Reliance Industries Limited Annual Report 2001

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FY2001 Annual Report · Reliance Industries Limited

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Reliance Industries Limited

ranks amongst the world’s top ten producers

for all its major products. Reliance’s demonstrated

global competitiveness, fully integrated operations,

and extensive nationwide marketing and distribution

network, contribute to its leadership in the Indian

petrochemicals sector. Reliance has substantial

interests in other growth sectors of the Indian

economy, including oil and gas, refining and

marketing of petroleum products,

power, telecom, infocom.

||||||||||

00288061.p65 May 23, 2001 @ 10:05 am

GROWTH IS LIFE

Reliance’s Achievements
in 2000-2001

Sales - Rs. 28,008 crores

(US $ 6,008 million)

Gross Profit - Rs. 5,562 crores

(US $ 1,193 million)

Cash Profit - Rs. 4,346 crores

(US $ 932 million)

Net Profit - Rs. 2,646 crores

(US $ 567 million)

Compounded Annual Net Profit

growth over 5 years - 15%

Compounded Annual Earnings Per Share

growth over 5 years - 12.5%

Total Assets - Rs. 29,875 crores

(US $ 6,408 million)

India’s World Class Corporation

Reliance Industries Limited

Page

Contents

GROWTH IS LIFE

Performance Highlights

Company Information

Notice

Chairman's Communication

Financial Highlights

Reliance Brands

Product Flow Chart

Management Discussion and Analysis

• Reliance Petroleum

• Reliance Telecom

• Reliance Power

• Human Resource Development

• Quality

• Research and Development

• Health, Safety and Environment

• Energy Conservation

• Community Development

• Forex Savings, Taxes Paid and Exports

• Awards - Recognition of Excellence

• Corporate Governance and Shareholder 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 and Loss Account

Cash Flow Statement

Adjusted Profit and Loss Account in accordance with US GAAP

Financial Ratios

Circular to the Shareholders for Dematerialisation

Nomination Request Form

Documents of Subsidiary Companies

143

Proxy Form and Attendance Slip

Reliance Industries Limited

Board of Directors

Dhirubhai H. Ambani
Chairman

Mukesh D. Ambani
Vice Chairman & Managing Director

Anil D. Ambani
Managing Director

Nikhil R. Meswani
Executive Director

Hital R. Meswani
Executive Director

H.S. Kohli
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

Dr. D.V. Kapur

M.P. Modi

Secretaries
Vinod M. Ambani

Rohit C. Shah

Solicitors & Advocates
Kanga & Co.

Auditors
Chaturvedi & Shah

Member - Summit International Associates Inc.

Rajendra & Co.

International Accountants
Deloitte Haskins & Sells

Member - Deloitte, Touche and

Tohmatsu International (DTTI)

Registered Office:

3rd Floor, Maker Chambers IV,
222, Nariman Point, Mumbai 400 021, India.
Tel. Nos. 91-22-2831633/2826070
Fax: 91-22-2042268`
E-Mail: investor_relations@ril.com
Internet: http://www.ril.com

GROWTH IS LIFE

Bankers

ABN AMRO Bank

Allahabad Bank

Bank of America

Bank of Baroda

Bank of India

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

Standard Chartered Grindlays Bank

Syndicate Bank

Union Bank of India

Vijaya Bank

Manufacturing facilities at:

•

Patalganga Complex
B-4, Industrial Area, Patalganga
Off Bombay-Pune Road
Near Panvel, Dist. Raigad 410 207
Maharashtra State, India.

Naroda Complex
103/106, Naroda Industrial Estate
Naroda, Ahmedabad 382 320
Gujarat State, India.

Hazira Complex
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. India

Registrar & Transfer Agents

•

Karvy Consultants Limited
46, Avenue 4, Street No.1, Banjara Hills
Hyderabad - 500 034, India.
Tel. Nos. 91-40-3320666,3320711,3323031, 3323037
Fax No. 91-40-3323058
E-Mail: rilinvestor@karvy.com
internet: http://www.karvy.com

Tulsiani Chambers
10th Floor, Nariman Point
Mumbai 400 021, India.
Tel. Nos. 91-22-2884769/2875951
Fax No. 91-22-2828454

Reliance Industries Limited

GROWTH IS LIFE

Notice

Notice is hereby given that the Twenty Seventh Annual General
Meeting of the Members of RELIANCE INDUSTRIES LIMITED
will be held on Friday, the 15th day of June, 2001, at 11.00 a.m. at
Birla Matushri Sabhagar, 19, Marine Lines, Mumbai 400 020 to
transact the following business:

Ordinary Business
1. To consider and adopt the Balance Sheet as at 31st March,
2001, Profit and Loss Account for the year ended on that date
and the Reports of the Board of Directors and Auditors
thereon.

2. To declare dividend on Equity Shares and to note payment of

dividend on Preference Shares.

3. To appoint a Director in place of Shri Y.P. Trivedi, who retires
for

rotation and being eligible, offers himself

by
re-appointment.

4. To appoint a Director in place of Shri D.H. Ambani, who retires
for

rotation and being eligible, offers himself

by
re-appointment.

5. To appoint a Director in place of Shri M.L. Bhakta, who retires
for

rotation and being eligible, offers himself

by
re-appointment.

6 To appoint M/s. Chaturvedi & Shah, Chartered Accountants
and M/s. Rajendra & Co., Chartered Accountants as Joint
Auditors, who shall hold office from the conclusion of this
Annual General Meeting until the conclusion of the next
Annual General Meeting and to fix their remuneration.

Special Business
7. To consider and if thought fit, to pass, with or without
modification(s), the following resolution as an Ordinary
Resolution:
"RESOLVED THAT Dr. D.V. Kapur, who was appointed as an
Additional Director of the Company pursuant to Section 260 of
the Companies Act, 1956, and holds office upto the date of
this Annual General Meeting and in respect of whom the
Company has received a notice under Section 257 of the
Companies Act, 1956, in writing, proposing his candidature
for the office of director, be and is hereby appointed as a
Director of the Company subject to retirement by rotation
under the Articles of Association of the Company."

8. To consider and if thought fit, to pass, with or without
modification(s), the following resolution as an Ordinary
Resolution:
"RESOLVED THAT Shri M.P. Modi, who was appointed as an
Additional Director of the Company pursuant to Section 260 of
the Companies Act, 1956, and holds office upto the date of
this Annual General Meeting and in respect of whom the
Company has received a notice under Section 257 of the
Companies Act, 1956, in writing, proposing his candidature
for the office of director, be and is hereby appointed as a
Director of the Company subject to retirement by rotation
under the Articles of Association of the Company."

9. To consider and if thought fit, to pass, with or without
resolution as a Special

the

following

in accordance with

modification(s),
Resolution:
"RESOLVED THAT
the provisions
contained in the Articles of Association and Sections 77A,
77B and all other applicable provisions, if any, of the
Companies Act, 1956 (the Act) and the provisions contained
in the Securities and Exchange Board of India (Buy-back of
Securities) Regulations, 1998
("Buy-back Regulations")
(including any statutory modification(s) or re-enactment of the
Act or Buy-back Regulations, for the time being in force) and
subject to such other approvals, permissions and sanctions
as may be necessary and subject to such conditions and
modifications as may be prescribed or imposed while granting
such approvals, permissions and sanctions which may be
agreed to by the Board of Directors of the Company
(hereinafter referred to as “the Board” which term shall be
deemed to include any Committee which the Board may

the Act and

constitute to exercise its powers, including the powers
conferred by this resolution), the consent of the Company be
and is hereby accorded to the Board to purchase its own fully
paid equity shares of Rs.10 each for an amount not exceeding
Rs. 1100 crores, upto a maximum price of Rs. 303 per equity
share (hereinafter referred to as "Buy-back");
RESOLVED FURTHER THAT the Company may implement
the Buy-back in one or more tranche/tranches, from out of its
free reserves and/or the securities premium account and/or
the proceeds of an earlier issue of shares other than equity
shares made specifically for Buy-back purposes, and that the
Buy-back may be made through the methodology of open
market purchases in the Stock Exchanges, in such manner as
may be prescribed under
the Buy-back
Regulations, and on such terms and conditions as the Board
may in its absolute discretion deem fit;
RESOLVED FURTHER THAT nothing contained hereinabove
shall confer any right on the part of any Shareholder to offer,
or any obligation on the part of the Company or the Board to
Buy-back, any shares, and/or impair any power of the
Company or the Board to terminate any process in relation to
such Buy-back, if so permissible by law;
RESOLVED FURTHER THAT the Board of Directors of the
Company (including any Committee thereof), be and is hereby
authorised to do all such acts, deeds, matters and things as
may, in its absolute discretion, deem necessary expedient
usual or proper including the appointment of Merchant
Bankers, Brokers, Solicitors, Registrars, Advertisement
Agency, Compliance Officer, Investors Service Centre and
other Advisors, Consultants or Representative, incidental to
the implementation of the scheme of Buy-back as also to
prefer all applications to the appropriate authorities, parties
and the Institutions for their requisite approvals as also to
initiate all necessary actions for preparation and issue of
public announcement and filing of public announcement with
SEBI/Stock Exchange(s), filing of declaration of solvency
certificate and filing of certificate for extinguishment and
physical destruction of certificates, and all other documents
required to be filed in the above connection and to settle all
such questions or difficulties whatsoever which may arise in
the Buy-back and take all such steps and decisions in this
regard;
the Board of Directors
RESOLVED FURTHER THAT
(including any Committee
is hereby
authorised to sub-delegate all or any of the authorities
conferred as above to any Director(s)/Officer(s)/Authorised
Representative(s) of the Company to give effect to the
aforesaid
to accept any change(s) or
modification(s) as may be suggested by the appropriate
authorities or Advisors."

thereof), be and

resolution or

10. To consider and if thought fit, to pass, with or without
resolution as a Special

the

following

modification(s),
Resolution:
"RESOLVED THAT pursuant to applicable provisions of the
Foreign Exchange Management Act, 1999 (FEMA), the
Companies Act, 1956 and all other applicable rules,
regulations, guidelines and laws (including any statutory
modification or re-enactment thereof for the time being in
force) and subject to all applicable approvals, permissions
and sanctions and subject to such conditions as may be
prescribed by any of the concerned authorities while granting
such approvals, permissions, sanctions, which may be agreed
to by the Board of Directors of the Company and/or a duly
authorised Committee thereof for the time being exercising
the powers conferred by the Board of Directors (hereinafter
referred to as "the Board"), the consent of the Company
be and is hereby accorded for investments by Foreign
sub-accounts
Institutional
(hereinafter referred to as the "FIIs"), in the shares or
debentures convertible into shares of the Company, by
purchase or acquisition from the market under the Portfolio
Investment Scheme under FEMA, subject to the condition that

Investors

including

their

Reliance Industries Limited

GROWTH IS LIFE

the total holding of all FIIs put together shall not exceed 49%
of the paid up equity share capital or paid up value of the
respective series of
the
Company as may be applicable or such other maximum limit
as may be prescribed from time to time:

the convertible debentures of

RESOLVED FURTHER THAT the Board be and is hereby
authorised to do all such acts, deeds, matters and things and
execute all documents or writings as may be necessary,
proper or expedient for the purpose of giving effect to this
resolution and for matters connected therewith or incidental
thereto."

11. To consider and if thought fit, to pass, with or without
resolution as a Special

following

the

modification(s),
Resolution:

"RESOLVED THAT subject to the provisions of the Companies
Act, 1956, (including any statutory modification(s) or re-
enactments thereof for the time being in force), Securities
Contracts (Regulation) Act, 1956, and the Rules framed
thereunder, Listing Agreements, and all other applicable laws,
rules, regulations and guidelines and subject
to such
approvals, permissions and sanctions, as may be necessary
and subject to such conditions and modifications as may be
prescribed or imposed by any authority while granting such
approvals, permissions and sanctions, which may be agreed
to by the Board of Directors of the Company (hereinafter
referred to as 'the Board', which term shall be deemed to
include any Committee thereof for the time being exercising
the powers conferred on the Board by the Resolution), the
consent of the Company be and is hereby accorded to the
Board to delist the equity shares of the Company from all or
any of the Stock Exchanges at Ahmedabad, Bangalore,
Calcutta, Chennai, Cochin, New Delhi, Kanpur and Pune."

12. To consider and

without modification(s),
Special Resolution:

thought
the

fit,
following

to pass, with or
resolution as a

"RESOLVED THAT in terms of Sections 80, 81 and all other
applicable provisions, if any, of the Companies Act, 1956,
(including any statutory modification(s) or re-enactment
thereof for the time being in force) and in accordance with the
provisions of the Articles of Association of the Company and
the Listing Agreements entered into by the Company with the
Stock Exchanges, where the shares of the Company are
listed and subject to the consent of all concerned authorities,
if and to the extent necessary and such other approvals,
permissions and sanctions as may be necessary and subject
to such conditions and modifications as may be prescribed or
imposed while granting such approvals, permissions and
sanctions, which may be agreed to by the Board of Directors
of the Company and/or a duly authorised Committee thereof
for the time being exercising the powers conferred by the
Board of Directors (hereinafter referred to as "the Board"), the
consent of the Company be and is hereby accorded to the
Board to offer/issue/allot, in the course of domestic and/or
international offering, redeemable preference shares of the
face value of Rs.100 each of an aggregate nominal amount
not exceeding Rs. 1,000 crores (Rupees One Thousand
crores), to be subscribed, by any person or persons, whether
or not shareholders of the Company, (including one or more of
the members, promoters, debentureholders, employees,
financial institutions, banks, mutual funds, foreign investors,
non-resident Indians, Overseas Corporate Bodies (OCBs),
Foreign Institutional Investors (FIIs), Multilateral Agencies,
Venture Capital fund, Foreign Financial Institutions, Bodies
Corporate, Companies, private or public and other entities,
whether through public issue, rights issue, private placement,
or otherwise, in one or more modes or combinations thereof
and in one or more tranches and on such terms and
conditions (including the rate of dividend, amount of premium,
if any, on redemption, redemption period, manner of
redemption and matters incidental thereto) as the Board may
in its absolute discretion decide;

RESOLVED FURTHER THAT such of these Preference
Shares to be issued as are not subscribed may be disposed of
by the Board to such persons and in such manner and on such
terms as the Board in its absolute discretion think most
beneficial to the Company;

RESOLVED FURTHER THAT for the purpose of giving effect
to this resolution, the Board be and is hereby authorised to do
all such acts, deeds, matters and things as it may in its
absolute discretion deem necessary, proper or desirable and
to settle any question, difficulty or doubt that may arise in
regard to the offer/issue, allotment and utilisation of the
proceeds and to finalise and execute all documents and
writings as may be necessary, proper, desirable or expedient
as it may deem fit."

By Order of the Board of Directors

Rohit C. Shah
Vice President and Company Secretary

Place: Mumbai
Dated: 30th April, 2001

NOTES:
1. A member entitled to attend and vote is entitled to appoint
a proxy to attend and vote instead of himself and the
proxy need not be a member of the Company. The
instrument appointing proxy should, however, be
deposited at the Registered Office of the Company not
less than forty eight hours before the commencement of
the meeting.

2. Members/Proxies should fill the Attendance Slip for attending

the meeting.

3. Members who hold shares in dematerialised form are
requested to bring their Client ID and DP ID numbers for easy
identification of attendance at the meeting.

4. All documents referred to in the accompanying Notice and
Explanatory Statement are open
the
Registered Office of the Company during office hours on all
working days, except Saturdays, and holidays, between 11.00
a.m. and 1.00 p.m. upto the date of the Annual General
Meeting.

inspection at

for

5. The Company has already notified closure of Register of
Members and the Transfer Books from Saturday, 12th May,
2001 to Saturday, 19th May, 2001 (both the days inclusive) for
payment of dividend on equity shares. In respect of shares
held in Electronic form, the dividend will be paid on the basis
of beneficial ownership as per details furnished by the
Depositories for this purpose. The Company will dispatch the
dividend warrants from 16th June, 2001 onwards.

6. Members are requested to note that the Dividend Warrants
are payable at par at the branches as printed overleaf of
Dividend Warrant within the initial validity period of 3 months.
Thereafter, the Dividend Warrants on revalidation are payable
only at the limited branches of the Bank. The members are
advised to encash Dividend Warrants within the initial
validity period.

7. The Company has already transferred, all unclaimed dividend
declared upto the financial year ended 31st March, 1996 to
the General Revenue Account of the Central Government as
required by the Companies Unpaid Dividend (Transfer to the
General Revenue Account of the Central Government) Rules,
1978. Those Shareholders who have so far not claimed or
collected their dividend upto the aforesaid financial year may
claim their dividend from the Registrar of Companies,
Maharashtra, C.G.O. Complex, 2nd Floor, "A" Wing, CBD-
Belapur, Navi Mumbai - 400 614. Phone No.7576802.

8. Pursuant to the provision of Section 205A of the Companiess
Act,1956, as amended, dividend for the financial year ended
31st March, 1997 and thereafter, which remain unpaid or
unclaimed for a period of 7 years will be transferred to the
Investor Education and Protection Fund of the Central
Government. Shareholders who have not encashed the
dividend warrant(s) so far for the financial year ended 31st
March, 1997 or any subsequent financial years are requested
to make their claim to the Office of the Registrar and Transfer
Agents, M/s. Karvy Consultants Limited. It may also be noted
that once the unclaimed dividend is transferred to the
Central Government, as above, no claim shall lie in
respect thereof.

Reliance Industries Limited

9. Shareholders are requested to bring their copy of Annual

Report to the Meeting.

10. Appointment/Reappointment of Directors:

GROWTH IS LIFE

for

At the ensuing Annual General Meeting, Shri Y.P. Trivedi,
Shri D.H. Ambani and Shri M.L. Bhakta, retire by rotation and
being eligible offer themselves for reappointment. Dr. D.V.
Kapur and Shri M.P. Modi are being appointed as Directors
liable to retire by rotation. The information or details to be
provided
the aforesaid Directors under Corporate
Governance code are as under:
(a) Shri Y.P. Trivedi is a Director of the Company since 16th
April, 1992. He is practicing as Senior Advocate, Supreme
Court. He is a member of various clubs and associations
and is holding important positions in various fields viz.
economic, professional, political, commercial, education,
medical, sports and social fields. He has received various
awards and merits for his contribution in various fields. He
was a Director in Central Bank of India and Dena Bank
amongst many other reputed companies. He is a Director
in the following companies: Keswani Synthetic Industires
Ltd., EZ.Comm Trade Technologies Ltd., Ripples Club,
Safari Industries Limited, Siltap Chemicals Limited, Metro
Exporters Limited, Birla Kennametal Limited, Sai Service
Station Limited, Zandu Pharmaceuticals Works Limited
and Zodiac Clothing Company Limited. He is also the past
President of Indian Merchants' Chamber and presently on
the Managing Committee
and
International Chamber of Commerce.

of ASSOCHAM

(b) Shri Dhirubhai H. Ambani is the founder and Chairman
of Reliance Industries Limited and Reliance Petroleum
Limited.
Under Shri Ambani’s leadership, the Reliance group has
achieved the distinction of becoming India’s leading
private sector group, in terms of all financial parameters,
including assets, sales, profits and net worth, and it is
today, India’s most valuable group. For the year ended
March 31, 2001, the particulars of Reliance group’s
achievements are:
•
• Cash flow over Rs. 6,000 crores (US$ 1.3 billion)
•

Sales nearly Rs. 60,000 crores (over US$ 12.5 billion)

Profit after
US$ 900 million)
Assets over Rs. 50,000 crores (over US$ 10 billion)
•
• Market capitalisation over Rs. 60,000 crores (over

tax over Rs. 4,000 crores

(nearly

responsible

competitiveness, and

US$ 12.5 billion).
Shri Ambani’s vision
for Reliance’s
consistent track record of establishing integrated, world
scale, and world class assets in India, with demonstrated
global
international quality
of products.
Under his direction, Reliance, a
first generation
enterprise, has rapidly emerged as a global ranking player
in the energy industry, with activities spanning oil and gas,
refining and marketing, petrochemicals, power, etc. Shri
Ambani has also provided the direction for Reliance’s new
initiatives in the information and telecommunications sector.
Shri Ambani has consistently espoused enhancement of
overall shareholder value as the underlying objective of
Reliance’s endeavours, and this has led to the creation of
unprecedented value for millions of investors, constituting
one of the largest families of shareholders in the world.

financial capital, in December, 2000.

A few of his major recognitions include:
* Civic reception by the City of Mumbai, India, India’s
* ‘Man of the Century’ award by leading industry
association, Chemtech Foundation and Chemical
Engineering World, in recognition of his outstanding
contribution to the growth and development of the
chemical industry in India, in November, 2000.
* ‘Indian Entrepreneur of the 20th Century’ award by
India’s
organisation, FICCI
business
(Federation of Indian Chambers of Commerce and

leading

Industries), for his meticulous scripting of one of the
most remarkable stories of business endeavor of the
20th century, in March, 2000.

* Thrice nominated as one of the ‘Power 50 - the most
powerful people in Asia’ by the leading Asiaweek
magazine (2000, 1998 and 1996).

* Awarded the Dean’s Medal by The Wharton School,
University of Pennsylvania, USA,
for setting an
outstanding example of leadership, in June, 1998.
* Voted as ‘Creator of Wealth of the Century’ in a poll
conducted by India’s leading newspaper, The Times of
India, in January, 2000.

* Chosen as one of the three ‘Makers of Equity’ by the
country’s leading newsmagazine, India Today, in its
special millennium issue entitled ‘100 People Who
Shaped India in the 20th Century’, in January, 2000.

(c) Shri M.L. Bhakta is a Director of the Company since 27th
September, 1977. He is a Senior Partner of Messrs.
Kanga & Company, a leading firm of Advocates and
Solicitors in Mumbai. He has been in practice for over 40
years and has vast experience in the legal field and
particularly on matters relating to corporate laws, banking
and taxation. He is the legal advisor to leading foreign and
Indian companies and banks. He has also been
associated with a large number of Euro issues made by
Indian companies. He was the Chairman of the Taxation
Law Standing Committee of LAWASIA, an Association of
Lawyers of Asia and Pacific which has its headquarters in
Australia. He is also a Director in the following companies
viz.: Gujarat Ambuja Cements Ltd., Hindustan Inks and
Resins Ltd., The Indian Merchants' Chamber, Bombay,
India Ltd., Reliance
Larsen & Toubro Ltd., Lazard
Petroleum Ltd. and SKF Bearings India Ltd.

the most

(d) Dr. D.V. Kapur who has joined the Board as an Additional
Director
in Electrical
is a Graduate with Honours
Engineering and is having wide experience in Chemicals
and Petrochemicals Industries. He has an illustrious
career in Government Sector with successful track record
of building vibrant organisation and successful project
implementation. He serviced BHEL in various positions
with distinction but perhaps
remarkable
achievement of Dr. Kapur's career is the establishment of
systems oriented National Thermal Power Corporation
(NTPC) of which he was the founder Chairman-cum-
Managing Director. Under his leadership the fledgling
organisation undertook and successfully implemented a
series of 2000 MW power projects which today form the
main stay of the Indian power sector.
He has made significant contributions in the field of
Technology Management and Industrial Development and
in
recognition of his services, Jawaharlal Nehru
Technological University, Hyderabad conferred the degree
of D.Sc. on him. He has also been associated with a
number of national institutions as Chairman, Board of
Governors,
Institute of Technology, Bombay,
Chairman, National Productivity Council, Member, Atomic
Energy Commission etc. He is Director in the following
companies viz.: Reliance Power Ltd., Jacobs H&G Ltd.,
GKN Driveshafts (India) Ltd., Larsen & Toubro Ltd., Tata
Chemicals Ltd., Tal Ishikawa Ltd., Zenith Ltd., DLF Power
Ltd., DCM Hyundai Ltd., Drivetech Accessories Ltd.,
Reliance Salgaocar Power Co. Ltd.

Indian

(e) Shri M.P. Modi who has joined the Board as an Additional
Director has held high positions in Government of India as
Chairman of Telecom Commission, Secretary, Ministry of
Coal, Special Secretary, Insurance. He has considerable
management experience, particularly in the fields of
energy,
telecom. At
the Boards of several
present he
companies, including ICICI Prudential Life Insurance
Company Ltd., Gujarat State Electricity Corporation,
BSES Ltd., BSES Telecom Ltd., Essar Shipping Ltd.,
Mangalore Refinery & Petrochemicals Ltd.

insurance, petrochemicals and

is Director on

Reliance Industries Limited

GROWTH IS LIFE

Explanatory Statement under Section 173(2) of
Companies Act, 1956
The Explanatory Statement for Item Nos. 7 to 12 of the
accompanying Notice set out hereinabove is as under:

the

therefore,

recommend

Item No. 7.
Dr. D.V. Kapur was appointed as an Additional Director of the
Company during the year. Pursuant to Section 260 of the
Companies Act, 1956, Dr. D.V. Kapur, will hold office as Additional
Director upto the date of the ensuing Annual General Meeting.
The Company has received a notice in writing from a member
proposing the candidature of Dr. D.V. Kapur for the office of
Director of the Company under the provisions of Section 257 of
the Companies Act, 1956.
Dr. D.V. Kapur, a Graduate with Honours in Electrical Engineering,
is having wide experience in Chemicals and Petrochemicals
Industries. Keeping in view his vast expertise and knowledge, it
will be in the interest of the Company that Dr. D.V. Kapur is
appointed as a Director of the Company.
Your Directors,
your approval.
Save and except Dr. D.V. Kapur none of the Directors are, in any
way, concerned or interested in this resolution.
Item No. 8.
Shri M.P. Modi was appointed as an Additional Director of the
Company during the year. Pursuant to Section 260 of the
Companies Act, 1956, Shri M.P. Modi, will hold office as Additional
Director upto the date of the ensuing Annual General Meeting.
The Company has received a notice in writing from a member
proposing the candidature of Shri M.P. Modi for the office of
Director of the Company under the provisions of Section 257 of
the Companies Act, 1956.
in corporate
Shri M.P. Modi,
management. Keeping in view his vast experience and knowledge
it will be in the interest of the company that Shri M.P. Modi is
appointed as a director of the company.
Your Directors,
your approval.
Save and except Shri M.P. Modi, none of the Directors are, in any
way, concerned or interested in this resolution.

is having wide experience

recommend

resolution

therefore,

the

for

Item No. 9.
At the Annual General Meeting held on 13th June, 2000, the
Shareholders had by Special Resolution, approved the Buy-back
of the Company's shares of Rs. 10 each, for an amount not
exceeding Rs. 1100 crores, upto a maximum price of Rs. 303 per
share, through open market purchases from the Stock Exchanges.
The Company's share price has closed below the specified
maximum Buy-back price of Rs. 303 per share, on only 11 days,
out of the total 264 trading days that have elapsed since the Buy-
back announcement.
The Company has not bought back any of its shares in those
limited number of days when the share price has dropped below
the maximum specified Buy-back price, as the share has
consistently been outperforming all benchmark indices by a wide
margin, and the temporary decline for a limited number of days
had also been more a reflection of short term volatility in the
global, regional and domestic stock markets.
The Company has consistently set forth its philosophy of viewing
share Buy-back as a measure to enhance overall shareholder
value and returns, and not a mechanism to artificially support any
particular price level for the Company's share, or to respond to
short term speculative pressures.
From the perspective of investors, the maximum specified
Buy-back price has effectively served as a floor price for the
Company's share, even though the Company, for the reasons
stated above, has not deployed any portion of the approved
amount for the share Buy-back. The aforesaid Special Resolution
will lapse on 12th June, 2001.
This is in sharp contrast to the experience of most other Indian
companies, which have seen their share prices generally trading
well below their specified Buy-back prices, even after such
companies have deployed significant amounts towards their Buy-
back programmes.
It is accordingly, proposed once again to obtain the approval of
shareholders for a share Buy-back programme, as detailed hereinafter.

The following is the explanatory statement which sets out the
various disclosures as required under sub-Section (3) of Section
77A of the Companies Act, 1956 (the Act) and Regulation 5(1)
read with Schedule I attached to Securities and Exchange Board
of India (Buy-back of Securities) Regulations, 1998 ("Buy-back
Regulations"):
1. The Board of Directors of the Company in its meeting held on
30th April, 2001 has approved the proposal for Buy-back of its
own fully paid up equity shares of Rs.10 each (hereinafter
referred to as "Buy-back") in accordance with the provisions
contained in the Articles of Association, Section 77A, 77B and
all other applicable provisions of the Act, and the provisions
contained in the Buy-back Regulations.

2. The share Buy-back programme

in
pursuance of the Company's desire to maximise returns to
investors, and enhance overall shareholder value. This will be
done without, in any manner, compromising on the pursuit of
high growth opportunities by the Company.

is being proposed

3. The implementation of the share Buy-back programme will
also be within the parameters of the overall framework for
capital allocation for various objectives, such as capital
for ongoing maintenance and expansion/
expenditure
debottlenecking, reduction of debt, enhanced distribution to
shareholders by way of dividends and share Buy-back, etc.

4. The share price of

the Company has consistently
outperformed the benchmark index, the BSE Sensex, NSE
Nifty and delivered superior returns
to domestic and
international investors, across all timeframes, spanning 10
years, 5 years, 3 years, 2 years, 1 year, and calendar year-to
date, as at the date of this notice. The details are as follows:

% change in

RIL share
Price
3%
24%
45%
1%
190%
76%
180%
415%

Sensex
-14%
-28%
-21%
-27%
5%
-16%
-9%
166%

Period
Year to Date
FY 2000-01
Year 2000
1 year
2 years
3 years
5 years
10 years

Nifty
-13%
-25%
-15%
-22%
18%
-5%
-2%
–
5. Nonetheless, the Board shares the perception of a very large
number of international and domestic investors and analysts
that the Company's share continues to remain undervalued.
This under-valuation is best reflected by the fact that the
share is generally traded at a discount to the broad market
multiples, despite the Company's consistent track record of all
round operational and financial performance and growth.
6. The implementation of a share Buy-back programme will send
a strong and positive signal to the markets on this perceived
under-valuation of the Company's share. The share Buy-back
is expected to reduce floating stock, enhance long term price
performance, and contribute to an increase in the Company's
overall market capitalisation. The achievement of higher all-
round valuations for the Company's share will, in the long
term, facilitate the use of the share as a currency for
acquisitions, in the domestic and international context.

7. The implementation of the share Buy-back programme is also
expected to enable the Company to manage volatility in its
share price, and attract longer term investors to hold the
share. The volatility of the Company's share vis-a-vis the
benchmark index, the Sensex, as measured by its beta, has
already declined from a high of around 2 a few years back,
and from a level of 1.16 at the time of announcement of the
buyback last year, to the range of 0.8 presently. The share
Buy-back is expected to lead to a further reduction of this volatility.
8. The reduction in beta will, in turn, lead to a lowering of the cost
of equity, and Weighted Average Cost of Capital (WACC), for
the Company, further enhancing its global competitiveness.
9. The share Buy-back programme is expected to contribute to
ratios, and overall
further
enhancement of shareholder value. The share Buy-back is
also expected to provide the Company with a powerful tool in
its endeavour to neutralize the impact of speculative forces,
and to protect the interests of its millions of long term

improvement

financial

Reliance Industries Limited

GROWTH IS LIFE

investors. The Company will judiciously deploy the resources
available for the share Buy-back, in a manner designed to
maximize overall shareholder value.

10. Buy-back regulations require the Company to specify the
maximum amount proposed to be utilised for a share Buy-
back programme. The Board of your Company has proposed a
maximum limit of Rs. 1100 crores for the share Buy-back
programme. This represents 9.80% of the aggregate of the
paid up share capital and free reserves of the Company,
against the maximum available 25% limit. This also represents
the largest ever share Buy-back announced in India.

11. This amount will be financed out of the Company's free
reserves and/or out of the securities premium account and/or
the proceeds of an earlier issue of shares other than equity
shares made specifically for Buy-back purposes. The funds
for Buy-back will be available from current surpluses, and/or
by liquidation of cash balances and financial investments,
and/or out of internal accruals of the Company.

12. Buy-back regulations in India also require the Company to
specify the maximum price at which shares may be bought
back under the share Buy-back. The Board of the Company
has proposed a maximum price of Rs.303 per share, for the
share Buy-back.

21. (a) The aggregate shareholding of the promoters of the
Company, and/or persons who are in control of the
Company, as on the date of the notice convening the
general meeting is 6.86 crores Equity Shares of Rs.10
each, constituting 6.51% of the issued and paid up equity
share capital of the Company.

(b) None of the Promoters, and/or persons in control of the
Company, have purchased any Equity Shares of Rs. 10
each, during the period of six months preceding the date
of the meeting of the Board of Directors at which the
Buy-back was approved.

22. The Company confirms that there are no defaults subsisting in
repayment of deposits,
redemption of debentures or
preference shares or repayment of term loans to any financial
institutions or banks.

23. The Board of Directors of the Company confirms that it has
made the necessary and full inquiry into the affairs and
prospects of the Company and the Board of Directors have
formed the opinion that:
(a) Immediately following the date on which the general
meeting is convened, there will be no grounds on which
the Company could be found unable to pay its debts;

the manner, and

13. The Company proposes to implement the share Buy-back
through the methodology of open market purchases in the
Stock Exchanges,
the
procedures, as may be prescribed, from time to time, under
the Act, and the Buy-back Regulations, and as may be
determined by
the Board of Directors (including any
Committee thereof) of the Company and on such terms and
conditions, as may be permitted in law, from time to time.
There will be no negotiated deals, spot transactions, or any
private arrangements, in the implementation of the share Buy-
back.

following

(b) As regards

for

the year

its prospects

immediately
following the date of the general meeting, having regard to
their intention with respect to the management of the
Company's business during that year and to the amount
and character of the financial resources which will in the
view of the Board of Directors be available to the
Company during that year, the Company will be able to
meet its liabilities as and when they fall due and will not be
rendered insolvent within a period of one year from the
date of this Annual General Meeting; and

14. The promoters, and/or persons in control, of the Company,
and/or their associates, and/or persons acting in concert with
them, will not offer their shares to the Company under the
share Buy-back.

15. As per the provisions of the Act, the special resolution passed
by the shareholders approving the share Buy-back will be
valid for a maximum period of twelve months from the date of
passing of the special resolution (or such extended period as
may be permitted under the Act or the Regulations or by the
appropriate authorities). The Company proposes to complete
the buy back on or before 14th June, 2002.

16. In accordance with the regulatory provisions, the shares
bought back by the Company will compulsorily be cancelled,
and will not be held for re-issuance.

17. The Company's

the share
Buy-back, will be well below the maximum limit of 2:1
specified in law.

total debt:equity ratio, after

18. In accordance with the provisions of the Act, the Company will
not be entitled to make a fresh offering of equity shares, of this
class, for a period of 2 years from the date of completion of
in cases/
this share Buy-back programme except
circumstances referred to in sub Section (8) of Section 77A of
the Act.

19. The Company has not made any equity fresh offering for the
past nearly 7 years. This will mean that the Company will not
be making any equity offering for a total period of 9 years
since the year 1994, while maintaining its consistent track
record of growth, operational and financial performance, and
also preserving a conservative gearing profile, with a
debt:equity ratio of 0.69:1. During the previous 7 years, the
Company's net worth has increased from Rs. 7,193 crores in
March, 1995, to Rs. 14,765 crores in March, 2001 and the
Total Assets have increased from Rs. 11529 crores in March,
1995 to Rs. 29875 crores in March, 2001.

20. In this entire period, the Company has completed its major
capital expenditure programmes at Hazira and Jamnagar. This
has raised the Company's capacities from less than 1 million
tonnes per annum (tpa) to nearly 10 million tpa, and placed
the Company amongst the top 5 global producers in almost all
its major products.

(c) In forming their opinion for the above purposes, the Board
of Directors have taken into account the liabilities, as if the
Company were being wound up under the provisions of
the Companies Act, 1956 (including prospective and
contingent liabilities).

