1995 2. Date from which they become subsidiary 30th September, 1985 30th December, 1988 11th Februar y, 1992 companies 3. 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 b. Extent of interest of holding company at the end of the financial year of the subsidiary companies 4. The net aggregate amount of the subsidiary companies Profit/(Loss) so far as it concerns the members of the holding Company. a. Not dealt with in the holding Company’s accounts. i) ii) For the financial year ended 31st March, 1995 For the previous financial years of the subsidiary companies since they became the holding Company’s subsidiaries. b. Dealt with in the holding Company’s accounts: 2,10,070 Equity Shares of the face value of Rs.10 each fully paid-up 14,75,04,400 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% Rs.78.03 Lakhs Rs.587.16 Lakhs Rs.20,626 (Rs.834.13 Lakhs) Rs.172.31 Lakhs (Rs.30,682) i) ii) For the financial year ended 31st March, 1995 For the previous financial years of the subsidiary companies since they became the holding Company’s subsidiaries. Nil Nil Nil Nil Nil Nil For and on behalf of the Board D.H. Ambani Chairman M.D. Ambani Vice Chairman & Managing Director A.D. Ambani Managing Director N.R. Meswani Executive Director S.S. Betrabet U. Mahesh Rao R.H. Ambani N.H. Ambani M.L. Bhakta T. Ramesh U. Pai Y.P. Trivedi Nominee Directors Directors V.M. Ambani Secretary Bombay Dated: 28th April, 1995 5 4 Reliance Industries Limited Devti Fabrics Limited Regd. Office : 3rd Floor, Maker Chambers IV, 222, Nariman Point, Bombay - 400 021. 5 5 Reliance Industries Limited 5 6 Reliance Industries Limited Directors’ Report To the Members, Your Directors present the Eleventh Annual Repor t together with the Audited Statement of Accounts for the Financial Year ended 31st March, 1995. Operations The Company has earned a profit of Rs.78.03 lacs during the year under review as against loss of Rs.13.69 lacs in the previous year. Sales decreased to Rs.314.42 lacs as against Rs.1176.13 lacs for the previous year. Dividend In view of the carried forward losses, your Directors have not recommended any Dividend for the Financial Year under review. Directors As per the provisions of the Companies Act, 1956, Shri V.M. Ambani and Shri N.M.Sanghvi retire by rotation and being eligible offer themselves for re-appointment. During the year Shri H.N.Arora resigned from the Board. The Board acknowledges the suppor t and guidance provided by Shri H.N. Arora to the Company during his tenure as Director. 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(1 -B) of the Companies Act,1956, fur nished a certificate of their eligibility for re-appointment. Deposits The Company has not accepted any deposits from the Public. Hence, no information is required to be appended to this report. Conser vation 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.25,000/- 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. Bombay Directors Dated: 25th April, 1995 For and on behalf of the Board V.M. Ambani N.M. Sanghavi J.B. Dholakia 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 The Company continued the energy conservation measures undertaken in the past, and tried to explore possibility of further energy conservation measures. Form - A (Form for disclosure of particulars with respect to Conservation of Energy) Part - A A . Power and Fuel Consumption 1 . Electricity a . PurchasedUnits Total Amount (Rs) Rate/Unit (Rs) b . Own Generation i. ii. Through Diesel Generator Units Units per Ltr. of Diesel Cost/Unit (Rs) Through Steam Turbine/Generator Units Unit per Ltr. of Fuel Oil/Gas cost/unit 2 . Coal Quantity(Tonnes) Total Cost (Rs) Average Rate (Rs) Current Year 1994-95 24,18,600 72,28,609 2.99 – – – – – – – – – – 352 7,16,290 2,034.91 Previous Year 1993-943. 61,95,240 1,63,06,926 2.63 – – – – – – – – – – 393 5,96,112 1,516.82 5 7 Reliance Industries Limited 3 . Furnace Oil Quantity (Kilo Ltrs.) Total Amount Average Rate 4 . Others/lnternal Generation Quantity Total Cost Average Rate Part- B B . Consumption per Unit of Production Current Year 1994-95 Previous Year 1993-943. – – – – – – – – – – – – – – – – – – – – – – – – Current Year 1994 - 95 Previous Year 1993 - 94 Yarn (Kgs) Fabrics ( P.M TR) Yar n (Kgs) Fabrics ( P.MTR) Electricity (Units) Furnace Oil Coal ** Othe rs ** Coal is used for steaming and heating the yarn for the purpose of sizing. It has no link with the production. 8.63 – – – – – – 5.46 – – – – – – – – – – – – – – – – – – – – – – Form - B (Form for disclosure of particulars with respect to Technology Absorption) The Company has no specific Research and Development Department. Hence information to be given in Form - B are not relevant for the Company. However, the Company has a quality control depar tment to check the quality of the products manufactured. C . Foreign Exchange Earning and Outgo i. Foreign Exchange used and earned Nil Auditors’ Report To The Members of Devti Fabrics Limited, We have audited the attached Balance Sheet of DEVTI FABRICS LIMITED as at 31st March,1995 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 Manufactur ing and Other Companies (Auditor’s Report) Order,1988, issued by the Company Law Board in terms of Section 227(4A) of the Companies Act,1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. 