Reliance Industries Limited
Annual Report 1996

Plain-text annual report

Reliance Industries Limited Annual Report 1995-96 92 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Sales - Rs. 7,786 crores (US$ 2,267 million) Operating Profit (EBDIT) - Rs.1,752 crores (US$ 510 million) Cash Profit (EBDT) - Rs.1,642 crores (US$ 478 million) Net Profit - Rs.1,305 crores (US$ 380 million) Total Assets - Rs.15,038 crores (US$ 4,378 million) Over 2.6 million shareholders Compounded Annual Net Profit growth over 5 years - 60% Compounded Annual Earnings Per Share growth over 5 years - 28% India’s largest shareholder family India’s largest private sector enterprise Board of Directors Dhirubhai H. Ambani Chairman Mukesh D. Ambani Vice Chairman & Managing Director Anil D. Ambani Managing Director Nikhil R. Meswani Executive Director Hital R. Meswani Executive Director Suresh S. Betrabet Nominee Director - ICICI Yashwant D. Patil Nominee Director - GIC Ramniklal H. Ambani Natvarlal H. Ambani Mansingh L. Bhakta T. Ramesh U. Pai Yogendra P. Trivedi Vinod M. Ambani Secretary Solicitors & Advocates Kanga & Co. Auditors Chaturvedi & Shah Rajendra & Co. Bankers ABN AMRO Bank Allahabad Bank Amer ican Express Bank Bank of America Bank of Baroda Canara Bank Central Bank of India Citi Bank N.A. Deutsche Bank HDFC Bank Ltd. Hongkong Bank Indian Bank Oriental Bank of Commerce Punjab National Bank State Bank of India Syndicate Bank Vijaya Bank Registered Office 3rd Floor, Maker Chambers IV, 222, Nariman Point, Mumbai 400 021, India. Tel. Nos. 2831633/2816,2826070 Fax No. 022-2042268 E-Mail: investor@ril.com Internet: http://www.ril.com Manufacturing Facilities 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 P.O., Surat-Hazira Road, Surat 394 510, Gujarat State, India. Subsidiary Companies 1. Devti Fabrics Limited 3rd Floor, Maker Chambers IV, 222, Nariman Point, Mumbai 400 021, India. 2. Reliance Industrial Investments and Holdings Limited 3rd Floor, Maker Chambers IV, 222, Nariman Point, Mumbai 400 021, India. Registrars & Transfer Agent Reliance Consultancy Services Limited 56, Mogra Village Lane, Off. Old Nagardas Road, Andheri (East), Mumbai 400 069, India. Tel. Nos. 8367015/16/17/18 Fax No. 022-8367019 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Contents Letter to Shareholders Investor Care Consistent Performance Business Mix Financial Highlights Key Indicators India’s Largest Selling Brands Marketing Network Markets Review of Operations Fibres Business Fibre Intermediates Business Polymers Business Chemicals Business Textiles Business Oil & Gas Business Projects and Expansions Hazira Petrochemicals Complex Jamnagar Petrochemicals Complex Environment, Health & Safety Quality Research and Development Energy Conservation Foreign Exchange Savings & Taxes Paid Employment Social Responsibility & Community Development New Growth Areas Reliance Petroleum Reliance Telecom Product Flow Chart 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 Cash Flow Statement Documents of Subsidiary Companies Listing & Investor Relations Information Page No. 5 7 8 9 10 11 12 14 15 16 17 18 19 20 21 22 26 28 30 31 32 33 34 35 36 37 39 41 43 46 48 49 50 62 67 68 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Dhirubhai H. Ambani Chairman Mukesh D. Ambani Vice Chair man & Managing Director Anil D. Ambani Managing Director 4 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Letter to Shareholders Financial Performance rate a company higher than the country in which I am pleased to repor t to the shareholders of the company is domiciled. The leading Indian Reliance Industries Limited that the company has rating agency, Credit Rating and Info rmation posted excellent results for the financial year ended Services India Limited (CRISIL), S & P’s Indian March 31,1996. Some of the key numbers are as shown in associate, assigned Reliance’s long term credit the table below: Sales “AAA” rating,designating “Highest Safety”. Rs. 7,786 crores US$ 2,267 million + 11 % T h e s e r a t i n g s e n a bl e d R e l i a n c e t o ra i s e U S $ 3 0 0 m i l l i o n ( R s. 1 , 0 3 0 c r o r e s ) i n t h e Operating Profit Rs. 1,752 crores US$ 510 million + 8 % Cash Profit Net Profit Taxes paid Rs. 1,642 crores US$ 478 million Rs. 1,305 crores US$ 380 million Rs. 2,234 crores US$ 650 million + 22 % + 23 % i n t e r n a t i o n a l d e b t m a r ke t i n t wo l a n d m a r k transactions in 1995. Reliance became the first I n d i a n p r i va t e s e c t o r c o m p a ny t o r a i s e US$ 150 million (Rs. 515 crores) as a 7 year + 4 % syndicated bullet loan at a floating rate of LIBOR Earnings per share Rs. 27.9 + 19 % plus 1%, and to issue 10 year bonds of US$ 150 million US 81 cents (Rs. 515 crores) in the US mar ket, without any Net Worth Rs. 8,405 crores US$ 2,447 million + 17 % guarantee or security from banks, financial institutions or the government. Landmark Transactions These transactions assisted Reliance in reducing During the year, Reliance became the first private the overall cost of capital at a time when money sector company in India to be rated by international market conditions in India were stringent. These credit rating agencies. Three US based international transactions were also consistent with the conservative rating agencies, i.e. Standard and Poor’s (S&P), financial policy adopted by the company. M o o d y ’s and T h e N a t i o n a l A s s o c i a t i o n o f T h e i nve s t m e n t gr a d e ra t i n g s o b t a i n e d f r o m Insurance Commissioners (NAIC) rated Reliance during international rating agencies continue to provide the year. S & P rated Reliance “BB+, Stable Outlook, c o m fo r t t o l e n d e r s v i s - a - v i s R e l i a n c e ’s constrained by the Sovereign Ceiling”, Moody’s rated creditwor thiness. “Baa3, Investment Grade, constrained by the Capital Expenditure So ve r e i g n C e i l i n g ” a n d N A I C rated “ N A I C 2 , Reliance continues to enhance the long term net I nve s t m e n t G r a d e ” , i n t h e b a ck g r o u n d t h a t worth of shareholders, through its basic strategy of international rating agencies generally do not creating productive assets. In less than 20 years, In less than 20 years, Reliance has created a world-class asset base of over Rs.15,000 crores (US$ 4,367 million). R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 5 Letter to Shareholders Reliance has created a world-class asset base Reliance believes that its chosen strategies will which is stated in the balance sheet at ove r continue to reward shareholders, in the challenging Rs. 15,000 crores (US$ 4,367 million). Significant environment likely to emerge for Indian industry additions w ere made to the asset base during in the years ahead. Reliance will: 1995-96, with capital expenditure for the year l avail opportunities in a growing domestic market; standing at Rs. 2,984 crores (US$ 869 million). l remain technologically world-class; Cumulative capital expenditure for the past two years l maintain leading market positions; amounts to Rs. 6,242 crores (US$ 1,817 million), l maintain global cost competitiveness; among the highest in Indian industry. Several plants l build production capacity ahead of demand where a of global scale, capable of delivering world-class potential for strong demand growth is evident; quality and value, are being commissioned in the l focus on conservative financial management. current year. Quality Maximisation of shareholder value by customer value enhancement will be the key driving force. Reliance Following last year’s ISO cer tification of the will continue to create and enhance value for Patalganga manu facturing complex, Reliance customers by producing quality products which can r e c e i ve d I S O 9 0 0 2 c e r t i f i c a t i o n f o r a l l i t s be benchmarked against international standards manufacturing as well as utility plants at the Hazira Reliance views the future with great optimism and complex. The ISO standard assures customers of an is confident of further enhancing its role efficient and reliable quality management system. as a unique value creator for all its Putting customers first is the underlying philosophy stakeholders. at work behind efforts at quality improvement Growth and Outlook Reliance will emerge as a petrochemicals company of truly global size and scale upon completion of the current expansion at Hazira. For the future, while remaining focussed on its core petrochemicals bu s i n e s s , R e l i a n c e i s a l s o p u r s u i n g ex c i t i n g opportunities in the other fast growing infrastructural sectors of Oil & Gas, Power and Telecom. May 27,1996 Dhirubhai H. Ambani Chairman Reliance Industries Limited Maximisation of shareholder value by customer value enhancement will continue to be the driving force for Reliance. 6 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Investor Care Reliance is pr ivileged to enjoy the t o a d d r e s s t h e n e e d s o f i t s suppor t of over 2.6 million domestic shareholders. During the year, a new and inter national investors, the largest Investor Relations Centre was opened shareholder family in the Indian in a c e n t r a l l o c a t i o n i n M u m b a i cor porate sector. An overwhelming (a complete list of such centres In the future, Reliance is committed to being among the first to opt into a depositor y based mechanism as s o o n a s t h e s a m e b e c o m e s operational, as it is the introduction of paper-less trading alone that can major ity of these investors are appears on the inside back cover of provide a lasting solution to the individual and small shareholders, this Annual Report). shor tcomings of the existing system. who together own almost 40% of the company’s equity. Reliance will maintain an emphasis I t i s a m a t t e r o f g r e a t p r i d e t o on timely resolution of investors’ Reliance has always taken the lead in queries and the strengthening of an reaching out to its investors . The active investor grievance mechanism, compan y oper ates 15 Investor to reinforce the strong bonds between R e l i a n c e t h a t t h e c o m p o u n d e d a n nu a l i s e d r a t e o f r e t u r n o n a n investment made in its shares in 1977 is currently over 25%. Reliance will persevere with its effor ts to maximise Relations Centres across the countr y the company and its shareholders. shareholders’ wealth at all times. Our Shareholders 19% 26% 12% 3% Promoters Banks Indian Financial Ins titutions 40% Public International Investors Reliance is privileg ed to enjoy the suppor t of over 2.6 million domestic and international Investors. R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 7 R e l i a n c e h a s d e m o n s t r a t e d consistent perfor mance in growth and profitability over the years. This i s c l e a r l y i n d i c a t e d b y t h e compounded annual rate of growth unique perfor mance. ( C A R G ) i n s a l e s a n d n e t p r o f i t Consistent Performance over the last 12, 5 and 3 y ears. CARG % Efficient management of resources 12 years 5 years 3 years has largely been responsible for this Sales Net Profit 24 29 30 60 24 60 Performance in the Post T h e t i m e - s p a n f r o m 1 9 9 1 - 9 2 t o has demonstrated that it has the Reforms-Liberalisation Era 1995-96 is histor ically significant as resources to meet the challenges of Reliance has performed significantly for the first time since independence, c o m p e t i t i o n . A s s e t s, s a l e s a n d better in the period after economic Indian industr y was forced to face p r o f i t s d u r i n g t h e p o s t r e fo r m s reforms started in India in July, 1991. international competition. Reliance period have grown faster. Post Reforms Performance 1991-92 1995-96 CARG Rs. in crs US$ in million Rs. in crs US$ in million Net Worth Sales EBDIT Cash Profit Net Profit EPS CEPS 1,944 2,953 585 356 163 Rs. 7 Rs. 16 566 860 170 104 48 21 cents 46 cents 8,405 7,786 1,752 1,642 1,305 Rs. 28 Rs. 35 2,447 2,267 510 478 380 81 cents US$ 1.02 % 44 27 32 47 68 40 22 Reliance has demonstrated consistent performance in growth and profitability over the years, even in the post reforms era. 8 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Business Mix Business Mix 9% 1% 33% 24% 5% 28% Polyes ter Textiles Chemicals Fibre Intermidiates Plas tics Oil & Gas Distribution of Income 4% 1% 4% 3% 2% 16% 19% 51% Manufacturing Expens es Excis e Duty Em ployee Cos t Sales Expenses Adm inis trative Expens es Interest Depreciation Profit R e l i a n c e I n d u s t r i e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 9 9 Financial Highlights 1995-’96 ’94-’95 ’93-’94 ’92-’93 ’91 -’92 ’90-’91 ’89-’90 1985 1980 Rs. in crores US $ millions Rs. in crores Sales 2,267 7,786 7,019 5,345 4,106 2,953 2,098 1,841 733 208 Total Income 2,346 8,058 7,331 5,555 4,222 3,005 2,106 1,857 744 212 Earnings Before Depreciation, Interest & Tax (EBDIT) Depreciation Profit After Tax Taxes Paid to the Govt. Equity Dividend % Dividend Payout Equity Share Capital 510 98 380 650 60 80 133 1,752 1,622 1,159 929 337 278 255 1,305 1,065 576 280 322 2,234 2,147 1,391 1,118 60 276 458 55 199 456 51 138 318 35 85 585 193 163 984 30 48 488 174 126 826 30 46 246 227 152 Reserves and Surplus 2,255 7,747 6,731 4,011 2,362 1,711 996 425 162 91 698 30 46 152 929 Net Worth 2,447 8,405 7,193 4,335 2,613 1,944 1,154 1,087 Gross Fixed Assets 3,311 11,374 8,390 5,132 4,641 4,314 2,186 1,999 139 37 71 373 50 25 52 254 311 736 Net Fixed Assets 2,688 9,233 6,585 3,600 3,368 3,338 1,483 1,469 607 31 7 11 74 25 3 12 19 32 75 58 Total Assets 4,378 15,038 11,529 8,121 6,083 4,880 2,712 2,553 1,046 153 Market Capitalisation 2,848 9,783 12,027 10,718 4,388 6,656 1,826 997 906 78 Number of Employees ---- 14,255 12,560 11,873 11,944 11,940 11,666 11,355 9,066 6,646 1 US$ = Rs. 34 35 (Exchange rate as on 31 3.1996) Rs. In Crores 8000 Total Income Rs. in crores Profits 6000 4000 2000 0 2000 1600 1200 800 400 0 91-92 92-93 93-94 94-95 95-96 91-92 92-93 93-94 94-95 95-96 PAT EBDIT Net Worth Rs. in crores 8000 6000 4000 2000 0 91- 92 92- 93 93- 94 94- 95 95- 96 10 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Key Indicators 1995-’96 ’94 ’95 ’93-’94 ’92-’93 ’91-’92 ’90-’91 ’89-’90 1985 1980 Figures in Rupees US $ Rs. Earnings Per Share-EPS Cash Earnings Per Share-CEPS Book Value Debt: Equity Ratio Operating Profit Margin % Net Profit Margin % Return on Net Worth %* 0.81 1.02 5.2 ---- ---- ---- ---- US$ = Rs.34.35 (Exchange rate as on 31.3.1996) Excluding CWIP 27.9 23.4 18.1 13.1 7.2 8.3 6.9 13.8 9.3 35.2 29.5 26.1 24.5 15.7 19.7 16.6 21.1 15.0 179 158 136 106 85 75 71 59 26 0.49:1 0.35:1 0.58:1 0.84:1 0.92:1 0.61:1 0.55:1 1.66:1 1.15:1 22.5 23.1 21.7 22.6 19.8 23.3 23.1 19.0 14.9 16.8 15.2 10.8 7.8 5.5 6.0 25.3 23.7 18.2 20.7 17.1 12.2 4.9 9.0 9.7 5.3 30.6 40.0 R s . in crores Assets CEPS & EPS Rs. in crores Book Value 12000 8000 4000 0 Rs. in crores 40 30 20 10 0 95- 96 200 160 120 80 40 0 91- 92 92- 93 93- 94 Gross Fixed Assets 94- 95 Net Fixed Assets 91-92 92-93 93-94 94-95 95-96 91-92 92-93 93-94 94-95 95-96 EPS CEPS R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 11 India’s Largest Selling Brands Business Beand Product Market Share No. of Other (% Share in Production) Players in the Industry Polyester Recron Texturised Yarn 38 29 51 42 38 55 49 10 23 2 6 2 3 4 Twisted/Dyed Yarn Polyester Staple Fibre (PSF) Polyester Filament Yarn (PFY) Polymers Relene High Density Polyethylene (HDPE) Reclair Linear Low Density Polyethylene (LLDPE) Reon Polyvinyl Chloride (PVC) Chemicals Relab Linear Alkyl Benzene (LAB) Fibre Intermediates Purified Terephthalic Acid (PTA) Mono Ethylene Glycol (MEG) Textiles Vimal Suitings, Shirtings, Dress material, Sarees Harmony Fur nishing fabrics, Day cur tains, Automotive upholstery SlumbeRel Fibre filled pillows and sleep products Oil & Gas Cr ude Oil & Natural Gas (Note: Given the highly fragmented structure of the textiles industr y, the market share in case of Textiles - Vimal, Harmony, SlumbeRel is difficult to work out. However, the share of these brands in the market controlled by top 5 premium brands is around 36%) 12 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 India’s Largest Selling Brands Nearest Brand Logo End Uses Technology Partner Competitor’s Market Share 13 8 35 21 38 30 27 Apparels, Home textiles, E.l. DuPont, USA Industrial sewing threads, Automotive Packaging - woven sacks, Novacor, Canada films, containers; (earlier DuPont, Canada) Household - luggage, bathware, kitchenware; Industrial - crates, pallets, gas pipes, ropes; Agriculture - water pipes Packaging - films, squeeze bottles; Household - lid and caps, water tanks; Industrial - storage containers, liners, cable sheathing; Agriculture - drip irrigation Pipes & fittings, profiles, Geon Company, USA films & sheets, bottles, (earlier B.F. Goodrich, USA) containers, wire & cables Detergents UOP, USA Raw material - polyester ICI, UK Raw material - polyester ABB Lummus Crest, Netherlands (Shell Process) Apparels Fur nishings, home textiles Sleep products E.l. DuPont, USA Refining Power, Fertilizers and Petrochemicals Enron Oil & Gas, USA R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 13 Marketing Network The extensive marketing network consists of over 500 distributors, 2,500 showrooms and 34,000 retail outlets. The customer base includes 25,000 industrial customers in addition to the retail markets throughout India. 14 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Markets Domestic and International India’s largest selling brands in their and Polyester chips to China. Reliance has one of the largest categories. mar keting networ ks in the Indian Reliance intends to maintain its i n d u s t r y, c o ve r i n g o ve r 5 0 0 focus on development of domestic d i s t r i b u t o r s , a n d 3 4 , 0 0 0 markets, but will tap expor t markets independently owned retail outlets as oppor tunities arise . Effor ts are for its branded textiles. Reliance’s now focussed on expor t of PVC to b r a n d s a r e a l l m a r k e t l e a d e r s. Australia, Philippines, and Thailand; The customer base includes over W orsted Ya r n t o t h e U n i t e d 2 5 , 0 0 0 i n d u s t r i a l c u s t o m e r s i n K i n g d o m ; D i E t hy l e n e G l y c o l Reliance has won the ‘Top Expor ter of Plastic Raw Material’ award from the Plastics and Linoleum Expor t Promotion Council for the second consecutive year. Another highlight of the year was a 3 0 0 % i n c r e a s e i n t h e ex p o r t o f premium brand ‘Vimal’ fabr ics. addition to retail mar kets all over (DEG), Tr i Ethylene Glycol (TEG) Global cost competitiveness and I n d i a . T h i s ex t e n s i v e r e a c h h a s and Te x t i l e s t o S o u t h A f r i c a , c u s t o m e r fo c u s a r e t h e k e y t o e n a b l e d R e l i a n c e t o c r e a t e C h i n a , a n d t h e N e t h e r l a n d s success in expor t promotion. Reliance intends to maintain its focus on development of domestic markets but will tap expor t markets as opportunities arise. R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 15 Review of Operations Fibres Business i t s s h a r e i n t o t a l d o m e s t i c per annu m b y 1997-98. Wo r k a t Polyester Staple Fibre (PSF) p r o d u c t i o n t o 3 8 % . R e l i a n c e Hazira is fast nearing completion Reliance’s polyester staple fibre maintained production dur ing the division has fur ther consolidated its year at about 90,000 MT, inspite of position in the domestic mar ke t the shut down taken at Patalganga t h r o u g h s p e c i a l e m p h a s i s o n and Terene Fibres India Ltd (TFIL) - improving operational efficiencies. whose total capacity is dedicated to I n n o v a t i ve p r o m o t i o n a l e f f o r t s Reliance - for debottlenecking and helped in g r owth of the existing modernisation. TFIL’s plant at Thane mar ket and development of new has been modernised to world-class and pre-commissioning activities a r e u n d e r w a y t o ex p a n d P S F capacity by commissioning two new plants of 80,000 tonnes per annum e a c h . T h r e e m a n u f a c t u r i n g complexes will ensure uninterrupted supply of the widest PSF product m a r k e t s e g m e n t s , t h e r e b y standards. This plant is now also range in the countr y. s u b s t a n t i a l l y i n c r e a s i n g t h e producing high quality Dope Dyed customer base. Consistent quality Blac k PSF which has been we l l a n d t o p c l a s s c u s t o m e r s e r v i c e received by customers in India and helped in establishing Reliance even overseas. Reliance, along with TFIL, more fir mly as the most “Preferred w i l l b e i n c r e a s i n g c a p a c i t y t o Supplier” and resulted in increasing 260,000 tonnes P S F 38% 62% Reliance's share in domestic production Other production Polyester Filament Yarn (PFY) I n l i n e w i t h t h e l a t e s t g l o b a l trends, Reliance has successfully d eveloped Micro Filament Ya r n s and commercially marketed these in s u b s t a n t i a l q u a n t i t i e s . R e l i a n c e h a s a l r e a d y c o m p l e t e d a 5 , 0 0 0 tonnes per annum Fully Drawn Yar n (FDY) plant at Patalganga. Reliance has also commissioned a 60,000 tonnes per annum POY facility at Hazira this year. Another 60,000 tonnes per annum POY facility is at an advanced stage of completion. Reliance is poised to substantially increase its market share in the fibres business due to the advantages of vertical integration, market leadership and world scale plants. 