24. The text of the Report dated 30th April, 2001 received from
Messers. Chaturvedi & Shah and Rajendra & Co., the
Statutory Joint Auditors of the Company addressed to the
Board of Directors of the Company is reproduced below:
"In connection with the proposal of Reliance Industries
Limited (the "Company") to Buy-back its shares and in
pursuance of the provisions of Section 77A and 77B of the
Companies Act, 1956 and the Securities and Exchange Board
of India (Buy-back of Securities) Regulations, 1998, we have
examined the audited financial statements of the Company for
the year ended 31st March, 2001 and the relevant records,
ratios, analysis, reports and according to the information and
explanations given to us and on the basis of such verification
of records as we considered appropriate, we report that :-
We have enquired into the Company's state of affairs.
In our opinion, the amount of maximum permissible capital
payment, being Rs. 1100 crores which is 9.80% of the total
paid-up capital and free reserves of the Company, for the
shares
in
accordance with Section 77A(2)(c) of the Companies Act, 1956.
The Board of Directors in their meeting held on 30th April,
2001, have formed their opinion, as specified in clause(x) of
Schedule 1 of Securities and Exchange Board of India (Buy-
Back of Securities) Regulations, 1998, on reasonable grounds
and that the Company will not, having regard to its state of
affairs, be rendered insolvent within a period of 1 year from
the date of Annual General Meeting of the members of the
Company proposed to be held on 15th June, 2001".

is properly determined

to be bought back,

25. The share Buy-back programme will be implemented after the
approval of the shareholders, subject to completion of
necessary formalities as prescribed in law.

26. All the material documents referred to in the Explanatory
Statement such as Memorandum and Articles of Association,
relevant Board resolution for Buy-back of shares and the

Reliance Industries Limited

GROWTH IS LIFE

Auditors' Report on their enquiry into the state of affairs of the
Company, will be made available for inspection at the
Registered Office of the Company on all working days, except
Saturdays and holidays, between 11.00 a.m. and 1.p.m. upto
the date of Annual General Meeting.

27. As the proposal for Buy-back of Equity Shares will be in the
interests of the Company, the Directors recommend the
passing of the resolution as set out in the notice.

28. None of the Directors of the Company are, in anyway,
concerned or interested in the resolution, save and except to
the extent that, in like manner as for all other shareholders,
their percentage holding in the post Buy-back equity share
capital will proportionately stand enhanced as a result of the
share Buy-back.

Item No. 10.
Pursuant to proposals mooted by the Union Budget for the fiscal
2001 - 2002, the Reserve Bank of India, by amending the Foreign
Exchange Management (Transfer or Issue of Security by a Person
Resident Outside India) Regulations, 2000, has raised the limit of
investment by Foreign Institutional Investors (FIIs), up to 49% of
the paid up equity capital of Indian companies, subject to the
approval of the Board of Directors and approval of members of the
Company by way of a special resolution.
The increase in the FIIs limit to 49% will result in increased
weightage of the Company's share in benchmarking international
stock market indices. Large number of FIIs direct their investment
on the basis of these benchmark indices and accordingly, the
increase in FIIs limit will be beneficial to the Company.
The resolution set out at Item 10 of this Notice will enable the FIIs,
who are considered to be prudent investors, to acquire shares of
the Company through authorised dealers within the revised ceiling
under the portfolio investment scheme of Reserve Bank of India.
Your Directors, therefore, recommend the resolution for your
approval.
None of the Directors of the Company are, in any way, concerned
or interested in the resolution.

Item No. 11.
Presently, the Company's securities are listed at the following ten
Stock Exchanges in India:-

The Stock Exchange, Mumbai (the Regional Stock
Exchange)

ii. The National Stock Exchange of India Limited, Mumbai
iii. The Stock Exchange, Ahmedabad
iv. Bangalore Stock Exchange Limited
v. The Calcutta Stock Exchange Association Limited
vi. The Delhi Stock Exchange Association Limited
vii. Chennai Stock Exchange Limited
viii. Cochin Stock Exchange Limited
ix. The U. P. Stock Exchange Association Limited
x. Pune Stock Exchange Limited

With the extensive networking of The Stock Exchange, Mumbai
(BSE) and The National Stock Exchange of India Limited (NSE),
and the extension of the BSE/NSE terminals to other cities as
well, investors have access to online dealings in the Company's
securities across the country. The bulk of the trading in the
Company's equity shares in any case takes place on the BSE and
the NSE, and the depth and liquidity of trading in the Company's
securities on all other Stock Exchanges are lower. The Company's
securities are also traded on virtually all other stock exchanges in
the country, in the 'permitted' category.

The Company's Equity Shares are one of the scripts which the
Securities and Exchange Board of India (SEBI) has specified for
settlement only in demateralised form by all investors, since
June, 1998.

It is also observed that the listing fee paid to the other Stock
Exchanges is disproportionately higher, and as stated herein, the
trading volumes and liquidity are lower compared to the BSE

and NSE.

The relevant statistics for average daily trading volumes on the
various exchanges in the year 2000-01 are set out hereunder:

No. of shares (in lakhs)

NSE
BSE
Calcutta
Ahmedabad
Cochin
Kanpur
Pune
Bangalore
New Delhi
Chennai

61.18
52.01
29.51
21.18
18.09
8.37
5.85
0.30
0.14
0.00

As a part of its cost reduction measures, the Company has
proposed this resolution, which will enable it to delist its equity
share from all or any of the following Stock Exchanges: The Stock
Exchange, Ahmedabad; Bangalore Stock Exchange Limited, The
Calcutta Stock Exchange Association Limited, The Delhi Stock
Exchange Association Limited, Chennai Stock Exchange Limited,
Cochin Stock Exchange Limited, The U. P. Stock Exchange
Association Limited, Pune Stock Exchange Limited, at an
appropriate time in the future. The actual timing of such a move
will depend upon future developments regarding integration of
stock exchanges across the country, growth in volume of trading
on different exchanges, etc.
In line with the SEBI regulations and approval, if any, required
members' approval is being sought by a Special Resolution for
enabling voluntary delisting of its Securities from the said other
Stock Exchanges.
The Company is also separately giving Special Notice of the
proposed enabling resolution for the said delisting in one National
Newspaper on all India basis. The proposed delisting of the
Company's securities from The Stock Exchange, Ahmedabad;
Bangalore Stock Exchange Limited, The Calcutta Stock
Exchange Association Limited, The Delhi Stock Exchange
Association Limited, Chennai Stock Exchange Limited, Cochin
Stock Exchange Limited, The U. P. Stock Exchange Association
Limited, Pune Stock Exchange Limited, as and when the same
takes place, will not adversely affect
investors. The
Company's securities will continue to be listed on BSE as the
Regional Stock Exchange and the NSE. The delisting will take
effect after all approvals, permissions and sanctions are received.
The exact date on which delisting will take effect will be suitably
notified at that time.
Your Directors recommend the Special Resolution for approval
of members.
None of the Directors of the Company are, in any way, concerned
or interested in the resolution.

the

Item No. 12.
The Company is the largest in private sector, measured in terms
of total assets, profits and net worth. The Company's strategy has
been to build modern, world scale plants and to establish market
leadership in its major products.
It has four major manufacturing complexes - one at Naroda,
producing Synthetic Textiles and Fabrics; second at Patalganga,
producing Fibres, Fibre and Chemicals Intermediates, Detergent
Intermediates; third at Hazira, manufacturing Plastics, Polyester
and Petrochemical products, and fourth at Jamnagar, producing
petrochemicals and intermediates.
The Company has significant plans for making investments,
directly or through associate companies, in various businesses,
including oil and gas, petrochemicals, refining and marketing,
telecom, infocom, power, etc.
In evaluating and deciding upon these investment opportunities, it
will be necessary to consider various financing options with a view
to reduce the overall cost of capital. Keeping in view the foregoing
and also for general corporate purposes, including normal capital
expenditure, working capital requirements, strategic investments,
any mergers, amalgamations, acquisitions,
reconstructions,
arrangements or any other reorganisation as the Board may

Reliance Industries Limited

GROWTH IS LIFE

decide, the Board of Directors consider that it would become
necessary to raise financial resources, at appropriate time(s) by
issuing Preference Shares in the course of domestic/international
offerings, to such persons and in such manner, as stated in the
resolution.

The Company, if necessary, in consultation with appropriate
authorities and advisors, will fix at the relevant time, the detailed
terms of the issue including the price of issue, rate of dividend,
period of redemption, etc.

Section 81 of the Companies Act, 1956, provides that when a
company proposes to increase its subscribed capital by allotment
of further shares, such further shares shall be offered to the
existing shareholders of the Company in the manner laid down in
Section 81. The Section further provides that further shares may
be offered to any person in any manner whatsoever if a special
resolution to that effect is passed by the Company in General
Meeting.

The Listing Agreements with the Stock Exchanges provide, inter
alia, that a listed company in the first instance should offer all
shares, securities and rights to be issued for subscription pro-rata
to the equity shareholders unless the shareholders in a general
meeting decide otherwise.

The consent of the Shareholders is being sought to enable the
Company for issuing further share capital in the manner set out at
Item No.12 of the notice pursuant to the provisions of Sections 80,
81 and all other applicable provisions of the Companies Act, 1956
and in terms of the provisions of the Listing Agreements executed
by the Company with the various Stock Exchanges where the
Company's Shares are listed.
The said resolution is an enabling resolution conferring authority
on
to cover all contingencies and corporate
requirements.
The Directors recommend the resolution for approval of the
shareholders.
All the Directors of the Company may be deemed to be concerned
or interested to the extent they may be entitled to the Shares that
may be offered to them on rights basis or otherwise and applied
for and allotted to them.

the Board

By Order of the Board of Directors

Rohit C. Shah
Vice President and Company Secretary

Place: Mumbai
Dated: 30th April, 2001

Reliance Industries Limited

GROWTH IS LIFE

Chairman's Communication

My dear fellow Reliance shareowners,

It has been another great year together, at your company.

Indeed, this year has brought a very special sense of achievement for all of us, perhaps more than ever
before in the past.

Reliance Industries, and Reliance Petroleum, have become the country’s two largest companies, on all
financial parameters, including assets, net worth, sales and profits.

Group sales have touched nearly Rs. 60,000 crores (US$ 12.9 billion).

Group exports have touched US$ 2 billion (Rs. 9,370 crores) – making Reliance the country’s largest exporter.

Cash profits, for the group, are nearly Rs. 6,200 crores (US$ 1.3 billion). Net profits are approximately
Rs. 4,100 crores (US$ 0.9 billion).

The group’s market capitalisation has exceeded Rs. 63,000 crores (US$ 13.5 billion). This has made Reliance
the most valuable group in the country.

What is truly commendable is the manner in which our people have achieved these new heights: always
breaking new ground, always setting new standards, always driven by a desire to excel.

Our activities now span all major growth sectors of the Indian economy – oil and gas exploration and production
(E&P), refining and marketing of petroleum products (R&M), petrochemicals and their intermediates, fibres,
polymers, chemicals, textiles, power, telecom, information and communications, etc.

Our confidence in the latent potential of the Indian economy is just beginning to be rewarded. As the pace of
economic growth accelerates in India, the investments we are making in all these areas will generate even
higher returns.

Leadership

We target market leadership in all our businesses.

That leadership is earned by building world scale and world class plants, being globally competitive in our
operations, providing international quality products and services to our customers, adhering to global best
practices in all our activities, maintaining financial conservatism, and delivering superior value to all our
stakeholders.

Our leadership has now been demonstrated in a global context. During the year, Reliance has become the
world’s second-largest producer of polyester staple fibre and polyester filament yarn. In several of our other
petrochemicals products, we are ranked amongst the top 5 producers globally.

The Reliance Petroleum refinery is the world’s largest grassroots refinery. It is, also, the 7th largest refinery
in the world, at any single location. Within India, the RPL refinery is the largest, most complex and most
profitable refinery.

The RPL refinery has achieved a unique distinction, transforming the country from being a net importer of
petroleum products, to a net exporter. RPL’s products, valued at US$ 1.4 billion (Rs. 6,410 crores), have been
exported, in the very first year of its operations, to the most quality conscious markets of the world, including
the US and Europe. This reflects the international quality of RPL’s products, and adherence to the most
stringent quality and environmental norms.

As per the government’s announced schedule for deregulation of the petroleum sector, RPL expects to
commence direct marketing of “controlled” petroleum products from April 2002.

New Areas

We are now, additionally, targeting leading market positions in India in 2 new sectors - oil and gas exploration
and production (E&P), and the convergence of information and communications.

In both these sectors, we will be serving key national priorities, even as we build profitable businesses, and
create value for our shareholders.

We have already become the country’s largest E&P operator in the private sector, with over 1,25,000 sq.
kms. of exploration acreage, in 19 different, offshore and onshore, deep and shallow water blocks. Over the
next 2 years, we intend making significant investments in these blocks, to establish the oil and gas reserves.

This will enhance the level of energy security for the country, reduce dependence on imports, reduce outflows
of foreign exchange, and lead to an increased level of integration for our own energy businesses, in addition
to generating attractive returns on our investments.

Reliance Industries Limited

GROWTH IS LIFE

In the field of information and communications, our group company, Reliance Infocom, is building a state-of-
the-art, terabit capacity, IP based, optic fibre, broadband backbone across the country. Reliance Infocom
intends to leverage the backbone, and related telecommunications infrastructure, to provide the full range of
voice, data, image and value added services, to its customers.

Your company will be the lead investor in Reliance Infocom.

The creation of this world class digital infrastructure will increase teledensity in the country, accelerate the
pace of development of the business of telecom/information technology enabled exports, and contribute to
rapid economic growth, while also creating significant value for our shareholders.

Creating Wealth

It is a matter of great happiness for all of us that your company achieved the distinction of adding the highest
market capitalisation in India, during the year 2000-01 – at a time when the broader markets witnessed
unprecedented erosion in value.

Your company added market capitalisation of Rs. 8,051 crores (US$ 1.7 billion), which was about four times
higher in value than the second best performer in the Indian stock markets.

I am particularly happy that the benefits of this creation of wealth have been shared by millions of investors
in Reliance Industries, domestic and international, and retail and institutional.

During the calendar year 2000, your company also achieved the distinction of becoming the best performing
petrochemicals stock globally, delivering an absolute return of 35% measured in US$ terms.

In addition, during the calendar year 2000, your company was the best performing stock among the 30
stocks constituting the country’s benchmark index, the Sensex, delivering an absolute return of 45%.

The Reliance Industries share price has now consistently outperformed the Sensex, over all timeframes, by
a wide margin.

I am delighted to note that long term investors in Reliance Industries shares have earned a return of 22% per
annum, compounded for the past 5 years, in a period when the Sensex has actually declined by 4%.

It is our belief that the Reliance Industries share price continues to remain under-valued.

The company has a demonstrated track record of consistent growth, and excellent future prospects, and we
are confident that the share price will better reflect the company’s strengths in the future.

From the current year, the true value of Reliance Industries will be more appropriately reflected, upon
consolidation of financials of Reliance Petroleum, and other affiliates, in line with international practice.

Our share buyback programme, announced last year, and proposed to be extended this year, has been
successful in diminishing volatility in the stock price, lowering the “beta” and cost of capital, and reducing
short term speculative pressures.

We remain committed to the use of the share buy-back programme, as a longer term measure for overall
shareholder value enhancement.

A National Tragedy

A devastating earthquake, with an intensity of over 7 on the Richter scale, and with its epicenter less than
100 kms. away from Reliance’s Jamnagar complex, shook the state of Gujarat on January 26, 2001.

Our plants achieved a safe shutdown in accordance with prescribed procedures, and were restarted in
phases, with full emphasis on safety and reliability.

The broader tragedy is unprecedented.

Reliance extended all possible support, including monetary contributions, and deployment of all available
men, materials and resources, for the relief of people affected by the earthquake.

On behalf of the entire Reliance family, I extend our deepest sympathies, and pledge our support, to the
people of Gujarat, affected by this enormous calamity.

Reliance Industries Limited

Dhirubhai H. Ambani
Chairman

GROWTH IS LIFE

Reliance Equity

THE FINAL test of any company, from the perspective of its shareholders, is the sustained price performance of its equity
share. Market share, size of business, competitive advantage, profit numbers, and all other parameters are important. But
at the end of the day, shareholders judge a company in the light of the returns earned on their investments in the company’s
share.

The performance of Reliance Industries equity shares has been attractive over a period of time to all investors. In the
1980s and early 1990s, Reliance raised significant equity financing for its projects, through several offerings. Yet, Reliance’s
long-term share price performance has been amongst the best in the country.

Consider this. The Bombay Stock Exchange listed Reliance Industries shares in January 1978, after the company's offer
for sale of 2.82 million shares. In the succeeding 23 years, Reliance's turnover has grown 418 times, and its net profit has
grown nearly 1,000 times. Reflecting this growth, the value of Reliance shares has increased exponentially.
More Shares, Higher Value

Over the last nearly seven years, Reliance has not approached the markets for equity financing. However, between the
initial listing in 1978, and the early-nineties, Reliance Industries made several rights issues of equity shares and convertible
debentures, to finance its projects.

Here is what that meant for the investor. An original investor of 100 shares in the maiden public offering, who subscribed
to every rights issue of equity shares and convertible debentures, would have invested Rs. 46,379.

To date, that investment would have fetched him 2,174 shares (a multiplication of holding by more than 20 times), including
1,310 bonus shares, valued at Rs. 7,60,900 at the average market price in April 2001. He (or she) would also have
received a total dividend of Rs.79,270.

The rate of return ? An extraordinary 29% per annum, compounded for 23 years !

Take an investor who subscribed to 100 shares in the maiden offering, and then did not subscribe to any of the subsequent
issues. For an original investment of Rs. 1,000, he would today have a holding of 512 shares (including 412 bonus shares),
valued at Rs. 1,79,200 at the average price in April 2001. He would also have received Rs. 24,765 as dividends over this
period. The compounded annual rate of return - a staggering 44% per annum !

These long term rates of returns achieved by investors in Reliance Industries equity are unmatched by any other Indian
company of significant size, and far outstrip the market averages.
The Value Drivers

This remarkable performance has been driven by a set of values. These values have helped Reliance deliver extremely
high returns to its shareholders, and helped sustain well over double-digit growth year after year.

Value 1: Spot the market, time the entry, and grow with it as India grows

Reliance has continuously focussed efforts on areas that had great latent market potential in India. The idea is simple: first
find unique opportunities, and then build enough strengths quickly, to be able to exploit the subsequent demand explosion.
Reliance has continuously tapped the entire spectrum of growth opportunities provided by the world’s second most
populous country.

Reliance has always shown the way, in the industry segments it chose to storm. It was synthetic textiles, textile intermediates
and chemicals in the eighties, plastics and petroleum products in the nineties, and now, telecommunications in the 21st
century.

Reliance’s focus on product segments with immense domestic market potential has allowed the company to build massive
plants, with a globally competitive cost structure, and operate them at full capacity. Not surprisingly, Reliance is ranked
amongst the top 5 global players in several of its key product segments.

Reliance’s turnover has grown at a compounded annual growth rate of 28%, over the 23 years since the share was listed
in 1978. This has been achieved through business cycles, years of low GDP growth, years of domestic economic crisis,
and years in which economic reforms resulted in opening up of Indian markets to overseas competition, and significant
reduction in import tariffs.

The quest for large domestic markets in which Reliance can assume significant positions continues unabated. India’s
telecommunications market is hugely under- penetrated, and offers one of the most attractive growth opportunities in the
world.

In fiscal 2001 Reliance has promoted Reliance Infocom, offering the widest geographical reach and the broadest range of
product offerings. The project will make Reliance a leading player in this market.

Value 2: Indian markets, global competitiveness

Reliance has always believed in building long term competitiveness and profitability, rather than in focussing on short-term
numbers. Long before economic reforms forced the Indian corporate world to consider competitiveness as a central
business aim, Reliance benchmarked itself against its global peer group.

This is why, right from the beginning, the company built capacities that were much larger than those set up by earlier
entrants. When Reliance set up a 10,000 tonnes per annum polyester yarn plant in the early 1980s, the total domestic
demand was officially estimated at about 20,000 tonnes per annum, and the existing capacity was already 11,000 tonnes
per annum. Reliance started from this small base and kept on adding capacity over the years as the market exploded.

Reliance Industries Limited

GROWTH IS LIFE

Eighteen years later, during a single fiscal (2000-01), Reliance has sold nearly 800,000 tonnes of polyester. And, Reliance
is now the world’s second largest producer of polyester staple fibre and polyester filament yarn. Importantly, Reliance is
also amongst the lowest cost producers of polyester in the world.

Over the past 10 years, import duties on products manufactured by Reliance have declined significantly. Proving the
doomsayers wrong, between 1993 and 2001, Reliance Industries’ net earnings have compounded at an annual rate of
30%, and earnings per share have compounded at an annual rate of 18% - testimony to its global competitiveness.

Value 3: Growth must be profitable

This is an important element of Reliance’s growth: Reliance believes that for a market to be attractive, it must not only be
large, but it must yield profits. Long term growth is sustainable, only if growth is consistently profitable.

Rather than squeezing capital usage to increase profitability, the Company has consistently used vertical integration,
world class economies of scale and technologies to optimise costs and achieve competitive advantage.

Reliance Industries’ planned investments in what are called “new economy” businesses are driven by the same beliefs
that have always underpinned its earlier investments in the “old economy”. Reliance continues to believe in focussing on
large growth opportunities, best-in-class technologies and superior project implementation, building scale and growing
the market, and superior operational management.

Reliance looks for strong cash flows, and attractive rates of returns on investment, and is not enamoured by any other
numbers purporting to reflect growth.

Value 4: Discipline, discipline, and discipline

Growth is heady, but it has never swayed Reliance off one of its driving principles: financial discipline.

Reliance Industries’ extraordinary growth has been financed by a judicious mix of debt and equity. Reliance raised equity
financing in its early years, and has then relied on debt financing and internal accruals, to sustain subsequent growth. The
last offering of equity share capital was in 1994.

RIL has a high interest cover ratio, and an impeccable record in debt servicing throughout its history. RIL continues to
enjoy the highest credit rating in the domestic markets, and its international credit rating is constrained by the sovereign
ceiling.

Reliance has proven itself to be amongst the most nimble-footed organisations in the world, when it comes to taking swift
advantage of unfolding financial market scenarios. All of this, is aimed at achieving financial discipline and flexibility - the
fundamental plank for sustained growth.

Value 5: Constant striving for management excellence

On January 26, 2001, one of the worst ever earthquakes, measuring over 7 on the Richter scale, rocked the Indian state
of Gujarat. About a 100 km from the epicenter of the earthquake, Reliance’s refinery and petrochemicals complex achieved
an automated, safe shutdown, in accordance with prescribed procedures. The complex was restarted, and normal business
resumed, in phases - a tribute to the preparedness of the management and operational team for any eventuality.

Of course, Reliance personnel then fanned out to the earthquake-affected areas in Gujarat, and centered their efforts on
providing efficient and complete support to the community, with all the resources at their disposal.

The company’s emphasis on investing ahead of visible demand called for large investments in plants. In most cases,
these had to be supported by vertical integration and building of support services, like captive power plants and ports,
because of the weak infrastructure environment in which the plants had to be set up.

The company has always recognised that to achieve profitability on such large investments, it would have to stabilise plant
operations quickly, and achieve high plant utilisation rates. This has required development of outstanding management
skills and organisational strengths, including skills for handling all unforeseen eventualities – even an earthquake of
unprecedented magnitude.
New Areas, New Vistas

Reliance has achieved global prominence in petrochemicals and oil refining – focused on India so far. Reliance is now
entering new areas of growth - E&P, marketing of petroleum products, and knowledge based industries, such as,
information and communications.

India – with a population of over a billion people – is amongst the largest markets in the world. Every sector in which
Reliance operates, is expected to witness strong demand growth.

At Reliance, growth is life.

Reliance Industries Limited

GROWTH IS LIFE

Financial Highlights

Consistent and robust growth

2000-01

'99-00

’98-99

’97-98

’96-97

’95-96

’94-95

’93-94

’92-93

’91-92

1985

(Rs. in crores)

Sales

Total Income

Earnings Before Depreciation,

$ Mn

6,008

28,008

20,301

14,553

13,404

8,730

7,786

7,019

5,345

4,106

2,953

6,090

28,391

20,988

15,161

13,740

9,020

8,058

7,331

5,555

4,222

3,005

Interest and Tax (EBDIT)

1,193

5,562

4,746

3,318

2,887

1,948

1,752

1,622

1,159

Depreciation

Profit After Tax

Taxes paid to the Government

Equity Dividend %

Dividend Payout

Equity Share Capital

336

567

917

42.5

226

1,565

1,278

855

667

410

337

278

2,646

2,403

1,704

1,653

1,323

1,305

1,065

255

576

4,277

3,719

2,893

3,021

2,490

2,234

2,147

1,391

1,118

42.5

448

385

1,053

37.5

350

933

327

932

299

458

276

458

199

456

138

318

929

280

322

575

193

163

984

245

152

Reserves and Surplus

2,941

13,712

12,636

11,183

10,863

8,013

7,747

6,731

4,011

2,362

1,711

Net Worth

3,167

14,765

13,983

12,369

11,983

8,471

8,405

7,193

4,335

2,613

1,944

Gross Fixed Assets

5,549

25,868

24,662

22,088

19,918

14,665

11,374

8,390

5,132

4,641

4,314

Net Fixed Assets

3,009

14,027

15,448

15,396

14,973

11,173

9,233

6,585

3,600

3,368

3,338

733

744

139

373

254

311

736

607

Total Assets

6,408

29,875

29,369

28,156

24,388

19,536

15,038

11,529

8,121

6,083

4,880

1,046

Market Capitalisation

8,836

41,191

33,346

12,176

16,518

14,395

9,783

12,027

10,718

4,388

6,656

906

Number of Employees

15,083

15,912

16,640

17,375

16,778

14,255

12,560

11,873

11,944

11,940

9,066

Key indicators

2000-01

'99-00

’98-99

’97-98

’96-97

’95-96

’94-95

’93-94

’92-93

’91-92

1985

Earnings Per Share - Rs.

Cash Earning Per Share - Rs.

Sales Per Share - Rs.

Book Value Per Share - Rs.

0.54

0.79

5.70

3.01

25.1

40.0

22.4

34.6

18.0

27.1

17.6

24.7

265.8

192.7

155.9

143.6

140.1

129.9

129.8

128.3

14.4

18.8

94.8

92.0

14.0

17.6

85.0

89.5

11.7

14.8

77.0

79.0

9.1

13.1

84.1

68.0

6.6

12.3

83.5

53.0

5.4

11.7

97.1

63.9

6.9

10.6

70.5

29.5

Debt : Equity Ratio

0.72:1

0.82:1

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 %

RONW % **

21.6

10.3

20.0

21.6

10.3

20.0

23.8

12.0

21.8

22.8

11.7

19.0

21.5

12.3

21.6

22.3

15.2

22.3

22.5

16.8

25.3

23.1

15.2

23.5

21.7

10.8

18.2

22.6

7.8

20.7

19.5

19.0

5.5

9.7

17.1

30.5

1US$ = Rs. 46.62 (Exchange rate as on 31.03.2001)

All references to $ are to US Dollars

Per share figures upto 1996-97 have been recast to adjust for 1 : 1 bonus issue in 1997-98

* Sales excludes merchant exports

** Adjusted for CWIP and revaluation

Reliance Industries Limited

GROWTH IS LIFE

India’s Largest Selling Brands

Product

Brand Logo

End Uses

Technology Partner

Business/
Brand

Polyesters

Recron

Texturised Yarn

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

Paraxylene (PX)

Intermediates

Purified Terephthalic Acid (PTA)

Mono Ethylene Glycol (MEG)

Textiles
Vimal

Harmony

Suitings, Shirtings, Dress material,
Sarees
Furnishing fabrics, Day curtains
Automotive upholstery

Apparels, Home textiles
Industrial sewing threads,
Automotive Upholstery
Sleep Product : Pillows, Cushions,
Toys, Quilts, Mattresses

Packaging-water, soft drinks,
beverages, confectionary

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

Pipes and fittings, profiles,
films and sheets, bottles
containers, wire and cables

E.I. DuPont, USA

E.I. DuPont, USA/Sinco, Italy

Novacor, Canada
(earlier DuPont, Canada)

Unipol

Geon Company, USA
(earlier B.F. Goodrich, USA)

Detergents

UOP, USA

ICI, UK/Du Pont

ABB Lummus Crest, Netherlands
(Shell Process)

Raw material-PTA

Raw material-Polyester

Apparels

Furnishings, home textiles

SlumbeRel

Fibre filled pillows and sleep products

Sleep products

E.I. DuPont, USA

RueRel

Suitings

Reancé

Readymade Garments

Oil and Gas

Crude Oil and Natural Gas

Refining, Power, Fertilizers
and Petrochemicals

Enron Oil and Gas, USA

Reliance Industries Limited

GROWTH IS LIFE

Product Flow Chart

Abbreviation
DEG
DMT
EDC
EO
HDPE
LAB
LLDPE

Full Name
Di-ethylene glycol
Di-methyl-terephthalate
Ethylene di-chloride
Ethylene oxide
High density polyethylene
Linear alkyl benzene
Linear low density polyethylene

Abbreviation
MEG
NGL
NP
PET
PFY
PP
PSF

Full Name
Mono-ethylene glycol
Natural gas liquid
Normal paraffin
Polyethylene terephthalate
Polyester filament yarn
Polypropylene
Polyester staple fibre

Abbreviation
PTA
PVC
PX
TEG
VCM

Full Name
Purified terephthalic acid
Polyvinyl chloride
Paraxylene
Tri-ethylene glycol
Vinyl chloride monomer

(1) Plant also operational at Jamnagar Complex (2) Plant also under operation at Hazira complex (3) Plant operational at Hazira Complex.

Reliance Industries Limited

GROWTH IS LIFE

Management Discussion and Analysis

Forward-Looking Statements
This report contains forward-looking statements which may be
identified by their use of words like “plans,” “expects,” “will,”
“anticipates,” “believes,” “intends,” “projects,” “estimates” or other
words of similar meaning. All statements that address expectations
or projections about the future, including, but not limited to,
statements about the company’s strategy for growth, product
development, market position, expenditures, and financial results,
are forward-looking statements.
Forward-looking statements are based on certain assumptions and
expectations of future events. The company cannot guarantee that
these assumptions and expectations are accurate or will be
realised. The company’s actual results, perfor mance or
achievements, could thus differ materially from those projected in
any such forward-looking statements. The company assumes no
responsibility to publicly amend, modify or revise any forward
looking statements, on the basis, of any subsequent developments,
information or events.

Overall Review
During the year, Reliance scaled new peaks and set several new
records at the corporate, and the group, level.
India’s No. 1 business group
Reliance strengthened its position as the largest business group in
India, on all major financial parameters, including sales, profits, net
worth, assets and market capitalisation.
Contribution to the Indian economy
The Reliance group’s leadership position in India, is reflected in its
all round contribution to the national economy.
Reliance group contributes:
l 3% of India’s GDP
l 5% of India’s total exports
l 9% of Indian government’s indirect tax revenues
The group also accounted for 2.3% of the gross capital formation in
the country, in the last 5 years.
Role in the Indian corporate sector
The Reliance group enjoys a pre-eminent position in the Indian
corporate sector.
The Reliance group accounts for:
l 30% of the total profits of the private sector in India
l 10% of the profits of the entire corporate sector in India
l over 12% of the total market capitalisation
l weightage of 24% in the Sensex
l weightage of 21% in the Nifty Index
Also, 1 out of every 4 investors in India is a Reliance shareholder.
India’s top 2 private sector companies
Reliance Industries Ltd. (RIL) and Reliance Petroleum Ltd. (RPL)
have become India’s top 2 companies, in terms of all major financial
parameters.
RIL is the largest private sector company in India, in terms of net
worth, assets, and net profits, and is second only to RPL, in terms of
sales.
Exports Performance
The Reliance group also set several new records in terms of its
exports performance during the year.
l Group exports were US$ 2 billion (Rs. 9,370 crores) during the
year, ranking the Reliance group as India’s largest exporter

l Individually, too, RIL and RPL are India’s top 2 exporters
l RIL’s manufactured exports increased 100% during the year, to

US$ 635 million (Rs. 2,960 crores)

Global Rankings
During the year, Reliance became the second largest producer of
POY and PSF in the world, as a result of its continued active
participation in the restructuring of the domestic polyester industry.

Reliance is now ranked amongst the top 10 producers globally, in all
its major products. Reliance is the 3rd largest producer of
paraxylene (PX), the 4th largest producer of PTA, and the 6th
largest producer of polypropylene (PP) in the world.
Operating Environment and Performance
During the year, Reliance faced a multitude of challenges on the
operating front. The petrochemicals industry globally faced difficult
times in this period, owing to increased feedstock costs, and
declining product selling prices.
There was also a devastating earthquake in the state of Gujarat,
where Reliance’s major plants are located. Reliance’s plants
achieved a shutdown, in accordance with prescribed procedures,
and were restarted in phases, but overall business activities in the
state were paralysed for 2-3 weeks.
Reliance overcame these challenges to report strong financial
performance.
RIL once again set new production records during the year, with
total production volume crossing a new milestone, at 10.4 million
tonnes - an increase of 16 % over the previous year.
Sales for the financial year 2000-01 increased 38% over the
previous financial year 1999-2000, to Rs. 28,008 crores (US$ 6
billion).
Net profits recorded growth of 10% to Rs. 2,646 crores (US$ 567
million), setting new records for the Indian corporate sector.
Plans for partial divestment of upto 13% stake in RPL
Reliance presently controls a 64% equity stake in RPL.
During the year, Reliance Industries announced its plans to divest
an equity stake of upto 13% in RPL, in one or more tranches, at an
appropriate time, by way of international offerings, to strategic and/
or financial investors.
The benefits to RIL from this transaction will include realisation of
substantial capital gains, generation of incremental resources to
RIL, lowering the cost of balance shareholding in RPL, and
unlocking the value of RIL’s shareholding in RPL, without impacting
management control.
Based on the market price of the RPL share as on March 31, 2001,
the value of the 13% equity stake in RPL is Rs. 3,283 crores (US$
704 million).

Financial Review
Sales increased 38% in the year ended March 31, 2001 to
Rs. 28,008 crores (US$ 6,008 million), against Rs. 20,301 crores
last year.
Sales, excluding merchant sales, increased 29% year-on-year,
to Rs. 25,731 crores (US$ 5,519 million).
Sales include inter-divisional transfers of Rs. 4,984 crores
(US$ 1,069 million), against Rs. 4,454 crores in the previous year.
Sales growth of 29% during the year (excluding merchant sales) is
comprised of the positive impact of 16% from volume growth,
and 13% increase in product selling prices, as compared to the
previous year.
RIL’s manufactured exports, including deemed exports, doubled
to Rs. 2,960 crores (US$ 635 million), from Rs. 1,478 crores
(US$ 339 million).
The increased exports demonstrate the international quality of
Reliance’s products, and reflect the diversification of its markets.
Prices of major feedstocks increased sharply during the year under
review, as a result of higher crude oil prices during a greater part of
the year. The rise in product prices lagged the increase in feedstock
costs, leading to overall pressures on profitability.
Despite these pressures, Reliance’s operating profit, before other
income, increased 28% during the year to Rs. 5,179 crores
(US$ 1,111 million).
Operating margin remained largely stable at 20%, as a result of
increased volumes, higher product prices, partially mitigating higher
feedstock costs, gains from productivity, cost control and

Reliance Industries Limited

GROWTH IS LIFE

efficiencies, higher degree of integration and value addition,
rationalisation of duties, and rupee depreciation.

Other income decreased 44% to Rs. 383 crores (US$ 82 million),
primarily on account of lower interest income, arising from the
reduction in foreign currency monetary assets, and conversion of
erstwhile interest bearing Optionally Fully Convertible Debentures
of RPL into equity.

Interest expense increased 21% to Rs. 1,216 crores (US$ 261
million), and depreciation increased 22% to Rs. 1,565 crores (US$
336 million), consequent upon completion of the Jamnagar
Petrochemicals complex, and a change in the basis of providing
depreciation in respect of certain assets.

Interest expense capitalised during the year was significantly lower
at Rs. 13 crores (US$ 2.7 million), as against Rs. 268 crores (US$ 61
million) in the previous year.

The company’s corporate tax liability for the year was Rs. 135 crores
(US$ 29 million), which was limited to the impact of the Minimum
Alternative Tax (MAT).

Cash profits increased 16% to Rs. 4,346 crores (US$ 932 million).

Net profit for the year increased 10% to Rs. 2,646 crores (US$ 567
million).