2 . Further to our comments in the Annexure referred to in Paragraph 1 above, we state that: ( a ) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit. ( b ) In our opinion proper books of account as required by law have been kept by the Company, so far as appears 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 ) Although the Company had incurred substantial losses in the past resulting in the erosion of its net worth, the accounts of the Company are prepared on going concern basis. 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) in so far as it relates to the Balance Sheet of the state of affairs of the Company as at 31st March,1995 (ii) 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. Bombay Dated: 25th April,1995 H. P. Chatur vedi Partner R.J. Shah Partner For Chaturvedi & Shah Chartered Accountants For Rajendra & Co. Chartered Accountants 5 8 Reliance Industries Limited 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 the year and that no material discrepancies were noticed on such verification. In our opinion, the frequency of such physical verification is reasonable having regard to the size of the Company and the nature of its assets. 2 . None of the fixed assets have been revalued during the year. 3 . 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. 4 . In our opinion, the procedures of physical verification of stocks followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business. 5 . As explained to us, there were no material discrepancies noticed on physical verification of the stocks and the same have been properly dealt with in the books of account. 6 . 7 . 8 . 9 . 10. 11. 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(1 B) of the Companies Act,1956. The terms and conditions of the above loan are not, in our opinion, prima facie prejudicial to the 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 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 Section 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules,1975 are not applicable to the Company. 14. The Company has no by-products and in our opinion reasonable records have been maintained by the Company for the sale and disposal of realisable scrap wherever significant. 15. 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. 17. According to the records of the Company, Provident Fund and Employees’ State Insurance dues have been regularly deposited with the appropriate authorities. 18. According to the information and explanations given to us, no undisputed amounts payable in respect of income-tax, wealth-tax, customs duty, sales tax and excise duty were outstanding as on 31st March,1995 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 specific system of allocation of material in respect of the processing activities carried out on ‘job work’ basis. (c) The Company has a reasonable system of allocating manhours utilised to the relative jobs commensurate with its size and the nature of its business. (d) There is a reasonable system of authorisation at proper levels and an adequate system of internal control commensurate with the size of the Company and the nature of its business on the issue of stores and allocation of stores and labour to relative jobs. For Chaturvedi & Shah Chartered Accountants For Rajendra & Co. Chartered Accountants Bombay Dated: 25th April,1995 H . P . C h a t u r v e d i Partner R . J . S h a h Partner 5 9 Reliance Industries Limited Balance Sheet as at 31st March, 1995 Schedule 1994 - 95 (Rs. in Lacs) 1993 - 94 Rs. Rs. Rs. Rs. Sources of Funds: S h a r e h o l d e r s ’ F u n d s Share Capital Loan Funds Secured Loans Unsecured Loans (From Holding Company) Total 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 ‘ A ’ `B’ ‘C’ `D’ ‘ E ’ Less: Current Liabilities and Provisions ‘F’ Current Liabilities Provisions Miscellaneous Expenditure (to the extent not written off or adjusted) Profit & Loss Account Total Notes on Accounts ‘ K ’ 2 1 . 0 1 21.0 –– 6 7 6 . 0 0 157.91 676.00 6 7 6 . 0 0 6 9 7 . 0 1 833.91 854.9 2 2 6 . 5 0 1 6 0 . 7 0 4 0 . 9 7 1 3 . 0 9 2 9 . 1 5 8 3 . 2 1 1 7 . 2 1 1 0 0 . 4 2 2 2 5 . 3 1 –– 2 2 5 . 3 1 559.44 401.55 6 5 . 8 0 157.89 74.74 48.73 8.30 131.77 22.86 154.63 285.26 6.49 291.75 ( 1 2 4 . 8 9 ) –– 7 5 6 . 1 0 6 9 7 . 0 1 (137.12) 0.02 834.13 854.92 As per our Report of even date For and on behalf of the Board For Chaturvedi & Shah Chartered Accountants For Rajendra & Co. Chartered Accountants R.J. Shah Partner Directors H.P. Chaturvedi Partner Bombay Dated: 25th April, 1995 6 0 V.M. Ambani N.M. Sanghavi J.B. Dholakia Profit and Loss Account for the year ended 31st March, 1995 Schedule 1994 - 95 (Rs. in Lacs) 1993 - 94 Rs. Rs. Rs. Rs. Reliance Industries Limited I n c o m Sales (Net) Other Income Variation in Stock E x p e n d i t u r e Manufacturing and Other Expenses Interest Depreciation ‘ G ’ ‘ H ’ ‘ I ’ ‘J’ Profit/(Loss) for the year Add: Balance brought forward from last year Balance carried to Balance Sheet Notes on Accounts ‘ K ’ 3 1 4 . 4 2 4 6 6 . 3 0 ( 1 3 . 7 1 ) 6 4 8 . 8 1 1 0 . 6 6 2 9 . 5 1 1176.13 75.47 (57.78) 7 6 7 . 0 1 11 93.82 1125.13 23.26 59.12 6 8 8 . 9 8 7 8 . 0 3 ( 8 3 4 . 1 3 ) ( 7 5 6 . 