Reliance’s Achievements
in 1998-99
Sales - Rs. 14,553 crores
(US $ 3,430 million)
Gross Profit - Rs. 3,318 crores
(US $ 782 million)
Cash Profit - Rs. 2,589 crores
(US $ 610 million)
Net Profit - Rs. 1,704 crores
(US $ 402 million)
Compounded Annual Net Profit
growth over 5 years - 24%
Compounded Annual Earnings Per Share
growth over 5 years - 15%
Total Assets - Rs. 28,156 crores
(US $ 6,636 million)
India’s largest private sector enterprise
GROWTH IS LIFE
Page Contents
1
3
6
8
10
12
13
15
17
27
28
29
30
31
32
33
36
37
38
39
40
42
50
51
53
54
55
56
82
83
86
Performance Highlights
Chairman’s Communication
Financial Highlights
Reliance at a glance
Reliance Brands
Product Flow Chart
Corporate Governance
Year 2000 Compliance
Management Discussion and Analysis
17 Overall Review
18 Resources and Liquidity
19
26
Forex Savings, Taxes Paid and Exports
Business Review
Jamnagar Petrochemicals Complex
Reliance Petroleum
Reliance Telecom
Reliance Power
Quality
Research & Development
Health, Safety and Environment
Energy Conservation
Human Resource Development
Community Development
Investor Information
Directors’ Report
Annexure to Directors’ Report
Auditors’ Report
Annexure to Auditors’ Report
International Accountants’ Report
Balance Sheet
Profit and Loss Account
Schedules Forming Part of
Balance Sheet and Profit & Loss Account
Cash Flow Statement
Reconciliation of Profit with US GAAP & IAS
Documents of Subsidiary Companies
108
Company Information
Reliance Industries Limited Annual Report 1998-99
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GROWTH IS LIFE
21st Century Agenda
21st Century Agenda
C h a i r m a n ’ s C o m m u n i c a t i o n
A lot has been said and written in the recent past, about the extended downturn in
commodities businesses world-wide, and the extreme adversity being faced by the global
petrochemicals industry.
Much of this is, undoubtedly, true. But, I would prefer to discuss here, the many growth
opportunities arising in the petrochemicals industry, as a result of this tough environment,
rather than dwelling on the difficulties of doing business in such times.
The extraordinary pace of global change will remain a reality in the future, affecting our
competitive environment in a fundamental and permanent way.
Reliance will endeavour in this increasingly competitive and fast-paced global economy, to
adapt, learn, and respond, quickly to changing conditions.
Reliance has drawn up its plans and strategies for future growth, based on the current
realities surrounding industry. An upturn in the global petrochemicals cycle will be
welcome, but we are not waiting for this to happen, to achieve profitable growth.
Financial performance
First, a word about our financial performance. Reliance has achieved the distinction, of
becoming one of the very few companies in this industry internationally, to have reported
sales, production volume, and earnings, growth, at, or near, the bottom phase of the
global petrochemicals cycle.
Sales have touched Rs. 14,553 crores ($ 3,430 million). Net profit has touched Rs. 1,704
crores ($ 402 million). Production volume has touched a record 7.06 million tonnes. Total
assets have crossed Rs. 28,000 crores (US$ 6,636 million).
It is a tribute, to the collective team-work, commitment and courageous spirit, of all our
people, that this remarkable performance, has been achieved, despite a temporary
dislocation, during the year, of the primary feedstock supply system at our Hazira
petrochemicals complex.
Performance such as this, in the face of adversity, inspires me to believe that Reliance is
fully equipped to enter the new millenium.
Reliance's Strengths
Over the last 2 decades, Reliance has become one of the world's largest integrated
petrochemicals companies, by creation of several core strengths, within the organisation.
As we embark on the next phase of our growth, I would like to highlight some of these
strengths:
• setting up, and operation, of world-scale plants
• strong, proven, technology platforms
• integrated manufacturing and business processes, employing a high degree of
automation
• clear market leadership
• global competitiveness, on capital and operating costs
• international quality of products
• emphasis on delivering total customer satisfaction
• conservative financial profile
• vast reservoir of intellectual capital
• unparalleled pool of in-house engineering skills
• young, committed, qualified, and skilled workforce
I believe this combination, of multi-functional strengths, is unique, not just in the
domestic context, but also in the global petrochemicals scenario, and will enable us to
strengthen our market leadership in the future.
Reliance Industries Limited Annual Report 1998-99
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GROWTH IS LIFE
Jamnagar Petrochemicals Complex
The commissioning of the Jamnagar petrochemicals complex, being set up at an estimated
capital outlay of Rs. 5,500 crores ($1.3 billion), has already begun, and will be completed
ahead of schedule, during the current financial year.
Shareowners will be happy to note that, upon commissioning of the Jamnagar
petrochemicals complex, our overall production volume will have multiplied, over the past
7 to 8 years, from less than a million tonnes per annum, to over 9 million tonnes per
annum.
This rapid pace of growth, and our ability to market more than 95% of our total
production within the domestic markets, is a silent vindication of our abiding faith in the
long term economic growth potential of India and its people.
The commissioning of the Jamnagar complex will significantly enhance our market
leadership, and lead to a higher degree of vertical integration, resulting in improved global
competitiveness.
Reliance Petroleum
Many of you are our valuable shareowners in Reliance Petroleum Ltd. (RPL). Reliance
itself will hold 50% of RPL's equity share capital.
I am happy to take this opportunity to inform you that Reliance Petroleum will be
commissioning its Rs. 14,250 crores ($ 3.4 billion), 27 million tonnes per annum, globally
competitive, high complexity refinery during the second quarter of the current financial
year - well ahead of schedule.
Upon commissioning of the refinery complex, our aggregate production volume, as a
group, will cross 36 million tonnes per annum. This will place us among the leading ranks
in our industry globally.
We are, of course, aware that mere growth in production volumes is not a sufficient reward
for our shareowners. This growth must translate into higher cash flows and sustainable
earnings growth.
We are committed to making every endeavour to improve the efficiency of the capital
employed in our businesses, thereby generating significant returns, and delivering value to
all our stakeholders.
Restructuring of Industry
Restructuring, and consolidation, of industry are a way of life in the global economy.
Increasing competitive pressures on business have brought about a new sense of urgency
to this process.
Rationalisation of manufacturing facilities, all-round cost reduction, and productivity of
capital and assets, are recognised today as an imperative for growth.
In keeping with these global trends, Reliance is committed to participating in the
restructuring of
industry. Reliance will pursue acquisition
opportunities in all its businesses, to strengthen its market leadership, improve the
competitive structure of industry, and deliver value to all shareowners.
the petrochemicals
During the year, we have acquired control in India over polyester capacities of 65,000
tonnes per annum, enabling us to extend our market penetration, and enhance value
integration for our polyester intermediates business. We are pursuing other similar
opportunities.
The Indian Market
A liberalised economic environment has heightened the aspirations of millions of Indian
consumers. Consumption patterns are being reshaped, creating a paradigm shift in the
character of demand for basic goods and services in the economy.
This is a very positive development for us. The Reliance brand is one of the most
recognised names in India. Given the industrial nature of most of our products, it is often
forgotten that we touch the lives of millions of Indians, through the thousands of articles
of day-to-day use, manufactured with our products as key raw materials.
On a per capita consumption basis, the potential for future demand growth in India is still
Reliance Industries Limited Annual Report 1998-99
4(cid:223) (cid:224)
GROWTH IS LIFE
enormous, even though we have now witnessed double-digit growth rates for over
10 years. The rise in the consumption of basic goods and services within the economy, will
ensure growing markets for our products.
Our efforts at product development, expansion of the market, and building of a customer
franchise continue to distinguish us from other chemical companies operating in
developed markets. I believe, over time, the markets will recognise that Reliance has built
a unique position in India, which is unlikely to be replicated.
The Future
Last year, in my communication to you, I had reiterated our commitment to the goal of
overall shareowner value enhancement, by endeavouring to achieve earnings growth
consistently through business cycles, and ensuring adequate communication to enable
people to better understand Reliance's real strengths.
I am aware that many of our valuable shareowners are concerned about the performance of
the Reliance share price, last year. This needs to be viewed in the context of the
globalisation of the Indian economy and capital markets. The under-performance of
global chemicals stocks has been a world-wide phenomenon last year. The movement of
the Reliance share price only mirrors this trend.
Nonetheless, we are committed to a continuous process of taking all necessary and
responsible steps to ensure that Reliance's true fundamentals and intrinsic worth are more
appropriately reflected in the marketplace.
Our corporate ethics initiative, during the year, underscores our continuing efforts
towards enhancing corporate governance.
Our objective is to endeavour to deliver sustainable, earnings growth, which will provide a
lasting basis for increased overall returns to our shareowners - in a manner that is
consistent with our principles, values and commitments.
Our current major capital expenditure programmes are now complete, as we have
achieved our objective of building world scale, vertically integrated, globally competitive,
manufacturing facilities.
Global benchmarking has always been a mantra for all of us, here at Reliance. We have now
geared ourselves up, to raise our levels of productivity and efficiency - for capital, assets,
people, and the entire organisation - well beyond comparable global benchmarks.
In the future, the nature of our challenges will be altered. Our businesses are expected to
generate substantial cash flows, even at the bottom of the petrochemicals cycle, without
factoring in any upside potential. We are committed to deployment of these cash flows,
within a disciplined and conservative financial framework, and in the best interests of
overall shareowner value enhancement.
Acquisitions in our core businesses, reduction of net debt levels, and pay-outs to
shareowners, are some of the intended avenues for deployment of these expected cash
flows.
My message to you, as we prepare to enter the new millenium, is one of realism, tinged, as
always, with optimism. Reliance has a 21st century team and business agenda in place. Our
business leaders possess a strong external focus, and a global vision. We see significant
opportunities in the present environment.
I am confident that our relentless commitment to productivity, efficiency and growth in
earnings and cash flows, and our impatience to live with only marginal improvements will
result in lasting value enhancement to all of you, our valuable shareowners.
Dhirubhai H. Ambani
Chairman
Reliance Industries Limited Annual Report 1998-99
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GROWTH IS LIFE
Financial Highlights
Financial Highlights
C o n s i s t e n t a n d r o b u s t g r o w t h
1998-99
97-98 ’96-97 ’95-96 ’94-95 ’93-94 ’92-93 ’91-92 1985
(Rs. in crores)
$ Mn
733
744
139
37
71
373
50
25
52
254
311
736
607
Sales
Total Income
3,430
14,553 13,404 8,730 7,786 7,019 5,345 4,106 2,953
3,573
15,161 13,740 9,020 8,058 7,331 5,555 4,222 3,005
Earnings Before Depreciation,
Interest and Tax (EBDIT)
Depreciation
Profit After Tax
Taxes paid to the Government
Equity Dividend %
Dividend Payout
Equity Share Capital
782
202
402
682
37.5
82
220
3,318
2,887 1,948 1,752 1,622 1,159
855
667
410
337
278
1,704
1,653 1,323 1,305 1,065
255
576
929
280
322
2,893
3,021 2,490 2,234 2,147 1,391 1,118
37.5
350
933
35*
327
932*
65
299
458
60
276
458
55
199
456
51
138
318
35
85
245
152
575
193
163
984
30
48
Reserves and Surplus
2,636
11,183 10,863 8,013 7,747 6,731 4,011 2,362 1,711
Net Worth
Gross Fixed Assets
Net Fixed Assets
Total Assets
2,915
12,369 11,983 8,471 8,405 7,193 4,335 2,613 1,944
5,206
22,088 19,918 14,665 11,374 8,390 5,132 4,641 4,314
3,629
15,396 14,973 11,173 9,233 6,585 3,600 3,368 3,338
6,636
28,156 24,388 19,536 15,038 11,529 8,121 6,083 4,880 1,046
Market Capitalisation
2,870
12,176 16,518 14,395 9,783 12,027 10,718 4,388 6,656
906
Number of Employees
16,640 17,375 16,778 14,255 12,560 11,873 11,944 11,940 9,066
1US$ = Rs. 42.43 (Exchange rate as on 31.3.1999)
Total Income
(Rs. in crores)
Profit
(Rs. in crores)
Net Worth
(Rs. in crores)
Reliance Industries Limited Annual Report 1998-99
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GROWTH IS LIFE
Financial Highlights
Financial Highlights
K e y i n d i c a t o r s
1998-99
97-98 ’96-97 ’95-96 ’94-95 ’93-94 ’92-93 ’91-92 1985
Earnings Per Share - Rs.
Cash Earning Per Share - Rs.
US$
0.42
0.64
18.0
27.1
17.6*
28.7
27.9
23.4
18.1
13.1
10.7 13.8
24.7*
37.6
35.2
29.5
26.1
24.5
23.4 21.1
Sales Per Share - Rs.
3.67
155.9
143.6* 189.6 169.9 153.9 168.1 166.9 194.1 141.0
Book Value Per Share - Rs.
3.06
129.8
128.3* 184.0 179.0 158.0 136.0 106.0 127.8 59.0
Debt : Equity Ratio
0.86:1 0.86:1
0.68:1 0.83:1 0.49:1 0.35:1 0.58:1 0.84:1 0.92:1 1.66:1
EBDIT/ Sales %
Net Profit Margin %
22.8
11.7
22.8
11.7
21.5
22.3
22.5
23.1
21.7
22.6
19.5 19.0
12.3
15.2
16.8
15.2
10.8
7.8
5.5
9.7
RONW %
22.6
22.6**
21.2
22.3
25.3
23.7
18.2
20.7
17.1 30.6
1US$ = Rs. 42.43 (Exchange rate as on 31.3.1999)
* After bonus issue of 1:1
** Excluding CWIP and revaluation
Assets
(Rs. in crores)
EPS & CEPS
(Rs.)
Book Value
(Rs.)
Gross
Fixed
Assets
Net
Fixed
Assets
CEPS
EPS
Reliance Industries Limited Annual Report 1998-99
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GROWTH IS LIFE
Reliance at a glance
Reliance at a glance
Textiles
Fibres, Fibre Intermediates
& Chemicals
Polymers, Chemicals,
Fibers & Fibre Intermediates
Naroda, near Ahmedabad,
Gujarat
Patalganga, near Mumbai,
Maharashtra
Hazira, near Surat,
Gujarat
Polyester Staple
Fibre (PSF)
Polyester Filament
Yarn (PFY)
Polyester Chips
Purified Terephthalic
Acid (PTA)
Paraxylene (PX)
Linear Alkyl
Benzene (LAB)
Normal Paraffin
Hydrocarbon
Solvents
RECRON
VIMAL
HARMONY
Suitings
Shirtings
Dress Materials
Saris
Furnishing
Fabrics
Day Curtains
Automotive
Upholstery
SLUMBEREL Fibrefilled
RELAB
RECRON
Pillows
Sleep Products
Texturised Yarns
Twisted / Dyed
Yarns
RUEREL
Suitings
REANCE
Shirts
Trousers
Jackets
REON
Polyvinyl Chloride
(PVC)
RECLAIR
RELENE
Linear Low Density
Polyethylene
(LLDPE)
High Density
Polyethylene
(HDPE)
REPOL
Polypropylene (PP)
Purified Terephthalic
Acid (PTA)
Ethylene Oxide
Mono-ethylene (EO)
Glycol (MEG)
Di-ethylene Glycol
Tri-ethylene Glycol
Ethylene
Propylene
Benzene
Toluene
Xylene
Carbon Black
Feed Stock (CBFS)
Vinyl Chloride
Monomer (VCM)
Polyester Staple
Fibre (PSF)
Polyester Filament
Yarn (PFY)
Polyester Fiber
Fill (PFF)
RECRON
RELPET
Polyethylene
Terephthalate (PET)
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GROWTH IS LIFE
Reliance at a glance
Reliance at a glance
Polymers &
Fiber Intermediates
Oil & Gas
New Initiatives
Jamnagar,
Gujarat
Paraxylene (PX)
Polypropylene (PP)
Panna & Mukta - off Bombay High
Tapti - Northwest of Mumbai
Crude Oil
Natural Gas
Refining - Reliance Petroleum
Infrastructure
Power
Telecom
Reliance Industries Limited Annual Report 1998-99
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GROWTH IS LIFE
India’s Largest Selling Brands
India’s Largest Selling Brands
Business
Brand
Product
Market Share
(% Share in
Production)
No. of Other
Players in
the Industry
Polyesters
Recron
Texturised Yarn
6
32
6
3
3
1
5
2
3
4
58
32
61
69
63
71
39
36
85
80
Twisted/Dyed Yarn
Polyester Staple Fibre (PSF)
Polyester Filament Yarn (PFY)
Polyester Fibre Fill (PFF)
Relpet
Polyethylene Terephthalate (PET)
Polymers
Relene
High Density
Polyethylene (HDPE)
Reclair
Linear Low Density
Polyethylene (LLDPE)
Repol
Polypropylene (PP)
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
Furnishing fabrics, Day curtains
Automotive upholstery
SlumbeRel
Fibre filled pillows and sleep products
RueRel
Suitings
Reancé
Readymade Garments
Oil & Gas
Crude Oil & Natural Gas
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GROWTH IS LIFE
India’s Largest Selling Brands
India’s Largest Selling Brands
Nearest
Competitor’s
Market Share
Brand Logo
End Uses
Technology Partner
23
10
10
19
28
29
28
25
11
13
Apparels, Home textiles
Industrial sewing threads,
Automotive Upholstery
Sleep Product : Pillows, Cushions,
Toys, Quilts, Mattresses
E.I. DuPont, USA
Packaging-water, soft drinks, beverages,
confectionary
E.I. DuPont, USA/Sinco, Italy
Novacor, Canada
(earlier DuPont, Canada)
Packaging-woven sacks,
films, containers,
Household-luggage
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
Packaging-Woven sacks, TQ and BOPP films,
containers, strappings
Household-Bathware, Kitchenware, Furniture
Industrial-Dashboard, bumpers, grills, fender,
other plastic components
Unipol
Pipes & fittings, profiles,
films & sheets, bottles
containers, wire & cables
Geon Company, USA
(earlier B.F. Goodrich, USA)
Detergents
UOP, USA
Raw material-Polyester
Raw material-Polyester
Apparels
Furnishings, home textiles
ICI, UK/Du Pont
ABB Lummus Crest, Netherlands
(Shell Process)
Sleep products
E.I. DuPont, USA
Refining, Power, Fertilizers
and Petrochemicals
Enron Oil & Gas, USA
Reliance Industries Limited Annual Report 1998-99
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Product Flow Chart
Product Flow Chart
GROWTH IS LIFE
Abbreviation Full Name
Abbreviation Full Name
Abbreviation Full Name
DEG
DMT
EDC
EO
HDPE
LAB
LLDPE
Di-ethylene glycol
Di-methyl-terephthalate
Ethylene di-chloride
Ethylene oxide
High density polyethylene
Linear alkyl benzene
Linear low density polyethylene
MEG
NGL
NP
PET
PFY
PP
PSF
Mono-ethylene glycol
Natural gas liquid
Normal paraffin
Polyethylene terephthalate
Polyester filament yarn
Polypropylene
Polyester staple fibre
PTA
PVC
PX
TEG
VCM
Purified terephthalic acid
Polyvinyl chloride
Paraxylene
Tri-ethylene glycol
Vinyl chloride monomer
(1) Manufacturing also planned at Jamnagar complex (2) Plant also under operation at Hazira complex (3) Plant operational at Hazira Complex.
(4) Jamnagar plant has commenced operation in April 1999.
Reliance Industries Limited Annual Report 1998-99
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GROWTH IS LIFE
Corporate Governance
Corporate Governance
Reliance is committed to achieving the highest
international standards of corporate governance,
recognising that the management is accountable to
all stakeholders for good governance - including
shareholders, employees,
the government and
creditors.
Reliance believes that its key decisions must serve the
underlying goals, of enhancing shareholder value
over a sustained period of time, and achieving the
definite and measurable performance targets that
have publicly been set out by the company.
To this end, Reliance consistently aims at achieving
increased levels of transparency, accountability and
equity, in all facets of its operations.
from
Board structure and practices
Reliance's Board of Directors is comprised of 11
directors, including 5 external directors. The external
directors
leading
include 2 nominees
investment and financial institutions.
The balanced composition of the Board ensures
adequate representation to the
interests of all
stakeholders, and provides the company with the
benefit of the accumulated skills, experience and
wisdom, of an independent body of professionals.
It is the policy of the company that, in addition to
matters statutorily requiring Board approval, all
major decisions, involving, inter alia, mobilisation of
resources, new investments and capital expenditure,
acquisitions, risk management, and technology are
considered by the Board.
time. The
The Board also has a committee structure in place, to
inputs, with the
balance the need
for Board
important
constraints on available
committees are:
• Audit Committee,
• Compensation Committee,
• Finance Committee and
• Share Transfer Committee
Except
for the Finance Committee, all other
committees are comprised of external directors only.
The full Board met four times during the year. All
directors, internal and external, have consistently
demonstrated an exceptional degree of involvement,
and commitment, in their participation in Board
meetings.
The full Board meetings were supplemented by several
meetings of the respective Board Committees, and a
continuing, interactive relationship between the Board
members, and senior company management.
Increased Transparency and Disclosure
Reliance believes that increased transparency and
enhanced disclosure promote better corporate
governance.
Reliance has set new benchmarks in adequate and
timely corporate disclosure, becoming the only
Indian company, with its scale and complexity of
operations, to publish, for the second year in
succession, its audited annual results, together with
the complete Annual Report, within 3 to 4 weeks of
the close of the financial year.
The accounts are audited by the statutorily appointed
Indian auditors, and a
international
accountants.
firm of
to
the
the
given
initiate
governance,
to voluntarily
inter-action with
financial performance,
In the interests of its wide base of international debt
and equity investors, Reliance also provides, as a
matter of regular practice, a reconciliation of its
quarterly and annual accounts with US GAAP and
International Accounting Standards (IAS).
During the year, Reliance became the first Indian
company
the process,
of regularly making detailed presentations on
current
leading
government controlled investment institutions in
the country.
This was viewed as a pioneering step in promoting
corporate
substantial
shareholding enjoyed by such institutions in most
Indian corporates.
Reliance regularly maintains a very high degree
of
institutional debt and
its
equity investors, in India and abroad, to keep them
abreast of current developments in the company,
and to address their ongoing needs for information.
During the year, Reliance became the first Indian
company to publish an Intellectual Capital Report,
providing insights into the value-creation processes
within the company.
This was aimed at redressing the imbalance between
non-financial and financial data, and in recognition
of the belief that the value of organisations will, in
times to come, increasingly reside in their intangible
assets. The Intellectual Capital Report will now be
published every year.
Reliance makes full use of the power of technology,
for communicating online corporate,
financial
its website,
and
www.ril.com. Reliance's
the
distinction of becoming one of the most visited
corporate websites in India.
site has earned
information,
product
on
Reliance Industries Limited Annual Report 1998-99
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GROWTH IS LIFE
studies,
courses,
Corporate Governance Chair at the National
Law School
It is Reliance's endeavour to promote the best
governance practices in the Indian corporate sector.
In August 1998, Reliance endowed a chair for
Corporate Law and Governance at the National Law
School of India University to co-ordinate and
training,
academic
manage
curriculum development, as well as publication and
dissemination of information and documentation
pertaining to Corporate Law and Governance.
The Professor of Corporate Law and Governance,
apart
functions, will be
responsible for organising seminars, conferences, and
consultative meetings, facilitating policy formulation
and law reform in the area of Corporate Law
and Governance.
The Professor will also have the responsibility to
design courses for persons from the corporate sector.
The Professor will undertake
fundamental and
sponsored research, as well as training, specially for
and on behalf of Reliance.
these academic
from
Corporate Ethics Initiative
that an effective Corporate
Reliance believes
Governance process
and
efficiency. It begins with the role and practices of the
Board of Directors, but it does not end there.
Good corporate governance encompasses all of the
corporation's relationships. It refers to the total
initiatives that
network of public and private
transcends
integrity
surround the corporation, and make it responsive and
accountable to all its stakeholders.
In pursuance of this belief, Reliance has, in another
pioneering initiative, set in place a policy framework
for ethical business conduct by its personnel.
The Ethics Policy, published during the year, sets
forth, inter alia:
• Our Values and Commitments,
• Our Code of Ethics,
• Our Business Policies,
• The Insider Trading Policy
• A detailed programme for Ethics Management at
Reliance.
Reliance strives to conduct its business, and develop
its relationships, in a manner that is dignified,
distinctive and responsible. The principles enshrined
in the ethics policy documents provide the direction
to the efforts to achieve this objective.
Our Values and Commitments are the foundations on
which the reputation of Reliance has been built.
These will continue to be a major force in shaping
Reliance's growth strategies,
the consistent
endeavour to enhance the reputation of the company.
The real expression of the ethics policies must be
reflected
in day-to-day behaviour and actions.
Reliance is committed to ensuring that these values
are reflected in the actions taken by all its people.
The ethics policies describe what is expected of the
people of Reliance, and what society can expect
of Reliance.
in
Values and Commitments policy document states that Reliance believes that any business conduct can be
ethical only when it rests on the nine core values of Honesty, Integrity, Respect, Fairness, Purposefulness,
Trust, Responsibility, Citizenship and Caring. These values are not to be lost sight of by anyone at Reliance
under any circumstances irrespective of the goals that are intended to be achieved. To us, means are as
important as the ends.
In pursuit of these values outlined in the "Values and Commitments" policy document, we are committed to
an ethical treatment of all our stakeholders - our employees, our customers, our environment, our
shareholders, our lenders and other investors, our suppliers and the Government. A firm belief that every
Reliance team member holds is that the other person’s interests count as much as their own.
Code of Ethics and Business Policies are in alignment with Reliance's Values and Commitments. The
essence of of these documents is that each employee should conduct the company's business with integrity, in
compliance with applicable laws, and in a manner that excludes considerations of personal advantage.
Code of Ethics Policy document contains our
policy on the following:
• Conflict of Interest
• Payments and Gifting
• Receipt of Gifts
• Purchases through suppliers
• Appointment of full-time agents,
consultants and representatives
• Political Contributions
Business Policies document contains our policy on
the following:
• Fair Market Practices
• Inside Information
• Financial, Records and Accounting Integrity
• External Communication
• Work Ethics
• Personal Conduct
• Health Safety and Environment
• Quality
Insider Trading Policy document contains our policies prohibiting insider trading.
Reliance Industries Limited Annual Report 1998-99
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GROWTH IS LIFE
Year 2000 Compliance
Year 2000 Compliance
The Year 2000 (Y2K) problem concerns the inability
of computerised information, process control and
other systems to properly recognise and process date
sensitive information beyond December 31, 1999.
These problems occur because some computer
systems use only the last 2 digits of the year for
specifying a date, rather than all 4 digits, and thus
may interpret the year 2000, represented as "00" to
be the year 1900.
The implications of such failure are difficult to
predict with any degree of certainty. The same, if not
failures and
addressed, could result
erroneous calculations, which could possibly affect
many business processes,
including production,
distribution, research and development, financial,
administrative and communications operations.
Year 2000 Compliance implies that all computer
systems are verified to be capable of correctly
recognising and processing date related information
beyond December 31, 1999.
in system
Reliance's Year 2000 Policy
Reliance's Year 2000 Compliance Program is devised
to commit adequate resources to assess risk, and take
corrective actions, wherever required, to ensure:
• There is no risk, of injury to any person,
environmental pollution, or damage to plant
equipment, owing to failure of automation and
control systems employed in Reliance's plants.
• There is no disruption of manufacturing activities
and operations in the plants, and there is no
discontinuity
and
distribution.
dispatch
product
of
• There is no disruption, or inaccuracy, in the
financial, accounting and other
transactions
undertaken by the company in the course of
business activities.
• The interests of all stakeholders in the company
are protected at all times.
Reliance's Y2K Organisation
formed a Year 2000 Compliance
Reliance has
Steering Committee under
leadership of
the
an Executive Director. The Y2K Steering Committee
is comprised of senior level executives, representing
information
all major
technology, manufacturing, engineering, business
and finance.
A senior manager has been appointed as the Chief
Year 2000 Compliance Co-ordinator. He is assisted
by a group of specialists, who co-ordinate and track
company wide efforts, share best practices and
monitor budgets.
functions,
including
Each of the manufacturing complexes has formed a
Task Force, under the leadership of a Y2K Co-
ordinator, to implement the Y2K compliance efforts.
The Task Force for each manufacturing complex
reports to the President of that complex.
Year 2000 Project Plan
The basic scope of Reliance's Y2K Compliance
programme is divided into four major areas:
1. Business systems
2. Manufacturing systems
3. Plant/Process automation and control systems,
4. Communication systems.
The
comprehensive Year
programme covers the following phases:
1.
2. Assessment and Impact analysis
3. Remediation
4. Testing
5.
6. Certification
7. Contingency plan
2000 Compliance
Implementation
Inventory
8. Post compliance surveillance
Reliance has developed an exhaustive database on the
Corporate Intranet to cover all phases of the Year
2000 Compliance activity. The information in the
database is updated online, as an activity related to
any particular equipment transits from one phase to
another.
latest
platforms,
Cost
Reliance's project philosophy in terms of selection of
equipment based on
technology, a
the
rationalised approach while selecting vendors for
identical equipment, and the use of common
software/hardware
ensured
uniformity in systems across the enterprise. This has
helped
in reducing the company's Year 2000
Compliance efforts and cost.
The likely final cost implications are being compiled,
but the Company believes, on the basis of realistic,
provisional estimates, that the costs being incurred
for achieving Year 2000 Compliance will not have any
financial
significant
position or results of operations.
the Company's
impact on
has
Status
As a result of assessments, modifications, upgrades,
or
already
completed-the Company believes the Year 2000 issue
as it relates to the Company's own date dependent
replacements-planned, ongoing or
Reliance Industries Limited Annual Report 1998-99
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GROWTH IS LIFE
systems will not pose any significant problems for the
Company's business, processes and operations.
It is anticipated that all mission critical systems will
be certified Year 2000 compliant by July 1999.
Internal identification of all business, manufacturing,
automation and IT systems has been completed and
potential
identified.
areas of non-compliance
Remedial actions, wherever required, have been
initiated.
The Company will continue its Year 2000 assessment
and testing efforts for new or modified business
computer systems throughout 1999.
systems have been
Manufacturers of various
contacted to verify Year 2000 compliance, and
product compliance responses have been received for
more than 85% of the identified systems. A limited
number of devices have been determined to be non-
compliant, with most
software
upgrades at a minimal cost.
A part of the upgrade work may occur in the
second half of 1999, owing to plant scheduling
and equipment procurement lead times. A few,
lower priority, non-critical devices may not be
tested or remediated, and will be managed by
contingency plans.
requiring only
The Company believes the risk, if any, in adoption of
this approach is controllable, with contingency plans
being developed, and this will not pose any
significant problems for the Company's various
manufacturing control systems.
The critical elements of the Compliance Action Plan
are on schedule, and Reliance is confident that it will
enter the new millennium without any significant
its mission critical
problems affecting any of
computerised systems.
Contingency Plan
A business contingency planning team, comprising
key business managers, has been assigned to develop
company-wide contingency plans. This team
is
actively assessing the internal and external risks posed
by the Year 2000 issue, such as power, energy,
telecommunications, transportation and material
supply disruptions, and will use existing business
continuity plans while taking into account issues
unique to the Year 2000 issue.
The major elements of the plan will be completed by
June 1999, with
execution
continuing up to and through the Year 2000 rollover.
refinement
and
Reliance Industries Limited Annual Report 1998-99
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GROWTH IS LIFE
Management Discussion and Analysis
Management Discussion and Analysis
O v e r a l l R e v i e w
to
Reliance Industries is one of the few petrochemicals
companies in the world to have achieved sales,
production volume and earnings growth, in a year
when the global petrochemicals industry has faced
perhaps the most adverse environment in its history.
International product selling prices touched historic
lows during the year, falling, at times, to levels which
were 30% to 60% below the average selling prices of
the past 5 years.
Reliance's encouraging performance, in this tough
environment, reflects the global competitiveness of
its operations, its proven leadership in a growing
domestic market, the international quality of its
products, and the indomitable spirit of all its people,
in overcoming the most difficult of challenges.
During
face an
the year, Reliance had
unprecedented situation, arising from the damage
caused, by an unloading mother vessel, to the
primary feedstock supply system, the Single Buoy
Mooring (SBM), at the Hazira petrochemicals
complex.
The accident dislocated feedstock supplies at Hazira,
and had the potential to cause cessation of operations
at the complex for a period of several weeks, or even,
months.
Reliance's people ensured, through a collective
logistics management effort, and by arranging a
replacement SBM, that loss of production was
minimised, and
resumed normal
the complex
functioning within a very short time.
Reliance's financial performance for the year has to
viewed in the context that the same has been
achieved, after accounting for additional operating
costs of Rs. 141crores ($ 33 million) incurred as a
result of this accident.
As a measure of financial conservatism, Reliance's
claims for loss of revenue, increased cost of working,
and other similar losses, have not been set off in the
financial results, against these additional costs.
Business Review
Reliance set new production records during the year,
with production volume crossing the 7 million tonne
mark, despite the dislocations arising from the
damage caused to the SBM.
Total production volume touched 7.06 million
tonnes - an increase of 26% over the previous year.
Continued robust growth of demand in domestic
markets ensured that over 95% of sales revenues were
derived from domestic sales.
intermediates 43.9%, polymers
and new product
to double-digit growth
The business mix was comprised of polyester and
polyester
and
polymers intermediates 36.2%, chemicals 15.3%,
textiles 2.2% and oil and gas 2.4%.
During the year, Reliance has strengthened its
leadership position in all its businesses, with a
continuing emphasis on delivering world class
quality, building its customer franchise, extending its
nationwide marketing and distribution network, and
offering a competitive value proposition to its
customers.
applications,
Substitution,
contributed
in
rates
Reliance's two main business segments, polyester and
polymers.
This trend is expected to be maintained in the future,
in view of the low per capita consumption rates still
prevailing in India, as compared to the world
averages, and levels in other similar countries, such
as, China.
Reliance has acquired control over two polyester
manufacturing facilities, with an aggregate capacity
of 65,000 tonnes per annum. This move will enhance
Reliance's market penetration, and lead to higher
value integration of the company's production of
polyester intermediates.
Export
exports,
increased 87% during the year, to Rs. 685 crores ($
161 million).
the
In April 1999, Reliance has commenced
commissioning of
its Jamnagar petrochemicals
complex, being set up at a capital outlay of over Rs.
5,500 crores ($ 1.3 billion).
including deemed
revenues,
The complex will be fully commissioned during the
current financial year, and will increase Reliance's
total capacity by 50% to over 9 million tonnes per
annum, besides significantly enhancing the degree of
value integration.
Financial Review
Reliance has continued to lead the Indian private
sector, in terms of revenues, profits, assets, and net
worth.
Sales increased 9% to Rs. 14,553 crores ($ 3,430
million) for the year ended March 31, 1999. This was
comprised of a positive impact of 26% from sales
volume growth, partially offset by the negative
impact of 17% from the decline in product selling
prices.
The operating profit, after considering the additional
operating costs of Rs. 141 crores ($ 33 million)
incurred as a result of the damage caused to the SBM,
Reliance Industries Limited Annual Report 1998-99
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(cid:224)
GROWTH IS LIFE
and before other income, increased 6% to Rs. 2,710
crores ($ 639 million).
The operating margin remained stable at 18.6%,
sustained by the strong growth in volumes, lower
feedstock prices, cost reductions and productivity
gains, higher value addition, and the cushioning
impact of the depreciation of the Indian rupee during
the year.
income,
Other income, which mainly represented interest and
dividend
increased to Rs. 608 crores
($ 143 million), owing to the higher interest income
arising from the larger deposits and investments held
by the company.