The profit for the year would have been higher by Rs. 163 crores
(US$ 35 million), had there been no change in the method of
providing depreciation.

Earnings Per Share (EPS) were Rs. 25.1 (US$ 0.54) and Cash
Earnings Per Share (CEPS) were Rs. 40 (US$ 0.86). The paid up
equity share capital stood at Rs. 1,054 crores (US$ 226 million).

RIL’s true value is reflected upon consolidation of RPL’s financials, in
accordance with international practice. The proforma figures for the
year 2000-01, based upon the equity accounting method, are:
l Consolidated profits of Rs. 3,588 crores (US$ 770 million)
l Consolidated EPS of Rs. 34 (US$ 0.73)
l Compounded profit growth of 22% per annum,

over the last 5 years

l Consolidated Return on Equity of 27%
RIL declared a dividend of 42.50%, constituting a dividend pay out
(including dividend tax) of Rs. 494 crores (US$ 106 million) for the
year. The dividend declared continues to be amongst the largest in
the private sector. The company has been consistently increasing
dividends since the past seven years.

The company contributed a total of Rs. 4,277 crores (US$ 917
million) to the national exchequer in the form of various taxes.

The company’s operations have helped the nation save precious
foreign exchange to the tune of Rs. 17,309 crores (US$ 3,713
million), an increase of 21% over the previous year’s figure of
Rs. 14,293 crores.

Capital expenditure during the year was Rs. 655 crores
(US$ 140 million).

Total Assets increased to Rs. 29,875 crores (US$ 6,408 million).

Resources & Liquidity
Reliance continues to maintain its conservative financial profile, as
reflected in both, its domestic and international ratings.

The ratings of the company’s long term debt were reaffirmed at
“AAA” from CRISIL, the highest rating awarded by the agency. The
company also obtained a “AAA” rating from FITCH India for its
domestic long term debt.

The company’s international debt carries ratings of “BB” (stable
outlook) from S&P, and Ba2 from Moody’s, the latter constrained by
the sovereign ceiling.

Reliance’s gross debt equity ratio, including long term and short
term debt as on March 31, 2001 is a conservative 0.72:1.

Reliance’s fully diluted equity share capital now stands at Rs. 1,054
crores (US$ 226 million). There are no outstanding instruments,
convertible into equity.

The company remitted US$ 844 million (Rs. 3,858 crores) during the
year from its offshore foreign currency balances. This was in line
with the company’s overall foreign exchange risk management

policies, in the backdrop of rapidly growing export revenues. The
company has no offshore balances at the end of the year.
The company’s exports, and foreign exchange denominated oil and
gas revenues, now provide a more than 6 times cover for its annual
interest obligations on foreign currency debt.
The company’s exposure to direct increase in feedstock costs from
devaluation of the rupee has also reduced, as it is presently
importing only ethylene dichloride (EDC). The value of these imports
is not material in the context of the overall scale of the company’s
operations.
Reliance funds its long term and project related financing
requirements from a combination of internally generated cash flows
and external sources.
Reliance has issued over US$ 1.3 billion (Rs. 6,000 crores) of debt
securities in the international capital markets since 1995, with
maturities ranging from 7 years to 100 years. The average final
maturity of the company’s foreign exchange debt is 17 years.
The company refinanced two outstanding foreign currency
syndicated loans aggregating to US$ 187 million (Rs. 880 crores),
achieving significant interest savings. This forms part of an ongoing
programme of interest cost reduction for the company.
Reliance bought back a total of US$ 157 million (Rs. 735 crores) of
its offshore bonds during the year and refinanced the same through
syndicated loans in the bank market.
Reliance has, in aggregate, bought back and cancelled US$ 194
million (Rs. 910 crores) of its bonds to date, which is about 19% of
the total issued amount.
During the year, Reliance demonstrated its financial flexibility and
innovativeness by successfully exercising call options on its existing
higher cost rupee debt, and refinancing the same by issuing debt
paper in the domestic market, to take advantage of the declining
interest rate environment.
Reliance repaid and exercised call options on domestic debt
aggregating to Rs. 2,089 crores (US$ 448 million), and issued a
combination of fixed rate and floating rate debt aggregating Rs. 450
crores (US$ 97 million), with significant interest cost savings.
During the year, the company exercised early call option on all its
outstanding preference shares of Rs. 293 crores (US$ 63 million),
owing to an unfavourable tax charge on dividend distribution.
Reliance meets its working capital requirements through committed
rupee credit lines, provided by a consortium of Indian and foreign
banks. The credit lines are fixed annually, and reviewed on a
quarterly basis. In addition, Reliance issues short term debt in the
form of commercial paper and unsecured bonds.
Reliance has established a rupee commercial paper programme, to
provide an alternative source of working capital. Reliance’s
commercial paper is rated P1+ by CRISIL, the highest credit rating
which may be assigned to this instrument. As at March 31, 2001,
Reliance had no commercial paper outstanding.
Reliance has significantly enhanced its pre-shipment export
financing programme, owing to the substantial increase in exports.
The year end outstandings were nominal.
The combination of the above has enabled Reliance to significantly
reduce the average cost of its short term debt.
Reliance also undertakes liability management transactions, such
as interest rate swaps and currency swaps, on an ongoing basis, to
reduce its overall cost of debt and diversify its liability mix.
Reliance’s cash flows, at current year’s levels, for less than 3 years,
are adequate to extinguish its entire debt.

Share Buy-back Programme
At the Annual General Meeting held on 13th June, 2000, the
shareholders had approved a buy-back of the company’s shares of
Rs. 10 each, for an amount not exceeding Rs. 1,100 crores, upto a
maximum price of Rs. 303 per share, through open market
purchases from the stock exchanges.
The company’s share closed below the specified maximum buy-
back price of Rs. 303 per share, on only 11 days, in the period of
over a year that elapsed since the buy-back announcement.

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This was in sharp contrast to the experience of most other Indian
companies, which saw their share prices generally trading well
below their specified buy-back prices, even after such companies
had deployed significant amounts towards their buy-back
programmes.
The Company has not bought back any of its shares in the limited
number of days when the share price has dropped below the
maximum specified buy-back price, as the share has consistently
been outperforming all benchmark indices by a wide margin, and the
temporary decline for a limited number of days was also more a
reflection of short term volatility in the global, regional and domestic
stock markets.
The Company has consistently set forth its philosophy of viewing
share buy-back as a measure to enhance overall shareholder value
and returns, and not a mechanism to artificially support any
particular price level for the Company’s share, or to respond to short
term speculative pressures.
The share buy-back has already achieved many of the company’s
stated objectives of reduction in volatility, lowering of beta, and
elimination of speculative pressures.
From the perspective of investors, the maximum specified buy-back
price has effectively served as a floor price for the company’s share,
even though the Company, for the reasons stated above, has not
deployed any funds for the share buyback.
The Directors have proposed to once again obtain the approval of
shareholders for a share buy-back programme, on the same terms
as applicable last year, namely, an amount of upto Rs. 1,100 crores,
at a maximum price of upto Rs. 303 per share.
The proposed share buy-back is likely to lead to further reduction in
volatility, lowering of beta and cost of capital, and enhancement of
Return on Equity (ROE) and Earnings Per Share (EPS).

Increase in FII Ownership Limit to 49%
The recent Union Budget has raised the limit of investment by
Foreign Institutional Investors (FIIs), in equity of Indian companies,
up to 49% of the paid up equity capital of such companies, subject
to the approval of the Board of Directors of the investee company,
and approval of members of the investee company by way of a
special resolution.
An increase in the FII limit to 49%, thereby increasing the quantum
of shares which can be held in the company by foreigners, results in
increased weightage of the company’s share in benchmark
international stock market indices. A large number of FIIs direct their
investments on the basis of these benchmark indices.
Accordingly, the Directors have proposed an increase in the FII limit,
to 49% of the equity capital of the company.
The foreign ownership in the company as on March 31, 2001 stood
at 17.34%.

Business Review
Oil & Gas
Reliance’s oil and gas interests form an operating division of
Reliance Industries.
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 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.
The Panna and Mukta fields are currently producing over 29,000
barrels of crude oil, and 2.5 million cubic meters of gas per day. Total
oil production has increased by 22% to 10.59 million barrels in 2000-
01, from 8.71 million barrels in the previous year, while gas
production has registered 11% volume growth at 951 million
cubic meters.
Current estimates of balance recoverable reserves from the Panna-
Mukta fields are 184 million barrels of oil and oil equivalent gas
(MMBOE). The proposed expanded plan of development under
consideration envisages increasing the reserves to 214 MMBOE.

This would increase the recoverable reserves by 16%.
From the Tapti field, 1,974 million cubic meters of gas have been
produced during the year. Estimates for in-place reserves from Tapti
field have been revised to 96.3 billion cubic meters of gas equivalent
based upon the results of 3D modeling. The new revised plan of
development is at an advanced stage of discussions amongst the
joint venture partners.
Oil and Gas accounted for 3% of Reliance’s revenues during the
period under review, reflecting the impact of increased production,
and higher energy prices.
During the year, Reliance has, in a 90:10 consortium with Niko
Resources of Canada, been awarded 12 new exploration blocks by
the Government, through a process of competitive international
bidding.
These 12 blocks cover a wide range of geological settings, spanning
shallow and deep waters. Together with the 2 blocks awarded to
Reliance in the earlier rounds of bidding, this has made Reliance the
country’s largest E&P (Exploration and Production) player in the
private sector, with exploration acreage of 1,05,765 sq. kms, off
both, the east coast and west coast of India.
The Production Sharing Contracts with the Government have been
signed in April 2000.
Reliance is in the process of completing the formalities for the
acquisition of 5 exploration blocks from Tullow of UK, consisting of
21,000 square kilometers.
Reliance has also bid for 15 new exploration blocks in the second
round under the Government’s New Exploration Licensing Policy
(NELP), along with Hardy Oil of UK.
The fiscal environment for the new exploration blocks being
awarded under the government’s New Exploration Licencing Policy
(NELP) is attractive, with several corporate tax, import duty and
other benefits. The company will enjoy complete marketing rights for
production from these blocks.
Reliance sees considerable promise in acreages held by it, and
expects the share of oil and gas revenues to consistently increase in
its overall business portfolio.
Reliance will deploy state-of-the-art technology for the project,
covering all activities, such as seismic studies, processing and
interpretation of data, and drilling.
Reliance has already started their exploratory activities and is now
in the process of acquiring more than 9,000 line kilometers of 2-D
and 3,500 square kilometers of 3-D seismic data. Most of this
seismic work is expected to be completed before the monsoon of
2001, by deploying upto 4 seismic vessels.

Polyester (POY, PSF, and PET)
Industry Structure and Developments

The polyester industry in India is highly fragmented with over 25
producers, most having operations which are below the minimum
economic size, and which are non-integrated.
Reliance is the largest polyester producer in the country, with over
51% share of the domestic market.
Reliance is also now the 2nd largest producer of polyester staple
fibre (PSF) and polyester filament yarn (PFY) in the world.
In line with global trends, the PSF and PFY industry in India
continued to witness restructuring and consolidation. Reliance
played the leading role in this process.
Subsequent to the close of the financial year, the Government has
imposed anti-dumping duties on POY imports from a large number
of countries in the Asia Pacific region, to counter unfair competition.
Product-wise Performance
Reliance’s production volumes in the polyester business (PFY, PSF
and PET) increased 10 % during the year, to 724,000 tonnes. The
industry’s production grew by 1% over this period.
During the year, Reliance’s POY production was nearly 336,000
tonnes, PSF production 317,000 tonnes and PET production
72,000 tonnes.
Reliance has continued its active participation in the restructuring of
the domestic polyester industry. During the year, Reliance has

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acquired control over two more polyester manufacturing facilities,
DCL Polyester Ltd. and JCT Ltd., with a total capacity of 1,20,000
tonnes per annum.
Over the last 3 years, Reliance has acquired control over 2,60,000
tonnes per annum of polyester capacity, through several, low-cost
transactions. This has further strengthened Reliance’s market
leadership position, and improved the competitive structure of
the industry.
Demand growth for POY and PSF, during the year, was flat. The key
reasons were the destocking of inventories, paralysis of business
activities for 2 – 3 weeks following the devastating earthquake in the
state of Gujarat in end-January, the strike observed by traders,
weavers and texturisers as a result of changes in the excise duty
structure, and the general slowdown in the economy.
However, over the past 2 decades, POY and PSF demand in India
has grown at double digit rates. At current levels, per capita
polyester consumption in the country still remains amongst the
lowest in the world. This reflects the continued potential for strong
demand growth in the future.
Demand growth in the PET segment was buoyant, at 36%. Reliance
fully captured this opportunity, and also helped downstream users to
develop new end uses for PET, in addition to conventional
applications.
Mineral water and soft drink applications continued to be the major
drivers for growth in PET consumption. Reliance also entered into a
strategic alliance with Eastman of the US, to develop the market for
PETG, a speciality polymer, which has considerable potential for the
future.
During the year, Reliance has further increased its focus on
speciality products in the polyester business. This has enhanced
Reliance’s market share, led to a wider product range, improved
margins, and provided a superior overall value proposition to
customers.
During the period under review, speciality products accounted for
63% of PSF production, and 24% of PFY production, contributing a
premium of 5 – 20% over commodity prices.
Reliance has announced plans to increase its aggregate polyester
capacity, by 33%, from the existing nearly 900,000 tonnes per year
to 1.2 million tonnes per year, in the next two years.
Reliance’s strategy is to achieve capacity expansion through
attractive, low cost, acquisition deals, and building cost competitive
facilities at existing sites.

Polyester Intermediates (PX, PTA, and MEG)
Industry Structure and Developments
Reliance is the world’s 3rd largest producer of paraxylene (PX), and
the world’s 4th largest producer of PTA.
In India, Reliance is the largest manufacturer of polyester
intermediates (PX, PTA, and MEG), with an aggregate market share
of over 80%.
Reliance is the only producer of PX, while there are 2 PTA, and 4
MEG, producers in India.
Product-wise Performance
Reliance’s production volumes in the fibre intermediates business
(PX, PTA, and MEG) were up 29%, to 2.83 million tonnes, during
the year.
PX production increased by 93% to nearly 1.3 million tonnes during
the year. This shar p increase reflects the full impact of
commissioning of the world’s largest PX plant, with a capacity of 1.4
million tonnes per year, at Jamnagar.
During the year, PTA production was nearly 1.2 million tonnes and
MEG production was nearly 368,000 tonnes.
Domestic demand for polyester intermediates grew by 9% during
the year.

Polymers (PP, PE, and PVC)
Industry Structure and Developments
Reliance is the largest polymers (PE, PP, PVC) producer in the
country, with a market share of 52%.

In all, there are 5 polyethylene (PE), 3 polypropylene (PP), and 6
polyvinyl chloride (PVC) manufacturers in the country.
Product-wise Performance
Reliance is the 6th largest PP producer in the world, with a capacity
of nearly 1 million tonnes per year. Reliance also has 400,000
tonnes per year of PE capacity, and 300,000 tonnes per year of PVC
capacity.
During the year, Reliance’s polymers business (PP, PE, and PVC)
reported an 18% increase in production volumes, to 1.54 million
tonnes.
This mainly reflects the impact of commissioning of the 600,000
tonnes per annum of PP capacity at the integrated Jamnagar
petrochemicals complex.
Reliance produced over 900,000 tonnes of PP, 352,000 tonnes of
PE, and 288,000 tonnes of PVC.
A new PE ducting plant was commissioned during the year, with a
capacity of 80,000 tonnes per year. This is the largest such facility in
Asia. This plant is primarily oriented towards meeting the needs of
Reliance Infocom, for its planned nationwide, optic fibre broadband
network. PE ducts are used for laying optic fibre cables below the
ground level.
Overall demand growth for Reliance’s polymers products was 11%
during the period under review. Demand for Reliance’s major
product, PP (accounting for nearly 60% of production), witnessed
exceptionally strong growth rates of 15% per year, as a result of the
continuing substitution effect, and its wider acceptability over
competing products.
India is one of the fastest growing polymers market in the world, and
is expected to become the world’s 3rd largest polymers market, after
the US and China, within this decade.
The significant domestic demand potential is derived from the
anticipated high growth in user industries such as telecom, food and
beverages, packaging, transportation and consumer durables, and
from continued substitution of traditional materials like wood,
metals, glass, etc.
Current polymers consumption in India is only 1/4th of the
consumption levels in China, with annual consumption of around 3
million tonnes in India, as compared to China’s annual consumption
of over 13 million tonnes.

Cracker Products – Ethylene and Propylene
Reliance operates the world’s largest grassroots, multi-feed cracker
at its Hazira petrochemicals complex. During the year, Reliance
produced 740,000 tonnes of ethylene and 354,000 tonnes of
propylene.
Reliance has announced plans to increase its cracker capacity by
33%, to 1 million tonnes per year, through debottlenecking.

Cracker – Other Products
Production of benzene, toluene and other by-products was optimal,
consistent with feedstock characteristics.
Benzene production increased 18% to over 252,000 tonnes per
year. Reliance maintained its leadership in the domestic market with
a share of over 44%. During the year, Reliance exported nearly
70,000 tonnes of benzene to styrene manufacturers in South East
Asia, Europe, and the US, reflecting the premium quality of
its production.
Production of toluene increased 19% to nearly 70,000 tonnes.
Reliance produces ultra pure toluene, suitable for producing toluene
di-isocyanate, benzoic acid and chloro toluene.
Orthoxylene production increased sharply to 110,000 tonnes during
the year, reflecting the full operations of the aromatics complex at
Jamnagar. Reliance has replaced imports to a large extent,
n ow c o m m a n d i n g a n e a r l y 9 5 % s h a r e o f t h e d o m e s t i c
orthoxylene market.

LPG Business
RIL produces Liquefied Petroleum Gas (LPG) from its cracker at
Hazira. RIL markets bulk LPG directly to end users and private
bottlers through RPL. Packed LPG is marketed in cylinders to
domestic and commercial customers.

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Packed LPG – “Reliance Gas”
The customer base for “Reliance Gas,” marketed by RPL in
cylinders, has reached almost 7 lakhs in the states of Maharashtra,
Gujarat, Madhya Pradesh and Rajasthan. Nearly 65% of the
customers are in the rural markets. “Reliance Gas” has reached
villages up to a population of 10,000.
Consumers are serviced by a network of 130 distributors, and over
5,500 distribution outlets strategically located in these 4 states.
Over 2 million tonnes of LPG is currently being produced by RPL, at
its Jamnagar refinery. This entire production is being sold only to
public sector oil companies, in accordance with the prevailing
regulatory framework. Government has announced plans to
decontrol marketing of all petroleum products, including LPG, from
April, 2002. The experience gained in marketing “Reliance Gas”,
especially in the rural segment, will help RPL in penetrating these
markets further for progressively absorbing this production.

Bulk LPG
RIL is marketing bulk LPG to industrial users, as well as private
bottlers, all over the country.
During the year, RIL sold 29,000 tonnes of LPG to industries for use
as a fuel, and 66,000 tonnes to private bottlers, for use as packed
LPG for packaging and selling in cylinders to their own customers.
Bulk LPG sales will be further promoted from next year, when LPG
production from the RPL refinery at Jamnagar is likely to become
available for direct marketing.
LPG being an environment friendly fuel, Reliance’s thrust is on
developing new applications, by substituting fossil fuels and
reducing the pollution load.

Chemicals
Reliance produced over 110,000 tonnes of Linear Alkyl Benzene
(LAB), an intermediate in the production of detergents. RIL is the
largest producer among four LAB producers in India.
Reliance is the most competitive producer of LAB in the country,
owing to its economies of scale, backward integration and proximity
to the markets.
Besides being a preferred supplier in the domestic market owing to
its superior quality, customer service and relationships, Reliance is
also the largest exporter of LAB from the country, catering to the
requirements of leading multinational detergent producers.
Reliance produced 123,000 tonnes of Normal Paraffin, accounting
for 45% of the domestic production. In addition to meeting captive
requirements for the production of LAB, a well differentiated product
range in Normal Paraffin enables Reliance to meet the diverse
requirements of domestic manufacturers of Chlorinated Paraffin
Wax, a plasticiser used in PVC compounding.

Textiles
Reliance’s textiles complex at Naroda, near Ahmedabad, in the
state of Gujarat is one of the largest and most modern textiles units
in the country.
Reliance’s textiles products are presently sold under the brand
names of Vimal, Harmony, Reance, RueRel, Micro and Slumberel.
Vimal, Reliance’s flagship brand, is one of the largest selling brands
of premium textiles in India.
Reliance announced a plan for comprehensive restructuring of its
textile operations in April, 2001.
As part of this restructuring, Reliance will focus on its high value
added product ranges of men’s wear, under the VIMAL brand, and
home textiles, under the HARMONY brand.
The first phase of restructuring has been completed, and will lead to
a reduction of over 4,600 people from the textile division’s total
workforce. This has been achieved at an estimated one-time outlay
of Rs. 90 crores (US$ 20 million), representing the largest voluntary
severance payout in the Indian textiles industry.
The restructuring of the textiles business is aimed at strengthening
the leadership of the VIMAL and HARMONY brands, enhancing
market share and overall competitiveness, by focussing on superior
quality, higher margin products, and substantially enhancing overall
shareholder value.

Reliance’s premium product quality ensures a ready export market
for its textiles products, which have found acceptance even in the
most demanding markets in the developed markets of the West.
The major elements of the textiles division’s growth strategy include:
greater thrust on high value added exports, expansion of retail
showroom network via franchised outlets, commercial tie-ups with
major international players, and a continued emphasis on brand
building efforts.
During the year, Reliance’s textiles exports (including deemed
exports) increased 84% to over Rs. 140 crores (US$ 30 million), with
a further consolidation of positions in the key markets of Europe, the
US, Far East, and the West Asia.
The textile division’s in-house R&D efforts led to the development of
many new products and processes during the year. These include
the development of polynosic blended high value fabrics,
optimisation of disperse dyeing cycle using rapid disperse dyes,
development of high performance shrink-resist machine washable
wool blended fabrics, substitution of transfer printing on knitted
velour by rotary printing, and the development of light-weight, wash-
fast, flame-retardant knitted net fabrics.
The annual HARMONY art show, hosted by Reliance’s textile
division in April, 2001, in Mumbai, met with its usual enthusiastic
response.

Opportunities
The Indian economy provides several attractive growth
opportunities, with GDP generally forecast to grow by 5%-7% per
annum over the next several years. Per capita consumption in India,
for most products and services, remains amongst the lowest in
the world.
Reliance intends to leverage its market leadership, and demonstrated
strengths, namely, conceptualisation and implementation of large
projects, technology absorption, financing flexibility, and large in-
house pool of intellectual capital resources, to effectively participate
in these opportunities.
Reliance is harnessing attractive opportunities for profitable growth
in its existing businesses of oil and gas, refining and marketing of
petroleum products, petrochemicals and their intermediates, fibres,
polymers, chemicals, textiles, etc., as well as in new business areas
of interest.
Reliance is participating in a unique, one time opportunity to create
a world class digital infrastructure in India, through its infocom foray.
The infocom initiative will enable Reliance to participate in India’s
growing markets for voice, data, image and value added services,
on a nationwide basis. These markets offer potential for exponential
growth over the medium to long term, with many segments of these
markets being opened up for private sector participation for the
first time.
There are increasing opportunities in the export markets, for
Reliance’s products. The demonstrated global competitiveness and
international quality of Reliance’s products, and its superior logistics
capabilities, provide the company with the ability to pursue
these opportunities.
With the policy changes announced by the government in the recent
budget, RIL now has an opportunity to divest a part of its controlling
stake in RPL, in the international markets, with the objective of
unlocking value for the benefit of RIL shareholders. RIL has already
announced its plans in this regard.

Challenges
As in the past, Reliance faces normal markets competition in all its
businesses from Indian and international companies. Reliance’s
business strategies and globally competitive cost positions have
enabled it to retain its leading market positions, maintain operating
margins, and enhance long term cash flows, even under difficult
operating conditions for the global petrochemicals industry.
Reliance has consistently delivered superior value to its customers.
This, together with Reliance’s strong customer franchise, and extensive
marketing and distribution network, has enabled the company to
successfully compete against the threat of exports to India from the
largest petrochemicals producers in Asia, and the Middle East.

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Reliance’s continued domestic market leadership, even after the
opening up of the Indian market to imports, and the steep decline in
import duties, over the past several years, reflects the global
competitiveness of its operations, and its unique position of strength
in the Indian market.
Reliance endeavours to enhance its competitive advantage, through
a process of continuous improvements, and by implementing
appropriate business strategies.

Outlook
Reliance’s production volumes of 10.4 million tonnes during the year
represent a new all time record.
These production volumes are expected to grow over the medium to
long term. The volume increases will be achieved through a mix of
low gestation, cost efficient debottlenecking and fresh capacity
creation plans, attractive acquisitions, and efficiency improvements.
The outlook for margins in the petrochemicals business will depend
upon global demand supply trends for the petrochemicals industry.
Any upturn in the petrochemicals cycle, as and when the same
occurs, can significantly enhance Reliance’s profitability, based on
its scale of operations and its globally competitive cost positions.
Reliance is already amongst the most profitable petrochemicals
companies globally, in terms of return on equity (ROE), and other
key indicators of profitability.
The import duty on naphtha, which is RIL’s principal feedstock, has
been increased from 5% to 10%, with effect from April, 2001. The
impact on RIL’s consolidated earnings is however largely mitigated
owing to the company’s significant controlling stake in RPL, which
benefits from this change.
Reliance is making significant investments in a well-balanced and
promising portfolio of oil and gas properties in India. This business
has the potential to provide a higher contribution Reliance’s overall
business profile, in the medium to long term.
RIL’s announced plans for partial divestment of its equity stake in
RPL will generate substantial capital gains and incremental
resources for RIL, and lower the cost of its balance shareholding in
RPL, without impacting management control.
From the current year onwards, RIL’s true value will be more
appropriately reflected, through consolidation of financials of RPL
and other affiliates.
RPL’s own profits are expected to increase, in line with improving
conditions for the petroleum sector, and with RPL’s entry into
marketing of controlled petroleum products from April 2002, as per
the currently announced schedule of the government. This will
translate into a higher share of income for RIL, as RPL’s largest
shareholder.
RIL’s investments in Reliance Infocom have the potential to generate
significant value for RIL, and its shareholders, in the medium to long
term.
RIL’s investments in RPL have already created substantial value for
the benefit of its shareholders, with unrealised capital gains of over
Rs. 9,800 crores (US$ 2.1 billion) in RIL’s balance sheet as on March
31, 2001.
Reliance’s investments in the oil and gas, infocom, telecom, and
power businesses will provide additional revenue streams, thereby
positively impacting its overall business and earnings profile.

Risks and Concerns
Nearly 90% of revenues from Reliance’s existing operations are
derived from sales in the Indian markets. The company is also
making investments in attractive new businesses and markets
in India.
These factors potentially expose Reliance to any risk of a significant
shock to the Indian economy, which may adversely impact the long
term fundamentals of the economy. Reliance’s increasing exports
revenues are part of a strategy to address this risk.
Reliance’s existing operations have an exposure to the global
petrochemicals cycle, and volatility in prices of its significant
products and raw materials. Changes in global economic growth
prospects may also impact prospects for petrochemicals
companies worldwide.

The company’s operations have historically shown significant
resilience to the normal ups and downs of the economic and
industry cycles, with demand for most of its key products
continuing to grow at healthy rates even at times of an overall
economic slowdown.
Reliance’s highly integrated, and globally competitive operations,
leading positions in domestic markets, diversification of markets
through exports, and thrust on speciality products, etc., have proved
to be an effective way to mitigate the impact of generic
industry factors.
The move towards higher overall integration and investments in new
businesses is further likely to positively impact Reliance’s overall
business risk profile.
Unfavourable trends in import tariffs on key raw materials and
products may adversely impact the cost structure and/or selling
prices of products in the domestic markets, thereby potentially
affecting margins.
However, the impact of further import tariff reductions on Reliance’s
products is not likely to be substantial in the future, as import tariffs
on Reliance’s major products have already been reduced to WTO
bound rates, or very close to those levels.
Reliance currently prices most of its products below the import
parity price levels, which adds to the company’s pricing flexibility in
the event of import tariff reductions. Additionally, the company’s
margins are helped by any depreciation of the rupee against the US
dollar – the historic rate of depreciation has been in the range of 5%
per year over the long term.
Reliance has insured its assets and operations against a wide range
of risks, as part of its overall risk management strategies.
Reliance continues to follow suitable strategies to positively
modify its risk profile by eliminating and significantly reducing key
business risks, and developing and implementing strategies to
achieve the maximum possible degree of insulation from broad
macroeconomic risks.
Reliance has raised foreign currency denominated external
commercial borrowings for US$ 1.3 billion. Any adverse movement
in the value of the Indian rupee may increase the company’s liability
on this account in rupee terms.
Reliance has adopted conservative foreign exchange risk
management policies, in this regard. The company’s rapidly growing
export revenues, and foreign exchange denominated oil and gas
revenues, provide more than adequate cover for the external debt
service requirements every year.
The outlook for the Indian rupee is also now considered to be
relatively stable. Historically, the Indian rupee has depreciated at an
annual rate of around 5% over the past few decades. The country’s
official foreign exchange reserves have climbed to a record level of
over US$ 42 billion.
Reliance operates a large number of complex manufacturing
facilities, spread across 4 locations, having a significant degree of
vertical integration, employing different technologies, and manned
by over 15,000 personnel.
Reliance manages potential operational risks by adopting leading
edge technologies, world class manufacturing practices, modern
HRD (Human Resource Development) policies, and an appropriate
HSE (Health, Safety and Environment) framework.
Reliance has been addressing new growth opportunities arising
from the ongoing liberalisation and deregulation of the Indian
economy. Any significant delays in further deregulation, or changes
in the direction of that process, may impact prospects of all new
players, including Reliance, targeting those opportunities.

Adequacy of Internal Controls
Reliance has a proper and adequate system of internal controls to
ensure that all assets are safeguarded, and protected against loss
from unauthorised use or disposition, and that transactions are
authorised, recorded, and reported correctly.
The internal control systems are supplemented by an extensive
programme of internal audits, reviews by management, and
documented policies, guidelines and procedures. The internal
control systems are designed to ensure that the financial and other

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records are reliable, for preparing financial statements and other
data, and for maintaining accountability of assets.
The efficiency and effectiveness of Reliance’s internal control
systems has further been improved during the year through
successful implementation of the integrated SAP / R3 financial and
business management system, which provides a high level of
system based checks and controls.
Reliance has strong and independent internal audit systems,
covering on a continuous basis, the entire gamut of operations

and services spanning all locations, businesses and functions.

In addition to the in-house internal audit team, Reliance has several
leading national and international professional firms on its internal
audit panel.

Internal audit at Reliance includes evaluation of all financial,
operating and information technology system controls.

Internal audit findings and recommendations are reviewed by the
top management and the Audit Committee of the Board.

Reliance Petroleum

Reliance controls an approximately 64% stake in Reliance
Petroleum Ltd. In accordance with Indian GAAP, RPL’s financials are
not consolidated with RIL.
RPL is the first refinery to be set up by the private sector in India,
pursuant to oil sector reforms.
RPL is the world’s largest grassroots refinery, and the 7th largest
refinery in the world at any single site, with a capacity of 27 million
tonnes per annum, at Jamnagar, in the state of Gujarat, India.
The RPL refinery has been set up at a capital outlay of Rs 14,250
crores (US$ 3.4 billion). The project cost has been financed on a
conservative basis, with RPL’s debt:equity ratio presently at 0.86:1.
The refinery has been set up at 30%+ lower per tonne capital costs,
as compared to other refineries recently set up in Asia, by leading
international oil companies. This has established new benchmarks
for capital productivity.
The lower per tonne, capital costs translate into a sustainable
competitive advantage for the company, enhancing its ability to
capture growth opportunities in India and abroad.
RPL is amongst the most complex refineries in the region, with a
Nelson’s Complexity Index of 9.93. The high degree of complexity
indicates large secondary processing capacity, leading to higher
value addition, and higher refining margins, as compared to less
complex refineries.
The refinery has been built adhering to the highest international
standards of safety and environmental protection, and has the
technical capability to deliver products of inter national
specifications, even beyond Euro II norms.
RPL is the only refinery in India which is capable of producing
gasoline with less than 1% benzene content, and diesel with less
than 0.05% sulphur content, right from the first day of its operations.
RPL has access to fully integrated logistics infrastructure for product
handling and evacuation. This allows the RPL refinery to move its
products to the key markets in India and abroad, by sea, pipeline,
rail and road, in a cost effective and timely manner.
In line with the government’s oil sector policies, RPL is currently
selling the four controlled products, namely, LPG, Gasoline,
Kerosene and Diesel, to the public sector oil companies, Indian Oil
Corporation Ltd. (IOC), Hindustan Petroleum Corporation Ltd.
(HPCL) and Bharat Petroleum Corporation Ltd. (BPCL), to the
extent required by the Government.
The Government’s Oil Coordination Committee determines the
price realisation for the sale of RPL’s controlled products, based on
the principle of import parity.
In addition, RPL is also exporting controlled products, which are not
lifted by public sector oil companies. All other products are being
directly marketed by RPL. About 25% of the production is being
consumed captively by group companies.
The marketing of controlled products is to be deregulated with effect
from April 1, 2002, as per the current schedule announced by the
Government.
RPL has already applied for marketing rights for the controlled
products, as it meets all the criteria specified in this regard by the
Government, as per the Gazette Notification of November 1997. As
soon as the marketing of controlled products is decontrolled, RPL
will make appropriate arrangements for the same.
RPL is also making investments in pipeline projects, to facilitate
distribution of petroleum products across the country, in a seamless
and cost efficient manner.

RPL has a 10% stake in Petronet India Limited, the holding
company set up for creation of pipeline infrastructure for evacuation
of petroleum products all over India.
RPL holds a 13% stake in Petronet V.K. Ltd., which owns the 113
km. long Vadinar Kandla Pipeline. This pipeline links RPL’s refinery
to the Kandla Bhatinda pipeline, providing access to the high growth
North and North-West markets.
The setting up of the Central India Pipeline project, which envisages
setting up a 1,615 km pipeline, serving the landlocked markets in
Central India, has been approved by the Government. RPL will hold
a 26% stake in the joint venture implementing this project.
RPL commenced commercial production on April 1, 2000.
The entire Jamnagar refinery complex was synchronised within a
very short period. The flawless start-up, and the subsequent quick
synchronisation, of the refinery complex have led to strong cash
flows and financial performance for RPL in its first year of
operations.
RPL has become the largest private sector company in India, in
terms of sales, and is second only to Reliance Industries Ltd. (RIL)
in terms of net worth, assets, and net profits, based on performance
in its very first year of operations.
RPL has thus joined RIL, amongst the ranks of India’s top two
companies, in terms of all major financial parameters.
RPL achieved 95% capacity utilisation during the year, despite the
severe earthquake, with an intensity of over 7 on the Richter scale,
which hit the state of Gujarat on January 26, 2001, with its epicentre
only 96 Kms away from RPL’s refinery.
Sales for the year were Rs 30,963 crores (US$ 6,642 million), and
net profit was Rs 1,464 crores (US$ 314 million).
Exports of RPL products during the year were Rs. 6,410 crores
(US$ 1,375 million), making RPL India’s largest manufacturer
exporter.
RPL’s products have been expor ted to a large number of
destinations in the Far East, Europe, the US, and South America,
including to Japan, Singapore, Indonesia, Malaysia, Thailand,
China, Greece and Italy. This reflects the international quality of
RPL’s products, and their adherence to the most stringent
international environment and quality specifications.
RPL’s paid up equity share capital as on March 31, 2001 stood at
Rs. 4,753 crores (US$ 1,020 million).
Earnings Per Share (EPS) for the year are Rs. 3.08 (US$ 0.07), and
Cash Earnings Per Share (CEPS) are Rs. 4.47 (US$ 0.1).
RPL is amongst the most profitable refining companies in the world
achieving a return on equity (ROE) of over 21% in the very first year
of operations.
RPL’s financial strength is demonstrated by the recent credit ratings
of AA by CRISIL and AA+ by Fitch India, for its long term debt.
The AA and AA+ instruments are judged to offer high safety of
timely payment of interest and principal, and differ only marginally in
safety from issues with the highest AAA credit rating. These “High
Investment Grade” ratings, in the very first year of operations, are a
unique achievement for RPL.
The Directors of RPL have recommended a maiden dividend of 5%,
constituting a dividend payout (including dividend tax) of Rs. 262
crores (US$ 56 million).
RPL ranks amongst the top five private sector companies in India,
with market capitalisation of Rs. 26,000 crores (US$ 5.6 billion).