16 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Review of Operations The company’s production increased largest producer of Paraxylene (PX). As captive consumption of MEG will 17% from 90,000 MT to 105,000 MT, The entire production of Paraxylene be increasing consequent upon new accounting for 29% of the industry production of 360,000 MT. There is likely to be excess supply in the near future owing to the commissioning i s c a p t i v e l y c o n s u m e d b y t h e polyester capacities being added by Company. Reliance produced about 250,000 MT of PTA, accounting for 55% of total industr y production of PTA/DMT. The industr y continued to Reliance, a second MEG plant of 120,000 tonnes per annum is being implemented at Hazira. of new capacities in the industr y. On p r e fe r t h e P TA r o u t e f o r t h e the other hand, reduction in customs manufacture of Polyester. Reliance and excise duties is expected to lead i s a l r e a d y i n t h e p r o c e s s o f MEG to stronger demand g rowth in the domestic mar ket. Reliance believes it will enjoy a significant competitive a d v a n t a g e , b e i n g a l o w c o s t , implementing a world size PTA plant of 350,000 tonnes per annum at Hazir a . It is now adding another 3 5 0 , 0 0 0 t o n n e s p e r a n n u m P TA capacity at Hazira. Reliance will be integ rated and quality producer. one of the largest PTA producers in 51% 49% PF Y capacity additions. Other production the wor ld on completion of these Reliance's share in domestic production 29% P T A 71% Reliance's share in domestic production Other production R e l i a n c e i s t h u s p o i s e d t o substantially increase its mar k e t share in the fibres business owing t o t h e a d v a n t a g e s o f ve r t i c a l integration, market leadership and world scale plants . Fibre Intermediates Business Purified Terephthalic Acid (PTA) 45% 55% Reliance's share in domestic production Other production Mono Ethylene Glycol (MEG) Reliance continues to be the largest producer of MEG in India accounting for 49% (95,000 MT) of domestic production. It achieved near 100% Reliance continues to be the only capacity utilisation dur ing the year . producer of Pur ified Terephthalic Most of the MEG produced at its Acid (PTA) in the countr y and the Hazira plant is captively consumed. Reliance will be one of the largest PTA producers in the world on completion of planned capacity additions. R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 17 Review of Operations Polymers Business Polyvinyl Chloride (PVC) leading supplier of PE to the woven Most of the key grades of our HDPE sac k sector which caters to the and LLDPE have substituted impor ts Reliance has maintained its premier packaging requirements of fer tilisers, and saved scarce foreign exchange p o s i t i o n i n t h e P V C m a r k e t , cement and other bulk materials. for the country. accounting for 42% (187,000 MT) of Reliance serviced more than 4,000 domestic production. T h e c o m m i t m e n t t o q u a l i t y a n d service is reflected in the confidence which many processors have shown b y a c c e s s i n g t h e i r e n t i r e requirement from .Reliance. Effor ts are being made to fur ther strengthen t h e m a r ke t i n g n e t w o r k . Process customers and consolidated its dominant presence in the Indian market. Development of Speciality Film grades of Octene LLDPE was further stepped up for capturing new end-use segments like milk sachets, edible oil packaging, cosmetic and dental care i m p r o v e m e n t a n d c o s t c u t t i n g product packaging. Reliance is one e x e r c i s e s h av e c o n t r i b u t e d t o of the six producers of this grade in improved performance. the world. Polyethylene (PE) Reliance is the largest producer of linear polyethylenes in India with a 51% share (192,000 MT) in domestic production. The company introduced additional grades and captured new markets which were earlier dependant only on impor ted material. Reliance is the Reliance is the largest producer of linear polyethylenes in India with a 51% share in domestic production. 18 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Review of Operations Chemicals Business Paraffins Linear Alkyl Benz ene (LAB) Reliance’s LAB is used by all the l e a d i n g d o m e s t i c d e t e r g e n t R e l i a n c e s t a ye d o n t o p o f t h e domestic par affins mar ket with a 40% share in domestic production. It intends to increase its capacity to c a p a c i t y o f 1 0 , 0 0 0 t o n n e s p e r annum. This will enable Reliance to a d d va l u e t o D i e t hy l e n e G l y c o l (DEG), which is a by product from man ufacturers. The company also s u b s t i t u t e i m p o r t s a n d i m p r o v e i t s M o n o e t h y l e n e G l y c o l ( M E G ) exports to multinational companies m a r k e t s h a r e . T h e m a r k e t f o r plant. TEG is an impor t substitute like Unilever and Procter & Gamble. paraffins is growing with increased usage of PVC. Tri Ethylene Glycol (TEG) used in oil exploration, lubr icants and speciality applications. Reliance Reliance has commissioned a new h a s a l r e a d y i n i t i a t e d e x p o r t s o f TEG manufactur ing facility with a TE G to ot her count r ie s in Asia. R e l i a n c e ’s s h a r e i n d o m e s t i c p r o d u c t i o n i n c r e a s e d t o 3 8 % (76,000 MT) with the introduction of special prices for detergent expor ters. R e l i a n c e h a s t a k e n s t e p s f o r capacity addition and it plans to d e b o t t l e n e c k L A B c a p a c i t y t o 100,000 tonnes per annum, making it India’s largest LAB facility. Further increase in capacity is also being planned to meet future demand. Ethylene Oxide (EO) R e l i a n c e c o n t i n u e s t o l e a d t h e market with a 31% share in domestic p r o d u c t i o n . E t hy l e n e O x i d e i s a versatile chemical used in speciality consumer products like shampoos, f a c e c r e a m s , t o i l e t r i e s a n d detergents. Reliance has taken steps for capacity addition and plans to debottleneck LAB capacity to 100,000 tonnes per annum, making it India’s largest LAB facility. R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 19 Review of Operations Textiles Business Vimal beams and fabrics. It is also the first the most advanced computer aided company in India to acquire woven technology were well received in the ‘VIMAL’ is the market leader in the velour machines for the manufacture premium suitings segment with the l a r g e s t s a l e s a n d d i s t r i b u t i o n network. Reliance has continued to i n c r e a s e i t s r e t a i l o u t l e t s a n d e x c l u s i ve s h o w r o o m s. I t s e x o t i c of a wide range of pile fabrics with bigger designs. The Naroda textiles complex is the only textiles facility in the countr y to become self-reliant range of premium woollen fabr ics in power through captive generation. has been well received by country’s Harmony market. SlumbeRel T h e S l u m b e R e l ra n g e o f s l e e p p r o d u c t s i s d o i n g we l l . D a c r o n f i b r e f i l l e d p i l l ow s h a v e b e e n welcomed for their super ior quality. Customer or iented products lik e top retailers. R e l i a n c e i s t h e f i r s t i n I n d i a t o i m p r o v e i t s p r i n t i n g f a c i l i t i e s b y adding wa r p tr ansfer pr inting f a c i l i t i e s . I t n o w h a s t h e The Har mon y r ange of premium super fine premium suitings, war p fur nishing fabrics continues to lead printed furnishing fabrics, decorative the market. Ten exclusive Harmony cushions and kiddies pillows have boutiques were opened dur ing the b e e n i n t r o d u c e d i n t h e m a r ke t . f l e x i b i l i t y t o p r i n t o n w a r p e d year. Home textiles designed using ‘VIMAL’ is the market leader in the premium suitings segment with the largest sales and distribution network. 20 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Review of Operations Oil and Gas Business Reliance has an unincor por ated joint venture with Enron and ONGC to develop Panna, Mukta and Tapti fields . The development of these fields is expected to yield 145 million T h e j o i n t ve n t u r e h a s m a d e facilities and associated pipelines, significant progress in implementation for the Panna, Mukta and Tapti fields. o f t h e d e v e l o p m e n t p l a n s. T h e Fabrication of platforms is state-of-the-ar t 3D surveys (using proceeding at a fast pace at different multiple cable and multiple source sites. Installation of three platfor ms configuration) of South Tapti and in Tapti and one platform in Panna Panna fields were executed for the has been completed. Orders for barrels of cr ude oil, 40 billion cubic first time in India. Fir m orders have hiring of drilling rigs have been meters of gas and 12 million barrels been placed for six well plafforms, placed and drilling of wells in Tapti of condensate. c e n t r a l o i l a n d g a s p r o c e s s i n g has commenced. The joint venture among Reliance, Enron and ONGC has made significant progress in implementation of the development plans of the Panna, Mukta and Tapti fields. R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 21 Projects & Expansions Hazira Petrochemicals Complex fully automated polyester staple New Polyester Complex S u b s t a n t i a l p r o g r e s s i n p r o j e c t implementation has been made at the new polyester complex at Hazira. T h e p r o j e c t s i n t h e p o l y e s t e r complex are: polyester staple fibre p r o j e c t o f 1 6 0 , 0 0 0 t o n n e s p e r ann um; polyester ya r n project of 120,000 tonnes per annum; and PET polymer project of 80,000 tonnes per ann um. This highly advanced ar id integrated polyester complex will have a capacity of 360,000 tonnes per annum. In addition, the fibre intermediates projects in the complex will be: two Pur ified Terephthalic Acid (PTA ) p r o j e c t s o f 3 5 0 , 0 0 0 t o n n e s p e r annum each; and a Mono Ethylene Glycol (MEG) project of 120,000 tonnes per annum. Polyester Staple Fibre (PSF - 2)Reliance is setting up f i b r e p l a n t w i t h E . l . D u Po n t technology. Major civil and structural f a b r i c a t i o n wo r k h a s b e e n completed. Erection of all major equipment has been completed. The pre-commissioning activities are u n d e r w a y. R e l i a n c e ex p e c t s t o commission the plant by the end of t h e t h i r d q u a r t e r o f 1 9 9 6 . O n completion of PSF, POY and PET e x p a n s i o n s a t H a z i r a , t h e t o t a l polyester capacity will increase from about 200,000 tonnes per annum to 600,000 tonnes per annum, making i t t h e e i g h t h l a r g e s t p o l y e s t e r producer in the world. Polyester Yarn (POY - 2) R e l i a n c e h a s s u c c e s s f u l l y All major civil and fabrication wor k has been completed for the remaining t wo polymer iser lines of 30,000 tonnes per annum each. Erection of major equipment is completed and the lines are nearing mechanical c o m p l e t i o n . P r e - c o m m i s s i o n i n g activities are in progress. Reliance expects to commission these two lines in phases by the third quar ter of this year. PET Polymer commissioned two polymer iser lines Substantial progress has been made of 30,000 tonnes per annum each, in construction and erection during using E.l. DuPont technology, in the t h e y e a r . P r e - c o m m i s s i o n i n g countr y’s largest (120,000 tonnes activities are nearing completion. per annum) POY plant. The fully The PET bottle grade resin plant of t h e c o u n t r y ’s l a r g e s t ( 1 6 0 , 0 0 0 automated commissioned lines are 80,000 tonnes per annum will be one t o n n e s p e r a n n u m ) operating well. of the largest plants in the world. Technological assistance is being provided by SINCO Engineering, Italy. Reliance sees tremendous growth potential for PET bottles in the rapidly growing aerated drinks, mineral water and other bottling s e g m e n t s. P E T i s hy g i e n i c , e n v i r o n m e n t f r i e n d l y a n d t h e preferred packaging mater ial fo r these segments. Reliance expects to commission its PET plant by the end of the third quar ter of 1996. Reliance has successfully commissioned two polymeriser lines of 30,000 tonnes per annum each using E.l. DuPont technology in the country’s largest (120,000 tonnes per annum) POY plant. 22 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 23 Projects & Expansions Purified Te r e p h t h a l i c A c i d PTA plant at Hazira. The basic and p r e p a ra t i o n , b a s i c a n d d e t a i l e d (PTA-2) d e t a i l e d e n g i n e e r i n g i s a l r e a d y engineering and procurement have The project for setting up a PTA plant completed. All major plant equipment been completed and the project is of 350,000 tonnes per annum at h a v e b e e n o r d e r e d . O n i t s H a z i r a , w i t h I C I t e c h n o l o g y, i s completion, Reliance will be one of now nearing mechanical completion. The pre-commissioning activities the largest PTA producers in the world. have also started. The jetty ter minal, nearing mechanical completion. All major equipment such as reactors and silos have been erected and i n s u l a t i o n w o r k h a s s t a r t e d . C o n s t r u c t i o n o f a l l e l e c t r i c a l installations and control room has been completed. Precommissioning a c t i v i t i e s a r e i n p r o g r e s s. Substantial progress has been made i n t h e i m p l e m e n t a t i o n s o a s t o f a c i l i t a t e t h e c o m p l e t i o n o f t h e project by the last quar ter of 1996. Purified Terephthalic Acid (PTA - 3) R e l i a n c e h a s d e c i d e d t o s e t u p another PTA plant of 350,000 tonnes Mono Ethylene Glycol (MEG - 2) The MEG plant of 120,000 tonnes per annum, using technology from ABB Lumm us Crest, Netherlands ( S h e l l P r o c e s s ) i s u n d e r construction. This project has made substantial progress during the year. M a j o r c i v i l w o r k i n c l u d i n g t h e substation and control room has been completed. Major items of equipment have been received at the site and the erection wor k is progressing. The plant is expected to be c ommi ssi oned by the l as t per annum with ICI technology, in quar ter of 1996. o r d e r t o m e e t i t s p r o j e c t e d r aw Cracker Substantial progress has been material requirement as well as the made in this major project. The technology g r o w i n g m a r k e t d e m a n d . T h i s used in the cracker is licensed from tank farm, SBM system (Single Buoy Mooring) and utilities have already b e e n c o m m i s s i o n e d . A l m o s t a l l e q u i p m e n t s u c h a s f u r n a c e s , columns, pressure vessels, heat exchangers and pumps have been erected. All utilities required for the commissioning activities alongwith the raw material storage facilities are ready. The cracker will have a capacity of approximately 750,000 tonnes per a n num of ethylene and 365,000 t o n n e p e r a n nu m o f p r o p y l e n e . Reliance’s cra cker is the wo rld’s largest gr ass-root single stream multi-feed cracker and is expected plant would be similar to the first Stone and W e b s t e r, U S A . S i t e to be commissioned by end 1996. Reliance’s cracker is the world’s largest grass-root single stream multi-feed cracker and Is expected to be commissioned by end 1996. 24 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Projects & Expansions Projects & ExpansionsSuccessful user fr iendliness. New products are completion of the cracker project will being developed, using the unique b e a n i m p o r t a n t l i n k i n t h e proper ties of polymers which are integration strategy as it will provide thus capturing a bigger share of a two basic raw materials i.e. ethylene p r o p y l e n e . a n d Captive Power Plants (CPPs) Reliance is expanding its captive power capacity, in order to cater to the increasing power requirement of t h e p e t r o c h e m i c a l s c o m p l e x a t H a z i r a . O n c o m p l e t i o n o f t h e e x p a n s i o n s , R e l i a n c e w i l l h a ve a c c e s s t o r e l i a b l e a n d c o s t competitive power of over 350 MW for its continuous process plants. This will ensure self-sufficiency and stability of power supply and will a l s o o p t i m a l l y u t i l i s e t h e s t e a m g e n e r a t e d . W o r k i s p r o gr e s s i n g satisfactorily so that the CPPs start growing market. Reliance is in the forefront to derive benefits of the growth by substantial expansion and implementation of new world-class facilities. The new polymer projects b e i n g s e t u p i n c l u d e a 3 5 0 , 0 0 0 tonnes per annum PP plant and a 200,000 tonnes per annum PE plant at Hazira. Polypropylene (PP -1) Reliance is building a state-of-the- a r t 3 5 0 , 0 0 0 t o n n e s p e r a n n u m polypropylene plant at Hazira using t h e U N I P O L p r o c e s s o f U n i o n Carbide Chemicals and Plastics C o m p a n y, U S A . A l m o s t a l l equipment have been erected and concurrently with the other facilities. t h e p r o j e c t i s m e c h a n i c a l l y Polymers Complex c o m p l e t e . P r e - c o m m i s s i o n i n g The use of polymers is g r owing activities are in the final stages . rapidly among all end-user segments Other infrastructure such as product owing to their cost effectiveness and warehouse, bagging, and propylene a n d L i n e a r L o w D e n s i t y Polyethylene (LLDPE), as required, to cater to the growing market needs. All civil wo r k including electrical substation and control room has been completed. Delivery, erection and construction of equipment has commenced. Reliance expects to complete the project by the end of this year. Effor ts will be made to synchronise the commissioning of this plant with the cr a cker star t u p . W i t h t h e c o m p l e t i o n o f t h i s s e c o n d P E p l a n t , t h e t o t a l P E capacity will increase to 400,000 tonnes per annum, making Reliance one of the top 10 PE producers in the wor ld. Polyvinyl Chloride (PVC -1) r e c e i v i n g f a c i l i t y h a s b e e n The PVC capacity at the existing c o m p l e t e d . T h e p l a n t i s a t a n plant at Hazira, based on technology advanced stage of completion and f r o m G E O N , U S A , i s b e i n g is expected to go on stream by the expanded to 300,000 tonnes per third quar ter of 1996. Polyethylene (PE - 2) annum in two phases: first by 90,000 t o n n e s p e r a n n u m , t a k i n g t h e Work is progressing at the 200,000 c a p a c i t y t o 2 7 0 , 0 0 0 t o n n e s p e r tonnes per annum PE plant at Hazira, annum and then by another 30,000 which uses the Sclair Tech Process. tonnes per annum. The facility of The plant will manufacture both High 270,000 tonnes per annum will be D e n s i t y P o l y e t hy l e n e ( H D P E ) oper ational by the end of 1996. On completion of the expansions, Reliance will have access to reliable and cost competitive power of over 350 MW for its continuous process plants. R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 25 Projects & Expansions Jamnagar Petrochemicals Fibre Intermediates Polymers Paraxylene (PX- 2 and PX-3) Polypropylene (PP- 2) Reliance has decided to build two To cater to the growing demand for Complex Reliance Industr ies Limited has i d e n t i f i e d J a m n a g a r a s i t s n e x t growth centre for future expansions in the petrochemicals business. The Jamnagar petrochemicals complex is to be located adjacent to the Reliance Petroleum refiner y. This will facilitate the integration between t h e p o w e r, p e t r o c h e m i c a l s a n d refining businesses of the Reliance new paraxylene facilities of 400,000 t o n n e s p e r a n n u m e a c h , a t J a m n a g a r, w i t h U O P I n t e r Amer icana technology. Basic and detailed engineering studies have been completed. Reliance is also reviewing a plan to set up a fur ther PX facility of 400,000 tonnes per annum. This will be the largest such Group. Reliance Industr ies initially facility in the wo r ld and will get proposes to set up paraxylene and n a p h t h a a s f e e d s t o ck f r o m t h e polypropylene plants at Jamnagar. proposed refiner y. Reliance’s PX The feedstock i.e. naphtha required capacity will be 1.35 million tonnes p o l y p r o py l e n e , R e l i a n c e i s proposing to build an additional 350,000 tonnes per annum plant utilising its locational advantage. The technology licensor is John Brown, UK (UNIPOL Process). The plant will use propylene from the proposed refinery as the feedstock. The total PP capacity will increase to over 700,000 tonnes per ann um with the setting up of the second plant of 350,000 tonnes per annum, f o r t h e p a r a x y l e n e p l a n t , a n d per annum on completion of these making Reliance the four th largest p r o p y l e n e r e q u i r e d fo r t h e projects. With this, Reliance will be PP producer in the world. polypropylene plant will be obtained amongst the top four par axylene from Reliance Petroleum’s refiner y. producers in the wor ld. The total PP capacity will increase to over 700,000 tonnes per annum with the setting up of the second plant of 350,000 tonnes per annum, making Reliance the fourth largest PP producer in the world. 26 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 27 Environment, Health & Safety R e l i a n c e m a i n t a i n s t h e h i g h e s t p r ovided b y licensors, including availed of the maximum rebate standards of quality in the areas of plant operations and maintenance on water cess for the fourth e n v i r o n m e n t , h e a l t h a n d s a fe t y. procedures. Reliance has invested successive year. All samples heavily in the latest and the best from stack, treated effluent and pollution control and environment storm water drain, collected by preservation technologies to keep GPCB from the Hazira complex, the water and air in areas close to were found nor mal and safe. i t s p l a n t s , a b s o l u t e l y f r e e f r o m l The Naroda textiles complex has Environment Reliance is sensitive to the impact its operations have on the environment, and all possible steps are taken to maintain the highest standards in t h i s r e g a r d . R e l i a n c e h a s a c o m p r e h e n s i v e e n v i r o n m e n t a l management policy cove r ing air, water, and noise pollution, disposal of gaseous, liquid and solid wastes and local ecology. Environmental har mful effluents. Reliance has won m a n y a w a r d s f o r i t s e f fo r t s i n pollution control and preservation of the environment: l T h e H a z i r a c o m p l ex h a s b e e n h o n o u r e d w i t h t h e Federation of Gujarat Industries protection is one of the impor tant A wa r d f or “ E n v i r o n m e n t & criteria for selection of new technology, Pollution Control” for 1995. The p l a n t a n d e q u i p m e n t . T h i s i s t h e a c h i e ve d p a r t l y t h r o u g h inclusion of inbuilt control equipment and pollution monitor ing in the plant d e s i g n a n d p a r t l y t h r o u g h a n H a z i r a c o m p l e x h a s a l s o r e c e i ve d t h e G o l d e n J u b i l e e M e m o r ial Tr u s t Aw a r d f o r o u t s t a n d i n g p o l l u t i o n c o n t r o l programme during 1994-95, from emphasis on control procedures and the Southern Gujarat Chamber of p o l l u t i o n m a n a g e m e n t a s a n C o m m e r c e & I n d u s t r y. i n t e g r a l p a r t o f t h e t r a i n i n g l The Hazira complex facilities have commissioned a supplementar y Effluent Treatment Plant (ETP). With this, the Naroda textiles complex today has the largest area dedicated and the highest investment committed for ETP activities in the entire Indian textile industry. Health and S a fe t y I n a d d i t i o n t o t h e n o r m a l medical facilities being provided t o t h e e m p l oy e e s, t h e c o m p a n y h a s a l s o t a ke n s t e p s t o e n s u r e p r e v e n t i ve c a r e . R e l i a n c e h a s sought to construct plants and adopt s a f e t y m o n i t o r i n g a n d a u d i t p r o c e d u r e s w h i c h c o n fo r m t o international standards. Extensive s a f e t y a u d i t s a n d h a z a r d o u s o p e ra t i o n s s t u d i e s h a ve b e e n c a r r i e d o u t i n r e l a t i o n t o a l l significant aspects of Reliance’s operations . Reliance has alway s ensured an absolutely safe wor king environment for all its employees, a n d h a s k e p t u p w i t h l a t e s t international trends, standards and practices. Reliance’s effor ts in this area have been widely regarded and acknowledged by various fora and associations. The Hazira complex has been honoured with the Federation of Gujarat Industries Award for “Environment & Pollution Control” for 1995. 