The interest expense increased to Rs. 729 crores
($ 172 million), consequent upon commissioning
and
the
full operation of all new plants at
Hazira petrochemicals complex for the entire year.
This also resulted in a 28% increase in depreciation to Rs.
855 crores ($ 201 million). The provision for corporate
tax was nominal at Rs. 30 crores ($ 8 million).
Net profit, after accounting for the additional costs
of Rs. 141 crores ($ 33 million) arising from the
damage caused to the SBM, was up 3% at Rs. 1,704
crores ($ 402 million).
During the year, total assets increased 16% to over
Rs. 28,000 crores. Capital expenditure during the
year was Rs. 2,170 crores ($ 512 million), mainly
representing expenditure on the setting up of the
new Jamnagar petrochemicals complex.
R e s o u r c e s & L i q u i d i t y
Reliance has maintained its conservative financial
profile, despite the capital
intensive nature of
its business.
Reliance's gross debt (including long and short term
debt) to equity ratio, as at March 31, 1999, remains
below 1:1, even after full commissioning of the $ 2.5
billion Hazira petrochemicals complex, and with the
bulk of the expenditure on the new $ 1.3 billion
Jamnagar petrochemicals complex already incurred.
The company's net gearing, as at March 31, 1999,
stood at 28%, even as total assets increased 16% to
over Rs. 28,000 crores ($ 6.6 billion).
Reliance funds its long term and project related
from a combination of
financing requirements
internally generated cash flows and external sources.
Reliance has issued over $ 1.3 billion of debt securities
in the international capital markets since 1995, with
maturities ranging from 7 years to 100 years.
Reliance demonstrated its financial flexibility during
the year, by successfully tapping the domestic debt
markets, at extremely competitive pricing, at a time
when borrowing spreads in the international capital
markets, for corporates from emerging markets,
remained unattractive.
During the year, Reliance borrowed an additional
syndicated
through a
amount of Rs. 2,177 crores ($ 525 million)
domestically, to finance ongoing capital expenditure
for its new petrochemicals complex at Jamnagar.
During the year, Reliance also raised an aggregate
amount of Rs. 1,000 crores ($ 236 million),
through a pioneering and innovative transaction, for
securitisation of future receivables from its oil and
gas business.
This was the first significant securitisation deal in the
domestic capital markets, and enabled Reliance to
obtain quasi-equity financing, with a final maturity of
15 years, at competitive terms.
The company bought back $ 37.44 million of
its 2005 Notes during the year, and refinanced
the purchase
loan of
identical maturity.
The rating of the company's long term debt from
CRISIL was maintained and reaffirmed at AAA, the
agency's highest rating.
The company's international debt carries ratings of
BB from S&P, and Ba2 from Moodys, the latter
constrained by the sovereign ceiling.
Reliance also placed Rs. 65 crores (US $15 million)
by way of issue of preference share capital during
the year.
The company meets its working capital requirements
through committed rupee credit lines, provided by a
consortium of Indian and foreign banks. The credit
reviewed on a
lines are
quarterly basis.
Reliance has established a rupee commercial paper
program, to provide an alternative source of working
capital. Reliance's commercial paper is rated at P1+
by CRISIL, the highest credit rating which can be
assigned to this instrument.
As at March 31, 1999, Reliance had no commercial
paper outstanding. The peak outstanding during the
crores
financial
(US $ 147 million).
During the year, the company issued two series of
MIBOR
linked
debentures in the domestic capital markets for
Rs. 150 crores ($ 35 million). Reliance obtained the
benefit of extremely competitive terms for short term
debt through these instruments.
Investments as at March 31, 1999 were Rs. 4,294
crores ($ 1.01 billion), of which liquid investments
stood at Rs. 1,036 crores ($ 247 million).
Cash and bank balances as at March 31, 1999 were
Rs. 4,855 crores ($ 1.15 billion).
Foreign currency denominated
investments and
balances as at March 31, 1999 stood at Rs. 5,800 crores
($ 1.3 billion). These afford the company a substantial
hedge against translation risk on its long term debt.
During the year, Reliance's total exports, including
deemed exports, were Rs. 685 crores ($ 161 million),
an increase of 87% compared to the previous year.
fixed annually, and
call money
(overnight
rate)
year
625
was
Rs.
Reliance Industries Limited Annual Report 1998-99
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GROWTH IS LIFE
Reliance's revenues from sale of crude oil and gas,
which are US dollar denominated, were Rs. 354
crores ($ 83 million).
The company's export and oil/gas
comfortably
exceed
requirements of foreign currency debt.
The company is exposed to increased costs from
devaluation of the rupee, on account of its foreign
currency loans and exposure to imported feedstocks,
mainly, naphtha, paraxylene (PX) and ethylene Di-
chloride (EDC).
revenues
servicing
annual
debt
The company believes that any adverse effect of
devaluation of the rupee, on the company's results, is
unlikely to be significant, in view of several factors,
such as, the holding of significant foreign currency
denominated investments and balances, increasing
export revenues, the dollar-based, product selling
pricing strategy adopted by the company, and
hedging transactions undertaken by the company.
undertakes
Reliance
management
transactions, such as interest rate swaps and currency
swaps, on an ongoing basis, to reduce overall cost of
debt and diversify its liability mix.
liability
B u s i n e s s R e v i e w
Polyesters
During the year, Reliance produced an aggregate of
601,000 tonnes of polyester products - polyester
filament yarn (PFY), polyester staple fibre (PSF),
polyester chips, polyester fibrefill, and poly ethylene
terepthalate (PET).
This represented growth of 19% over the previous
year's production of 504,000 tonnes, and surpassed
the industry's growth rate of 16%.
Reliance's market share in the polyester business
(PFY, PSF and PET) increased during the year, from
41% to 45%.
Domestic polyester demand has grown at an annual
compounded growth rate (CAGR) of nearly 20% over
polyester
the
consumption in India is still among the lowest in the
world, in per capita terms.
The per capita consumption of polyester in India now
stands at a little over 1 kg. In contrast, the
comparable per capita numbers for other countries
are over 3 kgs. for China, and nearly 8 kgs. for the
US. The world average is around 3 kgs.
These numbers are clearly indicative of the strong
potential for continued demand growth in India in
future years.
Consumer perceptions and preferences for clothing
materials in India are presently undergoing a secular
shift. When polyester was first introduced in India, in
1963, it was perceived as a superior textile fibre/
filament for apparel.
years. Nevertheless,
last
10
Over the last few years, polyester has evolved, from
being a luxury and high priced product, to becoming
the most widely chosen clothing material, preferred
on attributes such as convenience and competitive
pricing.
Polyester has also attained a firm position as a
prominent industrial textile material, in addition to
being a textile apparel material.
Reliance enjoys market leadership in the polyester
business in India, with its world scale capacities,
modern and integrated facilities, globally competitive
operations, international quality of products, an
extensive nationwide marketing and distribution
infrastructure, and strong customer relationships.
itself
industry
The Indian polyester
is highly
fragmented, characterised by the presence of a
number of small players, lacking the benefits of any
scale, size and integration.
The process of restructuring and consolidation of the
polyester industry in India has inevitably begun.
During the year, Reliance acquired control over two
polyester manufacturing facilities - JK Corp (43,000
tonnes per annum) and India Polyfibres Limited
(22,000 tonnes per annum).
The acquisition of control over these capacities will
enhance Reliance's geographical reach in the eastern
Indian
increased value-
and ensure
integration of Reliance's polyester intermediates'
(PTA and MEG) production.
Reliance
the
intends
restructuring of the domestic polyester industry, in a
manner which will strengthen its market leadership
position, improve the competitive structure of the
industry, and create value
the company's
shareholders.
further participating
regions,
for
in
The demand outlook
for the Indian polyester
industry remains strong, but all players in the
industry will face continuing challenges in the future,
with product pricing still under pressure.
Polyester Filament Yarn (PFY)
Reliance is the 6th largest producer of PFY in the
world, with a total production capacity of 220,000
tonnes per annum.
During the year, Reliance produced over 234,000
tonnes of PFY, achieving growth of 7.5% over the
previous year's production of 217,000 tonnes.
Over the last five years, Reliance's PFY production
has grown at a annual compounded rate of 28%,
exceeding the industry's growth rates by a wide
margin.
During the year, domestic consumption of PFY rose
from 595,000 tonnes to over 690,000 tonnes -
representing growth of 16%.
The positive trend in demand growth is expected to
continue, with the domestic market likely to expand
to over 850,000 tonnes in the next 2 years.
Reliance Industries Limited Annual Report 1998-99
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GROWTH IS LIFE
Higher relative prices of cotton yarn have continued
to drive higher consumption of PFY in India.
The demand shift towards polyester has been
accentuated by clear price differentials. For instance,
while the 60s cotton yarn was priced at Rs. 125 per
kg, Reliance's comparable grade of polyester yarn -
80 denier - was priced more than 30% lower, at Rs. 86
per kg.
Reliance's ongoing
initiatives, for growing and
expanding domestic markets, have also met with
continued success during the year. Reliance has been
successful in channeling PFY into new applications,
such as, knitting, home furnishings, caps, shoe-laces,
socks, soft luggage bags and winter garments.
several projects
Reliance has undertaken
for
modification of PFY properties, to suit specific
the
functional requirements. This has
development of new products, such as, flame-
retardant PFY, and PFY for geo-textiles.
led
to
Domestic consumption of PFY in the non-apparel
sector is extremely low, compared to global trends.
Globally, 40% of the total consumption of PFY is for
non-apparel applications. In India, such non-apparel
applications are presently negligible.
Reliance's initiatives in this direction have led to the
development of various grades of polyester for non-
textile applications.
and
During the year, Reliance completed substantial
manufacturing technology upgradation, to improve
productivity
and
yield.
upgradation of product properties have also enabled
Reliance to produce better value fabrics, such as,
specialty, fancy fabrics and other high value-added
products.
Enhancement
Polyester Staple Fibre (PSF)
Reliance is the 5th largest producer of PSF in the
world with an installed capacity of 270,000 tonnes
per annum. During the year, Reliance produced over
290,000 tonnes of PSF (including production from
India Polyfibres) - representing 25% growth over the
previous year's production of 232,000 tonnes.
Reliance's PSF sales have grown at a compounded
annual rate of 44% since 1995-96, significantly higher
than the industry's growth rate of 20% during the
same period.
Reliance’s ability to offer a complete range in PSF,
encompassing different grades,
from different
locations spread across the country, has helped the
company to acquire market leadership.
Domestic consumption of PSF is expected to further
grow, by over 60% in the next 3 years, from the
present level of 438,000 tonnes per annum to over
700,000 tonnes per annum.
Higher substitution of cotton by PSF has remained
the key demand driver. PSF is the lowest cost fibre for
the Indian spinning industry, as compared to cotton,
viscose and acrylic fibres.
Reliance's PSF is competitively priced at Rs. 41 per
kg, compared to an average price of Rs. 71 per kg for
a comparable grade of cotton, and Rs. 68 per kg for
comparable viscose.
budgetary
government's
The
for
rationalisation of excise duties, have also reduced the
differential between excise duty on blended and
cotton yarn from 15% to 9%.
proposals
The relative reduction in end-prices to the consumers is
likely to increase the preference for polyester blended
fabrics. Removal of such anomalies will help in spurring
higher cotton substitution by PSF in the future.
Reliance's market development initiatives have opened
up an entirely new demand segment for PSF - cotton
substitution on open end and ring frame machines.
Reliance was also successful in developing a new
product - short-cut polyester staple fibre - heralding a
breakthrough in polyester applications.
This special grade of PSF finds application in the
hitherto unexplored segment of the paper industry,
and opens up new opportunities for expanding
domestic consumption.
Our other new products that have met with good
customer response during the year are micro-fibres
for fine count spinning and optically white fibre.
Poly Ethylene Terepthalate (PET)
After commissioning its new PET chip plant at
Hazira in November 1997, the PET Business
operated the full installed capacity of the plant during
the current financial year.
Production climbed to 67,000 tonnes in 1998-99,
representing a more than 3-fold increase over the
previous year's level of 19,000 tonnes. Reliance's
PET products have now been established in all
important market segments, in the domestic and
export markets.
Reliance's domestic market share has increased to
70%. Domestic consumption of PET has increased
last year at a healthy rate of
40% per annum. The strong momentum in
demand growth is expected to continue, on
account of superior attributes of PET, such as
price competitiveness vis-'-vis glass and other
traditional materials, increasing health consciousness,
heightened consumer expectations, and introduction
of global standards in consumer goods packaging.
PET is also completely recyclable, and completely
environment and hygiene friendly.
Recent government announcements, including the
prohibition on sale of loose edible oil, the mandatory
compliance of standards for mineral water
packaging, and the reduction of excise duties on
soft drinks, are all likely to have a very positive
impact on the consumption of PET in the country.
Diverse consumer market segments, such as,
Reliance Industries Limited Annual Report 1998-99
20(cid:223) (cid:224)
GROWTH IS LIFE
are
mineral water, soft drinks, liquors, edible oil, and
pharmaceuticals,
already using Reliance's
PET products.
Reliance has also initiated a major applications
development programme, for broadening the base of
PET consumption.
Polyester Fibre Fill (PFF)
Reliance's 30,000 tonnes per annum Polyester Fibre
Fill facility at Hazira is based on DuPont technology.
PFF is used for filling/non-woven end usages, such as
pillows, quilts, cushions, sleeping bags, mattresses
and furniture cushions.
PFF is fast attaining the status of the preferred filling
material, on account of its superior attributes, such
as, lighter and cleaner feel, and better shape retention
compared to traditional filling materials like cotton,
cotton waste, synthetics waste, and coir.
Reliance has set up an extensive distribution network
to ensure availability of PFF
to consumers
throughout India.
New PFF applications developed during the year
include thermal bonded mattresses, sound and
thermal insulation, geotextiles, and furniture.
Polyester Intermediates
Purified Terephthalic Acid (PTA)
Reliance is the 6th largest manufacturer of PTA in the
world, with an installed capacity of 975,000 tonnes
per annum.
Within India, Reliance is the only manufacturer of
PTA, with a market share of 85%.
Reliance's PTA production during the year touched
nearly a million tonnes - 983,000 tonnes. This
represented growth of over 45%, as compared to the
previous year's production of 684,000 tonnes.
PTA is an essential raw material for the manufacture
of polyesters - PFY, PSF, PET and polyester films.
Demand for PTA is expected to grow at the rate of
12%-15% per annum in the future, riding on strong
demand growth in polyester production.
Reliance captively consumes nearly 50% of its PTA
production in the manufacture of polyester yarn and
fibre. The balance production is sold mainly in the
domestic market.
Captive production of PTA
to margin
enhancement, and increased cost competitiveness, in
Reliance's polyester business, apart from ensuring
superior quality and uninterrupted production.
In the past, PTA imports into India at unreasonably
low levels had caused distortions in the market
scenario. The commissioning of Reliance's 2 new,
globally competitive plants at Hazira in 1997-98,
based on ICI, UK technology, and each having a
capacity of 350,000 tonnes per annum, has resulted
in
foreign
exchange for the country.
import substitution, saving valuable
leads
In the year 1998-99, imports have dropped a further
57%, compared to the previous year's level of 15,000
tonnes per month, owing to Reliance's strong
competitive presence in the domestic market.
Imposition of anti-dumping duties under the WTO
provisions, provides the domestic industry with an
appropriate framework for seeking redressal against
unfair competition from imports. This framework has
suitably been tested in the past.
Paraxylene
Paraxylene (PX) is the major raw material for the
production of PTA.
Reliance is setting up a 1.4 million tonnes per annum,
PX manufacturing facility at
its new Jamnagar
petrochemicals complex.
Project implementation is at an advanced stage, and
the project is likely to be fully commissioned by the
third quarter of the financial year 1999-2000, several
months ahead of schedule.
With the completion of this project, Reliance will
rank among the top three producers of PX in the
world, after BP-Amoco and Exxon-Mobil.
The commissioning of the PX facilities will enhance
vertical - backward integration for Reliance, and
strengthen its overall global competitiveness.
A substantial portion of Reliance's PX production will
be consumed captively, and the remaining production
will be sold in the domestic and exports markets.
Mono Ethylene Glycol (MEG)
Reliance is among the top ten MEG producers in the
world, with an installed capacity of 340,000 tonnes
per anuum.
During
the year, Reliance's MEG production
touched 356,000 tonnes, registering growth of 28%,
over the previous year's production of 279,000
tonnes. Reliance's market share has moved up to
80%, from the previous year's level of 78%.
MEG is an essential raw material used, alongwith
PTA, in the production of polyester. Growth in
polyester consumption is the main driver for MEG
demand growth.
Total domestic consumption of MEG is presently
around 500,000 tonnes per annum. The strong
trends in domestic polyester production will continue
to drive MEG consumption in India.
Imports of MEG have come down to nominal levels,
owing to Reliance's strong competitive presence in
the domestic market.
Reliance captively consumes around 60% of its MEG
production. The balance is sold mainly in the
domestic market.
substantially
Reliance's cost competitiveness in MEG production
is
captive
availability of the major feedstock, ethylene, from the
naphtha cracker at Hazira.
strengthened by
the
Reliance Industries Limited Annual Report 1998-99
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GROWTH IS LIFE
Polymers Business
Reliance produced an aggregate of 1.025 million
tonnes of polymer products during the year -
polyethylene (PE), polypropylene (PP), and Polyvinyl
Chloride (PVC) - representing growth of 8%,
compared to the previous year's production of
945,000 tonnes.
Domestic consumption of these polymers increased
by a robust 19%, to cross 2 million tonnes. A part of
the consumption was met through imports.
The per capita polymer consumption
in India
increased to 2.4 kgs in 1998-99, but is still well below
comparable numbers for other countries.
China consumes 4 times as much polymers as India,
with a per capita of 9.6 kgs, and aggregate
consumption at over 11 million tonnes.
The US, with its more developed economy, consumes
72.2 kgs of polymers per capita. The world average is
itself 13.2 kgs per capita, more than 5 times the
Indian level.
Domestic demand for polymers (PE, PP, PVC) has
already grown at an annual compounded rate of 15%
over the last 10 years, but with India's per capita
consumption still remaining among the lowest in the
world, there is unlikely to be any slowdown in the
pace of demand growth.
New product applications, and substitution of
traditional packaging materials, such as, glass, metal,
jute, steel and wood, owing to superior product
attributes of polymers, are driving demand growth.
The steep drop in unit prices of polymers, resulting
from the fall in international product prices, and the
decline in customs and excise duties, over the past
few years, has also contributed to the robust growth
in demand.
scale
capacities,
Reliance's world
integrated
manufacturing facilities, countrywide marketing and
distribution network, superior customer service, and
intensive market development efforts, will ensure
that the company consistently strengthens its market
leadership in this fast-growing market.
International product prices of polymers had
dropped to historic lows during the year. There have
been signs of price recovery in the recent few weeks,
but with fresh capacities coming onstream in the
country, and in the Asia Pacific region, competitive
pressures are expected to continue in the future.
Polyethylene (PE)
Reliance produced 366,000 tonnes of PE during the
year, representing growth of 15%, compared to
production of 318,000 tonnes in the previous year.
Reliance leads the Indian PE market, with a 63% share.
Domestic consumption of PE increased to 783,000
tonnes during the year, compared to 665,000 tonnes
last year, and is expected to further increase to a level
of over 850,000 tonnes in the year 1999-2000.
During the year, the demand-supply deficit of around
200,000 tonnes in the domestic PE market was met
through imports.
The commissioning of two new domestic PE
manufacturing capacities in the next couple of years is
expected to provide a boost to the 'supply-driven'
domestic PE market.
Polyethylene is used in the manufacture of packaging
materials, water
tanks, dairy/beverage,
irrigation systems and a variety of household
products.
storage
Around one third of PE and PP (Polypropylene)
markets tend to overlap in the domestic environment.
PP has been
rates of
consumption growth in the domestic markets relative
to PE over the last couple of years.
experiencing higher
Relative product selling prices, market development
initiatives, and customer service are the factors
influencing this evolving scenario. New product
applications and
substitution opportunities are
expected to drive consumption for both, PE and PP,
in the coming years.
Per capita consumption of PE in India is still among
the lowest in the world. India consumes only 0.8 kgs
per year of PE per capita, compared to China's level
of 2.7 kgs per year.
Reliance's key market development efforts during the
year included the production of cable insulation
grade PE. This new grade opens up the fast growing
telecom cables market for PE.
Continuous benchmarking against imported grades
has enabled Reliance to develop niche markets.
The increased use of PE pouches and blow-moulded
containers for edible oil and milk packaging are
some
successful market
other
development initiatives.
the
of
Reliance's integrated manufacturing facilities have
enhanced its competitiveness in the PE market.
Ethylene, the major raw material for PE, is sourced
from the naphtha cracker at Hazira.
The captive supply of ethylene insulates the company
from the impact of volatility in international prices,
leads to efficiencies in logistics, and helps reduce
costs and improve overall margins.
Polypropylene (PP)
Reliance's PP production for the year touched
384,000 tonnes - an increase of 8% over the
production of 357,000 tonnes last year. Reliance
enjoys leadership in the domestic PP market, with a
71% share.
Globally, PP is the fastest growing plastics product.
PP is used in the production of articles of daily use,
such as, packaging materials, hosiery garments,
moulded articles, kitchenware, furniture and medical
appliances.
Reliance Industries Limited Annual Report 1998-99
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GROWTH IS LIFE
Domestic PP consumption increased 21%, to reach
a level of nearly 800,000 tonnes during the year.
The demand-supply deficit of almost 200,000
tonnes of PP market during the year was met
through imports.
Indian per capita PP consumption still stands at just
0.8 kgs, far below comparable levels for China and
other countries in the region, clearly indicating the
potential for continued strong demand growth.
The key demand drivers for PP include substitution
of traditional packaging materials, new end-use
applications, regulatory and policy changes such as
dilution or withdrawal of jute packaging rules, and
mandatory packaging of edible oil, and the adoption
of International Labour Organization norms on
limits to head-loads.
Reliance is setting up a new PP plant at the upcoming
Jamnagar petrochemicals complex, with a capacity of
600,000 tonnes per annum.
One production line, with a capacity of 200,000
tonnes per annum, has already been commissioned in
April 1999. The output from the new line will have a
ready market, substituting imports which took place
last year.
The second line, with capacity of another 200,000
tonnes per annum, is expected to be commissioned in
the second quarter of the current financial year. The
third line, with capacity of 200,000 tonnes per
annum, will be commissioned in the fourth quarter of
the current financial year.
Reliance's PP capacity will touch one million tonnes
per annum, upon commissioning of the new facilities
at Jamnagar.
Reliance's PP facilities enjoy the benefit of vertical
backward integration at both sites, Hazira and
Jamnagar. The existing plant at Hazira sources its
basic raw material, propylene, from the naphtha
cracker. The new facility at Jamnagar will obtain
propylene from Reliance Petroleum's refinery located
at the same complex.
Reliance has successfully created a commanding
market leadership position, over the past few years,
displacing imports from across the globe. This has
been achieved by providing world-class quality, and
adhering to the highest customer service standards.
Reliance anticipates no difficulty in exporting the
temporary PP surplus in the domestic market,
resulting from creation of new capacities this year, to
export markets around the world.
The deficit Asia-Pacific region serves as a ready
market, where Reliance enjoys a substantial freight
cost advantage over other European and American
manufacturers.
Polyvinyl Chloride (PVC)
Reliance's PVC production for the year touched an
all time high of 275,000 tonnes.
Domestic consumption increased 21%, to reach a
record level of over 700,000 tonnes. Substitution of
traditional materials is providing the momentum for
increased PVC consumption. PVC is a versatile
material, with a variety of applications, such as pipes,
sheets, films, footwear, wires and cables.
A constructive pricing and customer servicing
strategy has enabled Reliance to effectively compete
against imports and maintain its leadership in the
domestic markets.
Reliance's PVC brand, `Reon' remained the first
choice of most processors, owing to Reliance's
efficient
successful
marketing and distribution network, spread across
the country.
'customer mapping'
and
An intensive product development effort, supported
by a broad product range suitable for the entire
spectrum of applications, has ensured over 90%
market penetration. Demanding customers source
more than 70% of their requirement from Reliance.
Reliance's market development initiatives have led to
the widening of markets for water supply with pipes
of size upto 400 mm substituting conventional
construction materials like cast iron and asbestos.
Reliance's efforts in promoting the use of PVC for
sewerage conveyance and storm water drains are
bearing
increased
consumption.
contributing
fruit
and
to
The Government's current thrust on social sector
development provides growth opportunities for PVC
applications in areas, such as, protected water supply
systems, safe sewerage disposal systems and housing.
These initiatives are likely to lead to higher growth in
PVC consumption.
Over the past few years, the per capita PVC consumption
in India has more than doubled from 0.32 kg to 0.69 kg.
The potential for future demand growth is borne out by
the much higher per capita consumption levels prevailing
in countries, such as, China, at 1.6 kgs, and a per capita
world average of 4 kgs.
During the year, the Hazira PVC manufacturing
in production, by
facility achieved economies
achieving globally comparable productivity levels.
Reliance sourced the main feedstock - Ethylene
Dichloride (EDC) - at competitive rates, achieving
enhanced margins.
Cracker Products
Ethylene and Propylene
Reliance's cracker is the world's largest grassroots
multi-feed cracker, and has the distinction of being
the largest operating naphtha cracker in Asia. The
cracker can use a variety of feedstocks, including
naphtha, natural gas liquids and other petroleum
feedstocks.
During the year, Reliance produced 733,000 tonnes
of ethylene - up 17% from production of 626,000
Reliance Industries Limited Annual Report 1998-99
23(cid:223)
(cid:224)
GROWTH IS LIFE
in the cracker are used
tonnes in the previous year. Propylene production
stood at 374,000 tonnes - up 21% compared to
production of 309,000 tonnes last year. Total output
from the cracker increased 23% in 1998-99.
At current production levels, Reliance accounts for
58% of the total ethylene produced in India, up from
54% in the last year.
The cracker produces important raw materials for
many of Reliance's key products, and plays a crucial
position in the overall value-integration strategy.
The propylene and ethylene produced from the
cracker are used for the manufacture of PP, PE, PVC
and MEG at the Hazira complex. Benzene and
xylenes produced
for
manufacturing LAB and paraxylene at the Patalganga
complex.
During the year, production of 34,000 tonnes of
ethylene was sold to various customers within India,
after meeting the internal requirement of all the
ethylene based downstream plants.
The polymers, polyester and textile businesses of
Reliance are now fully integrated, from naphtha to
fabrics and plastics.
The cracker has eliminated Reliance's exposure to
international market vis-à-vis
volatility
procurement of basic feedstocks, like ethylene and
propylene, and contributed significantly to stability,
and enhancement, of margins, besides ensuring
uninterrupted production.
The naphtha for the cracker is received at Reliance's
primary feedstock supply system, the single-buoy
mooring (SBM), off the coast of Hazira. Naphtha is
transferred to the Hazira petrochemicals complex
through sub-sea pipelines.
During the year, the operational SBM was damaged
by an unloading mother vessel. Reliance met the
challenge, by demonstrating its ability to provide
multiple alternate solutions, for meeting the naphtha
requirement of the cracker. A new SBM has now been
installed and is operational.
The
remained
international
depressed during a major part of 1998-99, mainly on
the account of the continuing supply side imbalance,
and weak demand fundamentals, in the region. In
recent times, there have been signs of price recovery.
ethylene market
the
in
Cracker – Other Products
In addition to ethylene and propylene, the cracker
also produces aromatics, such as, benzene, toluene,
mixed xylene, and carbon black feed stock (CBFS).
Benzene
During the year, Reliance produced 155,000 tonnes
of benzene, compared to production of 130,000
tonnes in the previous year. Reliance has a 36%
market
for benzene
increased by 10% during the year, and the outlook
remains stable.
share. Domestic demand
Benzene, like ethylene and propylene, is a building
block in the petrochemicals industry. It is used in the
manufacture of major
like
styrene, phenol, caprolactum, linear alkyl benzene
chloro-benzene, maleic
(LAB), nitro-benzene,
anhydride and aniline.
Toluene
industrial chemicals
industry to grow
Reliance produced 61,000 tonnes of toluene during
the year, giving it a market share of 65%.
Regular and large supplies of toluene have helped the
downstream
faster. Domestic
demand for Toluene grew at 10% during 1998-99,
and is expected to grow at an even healthier pace in
the coming years.
Reliance produces ultra-pure toluene, suitable for the
manufacture of
toluene di-isocyanate. Other
applications include nitro-toluene, chloro toluene
and solvents for bulk drugs.
Bulk LPG
Reliance markets commercial butane as Liquefied
Petroleum Gas (LPG), under the parallel marketing
scheme for oil products. Reliance is the only private
sector producer in India offering this product.
Reliance sells over 100,000 tonnes of LPG per annum
to over 115 industrial customers and 135 bottlers all
over India. Customers include industrial units in the
glass ceramics sector, automotive industry and textiles
processing. Reliance's LPG sales primarily replace the
imports of LPG undertaken by industrial users.
serviced
industrial customers
Packaged LPG - Reliance Gas
Reliance commenced marketing of packaged LPG in
15 kg cylinders in June 1998. Bulk LPG produced
from the Hazira Cracker is distributed through a
marketing network, under the brand name of
Reliance Gas.
Within just 10 months of operations, Reliance has
over 70,000 domestic customers, 16,000 commercial
and
through 23
distributors, and over 1,000 distribution centres
located all over Gujarat.
A unique two-tier marketing and distribution system
ensures that all demand centres in the state of Gujarat
are covered. Reliance has now commenced marketing
efforts in the states of Madhya Pradesh, Maharashtra,
Rajasthan, Uttar Pradesh and other Northern States.
Bottling plants will be set up at strategic locations to
serve these markets.
Reliance provides world-class service to customers of
Reliance Gas, ensuring that immediate connections,
with prompt
refill options, are available at
competitive prices.
An affiliate company of Reliance is in the process of
completing an acquisition of the LPG division of
Gujrat Gas. The acquisition provides immediate
access to 25,000 customers, and over 55 operating
franchisees.
Reliance Industries Limited Annual Report 1998-99
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GROWTH IS LIFE
India has among the lowest per capita consumption
of LPG in the world. Till last year, there were more
than 12.7 million waitlisted gas connections with the
various public sector companies in the oil sector.
the
According
government, demand for LPG is slated to double by
the year 2005, from the present level of 5 million
tonnes per annum.
to Ninth Plan projections of
Reliance will have over 250,000 tonnes of LPG
available for marketing from the Hazira Cracker.
Reliance Petroleum's refinery will produce an
additional 2.1 million tonnes of LPG. The experience
gained from the present marketing efforts in LPG
will help Reliance, as a group, expand its leadership in
this sector.
Chemicals
Linear Alkyl Benzene (LAB)
LAB is used as a intermediate in production of
detergents. Its key demand drivers are primarily
linked to retail consumption trends. The domestic
buyers of LAB are detergent manufacturers like
Hindustan Lever, Procter & Gamble and other
regional detergent producers.
Reliance produced nearly 100,000 tonnes of LAB in
1998-99, attaining a market share of 36%. The
domestic consumption of LAB was 240,000 tonnes.
This represents a compounded annual growth rate of
8.5% over the last 3 years.
The past year saw buoyant conditions in the sector.
Robust international trends are expected to keep
LAB prices firm in the coming year.
Paraffins
Paraffins are used to manufacture LAB, and for
chlorinated paraffin wax, a plasticiser intermediate.
Reliance crossed the 100,000 tonne milestone in
production in 1998-99, with production volume
touching 105,400 tonnes.
The total domestic production of paraffins was
235,000 tonnes. The demand outlook for paraffins
remains stable.
Oil and Gas
Reliance holds a 30% interest in an unincorporated Joint
Venture with Enron and ONGC, to develop proven oil
and gas fields at Panna, Mukta and Tapti. Enron has a
30% share, and ONGC the balance 40% share.
The total capital expenditure incurred by the Joint
Venture as at March 31, 1999 has increased to Rs.
2,810 crores ($692 million). The total number of
wells has increased to 70 in the Panna-Mukta fields,
with the addition of 18 new wells, and to 15 in the
Tapti fields, with the addition of 3 new wells.
The oil and gas production from the Panna-
Mukta and Tapti fields is presently being sold to
Indian Oil Corporation (IOC) and Gas Authority of
India Ltd. (GAIL), as nominees of the Government.
Under the terms of the Production Sharing
Contracts entered with the Government, revenues
for Reliance from these fields are denominated in US
dollars. This provides Reliance with a hedge against
depreciation of the Indian rupee. The business also
yields several tax benefits to Reliance.
The share of this business in Reliance's revenues has
more than doubled to 2.4% during the year.
Panna-Mukta
The Panna and Mukta fields are currently producing
over 27,000 barrels of crude oil, and 2.0 million
cubic meters of gas per day, as compared to the
production levels of 18,000 barrels of oil and 1.2
million cubic meters of gas per day, in the last year.
Total oil production increased 123% to 314,000
tons in 1998-99, from 141,000 tons in the previous
year, while gas production registered 105% volume
growth.
By March 2000, crude oil production is likely to
reach 30,000 barrels per day and gas production
will go upto 2.5 million cubic meters of gas per day.
Estimates of recoverable reserves from the Panna-
Mukta fields have increased by 36% from 210
million
of oil and oil equivalent
gas(MMBOE) to 287 MMBOE for the current
development plan. The bulk of the increase has come
from gas reserves, which have gone up by 215%.
The preliminary and detailed engineering of
facilities has been completed for the exploitation of
upside reserves, including the newly discovered
Alternation Zone, and a revised plan has been
submitted.
Tapti
barrels
The Tapti field is currently producing 5.7 million
cubic meters of gas per day, as compared to
production of 5 million cubic meters of gas per day,
in the last year.
Estimates for recoverable reserves from Tapti field
have been revised upwards, based upon the results of
drilling and 3-D seismic interpretation, by 300%
from 1.13 Trillion Cubic Feet of Gas Equivalent
(TCFE) to 3.39 TCFE.
The Joint Venture partners have already approved
an expenditure of $10.6 million for front end
activities for Tapti development. Government
approvals are awaited for implementation of the
revised development plan for the Tapti gas fields,
which may result in total gas production of about 22
million cubic meters per day. Implementation of the
new development plan will make the Joint Venture
one of the largest producers of natural gas in the
country.
Textiles Division
Reliance started out as a small unit in the synthetic
textiles business over two decades ago. Today,
textiles
Reliance
synthetic
India’s
largest
is
Reliance Industries Limited Annual Report 1998-99
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(cid:224)
GROWTH IS LIFE
manufacturer. While maintaining its pre-eminent
position in synthetics, it has over the years added a
large capacity for quality Worsted Suitings and
Furnishing Fabrics (Home Textiles) also.
Reliance’s Textiles complex at Naroda, Ahmedabad,
is one of Asia's largest and most modern textile mills.
The complex houses the complete spectrum of
textiles manufacturing activities, such as spinning,
weaving, crimping, texturising, dyeing of yarn, warp
knitting, fabric designing, printing and processing.
Reliance’s Textiles complex is unique in the sense that
it handles diversified product range encompassing
Sarees, Dress Materials,
Suitings,
Furnishing Fabrics and Sleep Products under one
roof. The Unit is also home to one of the largest and
most modern design studios in Asia.
Shirtings,
Reliance’s textile products are sold under the brand
names of Vimal, Harmony, Reance, RueRel and
SlumbRel. These brands have gained a wide
acceptance as high quality premium products, both
in the Indian and International markets.