1 0 ) 1207.51 (13.69) (820.44) (834.13) As per our Report of even date For and on behalf of the Board For Chaturvedi & Shah Chartered Accountants For Rajendra & Co. Chartered Accountants Directors H.P. Chaturvedi Partner Bombay Dated: 25th April, 1995 R.J. Shah Partner V.M. Ambani N.M. Sanghavi J.B. Dholakia 6 1 Reliance Industries Limited Schedules forming part of the Balance Sheet Schedule ‘A’ S h a r e C a p i t a l Authorised: As at 31st March,1995 Rs. (Rs. in Lacs) As at 31st March, 1994 Rs. 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) 2 5 . 0 0 2 1 . 0 1 2 1 . 0 1 25.00 21.01 21.01 Schedule ‘B’ S e c u r e d L o a n s Working Capital Loan from a Bank Term Loans from Financial Institutions As at 31st March,1995 Rs. –– –– –– (Rs. in Lacs) As at 31st March, 1994 Rs. 89.15 68.76 1 57.91 N o t e : Working Capital Loans from a scheduled Bank are secured against Hypothecation of present and future stock of the materials, stock-in-process, finished goods, book debts, movable machineries including all stock and spare parts belonging to the Company at Sidhpur in the State of Gujarat, and are further guaranteed by Reliance Industries Limited, the Holding Company. Schedule ‘C’ Fixed Assets Description Buildings Plant & Machinery Electric Installation Factory Equipment Furniture & Fixture Vehicles Previous Year Schedule ‘D’ As at 1.4.94 Rs. 27.48 504.58 17.99 2.97 4.30 2.12 559.44 560.51 Gross Block (At Cost) Depreciation Net Block (Rs. in Lacs) Additions Deductions Rs. –– –– –– –– –– –– 0.00 0.34 As at 3 1 . 3 . 9 5 R s . Total up to 31.3.95 Rs. As at 3 1 . 3 . 9 5 R s . As at 31.3.94 Rs. 2 7 . 4 8 6.86 2 0 . 6 2 21.54 Rs. –– 329.99 1 7 4 . 5 9 144.77 2 9 . 8 2 117.83 0.76 0.08 –– 2.11 1 7 . 2 3 2 . 8 9 4 . 3 0 0 . 0 1 6.16 1.41 1.50 0.00 1 1 . 0 7 12.13 1 . 4 8 2 . 8 0 0 . 0 1 1.67 3.04 1.68 332.94 2 2 6 . 5 0 1 60.70 6 5 . 8 0 157.89 1.41 5 5 9 . 4 4 401.55 1 5 7 . 8 9 As at 31st March,1995 Rs. Rs. (Rs. in Lacs) As at 31st March, 1994 Rs. Rs. Current Assets Inventories (at cost or market value whicheve is lower except otherwise stated) Stores, spares, dyes & chemicals Raw materials Stock-in-process Finished goods Others 6 2 8 . 1 9 1 . 9 2 7 . 7 5 2 3 . 0 0 0 . 1 1 16.06 14.11 15.78 27.79 1.00 Carried Forward ------------------ 4 0 . 9 7 74.74 Schedules forming part of the Balance Sheet Schedule ‘D’ (Contd) Brought forward As at 31st March,1995 Rs. Rs. 4 0 . 9 7 Sundry Debtors (Unsecured) Over six Months: Considered doubtful Others: Considered good Less: Provision for doubtful debts C a s h a n d B a n k b a l a n c e s Cash on hand Balance with Scheduled Banks: In Current Accounts In Fixed Deposit Accounts Schedule ‘E’ L o a n s a n d A d v a n c e s (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’ (Contd) Current Liabilities & Provisions Current Liabilities Sundry Creditors Interest accrued but not due on loans Provisions Gratuity, Superannuation and Provident Funds Schedules forming part Of the Profit and Loss Account Schedule ‘G’ O t h e r I n c o m e Processing charges Profit on sale of assets Miscellaneous Income Excess provision for expenses no longer required Reliance Industries Limited (Rs. in Lacs) As at 31st March, 1994 Rs. Rs. 74.74 7.82 48.73 56.55 7.82 –– 1 3 . 0 9 1 3 . 0 9 –– 1 . 4 9 2 6 . 7 6 0 . 9 0 1 3 . 0 9 48.73 1.13 3.75 3.42 2 9 . 1 5 8 3 . 2 1 8.30 131.77 As at 31st March,1995 Rs. (Rs. in Lacs) As at 31st March, 1994 Rs. 3 . 5 7 1 2 . 8 2 0 . 5 3 0 . 2 9 1 7 . 2 1 6.09 12.82 0.58 3.37 22.86 As at 31st March,1995 Rs. Rs. (Rs. in Lacs) As at 31st March, 1994 Rs. Rs. 2 2 5 . 2 6 0 . 0 5 284.41 0.85 2 2 5 . 3 1 –– 2 2 5 . 3 1 1994 - 95 Rs. 1 8 . 7 5 4 3 4 . 4 1 8 . 7 3 4 . 4 1 4 6 6 . 3 0 285.26 6.49 291.75 (Rs. in Lacs) 1993 - 94 Rs. 58.10 2.10 15.03 0.24 75.47 6 3 Reliance Industries Limited Schedules forming part of the Profit and Loss Account Schedule ‘H’ V a r i a t i o n i n S t o c k Stock-in-Trade (at close) Finished goods Stock-in-process Others Stock-in-Trade (at commencement) Finished goods Stock-in-process Others Schedule ‘I’ 1994 - 95 (Rs. in Lacs) 1993 - 94 Rs. Rs. Rs. Rs. 2 3 . 0 0 7 . 7 5 0 . 1 1 2 7 . 7 9 1 5 . 7 8 1 . 0 0 3 0 . 8 6 4 4 . 5 7 ( 1 3 . 7 1 ) 27.79 15.78 1.00 72.60 28.87 0.88 44.57 102.35 (57.78) 1994 - 95 (Rs. in Lacs) 1993 - 94 M a n u f a c t u r i n g a n d o t h e r E x p e n s e s Rs. Rs. Rs. Rs. Raw material consumed Stock at commencement Add: Purchases Less: Stock at close M a n u f a c t u r i n g E x p e n s e s Carriage inward Stores and spare parts Dyes & Chemicals Electric Power, fuel and water Machinery repairs Labour, Processing and machinery hire charges Payment 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 Retrenchment Compensation 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 Provision for Doubtful debts S c h e d u l e ‘ J ’ Interest Fixed Loans Others (Net) 6 4 1 4 . 1 1 1 7 8 . 6 8 1 9 2 . 7 9 1 . 9 2 0 . 0 6 5 . 4 2 0 . 1 1 7 9 . 6 7 0 . 1 1 2 . 2 9 1 9 5 . 2 7 6 1 . 2 3 1 8 . 3 3 5 4 . 7 9 0 . 0 5 3 . 0 3 6 . 0 2 2 . 6 3 –– 1 3 . 7 5 3 . 5 9 1 . 1 0 0 . 5 4 0 . 4 4 0 . 2 5 0 . 3 5 8 . 9 1 –– 1 9 0 . 8 7 87.66 3 2 9 . 6 2 633.12 214.50 203.27 64.78 582.45 647.23 14.11 0.26 31.10 0.32 169.06 0.76 13.00 167.14 16.13 12.22 7.78 0.01 9.62 21.98 4.77 0.10 10.75 2 5 . 4 8 47.23 3.40 5.00 0 75 1.07 0.44 0 35 8.73 7.27 27.01 1125.13 Rs. Lacs 1993 - 94 Rs. 11.53 11.73 23.26 1 5 . 