28 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Environment, Health & Safety Dur ing the year, Reliance has won S a f e t y o f N a t i o n a l S a fe t y As in the past, Reliance accepted major awards for safe practices: Council, India. l The Award of Honour for the year l Reliance’s Hazira complex has 1994 for Reliance’s Patalganga won many safety awards complex is the highest award of including the Safety Award-1992, saf ety of The National Safety 5 STAR Award-1994, and Sword Council of USA. The National of Honour-1994, all from the S a f e t y C o u n c i l o f U S A a l s o British Safety Council of UK . o n l y t h e m e r i t c e r t i f i c a t e , foregoing the shield in favour of the next best competitor, in order to encourage and enthuse other m e m b e r s . T h i s g e s t u r e wa s highly appreciated by ATMA, and awarded “Second Place” for 1994 l In December, 1995, Reliance was even noted in the Award of t o R e l i a n c e ’s P a t a l g a n g a received an award for achieving Honour-1994 certificate. c o m p l e x , a m o n g s t wo r l d w i d e the lowest disability index during chemical companies in the group. the year 1994 for its Naroda l Reliance’s Patalganga complex textiles plant, among all member w a s a w arded the “ S a fe t y mills of the Ahmedabad Textile Award” for the longest accident Mills Association (ATMA). free spell for the year 1994, by Reliance has won this award every Reliance has sought to create safety a w a r e n e s s n o t o n l y a m o n g i t s employees but also its customers. Reliance arranged safety audits, and c o n d u c t e d s a fe t y t r a i n i n g fo r t h e C o u n c i l o f I n d u s t r i a l year since its inception in 1988. customers and transporters. Reliance’s efforts in the area of Environment, Health & Safety have been widely regarded and acknowledged by various fora and associations. R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 29 Quality At Reliance, the focus on Quality plants as well as central power control and qual it y assu r a n c e is not only on the final product - plants and utilities. it covers all aspects of operations, l The Patalganga comple x wa s including processes and people . conferred the ‘Golden Peacock Major achievements in 1995-96 are: National Quality Award 1995’. l R e l i a n c e h a s p u t t h e I S O l Quality management systems for p r o g r a m m e i n p l a c e a f t e r t h e s ev e n o p e r a t i o n a l u n i t s r i g o r o u s t r a i n i n g a n d c e r t i f i e d by Bureau Ve r i t a s documentation. The ISO 9002 Q u a l i t y I n t e r n a t i o n a l i n cer tification was received for all S e p t e m b e r, 1 9 9 4 , c o n t i n u e its manufacturing plants (MEG, effectively, as demonstrated in PVC, VCM and HDPE) as well as the agency’s surveillance audits central power and utility plants at d u r i n g M a r c h , 1 9 9 5 a n d t h e H a z i r a p e t r o c h e m i c a l s September, 1995. practices. New machines and test methods were added to analyse the samples so that the material delivered to the customer is of the highest standard. l The Patalganga complex uses modern technologies like tracer a p p l i c a t i o n s a n d n u c l e o n i c control systems for improvement o f q u a l i t y o f p r o c e s s e s a n d products. In chemicals, special effor ts were made to check the fitness of empty tankers before loading. complex in December, 1995. With l PE product quality achie ve d this, both Hazira and Patalganga during the year was 98.3% prime l The POY division has substantially i m p r o ve d t h e q u a l i t y o f petrochemical complexes have against 95% achieved last year. p a c k a g i n g , w h i c h h a s n o w achieved ISO 9002 certification l In polymers, several new grades e l i m i n a t e d t h e p o s s i b i l i t y o f f o r a l l t h e i r m a n u fa c t u r i n g were established with best quality p r o d u c t d a m a g e i n t r a n s i t . Both petrochemical complexes of Reliance, Hazira and Patalganga, have achieved ISO 9002 cer tification for all their manufacturing plants as well as central power plants and utilities. 30 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Reliance’s entrepreneurial drive has a l w a y s b e e n t h e i n s p i ra t i o n fo r developing new products and new applications for existing products Most moder n facilities are used by Reliance for research activities The thr ust of the research effor ts has been towards process development, process modification and product development PFY, PSF, PE, PVC, Research Development major achievements of the research efforts are: l C a t a l y s t r e g e n e r a t i o n a n d l Oil and water repellent worsted suitings with Teflon coating were d e ve l o p e d f o r i n t e r n a t i o n a l modification with impregnation of acceptance; a d d i t i o n a l m e t a l w a s d o n e l F i r e r e t a r d a n t a u t o m o t i v e successfully for the project of textiles/ upholstery fabrics were Non-HF alkylation catalyst to developed; improve LAB quality; l New variations in the Fully Drawn Yar n segment were developed and successfully commercialised l New deniers in POY w e r e s u c c e s s f u l l y d e ve l o p e d fo r achieving better perf o r mance and modified texture of fabric; l A new fabr ic evaluation technique w a s a d o p t e d i n N a r o d a t o improve tailorability and fabric P TA and LAB continue to be the during the year; f o c u s o f t h e r e s e a r c h a n d l Stretch fabrics using polyurethane de velopment effor ts Some of the filament were developed; perfor mance. PFV,PSF.PE,PVC, PTA and LAB continue to be the focus of research and development efforts. R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 31 Energy Conservation At Reliance, energy conser vation is first prize to Reliance - Patalganga e n a bl e d t h e s t e a m t u r b i n e r e g a r d e d a s a m a j o r f a c t o r i n f o r e n e r g y c o n s e r v a t i o n i n t h e g e n e r a t o r t o r u n u n d e r c o - enhancing cost competitiveness . petrochemical sector, for the second generation mode; E n e r g y c o n s e r va t i o n a n d optimisation is achieved from the design stage of the plants itself and is then maintained and improved in t h e n o r m a l p l a n t o p e r a t i o n s . C o n t i n u o u s u p d a t i n g o f e n e r g y conser vation effor ts is achieved by frequent energy audits at operating levels. T h e c o m m i t m e n t o f R e l i a n c e c o n s e c u t i v e ye a r i n 1 9 9 5 . S o m e o f t h e o t h e r s i g n i f i c a n t achiev ements of Reliance in the area of energy conservation are: l Impro ved utilisation of steam generation potential in the HRSG ( H e a t R e c o v e r y S t e a m Generators) using the exhaust h e a t f r o m g a s t u r b i n e s m o r e t o w a r d s e n e r g y c o n s e r v a t i o n i s efficiently, resulted in reduction in l Optimisation of condenser blow down rates in PVC and PE plants; l Lube oil recover y system from gas turbine lube oil console vent was set up; l C o o l i n g t o w e r s i n t h e M E G complex were modified which resulted in power savings; l Water recycling scheme is under implementation to conser ve and r e c y c l e w a t e r i n t h e F i b r e s r e f l e c t e d i n t h e f a c t t h a t t h e t h e a v e r a g e c a p t i ve p o w e r complex; M i n i s t r y o f Pow e r , G ov e r n m e n t generation cost; l New steamlines and aircur tains o f I n d i a , a w a r d e d t h e l Installation of gas turbine with HRSG were added in the plants. The Ministry of Power, Government of India, awarded the first prize to Reliance - Patalganga for energy conservation in the petrochemical sector for the second consecutive year in 1995. 32 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Foreign Exchange Savings & Taxes Paid Foreign Exchange Savings Reliance r anks among the top Reliance contributed Rs.2,234 crores Reliance’s products are pr imarily companies in India. During 1995-96, (US$ 650 million) in the form of various import substitutes. In other words, if a saving of Rs . 2,783 crores taxes as against Rs. 2,147 crores (US$ Reliance does not produce them, ( US$ 810 million) was achieved. similar quantities of these products Taxes Paid would have to be imported. Reliance In the pr ivate sector, Reliance is assists the country towards achieving amongst the top three tax payers, to self-sufficiency in petrochemical and various government agencies. The petroleum products, thereby saving main forms of taxes paid by Reliance precious foreign exchange, through are excise duty and customs duty. In 625 million) last year. It is noteworthy that the absolute amounts of revenue generated for the gover nment through Reliance’s operations have increased even though the rates of customs and excise duties have been brought down. production of polyester, polymers, fibre fact, in terms of proportion, these taxes The total amount of contr i bution intermediates and petrochemicals. form one of the highest elements of continues to be as high as almost twice In terms of foreign exchange saved, Reliance’s cost structure. the Profit After Tax. Taxes Paid - Increasing Rs. in crores contribution to India 2500 2000 1500 1000 500 0 91-92 92-93 93-94 94-95 95-96 In the private sector, Reliance is amongst the top three tax payers, to various government agencies. R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 33 Employment Reliance has over 14,000 employees. Reliance additionally creates over a This makes Reliance one of the A major ity of the human resources required to handle incremental volume for the Hazira expansion have been recruited. Expatriates, too, have been recr uited in the areas of Man u factur ing, Technical Training, Info r mation Systems, million jobs through the product biggest job creators in India. markets that it develops. This includes Employment with Reliance off ers jobs created in ancillar y and better job satisfaction through training downstream units, as well as indirect and wor ld-class exposure. This is one employment generated in ter ms of reason why Reliance contin ues to transpor tation ser vices , marketing enjoy the status of a preferred Information Technology and Logistics. outlets , godowns and depots . employer. Reliance creates over a million jobs through the product markets that it develops. 34 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Social Responsibility & Community Development Reliance’s commitment towards The activities which ha ve been upgradation of Zilla Parishad Schools community development is reflected in initiated under the auspices of the at the level of primary education in the resources directed to wards programme are: fulfilling social responsibility. Reliance has launched a Community D evelopment Project which is focussed on providing ser vices and facilities to people in villages around the man u factur ing facilities. The l Promotion of savings groups l Medical check up camps; l Establishment of mahila mandals; l Health and hygiene awareness projects; l Sewing classes for women; l Establishment of nurseries; objective of this programme is to meet l Sponsoring of a 6 monthly course- the ob ligations of a conscious for hospital and community health cor porate citizen and to dev elop workers; goodwill among the people in the neighbouring areas. Cooperation and participation of the people are solicited for the development of their villages. The ultimate objective is to create a more sustainab le model of rur al l Launching of Mobile dispensaries; l Establishment of a dispensary at Mora village near the Hazira Complex; l Trade familiarisation scheme for Raigad District which covers the Patalganga Complex; l Launched hospital and community health worker training course; l Provided facilities to supply water to industries located at Hazira and Surat City; l Made arrangements for supply of water to Mora village residents; l Assisted the village authorities in the expansion of schools at Mora village; l Constructed the main arterial road for the Mora village; boys who have passed Standard 10. l Contributed to the Mora village in In addition to the above, the other the Gokul Gram Scheme; noteworthy efforts are: l Reliance is also getting ready to d evelopment which will help the l Reliance jointly with UNICEF has launch free medical services for the villages to be more self-reliant. launched a programme for the villages near the plant sites. Reliance’s commitment to community development is reflected in the resources directed towards fulfilling social responsibility. R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 35 New Growth Areas Reliance Petroleum sourcing and operations management single stream grass-root refiner y. The proposed 15 million tonnes will prove to be an advantage in the The capital cost of the refinery is one per ann um refiner y of Reliance refinery project implementation. Petroleum Limited will be an important Reliance Group has already link in the integration chain of Reliance. contributed Rs. 561 crores (US$ 163 Over 20% of the refinery’s output is million) over the past three years to expected to be consumed by Reliance Reliance Petroleum as promoters’ Industries. The value of the feed stocks contribution. Reliance Group is to to be provided to Reliance Industries contribute a further Rs. 713 crores by Reliance Petroleum is expected to (US$ 208 million). The total cost of the be about Rs. 2,000 crores (US$ 582 refinery is expected to be Rs. 8,694 million) per ann um. The exper tise crores (US$ 2531 million) as of the lowest compared to other new Indian and international refineries. Bechtel, the w o rld reno wned engineering construction company, has the single point responsibility for technology, engineering, procurement, construction management and project management services for the refiner y project. Bechtel has engaged UOP (USA), the world leaders in refiner y technologies for providing the basic gained by Reliance Industries in the areas appraised by the IDBI. Reliance engineer ing and licensing for this of project management, engineering, Petroleum’s refiner y will be project. the w o r ld’s largest Reliance Petroleum’s refinery will be the world’s largest single stream grass-root refinery. The capital cost of the refinery is one of the lowest compared to other new Indian and international refineries. 36 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 New Growth Areas Reliance Telecom System in 1984. NYNEX is a leading The combined license fee for 10 years telecommunications investor in Asia. for the cellular circles is Rs. 337 crores Reliance Telecom proposes to build (US$ 98 million). These circles have moder n mobile telecommunications 32.5% of India’s population and 12.9% networks in each of its licensed circles, of the nation’s telephone lines. The providing the full spectrum of GSM license fee for providing basic services ser vices to both residential and in the Gujarat circle is Rs. 3,396 crores business subscribers. (US$ 989 million) over 15 years. Reliance Industr ies Limited has entered into a joint v enture arrangement with NYNEX, USA, to form Reliance Telecom Private Limited, with a view to enter into the telecom sector in India which has been opened up for private sector par ticipation. Tenders for licenses to operate basic and cellular telephone services were invited. The telecom sector in India, as is the case all over the world, is likely to experience phenomenal growth. Sensing a great opportunity, Reliance decided to par ticipate in this growth. Reliance Telecom bid f or these licenses in June,1995. Reliance Telecom was a warded licenses for operating cellular services in Assam, Bihar, Himachal Pradesh, Madhya Pradesh, Nor th-East, Orissa and West Bengal circles.Six circles out of the seven are geog r aphically contiguous. Reliance Telecom is the only licensee in West Bengal and Assam circles. These licenses are initially valid for 10 years extendable in multiples of 5 years thereafter. Reliance is the sole successful bidder in Gujarat circle for the basic telecom ser vices. NYNEX, USA, is one of the Regional Bell Operating Companies, created with the div estiture of the Bell Reliance Telecom has been awarded licenses for operating cellular services in Assam, Bihar, Himachal Pradesh, Madhya Pradesh, North-East, Orissa and West Bengal circles. lt is the sole successful basic services bidder in Gujarat circle. R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 37 Hazira Jetty, Terminal and Lighterage Ship Reliance is the world’s largest and most experienced lighterage operatorfor cryogenic products being handled at upto -1020C. 38 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Product Flow Chart Oil & Gas Production Planned Jamnagar Complex Refining Fuel Oil Naphtha /Ngl Kerosene Haxira Complex P P Propylene Ethylene Butene-1 VCM PCV EDC D E G Pataiganga Complex 123456789012345 123456789012345 123456789012345 Acetic Acid 123456789012345 E O MEG TEG HDPE/LLDPE PX(1) PTA (2) PET(3) Polyester Chips N P LAB 12345678901234 12345678901234 12345678901234 Wool, Viscose, Silk, Linen 12345678901234 PFY(2) PSF(2) Naroda Complex Texur ised/Twisted Dyed Yar n Spun Yarn Existing Products Currently Purchased-Planned Future Products/Projects 123 123 123 Purchased Raw Materials Fabrics Abbreviation DEG ........... DMT ........... EDC ........... EG ............. EO ............. HDPE ........ LAB ........... Full Name Di-ethylene glycol Di-methyl-terephthalate Ethylene di-chloride Ethylene glycol Ethylene oxide High density polyethylene Linear alkyl benzene (1) Manufacture also planned at Jamnagar complex (2) Plant also under construction at Hazira complex (3) Manufacture planned at Hazira complex Abbreviation LLDPE ......... MEG ............ NGL ............. NP ................ PET .............. PFY .............. PP ................ Full Name Linear low density polyethylene Mono-ethylene glycol Natural gas liquid Normal paraffin Polyethylene terephthalate Polyester filament yarn Polypropylene Abbreviation PSF ........... PTA ........... PVC .......... PX ............ TEG .......... VCM ......... Full Name Polyester staple fibre Purified terephthalic acid Polyvinyl chloride Paraxylene Tri-ethylene glycol Vinyl chloride monomer R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 39 Directors’ Report The Directors have pleasure in presenting the 22nd Annual Repor t and the audited accounts for the financial year ended 31st March, 1996. Financial Results Gross profit before interest and depreciation Less: Interest Depreciation Profit for the year Add: Balance in Profit & Loss A/c. Surplus Available for Appropriation Appropriations: Capital Redemption Reser ve Debenture Redemption Reser ve General Reser ve Inter im Dividend paid on Preference Shares Recommended Dividend on: Preference Shares Equity Shares Balance carr ied to Balance Sheet * 1 US $ = Rs. 34.35 (Exchange rate as on 31.3.96) Dividends The Directors have recommended dividend (subject to deduction of tax at source) for the financial year ended 31st March, 1996, which if approved at the for thcoming Annual General Meeting will be paid out of profits of the Company for the said year to all those Equity Shareholders whose names appear on the Register of Members as on 22nd June, 1996. The Directors have also recommended dividend on 14% Redeemable Preference Shares of Rs. 100 each. This dividend has been fully adjusted against the interim dividend paid by the Company during the financial year ended 31st March, 1996. On Preference Shares (Rs. in Crores) Dividend of Rs. 14 per share on 2,00,00,000 Redeemable Preference Shares of Rs. 100 each fully paid up On Equity Shares Dividend of Rs. 6.00 per Share on 46,03,69,802 Equity Shares of Rs. 10 each fully paid up 28.00 276.22 304.22 Promise Vs. Performance (In Terms of Clause 43 of Listing Agreement) 1995-96 1994-95 Rs. Crs. US$ Mn* Rs. Crs. US$ Mn* 1751.91 110.13 336.51 1305.27 90.92 1396.19 ---- 231.30 800.00 28.00 ---- 276.22 60.67 510.02 32.06 97.97 379.99 26.47 406.46 ---- 67.34 232.90 8.15 ---- 80.41 17.66 1622.60 279.51 278.24 1064.85 62.24 1127.09 5.50 30.50 800.00 ---- 0.83 199.34 90.92 472.37 81.37 81.00 310.00 18.12 328.12 1.60 8.88 232.90 ---- 0.24 58.03 26.47 1396.19 406.46 1127.09 328.12 (Rs. in Crores) 1995-96 Particulars Projections Actual Sales* Gross Profit Wtd. Ave. Equity EPS (Rs)** 7,488 1,651 301 21.1 7,786 1,752 457 27.9 * Includes inter-divisional transfers. ** Based on weighted average equity. Reason EPS has improved due to better margins and reduction in interest and depreciation charges. Duplicate share cer tificates/Replacement of shares. In both the above cases, as per the legal advice received by the Company, the actions taken by the Registrars, were not in contravention of any provision of law. Neither of the issues have occasioned any loss to any investor or to the Company. If any inadvertent technical lapses have been committed by the Registrars, the reason for the same is attr ibutable to their handling of huge volumes of transactions. The Registrars are in the process of enhancing the effectiveness of their systems and procedures to obviate recurrence of such situations. Investments The Company has given following profitability projections in the Letter of Option dated 8th September, 1992 issued to the Debentureholders - Ser ies F for rollover of the debentures. The Company has invested Rs.631 crores in Reliance Industrial Investments & Holdings Limited which in turn has an investment to the extent of Rs. 299 crores in Reliance Petroleum Limited, R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 41 Rs. 359 crores in Larsen & Toubro Limited, and Rs. 113 crores in BSES Limited. D i r e c t o rs During the year the Company conver ted Rs. 100 crores out of i t s l o a n o f R s . 