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GROWTH IS LIFE

Reliance Telecom

Reliance Industries holds a 26% equity stake in Reliance Telecom
Ltd. (RTL).

RTL has two divisions – basic services, and cellular services.

RTL has licenses for Cellular Mobile Telephone Services (CMTS) in
7 cellular circles spanning 15 states, namely, HP, MP (including
Chattisgarh), Bihar (including Jharkhand), Orissa, West Bengal
(including Sikkim), Assam, and NE (including Arunachal Pradesh,
Manipur, Meghalaya, Mizoram, Nagaland and Tripura).

RTL is the largest cellular operator in India, in terms of coverage,
with its footprint covering about a third of India’s population and
geographical area.

RTL had operations in 86 towns and a subscriber base of 1,87,000
nos. as on March 31, 2001. The subscriber base increased 170%
during the year, as against of industry growth rate of 90%.
The network capacity has been augmented to take care of the
increased subscriber base. A new MSC (Mobile Switching Center)
was installed in Indore, and capacity in 7 out of the 10 MSCs was
increased to 2,64,000 subscribers, from 1,18,000 subscribers in
March 2000.

RTL’s operations have become cash positive during the year.
Prepaid Services have been launched in all circles during the year,
and this segment now constitutes 88% of the total subscriber base,
as compared to 43% last year. This is in line with the Company’s
strategy of automating its customer operations in far-flung
semi-urban areas, to reduce fixed costs, and to ensure full collection
of revenues.
RTL has launched two-way auto roaming services with key
operators in all its circles, and this is expected to add to the
company’s revenues in the current year.
The ongoing deregulation of the telecom sector poses new
challenges for the company. The public sector companies, BSNL
and/or MTNL, will be licensed as a third cellular operator in each
service area, and the process for the entry of a fourth operator in
each area has also been announced by the government.
Recently, the Government has also allowed Fixed Service Providers
(FSPs) to commence Wireless in Local Loop (WLL) services. This
will result in increased competition for RTL.
RTL’s basic services operations in the state of Gujarat are at an
initial stage of development.

Reliance Infocom

Reliance Industries will be the lead investor in Reliance Infocom,
with a 45% equity stake.
The Indian infocom markets present a unique opportunity, with
significant potential for sustained growth over the medium term.
The current Indian teledensity is amongst the lowest in the world
with only 30 million phones in a population of over a billion people.
The Government’s stated objective is to achieve over 150 million
phones by the year 2010.
The Government is pursuing an open door policy, promoting
unlimited competition in telecom services, in the best interests
of consumers.
Reliance Infocom has announced plans for addressing the entire
telecom market in India with a national footprint, and presence in
fixed line, mobile, national long distance, and international long
distance telephony, as well as a full bouquet of data, image and
value added services.
Reliance is building a world class broadband, IP backbone,
connecting India’s top 115 cities with 60,000 route kilometers of
fibre and with terabit capacity.

This integrated business model will provide a sustainable
competitive advantage, enhance Reliance’s retur ns and
minimise risks.

Reliance will leverage its core competencies of complex project
management, technology absorption, financial engineering, and
building grassroots businesses, to become a leading player in the
infocom landscape.

Reliance is implementing its infocom projects with a traditional
return based philosophy to maximise value. All investments are
based on traditional financial criteria, like positive cash flows,
attractive IRRs and ROEs, and low payback period.

Reliance believes that there is a one time opportunity for the Indian
economy to leapfrog from its current inadequate infrastructure, to a
super, world-class digital infrastructure, comparable to any other in
the world.

Reliance’s infocom initiatives are married to the objectives of
accelerating India’s economic growth, building world class assets,
capable of delivering superior long term returns, and enhancing
overall shareholder value.

Reliance Power

Reliance Power intends to pursue attractive opportunities in the
power sector.

Currently, power projects with aggregate capacity of over 6000 MW
are being actively pursued. These projects have immense potential
for feedstock linkages, thereby enhancing the value addition across
the broader spectrum of the energy chain.

Reliance has substantial experience in power generation, having
implemented power plants at all its manufacturing sites. The
aggregate power generation capacity, for captive consumption, at
the various manufacturing locations at Naroda, Patalganga, Hazira
and Jamnagar is over 800 MW.

Reliance Power, jointly with Mirant Asia Pacific Ltd., formerly
Southern Energy Asia Pacific Limited, is developing 3,960 MW coal
based thermal power project at Hirma, in the state of Orissa, India.

Reliance and Mirant have signed a Joint Development Agreement to
develop the project with equal interest.

This will be one of the largest independent power projects ever
undertaken in the country. Coal mines in the lb Valley will be tapped
to provide more than 22 million tonnes per annum of fuel. State-of-
the-art power generators will deliver electricity to the east, north and west
of the country, along a power grid involving 3,300 km. of transmission
lines.

Electricity will be sold to Power Trading Corporation, which in turn
will sell it to power deficit states, such as Madhya Pradesh and
Gujarat in the west and Rajasthan, Punjab and Haryana in the north.
The Ministry of Power and Power Trading Corporation are reviewing
the Power Purchase Agreement and payment security structure.
Discussions with the short listed EPC bidder are under progress.
The Energy Tariff for the project is being reviewed by the Central
Electricity Regulatory Commission.
The Power Purchase Agreement (PPA) has already been signed for
the 447 MW Patalganga power project, Maharashtra. All statutory
clearances have been obtained. Discussions with the Government
of Maharashtra (GoM) for Escrow agreement, are in progress.
Financial closure is expected to be achieved after finalisation of the
Escrow arrangement.
The Techno-Economic clearance for the 500 MW Jamnagar, Gujarat
project has been received from the Central Electricity Authority
(CEA). Various formalities for finalisation of the Escrow agreement
with GEB, are under progress. This project, too, is expected to
achieve financial closure after concluding the Escrow agreement.
The Power Purchase Agreement (PPA) for the 500 MW
Jayamkondam, power project in Tamilnadu has already been
finalised and approved by the state government. Various

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GROWTH IS LIFE

developmental activities pertaining to statutory clearances, mining
plans, land acquisition, etc., are under progress.

Reliance is developing a 375 MW lignite based project at Ghogha,
Gujarat. Discussions for finalisation of the Power Purchase
Agreement (PPA) and Fuel Supply Agreement (FSA) are under
progress. Part land has been acquired by project authorities and
most of the project clearances have been obtained.

Reliance Power will also explore opportunities in the power
transmission and distribution business, as reforms in the power
sector accelerate in the future.

Reliance has been the single largest shareholder in BSES Ltd.
(BSES), for the past more than a decade. During the year under
review, Reliance announced an open offer for acquisition of an
additional 20% of the equity share capital of BSES, in accordance
with the provisions of the SEBI (Substantial Acquisition of Shares
and Takeovers) Regulations, 1997.

Reliance received shares aggregating 11.86% of the equity share
capital of BSES in the open offer, thereby taking its total
shareholding in BSES to 26.68%. Reliance publicly announced that
it would not change the existing professional management structure
of BSES. Subsequently, two of Reliance nominee directors have
been appointed on the Board of BSES.

BSES is one of the leading power companies of the country, and is
engaged in the generation, transmission and distribution of

electricity. BSES is ranked among India’s top 20 companies in terms
of net profits, and among the top 30-35 companies, on all other
financial parameters:

The company’s existing power generation capacity is 500 MW, and
the additional capacity planned is over 1,000 MW. BSES is also the
largest power distribution company in India, and holds license for
distribution of power in Mumbai, and also for more than 75% of the
area for the state of Orissa. BSES and its subsidiaries provide
electricity service to more than 2.7 million consumers, in areas
covering 1,23,000 square kms, and with an estimated population of
34 million.

The company provides ser vices in electrical contracting,
engineering, procurement and construction contracts and computer
services, and has recently commenced operations as an Internet
Service Provider (ISP) in Mumbai.

BSES’ total assets are over Rs. 4,000 crores, and the company has
a consistent track record of growth in revenues, cash profits and net
earnings. The company has a conservative gross debt:equity ratio
of less than 0.40:1, and it holds substantial cash balances and
liquid investments.

The acquisition of BSES represents a strategic step for Reliance in
its pursuit of attractive growth opportunities in the power sector, and
reflects its commitment to development of the power sector, a core
infrastructural area, in line with national priorities.

Energy Conservation

Energy costs are typically a significant cost in petrochemicals
operations, and it is important for Reliance to continuously target all
potential areas for improvement in energy conser vation
performance.

Reliance continuously benchmarks itself with world leaders,
identifies gaps, and implements new proposals to stay ahead in the
area of energy conservation, as part of its strategy of enhancing
overall global competitiveness.

All the three Manufacturing sites extensively use a variety of fuels
like natural gas, kerosene, fuel oil and low sulphur heavy stock
(LSHS), to produce power and steam for captive consumption.

Manufacturing complexes of Reliance have dedicated energy
conservation cells manned by experienced engineers, who identify
potential areas of technological improvements, carr y out
benchmarking exercises, monitor energy consumption, and
implement new proposals.

Significant highlights of the efforts made and the results achieved in
the area of energy conservation, at Reliance’s complexes, include:

Hazira:
l Power savings by reviewing requirements of pumps in

operation, and by using them in optimal combinations.

l Introduction of fogging of combustion air to one of the Gas
Turbines has resulted in significantly improved heat rate and
higher power generation capacity. This scheme is planned to be
extended to all other Gas turbines.

l The energy conservation measures have helped in reducing the
steam and power consumption in the complex by 6.5% and
0.6% respectively compared to the last year. Energy index for
the complex has declined further to 2.20 Gcal / tonne this year
from 2.26 Gcal / tonne in the previous year.

These performance improvements have led to the Hazira complex
winning the following prestigious awards during the year, in the area
of energy conservation:

1. First prize in the “National Energy Conservation Award -2000
contest”, instituted by the Ministry of Power, Government of
India, for the second time in a row.

2. Petroleum Conservation Research Association (PCRA) award

for outstanding work in the area of energy conservation.

3. The “Confederation of Indian Industry (CII) Award of Energy

Conservation” for 2000.

4. Golden Jubilee Trust Award for “Excellence in Energy
Conservation”, instituted by The Southern Gujarat Chambers of
Commerce and Industry for the year 1999-2000.

Patalganga:
l Various energy conservation schemes implemented this year
have resulted in reduction in the total power load of the complex.
l The Patalganga complex was awarded the second prize by the
Ministry of Power, Government of India, in the “National Energy
Conservation Award – 2000” contest.

Jamnagar:
The Jamnagar Refinery and Petrochemicals Complex has several
built-in state-of-the-art energy conservation features. A few
examples are:
l All the furnaces at Jamnagar including the steam boilers are
highly energy efficient (90%-92% efficiency). The designs
incorporate Air Preheater, ID/FD fans in major furnaces and
capability to achieve less than 15% excess air for combustion.
l The world’s biggest Fluidised Catalytic Cracker Unit (FCCU) at
Jamnagar incorporates two power recovery turbines to recover
power from the flue gases from FCCU regenerator. The two
turbines make FCC operations highly energy efficient.

l All hydrocarbon gases going to the flare stack are monitored by
using acoustic meters at different locations thus helping to
identify and arrest any leaks.

l In addition, several energy conservation schemes developed in
house have resulted in savings of nearly 28,000 tonnes per year
of fuel oil.

Research & Development (R&D)

Research & Development (R&D) activities are an essential part of
Reliance’s various businesses.
Reliance aims at capturing value through a “6 point agenda” for
growth-oriented R&D, which supports Reliance’s strategy for
sustainable earnings growth, through “Knowledge Intensity” in
all products.

The 6 action points are:
l Revolutionise asset productivity
l Build a strong Intellectual Property Rights (IPR) regime
l Increase pace of new product introductions – growing the

domestic market for all products on accelerated basis

l Build New Product Platforms

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GROWTH IS LIFE

l Commercialise new businesses
l Develop future opportunities through discovery research

During the year, the polymers business invested in a state-of-the
art, Department of Scientific & Industrial Research (DSIR),
accredited R&D center. The center covers instrumentation,
characterisation and wet lab polymerisation, and pilot plant
activities at Hazira. Two multi-purpose pilot plants were designed
and commissioned during the year, for development of fine
chemicals products.

During the year, Reliance also initiated various basic research
programmes in the polymers and fine chemicals fields. The
company filed one patent, three research publications and 12
technical reports this year.

The R&D group strengthened its strategic relationship with National
Chemical Laboratories (NCL), Pune, and as part of a Research
Alliance Agreement, initiated seven projects in product
improvement strategies, fine chemicals and catalyst synthesis.

As part of this effort, Reliance also initiated R&D projects in fine
chemicals, process development for polyolefins, surface chemistry
and computational science for fine chemicals, with institutions like
the IITs (Mumbai and Chennai) and Jawaharlal Nehru Centre for
Advanced Scientific Research (JNCASR), Bangalore. Reliance also
attained corporate membership to the Centre for UMass Industry
Research on Polymers (CUMIRP) programme at University of
Massachusetts (UMASS) Lowell, USA on polyolefins development.

During the year, three new grades in PE, 7 new grades in PP, 5 new
deniers in POY, one new grade in PET, a micro denier PSF product,
a high tenacity PSF product and eight modified Fibrefill products
were successfully developed, and all these products have received
overwhelming customer acceptance.

Several new applications, such as PE pipe coating, specialised PE
& PVC wire and cable applications, and flame retardant and wood
filled PP compounds for the automotive and appliances industry,
were successfully commercialised with Reliance’s support.
Reliance also provided support to several machinery and tooling
suppliers to the plastics processing industry, for development of
machinery.
The polyester business, too, has seen significant benefits from
research in recent years. The process technology for dope dyed
polyester staple fibre has been upgraded. This has helped in
improving both productivity and product quality of this premium
product. A continuous polymerisation based process technology for
dope dyed PSF has been evolved and commercialised to produce
fibre of superior quality, which has provided outstanding
performance to customers in both domestic and export markets.
Reliance has developed a new short cut polyester staple fibre as a
reinforcement additive for paper and wet-laid non-wovens. This has
helped create new business opportunities, both in domestic and
export markets.
Reliance’s Product Application & Research Centre (PARC), also a
DSIR accredited R&D center, has proposed the creation of a “virtual
network,” which will create and share knowledge with customers,
facilitating R&D for product enhancements and modifications on a
continuous basis.
During the year, Reliance’s Patalganga complex won the Golden
Peacock National Award for Innovative Product – 2000, for the
development of three new products.
Reliance’s Hazira complex won the prestigious Golden Peacock
National Award for Innovation Management, for product innovation
and for establishing high-class systems to manage the innovation
process. The awards were received at the World Congress on Total
Quality in New Delhi in January 2001.

Quality

The Reliance mantra is Total Customer Satisfaction. Proactive
efforts are directed towards determining customers’ requirements,
and achieving all-round customer satisfaction.

This is primarily achieved through automated systems (reducing
manual handling to a minimum), high attention to complaint
resolution, online communication and information exchange, quality
circles and adoption of programmes such as “six sigma”, and
institutionalisation of benchmarking and other methods which
constantly guide Reliance employees in all their activities.

Reliance’s increasing exports revenues, and the fact that it
commands market leadership in India in the face of unrestricted
competition from imports, bear testimony to the international quality
of Reliance’s products.

Reliance’s products are now exported to over 100 countries across
continents, including the US and Europe.

Reliance has carefully designed systems to ensure quality. All
relevant information, including process data, is made available on
the corporate Intranet, leading to faster decision making and
improved quality of products.

Advanced process control systems at all plants, and the use of

advanced analytical instruments at sophisticated Quality Assurance
laboratories, form the key elements of the Quality drive.

A total of 29 ISO 9000 certificates in Reliance’s plants bear ample
testimony to the commitment to quality. In addition to the
manufacturing facilities, the certificates also cover internal service
functions, such as administration and human resources
development. The Reliance culture demands that each department
is a service provider to the next in line.

Monthly apex forum meetings review product quality improvement
activities, based on customer feedback and benchmarking. A
steering committee monitors Total Quality Management (TQM)
implementation.

Quality Circles are active in all the plants, and during the year, five
Quality circles participated in state level case study presentation
competitions, winning several awards. All five circles qualified for
participation in National Convention of Quality Circles.

The quality processes at the new Jamnagar complex reflect a
proactive approach to product quality enhancements, and
incorporate modern, advanced features like customer relationship
management, quality chain audits, quality review through 16 points
benchmark on quality system, etc.

Health

Reliance accords a very high priority to the provision of adequate
and modern medical services to all its people.

Reliance has occupational health centers at all locations. Reliance
emphasises prevention of work related health hazards, reduction of
health impairment, and the promotion of positive health.

Senior health specialists, fully supported by qualified doctors and
trained paramedical staff, are available at all locations. There is a
continuous emphasis on improving health standards through
improvement in production processes, as also various health
promotion activities at the medical centres.

Health related activities at the Patalganga complex this year
included health awareness campaigns conducted to address
common health concerns like hypertension, diabetes, heart
disease, backache prevention and lifestyle management.
Activities at the Hazira manufacturing complex included health
audits, medical monitoring, comparative studies of interdepart-
mental health status, and steady improvement in all medical
facilities. A physiotherapy department was introduced during the year.
The occupational health and family welfare centre established at the
Jamnagar complex caters to the comprehensive healthcare needs

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GROWTH IS LIFE

of employees, and their families, staying in the township. The regular
activities include pre-employment medical examinations, periodic
medical check-ups of employees, school health check-ups,
preventive immunisation and medical camps.
A medical data management system has been developed and

installed at the Jamnagar medical center, rendering the department
paperless. This programme will be implemented at other Reliance
sites in phases.
The Naroda complex, too, houses a full-fledged health centre with
facilities for emergency and routine health care.

Safety

Reliance believes that good safety performance is an integral part of
efficient and profitable business management. The company
religiously follows the dictum that safety of persons overrides all
production targets.
To ensure safety at the workplace, the following programmes are
pursued at all manufacturing sites:
l Safety performance benchmarking against leading international

companies and databases

l Well-defined team safety performance appraisal targets, with
safety performance having as much weight as production
volumes

l A comprehensive internal and external auditing system
involving intersite audits, national and international safety
councils, and external auditing organisations

l Coaching programmes for operators, maintenance technicians,
and contractor workers, with over 25 daily sessions for different
groups of individuals at their work place

l Safety induction training to all contractor workers at the site
l Accidents and near misses learning and sharing
l Frequent emergency mock drills

l Safety quiz competitions, and safety week celebrations to

create increased awareness among employees

The Patalganga complex has achieved a frequency rate and
severity rate of zero (indicating that it has not lost any time to injuries
this year). First aid and minor injury cases dropped by 45% owing to
adoption of various monitoring measures, such as permit system
audit, focus audit, Reliance Manufacturing Advantage (REMA)
audit, Hazard and Operability study (HAZOP), safety inspection,
pre-startup safety review and various training and awareness
programmes.
Extensive safety audits were conducted by a leading international
firm last year at the Jamnagar complex, establishing the adequacy
of Reliance’s safety standards. The British Safety Council audit was
also conducted during last year. The Jamnagar complex has
achieved a significant milestone, of working for more than 7 million
man-hours without any lost time accidents during the year.
The Jamnagar complex has a state-of-the-art fire control room, with
sophisticated fibre optic oriented communication systems
interfaced with each other - a fire & gas system, a public address
system, an emergency siren system and hotlines. More than 8,000
portable fire extinguishers are provided in the complex.

Environment

Reliance is conscious of its responsibility towards creating,
maintaining and ensuring a safe and clean environment.
Strict adherence to all regulatory requirements and guidelines is
maintained at all times. Anticipated legislation, rules and regulations
are also considered, and provisions made during the design
engineering phase.
The Hazira complex is the only integrated petrochemicals complex
enjoying ISO 14000 certification for its implementation of an
Environmental Management System (EMS). The complex is being
regularly and continuously audited by Lloyds Register Quality
Assurance, as a part of the certification procedure.
The British Safety Council auditors have commended the efforts of
the Hazira complex in reducing effluent generation by 15%, steam
consumption by 22% and paper consumption by 11%. During the
year, the complex was recognised for the efforts made for water
conservation, recycle and reuse.
The Naroda Complex has also obtained the ISO 14000 certification,
and is the only composite textile mill in India with this
prestigious certification.
The Patalganga complex has initiated the ISO 14000 certification
process.

Reliance has implemented a number of path-breaking approaches
for resource conservation and environmental protection.

These include an integrated desalination plant at the Jamnagar
complex to produce 20 million gallons of desalinated water for use in
process and domestic applications, using the low temperature heat
sources of the process units. This desalination plant is coupled with
a state-of-the-art effluent treatment plant, thereby conserving water
and protecting the environment.

Around 2,200 acres of land at Reliance’s Jamnagar complex has
been transformed into green pastures, with agroforestry of over 2.3
million trees. The trees being grown in the complex include mango,
teak, neem, guava and custard apple. In all, over 200 species are
being planted in the green belt.

Reliance stresses strict compliance with all applicable rules and
regulations, effective environmental management systems,
maximising resource utilisation, reduction in waste generation,
individualistic commitment to the environment and shared
responsibility, for ensuring the highest care and respect for
the environment.

Reliance’s commitment to environment friendly polymers

Reliance sets environment related benchmarks for those who use Reliance polymers to create end-products, to help environment friendly applications of all its products. All products
made from Reliance’s plastics are recyclable.
Reliance has assisted and provided inputs in bringing required legislation that protects the environment, and has played a significant role in the formation of institutions for creating
environmental awareness and sensitivity amongst the manufacturers of plastics-related products in India.
Reliance produces polymers for a wide range of applications. Products such as LLDPE, HDPE, PP and PVC find application in every segment in our daily life. By achieving progressively
higher technological and quality standards, Reliance’s products enrich the quality of life, and improve the general quality of packaging, shelf life, and freshness of merchandise.
Reliance strongly believes that effective management of plastic disposal is essential to conservation. Reliance has taken the lead in establishing quality standards - the first BIS
recycling standard was established with efforts of Reliance’s technical inputs. These standards are meant to ensure high quality of end products coming in contact with foodstuff,
pharmaceuticals and drinking water.
Environmental hazards caused by thin plastic carry bags were the major cause of concern for the plastics industry. Reliance provided its inputs to the framing of legislation which
prevents manufacture of carry bags less than 20 micron in thickness, and restricts the use of coloured recycled bags for non food contact applications.
With the establishment of quality standards and regulations, Reliance has also contributed towards the setting up of the Indian Council of Plastics in Environment (ICPE), for the
promotion of social awareness and establishing structured quality recycling systems. As a part of ICPE’s activities, Reliance’s staff also offers technical guidance at various professional
platforms and educational institutes.

Reliance Industries Limited

GROWTH IS LIFE

Human Resource Development (HRD)

People are central to Reliance’s growth strategy. A large in-house
pool of intellectual capital is the driving force behind Reliance’s
a c c e l e r a t e d g r o w t h , a n d i s o n e o f i t s f u n d a m e n t a l
competitive strengths.
Reliance is a young company, with an average age of 39 years for its
15,083 employees as on March 31, 2001.
Talent is drawn from diverse academic backgrounds, and the
emphasis is on recruiting people with formal training that matches
their job profile. Reliance has over 4,000 qualified professionals -
3,436 engineers, 340 engineers/MBAs, 155 CA/ICWAs and 55
PhDs. These comprise over 80% of the company’s total supervisory
workforce of over 5,000.
The world-class exposure, growth opportunities and competitive
compensation packages offered by Reliance enable it to attract and
retain the best talent in the company. As a result, Reliance’s
employee turnover at 3.26% is among the lowest in the industry.
Recruitment in Reliance targets the world market for the right
individuals, ensuring a global perspective for the people responsible
for global scale plants and operations. Reliance is one of the few
Indian companies with a significant number of expatriates within
the organisation.

Learning and Training
Reliance believes that constant training and development, and
continuous learning, is necessary for ensuring retention of the best
talent, besides providing Reliance with a sustainable platform for
growth in the business environment.
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.
During the year, 336 training programmes covering over 5,000
employees were conducted.
Management Programme for Reliance Engineers
(MPRE)
Reliance has, in association with the Indian Institute of
Management, Bangalore, created a customised management
course for its engineers. The course, which provides managerial
insights to engineers, keeping Reliance’s specific needs in view, is
now completing its 7th year.
The course has now expanded its scope to include, apart from

‘Manufacturing Excellence’, the ‘Techno-Commercial’ aspects of
business. The medium of education is Reliance-specific case
studies, projects and supplementary sessions which are taken by
Reliance’s executives.
Typically, the participants, after undergoing MPRE, move on to
assignments different from the ones they were holding earlier. Care
is taken to match the aptitude of the person with the requirement of
the organisation.
Training Matrices
The key to creating a cutting-edge organisation depends upon its
ability to transform itself into a learning organisation. Reliance has
developed specific matrices, which help to determine the skills/
ability/knowledge required to do the present job, to do the present
job better, and to prepare for the next job.
Every employee identifies his training needs (based on gaps
identified through matrices) with the help of his superior. These
needs are then addressed by imparting the appropriate training to
the employee.
Performance appraisal and reward system
Reliance’s appraisal and reward system is aimed at increasing
employee involvement in the goals and objectives of the
organisation, and encouraging individuals to go beyond their scope
of work, undertake voluntary projects that enable them to learn, and
contribute innovative ideas in meeting the targets of the company.
Reliance places great emphasis on soft, conceptual and cross-
functional skills, especially at managerial levels. Employee
commitment to areas like Human Resource Development, Industrial
Relations, Health, Safety and Environment, and Quality and
Documentation is given high importance.
Human Resources Management System (HRMS)
During the year, a new Human Resources Management System
(HRMS) was implemented to support the task of Human Resource
and Personnel Administration.
This system, designed and developed in-house, is an efficient,
online, user-friendly system, which provides an effective interface
between HR and its employees spread over diverse locations.
The system is built around a central comprehensive database of all
employees which is linked to the attendance system, payroll system
and administrative system (housing, transport and travel), and
which assists the HR department in carrying out recruitment,
performance appraisal, transfer/deputation, separation and final
settlement of employees.

Social Responsibility and Community Development

Reliance believes that organisational growth objectives need to
be married with the overall developmental imperatives of the
society and the community at large, for ensuring sustainable
all-round growth.

Reliance’s social welfare and community development initiatives
focus on the key areas of education, healthcare, and the overall
development of the communities in which it operates.

Reliance has always been quick to place all its resources at the
service of the nation and the community, in times of crises
and emergency.

The Reliance group undertakes its social welfare and philanthropic
initiatives through various organisations, including corporates,
trusts, and others.

Educational Initiatives
Dhirubhai Ambani Institute of Information and Communication
Technology (DA-IICT)

Dhirubhai Ambani Foundation (DAF) has sponsored the Dhirubhai
Ambani Institute of Information and Communication Technology
(DA-IICT) at Gandhinagar, near ‘Infocity’, Gujarat, a fast growing

information technology park.

DA-IICT will offer a wide range of educational, training and research
programmes in information and communication technology at
certificate, undergraduate and postgraduate levels. It will also offer
continuing education programmes for working executives and
practising professionals.
The Institute is launching its four-year programme in information and
communication technology from this academic year.
The Institute will network with leading educational institutions
worldwide, as well as with the industry, to ensure access to state-of-
the-art learning techniques and resources, and strong career
orientation of the programmes.

Dhirubhai Ambani University of Science and Technology
(DAUST)
DAF is also working on establishing the Dhirubhai Ambani
University of Science and Technology (DAUST), a university of
science and technology at Jamnagar, with a focus on emerging
knowledge areas such bio-engineering and bio-technology,
computer science and engineering, energy engineering, food
science and engineering, infrastructure engineering, materials
science and engineering and, ocean engineering.

Reliance Industries Limited

GROWTH IS LIFE

The DAUST is expected to commence in the academic year
beginning June 2002. The process for obtaining university status
has already been initiated with the government of Gujarat.

Scholarships
DAF has introduced and implemented scholarship and reward
schemes for providing encouragement and financial assistance to
meritorious students obtaining first three positions in each district of
Maharashtra, Gujarat, Goa, Daman, Diu, and Nagar Haveli at the
HSC and SSC levels.

Till date, 2090 students have received scholarships under the
“Dhirubhai Ambani SSC Merit Reward “ and “Dhirubahi Ambani
Undergraduate Scholarship” Schemes. Every year, 613 additional
meritorious students will benefit from these schemes.

In addition, the “Reliance Kargil Scholarship Scheme”, floated
specifically with the purpose of assisting children of Kargil war
heroes, has benefited children from 89 families of Army and the Air
force personnel, in the first year of its inception.

Healthcare Initiatives
Sir Hurkisondas Nurottumdas Hospital and Research Centre
(HNHRC), Mumbai

DAF has joined the management of Sir Hurkisondas Nurottumdas
Hospital and Research Centre (HNHRC) and Sir Hurkisondas
Nurottumdas Medical Research Society (HNMRS), based in Mumbai.

HNHRC is one of the oldest hospitals established in 1925, and
HNMRS is a 25 year old institution involved in clinical research
having a social bearing.

DAF plans to make substantial contribution over the next few years
on a ‘Not for Profit’ basis for converting this hospital into a “patient
focused”, world class, state-of-the-art centre of excellence in the
field of healthcare. This institution will serve as a knowledge domain
for health care activities and also become a hub for a wider health
care network. It is also proposed to make this a centre of excellence
for clinical research and medical education. The project is currently
under execution and is likely to be completed over the next few years.

HNHRC currently offers tertiary level health care facilities including
super-specialities like cardiology, cardio-thoracic surgery, neurology
and neuro-surgery, oncology, urology, nephrology, gastroentrology,
etc., with over 150 consultants in various specialisations, and a total
staff of about 1,000, including paramedical and other support staff.

HNHRC also provides free and subsidised outpatient and in-patient
treatment for the poor.

HNHRC is recognised for offering the post graduate programme,
leading to post-graduate diplomas in various specialities awarded
by College of Physicians & Surgeons (CPS), Mumbai and the DNB
(Diplomate of National Board) in various specialities and super-
specialities awarded by the National Board of Examinations, New Delhi.

HNHRC is also recognised by Mumbai University for M.Sc. and
Ph.D. in biochemistry, applied biology, and microbiology. The
hospital also runs a nursing school.

Dhirubhai Ambani Hospital, Lodhivali, District Raigad
This 82-bedded fully equipped hospital caters to an industrial and
rural population in the Raigad district of Maharashtra. It provides for
free outpatient and subsidised in-patient treatment for the needy

and poor patients. It also provides free treatment to trauma victims
of highway accidents.
The hospital has been in existence for about 2 years and has proved
its worth by saving countless lives of victims of vehicular and
industrial accidents. A modern Computerised Tomography (CT)
scan facility has recently been inaugurated, which will be the first
such facility in the entire Raigad district.
Improving quality of life in neighbouring communities
Reliance attaches a high level of importance to improving the quality
of life in the communities surrounding its manufacturing complexes.
The initiatives include coming to the rescue of the community at
times of crises, and also longer-term efforts in areas of education,
health, programmes for social upliftment, etc.
Reliance extends medical services at all its locations. The services
include: free outdoor medical services for nearby communities,
outreach mobile medical services, family planning camps, blood
donation drives, periodic medical camps, antenatal check ups,
vaccination centres, pulse polio camps, school health check up,
diagnostic multidisciplinary camp, eye camps, etc.
Reliance runs its own schools at its manufacturing sites, which
provide high quality education to the children of employees, and
also to the children living in nearby areas.
These schools provide education to over 4,000 students, and are
equipped with modern amenities like well-stocked libraries,
computers, laboratories, sports facilities and playgrounds.
Free transportation facility is provided to all students - a fleet of 25
buses at Patalganga and 12 buses at Hazira, enables over 1,000
students living in nearby villages to attend school everyday.
Apart from this, Reliance provides assistance to schools in nearby
areas in the form of construction of school buildings, providing
computers and felicitating meritorious students, etc.
Reliance has also constructed roads, temples, community halls,
toilet blocks, drainage systems and streetlights in neighbouring
villages. It has also provided financial support to play-schools
(Balwadis) and organised women’s groups (Mahila Mandals) to
promote the concept of small savings.
During the severe drought last year, Reliance took major initiatives
to mitigate the acute shortage of water and fodder in Jamnagar city
and other affected areas.
Reliance supplied 16 lakh gallons of drinking water per day free of
cost to the Jamnagar Municipal Corporation through specially laid
pipelines from the Desalination Plant in the refinery complex during
that time.
Approximately 25% of the city’s demand for drinking water was
fulfilled from the supplies made from the Jamnagar complex. This
supply was continued for nearly 2.5 months. This is the first time in
the history of India that an industrial house provided potable water in
such large quantities to the affected people.
This year, pre-emptive measures have already been taken to avoid
a drinking water crisis in Jamnagar during the summer of 2001.
Reliance, in close coordination with the Gujarat Water Supply and
Sewerage Board and the Jamnagar Municipal Corporation, has laid
a 22-kilometer long pipeline to provide regular water supply. With
this pipeline, the flow of drinking water at the rate of 20 lakh gallons
per day has already commenced, benefiting the people of Jamnagar.

Earthquake Relief

A natural disaster tests the preparedness and crisis management
abilities of even the best organisations. Reliance came through such
a test with determination and a sense of purpose as a massive
earthquake, measuring over 7 on the Richter scale, shook the state
of Gujarat on January 26, 2001.
The earthquake claimed the lives of more than 30,000 people, and
reduced city after city, village after village, to rubble. People lost
homes, commercial establishments and livelihoods in a few
minutes, as the ground shook below their feet. Over 500,000 people
became homeless. The cities of Bhuj (the epicenter), Anjar and
Bachau were worst affected. The epicentre was 96 Kms from Jamnagar.
Reliance immediately allocated a sum of Rs. 15 crores (US$ 3.25

million) for earthquake relief measures in the state. This included a
sum of Rs. 5 crores (US$ 1.1 million) contributed to the Prime
Minister’s Relief Fund.
Reliance placed all available human and material resources at the
disposal of the state government, and the army / air force
authorities, for rescue and relief operations.
More than 20 DG sets were provided in Bhuj, the worst affected
area, for restoration of emergency power.
A reliable communication network was set up linking nearby
affected areas with Jamnagar, through wireless, satellite and
terrestrial telephone lines. A V-Sat connection was installed, and a
radio wireless system was also set up.

Reliance Industries Limited

GROWTH IS LIFE

Helicopter and aircraft sorties were flown continuously to bring in
people, materials, supplies, etc. and evacuate the most seriously
injured persons.
Over 60 heavy equipments and machinery (cranes, bull-dozers,
etc.) were mobilised for removal of debris/rescue work.
More than 3,000 construction workers, and hundreds of vehicles
(including dumpers, trucks, tempos, etc.), were pressed into
service, to assist in the rescue and relief work, and to provide
temporary shelter to affected persons.
Reliance opened several Medical Centres, including a very
large makeshift hospital, with 12 orthopaedic and general surgeons,
20 other doctors and 30 paramedical staff, and over 200
other personnel, on duty, round the clock, for provision of medical
aid, with uninterrupted access to all required medical supplies,
etc.
The Reliance medical team handled over 450 cases, including 20-
30 surgeries, every day. Besides, scores of critically wounded were
flown in to hospitals in Jamnagar, Ahmedabad and Mumbai.

25,000 tarpaulins for tents were flown in and used to set up
community tents, where community kitchens and water tankers
helped serve basic needs of the people. Over 20,000 blankets were
also supplied.
Over 15,000 people were supplied with regular food packets,
including basic rations as well as pre-packed meals, prepared daily
by the Reliance Employees’ Wives’ Association (REWA).
The Reliance team, which camped at Anjar till end March, cleared
about 1 lakh tonnes of debris, and cleared about 8 kilometers of
roads and streets.
Reliance has set up 18 screen printing units in Anjar in the effort to
re-establish the traditional means of livelihood of the families in the
area.
The Reliance team is also putting up shelters, where school children
may resume their classroom studies.
About 1,500 earthquake victims were treated, and 42 were airlifted
to Mumbai for further treatment. Engineering assistance was also
provided to government agencies to remove debris.