1 8 6 4 8 . 8 1 1994 - 95 Rs. 5 . 8 6 4 . 8 0 1 0 . 6 6 Reliance Industries Limited Schedule ‘K’ N o t e s o n A c c o u n t s 1 . Significant Accounting Policies A . Basis of preparation of Financial Statements i) ii) 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. The Company follows mercantile system of accounting and recognises significant items of income and expenditure on accrual basis. B . Fixed Assets and Depreciation i) ii) Fixed assets are stated at acquisition cost less accumulated depreciation. Depreciation on fixed assets is provided under the straight line method at the rates and in the manner prescribed by Schedule XIV to the Companies Act, 1956. C . I n v e n t o r i e s i) ii) Raw Materials, Stores, Spares, Dyes & Chemicals are valued at cost. Stock-in-process is valued at cost including related overheads. iii) Finished Goods are valued at cost or market value, whichever is lower. Costs includes cost of production and expenses incurred in putting the inventories in their present location and condition. D . S a l e s Sales is net of excise & sales tax collected from customers. E . E m p l o y e e / R e t i r e m e n t B e n e f i t s i) Company’s contributions to Provident Fund, Superannuation Fund and other funds for the year are charged to Profit and Loss Account. ii) Gratuity is charged to Profit and Loss Account on the basis of actuarial valuation. 2 . Figures of the previous year have been regrouped/rearranged wherever necessary. 3 . Auditors’ Remuneration: (a) Audit fees (b) Tax audit fees 1994 - 95 Rs. 0 . 2 5 0 . 1 0 0 . 3 5 Rs. Lacs 1993 - 94 Rs. 0.25 0.10 0.35 4 . The Company has been accounting liability for Excise Duty in respect of finished products lying in factory premises as and when the same are cleared/debonded. Accordingly estimated liability amounting to Rs.4.09 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 profits for the year. 5 . Contingent Liabilities Claims against the Company not acknowledged as debts 6 . Licensed & Installed Capacity As at 3 1 s t M a r c h , 1 9 9 5 1 . 5 0 Rs. Lacs As at 31st March, 1994 6.10 Licensed Capacity Installed Capacity 31.3.95 31.3.94 31.3.95 31.3.94 Spindles N.A. N.A. 11816 23336 7 . Production of finished products meant for sale Blended Yarn 8 . Value of imports on CIF basis 9 . Expenditure in-foreign currency Unit M.T. 1 9 9 4 - 1 9 9 5 1993-1994 2 4 3 –– –– 973 –– –– 6 5 Reliance Industries Limited S c h e d u l e ‘ K ’ ( C o n t d ) 10. Quantitative Information a) Opening stock i) Finished Stock Yarn ii) Stock in process (Yarn) iii) Others b) Closing stock i) ii) Finished stock (Yarn) Stock in process (Yarn) iii) Others c ) Sales Yarn 1176.13 d) Raw Material Consumed Cotton Fibre Viscose 11. Value of Raw Material Consumed Unit Quantity 1994 - 95 1993 - 94 Rs. Lacs Quantity Rs. L a c s M.T. 2 6 2 7 . 7 9 1 5 . 7 8 1 . 0 0 6 9 28.87 M.T. 1 8 2 3 . 0 0 2 6 7 . 7 5 0 . 1 1 72.60 0.88 27.79 15.78 1.00 M.T. 2 5 1 3 1 4 . 4 2 1016 M.T. M.T. M.T. 1 0 4 1 4 2 3 2 5 5 . 2 3 1 1 9 . 3 6 1 6 . 2 8 206 517 319 67.75 377.57 187.80 Rs. Lacs 1994 - 95 % of total Consumption 1993 - 94 Rs. % of total L a c s Consumption Indigenous 1 9 0 . 8 7 1 0 0 . 0 0 633.12 100.00 12. Value of stores, spare parts dyes & chemicals Rs. Lacs 1994 - 95 % of total Consumption 1993 - 94 Rs. % of total L a c s Consumption Indigenous 5 . 5 3 1 0 0 . 0 0 31.42 100.00 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 R.J. Shah Partner Directors H.P. Chaturvedi Partner Bombay Dated: 25th April, 1995 6 6 V.M. Ambani N.M. Sanghavi J.B. Dholakia Reliance Industries Limited Reliance Industrial Investments and Holdings Limited Regd. Office 3rd Floor, Maker Chambers IV, 222, Nariman Point, Bombay - 400 021. 6 7 Reliance Industries Limited Directors’ Report To the Members, Your Directors present the Ninth Annual Report together with the Audited Statement of Accounts for the year ended 31st March, 1995. F i n a n c i a l R e s u l t s Profit before tax Less: Provision for taxation Profit after tax Less: Short provision of tax for the earlier year Add: Balance in Profit & Loss Account Less: a. Transfer to General Reserve b. Proposed Dividend Balance carried forward to Balance Sheet 1994 - 95 6 4 7 . 1 6 6 0 . 0 0 5 8 7 . 1 6 4 . 0 1 5 8 3 . 1 5 1 7 2 . 3 1 7 5 5 . 4 6 6 0 5 . 7 7 1 4 9 . 6 9 Rs. Lacs 1993 - 94 879.03 152.00 727.03 3.34 723.69 0.72 724.41 552.10 172.31 72.70 479.40 6 0 . 0 0 5 4 5 . 7 7 I n c o m e During the year, the Company received dividend income of Rs.535.37 lacs from investments. D i v i d e n d Your Directors are pleased to recommend a dividend of Re.0.37 per share on 14,75,04,400 Equity Shares of Rs.10/- each (subject to deduction of tax at source) for the financial year ended 31st March, 1995 aggregating to Rs. 545.77 lacs. D i r e c t o r s Shri Sandeep Junnarkar was appointed as an Additional Director of the Company on 5.10.1994. He holds office of Director up to the date of the ensuing Annual General Meeting and is eligible for re-appointment. Shri Satish Seth retires by rotation and being eligible offers himself for re appointment Shri Manoj H. Modi resigned from the Board of Directors of the Company on 5.10.1994 The Directors record their appreciation for the valuable services rendered by Shri Manoj H. Modi during his