3 0 4 c r o r e s , i n t o d e b e n t u r e s o f R e l i a n c e Petroproducts Limited. This is meant to promote downstream projects in the Polyester and Petrochemicals areas. Energy, Technology & Foreign Exchange Shri H.R. Meswani, was appointed as an Additional Director o n 3 r d Au g u s t , 1 9 9 5 , d e s i g n a t e d a s E xe c u t i ve D i r e c t o r. H e h o l d s o f f i c e u n t i l t h e c o n c l u s i o n o f t h i s A n n u a l G e n e ral M e e t i n g a n d i s e l i g i ble fo r a p p o i n t m e n t . T h e C o m p a ny h a s r e c e i ve d f r o m s o m e o f i t s m e m b e r s a n o t i c e u n d e r S e c t i o n 257 of the Companies Act,1956, proposing his appointment a s a D i r e c t o r, s u b j e c t t o r e t i r e m e n t by r o t a t i o n . Information in accordance with the provisions of Section 217 (1) ( e ) o f t h e C o m p a n i e s A c t , 1 9 5 6 , r e a d w i t h C o m p a n i e s (Disclosures of Particulars in the Repor t of Board of Directors) Rules , 1988 regarding conser vation of energy, technology absorption and foreign exchange ear nings and outgo is given in the Annexure for ming part of this repor t. D u r i n g t h e y e a r S h r i U. M a h e s h R a o , N o m i n e e D i r e c t o r o f Gener al Insurance Cor poration resigned and Shr i Yashwant D. P a t i l w a s a p p o i n t e d a s N o m i n e e D i r e c t o r o f t h e C o r p o ra t i o n o n 1 5 t h M a r c h , 1 9 9 6 . T h e B o a r d p l a c e s o n r e c o r d i t s a p p r e c i a t i o n fo r t h e va l u a b l e g u i d a n c e r e c e i ve d f r o m S h r i U. M a h e s h R a o d u r i n g h i s t e nu r e a s D i r e c t o r. Subsidiary Companies As required under Section 212 of the Companies Act, 1956, the audited statements of accounts, alongwith the report of the Board of the Directors of Devti Fabrics Limited and Reliance Industrial Investments and Holdings Limited and the respective Auditors’ Repor t thereon for the y ear ended 31 st March,1996, are annexed. During the year Reliance Petroproducts Limited, ceased to be a subsidiar y of the Company. Reliance Global Trading Limited, which became a subsidiar y of the Company during the year, also ceased to be a subsidiary of the Company. Fixed Deposits The Company has not accepted /renewed any deposits during the year. Deposits of Rs. 0.60 crore due for repayment on or before 31 st March,1996 were not claimed by 1010 depositors as on that date. Of these, deposits amounting to Rs. 0.03 crore of 57 depositors have since been repaid. Personnel A s r e q u i r e d b y t h e p r ov i s i o n s o f S e c t i o n 2 1 7 ( 2 A ) o f t h e Companies Act, 1956, read with Companies (Par ticulars of Employees) Rules, 1975 as amended, the names and other par ticulars of the employees are set out in the Annexure to the Directors’ Repor t. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Repor t and the Accounts is being sent to all shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining such par ticulars may write to the secretar y at the Registered Office of the Company. S h r i T. R . U. Pa i , S h r i D. H . A m b a n i a n d S h r i R . H . A m b a n i , r e t i r e by r o t a t i o n a n d b e i n g e l i g i b l e o f fe r t h e m s e l ves f o r r e a p p o i n t m e n t Au d i t o rs a n d Au d i t o rs ’ R e p o r t M e s s r s C h a t u r ve d i & S h a h a n d M e s s r s R a j e n d r a & C o. Au d i t o r s o f t h e C o m p a ny h o l d o f f i c e u n t i l t h e c o n c l u s i o n o f t h e e n s u i n g A n nu a l G e n e r a l M e e t i n g . T h e C o m p a ny l a s r e c e i v e d l e t t e r s f r o m t h e m t o t h e e f f e c t t h a t t h e i r appointment, if made , would be within the prescr ibed limits u n d e r S e c t i o n 2 2 4 ( 1 - B ) o f t h e C o m p a n i e s A c t , 1 9 5 6 . Accordingly, the said auditors will be appointed as auditors o f t h e C o m p a ny a t t h e e n s u i n g A n n u a l G e n e ra l M e e t i n g . T h e n o t e s t o t h e a c c o u n t s r e fe r r e d t o i n t h e Au d i t o r s ’ R e p o r t a r e s e l f ex p l a n a t o r y a n d , t h e r e fo r e d o n o t c a l l fo r a ny fur t h e r c o m m e n t s. Ack n ow l e d g e m e n t Yo u r D i r e c t o r s w o u l d l i k e t o e x p r e s s t h e i r g r a t e f u l a p p r e c i a t i o n fo r t h e a s s i s t a n c e a n d c o - o p e ra t i o n r e c e i ve d f r o m t h e F i n a n c i a l I n s t i t u t i o n s a n d t h e B a n k s, dur i n g t h e ye a r u n d e r r ev i ew. Yo u r D i r e c t o r s w i s h t o p l a c e o n r e c o r d t h e i r d e e p s e n s e o f a p p r e c i a t i o n fo r t h e d evo t e d s e r v i c e s o f t h e E xe c u t i ve s, s t a f f a n d W o rk e r s o f t h e C o m p a ny fo r i t s s u c c e s s . Fo r a n d o n b e h a l f o f t h e B o a r d o f t h e D i r e c t o r s M u m b a i D a t e d : 2 7 t h M ay, 1 9 9 6 D h i r u b h a i H . A m b a n i C h a i r man 42 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Annexure to Directors’ Report Particulars required under the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 A. Conservation of Energy (a) Energy Conservation Measures Taken: 1. 2. 3. Installation of Gas Turbine with HRSG to enable to run STG under co-generation mode. Installation of APH for hot oil heaters. Simulation package utilised for optimising distillation column operation in petrochemical plants. Flash steam venting reduction through soft water spray. 4. 5. Reduction in boiler blow down frequency. 6. Waste LP steam utilisation in vapour absor ption chiller. 7. 8. Installation of separate inverters for quench blower motors. Improved utilisation of steam generation potential in the Heat Recover y steam generators utilising the exhaust heat from gas turbines. 9. Optimisation of cooling water consumption in va rious condensers and coolers. 10. Usage of low pressure steam in dehydrator column reboiler. 11. Provision of demister pad in CO 2 stripper to minimise carry over. 12. Provision of restriction orifice in Nitrogen consumption lines to minimise LP Nitrogen consumption. 13. Replaced fan blades of one cooling tower from solid GRP to hollow FRP to reduce power consumption. 14. Va r i a bl e s p e e d d r iv e i n c e n t r i f u g e t o r e d u c e p o we r consumption and improve capacity. 15. Reduction of HB condenser and LB condenser blow down rates. 16. Replacement of aluminium fans with FRP fans for air conditioning, air cooling and cooling towers to reduce power consumption . Installation of air cur tains for air conditioned plants to reduce the power consumption. Installation of new main steamline to reduce the line losses. 18. 19. Solar hot w ater system for guest house (Utilisation of 17. 20. nonconventional energy). Installation of new capacitors to improve power factor from 0.91 to 0.93. (b) A dditional Investments and Proposals, it any, being implemented for reduction in consumption of energy: Installation of back pressure turbine. 1. 2. Replacement of conventional shell and tube type combined feed exchanger in LAB plant by plate type exchanger. 3. Optimisation of recycle paraffin pumping system. 4. 5. 6. Installation of advance process control system. Prefractionation stripper side cut recover y. Steam condensate preheating by integration with process plants leading to reduced steam consumption in deaerators. Installation of vapour absor ption chiller utilising waste LP steam. Advanced simulation package for optimising distillation column operation. 7. 8. 9. Heat integration of column bottom in LAB plant. 10. Automatic blow down controls for steam boilers in fibre division. 11. Doub le extr action cum condensing steam turbine with alternator is being installed to augment power generation capacity. 12. Flash steam from blow down of HRSGs will be used in Deaerators. 13. Change over from trap system to condensate pot system for Concentrator-l reboiler. 14. Replace second cooling tower fan blades by hollow FRR. 15. Better chilled water chemical treatment to minimise fouling and corrosion and thereby improve heat transfer rates to achieve lower energy consumption. 16. Modify steam traps network in dr yer heaters to reduce steam 17. consumption. Installation of modified centr ifuge to reduce moisture in wet cake thereby reducing steam requirement in dryer. Installation of injection water chilling system to improve higher productivity and reduced energy consumption. 19. Provision of pumping trap for reslurry water heater to recover 18. steam condensate. (c) Impact of measures at (a) & (b) above for reduction of energy consumption and on the cost of production of goods: Air preheater for hot oil heater would lead to savings of Rs.10 lakhs p.a. 1. 2. Steam integration through back pressure turbine would lead to saving of Rs. 560 lakhs p.a. 3. Replacement of combined feed exchanger with plate type heat exchanger would result in saving of Rs. 220 lakhs p.a. in terms of fuel only. 4. Optimisation of recycle paraffin pumping system would lead 5. 6. 7. to saving of Rs.10 lakhs p.a. Prefractionation stripper side cut recover y operation for better heat integration will save Rs. 90 lakhs p.a. Preheating of steam condensate by integration with process plants would save low pressure steam requirement to the tune of Rs. 374 lakhs p.a. Vapour absorption chiller using waste low pressure steam in fibre division resulted in saving of Rs. 100 lakhs p.a. in ter ms of electrical power. 8. Replacement by FRP blades would result in saving of Rs. 21 lakhs p.a. 9. Heat integration of extract column bottom LAB plant would result in saving of Rs. 19 lakhs p.a. 10. Advance process control system would result in saving of approximately Rs. 82 lakhs p.a. 11. Automatic blow down control system for steam boilers in fibre division would result in savings of Rs. 59 lakhs p.a. 12. Cooling water flow reduction by 1000 M 3/hr. 13. Steam consumption reduction by 3 MT/hr. 14. DM water consumption reduction by 4 MT/hr. 15. LP Nitrogen consumption reduction by 75 NM 3/hr. 16. Power saving due to replacement of fan blades by 20% i.e. 10 KW. 17. Recover y of 3 MT/hr of steam condensate. B. Technology Absorption Form - ‘B’ Form for disclosure of par ticulars 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: Research and Development activity is mainly focussed in the field of Polyester filament yar n, Polyester staple fibre, Purified terephthalic acid and Linear alkyl benzene. The stress has been on process development, process modification, product development, energy conser vation, pollution control, impor t substitution and technology upgradation. Improvement in specific consumption of catalysts and additives in petrochemical processes. Substitution of catalysts and chemicals without affecting quality, yield and other related parameters. Development of new and finer filament deniers for better perfor mance and improved fabric texture. Development of special staple fibre with specific denier and high lustre with improved tensile proper ties. Installation of Pilot Plant for alkylation using non-HF catalyst. Trials with alter nate co-catalyst for polymerisation. Development of extrusion coating grade. Superior additive package to improve LLDPE film quality. Development of stretch worsted fabric using elasthane type filament as one of the components. Development of oil, water and stain repellent worsted suiting using oleophobic compound as finishing agent. Instrumental revaluation of menswear fabric to improve fabric tailorability and perfor mance during wear. Development of new process to produce silk-like finish on 100% polyester dress materials. Improvement of the stability of war p knitted fabrics. Dev e l o p m e n t o f f i r e r e t a r d a n t a u t o m o t i ve t ex t i l e / upholstery fabrics. i) ii) iii) iv) v) vi) vii) viii) ix) x) xi) xii) xiii) xiv) xv) R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 43 Benefits derived as a result of the above R&D: Product Development Improvement: Pilot plant tr ials to develop eco-friendly catalyst fo r alkylation produced encouraging results. 2.0 Denier Polyester staple fibre successfully developed in trilobal cross- section. Reduction in spin-finish consumption has been achieved for production of Polyester staple fibre. Improvement in down stream processing in textile mill has been achieved by using different type of spin-finishes. New Deniers like - 230/216/POY, 135/34/POY, 140/34/POY, 1 0 0 / 3 4 / P OY, 1 1 5 / 3 4 / P OY h a ve b e e n d ev e l o p e d s u c c e s s f u l l y fo r a c h i ev i n g b e t t e r p e r fo r m a n c e a n d modified texture of fabric. Development of FDY products like - 75/108, 50/48, 70/ 72, 50/36, 70136 for direct use in war ping and weaving. 115/1 08/POY - micro denier developed for domestic mar ket. Sp in- fini sh application system mod ified to a chieve optimum oil pick up on yarn. Development of design for inter mingling air jets to improve interlacement in FOY & SDY to improve textur ising and warping performance. Development of new process parameters to produce the co mmod ity products based on changes in p roc ess conditions. Par tial recover y of unconver ted Ethylene back to system o n a c o n s i s t e n t t r i a l s u c c e s s f u l l y c o n d u c t e d a n d estab lished. Fur ther tr ials / modification in system hardware to carr y forward the effor ts to total recycle underway. Development of extrusion coating grade. xiii) Superior additive package for improved LLDPE film quality. Development of high value worsted suitings, sport and leisure wear fabrics. Produced menswear for up-market requirement. New fabric evaluation technique to improve tailorability and fabric performance. I m p r ov e m e n t o f fe e l a n d f i n i s h o f p o l ye s t e r d r e s s mater ials. Impor t Substitutlon Silicon r ubber gaskets developed indigenously. Spin-pack consumables developed. Ceramic pin guides indigenously developed. Indigenisation of a number of engineer ing spares and accessor ies in polyester and petrochemical areas yielded a net saving of Rs. 274 lakhs in the year 1995-96. Future Plan of Action: Projects Proposed for the following: Installation of continuous polymer filter in polycondensation for improved filteration. Booster pump installation for polymer pumping. Replacement of gland packing by mechanical seal to reduce degradation of polymer. Development of multi-lobal profil filament yar n for fancy effects. Automation of product handling system. Winder upgradation for better yield and quality. H i g h p u r i t y N i t r o g e n g e n e r a t i o n u s i n g m e m b ra n e technology. Pentane recover y from PX plant stream. Model dev elopment for molecular sieve adsor ption phenomenon. Modification of annealer steam condensate in drawing process. Recycle of treated effluent for the purpose of makeup. Ethyl chloride dosing system. Use of front-end catalyst and other debottlenec king measures to achieve higher production levels. Commercial production with alter nate co-catalyst for polymerisation. Development of more efficient alumina grade. Development of high flow HDPE and LLDPE grades. xv) xvi) xvii) Development of MDPE grade suited for wire insulation application. xviii) Faster decoking of EDC cracking fur naces by having higher decoking temperature. Use of a new catalyst Oxy-VIII for enhancing efficiency of EDC in production. Optimisation of furnace cr acking severity to maximise throughput while reducing undesired by-product formation. 2. (a) i) ii) iii) iv) v) vi) vii) viii) ix) x) xi) xii) xiv) xv) xvi) xvii) (b) i) ii) iii) iv) 3. i) ii) iii) iv) v) vi) vii) viii) ix) x) xi) xii) xiii) xiv) xix) xx) 44 xxi) xxii) Efforts to recover chlorine value of VCM plant dr y by- product by recycling the effluent of incinerated waste to Oxy-reactor. A s a p a r t o f i m p l e m e n t a t i o n p r o c e s s o f C o m p u t e r Integ rated Man u factur ing (CIM), Advanced Process Control (APC) system is being installed in PP project, MEG / VCM / HDPE plants to improve productivity, product qualities, reduce cost of production and increase overall bu s i n e s s e f f i c i e n c y. A l s o, va r i o u s s t a t e - o f - t h e - a r t simulation systems are acquired for plant performance monitor ing, technical ser vices, accounting ser vices, technical training, etc. xxiii) Development of machine washable wool and wool blended worsted fabrics. xxiv) Development of Flax blended yar n on worsted system for manufacturing menswear with classic linen like feel. xxv) Control of hairiness on polyester-viscose blended yar n for improved weaveability and fabric properties. xxvi) Study the effects of length distr ibution of var ious animal fibres other than wool on the quality of worsted yar ns and fabrics. xxvii) Development of 100% wool single yarn weft suitable for (i) (ii) ( b ) (iii) 1.0% 4. ( a ) Rs. Crs. 50.53 24.56 75.09 weaving of high speed shuttleless looms. Expenditure on R&D Capital Recurring Total Total R & D expenditure as percentage of turnover Technology absorption, adaptation and innovation: Efforts in brief, made towards technology absorption, adaptation and innovation and benefits derived as a result thereof: Development of eco-fr iendly catalyst for alkylation reactions. Development of 2.5 Denier PSF in trilobal cross-section profile. Appreciable reduction in finish consumption has been achieved for PSF production. New POY Deniers developed to suit market requirements. (v) Micro denier for POY developed. Variety of denier developed for fully drawn yar n (FDY) for direct use in war ping and weaving. (vii) Pre and post treatment for effluent recycle scheme. (viii) Model simulation for adsor ption type of processes. (ix) (x) DEG to TEG conversion facility commissioned. Successfully implemented glycol product drumming facility. Next gener ation EO reactor catalyst used and plant operation stabilised. Installation of additional slurr y str ipping column to i n c r e a s e p r o d u c t i o n ra t e, r e d u c e o f f - s p e c i f i c a t i o n generation and improve plant-up time. Foreign Exchange Ear nings and Outgo 1. (xi) (xii) C. (vi) (iv) Activities relating to Exports, initiatives to Increase Expor ts, Development of new Export Markets for Products and Services and Export Plan.The Company has maintained its focus on development of domestic market while seeking expor t markets as opportunities arise. During the year, the Company had exports worth Rs. 80 crores (US $ 23 million). The Company won the ‘Top expor ter of Plastic Raw Material’ award from the Plastics and Linoleum Expor t Promotion Council for the second consecutive year. a. Development of new markets such as Singapore, Sri Lanka, Thailand, Australia for marketing of ‘REON’ brand PVC product. Expor ts of premium quality staple fibre to USA. Expor ts of value added polyester yar n to Japan, Greece, Morocco. Expor ts of LAB to quality conscious customers in Japan, Saudi Arabia.e. Expor ts of premium brand ‘VIMAL’ worsted fabr ics to USA, Italy, Spain. b. c. d. 2. Total Foreign Exchange used and earned Rs. Crs. 126.08 a) 2783.00 b) Total Foreign exchange ear ned Total savings in foreign exchange through products manufactured by the Company and deemed expor ts (US $ 810 million) Sub Total (a+b) Total foreign exchange used c) 2909.08 3062.82 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Form ‘A’ Form for disclosure of particulars with respect to Conser vation of Energy Part ‘A’ Power & Fuel Consumption 1. Electricity a) Purchased Units (Lakhs) Total Cost (Rs. in crores) Rate/Unit (Rs.) b) Own Generation 1) 2) Through Diesel Generator Units (Lakhs) Units per unit of fuel Cost/Unit (Rs.) Through Steam Turbine/Generator Units (Lakhs) Units per unit of Fuel Cost/Unit (Rs.) 2. Furnace Oil Quantity (K. Ltrs.) Total Cost (Rs. in crores) Average Rate per Ltr. (Rs.) 3. Diesel Oil Quantity (K. Ltrs.) Total Cost (Rs. in crores) Rate/Unit per Ltr. (Rs.) 4. Others Gas Quantity (1000 M3) Total Cost (Rs. in crores) Rate/Unit per 1000M 3 (Rs.) 2,099.31 231,258.67 Par t ‘B’ Consumption per Unit of Production April, 95 to March, 96 April, 94 to March, 95 1,647.93 58.42 3.55 531.80 3.57 2.31 8,411.95 3.50 1.25 3,722.76 107.44 2.89 561.78 3.57 2.57 6,306.45 3.78 1.05 253,297.55 117.58 4.64 230,920.82 107.80 4.67 77,867.16 56.72 7.28 65,289.26 46.10 7.06 192,934.00 48.55 1,884.31 36.35 Fabrics PFY Per 1000 Mtrs Per MT PSF Per MT PTA Per MT LAB Per MT MEG Per MT PVC Per MT HOPE Per MT C u r r e n tP r e v i o u sC u r r e n tP r e v i o u sC u r r e n tP r e v i o u sC u r r e n tP r e v i o u sC u r r e n tP r e v i o u sC u r r e n tP r e v i o u sC u r r e n tP r e v i o u s C u r - r e n t P r e v i o u s Y e a r Y e a r Y e a r Y e a r Y e a r Y e a r Y e a r Y e a r Y e a r Y e a r Y e a r Y e a r Y e a r Y e a r Y e a r Y e a r Electricity (KWH) 1199 1049 1318 1309 Furnace Oil (Ltrs.) 6 6 16 138 693 18 699 155 371 134 374 28 320 84 325 115 840 899 497 450 207 217 Gas (SM 3) LSHS (Kgs) 3 7 1 3 8 8 1 1 1 8 1 0 8 1 2 1 3 3 3 6 3 4 157 37 179 42 20 126 249 219 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 45 Auditors’ Report To the Members of Reliance Industries Limited We have audited the attached Balance Sheet of Reliance Industries Limited as at 31st March,1996 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 ter ms of Section 227 (4A) of the Companies Act,1956 we give in the Annexure hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order. 