Foreign exchange savings, taxes paid and exports

Foreign Exchange Savings
Reliance primarily manufactures products that are impor t
substitutes, thereby contributing to savings of precious foreign
exchange for the country.
The company’s operations have helped the nation save valuable
foreign exchange to the tune of Rs. 17,309 crores (US$ 3,713
million), an increase of 21% over the previous year’s figure of Rs
14,293 crores.
Taxes Paid
Reliance is one of India’s largest contributors to the national
exchequer, primarily by way of payment of customs and excise
duties to various government agencies.
During the year, Reliance paid a total of Rs. 4,277 crores ($ 917
million) in taxes and duties - representing an increase of 15% over
the Rs. 3,719 crores contributed in the form of taxes and duties
during the year 1999-00.
Reliance’s payment of duties and taxes has risen consistently over
the years, despite the decline in the rates of custom and excise
duties. This is on account of the continued growth in production and
sales volumes.

Exports
RIL’s manufactured exports, including deemed exports, doubled to
Rs. 2,960 crores (US$ 635 million), from Rs 1,478 crores (US$ 339
million) in the previous year.

RIL’s total exports, including merchant exports of petroleum
products, were Rs 5,237 crores (US$ 1,123 million).

Total exports from Reliance Industries Limited (RIL) and Reliance
Petroleum Limited (RPL) during the year crossed the US$ 2 billion
mark (Rs 9,370 crores). This ranks the Reliance group as the largest
exporter in the country.

During the year, RIL exported products to over 100 countries,
including to the most quality conscious customers in the US and Europe.

These substantial export revenues demonstrate Reliance’s global
competitiveness, the world class quality of its products, and superior
logistics capabilities.

This strong growth in exports has been achieved while retaining the
thrust on the domestic markets, with exports still representing only
11.5% of RIL’s total sales.

Rankings, Awards and Recognition

Reliance received several national and international awards, and
enjoyed top rankings last year, recognising the company’s
commitment to excellence.

Corporate Rankings
During the year, Reliance was ranked several times among the
global best, reaffirming the company’s growing profile in the world
market.

Reliance was selected as one of the ‘World’s 100 Best Managed
Companies’ for the second consecutive year by Industry Week (IW),
a leading US magazine, in August 2000.

Reliance emerged amongst the ‘Top five fastest growing chemical
companies in the world’ in a survey conducted by the American
Chemical Society published in the Chemical & Engineering News, in
July 2000.

Reliance continued to be mentioned amongst the best companies in
Asia. The Far Eastern Economic Review, in its survey of “Asia’s
leading companies”, ranked Reliance number one in the ‘Long Term
Vision Category’ for the fourth consecutive year, and in the
‘Financial Soundness Category’ for the third consecutive year. The
survey was conducted by AC Nielsen International Research, Hong
Kong, in December 2000.

Reliance entered the list of ‘Top 50 profitable companies in Asia’,
according to Asiaweek’s ranking of Asia’s 1000 largest companies.
The company was ranked amongst the ‘10 most credit worthy
companies in Asia’ in the annual benchmark survey for the best
credits in Asia, featured in Asset Magazine, June 2000.

The Reliance website, www.ril.com was named as the best Asian
Corporate Web site in an analysts’ and investors’ survey conducted
by Financial Intelligence Asia (FIA).

In India, Reliance continued to receive wide recognition. Reliance
was ranked amongst ‘India’s most admired Corporate/Business
Houses’ in a study conducted by Taylor Nelson Sofres Mode (TNS
Mode), the Indian affiliate of the world’s second largest market
research agency, in June 2000.

The company also won the ‘ICMA (Indian Chemical Manufacturers
A s s o c i a t i o n ) Aw a r d ’ fo r O r g a n i s a t i o n a l E x c e l l e n c e, i n
November 2000.

Recognition for Management

Reliance Chairman, Dhirubhai H Ambani, was accorded the rare
honor of being felicitated by the Municipal Corporation of Greater
Mumbai, at a civic reception, in December 2000.

Reliance Industries Limited

GROWTH IS LIFE

He was also conferred the ‘Man of the Century’ award by Chemtech
Foundation and Chemical Engineering World, in recognition of his
outstanding contribution to the growth and development of the
chemical industry in India, in November 2000.
Vice Chairman and Managing Director, Mukesh D. Ambani, received
the ‘Ernst & Young Entrepreneur of the Year award - 2000’, in
September 2000.

The award for ‘Second Highest Export Performance in Woollen /
Worsted Fabric’ presented by the Wool & Woollens Export
Promotion Council during 1999-2000, a special award for Second
Best Overall Performance from SRTEPC for 1999-2000, and the
SRTEPC award for excellence in exports for Man-Made Staple Fibre
for 1999-2000, also recognized Reliance’s export excellence.

Recognition for Exports

Recognition for Community Development

The export performance of the Hazira complex was celebrated with
two awards: the “Export Performance Award” from the government
of Gujarat and the “Excellence in Export Performance” award from
the South Gujarat Chamber of Commerce & Industry.

The ‘Excellence in Community Development’ - 1999-2000 award by
the Golden Jubilee Memorial Trust was presented by The South
Gujarat Chamber of Commerce & Industry, in June 2000, in
recognition of Reliance’s commitment to the people.

Corporate Governance

Reliance aspires to the best global practices in the area of corporate
governance, and follows the principles of fair representation and full
disclosure in all its dealings and communications.
Reliance recognises communication as a key element of the overall
corporate governance framework, and therefore emphasises
continuous, efficient, and relevant communication to all external
constituencies.
Reliance’s annual reports, results media releases, results
presentations, and other forms of corporate and financial
communications, provide extensive details and convey important
information on a timely basis.
The corporate communications and investor relations functions are
accorded the highest level of importance within the company, with
active ongoing monitoring by, and involvement of, the top management.
Reliance has set new benchmarks in adequate and timely corporate
disclosure, becoming the only Indian company, with its scale and
complexity of operations, to regularly publish its audited annual
results, together with the complete annual report, soon after the
close of each financial year.
Reliance has taken the lead in having its accounts audited by a firm
of international accountants, in addition to the regular audit by the
statutorily appointed Indian auditors.

Reliance provides, as a matter of regular practice, a reconciliation of
its quar terly and annual accounts with US GAAP, for the
convenience of its wide and growing base of international investors.
Reliance communicates cor porate, financial and product
information, online, on its website, www.ril.com. During the year, the
Reliance website, was adjudged the best Asian corporate website in
an analysts’ and investors’ survey conducted by Financial
Intelligence Asia (FIA).

Corporate Ethics

Reliance has a defined policy framework for ethical business
conduct by its personnel.

The Ethics Policy 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.
These policies support the consistent endeavour to enhance the
reputation of the company.

The “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, the 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 persons’ interests count as much as their own.

The “Code of Ethics” and the “Business Policies” are in alignment with Reliance’s Values and Commitments. The essence 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.

The “Code of Ethics” policy document contains the policy on the
following:

The “Business Policies” document contains the policy on the
following:

l Conflict of Interest

l Payments and Gifting

l Receipt of Gifts

l Purchases through suppliers

l Appointment of full-time agents, consultants and

representatives

l Political Contributions

l Fair Market Practices

l Inside Information

l Financial, Records and Accounting integrity

l External Communication

l Work Ethics

l Personal Conduct

l Health Safety and Environment

l Quality

The “Insider Trading Policy” document contains the policies prohibiting insider trading.

Reliance Industries Limited

GROWTH IS LIFE

In compliance with Clause 49 of the Listing Agreement with Stock
Exchanges the Company submits the report on the matters
mentioned in the said Clause and practice followed by the
Company:

1. Company’s Philosophy on Code of Governance

Reliance’s philosophy on corporate governance envisages the
attainment of the highest levels of transparency, accountability
and equity, in all facets of its operations, and in all its inter-
actions with its stakeholders, including shareholders,
employees, the government and lenders.

Reliance is committed to achieving the highest international
standards of corporate governance.

Reliance believes that all its operations and actions must serve
the underlying goal of enhancing overall shareholder value, over
a sustained period of time.

2. Board of Directors

The Board of Directors consists of 14 directors.

Composition and category of Directors is as follows:

Category
Promoter/Executive Directors

Name of the Directors
D.H. Ambani
M.D. Ambani
A.D. Ambani
N.R. Meswani
H.R. Meswani

Promoter Non-Executive Director

R.H. Ambani

Non-Promoter Executive Director

H.S. Kohli

Non-Executive and
Independent Directors

M.L. Bhakta
Y. P. Trivedi
T.R. U. Pai
S. Venkitaramanan
(Nominee Director -
ICICI)
U. Mahesh Rao
(Nominee Director -
GIC)
Dr. D.V. Kapur
M.P. Modi

Attendance of each Director at the Board meetings, last
Annual General Meeting and Number of other Directorship
and Chairmanship/Membership of Committee of each
Director in various companies:

Name of
the Director

Attendance
Particulars

No. of other directorships
and committee member/chairmanship

Board Meetings

Last AGM

Other

Committee

Directorships Memberships

Committee
Chairmanships

D. H. Ambani
M.D. Ambani
A.D. Ambani
N.R. Meswani
H.R. Meswani
H.S. Kohli
R.H. Ambani
M.L. Bhakta
Y.P. Trivedi
T.R.U. Pai
S.Venkitaramanan
U. Mahesh Rao
*Dr. D.V. Kapur
*M.P. Modi

6
3
6
5
3
3
5
6
5
5
1
6
None
None

Yes
Yes
Yes
No
No
Yes
Yes
Yes
Yes
Yes
No
Yes
--
--

None
2
2
1
None
None
None
9
5
2
3
10
3

1
4
4
1
1
1
7
7
15
15
9
7
11
9

* Appointed as additional Directors during the year.

None
1
None
None
None
None
None
5
1
None
None
None
2

Number of Board Meetings held and the dates on which held

6 Board Meetings were held during the year, as against the
minimum requirement of 4 meetings. The dates on which the
meetings were held are as follows: 12th April, 18th April, 19th
May, 20th July, 31st October in 2000, and 31st January in the year
2001. The maximum time gap between any two meetings was not
more than three calendar months.

3. Audit Committee

The Board of the Company has constituted an Audit
Committee, comprising four independent, Non-Executive
Directors viz. Shri Y.P. Trivedi, Chairman, Shri S.
Venkitaramanan, Shri U.Mahesh Rao and Shri T.R.U. Pai. The
the
constitution of Audit Committee also meets with
requirements under Section 292A of the Companies Act,
1956.

The terms of reference stipulated by the Board to the Audit
Committee are, as contained under Clause 49 of the Listing
Agreement, as follows:

a. Oversight of the Company's financial reporting process

and the disclosure of its financial information.

b. Recommending the appointment and removal of external
auditors, fixation of audit fee and also approval for
payment for any other services.

c. Reviewing with management

the annual

financial
statements before submission to the board, focussing
primarily on (i) any changes in accounting policies and
practices, (ii) major accounting entries based on exercise
of judgement by management, (iii) qualifications in draft
audit report, (iv) significant adjustments arising out of
audit, (v) the going concern assumption, (vi) compliance
with accounting standards, (vii) compliance with Stock
Exchange and legal requirements concerning financial
statements and (vii) any related party transactions i.e.
transactions of the company of material nature, with
promoters or the management, their subsidiaries or
relatives etc. that may have potential conflict with the
interests of Company at large.

d. Reviewing with the management, external and internal

auditors, the adequacy of internal control systems.

e. Reviewing the adequacy of internal audit functions.

f. Discussion with internal auditors any significant findings

and follow up there on.

g. Reviewing the findings of any internal investigations by
the internal auditors into matters where there is suspected
fraud or irregularity or a failure of internal control systems
of a material nature and reporting the matter to the board.

h. Discussion with external auditors before

the audit
commences nature and scope of audit as well as have
post-audit discussion to ascertain any area of concern.

i. Reviewing the Company's financial and risk management

policies.

j. To look into the reasons for substantial defaults in the
payment
debentureholders,
shareholders (in case of non payment of declared
dividends) and creditors.

depositors,

the

During the year, the Committee has met 7 times, as against
the minimum requirement of 3 meetings. Shri U. Mahesh Rao
was present for 7 meetings, Shri T.R.U. Pai was present for 6
meetings, Shri Y. P. Trivedi was present for 6 meetings and
Shri S. Venkitaramanan was present for 4 meetings.

4. Remuneration Commisttee

The Board of the Company has constituted a Remuneration
Committee, comprising of 3 independent, Non-Executive

Reliance Industries Limited

Directors viz. Shri M.L. Bhakta, Chairman, Shri Y.P. Trivedi
and Shri U. Mahesh Rao.

GROWTH IS LIFE

The Remuneration Committee has been constituted to
the
recommend/review
Managing/ Whole time Directors, based on performance and
defined criteria.

remuneration package of

the

During the year, the Committee has met once and all the
members of the Committee were present at the meeting.

The remuneration policy is directed towards rewarding
performance, based on review of achievements on a
periodical basis. The remuneration policy is in consonance
with the existing Industry practice.

Details of remuneration paid to all the
Directors for the year:
The aggregate value of salary, perquisites and commission
paid for the year ended 31st March, 2001 to Wholetime
Directors is as follows:- Shri D.H. Ambani, Chairman, Rs.8.85
crores, Shri M.D. Ambani, Vice Chairman and Managing
Director, Rs.7.13 crores, Shri A.D. Ambani, Managing
Director, Rs.7.13 crores, Shri N.R. Meswani, Executive
Director, Rs. 1.90 crores, Shri H.R. Meswani, Executive
Director, Rs.1.90 crores. The aggregate value of salary and
perquisites paid to Shri H.S. Kohli, Executive Director was
Rs.15.60 lacs. Besides this, all the Wholetime Directors were
also entitled to company's contribution to Provident Fund,
Superannuation or Annuity Fund, to the extent not taxable
and Gratuity and encashment of leave at the end of tenure,
as per the rules of the Company.

The Company pays sitting fees to all the Non-Executive
Directors at the rate of Rs.5000 for each meeting. The sitting
fees paid for the year ended 31st March, 2001 to the
Directors are as follows:- Shri R.H. Ambani, Director,
Rs.25,000, Shri M.L. Bhakta, Director, Rs.1,45,000, Shri Y.P.
Trivedi, Director, Rs.1,75,000, Shri T.R.U. Pai, Director,
Rs.60,000, Shri S. Venkitaramanan, Nominee Director - ICICI
Rs. 25,000 and Shri U. Mahesh Rao, Nominee Director - GIC
Rs.70,000.

5. Shareholders’/ Investors’ Grievance Committee
The Board of the Company has constituted a Shareholders' /
Investors' Grievance Committee, comprising of Shri M.L.
Bhakta, (Chairman), Shri Y.P. Trivedi, Shri M.D. Ambani and
Shri A. D. Ambani. The Committee, inter alia, approves issue
of duplicate certificates and oversees and reviews all matters
connected with the securities transfers. The Committee also
looks into redressing of shareholders' complaints like transfer
of shares, non-receipt of balance sheet, non-receipt of
declared dividends, etc. The Committee oversees
the
performance of the Registrar and Transfer Agents, and
recommend measures for overall improvement in the quality
of investor services. The Board of Directors have delegated
the power of approving transfer of securities to the Managing
Directors and the Company Secretary.

The Board has designated Shri Rohit C. Shah, Vice President
and Company Secretary, as the Compliance Officer.

The total number of complaints received and replied to the
satisfaction of shareholders during the year under review,
was 39,669. Outstanding complaints as on 31st March, 2001
were 428, which were attended/replied to by 7th April, 2001.
for
2101
dematerialisation were pending for approval as on 31st
March, 2001, which were approved and dealt with by 9th
April, 2001 and 4th April, 2001 respectively.

transfers and 1476

requests

for

6. General Body Meetings

Location and time for last 3 Annual General Meetings were:

Year

AGM

Location

Date

Time

1997-98 AGM

Birla Matushri Sabhagar,

24/6/1998

11.00a.m.

19 Marine Lines,

Mumbai 400020

1998-99 AGM

Same as above

1999-00 AGM

Same as above

26/6/1999

11.00a.m.

13/6/2000

11.00a.m.

No postal ballots were used/invited for voting at these
meetings in respect of special resolutions passed as there
were no such provisions in the Companies Act, 1956. The
Company shall comply with the requirements relating to
postal ballot as and when the relevant guidelines in this
connection are issued.

a. Disclosures on materially significant related party
transactions i.e. transactions of the Company of
material nature, with its promoters, the directors or
the management, their subsidiaries or relatives, etc.
that may have potential conflict with the interests of
the company at large.

None of the transactions with any of the related parties
were in conflict with the interest of the Company.

b. Details of non-compliance by

the Company,
penalties, strictures
imposed on the Company
by Stock Exchanges or SEBI, or any statutory
authority, on any matter related to capital markets,
during the last three years.

None

8. Means of communication

Half-yearly
shareholders

report sent

to each household of

This will be done for the half year ending 30th September,
2001.

Quarterly results

The quarterly results are published in 'Business Standard'
and 'Sakal', alongwith the official news release, and the
detailed presentations made
the media, analysts,
institutional investors, etc. are displayed on the corporate
website, www.ril.com,

The Management Discussion and Analysis (MD&A) is a
part of the annual report, and each quarterly official
media release.

Reliance Industries Limited

9. General Shareholder Information

GROWTH IS LIFE

9.1. Annual General Meeting

- Date and Time
- Venue

9.2. Financial Calendar

(tentative)

9.3. Book closure date

9.4. Dividend payment date

June 15, 2001 at 11.00 a.m.
Birla Matushri Sabhagar, 19, Marine Lines, Mumbai 400 020

Annual General Meeting
Results for quarter ending June 30, 2001
Results for quarter ending September 30, 2001
Results for quarter ending December 31, 2001
Results for year ending March 31, 2002

June 15, 2001
Last week of July, 2001
Last week of October, 2001
Last week of January, 2002
Last week of April, 2002

12th May, 2001 to 19th May, 2001, for payment of dividend

16th June, 2001 onwards

9.5. (a) Listing of Equity Shares on
Stock Exchanges at

: Mumbai • Ahmedabad • Bangalore • Calcutta • Chennai • Cochin • New Delhi •

Kanpur • Pune and the National Stock Exchange (NSE).

(b) Listing of Non-Convertible
Debentures (Series PPD-III
and PPD-VIII)

Bombay Stock Exchange and National Stock Exchange on Wholesale Debt Market
Segment.

Receipts (GDRs) at

Luxembourg Stock Exchange and traded on PORTAL System (NASDAQ, USA) and
SEAQ System (London Stock Exchange).
(Note: Annual listing fees for the year 2001-02 have been duly paid to all the above Stock Exchanges)

9.6. (a) Stock Code

Trading Symbol Bombay Stock Exchange
Trading Symbol Bombay Stock Exchange (Demat Segment)
Trading Symbol National Stock Exchange
Trading Symbol National Stock Exchange (Demat Segment)
(For T+5 settlement) and ‘RELIANCEBE’ (For T+1 settlement)

:
:
:
:

‘RIL 325’
‘RILDM500325’
‘RELIANCE EQ’
‘RELIANCEAE’

(b) Demat ISIN Numbers in NSDL :
& CDSL for Equity Shares

ISIN No. : INE002A01018

9.7. Stock Market Data

Bombay Stock Exchange (BSE)
(In Rs.)

National Stock Exchange (NSE)
(In Rs.)

April 2000
May 2000
June 2000
July 2000
August 2000
September 2000
October 2000
November 2000
December 2000
January 2001
February 2001
March 2001

Month’s High Price
376.90
357.40
353.80
376.00
345.85
390.00
350.00
332.00
352.50
391.00
430.35
451.80

Month’s Low Price
279.10
304.00
323.10
320.00
322.40
331.05
283.70
300.00
324.15
339.50
373.00
370.10

Month’s High Price
380.00
356.80
354.65
377.70
346.00
389.80
348.50
332.40
352.80
405.00
429.35
451.00

Month’s Low Price
278.25
306.50
323.25
320.20
322.30
334.00
283.35
301.15
324.00
339.00
372.70
365.25

9.8. Share price performance in comparison to broad based indices – BSE Sensex and NSE Nifty

RIL share price performance relative to BSE Sensex based on share price on 31st March, 2001
Period

% Change in

Year to Date
Financial Year 2000-2001
Year-on-Year
2 years
3 years
5 years
10 years
RIL share price performance relative to Nifty based on share price on 31st March, 2001
Period

RIL share price
+15%
+24%
+24%
+200%
+121%
+269%
+552%

Sensex
-9%
-28%
-28%
-4%
-7%
+7%
+209%

% Change in

Year to Date
Financial Year 2000-2001
Year-on-Year
2 years
3 years
5 years

9.9. Registrar and Transfer Agents:

(Share transfer and communication
regarding share certificates,
dividends and change of address)

Nifty
-9%
-25%
-25%
+7%
+3%
+17%

RIL share price
+15%
+23%
+23%
+199%
+123%
+277%
Karvy Consultants Ltd.
46, Avenue 4, Street No.1
Banjara Hills
Hyderabad 500 034
E-Mail: rilinvestor@karvy.com

RIL relative to Sensex
+24%
+52%
+52%
+204%
+128%
+262%
+343%

RIL relative to Nifty
+24%
+48%
+48%
+192%
+120%
+260%

Reliance Industries Limited

9.10. Share Transfer System

GROWTH IS LIFE

Presently, the share transfers which are received in physical form are processed and
the share certificates returned within a period of 10 to 15 days from the date of receipt,
subject to the documents being valid and complete in all respects. The Company has,
as per SEBI guidelines with effect from 24th March, 2000, offered the facility of
transfer cum demat. Under the said system, after the share transfer is effected, an
option letter is sent to the transferee indicating the details of the transferred shares
and requesting him in case he wishes to demat the shares, to approach a Depository
Participant (DP) with the option letter. The DP, based on the option letter, generates a
demat request and sends the same to the company along with the option letter issued
by the Company. On receipt of the same, the Company dematerialise the shares. In
case the transferee does not wish to dematerialise the shares, he need not exercise
the option and the Company will despatch the share certificates after 15 days from the
date of such option letter.

9.11. Distribution of Shareholding as on 31st March, 2001:

Others
18%

International
Investors
(GDR/FIIs/NRIs)
24%

Bodies
Corporate
43%

Indian
Financial
Institutions/
Banks/
Mutual Funds
15%

9.12. Dematerialisation of Shares

: Over 85% of the outstanding shares have been dematerialised up to 31st March,
2001. Trading in Equity Shares of the Company is permitted only in dematerialised
form w.e.f. 5th April, 1999 as per notification issued by the Securities and Exchange
Board of India (SEBI).

Liquidity:
RIL shares are among the most liquid and actively traded shares on the Indian stock exchanges. RIL shares consistently rank
among the top few traded shares, both in terms of number of shares traded, as well as in terms of value. The highest trading
activity is witnessed on the BSE and NSE stock exchanges. Relevant data for the average daily turnover for the financial year
2000-2001 is given below:

In no. of shares (in lakhs)
In value terms (Rs. crores)

($ million)

Bombay Stock Exchange
(BSE)
52.01
182.92
39.24

National Stock Exchange
(NSE)
61.18
212.97
45.68

BSE + NSE
113.19
395.89
84.29

9.13. Outstanding GDR/Warrants and
Convertible Bonds, Conversion
date and likely impact on the Equity

: Outstanding GDRs as on 31st March, 2001 represent 5,62,92,927 shares (5.34%).

There are no further outstanding instruments, which are convertible into equity in
the future.

9.14. Plant locations

•

Patalganga Complex
B-4, Industrial Area, Patalganga
Off Bombay-Pune Road
Near Panvel, Dist. Raigad 410 207
Maharashtra State, India.

• Hazira Complex

Village Mora, Bhatha P.O.
Surat-Hazira Road
Surat 394 510, Gujarat State, India.

9.15. (i) Investor Correspondence

For transfer / dematerilisation of
shares, payment of dividend on
shares, interest and redemption
of debentures, and any other
query relating to the shares and
debentures of the Company.

(ii) Any query on Annual Report

• Naroda Complex

•

103/106, Naroda Industrial Estate
Naroda, Ahmedabad 382 320
Gujarat State, India.

For Shares held in Physical form
Karvy Consultants Ltd.
46, Avenue 4, Street No. 1
Banjara Hills
Hyderabad 500 034
E-Mail: rilinvestor@karvy.com

Secretarial Department
"Chitrakoot", 'C' & 'D' Block, Second Floor
Shree Ram Mills Compound
Ganpatrao Kadam Marg, Worli
Mumbai 400 013

Reliance Industries Limited

Jamnagar Complex
Village Motikhavdi
P.O. Digvijay Gram, Dist. Jamnagar
Gujarat 361 140, India.
For Shares held in Demat form
To the Depository Participant

GROWTH IS LIFE

List of Investor Service Centres of Karvy Consultants Ltd.

PHONE - 0FF

FAX

CITY / CENTRE

AGRA

AHMEDABAD
ALLAHABAD
AMBALA CITY

AMRITSAR
ASANSOL

BANGALORE
BAREILY
BELLARY

BHUBANESWAR
CHENNAI

COIMBATORE
DEHRADUN

DHANBAD
ERODE
GHAZIABAD

GOA
GULBARGA

GUNTUR
GUWAHATI
GWALIOR

HUBLI
HYDERABAD

INDORE
JABALPUR
JAGADISHPUR

JAIPUR
JAMMU

JAMNAGAR
JAMSHEDPUR

JODHPUR
KANPUR

STD

0562

079
0532
0171

0183
0341

080
0581
08392

0674
044

0422
0135

0326
0424
0120

0832
08472

0863
0361
0751

0836
040

0731
0761
05361

0141
0191

0288
0657

0291
0512

352368

6420422 / 6400527
400588
530891 / 533878

547279
204968 / 200169

6621184 / 6621192
574731
77592

539287 / 539387
8253445 / 8258034

237501 / 237502
659771 / 713351

302838 / 304068
225601 / 225603
4796496

226150 / 228470
27635 / 41193

326684 / 326686
543322 / 515251
321524

352368

6565551
400988
530891

~
~

6621196
~
77592

~
8273181

237507
~

303021
~
4792961

223742
26794

326687
515251
328007

254568 / 351533
3312454 / 3320251

351756
3312946

432837
312009 / 504165
70049

363321 / 375039
547246

540998
432064

627918 / 641533
318850 / 357672

~
312009
~

364660
~

~
423061

627918
318850

MUMBAI - NARIMAN POINT 022

2855814 / 2875951

2828454

KARUR

KHARAGPUR

KOCHI

KOLKATA

LUCKNOW

LUDHIANA

MADURAI

MANGALORE

MUMBAI -ANDHERI

MYSORE

NAGPUR

NASIK

NEW DELHI

ONGOLE

PATNA

PONDICHERRY

PUNE

RAJAHMUNDRY

RAJKOT

ROURKELA

SALEM

SHIMOGA

SIRSI

SOLAPUR

SURAT

TANJORE

VADODARA

VIJAYAWADA

VISHAKHAPATNAM

STD

04324

03222

0484

033

0522

0161

0452

0824

022

PHONE - 0FF

66881 / 66882

55092 / 55582

FAX

66881

55582

310884 / 322152

323104

4647232 / 4644891

4644866

230552 / 230273

424862 / 426112

587948

492302

280978

407749

587948

6369044 / 6367226

6310882

0821

0712

0253

011

510781

537531 / 538131

538133

577811 / 577833

3324401

3324621

08592

26091 / 26092

0612

0413

020

0883

0281

0661

0427

08182

08384

0217

0261

04362

0265

0866

0891

263604 / 268292

330291

345638

5530204 / 5530205

5533292

444318

223733 / 220339

510771 / 510772

335701

78199

27919 / 27929

311027

227365 / 220636

50147

361514 / 364168

436965 / 437250

595183 / 596877

465318

220339

335705

78199

25319

312219

363207

436241

595338

Reliance Industries Limited

GROWTH IS LIFE

Directors’ Report

The Directors have pleasure in presenting the 27th Annual Report and the audited accounts for the financial year ended 31st March, 2001.

Financial Results

Gross profit before interest and depreciation

Less :Interest

Depreciation

2000-2001

Rs. Crs.

US$ Mn*

5,561.72

1,192.99

1,215.99

260.83

1999-2000

Rs. Crs.

US$ Mn

4,746.61

1,088.17

1,008.00

231.09

2,636.73

2,533.59

Less : Transfer from General Reserve

1,071.62

1,565.11

335.72

1,255.23

1,278.36

293.06

Profit before Tax

Less : Provision for Taxation

Profit after Tax

Balance in Profit and Loss Account

Investment Allowance (Utilised) Reserve Written Back
Debenture Redemption Reserve Written back

2,780.62

596.44

2,460.25

564.02

135.00

28.96

57.00

13.07

2,645.62

1,739.48

10.00
–

567.48

373.12

2.15
–

2,403.25

1,132.67

30.00
232.12

550.95

259.67

6.88
53.21

Surplus Available for Appropriation

4,395.10

942.75

3,798.04

870.71

Appropriations :

Capital Redemption Reserve

Debenture Redemption Reserve

Capital Reserve

General Reserve

Dividend on Preference Shares

Interim Dividend on Equity Shares

Recommended dividend on Equity Shares

Tax on dividend

Balance carried to Balance Sheet

292.95

344.57

98.11

62.84

73.91

21.05

192.12

44.04

–

1,000.00

214.50

1,400.00

320.96

4.77

–

447.85

46.20

2,160.65

4,395.10

1.02

–

96.06

9.91

463.46

942.75

35.57

384.65

–

46.22

1739.48

3,798.04

8.15

88.18

–

10.60

398.78

870.71

* 1 US $ = Rs. 46.62 Exchange rate as on 31-3-2001 (Previous year as on 31-3-2000 1 US $ = Rs. 43.62)

DIVIDENDS
The Directors have declared a dividend of Rs. 4.25 per Equity share
on 105,37,57,027 Equity shares of Rs. 10 each for the financial year
ended 31st March, 2001, which if approved at the forthcoming Annual
General Meeting will be paid to all those Equity Shareholders whose
names appear in the Register of Members as on 12th
May, 2001.
The directors have also declared interim dividend on 1,17,45,000 -
10% Cumulative Redeemable Preference Shares of Rs. 100 each,
10,50,000 - 10.5% Cumulative Redeemable Preference Shares of
Rs. 100 each, 50,00,000 - 10.5% Cumulative Redeemable Preference
Shares of Rs. 100 each, 1,15,00,000 - 9.5% Cumulative Redeemable
Preference Shares of Rs. 100 each, which have been paid on 30th
May, 2000.

Buy-back of Shares
At the Annual General Meeting held on 13th June, 2000, the
Shareholders had approved the Buy-back of the company’s shares
of Rs. 10 each for an amount not exceeding Rs. 1100 Crores, upto a
maximum price of Rs. 303 per share, through open market purchases
from the stock exchanges.
The company’s share price has closed below the specified maximum
Buy-back price of Rs. 303 per share, on only 11 days, out of the total
264 trading days that have elapsed since the Buy-back announcement.
The Company has not bought back any of its shares in those limited
number of days when the share price has dropped below the
maximum specified Buy-back price, as the share has consistently
been outperforming all benchmark indices by a wide margin, and the

temporary decline for a limited number of days had also been more
a reflection of short term volatility in the global, regional and domestic
stock markets.
The Company has consistently set forth its philosophy of viewing
share Buy-back as a long term measure to enhance overall
shareholder value and returns, and not a mechanism to artificially
support any particular price level for the Company’s shares, or to
respond to short term speculative pressures. Accordingly, it is
proposed once again to obtain the approval of shareholders for a
share Buy-back programme, on the same terms, at the forthcoming
Annual General Meeting.

Employee Stock Option Schemes
At the Annual General Meeting held on 13th June, 2000, the
Shareholders had approved the Employee Stock Option Schemes.
During the year, the Company has reserved issuance of 5,26,87,851
Equity Shares of Rs 10 each for employees under the Employees
Stock Option Scheme (ESOP). No ESOPs have been granted to
employees as on date.

Subsidiary Companies
During the year, Reliance Power Ventures Limited, Reliance Life
Insurance Company Limited, Reliance General Insurance Company
Limited, Reliance Infocom B. V., Reliance Infocom Inc., and Reliance
Technologies LLC have become 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 and the respective Auditors’ Report thereon of all the
subsidiary companies for the year ended 31st March, 2001, are
annexed.

Reliance Industries Limited

GROWTH IS LIFE

Fixed Deposits

The Company has not accepted any deposits during the year.

Directors

Dr. D. V. Kapur and Shri M. P. Modi were appointed as Additional
Directors during the year from 28th March, 2001. They hold office
upto the date of ensuing Annual General Meeting and are eligible for
reappointment. The company has received notices under Section
257 of the Companies Act,1956, proposing their appointment as
Director, subject to retirement by rotation.

Shri Y. P. Trivedi, Shri D. H. Ambani and Shri M. L. Bhakta, retire by
rotation and being eligible offer themselves for reappointment.

Directors’ Responsibility Statement

Pursuant to the requirement under Section 217(2AA) of the
Companies Act, 1956, with respect to Directors’ Responsibility
Statement, it is hereby confirmed:

(i)

That in the preparation of the accounts for the financial year
ended 31st March, 2001, the applicable accounting standards
have been followed along with proper explanation relating to
material departures;

(ii) That the Directors have selected such accounting policies and
applied them consistently and made judgements and estimates
that were reasonable and prudent so as to give a true and fair
view of the state of affairs of the Company at the end of the
financial year and of the profit or loss of the Company for the
year under review;

(iv) That the Directors have prepared the accounts for the financial
year ended 31st March, 2001 on a ‘going concern’ basis.

Auditors

International Accountants
The report submitted by M/s. Deloitte Haskins and 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.

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, as per
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.

Energy, Technology and 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.

Compliance Certificate
A certificate from the auditors of the Company regarding compliance
of conditions of Corporate Governance as stipulated under Clause
49 of the Listing Agreement is attached to this report.

Acknowledgment
Your Directors would like to express their grateful appreciation for
the assistance and co-operation received from the Financial
Institutions, Banks, Government Authorities and Shareholders 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

Mumbai
Dated: 30th April, 2001.

Dhirubhai H. Ambani
Chairman

Annexure to Directors' Report

PARTICULARS REQUIRED UNDER THE COMPANIES
(DISCLOSURES OF PARTICULARS IN THE REPORT OF BOARD
OF DIRECTORS) RULES, 1988
A.
a)
1.

CONSERVATION OF ENERGY
Energy Conservation Measures taken:-
Optimisation of Nitrogen requirement led to stoppage of one
Nitrogen compressor in MEG Plant.
Optimisation of steam condensate transfer led to stoppage of
one condensate transfer pump in VCM Plant.
Optimisation of purge air compressor in VCM plant.
Replacement of pumping ring by screw in EDC cracking
furnace feed pumps in VCM plant led to reduction in power
consumption.
Stoppage of old warm water pump in PVC plant.

3.
4.

Optimisation of OSBL chilled water supply pumps in PVC plant
led to stoppage of two pumps.

Optimisation of new chilled water supply pumps in PVC plant
led to stoppage of two pumps.

Stoppage of injection water pump in PVC plant.

Pneumatic conveying operation optimisation in System-2 line-
2 of PVC plant.

10. Reduction in plant air compressor discharge pressure from

3.2 to 2.5 kg/cm^2g in PVC plant.

11. Changing of connection from Delta to Star in stripping column
bottom pumps in PVC plant for maximum utilisation of available
power.

12. Capacity up-gradation of Old Slurry Stripping Column top

Reliance Industries Limited

GROWTH IS LIFE

condensers in PVC plant led to reduction in steam and power
consumption.

44. Conversion of under utilized motors from delta to star

connection in PSF plant.

13. Gas firing in dryer heater instead of steam heating coil system

45. Removal of delumper in finisher EG circulation system of CP-

in PVC plant.

6/7.

14. Optimisation of CM column overhead fan in PE plant.

15. Reduction in insulation losses in PE furnace by attending faulty

insulation.

16. Rectification of Steam traps in PE plant to reduce steam loss.

17. Use of MP steam in place of HP steam in reactor feed heater

in PE plant.

18. Running only one filtrate pump and seal fluid pump in oxidation

section of PTA plants.