These premium products are marketed through
a distribution network comprising
independent
wholesale dealers, franchised outlets and a large
number of retailers spread across the country.
Additions to the existing retail network owned
& franchised show rooms improved the penetration
of Textile Products during the year. This was achieved
through the Retail Marketing Services Division,
which focusses on widening the distribution channel.
This division is a crucial link in the distribution chain,
ensuring linkages with the ultimate consumers. By
regularly arranging training programmes for dealers,
it ensures that they were aware of the finer nuances of
fabrics. This helps them in providing better service to
the customer, particularly
the selection of
appropriate fabrics.
in
The Retail Marketing Service Division also acts as a
feedback mechanism for the manufacturing division,
to convey the consumers’ concerns and needs. This
initiative has greatly helped in enhancing customer
satisfaction.
The year 1998-99 witnessed a continued focus on
export markets. Reliance’s products met with a
positive response from customers in the UK, the US,
Canada, France, Italy and Germany. Besides these,
exports are also focussed on Dubai, Kuwait, Sri Lanka,
Hong Kong, Bangladesh, Singapore and Egypt. The
most heartening feature is the general acceptance of
the textile products even in the most demanding and
critical markets in the developed countries.
Textiles Division is giving greater thrust to become
one of the key players in the supply channel
management in the developed countries.
Vimal
Vimal is India’s largest selling brand of premium
textiles. It offers an extensive range of latest fashions
and tasteful designs. It is widely perceived as the
among
preferred brand
consumers. Reliance
continuous to invest both in the technology and
human resources towards this end which ensures the
sustenance of the brand image of VIMAL by regular
introduction of newer designs and collections.
Special emphasis
introduce high
is given
valueadded products, for the premium end of the
market to enhance overall margins.
to
Harmony
is
largest
India?s
latest ethnic and
HARMONY
selling brand
of premium furnishing fabrics. It offers a broad range
of the
international designs.
An annual art show, hosted in Bombay, under
the auspices of the HARMONY collection to
promote new talent has become a high point in the
country’s art circuit. The latest show, held in April
1999, has again met with an enthusiastic response.
Products from the entire HARMONY collection
were on display at the show.
J a m n a g a r P e t r o c h e m i c a l s
C o m p l e x - t h e n e w g r o w t h
c e n t r e
refinery,
petroleum
Reliance has entered the next phase of its growth,
with commissioning of facilities having commenced
at the new Jamnagar petrochemicals complex, being
set up at a capital outlay of over Rs. 5,500 crores
(US $ 1.3 billion).
The entire Jamnagar Complex is the first world-scale
manufacturing complex of its kind, having a fully
integrated
petrochemicals
complex, captive power plants, and a captive port,
with related infrastructure.
The Rs. 25,000 crore complex being set up by the
Reliance group at Jamnagar represents the single
largest investment ever made by the private sector at
any single location in India.
Reliance's
Jamnagar Petrochemicals Complex
comprises an aggregate paraxylene (PX) capacity of
1.4 million tonnes per annum, and a 600,000 tonnes
per annum polypropylene (PP) plant.
Upon full commissioning of this complex during the
current financial year, Reliance's total capacities will
increase 50% to over 9 million tonnes per annum.
The commissioning of the Jamnagar Petrochemicals
the degree
complex will
of vertical
to
capture value across a broader spectrum of the
energy chain.
The first production line of the new polypropylene
facilities at Jamnagar, with a capacity of 200,000
tonnes per annum, has been commissioned, ahead of
schedule, in April 1999.
The second polypropylene line, with a capacity of
200,000
to be
commissioned in the first quarter of the current
financial year. The third line, with similar capacity of
integration, enabling Reliance
significantly enhance
tonnes per annum,
likely
is
Reliance Industries Limited Annual Report 1998-99
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GROWTH IS LIFE
is
likely
tonnes per annum,
200,000
to be
commissioned in the fourth quarter of the current
financial year.
The commissioning of the new polypropylene facilities
at Jamnagar will increase Reliance's total polypropylene
volume to one million tonnes per annum, giving a
substantial boost to the company's market share in the
plastics business.
Work on Reliance's 1.4 million tonnes per annum
paraxylene facilities at Jamnagar is also proceeding
production
ahead of schedule.
The
lines
paraxylene
two
first
at Jamnagar are likely to be commissioned in the
second quarter of the current financial year. The third
production line is likely to be commissioned in the
third quarter of the current financial year.
The commissioning of the paraxylene facilities, and
integration with the refinery complex at Jamnagar,
will complete the integration chain for Reliance's
growing polyester business.
Foreign Exchange Savings, Taxes Paid, and Exports
Foreign Exchange Savings, Taxes Paid, and Exports
increase
in the coming years, with
Foreign Exchange Savings
Reliance primarily manufactures products that are
import substitutes, thereby contributing to savings of
precious foreign exchange for the country. Reliance
now ranks among the top companies in India in
terms of foreign exchange savings.
During the year, Reliance saved Rs. 9,487 crores
($ 2,236 million) in foreign exchange for the country
- up from the foreign exchange savings of Rs. 9,174
crores ($ 2,074 million) achieved in the previous year.
Foreign exchange savings are expected to increase
further
in
production and exports.
Taxes paid
Reliance is among the top taxpayers to various
government agencies, primarily by way of customs
and excise duties. Various taxes and duties form one
of the largest elements in Reliance's cost structure.
Reliance paid a total of Rs. 2,893 crores ($ 682
million) in taxes and duties during the year 1998-99.
Despite the absolute fall in the rates of custom and
excise duties, the quantum increase in production
volume has ensured a consistent increase over the
years in the total amount of duties and taxes paid by
Reliance.
Exports
Reliance's export
including deemed
revenues,
exports, increased 87% in the year 1998-99 to Rs.
685 crores ($ 161 million). This places Reliance
among the top manufacturer-exporters from India,
even though exports accounted for less than 5 % of
Reliance's overall revenues.
Reliance's export revenues will increase further to
around Rs. 2,000 crores ($ 400 - 500 million) over
the next 2 to 3 years, with the full commissioning of
the Jamnagar Petrochemicals Complex.
Reliance's products have export destinations that
span the globe, including developed as well as
developing markets.
Reliance's international customers are based in the
US, Canada, UK, France, Italy, Netherlands, Russia,
Saudi Arabia, Yemen, Abu Dhabi, Oman, Qatar,
Japan, Korea, Australia, Mauritius and several other
countries.
Some of the biggest and most reputed international
companies are buyers of Reliance's products. These
include Unilever, Condea Augusta, Les Plastigues
Petco, Acqua Minerals, SA Schwepps, SASA, Shell
Italia, Huntsman, BP Chemicals, Mitsui, E. I.
DuPont, Samsung, Hanwha, Matushita Chemicals,
Hannung, Bata, Unifi, ICI Pakistan and Tolson.
Reliance exports value added quality products to
discerning customers, on considerations of superior
economics, and does not compete in the low end,
purely price driven, commodity segments.
The global acceptance of Reliance's products is a
testimony to the world-class quality of its products,
and the intense focus on customer satisfaction. The
continuous benchmarking in the domestic market, to
compete against imported products, has helped
Reliance in carving out a niche in the global arena.
Reliance Industries Limited Annual Report 1998-99
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GROWTH IS LIFE
Reliance Petroleum
Reliance Petroleum
refining
Reliance Petroleum Ltd. (RPL), a separately listed
Reliance group company, is setting up the world's
largest grassroots refinery project at Jamnagar,
Gujarat, with a capacity of 27 million tonnes
per annum.
RPL is poised to enjoy market leadership in the
hugely deficit domestic markets
for petroleum
products, as a result of its share of over 25% in
and
capacity,
domestic
global
its
competitiveness. Per
consumption of
capita
petroleum products in India remains among the
lowest in the world, indicating the strong potential
for demand growth.
Reliance Industries Ltd., along with its subsidiary,
Reliance Industrial Investments and Holdings Ltd.
(RIIHL) will hold upto a maximum of 50% of RPL's
fully diluted equity capital.
RPL is implementing the 27 million tonnes per
annum refinery project, at a total capital outlay of
only Rs. 14,250 crores ($ 3.4 billion). The capital
cost per tonne has declined by 15% from Rs. 6,238
per tonne to Rs. 5,278 per tonne, as compared to
initial estimates.
The unit-wise commissioning process of the project
has already begun, and the refinery is likely to be fully
commissioned in the second quarter of the current
financial year, well ahead of schedule.
The commissioning of the refinery will further
for
enhance the degree of vertical
Reliance's petrochemicals business, thereby adding to
the company's already substantial global competitive
edge.
RPL's globally competitive edge is derived from
factors, such as the following:
integration
Scale
RPL is the largest grassroots refinery in the world,
and also the largest state-of-the-art refinery in India,
accounting for over 25% of the country's refining
capacity. The scale of operations will give the refinery
the benefit of having the lowest capital and operating
costs per tonne.
Configuration and Higher Complexity
The unique processing scheme consisting of a FCC, a
Coker and a reformer alongwith the integration of
the refinery, with petrochemicals and power, has
resulted in high complexity.
The degree of complexity indicates the potential for
higher value addition. RPL's higher complexity
indicates that the company will add higher value to a
given unit of crude. This will mean higher gross
refining margins for RPL, compared to its domestic,
regional and global peers.
The configuration and higher complexity will enable
deep conversion, resulting in a better value-added
product mix, with the ability to maximise output of
propylene, LPG and middle distillates, and minimise
bottom-of-the-barrel production. There will be no
fuel oil production, which
to negative
contribution.
The configuration of Reliance Petroleum's refinery
gives it tremendous process flexibility, with the ability
to process virtually any traded crude, neat, or, in
blend. Other Indian refineries can only process
relatively sweeter and lighter crude. This will enable
RPL to capture the price differential between heavy/
sour crude and sweet/light crude.
leads
Product Mix and Specifications
Reliance Petroleum's refinery is equipped to meet the
challenge of stringent world-class product quality,
and environmental norms and specifications. This
will enable RPL to build leadership in domestic
markets, and effectively compete in export markets.
RPL's refinery has the ability to produce HSD with
0.05% sulphur content, against the maximum limit of
0.25% for the year 2000. The refinery can produce
gasoline (petrol), adhering to the most stringent
California (US) specifications, and unleaded gasoline
with benzene content of under 1%.
Crude Procurement and Logistics
The Government has already given private sector
refiners in India the freedom to independently source
their own crude requirements, from any part of
the world.
Reliance Petroleum has set up a world-class crude
procurement planning and processing group to
optimise the procurement of crude, its transportation
and processing.
The location of RPL's refinery close to the major
crude surplus regions in the Middle East, will lead to
considerable freight savings, and easier logistics
management.
The Jamnagar Complex is port-based, serviced by
India's largest private sector port, set up by Reliance
Ports and Terminals Ltd. There is an adequate draft
for receiving large vessels. State-of-the-art marine
facilities and equipment provide efficient logistics
support to the refinery.
Two Single Point Mooring (SPM) systems, capable
of receiving crude in Ultra Large Crude Carriers -
ULCC Tankers - to transport parcels of 300,000
tonnes, will allow economies of scale, and logistics
efficiencies, in receipt of crude.
Reliance Industries Limited Annual Report 1998-99
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GROWTH IS LIFE
transition period, based on
Marketing and Distribution
RPL has signed an agreement with IOC for off-take
of 50% of RPL's output of controlled products,
primarily, HSD, gasoline, and LPG. Marketing of
these controlled products is with the oil sector PSUs,
during the transition period up to 2002.
Similar agreements are to be signed with BPCL and
HPCL, for off-take of the balance 50% of the output
of controlled products.
The oil sector PSUs will lift products on a take
or pay basis, with refinery gate pricing during
import
the
parity principle.
The agreements contemplate a 50:50 joint venture
with Indian Oil for marketing and distribution of
controlled products which are not contracted to
Indian Oil after the transition period.
Reliance group companies will consume 25% - 30% of
the
total production volume of decontrolled
products from RPL's refinery. These include, mainly,
reformate, propylene, kerosene, and
naphtha,
petroleum coke.
Suitable arrangements have been made for marketing
and distribution of
the balance decontrolled
products, such as sulphur.
There exist adequate demand supply deficits in the
country for all the products of RPL's refinery,
excluding gasoline, for which there may be a
the
temporary surplus, and for which RPL is tying up
suitable export markets.
On the product evacuation front, the captive port
facilities at Jamnagar, the setting up of the Jamnagar-
Kandla pipeline (presently under implementation),
and adequate provision of rail and road facilities, will
allow RPL's refinery to seamlessly integrate with the
network for distribution of petroleum products in the
country. Reliance will hold a 10% stake in Petronet
India Limited, the holding company, and a 13% stake
in the Petronet Vadinar-Kandla Pipeline Limited.
These stakes will help us improve our distribution
capabilities in an economical way.
The port terminal at Jamnagar has been designed to
handle over 50 million tonnes of crude, petro-products
and petrochemicals, and will have the distinction of
being the largest petroleum terminal in India.
Financing
The entire project financing, for the capacity of 27
million tonnes per annum, has been fully tied up.
RPL has adopted a conservative financing approach,
maintaining its debt:equity ratio at below 1:1, despite
the capital intensity of the project.
Reliance Petroleum already has a base of more than 5
million, domestic and international, investors.
The company has accessed foreign equity capital
through a US $ 100 million convertible bond.
Reliance Telecom
Reliance Telecom
Reliance Telecom is a separate, unlisted company,
which holds seven licences for the cellular mobile
services business in thirteen states, namely, MP,
Bihar, Orissa, West Bengal, Sikkim, Assam,
Meghalaya, Nagaland, Arunachal Pradesh, Manipur,
Mizoram, Tripura and HP. The six North Eastern
states of Meghalaya, Nagaland, Arunachal Pradesh,
Manipur, Mizoram and Tripura are treated as one
license and similarly, West Bengal and Sikkim are
clubbed together and treated as another license.
Reliance Telecom also has a basic fixed line telephone
service license for the State of Gujarat. Reliance
Telecom has two service divisions, Reliance Mobile
and Reliance Basic: Reliance Mobile for the cellular
businesses in the thirteen states and Reliance Basic for
the fixed line telephone services license.
Cellular Mobile Services
During the year, Reliance Telecom further rolled-out
its cellular mobile
states
services
encompassing seven licenses for which it had won the
mandate. Services have commenced in 26 cities,
spread over Himachal Pradesh, Madhya Pradesh,
Bihar, Orissa, West Bengal, Assam and the North-East.
With a network of 76 base stations and 8 mobile
in all
the
switching centres spread across 13 states, Reliance
Telecom has the largest cellular network in India.
Reliance Telecom currently has a customer base of
30,000 cellular subscribers.
Reliance Telecom has won seven of the 19 cellular
mobile services licenses offered by the government.
The seven licenses awarded to Reliance cover 13 states,
nearly a third of India's population, and 36 per cent of
India's land-mass. The tele-density encompassing
these regions is among the lowest in India.
The license fees committed by Reliance Telecom are
the lowest on a per POP basis, among comparable
circles. 12 of the 13 states except HP are contiguous
to each other, leading to lower capital costs for the
project. The project has been set up at the lowest
capital cost for any cellular investment in India, and is
also cost competitive in a global context.
Reliance Telecom is maintaining a high focus on
customer satisfaction. It is automating its customer
care services, and expanding its network coverage,
with a view to enhancing customer satisfaction.
Reliance Telecom has already established a well-
supported network of customer care centres in all
cities where its services are operational.
Reliance Industries Limited Annual Report 1998-99
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GROWTH IS LIFE
the
customer
Connected via V-Sats,
service
representatives have ready access to a centralised
database, which helps them provide a high level of
service to their customers.
Demand for cellular mobile services is on the rise.
The Calling Party Pays (CPP) regime to be
introduced from August 1999 onwards is expected to
fuel demand for cellular services, as this will reduce
the cost to the cellular customers.
Operating a network in six of the seven contiguous
licenses, Reliance Telecom is also ideally positioned
to benefit from the opening up of domestic long
distance telephony.
Basic fixed-line telephone services
Reliance Telecom holds the license for providing
basic services (fixed line telephony) in Gujarat.
Gujarat is an attractive market, with a high rate of
industrial growth, a high per capita income and a low
existing telephone penetration.
Reliance Telecom has put together a core team of
experienced telecom professionals for various functions,
such as, Marketing, Network Planning, Operations
Support Systems and Program Management.
The Government's proposed new Telecom Policy
recognises the technological advances, and realities,
such as convergence, that are altering the fixed lines
services business. It is expected that the new policy
will bring about changes in the license system - the
most significant being the removal of the fixed license
fee structure.
Reliance Telecom will suitably modify its plans for
basic telecom services, depending upon the final
shape given to the Government's new telecom policy.
Reliance Telecom has independently raised resources
for implementation of its projects, without recourse
to Reliance Industries. It is expected that Reliance's
contribution to Reliance Telecom's equity share
capital will be nominal, in the context of Reliance's
existing and future cash flow streams.
Reliance Power
Reliance Power
The long-term importance, and growth potential, of
the energy sector provide attractive
investment
opportunities in the power business. The power sector
forays represent a strategic fit, in Reliance's strategy of
capturing value across the entire energy chain.
Reliance already has significant prior experience in
captive power generation, with substantial in-house
skills for planning and executing large projects. Captive
power generation facilities at Naroda, Patalganga,
Hazira and Jamnagar, aggregate over 800 MW.
Reliance is pursuing power projects with meaningful
feedstock linkages. Attractive annuity based returns
in the power generation business are expected to
provide a strategic balance to the business portfolio.
Reliance Power has won several independent power
projects, through competitive bidding, with an
aggregate capacity of over 2,500 MW. These include:
• 500 MW at Jamnagar, Gujarat;
• 410 MW at Patalganga, Maharashtra;
• 500 MW at Jaymkondam, Tamilnadu
Reliance will continue to pursue other attractive
opportunities in power, on a competitive bidding
basis, with the objective of achieving aggregate
capacity of over 5,000 MW in the medium term.
Separate, stand-alone, companies are implementing
these projects, with financing structured on a non-
recourse basis to RIL. Reliance's contribution to
Reliance Power's equity share capital is expected to
represent a small proportion of Reliance's existing
and future cash flow streams.
trend
towards deregulation
Reliance Power's plants will supply power to the state
electricity grid under pre-negotiated power purchase
agreements.
Given
and
the
privatisation of infrastructural sectors, Reliance also
sees opportunities emerging in the future, in the area
of transmission and distribution of power.
The long term vision is to build a dominant presence
across the entire spectrum of power generation,
transmission and distribution activities.
Reliance Industries Limited Annual Report 1998-99
30(cid:223) (cid:224)
GROWTH IS LIFE
Quality
Quality
Reliance recognises that quality is no longer a debate,
it is a given - a pre-requisite for conducting business
in today's highly competitive, and quality conscious,
environment.
Quality is an inseparable element of all activities
carried out at Reliance. Key competitive parameters
are benchmarked against world standards, and targets
consistently raised.
Reliance's ability to sell more than 95% of its
production volume in the domestic market, despite
the steep reduction in import tariffs, and the
abolition of quantitative barriers to imports reflects
the international quality, and wide acceptability, of
Reliance's products.
The percentage of delivered products, which did not
satisfy customers, was less than 0.5% for almost all of
Reliance's major products - reflecting the application
of stringent quality assurance norms, before despatch
of products from the plants.
Incorporation of Advanced Process Control systems
the use of advanced analytical
at all plants,
instruments and methods at Reliance's fully equipped
Quality Assurance laboratories, and swift customer
response form the key elements of Reliance's Quality
initiative.
Every customer is critical for Reliance. One of
the major steps taken in 1998-99 was the mapping
of customers, giving a precise
into
in Hazira,
their specific needs. For
the quality of calendering films for clear applications
has
the
the
K 57 resin. This is a direct outcome of the
mapping process.
introduction of
improved, with
instance,
insight
These quality enhancement processes are constantly
being strengthened, and are expected to lead to
customer
product
and
innovation,
satisfaction. This will expand
for
Reliance's products.
the market
improved
In Patalganga, the commissioning of the completely
automated state-of-the-art product handling system
for PFY has raised the quality of the products. This
has obviated the need for manual handling, and
resulted in the elimination of product mix-ups and
consequent damage.
The installation of the Constant Bale Handling
system has led to lower weight variances, resulting in
higher
increased
availability of in-house chips has raised the quality of
the products from the plant.
satisfaction. The
customer
The creation of a knowledge pool of best practices in
the Patalganga plant, through the corporate intranet,
is helping the managers in quicker, and better,
decision making.
The achievements at the Hazira plant are:
• Introduction of high quality grades
in the
domestic market for substituting imports.
• Development of speciality grades in the PP
segment, finding application in battery casings,
luggage and washing machine tubs.
• Achievement of the highest ever yield of 99.05%
from the POY plant.
• Improvement in the quality of PP produced,
from 94.6% to 95.9%.
• Achievement of better impact properties and
colour stability in the PP ranges. The REPOL
grade injection ranges in PP have received
excellent response from the market.
• Elimination of metal contamination, through the
installation of metal grids and detectors in the
PET section - thereby resulting in higher quality
delivery.
• Testing of products in the Q&A labs has been
strengthened, with the installation of application
testing facilities. This has resulted in substantially
increased
customer
applications. The LLDPE grades have been
benchmarked with domestic and international
brands to improve quality.
customisation
of
• The customer complaints in the PTA section in
1998-99 have dropped to just 0.007 per MT of
product.
and
Machines do not deliver quality, people do. To drive
home the quality angle better at the Hazira plant,
senior personnel stay back in night shifts, to study the
processes of
suggest
the plant better,
improvements. A complete report is prepared each
night for different areas in the plant, with a time
frame to implement the change.
The Quality drive has been initiated at the new
Jamnagar site, even at the plant construction stage.
Pipe fabrication and welding are among the largest
and most critical activities in a petroleum refinery
complex. The high quality output of the pipe
fabrication plant at Jamnagar, has enabled the
manufacture of a large number of pipes in record time.
The production of over 7,500,000 inch diameter
pipes in a single year is a big achievement in the
hydrocarbons
industry. In addition, the piping
erection of 25 million inch meters is an achievement
of equal proportion. This has been possible with the
establishment of the fully automated pipe fabrication
shop with ultra modern facilities.
The Quality initiative extends beyond products. The
security department of the Hazira complex has
earned the unique distinction of becoming the first
security unit in India to independently earn the ISO
9002 certification.
Reliance Industries Limited Annual Report 1998-99
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GROWTH IS LIFE
Research and Development
Research and Development
R&D activities and the drive towards Quality go
hand in hand. Reliance seeks to enhance product
quality, achieve higher levels of customer satisfaction,
and develop more efficient and environment friendly
processes, through its R&D activities.
Innovation is the key to survival and growth in the
global market place. The essence of business lies in
being able to deliver superior quality, customised,
inexpensive, eco-friendly and
low maintenance
products.
and
The development
introduction of new
applications hinges on the critical understanding of
the needs of the market place, in other words,
understanding the needs of the customer. R&D is the
driver behind these targets, and also the point of
delivery of solutions.
New products, quality improvements and innovation
are engineered at Reliance's
laboratories. One
example - the introduction of shortcut fibre for the
paper industry.
A PSF grade fibre is blended with conventional paper
pulp to lend strength to the paper. India lacks high
quality conventional raw material for the paper
industry - this leads to the production of paper of low
strength. PSF fibre adds strength. This has been
achieved, for the first time in India, by Reliance.
The R&D activity takes place at three levels in
Reliance. One is in the R&D departments of the
respective plants. Second, is in the PARC - Product
Applications Research Centre. Thirdly, Reliance has
entered
leading
into collaboration with several
research institutes in India.
finding newer product
The
applications and subsequent development lies with
the PARC. All R&D centres have the
latest
equipment and technologies, and are manned by
trained technologists, to develop and launch new
products.
Reliance's PARC has been accepted as a state-of-the-
art R&D centre for the Indian petrochemicals
industry. The Centre comes out regularly with several
well-researched publications and programmes.
responsibility of
R&D activities at the different plants include:
Patalganga
• Development of new products:
i)
235 / 34 OLY and POY for knitting and
weaving
265 / 34 for draw texturising
ii)
iii) 200 / 72 FDY for mink upholstery
iv) 146 / 72 for upholstery
in reduced consumption of acetic acid in the PTA
plant.
• Commissioning of the crystalliser unit, leading to
the enhancement of the paraxylene capacity.
• Debottlenecking of the normal paraffin plant.
Textiles (Naroda)
• Improvement in the quality of all the wool
worsted fabrics, enhancing product acceptance in
the international markets.
• Improved productivity and performance of yarns
on high speed shuttleless looms.
• Improved performance of dyed wool fibres
during spinning, resulting in better feel and finish
- leading to a reduced load of heavy metal on
the ETP.
• Development of wool-viscose blended fabrics for
uniforms.
• Substitution of moulded material headliner by
for
100 per cent polyester knitted
automobiles.
fabrics
• Development of polyester viscose uniform
fabrics, resulting in better fastness and shade
consistency properties.
The textile division's future R&D plans include
development of silk like finish, superfine, all wool
worsted fabrics, standardisation of eco-friendly metal
complex dyes for wool, resulting in minimal wool
harshness and a reduced load on the ETP, and
development of
fabrics of wool blends using
regenerated cellulose.
Hazira
• Development and production of new grades of
PVC like the K 65, K 74 and K 57.
• Introduction of new fire retardant grades of PE
for wire and cable sheeting and cable insulation.
• Introduction of new POY products like the
90 / 34, 100 / 68 and 150 / 108 for the first
time in the country. Spinning speeds of more
than 3,500 metres per second attained for the
first time.
• In the PET segment, RELPET resin was
launched in the first quarter of 1997-98. In the
following year, it has garnered a 70 per cent
market share. Approval from the US FDA and
the European Union authorities was received for
applications in their markets.
• Development of 2 new PET grades for the
mineral water and soft drinks market.
• Introduction of short-cut staple in PPF, virgin
• Optimistion of the process parameters, resulting
PPF and micro denier in PSF.
Reliance Industries Limited Annual Report 1998-99
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GROWTH IS LIFE
Health, Safety and Environment
Health, Safety and Environment
As mankind reaches the end of this millennium, in
which science has made several quantum and
outstanding discoveries, man has still not found any
other life form in this planetary system, much less
outside of it.
Reliance recognises that this places tremendous
responsibility on the present generation, not just for
preserving fragile eco-systems, but also making them
sustainable for future generations.
This responsibility does not end with protecting and
nurturing the environment. Reliance seeks to make
all its plants safe places to work, to protect the
interests of its employees and stakeholders. Reliance
also strives to protect the health of all persons who
work at its plants.
Reliance's Health, Safety and Environment
(HSE) policy:
'The safety of persons overrides all production
targets' - is Reliance's Safety Policy.
Reliance's Health, Safety and Environment policy
prescribes the following:
• Protection of the Health and Safety of people
• Protection of the environment
• Use of materials and energy efficiently, to achieve
maximum productivity
• Adoption of the best HSE practices of global
industry
• Managing HSE aspects as a critical business
activity
• Promoting
employees
safety
culture
among
all
the
• Ensuring commitment
from contractors
to
manage HSE in line with the company's policy
to
Safety Management
In pursuance of the HSE policy, and Reliance's
commitment
achieve production without
compromising on safety, Reliance has embarked on a
three-pronged approach to safety management:
• Hazards identification and analysis
• Risk evaluation
• Programmed action plan
All plants are designed with the safety element
foremost in mind. The following steps to promote
safety have also been
initiated at Reliance's
manufacturing complexes:
• A ready reckoner pertaining to all issues on health,
safety and environment issues has been drafted.
This includes details on safe working practices, and
clearly defined procedures
inspection,
operation and emergency shutdown of plants.
for
• A Central Safety Committee represented by
management and union members has been
constituted.
• A crisis and emergency management procedure
document has been drafted, preparing the plants
for all kinds of disasters.
• Accidents, and near-misses, within the industry
have been documented, and preventive measures
spelt out.
• Special training for security personnel has been
imparted to enable them to handle emergency
situations.
• Incentives have been provided, for improving the
safety and productivity.
The Hazira plant operated without any lost time due
to accidents during 1998-99. Minor accident rates
were brought further down by 33 per cent, during
the year.
is
to develop world
Health
Reliance's vision
class
occupational health services, with an emphasis on
prevention of work related health hazards. For this
purpose, a modern occupational health centre with
state-of-the-art equipment has been installed.
The management accords a high priority to provision
of adequate medical services, at all locations. These
are headed by a senior health specialist, and staffed
with appropriately trained and qualified doctors and
paramedical staff.
Health standards are consistently sought to be
upgraded, through the use of improved production
processes. For instance, health standards at the
Hazira plant have improved, with the introduction of
1 MT jumbo bagging line, which has resulted in the
elimination of dust.
Other occupational health and preventive activities
include periodic medical monitoring of all employees,
conduct of health awareness programmes, and
periodic first aid training.
Periodic medical monitoring comprises an exhaustive
and compulsory medical check-up for all employees
at least once every year, followed by feedback
through
cards.
Medical check-up of contract employees like canteen
workers, bus drivers and others has also been
introduced.
Health awareness is created through various health
education programmes, individual counselling, and
the publication of informative articles in house
magazines. A periodical publication, devoted to
health, safety and environment issues, has recently
been introduced.
system of health
a novel
Reliance Industries Limited Annual Report 1998-99
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GROWTH IS LIFE
The Reliance Health Index:
A novel feature Health Audit has been introduced, to
introduce a competitive element
for remaining
healthy. The department wise status on 'Health
Audit' is presented during weekly HSE meetings at
the plants, chaired by the site President, and attended
by the departmental heads. The Reliance Health
Index is based on routine parameters, such as,
hypertension, over weight, high blood pressure,
high cholesterol, liver functions, renal functions, and
lung function.
Environment
Reliance employs proven technologies from world-
class licensers, like E.I. DuPont, ICI, B.F. Goodrich
(now Geon), and Shell, at all its plants, to ensure the
minimum quality/quantity of waste generation per
unit of output, low emission of pollutants, minimum
solid waste generation per unit of output, low noise
pollution level during plant operations, and in-built
measures for waste reduction, waste recycling and
waste utilisation.
Reliance's philosophy has been to use clean fuel
wherever possible. In the gas turbines, Reliance uses
kerosene and naphtha, as an alternative
to
conventional fuels. By utilising off-gas and hydrogen
from the process plants in the fired heaters, Reliance
has reduced the consumption of fuels like LSHS and
fuel oil.
Steam integration, and the use of low pressure steam
in the vapour absorption chillers, has resulted in
substantial savings for the company.
Reliance encourages recycling. For polyester filament
yarn packaging, wooden/plastic pellets are recycled,
and reused. PVC and PTA, at Hazira, are packed in
jumbo bags, which have a capacity of 1000 kgs,
thereby reducing the need for more packing. Bobbins
used for the wrapping of POY are retrieved from the
vendors and reused.
Reliance's Jamnagar refinery and petrochemicals
complex
environment
protection mandate from the design stage. Some of
the unique features of the complex include:
• gas turbines and extraction type steam turbines,
which are expected to have a higher efficiency,
have been provided in the captive power plant;
• air preheater and economisers are provided in
auxiliary boilers
for utilising the maximum
amount of energy from the flue gases before
venting into the atmosphere;
incorporated
has
the
• high efficiency low NOx burners will be used in
boilers and process heaters, to ensure complete
combustion with low excess air, resulting in a
lower fuel requirement than the conventional
burners;
• process heaters have been provided with air pre-
heaters to minimise the fuel requirement;
• heat integration inside each unit and with other
units is also expected to reduce the overall fuel
consumption;
• power recovery turbines are provided in various
units like the FCC and VGO Hydro Treater to
recover power, while reducing the pressure,
instead of wasting it across a control valve;
• high speed diesel (HSD) with low sulphur
content and motor spirit (MS) with no lead and
low benzene will be produced in the Jamnagar
complex.
• Sulphur recovered from these products will be
converted into elemental sulphur which would
otherwise be imported;
• crude unloading and product loading operations
will be completely automated so that there is no
possibility of any leakage through hoses and
other fittings, with the facility of an automatic
shutdown in the event of the detection of any
leakage;
• cathodic protection for all the HC storage tanks,
to protect tank bottoms from corrosion and
leakages, is being done for the first time in the
world on this scale.
An extensive green belt of around 850 acres is being
developed around the Jamnagar complex. This will
sustain nearly two million trees of various species.
This green belt will be developed around the
periphery of the refinery, as well as the marine
tank farm.
Agro forestry will also be attempted in the area. Trees
will be planted along the roads all across the refinery
complex. Mangrove forestation over 50 acres is being
done in the marine area to stabilise the loose soils and
protect the hinterland from tidal surges, cyclonic
storms and high velocity winds.
This will function as a buffer against potential
oil slicks washed down from the sea, as well as
sea incursion, in addition to fixing the sediments
of the sea with the detritus, producing a rich
fish, marine
ecosystem, creating a haven
for
invertebrates, molluscs, colourful
living corals
and birds.
No activity is perfect, unless constant training and
validation is incorporated in the system. Reliance has
introduced training manuals and modules, to impart
training to employees involved in activities having a
bearing on environment protection.
The degree to which the knowledge has been
absorbed is periodically evaluated. Apart from this,
induction and orientation programmes are also
conducted, to give a thorough idea about the
activities at the complex, from an environmental
angle.
The environmental initiatives undertaken by Reliance
have been recognised globally, and in India. Over the
years, Reliance has
awards,
including:
received various
Reliance Industries Limited Annual Report 1998-99
34(cid:223) (cid:224)
GROWTH IS LIFE
Patalganga
• Award of Honour (National Safety Council,
USA) - 1992, 1994 and 1995
• 5 Star Grading (British Safety Council) - 1992,
1994 and 1996
• National Award (ICMA) for Novel Technology
of PTA - 1992
• National Award
for Technology
(DGTD)
Development of PSF waste recovery through
glycolysis - 1990
• National Award (Ministry of Power) for Energy
Conservation in the petrochemical sector - 1994,
1995 and Special Award for the year 1996 and
1997
• Sword of Honour (British Safety Council) -
1992, 1993, 1994 and 1996
Hazira
• British Safety Council 5 star award and Sword of
Honour - 1994
• British Safety Council award for the lowest
accident / incident rate - 1992
• National Safety Award from the Ministry of
Labour (Government of India) for the highest
accident free period - 1991
• ICMA Award
for Environmental Control
Strategies and Safety in Chemical Plants - 1996
• Golden Jubilee Memorial Trust Award instituted
by South Gujarat Chamber of Commerce and
Industry for Outstanding Pollution Control
Programme - 1995-96 and 1994-95
• Federation of Gujarat Industries Award for
Excellence in Environment Preservation and
Pollution Control - 1995
• Indian Merchants' Chamber Award
for
Outstanding Achievement towards Control of
Air and Water Pollution in Industry - 1994
• Gujarat Safety Council Award for Achieving the
Lowest Disable Injury Index - 1992 and 1996
• Baroda Productivity Council 1st rank trophy for
Good House Keeping Contest for Petrochemical
Complex - 1992-93
Reliance Industries Limited Annual Report 1998-99
35(cid:223)
(cid:224)
GROWTH IS LIFE
Energy Conservation
Energy Conservation
Energy is the driving force behind all industrial
industrialisation grows, energy
operations. As
consumption
levels are growing exponentially,
placing tremendous pressure on natural reserves and
the environment of the planet.
Conservation of energy
is a critical priority,
both in terms of conservation of scarce resources,
and the consequent savings generated. Reliance
has inculcated a missionary spirit in its employees
in this direction, with energy conservation placed
at the heart of all activities.