tenure as Director. P e r s o n n e l The Company has not paid any remuneration attracting the provisions of Companies (Particulars of Employees) Rules, 1975 read with Section 217(2A) of the Companies Act, 1956. Hence, no information is required to be appended to this report in this regard. Conservation of Energy, Technology absorption and Foreign Exchange Earnings and Outgo Being an investment company, there are no particulars furnished in this report as required under section 217(1) (e) of the Companies Act,1956, relating to conservation of energy and technology absorption. There was no foreign exchange earnings or outgo during the year. D e p o s i t s 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. Auditors The Auditors of the Company, M/s. Rajendra & Co. and M/s. Chaturvedi & Shah hold office until the conclusion of the ensuing Annual General Meeting and are recommended for reappointment. The Company has received Certificates from these Auditors to the effect that their reappointment, if made, would be within the prescribed limits under Section 224(1-B) of the Companies Act, 1956. For and on behalf of the Board Alok Agarwal Satish Seth Directors Bombay Dated: 25th April, 1995 Sandeep Junnarkar - Bombay Dated: 25th April, 1995 6 8 For and on behalf of the Board Alok Agarwal Satish Seth Directors Sandeep Junnarkar Reliance Industries Limited Auditors’ Report T o The Members of Reliance Industrial Investments and Holdings Limited, We have audited the attached Balance Sheet of RELIANCE INDUSTRIAL INVESTMENTS AND HOLDINGS LIMITED as at 31st March, 1995, and the Profit & Loss Account for the year ended on that date annexed thereto and report that: 1 . As required by the Manufacturing and Other Companies (Auditors’ Report) Order,1988 issued by the Company Law Board in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. 2 . Further to our comments in the Annexure referred to in paragraph 1 above, we report that: (a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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,1995 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 Bombay Dated: 25th April,1995 R a j e s h D . C h a t u r v e d i Partner R . J . S h a h Partner Annexure to Auditors’ Report Referred to in Paragraph 1 of our Report of even date 1 . As the Company had no Fixed Assets during the year, Clauses 4(A)(i) and (ii) of the said Order are not applicable. 2 . Since the Company has not commenced any manufacturing and/or trading activity, items (iii), (iv), (v), (vi), (x), (xi), (xii), (xiv) and (xvi) of the Clause A of paragraph 4 of the aforesaid Order are not applicable. 3 . 4 . 5 . 6 . The Company had received an interest free unsecured loan from the holding Company. It has not taken any other loan, secured or unsecured, from companies, firms and other parties as listed in the register maintained under Section 301 of the Companies Act,1956, or from companies under the same management within the meaning of Section 370(1 B) of the Companies Act,1956. The terms and conditions of the above loan are not, in our opinion, prima facie prejudicial to the 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 (1 B) of the Companies Act,1956. In respect of the loans and advances in the nature of loans given by the Company, parties are generally repaying the principal 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, the Company has not accepted any deposits from the public. 7 . In our opinion the Company has an internal audit system commensurate with its size and the nature of its business. 8 . 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. 9 . According to the information and explanations given to us, no undisputed amounts payable in respect of Income-Tax, Wealth- Tax, Sales-Tax, Excise Duty and Customs Duty were outstanding as at 31st March,1995 for a period of more than six months from the date they became payable. 10. In our opinion and according to the information and explanations given to us, no personal expenses have been charged to revenue account. 11. The Company is not a Sick Industrial Company within the meaning of clause (O) of sub-section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act,1985. 12. Adequate documents and records are maintained by the Company for the loans and advances granted 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, save and except, those in the process of being transferred in its name. For Chaturvedi & Shah Chartered Accountants For Rajendra & Co. Chartered Accountants Bombay Dated: 25th April,1995 R a j e s h D . C h a t u r v e d i Partner R . J . S h a h Partner 6 9 Reliance Industries Limited Balance Sheet as at 31st March, 1995 Sources of Fun ds S h a r e h o l d e r s ’ F u n d s Capital Reserves & Surplus General Reserve As per last Balance Sheet Add: Transferred from Profit and Loss Account Profit and Loss Account Loan Funds Unsecured Loans (From Holding Company) Total Application of Funds Investments ‘ B ’ Current Assets, Loans and Advances Current Assets Sundry Debtors Cash and Bank Balances `C’ Loans and Advances Less: Current Liabilities and Provisions ‘ D ’ Current Liabilities Provisions Schedule 1994 - 95 (Rs. in Lacs) 1993 - 94 Rs. Rs. Rs. Rs. ‘ A ’ 1 4 7 5 0 . 4 4 14750.44 2 6 5 . 1 6 192.46 6 0 . 