2. Fur ther 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 pur poses of our audit. b) c) In our opinion, proper books of account, as required by law have been kept by the Company so far as appears from our examination of such books. The Balance Sheet and Profit and Loss Account referred to in this report are in agreement with the books of account.d) In our opinion and to the best of our infor mation and according to explanations given to us, the said Balance Sheet and Profit and Loss Account read 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: i) ii) in so far as it relates to Balance Sheet, of the state of affairs of the Company as at 31 st March,1996 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. Mumbai : Dated 27th May,1996 For Chaturvedi & Shah Char tered Accountants For Rajendra & Co. Char tered Accountants D. Chaturvedi Par tner R.J. Shah Partner 46 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Annexure to Auditor’s Report Referred to in paragraph 1 of our repor t of even date 1. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of infor mation available except in respect of cer tain items of furniture and fixtures. According to the infor mation and explanations given to us most of the fixed assets were physically ver ified by the management during the year and no material discrepancies were noticed on such verification as compared to the available records. In our opinion, the frequency of such verification is reasonable having regard to the size of the Company and the nature of its assets. 2. None of the fixed assets have been revalued during the year. 3. 4. 5. 6. 7. 8. 9. 10. 11. As explained to us, the stock of stores, spare par ts, raw materials and finished goods have been physically verified by the management at reasonable inter vals dur ing the year. In our opinion, the frequency of such ver ification is reasonable having regard to the size of the Company and the nature of its business. In our opinion and according to the information and explanations given to us, the procedures of physical verification of stocks followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business. As explained to us there were no material discrepancies noticed on physical verification of the stocks of raw materials, stores and spares and finished goods having regard to the size of the operations of the Company and the same have been properly dealt with in the books of account. The valuation of stocks is fair and proper and is in accordance with the nor mally accepted accounting principles and is on the same basis as in the preceding year. The Company has not taken any loans, secured or unsecured from companies, fir ms 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 subsection (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 subsidiar y companies and advance towards promoters contr ibution. Attention is invited to Note No. 8 of Schedule ‘O’ to the accounts. In our opinion, having regard to the long term involvement with the companies and the explanations given to us in this regard, the terms and conditions of the above are not, pr ima-facie, prejudicial to the interests of the Company. In respect of the loans and advances in the nature of loans given by the Company to par ties other than subsidiary companies and advance towards promoters contr ibution as 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 mater ials 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 of arrangements entered in the register maintained under Section 301 of the Companies Act,1956 and aggregating during the year to Rs.50,000(Rupees Fifty Thousand only) or more in respect of any par ty. 12. According to the infor mation and explanations given to us, the Company has a regular procedure for the deter mination of unserviceable or damaged stores, raw mater ials and finished goods. Adequate provision has been made in the accounts for the loss ar ising on the items so determined. 13. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the Public. 14. In our opinion reasonable records have been maintained by the Company for the sale and disposal of realisable by-products and scrap wherever significant. 15. In our opinion the inter nal audit system of the Company is commensurate with its size and the nature of its business. 16. The Centr al Government has prescribed maintenance of Cost Records under Section 209(1)(d) of the Companies Act, 1956, in respect of cer tain manufacturing activities of the Company. We have broadly reviewed the accounts and records of the Company in this connection and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same. 17. According to the record of the Company, Provident Fund and Employees’ State Insurance dues have been regular ly deposited with the appropr iate authorities. 18. According to information and explanation 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, 1996 for a period of more than six months from the date of becoming payable. 19. According to the infor mation 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 Industr ial Companies (Special Provisions) Act, 1985. 21. In respect of trading activities, we are infor med that the Company does not have damaged goods lying with it at the end of the year. Therefore, no provision for any loss is required to be made in the accounts. Mumbai : Dated: 27th May, 1996 For Chatur vedi & Shah Char tered Accountants For Rajendra & Co. Char tered Accountants D. Chaturvedi Partner R.J. Shah Partner R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 47 Balance Sheet as at 31st March, 1996 Schedule As at 31st March,1996 Rs. Rs. (Rs. in crores) As at 31st March, 1995 Rs. Rs. Sources of Funds Shareholders’ Funds Share Capital - Equity ‘A’ - Preference Reserves and Surplus Loan Funds Secured Loans ‘C’ 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 Sundr y Debtors Cash and Bank Balances Loans and Advances Less: Current Liabilities and Provisions Current Liabilities Provisions Net Current Assets Total Significant Accounting Policies Notes on Accounts ‘A’ ‘B’ ‘D’ ‘E’ ‘F’ ‘G’ ‘H’ ‘I’ ‘N’ ‘O’ 458.23 200.00 7,747.07 3,422.54 1,298.91 6,885.50 2,141.34 4,744.16 4,488.71 34.00 759.61 330.56 1,555.31 2,679.48 1,173.12 3,852.60 1,629.61 282.02 1,911.63 455.86 5.50 6,731.29 8,405.30 7,192.65 2,117.25 822.87 4,721.45 13,126.75 2,939.92 10,132.57 5,315.40 1,805.78 3,509.62 3,075.09 9,232.87 1,952.91 6,584.71 1,993.41 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 1,940.97 13,126.75 1,554.45 10,132.57 As per our Repor t of even date For and on behalf of the Board For Chaturvedi & Shah Char tered Accountants For Rajendra & Co. Char tered Accountants D. Chaturvedi Par tner R.J. Shah Par tner Mumbai Dated: 27th May, 1996 D.H. Ambani M.D. Ambani A.D. Ambani N.R. Meswani H.R. Meswani S.S. Betrabet Y.D. Patil R.H. Ambani N.H Ambani M.L Bhakta T. Ramesh U. Pai Y.R Trivedi } } } Chairman Vice Chairman & Managing Director Managing Director Executive Directors Nominee Directors Directors V.M. Ambani Secretar y 48 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Profit and Loss Account for the year ended 31st March, 1996 Schedule Rs. Rs. Rs. Rs. 1995-96 (Rs. in crores) 1994-95 ‘J’ ‘K’ ‘L’ ‘M’ Income Sales Other Income Variation in Stock Expenditure Purchases Manufactur ing and Other Expenses Interest Depreciation Less: Pre-operative expenses of projects under commissioning Profit for the year Add: Balance brought forward from last year Amount Available For Appropriations Appropriations Capital Redemption Reser ve Debenture Redemption Reser ve General Reser ve Inter im Dividend Paid on Preference Shares (subject to tax) Proposed Dividend (subject to tax) Preference Shares Equity Shares Balance Carried to Balance Sheet Significant Accounting Policies Notes on Accounts ‘N’ ‘O’ 7,018.78 312.59 4.42 7,335.79 6,270.94 1,064.85 62.24 1,127.09 7,786.34 271.85 152.52 8,21 0.71 6,905.44 1,305.27 90.92 1,396.19 18.71 6,461.08 110.13 336.51 6,926.43 20.99 ---- 231.30 800.00 28.00 ---- 276.22 23.68 5,726.40 279.51 278.24 6,307.83 36.89 5.50 30.50 800.00 ---- 0.83 199.34 1,335.52 60.67 1,036.17 90.92 As per our Repor t of even date For and on behalf of the Board For Chaturvedi & Shah Char tered Accountants For Rajendra & Co. Char tered Accountants D. Chaturvedi Par tner R.J. Shah Par tner D.H. Ambani M.D. Ambani A.D. Ambani N.R. Meswani H.R. Meswani S.S. Betrabet Y.D. Patil R.H. Ambani N.H Ambani M.L Bhakta T. Ramesh U. Pai Y.R Trivedi } } } Chairman Vice Chairman & Managing Director Managing Director Executive Directors Nominee Directors Directors Mumbai Dated: 27th May, 1996 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 49 V.M. Ambani Secretar y Schedules forming part of the Balance Sheet Schedule ‘A’ Share Capital Author ised: 55,00,00,000 5,50,000 3,00,00,000 14,45,00,000 Equity Shares of Rs. 10 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 Equity Shares of Rs. 10 each As at 31st March,1996 Rs. Rs. (Rs. in crores) As at 31st March, 1995 Rs. Rs. 550.00 5.50 300.00 144.50 1,000.00 460.37 550.00 5.50 300.00 144.50 1,000.00 460.37 Subscribed: Equity 46,03,69,802 (46,03,61 ,894) Equity Shares of Rs. 10 each fully paid up 460.37 Less: Calls in arrears - by others Add: Shares forfeited (Previous Year, amount originally paid on 7908 Equity Shares Rs. 39,540) 2.14 458.23 ---- 460.36 4.50 455.86 ---- Issued & Subscribed: Preference ---- (5,50,000) 2,00,00,000 15% Cumulative Redeemable Preference Shares of Rs. 100 each fully paid up (Redeemed on 1st Apr il, 1995) 14% Cumulative Redeemable Preference Shares of Rs. 100 each fully paid up (Redeemable at par on 29th March, 1997) 458.23 455.86 ---- 200.00 658.23 5.50 ---- 461.36 Of the above Equity Shares: 1. (a) 1,56,80,100 (b) 18,05,78,290 (c) 20,31,30,572 (20,31,22,664) 4,060 (d) Shares were allotted as Bonus Shares by capitalisation of Premium and Reser ves. 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 Warrants, against Global Depositor y Shares (GDS) and reissue of forfeited equity shares. Shares (including 2,475 Shares by way of Bonus Shares by Capitalisation of Share Premium and Reserves) are re ser ved for allotment to some of the Shareholders/pur ported transferees of shares of erstwhile, ‘The Sidhpur Mills Company Limited’, which was amalgamated with the Company. 2. Refer Note 1 (d)(vi) of Schedule C and Note to Schedule D in respect of option on unissued share capital. 50 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Schedules forming part of the Balance Sheet Schedule ‘B’ Reser ves & Surplus Capital Reser ve As per last Balance Sheet Add: On redemption of Debentures Profit on reissue of Forfeited Shares (Rs. 39,540) Capital Redemption Reser ve As per last Balance Sheet Add: Transferred from Profit and Loss Account Amalgamation Reser ve 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 Reserve On Reissue of Forfeited Shares Less: Calls in arrears Debenture Redemption Reser ve As per last Balance Sheet Add: Transferred from Profit and Loss Account Investment Allowance Reserve As per last Balance Sheet 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 Reser ve Taxation Reserve As per last Balance Sheet General Reser ve As per last Balance Sheet Add: Acquired on Amalgamation of RPEL & RPPL Transferred from Profit and Loss Account Profit and Loss Account As at 31st March,1996 Rs. Rs. 2.45 5.80 0.58 1.87 5.80 ---- ---- ---- ---- ---- (Rs. in crores) As at 31st March, 1995 Rs. 0.58 5.80 Rs. 0.24 0.34 ---- 0.30 5.50 674.47 244.78 919.25 919.25 4,823.71 ---- ---- ---- 0.04 4,823.75 12.49 141.75 231.30 ---- ---- 301.35 ---- 1,382.49 ---- 800.00 ---- ---- 2,312.62 1,266.42 325.42 919.25 ---- 4,823.71 25.31 4,811.26 4,798.40 111.25 30.50 373.05 141.75 6.70 6.70 ---- ---- 294.65 6.70 550.00 32.49 800.00 301.35 10.00 2,182.49 60.67 7,747.07 301.35 10.00 1,382.49 90.92 6,731.29 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 51 Schedules forming part of the Balance Sheet Schedule ‘C’ Reserves & Surplus A) Debentures 1. Non-Convertible Debentures Less: Calls in arrears 2. Advance Subscription on Debentures B) Term Loans 1. 2. From Banks a) b) Rupee Loans Foreign Currency Loans From Financial Institutions Foreign Currency Loans a) b) Rupee Loans C) Working Capital Loans From Banks As at 31st March, 1996 Rs. Rs. (Rs. in crores) As at 31st March, 1995 Rs. Rs. 1,780.95 52.43 1,728.52 83.00 529.39 77.80 607.19 395.01 16.94 411.95 1,273.04 6.48 1,266.56 ---- 1,811.52 1,266.56 17.47 142.80 160.27 275.43 9.36 284.79 1,019.14 591.88 3,422.54 445.06 405.63 2, 1 7.25 Notes 1. (a) Debentures referred to in A(1) to the extent of Rs.1217.62 crores are secured/to be secured by way of legal/equitable mor tgage on the proper ties situated at Naroda, District Ahmedabad and Hazira, District Surat in the State of Gujarat and at Patalganga, District Raigad in the State of Maharashtra and Ships of the Company. ( b ) Debentures referred to in A(1) to the extent of Rs.53.33 crores are secured by way of second and subservient charge, created by legal mor tgage in English for m on the properties situated at Naroda, District Ahmedabad in the State of Gujarat. (c) Debentures referred to in A(1 ) to the extent of Rs.510.00 crores and advance subscription referred to in A (2) are secured by legal mortgage in English form on the properties situated at Hazira, District Surat, in the State of Gujarat and at Patalganga, Distr ict Raigad in the State of Maharashtra. (d) Debentures referred to in A(1) consist of: (i) 13 .5% Debentures of Rs. 100 each aggregating Rs. 53.33 crores which are redeemable at par on the 10th December, 1996. (ii) 15% Debentures of Rs. 100 each aggregating Rs. 266.55 crores which are redeemable at par on 31 st August, 1999. (iii) 14% Debentures of Rs. 100 each aggregating Rs.82.50 crores which are redeemable at a premium of 5% on the face value of the Debentures on the expir y of seven years from the respective dates of allotment or at the option of the Board to redeem the Debentures in three equal instalments at the end of sixth, seventh and eighth year from the respective dates of allotment commencing from March, 1997. (iv) 12.5% Debentures of Rs.95 each aggregating Rs. 342.87 crores, 14% Debentures of Rs.150 each aggregating Rs. 125.78 crores and 17.5% Debentures of Rs 100 each aggregating Rs.264.92 crores, all of which are redeemable at par on the expiry of 10 years from the date of allotment i.e. 2002 with an option to the Board to redeem at any time after 26th February, 1999. (v) 18% Debentures of Rs.100 each aggregating Rs.60 crores which are redeemable at par in three equal instalments on the expiry of sixth, seventh and eighth year from the date of allotment; the redemption will commence from July, 1999. (vi) 14% Debentures of Rs.50 each aggregating Rs.75 crores which are redeemable at par on the expiry of sixth year from the date of allotment i.e. 11th Januar y, 2000. Warrants issued with the debentures entitle the holders thereof to apply at the option of the warrantholders for six crore equity shares of Rs. 10 each of the Company. (vii) 16.5% Debentures of Rs. 100 each, aggregating Rs 285 crores which are redeemable at par on the expiry of seven years from the respective dates of allotment, commencing from September, 2002. (viii) 14 08% Debentures of Rs. 100 each, aggregating Rs.308.00 crores (including advance subscr iption) which are redeemable at par in three equal instalments, commencing from the expir y of fifth year from the respective dates of allotment commencing from February, 2000. (ix) Debentures aggregating Rs.0.11 crore are held by Directors. (a) Term Loans referred to in B(1 ) (a), to the extent of Rs. 515.25 crores are secured on the proper ties situated at Hazira, Distr ict Surat in the State of Gujarat and at Patalganga, District Raigad in the State of Maharashtra and Ships of the Company and Term Loan referred to in B(2)(a) above to the extent of Rs.226.34 crores are to be secured on the properties situated at Hazira, Distr ict Surat in the State of Gujarat and at Patalganga, District Raigad in the State of Maharashtra. (b) Term Loan referred to in B(2) (a) to the extent of Rs. 159 55 crores and Ter m Loan referred to in B(2)(b) above, to the extent of Rs.7.28 crores are secured/to be secured on the properties situate at Naroda, District Ahmedabad and Hazira, District Surat in the State of Gujarat, at Patalganga, District Raigad in the State of Maharashtra and Ships of the Company. (c) Term Loans referred to in B(2)(a) to the extent of Rs.9.12 crores are secured by an exclusive charge by way of hypothecation of specific items of machiner y ÜjÜŒ(d) Ter m Loans referred to in B(1 ) (a) to the extent of Rs.1.65 crores are secured by guarantee issued by one of the Bankers of the Company against hypothecation of specific items of plant and machiner y. (e) Term Loans referred to in B(1) (a) to the extent of Rs.12.49 crores are secured by guarantee issued by one of the Bankers to the Company against hypothecation of all movable assets both present and future situated at Naroda and Patalganga. (f) The Ter m Loans referred to in B(1 )(b) are secured by pledge of units of Unit Trust of India. (g) The Term Loans referred to in B(2)(b) above to the extent of Rs.9 66 crores are secured/to be secured only on the dwelling units constr ucted/to be constructed for the employees of the Company. The charges created/to be created on the debentures referred to in Note 1 (a) and Note 1 (c) and term loans referred to in Notes 2(a) and (b) above, shall rank par i 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, stock-in-process, stores and spares, book debts, outstanding monies, receivable claims, trust receipts etc. (b) Secured Loans, include loans of Rs. 158.25 crores and Debentures of Rs. 78.33 crores repayable/redeemable within one year. R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 2. 3. 4. 52 Schedules forming part of the Balance Sheet Schedule ‘D’ Unsecured Loans As at 31st March, 1996 Rs. Rs. (Rs. in crores) As at 31st March, 1995 Rs. Rs. A) i) ii) 3.5% Euro Conver tible Bonds due 1999 8.125% Euro Bonds due 2005 B) Fixed Deposit C) Shor t Ter m Loans Banks i) ii) Others D) Interest-free Loans under Sales-tax Deferral Scheme 480.92 515.25 ---- ---- 67.00 235.74 1,298.91 442.43 ---- 8.04 137.16 235.04 822.67 ---- Note: The Bonds referred to in (A) (i) are conver tible into 1,52,49,305 Equity Shares of Rs. 10 each of the Company at the option of the bondholders. Schedule ‘E’ Fixed Assets Description Leasehold Land Freehold Land Development Rights Buildings Plant & Machi nery Electrical Installation Factory Equipments Furniture & Fixtures Vehicles Ships Aircrafts & Helicopter Jetties Total Previous Year Capital Work-in-Progress Notes: Gross Block Depreciation Net Block (Rs. in crores) Additions Rs. Deductions Rs. Upto 01-04-95 Rs. For the Year Rs. Deduc---- tions Rs. Upto 31-03-96 Rs. As At 31 -03-96 Rs. As At 31-03-95 Rs. As At 01-04-95 Rs. 52.36 1.09 38.66 334.45 2.05 2.22 ---- 92.87 4,429.98 1,166.05 142.75 52.44 31.19 26.63 152.63 25.41 27.82 5,315.40 4,737.72 88.47 36.21 7.61 10.26 18.75 ---- 148.50 1,572.99 593.86 As At 31-03-96 Rs. 54.41 3.31 38.65 427.32 0.95 ---- 0.12 38.34 5,595.98 1,681.66 231.22 88.53 38.77 34.20 171.38 25.41 176.32 31.99 9.33 8.99 4.61 25.09 1.71 2.99 ---- ---- -------- 0.05 ---- 0.12 0.03 2.69 ---- ---- ---- 0.35 ---- 1.23 14.33 284.85 8.41 4.90 2.71 2.87 8.51 1.42 6.93 2.89 16.18 6,885.50 5,315.40 1,805.78 1,532.68 336.51 278.24 - ---- ---- - 0.04 ---- 0.03 0.01 0.87 - ---- ---- 0.95 5.14 1.30 ---- 1.35 52.67 53.11 3.31 37.30 51 40 1.09 38.52 374.65 296.11 1, 966.47 3,629.51 2,748.35 40.40 14.20 11.69 6.61 33.60 3.13 9.92 2,141.34 1,805.78 190.82 110.76 74.33 27.08 27.59 137.78 22.28 166.40 4,744.16 3,509.62 4,488.71 43.11 22.19 22.02 127.54 23.70 24.83 3.509.62 3,075.09 a) Leasehold Land include Rs.0.11 Crore in respect of which lease-deeds are pending execution. b) Buildings include cost of shares in Co-operative Societies Rs.0.01 crore (Previous Year Rs. 44,150). c) Capital Work-in-Progress includes (i) Rs.395.67 Crores on account of pre-operative expenses. (Previous Year Rs. 195.40 Crores). (ii) Rs.236.82 Crores on account of cost of construction materials at site. (Previous Year Rs. 148.22 Crores) (iii) Rs.307.59 Crores on account of advance against Capital Work-in-Progress. (Previous Year Rs. 1432.66 Crores). d) Additions include Rs.20.41 Crores on account of exchange difference. (Previous Year Rs. 11.14 Crores). e) The Ownership of Jetties vests with Gujarat Maritime Board. However, under an agreement with Gujarat Maritime Board, the Company has been per mitted to use the same at a concessional rate. R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 53 Schedules forming part of the Balance Sheet Schedule ‘F’ Investments A. Long Term Investments Government and other Securities Unquoted As at 31st March, 1996 Rs. Rs. (Rs. in crores) As at 31st March, 1995 Rs. Rs. 7 Years National Savings Cer tificates (Face Value Rs.5,000) (Deposited with Sales Tax Dept)(Previous Year Rs.5,000) Post Office Time Deposit Indira Vikas Patra (Rs.15,000; Previous year Rs.15,000) Kisan Vikas Patra (Deposited with Sales Tax Dept) (Rs.20,000; Previous year Rs.20,000) Vikas Cash Cer tificate (Deposited with Sales Tax Dept) (Rs.2,000; Previous year Rs.2,000) ---- 0.20 ---- ---- ---- 0.20 Trade Investments In Equity Shares Quoted, fully paid up 6,05,80,969 Reliance Capital Ltd. of Rs. 10 each 486.55 * (5,30,55,150) 69,80,000 Reliance Industrial Infrastructure Ltd. of Rs. 10 each (69,80,000) Unquoted, fully paid up 16.58 503.13 60 New Piece Goods Bazar Co. Ltd. of Rs.100 each (60) (Rs.17,000; Previous year Rs.17,000) 5 Bombay Gujarat Art Silk Vepari Mahajan Co-operative Shops (5) & Warehouse Society Ltd. of Rs.200 each (Rs.1,000; Previous year Rs.1,000) 165 The Ar t Silk Co-operative Society Ltd. of Rs.100 each (165) (Rs.16,500;Previous Year Rs.16,500) 20 The Bombay Mar ket Ar t Silk Co-operative (Shops & (20) Warehouses) Society Ltd., of Rs.200 each, (Rs.4,000; Previous Year Rs.4,000) 15 Pandesara Industrial Co-operative Society Ltd. of (15) Rs.100 each (Rs.1,500; Previous year Rs.1,500) 11,08,500 Reliance Europe Ltd. of Sterling (11,08,500) Pound 1 each 650 Reliance Petroproducts Private Ltd. of Rs.10 each @ (1,300) (Rs.6,500; Previous year Rs.13,000) 800 Reliance Global Trading Private Ltd. of Rs.10 each @ (-) (Rs.8,000; Previous year Rs. Nil) Unquoted, partly paid up 225 Crimpers Industr ial Co-operative Society Ltd. of Rs. 100 (225) each Rs. 25 paid up (Rs.5,625; Previous Year Rs. 