Energy conservation efforts at Reliance are proactive,
and not reactive. The priority at the plants has been
to deploy energy efficient systems at the design stage
itself. This helps in achieving a critical objective -
building efficient systems from the starting block,
and avoiding the subsequent cost of adding expensive
energy efficient systems.
Reliance has relied upon captive power plants at all its
manufacturing locations. This ensures steady and
uninterrupted production, and leads to considerable
savings in cost. Reliance's cost of captive power
generation has been recognised as being among the
lowest in the world. The establishment of captive
power plants also ensures minimal transmission losses.
Savings generated through conservation efforts help
the company fund further investments in energy
efficient systems.
Reliance has always believed in setting up global scale
plants, using the latest technologies. Apart from the
obvious advantage of resultant economies of scale,
and cost efficiencies, large sized plants use optimum
the goal of energy
levels of energy, serving
conservation.
Energy monitoring
is a critical activity. The
installation of automated equipment in all the plants
facilitates continuous monitoring of all energy
consumption parameters. An elaborate energy
accounting system, and energy audits, are a regular
feature at all Reliance complexes.
Regular studies are conducted to analyse quantitative
energy consumption patterns, and variances are
rigorously scrutinised. Reliance regularly benchmarks
its energy conservation levels with global standards,
and consistently works towards further improving
efficiencies.
Some of the successful conservation efforts during
the year are:
Patalganga
• The plant received a Special Award from the
Ministry of Power, Government of India for its
energy conservation efforts. It has won this
award three years in a row.
• The stoppage of low efficiency DG sets and steam
boilers, with the installation of high efficiency
lower energy
Dow Vaporisers, has
consumption.
led
to
Textiles division
• Conservation measures have resulted in a saving
of 45,000 cubic metres of water per month.
• Modification of the water distribution system has
resulted in savings of 350,000 units of power per
year.
• Auxiliary power consumption in the CPP has
reduced from 7.15% to 6.12%.
• Replacement of axial flow A1 fans with FRP fans
in humidification plants of worsted spinning,
Sulzer, Waterjet and PV spinning have resulted in
substantial power savings.
Hazira
• Lower fuel gas consumption has resulted in a
saving of Rs. 6 crores per annum.
• An overall 12%
chemical
consumption based on per MT of C2 and C3 has
been achieved during the year.
reduction
in
• A 6.7% energy reduction based on BTU / lb of high
value chemicals has been achieved during the year.
• Elimination of carrier gas cylinders with the
usage of in-house PSA hydrogen and ASU
nitrogen.
• Major
raw materials and
specific utilities
consumption are substantially lower compared to
budgeted norms.
• Water lines modified to reduce consumption of
DMW and power in the plant.
• A saving of Rs 5.75 crores was made arising from
conservation measures taken up at the cooling
water DMW, HPS, LPS and BFW sections.
• The recovery of vent gases from the PP section
has resulted in an annualised savings of Rs. 0.48
crores.
Reliance is committed to strengthening its energy
conservation efforts.
Reliance Industries Limited Annual Report 1998-99
36(cid:223) (cid:224)
GROWTH IS LIFE
Human Resources Development
Human Resources Development
Reliance’s people constitute its key competitive edge.
Reliance’s people, are the key reason for its success,
providing the platform of innovative ideas, across all
functions. Reliance recognises that development of
its people is among its primary obligations as a
responsible corporate citizen.
The average age of Reliance personnel is just a little
over 36 years. Not surprisingly, innovative thinking,
and a relentless, youthful pursuit of goals, are key
attributes of Reliance people.
Recruitment in Reliance targets the world market for
the right individuals, ensuring a global perspective for
for global scale plants and
people responsible
operations. Reliance
is one of the few Indian
companies, with a significant number of expatriates
within the organisation.
Knowledge activities at Reliance form a unique
basket. The existing plants at Hazira and Patalganga
require skills that drive efficiency and performance,
apart
skills. The
establishment of a world scale refinery at Jamnagar
requires skills in project management and turnkey
operations.
from project management
The Jamnagar complex is using captive talent from
Hazira and Patalganga, even as it draws on a vast skill
pool of global talent. This amalgam of in-house
experience with global exposure has resulted in the
creation of world class facilities at all the three major
locations.
The collective experience across diverse functions in
Reliance forms the bedrock of Reliance’s global
competitiveness. There is an additional focus on
updating skills of employees on a continual basis.
Reliance is conscious that constant training and
development, and continuous learning, will alone
ensure retention of the best talent, besides providing
Reliance with a sustainable platform for growth, in a
business environment where change is the only
constant.
Training programmes have been devised to develop
cross-functional skills. The objective is to provide
Reliance’s people with an opportunity to address
areas, not immediately relevant to their job profile,
but important from the perspective of all-round
development.
Matrices have been developed in Hazira, for several
disciplines for which training has to be imparted.
These matrices have been created for each function
and level. The focus is on development of multiple
skills and job rotation.
in Hazira, with
Mapping of jobs has been initiated to ensure that the
right person is allocated the right job. Modern HR
practices, and new internal processes, have been
introduced.
Mentorship as a HR tool has been introduced in
Hazira. The emphasis is on developing creativity, self-
awareness and team building. The exercise covered
1,804 employees totalling 61,440 hours.
The role of the Plant Training Coordinator has been
made more meaningful
the
introduction of new mediums like CD ROMs to
assist in the transfer of knowledge.
Training needs for all employees have been identified.
Seven hundred training modules have been developed
at Patalganga alone, to impart structured training for
all levels of employees. At Hazira, 250 managers
worked to analyse over 900 different job positions,
and recommended more than 26,000 individual
training templates.
Chemical engineering and
related engineering
courses are regularly conducted, with the help of
professors from reputed institutes to enhance skills.
Computer training has been imparted at all levels.
In the textiles division, a total of 114 training
818
programmes were
employees, during the year. The focus has been on
self-development, technical, marketing and safety
programmes for all levels, starting from workers,
supervisors and managers.
All plant locations house well stocked libraries, with
the latest business and technical publications and
books. Reliance’s people are encouraged to make full
use of these facilities, and enhance their personal
knowledge levels.
Quality of personnel often decides the success of an
operation. For the Jamnagar complex, Reliance has
created a highly skilled technical team, for its EPC
requirements. It has also recruited personnel for the
operating and commissioning teams.
Individuals
and
leading
consultancy organisations have been recruited from
India and abroad. Around 3,000 personnel have been
recruited and put into place within a span of one year
– most of them in the supervisory and management
cadre.
Human issues are of deep concern for Reliance. To
enhance the quality of life for its people, Reliance has
introduced several benefits, including:
• Subsidised housing facilities for more than 38 per
construction
organised,
covering
from
cent of its employees in Patalganga.
A best practices approach has been adopted at all
plant locations to acquire the highest levels of skills
relevant for the global petrochemicals industry.
• Extended medical help in the textiles division to
over 63 seriously ill employees over and above the
normal provision of medical benefits.
Reliance Industries Limited Annual Report 1998-99
37(cid:223)
(cid:224)
GROWTH IS LIFE
• Deserving children scoring high academic marks
were extended financial help towards fees and books.
• Housing has been provided to the working
community close to the plant in Jamnagar.
• Children of employees are given counselling on
their strengths and weaknesses in relation to
academics, behavioural and vocational areas.
• A housing complex in Surat consisting of 924
houses has been constructed
for Reliance
employees. The complex is equipped with sports
equipment, medical assistance, and a library,
amongst other amenities. A school building has
also been constructed with library, laboratory and
computer facilities.
Community Development
Community Development
A citizen's role extends beyond his or her call of duty.
A responsible corporate citizen needs to look beyond
the financial numbers of sales and profit growth,
from year to year.
Reliance is committed to the development of the
community around its manufacturing complexes.
Over the years, Reliance has not just supported
communities financially, but has worked towards
providing people with skills to earn a sustainable
livelihood. Reliance's long-term aim is to raise
economic standards of these communities, through
self-sustainable measures.
Some of the community development programmes
initiated by Reliance include:
• Opened a modern 82 bed Dhirubhai Ambani
Hospital, one of its kind in the region. This will
also cater to individuals hurt by accidents on the
Mumbai-Pune highway, and provide free OPD
treatment to residents of nearby villages.
• Opened
the
Jamnaben Hirachand Ambani
School at Lodhivali. One of the best schools in
the region, the school provides education to
more than 2,000 students by applying unique
and innovative methods in teaching.
• Supplying potable water to nearby villages.
• Provided financial support to Balwadis in the
nearby areas, to promote education.
• Three of Reliance's employees have been
appointed as Gunwant Kamgars, a distinction
instituted by the Government of Maharashtra.
The Gunwant Kamgars are responsible citizens
who help the residents of their area, by
counselling and providing other assistance.
• The neighbourhood of Muthia village, near
Reliance's textiles mill, used to get flooded
during the monsoon season, in absence of an
adequate outlet. Reliance has constructed a
permanent drainage system to overcome this
problem.
• The Jamnagar complex has initiated provision of
medical services in the areas around the plant.
Free medical services to surrounding villages,
round the clock presence of doctors and para-
medical staff in the Motikhvadi Medical Centre,
and a mobile medical van, are some of the
highlights.
• Village roads and overhead water tanks have been
constructed in Jamnagar's nearby areas. Satellite
projects, like the building of community halls,
temples and cattle sheds have been undertaken to
provide shelter, support and assistance to people
living in those areas.
Reliance also made a major contribution, to counter
the impact of the cyclone in Jamnagar in June 1998.
Resources were mobilised
round-the-clock
operations. Thirty six doctors and 43 paramedical
staff were deployed to attend to relief operations. 19
lives were saved, and 378 injured persons were
treated.
for
One hundred water tankers were pressed into relief,
and 200,000 food packets were distributed in 11
villages. Additionally, more than 20 trucks of
foodstuffs, 7.5 tonnes of milk, and 20 tons of
vegetable oil were provided.
service
Chartered
for supplying medicines and equipment
to a
hospital, and DG set power supplies were installed
restoring power supply to the operation theatre. DG
sets were also pressed
to help
the Municipal Corporation to restore water supplies
in the region.
aircraft were pressed
service
into
into
Reliance Industries Limited Annual Report 1998-99
38(cid:223) (cid:224)
GROWTH IS LIFE
Calendar
Audited annual results
Annual general meeting
First quarter results
Second quarter results
Third quarter results
Second fortnight June
: End April
:
: Third week July
: Third week October
: Third week January
Reliance Industries Limited’s
Equity Shares are listed
on the stock exchanges in the following cities :
• Mumbai • Ahmedabad • Bangalore • Calcutta • New Delhi • Chennai • Cochin • Kanpur • Pune
as also with
The National Stock Exchange (NSE)
u
Trading Symbol Bombay Stock Exchange
Trading Symbol Bombay Stock Exchange (Demat Segment)
Trading Symbol National Stock Exchange
Trading Symbol National Stock Exchange (Demat Segment)
:
:
:
:
‘RIL 325’
‘RILDM500325’
‘RELIANCE EQ’
‘RELIANCEAE’ (For T+5 settlement)
and ‘RELIANCEBE’ (For T+1 settlement)
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 ‘RIDGq.LT’
Euro-convertible Bonds
are listed on the Luxembourg Stock Exchange and are traded on PORTAL System (NASDAQ, USA).
u
Toll Free Number for Investors in Delhi : 1600157777
Voice Mail Number for Investors in Mumbai : 9729044
u
List of Investor Service Centres of Karvy Consultants Ltd.
CITY
STD CODE TEL. NO.
FAX
CITY
STD CODE TEL. NO.
Agra
Ahmedabad
Allahabad
Alwar
Ambala
Amritsar
Asansole
Bangalore
Bangalore
Baroda
Bellary
Bhopal
Bhubaneshwar
Calcutta
Chandigarh
Chennai
Cochin
Coimbatore
Dhanbad
Erode
Goa
Gulbarga
Guwahati
Gwalior
Hyderabad
Indore
Jabalpur
Jaipur
Jammu
Jamnagar
(0562)
(079)
(0532)
(0144)
(0171)
(0183)
(0341)
(080)
(080)
(0265)
(08392)
(0755)
(0674)
(033)
(0172)
(044)
(0484)
(0422)
(0326)
(0424)
(0832)
(08472)
(0361)
(0751)
(040)
(0731)
(0761)
(0141)
(0191)
(0288)
352368
6420422 / 6443702
400588
22752
530891
220370
204968 / 200169
6621184 / 6621192
6621193
5253249 / 5362930
361514 / 363207
77592
554165 /555732
500909 / 503777
4644891 / 4647232
705543
8258034 / 8253445
310884 / 322152
497562
302838 / 304068
303000
221671
226150 / 228470
27635
543322
321524
3353758 / 3351988
432837
312009
363321 / 375039 /
375099
547246
540998
(0562)
(079)
(0532)
(0171)
(0183)
(080)
(080)
(0265)
(08392)
(0755)
(0674)
(033)
(044)
(0484)
(0422)
(0326)
(0832)
(08472)
(0361)
(040)
(0141)
352368
6565551
400988
——
442929/
445795
229473
——
6621196
5257926
363207
77592
555732
501657
4644866
——
8273181
323104
497562
303021
——
223742
26794
515251
——
3351969
——
——
364660
——
Jamshedpur
Jodhpur
Kanpur
Kolhapur
Lucknow
Ludhiana
Madurai
Mumbai
Mumbai
(0657)
(0291)
(0512)
(0231)
(0522)
(0161)
(0452)
(022)
(022) Voice Mail
432064
627918 / 641533
357672 /295125
651716
230273 / 285782
424862
537948
2675829
Mumbai
Mangalore
Mysore
Nagpur
(022)
(0824)
(0821)
(0712)
9729044
6367226 / 6369044
2004090 / 2004091
492302
510781
537531 / 538131
533428
New Delhi
(011) Toll Free
(0612)
Patna
(0413)
Pondicherry
(0212)
Pune
(0883)
Rajahmundry
(0281)
Rajkot
(0651)
Ranchi
(0661)
Rourkela
(0427)
Salem
(08182)
Shimoga
(0217)
Solapur
(08384)
Sirsi
(0261)
Surat
(04362)
Tanjore
(0542)
Varanasi
Vijayawada
(0866)
Visakhapatnam (0891)
1600157777
5154978 / 5154940
263604 / 268292
330291
323291 / 321130
444318
223733 / 232229
203166
506116 / 505388
419515 / 415898
78199
311027
75319
667365 / 670636
23406
323930
436965 / 437250
575202 / 573143
FAX
(0657)
(0231)
(0522)
(0161)
(0452)
(022)
(022)
(022)
423061
——
——
652108
230552
402125
537948
2671237
6310882
2004094
——
——
(0712)
538133
(011)
(0413)
(0212)
(0883)
(0281)
(0651)
(0427)
(08182)
(0217)
(08384)
(0866)
(0891)
5105993
——
330291
323292
494318
232229
201979
——
419515
78199
311219
77929
——
——
——
436241
550328
Reliance Industries Limited Annual Report 1998-99
(cid:223) 3 9 (cid:224)
GROWTH IS LIFE
Directors’ Report
Directors’ Report
The Directors have pleasure in presenting the 25th Annual Report and the audited accounts for the financial year
ended 31st March, 1999.
Financial Results
Gross profit before interest and depreciation
Less :
Interest
Depreciation
Less : Transfer from General Reserve
Profit before Tax
Less : Provision for Taxation
Profit after Tax
Add : Taxation for earlier years
Balance in Profit & Loss Account
Investment Allowance (Utilised)
Reserve Written Back
1998-99
Rs. Crs. US$ Mn*
3,317.54
728.81
781.89
171.77
1997-98
Rs. Crs. US$ Mn
2,886.54
503.55
730.86
127.50
1,776.66
921.62
855.04
201.52
1,460.27
792.95
667.32
168.96
1,733.69
408.60
1,715.67
434.40
30.00
7.07
63.00
15.95
1,703.69
401.53
1,652.67
418.45
–
1,047.89
–
246.97
(85.67)
662.79
(21.69)
167.82
–
–
36.00
9.11
Surplus Available for Appropriation
2,751.58
648.50
2,265.79
573.69
Appropriations :
Debenture Redemption Reserve
General Reserve
Dividends paid on Preference Shares
Recommended dividend on Equity Shares
Tax on dividend
204.50
1,000.00
23.39
350.16
40.86
48.20
235.68
5.51
82.53
9.63
64.47
752.65
10.33
326.81
63.64
16.32
190.57
2.62
82.75
16.12
Balance carried to Balance Sheet
1,132.67
266.95
1,047.89
265.31
2,751.58
648.50
2,265.79
573.69
* 1 US $ = Rs. 42.43 (Exchange rate as on 31-3-99)
Commissioning of Polypropylene Plant
The Company has commissioned the first line of
2,00,000 tonnes of Polypropylene at Jamnagar. This
plant the largest in the world has been commissioned
ahead of schedule. On the commissioning of all the
plants at Jamnagar, the total production capacity will
stand increased to 9 million tonnes from the present
6 million tonnes.
Dividends
The Directors have recommended a dividend of
Rs. 3.75 per Equity share on 93,37,49,403 Equity
shares of Rs. 10 each, for the financial year ended
31st March, 1999, which
if approved at the
forthcoming Annual General Meeting will be paid to
all those Equity Shareholders whose names appear on
the Register of Members as on 29th May, 1999.
The Directors have declared interim dividend on 10%
- 1,27,45,000 Redeemable Preference Shares of
Rs. 100 each, 10.5% - 10,50,000 Redeemable
Preference Shares of Rs. 100 each and 10.5% -
50,00,000 Redeemable Preference Shares of
Rs. 100 each and 9.75% - 65,00,000 Redeemable
Preference Shares of Rs. 100 each. As no final
dividend has been recommended on these preference
shares, the interim dividend paid, shall be fully
adjusted as final dividend for the financial year ended
31st March, 1999.
Energy, Technology & Foreign Exchange
Information in accordance with the provisions of
Section 217(1)(e) of the Companies Act, 1956, read
with Companies (Disclosures of Particulars in the
Report of Board of Directors) Rules, 1988 regarding
conservation of energy, technology absorption and
foreign exchange earnings and outgo is given in the
Annexure forming part of this report.
Reliance Industries Limited Annual Report 1998-99
(cid:223) (cid:224)40
GROWTH IS LIFE
Subsidiary Companies
As required under Section 212 of the Companies Act,
1956, the audited statements of accounts, along with
the report of the Board of the Directors of Devti
Fabrics Limited and Reliance Industrial Investments
& Holdings Limited and the respective Auditors'
Report thereon for the year ended 31st March, 1999,
are annexed.
Fixed Deposits
The Company has not accepted/renewed any
deposits during the year. Deposits of Rs. 0.33 crore
due for repayment on or before 31st March, 1999
were not claimed by 555 depositors as on that date
and as on date of this report.
Personnel
As required by the provisions of Section 217(2A) of
the Companies Act, 1956, read with Companies
(Particulars of Employees) Rules, 1975 as amended,
the names and other particulars of the employees are
set out in the Annexure to the Directors' Report.
However,
the provisions of Section
219(1)(b)(iv) of the Companies Act, 1956, the
Report and the Accounts is being sent to all
shareholders of the Company excluding the aforesaid
information. Any shareholder interested in obtaining
such particulars may write to the Secretary at the
Registered Office of the Company.
Directors
During the year Shri U. Mahesh Rao was appointed
as Nominee Director of General
Insurance
Corporation of India (GIC) on the Board in place of
Shri A.N. Poddar. The Board places on record its
appreciation for the valuable guidance received from
Shri A.N. Poddar during his tenure as Director.
Shri Dhirubhai H. Ambani, Shri M.L. Bhakta and
Shri Hital R. Meswani, retire by rotation and being
eligible offer themselves for reappointment.
as per
Auditors and Auditors' Report
Messrs. Chaturvedi & Shah and Messrs. Rajendra &
Co. Auditors of the Company hold office until the
conclusion of the ensuing Annual General Meeting.
The Company has received letters from them to the
effect that their appointment, if made, would be
within the prescribed limits under Section 224(1-B)
of the Companies Act, 1956. Accordingly, the said
auditors will be appointed as auditors of the
Company at the ensuing Annual General Meeting.
The notes to the accounts referred to in the Auditors’
Report are self explanatory and, therefore, do not call
for any further comments.
International Accountants
The report submitted by M/s. Deloitte Haskins &
Sells, member firm of Deloitte Touche Tohmatsu
International (DTTI), appointed as International
Accountants of the Company, for the year under
review to the Board of Directors, is circulated with
this report for the information of members.
Acknowledgment
Your Directors would like to express their grateful
appreciation for the assistance and co-operation
received from the Financial Institutions and the
Banks, during the year under review.
Your Directors wish to place on record their deep
sense of appreciation for the devoted services of the
Executives, Staff and Workers of the Company for its
success.
For and on behalf of the Board of the Directors
Dhirubhai H. Ambani
Chairman
Mumbai
Dated: 22nd April, 1999
Reliance Industries Limited Annual Report 1998-99
(cid:223) 4 1 (cid:224)
GROWTH IS LIFE
Annexure to Directors’ Report
Annexure to Directors’ Report
PARTICULARS REQUIRED UNDER THE
COMPANIES
OF
PARTICULARS IN THE REPORT OF BOARD
OF DIRECTORS) RULES, 1988
(DISCLOSURES
A. Conservation of Energy
(a) Energy Conservation Measures Taken : -
1. Optimisation of recycle paraffin pumping system
2.
in the LAB plant.
Installation of additional module in BE APH of
the LAB plant.
3. Annealer roll rotary joint's sealing improved
leading to steam savings in the PSF plant.
4. Conversion of Delta connected motors to Star
wherever possible.
5. Stoppage of low efficiency Dow vaporisers &
commissioning of a new high efficiency Dow
vaporiser.
6. On-line monitoring of fouling of GT compressor
blades leading to timely water wash of the system.
7. Reduction in refrigeration load by optimisation
8.
of the running of AHUs in PFY lag area.
Implementation of Advanced Process Control
Systems in Cracker, MEG-III and PTA plants.
9. Reduction in blow down water quantity by 2 % in
steam boilers of Captive Power Plant and Cracker
plant.
10. Optimisation of cooling water consumption in
Cracker, PTA -I, MEG-II and Captive Power
Plant has led to stoppage of three cooling water
circulation pumps and reduction
in power
consumption by 50 MWH per day.
11. Reduction in deaeration steam quantity by 6
tonnes per hour in steam boilers of Captive
Power Plant.
12. Optimisation of inlet steam pressures for Steam
Turbine Generator of Captive Power Plant and
Charge Gas Compressor Turbine of Cracker has
resulted in savings of 3 tonnes per hour of super
high pressure steam.
13. Replacement of solid GRP fan blades with hollow
FRP blades in POY cooling tower has resulted in
power savings of 135 MWH per year.
14. Provision of alternate cooling water supply to
SSP dow pump located at 33 metres has resulted
in stopping of one high pressure cooling water
pump.
15. Connected two esterifiers to a single stripper
column. This has resulted in savings of 1.3 MWH
per day of power required for the blower.
16. Reduction in LP air consumption by 2200 Nm3/
hr in CR - 2 jets by PLC modifications in
spinning unit of POY plant.
17. Modification implemented for bypassing of draw
stand heating system in draw-lines of PSF plants.
18. Substitution of high pressure steam (25 kg/cm2)
with LP steam in the dryers of PSF plant.
19. Optimisation of dryer fan operation for PSF draw
lines, HCT / CCT / VCT and liquid dow
coolers in Fiberfill plant.
20. Steam to feed ratio reduction
in Heads-II
Column of VCM plant has resulted in reduction
of steam consumption by 8000 MTA.
21. Optimisation of VCM column and high boil
column has resulted in savings of 16000 MTA of
IP steam.
22. Imported EDC feed pump was uprated. This has
resulted in power savings of 10 KWH per hour.
23. Improvement in COC (cycle of concentration) of
various cooling towers in the complex from an
average value of 3.5 to 4.2 has resulted in savings
of makeup water to the extent of 3200 m3/day.
24. Condensate and flash steam recovery from boiler
blow down in naphtha Cracker.
25. Plant condensate recycle to deaerators of PTA
plants has led to savings of 13 tonnes per hour of
DM water.
26. Uprating of condensate pump in MEG-I plant
has resulted in power savings of 1.2 MWH
per day.
27. Transfer of glycol bleed stream started with
pressure difference instead of pumping in MEG-
I, II and III plants and the transfer pump has
been stopped.
28. Reduction in excess oxygen by 1 % in flue gases of
furnaces in Cracker plant.
29. Optimisation of Charge Gas Compressor suction
pressure.
30. Stoppage of electrolysers
in PE plant and
utilization of excess hydrogen from Cracker in
place of electrolyser hydrogen.
31. Diversion of pumps seal cooling water to cooling
tower sump in PE-I plant.
32. Condensate recovery from reslurry heaters in
PE-I plant.
33. 3 Nos. Aluminium Fans of PV Spinning
Humidification plant replaced by FRP Fans. This
shall generate a Power Saving of 32000
Units/year.
34. Steps taken for water conservation has resulted in
saving of 45000 m3 of water per month.
Reliance Industries Limited Annual Report 1998-99
(cid:223) (cid:224)42
GROWTH IS LIFE
35. Modification of water distribution
system
resulted in saving of man power as well as power
saving of 350000 units / year.
36. 20 HP and 30HP sludge transfer pump in ETP
replaced by 7.5 HP pumps without effecting the
performance of ETP. Power saving is 11000 units
/ month.
37. Replacement of inverted bucket type steam traps
- 10 nos. by float type steam traps in stenter
processing unit I. Steam saving 540 MTS / year.
38. Replacement of old copper chokes by electronic
chokes 160 nos. in Waterjet sulzer looms. Power
saving 27400 units / year.
39. Aux. Power consumption in CPP is reduced from
7.15% to 6.12% resulted in saving of 1580535
units / year.
implemented
(b) Additional Investments and proposals, if any,
in
being
Consumption of Energy:
Installation of back pressure turbine in place of
existing letdown between 100 Barg & 30 Barg.
reduction
for
1.
2. Prefractionation stripper side cut recovery in the
FE section of the LAB plant.
3. Advanced simulation package for optimising
distillation column operation.
4. Optimisation of LAB (FE),
feed Kerosene
Preheat train.
5. Gas Turbines Inlet Air Cooling to increase
fuel
specific
lower
capacity utilisation &
consumption/kWh.
6. Utilisation of PX plant's liquid by-products as
fuel for supplementary firing in the HRSGs.
7. Replacement of LAB plant FE APH by a better
design.
8. Condensate recycle from Aromatics plant to
deaerators of Cracker plant.
9. Preheating quench water in GHU coolers.
10. Preheating naphtha utilising
surplus heat
available in quench water.
11. Recover additional heat from quench water in the
stripper of propylene tower.
12. Recovery of condensate from PVC dryer.
13. Variable frequency drive for RFP of PE-II.
14. Utilisation of flash steam from blow down drums
in deaerators of the Power Plant.
15. Substitution of HP steam with MP steam in
MEG-I, II, III plants.
16. Recycle of condensate to process cooling towers
in MEG-I, II, III plants.
17. Conversion of Thermopac from F.O. to NG fired
in furnishing dept. Expected saving of 270 KL of
F.O. per year.
18. Conversion of fuel from solvent to NG in sinzing
m/c Unit I processing.
19. Replacement of Axial flow A1 fans by FRP fans in
Humidification plants of Worsted Spg, Sulzer,
Waterjet and PV Spinning Dept. There will be a
power saving of 2000000 units / year.
20. It is proposed to replace existing 25 numbers
mercury street light fittings by sodium vapor
fixtures. The energy saving will be 237600
units / year.
21. It is proposed to replace existing 1000 nos. 40
watts TL by 36 watts TL in the administration
office - block. There will be a saving of 15000
units of electricity / year.
(c) Impact of Measures at (a) and (b) above for
Reduction of Energy Consumption and on the
Cost of Production of Goods:
1. Steam integration through back pressure turbine
would lead to saving of Rs. 420 lakhs/year.
2. Optimisation of recycle paraffin pumping system
has led to saving of Rs.10 lakhs/year.
3. Prefractionation stripper side cut recovery
operation for better heat integration will save Rs.
90 lakhs/year.
4. Saving of fuel to the extent of Rs.116 lakhs will
be achieved by optimisation of LAB (FE) feed
Kerosene preheat train.
5. LAB(BE) APH installation has led to savings of
fuel of Rs.37 lakhs/annum.
6. Capacity utilisation & reduced specific fuel
consumption at lower inlet air temperature to GT
will enable savings of fuel upto Rs.107 lakhs/GT.
7. LAB(FE) APH upgradation will lead to savings
of fuel of Rs.10 lakhs/annum.
8. Usage of improved efficiency Dow vaporisers has
led to fuel savings of Rs. 19 lakhs/annum.
9. On-line monitoring of fouling of GT compressor
blades, leading to timely water wash has enabled
fuel savings of Rs.13 lakhs/annum
10. Reduction in refrigeration load by optimisation
of running AHUs in PFY lag area has led to
savings of Rs. 55 lakhs/annum.
11. Recovery of N - Pentane from stabilizer
overhead liquid.
12. Development of soft sensor for PTA - Y colour
improvement.
13. Implementation of Advanced Process Controls in
Cracker / PTA-I / PTA-II /PE / MEG-II /
MEG-III has resulted in savings worth Rs. 6.5
crores per annum on account of reduced fuel /
utilities consumption and improved raw material
efficiencies.
14. Reduction in blow down water quantity by 2 % in
CPP and Cracker has resulted in savings of
Rs. 1.7 crores per annum.
15. Optimisation of cooling water consumption in
Cracker, PTA -I, MEG-II and Captive Power
Plant has led to stoppage of three cooling water
Reliance Industries Limited Annual Report 1998-99
(cid:223) 4 3 (cid:224)
GROWTH IS LIFE
circulation pumps resulting in savings of power
worth Rs. 1.85 crores per annum.
16. Reduction in deaeration steam quantity by 6
tonnes per hour in steam boilers of Captive
Power Plant. This has resulted in savings of
Rs. 2.5 crores per annum.
17. Optimisation of inlet steam pressures for Steam
Turbine Generator of Captive Power Plant and
Charge Gas Compressor Turbine of Cracker has
resulted in savings of Rs. 1.2 crores per annum.
18. Replacement of solid GRP fan blades with hollow
FRP blades in POY cooling tower has resulted in
power savings of Rs. 1.35 lakhs per annum.
19. Provision of alternate cooling water supply to
SSP dow pump located at 33 metres has resulted
in savings of Rs. 12 lakhs per annum.
20. Connected two esterifiers to a single stripper
column. This has led to savings of Rs. 5 lakhs per
annum.
21. Reduction in LP air consumption by 2200 Nm3/
hr in CR - 2 jets by PLC modifications in
spinning unit of POY plant. This has resulted in
savings of Rs. 42.3 lakhs per annum.
22. Modification implemented for bypassing of draw
stand heating system in draw-lines of PSF plants.
This has given a saving of Rs. 27.0 lakhs per
annum.
23. Substitution of high pressure (25 kg/cm2) with
LP steam in the dryers of PSF plant has resulted
in savings of Rs. 1.2 lakhs per annum.
24. Optimisation of dryer fan operation for PSF draw
lines, HCT / CCT / VCT and liquid dow
coolers in Fiberfill plant has resulted in savings of
Rs. 13.8 lakhs per annum.
25. Steam to feed ratio reduction
in Heads-II
Column of VCM plant has resulted in reduction
of steam consumption by 8000 MTA equivalent
to Rs. 45 lakhs per annum.
26. Optimisation of VCM column and high
boil column has resulted in savings of 16000
MTA of IP steam. This has resulted in savings of
Rs. 90 lakhs per annum.
27. Imported EDC feed pump was uprated. This has
resulted in power savings of 10 KWH per hour
equivalent to Rs. 1 lakh per year.
28. Improvement in COC (cycle of concentration) of
various cooling towers in the complex from an
average value of 3.5 to 4.2 has resulted in savings
of makeup water to the extent of 3200 m3/day
worth Rs. 75 lakhs per year.
29. Condensate and flash steam recovery from boiler
blow down in naphtha Cracker has resulted in
savings of Rs. 47 lakhs per annum.
30. Plant condensate recycle to deaerators of PTA
plants has led to savings of 13 tonnes per hour of
DM water equivalent to Rs. 13 lakhs per annum.
31. Uprating of condensate pump in MEG-I plant
has resulted in power savings of 1.2 MWH per
day equivalent to Rs. 4.5 lakhs per annum.
32. Reduction in excess oxygen by 1 % in flue gases of
furnaces in Cracker plant has resulted in savings
of fuel gas worth Rs. 4.0 crores per annum.
33. Stoppage of electrolysers
in PE plant and
utilization of excess hydrogen from Cracker in
place of electrolyser hydrogen has resulted in
savings of Rs. 48 lakhs per annum.
34. Diversion of pumps seal cooling water to cooling
tower sump in PE-I plant has resulted in savings
of Rs. 6.0 lakhs per annum.
35. Condensate recovery from reslurry heaters in PE-
I plant has given a saving of Rs. 1.0 lakh per
annum.
36. Condensate recycle from Aromatics plant to
deaerators of Cracker plant results in a saving of
Rs. 36.0 lakh per annum.
37. Preheating quench water in GHU coolers. This
result in savings of Rs. 2.87 crores per annum.
38. Preheating naphtha utilising
surplus heat
available in quench water. This results in savings
of Rs. 2.87 crores per annum.
39. Recover additional heat from quench water in the
stripper of propylene tower. This results in
savings of Rs. 2.0 crores per annum.
40. Recovery of condensate from PVC dryer. This
results in a saving of Rs. 8.4 crores per annum.
41. Variable frequency drive for RFP of PE-II. This
results in savings of Rs. 20 lakhs per annum.
42. Utilisation of flash steam from blowdown drums
in deaerators of the Power Plant. The savings are
estimated to be Rs. 50 lakhs per annum.
43. Substitution of HP steam with MP steam in
MEG-I, II, III plants. This will result in savings
of Rs. 2.0 lakhs per annum.
44. Recycle of condensate to process cooling towers
in MEG-I, II, III plants. This will result in a
saving of Rs. 2.7 lakhs per annum
B. Technology Absorption
FORM - ‘B’
Form for Disclosure of Particulars with respect to:
Research and Development (R&D)
1. Specific Areas
in which Research
and
Development ( R&D) is being carried out by the
Company:
1. Research and Development activity is focused
in the fields of Purified terephthalic acid,
Paraxylene, Linear Alkyl Benzene, Polyester
Filament Yarn and Polyester Staple Fibre
plants. The stress has been on process
development, process modification, product
development, energy conservation, pollution
control, import substitution and technology
Reliance Industries Limited Annual Report 1998-99
(cid:223) (cid:224)44
GROWTH IS LIFE
upgradation.
2. Decarboxylation studies of acetic acid and in
presence and absence of p- xylene and its
oxidation intermediates to improve quality.
3. Reduction of Y- colour impurities in crude
terephthalic acid by further oxidation.
4. Oxidation reactor residence time estimation
for dead volume prediction in the reactor.
5. Non - HF Pilot - plant trials for generating
design parameters in Linear Alkyl Benzene.
Improvements
process by Simulation model.
in MOLEX and PAREX
6.
7. Value addition of PX by-products
i.e.
8.
REMAX TO BTX.