0 0 3 2 5 . 1 6 1 4 9 . 6 9 72.70 265.16 172.31 4 7 4 . 8 5 437.47 2 8 1 3 0 . 3 5 4 3 3 5 5 . 6 4 31533.00 46720.91 4 2 4 4 2 . 6 4 42310.98 –– 1 1 9 4 . 1 6 1 1 9 4 . 1 6 3 3 1 . 2 9 1 5 2 5 . 4 5 5 . 6 4 6 0 6 . 8 1 6 1 2 . 4 5 1835.26 2982.87 4818.13 256.21 5074.34 31.97 632.44 664.41 Net Current Assets Total 9 1 3 . 0 0 4 3 3 5 5 . 6 4 4409.93 46720.91 Notes on Accounts ‘F’ As per our Report of even date For and on behalf of the Board For Chaturvedi & Shah Chartered Accountants For Rajendra & Co. Chartered Accountants Alok Agarwal Rajesh D. Chaturvedi Partner R.J. Shah Partner Satish Seth Directors Sandeep Junnarkar Bombay Dated: 25th April, 1995 7 0 Profit and Loss Account for the Year ended 31st March, 1995 Schedule 1994 - 95 (Rs. in Lacs) 1993 - 94 Rs. Rs. Rs. Rs. Reliance Industries Limited I n c o m e Dividend Income (Tax deducted at source Rs.132.32 lacs Previous year Rs.118.22 lacs) Interest Received (Tax deducted at source Rs.NIL previous year Rs.32.88 lacs) Commission & Brokerage Profit on Sale of Investments (Net) 5 3 5 . 3 7 478.13 7 4 . 7 3 3 . 8 1 3 8 . 3 2 6 5 2 . 2 3 162.59 –– 317.33 958.05 E x p e n d i t u r e Establishment & Other Expenses ‘ E ’ 5 . 0 7 79.02 Profit before tax 879.03 Less: Provision for taxation Profit after tax Less: Short provision of tax for the earlier year Add: Balance brought forward from last year Amount available for appropriation Appropriations General Reserve Proposed Dividend (Subject to Tax) B a l a n c e c a r r i e d t o B a l a n c e S h e e t Notes on Accounts ‘F’ 6 4 7 . 1 6 72.70 479.40 6 0 . 0 0 5 8 7 . 1 6 4 . 0 1 5 8 3 . 1 5 1 7 2 . 3 1 7 5 5 . 4 6 6 0 5 . 7 7 1 4 9 . 6 9 152.00 727.03 3.34 723.69 0.72 724.41 552.10 172.31 6 0 . 0 0 5 4 5 . 7 7 As per our Report of even date For and on behalf of the Board For Chaturvedi & Shah Chartered Accountants For Rajendra & Co. Chartered Accountants Alok Agarwal Rajesh D. Chaturvedi Partner R.J. Shah Partner Bombay Dated: 25th April, 1995 Satish Seth Directors Sandeep Junnarkar 7 1 Reliance Industries Limited Schedules forming part of the Balance Sheet Schedule ‘C’ 31st March, 1994 S h a r e C a p i t a l Authorised 149990000 10000 Equity Shares of Rs.10/- each 11 % Non-Cumulative Redeemable Preference Shares of Rs.10/- each Issued & Subscribed 147504400 Equity Shares of Rs.10/- each fully paid up (held by Reliance Industries Limited, the holding Company) S c h e d u l e ‘ B ’ (Rs. Lacs) Investments (Valued, Verified & Certified by Management) ( A ) Q u o t e d Equity Shares - Fully Paid-up 13067712 Larsen & Toubro Ltd. of Rs.10/- each 882370 Kothari Sugars and Chemicals Ltd. of Rs.10/- each * 95796000 Reliance Petroleum Ltd. of Rs.10/- each 17800 Nirma Ltd. of Rs.10/- each 34500 Global Trust Bank Ltd. of Rs.10/- each (––) De b ent ur es - Par tly Paid-up –– (235400) 16% Secured Optionally fully Convertible Debentures of Reliance Polypropylene Ltd. of Rs.50/- each –– (183600) 16 % Secured Optionally fully Convertible Debentures of Reliance Polyetheylene Ltd. of Rs.50/- each As at Rs. 1 4 9 9 9 . 0 0 1 . 0 0 1 5 0 0 0 . 0 0 (Rs. in Lacs) As at 31st March,1995 Rs. 14999.00 1.00 15000.00 1 4 7 5 0 . 4 4 14750.44 1 4 7 5 0 . 4 4 14750.44 As at 3 1 s t M a r c h , 1 9 9 5 R s . As at 31st March,1994 Rs. 1 3 1 3 9 . 7 2 3 3 7 . 3 0 9 5 7 9 . 6 0 1 9 . 5 8 3 . 4 5 –– –– 13139.72 337.30 9579.60 19.58 –– 40.02 31.21 * 95796000 Secured Tripal Option Convertible Debentures (TOCDS) of Reliance Petroleum Ltd. of Rs.50/- each 9 5 7 9 . 6 0 9579.60 (B) Unquoted Equity Shares - Fully Paid-up 22900 Observer (India) Ltd. of Rs.10/- each (26400) (C ) S har e Application Money Pending Adjustment towards Shares/TOCDS of Reliance Petroleum Ltd. HDFC Bank Ltd. 2000000 Equity Shares of Rs.10/- each Quoted Investments - Book Value Market Value 3 . 7 9 4.35 9 5 7 9 . 6 0 9579.60 2 0 0 . 0 0 4 2 4 4 2 . 6 4 3 2 6 5 9 . 2 5 8 6 7 8 0 . 1 0 –– 42310.98 32707.45 59316.65 *The Company’s investment in Reliance Petroleum Ltd. is towards promoters contribution . This is subject to lock in period of five years from the date of commercial production, that is till 30th June, 2001. 7 2 Schedules forming part of the Balance Sheet Schedule ‘C’ Current Assets, Loans and Advances Current Assets Sundry Debtors (Unsecured, considered good subject to confirmation) Over six months Others Cash and Bank Balances: Cash on hand Balance with a Scheduled Bank: In Current Account In Fixed Deposit Account Loans and Advances Advances recoverable in cash or in kind or for value to be received Deposit Advance Payment of Taxes # Utilised to acquire stockinvest instrument. Schedule ‘D’ Current Liabilities and Provisions Current Liabilities Sundry Creditors Other Liabilities Provisions For Taxation Proposed Dividend Reliance Industries Limited As at 31st March,1995 Rs. Rs. (Rs. in Lacs) As at 31st March, 1994 Rs. Rs. –– –– 0 . 0 7 1 1 9 4 . 0 9 –– 3 5 . 6 7 1 0 0 . 0 0 1 9 5 . 6 2 36.05 1799.21 –– 1835.26 0.01 375.18 2607.68 #-------------- 1 1 9 4 . 1 6 2982.87 41.81 –– 214.40 3 3 1 . 2 9 1 5 2 5 . 4 5 256.21 5074.34 As at 31st March,1995 Rs. Rs. (Rs. in Lacs) As at 31st March, 1994 Rs. Rs. –– 5 . 6 4 6 1 . 0 4 5 4 5 . 7 7 2.46 29.51 5 . 6 4 31.97 153.04 479.40 6 0 6 . 8 1 6 1 2 . 