19.

Blade angle change of cooling tower Fans in PTA plant has
resulted in stopping of one Fan.

20. CPU feed pump, Ethylene tower reflux pump , Quench water
Pump stoppage in Cracker Plant through optimisation.

21. Heat recovery from Aromatics steam condensate lead to

saving in LP Steam.

22.

23.

By-pass provision for CPU tank and feed pump in Cracker
plant.

End capping of purge steam to USX and TLX outlet points in
Cracker plant.

24. Reduction of 2 TPH MP Steam by reducing solvent ratio from

4.1 to 3.7 in Aromatic plant.

25.

Additional lean solvent pump of lower capacity to avoid dual
running of higher capacity pumps in Aromatics plant.

26. Uprating of Fractionation Feed pump Motor to avoid dual
running during high frequency / load fluctuations in Aromatics
plant.

27.

Provision of additional MP Steam Header in Aromatics plant
has stopped HP Steam letdown to MP Steam.

28.

Stopping of propylene condensate pump by using gravity head.

29. Running one C3 compressor at 100% load instead of running

two C3 compressors at 50 % load.

30.

Stoppage of one jet water pump in CP-1/2/3 by providing orifice
at condenser.

31. Dowtherm Heat optimization in CP Polymer cooler.

32.

33.

Stoppage of 2 nos chilled water circulation pump in POY plant
by system modification.

Stoppage of chilled water Transfer pump for PTA by system
modification.

34. Connecting three estrifier to single stripping column in POY

plant.

35.

Stoppage of one jet water pump in CP-7 by providing orifice at
condenser.

36. Optimisation of operation of CP-7 HCT pump by reducing re-

circulation flow.

37.

Stoppage of one fan of VCT out of two running in CP-8 by
reducing Dowtherm venting.

38. Optimisation of filter exhaust fans running in Glycolysis.

39.

Stoppage of one cooling tower fan in CP-8 by optimising
requirement.

46.

47.

Switching off of pack pre-heaters in PSF plant.

Stoppage of electrical super heater in CP-8 ejector.

48. Replacement of faulty traps (inverted bucket) with float type

traps of correct capacity in EG recovery heat exchangers.

49.

Impeller modification of CCT pump of CP-7, CP-8 VCT pump
and Steam condensate pump for power saving.

50. Reduction in dow load by utilizing heat of esterifier hot EG for

pre-heating cold EG for slurry preparation.

51.

52.

53.

Provision of additional trap for spray draw zone of PFF draw
line and closure of trap drain.

Provision MP steam in place of HP let down steam for Steam
draw chest, steam boxes of PSF draw line and dryer of PFF
draw line.

Stoppage of one out of two steam ejectors in CP 6/7 by
increasing the EG flow to UFPP EG spray condenser.

54. DS-II heating system bypass by optimizing process parameters

in PSF plant.

55. Optimization of CT fan operation during night shift in PP plant.

56.

57.

58.

59.

60.

61.

62.

Lighting optimization by providing switches, timers, LED type
lamp in place of filament indication lamp and delamping in the
complex.

Powers saving in cooling water pumping by optimizing the
cooling water supply in STG and RC trim cooler.

Power saving by shifting of partial load to RWTP#1 from
RWTP#2.

Power saving by switching off one transfer pump at RWTP#2.

Installation of Fogging system in GT-5.

Stoppage of booster pump for chlorination in CT-2 & CT-3 by
providing the supply from main header.

Power saving by avoiding double pumping of CT makeup to
PP, PE C/T.

Additional Investments / Proposals, being implemented
for reduction in Consumption of Energy:-

Use of LP Steam instead of MP steam in Glycol bleed flasher-
II Reboiler in MEG plant.

Use of process vent gas in POY Dow vaporiser.

BFW pre-heating using condensate in MEG plant.

Use of existing MEG Pumps for transferring to POY.

Use of LP steam in heads column 1 & 2 in place of IP steam
in VCM plant.

Use of pump in VCM column bottom.

Improvement in efficiency of 7 pumps in VCM plant.

Use of MP steam in place of HP steam for tracers, atomising,
purge heater in PE-II.

Re-routing of DOW HP condensate of Area 200 to HP
condensate instead of LP DTA Tank in PE plant.

10.

Variable frequency drives for area 200 regeneration blowers
in PE plant.

11. Reducing CW flow in PE-II.

40.

Stoppage of blowers of tow feeder in PFF draw line.

12.

VFD in reactor feed pump in PE plant.

41. Optimisation of Spinning Quench AHU conditions to reduce

13. Recovery of heat from recycle cyclohexane in PE plant.

chilled water load.

Stoppage of water circulation of cooling stand in PSF draw
line.

Stoppage of chilled water of knock out pot in EGR by diverting
the vapour load to EGR jet.

14. Replacing conveying blowing motors of 8026 A/B of both lines

with low rating motors in PP plant.

15. Replacing flare MP steam by LP steam in PP plant.

16. Replacement of DH column fan blades by FRP in PTA plant.

Reliance Industries Limited

42.

43.

GROWTH IS LIFE

17.

Increasing dia of PAC discharge line to 20" in PTA plant.

18. C/O of impeller for G207 pumps in PTA plant.

19.

20.

Kickback control valves for G2351, G207, G802 in PTA plant.

Providing intermediate flash vessel; (HP condensate) for E2-
1211 condensate in PTA plant .

21.

Stopping de-superheating pumps for SHP in PTA 1 / 2.

22. Reducing furnace insulation losses in Cracker plant.

23.

Impeller change in P230/P240/P731 in Cracker plant.

11. Delta to star connection in stripping column bottom pumps
resulted in savings of Rs 2.8 lacs/annum in PVC plant.

12. Capacity up-gradation of Old Slurry Stripping Column top
condensers resulted in savings of Rs 19.7 lacs/annum in PVC
plant.

13. Gas firing in dryer heater instead of steam heating coil system
resulted in savings of Rs 239 lacs/annum in PVC plant.

14. Optimisation of CM column overhead fan resulted in savings

of Rs 2.3 lacs/annum in PE plant.

24. Recovery of 40K steam from Cracker furnace boiler blow down
by adding intermediate flashing at 40K level in Cracker plant.

15.

Insulation losses reduction in PE furnace by attending faulty
insulation resulted in savings of Rs 75 lacs/annum.

25.

APC implementation in Aromatic plant.

26. Replacing 40K steam with 17K steam for extract Detol column

Re-Boiler in Aromatics plant.

27.

28.

LP cooling water pnump efficiency improvement in POY plant.

Eliminating air conditioning losses for 7 months a year in POY
plant by Air curtain provision.

29. Cell type air washer in place of spray type air washer in POY

spinning.

30.

Stop one jet water pump in CP-8.

31. Replace two pumps running in parallel with only one bigger

pump in Glycolysis liquid Dow system in PSF plant.

32.

By pass cooling stand in PSF draw line.

33. Replace under utilised motor with low capacity in PSF plant.

34. Replace annealer HP steam by MP steam in PSF plant.

35.

Acid injection in DM-3 to be done by pump instead of ejector
in CPP &U.

36. Replace SHP steam for BHEL Boiler atomisation by HP/MP

in CPP&U.

37.

Eliminating EA-1503 and EA-1552 heat exchangers in
condensate recovery system in CPP.

38.

Star mode operation of Cooling Tower 2&3 Fans.

39. Controlling air flow in augment air fan in HRSG 3&4.

40. Replace MOC of 42 Fans of Site Cooling Towers from GRP to

Hollow FRP.

Impact of Measures at (a) and (b) above for Reduction of
Energy Consumption and on the Cost of Production of
Goods:-

Stopping of one Nitrogen compressor by Nitrogen optimization
has led to saving of 193 lacs/annum in MEG Plant.

Stoppage of one condensate transfer Pump resulted in savings
of Rs 4.3 lacs/annum in VCM Plant.

Optimization of purge air compressor resulted in savings of
Rs 1.5 lacs/annum in VCM plant.

Replacement of pumping ring by screw in EDC cracking
furnace feed pumps resulted in saving of Rs 0.1 lac/annum in
VCM plant.

Stoppage of old warm water pump resulted in savings of Rs
8.6 lacs/annum in PVC plant.

Optimization of OSBL chilled water supply pumps resulted in
savings of Rs 12.3 lacs/annum in PVC plant.

Optimization of new chilled water supply pumps resulted in
savings of Rs 21.5 lacs/annum in PVC plant.

Stoppage of injection water pump resulted in savings of Rs 8
lacs/annum in PVC plant.

Pneumatic conveying operation optimisation in System-2 line-
2 resulted in savings of Rs 6 lacs/annum in PVC plant.

10. Reduction in plant air compressor discharge pressure from
3.2 to 2.5 kg/cm^2g resulted in savings of Rs 3 lacs/annum in
PVC plant.

16. Minimizing the losses due to passing of traps resulted in

savings of Rs 157 lacs/annum in PE plant.

17.

Use of MP steam in place of HP steam in reactor feed heater
resulted in savings of Rs 235 lacs/annum in PE plant.

18. Running only one filtrate pump and seal fluid pump in oxidation
section of both PTA plants resulted in savings of Rs 49 lacs/
annum.

19.

Blade angle changing of cooling tower Fans in PTA plant
resulted in savings of Rs 4 lacs/annum.

20. CPU feed pump, Ethylene tower reflux pump , Quench water
Pump stoppage in Cracker Plant resulted in savings of Rs 68
lacs/annum in Cracker Plant.

21. Heat recovery from Aromatic condensate resulted in savings

of Rs 2 Crores/annum.

22.

23.

By-pass provision for CPU tank and feed pump resulted in
savings of Rs 29 lacs/annum in Cracker plant.

End caping of purge steam to USX and TLX outlet points
resulted in savings of Rs 27 lacs/annum in Cracker plant.

24. Reduction of 2 TPH MP Steam by reducing solvent ratio from
4.1 to 3.7 resulted in savings of Rs 1.2 Crores/annum in
Aromatic plant.

25.

Additional lean solvent pump P 105 C of lower capacity to
avoid dual running of higher capacity pumps resulted in savings
of Rs 9.9 lacs/annum in Aromatics plant.

26. Up-rating of Fractionation Feed pump Motor to avoid dual
running during high frequency / load fluctuations resulted in
savings of Rs 6.5 lacs/annum in Aromatics plant.

27.

28.

Provision of additional MP Steam Header in Aromatics plant
has stopped HP Steam letdown to MP Steam which resulted
in savings of Rs 3.9 Crores/annum.

Stopping of propylene condensate pump by using gravity head
resulted in savings of Rs 2.3 lacs/annum.

29. Running one C3 compressor @100% load instead of running
two C3 compressors at 50 % load resulted in savings of Rs
35.9 lacs/annum.

30.

Stoppage one jet water pump in CP-1/2/3 by providing orifce
at condenser resulted in savings of Rs 6.9 lacs/annum.

31. Dowtherm Heat optimization in CP Polymer cooler resulted in

savings of Rs 12 lacs/annum.

32.

33.

Stoppage of 2 nos. chilled water circulation pump in POY plant
by system modification resulted in saving of 700kwh equivalent
to RS 2 Crores/annum.

Stoppage of chilled water transfer pump for PTA by system
modification resulted in savings of Rs 6.8 lacs/annum.

34. Connecting three esterifier to single stripping column in POY

plant resulted in savings of Rs 12.6 lacs/annum.

35.

Stoppage of one jet water pump in CP-7 by providing orifice at
condenser resulted in savings of Rs 13.5 lacs/annum

36. Optimization of operation of CP-7 HCT pump by reducing re-

circulation flow resulted in savings of Rs 1.2 lacs/annum.

37.

Stoppage one fan of VCT out of two running in CP-8 by reducing

Reliance Industries Limited

GROWTH IS LIFE

Dowtherm venting resulted in savings of Rs 1.8 lacs/annum.

64. Use of process vent gas in POY Dow vaporiser has saving

38. Optimization of filter exhaust fans running in Glycolysis resulted

in savings of Rs 1.6 lacs/annum.

39.

40.

Stoppage of one cooling tower fan in CP-8 resulted in savings
of Rs 2.8 lacs/annum.

Stoppage of blowers of tow feeder in PFF draw line resulted in
savings of Rs 1.7 lacs/annum.

41. Optimization of Spinning Quench AHU conditions to reduce
chilled water load resulted in savings of Rs 18.4 lacs/annum.

42.

43.

Stoppage of water circulation of cooling stand in PSF draw
line resulted in savings of Rs 10.7 lacs/annum.

Stoppage of chilled water of knock out pot in EGR by diverting
the vapour load to EGR jet resulted in savings of Rs 3.5 lacs/
annum.

44. Conversion of motors from delta to star connection in PSF

plant resulted in savings of Rs 3.7 lacs/annum.

45. Removal of delumper in finisher EG circulation system of CP-

6/7 resulted in savings of Rs 1.8 lacs/annum.

46.

47.

Switching off of pack pre-heaters in PSF plant resulted in
savings of Rs 6.9 lacs/annum.

Stoppage of electrical super heater in CP-8 ejector resulted
in savings of Rs 2 lacs/annum.

48. Replacement of faulty traps with float type traps of correct
capacity in EG recovery heat exchangers resulted in savings
of Rs 6.3 lacs/annum.

potential of Rs. 1.05 crore/annum.

65.

BFW pre-heating using condensate in MEG plant has saving
of potential Rs.1.6 Crores/annum.

66. Use of existing MEG Pumps for transferring to POY has saving

potential of Rs 1.7 lacs/annum.

67. Use of LP steam in heads column 1 & 2 in place of IP steam

in VCM plant has saving potential of Rs 1.18 Crore/annum.

68. Use of pump in VCM column bottom has saving potential of

Rs 1.27 Crore/annum.

69.

Improvement in pump efficiency (7 pumps) in VCM plant has
saving potential of Rs 24.5 lacs/annum.

70. Use of MP steam in place of HP steam for tracers, atomising,
purge heater in PE-II has saving potential of Rs 73 lacs/annum.

71. Re-routing of DOW HP condensate of Area 200 to HP
condensate instead of LP DTA Tank in PE plant has saving
potential of Rs 1.3 Crore/annum.

72.

Variable frequency drives for area 200 regeneration blowers
in PE plant has saving potential of Rs 18.4 lacs/annum.

73. Reducing CW flow in PE-II has saving potential of Rs 27.6

lacs/annum.

74.

VFD in reactor feed pump in PE plant has saving potential of
Rs 62.2 lacs/annum.

75. Recovery of heat from recycle cyclohexane in PE plant has

saving potential of Rs 89.7 lacs/annum.

49. Modification of CCT pump of CP-7, CP-8 VCT pump, Steam
condensate pump CP-8 with smaller size impeller resulted in
savings of Rs 2.5 lacs/annum.

76. Replacing conveying blowing motors of 8026 A/B of both lines
with low rating motors in PP plant has saving potential of Rs
11.3 lacs/annum.

50. Reduction in Dowtherm heat load by utilizing heat of esterifier

77. Replacing flare MP steam by LP steam in PP plant has saving

hot EG resulted in savings of Rs 14.5 lacs/annum.

potential of Rs 65.7 lacs/annum.

51.

52.

53.

Provision of additional trap for spray draw zone of PFF draw
line and closure of trap drain resulted in savings of Rs 9.5
lacs/annum.

Provision of MP steam in place of HP let down steam for Steam
draw chest, steam boxes of PSF draw line and dryer of PFF
draw line resulted in savings of Rs 2.1Crores/annum.

Stoppage of one out of two steam ejectors in CP 6/7 by
increasing the EG flow to UFPP EG spray condenser resulted
in savings of Rs 83 lacs/annum.

54. DS-II heating system bypass by optimizing process parameters
in PSF plant resulted in savings of Rs 45.8 lacs/annum.

55. Optimization of CT fan operation during night shift resulted in

savings of Rs 3.3 lacs/annum in PP plant.

56.

57.

58.

59.

60.

61.

62.

Lighting optimization by providing switches, timers, LED type
lamp in place of filament indication lamp and delamping in the
complex resulted in savings of Rs 76 lacs/annum.

Powers saving in cooling water pumping by optimizing the
cooling water supply in STG and RC trim cooler resulted in
savings of Rs 1.28 Crores/annum.

Power saving by shifting of partial load to RWTP#1 from
RWTP#2 resulted in savings of Rs 22 lacs/annum.

Power saving by switching off one transfer pump at RWTP#2
resulted in savings of Rs 21 lacs/annum.

Installation of Fogging system in GT-5 resulted in saving of Rs
5.45 Crores/annum.

Stoppage of booster pump for chlorination in CT-2 & CT-3 by
providing the supply from main header resulted in savings of
Rs 3 lacs/annum.

Power saving by avoiding double pumping of CT makeup to
PP , PE C/T resulted in savings of Rs 13.5 lacs/annum.

63. Use of LP Steam in place of MP steam in Glycol bleed flasher-
II Reboiler in MEG plant has saving potential of Rs 19.7 lacs/
annum.

78. Replacement of DH column fan blades by FRP in PTA plant

has saving potential of Rs 55.2 lacs/annum.

79.

Increasing dia of PAC discharge line to 20" in PTA plant has
saving potential of Rs 84.3 lacs/annum.

80. C/O of impeller for G207 pumps in PTA plant has saving

potential of Rs 21.5 lacs/annum.

81.

82.

83.

Kickback control valves for G2351, G207, G802 in PTA plant
has saving potential of Rs 4.3 lacs/annum.

Providing intermediate flash vessel for E2-1211 condensate
in PTA plant has saving potential of Rs 3.1 Crores/annum.

Stopping de-superheating pumps for SHP in PTA plant has
saving potential of Rs 61.3 lacs/annum.

84. Reducing furnace insulation losses in Cracker plant has saving

potential of Rs 4.6 Crores /annum.

85.

86.

Impeller change in P230/P240/P731 in Cracker plant has
saving potential Rs 4.6 lacs /annum.

APC implementation in Aromatic plant has saving potential of
Rs 98.7 lacs/annum.

87. Replacing 40K steam with 17K steam for extract Detol column
Re-Boiler in Aromatics plant has saving potential of Rs 4.2
Crores/annum.

88.

89.

LP cooling water pump efficiency improvement in POY plant
has saving potential of Rs 12.3 lacs /annum.

Eliminating air conditioning losses for 7 months a year in POY
plant has saving potential of Rs 92 lacs/annum.

90. Cell type air washer in place of spray type air washer in POY
spinning / take up has saving potential of Rs 43.8 lacs/annum.

91.

Stoppage of one jet water pump in CP-8 has saving potential
of Rs 13.5 lacs/annum.

92. Replacement of two pumps running in parallel with only one
bigger pump in Glycolysis liquid Dow system in PSF plant has
saving potential of Rs 7.4 lacs/annum.

Reliance Industries Limited

GROWTH IS LIFE

93.

By pass cooling stand in PSF draw line has saving potential
of Rs 90.8 lacs/annum.

iii) Catalyst - less Purification of crude Terephthalic acid to

reduce the cost of production and down time.

94. Replacement of motor with low capacity in PSF plant has

iv) Conversion of ETP biological waste into value added product

saving potential of Rs 24.5 lacs/annum.

( bio-fertilizer ) using biotechnology methods.

95. Replacement of annealer HP steam by MP steam in PSF plant

96.

has saving potential of Rs 1.57 Crores /annum.
Acid injection in DM-3 to be done by pump instead of ejector
in CPP &U has saving potential Rs 11 lacs/annum.

98.

97. Replacement of SHP steam for BHEL Boiler atomisation by
HP/MP in CPP&U has saving potential of Rs 63.8 lacs/annum.
Eliminating EA-1503 and EA-1552 heat exchangers in
condensate recovery system in CPP has saving potential of
Rs 2 Crores/annum.
Star mode operation of Cooling Tower 2&3 Fans has saving
potential of Rs 5 lacs/annum.

99.

100. Controlling air flow in augment air fan in HRSG 3 & 4 has

saving potential of Rs 9 lacs/annum.

101. Replacement of MOC of 42 Fans of Site Cooling Towers from
GRP to Hollow FRP has saving potential of Rs 2.15 Crores/
annum.

Total energy consumption and energy consumption per
unit of production as per Form-A.

FORM - 'B'

Form for Disclosure of particulars with respect to:

B. RESEARCH AND DEVELOPMENT (R & D)

1. Specific Areas in which Research and Development

(R & D) is being carried out by the Company:
Research and Development activity is focussed in the fields of
Purified Terephthalic Acid, Paraxylene , Linear Alkyl Benzene
plants. The stress has been on process development, process
modification , product development, energy conservation,
pollution control, import substitution, and technology upgradation.
i) Recovery of Cobalt and Manganese from the Mother Liquor
purge stream in the oxidation plant and recycling back to the
Reactor.

ii) Pilot scale trials for Catalyst and Water Recovery from

purification Mother Liquor.

4. Expenditure on R & D:

a) Capital

Recurring

Total

b) Total R & D Expenditure as a
percentage of Total Turnover

Rs. Crores
1.99

47.68

49.68

0.18%

C. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

1. Efforts made towards technology absorption, adaptation

and innovation

i) Optimisation of Spin Finish application on Tow for Staple

Fibre.

ii) Development of higher size Crimper for increased

throughput.

iii) Process optimisation for the improved quality of 1.2 denier
bright, 1.2 SHT, 2.5TBL, 2.0 TBL, 3.0 TBL Tow, 2.5 circular
Tow.

iv) Process improvement using online monitoring devices.

v) Modification of quench system from radial to cross flow to

enhance productivity and quality.

vi) Polymer and process modification to increase the polymer

throughput for each position.

vii) Revamping of Continuous Polymerization units to increase
production capacity, improve process reliability and product
performance.

viii) Introduction of planetary polymer metering pumps to improve

quality and reduce maintenance costs.

ix) Adoption of SIX SIGMA philosophy for product and process

improvement.

x) New Product Development :

• Coarse Denier Micro for Draw texturing end use
• 200/34/HOLLOW/SD/POY for Draw texturing/draw

iii) Development of a Kinetic- Fluid -dynamic model of the

twisting end use

Oxidation Reactor.

iv) Development of a new Purification Catalyst.
v) Development of Azeotropic distillation process for separation

of acetic acid and water.

vi) Development of design and basic engineering for LPG

recovery from PX offgas.

vii) Process development for manufacture of n- pentane.
viii) Collaborative efforts for the catalyst development in
manufacturing Para diethyl benzene from mixed xylenes.
ix) Development of kinetic reaction model for Pacol reactor in

LAB plant.

x) Development of process and optimisation of process
parameters to convert heavy aromatics to xylenes in PX plant.
xi) Process heat integration using Pinch technology in PTA, PX,

LAB and Polyester plants.

2. Benefits derived as a result of the above R & D:

i) Reduction in specific consumption of acetic acid in PTA plant.
Improved operation of Pacol unit resulting in higher LAB
ii)
production.

iii) Optimisation of PAREX operating parameters resulting in

reduction of utility consumption.

3. Future Plan of Action

i) Development of electrochemical membrane to improve
production of paraxylene without increasing hydraulic load.

ii) Development of new product range and speciality product in

PFY and PSF.

• 145/144/RND/SD/FDY for twisting/Weaving end use
• 145/72/RND/SD/FDY for twisting/Weaving end use
• 200/72/RND/SD/FDY for mink blanket end use
• 1.5 D relaxed Tow
• 2.0 circular Tow

xi) Use of indigenous catalyst for dehydrogenation of Normal

Paraffin.

xii) Metallurgy study of imported equipment and spares for local

development of components.

2. Benefits derived as a result of the above efforts:

a. Product Development / Improvement and Cost Reduction

i) 10 New PFY grades developed
ii) 8 New PSF / Tow product developed
iii) Single point chemical dosing in steam condensate
resulted in saving of hot water blowdown by 60 TPD

Import Substitution

i) Use of indigenous catalyst for dehydrogenation of
Normal Paraffin to produce LAB resulted in saving of
Rs. 20 Lacs .

ii) Import substitution of process equipment resulted in
saving of Rs. 44 Lacs in PFY and Rs. 10 Lacs
in PSF

iii) Indigenisation of various other spares and accessories

resulted in saving of 96 Lacs

Reliance Industries Limited

Information regarding imported technology

Product

Technology from

GROWTH IS LIFE

Ethylene & Cracker
Products

Purified Terephthalic Acid

Stone & Webster Engineering
Corp. USA

John Brown Engineers, UK
(ICI PLC-UK)

Mono Ethylene Glycol

Shell (Lummus Crest B.V.Holland)

PVC Expansion

Polypropylene

Geon Co., U.S.A.

John Brown Engineers, UK
(Shell / Union Carbide)

Polyethylene Terephthalate

Sinco engineering-Italy

High Density Polyethylene

Navacor, Canada

Polyester Staple Fibre Fill

Dupont (U.S.A.)/Chemtex U.S.A.

Paraxylene

Polypropylene

UOP Inter America Inc. - U.S.A.

Union Carbide U.K.

Year of

Import

1992

1994

1996

1994

1995

1998

1999

Status of

implementation/

Absorption

Full

D. FOREIGN EXCHANGE EARNINGS AND OUTGO

1. Activities relating to export, initiatives to increase
exports, Developments 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 (FOB value)
worth Rs. 4,710.07 Crores (US$ 1,027 million)

2. Total Foreign exchange used and earned

Rs. Crores

a. Total Foreign exchange earned

4,854.28

b. Total savings in foreign exchange through
products manufactured by the Division
and deemed exports (US$ 3,713 million)

Sub total (a + b)

c. Total Foreign Exchange used

17,308.89

22,163.17

4,787.10

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 ( Lacs )

Total Cost ( Rs. In Crores )
Rate/Unit (Rs.)

b) Generation by/through third party captive

power facilities through Steam Turbine/Generator
Units ( Lacs )
KWH per unit of fuel
Cost ( Rs. In Crores )
Cost/Unit (Rs.)
c) Own Generation

1) Through Diesel Generator

Units ( Lacs )
KWH per unit of fuel
Fuel Cost/Unit (Rs.)

April,00 to
March,01

113.36
5.28
4.65

7,954.65
4.76
335.34
4.22

82.31
3.86
3.31

April,99 to
March,00

101.60
4.76
4.69

5,481.87
4.31
189.86
3.46

68.97
3.48
2.11

Reliance Industries Limited

GROWTH IS LIFE

Annexure to Directors' Report

Power & Fuel Consumption

2) Through Steam Turbine/Generator

Units ( Lacs )
KWH per unit of fuel
Fuel Cost/Unit (Rs.)

2 Furnace Oil

Quantity ( K.Ltrs )
Total Cost ( Rs. In crores )
Average rate per Ltr.( Rs )

3 Others/Internal Generation

a) Gas

Quantity ( 1000 M3 )
Total Cost ( Rs. In crores )
Average rate per 1000M3 ( Rs )

b) Liquid Fuels

Quantity ( K.Ltrs )
Total Cost ( Rs. In crores )
Average rate per Ltr.( Rs )

April,00 to
March,01

22,702.80
4.49
1.64

165,747.10
130.25
7.86

333,108.53
110.64
3,321.54

249,205.70
299.44
12.02

April,99 to
March,00

22,641.89
4.19
1.56

136,463.88
89.68
6.57

208,836.60
66.84
3,200.59

39,027.48
48.06
12.31

The previous year's figures have been regrouped/ rearranged where necessary

Part ‘B’

Consumption per Unit of Production
PVC
PSF
Fabrics
Per 1000 Mtrs.
Per MT
Per MT
Current Previous 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

LAB
Per MT

FF
Per MT

PP
Per MT

MEG
Per MT

HDPE
Per MT

PTA
Per MT

PFY
Per MT

PX
Per MT

PET
Per MT

Year

Electricity (KWH)

2,964 2,726

965

959

556

435

456

565

303

Furnace Oil (Ltrs)/
HSD/HFHSD

LSHS (Kgs)

–

Gas (SM3)

1,491 1,840

–

210

225

–

532

321

638

631

511

564

293

316

384

369

985 1,023

163

166

291

302

274

343

–

Note : The above figures in addition to direct consumption also include allocated consumption in the supporting utilities and facilities applicable to respective products.

Mumbai
Dated: 30th April, 2001

For and on behalf of the Board of the Directors

Dhirubhai H. Ambani
Chairman

COMPLIANCE CERTIFICATE ON CORPORATE GOVERNANCE

To The Board of Directors of Reliance Industries Limited

We have reviewed implementation of Corporate Governance procedure set by Reliance Industries Limited (“The Company”) for the year ended
31st March, 2001 with the relevant records and documents maintained by the Company and furnished to us for our review.

Based on our verification and information and explanations given to us, we certify that the Company has complied with the conditions of
Corporate Governance as stipulated under Clause 49 of the Listing Agreement with Stock Exchanges.

For Chaturvedi & Shah
Chartered Accountants

D. Chaturvedi
Partner

Mumbai

Dated: 30th April, 2001

For Rajendra & Co.
Chartered Accountants

R.J. Shah
Partner

Reliance Industries Limited

GROWTH IS LIFE

Auditors’ Report

To the Members,
RELIANCE INDUSTRIES LIMITED
We have audited the attached Balance Sheet of RELIANCE
INDUSTRIES LIMITED as at 31st March 2001 and the Profit and
Loss Account of the Company for the year ended on that dated
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 far as appears
from our examination of such books.

c) The Balance Sheet and Profit and Loss Account referred
to in this report are in agreement with the books of
account.

referred

(3C) of

in Section 211

In our opinion the Balance Sheet and the Profit and Loss
the mandatory Accounting
Account complies with
Standards
the
Companies Act, 1956.
information and
In our opinion, and based on
explanations given to us, none of the directors are
disqualified as on 31st March 2001
from being
appointed as directors in terms of clause (g) of sub-
section (1) of Section 274 of 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, 2001 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: 30th April, 2001

For Rajendra & Co.
Chartered Accountants

R.J. Shah
Partner

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. 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
No material
discrepancies were noticed on such verification.

the assets.

2. None of the fixed assets have been revalued during the

year.

3. As explained to us, the stock of stores, spare parts, raw
materials and finished goods have been physically verified
by the management at regular 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.
information and
In our opinion and according
explanations given
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 the business.

to us,

the

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
the normally accepted accounting
principles and is on the same basis as in the preceding year

In respect of loans from companies listed in the register
maintained under Section 301 of the Companies Act, 1956
and Companies under the same management as defined
under sub-section (1B) of Section 370 of the Companies
Act, 1956, the rate of interest and other terms and
conditions are not prima facie prejudicial to the interests of
the company.
In respect of loans given to companies 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 the rates of
interest, where applicable, and other terms and conditions
are not prima facie prejudicial to the interest of the company.
The above includes interest free loans to its subsidiary
companies and advance towards promoters contribution.
Attention is invited to Note No 11 of Schedule 'O' to the
accounts. In our opinion, having regard to the long term
involvement with these companies and considering the
explanations given to us in this regard, the terms and
conditions of the above are not, prima facie, prejudicial to
the interests of the Company.
In respect of outstanding loans and advances in the nature
of loans given by the Company to parties, other than to the
companies mentioned in para 8 above, where stipulated,
they are generally repaying the principal amounts as
stipulated and are also generally regular in the payment of
interest, where applicable.

10. In our opinion and according to the information explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature

Reliance Industries Limited

00288021.p65

May 23, 2001 @ 10:03 am

GROWTH IS LIFE

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.

the

11. In our opinion and according

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 nature of its business.
16. The Central Government has prescribed maintenance of
Cost Records under Section 209 (1)(d) of the Companies

For Chaturvedi & Shah
Chartered Accountants

D. Chaturvedi
Partner

Mumbai

Dated: 30th April, 2001

Act, 1956 in respect of certain manufacturing activities of
the Company. We have broadly reviewed the accounts and
records of the Company in this connection and are of the
opinion that, prima facie, the prescribed accounts and
records have been made and maintained. We have not,
however, made a detailed examination of the same.

17. According to the records of the Company, Provident Fund
and Employees State Insurance dues have been regularly
deposited with the appropriate authorities.

18. According to the 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, 2001 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
those payable under
Revenue Account other
contractual obligation or
in accordance with generally
accepted business practice.

than

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 Rajendra & Co.
Chartered Accountants

R.J. Shah
Partner

International Accountants’ Report

To the Board of Directors of
RELIANCE INDUSTRIES LIMITED
We have audited
the Balance Sheet of RELIANCE
INDUSTRIES LIMITED as on 31st March, 2001 and the Profit
and Loss Account of the Company for the year ended on that
date (the financial statements) attached hereto, which have
been prepared in accordance with the Generally Accepted
Accounting Principles
India and Accounting Standards
referred to in Section 211(3C) of the Companies Act, 1956.

these

the Management and

financial statements. The

Respective Responsibilities of
Auditors
The management of the company is responsible for the
preparation of
financial
statements have also been audited by firms of Chartered
Accountants appointed as Auditors under the statute (The
Companies Act) who submit separately
in
accordance with the provisions of the Companies Act. It 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.

report

their

Basis of Opinion
We conducted our audit in accordance with the auditing
standards issued by the Institute of Chartered Accountants of
India. An audit includes examination, on a test basis of evidence
relevant to the amounts and disclosures in the financial
statements. It also includes an assessment of the significant
estimates and judgements made by the management in the
preparation of
the
accounting policies are appropriate to the circumstances to the

financial statements and whether

the

company, consistently applied and adequately disclosed. We
planned and performed 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 2001 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: 30th April, 2001

Reliance Industries Limited

00288021.p65

May 23, 2001 @ 10:03 am

GROWTH IS LIFE

Balance Sheet as at 31st March, 2001

SOURCES OF FUNDS

Shareholders’ Funds
Share Capital - Equity
Share Capital - Preference
Reserves and Surplus

Loan Funds
Secured Loans
Unsecured Loans

TOTAL

APPLICATION OF FUNDS

Fixed Assets
Gross Block
Less: Depreciation

Net Block
Capital Work-in-Progress

Investments
Current Assets, Loans and Advances
Current Assets
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

As per our Report of even date

For Chaturvedi & Shah
Chartered Accountants

For Rajendra & Co.
Chartered Accountants

D. Chaturvedi
Partner

R. J. Shah
Partner

Mumbai
Dated: 30th April, 2001

Schedule

As at
31st March, 2001
Rs.

Rs.

(Rs. in Crores)

As at
31st March, 2000
Rs.

Rs.

1,053.49
–
13,711.88

4,068.40
6,067.39

25,355.99
11,841.53

13,514.46
512.38

85.13
2,299.85
1,134.17
100.63

3,619.78
5,502.73

9,122.51

4,110.80
863.50

4,974.30

‘A’
‘A’
‘B’

‘C’
‘D’

‘E’

‘F’

‘G’

‘H’

‘I’

‘N’
‘O’

1,053.45
292.95
12,636.35

14,765.37

13,982.75

5,988.11
5,532.13

10,135.79

24,901.16

11,520.24

25,502.99

24,330.95
9,214.06

15,116.89
331.42

14,026.84
6,726.11

15,448.31
6,066.56

47.48
1,823.20
842.46
1,081.55

3,794.69
4,059.26

7,853.95

3,600.03
265.80

3,865.83

4,148.21

24,901.16

3,988.12

25,502.99

- Chairman
- Managing Director

For and on behalf of the Board
D.H.Ambani
A.D.Ambani
N.R.Meswani
H.R.Meswani
H.S.Kohli
S.Venkitaramanan
U.Mahesh Rao
R.H.Ambani
T.Ramesh U.Pai
Y.P.Trivedi
Dr.D.V.Kapur
M.P.Modi
Rohit C. Shah

}
}
}

Executive
Directors

Nominee
Directors

Directors

- Vice President and
Company Secretary

Reliance Industries Limited

00288021.p65

May 23, 2001 @ 10:03 am

Profit and Loss Account for the year ended 31st March, 2001

GROWTH IS LIFE

Schedule

2000-2001

(Rs. in Crores)

1999-2000

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’

Profit Before Tax

Provision for Taxation

Profit for the year

Add :

Balance brought forward from last year
Debenture Redemption Reserve Written back
Investment Allowance (Utilised)
Reserve Written Back

Amount Available For Appropriations

APPROPRIATIONS

Capital Redemption Reserve
Debenture Redemption Reserve
Capital Reserve
General Reserve
Interim Dividend on Preference Shares
Interim Dividend on Equity Shares
Proposed Dividend on Equity Shares
Tax on Dividend

Balance Carried to Balance Sheet

Significant Accounting Policies
Notes on Accounts

‘N’
‘O’

28,008.25
382.63
317.94

28,708.82

2,935.66
20,211.44
1,215.99

1,565.11

25,928.20

2,780.62
135.00

2,645.62

1,739.48
–

10.00

4,395.10

20,301.39
687.30
343.68

21,332.37

486.01
16,099.75
1,008.00

1,278.36

18,872.12

2,460.25
57.00

2,403.25

1,132.67
232.12

30.00

3,798.04

2,533.59
1,255.23

192.12
–
–
1,400.00
35.57
384.65
–
46.22

2,234.45

2,160.65

2,058.56

1,739.48

2,636.73
1,071.62

292.95
344.57
98.11
1,000.00
4.77
–
447.85
46.20

As per our Report of even date

For Chaturvedi & Shah
Chartered Accountants

For Rajendra & Co.
Chartered Accountants

D. Chaturvedi
Partner

R. J. Shah
Partner

Mumbai
Dated: 30th April, 2001

00288021.p65

May 23, 2001 @ 10:03 am

- Chairman
- Managing Director

For and on behalf of the Board
D.H.Ambani
A.D.Ambani
N.R.Meswani
H.R.Meswani
H.S.Kohli
S.Venkitaramanan
U.Mahesh Rao
R.H.Ambani
T.Ramesh U.Pai
Y.P.Trivedi
Dr.D.V.Kapur
M.P.Modi
Rohit C. Shah

}
}
}

Executive
Directors

Nominee
Directors

Directors

- Vice President and
Company Secretary

Reliance Industries Limited

GROWTH IS LIFE

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, 2001
Rs.