In the PVC plant four new grades have been
developed and accepted in the market. Out
of the four new grades, two have been
targeted to meet electrical applications and
rest
film
applications.
calendering
two
and
for
9. New coating chemical for poly-reactors and
new emulsifiers for better control of resin
properties and new catalyst
to
improve base color and thermal stability of
resin, have been introduced in PVC.
system
10. M/s. RIL have entered into a strategic
alliance with M/s NCL in some of the key
areas of development PE grades. It includes
on
providing
Polyolefins, bench marking of grades
specially
roto moulding
films and
applications.
information
customized
for
11. New PE grades
for mono
filament
applications,
for
cables, sheathing/jacketing for cables have
been developed.
lamination,
insulation
12. Alternate sources of absorbents for removal
of
impurities and catalysts have been
commercialized in PE process towards cost
reduction.
entered
13. M/s. RIL/NCL have
into a
strategic alliance in areas of development
for bench marking of
PP grades and
indigenisation of catalyst system. So far this
has led to the development of cost effective
alternate catalysts from sources outside India.
14. Two new PP grades have been launched and
accepted well in the market. These grades are
primarily for Battery covers and washing
machine basket applications. Trial runs have
also been conducted after development of a
third product grade for lamination purpose.
15. Usage of alternative additives and their
indigenisation in PP plant.
16. Developed various POY "Short heater
exports
texturing products"
to meet
requirements ( 126/34,80/34,115/108 &
265/34 POY)
17. "Highly oriented
yarn products"
like
90/34, 100/68 & 150/108 produced for
first time in the country and is in the trial
increase the
stage.
processing
reduced
processing steps. It finds its major market
application in direct weaving/knitting areas.
This product will
throughput with
18. Development work in the field of modified
polymers. This modified polymer along with
the normal POY
increases the spinning
potential processing capability to the extent
of 7 to 8% beside increasing the product
quality.
19. "Micro denier" PSF product on commercial
its
scale was made. This product finds
application in the area of exclusive garment
manufacture.
in our PFF plant.
20. Two new grades have been successfully
The
manufactured
"Medium tenacity fibre" finds its major
application to impart soft touch and the
" Short cut staple fibre" as developed, finds
its major application in the paper industry.
21. Process optimization and development of silk
like finish superfine all wool worsted fabrics
for international market.
22. Development of Wool woven jacquard by
using intermingled 100% Polyester Filament
Yarn for automotive fabrics.
23. Process optimisation to reduce hairiness and
fly generation for better weavability on high
speed shuttleless looms.
24. Standardisation
of
eco-friendly metal
complex dyes for wool resulting into minimal
wool harshness and reduced load on ETP of
heavy metal.
25. Development of fabrics of wool blends with
re-generated cellulose for uniforms.
26. Development of high
polyester headliner
moulded material for automobiles.
fabrics
light
fast 100%
substituting
27. Development of superior light fast polyester
/ viscose blended fabrics using dope dyed
fibres for uniforms.
2. Benefits derived as a result of the above R&D :
a. Product Development/ Improvement :-
1. Recovery of acetic acid to reduce the load
on effluent treatment by separation
techniques.
2. To achieve improved consumption of
Acetic acid in oxidation of p-xylene to
PTA by stabilising process parameters.
3. Simulation models
for MOLEX and
PAREX to achieve optimization of Zone
Reliance Industries Limited Annual Report 1998-99
(cid:223) 4 5 (cid:224)
GROWTH IS LIFE
ratios and hence utilities consumption.
4. Use of alternate equipment in existing
Px- facility to achieve 100 % on - stream
day.
5. Maximize
throughput
the Px-
adsorption section by process parameter
optimization.
in
6. Eco friendly non-HF catalyst for LAB
process have given encouraging data in
pilot plant trials.
7. High severity operation
in Back-end
section to enhance through puts and
optimise yields.
8. New Deniers like 235/34/OLY/ POY,
265/34/POY have been successfully
developed
better
performance and texture of fabric.
9. Development of FDY products like 200/
achieving
for
23. Development and acceptability of woven
jacquards in automobile industry as seat
cover fabrics.
24. Better performance of yarns on high
speed shuttleless looms and improved
productivity.
25. Improved performance of dyed wool
fibres during spinning better feel / finish
of fabrics and reduced load of heavy
metal on ETP.
26. Development of wool-viscose blended
fabrics for Uniforms.
27. Substitution of moulded material head-
liner by 100% polyester light-fast knitted
fabrics for automobiles.
28. Developed polyester-viscose uniform
fabrics having better fastness properties
and shade consistency.
72/FDY, 146/72/FDY for special use.
10. Development of alternate sources of
b.
Import substitution : -
1. LAB Rotary valve plate bellow developed
catalysts, additives.
indigenously.
11. Polymer modification trials for higher
2. ENC Boiler superheater PRV springs
spinning speeds.
developed indigenously.
12. Trials conducted for improving FDY
3. PTA Sundyne Pump (G1209)
seals
productivity.
13. Four new PVC grades have been
successfully launched and accepted in the
market.
14. Trial of new emulsifiers resulted in 20%
reduction in emulsifier consumption.
15. Change of emulsifier system enabled in
better control of resin properties and
reduction of reaction time.
16. Use of new catalyst system in PVC
improved the base colour and thermal
stability of resin.
developed indigenously.
4. PSF Booster Pump gearbox
shaft
developed indigenously.
5. PFY Finish Application pump earbox
a
6.
number
developed indigenously.
of
Indigenisation
of
engineering spares & Accessories
in
Polyester & Petrochemical area yielded a
net Saving of Rs. 120 Lacs in 1998-1999.
7. PTA plant atmospheric centrifuge back
drive units were developed indigeneously
8. PTA plant sundyne pump shafts were
17. Cost effective alternate catalyst systems
developed indigeneously.
for PP.
18. Significant cost reduction achieved due
to the usage of alternative additives and
their indigenisation in PP plant.
19. "POY" yarn products
processing
processing steps.
throughput with
increase the
reduced
20. Modified polymer in POY increases the
spinning potential processing capability
to the extent of 7 to 8% beside increasing
the product quality.
21. New grades Micro denier
in PSF,
Medium tenacity fibre and short cut
staple fibre have enabled new areas of
product application.
22. Improved all wool worsted fabrics and
international
in the
their acceptance
market.
9. Gear set for Carrier compressor of PE
plant were import substituted.
10. Indigenisation of number of spares and
accessories yielded a net saving of
Rs 65 lacs.
3. Future Plan of Action :
1.
Improved mass transfer in Oxidation
reactor with new Iso - pentane production
for NP from existing pilot plant agitator
design.
2. Recovery of cobalt from PTA residue and
incinerator ash.
3. Reduction of diolefins in LAB Process.
4. Use of chain transfer agent in low-K value
grades of PVC to improve the product
quality, specially with respect to thermal
stability.
5. Work has been planned to introduce new
Reliance Industries Limited Annual Report 1998-99
(cid:223) (cid:224)46
GROWTH IS LIFE
chemicals in the polymerisation recipe in
place of existing one (like suspending agents)
and combination of various catalyst systems
for PVC. This is aimed to improve product
quality and productivity, thus leading to
reduction in cost of production.
6. New generation coating materials to improve
poly-reactor up-time at reduced cost
is
planned in PVC.
7. Special
for
grades
mono-filament
applications in PE aimed to improve the
product quality of mono-filament grades and
that of raffia.
8. Development of Grades for LLDPE high
flow applications.
9. Soft sensor for polymer properties : A joint
collaborative work shall be taken between
RIL and IIT Bombay for Continuous and
online monitoring of product quality.
Reduction in transition time between resin
grades and hence reduction in off-spec grade
material during the changeover, Reduction in
off-spec product due to direct and tighter
control of quality and. increase in yield.
10. Development of cost effective additives for
PE grades.
11. Developmental work has been undertaken in
the areas of replacement of glass bottles and
jute bags with PP.
12. Development of alternate indigenous source
of catalyst in PP.
13. As a joint collaborative approach, the project
for the recovery of cobalt/manganese from
residue in PTA plant has been sponsored to
UDCT Bombay. Identically recovery of
cobalt manganese
from purified mother
liquor has also been sponsored.
14. Development of Kinetic Reaction model for
Oxy-reactor in PTA has also been entrusted
to IIT, Bombay for better understanding of
Reactor mechanism.
15. Development of worsted and
synthetic
fabrics having superior fastness properties
and shade constancy for uniforms.
16. Development of all-wool and blended
worsted single yarn suitable as warp yarn
using Solo-spun technique.
17. Improvement in woven jacquards by using
spun yarn in warp to have softer handle and
comfort during use for automobiles seat
covers.
of
pigment
18. Development
for
disruptive-printed uniform jackets fabrics and
tapestry using non-kerosene based binders.
19. Development of hydrophilic and anti-static
fabrics and
for 100% polyester
prints
finish
their blends.
20. Development of wrinkle-free, easy care and
durable press suitings fabrics for apparels.
21. Development of durable fire-retardent fabrics
using fire-retardant polyester fibres.
22. Standardisation
yarn
parameters to eliminate warp sizing before
weaving.
Expenditure on R&D :
Rs. Crs.
double
PV
of
a) Capital
Recurring
Total
b) Total R& D expenditure
as percentage of turnover.
NIL
41.30
41.30
0.28%
Technology absorption, adaption and innovation:
Efforts in brief, made towards technology absorption
and innovation and benefits derived as a result
thereof :
1. Non HF catalyst manufacturing on commercial
scale and generation of process variables for
designing commercial non-HF LAB Plant.
2. New Deniers developed for achieving better
performance and modified texture of fabric.
3. New FDY products developed for special use.
4. Application of PAREX and MOLEX simulation
in plant operation and optimisation.
Reliance Industries Limited Annual Report 1998-99
(cid:223) 4 7 (cid:224)
Information regarding imported technology
GROWTH IS LIFE
Product
Technology from
Year of import
Status of
implementation/
absorption
Ethylene & Cracker Products Stone & Webster Engineering
Purified Terephthalic Acid
Mono Ethylene Glycol
PVC Expansion
Polypropylene
Polyethylene Terephthalate
Corp. (USA)
John Brown Engineers, UK
(ICI PLC,UK)
Shell (Lummus Crest B.V. Holland)
Geon Co., U.S.A.
John Brown Engineers, UK
(Shell/Union Carbide)
Sinco Engineering Italy
High Density Polyethylene
Polyester Staple Fibre Fill
Novacor, Canada
Dupont (U.S.A.)/Chemtex (U.S.A.)
1992
1994
1996
1994
1994
1994
1995
1998
Full
Full
Full
Full
Full
Full
Full
Full
C. Foreign Exchange Earnings and Outgo
1. Activities relating
initiatives
to Export,
to
increase exports, Development of New Export
Markets for Products and Services and Export
Plan.
The Company has continued to maintain focus
and avail of export opportunities based on
economic considerations. During the year, the
Company had exports worth Rs. 589.56 crores
(US$ 138.95 million)
a. Total Foreign Exchange earned
b. Total savings in foreign
exchange through products
manufactured by the Division
and deemed exports
(US$ 2,248.29 million)
Sub total (a + b)
c. Total Foreign exchange used
Rs. Crs.
961.25
9,487.10
10,448.35
3,957.26
2. Total Foreign exchange used and earned
Reliance Industries Limited Annual Report 1998-99
(cid:223) (cid:224)48
GROWTH IS LIFE
Annexure to Directors’ Report
Annexure to Directors’ Report
Form ‘A’
Form for disclosure of particulars with respect to Conservation of Energy
Part ‘A’
Power & Fuel Consumption
1. Electricity
a) Purchased Units (Lakhs)
Total Cost (Rs. in crores) (Note)
Rate/ Unit (Rs.)
b) Own Generation
1) Through Diesel Generator
Units (Lakhs)
Units per unit of fuel
Cost/ Unit (Rs.)
2) 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)
Average Rate per Ltr. (Rs.)
4. Others
Gas
Quantity (1000 M3)
Total Cost (Rs. in crores)
Average Rate per 1000M3 (Rs.)
Note: Excluding demand charges.
Part ‘B’
Consumption per Unit of Production
April ’98 to
March ’99
April ’97 to
March ’98
2,027.52
49.11
2.42
53.24
3.44
2.37
22,335.55
4.23
0.98
147,119.30
76.75
5.22
31,846.15
31.61
9.93
801.79
32.13
4.01
200.82
3.63
2.18
20,576.97
4.39
1.03
113,501.40
67.24
5.92
77,906.14
69.28
8.89
343,019.40
84.43
2,461.50
412,568.94
111.83
2,710.63
PFY
Per MT
Fabrics
Per 1000 Mtrs.
Current Previous Current Previous Current Previous Current Previous Current Previous Current Previous Current Previous Current Previous Current Previous Current Previous Current Previous Current Previous
Year
CRACKER
Per MT
PSF
Per MT
LAB
Per MT
PTA
Per MT
MEG
Per MT
PVC
Per MT
PP
Per MT
FF
Per MT
HDPE
Per MT
PET
Per MT
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Year
Electricity (KWH)
2559
2281
1047
1116
Furnace Oil (Ltrs)/
HSD/HFHSD
LSHS (Kgs)
Gas (SM3)
8
–
10
–
1637
1429
21
28
67
31
28
60
605
12
57
47
637
25
58
55
539
22
48
27
574
17
14
38
553
248
591
250
270
288
719
741
575
607
323
339
-
-
–
–
–
–
–
–
–
–
–
–
-
-
10
37
54
76
71
94
359
10
–
–
358
1310
2109
175
10
3
1
–
1
14
177
65
169
4
–
43
212
17
–
69
356
394
1
5
57
–
21
55
Note : The above figures in addition to direct consumption also include allocated consumption in the supporting utilities and facilities applicable to respective products. Accordingly previous
year figures have been recomputed.
Reliance Industries Limited Annual Report 1998-99
(cid:223) 4 9 (cid:224)
GROWTH IS LIFE
Auditors’ Report
Auditors’ Report
To the Members,
RELIANCE INDUSTRIES LIMITED
We have audited the attached Balance Sheet of
RELIANCE INDUSTRIES LIMITED as at 31st
March 1999 and the Profit and Loss Account of the
Company for the year ended on that date annexed
thereto and report that :
1. As required by the Manufacturing and Other
Companies (Auditors’ Report) Order, 1988
issued by the Company Law Board in terms of
Section 227 (4A) of the Companies Act 1956, we
give in the Annexure hereto a statement on the
matters specified in paragraphs 4 and 5 of the
said Order.
2. Further to our comments in the Annexure
referred to in paragraph 1 above, we state that :
a) We have obtained all the information and
explanations which to the best of our
knowledge and belief were necessary for the
purposes of our audit.
In our opinion, proper books of account, as
required by law, have been kept by the
Company, so
from our
examination of such books.
far as appears
b)
e)
d)
(3C) of
c) The Balance Sheet and Profit and Loss
Account referred to in this report are in
agreement with the books of account.
In our opinion the Balance Sheet and the
Profit and Loss Account complies with the
mandatory Accounting Standards referred in
Section 211
the Companies
Act, 1956.
In our opinion and to the best of our
information and according to explanations
given to us, the said Balance Sheet and Profit
and Loss Account read together with the
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) in so far as it relates to Balance Sheet, of
the state of affairs of the Company as at
31st March, 1999 and
(ii) in so far as it relates to the Profit and Loss
Account, of the Profit of the Company
for the year ended on that date.
For Chaturvedi & Shah
Chartered Accountants
D. Chaturvedi
Partner
Mumbai
Dated : 22nd April, 1999
For Rajendra & Co.
Chartered Accountants
R.J. Shah
Partner
Reliance Industries Limited Annual Report 1998-99
(cid:223) (cid:224)50
GROWTH IS LIFE
Annexure to Auditors’ Report
Annexure to Auditors’ Report
1. The Company has maintained proper records
showing full particulars including quantitative
details and situation of fixed assets on the basis of
information available, except in respect of certain
items of furniture and fixtures, which is being
updated. According to the information and
explanations given to us, the fixed assets have
been physically verified by the management
during the year in a phased periodical manner
which in our opinion is reasonable, having regard
to the size of the Company and nature of the
assets. No material discrepancies were noticed on
such verification.
2. None of the fixed assets have been revalued
during the year.
3. As explained to us, the stock of stores, spare
parts, raw materials and finished goods have been
physically verified by
the management at
reasonable intervals during the year. In our
opinion, the frequency of such verification is
reasonable having regard to the size of the
Company and the nature of its business.
In our opinion and according to the information
and explanations given to us, the procedures of
physical verification of stocks followed by the
management are reasonable and adequate in
relation to the size of the Company and the
nature of its business.
4.
5. As explained to us, there were no material
discrepancies noticed on physical verification of
the stocks of raw materials, stores and spares and
finished goods, having regard to the size of the
operations of the Company.
6. The valuation of stocks is fair and proper and is in
accordance with
accepted
the
accounting principles and is on the same basis as
in the preceding year except for the inclusion of
taxes or duties incurred as required by Section
145A of the Income Tax Act, 1961 and the same
has no impact on the profit for the year.
normally
7. The Company has not taken any loans, secured or
unsecured from companies, firms or other parties
listed in the register maintained under Section
301 of the Companies Act, 1956, or from
Companies under the same management as
defined under sub-section (1B) of Section 370 of
the Companies Act, 1956.
8. The Company has not granted any loans, secured
or unsecured, to companies, firms or other
parties listed in the register maintained under
Section 301 and/or to the companies under the
same management as defined under sub-section
(1B) of Section 370 of the Companies Act, 1956,
free
loans to
companies
considering
its subsidiary
except
interest
companies and advance
towards promoters
contribution. Attention is invited to Note No. 10
of Schedule ‘O’ to the accounts. In our opinion,
having regard to the long term involvement with
these
the
and
explanations given to us in this regard, the terms
and conditions of the above are not, prima facie,
prejudicial to the interests of the Company.
In respect of the loans and advances in the nature
of loans given by the Company to parties, other
than to the companies mentioned in para 8
above, they are generally repaying the principal
amounts as stipulated/rescheduled and are also
generally regular in the payment of interest,
wherever stipulated.
9.
10. In our opinion and according to the information
and explanations given to us, there are adequate
internal control procedures commensurate with
the size of the Company and the nature of its
business for the purchase of stores, raw materials
including components, plant and machinery,
equipment and other assets and for the sale of
goods.
11. In our opinion and according to the information
and explanations given to us, there are no
transactions of purchases of goods and materials
and sale of goods, materials and services made in
pursuance of contracts or arrangements entered
in the register maintained under Section 301 of
the Companies Act, 1956 and aggregating
during the year to Rs. 50,000 (Rupees Fifty
Thousand only) or more in respect of any party.
12. According to the information and explanations
given to us, the company has a regular procedure
for
the determination of unserviceable or
damaged stores, raw materials and finished
goods. Adequate provision has been made in the
accounts for the loss arising on the items so
determined.
13. The Company has not accepted any deposits
from the public.
14. In our opinion reasonable records have been
maintained by the Company for the sale and
disposal of realisable by-products and scrap,
wherever significant.
15. In our opinion the internal audit system of the
Company is commensurate with its size and the
nature of its business.
16. The Central Government has prescribed
maintenance of Cost Records under Section 209
(1)(d) of the Companies Act, 1956 in respect of
certain manufacturing activities of the Company.
Reliance Industries Limited Annual Report 1998-99
(cid:223) 5 1 (cid:224)
GROWTH IS LIFE
We have broadly reviewed the accounts and
records of the Company in this connection and
are of the opinion that, prima
facie, the
prescribed accounts and records have been made
and maintained. We have not, however, made a
detailed examination of the same.
17. According to the records of the Company,
Provident Fund and Employees State Insurance
dues have been regularly deposited with the
appropriate authorities.
18. According to information and 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, 1999 for a period of more than six
months from the date of becoming payable.
19. According to the information and explanations
given to us and on the basis of records examined
by us, no personal expenses of employees or
Directors have been charged to Revenue Account
other than those payable under contractual
obligation or
in accordance with generally
accepted business practice.
20. The Company is not a sick industrial company
within the meaning of clause (o) of sub-section
(1) of Section 3 of the Sick Industrial Companies
(Special Provisions) Act, 1985.
21. In relation to trading activities of the company,
we are informed that there are no damaged
goods.
For Chaturvedi & Shah
Chartered Accountants
D. Chaturvedi
Partner
Mumbai
Dated : 22nd April, 1999
For Rajendra & Co.
Chartered Accountants
R.J. Shah
Partner
Reliance Industries Limited Annual Report 1998-99
(cid:223) (cid:224)52
GROWTH IS LIFE
International Accountants’ Report
International Accountants’ Report
To the Board of Directors of
RELIANCE INDUSTRIES LIMITED
We have audited the Balance Sheet of RELIANCE
INDUSTRIES LIMITED as at 31st March 1999 and
the Profit and Loss Account of the Company for the
year ended on that date (the financial statements)
in
attached hereto, which have been prepared
accordance with the Generally Accepted Accounting
Principles in India.
Respective Responsibilities of the Management
and Auditors
The Management of the company is responsible for
the preparation of these financial statements. The
financial statements have also been audited by firm of
Chartered Accountants appointed as Auditors under
the statute (The Companies Act) who submit
in accordance with the
separately their report
provisions of
is our
responsibility to form an independent opinion, based
on our audit of the statements and to report our
opinion to you as a concurrent special assignment.
Basis of Opinion
the Companies Act. It
We conducted our audit in accordance with the
the Institute of
auditing standards
issued by
in
the
Chartered Accountants of India. An audit includes
examination, on a test basis of evidence relevant to
the amounts and disclosures
financial
statements. It also includes an assignment of the
significant estimates and judgements made by the
management in the preparation of the financial
statements, and whether the accounting policies are
appropriate to the circumstances to the company,
consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain
all information and explanations, which to the best of
our knowledge and belief were necessary for the
purposes of our audit.
The financial statements dealt with by this report are
in agreement with books of account of the company.
Opinion
In our opinion and to the best of our information and
according to the explanations given to us, the
financial statements read with the accounting policies
and notes thereon give a true and fair view:
(i) In the case of the Balance Sheet, the state of
affairs of the Company as at 31st March, 1999
and
(ii) In the case of the Profit and Loss Account, of the
profit for the year ended on that date.
For Deloitte Haskins & Sells
Chartered Accountants
(P. R. Barpande)
Partner
Mumbai
Dated : 22nd April, 1999
Reliance Industries Limited Annual Report 1998-99
(cid:223) 5 3 (cid:224)
GROWTH IS LIFE
Balance Sheet as at 31st March, 1999
Balance Sheet as at 31st March, 1999
SOURCES OF FUNDS
Shareholders’ Funds
Share Capital - Equity
Share Capital - Preference
Reserves and Surplus
Securitisation/Advance Against
Future Receivables
Loan Funds
Secured Loans
Unsecured Loans
TOTAL
APPLICATION OF FUNDS
Fixed Assets
Gross Block
Less: Depreciation
Net Block
Capital Work-in-Progress
Investments
Current Assets, Loans and Advances
Current Assets
Interest Accrued on Investments
Inventories
Sundry 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
Schedule
As at
31st March, 1999
Rs.
Rs.
(Rs. in crores)
As at
31st March, 1998
Rs.
Rs.
‘A’
‘A’
‘B’
933.39
252.95
11,183.00
931.90
187.95
10,862.75
12,369.34
11,982.60
965.02
300.00
‘C’
‘D’
5,477.64
5,207.65
2,736.78
5,510.55
10,685.29
24,019.65
8,247.33
20,529.93
18,650.33
6,691.93
11,958.40
3,437.83
25.61
1,408.61
457.10
4,897.60
6,788.92
1,676.26
8,465.18
3,591.98
544.37
4,136.35
‘E’
‘F’
‘G’
‘H’
‘I’
‘N’
‘O’
17,848.33
4,944.47
12,903.86
2,069.43
15,396.23
4,294.59
14,973.29
4,282.33
21.07
1,343.96
642.72
2,133.51
4,141.26
991.05
5,132.31
3,382.01
475.99
3,858.00
4,328.83
24,019.65
1,274.31
20,529.93
As per our Report of even date
For and on behalf of the Board
For Chaturvedi & Shah
Chartered Accountants
For Rajendra & Co.
Chartered Accountants
D. Chaturvedi
Partner
R.J. Shah
Partner
Mumbai
Dated: 22nd April, 1999
D.H. Ambani
Chairman
M.D. Ambani
V. Chairman & Managing Director
A.D. Ambani
Managing Director
N.R. Meswani
Executive Director
S.Venkitaramanan Nominee Director
U. Mahesh Rao
Nominee Director
R.H. Ambani
M.L. Bhakta
T.Ramesh U. Pai
Y.P. Trivedi
V.M. Ambani
Directors
}
Secretary
Reliance Industries Limited Annual Report 1998-99
(cid:223) (cid:224)54
Profit and Loss Account for the year ended 31st March, 1999
Profit and Loss Account for the year ended 31st March, 1999
GROWTH IS LIFE
Schedule
1998-99
(Rs. in crores)
1997-98
Rs.
Rs.
Rs.
Rs.
INCOME
Sales
Other Income
Variation in Stock
EXPENDITURE
Purchases
Manufacturing and Other Expenses
Interest
Depreciation
Less : Transferred from General Reserve
[Refer Note 3, Schedule ‘O’]
‘J’
‘K’
‘L’
‘M’
14,553.26
607.55
(152.43)
15,008.38
190.32
11,500.52
728.81
1,776.66
921.62
1,460.27
792.95
13,403.78
335.60
368.28
14,107.66
14.19
11,206.93
503.55
667.32
12,391.99
1,715.67
63.00
1,652.67
(85.67)
662.79
36.00
2,265.79
855.04
13,274.69
1,733.69
30.00
1,703.69
-
1,047.89
-
2,751.58
204.50
1,000.00
23.39
350.16
40.86
64.47
752.65
10.33
326.81
63.64
1,618.91
1,132.67
1,217.90
1,047.89
Profit Before Tax
Provision for Taxation
Profit for the year
Add : Taxation for earlier years
Balance brought forward from last year
Investment Allowance (Utilised)
Reserve Written Back
Amount Available For Appropriations
APPROPRIATIONS
Debenture Redemption Reserve
General Reserve
Interim Dividend on Preference Shares
Proposed Dividend on Equity Shares
Tax on Dividend
Balance Carried to Balance Sheet
Significant Accounting Policies
Notes on Accounts
‘N’
‘O’
As per our Report of even date
For and on behalf of the Board
For Chaturvedi & Shah
Chartered Accountants
For Rajendra & Co.
Chartered Accountants
D. Chaturvedi
Partner
R.J. Shah
Partner
Mumbai
Dated: 22nd April, 1999
D.H. Ambani
Chairman
M. D. Ambani
V. Chairman & Managing Director
A.D. Ambani
Managing Director
N.R. Meswani
Executive Director
S.Venkitaramanan Nominee Director
U. Mahesh Rao
Nominee Director
R.H. Ambani
M.L. Bhakta
T.Ramesh U. Pai
Y.P. Trivedi
V.M. Ambani
Directors
}
Secretary
Reliance Industries Limited Annual Report 1998-99
(cid:223) 5 5 (cid:224)
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
Schedules forming part of the Balance Sheet
SCHEDULE ‘A’
SHARE CAPITAL
Authorised:
120,00,00,000 Equity Shares of Rs. 10 each
(120,00,00,000)
10,00,00,000 Preference Shares of Rs. 100 each
(10,00,00,000)
As at
31st March, 1999
Rs.
Rs.
1,200.00
1,000.00
(Rs. in crores)
As at
31st March, 1998
Rs.
Rs.
1,200.00
1,000.00
2,200.00
2,200.00
Issued, Subscribed and Paid up:
Equity
93,37,49,403 Equity Shares of Rs. 10 each fully
(93,37,49,403) paid up
Less: Calls in arrears - by others
933.75
0.36
933.75
1.85
933.39
931.90
Preference
1,27,45,000 10% Cumulative Redeemable
(1,27,45,000) Preference Shares of Rs. 100 each
fully paid-up (Redeemable at par
on 15th September, 2000)
10,50,000 10.5% Cumulative Redeemable
(10,50,000) Preference Shares of Rs. 100 each
fully paid-up (Redeemable at par
on 15th September, 2002)
50,00,000 10.5% Cumulative Redeemable
(50,00,000) Preference Shares of Rs. 100 each
fully paid-up (Redeemable at par
on 17th September, 2002)
65,00,000 9.75% Cumulative Redeemable
(-) Preference Shares of Rs. 100 each
fully paid-up (Redeemable at par
on 28th July, 1999)
127.45
127.45
10.50
50.00
65.00
10.50
50.00
-
252.95
1,186.34
187.95
1,119.85
Of the above Equity Shares:
1. (a)
48,17,70,552
(48,17,70,552)
Shares were allotted as Bonus Shares by capitalisation of Share Premium and Reserves.
(b)
18,05,78,290
(18,05,78,290)
Shares were allotted pursuant to Schemes of Amalgamation without payments being
received in cash.
(c)
21,04,19,721
(21,04,19,721)
Shares were allotted on conversion / surrender of Debentures and Bonds, conversion
of Term Loans, exercise of warrants, against Global Depository Shares (GDS) and
re-issue of forfeited equity shares.
2. Refer Note 1(e)(iii) of Schedule ‘C’ and Note 1 of Schedule ‘D’ in respect of option on unissued share capital.
Reliance Industries Limited Annual Report 1998-99
(cid:223) (cid:224)56
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
Schedules forming part of the Balance Sheet
SCHEDULE ‘B’
RESERVES & SURPLUS
Revaluation Reserve
As at
31st March, 1999
Rs.
Rs.
(Rs. in crores)
As at
31st March, 1998
Rs.
Rs.
As per last Balance Sheet
Add : On Revaluation of Fixed Assets
2,771.06
–
–
2,771.06
Capital Reserves
As per last Balance Sheet
Add : On Redemption of Bonds/Debentures
Less : Adjusted on Sales Tax Assessment
Capital Redemption Reserve
As per last Balance Sheet
Less : Capitalised on Issue of Bonus Shares
Securities Premium Account
As per last Balance Sheet
Add : Received during the year
Less : Capitalised on Issue of Bonus Shares
Issue Expenses
Premium on Redemption of Bonds
Less : Calls in arrears - by others
Debenture Redemption Reserve
As per last Balance Sheet
Add: Transferred from Profit and Loss Account
Investment Allowance (Utilised) Reserve
As per last Balance Sheet
Less : Transferred to Profit and Loss Account to
the extent no longer required
Taxation Reserve
As per last Balance Sheet
183.24
4.58
187.82
0.25
–
–
4,737.09
–
4,737.09
–
0.07
59.26
4,677.76
3.15
535.51
204.50
238.70
–
2,771.06
2,771.06
185.26
0.01
185.27
2.03
187.57
183.24
205.80
205.80
–
–
4,823.75
180.05
5,003.80
260.29
6.42
–
4,737.09
10.74
4,674.61
4,726.35
471.04
64.47
740.01
535.51
274.70
36.00
238.70
10.00
238.70
10.00
Reliance Industries Limited Annual Report 1998-99
(cid:223) 5 7 (cid:224)
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
Schedules forming part of the Balance Sheet
SCHEDULE ‘B’ (Contd.)
RESERVES & SURPLUS
As at
31st March, 1999
Rs.
Rs.
(Rs. in crores)
As at
31st March, 1998
Rs.
Rs.
General Reserve
As per last Balance Sheet
Less : Transferred to Profit and Loss Account*
[Refer Note 3(a) & 3(b), Schedule ‘O’]
Add : Transferred from Profit and Loss Account
1,350.00
921.62
428.38
1,000.00
1,390.30
792.95
597.35
752.65
Profit and Loss Account
1,428.38
1,132.67
11,183.00
1,350.00
1,047.89
10,862.75
* Cumulative amount transferred on account of Depreciation on Revaluation
Rs. 1,521.21 Crores (Previous Year Rs.792.95 Crores)
SCHEDULE ‘C’
SECURED LOANS
A) DEBENTURES
Non-Convertible Debentures
Less : Calls in arrears - by others
3,578.04
0.67
2,413.54
0.68
3,577.37
2,412.86
B) TERM LOANS
1. From Banks
a) Foreign Currency Loans
b) Rupee Loans
2. From Financial Institutions
a) Foreign Currency Loans
b) Rupee Loans
C) WORKING CAPITAL LOANS
From Banks
–
1,527.00
1,527.00
12.52
33.72
46.24
0.53
200.00
200.53
38.15
19.26
57.41
1,573.24
327.03
5,477.64
257.94
65.98
2,736.78
Notes
1.
(a) Debentures referred to in A to the extent of Rs. 341.54 crores are secured by way of mortgage / charge
on all the properties situated at Naroda, District Ahmedabad and Hazira, District Surat in the State of
Gujarat and at Patalganga, District Raigad in the State of Maharashtra.
(b) Debentures referred to in A to the extent of Rs.1,702.50 crores are secured by way of mortgage / charge
on all the properties situated at Hazira, District Surat, in the state of Gujarat and at Patalganga, District
Raigad, in the State of Maharastra.
(c) Debentures referred to in A to the extent of Rs. 1,080.00 crores are secured by way of mortgage / charge
on all the properties situated at Patalganga, District Raigad in the State of Maharashra and on the
Reliance Industries Limited Annual Report 1998-99
(cid:223) (cid:224)58
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
Schedules forming part of the Balance Sheet
properties situated at Jamnagar, in the State of Gujarat and on the movable properties situated at Hazira,
District Surat, in the State of Gujarat.
(d) Debentures referred to in A to the extent of Rs. 454.00 crores are secured by way of second and
subservient charge, created on all the properties situated at Patalganga, District Raigad in the State of
Maharashtra.
(e) Debentures referred to in A (i) 12.5% Debentures of Rs. 95 each aggregating Rs. 341.54 Crores, are
redeemable at par on the expiry of 10 years from the date of allotment i.e. 26th February, 2002 with an
option to the Board to redeem at any time after 26th February, 1999. The Company has decided to
redeem the debentures at any time on or before 26th February, 2002. (ii) 18% Debentures of Rs. 100 each
aggregating Rs. 60.00 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.
(iii) 14 % Debentures of Rs. 50 each aggregating Rs. 300.00 Crores which are redeemable at par on the
expiry of sixth year from the date of allotment i.e. 12th January, 2000. Warrants issued with the
debentures entitle the holders thereof to apply at the option of the warrant holders for 12, 00, 00, 000
Equity Shares of Rs. 10 each of the Company. (iv) 16.5% Debentures of Rs. 100 each, aggregating
Rs. 285.00 Crores which are redeemable at par on the expiry of seven years from the respective dates of
allotment, commencing September, 2002. (v) 14.08% Debentures of Rs. 100 each aggregating
Rs. 312.50 Crores which are redeemable at par in three equal annual instalments, commencing from the
expiry of fifth year from the respective dates of allotment; commencing February, 2000. (vi) 14.5%
Debentures of Rs. 10,00,000 each, aggregating Rs. 112.00 Crores which are redeemable at par on the
expiry of fifth year from the date of allotment; i.e. 19th May, 2002. (vii) 13.5% Debentures of Rs.