4 5 632.44 664.41 7 3 Reliance Industries Limited Schedule Forming part of the Profit & Loss Account Schedule ‘E’ Establishment & other Expenses Salary, Wages and Bonus Legal & Professional Charges Filing Fees Miscellaneous Expenses: Interest Tax Brokerage Paid Other Administrative Expenses Auditors’ Remuneration: Audit Fees Tax Audit Fees S c h e d u l e ‘ F ’ N o t e s o n A c c o u n t s 1 . Basis of Preparation of Financial Statements As at 31st March,1995 Rs. Rs. (Rs. in Lacs) As at 31st March, 1994 Rs. Rs. –– 0 . 0 6 2 . 2 2 1 . 0 0 0 - 5 0 1 . 2 8 –– 0 . 0 1 2 . 2 8 1 . 5 0 5 . 0 7 0.75 1.24 75.01 0.52 1.50 79.02 0.05 –– 0.47 1.00 0.50 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. b) Investments are stated at cost. 2 . Previous year’s figures have been regrouped and/or rearranged wherever necessary. 3 . Contingent Liabilities As at 3 1 s t M a r c h , 1 9 9 5 R s . L a c s Uncalled liabilities on partly paid shares/debentures 2 8 7 3 8 . 8 0 As at 31st March,1994 Rs. Lacs 28843.55 4 . As the Company is not a manufacturing company, information required under paragraphs 3 and 4 of Schedule Vl of the Companies Act,1956 is not given. As per our Report of even date For and on behalf of the Board For Chaturvedi & Shah Chartered Accountants For Rajendra & Co. Chartered Accountants Alok Agarwal Rajesh D. Chaturvedi Partner R.J. Shah Partner Satish Seth Directors Sandeep Junnarkar Bombay Dated: 25th April, 1995 7 4 Reliance Petroproducts Limited Regd. Office: 201/202, Lalita Complex, Near Vijaya Bank, 352/3, Rasala Road, Navrangpura, Ahmedabad 380 009. Reliance Industries Limited 7 5 Reliance Industries Limited Directors’ Report To the Members Your Directors present the Fifth Annual Report together with the Audited Statement of Accounts for the Financial Year ended 31st March, 1995. F i n a n c i a l R e s u l t s The Company made a profit of Rs.0.21 lac during the year under review as against loss of Rs.0.12 lac for the previous year. D i v i d e n d In view of the accumulated losses of previous years, the Board of Directors has not recommended any dividend for the financial year under review. D i r e c t o r s As per the provisions of the Companies Act, 1956, Shri J.S. Bakshi retires by rotation and being eligible offers himself for re- appointment. D e p o s i t The Company has not accepted any deposit from the public. Hence, no information is required to be appended to this report. P e r s o n n e l The Company has not paid any remuneration attracting the provisions of the Companies (Particulars of Employees) Rules, 1975 read with Section 21 7(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 conservation of energy, technology absorption and foreign exchange earnings and outgo. Auditors The Auditors of the Company, M/s. Rajendra & Co. and M/s. Chaturvedi & Shah, hold office until the conclusion of the ensuing Annual General Meeting and are recommended for reappointment. The Company has received certificate from the Auditors to the effect that their reappointment, if made, would be within the prescribed limits under Section 224(1-B) of the Companies Act,1956 Bombay Dated: 25th April, 1995 For and on behalf of the Board J . S . B a k s h i K . K . S e t h Directors 7 6 Reliance Industries Limited Auditors’ Report T o The Members of Reliance Petroproducts Limited We have audited the attached Balance Sheet of Reliance Petroproducts Limited as at 31st March,1995 and the Profit & Loss Account for the year ended on that date annexed thereto and report that: 1 . As required by the Manufacturing and Other Companies (Auditors’ Report) Order,1988, issued by the Company Law Board in terms of Section 227(4A) of the Companies Act,1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. 2 . Further to our comments in the Annexure referred to in paragraph 1 above, we report that: a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit. b) c ) d) In our opinions proper books of account as required by law have been kept by the Company so far as appears from our examination of such books. The Balance Sheet and Profit and Loss Account referred to in this Report are in agreement with the books of account. 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 1995, 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 Bombay Dated: 25th April,1995 D e v a n a n d C h a t u r v e d i Partner R . J . S h a h Partner Annexure to Auditors’ Report Referred to in Paragraph 1 of our Report of even date 1 . As the Company had no Fixed Assets during the year, clauses 4(A)(i) and (ii) of the said Order are not applicable. 2 . Since the Company has not commenced any manufacturing and/or trading activity, items (iii), (iv), (v), (vi), (x), (xi), (xii), (xiv) and (xvi) of the clause A of paragraph 4 of the aforesaid Order are not applicable. 3 . 4 . 5 . 6 . The Company has received 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(1 B) of the Companies Act,1956. The terms and conditions of the above loan are not, in our opinion, prima facie prejudicial to the interests of the Company. 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 Section-j-(1 B) of Section 370 of the Companies Act,1956. In respect of loans and advances in the nature of loans given by the Company, free of interest, parties are generally repaying the principal amounts as stipulated. 