Rs.

1,200.00

1,000.00

(Rs. in Crores)

As at
31st March, 2000
Rs.

Rs.

1,200.00

1,000.00

2,200.00

Issued, Subscribed and Paid up:

Equity

105,37,57,027 Equity Shares of Rs. 10 each fully
(105,37,57,027) paid up

Less: Calls in arrears - by others

1,053.76
0.27

1,053.76
0.31

1,053.49

1,053.45

Preference

– 10% Cumulative Redeemable

(1,17,45,000) Preference Shares of Rs. 100 each

fully paid-up (Redeemable at par
on 15th September, 2000)
– 10.5% Cumulative Redeemable

(10,50,000) Preference Shares of Rs. 100 each

fully paid-up (Redeemable at par
on 15th September, 2002)
– 10.5% Cumulative Redeemable

(50,00,000) Preference Shares of Rs. 100 each

fully paid-up (Redeemable at par
on 17th September, 2002)
– 9.5% Cumulative Redeemable

(1,15,00,000) Preference Shares of Rs. 100 each
fully paid-up (Redeemable at par on
31st July, 2004)

–

117.45

10.50

50.00

115.00

–

1,053.49

292.95

1,346.40

Notes:

1. Of the above Equity Shares:

(a)

(b)

(c)

48,17,70,552
(48,17,70,552)

Shares were allotted as Bonus Shares by capitalisation of Share Premium and Reserves.

18,05,78,290
(18,05,78,290)

Shares were allotted pursuant to Schemes of Amalgamation without payments being received in
cash.

33,04,27,345
(33,04,27,345)

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. The Company has reserved issuance of 5,26,87,851 Equity Shares of Rs. 10 each for offering to employees under Employees

Stock Option Scheme (ESOP).

3. The Company has during the year redeemed 2,92,95,000 Preference Shares by exercising call option.

Reliance Industries Limited

00288021.p65

May 23, 2001 @ 10:03 am

GROWTH IS LIFE

Schedules forming part of the Balance Sheet

SCHEDULE ‘B’

RESERVES AND SURPLUS

As at

(Rs. in Crores)

As at

31st March, 2001

31st March, 2000

Rs.

Revaluation Reserve

As per last Balance Sheet
Less: Deduction on retirement of Revalued Assets

2,771.06
0.28

2,771.06
–

Capital Reserve

As per last Balance Sheet
Add : Transferred from Profit and Loss Account

Capital Redemption Reserve
As per last Balance Sheet
Add : Transferred from Profit and Loss Account

Securities Premium Account
As per last Balance Sheet
Add : Received during the year

Less:

Issue Expenses
Premium on Redemption of Debentures/Bonds

Less: Calls in arrears - by others

Debenture Redemption Reserve
As per last Balance Sheet
Add : Transferred from/(to) 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

General Reserve

As per last Balance Sheet
Less: Transferred to Profit and Loss Account*
[Refer Note 3(a) and 3(b), Schedule ‘O’]

Add : Transferred from Profit and Loss Account

Profit and Loss Account

187.57
98.11

192.12
292.95

5,449.22
–

5,449.22
–
–

5,449.22
2.21

507.89
344.57

208.70

10.00

1,573.15
1,071.62

501.53
1,000.00

2,770.78

2,771.06

187.57
–

285.68

187.57

–
192.12

485.07

192.12

4,677.76
780.10

5,457.86
2.65
5.99

5,449.22
2.84

5,447.01

5,446.38

740.01
(232.12)

852.46

507.89

198.70

10.00

238.70

30.00

1,428.38
1,255.23

173.15
1,400.00

208.70

10.00

1,501.53
2,160.65

13,711.88

1,573.15
1,739.48

12,636.35

* Cumulative amount transferred on account of Depreciation on Revaluation
Rs. 2131.86 Crores (Previous Year Rs.1895.27 Crores)

Reliance Industries Limited

00288021.p65

May 23, 2001 @ 10:03 am

GROWTH IS LIFE

Schedules forming part of the Balance Sheet

SCHEDULE ‘C’

SECURED LOANS

A) DEBENTURES

Non-Convertible Debentures

Deep Discount Debenture
Less : Unamortised Discounts

B) TERM LOANS

From Banks
a) Foreign Currency Loans
b) Rupee Loans

From Financial Institutions
a) Foreign Currency Loans
b) Rupee Loans

C) WORKING CAPITAL LOANS

From Banks

a) Foreign Currency Loans
b) Rupee Loans

Note:

As at
31st March, 2001
Rs.

Rs.

(Rs. in Crores)

As at
31st March, 2000
Rs.

Rs.

3,352.50

600.00
190.52

409.48

–
–

–

3.41
65.25

68.66

69.96
167.80

3,406.50

616.00
242.65

373.35

3,761.98

3,779.85

750.87
650.07

1,400.94

7.97
150.54

158.51

68.66

1,559.45

–
648.81

237.76

4,068.40

648.81

5,988.11

1.(a) Debentures referred to in A above to the extent of Rs. 2,598.98 Crores are secured / to be 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 Maharashtra.

(b) Debentures referred to in A above to the extent of Rs. 1,001.00 Crores are secured by way of mortgage / charge on all the
properties situated at Patalganga, District Raigad in the State of Maharashtra and on the properties situated at Jamnagar, in
the State of Gujarat and on the movable properties situated at Hazira, District Surat, in the State of Gujarat.

(c) Debentures referred to in A above to the extent of Rs. 162.00 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.

(d) Debentures referred to in A above consisting of: (i) 18% Debentures of Rs. 100 each aggregating Rs. 20.00 Crores are
redeemable at par in July 2001. (ii) 16.5% Debentures of Rs. 100 each, aggregating Rs. 25.00 Crores are redeemable at par
on the expiry of seventh year from the date of allotment, i.e. 2002. (iii) 13% Debentures of Rs. 100 each, aggregating Rs.
160.00 Crores are redeemable at par as follows: viz Rs. 60 Crores on 11th October, 2009 and Rs. 100 Crores on 17th November,
2009. (iv) 14.08% Debentures of Rs. 100 each aggregating Rs. 87.50 Crores are redeemable at par in three equal annual
instalments, on the expiry of fifth, sixth and seventh year from the date of allotment; commencing from March, 2002. (v) 14.5%
Debentures of Rs. 10,00,000 each, aggregating Rs. 112.00 Crores are redeemable at par in May, 2002. (vi) 13.5% Debentures
of Rs. 1,00,00,000 each, aggregating Rs. 50.00 Crores are redeemable at par in three equal annual instalments on the expiry
of the fifth, sixth and seventh year from the date of allotment; i.e. commencing from September, 2002. (vii) 12.25% Debentures
of Rs. 1,00,00,000 each aggregating Rs. 325.00 Crores, are redeemable at par in three equal annual instalments on the expiry
of fifth, sixth and seventh year from the date of allotment; commencing from January, 2003. (viii) 12.5% Debentures of Rs.
1,00,00,000 each aggregating Rs. 110.00 Crores are redeemable at par on the expiry of seventh year from the date of allotment
i.e. January, 2005. (ix) 13.75% Debentures of Rs. 1,00,00,000 each aggregating Rs. 110.00 Crores are redeemable at par on
the expiry of the tenth year from the respective dates of allotment i.e. January, 2008. (x) 13.75% Debentures of Rs. 1,00,00,000
each aggregating Rs. 80.00 Crores are redeemable at par on the expiry of the tenth year from the respective dates of allotment;
commencing from January, 2008. (xi) 14.75% Debentures of Rs. 1,00,00,000 each aggregating Rs. 200.00 Crores are
redeemable at par in three equal annual instalments, commencing from the expiry of eighth year from the respective dates of
allotment; commencing from February, 2006. (xii) 14.25% Debentures of Rs. 1,00,00,000 each aggregating Rs. 200.00 Crores
are redeemable at par on the expiry of the tenth year from the date of allotment; i.e May, 2008. (xiii) 15.03% Debentures of
Rs. 1,00,00,000 each aggregating Rs. 150.00 Crores are redeemable at par on the expiry of the tenth year from the date of
allotment; i.e June, 2008. (xiv) 15.03 % Debentures of Rs. 25,00,000 each aggregating Rs. 75.00 Crores which are redeemable
at par on the expiry of the tenth year from the date of allotment; i.e. June, 2008. (xv) 14.25% Debentures of Rs. 1,00,00,000
each aggregating Rs. 150.00 Crores are redeemable at par on the expiry of the tenth year from the date of allotment; i.e.
September, 2008. (xvi) 15.03% Debentures of Rs. 1,00,00,000 each aggregating Rs. 21.00 Crores are redeemable at par on
the expiry of the tenth year from the date of allotment; i.e. September, 2008. (xvii) 15.03% 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. October,
2008. (xviii) 14.25% 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. November, 2008. (xix) 15.03% Debentures of Rs. 1,00,00,000 each aggregating

Reliance Industries Limited

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GROWTH IS LIFE

Schedules forming part of the Balance Sheet

Rs. 25.00 Crores are redeemable at par on the expiry of the tenth year from the date of allotment; i.e. October, 2008. (xx) 11.50
% Debentures of Rs. 1,00,00,000 each aggregating Rs. 195.00 Crores are redeemable at par on the expiry of the fifty four
months from the date of allotment; i.e. November, 2003. (xxi) Deep Discount debentures aggregating Rs. 600.00 Crores are
redeemable at par on the expiry of the fifth year from the date of allotment; i.e. May, 2004. (xxii) 12.10% Debentures of Rs.
1,00,00,000 each aggregating Rs. 50.00 Crores are redeemable at par on the expiry of third year from the date of allotment;
i.e. June, 2002. (xxiii) 12.10% Debentures of Rs. 1,00,00,000 each aggregating Rs. 92.00 Crores are redeemable at par on the
expiry of fifth year from the date of allotment; i.e. June, 2004. (xxiv) 12.70% Debentures of Rs. 1,00,00,000 each aggregating
Rs. 100.00 Crores are redeemable at par on 15th December, 2007. (xxv) 12.36% Debentures of Rs. 1,00,00,000 each
aggregating Rs. 51.00 Crores are redeemable at par on the expiry of fifth year from the date of allotment; i.e. August, 2004.
(xxvi) 12.35% Debentures of Rs. 1,00,00,000 each aggregating Rs. 45.00 Crores are redeemable at par on the expiry of fifth
year from the date of allotment; i.e. August, 2004. (xxvii) Debentures of Rs. 50,00,000 each aggregating Rs. 92.00 Crores
carrying an interest rate linked to the interest rate announced by CRISIL, which are redeemable at par on the expiry of fifth
year from the date of allotment; i.e. February, 2005. (xxviii) 10.85% Debentures of Rs. 1,00,00,000 each aggregating Rs. 50.00
Crores are redeemable at par on the expiry of fifth year from the date of allotment; i.e. February, 2005. (xxix) 10.40% Debentures
of Rs. 1,00,00,000 each aggregating Rs. 72.00 Crores are redeemable at par on the expiry of 364 days from the date of
allotment; i.e. June, 2001. (xxx) MIBOR Linked Debentures of Rs. 1,00,00,000 each aggregating Rs. 30.00 Crores are
redeemable at par on the expiry of 365 days from the date of allotment; i.e. July, 2001. (xxxi) 10.80% Debentures of Rs.
1,00,00,000 each aggregating Rs. 75.00 Crores are redeemable at par on the expiry of 364 days from the date of allotment;
i.e. July, 2001. (xxxii) 11.00% Debentures of Rs. 1,00,00,000 each aggregating Rs. 75.00 Crores are redeemable at par on the
expiry of third year from the date of allotment; i.e. July, 2003. (xxxiii) 12.10% Debentures of Rs. 1,00,00,000 each aggregating
Rs. 155.00 Crores are redeemable at par on the expiry of fifth year from the date of allotment; i.e. September, 2005. (xxxiv)
MIBOR Linked Debentures of Rs. 1,00,00,000 each aggregating Rs. 60.00 Crores are redeemable at par on the expiry of third
year from the date of allotment; i.e. October, 2003. (xxxv) 10.90% Debentures of Rs. 1,00,00,000 each aggregating Rs. 100.00
Crores are redeemable at par on the expiry of third year from the date of allotment; i.e. January, 2004. (xxxvi) MIBOR Linked
Debentures of Rs. 1,00,00,000 each aggregating Rs. 10.00 Crores are redeemable at par on the expiry of 180 days from the
date of allotment; i.e. July, 2001.

(a) Term loan referred to in B(2) (a) above to the extent of Rs. 3.41 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.

(b) Term loan referred to in B(2) (b) above to the extent of Rs. 65.25 Crores are secured / to be secured only on the

dwelling units constructed/to be constructed for the employees of the Company.

The charges created on the Debentures referred to in Note 1(a) and Term Loan referred to in 2(a) above shall rank pari passu,
inter se and charges created on the Debentures referred to in Note 1(b), 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, finished goods, stores and spares, book debts, outstanding monies, receivable claims, etc. save and
except receivable of Oil and Gas Division.

5. Secured Loans include loans of Rs. 73.38 Crores and Debentures of Rs. 236.17 Crores repayable / redeemable at par within

one year.

SCHEDULE ‘D’

UNSECURED LOANS

A. Long Term

i)
ii)

From Banks
From Others

B. Short Term

From Banks

As at
31st March, 2001
Rs.

Rs.

(Rs. in Crores)

As at
31st March, 2000
Rs.

Rs.

1,611.84
4,355.55

778.37
4,753.76

5,967.39

100.00

6,067.39

5,532.13

–

5,532.13

Note :

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. 56.30 Crores.)

Reliance Industries Limited

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May 23, 2001 @ 10:03 am

GROWTH IS LIFE

Schedules forming part of the Balance Sheet

SCHEDULE ‘E’

FIXED ASSETS

(Rs. in Crores)

Gross Block

Depreciation

Net Block

Description

Leasehold Land
Freehold Land
Development Rights/
Producing Properties
Buildings
Plant and Machinery
Electrical Installation
Factory Equipments
Furniture and Fixtures
Vehicles
Ships
Aircrafts
Jetties

As At
1-4-2000
Rs.

59.20
24.22

945.77
1,456.18
20,381.52
678.80
247.72
81.28
82.78
213.31
46.92
113.25

Additions/ Deductions/
Adj.
Rs.

Adj.
Rs.

As at
31-3-2001
Rs.

–
18.77

87.70
43.32
755.64
23.38
71.68
41.33
10.25
–
–
–

6.37
–

–
0.05
3.72
0.10
0.63
2.10
14.06
–
–
–

52.83
42.99

1,033.47
1,499.45
21,133.44
702.08
318.77
120.51
78.97
213.31
46.92
113.25

Upto
1-4-2000
Rs.

3.26
–

111.76
140.32
8,531.57
117.63
50.61
31.49
23.64
141.77
22.76
39.25

For the
Year
Rs.

0.51
–

66.76
275.82
1,975.23
156.02
74.54
23.07
32.12
10.17
3.90
18.59

Total

24,330.95

1,052.07

27.03

25,355.99

9,214.06

2,636.73

Deductions

Rs.

–
–

–
0.01
2.09
0.04
0.12
1.27
5.73
–
–
–

9.26

Upto
31-3-2001
Rs.

As At
31-3-2001
Rs.

As At
31-3-2000
Rs.

3.77
–

49.06
42.99

55.94
24.22

178.52
416.13
10,504.71
273.61
125.03
53.29
50.03
151.94
26.66
57.84

854.95
1,083.32
10,628.73
428.47
193.74
67.22
28.94
61.37
20.26
55.41

834.01
1,315.86
11,849.95
561.17
197.11
49.79
59.14
71.54
24.16
74.00

11,841.53

13,514.46

15,116.89

Previous Year

18,650.33

5,720.76

40.14

24,330.95

6,691.93

2,533.59

11.46

9,214.06

15,116.89

Capital Work-in-Progress

NOTES :

512.38

331.42

Leasehold Land includes Rs. 0.11 Crores in respect of which lease-deeds are pending execution.
Buildings include cost of shares in Co-operative Societies Rs. 0.01 Crores (Previous Year Rs. 0.01 Crores).

a)
b)
c) Capital Work-in-Progress includes :

Rs.6.52 Crores on account of Pre-operative Expenses (Previous Year Rs. 8.73 Crores).
Rs.160.23 Crores on account of cost of construction materials at site (Previous Year Rs. 100.80 Crores).
Rs. 29.23 Crores on account of advance against Capital Expenditure (Previous Year Rs. 78.62 Crores).

(i)
(ii)
(iii)
Additions and Capital Work-in-Progress include Rs. 551.42 Crores on account of exchange difference during the year
(Previous Year Rs. 214.13 Crores)
The 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.
Gross Block includes Rs. 2770.78 Crores being the amount added on revaluation of Plant and Machinery as at 01-04-1997.

* Refer to Note 3(a) and 3 (b), Schedule ‘O’.

Reliance Industries Limited

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May 23, 2001 @ 10:03 am

GROWTH IS LIFE

Schedules forming part of the Balance Sheet

SCHEDULE ‘F’

INVESTMENTS

A. LONG TERM INVESTMENTS
Government and other securities
Unquoted

As at

(Rs. in Crores)

As at

31st March, 2001

31st March, 2000

Rs.

Indira Vikas Patra
Kisan Vikas Patra
(Deposited with Sales Tax Dept.)
(Rs. 20,000; Previous Year Rs. 20,000)

0.51
–

0.51

Trade Investments
In Equity Shares
Quoted, fully paid up

6,01,23,886 Reliance Capital Ltd. of Rs. 10 each

(6,01,08,033)

69,80,000 Reliance Industrial Infrastructure Ltd.

(69,80,000) of Rs. 10 each

127,25,89,200 Reliance Petroleum Ltd. of Rs. 10 each

(111,23,37,100)

(Company under the same management)

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 and

Warehouse Society Ltd. of Rs. 200 each,
(Rs. 1,000; Previous Year Rs. 1,000)

165 The Art Silk Co-operative Society Ltd.

(165) of Rs.100 each,

(Rs.16,500; Previous Year Rs. 16,500)
20 The Bombay Market Art Silk Co-operative

(20)

(Shops and 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)

486.25

16.58

2,638.37

3,141.20

–

11,08,500 Reliance Europe Ltd. of Sterling Pound

3.93

(11,08,500) 1 each

300 Reliance Petroproducts Private Ltd.

(300) of Rs.10 each

(Rs. 3,000; Previous Year Rs. 3,000)
800 Reliance Global Trading Private Ltd.

(800) of Rs.10 each

(Rs. 8,000; Previous Year Rs. 8,000)

51,02,080 Reliance Telecom Limited

(51,02,080) of Rs. 10 each
2,50,00,000 Reliance Communications Private Ltd. of
(–) Rs. 10 each (Company under the

same management)

–

5.10

25.00

34.03

487.85

16.58

2,157.62

2,662.05

–

3.93

–

5.10

–

9.03

Reliance Industries Limited

00288021.p65

May 23, 2001 @ 10:03 am

GROWTH IS LIFE

Schedules forming part of the Balance Sheet

As at
31st March, 2001
Rs.

Rs.

(Rs. in Crores)
As at
31st March, 2000
Rs.

Rs.

SCHEDULE ‘F’ ( contd.)

INVESTMENTS

Unquoted, partly paid up

225 Crimpers Industrial Co-operative Society

(225) Ltd. of Rs. 100 each Rs. 25 paid up
(Rs. 5,625; Previous Year Rs. 5,625)

182 Reliance Petroproducts Private Ltd.

(1,000) of Rs. 10 each Rs. 2.50 paid up

(Rs. 455; Previous Year Rs. 2,500)

226 Reliance Global Trading Private Ltd.

(1,250) of Rs.10 each Rs. 2.50 paid up

(Rs. 565; Previous Year Rs. 3,125)

In Preference Shares

Unquoted, fully paid up

86,00,000 6% Cumulative Redeemable
(86,00,000) Preference Shares of Reliance

Enterprises Limited, of Rs. 100 each

1,08,00,000 14% Cumulative Redeemable

(1,08,00,000) Preference Shares of Reliance Ports

and Terminals Ltd., of Rs. 100 each

37,50,000 14% Cumulative Redeemable Preference
(37,50,000) Shares of Reliance Utilities and Power
Limited, of Rs. 100 each

2,18,90,000 14% Cumulative Redeemable Preference
(–) Shares of Reliance Salgaocar Power Ltd.,

of Rs. 10 each

–

86.00

108.00

37.50

21.89

–

86.00

108.00

37.50

–

12,69,000 9% Cumulative Redeemable Preference

12.69

(–) Shares of Goa Trading Private Ltd., of

Rs. 100 each

266.08

231.50

In Warrant Equity Shares

Quoted, partly paid up

– Warrant Equity Shares 2000 of Reliance

–*

(16,02,52,100) Petroleum Ltd. of Rs. 10 each, Rs. 3 paid-up

(Company under the same management)

16,02,52,100 Warrant Equity Shares 2001 of Reliance

48.08

(16,02,52,100) Petroleum Ltd. of Rs. 10 each, Rs. 3 paid-up

(Company under the same management)

48.08

In Debentures
Unquoted, fully paid up

6,40,140 Deep Discount Bonds of Reliance Infocom Ltd.

1,600.02

(–) of Maturity Value of Rs. 1,00,000 each

(Company under the same management)

1,60,260 Deep Discount Bonds of Reliance Power Ltd.
(–) of Maturity Value of Rs. 1,00,000 each

400.01

2,000.03

48.08

96.16

–

5,489.42

2,998.74

Reliance Industries Limited

00288021.p65

May 23, 2001 @ 10:03 am

GROWTH IS LIFE

Schedules forming part of the Balance Sheet

SCHEDULE ‘F’ ( contd.)

INVESTMENTS

As at
31st March, 2001
Rs.

Rs.

(Rs. in Crores)
As at
31st March, 2000
Rs.

Rs.

In Equity Shares of Subsidiary Companies
Unquoted, fully paid up

2,10,070 Vimal Fabrics Ltd. of Rs. 10 each
(Erstwhile Devti Fabrics Limited)
14,75,04,400 Reliance Industrial Investments and Holdings

(2,10,070)

(14,75,04,400) Ltd. of Rs. 10 each

20,20,000 Reliance Ventures Ltd. of Rs. 10 each

(20,20,000)

20,20,000 Reliance Power Ventures Ltd. of Rs. 10 each

0.21

147.50

2.02

(-)

10,20,00,700 Reliance General Insurance Company Ltd.

102.00

of Rs. 10 each

(-)

20,00,700 Reliance Life Insurance Company Ltd. of

(-) Rs. 10 each

11,120 Reliance Infocom BV of 100 EURO each

(-)

Reliance Technologies LLC

In Debentures of Subsidiary Companies
Unquoted, fully paid up

8,83,143 Zero Coupon Optionally Convertible
(8,83,143) Unsecured Debentures of Reliance

Industrial Investments and
Holdings Ltd. of Rs. 5,000 each

2.00

4.48

16.40

276.63

441.58

2,79,90,000 8.25% Unsecured Convertible Debentures

279.90

(2,79,90,000) of Reliance Industrial Investments
and Holdings Ltd. of Rs. 100 each

0.21

147.50

2.02

149.73

441.58

279.90

721.48

998.11

871.21

Other Investments
In Equity Shares
Quoted, fully paid up

15,51,549 BSES Ltd. of Rs. 10 each
(15,51,549)

71,67,781 Larsen and Toubro Ltd. of Rs. 10 each
(9,52,347)

Unquoted, fully paid up

1,000 Air Control and Chemical Engineering

(1,000) Co. Ltd. of Rs. 100 each

33.73

163.95

197.68

0.01

33.73

28.37

62.10

0.01

TOTAL (A)

197.69

6,685.73

62.11

3,932.57

Reliance Industries Limited

00288021.p65

May 23, 2001 @ 10:03 am

GROWTH IS LIFE

Schedules forming part of the Balance Sheet

SCHEDULE ‘F’ ( contd.)

INVESTMENTS

B. CURRENT INVESTMENTS
Other Investments
In Units
Quoted

As at
31st March, 2001
Rs.

Rs.

(Rs. in Crores)
As at
31st March, 2000
Rs.

Rs.

1,61,100 SBI Magnum Multiplier Plus 1993 units

(1,61,100) of Rs. 10 each

85,600 Units of Unit Scheme 1964, Unit Trust

(85,600) of India of Rs. 10 each

(Deposited with Mumbai Port Trust)

0.16

0.13

0.29

Unquoted

2,78,49,807 Reliance Income Fund - Growth Plan

40.09

(-) of Rs. 10 each

- Reliance Capital Vision Fund Units

(78,25,116) of Rs. 10 each

- Reliance Capital Growth Fund Units

(10,00,000) of Rs. 10 each

In Investment Management Account

With Union Bank of Switzerland
With Credit Suisse

40.09

-
-

0.16

0.13

0.29

7.83

1.00

8.83

2,081.86
43.01

2,124.87

TOTAL (B)

TOTAL (A+B)

40.38

6,726.11

2,133.99

6,066.56

INVESTMENTS

AGGREGATE VALUE OF

Quoted Investments
Unquoted Investments

Movements during the year
Purchased and Sold

Mutual Fund Units
Reliance Liquid Fund (Treasury Plan)
Reliance Liquid Fund (Serial Plan)
Reliance Income Fund

Debentures
IDBI Bonds

Equity Shares
Larsen and Toubro Ltd.
Reliance Capital Ltd.

As at
31st March, 2001

(Rs. in Crores)
As at
31st March, 2000

Book Value
Rs.

Market Value
Rs.

Book Value
Rs.

Market Value
Rs.

3,387.25
3,338.86

7,084.05
–

2,820.60
3,245.96

8,689.71
–

Face Value
Rs.

Nos.
(In Crores)

Cost
(Rs. in Crores)

10.00
10.00
10.00

Face Value
Rs.

10,000.00

10.00
10.00

103.07
23.65
0.69

Nos.

100

49,773
1,320

1,244.50
238.95
9.91

Cost
(Rs. in Crores)

0.10

1.07
0.01

The Company’s investment in Reliance Petroleum Ltd., a Company under the same management is towards promoters contribution. During the year the
company has received 16,02,52,100 equity shares on exercise of warrants The Company has given an undertaking to financial institutions not to dispose
off 32,00,37,700 shares till the loans granted by them to Reliance Petroleum Ltd. are outstanding.
Investment in Reliance Technologies LLC of Rs. 16.40 Crores represents 90% Membership Interest.

#
@ Interest on Unsecured Convertible Debentures of Reliance Industrial Investments and Holdings Ltd. has been changed from 0% to 8.25% with effect

from 1st April, 2000.

Reliance Industries Limited

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GROWTH IS LIFE

Schedules forming part of the Balance Sheet

SCHEDULE ‘G’

CURRENT ASSETS

INTEREST ACCRUED ON INVESTMENTS

INVENTORIES
Stores, Chemicals and Packing Materials
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, 2001
Rs.

Rs.

85.13

(Rs. in Crores)

As at
31st March, 2000
Rs.

Rs.

47.48

720.12
378.56
177.74
1,023.43

129.40
56.80

186.20
56.80

129.40
1,004.77

1.30

66.90

32.43
-

642.62
297.35
96.09
787.14

2,299.85

1,823.20

61.01
62.59

123.60
62.59

61.01
781.45

1,134.17

842.46

1.00

41.37

29.30
1,009.88

100.63

3,619.78

1,081.55

3,794.69

# Sundry Debtors include Rs 219.49 Crores from Reliance Infocom Limited a Company under the same management which includes Rs

22.07 Crores outstanding for more than 6 months.

* Represent deposits of

a) Rs. NIL with Union Bank of Switzerland (Previous year Rs. 672.84 Crores) (Maximum amount outstanding at any time

during the year Rs. 672.84 Crores.)

b) Rs. NIL with Credit Suisse (Previous year Rs. 337.04 Crores) (Maximum amount outstanding at any time during the year

Rs.337.04 Crores.)

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, 2001
Rs.

Rs.

(Rs. in Crores)

As at
31st March, 2000
Rs.

Rs.

2,922.58

1,863.99
572.74
143.42

5,502.73

2,411.16

1,221.45
297.91
128.74

4,059.26

Advances includes:
(i) Rs 0.21 Crores to Officers ( Maximum amount outstanding at any time during the year Rs 0.21 Crores)
(ii) Rs. 99.21 Crores towards Shares / Debentures Application money pending allotment. (Previous Year Rs 165.41 Crores)
(iii) Rs 10.00 Crores towards Equity Share Application money pending allotment and Rs 28.70 Crores towards Debenture

Application money pending allotment to Reliance Infocom Limited; a Company under the same management.

(iv) Rs 2.54 Crores towards Debenture Application money pending allotment to Reliance Communications Private Limited,

a Company under the same management.

(v) Rs 17.93 Crores towards Material on Loan to Reliance Petroleum Limited, a Company under the same management.

Reliance Industries Limited

00288021.p65

May 23, 2001 @ 10:03 am

GROWTH IS LIFE

Schedules forming part of the Balance Sheet

SCHEDULE ‘I’

CURRENT LIABILITIES AND PROVISIONS

As at
31st March, 2001
Rs.

Rs.

(Rs.in Crores)

As at
31st March, 2000
Rs.

Rs.

CURRENT LIABILITIES

Sundry Creditors

Interim Dividend

Unclaimed Dividend

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

3,859.22 *

–

28.58

223.00

17.85

330.55

21.57

447.85

45.68

2,959.29

384.65

21.65

234.44

4,110.80

3,600.03

13.35

195.55

14.59

–

42.31

863.50

4,974.30

265.80

3,865.83

* Includes for capital expenditure Rs 104.72 Crores.(Previous Year Rs 372.43 Crores), acceptances of Rs NIL (Previous Year Rs
5.33 Crores) and Rs 4.72 Crores (Previous Year Rs 1.82 Crores) due to small scale industrial undertakings, listed below,
exceeding Rs 1 lakh, each outstanding for more than 30 days, within the agreed terms:

Accurate Paper Tube, Aditya Forge Ltd, Agencies(India)Corporation, Aico Agencies Pvt. Ltd.,Aksh India Ltd, Ambica Textiles, Anil Industrial Components, Associated
Chemicals, Associated Products, Bhandari Industries, Bilimoria (India), CEAG Flameproof Control Gear Pvt Ltd, Colloids India, Elite Printers, Fibro Chemicals, Fibrochem
Industries, Fine Flow Plastic Industries, Fourwents Engineering Co.,Geecy Engineering Pvt Ltd, Globe Electrical Industries, Harisidh Engineering Works, Hi-Tech Paper
Products, Horizon Offset, Interlabels Industries, IPSA Chemicals Pvt.Ltd., J.B.Industries, Lee Marketing (India), Nec Containers Pvt Ltd, R D Brothers, PITICO Chemicals,
Pooja Paper crafts Reliable Art Printery, Reliance Industrial Products, Riddhi Forms Pvt Ltd, S.Kumar Industries Ltd, Sarex International, Sarex Overseas, Shiv Ganga
Paper Converters (P) Ltd, Shree Krishna Packaging, Shree Ram Engineers, Sukhvir Engineering Works, Tex Tube Mfg Co, Universal Wire Industries, Valia Enterprises.

Schedules forming part of the Profit and Loss Account

SCHEDULE ‘J’

OTHER INCOME

Dividends :

From Current Investments
From Long Term Investments

Interest Received :

From Current Investments
From Long Term Investments
From Others

[Tax Deducted at source Rs. 5.17 Crores;
(Previous Year Rs. 0.69 Crore)]
Profit on Sale of Long Term Investments (net)
Profit on Sale of Current Investments (net)
Profit on Sale of Assets
Miscellaneous Income

2000-2001

(Rs. in Crores)

1999-2000

Rs.

0.01
20.10

132.18
28.49
40.90

0.01
20.74

472.09
87.44
35.15

20.11

201.57

0.28
13.41
0.41
146.85

382.63

20.75

594.68

55.96
2.73
0.42
12.76

687.30

Reliance Industries Limited

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Schedules forming part of the Profit and Loss Account

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

2000-2001

(Rs. in Crores)
1999-2000

Rs.

1,023.43
177.74

787.14
96.09

486.98
52.57

1,201.17

883.23

317.94

883.23

539.55

343.68

SCHEDULE ‘L’

MANUFACTURING AND OTHER EXPENSES

2000-2001

RAW MATERIALS CONSUMED
INTER-DIVISIONAL TRANSFERS
MANUFACTURING EXPENSES

Rs.

9,430.09
4,984.08

Rs.

(Rs. in Crores)
1999-2000

Rs.

6,642.44
4,454.23

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)

806.15
987.86
70.78
22.22
114.81
2,578.91
31.26
(594.16)*

789.95
439.54
49.02
19.96
199.69
2,451.53
37.83
(289.26)

4,017.83

3,698.26

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

SALES AND DISTRIBUTION EXPENSES

Samples, Sales Promotion and Advertisement Expenses
Brokerage, Discount and Commission
Warehousing and Distribution Expenses
Sales Tax

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 and Donations

374.80

376.36

335.33

46.42
59.32

37.23
328.55
388.39
7.61

38.87
27.92
115.59
32.17
35.74
2.56
128.67
2.80
158.68
4.50
30.39

441.07

761.78

281.33

36.17
57.30

41.16
100.28
226.61
8.31

48.56
28.45
85.17
27.37
25.53
2.15
123.49
7.50
183.76
4.00
21.55

Less : Pre-operative Expenses of Projects Under Commissioning (net)

* Includes Rs. 546.63 Crores on account of repatriation of foreign currency monetary assets.

577.89

20,212.74

1.30

20,211.44

557.53

16,103.62

3.87

16,099.75

Reliance Industries Limited

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Schedules forming part of the Profit and Loss Account

SCHEDULE ‘M’

INTEREST

Debentures
Fixed Loans

Others

2000-2001

(Rs. in Crores)
1999-2000

Rs.

918.97
166.99

130.03

1,215.99

794.73
156.99

56.28

1,008.00

Significant Accounting Policies

SCHEDULE ‘N’

SIGNIFICANT ACCOUNTING POLICIES
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. Use of Estimates

The presentation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions
to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported a mount of
revenues and expenses during the reporting period. Difference between the actual result and estimates are recognised in the per iod in which
the results are known/materialised.

C. Fixed Assets

Fixed Assets are stated at cost net of modvat / cenvat 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.

D. Depreciation

Depreciation on fixed assets is provided on written down value method at the rates and in the manner prescribed in Schedule XIV to the
Companies Act, 1956 except: on the assets situated at Jamnagar, which is under straight line method; 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 leasehold 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 depreciation has been charged over the residual life
of the assets.

E. Foreign Currency Transactions

a. Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction.
b. 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 on 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.

c. Non monetary foreign currency items are carried at cost.
d. 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.

e. Any income or expense on account of exchange difference either on settlement or on translation is recognised in the profit and loss
account except in cases where they relate to acquisition of fixed assets in which case they are adjusted to the carrying cost of
such assets.