5,625) 1,000 Reliance Petroproducts Pr ivate Ltd. of Rs. 2.50 each (-) (Rs.2,500; Previous year Rs. Nil) 1,250 Reliance Global Trading Pr ivate Ltd. of Rs. 2.50 each (Rs.3,125; Previous year Rs. Nil) (-) ---- Reliance Capital Limited, of Rs.10 each (73,82,781) Rs. 5 Paid up In Preference Shares Unquoted, fully paid up 86,00,000 6% Cumulative Redeemable Preference (86,00,000) Shares of Reliance Enterprises Limited, of Rs. 100 each ---- ---- ---- ---- ---- 3.93 ---- ---- 3.93 ---- ---- ---- ---- ---- 86.00 86.00 ---- 0.20 ---- ---- ---- 0.20 0.20 0.20 443.95 16.58 460.53 ---- ---- ---- ---- ---- 3.93 ---- ---- 3.93 ---- ---- ---- 21.71 21.71 86.00 86 00 54 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Schedules forming part of the Balance Sheet Schedule ‘F’ (Contd.) Investments In Debentures Unquoted, fully paid up As at 31st March, 1996 Rs. Rs. (Rs. in crores) As at 31st March, 1995 Rs. Rs. 1,00,00,000 Zero Coupon Optionally Convertible Unsecured Debentures (-) of Reliance Petroproducts Private Limited of Rs.100 each 100.00 In Equity Shares of subsidiary companies Unquoted, fully paid up 2,10,070 Devti Fabrics Ltd. of Rs.10 each (2,10,070) 14,75,04,400 Reliance Industr ial Investments and Holdings Ltd. (14,75,04,400) of Rs.10 each In Debentures of subsidiary companies Unquoted, fully paid up 12,62,903 Zero Coupon Optionally Conver tible Unsecured (-) Debentures of Reliance Industrial Investments and Holdings Ltd. of Rs.5,000 each Other Investments In Equity Shares Quoted, fully paid up 15,51,600 BSES Ltd. of Rs.10 each (14,86,700) 27,57,800 (5,98,250) Larsen & Toubro Ltd. of Rs.10 each Unquoted, fully paid up 1,000 Air Control & Chemical Engineer ing Co. Ltd. (1,000) of Rs.100 each 100.00 0.21 147.50 147.71 631.45 631.45 33.73 69.53 103.26 0.01 0.01 Total (A) 103.27 1,575.69 B. Current Investments Other Investments In Equity Shares Quoted, fully paid up 11,000 Delta Industr ies Ltd of Rs. 10 each (11,000) 80 The Industr ial Credit & Investment Cor poration (54,980) 3,91,960 Indian Petrochemicals Cor poration Ltd. of India Ltd. of Rs.10 each (Rs.1,491) (-) of Rs.10each 2,54,700 Industr ial Development Bank of India Ltd. (-) of Rs.10 each ---- State Bank of India of Rs.10 each (2,75,000) Unquoted, fully paid up 4,80,000 Him Teknoforge Limited of Rs.10 each (4,80,000) 22,500 Equity Shares of Container Cor poration of India Ltd. (34,42,600) of Rs.10 each 0.08 ---- 6.44 3.40 ---- 9.92 1.20 0.16 1.36 ---- ---- 693.06 572.17 0.21 147.50 147.71 ---- ---- 779.16 147.71 47.27 767.35 32.28 14.98 47.26 0.01 0.01 0.08 0.17 ---- ---- 6.30 6.55 1.20 25.13 26.33 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 55 Schedules forming part of the Balance Sheet Schedule ‘F’ (Contd.) Investments In Debentures Quoted, fully paid up 624 12.5% Fully Conver tible Debentures of ICICI Ltd. (624) of Rs. 450 each As at 31st March, 1996 Rs. Rs. (Rs. in crores) As at 31st March, 1995 Rs. Rs. In Bonds Taxfree, unquoted, fully paid up 9.50% India Development Bonds (Face Value US$ NIL) (Previous year US$1,39,72,000) Taxable , unquoted, fully paid up 13% Unsecured, Redeemable, Industrial Development Bank of India Omni Bonds Series 2 in the form of Promissor y Note (Face value Rs.2 crores;Previous year Rs. Nil) 50,000 13% Secured, Redeemable Bonds of Nuclear Power (-) Corporation of India Ltd. of Rs.1,000 each ---- 15% Secured, Redeemable, Non-cumulative Bonds of (1,00,000) Steel Authority of India Ltd. of Rs.1,000 each 1,10,000 15.5% Secured, Redeemable, (2nd issue) Privately placed (-) Bonds of Nuclear Power Corporation of India Ltd. of 0.03 0.03 ---- ---- 1.92 4.73 ---- Rs.1,000 each 17% Secured, Redeemable, 6th Issue, pr ivately placed ---- 10.29 (20,000) Bonds of Mahanagar Telephone Nigam Ltd. of Rs.1,000 each ---- 3,04,500 17.5% Secured, Redeemable, Non-cumulative Bonds of (-) Nuclear Power Corporation of India Ltd. of Rs.1,000 each 30.75 5,000 Unsecured, Redeemable, Floating Interest Rate Bonds of (-) Punjab National Bank of Rs.10,000 each ---- Unsecured, Redeemable, Floating Interest Rate Bonds of (10,000) State Bank of India of Rs.1,000 each 17% Secured, Redeemable Bonds of Power Finance Corporation (Face value Rs.17 crores; Previous year Rs.Nil) In Units Quoted ---- Kothari Bluechip Fund of Rs.10 each (70,00,000) 22,60,100 SBI Magnum Multiplier Plus 1993 units (3,65,800) of Rs. 10 each ---- GIC RISE-II of Rs.10 each (3,75,00,000) 11,40,85,600 Units (1964 scheme), Unit Tr ust of India (52,34,25,310) of Rs.10 each 50,00,000 Reliance Capital Growth Fund of Rs.10 each (-) Unquoted 50,00,000 The Alliance ’95 Fund Units of Rs.10 each (50,00,000) ---- (2,00,00,000) JM Mutual Fund (Liquid Fund) of Rs.10 each 3,00,000 Units of Unit Scheme 1995, Unit Trust of India (10.00,000) 9,05,37,771 Kothari Pioneer Prima Fund Units of Rs.10 each of Rs.100 each (15,79,57,680) 1,50,00,000 Reliance Vision Fund of Rs.10 each (-) 4.83 ---- 17.22 69.74 ---- 2.26 ---- 173.97 5.00 181.23 4.85 ---- 3.00 92.09 15.00 114.94 0-03 0.03 54.16 54.16 ---- ---- 10.53 ---- 2.32 ---- ---- 1.00 ---- 13.85 7.00 0.40 40.17 834.91 ---- 882.48 5.00 18.98 10 00 208.68 ---- 242.66 Total Investments (A) + (B) Total (B) 377.22 1,952.91 1,226.06 1,993.41 * Includes 2,57,12,100 shares having a lock-in period upto October 1999. @ Ceased to be a Subsidiar y Company during the year. 56 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Schedules forming part of the Balance Sheet Schedule ‘F’ (Contd.) Investments Aggregate Value of Quoted Investments Unquoted Investments Movements during the year (Purchased & Sold) Government Securities 14% Central Government Stock, 2005 14% Maharashtra State Development Loan, 2005 Bonds 9% Coal India Limited 13% Industrial Development Bank of India 9.25% National Hydroelectr ic Power Corporation Limited 13% National Hydroelectric Power Cor poration Limited 15% Steel Authority of India Limited Shares Padmini Polymers Ltd. Indian Petrochemicals Cor poration Ltd. Larsen & Toubro Ltd. Industr ial Development Bank of India Reliance Global Trading Private Ltd. Reliance Global Trading Private Ltd. Reliance Petroproducts Pr ivate Ltd. Mutual Fund Units Units’64 SBI Magnum Multiplier Plus ’93 ‘Represents Rupees in Crores As at 31st March, 1996 Rs. Rs. Book Value Rs. 797.56 1155.35 Market Value Rs. 785.52 ---- (Rs. in crores) As at 31st March, 1995 Rs. Book Value Rs. 1396.85 596.56 Rs. Mar ket Value Rs. 1738.56 ---- Face Value Rs. Nos. Cost Rs. in crores 3.00* 5.00* 1000.00 158.00 1000.00 * 1000.00 1000.00 50000 50000 1010000 130000 10.00 10.00 10.00 10.00 10.00 2.50 2.50 200000 310040 4 1440000 800 1250 1000 * 2.21 5.00 4.45 155.01 4.45 96.59 12.83 34.80 6.05 59.14 0.50 5.27 19.22 0.00 0.00 0.00 10.00 10.00 84400000 43510300 149.37 43.54 13% Industrial Credit & Investment Corporation of India Limited 9.5% India Development Bonds 39.00 US$ 19,10,000 * 17.5% Nuclear Power Corporation of India Ltd. 1000.00 585500 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 57 186.75 148.19 41.43 383.24 54.79 4.58 59.37 4.58 54.79 275.77 0.50 130.48 2.96 1,421.37 * Schedules forming part of the Balance Sheet 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 Banks In Current Accounts with Scheduled Banks In Fixed Deposit Accounts With Scheduled Bank With Others * Represents deposits of a) Rs.1318.32 Crores with Union Bank of Switzerland (Previous Year Rs.224.07 Crores)(Maximum amount outstanding at any time during the year Rs.1318.32 Crores.) b) Rs.103.05 Crores with Industrial Development Bank of India (Previous Year Rs. Nil)(Maximum amount outstanding at any time during the year Rs.103.05 Crores.) Schedule ‘H ‘ Loans and Advances Unsecured - (Considered Good) Loans to subsidiar y companies Advances recoverable in cash or in kind or for value to be received Deposits Balance with Customs, Central Excise Authorities, etc. As at 31st March, 1996 Rs. Rs. 34.00 (Rs. in crores) As at 31st March, 1995 Rs. 8.76 Rs. 168.48 221.93 48.42 223.73 759.61 662.56 83.67 6.66 90.33 6.66 83.67 457.53 330.56 541.20 0.38 139.93 2.41 224.07 1 ,555.31 2,679.48 366.79 1,579.31 13.43 675.25 257.21 227.23 1,173.12 592.64 568.95 125.18 84.84 1,371.61 Notes: Advances include: (a) Rs.0.23 Crore to Officers (Maximum amount outstanding at any time during the year Rs. 0.23 Crore) (b) Rs. 200.00 Crores to Reliance Petroleum Limited, a Company under the same management, towards promoters’ contribution. (Previous Year Rs. Nil) 58 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Schedules forming part of the Balance Sheet Schedule ‘I’ Current Liabilities Provisions Current Liabilities Sundry Creditors Unclaimed Dividends Excess Debenture Application monies refundable/adjustable Interest accrued but not due on loans Provisions Provision for Wealth Tax Provision for Leave Encashment Proposed Dividend (subject to tax) *includes for capital expenditure Rs.643.36 Crores (Previous year Rs.286.34 Crores) and acceptances of Rs.209.22 Crores (Previous year Rs.91.31Crores) (Rs. in crores) As at 31st March, 1996 Rs. Rs. As at 31st March, 1995 Rs. Rs. * 1,514.54 9.54 3.14 102.39 2.40 3.40 276.22 1,118.23 10.74 3.07 62.86 1,629.61 1,194.90 1.40 ---- 200.17 282.02 1,911.63 201.57 1,396.47 Schedules forming part of the Profit and Loss Account Schedule ‘J’ Other Income Expor t Incentives Dividends: From Subsidiaries From Long Ter m Investments From Current Investments [Tax Deducted at source Rs. 26.19 Crores; (Previous Year Rs. 7.37 Crores)] Interest Received From Current Investments From Others [Tax Deducted at source Rs.t3.03 Crores; (Previous year Rs.9.88 Crores)] Profit on Sale of Current Investments (net) Profit on Sale of Assets (net) Miscellaneous Income Schedule ‘K’ Variation in Stock Stock-in-trade (at close) Finished goods Stock-in-process Stock-in-trade (at commencement) Finished goods Stock-in-process 1995-96 Rs. Rs. ---- 12.24 18.34 80.66 16.91 96.33 383.24 41.43 223.73 48.42 111.24 113.24 25.77 0.03 21.57 271.85 424.67 272.15 152.52 Rs. 4.79 2.13 77.07 70.71 94.48 223.73 48.42 226.08 41.65 (Rs. in crores) 1994-95 Rs. 0.27 83.99 165.19 56.05 0.24 6.85 312.59 272.15 267.73 4.42 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 59 Schedules forming part of the Profit and Loss Account 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 Spares Dyes and Chemicals Electr ic Power, Fuel and Water Machiner y Repairs Building Repairs Labour, Processing and Machinery hire Charges Excise Duty Lease Rent Exchange Differences 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 Adver tisement 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 Schedule ‘M’ Interest Debentures Fixed Loans Others (Rs. in crores) 1995-1996 Rs. Rs. 1994-1995 Rs. Rs. 221.93 1,197.19 1,419.12 148.19 107.09 166.23 315.89 45.10 24.46 126.48 1,507.83 97.45 19.05 134.40 18.28 37.75 40.76 51.46 79.08 3.65 38.80 5.69 13.77 36.29 21.62 21.81 17.13 32.44 1.21 161.41 1.00 4.34 1,203.87 1,630.63 1,270.93 2,059.68 143.78 1,282.02 1,425.80 221.93 107.42 136.68 289.59 14.18 10.84 92.96 1,517.13 142.97 1.97 2,409.58 2,313.74 190.43 95.22 12.37 29.68 27.39 57.56 67.26 2.92 48.59 4.33 7.38 137.27 233.21 215.43 27.53 15.23 29.66 12.65 22.05 0.72 112.85 0.60 4.17 297.25 6,461.08 73.90 30.13 6.10 110.13 225.46 5,726.40 183.26 21.24 75.01 279.51 60 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Significant Accounting Policies Schedule ‘N’ 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 pr inciples 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 accr ual 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; depreciation on Development Rights has been provided in propor tion of oil production achieved; Premium on leasehold land is amor tised over the period of lease; and cost of Jetty is amortised over the period of agreement so however that the aggregate depreciation provided to date is not less than the aggregate rebate availed by the Company. C. Foreign Currency Transactions a) Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction. b) Monetar y items denominated in foreign currencies at the year end and not covered by forward exchange contracts are translated at year end rates and those covered by forward exchange contracts are translated at the rate ruling at the date of transaction as increased or decreased by the propor tionate difference between the forward rate and exchange rate on the date of transaction, such difference having been recognised over the life of the contract. c) Non monetar y foreign currency items are carried at cost. d) Any income or expense on account of exchange difference either on settlement or on translation is recognised in the profit or loss account except in cases where they relate to the acquisition of fixed assets in which case they are adjusted to the carr ying cost of such assets. D. Investments a) Long ter m investments and unquoted current investments are carried at cost. Current investments are carr ied at the lower of cost and quoted/fair value, computed categor y wise. b) Cost is arrived at by applying specific identification method. E. Inventories Inventor ies are valued at cost except for finished goods and by-products. Finished goods are valued at lower of cost or market value and byproducts 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. H. Employee Retirement Benefits Company’s contr ibutions to Provident Fund and Superannuation Fund are charged to Profit and Loss Account. Gratuity and Leave encashment benefit at the time of retirement are 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 ter ms and other considerations, except for rentals pertaining to the period upto 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 Unincorporated joint venture with Oil and Natural Gas Corporation Ltd. and Enron Oil and Gas India 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 per taining to the projects are capitalised. R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 61 Notes on Accounts Schedule ‘O’ 1 . 2. 3. 4. ( a ) The previous year’s figures have been reworked, regrouped, rearranged and reclassified wherever necessar y. ( b ) Figures have been presented in ‘crores’ of r upees 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 past, sales include Inter divisional transfers of Rs. 2059.68 crores (Previous Year Rs. 1630.63 crores). A sum of Rs.6.29 crores (net) (Previous Year Rs. 0.14 crore) included in ‘Manufacturing and Other Expenses’ represents net pr ior period adjustments. (a) Auditors’ Remuneration: (Rs.in crores) i) Audit Fees Tax Audit Fees ii) iii) For Cer tification and Consultation in finance and tax matters iv) Expenses reimbursed (b) Cost Auditor : Audit Fees Rs. 0.03 crore (Previous Year Rs. 0.02 crore) 1995-96 0.62 0.18 0.35 0.06 1.21 1994-95 0.45 0.14 0.08 0.05 0.72 5. (a) The Company has been advised that the computation of net profits for the purpose of Directors’ rem uneration 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 XlIl to the Companies Act, 1956. (b) Directors’ Remuneration: Salaries i) ii) Contribution to Provident Fund and Superannuation Fund iii) Provision for Gratuity iv) Perquisites 1995-96 0.79 0.11 0.09 0.37 1.36 (Rs.in crores) 1994-95 0.35 0.02 0.06 0.03 0.46 6. 7. The income-tax assessments of the Company have been completed upto Assessment Year 1993-94. The total demand raised by the Income-Tax Depar tment upto the said Assessment Year is Rs. 176.52 crores which is disputed. Based on the decisions of the Appellate Orders and the interpretations of other relevant provisions, the Company has been legally advised that the demand is likely to be either deleted or substantially reduced and hence the Taxation Reserve created in the past would be adequate enough to meet the liabilities, if any. The Company has been advised that no provision for taxation is necessary for the current financial year in view of admissible reliefs under Income Tax Act. Pre-Operative Expenses (Rs. in crores) (in respect of Projects upto 31st March 1996, to be capitalised). Opening Balance Add: Preoperative expenditure transferred from Profit and Loss Account Lease Expenses General Expenses Interest Issue Expenses Less: Capitalised during the year Closing Balance 1995-96 195.40 1994-95 82.65 20.99 51.75 - 235.83 11.97 36.89 4.47 0.06 101.99 27.77 320.54 515.94 120.27 395.67 171.18 253.83 58.43 195.40 8. 9. The Company has an investment of Rs.0.21 crore in the Share Capital, loan of Rs.13.43 crores and receivables on account of sale of goods of Rs. 0.20 crore from Devti Fabrics Ltd., (DFL), a wholly owned subsidiar y company. The losses of DFL exceed its paid-up Capital and Reser ves as on 31st March,1996. 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 ar ise. The Department of Company Affairs, Government of India vide its Order dated 13th May,1996 issued under Section 211 (4) of the Companies Act,1956 has exempted the Company from publication of cer tain infor mation in the Profit and Loss Account under paras 3 (i) (a), 3 (ii)(a) and 3 (ii) (b) of Part II of Schedule Vl to the Companies Act, 1956. 10. Fixed assets taken on lease amount to Rs.378 24 crores. Future obligations towards lease rentals under the lease agreements as on 31st March,1996 amount to Rs.171.53 crores. 11. (a) In view of the Accounting Standard on “Accounting for the Effects of Changes in Foreign Exchange Rates” (AS-11) issued by the Institute of Chartered Accountants of India, being mandatory with effect from 1st April 1995, foreign currency transactions are translated as per the accounting policy referred to in Item C (b) of Schedule ‘N’. Consequent to the change, profit for the year is higher by Rs. 5.79 crores. (b) In view of the Accounting Standard referred to in (a) above the expense on account of exchange difference on outstanding forward exchange contracts to be recognised in the Profit and Loss Account of subsequent accounting periods aggregate to Rs. 3.50 crores. 62 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Notes on Accounts Schedule ‘O’ (Contd.) 12. Hither to, depreciation on Jetty was provided under straight line method at the rate and in the manner prescr ibed in Schedule XIV to the Companies Act, 1956. The basis of depreciation has now been changed retrospectively from the date of constr uction of Jetty on the basis indicated in Item B(b) of Schedule N. Consequent to the change there is an additional depreciation charge for previous years of Rs.1.46 crores which is included in the depreciation for the year. 13. In view of the Accounting Standard on “Accounting for Retirement Benefits in the Financial Statement of Employers” (AS-15) issued by the Institute of Chartered Accountants of India, being mandator y with effect from 1 st April, 1995 the Company has made provision for leave encashment benefit on retirement aggregating to Rs. 3.40 crores. As at 31st March,1996 (Rs.in crores). As at 31st March,1995 14. Contingent Liabilities (a) Estimated amount of contracts remaining to be executed on capital accounts and not provided for (b) Outstanding guar antees furnished to Banks and Financial Institutions including in respect of Letters of Credit (c) Guarantees to Banks and Financial Institutions against credit facilities extended to third par ties 221.61 14.27 (d) Liability in respect of bills discounted with Banks (e) Uncalled liability on par tly paid Shares/Debentures (Rs. 33,750) . (f) Claims against the Company/disputed liabilities not acknowledged as debts 1889.98 1725.10 81.33 ---- 47.27 15. Licensed and Installed Capacity Licensed Capacity Installed Capacity (a) Polyester Filament Yar n/Polyester Chips (b) Polyester Staple Fibre/Polyester Chips (c) Man-made 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 Terepthalic Acid (g) Linear Alkyl Benzene Ethylene (h) (i) (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) (ii) Ethylene Glycol (Non-Fibre) (iii) Carbon Dioxide Ethylene Oxide (k) High/Linear Low Density Polyethylene (Swing Plant) (I) Poly Vinyl Chloride (m) Polyster Filament Yarn (n) Paraxylene (i) Chlorine (ii) Caustic Soda (By Product) (iii) Hydrogen (By Product) (i) (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) Mono Ethylene Glycol (ii) Ethylene Oxide (iii) Higher Ethylene Glycol (By-Product) (i) (ii) Propylene (iii) Butadiene & Other C4s (i) Naphtha (ii) LPG (iii) KeroseneM.T. (iv) Diesel Ethylene (u) LDPE. (v) (i) Chlorine (ii) Caustic Soda (iii) Hydrogen (i) (j) (o) (p) (q) (r) (s) (t) Unit 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. M.T. M.T. M.T. M.T. 180,000 M.T. M.T. M.T. M.T. M.T. 1995-96 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. N.A. 396,000 468,000 11 700 1,400,000 56,000 100,000 12,500 100,000 10,000 12,500 200,000 25,000 25,000 800,000 390,000 240,000 720,000 110,000 ---- 360,000 150,000 708,000 800,000 20,160 1994-95 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. N.A. 396,000 468,000 11,700 1,400,000 56,000 100,000 12,500 ---- ---- ---- 200,000 25,000 25,000 800,000 390,000 240,000 ---- ---- ---- ---- ---- ---- ---- ---- + 1995-96 32,300 75,000 24,094 23,040 714 28 200,000 80,000 U.l. U.l. U.l. U.l. U.l. U.l. 80,000 10,000 12,500 ---- ---- ---- 160,000 135,000 60,000 U.l. U.l. U.l. ---- ---- U.l. U.l. U.l. U.l. U.l. ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- N.A. - 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. R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 + 706.73 1342.09 115.49 15.60 37.71 994-95 32,300 45,000 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. U.l. ---- ---- U.l. U.l. ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- 63 Notes on Accounts Schedule ‘O’ (Contd.) 16. Production of Finished Products Meant for Sale Fabrics Polyester Filament Yar n Polyester Staple Fibres PTA LAB Ethylene Glycol PVC PE Crude Oil Unit Mtrs. in Lacs M.T. M.T. M.T. M.T. M.T. M.T. M.T. M.T. 1995-96 492.44 104,522 93,046 65,726 75,826 52,924 186,511 191,324 181,103 1994-95 474.95 94,380 92,556 86,335 80,508 54,811 186,597 166,250 43,719 17. Value of Imports on C.l.F. basis in respect of (a) Raw Materials (b) Stores and Spares, Dyes and Chemicals (c) Capital goods 18. 