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. 7 . According to the information and explanations given to us and in our opinion, internal audit is not required statutorily. 8 . 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. 9 . According to the information and explanations given to us, no undisputed amounts payable in respect of Income-tax, Wealth- tax, Sales-tax, Excise Duty and Customs Duty were outstanding as at 31st March,1995 for a period of more than six months from the date they became payable. 10. In our opinion and according to the information and explanations given to us, no personal expenses have been charged to revenue account. 11. The Company is not a Sick Industrial Company within the meaning of clause (o) of sub-section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act,1985. Bombay Dated: 25th April,1995 D e v a n a n d C h a t u r v e d i Partner R . J . S h a h Partner For Chaturvedi & Shah Chartered Accountants For Rajendra & Co. Chartered Accountants 7 7 Reliance Industries Limited Balance Sheet as at 31st March, 1995 Schedule As at 31st March,1995 Rs. Rs. (Rs. in Lacs) As at 31st March, 1994 Rs. Rs. Sources of Funds S h a r e h o l d e r s ’ F u n d s Share Capital Loan Funds Unsecured Loans ‘ A ’ 0 . 1 3 3 0 4 5 7 . 6 0 (From Holding Company) Totalgggggggggggggggg 3 0 4 5 7 . 7 3 Application of Funds Current Assets, Loans and Advances ‘ B ’ Cash and Bank Balances Loans & Advances Less: Current Liabilities and Provisions ‘C’ Liabilities Provisions M i s c e l l a n e o u s E x p e n d i t u r e (To the extent not written off or adjusted) Profit and Loss Account 0 . 8 0 3 0 4 5 7 . 0 4 3 0 4 5 7 . 8 4 0 . 1 0 0 . 1 4 0 . 2 4 0.08 –– 0.08 0.20 –– 0.20 3 0 4 5 7 . 6 0 0 . 0 3 0 . 1 0 Notes on Accounts: ‘ D ’ Totalaaaaaaaaa 3 0 4 5 7 . 7 3 0.13 0.10 0.23 (0.12) 0.04 0.31 0.23 As per our Report of even date For and on behalf of the Board For Chaturvedi & Shah Chartered Accountants For Rajendra & Co. Chartered Accountants Devanand Chaturvedi Partner R.J. Shah Partner J.S. Bakshi K.K. Sheth Directors Bombay Dated: 25th April, 1995 7 8 Reliance Industries Limited Profit and Loss Account for the year ended 31st March, 1995 Schedule As at 31st March,1995 Rs. Rs. (Rs. in Lacs) As at 31st March, 1994 Rs. Rs. I n c o m e Commission E x p e n d i t u r e Audit Fees General Expenses Miscellaneous Expenditure written off Profit before tax/(Loss) Less: Provision for taxation Profit after tax/(Loss) Add: Balance brought forward from the last year Balance carried to Balance Sheet Notes on Accounts: ‘ D ’ 0 . 4 6 –– 0 . 4 6 –– 0 . 1 0 –– 0 . 0 1 0.10 0.01 0.01 0 . 1 1 0 . 3 5 0 . 1 4 0 . 2 1 ( 0 . 3 1 ) ( 0 . 1 0 ) 0.12 (0.12) –– (0.12) (0.19) (0 31) As per our Report of even date For and on behalf of the Board For Chaturvedi & Shah Chartered Accountants For Rajendra & Co. Chartered Accountants Devanand Chaturvedi Partner R.J. Shah Partner Bombay Dated: 25th April, 1995 J.S. Bakshi K.K. Sheth Directors 7 9 Reliance Industries Limited Schedules forming part of the Balance Sheet Schedule ‘A’ S h a r e C a p i t a l Authorised: 50,000 Equity Shares of Rs.10/- each Issued & Subscribed: 1,300 Equity Shares of Rs.10/- each fully paid up (held by Reliance Industries Limited, the Holding Company) Schedule ‘B’ Current Assets C a s h a n d B a n k B a l a n c e s Balance with a Scheduled Bank In Current Account Loans and Advances Unsecured - (Considered Good) As at 31st March,1995 Rs. (Rs. in Lacs) As at 31st March, 1994 Rs. 5 . 0 0 0 . 1 3 0 . 1 3 5.00 0.13 0.13 As at 31st March,1995 Rs. Rs. (Rs. in Lacs) As at 31st March, 1994 Rs. Rs. 0 . 8 0 0.08 Advances recoverable in cash or in kind or for value to be received Deposits 2 8 9 5 5 . 0 0 1 5 0 2 . 0 4 –– –– Schedule ‘C’ Current Liabilities and Provisions Current Liabilities Sundry Creditors Provisions Provision for taxation S c h e d u l e ‘ D ’ N o t e s o n A c c o u n t s 3 0 4 5 7 . 0 4 3 0 4 5 7 . 8 4 –– 0.08 As at 31st March,1995 Rs. Rs. (Rs. in Lacs) As at 31st March, 1994 Rs. Rs. 0 . 1 0 0 . 1 4 0.20 –– 0 . 2 4 0 . 2 4 0.20 0.20 1) As no Manufacturing and/or Trading activities were carried out during the year, information required under paragraphs 3 and 4 ofSchedule Vl of the Companies Act, 1956 are not applicable. 2) Figures of the previous year have been regrouped/rearranged wherever necessary. 3) Basis of Preparation of Financial Statements: a) b) The financial statements have been prepared under the historical cost conventions, in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956 as adopted consistently by the Company. The Company follows mercantile system of accounting and recognises significant items of income and expenditure 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 Devanand Chaturvedi Partner R.J. Shah Partner Bombay Dated: 25th April, 1995 8 0 J.S. Bakshi K.K. Sheth Directors Reliance Industries Limited 8 1 Reliance Industries Limited Where growth is a way of life Reliance Industries Ltd. Maker Chambers IV, Nariman Point, Bombay - 400 021. Fax 022-2042268 Reliance Industries. Ltd. Meridien Commercial Tower, 5th Floor, Windsor Place, Janpath, New Delhi 110 001. Fax: 011 -3714295 Reliance Europe Ltd. Bastion House, London Wall, London EC 2Y 5 DN. Fax: 44-171-600-1757 

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