1,00,00,000 each, aggregating Rs. 50.00 Crores which are redeemable at par in three instalments on the
expiry of the fifth, sixth and seventh year from the date of allotment; the redemption to commence from
15th September, 2002. (viii) 13.5% Debentures of Rs. 1,00,00,000 each aggregating Rs. 100.00 Crores
are redeemable at par on the expiry of the tenth year from the date of allotment; i.e. on 28th November,
2007. (ix) 12.25% Debentures of Rs. 1,00,00,000 each aggregating Rs. 325.00 Crores, are redeemable at
par in three equal instalments on the expiry of fifth, sixth and seventh year from the date of allotment; the
redemption will commence from January, 2003. (x) 12.5% Debentures of Rs. 1,00,00,000 each
aggregating Rs. 110.00 Crores which are redeemable at par on the expiry of seventh year from the date of
allotment i.e. January, 2005. (xi) 13.75% Debentures of Rs. 1,00,00,000 each aggregating Rs. 110.00
Crores which are redeemable at par on the expiry of the tenth year from the respective dates of allotment
i.e. January, 2008. (xii) 13.75% Debentures of Rs. 1,00,00,000 each aggregating Rs. 80.00 Crores which
are redeemable at par on the expiry of the tenth year from the respective dates of allotment i.e. January,
2008. (xiii) 14.75% Debentures of Rs. 1,00,00,000 each aggregating Rs. 200.00 Crores which are
redeemable at par in three equal annual instalments, commencing from the expiry of eighth year from the
respective dates of allotment; redemption will commence from February, 2006. (xiv) 14.25% Debentures
of Rs. 1,00,00,000 each aggregating Rs. 200.00 Crores which are redeemable on the expiry of the tenth
year from the date of allotment; i.e. May, 2008. (xv) 15.03% Debentures of Rs. 1,00,00,000 each
aggregating Rs. 150.00 Crores which are redeemable on the expiry of the tenth year from the date of
allotment; i.e. June, 2008. (xvi) Debentures of Rs. 50,00,000 each carrying an interest rate linked to
Mumbai Interbank Overnight Rate (MIBOR) aggregating Rs. 67.00 Crores which are redeemable after
the expiry of one year from the date of allotment, in July, 1999. (xvii) 15.03 % Debentures of
Rs. 25,00,000 each aggregating Rs. 75.00 Crores which are redeemable on the expiry of the tenth year
from the date of allotment; i.e. June, 2008. (xviii) 13.25% Debentures of Rs. 50,00,000 each aggregating
Rs. 225.00 Crores which are redeemable on the expiry of one year from the date of allotment; i.e. July,
1999. (xix) 14.25% Debentures of Rs. 1,00,00,000 each aggregating Rs. 150.00 Crores which are
redeemable on the expiry of the tenth year from the date of allotment; i.e. September, 2008.
(xx) 15.03% Debentures of Rs. 1,00,00,000 each aggregating Rs. 100.00 Crores which are redeemable
on the expiry of the tenth year from the date of allotment; i.e. September, 2008. (xxi) 15.03% Debentures
of Rs. 1,00,00,000 each aggregating Rs. 100.00 Crores which are redeemable on the expiry of the tenth
year from the date of allotment; i.e. September, 2008. (xxii) 14.25% Debentures of Rs. 1,00,00,000 each
aggregating Rs. 100.00 Crores which are redeemable on the expiry of the tenth year from the date of
allotment; i.e. November, 2008. (xxiii) 15.03% Debentures of Rs. 1,00,00,000 each aggregating
Rs. 25.00 Crores which are redeemable on the expiry of the tenth year from the date of allotment; i.e.
October, 2008. (xxiv) Debentures aggregating Rs. 0.03 Crore are held by Directors.
Reliance Industries Limited Annual Report 1998-99
(cid:223) 5 9 (cid:224)
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
Schedules forming part of the Balance Sheet
2. (a) The Term Loans referred to in B(1) (b) above, to the extent of Rs. 1,327 Crores are secured on all the
properties situated at Patalganga, District Raigad in the State of Maharashtra and Jamnagar, in the State
of Gujarat and on the moveable properties situated at Hazira, District Surat, in the State of Gujarat.
(b) Term Loans referred to in B(1) (b) above, to the extent of Rs. 200 Crores are secured on the movable
properties situated at Naroda, District Ahmedabad and Hazira, District Surat both in the State of Gujarat
and at Patalganga, District Raigad in the State of Maharashtra.
(c) Term Loan referred to in B(2) (a) above, to the extent of Rs. 12.52 Crores are secured on all the
properties situated at Hazira, District Surat in the State of Gujarat and Patalganga, District Raigad in the
State of Maharashtra
(d) The Term Loans referred to in B(2) (b) above, to the extent of Rs. 33.72 Crores are secured / to be
secured only on the dwelling units constructed / to be constructed for the employees of the Company.
3. The charges created on the Debentures referred to in Note 1(b) and Term Loans referred to in Note 2(c)
above, shall rank pari passu, inter-se and charges created on the Debentures referred to in Note 1(c) and Term
Loans referred to in Note 2(a) above, shall rank pari passu, inter-se.
4. Working Capital Loans from Banks referred to in C above 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. save and except receivables of the Oil & Gas Division.
5. Secured Loans include loans of Rs.4.55 Crores and Debentures of Rs. 687.00 Crores repayable / redeemable
within one year.
SCHEDULE ‘D’
UNSECURED LOANS
i) From Banks
ii) From Others
As at
31st March, 1999
Rs.
Rs.
751.71
4,455.94
5,207.65
(Rs. in crores)
As at
31st March, 1998
Rs.
Rs.
592.43
4,918.12
5,510.55
Note :
1. Included in (ii) above are short term loans of Rs. 1.51 crores which are either convertible into 77,335
equity shares of Rs. 10 each of the company at the option of the bondholders or repayable within
one year.
2. Short Term Loans raised by issue of commercial paper and outstanding at year end Rs. NIL (Previous
Year Rs. NIL) (Maximum amount outstanding at any time during the year Rs. 625 crores.)
Reliance Industries Limited Annual Report 1998-99
(cid:223) (cid:224)60
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
Schedules forming part of the Balance Sheet
SCHEDULE ‘E’
FIXED ASSETS
Gross Block
Depreciation
(Rs. in crores)
Net Block
Description
As At
Additions Deduc-
As At
Leasehold Land
Freehold Land
Development Rights/
Producing Properties
Buildings
1-4-98
Rs.
54.41
12.15
598.40
1,056.42
Plant & Machinery
14,949.18
Electrical Installation
Factory Equipments
Furniture & Fixtures
Vehicles
Ships
Aircrafts
Jetties
Total
441.66
202.69
62.54
67.84
198.30
46.70
158.04
tions
31-3-99
Rs.
-
-
-
Rs.
54.65
23.67
822.37
0.03 1,269.18
Upto
1-4-98
Rs.
2.22
–
19.87
82.69
For the Deduc-
Upto
As At
As At
Year
Rs.
0.52
-
39.27
26.79
tions
31-3-99
31-3-99
31-3-98
Rs.
-
-
-
Rs.
2.74
-
Rs.
51.91
23.67
59.14
763.23
0.01
109.47
1,159.71
Rs.
52.19
12.15
578.53
973.73
20.23 15,340.03
4,624.14
1,565.38
12.55 6,176.97
9,163.06 10,325.04
-
0.42
0.40
4.83
-
-
447.35
230.27
74.68
81.69
198.30
46.87
61.27
70.40
25.39
20.63
13.42
55.71
6.20
23.80
21.08
12.54
5.77
7.20
75.79
11.89
10.43
-
0.06
0.08
1.77
-
-
14.73
91.48
37.87
26.32
18.85
131.50
18.09
19.50
355.87
192.40
48.36
62.84
66.80
28.78
41.77
371.26
177.30
41.91
54.42
142.59
40.50
134.24
-
96.77
Rs.
0.24
11.52
223.97
212.79
411.08
5.69
28.00
12.54
18.68
-
0.17
17,848.33
924.68
122.68 18,650.33
4,944.47
1,776.66*
29.20 6,691.93
11,958.40 12,903.86
Previous Year
10,955.92
6,904.11
11.70 17,848.33
3,491.20
1,460.27
7.00 4,944.47
12,903.86
Capital Work-in-Progress
3,437.83
2,069.43
NOTES :
a) Leasehold Land includes 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. 0.01 crore).
c) Capital Work-in-Progress includes :
Rs.558.98 crores on account of Pre-operative Expenses (Previous year Rs. 189.86 crores).
(i)
(ii) Rs.82.04 crores on account of cost of construction materials at site (Previous year Rs. 35.96 crores).
(iii) Rs.58.58 crores on account of advance against Capital Expenditure (Previous year Rs. 76.47 crores).
d) Additions and Capital Work-in-Progress include Rs. 21.68 crores on account of exchange difference during
the year (Previous year Rs. 349.37 crores)
e) Ownership of Jetties vests with Gujarat Maritime Board. However, under an agreement with Gujarat
Maritime Board, the company has been permitted to use the same at a concessional rate.
f) Gross Block includes Rs. 2,771.06 crores being the amount added on revaluation of Plant & Machinery as at
01-04-1997.
Refer to Note 3(a) & 3 (b), Schedule ‘O’.
*
Reliance Industries Limited Annual Report 1998-99
(cid:223) 6 1 (cid:224)
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
Schedules forming part of the Balance Sheet
SCHEDULE ‘F’
INVESTMENTS
A. LONG TERM INVESTMENTS
Government and other securities
Unquoted
As at
31st March, 1999
Rs.
Rs.
(Rs. in crores)
As at
31st March, 1998
Rs.
Rs.
Post Office Time Deposit
7 Years National Savings Certificate
(Deposited with Sales Tax Dept.)
(Face value Rs. 5,000;
Previous year Rs. 5,000)
Indira Vikas Patra
Kisan Vikas Patra
(Deposited with Sales Tax Dept.)
(Rs. 20,000; Previous year Rs. 20,000)
0.20
–
0.51
–
0.71
Trade Investments
In Equity Shares
Quoted, fully paid up
6,05,79,809 Reliance Capital Ltd. of Rs. 10 each
486.54 *
(6,05,79,809)
69,80,000 Reliance Industrial Infrastructure
16.58
(69,80,000) Ltd. of Rs. 10 each
503.12
Unquoted, fully paid up
60 New Piece Goods Bazar Co. Ltd. of
(60) Rs.100 each, (Rs. 17,000;
Previous year Rs. 17,000)
5 Bombay Gujarat Art Silk Vepari
(5) Mahajan Co-operative Shops &
Warehouse Society Ltd. of Rs. 200 each,
(Rs. 1,000; Previous year Rs. 1,000)
165 The Art Silk Co-operative
(165) Society Ltd. of Rs.100 each,
(Rs.16,500; Previous year Rs. 16,500)
20 The Bombay Market Art Silk
(20) Co-operative (Shops & Warehouses)
Society Ltd., of Rs.200 each,
(Rs. 4,000; Previous year Rs. 4,000)
15 Pandesara Industrial Co-operative
(15) Society Ltd. of Rs.100 each
(Rs.1,500; Previous year Rs. 1,500)
–
–
–
–
–
11,08,500 Reliance Europe Ltd. of Sterling
3.93
(11,08,500) Pound 1 each
300 Reliance Petroproducts
(300) Private Ltd. of Rs.10 each
(Rs. 3,000; Previous year Rs. 3,000)
800 Reliance Global Trading
(800) Private Ltd. of Rs.10 each
(Rs. 8,000; Previous year Rs. 8,000)
51,02,080 Reliance Telecom Limited
(12,800) of Rs. 10 each
–
–
5.10
9.03
Reliance Industries Limited Annual Report 1998-99
(cid:223) (cid:224)62
0.20
–
0.52
–
0.72
486.54
16.58
503.12
–
–
–
–
–
3.93
–
–
0.01
3.94
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
Schedules forming part of the Balance Sheet
SCHEDULE ‘F’ (Contd.)
INVESTMENTS
Unquoted, partly paid up
As at
31st March, 1999
Rs.
Rs.
(Rs. in crores)
As at
31st March, 1998
Rs.
Rs.
225 Crimpers Industrial Co-operative Society
(225) Ltd. of Rs. 100 each Rs. 25 paid up
(Rs. 5,625; Previous year Rs. 5,625)
1,000 Reliance Petroproducts Private Ltd.
(1,000) of Rs. 10 each Rs. 2.50 paid up
(Rs. 2,500; Previous year Rs. 2,500)
1,250 Reliance Global Trading Private Ltd.
(1,250) of Rs.10 each Rs. 2.50 paid up
(Rs. 3,125; Previous year Rs. 3,125)
–
–
–
–
–
–
–
–
In Preference Shares
Unquoted, fully paid up
86,00,000 6% Cumulative Redeemable
86.00
86.00
(86,00,000) Preference Shares
of Reliance Enterprises Limited,
of Rs. 100 each
32,00,000 14% Cumulative Redeemable
(32,00,000) Preference Shares of
Reliance Ports & Terminals Ltd.,
of Rs. 100 each
37,50,000 14% Cumulative Redeemable
(-) Preference Shares of Reliance
Utilities and Power Limited,
of Rs. 100 each
In Debentures
Unquoted, fully paid up
2,23,52,830 14% Optionally Fully Convertible
(2,23,52,830) Debentures of Reliance Petroleum Ltd.
of Rs. 770 each
(Previous year Rs. 38.50 paid up)
(Company under the same management)
32.00
32.00
37.50
–
155.50
118.00
1,721.17
86.06
1,721.17
86.06
2,388.82
711.12
In Equity Shares of Subsidiary Companies
Unquoted, fully paid up
2,10,070 Devti Fabrics Ltd. of Rs. 10 each
0.21
(2,10,070)
14,75,04,400 Reliance Industrial Investments and
(14,75,04,400) Holdings Ltd. of Rs. 10 each
147.50
147.71
0.21
147.50
147.71
Reliance Industries Limited Annual Report 1998-99
(cid:223) 6 3 (cid:224)
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
Schedules forming part of the Balance Sheet
SCHEDULE ‘F’ (Contd.)
INVESTMENTS
As at
31st March, 1999
Rs.
Rs.
(Rs. in crores)
As at
31st March, 1998
Rs.
Rs.
In Debentures of Subsidiary Companies
Unquoted, fully paid up
8,83,143 Zero Coupon Optionally Convertible
(8,83,143) Unsecured Debentures of Reliance
441.58
Industrial Investments and
Holdings Ltd. of Rs. 5,000 each
2,79,90,000 0% Unsecured Convertible
(2,79,90,000) Debentures of Reliance Industrial
279.90@
Investments and Holdings Ltd.
of Rs. 100 each
441.58
279.90
Other Investments
In Equity Shares
Quoted, fully paid up
15,51,549 BSES Ltd. of Rs. 10 each
(15,51,574)
17,82,347 Larsen & Toubro Ltd.
(17,82,602) of Rs. 10 each
721.48
721.48
869.19
869.19
33.73
43.36
77.09
33.73
43.37
77.10
Unquoted, fully paid up
1,000 Air Control & Chemical Engineering
(1,000) Co. Ltd. of Rs. 100 each
0.01
0.01
TOTAL (A)
B. CURRENT INVESTMENTS
Other Investments
In Equity Shares
Quoted, fully paid up
– ICICI Ltd.
(80) of Rs. 10 each (previous year Rs. 1,491)
– Indian Petrochemicals
(120) Corporation Ltd.of
Rs. 10 each (previous year Rs. 15,360)
– Container Corporation of India Ltd.
(100) of Rs. 10 each
(previous year Rs. 7,187.40)
77.10
3,335.82
77.11
1,658.14
–
–
–
–
–
–
–
–
Reliance Industries Limited Annual Report 1998-99
(cid:223) (cid:224)64
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
Schedules forming part of the Balance Sheet
SCHEDULE ‘F’ (Contd.)
INVESTMENTS
Unquoted, fully paid up
– HIM Teknoforge Ltd. of Rs. 10 each
(4,80,000)
In Debentures
Quoted, fully paid up
– 12.5% Fully convertible Debentures of
(624) ICICI Ltd. of Rs. 450 each
In Bonds
Taxable, unquoted, fully paid up
– 14% Sardar Sarovar Nigam Ltd. Bonds of
(8) Rs. 50,000 each
In Units
Quoted
3,05,200 SBI Magnum Multiplier
(3,06,400) Plus 1993 units of Rs.10 each
85,600 Units of Unit Scheme 1964,
(85,600) Unit Trust of India of Rs.10 each
25,00,000 Reliance Capital Growth Fund
(50,00,000) Units of Rs.10 each
Unquoted
– Kothari Pioneer Prima Fund
(14,28,262) Units of Rs.10 each
1,06,42,017 Reliance Capital Vision Fund
(1,06,42,017) Units of Rs.10 each
– Reliance Liquid Fund Units
(10,000) of Rs. 10 each
In Investment Management Account
– With Union Bank of Switzerland
– With Credit Suisse
As at
31st March, 1999
Rs.
Rs.
(Rs. in crores)
As at
31st March, 1998
Rs.
Rs.
–
–
–
–
–
–
0.31
0.13
2.50
2.94
–
10.64
–
10.64
539.34
405.85
945.19
1.20
1.20
0.03
0.03
0.04
0.04
0.31
0.13
5.00
5.44
1.43
10.64
0.01
12.08
1,777.73
827.67
2,605.40
TOTAL (B)
958.77
2,624.19
TOTAL INVESTMENTS (A) + (B)
4,294.59
4,282.33
Reliance Industries Limited Annual Report 1998-99
(cid:223) 6 5 (cid:224)
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
Schedules forming part of the Balance Sheet
SCHEDULE ‘F’ (Contd.)
INVESTMENTS
AGGREGATE VALUE OF
Quoted Investments
Unquoted Investments
Movements during the year
Purchased & Sold
Mutual Fund Units
Reliance Income Fund
As at
31st March, 1999
(Rs. in crores)
As at
31st March, 1998
Book
Value
Rs.
Market
Value
Rs.
Book
Value
Rs.
583.14
3,711.45
Face Value
Rs.
296.35
-
585.69
3,696.64
Nos.
Cost
in crores Rs. in crores
Market
Value
Rs.
491.12
10.00
197.09
2,045.00
* Includes 3,57,14,300 shares having a lock-in-period upto January, 2000.
@ Interest rate revised from 6.25% to 0% with effect from 1st April, 1998.
Reliance Industries Limited Annual Report 1998-99
(cid:223) (cid:224)66
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
Schedules forming part of the Balance Sheet
SCHEDULE ‘G’
CURRENT ASSETS
INTEREST ACCRUED ON INVESTMENTS
INVENTORIES
(Certified 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 Banks
With Others
As at
31st March, 1999
Rs.
Rs.
(Rs. in crores)
As at
31st March, 1998
Rs.
Rs.
25.61
21.07
556.46
312.60
52.57
486.98
58.40
44.35
102.75
44.35
58.40
398.70
1.08
40.15
464.66
187.32
54.78
637.20
1,408.61
1,343.96
90.13
21.35
111.48
21.35
90.13
552.59
457.10
642.72
0.56
40.56
1.21
4,855.16 *
0.80
2,091.59
4,897.60
6,788.92
2,133.51
4,141.26
* Represents deposits of
a) Rs. 3,273.65 crores with Union Bank of Switzerland (Previous year Rs. 648.29 crores) (Maximum amount
outstanding at anytime during the year Rs. 3,273.65 crores.)
b) Rs. 1,581.51 crores with Credit Suisse (Previous year Rs. 1,443.30 crores) (Maximum amount outstanding at
anytime during the year Rs. 1,581.51 crores.)
Reliance Industries Limited Annual Report 1998-99
(cid:223) 6 7 (cid:224)
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
Schedules forming part of the Balance Sheet
SCHEDULE ‘H’
LOANS AND ADVANCES
UNSECURED - (CONSIDERED GOOD)
Loans to subsidiary companies
Advances recoverable in cash or in kind or for
value to be received
Deposits
Balance with Customs, Central Excise Authorities, etc.
As at
31st March, 1999
Rs.
Rs.
(Rs. in crores)
As at
31st March, 1998
Rs.
Rs.
359.48
1,032.61
163.64
120.53
1,676.26
13.33
763.41
75.98
138.33
991.05
NOTES :
Advances includes :
(i) Rs. 0.21 crore to Officers (Maximum amount outstanding at any time during the year Rs. 0.21 crore)
(ii) Rs. 40.77 crores to Reliance Petroleum Limited, a Company under the same management towards advance
against promoters’ contribution. (Previous year Rs. 120.00 crores) (Maximum amount outstanding anytime
during the year Rs. 2,044.97 crores.)
(iii) Rs. 134.71 crores towards Preference Shares/Debenture Application money pending allotment. (Previous
year Rs. 51.96 crores)
SCHEDULE ‘I’
CURRENT LIABILITIES AND PROVISIONS
CURRENT LIABILITIES
Sundry Creditors
Unclaimed Dividends
Interest accrued but not due on loans
PROVISIONS
Provision for Wealth Tax
Provision for Income Tax
Provision for Leave Encashment
Proposed Dividend
Tax on Dividend
3,345.20 *
12.42
234.36
3,193.59
12.89
175.53
3,591.98
3,382.01
6.73
138.00
10.96
350.16
38.52
2.73
108.00
5.77
326.81
32.68
544.37
4,136.35
475.99
3,858.00
*
Includes for capital expenditure Rs. 331.54 crores. (Previous year Rs. 610.05 crores), acceptances of Rs. 6.47
crores (Previous year Rs. 95.45 crores) and Rs. 2.19 crores due to small scale industrial undertakings , listed
below, exceeding Rs. 1 lakh, each outstanding for more than 30 days, within the agreed terms.
(Aashit Engineering Company, Agencies (India) Corporation, Anil Industrial Components, Anil Trading Co., Associated Products, Associated Rasayan
Agencies, Associated Chemicals, Bilimoria (India), Chhaya Engineering Corporation, Fibro Chemicals, Fine Polycolloids Pvt. Ltd., Jay Nakoda Industries,
Shree Laxmi Krupa Engineering Work, Shree Mahesh Engineering Works, Pioneer Fabrics & Packaging (P.) Ltd., Reliance Industrial Products, Sarex Overseas,
Smruti Agency, Shrijay Packaging, Sumeto Resins & Chemicals Inds. (I), Talwar Industrial Products, Vijay Box Mfg. Co., Vimal Chemicals, K S Industries,
Patel Airtemp Pvt. Ltd., Detriv Instrument & Elec. Ltd., Lunar Eng. (P) Ltd., Chemtech Intermediates, Gamma Manganese Chemical, Metal Salt Catalyst,
Satyam Pharma Chemical, Aakar Packaging (P) Ltd., Brown Craft Industries, Kagaz Packaging, Tex Tube Mfg. Co., Accurate Paper Tube (P) Ltd., Brown Craft
Industries Ltd., India Corrugating Ltd., Nice Pack Industries, PLA Chem. Industries, Super Forge, Greenaries.)
Reliance Industries Limited Annual Report 1998-99
(cid:223) (cid:224)68
GROWTH IS LIFE
Schedules forming part of the Profit and Loss Account
Schedules forming part of the Profit and Loss Account
SCHEDULE ‘J’
OTHER INCOME
Export Incentives
Dividends :
From Current Investments
From Long Term Investments
[Tax Deducted at source Rs. 0.01 crores;
(Previous year Rs. 34,240)]
Interest Received :
From Current Investments
From Long Term Investments
From Others
[Tax Deducted at source Rs. 3.13 crores;
(Previous year Rs. 9.23 crores)]
Profit on Sale of Current Investments (net)
Profit on Sale of Assets
Miscellaneous Income
SCHEDULE ‘K’
VARIATION IN STOCKS
STOCK-IN-TRADE (at close)
Finished goods
Stock-in-process
STOCK-IN-TRADE (at commencement)
Finished goods
Stock-in-process
0.06
20.63
367.89
124.15
70.42
Rs.
1998-99
Rs.
–
(Rs. in crores)
1997-98
Rs.
0.34
Rs.
0.07
20.48
20.69
20.55
244.03
17.50
27.40
562.46
288.93
3.39
4.72
16.29
607.55
9.38
0.46
15.94
335.60
486.98
52.57
637.20
54.78
637.20
54.78
539.55
691.98
272.96
50.74
691.98
(152.43)
323.70
368.28
Reliance Industries Limited Annual Report 1998-99
(cid:223) 6 9 (cid:224)
GROWTH IS LIFE
Schedules forming part of the Profit and Loss Account
Schedules forming part of the Profit and Loss Account
SCHEDULE ‘L’
MANUFACTURING AND OTHER EXPENSES
RAW MATERIALS CONSUMED
INTER-DIVISIONAL TRANSFERS
MANUFACTURING EXPENSES
Rs.
1998-99
Rs.
3,210.94
3,929.11
Rs.
(Rs. in crores)
1997-98
Rs.
3,646.43
3,684.60
Stores, Chemicals and Packing Materials
Electric Power, Fuel and Water
Machinery Repairs
Building Repairs
Labour, Processing and Machinery Hire Charges
Excise Duty
Lease Rent
Exchange Differences (Net)
826.61
270.00
72.20
20.42
85.77
1,929.46
50.15
(21.64)
PAYMENTS TO AND PROVISIONS
FOR EMPLOYEES
Salaries, Wages and Bonus
Contribution to Provident Fund, Gratuity Fund,
Superannuation Fund, Employee’s State Insurance
Scheme, Pension Scheme, Labour Welfare Fund etc.
Employee’s Welfare and other amenities
262.96
35.92
59.42
SALES & DISTRIBUTION EXPENSES
Samples, Sales Promotion and Advertisement Expenses
Brokerage and Commission
Warehousing and Distribution Expenses
Sales Tax
30.90
78.08
179.34
2.12
639.58
301.69
56.21
21.85
118.33
1,893.13
54.33
(27.49)
3,232.97
3,057.63
229.06
25.75
55.05
358.30
309.86
55.27
70.75
109.14
0.04
290.44
235.20
ESTABLISHMENT EXPENSES
Insurance
Rent
Rates and Taxes
Other Repairs
Travelling Expenses
Payment to Auditors
Professional Fees
Loss on Sale of Discarded Assets
General Expenses
Wealth Tax
Charity & Donations
49.56
25.16
73.34
28.88
30.91
1.95
95.37
1.33
172.58
4.00
7.21
44.58
31.31
35.30
22.80
46.86
1.90
88.00
2.15
119.88
2.50
10.30
Less : Pre-operative Expenses of Projects Under Commissioning (net)
SCHEDULE ‘M’
INTEREST
Debentures
Fixed Loans
Others
490.29
11,512.05
11.53
11,500.52
608.21
60.00
60.60
728.81
405.58
11,339.30
132.37
11,206.93
426.85
73.74
2.96
503.55
Reliance Industries Limited Annual Report 1998-99
(cid:223) (cid:224)70
GROWTH IS LIFE
Significant Accounting Policies
Significant Accounting Policies
SCHEDULE ‘N’
A. Basis of Preparation of Financial Statements
a) The financial statements have been prepared under the historical cost convention in accordance with the
generally accepted accounting principles and the provisions of the Companies Act, 1956, as adopted
consistently by the company, except for certain fixed assets which have been revalued.
b) The company generally follows mercantile system of accounting and recognises significant items of
income and expenditure on accrual basis.
B. Fixed Assets
Fixed Assets are stated at cost net of Modvat and includes amounts added on revaluation, 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.
C. Depreciation
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: on all power plants, ships, aircrafts, computer systems
acquired to date and on plant & machinery which has commenced commercial production before 1/4/95,
depreciation has been provided on written down value basis (WDV) at the rates and in the manner prescribed
in Schedule XIV to the Companies Act, 1956; on additions, or extensions forming an integral part of existing
plants, including incremental cost arising on account of translation of foreign currency liabilities for
acquisition of fixed assets, depreciation has been provided, as aforesaid over the residual life of the respective
plants; on development rights and producing properties depreciation has been provided in proportion of oil
and gas production achieved; premium on lease hold land is amortised over the period of lease; cost of jetty
has been 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; on revalued assets the depreciation has been
charged over the residual life of the assets.
D. Foreign Currency Transactions
a) Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at
the time of the transaction.
In the case of interrelated assets and liabilities the net balance is restated at year end rates.
b)
Subject to the above
(i) Monetary 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
proportionate difference between the forward rate and exchange rate on the date of transaction, such
difference having been recognised over the life of the contract.
(ii) Non monetary foreign currency items are carried at cost.
c) Branch income and expenses are translated at average rate. Branch monetary assets and liabilities are
translated at year-end rates. Non monetary items are translated at the rates on the date of transaction.
d) Any income or expense on account of exchange difference either on settlement or on translation is
recognised in the profit & loss account except in cases where they relate to the acquisition of fixed assets
in which case they are adjusted to the carrying cost of such assets.
E. Investments
a) Current investments are carried at the lower of cost and quoted/fair value, computed category wise.
Long Term Investments are stated at cost. Provision for diminution in the value of long term investments
is made only if, such a decline is other than temporary in the opinion of the management.
b) Cost is arrived at by applying specific identification method.
Reliance Industries Limited Annual Report 1998-99
(cid:223) 7 1 (cid:224)
GROWTH IS LIFE
Significant Accounting Policies
Significant Accounting Policies
SCHEDULE ‘N’ (Contd.)
F.
Inventories
Inventories are valued at cost except for finished goods and by-products. Finished goods are valued at lower of
cost or market value and by-products are valued at net realisable value; cost is inclusive of any taxes or duties
incurred.
G. Sales
Sales include inter-divisional transfers, sales during trial run and are net of discounts.
H. 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.
I. Employee Retirement Benefits
Company's contributions 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.
J. 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.
K. Leases
Lease rentals are expensed with reference to lease terms and other considerations, except for rentals pertaining
to the period up to the date of commissioning of the assets which are capitalised.
L. Accounting for Oil and Gas Activity
Assets and liabilities as well as income and expenditure in respect of the un-incorporated 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.
M. Issue Expenses
Issue Expenses pertaining to the projects are capitalised.
Reliance Industries Limited Annual Report 1998-99
(cid:223) (cid:224)72
GROWTH IS LIFE
Notes on Accounts
Notes on Accounts
SCHEDULE ‘O’
1.
(a) The previous year's figures have been reworked, regrouped, rearranged and reclassified wherever
necessary.
(b) Figures have been presented in 'crores' of rupees with two decimals in accordance with the approval
received from the Company Law Board. Figures less than Rs. 50,000 have been shown at actuals in
brackets.
Sales include Inter divisional transfers of Rs. 3,929.11 crores (Previous Year Rs. 3,684.60 crores).
(a) On account of technological advancements and increasing obsolescence, the Company has changed the
method of depreciation for plant & machinery situated at Naroda and all power plants, ships, aircrafts and
computer systems from Straight Line to Written Down Value method with effect from April 1, 1998.
2.
3.
In compliance with the Accounting Standards (AS6) issued by the Institute of Chartered Accountants of
India, depreciation has been recomputed from the date of commissioning/installation of these plants,
computer systems, acquisition of ships and aircrafts at WDV rates applicable to those years. Consequent
to this, there is an additional charge for depreciation during the year of Rs. 193.36 crores due to the said
change which relates to the previous years and an equivalent amount has been withdrawn from General
Reserve and credited to the Profit & Loss Account.
Had there been no change in the method of depreciation, the charge for the year would have been lower
by Rs. 35.73 crores, excluding the charge relating to the previous years and due to revaluation.
Consequently, the Net Block of Fixed Assets and Reserves & Surplus are lower by Rs. 229.09 crores.
(b) The Gross Block of Fixed Assets include Rs. 2,771.06 crores (Previous Year Rs. 2,771.06 crores) on
account of revaluation of Fixed Assets carried out in the past. Consequent to the said revaluation there is
an additional charge of depreciation of Rs 728.26 crores (Previous Year Rs. 792.95 crores) and an
equivalent amount has been withdrawn from General Reserve and credited to the Profit & Loss Account.
4. During the year one of the jetties viz. Single Buoy Mooring (SBM) system, at the Hazira Petrochemicals
Complex was damaged. The Company has inter alia filed a claim for loss of revenue, increased cost of working
and other like losses. The additional operating cost, aggregating to Rs. 141.04 crores, has been charged under
respective heads of expenses in the Profit & Loss Account. Further necessary adjustments will be made in the
year in which the claim is settled.
5. The expense on account of exchange difference on outstanding forward exchange contracts to be recognised
in the Profit and Loss account of subsequent accounting period aggregate to Rs. 0.14 Crores. (Previous year
Rs 2.24 Crores)
6.
(a) Auditors’ Remuneration :
1998-99
(Rs. in crores)
1997-98
i) Audit Fees
ii) Tax Audit Fees
iii) For Certification and Consultation in finance and tax matters
iv) Expenses reimbursed
(b) Cost Audit Fees :
1.00
0.20
0.65
0.10
1.95
0.03
0.90
0.20
0.70
0.10
1.90
0.02
Reliance Industries Limited Annual Report 1998-99
(cid:223) 7 3 (cid:224)
GROWTH IS LIFE
Notes on Accounts
Notes on Accounts
SCHEDULE ‘O’ (Contd.)
7. Managerial Remuneration :
i)
Salaries
ii) Perquisites
iii) Commission
iv) Contribution to Provident Fund and Superannuation Fund
v) Provision for Gratuity
1998-99
2.12
0.90
2.70
5.72
0.30
0.06
6.08
(Rs. in crores)
1997-98
2.22
0.78
2.57
5.57
0.30
0.06
5.93
The above includes Rs. 0.61 crores being remuneration to the wholetime directors for part of the year, which is
subject to the approval of the shareholders in the ensuing Annual General Meeting.
Computation of net profit in accordance with Section 198 read with Section 309(5) of the Companies Act, 1956
Profit before taxation
Add
Less
Depreciation as per accounts
Transfer from General Reserve
Add
Less
Provision for Doubtful Debts
Loss on Sale of Assets
Managerial Remuneration
Depreciation under Section 350
of the Companies Act, 1956
Profit on sale of Assets
Profit on Sale of Investments
Net Profit for the year
Salaries, Perquisites and Commission
@ 0.50 % of the above.
Less
Salaries and Perquisites
Balance commission
Rs.
1776.66
921.62
1998-99
Rs.
1,733.69
855.04
23.00
1.33
5.72
2,618.78
1467.53
4.72
3.39
1,143.14
5.72
3.02
2.70
(Rs. in crores)
1997-98
Rs.
1,715.67
Rs.
1,460.27
792.95
667.32
12.85
2.15
5.57
2,403.56
1,280.70
0.46
9.38
1,113.02
5.57
3.00
2.57
8. A sum of Rs. 0.65 crores (net) (Previous Year Rs. 1.14 crore net credit) is adjusted to General Expenses
representing Net Prior Period Items.
9. The income-tax assessments of the Company have been completed up to Assessment Year 1996-97. The total
demand raised by the Income-Tax Department up to the said Assessment Year is Rs. 467.09 crores, which is
disputed. Based on the decisions of the appellate authorities 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 reserves created in the past would be adequate enough to meet the liabilities, if any, in
respect of disputed matters which are pending in appeals.
Provision for Taxation for the current year has been made after taking into consideration benefits admissible
under the provisions of the Income Tax Act, 1961.
Reliance Industries Limited Annual Report 1998-99
(cid:223) (cid:224)74
GROWTH IS LIFE
Notes on Accounts
Notes on Accounts
SCHEDULE ‘O’ (Contd.)
10. The company has an investment of Rs. 0.21 crore in the Share Capital, loan of Rs. 12.47 crores in Devti
Fabrics Ltd., (DFL), a wholly owned subsidiary company. The losses of DFL exceed its paid-up Capital and
Reserves as on 31st March 1999. In view of the long-term involvement of the company in the said company,
no provision has been made in the accounts for the probable loss that may arise.
11. Fixed assets taken on lease amount to Rs.436.47 Crores. (Previous year Rs. 399.92 crores). Future obligations
towards lease rentals under the lease agreements as on 31st March,1999 amount to Rs. 91.71 Crores.
(Previous year Rs. 126.87 crores)
12. PRE-OPERATIVE EXPENSES
(In respect of Projects up to 31st March 1999, to be capitalised.)
Opening Balance
Rs.
1998-99
Rs.
189.86
(Rs. in crores)
Rs.
1997-98
Rs.