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 Know-how & Engineering Fees Euro Bond & other expenses 19. Value of Raw Materials Consumed Impor ted Indigenous 20. Value of Dyes, Chemicals, Catalysts, Stores and Spares Consumed Impor ted Indigenous 21. Earnings in Foreign Exchange Expor t of goods on FOB basis Interest Others 22. Remittance in Foreign Currency on Account of Dividend (Rs.in crores) 1994-95 808.58 67.80 386.30 54.38 2.64 318.62 53.97 1994-95 % of total Consumption 73.32 26.68 1995-96 709.72 89.28 1,274.57 72.19 1.42 755.15 126.38 Rs.in Crores 882.72 321.15 1995-96 Rs.in % of total Crores Consumption 81.62 1037.36 18.38 233.57 1,270.93 100.00 1,203.87 100.00 119.37 153.95 43.67 56.33 82.45 161.65 33.77 66.23 273.32 100.00 244.10 100.00 (Rs. in crores) 1995-96 1994-95 79.88 46.21 0.00 174.45 24.62 6.74 The Company has paid dividend in respect of shares held by Non-Residents on repatriation basis. This inter-alia includes por tfolio investment and direct investment, where the amount is also credited to Non-Resident External Account (NRE A/c). The exact amount of dividend remitted in foreign currency cannot be ascer tained. The total amount remittable in this respect is given herein below: (a) Number of Non-resident share holders (b) Number of Equity Shares held by them (c) (i) Amount of dividend paid (Gross) Tax deducted at source: Rs.4.39 crs (Previous Year : Rs.2.51 crs.) (ii) Year to which dividend relates 27,444 7,45,42,742 34.11 19,726 5,95,82,568 18.53 1994-95 1993-94 64 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Notes on Accounts Schedule ‘O’ (Contd.) 23. Balance Sheet Abstract and Company’s General Business Profile I . Registration Details Registration Balance Sheet Date N o . 31-03-96 II. Capital Raised during the year (Amount Rs. in crores) 19786 State Code 1 1 Public Issue Nil Bonus Issue Nil Rights Issue Nil Private Placement 200.00 III. Position of Mobilisation and Deployment of Funds (Amount Rs. in crores) Total Liabilities 13,126.75 Sources of Funds Paid-up Capital 658.23 Secured Loans 3,422.54 Application of Funds Net Fixed Assets 9,232.87 Net Current Assets 1,940.97 Accumulated Losses Nil IV. Performance of Company (Amount Rs. in crores) Tu rno ve r 7,786.34 Profit Before Tax 1,305.27 Earning per share Rs.27.89 Total Assets 13,126.75 Reserves & Surplus 7,747.07 Unsecured Loans 1,298.91 Investments 1,952.91 Misc. Expenditure Nil Total Expenditure 6,905.44 Profit After Tax 1,305.27 Dividend Rs. 6.00 per share V. Generic Names of Three Principal Products of Company (as per monetary ter ms) Item Code No (ITC Code) Product Description Item Code No (ITC Code) Product Description Item Code No (ITC Code) Product Description 29172.00 Purified Terephthalic Acid (PTA) 540242.00 Polyester Filament Yarn (PFY) 390120.00 Polyethylene (PE) As per our Repor t of even date For and on behalf of the Board For Chaturvedi & Shah Char tered Accountants For Rajendra & Co. Char tered Accountants D. Chaturvedi Partner R.J. Shah Partner D.H. Ambani M.D. Ambani A.D. Ambani N.R. Meswani H.R. Meswani S.S. Betrabet Y.D. Patil R.H. Ambani N.H Ambani M.L Bhakta T. Ramesh U. Pai Y.R Trivedi } } } Chairman Vice Chairman & Managing Director Managing Director Executive Directors Nominee Directors Directors Mumbai Dated: 27th May, 1996 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 65 V.M. Ambani Secretar y Statement pursuant to Section 212 of the Companies Act, 1956, relating to Company’s interest in subsidiary Companies. Name of Subsidiar y Company Devti Fabrics Ltd. Reliance Industrial Investments and Holdings Ltd. 1. The financial year of the Subsidiar y Companies ended on 31st March, 1996 31st March, 1996 2. Date from which they become subsidiar y 30th September, 1985 30th December, 1988 companies 3. a. Number of shares held by Reliance Industr ies Limited with its nominees in the subsidiar ies at the end of the financial year of the subsidiary fully paid-up companies. b. Extent of interest of holding company at the end of the financial year of the subsidiar y companies. 4. The net aggregate amount of the subsidiar y 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 1996 For the previous financial years of the subsidiar y companies since they became the holding Company’s subsidiaries b. Dealt with in holding company’s accounts: i) ii) For the financial year ended 31st March, 1996 For the previous financial years of the subsidiar y Companies since they became the holding Company’s subsidiaries 2,10,070 Equity Shares of the face value of Rs.10 each fully paid-up 14,75,04,400 Equity Shares of the face value of Rs.10 each 100 % 100 % (Rs. 646.70 Lakhs) Rs. 0.57 Lakh (Rs. 756.10 Lakhs) Rs. 149.69 Lakhs NIL NIL NIL NIL As per our Repor t of even date For and on behalf of the Board For Chaturvedi & Shah Char tered Accountants For Rajendra & Co. Char tered Accountants D. Chaturvedi Par tner R.J. Shah Par tner Mumbai Dated: 27th May, 1996 D.H. Ambani M.D. Ambani A.D. Ambani N.R. Meswani H.R. Meswani S.S. Betrabet Y.D. Patil R.H. Ambani N.H Ambani M.L Bhakta T. Ramesh U. Pai Y.R Trivedi } } } Chairman Vice Chairman & Managing Director Managing Director Executive Directors Nominee Directors Directors V.M. Ambani Secretar y 66 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Cash Flow Statement Annexed to the Balance Sheet for the Period April 1995 - March 1996 1995-1996 Rs. Rs. (Rs. in crores) 1994-1995 Rs. Rs. A. Cash Flow from Operating Activities Net Profit after tax as per P & L Account Adjusted for Net Prior Year Expenses Net Profit before tax and extraordinar y items Adjusted for Depreciation Effects of exchange rate change Profit on Sale of Investments/Dividend Income Interest/Other Income Interest Expenses Operating Profit before working Capital Changes Adjusted for Trade & Other Receivables Inventories Tr ade Payables Cash generated from operations Interest Paid Cash Flow before extraordinary items Net Pr ior Year Expenses Net Cash from Operating Activities B. Cash Flow from Investing Activities Purchase of Fixed Assets Sale of Fixed Assets Purchase of Investments Sale of Investments Movement in Loans Interest Income Dividend Income Net Cash used in Investing Activities C. Cash Flow from Financing Activities Proceeds from issue of Share Capital (Net) Increase in Cash & Bank Balance on Amalgamation Proceeds from Long Ter m Borrowings Repayment of Long Ter m Borrowings Short term loans Dividends Paid Effects of exchange rate change Net Cash used in Financing Activities Net increase in Cash and Cash Equivalents (A+B+C) Opening Balance of Cash and Cash Equivalents Closing Balance of Cash and Cash Equivalents Mumbai Dated: 27th May,1996 Auditors’ Report 278.24 1.97 (140.04) (165.43) 279.51 208.54 (77.92) (131.86) 336.51 13.71 (137.01) (113.27) 110.13 42.50 (97.05) 44.18 1,305.27 6.29 1,311.56 210.07 1,521.63 (10.37) 1,511.26 (308.89) 1,202.37 (6.29) 1,196.08 (2,384.73) 1.96 (1,509.18) 1,575.45 439.70 74.98 85.05 (1,716.77) 209.75 0.00 1,754.24 (209.43) 156.89 (229.35) 27.11 1,709.21 1,188.52 366.79 1,555.31 1,064.85 0.14 1,064.99 254.25 1,319.24 (1.24) 1,318.00 (382.82) 935.18 (0.14) 935.04 (2,605.08) 11.27 (4,721.33) 4,787.16 31.15 157.89 76.62 (2,262.32) 1,328.65 48.12 296.26 (333.81) 393.55 (133.07) (1.97) 1,597.73 270.45 96.34 366.79 For and on behalf of the Board A. D. Ambani Managing Director We have ver ified the attached Cash Flow Statement of Reliance Industries Limited., derived from audited financial statements and the books and records maintained by the Company for the Years ended 31 st March,1996 and 31 st March,1995 and found the same in agreement therewith. For Chaturvedi & Shah Char tered Accountants D. Chaturvedi Par tner Mumbai Dated 27th May,1996. For Rajendra & Co. Char tered Accountants R. J. Shah Par tner R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 67 Directors’ Report To the Members, Directors Shri Alok Agarwal retires by rotation and being eligible offers himself for re-appointment. Your Directors present the 10th Annual Report together with the Audited Statement of Accounts for the year ended 31st March, 1996. Personnel Financial Results Profit before tax Less: Provision for taxation Profit after tax Less: Shor t provision of tax for the earlier year Add: Balance in Profit & Loss Account - Less: a. Transfer to (Rs. in lacs) The Company has not paid any remuneration attracting the provisions of Companies (Par ticulars of Employees) Rules,1975 read with Section 217(2A) of the Companies Act,1956. Hence, no information is required to be appended to this repor t in this 1995-96 685.28 6.00 679.28 0.19 679.09 149.69 828.78 1994-95 regard. 647.16 60.00 587.16 4.01 583.15 172.31 755.46 Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo Being an investment Company, there are no particulars fur nished in this repor t 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 ear nings or outgo during the year. Deposits General Reserve 70.00 b. c. Interim Dividend 678.52 Proposed Dividend ---- 60.00 ---- 545.77 748.52 605.77 The Company has not accepted any deposit from the public. Hence, no information is required to be appended to this repor t in ter ms of Non-Banking Financial Companies (Reserve Bank) Directions,1977. Balance carried forward to Auditors Balance Sheet 80.26 149.69 Income During the year, the Company has received dividend income of Rs. 672.05 lacs from investments. Dividend The Directors had approved payment of an interim dividend of Re. 0.46 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, 1996, aggregating to Rs.678.52 lacs. This dividend will be fully adjusted against final dividend to be declared at the ensuing Ann ual General Meeting for the financial year ended 31st March,1996. 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. 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. For and on behalf of the Board Alok Agarwal S. Seth Sandeep Junnarkar } Directors Mumbai Dated: 6th May, 1996 68 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Auditors’ Report To, The Members of Reliance Industrial Investments and Holdings Limited. We have audited the attached Balance Sheet of Reliance Industr ial Investments and Holdings Limited as at 31st March, 1996 and the Profit and Loss Account of the Company for the year ended on that date annexed thereto and repor t that: 1. As required by the Manufactur ing and Other Companies (Auditors’ Repor t) Order,1988 issued by the Company Law Board in ter ms of Section 227 (4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order. 2. Fur ther to our comments in the Annexure referred to in paragraph 1 above, we repor t that: (a) We have obtained ail the infor mation and explanations which to the best of our knowledge and belief were necessar y 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 Repor t are in agreement with the books of account. Annexure to the Auditors’ Report Referred to in Paragraph 1 of our Repor t of even date As the Company had no Fixed Assets during the year, Clauses 4(A)(i) and (ii) of the said Order are not applicable. (d) i) ii) In our opinion and to the best of our info rmation and according to the explanations given to us, the said Balance Sheet and Profit and Loss Account read together with the n o t e s t h e r e o n , g i ve t h e i n f o r m a t i o n r e q u i r e d by t h e Companies Act,1956, in the manner so required and give a true and fair view: in so far as it relates to the Balance Sheet of the state of affairs of the Company as at 31st March, 1996 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 Char tered Accountants For Rajendra & Co. Char tered Accountants Rajesh D. Chaturvedi Partner Mumbai Dated: 6th May,1996 R.J. Shah Partner 9. According to the information and explanations given to us, no undisputed amounts payable in respect of Income-Tax, WealthTax, Sales-Tax, Excise Duty and Customs Duty were outstanding as at 31 st March,1996 for a period of more than six months from the date they became payable. 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. 10. In o ur opinion and accord ing to the info r m at i on a nd ex p l a n a t i o n s g i ve n t o u s , n o p e r s o n a l ex p e n s e s o f employees or Directors have been charged to revenue account. The Company has received interest free unsecured loans from the holding Company. It has not taken any other loans, secured or unsecured, from companies, fir ms and other par ties as listed in the register maintained under Section 301 of the Companies Act, 1956, or from companies under the same management within the meaning of Section 370(1B) of the Companies Act, 1956. The ter ms and conditions of the above loan are not, in our opinion, prima- facie prejudicial to the interests of the Company. The Company has not g ranted any loans, secured or unsecured to companies, fir ms, or other parties listed in the register maintained under Section 301 of the Companies Act,1956, or to Companies under the same management within the meaning of Section 370 (1 B) of the Companies Act,1956. In respect of the loans and advances in the nature of loans given by the Company, par ties are generally regular both in repaying the pr incipal amounts and payment of interest whenever stipulated. In our opi nion and according to the info r m ation and explanations given to us, the Company has not accepted any deposits from the public. In our opinion the Company has an inter nal audit system commensurate with its size and the nature of its business. According to the infor mation and explanations given to us, the provisions of the Employees’ Provident Fund and Miscellaneous Pro visions Act, 1952 and the Employees’ State Insurance Act, 1948 are not applicable to the Company. 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 Char tered Accountants For Rajendra & Co. Char tered Accountants Rajesh D. Chaturvedi Partner Partner Mumbai Dated: 6th May, 1996 R.J. Shah R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 69 1. 2. 3. 4. 5. 6. 7. 8. Balance Sheet as at 31 st March, 1996 Sources of Funds: Shareholders’ Funds Capital Reser ves and Sur plus Loan Funds Unsecured Loans Total Application of Funds: Investments Current Assets, Loans and Advances Current Assets Sundr y Debtors Cash and Bank Balances Loans and Advances ‘A’ ‘B’ ‘C’ ‘D’ ‘E’ Less: Current Liabilities and Provisions ‘F’ Current Liabilities Provisions As at 31st March, 1996 Rs. Rs. (Rs. in crores) As at 31st March, 1995 Rs. Rs. 14750.44 475.42 14750.44 474.85 15225.86 63145.15 78371.01 15225.29 28130.35 43355.64 78042.69 42442.64 3.98 14.56 18.54 382.61 401.15 5.79 67.04 72.83 ---- 1194.16 1194.16 331.29 1525.45 5.64 606.81 612.45 Net Current Assets Total 328.32 78371.01 913.00 43355.64 Notes on Accounts ‘I’ As per our Repor t of even date For and on behalf of the Board For Chatur vedi & Shah Char tered Accountants For Rajendra & Co. Char tered Accountants H.P. Chaturvedi Par tner Mumbai Dated: 6th May,1996 R.J. Shah Par tner V.M. Ambani N.M. Sanghavi Directors J.B. Dholaki 70 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Profit and Loss Account for the year ended 31st March, 1996 As at 31st March, 1996 Rs. Rs. (Rs. in crores) As at 31st March, 1995 Rs. Rs. Income Income on Investments Interest received (Tax deducted at source Rs. 0.03 lac, previous year Rs. Nil) Commission & Brokerage Schedule ‘G’ Expenditure Establishment & Other Expenses `H’ Profit before tax 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 Reser ve Inter im Dividend paid (subject to tax) Proposed Dividend (subject to tax) 70.00 678.52 ---- Balance carried to Balance Sheet Notes on Accounts ‘I’ 683.07 6.01 ---- 689.08 3.80 685.28 6.00 679.28 0.19 679.09 149.69 828.78 748.52 80.26 60.00 ---- 545.77 573.69 74.73 3.81 652.23 5.07 647.16 60.00 587.16 4.01 583.15 172.31 755.46 605.77 149.69 As per our Repor t of even date For and on behalf of the Board For Chaturvedi & Shah Char tered Accountants For Rajendra & Co. Char tered Accountants H.P. Chaturvedi Par tner Mumbai Dated: 6th May,1996 R.J. Shah Par tner V.M. Ambani N.M. Sanghavi Directors J.B. Dholaki R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 71 Schedules forming part of the Balance Sheet Schedule ‘A’ Share Capital Authorised: 149990000 Equity Shares of Rs.10/- each 10000 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) Note :Refer Note of Schedule ‘C’ in respect of option on unissued share capital. Schedule ‘B’ Reserves and Surplus General Reser ves As per last Balance Sheet Add: Transferred from Profit and Loss Account Profit and Loss Account As at 31st March, 1996 Rs. Rs. (Rs. in crores) As at 31st March, 1995 Rs. Rs. 14999.00 1.00 15000.00 14750.44 14750.44 14999.00 1.00 15000.00 14750.44 14750.44 As at 31st March, 1996 Rs. Rs. (Rs. in crores) As at 31st March, 1995 Rs. Rs. 325.16 70.00 265.16 60.00 395.16 80.26 475.42 325.16 149.69 474.85 Schedule ‘C’ Unsecured Loans a. Unsecured loans (from holding Company) b. Zero Coupon Convertible Unsecured Redeemable Debentures of Rs. 5000/- each As at 31st March, 1996 Rs. Rs. (Rs. in crores) As at 31st March, 1995 Rs. Rs. ---- 63145.15 * 63145.15 28130.35 ---- 2 8 1 3 0 . 3 5 * The Company may give at its option a three months notice to the Debentureholders to opt to convert the Debentures into Equity Shares at par any time after the expiry of 15 years, from the respective dates of allotment of such Debentures. In the event of the option not being granted by the Company or debentureholders not exercising their option to convert, the Debentures will be redeemed at par on the expiry of 25 years Commencing from the said dates of allotment. 72 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Schedules forming part of the Balance Sheet Schedule ‘D’ Investments (Valued, Verified & Certified by Management) (A) Long Term Investments Quoted: Equity Shares - Fully paid-up As at 31st March, 1996 Rs. (Rs. in crores) As at 31st March, 1995 Rs. 18940162 Larsen & Toubro Ltd. of Rs. 10/- each 29948.67 13139.72 (13067712) 882370 Kothari Sugars and Chemicals Ltd. of Rs.10/- each #95796000 Reliance Petroleum Ltd. of Rs.10/- each 6839078 BSES Ltd. of Rs.10/- each (-) 337.30 9579.60 11284.48 Equity Shares - Partly paid-up #95796000 Reliance Petroleum Ltd. of Rs.10/- each, 4789.80 (-) Rs.5/- paid-up Debentures - Partly paid-up 337.30 9579.60 ---- ---- #95796000 Secured Triple Option Conver tible Debentures 14369.40 9579.60 (TOCDs) of Reliance Petroleum Ltd. of Rs. 40/- each, Rs.15/- paid-up Unquoted: Equity Shares - fully paid-up 22900 Obser ver (India) Ltd. of Rs.10/- each 1700 Far vision Securities Private Ltd. (-) of Rs. 100/- each Calls in Advance 3.79 9.35 Pending Adjustment towards Shares/TOCDS of Reliance Petroleum Ltd., being promoter’s contribution 7184.70 Total (A) 77507.09 ( B) Current Investments Quoted: Equity Shares - Fully paid-up 1250 Maneklal Harilal Mills and Industries (-) Ltd. of Rs.10/- each 37200 HDFC Bank Ltd. of Rs. 10/- each (-) Nir ma Ltd. of Rs.10/- each (17800) ---- Global Trust Bank Ltd. of Rs.10/- each (34500) Debentures - Partly paid-up 1250 14% Par tly Conver tible Debentures of (-) Maneklal Harilal Mills and Industries Ltd. Of Rs. 37.50 each. Rs.25/- paid-up 1250 14% Non-Conver tible Debentures of (-) Maneklal Har ilal Mills and Industries Ltd. Of Rs. 45/- each, Rs. 22.50 paid-up Unquoted-Fully Paid-up: Bonds - Taxable 40000 13% Secured Redeemable, National Hydroelectr ic (-) Power Corporation Ltd. of Rs.1000/- each 16000 15.5% Secured Redeemable, Nuclear Power (-) Corporation of India Ltd. of Rs. 1000/- each Carried Forward 0.47 3.72 ---- ---- 0.31 0.28 378.85 151.97 535.60 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 3.79 ---- 9579.60 42219.61 ---- ---- 19.58 3.45 ---- ---- ---- ---- 23.03 73 Schedules forming part of the Balance Sheet Schedule ‘D’ (Contd.) Brought Forward Share Application Money: HDFC Bank Ltd. 2000000 Equity Shares of Rs. 10/- each Total (B) Total (A+B) As at 31st March,1996 (Rs. in Lacs) As at 31st March, 1995 Rs. 535.60 –– 535.60 78042.69 Rs. 23.03 200.00 223.03 42442.64 # The Company’s investment in Reliance Petroleum Ltd. is towards promoters’ contr ibution. This is subject to lock in period of five years from the date of commercial production. The Company has also given an undertaking to Financial Institutions not to dispose of the said holding, till the loans granted by them to Reliance Petroleum Ltd. is outstanding. Aggregate Value of Quoted Investments Unquoted Investments Schedule ‘E’ Current Assets, Loans and Advances Unsecured - (Considered Good) Current Assets Sundr y Debtors (subject to confir mation) Over six months 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 Schedule ‘F’ Current Liabilities and Provisions Current Liabilities Other Liabilities Provisions For Taxation Proposed Dividend (Subject to tax) As at 31st March,1996 Book Value Market Value Rs. Rs. As at 31st March,1995 Book Value Mar ket Value Rs. Rs. 88162.36 70314.03 7728.66 78042.69 86780.10 32659.25 9783.39 42442.64 As at 31st March,1996 Rs. (Rs. in Lacs) As at 31st March, 1995 Rs. 0.04 4.52 10.00 59.59 – 323.02 3.98 – 0 07 1194.09 –– 14.56 1194.16 35.67 100.00 195.62 382.61 401.15 331.29 1525.45 As at 31st March,1996 Rs. (Rs. in Lacs) As at 31st March, 1995 Rs. 5.79 5.64 67.04 –– 61.04 545.77 67.04 72.83 606.81 612 45 74 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Schedules forming part of the Profit & Loss Account Schedule `G’ 1995-96 (Rs. in Lacs) 1994-95 Rs. Rs. Rs. Rs. Income on Investments Dividend From Long Ter m Investments From Current Investments (Tax deducted at source Rs. 166.16 lacs, previous year Rs.132.32 lacs) Interest From Current Investments (Tax deducted at source Rs. 6.14 lacs, previous year Rs. Nil) Profit/Loss on Sale of Investments (Net) From Long Ter m investments From Current Investments Schedule `H’ Establishment & Other Expenses Salar y, Wages and Bonus Legal & Professional charges Filing Fees Miscellaneous Expenses Brokerage paid Other Administrative Expenses Auditors’ Remuneration Audit Fees Tax Audit Fees Schedule ‘I’ Notes on Accounts 672.05 –– 535.36 0.01 672.05 535.37 32.79 –– (129.31) 107.54 12.85 25.47 (21.77) 683.07 1995-96 Rs. Rs. Rs. 0.03 0.26 1.00 0.50 1.85 0.15 0.01 0.29 1.50 3.80 0.06 2.22 1.00 0.50 38.32 573.69 (Rs. in Lacs) 1994-95 Rs. 1.28 –– 0.01 2.28 1.50 5.07 1. Significant Accounting Policies: a) Basis of Preparation of Financial Statements The financial statements have been prepared under the histor ical cost convention, in accordance with the generally accepted accounting pr inciples and the provisions of the Companies Act,1956 as adopted consistently by the Company. b) Investments i) Long term investments and unquoted current investments are carried at cost. Current investments are carried at the lower of cost and quoted/fair value, computed category wise. ii) Cost is arr ived at by applying specific identification method. 