302.04
Add : Preoperative expenditure transferred from
Profit and Loss account
Lease Expenses and Hire Charges
Interest
Issue Expenses
11.53
4.11
363.25
24.94
132.37
20.57
254.29
21.64
Less : Capitalised during the year
Closing Balance
13. CONTINGENT LIABILITIES
403.83
593.69
34.71
558.98
428.87
730.91
541.05
189.86
As at
31st March, 1999
Rs.
(Rs. in crores)
As at
31st March, 1998
Rs.
(a) Estimated amount of contracts remaining to be executed
on capital accounts and not provided for
923.58
1,725.56
(b) Outstanding guarantees 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 parties
(d) Liability in respect of bills discounted with Banks
(e) Uncalled liability on partly paid Shares/Debentures
(Rs. 33,750)
(f) Claims against the company/disputed liabilities not
acknowledged as debts
(g) Sales tax deferral liability assigned
635.16
1,001.61
1623.00
61.33
–
200.92
235.27
1,385.98
65.30
1,635.11
155.87
235.56
14. The Department of Company Affairs, Government of India vide its Order No. 48/38/99/CL III dated
March 11, 1999 & issued under section 211 (4) of the Companies Act, 1956 has exempted the company from
publication of certain information in the Profit and Loss Account under paras 3 (i) (a), 3 (ii) (a) and 3 (ii) (b)
of Part II, Schedule VI to the Companies Act, 1956.
Reliance Industries Limited Annual Report 1998-99
(cid:223) 7 5 (cid:224)
GROWTH IS LIFE
Notes on Accounts
Notes on Accounts
SCHEDULE ‘O’ (Contd.)
15. LICENSED AND INSTALLED CAPACITY
(a)
(i) Ethylene
(ii) Propylene
(iii) Benzene
(iv) Butadiene and Other C4s
(v) Toluene
(vi) Xylene
(b) Purified Terepthalic Acid
(c) Polypropylene
(d) Poly Vinyl Chloride
(e) Polyester Staple Fibre/Polyester Chips
(f) High/Linear Low Density Polyethylene
(Swing Plant)
(g) Polyester Filament Yarn/Polyester Chips
(h) (i) Mono Ethylene Glycol
(ii) Higher Ethylene Glycol
(iii) Ethylene Oxide
(iv) Ethylene Glycol (Non-Fibre)
(v) Carbon Dioxide
(i) Linear Alkyl Benzene
(j) Man-made Fibre spun yarn on worsted
system (Spindles)
(k) Man-made Fibre on cotton system (Spindles)
(l)
(i) Man-made Fabrics (Looms)
(ii) Knitting M/c
(m) (i) Chlorine
(ii) Caustic Soda
(iii) Hydrogen
(n) Paraxylene
(o) (i) Naphtha
(ii) LPG
(iii) Kerosene
(iv) Diesel
(p) LDPE
(q) Poly Ethylene Terephthalate
(r) Polyester Staple Fibre Fill
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.
MT
MT
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.
Licensed Capacity
Installed Capacity
UNIT
1998-99
1997-98
1998-99
1997-98
1,550,000 1,550,000
755,000
755,000
750,000
365,000
235,000
225,000
197,000
165,000
975,000
360,000
270,000
235,000
750,000
365,000
235,000
225,000
197,000
165,000
975,000
360,000
270,000
235,000
291,000
465,000
197,000
165,000
N.A.
N.A.
N.A.
N.A.
320,000
N.A.
N.A. 152,300+ 152,300+
320,000
600,000
75,000
75,000
-
-
N.A.
300,000
37,500
50,000
-
-
100,000
300,000
37,500
50,000
-
-
80,000
291,000
465,000
197,000
165,000
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
600,000
75,000
75,000
-
-
N.A.
N.A.
N.A.
N.A.
N.A.
24,094
23,040
24,094
23,040
N.A.
N.A.
1,104,800
N.A.
N.A.
708,800
1,268,000
31,860
800,000
20,160
1,400,000 1,400,000
720,000
110,000
180,000
360,000
150,000
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
150,000
N.A.
N.A.
607
28
–
–
–
–
–
–
–
–
–
80,000
30,000
602
28
–
–
–
–
–
–
–
–
–
80,000
30,000
NA- Delicensed vide notification No 477(E) dated 27th July 1991 and press note No. 1 (1998 series), dated
8th June, 1998.
Includes 32300 MT based on average Denier of 40.
+
Reliance Industries Limited Annual Report 1998-99
(cid:223) (cid:224)76
GROWTH IS LIFE
Notes on Accounts
Notes on Accounts
SCHEDULE ‘O’ (Contd.)
16. PRODUCTION MEANT FOR SALE
Fabrics
Polyester Filament Yarn
PET
Polyester Staple Fibre
Fibre Fill
PTA
LAB
Normal Paraffin
Ethylene Glycol
PVC
Ethylene
Propylene
Benzene
Xylene
Toluene
PE
PP
Crude Oil
Gas
UNIT
1998-99
1997-98
Meters in lacs
352.09 401.84
MT
MT
MT
MT
MT
MT
MT
MT
MT
MT
MT
MT
MT
MT
MT
MT
MT
2,32,278
2,20,573
67,132
18,839
2,63,381
2,41,522
11,746
7,447
4,66,913
2,16,833
99,789
94,908
8,719
18,800
2,07,876
1,59,770
2,74,476
2,70,067
34,277
43,006
915
1,102
1,22,123
1,00,456
31,823
18,773
59,967
6,510
3,64,676
3,16,377
3,76,924
3,56,788
3,13,134
1,40,906
BBTU
24,209
11,493
17. VALUE OF IMPORTS ON C.I.F. BASIS IN RESPECT OF
Raw Materials
Stores & Spares, Chemicals & Packing Materials
Capital Goods
18. EXPENDITURE IN FOREIGN CURRENCY
Interest on Foreign Currency Loans
Premium on Redemption of Bonds (Excluding withholding Tax)
Interest on Debentures held by
Non residents on repatriation basis (Gross)
Technical Know-how and Engineering Fees
Oil and Gas Activity
Other Matters
(Rs. in crores)
1997-98
Rs.
1998-99
Rs.
1,766.82
2,726.58
360.76
627.52
224.08
1,307.51
475.11
53.37
0.39
241.87
158.86
185.18
413.96
–
1.11
104.39
211.74
115.81
Reliance Industries Limited Annual Report 1998-99
(cid:223) 7 7 (cid:224)
GROWTH IS LIFE
Notes on Accounts
Notes on Accounts
SCHEDULE ‘O’ (Contd.)
19. VALUE OF RAW MATERIALS CONSUMED
Imported
Indigenous
20. VALUE OF STORES, CHEMICALS AND
PACKING MATERIALS CONSUMED
Imported
Indigenous
21. EARNINGS IN FOREIGN EXCHANGE
1998-99
1997-98
Rs. in
% of total
crores Consumption
Rs. in
% of total
crores Consumption
1,981.17
1,229.77
3,210.94
61.70 3,176.16
38.30
470.27
87.10
12.90
100.00 3,646.43
100.00
1998-99
1997-98
Rs. in
% of total
crores Consumption
Rs. in
% of total
crores Consumption
431.30
395.31
826.61
52.18
47.82
219.49
420.09
34.32
65.68
100.00
639.58
100.00
FOB Value of Exports
Interest
Others
22. EXPENDITURE ON RESEARCH & DEVELOPMENT
Total Revenue Expenditure including amortisation of
deferred cost and Unamortised Deferred Research
& Development Expenditure
23. REMITTANCE IN FOREIGN CURRENCY
ON ACCOUNT OF DIVIDEND
The Company has paid Dividend in respect of shares held by
Non-Residents on repatriation basis. This inter-alia includes
portfolio investment and direct investment, where the amount
is also credited to Non-Resident External Account (NRE A/c).
The exact amount of dividend remitted in foreign currency
cannot be ascertained. The total amount remittable in this
respect is given herein below:
(a) Number of Non Resident Shareholders
b) Number of Equity Shares held by them
1998-99
Rs.
589.56
370.99
0.70
(Rs. in crores)
1997-98
Rs.
321.27
244.65
–
41.30
38.96
18,085
19,006
24,96,80,562 11,00,13,404
c)
(i) Amount of Dividend Paid (Gross) (Rs. in Crores)
87.38
71.51
Tax Deducted at Source Rs. Nil (Previous Year Nil)
(ii) Year to which dividend relates
1997-98
1996-97
Reliance Industries Limited Annual Report 1998-99
(cid:223) (cid:224)78
GROWTH IS LIFE
Notes on Accounts
Notes on Accounts
24. BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE
I. Registration Details
Registration No. :
Balance sheet Date :
1 1 - 1 9 7 8 6
3 1 - 0 3 - 9 9
State Code:
II. Capital Raised during the year (Amount Rs. Crores)
1 1
Public Issue :
Bonus Issue :
Conversion of Bonds :
N I L
N I L
N I L
Rights Issue :
Private Placement :
N I L
6 5 . 0 0
III.Position of Mobilisation and Deployment of Funds (Amount Rs. crores)
2 8 1 5 6 . 0 0
Total Assets :
Total Liabilities :
Sources of Funds
2 8 1 5 6 . 0 0
Paid-up Capital :
Advance Against
Future Receivables:
Secured Loans :
Application of Funds
Net Fixed Assets :
Net Current Assets:
1 1 8 6 . 3 4
Reserves & Surplus :
1 1 1 8 3 . 0 0
9 6 5 . 0 2
5 4 7 7 . 6 4
1 5 3 9 6 . 2 3
4 3 2 8 . 8 3
Unsecured Loans :
5 2 0 7 . 6 5
Investments :
4 2 9 4 . 5 9
IV. Performance of Company (Amount Rs. crores)
Turnover :
Profit Before Tax :
Earnings per share in Rs.
1 4 5 5 3 . 2 6
1 7 3 3 . 6 9
1 8 . 0 0
V. Generic Names of Three Principal Products of Company (as per monetary terms)
Total Expenditure :
Profit After Tax :
Dividend : Rs. per share
1 3 2 7 4 . 6 9
1 7 0 3 . 6 9
3 . 7 5
Item Code No. (ITC Code) :
2 9 1 7 2 . 0 0
Product Description :
P U R I F I E D
Item Code No. (ITC Code) :
5 4 0 2 4 2 . 0 0
Product Description :
P O L Y E S T E R
Item Code No. (ITC Code) :
3 9 0 1 2 0 . 0 0
Product Description :
P O L Y E T H Y L E N E
( P E )
T E R E P H T H A L I C
A C I D
( P T A )
F I L A M E N T
Y A R N
( P F Y )
As per our Report of even date
For and on behalf of the Board
For Chaturvedi & Shah
Chartered Accountants
For Rajendra & Co.
Chartered Accountants
D. Chaturvedi
Partner
R.J. Shah
Partner
Mumbai
Dated: 22nd April, 1999
D.H. Ambani
Chairman
M. D. Ambani
V. Chairman & Managing Director
A.D. Ambani
Managing Director
N.R. Meswani
Executive Director
S.Venkitaramanan Nominee Director
U. Mahesh Rao
Nominee Director
R.H. Ambani
M.L. Bhakta
T.Ramesh U. Pai
Y.P. Trivedi
V.M. Ambani
Directors
}
Secretary
Reliance Industries Limited Annual Report 1998-99
(cid:223) 7 9 (cid:224)
GROWTH IS LIFE
Statement Pursuant to Section 212 of the Companies Act, 1956,
Statement Pursuant to Section 212 of the Companies Act, 1956,
relating to Company’s Interest in Subsidiary Companies.
relating to Company’s Interest in Subsidiary Companies.
Name of Subsidiary Company
Devti Fabrics Ltd.
Reliance Industrial
Investments and
Holdings Ltd.
1. The financial year of the Subsidiary
31st March, 1999
31st March, 1999
Companies ended on
2. Date from which they become subsidiary
30th September, 1985
30th December, 1988
companies
3. a. Number of shares held by Reliance
Industries Ltd. with its nominees
in the subsidiaries at the end of the
financial year of the subsidiary companies.
b. Extent of interest of holding company
at the end of the financial year of the
subsidiary companies.
4. The net aggregate amount of the
subsidiary companies Profit/(Loss) so
far as it concerns the members of the
holding Company.
a. Not dealt with in the holding
Company’s accounts.
i) For the financial year ended
31st March, 1999
2,10,070 Equity Shares
of the face value of
Rs. 10 each fully paid-up
100 %
14,75,04,400 Equity
Shares of the face
value of Rs. 10 each
fully paid-up
100 %
Rs. 1.51 Lakhs
Rs. 883.49 Lakhs
ii) For the previous financial years
(Rs. 1,197.17 Lakhs)
Rs. 39.19 Lakhs
of the subsidiary companies since
they became the holding
Company’s subsidiaries.
b. Dealt with in holding company’s
accounts:
i) For the financial year ended
31st March, 1999
ii) For the previous financial years of
the subsidiary Companies since
they became the holding
Company’s subsidiaries
NIL
NIL
NIL
Rs. 2,673.89 Lakhs
As per our Report of even date
For and on behalf of the Board
For Chaturvedi & Shah
Chartered Accountants
For Rajendra & Co.
Chartered Accountants
D. Chaturvedi
Partner
R.J. Shah
Partner
Mumbai
Dated: 22nd April, 1999
D.H. Ambani
Chairman
M. D. Ambani
V. Chairman & Managing Director
A.D. Ambani
Managing Director
N.R. Meswani
Executive Director
S.Venkitaramanan Nominee Director
U. Mahesh Rao
Nominee Director
R.H. Ambani
M.L. Bhakta
T.Ramesh U. Pai
Y.P. Trivedi
V.M. Ambani
Directors
}
Secretary
Reliance Industries Limited Annual Report 1998-99
(cid:223) (cid:224)80
GROWTH IS LIFE
Cash Flow Statement Annexed to the Balance Sheet for the
Cash Flow Statement Annexed to the Balance Sheet for the
period April 1998-March 1999
period April 1998-March 1999
A: CASH FLOW FROM OPERATING ACTIVITIES :
Net Profit after tax as per P & L Account
Adjusted for :
1998-99
Rs. in crores
1997-98
Rs.
Rs.
Rs.
Rs.
1,703.69
1,652.67
(1.14)
63.00
12.85
1.69
1,460.27
(792.95)
(2.03)
(34.46)
(29.92)
(288.93)
503.55
312.99
(258.59)
713.12
Net Prior Year Adjustments
Tax Provision
Provision for Doubtful Debts
Profit/Loss on Sale of Discarded Assets
Depreciation
Transferred from General Reserve
Adjusted on Sales Tax Assessment
Effects of Exchange Rate Change
Profit on Sale of Investments/Dividend Income
Interest/Other Income
Interest Expenses
0.65
30.00
23.00
(3.39)
1,776.66
(921.62)
(0.25)
(8.43)
(24.08)
(562.48)
728.81
Operating Profit before Working Capital Changes
Adjusted for :
Trade & Other Receivables
Inventories
Trade Payables
97.96
(64.65)
30.55
Cash Generated from Operations
Interest Paid
Net Prior Year Adjustments
Taxes Paid
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 Investment Management Account
Movement in Loan
Interest Income
Dividend Income
Net Cash Used in Investing Activities
1,038.87
2,742.56
63.86
2,806.42
(1,034.69)
(0.65)
(25.00)
1,746.08
(1,822.28)
14.83
(3,722.70)
2,053.61
1,660.22
(481.91)
554.78
20.69
(1,722.76)
891.93
2,544.60
767.52
3,312.12
(737.54)
1.14
(100.67)
2,475.05
(2,324.77)
3.00
(1,209.58)
1,118.68
273.64
(93.92)
317.27
20.54
(1,895.14)
Reliance Industries Limited Annual Report 1998-99
(cid:223) 8 1 (cid:224)
GROWTH IS LIFE
Cash Flow Statement Annexed to the Balance Sheet for the
Cash Flow Statement Annexed to the Balance Sheet for the
period April 1998-March 1999
period April 1998-March 1999
C: CASH FLOW FROM FINANCING ACTIVITIES :
Proceeds from Issue of Share Capital (net)
Securitisation/Advance Against Future Receivables
Proceeds from Long Term Borrowings
Repayment of Long Term Borrowings
Short Term Loans
Dividends Paid
Effects of exchange rate change
Net Cash used in Financing Activities
Net Increase in Cash & Cash Equivalents (A+B+C)
Opening Balance of Cash & Cash Equivalents
Closing Balance of Cash & Cash Equivalents
Mumbai
Dated: 22nd April, 1999
1998-99
Rs. in crores
1997-98
Rs.
Rs.
Rs.
Rs.
74.01
665.02
2,875.76
(777.25)
246.86
(385.69)
42.06
2,740.77
2,764.09
2,133.51
4,897.60
182.01
300.00
3,488.26
(2,757.87)
(431.83)
(339.83)
249.11
689.85
1,269.76
863.75
2,133.51
For and on behalf of the Board
A.D. Ambani
Managing Director
Auditors’ Report
We have verified the attached Cash Flow Statement of Reliance Industries Ltd., derived from audited financial
statements and the books and records maintained by the Company for the year ended 31st March, 1999 and 31st
March, 1998 and found the same in agreement therewith.
For Chaturvedi & Shah
Chartered Accountants
D. Chaturvedi
Partner
Mumbai
Dated: 22nd April, 1999
For Rajendra & Co.
Chartered Accountants
R.J. Shah
Partner
Reliance Industries Limited Annual Report 1998-99
(cid:223) (cid:224)82
GROWTH IS LIFE
Reconciliation of Profit determined under Indian GAAP
Reconciliation of Profit determined under Indian GAAP
to Net Income in accordance with US GAAP and
to Net Income in accordance with US GAAP and
International Accounting Standards (IAS)
International Accounting Standards (IAS)
The following reconciliations between accounting principles generally accepted in India ("Indian GAAP"),
accounting principles generally accepted in the United States of America ("US GAAP") and International
Accounting Standards ("IAS") have been provided as additional disclosure to assist readers who may be unfamiliar
with Indian GAAP.
It may, however be noted that 95 % of the revenue of the Company is earned in India and therefore the accounts
should be read as per Indian GAAP.
Reconciliation of Profit determined under Indian GAAP with Net Income according to US GAAP.
Year ended 31st March, 1999
Profit after tax determined under Indian GAAP
Adjustments to conform with US GAAP
Share in Income of Affiliates
Consolidation of Subsidiaries
Leases
Foreign Currency
Depreciation
Deferred Income Tax
Issue Expenses
Income before cumulative effect of accounting changes
Cumulative effect of change in depreciation method,
(net of Rs. 62 crores of deferred income taxes)
Consolidated net income in accordance with US GAAP
1 US $= Rs. 42.43 (Exchange rate as on 31.03.99)
Notes
1
2
3
4
5
6
7
8
Rs.
(Crores)
US $
(Millions)
1,704
(18)
69
15
(22)
48
(301)
(2)
1,493
(115)
1,378
402
(4)
16
3
(5)
11
(71)
–
352
(27)
325
Notes to Reconciliation of Profit determined under Indian GAAP with Net Income according to US
GAAP.
1. Share in Income of Affiliates
Under Indian GAAP, investments in affiliates, where RIL generally owns 20% to 50%, are carried at cost.
Income from such affiliates is recognised to the extent dividends are declared.
Under US GAAP, investments in unconsolidated affiliates are accounted for using the equity method,
whereby the investment is carried at RIL's related share of the net assets of such affiliates. RIL records as
income, its share of the net earnings, determined in accordance with US GAAP, of such affiliates.
2. Consolidation of Subsidiaries
US GAAP requires the preparation of consolidated financial statements, whereas Indian GAAP has no such
requirement. Accordingly, under US GAAP, net income includes the earnings of subsidiaries, determined in
accordance with US GAAP.
3. Leases
Under Indian GAAP, no distinction is made between an operating and a capital lease. Under US GAAP, leases
are classified into operating or capital, based on the underlying characteristics of the lease. Capital leases are
accounted for as though the company had entered into an obligation and invested in an asset, resulting in the
charge to operations being the aggregate of depreciation on the asset and interest on the outstanding
obligation. For leases under Indian GAAP, the charge to operations consists of the lease rental. Adjustment
has been made for reversal of lease rental and the revenue charge of depreciation and interest for capital leases.
4. Foreign Currency
Under Indian GAAP foreign exchange difference relating to acquisition of fixed assets is adjusted to the
carrying cost of such assets. Under US GAAP, such gains or losses are required to be included in the
determination of net income.
5. Depreciation
Under Indian GAAP indirect preoperative expenses incurred during construction are capitalised. Under US
GAAP, such indirect costs must be expensed as incurred. Depreciation has been adjusted to take account of
the adjustments to fixed assets for indirect preoperative expenses and foreign currencies.
Reliance Industries Limited Annual Report 1998-99
(cid:223) 8 3 (cid:224)
GROWTH IS LIFE
6. Deferred Income Tax
The provision for taxation under Indian GAAP is based on the estimated tax currently payable and no
provision is required to be made for deferred income taxes for the future tax effects of past transactions.
US GAAP requires that a provision for such deferred income taxes be made.
7. Issue Expenses
Under Indian GAAP debt issue expenses may be capitalised or charged to share premium. Under US GAAP,
debt issue cost are amortised over the life of the debt. The amortization pertaining to projects still under
construction is recapitalised.
8. Cumulative effect of change in accounting principle
On account of technological advancements and increasing obsolescence, the Company has changed the
method of depreciation for plant & machinery situated at Naroda and all power plants, ships, aircrafts and
computer systems from Straight Line to Written Down value method with effect from April 1, 1998. The new
method has been applied retrospectively to plant & equipment acquisitions of prior years.
Under Indian GAAP consequent to this, there is an additional charge for depreciation during the year relating
to previous years and an equivalent amount has been withdrawn from General Reserve and credited to Profit
& Loss Account.
Under US GAAP, the cumulative effect of the change in depreciation method for previous years has reduced
the consolidated net income by Rs. 115 crores (net of Rs. 62 crores in deferred income taxes) after taking into
account the adjustments to fixed assets for indirect preoperative expenses and foreign currencies. Had there
been no change in the method of depreciation, the charge for the year would have been lower by
Rs. 33 crores, excluding the charge relating to the previous years.
9. Use of Estimates
The preparation of financial statements in conformity with US GAAP requires the use of estimates. Actual
results could differ from those estimates.
Reconciliation of Profit determined under Indian GAAP with Net Income according to IAS.
Year ended 31st March, 1999
Profit after tax determined under Indian GAAP
Adjustments to conform with IAS
Share in Income of Affiliates
Consolidation of Subsidiaries
Leases
Foreign Currency
Depreciation
Deferred Income Tax
Consolidated net income in accordance with IAS
1 US $= Rs. 42.43 (Exchange rate as on 31.03.99)
Notes
Rs.
(Crores)
US $
(Millions)
1
2
3
4
5
6
1,704
(5)
111
15
(22)
(15)
(279)
1,509
402
(1)
26
3
(5)
(3)
(66)
356
Notes to Reconciliation of Profit determined under Indian GAAP with Net Income according to IAS.
1. Share in Income of Affiliates
Under Indian GAAP, investments in affiliates, where RIL generally owns 20% to 50%, are carried at cost.
Income from such affiliates is recognised to the extent dividends are declared.
Under IAS, investments in unconsolidated affiliates are accounted for using the equity method, whereby the
investment is carried at RIL's related share of the net assets of such affiliates. RIL records as income, its share
of the net earnings, determined in accordance with IAS, of such affiliates.
2. Consolidation of Subsidiaries
IAS requires the preparation of consolidated financial statements, whereas Indian GAAP has no such
requirement. Accordingly, under IAS, net income includes the earnings of subsidiaries, determined in
accordance with IAS.
3. Leases
Under Indian GAAP, no distinction is made between an operating and a capital lease. Under IAS, leases are
classified into operating or capital, based on the underlying characteristics of the lease. Capital leases are
accounted for as though the company had entered into an obligation and invested in an asset, resulting in the
charge to operations being the aggregate of depreciation on the asset and interest on the outstanding
Reliance Industries Limited Annual Report 1998-99
(cid:223) (cid:224)84
GROWTH IS LIFE
obligation. For leases under Indian GAAP, the charge to operations consists of the lease rental. Adjustment
has been made for reversal of lease rental and the revenue charge of depreciation and interest for capital leases.
4. Foreign Currency
Under Indian GAAP foreign exchange difference relating to acquisition of fixed assets is adjusted to the
carrying cost of such assets. Under IAS, such gains or losses are required to be included in the determination
of net income.
5. Depreciation
Under Indian GAAP indirect preoperative expenses incurred during construction are capitalised. Under IAS,
such indirect costs must be expensed as incurred. Depreciation has been adjusted to take account of the
adjustments to fixed assets for indirect preoperative expenses and foreign currencies.
On account of technological advancements and increasing obsolescence, the Company has changed the
method of depreciation for plant & machinery situated at Naroda and all power plants, ships, aircrafts and
computer systems from Straight Line to Written Down value method with effect from April 1, 1998. The new
method has been applied prospectively and depreciation has been adjusted accordingly.
6. Deferred Income Tax
The provision for taxation under Indian GAAP is based on the estimated tax currently payable and no
provision is required to be made for deferred income taxes for the future tax effects of past transactions. IAS
requires that a provision for such deferred income taxes be made.
7. Use of Estimates
The preparation of financial statements in conformity with IAS requires the use of estimates. Actual results
could differ from those estimates.
As per our report of even date
For Deloitte Haskins & Sells
Chartered Accountants
P.R. Barpande
Partner
Mumbai
22nd April, 1999
For and on behalf of the Board
A.D. Ambani Managing Director
N. R. Meswani Executive Director
International Accountants’ Report
International Accountants’ Report
To The Board of Directors
RELIANCE INDUSTRIES LIMITED
We have audited the accompanying reconciliations of (1) Profit after Tax determined under accounting principles
generally accepted in India ("Indian GAAP") to Consolidated Net Income in accordance with accounting
principles generally accepted in the United States of America ("US GAAP"), and (2) Profit after tax determined
under Indian GAAP to Consolidated Net Income in accordance with International Accounting Standards
("IAS") ("the Reconciliations") for the year ended 31st March, 1999 for Reliance Industries Limited
("Reliance"). These Reconciliations are the responsibility of Reliance's management. Our responsibility is to
express an opinion on the Reconciliations based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the Reconciliations are free of material misstatement. An audit also includes assessing the accounting
principles used, as well as evaluating the overall Reconciliation presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the Reconciliations referred to above present fairly, in all material respects, the adjustments
required to restate Profit After Tax as determined under Indian GAAP to Consolidated Net Income in accordance
with US GAAP and IAS, respectively.
For Deloitte Haskins & Sells
Chartered Accountants
P.R. Barpande
Partner
Mumbai
22nd April, 1999
Reliance Industries Limited Annual Report 1998-99
(cid:223) 8 5 (cid:224)
GROWTH IS LIFE
Directors’ Report
Directors’ Report
To the Members,
Your Directors present the 15th Annual Report
together with the audited Statement of Accounts for
the financial year ended 31st March, 1999.
Operations
The Company has earned profit of Rs 1.51 lacs
during the year under review as against Rs. 96.66 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.
Directors
Shri V.M. Ambani retires by rotation and being
eligible offers himself for re-appointment.
Personnel
The Company has not paid any remuneration
attracting the provisions of Companies (Particulars
of Employees) Rules, 1975 read with Section 217
(2A) of the Companies Act, 1956. Hence, no
information is required to be appended to this report
in this regard.
Conservation of Energy, Technology Absorption
and Foreign Exchange Earnings and Outgo
Particulars required to be furnished in this report
under Section 217(1)(e) of the Companies Act,
1956, relating to conservation of energy and
technology absorption are not applicable for the year
under review, and hence not furnished. There was no
foreign exchange earnings or outgo during the year.
Deposits
The Company has not accepted any deposits from
the Public. Hence, no information is required to be
appended to this report.
Auditors
The Auditors of the Company, M/s. Chaturvedi &
Shah and M/s. Rajendra & Co. 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
V.M. Ambani
N.M. Sanghavi
J.B. Dholakia
}
Directors
Mumbai
Dated : 19th April, 1999
Devti Fabrics Limited Annual Report 1998-99
86(cid:223) (cid:224)
GROWTH IS LIFE
Auditors’ Report
Auditors’ Report
To
The Members of Devti Fabrics Limited.
We have audited the attached Balance Sheet of
DEVTI FABRICS LIMITED as at 31st March,
1999, and the Profit and Loss Account of the
Company for the year ended on that date annexed
thereto and report that:
1. As required by the Manufacturing and Other
Companies (Auditors' Report) Order, 1988,
issued by the Company Law Board in terms of
Section 227 (4A) of the Companies Act, 1956,
we enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the
said order.
2. Further to our comments in the Annexure
referred to in paragraph 1 above, we report that:
(a) We have obtained all the information and
explanations which to the best of our
knowledge and belief were necessary for the
purpose of our audit.
(b) In our opinion proper books of account as
required by law have been kept by the
Company, so far as appears from our
examination of such books.
For Chaturvedi & Shah
Chartered Accountants
H.P. Chaturvedi
Partner
Mumbai
Dated : 19th April, 1999
(c) The Balance Sheet and Profit and Loss
Account referred to in this Report are in
agreement with the books of account.
(d) In our opinion, the Balance Sheet and Profit
and Loss Account complies with
the
requirements of the mandatory accounting
standards referred to in Section 211 (3C) of
the Companies Act, 1956.
(e) Although
incurred
the Company had
substantial losses in the past resulting in the
erosion of its net worth, the accounts of the
Company are prepared on a going concern
basis. Subject to above, in our opinion and
to the best of our information and according
to the explanations given to us, the said
Balance Sheet and Profit and Loss Account
read together with the notes thereon, give
the information required by the Companies
Act, 1956, in the manner so required and
give a true and fair view :
(i) in so far as it relates to the Balance Sheet
of the state of affairs of the Company as
at 31st March, 1999 and
(ii) in so far as it relates to the Profit and Loss
Account of the 'Profit' of the Company
for the year ended on that date.
For Rajendra & Co.
Chartered Accountants
R.J. Shah
Partner
Annexure to Auditors’ Report
Annexure to Auditors’ Report
R e f e r r e d t o i n P a r a g r a p h 1 o f o u r R e p o r t o f e v e n d a t e
1. The Company has maintained proper records
showing full particulars including quantitative
details and situation of its fixed assets. We are
informed that most of the assets have been
physically verified by the management at the
year end and that no material discrepancies were
noticed on such verification. 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. According to the information and explanations
given to us, the stock of raw materials have been
physically verified by the Management at the end
of the year. In our opinion, the frequency of such
verification is reasonable.
4.
In our opinion, the procedures of physical
the
verification of
followed by
stocks
Devti Fabrics Limited Annual Report 1998-99
87(cid:223) (cid:224)
GROWTH IS LIFE
Management are reasonable and adequate in
relation to the size of the Company and the
nature of its business.
5. As explained to us, there were no material
discrepancies noticed on physical verification of
the stocks.
6.
In our opinion and on the basis of our
examination of stock and other records the
valuation of stocks is fair and proper and is in
accordance with
accepted
the
accounting principles and is on same basis as in
the preceding year.
normally
7. The Company has
interest
taken an
free
unsecured loans from the holding Company.
It has not taken any other loan, secured or
unsecured, from companies, firms and other
parties as listed in the register maintained under
Section 301 of the Companies Act, 1956, or
from companies under the same management
within the meaning of Section 370(1B) of the
Companies Act, 1956. The terms and conditions
of the loan are not, in our opinion, prima-facie
prejudicial to the interests of the Company.
8. The Company has not granted any loans, secured
or unsecured to companies, firms, or other
parties listed in the register maintained under
Section 301 of the Companies Act, 1956 or to
companies under the same management within
the meaning of Section 370 (1B) of the
Companies Act, 1956.
9. The Company has not given any loans and
advances in the nature of loans.
10. In our opinion and according to the information
and explanations given to us, there are adequate
internal control procedures commensurate with the
size of the Company and the nature of its business
with regard to purchase and sale of goods.
11. In our opinion and according to the information
and explanations given to us, there are no
transactions of purchase of goods or materials
and sale of goods materials and services made in
pursuance of contracts or arrangement entered in
the register maintained under Section 301 and
aggregating during the year to Rs.50,000/- or
more in respect of each party.
For Chaturvedi & Shah
Chartered Accountants
H.P. Chaturvedi
Partner
Mumbai
Dated : 19th April, 1999
12. As explained to us, in the opinion of the
management the raw materials are not damaged
or unserviceable and hence no provision is made
for the same.
13. The Company has not accepted any deposit from
the Public.
14. As there was no manufacturing activity during
the year the question of by products or realisable
scrap does not arise.
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.
Since there is no manufacturing activity during
the year we have no comments to offer on the
said clause.
17. We have been
informed that provisions of
the Provident Fund and Employees' State
Insurance are not applicable to the Company
for the year.
18. According to the information and explanations
given to us, no undisputed amounts payable in
respect of Income-Tax, Wealth-Tax, Sales-Tax,
Excise Duty and Customs
were
outstanding as at 31st March, 1999 for a period
of more than six months from the date they
became payable.
Duty
19. According to the information and explanations
given to us, no personal expenses of Directors
have been charged to revenue account.
20. According to the information and explanations
given to us and in our opinion the Company has
become a Sick Industrial Company within the
meaning of clause (O) of sub-section (1) of
Section 3 of the Sick Industrial Companies
(Special Provisions) Act, 1985.
21. In respect of 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 Rajendra & Co.
Chartered Accountants
R.J. Shah
Partner
Devti Fabrics Limited Annual Report 1998-99
88(cid:223) (cid:224)
GROWTH IS LIFE
Balance Sheet as at 31st March, 1999
Balance Sheet as at 31st March, 1999
SOURCES OF FUNDS:
Shareholders’ Funds
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
Sundry Debtors
Cash and Bank Balances
Loans and Advances
Less : Current Liabilities and Provisions
Current Liabilities
Net Current Assets
Profit and Loss Account
TOTAL
Notes on Accounts
Schedule
As at
31st March, 1999
Rs.
Rs.
(Rs. in lacs)
As at
31st March, 1998
Rs.
Rs.
‘A’
21.01
21.01
1,247.01
1,268.02
1,302.79
1,323.80
30.93
11.51
18.25
19.42
3.87
99.70
5.80
109.37
13.75
123.12
15.91
15.91
54.11
1,195.66
1,268.02
107.21
1,197.17
1,323.80
30.83
12.58
6.50
40.43
0.37
47.30
13.77
61.07
6.96
6.96
‘B’
‘C’
‘D’
‘E’
‘I’
As per our Report of even date
For and on behalf of the Board
For Chaturvedi & Shah
Chartered Accountants
For Rajendra & Co.
Chartered Accountants
V.M. Ambani
N.M. Sanghavi
Directors
}
H.P. Chaturvedi
Partner
R.J. Shah
Partner
Mumbai
Dated : 19th April, 1999
J.B. Dholakia
Devti Fabrics Limited Annual Report 1998-99
89(cid:223) (cid:224)
Profit and Loss Account for the year ended 31st March, 1999
Profit and Loss Account for the year ended 31st March, 1999
GROWTH IS LIFE
Schedule
1998-99
(Rs. in lacs)
1997-98
Rs.
Rs.
Rs.
Rs.
INCOME
Sales
Other Income
Variation in stock
EXPENDITURE
Purchases
‘F’
‘G’
Manufacturing and Other Expenses
‘H’
Depreciation
Profit for the year
Add : Balance brought forward from last year
Balance carried to Balance Sheet
Notes on Accounts
‘I’
48.86
2.45
4.58
44.54
8.73
1.11
1,057.11
30.74
-
55.89
1,087.85
981.20
7.37
2.62
54.38
1.51
(1,197.17)
(1,195.66)
991.19
96.66
(1,293.83)
(1,197.17)
As per our Report of even date
For and on behalf of the Board
For Chaturvedi & Shah
Chartered Accountants
For Rajendra & Co.