2. The previous year’s figures have been rewor ked, regrouped, rearranged and reclassified wherever necessary. As at 31 st March,1996 (Rs. in Lacs) As at 31 st March,1995 (Rs. in Lacs) 3. Contingent Liabilities Uncalled liabilities on par tly paid shares/debentures 21554.54 28738.80 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. R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 75 Schedule ‘I’ (Contd.) 5. Additional infor mation as required under Par t IV of Schedule Vl to the Companies Act,1956. Balance Sheet Abstract and Company’s General Business Profile: 1. Registration Details: Registration No. State Code Balance Sheet Date 41081 11 31st March, 1996 2. Capital raised during the year: (Rs. in Lacs) Public Issue Rights Issue Bonus Issue Private Placement 3. Position of Mobilisation and Deployment of Funds: Total Liabilities Total Assets Sources of Funds: Paid up Capital Reser ves & Sur plus Secured Loans Unsecured Loans Application of Funds: Net Fixed Assets Investments Net Current Assets Miscellaneous Expenditure Accumulated Losses –– –– –– –– (Rs. in Lacs) 78371.01 78371.01 14750.44 475.42 –– 63145.15 78042.69 328.32 –– –– 4. Performance of Company: (Rs. in Lacs) Turnover/Income Total Expenditure Profit before Extraordinar y item and taxation Profit/(Loss) before tax Profit/(Loss) after tax Earnings per Share (Rs.) Dividend Rate 5. Generic Names of principal products, services of the Company: Item Code No. Product Descr iption 689.08 3.80 685.28 685.09 679.09 0.46 4.60 % N.A. N.A. As per our Repor t of even date For and on behalf of the Board For Chatur vedi & Shah Char tered Accountants For Rajendra & Co. Char tered Accountants H.P. Chaturvedi Par tner Mumbai Dated: 6th May,1996 R.J. Shah Par tner 76 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Alok Agarwal S. Seth Directors Sandeep Junnarkar Directors’ Report To the Members, Your Directors present the 12th Annual Report together with the Audited Statement of Accounts for the Financial year ended 31 st March, 1996 Operations The Company had announced voluntar y retirement scheme as a p p r o ve d b y T h e C h i e f C o m m i s s i o n e r o f I n c o m e - Ta x , Maharashtra, and it has received overwhelming response. The Company has incurred a loss of Rs.646.70 Lacs during the year under review as against profit of Rs.78.03 Lacs in the previous year. Dividend In view of the carried forward losses, your Directors have not recommended any dividend for the financial year under review. S e c t i o n 2 1 7 ( 1 ) o f t h e C o m p a n i e s A c t , 1 9 5 6 , r e a d w i t h Companies (Disclosure of Par ticulars in the Repor t of Board of Directors) Rules, 1988 are given in the Annexure which forms part of the Directors’ Report. Deposits The Company has not accepted any deposits from the Public. Hence, no infor mation is required to be appended to this report. Auditors The Auditors of the Company, M/s. Rajendra & Co. and M/s. Chatur vedi & Shah 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. Directors Appreciation Shri. J.B. Dholakia retires by rotation and being eligible offers himself for re-appointment. Personnel The Company has not paid any remuneration attracting the provisions of Companies (Par ticulars 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 repor t in this regard. Conser vation of Ener gy, Tec hnology Absorption and Foreign Exchange Earnings and Outgo T h e p a r t i c u l a r s a s p r e s c r i b e d u n d e r S u b - s e c t i o n ( e ) o f Your Directors wish to place on record their appreciation of the devoted services rendered by the Executives, Staff and Workers of the Company. For and on behalf of the Board V.M. Ambani N. M. Sanghavi J. B. Dholakia Directors Mumbai Dated: 6th May, 1996. Annexure to Directors’ Repor t Par ticulars required under the Companies (Disclosure of Particulars in the Repor t of Board of Directors) Rules, 1988. A. Conservation of Energy The Company continued the energy conser vation measures under taken in the past, and tried to explore possibility of fur ther energy conser vation measures. (For m for disclosure of particulars with respect to conser vation of energy) FORM - A Par t - A A. Power and Fuel Consumption 1 995-96 1994-95 1. Electr icity a. Purchased Units 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) R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 3,31,410 16,59,766 4.96 24,18,600 72,28,609 2.99 –– –– –– –– –– 152 3,76,327 2,475.84 –– –– –– –– –– 352 7,16,290 2,034.91 77 3. Furnace Oil Quantity (Kilo Ltrs.) Total Amount verage rate 4. Others/lnternal Generation Quantity Total Cost Average Rate Par t- B B. Consumption per unit of Production Electr icity (Units) Furnace Oil Coal ** Others 1995-96 – 1994-95 _ _ _ _ _ _ _ _ _ _ _ 1995-96 1994 - 95 Yarn (Kgs) 57.79 –– –– –– Fabrics (RMtr.) –– –– –– –– Yarn (Kgs) 8.63 –– –– –– Fabrics (RMtr.) –– –– –– –– ** Coal is used for steaming and heating the yarn for the pur pose of sizing. It has no link with the production. FORM - B (For m for disclosure of particulars with respect to Technology Absor ption) The Company has no specific Research and Development Department. Hence infor mation to be given in For m - 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 Earnings and Outgo i. Activities relating to exports - Company is making a study to explore the foreign mar ket for export of Company’s products. ii. Foreign Exchange used and ear ned .. .. 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, 1996 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 Repor t) order, 1988, issued by the Company Law Board in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order. 2. Fur ther 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 necessar y for the pur pose 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 and also for the year resulting in the erosion of its net wo r th, the accounts of the Company are prepared on going concer n basis. Subject to the above, in our opinion and to the best of our infor mation 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, 1996. in so far as it relates to the Profit and Loss Account of the ‘loss’ of the Company for the year ended on that date. For Chaturvedi & Shah For Rajendra & Co. Char tered Accountants Chartered Accountants H.P. Chatur vedi R.J. Shah Partner PartnerMumbai Dated: 6th May, 1996. For Chaturvedi & Shah Char tered Accountants For Rajendra & Co. Char tered Accountants H.P. Chatur vedi Partner Mumbai Dated: 6th May, 1996. R.J. Shah Partner 78 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Annexure to Auditors’ Report Referred to in Paragraph 1 of our Repor t of even date 1. The Company has maintained proper records showing full par ticulars including quantitative details and situation of fixed assets. We are informed that most of the assets have been physically verified by the management dur ing 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. 4. 5. 6. 7. 8. 9. 10. 11. According to the information and explanations given to us, the stocks of finished goods, stores, spare parts and raw mater ials have been physically verified by the Management dur ing the year. In our opinion, the frequency of such verification is reasonable. In our opinion, the procedures of physical ver ification of stocks followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business. As explained to us, there were no material discrepancies noticed on physical verification of the stocks and the same have been properly dealt with in the books of account. In our opinion and on the basis of our examination of stock and other records the valuation of stocks is fair and proper a n d i s i n a c c o r d a n c e w i t h t h e n o r m a l l y a c c e p t e d accounting pr inciples 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 loans, secured or unsecured, from companies, fir ms or other par ties as listed in the register maintained under Section 301 of the Companies Act, 1956, or from companies under the same management within the meaning of Section 370(1B) of the Companies Act,1956. The ter ms and conditions of the above loan are not, in our opinion, prima- facie prejudicial to the interests of the Company. The Compan y has not gr anted any loans, secured or unsecured to companies, firms or other par ties listed in t h e r e g i s t e r m a i n t a i n e d u n d e r S e c t i o n 3 0 1 o f t h e 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 loans and advances in the nature of loans given by the Company, the par ties 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 info rmation 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 and sale of goods. In our opinion and according to the info rmation and explanations given to us, there are no transactions of purchase of goods or materials and sale of goods materials a n d s e r v i c e s m a d e i n p u r s u a n c e o f c o n t r a c t s o r arrangement entered in the register maintained under Section 301 and aggregating during the year to Rs.50,000/ - or more in respect of each par ty. 12. As explained to us, the Company has a regular procedure for the determination of unser viceable or damaged stores, raw materials and finished goods. Adequate provision has been made in the accounts for the loss arising on the items so deter mined. 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 infor mation 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 31 st March,1996 for a period of more than six months from the date they became payable. 19. According to the infor mation 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 industr ial Company within the meaning of clause (O) of s u b - s e c t i o n ( 1 ) o f S e c t i o n 3 o f t h e S i c k I n d u s t r i a l Companies (Special Provisions)Act, 1985. 21. In respect of trading activities, we are informed that the Company does not have damaged goods lying with it at the end of the year. Therefore, no provision for any loss is required to be made in the accounts. For Chaturvedi & Shah Char tered Accountants For Rajendra & Co. Char tered Accountants H.P. Chaturvedi Partner Mumbai Dated: 6th May, 1996. R.J. Shah Partner R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 79 Balance Sheer as at 31st March, 1996 Schedule Rs. Rs. Rs. Rs. 1995-96 (Rs. in Lacs) 1994-95 Sources Of Funds: Shareholders’ Funds Share Capital Loan Funds 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 Sundr y Debtors Cash and Bank Balances Loans and Advances ‘A’ ‘B’ ‘C’ ‘D’ Less: Current Liabilities and Provisions ‘E’ Current Liabilities Profit and Loss Account Notes on Accounts Total ‘J’ 21.01 1342.84 1363.85 21.01 676.00 697.01 225.61 171.03 226.50 160.70 54.58 65.80 9.32 – 11.19 20.51 13.67 34.18 127.71 127.71 40.97 13.09 29.15 83.21 17.21 100.42 225.31 225.31 (93.53) (124.89) 1402.80 1363.85 756.10 697.01 As per our Repor t of even date For and on behalf of the Board For Chatur vedi & Shah Char tered Accountants For Rajendra & Co. Char tered Accountants H.P. Chaturvedi Par tner Mumbai Dated: 6th May,1996 R.J. Shah Par tner 80 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 V.M. Ambani N.M. Sanghavi Directors J.B. Dholaki Profit and Loss Account for the year ended 31st March, 1996 Schedule Rs. Rs. Rs. Rs. 1995-96 (Rs. in Lacs) 1994-95 Income Sales (Net) Other Income Variation in Stock Expenditure Purchases Manufactur ing and Other Expenses Interest Depreciation ‘F’ ‘G’ ‘H’ ‘I’ Profit/(Loss) for the year Add: Balance brought forward from last year Balance carried to Balance Sheet Notes on Accounts ‘J’ 122.10 2.75 (30.86) 83.54 646.63 – 10.52 314.42 467.34 (13.71) 93.99 768.05 – 648.81 11.70 29.51 740.69 (646.70) (756.10) (1402.80) 690.02 78.03 (834.13) (756.10) As per our Repor t of even date For and on behalf of the Board For Chaturvedi & Shah Char tered Accountants For Rajendra & Co. Char tered Accountants H.P. Chaturvedi Par tner Mumbai Dated: 6th May,1996 R.J. Shah Par tner V.M. Ambani N.M. Sanghavi Directors J.B. Dholaki R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 81 Schedules forming part of the Balance Sheet Schedule ‘A’ Share Capital Authorised: 2,50,000 Equity Shares of Rs.10/- each. Issued & Subscribed: 2,10,070 Equity Shares of Rs. 10/- each fully paid-up (Held by Reliance Industr ies Limited, the Holding Company As at 31st March,1996 Rs. Rs. (Rs. in Lacs) As at 31st March, 1995 Rs. Rs. 25.00 21.01 21.01 25.00 21.01 21.01 (Rs. in Lacs) Gross Block Depreciation NetBlock Addi- Deduc- As at tions 31.3.96 tions As at For the Wr itten Back year 1.4.95 As at 31.3.96 As at 31.3.96 As at 31.3.95 – – – – – – – – – 27.48 6.85 0.92 – 174.59 144.77 8.69 – 17.23 6.16 0.58 – – – 7.77 19.71 20.62 153.46 21.13 29.82 6.74 10.49 11.07 0.03 2.86 1.41 0.15 0.02 1.54 1.32 0.86 3.44 1.50 0.18 0.17 1.51 1.93 – 0.01 0.01 – – 0.01 – 1.48 2.80 0.01 0.89 225.61 160.70 10.52 0.19 171.03 54.58 65.80 332.94 226.50 401.55 29.51 270.36 160.70 65.80 As at 1.4.95 27.48 174.59 17.23 2.89 4.30 0.01 226.50 559.44 Schedule ‘B’ Fixed Assets DESCRIPTION Buildings Plant & Machiner y Electr ic Installation Factor y Equipment Furniture & Fixture Vehicles Total Previous Year Schedule ‘C’ Current Assets Inventories (at cost or market value whichever is lower except otherwise stated) Stores, spares, dyes & chemicals Raw materials Stock-in-process Finished goods Others Sundry Debtors (Unsecured) Others: Considered good Cash and Bank Balances Cash on hand Balance with Scheduled Banks: In Current Accounts In Fixed Deposit Account As at 31st March,1996 Rs. Rs. (Rs. in Lacs) As at 31st March, 1995 Rs. Rs. 7.40 1.92 – – – – 10.29 0.90 8.19 1.92 7.75 23.00 0.11 1.49 26.76 0.90 9.32 – 11.19 20.51 40.97 13.09 29.15 83.21 82 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Schedules forming part of the Balance Sheet Schedule ‘D’ Loans and Advances (Unsecured, Considered Good) Advances recoverable in cash or in kind or for value to be received Deposits Prepaid expenses Balance with Customs, Central Excise Authorities, etc. Schedule ‘E’ Current Liabilities & Provisions Current Liabilities Sundr y Creditors Other Liabilities Interest accr ued but not due on loans Schedules forming part of the Profift and Loss Account Schedule ‘F’ Other Income Processing charges Profit on sale of assets Interest received Miscellaneous Income Excess provision for expenses no longer required As at 31st March,1996 Rs. (Rs. in Lacs) As at 31st March, 1995 Rs. ---- 13.67 ---- ---- 13.67 3.57 12.82 0.53 0.29 17.21 As at 31st March,1996 Rs. (Rs. in Lacs) As at 31st March, 1995 Rs. 84.54 43.17 –– 127.71 1995-96 Rs. –– –– 0.17 2.58 –– 2.75 4.51 220.75 0.05 225.31 (Rs. in Lacs) 1994-95 Rs. 18.75 434.41 1.04 8.73 4.41 467.34 Schedule ‘E’ Variation in Stock Stock-in-Trade (at close) Finished goods Stock-in-process Others Stock-in-Trade (at commencement) Finished goods Stock-in-process Others As at 1995-96 (Rs. in Lacs) As at 1994-95 Rs. Rs. Rs. Rs. –– –– –– 23.00 7.75 0.11 –– 30.86 (30.86) 23.00 7.75 0.11 27.79 15.78 1.00 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 30.86 44.57 (13.71) 83 Schedules forming part of the Profit and Loss Account Schedule ‘H’ Reserves & Surplus Manufacturing and Other Expenses Raw Materials Consumed Stock at commencement Add: Purchases Less: Stock at close Manufacturing Expenses Carriage inward Stores and spare par ts Dyes & Chemicals Electr ic Power, fuel and water Machiner y repairs Labour, Processing and machinery hire charges 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 Retrenchment NRS Compensation Ex-Gratia Wages Sales and Distribution Expenses Samples, Sales Promotion and Adver tisement Expenses Brokerage and Commission Packing Expenses Freight and forwarding charges Sales Tax Establishment Expenses Insurance Rent Rates and taxes Other repairs Travelling expenses Payment to Auditors General Expenses Loss on sale of assets (Net) Schedule ‘I’ Interest Fixed Loans Others As at 31st March,1996 Rs. Rs. (Rs. in Lacs) As at 31st March, 1995 Rs. Rs. 1.92 ---- 1.92 1.92 ---- 1.25 ---- 20.45 ---- ---- 14.11 178.68 192.79 1.92 ---- 190.87 0.06 5.42 0.11 79.67 0.11 2.29 21.70 87.66 113.50 195.27 43.73 8.07 367.42 79.50 0.31 0.20 0.16 ---- 0.39 2.01 ---- 1.18 0.33 0.30 0.35 6.93 0.55 61.23 18.33 54.79 ---- 612.22 329.62 0.05 3.03 6.02 2.63 13.75 1.06 25.48 3.59 1.10 0.54 0.44 0.25 0.35 8.91 ---- 11.65 646.63 1995-96 Rs. ---- ---- ---- 15.18 648.81 1994-95 Rs. 5.86 5.84 11.70 84 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 Schedule ‘J’ Notes On Accounts 1. Significant Accounting Policies A. Basis of preparation of Financial Statements i) 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 concer n basis. ii) The Company follows mercantile system of accounting and recognises significant items of income and expenditure on accrual basis. B. Fixed Assets and Depreciation i) Fixed assets are stated at acquisition cost less accumulated depreciation. ii) 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. Inventories i) Raw Materials, Stores, Spares, Dyes & Chemicals are valued at cost. ii) Stock-in-process is valued at cost including related overheads. iii) Finished Goods are valued at cost or market value, whichever is lower. Cost includes cost of production and expenses incurred in putting the inventories in their present location and condition. D. Sales Sales is net of excise & sales tax collected from customers. E. Employee/Retirement Benefits i) Company’s contr ibutions 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 and any shortfall is charged in the year of payment to employees. 2. The previous year’s figures have been rewor ked, regrouped, rearranged and reclassified wherever necessary. 3. Auditors’ Remuneration (a) Audit fees (b) Tax audit fees 4. Contingent Liabilities 1995-96 (Rs. in Lacs) 1994-95 0.25 0.10 0.35 As at 0.25 0.10 0.35 (Rs in Lacs) As at 31st March, 31st March, 1996 1995 Claims against the Company not acknowledged as debts 3.88 1.50 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 85 Schedule ‘J’ (Contd.) 5. Licenced & Installed Capacity (As cer tified by the Management) Licenced Capacity Installed Capacity 31.3.96 31.3.95 31.3.96 31.3.95 Spindles (Nos.) 6. Production of finished products meant for sale Blended Yar n N.A. UNIT M.T. 7. Value of imports on CIF basis 8. Expenditure in foreign currency N.A. 11816 11816 1995-1996 8 ---- ---- 1994-1995 243 ---- ---- 9. Quantitative Information 1995-1996 1994-1995 a) Opening Stock Finished Stock (Yar n) Stock in process(Yar n) i) ii) iii) Others b) Closing Stock Finished Stock (Yar n) Stock in process (Yarn) i) ii) iii) Others c) Purchases Fabrics d) Sales Yar n Fabrics e) Raw Material Consumed Cotton Fibre Viscose UNIT Quantity M.T. 18 M.T. ---- Quantity 26 18 Rs.in Lacs 23.00 7.75 0.11 ---- ---- ---- Rs.in Lacs 27.79 5.78 1.00 23.00 7.75 0.11 Mtrs.in lacs 2.16 83.54 ---- ---- M.T. Mtrs.in lacs M.T. M.T. M.T. 26 2.16 ---- ---- ---- 34.38 87.72 ---- ---- ---- 251 ---- 104 142 32 314.42 ---- 55.23 119.36 16.28 10. Value of Raw Material Consumed 1995-1996 1994-1995 Indigenous Rs.in % of total Lacs Consumption ---- ---- Rs.in Lacs 190.87 %of total Consumption 100.00 11. Value of stores, spare parts 1995-1996 1994-1995 dyes & chemicals Indigenous Rs.in % of total Lacs Consumption 100.00 1.25 Rs.in Lacs 5.53 %of total Consumption 100.00 12. Earnings in foreign exchange ---- ---- 86 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 13. Additional infor mation as required under Par t IV of Schedule Vl to the Compaines Act, 1956. Balance Sheet Abstract and Company’s General Business Profile: 1. Registration Details: Registration No. State Code Balance Sheet Date 2. Capital raised during the year: Public Issue Rights Issue Bonus Issue Pr ivate Placement 3. Position of mobilisation and deployment of funds: Total Liabilities Total Assets Source of Funds: Paid up Capital Reser ves & Surplus Secured Loans Unsecured Loans Application of Funds: Net Fixed Assets Investments Net Current Assets Miscellaneous Expenditure Accum ulated Losses 4. Performance of Company: Turnover Total Expenditure Profit/(Loss) before tax Profit/(Loss) after tax Earnings per Share (Rs) Dividend Rate 5. Generic Names of principal products, services of the Company: Item Code No. Product Descr iption 31593 11 31st March, 1996 (Rs. in lacs) - - - - (Rs. in lacs) 1363.85 1363.85 21.01 - - 1342.84 54.58 - (93.52) - 1402.79 (Rs. in lacs) 122.10 740.69 (646.70) (646.70) - - 550953.00 Blended Yar n As per our Repor t of even date For and on behalf of the Board For Chaturvedi & Shah Char tered Accountants For Rajendra & Co. Char tered Accountants H.P. Chaturvedi Par tner Mumbai Dated: 6th May,1996 R.J. Shah Par tner V.M. Ambani N.M. Sanghavi Directors J.B. Dholaki R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 87 Reliance Industries Limited’s Equity Shares are listed on the stock exchanges in the following cities: • Mumbai • Ahmedabad • Bangalore • Calcutta • New Delhi • Madras • Cochin • Kanpur • Pune as also with The National Stock Exchange (NSE). Symbol in Mumbai Stock Exchange is ‘RIL 325’ Symbol in National Stock Exchange is ‘RELIANCE EQ’ Global Depository Shares are listed on the Luxembourg Stock Exchange and traded on PORTAL System (NASDAQ, USA) and SEAQ System (London Stock Exchange). Symbol on SEAQ System is ‘RlDGq.LT’ Euro-Convertible Bonds are listed on the Luxembourg Stock Exchange and are traded on PORTAL System (NASDAQ, USA). Your Local Investor Relations Centres Telephone Fax Ahmedabad (079)-657 8470/8021 (079)-6578070 Bangalore Baroda (080)-2259491 (080)-2254621 (0265)-329394 (0265)-329394 Calcutta (033)-266664 (033)-268580 Hyderabad Jaipur Jamnagar Kanpur Lucknow Madras Mumbai (Andheri) (City) (040)-231561 (040)-231562 (0141)-318351 (0141)-319902 (0288)-75104 (0288)-555102 (0512)-210341 (0512)-210341 (0522)-271548/280329 (0522)-280288 (044)-8268292/8268425 (044)-8268426 (022)-8367015/16/ 8350514/8214542 (022)-2004090/91 /208/ 1428/78 (022)-8367019 (022)-2088165 New Delhi (011)-6196551/7343 (011)-6886490 Pune Rajkot Surat London New York (0212)-656978 (0212)-643885 (0281)-222137 (0281)-228159 (0261)-425062 (0261)-425062 0044(171)-600 5300 0044(171)-600 1757 001 (212)-688 5744 001 (212)-688 5213 Reliance Industries Limited Where growth is a way of life Reliance Industries Ltd. Maker Chambers IV Nariman Point, Mumbai 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 90 R e l i a n c e I n d u s t ri e s L i m i t e d 2 2 n d A n n u a l R e p o r t 1 9 9 5 - 9 6 

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