Chartered Accountants
V.M. Ambani
N.M. Sanghavi
Directors
}
H.P. Chaturvedi
Partner
R.J. Shah
Partner
Mumbai
Dated : 19th April, 1999
J.B. Dholakia
Devti Fabrics Limited Annual Report 1998-99
90(cid:223) (cid:224)
GROWTH IS LIFE
Schedules Forming Part of the Balance Sheet
Schedules Forming Part of the Balance Sheet
SCHEDULE ‘A’
SHARE CAPITAL
Authorised:
As at
31st March, 1999
Rs.
(Rs. in lacs)
As at
31st March, 1998
Rs.
2,50,000 Equity Shares of Rs. 10 each
25.00
Issued, Subscribed & Paid up:
2,10,070 Equity Shares of Rs. 10 each fully paid up
21.01
(Held by Reliance Industries Limited,
the Holding Company)
25.00
21.01
21.01
21.01
SCHEDULE ‘B’
FIXED ASSETS
Description
Buildings
Furniture & Fixture
Vehicles
Total
As at
1.4.98
Rs.
27.48
3.44
0.01
30.93
Gross Block
Additions Deduc-
tions
Rs.
Rs.
Depreciation
As at
31.3.99
Rs.
As at
1.4.98
Rs.
For the
year
Rs.
Deduc-
tions
Rs.
(Rs. in lacs)
Net Block
Up to
As at
31.3.99 31.3.99
Rs.
Rs.
As at
31.3.98
Rs.
-
-
-
-
-
27.48
9.61
0.92
-
10.53
16.95
17.87
0.10
3.34
1.89
0.19
0.04
2.04
1.30
1.55
-
0.01
0.01
-
-
0.01
-
-
0.10
30.83
11.51
1.11
0.04
12.58
18.25
19.42
Previous Year
225.61
36.90
231.58
30.93
181.14
2.62
172.25
11.51
19.42
Devti Fabrics Limited Annual Report 1998-99
91(cid:223) (cid:224)
GROWTH IS LIFE
Schedules Forming Part of the Balance Sheet
Schedules Forming Part of the Balance Sheet
SCHEDULE ‘C’
CURRENT ASSETS
As at
31st March, 1999
Rs.
Rs.
(Rs. in lacs)
As at
31st March, 1998
Rs.
Rs.
Inventories
(as verified, valued and certified by the management)
Stores, spares, dyes & chemicals
Raw materials
Stock in Trade
Sundry Debtors (Unsecured, considered good)*
Over Six months
Others
-
1.92
4.58
35.79
4.64
Cash and Bank Balances
Balance with Scheduled Banks:
In Current Account
1.95
1.92
-
6.50
3.87
56.77
42.93
40.43
99.70
0.37
47.30
5.80
109.37
* Includes Rs. 24.64 lacs due from Reliance Petroleum Ltd., a Company under the same management
(previous year Rs. 33.22 lacs)
SCHEDULE ‘D’
LOANS AND ADVANCES
(Unsecured, considered good)
Advances recoverable in cash or in kind
or for value to be received
Deposits
SCHEDULE ‘E’
CURRENT LIABILITIES AND PROVISIONS
Current Liabilities
Sundry Creditors
Other Liabilities
As at
31st March, 1999
Rs.
(Rs. in lacs)
As at
31st March, 1998
Rs.
0.10
13.67
13.77
0.08
13.67
13.75
As at
31st March, 1999
Rs.
(Rs. in lacs)
As at
31st March, 1998
Rs.
-
6.96
6.96
0.32
15.59
15.91
Devti Fabrics Limited Annual Report 1998-99
92(cid:223) (cid:224)
GROWTH IS LIFE
Schedules Forming Part of the Profit and Loss Account
Schedules Forming Part of the Profit and Loss Account
SCHEDULE ‘F’
OTHER INCOME
Profit on sale of fixed assets, stores and spare parts
Excess provision for expenses no longer required
SCHEDULE ‘G’
VARIATION IN STOCK
Stock at close
Stock at Commencement
SCHEDULE ‘H’
MANUFACTURING AND OTHER EXPENSES
1998-99
Raw Materials Consumed
Stock at commencement
Add : Purchases
Less : Stock at close
Manufacturing Expenses
Electric Power, fuel and water
Stores and spares written off (net)
Payment to and Provisions for Employees
Retrenchment/Voluntary Retirement Scheme
Compensation
Establishment Expenses
Insurance
Rates and taxes
Payment to Auditors
General Expenses
Loss on sale of assets
Rs.
1.92
-
1.92
1.92
4.46
1.79
0.39
0.20
0.37
0.13
0.02
Devti Fabrics Limited Annual Report 1998-99
93(cid:223) (cid:224)
1998-99
Rs.
-
2.45
2.45
1998-99
Rs.
4.58
-
4.58
Rs.
–
6.25
1.37
1.11
8.73
(Rs. in lacs)
1997-98
Rs.
27.61
3.13
30.74
(Rs. in lacs)
1997-98
Rs.
-
-
-
(Rs. in lacs)
1997-98
Rs.
–
5.52
–
1.85
7.37
Rs.
1.92
–
1.92
1.92
5.52
-
0.88
0.07
0.35
0.55
–
GROWTH IS LIFE
Notes on Accounts
Notes on Accounts
SCHEDULE ‘I’
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 concern 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 is provided on the straight line method at the rates and in the manner prescribed in
Schedule XIV to the Companies Act, 1956.
c)
Inventories
Raw Material is valued at cost and Stock in Trade is valued at cost or market value whichever is lower.
2. The previous year’s figures have been reworked, regrouped, rearranged and reclassified wherever necessary.
3. Auditors’ Remuneration:
(a) Audit fees
(b) Tax audit fees
1998-99
0.26
0.11
0.37
(Rs. in lacs)
1997-98
0.25
0.10
0.35
4. As the company has not carried out any manufacturing activity during the year, information required under
paragraphs 3 and 4 of schedule VI of the Companies Act, 1956 is given to the extent applicable.
5. Contingent Liability
Claims against the company/disputed liabilities
not acknowledged as debts for ex-employees.
6. Licensed & Installed Capacity
As at
31st March,
1999
(Rs. in lacs)
As at
31st March,
1998
10.50
–
Licensed Capacity
31.3.99
31.3.98
Installed Capacity
31.3.99
31.3.98
N.A.
N.A.
N.A.
N.A.
7. Quantitative Information
a) Opening stock
b) Closing stock
Fabrics
c) Purchases
Fabrics
d) Sales
Fabrics
e) Raw Material Consumed
1998-99
1997-98
UNIT Quantity Rs. in lacs
–
–
Quantity
–
Rs. in lacs
–
Mtrs/lacs
0.09
4.58
–
–
Mtrs/lacs
0.58
44.54
25.67
981.20
Mtrs/lacs
0.49
48.86
–
25.67
1,057.11
–
Devti Fabrics Limited Annual Report 1998-99
94(cid:223) (cid:224)
GROWTH IS LIFE
Notes on Accounts
Notes on Accounts
SCHEDULE ‘I’ (Contd.)
8. Additional information as required under Part IV of Schedule VI to the Companies Act, 1956.
Balance Sheet Abstract and Company's General Business Profile:
1. Registration Details:
Registration No.
Balance Sheet Date
1 1 - 3 1 5 9 3
3 1 - 0 3 - 9 9
State Code
2. Capital raised during the year: (Rs. in lacs)
Public Issue
Bonus Issue
N I L Rights Issue
N I L
Private Placement
3. Position of mobilisation and deployment of funds: (Rs. in lacs)
1 1
N I L
N I L
1 2 6 8 . 0 2 Total Assets
1 2 6 8 . 0 2
2 1 . 0 1 Reserves & Surplus
N I L Unsecured Loans
N I L
1 2 4 7 . 0 1
Total Liabilities
Source of Funds:
Paid-up Capital
Secured Loans
Application of Funds:
Net Fixed Assets
Net Current Assets
Accumulated Losses
Investments
1 8 . 2 5
5 4 . 1 1 Miscellaneous
Expenditure
1 1 9 5 . 6 6
4. Performance of Company: (Rs. in lacs)
Turnover
Profit before tax
Earnings per Share (Rs)
5 1 . 3 1 Total Expenditure
1 . 5 1
0 . 7 2 Dividend Rate (%)
Profit after tax
5. Generic names of principal products, services of the Company:
Item Code No.
Product Description
5 5 1 5 1 1. 0 0
F A B R I C S
N I L
N I L
4 9 . 8 0
1 . 5 1
N I L
As per our Report of even date
For and on behalf of the Board
For Chaturvedi & Shah
Chartered Accountants
For Rajendra & Co.
Chartered Accountants
V.M. Ambani
N.M. Sanghavi
Directors
}
H.P. Chaturvedi
Partner
R.J. Shah
Partner
Mumbai
Dated : 19th April, 1999
J.B. Dholakia
Devti Fabrics Limited Annual Report 1998-99
95(cid:223) (cid:224)
GROWTH IS LIFE
Directors’ Report
Directors’ Report
To the Members,
Your Directors present the 13th Annual Report together with the Audited Statement of Accounts for the year
ended 31st March, 1999.
Financial results
Profit for the year
Add : Taxes for the earlier years
Balance brought forward from last year
Balance carried forward to Balance sheet
Income
During the year, the Company has received dividend
income of Rs. 1070.31 Lacs from its investments.
Dividend
The Directors have not recommended dividend on
Equity shares for the financial year ended 31st
March, 1999.
Directors
Shri Alok Agarwal retires by rotation and being
eligible offers himself for re-appointment.
Personnel
The Company has not paid any remuneration
attracting the provisions of Companies (Particulars
of Employees) Rules, 1975 read with Section
217(2A) of the Companies Act, 1956. Hence, no
information is required to be appended to this
report in this regard.
Conservation of Energy, Technology Absorption
and Foreign Exchange Earnings and outgo
investment company,
Being an
there are no
particulars furnished in this report as required under
Section 217(1)(e) of the Companies Act, 1956,
relating to conservation of energy and technology
1998-99
883.49
4.19
39.19
926.87
(Rs. in lacs)
1997-98
53.66
(69.73)
55.26
39.19
absorption. There was no foreign exchange earnings
or outgo during the year.
Non-Banking Financial Companies
Bank) Directions
(Reserve
The Company's application for registration under
Section 45 I A of the Reserve Bank of India Act,
1934, to carry on the business as a Non-Banking
Financial institution is pending for its consideration.
Deposits
The Company has not accepted any public deposit
during the year. Hence, no information is required
to be appended to this report in terms of Non-
Banking Financial Companies Acceptance of Public
Deposits (Reserve Bank) Directions, 1988.
Auditors
The Auditors of the Company, M/s. Chaturvedi &
Shah and M/s Rajendra & Co. 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 : 20th April, 1999
Reliance Industrial Investments and Holdings Limited Annual Report 1998-99
96(cid:223)
(cid:224)
GROWTH IS LIFE
Auditors’ Report
Auditors’ Report
To,
The Members of Reliance Industrial Investments and
Holdings Limited.
Industrial
We have audited the attached Balance Sheet of
Reliance
Investments and Holdings
Limited as at 31st March, 1999, and the Profit and
Loss Account of the Company for the year ended on
that date annexed thereto and report that:
1. As required by the Manufacturing and Other
Companies (Auditors' Report) Order, 1988
issued by the Company Law Board in terms of
Section 227 (4A) of the Companies Act, 1956,
we enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the
said order.
2. Further to our comments in the Annexure
referred to in paragraph 1 above, we report that:
a) We have obtained all the information and
explanations which to the best of our
knowledge and belief were necessary for the
purpose of our audit.
In our opinion proper books of account as
required by law have been kept by the
from our
Company, so
examination of such books.
far as appears
b)
d)
c) The Balance Sheet and Profit and Loss
Account referred to in this Report are in
agreement with the books of account.
In our opinion, the Balance sheet and Profit
and Loss Account complies with
the
requirements of the mandatory accounting
standards referred to in Section 211 (3C) of
the Companies Act, 1956.
In our opinion and to the best of our
information
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 :
according
and
to
e)
i)
ii)
in so far as it relates to the Balance Sheet
of the state of affairs of the Company as
at 31st March, 1999 and
in so far as it relates to the Profit and
Loss Account of the 'Profit' of the
Company for the year ended on that
date.
For Chaturvedi & Shah
Chartered Accountants
Rajesh D. Chaturvedi
Partner
Mumbai
Dated : 20th April, 1999
For Rajendra & Co.
Chartered Accountants
R.J. Shah
Partner
Reliance Industrial Investments and Holdings Limited Annual Report 1998-99
97(cid:223) (cid:224)
GROWTH IS LIFE
Annexure to Auditors’ Report
Annexure to Auditors’ Report
R e f e r r e d t o i n P a r a g r a p h 1 o f o u r R e p o r t o f e v e n d a t e
1. The only fixed assets of the company is a building
in respect whereof the company has maintained
proper records showing full particulars
including quantitative details and its situation.
According to information and explanations given
to us, the documents thereof have been verified
by the management at the year end 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. 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.
4.. The Company has received unsecured loans from
the holding Company. It has not taken any other
loan, secured or unsecured, from companies,
firms and other parties as listed in the register
maintained under Section 301 of the Companies
Act, 1956, or from companies under the same
management within the meaning of Section
370(1B) of the Companies Act, 1956. The terms
and conditions of such loans are not, in our
opinion, prima-facie prejudicial to the interests
of the Company.
5. The Company has not granted any loans, secured
or unsecured to companies, firms, or other
parties listed in the register maintained under
Section 301 of the Companies Act, 1956. The
Company has granted a loan to its Holding
Company, the rate of interest and other terms
and conditions of the said loan are not, in our
opinion, prima facie prejudicial to the interest of
the Company.
In respect of the loans and advances in the nature
of loans given by the Company, there are
no specific stipulations as to repayment of
principal amounts and
interest has been
charged wherever stipulated.
6.
For Chaturvedi & Shah
Chartered Accountants
Rajesh D. Chaturvedi
Partner
Mumbai
Dated : 20th April, 1999
7.
8.
In our opinion and according to the information
and explanations given to us, the Company has
not accepted any deposits from the Public.
In our opinion the Company has an internal
audit arrangement commensurate with its size
and the nature of its business.
9. According to the information and explanations
given to us, the provisions of the Employees'
Provident Fund and Miscellaneous Provisions
Act, 1952 and the Employees' State Insurance
Act, 1948 are not applicable to the Company.
10. According to the information and explanations
given to us, no undisputed amounts payable in
respect of Income-Tax, Wealth-Tax, Sales-Tax,
Excise Duty and Customs Duty were outstanding
as at 31st March, 1999 for a period of more than
six months from the date they became payable.
11. In our opinion and according to the information
and explanations given to us, no personal
expenses of employees or Directors have been
charged to revenue account.
12. 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.
13. 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.
14. According to the information and explanations
given to us, the provisions of any special statute
applicable to Chit-Fund, Nidhi or Mutual
the
Benefit Society are not applicable
Company.
to
investments dealt
15. In our opinion, the Company has maintained
proper records and made timely entries in respect
in or traded by the
of
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 Rajendra & Co.
Chartered Accountants
R.J. Shah
Partner
Reliance Industrial Investments and Holdings Limited Annual Report 1998-99
98(cid:223)
(cid:224)
GROWTH IS LIFE
Balance Sheet as at 31st March, 1999
Balance Sheet as at 31st March, 1999
SOURCES OF FUNDS:
Shareholders’ Funds
Capital
Reserves and Surplus
Loan Funds
Secured Loans
Unsecured Loans
TOTAL
APPLICATION OF FUNDS:
Fixed Asset
Gross Block
Less : Depreciation
Net Block
Investments
Current Assets, Loans and Advances
Current Assets
Cash and bank balances
Loans and advances
Less : Current Liabilities and Provisions
‘H’
Current Liabilities
Provisions
Net Current Assets
TOTAL
Schedule
As at
31st March, 1999
Rs.
Rs.
(Rs. in lacs)
As at
31st March, 1998
Rs.
Rs.
‘A’
‘B’
14,750.44
1,322.03
14,750.44
434.35
16,072.47
15,184.79
‘C’
‘D’
11,338.77
106,848.55
–
72,177.15
118,187.32
134,259.79
72,177.15
87,361.94
‘E’
‘F’
‘G’
4.57
0.04
–
–
4.53
–
175,360.56
128,223.15
4.12
744.43
748.55
41,852.90
0.95
41,853.85
22.32
398.22
420.54
41,106.75
175.00
41,281.75
(41,105.30)
134,259.79
(40,861.21)
87,361.94
Notes on Accounts
‘K’
As per our Report of even date
For and on behalf of the Board
For Chaturvedi & Shah
Chartered Accountants
For Rajendra & Co.
Chartered Accountants
Rajesh D. Chaturvedi
Partner
R.J. Shah
Partner
Mumbai
Dated : 20th April, 1999
Alok Agarwal
S. Seth
Sandeep Junnarkar
}
Kalpana Srinivasan
Directors
Assistant
Secretary
Reliance Industrial Investments and Holdings Limited Annual Report 1998-99
99(cid:223) (cid:224)
Profit and Loss Account for the year ended 31st March, 1999
Profit and Loss Account for the year ended 31st March, 1999
GROWTH IS LIFE
Schedule
1998-99
(Rs. in lacs)
1997-98
Rs.
Rs.
Rs.
Rs.
INCOME
Income on Investments
‘I’
1,072.70
344.23
1,002.59
4.04
Interest received
[Tax Deducted at source Rs. NIL,
previous year Rs. 0.81 lacs]
Income from Stock Lending
EXPENDITURE
Establishment & Other Expenses
‘J’
Discount on debentures
Premium on redemption of debentures
Provision for diminution in market value
of investments
Interest
Debentures
Others
Depreciation
Profit for the year
Add : Taxation for earlier years
Balance brought forward from last year
Balance carried to Balance Sheet
Notes on Accounts
‘K’
–
813.02
1,416.93
1,819.65
35.69
98.77
–
0.20
–
398.74
0.04
4.19
39.19
14.24
–
1.75
0.62
1,749.38
–
–
(69.73)
55.26
533.44
883.49
43.38
926.87
1,765.99
53.66
(14.47)
39.19
As per our Report of even date
For and on behalf of the Board
For Chaturvedi & Shah
Chartered Accountants
For Rajendra & Co.
Chartered Accountants
Rajesh D. Chaturvedi
Partner
R.J. Shah
Partner
Mumbai
Dated : 20th April, 1999
Alok Agarwal
S. Seth
Sandeep Junnarkar
}
Kalpana Srinivasan
Directors
Assistant
Secretary
Reliance Industrial Investments and Holdings Limited Annual Report 1998-99
100(cid:223)
(cid:224)
GROWTH IS LIFE
Schedules Forming Part of the Balance Sheet
Schedules Forming Part of the Balance Sheet
SCHEDULE ‘A’
SHARE CAPITAL
Authorised:
14,99,90,000 Equity Shares of Rs. 10 each.
10,000
11% Non-Cumulative Redeemable
Preference Shares of Rs. 10 each
Issued, Subscribed & Paid up:
14,75,04,400 Equity Shares of Rs. 10 each fully paid up
(Held by Reliance Industries Limited,
the Holding Company)
As at
31st March, 1999
Rs.
(Rs. in lacs)
As at
31st March, 1998
Rs.
14,999.00
14,999.00
1.00
15,000.00
1.00
15,000.00
14,750.44
14,750.44
14,750.44
14,750.44
Note: Refer Note of Schedule ‘D’ in respect of option on unissued share capital.
SCHEDULE ‘B’
RESERVES AND SURPLUS
General Reserves:
As per last Balance Sheet
Profit and Loss Account
SCHEDULE ‘C’
SECURED LOANS
As at
31st March, 1999
Rs.
395.16
926.87
1,322.03
As at
31st March, 1999
Rs.
Rs.
A. 12,40,000 Secured, Redeemable, Not-Interest
Bearing, Non-Convertible Debentures
3,720.00
Redemption value
Less : Discount to be written off in future 2,381.23
B. Secured loan from a Bank
1,338.77
10,000.00
11,338.77
(Rs. in lacs)
As at
31st March, 1998
Rs.
395.16
39.19
434.35
(Rs. in lacs)
As at
31st March, 1998
Rs.
Rs.
–
–
–
–
–
NOTE:
a. The debentures referred to in A above are redeemable at Rs. 300 each on maturity i.e. on 28-02-2006 (issued
at Rs. 100 each) and are secured by way of a second and subservient charge on the Company's immovable
property situated at Mumbai and by way of pledge of securities.
b. The loan referred to in B above is repayable not later than 23-12-1999 and is secured by way of pledge of
securities.
Reliance Industrial Investments and Holdings Limited Annual Report 1998-99
101(cid:223) (cid:224)
GROWTH IS LIFE
SCHEDULE ‘D’
UNSECURED LOANS
A. Zero Coupon Convertible Unsecured
Redeemable Debentures of Rs. 5,000 each
Less : Redeemed
B. Fully-Convertible Unsecured Debentures of
Rs. 100 each.
C. Loans from Holding Company
As at
31st March, 1999
Rs.
Rs.
44,157.15
(Rs. in lacs)
As at
31st March, 1998
Rs.
Rs.
44,192.15
–
35.00
44,157.15
27,990.00
34,701.40
106,848.55
44,157.15
27,990.00
30.00
72,177.15
NOTE:
a.
In respect of Debentures referred to in A above, the Company may give at its option a three months notice to the
Debentureholders to opt for conversion of the Debentures into Equity Shares at par at any time after the expiry of 15 years,
from the respective dates of allotment of such Debentures. The debentures are redeemable at a premium of 5% of the face
value of the debentures. In the event of the option not being granted by the Company or debentureholders not exercising
their option to convert it may redeem the said debentures in part or in full at any time during the tenure of the said
debentures but not later than 25 years commencing from the respective dates of allotment. Premium payable on
debentures redeemed during any financial year will become due at the end of the said financial year.
b. Debentures referred to in B above are fully convertible into equity shares of the Company at prevailing book value at
any time after the expiry of 15 years but not later than 20 years from the respective date of allotments. As per revised
terms of the said debentures interest rate has been reduced from 6.25% p.a. to Zero % p.a. w.e.f. 01.04.1998 with the
consent of the debentureholders for the remaining tenure of the Debenture.
SCHEDULE ‘E’
FIXED ASSETS
Description
Building
Total
Previous Year
Gross Block
Additions
Rs.
As at
1.4.98
Rs.
As at
31.3.99
Rs.
As at
1.4.98
Rs.
Depreciation
Additions
Rs.
(Rs. in lacs)
Net Block
As at
31.3.99
Rs.
As at
31.3.99
Rs.
As at
31.3.98
Rs.
-
-
-
4.57
4.57
4.57
4.57
-
-
-
-
-
0.04
0.04
4.53
0.04
0.04
4.53
-
-
-
-
-
Reliance Industrial Investments and Holdings Limited Annual Report 1998-99
102(cid:223)
(cid:224)
GROWTH IS LIFE
Schedules Forming Part of the Balance Sheet
Schedules Forming Part of the Balance Sheet
SCHEDULE ‘F’
INVESTMENTS
Investments : (Valued, Verified & Certified by Management)
(A) Long Term Investments
Quoted:
Equity Shares - Fully paid-up
As at
31st March, 1999
Rs.
(Rs. in lacs)
As at
31st March, 1998
Rs.
1,31,63,772
Larsen & Toubro Ltd. of Rs. 10 each
13,415.30
13,415.30
8,82,370
Kothari Sugars and Chemicals Ltd.
of Rs. 10 each
337.30
337.30
38,31,84,000
(19,15,92,000)
1,27,14,783
(68,39,078)
Reliance Petroleum Ltd. of Rs. 10 each
57,477.60
19,159.20
BSES Ltd. of Rs. 10 each
20,107.67
11,288.58
Debentures - Fully paid-up
–
(9,57,96,000)
Secured Triple Option Convertible
Debentures (TOCDs) of Reliance
Petroleum Ltd. of Rs. 40 each.
Warrant Equity Shares (WES) - Fully paid-up
–
38,318.40
9,57,96,000 WES 1999 of Reliance Petroleum Ltd.
9,579.60
(-)
of Rs. 10 each.
9,57,96,000 WES 2000 of Reliance Petroleum Ltd.
14,369.40
(-)
of Rs. 15 each.
9,57,96,000 WES 2001 of Reliance Petroleum Ltd.
14,369.40
(-)
of Rs. 15 each.
Unquoted:
Equity Shares - Fully paid-up
22,900
Observer (India) Ltd. of Rs. 10 each
1,700
3,500
1,150
1,200
Farvision Securities Private Ltd. of
Rs. 100 each
Neha Real Estates Private Limited of
Rs. 10 each
Reliance Aromatics & Petrochemicals
Pvt. Ltd. of Rs. 10 each
Reliance Energy & Project Development
Pvt. Ltd. of Rs. 10 each
50
Reliance Telecom Ltd. of Rs. 10 each
Debentures - Fully paid-up
@ 48,06,897
Reliance Petroleum Ltd.
Unsecured Fully-Convertible Non Interest
bearing Debentures of Rs. 950 each.
3.79
9.35
24.69
0.11
0.12
0.01
45,665.52
45,665.52
TOTAL (A)
175,359.86
128,222.25
Reliance Industrial Investments and Holdings Limited Annual Report 1998-99
103(cid:223) (cid:224)
–
–
–
3.79
9.35
24.57
0.11
0.12
0.01
GROWTH IS LIFE
Schedules Forming Part of the Balance Sheet
Schedules Forming Part of the Balance Sheet
SCHEDULE ‘F’ (Contd.)
(B) Current Investments
As at
31st March, 1999
Rs.
(Rs. in lacs)
As at
31st March, 1998
Rs.
Quoted:
Equity Shares - Fully paid-up
2,500 M H Mills and Industries Ltd. of Rs. 10 each
200 HDFC Bank Ltd. of Rs. 10 each
Debentures - Fully Paid-up
1,250 14% Non-Convertible Debentures of
M H Mills and Industries Ltd. of Rs. 45 each.
Less : Provision for diminution in the value of investments
TOTAL (B)
TOTAL (A+B)
0.94
0.02
0.56
1.52
0.82
0.70
0.94
0.02
0.56
1.52
0.62
0.90
175,360.56
128,223.15
The Company’s investment in Reliance Petroleum Ltd., a Company under the same management is towards
promoters’ contribution. This is subject to lock in period of five years from the date of commercial
production and the Company has also given an undertaking to Financial Institutions not to dispose off the
said holdings, till the loans granted by them to Reliance Petroleum Ltd. are outstanding, save and except on
19,15,92,000 Equity shares alloted during the year.
@ Since converted into 48,06,89,700 Equity shares of Rs. 10 each, Rs. 5 paid up.
AGGREGATE VALUE OF
Quoted Investments
Unquoted Investments
SCHEDULE ‘G’
CURRENT ASSETS, LOANS AND ADVANCES
Current Assets:
Cash and Bank Balances:
Cash on hand
Balance with Scheduled Banks:
In Current Account
Loans and Advances
Advances recoverable in cash or
in kind or for value to be received
Advance Payment of Taxes
As at
31st March, 1999
As at
31st March, 1998
Book Value Market Value Book Value MarketValue
Rs.
Rs.
Rs.
Rs.
129,656.97 165,708.46
45,703.59
175,360.56
82,519.68 129,782.03
45,703.47
128,223.15
As at
31st March, 1999
Rs.
Rs.
(Rs. in lacs)
As at
31st March, 1998
Rs.
Rs.
0.04
4.08
558.60
185.83
0.01
22.31
4.12
22.32
42.44
355.78
774.43
748.55
398.22
420.54
Reliance Industrial Investments and Holdings Limited Annual Report 1998-99
104(cid:223)
(cid:224)
GROWTH IS LIFE
Schedules Forming Part of the Balance Sheet
Schedules Forming Part of the Balance Sheet
SCHEDULE ‘H’
CURRENT LIABILITIES AND PROVISIONS
Current Liabilities
Sundry Creditors
Other Liabilities
Provisions
For Taxation
For Super annuation
For Gratuity
As at
31st March, 1999
Rs.
Rs.
(Rs. in lacs)
As at
31st March, 1998
Rs.
Rs.
342.58
41,510.32
–
41,106.75
41,852.90
41,106.75
_
0.39
0.56
175.00
–
–
0.95
41,853.85
175.00
41,281.75
Schedules Forming Part of the Profit and Loss Account
Schedules Forming Part of the Profit and Loss Account
SCHEDULE ‘I’
INCOME ON INVESTMENTS
Dividend
From Long Term Investments
Interest
From Current Investments
[Tax Deducted at Source Rs. NIL,
previous year Rs. 0.84 lacs]
Profit on Sale of Investments (Net)
From Long Term Investments
From Current Investments
1998-99
Rs.
Rs.
Rs.
(Rs. in lacs)
1997-98
Rs.
1,070.31
1,002.04
–
0.15
–
2.39
2.39
1,072.70
0.40
–
Rs.
1.00
0.50
0.40
1,002.59
(Rs. in lacs)
1997-98
Rs.
2.91
–
0.50
–
0.01
5.26
3.98
0.08
1.50
14.24
SCHEDULE ‘J’
ESTABLISHMENT & OTHER EXPENSES
1998-99
Salary, Wages and Bonus
Contribution to Super annuation, Gratuity etc.
Legal & Professional charges
Trusteeship Fee
Filing Fees
Custodian fees
Bad Debts
Miscellaneous expenses
Auditors’ Remuneration :
Audit Fees
Tax Audit Fees
Rs.
1.05
0.53
Rs.
6.13
0.95
5.50
0.25
0.01
16.86
–
4.41
1.58
35.69
Reliance Industrial Investments and Holdings Limited Annual Report 1998-99
105(cid:223) (cid:224)
GROWTH IS LIFE
Notes on Accounts
Notes on Accounts
SCHEDULE ‘K’
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.
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 cost of acquisition less accumulated depreciation.
ii) Depreciation is provided on the straight line method at the rates and in the manner prescribed in
Schedule XIV to the Companies Act, 1956.
c)
Investments
i) Long term investments are carried at cost and provision for diminution in value is made only if such
decline is other than temporary in the managements opinion. Current investments are carried at the
lower of cost and quoted/fair value, computed category wise.
ii) Cost is arrived at by applying specific identification method.
2. The previous year's figures have been reworked, regrouped, rearranged and reclassified wherever necessary.
3. No provision is made for premium on redemption of debentures since the amount so payable is uncertain.
The premium paid will therefore be accounted for in the year of redemption.
4. As the Company is not a manufacturing company, information required under paragraphs 3 and 4 of
Schedule VI of the Companies Act, 1956 is not given.
Reliance Industrial Investments and Holdings Limited Annual Report 1998-99
106(cid:223)
(cid:224)
GROWTH IS LIFE
Notes on Accounts
Notes on Accounts
SCHEDULE ‘K’ (Contd.)
5. Additional information as required under Part IV of Schedule VI to the Companies Act, 1956:
Balance Sheet Abstract and Company’s General Business Profile:
1. Registration Details:
Registration No.
1 1 - 4 1 0 8 1
State Code
1 1
Balance Sheet Date
3 1 - 0 3 - 9 9
2. Capital raised during the year: (Rs. in lacs)
Public Issue
Bonus Issue
N I L Rights Issue
N I L
Private Placement
N I L
N I L
3. Position of mobilisation and deployment of funds: (Rs. in lacs)
Total Liabilities
1 3 4 2 5 9 . 7 9 Total Assets
1 3 4 2 5 9 . 7 9
Source of Funds:
Paid-up Capital
1 4 7 5 0 . 4 4 Reserves & Surplus
1 3 2 2 . 0 3
Secured Loans
1 1 3 3 8 . 7 7 Unsecured Loans
1 0 6 8 4 8 . 5 5
Application of Funds:
Net Fixed Assets
4 . 5 3
Investments
1 7 5 3 6 0 . 5 6
Net Current Assets
Accumulated Losses
( 4 1 1 0 5. 3 0 ) Miscellaneous
Expenditure
N I L
N I L
4. Performance of Company: (Rs. in lacs)
Turnover/Income
1 4 1 6 . 9 3 Total Expenditure
5 3 3 . 4 4
Profit before extraordinary
item and taxation
8 8 3 . 4 9
Profit before tax
8 8 3 . 4 9
Profit after tax
8 8 3 . 4 9 Dividend Rate(%)
N I L
Earnings per Share (Rs)
0 . 6 0
5. Generic names of principal products, services of the Company:
Item Code No.
Product Description
N A
N A
As per our Report of even date
For and on behalf of the Board
For Chaturvedi & Shah
Chartered Accountants
For Rajendra & Co.
Chartered Accountants
Rajesh D. Chaturvedi
Partner
R.J. Shah
Partner
Mumbai
Dated : 20th April, 1999
Alok Agarwal
S. Seth
Sandeep Junnarkar
}
Kalpana Srinivasan
Directors
Assistant
Secretary
Reliance Industrial Investments and Holdings Limited Annual Report 1998-99
107(cid:223) (cid:224)
Board of Directors
Registered Office:
GROWTH IS LIFE
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
S. Venkitaramanan
Nominee Director - ICICI
U. Mahesh Rao
Nominee Director - GIC
Ramniklal H. Ambani
Mansingh L. Bhakta
T. Ramesh U. Pai
Yogendra P. Trivedi
Secretary
Vinod M. Ambani
Rohit C. Shah
Solicitors & Advocates
Kanga & Co.
Auditors
Chaturvedi & Shah
Rajendra & Co.
International Accountants
Deloitte Haskins and Sells
Member - Deloitte, Touche and
Tohmatsu International (DTTI)
Bankers
ABN AMRO Bank
Allahabad Bank
Bank of America
Bank of Baroda
Canara Bank
Central Bank of India
Citibank 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
3rd Floor, Maker Chambers IV,
222, Nariman Point
Mumbai 400 021, India.
Tel. Nos. 91-22-2831633/16-2826070
Fax No. 91-22-2042268
E-Mail: investor@ril.com
Internet: http://www.ril.com
Manufacturing facilities at:
l Patalganga Complex
B-4, Industrial Area, Patalganga
Off Bombay-Pune Road
Near Panvel, Dist. Raigad 410 207
Maharashtra State, India.
l Naroda Complex
103/106, Naroda Industrial Estate
Naroda, Ahmedabad 382 330
Gujarat State, India.
l Hazira Complex
l
Village Mora, Bhatha P.O.
Surat-Hazira Road
Surat 394 510, Gujarat State, India.
Jamnagar Complex
Village Motikhavdi
P.O. Digvijay Gram, Dist. Jamnagar
Gujarat 361 140
Subsidiary Companies
l Devti Fabrics Limited
3rd Floor, Maker Chambers IV,
222, Nariman Point, Mumbai 400 021. India
l Reliance Industrial Investments and
Holdings Ltd.
3rd Floor, Maker Chambers IV,
222, Nariman Point, Mumbai 400 021. India
Registrars & Transfer Agent
Karvy Consultants Limited
l
46, Avenue 4, Street No.1, Banjara Hills
Hyderabad - 500 034, India.
Tel. Nos. 91-40-3320251/3320751/3312454
Fax No. 91-40-3311968
E-Mail: reliance@indl.vsnl.net.in
l 7, Andheri Industrial Estate
Off Veera Desai Road
Andheri (West), Mumbai 400 053, India.
Tel. Nos. 91-22-6267226/6269044/6271802
Fax No. 91-22-6290882
108(cid:223) (cid:224)