Investments
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.
Inventories
Items of inventories are measured at lower of cost or net realisable value. Cost of inventories comprise of all cost of purchase, cost of
conversion and other cost incurred in bringing the inventory to their present location and condition. Cost of stores and spares, raw materials,
process chemicals, packing materials, trading and other products is determined on weighted average basis. By products are valued at net
realisable value. Cost of work in progress and finished stock is determined on absorption costing method.

Reliance Industries Limited

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H. Sales

Sales include inter-divisional transfers and sales during trial run; adjusted for discounts (net).

I. 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.

J. 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.

K. Research and Development Expenses

Expenditure relating to capital items is debited to fixed assets and depreciated at applicable rates. Revenue expenditure is c harged to Profit
and Loss Account of the year in which they are incurred.

L. Borrowing Cost

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets.
A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged
to revenue.

M. 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.

N. Accounting for Oil and Gas Activity

Assets and liabilities as well as income and expenditure 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 in respect of the un-incorporated joint
ventures.
Issue Expenses
Issue Expenses pertaining to the projects are capitalised.

Notes on Accounts

SCHEDULE ‘O’

(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. 4,984.08 Crores (Previous Year Rs. 4,454.23 Crores).

(a) The Company has changed the method of depreciation from straight line method to written down value method with effect from
1-4-2000, for Cracker and Aromatic plants at Hazira on account of technological advancements and obsolescence and for
buildings, electrical installations, factory equipment, furniture and fixtures and vehicles, other than those situated at Jamnagar
to provide for timely replacement.

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 of these plants at WDV rates applicable to those years. Consequent to this,
there is an additional charge for depreciation during the year of Rs.835.03 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 163.20 Crores,
excluding the charge relating to the previous years.

Consequently, the Net Block of Fixed Assets and Reserves and Surplus are lower by Rs. 998.23 Crores.

(b) The Gross Block of Fixed Assets include Rs 2770.78 Crores (Previous Year Rs 2771.06 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
236.59 Crores (Previous Year Rs 374.06 Crores) and an equivalent amount has been withdrawn from General Reserve and
credited to the Profit and Loss Account.

The income 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. 0.83 Crores. (Previous year Rs NIL)

Due to the Gujarat earthquake on 26-01-2001, the Company has made insurance claims for loss of revenue, increased cost of
working and other like losses. Pending settlement of the claims, additional operating cost of Rs 13.81 Crores has been charged
under the respective heads of expense in the Profit and Loss Account. Further necessary adjustment will be made in the year
when the claim is settled.

Miscellaneous Income includes Rs 98.11 Crores being Discount received on Redemption of Debentures and an equivalent
amount has been transferred to Capital Reserve.

Reliance Industries Limited

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Notes on Accounts

SCHEDULE ‘O’ (Contd.)

(a) Auditors’ Remuneration :

Audit Fees
Tax Audit Fees

i)
ii)
iii) For Certification and Consultation in finance and tax matters

iv) Expenses reimbursed

(b) Cost Audit Fees

8. Managerial Remuneration :

i)
Salaries
ii) Perquisites
iii) Commission

iv) Contribution to Provident Fund and Superannuation Fund
v) Provision for Gratuity

2000-2001
1.16
0.47
0.68

0.21

2.52

0.04

2000-2001
2.35
2.04
22.69

27.08

0.59
0.10

27.77

(Rs. in Crores)
1999-2000
1.00
0.40
0.65

0.10

2.15

0.03

(Rs. in Crores)
1999-2000
2.61
0.99
11.78

15.38

0.45
0.58

16.41

Computation of net profit in accordance with Section 198 read with Section 309(5) of the Companies Act, 1956.

2000-2001

(Rs. in Crores)

1999-2000

Profit before Taxation
Add: Depreciation as per accounts

Less: Transfer from General Reserve

Add: Provision for Doubtful Debts / (Written Back)

Loss on Sale of Assets
Managerial Remuneration

Less: Depreciation as per the Companies Act, 1956

Discount received on Redemption of Debentures
Profit on Sale of Assets
Profit on Sale of Investments

Net Profit for the year

Salaries, Perquisites and Commission
@ 1.00 % of the above.

Less: Salaries and Perquisites of Directors eligible for

commission

Balance commission

Rs.

2,636.73

1,071.62

Rs.

2,533.59

1,255.23

Rs.
2780.62

1,565.11

(5.80)
2.80
27.08

4,369.81

1,565.11
98.11
0.41
13.69

2,692.49

26.92

4.23

22.69

Rs.
2460.25

1,278.36

18.24
7.50
15.38

3779.73

1,670.10
–
0.42
58.69

2050.52

15.38

3.60

11.78

10.

A sum of Rs. 3.01 Crores (net debit) (Previous Year Rs. 0.07 crore (net debit)) is adjusted to General Expenses
representing Net Prior Period Items.

The income-tax assessments of the Company have been completed up to Assessment Year 1998-99. The total demand
raised by the Income-Tax Department up to the said Assessment Year is Rs. 471.64 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

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GROWTH IS LIFE

Notes on Accounts

SCHEDULE ‘O’ (Contd.)

11.

12.

The company has an investment of Rs.0.21 crore in the Share Capital, loan of Rs. 12.16 Crores in Vimal Fabrics Ltd.
(VFL) (erstwhile Devti Fabrics Limited), a wholly owned subsidiary company. The losses of VFL exceed its paid-up
Capital and Reserves as on 31st March 2001. 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.

Fixed assets taken on lease amount to Rs.344.66 Crores. (Previous year Rs. 434.22 Crores). Future obligations towards
lease rentals under the lease agreements as on 31st March 2001 amount to Rs.38.78 Crores. (Previous year
Rs. 54.20 Crores)

13. PRE-OPERATIVE EXPENSES

(In respect of Projects up to 31st March 2001, to be capitalised.)

Opening Balance

Add : Pre-operative expenditure transferred from

Profit and Loss Account

Lease Expenses and Hire Charges

Interest Capitalised

Less : Pre-operative Expenses capitalised during

the year

Closing Balance

14. CONTINGENT LIABILITIES

Rs.

1.30

12.57

2000-2001

Rs.
8.73

(Rs. in Crores)

1999-2000

Rs.
558.98

Rs.

3.87

7.49

267.52

278.88

837.86

829.13

8.73

(Rs. in Crores)

As at

13.87

22.60

16.08

6.52

As at

31st March, 2001

31st March, 2000

Rs.

(a) Estimated amount of contracts remaining to be executed

on capital accounts and not provided for

221.43

63.92

(b) Outstanding guarantees furnished to Banks and Financial

Institutions including in respect of Letters of Credit

244.75

150.34

credit facilities extended to third parties

(d) Liability in respect of bills discounted with Banks

(e) Uncalled liability on partly paid Shares/Warrant

Equity Shares

(f) Claims against the company/disputed liabilities not

acknowledged as debts

(g) Sales tax deferral liability assigned

861.40

312.81

203.38

370.74

432.68

865.36

386.97

235.27

110.75

235.27

Reliance Industries Limited

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Notes on Accounts

SCHEDULE ‘O’ (Contd.)

15. LICENSED AND INSTALLED CAPACITY

(As certified by the Management)

(a)

(i) Ethylene

(ii) Propylene

(iii) Benzene

(iv) Butadiene and Other C4s

(v) Toluene

(vi) Xylene

(b) Purified Terepthalic Acid

(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

(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)

(i) Paraxylene

(ii) Orthoxylene

(o)

LDPE

(p) Poly Ethylene Terephthalate

(q) Polyester Staple Fibre Fill

(r) High Density Polyethylene Pipes

Licensed Capacity

Installed Capacity

UNIT

2000-2001

1999-2000

2000-2001

1999-2000

M.T.

Nos.

M.T.

1,550,000

750,000

755,000

365,000

291,000

465,000

225,000

197,000

165,000

N.A.

975,000

960,000

270,000

235,000

320,000

152,300

320,000
+
152,300

600,000

300,000

75,000

N.A.

75,000

37,500

50,000

37,500

50,000

N.A.

100,000

N.A.

24,094

23,040

24,094

23,040

603

–

607

–

708,800

800,000

20,160

1,646,000

150,000

N.A.

–

80,000

30,000

80,000

–

80,000

30,000

–

N.A. - Delicensed vide notification No 477(E) dated 27th July 1991 and press note No 1 (1998 series) dated 8th June 1998
+

Includes 32,300 MT based on average Denier of 40

Reliance Industries Limited

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GROWTH IS LIFE

Notes on Accounts

SCHEDULE ‘O’ (Contd.)

16. The Department of Company Affairs, Government of India vide its Order No. 46/59/2001/CL-III dated April 26, 2001 issued
under Section 211 (4) of the Companies Act, 1956 has exempted the company from disclosure of quantitative details 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.

17. PRODUCTION MEANT FOR SALE

Products

Fabrics

Polyester Filament Yarn

PET

Polyester Staple Fibre

Fibre Fill

PTA

LAB

Normal Paraffin

Ethylene Glycol

PVC

Ethylene

Paraxylene

Propylene

Benzene

Xylene

Orthoxylene

Toluene

Crude Oil

Gas

18. VALUE OF IMPORTS ON CIF BASIS IN RESPECT OF

Raw Materials
Stores & Spares, Dyes and Chemicals
Capital Goods

19. EXPENDITURE IN FOREIGN CURRENCY

Interest on Foreign Currency Loans
Interest on Debentures held by Non residents on repatriation basis (Gross)
Technical Know-how and Engineering Fees
Oil and Gas Activity
Other Matters

Unit

2000-2001

1999-2000

Meters in lacs

BBTU

330.62

2,35,575

70,680

309.62

2,43,755

73,786

3,02,429

3,13,129

16,313

6,03,466

1,10,164

11,866

2,19,370

2,87,359

27,763

11,49,608

5,025

2,06,904

26,737

1,10,196

68,963

3,59,927

8,17,630

4,10,887

27,840

17,367

6,06,023

1,12,608

2,133

2,08,282

2,89,848

40,362

5,00,220

–

1,88,267

28,583

38,978

58,645

3,82,218

6,19,397

3,42,138

30,780

2000-2001

3,407.85
395.06
47.73

(Rs in Crores)
1999-2000

2,410.05
313.06
114.40

2000-2001

(Rs in Crores)
1999-2000

553.86
-
110.84
112.55
74.25

488.69
0.01
472.92
133.84
71.81

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Notes on Accounts

SCHEDULE ‘O’ (Contd.)

20. VALUE OF RAW MATERIALS CONSUMED

Imported
Indigenous

2000-2001

1999-2000

Rs in
Crores

% of
Consumption

Rs in
Crores

% of
Consumption

3,709.88
5,720.21

39.34
60.66

2,772.61
3,869.83

41.74
58.26

9,430.09

100.00

6,642.44

100.00

21. VALUE OF STORES, CHEMICALS AND PACKING MATERIALS CONSUMED

2000-2001

1999-2000

Rs in
Crores

% of
Consumption

374.22
431.93

806.15

46.42
53.58

100.00

Rs in
Crores

419.51
370.44

789.95

% of
Consumption

53.11
46.89

100.00

Imported
Indigenous

22. EARNINGS IN FOREIGN EXCHANGE

FOB Value of Exports
Interest
Others - Charter Hire Income

23. EXPENDITURE ON RESEARCH AND DEVELOPMENT

Revenue Expenditure including amortisation of
deferred cost and Unamortised Deferred Research
and Development Expenditure

Capital Expenditure on Research & Development

Total

24. 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
foreign currency cannot be
ascertained. The total amount remittable in this respect
is given herein below:

remitted

2000-2001

Rs.
4710.07
141.24
2.97

(Rs. in Crores)
1999-2000

Rs.
1475.99
472.42
–

2000-2001
Rs.

47.68

(Rs. in Crores)
1999-2000
Rs.

49.65

1.99

49.67

–

49.65

2000-2001

(Rs. in Crores)
1999-2000

(a) Number of Non-Resident Shareholders

(b) Number of Equity Shares held by them

(c)

(i) Amount of Dividend Paid (Gross) (Rs. in Crores)

Tax Deducted at Source Rs. Nil (Previous Year Nil)

27,682

32,131

21,23,94,239

23,52,66,428

84.96

88.22

(ii) Year to which dividend relates

1999-2000

1998-99

Reliance Industries Limited

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Notes on Accounts

25. BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE

Registration Details

Registration No. :

1 1

- 1

9 7

8 6

State Code:

Balance Sheet Date :

3 1

- 0

3 -

0 1

II. Capital Raised during the year (Amount Rs. Crores)

Public Issue :

Bonus Issue :

N I

Rights Issue :

Private Placement :
(Preference Shares)

Conversion of Bonds :

N I

Exercise of warrants

III. Position of Mobilisation and Deployment of Funds (Amount Rs. Crores)

1 1

N I L

Total Liabilities :

2 9

8 7

5 .

4 6

Total Assets :

9 8 7 5 . 4 6

Sources of Funds

Paid-up Capital :

Secured Loans :

Application of Funds

0 5

3 .

4 9

Reserves and Surplus :

3 7 1 1 . 8 8

0 6

8 .

4 0

Unsecured Loans :

6 0 6 7 . 3 9

Net Fixed Assets :

1 4

0 2

6 .

8 4

Investments :

6 7 2 6 . 1 1

Net Current Assets:

1 4

8 .

2 1

IV. Performance of Company (Amount Rs. Crores)

Turnover :

2 8

0 0

8 .

2 5

Total Expenditure :

5 9 2 8 . 2 0

Profit Before Tax :

7 8

0 .

6 2

Profit After Tax :

2 6 4 5 . 6 2

Earnings per share in Rs.

5 .

0 6

Dividend : Rs. per share

4 . 2 5

V. Generic Names of Three Principal Products of Company (as per monetary terms)

Item Code No. (ITC Code) :

3 9 0 2 1 0

0 0

Product Description :

P O L Y P R O P Y L E N E

( P P )

Item Code No. (ITC Code) :

5 4 0 2 4 2

0 0

Product Description :

P O L Y E S T E R

F I

L A M E N T

Y A R N

( P F Y )

Item Code No. (ITC Code) :

2 9 0 2 4 3

0 0

Product Description :

P A R A X Y L E N E

( P X )

As per our Report of even date

For Chaturvedi & Shah
Chartered Accountants

For Rajendra & Co.
Chartered Accountants

D. Chaturvedi
Partner

R. J. Shah
Partner

Mumbai
Dated: 30th April, 2001

- Chairman
- Managing Director

For and on behalf of the Board
D.H.Ambani
A.D.Ambani
N.R.Meswani
H.R.Meswani
H.S.Kohli
S.Venkitaramanan
U.Mahesh Rao
R.H.Ambani
T.Ramesh U.Pai
Y.P.Trivedi
Dr.D.V.Kapur
M.P.Modi
Rohit C. Shah

}
}
}

Executive
Directors

Nominee
Directors

Directors

- Vice President and
Company Secretary

Reliance Industries Limited

00288021.p65

May 23, 2001 @ 10:03 am

GROWTH IS LIFE

Statement Pursuant to Section 212 of the Companies Act, 1956, relating to
Company’s Interest in Subsidiary Companies.

Name of Subsidiary Company

Vimal Fabrics Ltd.
(formerly Devti
Fabrics Ltd)

Reliance Industrial
Investments and
Holdings Ltd.

Reliance Ventures Ltd.

Reliance Power
Ventures Ltd.

31st March, 2001

30th September, 1985

30th December, 1988

7th October, 1999

13th May, 2000

2,10,070 Equity Shares
of the face value of
Rs.10 each fully paid-up

14,75,04,400 Equity
Shares of the face value
of Rs.10 each fully paid-up

20,20,000 Equity Shares
of the face value of Rs.10
each fully paid-up

20,20,000 Equity
Shares of the face
value of Rs.10 each
fully paid-up

100%

The financial year of the
Subsidiary Companies ended on

2. Date from which they became
Subsidiaries 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

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

(Rs.2.10 Lakhs)

Rs.26.81 Lakhs

(Rs.0.43 Lakhs)

Rs.0.84 Lakhs

31st March, 2001

ii) For the previous financial years of
the Subsidiary Companies since
they became the Holding Company’s
subsidiaries

b. Dealt with in Holding Company’s

accounts:

(Rs. 1,195.56 Lakhs)

Rs. 8,205.91 Lakhs

Rs. 0.10 Lakhs

Not applicable

i) For the financial year ended 31st

NIL

March, 2001

ii) For the previous financial years of
the Subsidiary Companies since
they became the Holding
Company’s subsidiaries

NIL

Rs. 2,673.89 Lakhs

NIL

Not applicable

Reliance Industries Limited

00288021.p65

May 23, 2001 @ 10:03 am

GROWTH IS LIFE

Statement Pursuant to Section 212 of the Companies Act, 1956, relating to
Company’s Interest in Subsidiary Companies.

Reliance Life Insurance
Company Ltd.

Reliance General
Insurance
CompanyLtd.

Reliance Infocom
B.V.

Reliance Infocom
Inc.
(See Note 2)

Reliance Technologies
LLC

31st March, 2001

(See Note 1)

31st March, 2001

22nd August, 2000

31st December, 2000

2nd May, 2000

20,00,700 Equity Shares of
the face value of Rs.10
each fully paid-up

10,20,00,700 Equity Shares of
the face value of Rs.10 each
fully paid-up

11,120 shares of
the face value of
EUR 100 each
fully paid-up

100 shares aggregating
to US $ 9,00,000
fully paid-up, held by
Reliance Infocom B.V.

–

100%

90%

NIL

Rs.45.08 Lakhs

Not applicable

(US $ 1,274)
(Rs.59,394)

Not applicable

(US $ 1,768,519)
(Rs. 8.24 Crores)

Not applicable

NIL

Not applicable

NIL

Not applicable

Notes :

1. The first Statutory financial year of this Company ends on 31st December, 2001.
2. 100% subsidiary of Reliance Infocom B.V.
3. Figures in bracket represent losses.

For and on behalf of the Board

- Chairman
- Managing Director

D.H.Ambani
A.D.Ambani
N.R.Meswani
H.R.Meswani
H.S.Kohli
S.Venkitaramanan
U.Mahesh Rao
R.H.Ambani
T.Ramesh U.Pai
Y.P.Trivedi
Dr.D.V.Kapur
M.P.Modi
Rohit C. Shah

}
}
}

Executive
Directors

Nominee
Directors

Directors

- Vice President and
Company Secretary

Reliance Industries Limited

Mumbai
Dated: 30th April, 2001

00288021.p65

May 23, 2001 @ 10:03 am

GROWTH IS LIFE

Cash Flow Statement Annexed to the Balance Sheet
for the period April 2000-March 2001

A: CASH FLOW FROM OPERATING ACTIVITIES :

Net Profit after tax as per Profit and Loss Account
Adjusted for :

Net Prior Year Adjustments
Tax Provision
Provision for Doubtful Debts
Profit/(Loss) on Sale of Discarded Assets
Depreciation
Transferred from General Reserve
Discount on Redemption of Debentures
Effect of Exchange Rate Change
Profit on Sale of Investments/Dividend Income
Interest/Other Income
Interest Expenses

Operating Profit before Working Capital Changes
Adjusted for :

Trade and Other Receivables
Inventories
Trade Payables

Cash Generated from Operations

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 Loans
Interest Income
Dividend Income

Net Cash Used in Investing Activities

2000-2001

(Rs. in Crores)
1999-2000

Rs.

2,645.62

2,403.25

3.01
135.00
(5.80)
2.39
2,636.73
(1,071.62)
(98.11)
(548.23)
(33.81)
(201.57)
1,215.99

(591.77)
(476.65)
1,271.91

0.07
57.00
18.24
7.07
2,533.59
(1,255.23)
–
(331.87)
(79.45)
(594.67)
1,008.00

(1,080.70)
(414.59)
(583.59)

2,033.98

4,679.60

203.49

4,883.09

(3.01)
(132.00)

4,748.08

(906.18)
15.10
(4,292.52)
1,521.80
2,124.87
(1,066.51)
159.44
20.11

(2,423.89)

1,362.75

3,766.00

(2,078.88)

1,687.12

(0.07)
(56.50)

1,630.55

(2,111.89)
21.61
(2,998.41)
2,464.83
(1,179.68)
(1,789.38)
572.11
20.75

(5,000.06)

Reliance Industries Limited

00288021.p65

May 23, 2001 @ 10:03 am

GROWTH IS LIFE

Cash Flow Statement Annexed to the Balance Sheet
for the period April 2000-March 2001

C: CASH FLOW FROM FINANCING ACTIVITIES :
Proceeds from Issue of Share Capital (net)
Securitisation of Future Receivables
Redemption of Preference Share Capital
Proceeds from Long Term Borrowings
Repayment of Long Term Borrowings
Short Term Loans
Dividends Paid
Interest Paid
Effects of exchange rate change

Net Cash used in Financing Activities

Net Increase/(Decrease) in Cash and Cash Equivalents

Opening Balance of Cash and Cash Equivalents

Closing Balance of Cash and Cash Equivalents

Rs.

2000-2001
Rs.

(Rs. in Crores)
1999-2000
Rs.

Rs.

0.67
-
(292.95)
8,117.61
(9,689.35)
(368.98)
(425.33)
(1,193.67)
546.89

(3,305.11)

(980.92)

1,081.55

100.63

1,129.83
(965.02)
(192.12)
2,645.19
(2,372.83)
631.19
(418.93)
(1,241.95)
338.10

(446.54)

(3,816.05)

4,897.60

1,081.55

For and on behalf of the Board

D.H.Ambani
A.D.Ambani
N.R.Meswani
H.R.Meswani
H.S.Kohli
S.Venkitaramanan
U.Mahesh Rao
R.H.Ambani
T.Ramesh U.Pai
Y.P.Trivedi
Dr.D.V.Kapur
M.P.Modi
Rohit C. Shah

Mumbai
Dated: 30th April, 2001

Auditors’ Report

}
}
}

- Chairman
- Managing Director

Executive
Directors

Nominee
Directors

Directors

- Vice President and
Company Secretary

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, 2001 and 31st March, 2000 and found the same in
agreement therewith.

For Chaturvedi & Shah
Chartered Accountants

D. Chaturvedi
Partner

Mumbai
Dated: 30th April, 2001

For Rajendra & Co.
Chartered Accountants

R.J. Shah
Partner

Reliance Industries Limited

00288021.p65

May 23, 2001 @ 10:03 am

GROWTH IS LIFE

Profit & Loss Account under Indian GAAP, adjusted
to reflect Consolidated Net Income in accordance with US GAAP

The Indian GAAP Profit and Loss Account has been adjusted to reflect Consolidated Net Income measured in accordance with the
accounting principles generally accepted in the United States of America ("US GAAP"). The accounting policies and disclosure notes
relating to Indian GAAP Profit and Loss Account have already been given along with the Indian GAAP financial statements. Hence,
detailed accounting policies & disclosure notes for the Adjusted Profit & Loss Account are not given. Instead, description of differences
between Indian GAAP & US GAAP as applicable to the company, requiring adjustments to Indian GAAP Profit & Loss Account to arrive
at the consolidated net income measured under US GAAP has been given. The company is not subject to reporting and disclosure
requirements as per US GAAP. This disclosure has been provided as additional disclosure on voluntary basis to assist readers to
understand the company's results under US GAAP.

It may, however be noted that over 88% of the revenue of the company is earned in India and therefore the accounts should be read as
per Indian GAAP.

Adjusted Profit & Loss Account showing
Consolidated Net Income measured in accordance with US GAAP

Year ended 31st March, 2001

Gross turnover

Inter-divisional sales

Turnover from external customers

Operating costs and expenses

Raw materials consumed
Manufacturing expenses
Selling and distribution expenses
Depreciation
General and administrative expenses

Total operating costs and expenses

Operating income

Other income (expenses)

Foreign exchange difference - net
Interest expense
Interest income
Others - net

Total other income (expenses)

Income before income taxes

Income taxes (including deferred tax credits)

Gain on early extinguishment of debt (discount on early redemption of debentures)

Cumulative effect of change in method of depreciation (net of deferred taxes)

Consolidated net Income as per US GAAP

1 US $ = Rs 46.62

Rs.
(Crores)

28,015

(4,984)

23,031

12,048
4,587
762
1,393
1,019

19,809

3,222

(100)
(1,220)
178
(28)

(1,170)

2,052

374

(488)

2,036

US $
(Millions)

6,009

(1,069)

4,940

2,584
984
163
299
219

4,249

691

(21)
(262)
38
(6)

(251)

440

(105)

436

Notes to show GAAP differences:
The following notes show the difference between Indian and US GAAP and necessary adjustments to arrive at consolidated net income
under the US GAAP.
a) Share in Income of Affiliates and Subsidiaries

Under Indian GAAP, investments in affiliates, where RIL generally owns 20% to 50%, are carried at cost. Income from such affiliates is
recognized 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 original cost, plus its share of the net earnings, determined in accordance
with US GAAP of such affiliates, less any dividends received. US GAAP requires the preparation of consolidated financial statements,
whereas Indian GAAP currently has no such requirement. Accordingly, under US GAAP consolidated net income includes the
revenues, expenses, gains and losses of subsidiaries determined in accordance with US GAAP on line by line basis.

b) 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

Reliance Industries Limited

00288021.p65

May 23, 2001 @ 10:03 am

GROWTH IS LIFE

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 to reverse lease rentals charged under Indian GAAP and to charge depreciation and interest for
capital leases under US GAAP.
Indirect Preoperative Expenses
Under Indian GAAP, indirect preoperative expenses incurred during construction are capitalised. Under US GAAP, such indirect
costs are expensed as incurred.

d) Foreign Currency

Under Indian GAAP, foreign exchange difference relating to acquisition of fixed assets is adjusted against the carrying cost of such
assets. Other foreign exchange differences are recognized in profit and loss account. Under US GAAP, all gains or losses arising
from foreign exchange differences are included in the determination of net income.

e) Depreciation

Under Indian GAAP, indirect preoperative expenses incurred during construction are capitalised. Under US GAAP, such indirect
costs are expensed as incurred. Depreciation has been adjusted to take account of the US GAAP adjustments made to fixed assets
for indirect preoperative expenses and foreign currencies.

f) Deferred Income Tax

The provision for taxation under Indian GAAP is based on the estimated tax currently payable and no adjustment is currently
required to be made for deferred income taxes for the future tax effects of past transactions. US GAAP requires that adjustment for
such deferred income taxes be made. In calculating the deferred taxes, effect is given for change in tax laws and rates, in the period
in which such changes are enacted. Changes in enacted rates and laws have resulted in a reduction of Rs 287 crores (net) in
deferred income taxes for the year.
Issue Expenses
Under Indian GAAP debt issue expenses may be capitalised or charged to share premium. Under US GAAP, debt issue cost are
amortized as an expense over the life of the debt.
h) Cumulative effect of change in accounting principle

On account of technological advancements and increasing obsolescence, the Company has changed the method of depreciation
for its Cracker & Aromatics plant & machinery situated at Hazira and for buildings, electrical installations, factory equipment,
furniture and fixtures and vehicles, other than those situated at Jamnagar from Straight Line to Written Down value method with
effect from April 1, 2000. The new method has been applied retrospectively to plant & equipment acquisitions made in 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. 488 crores (net of Rs. 319 crores in deferred income taxes) after taking into account the adjustments to fixed assets
for indirect preoperative expenses and foreign currency differences. Had there been no change in the method of depreciation, the
charge for the year would have been lower by Rs. 163 crores, excluding the charge relating to the previous years.

As per our report of even date
For Deloitte Haskins & Sells
Chartered Accountants

P. R. Barpande
Partner

Mumbai
30th April, 2001

For and on behalf of the board

A.D. Ambani

Managing Director

N.R. Meswani

Executive Director

International Accountants’ Report

To the Board of Directors
Reliance Industries Limited
We have audited the accompanying adjusted profit and loss account (“adjusted profit and loss account”) showing consolidated net
income measured in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for the
year ended March 31, 2001 for Reliance Industries Limited (“Reliance”). The adjusted profit and loss account is prepared by
incorporating the adjustments required under the US GAAP to the profit and loss account prepared under the Indian GAAP. As
represented to us, Reliance has prepared the adjusted profit and loss account voluntarily to disclose the consolidated net income under
the US GAAP and accounting policies and disclosures relating to the adjusted profit and loss account have not been given. This
adjusted profit & loss account showing consolidated net income is the responsibility of Reliance’s management. Our responsibility is to
express an opinion on the consolidated net income based on our audit.

In our opinion, the adjusted profit and loss account fairly incorporates, in material respects, the adjustments required to be made to the
profit and loss account prepared under the Indian GAAP to arrive at the consolidated net income in accordance with US GAAP.

As per our report of even date
For Deloitte Haskins & Sells
Chartered Accountants

P.R.Barpande
Partner

Mumbai
30th April, 2001

00288021.p65

May 23, 2001 @ 10:03 am

Reliance Industries Limited

GROWTH IS LIFE

Financial ratios

2000-2001

1999-00

1998-99

1997-98

1996-97

1995-96

Profitability Ratios
EBIDTA / total revenue (%)
Operating profit margin (%)*
PAT / total revenue (%)
Operating expenses / total revenue (%)
Establishment expenses / total revenue (%)
Employee costs / total revenue (%)
Selling Expenses / total revenue (%)
Tax / PBT (%)

Domestic revenue / total revenue (%)
Export revenue / total revenue (%)
Other income / total revenue (%)
Cash profit / total revenue (%)

Balance Sheet Ratios
Acid test ratio
Cash and cash equivalents / current liabilities
Current ratio
Debt - equity ratio
Depreciation for the year / average gross block (%)
Capital expenditure / depreciation (%)
Capital expenditure / cash profit (%)
Capital expenditure / pre-tax profit (%)
Capital expenditure / total revenue (%)
Capital expenditure / total assets (%)
CWIP / total assets (%)

Efficiency Ratios
ROE (PAT / average net worth**) (%)
ROCE (PBIT / average capital employed) (%)
Cash profit / average net worth (%)
Growth in total revenue (%)
Growth in net profit (%)
Growth in export revenue (%)
Sales / total assets (%)
Inventory / sales (%)
Inventory turnover ( no of days )
Debtors turnover ( no of days )
EBITDA / net debt (%)
Cash and cash equivalents / total revenue (%)
Cash and cash equivalents / total assets (%)

Employee Related Ratios
Cost per employee (Rs lakhs)
Value added per employee (Rs lakhs)
Total Assets per employee (Rs lakhs)
Sales per employee (Rs lakhs)
PBT per employee (Rs lakhs)

Other Ratios
Book value (Rs.)
Cash Earning Per Share (Rs.)
Dividend (%)
Dividend per share (Rs.)
Dividend payout (%)
EPS - Earning Per Share (Rs.)
EPS growth (%)
Price / book value, end of year
Price / cash earnings, end of year
Price / earnings, end of year
Price / total revenue, end of year
Enterprise value / total revenue (%)

19.6
18.5
9.3
76.8
2.0
1.6
2.7
4.9

80.2
18.5
1.3
14.8

0.3
0.1
0.8
0.7
6.3
41.8
15.6
17.7
2.3
2.2
1.7

20.0
17.1
31.8
35.3
10.1
189.3
124.0
8.2
30.0
18.0
56.8
1.2
1.1

2.9
90.1
198.1
185.7
18.4

140.1
40.0
42.5
4.3
18.9
25.1
11.7
2.8
9.8
15.6
1.5
180.8

22.6
20.0
11.5
72.9
2.7
1.8
1.8
2.3

88.1
8.6
3.3
17.5

1.1
0.8
1.5
0.8
5.9
201.4
69.9
104.6
12.3
8.8
1.1

21.8
18.4
34.0
38.4
41.1
164.5
94.2
9.0
32.9
19.5
57.5
15.3
10.9

2.4
57.8
184.6
127.6
15.5

129.9
34.6
40.0
4.0
19.7
22.4
24.8
2.4
9.2
14.1
1.6
213.8

21.9
18.6
11.2
72.5
3.2
2.4
1.9
1.7

91.5
4.5
4.0
16.9

1.5
1.4
1.9
0.9
4.7
253.8
84.8
125.2
14.3
7.7
12.2

19.0
17.1
28.9
10.3
3.1
87.2
91.6
9.7
35.3
15.7
69.6
38.5
20.8

2.2
44.6
169.2
87.5
10.4

129.8
27.1
37.5
3.8
24.5
18.0
2.1
1.0
4.8
7.3
0.8
150.8

21.0
19.0
12.0
73.8
3.0
2.3
1.7
3.7

94.9
2.7
2.4
16.9

1.4
1.2
1.7
0.7
4.6
372.0
107.0
144.7
18.1
10.2
8.5

21.6
17.2
30.6
52.3
24.9
241.9
88.9
10.0
36.6
24.1
84.1
34.5
19.4

1.8
35.0
140.4
77.1
9.9

128.3
24.7
35.0
3.5
22.6
17.6
22.1
1.4
7.2
10.1
1.2
180.3

21.6
19.0
14.7
72.5
3.2
2.6
1.5
3.3

95.6
1.2
3.2
19.2

1.3
1.1
1.6
0.9
4.6
802.2
189.9
240.6
36.5
16.8
19.0

22.3
16.5
29.2
11.9
1.4
24.4
79.7
12.4
45.4
34.1
51.2
41.5
19.2

1.4
26.9
116.4
52.0
8.2

92.0
18.8
32.5
3.3
22.6
14.4
3.6
1.7
8.3
10.9
1.6
244.1

21.7
19.0
16.2
72.2
3.7
2.4
1.9
-

95.6
1.1
3.4
16.5

1.0
0.8
1.4
0.6
5.5
886.7
223.9
228.7
37.0
19.8
29.8

24.7
20.5
25.8
9.9
22.5
(49.6)
113.1
9.8
35.7
21.1
57.2
19.3
10.3

1.3
30.1
105.5
54.6
9.2

89.5
17.6
30.0
3.0
23.8
13.9
19.1
1.2
6.1
7.7
1.2
180.0

* excluding other income
** adjusted for CWIP and revaluation
EBITDA : Earnings before interest, tax, depreciation and amortisation
PBIT: Profit before interest and tax
PBT: Profit before tax

PAT: Profit after tax
CWIP: Capital work in progress
ROE: Return on equity
ROCE: Return on capital employed

Reliance Industries Limited

00288021.p65

May 23, 2001 @ 10:03 am

GROWTH IS LIFE

CIRCULAR TO THE SHAREHOLDERS

Dear Shareholder(s),

We are happy to inform you that we have received an overwhelming
response to our initiatives for dematerialisation of shares in our
Company, and presently, over 85% of our paid up share capital stands
converted into dematerialised form. For those investors still holding
shares in physical form, we have arranged a Special Offer for
conversion into dematerialised shares.

Why dematerialise?

1. Compulsory Demat

As you may be aware, trading in the shares of Reliance Industries
Limited is under compulsory demat segment.

2. Elimination of Odd Lot

The concept of an ‘‘Odd Lot’’ in respect of dematerialised shares
stands abolished i.e. in the DEMAT MODE market lot becomes
ONE share.

3. Demat - Most Preferred

Dematerialised securities are most preferred by the banks and
other financiers for providing credit facility against securities.
Generally, demat securities attract lower margin and lower interest
rate compared to physical securities.

4. Safety

Securities in dematerialised form reduce all risk of loss of
certificates. Under your specific instructions the same can be
kept in the ‘‘Frozen Mode’’ by your Depository participant (DP).

To facilitate the process for share holders who have still not
dematerialised their holdings, we have entered into special
arrangements with leading Depository Participants (DPs). The
DPs have agreed to provide a special tariff to Reliance share
holders. The details of the DPs and their special tariff is provided
in the annexure for your kind information.
Under this ‘‘Special Offer’’ you can dematerialise your
shareholdings in our Company FREE OF COST.
Please ensure the following while availing the service from
the DPs :
• Open a demat account with any of the Depository Participants

•

(DPs)
Submit demat request form (DRF) duly signed by all the
holders alongwith the certificates duly cancelled only to the
DPs.

• Obtain acknowledgement from the DP for having accepted

the certificates.

• Receive a confirmation statement of holding from your DP

within 30 days from the lodgement of securities with DPs.

•

PLEASE DO NOT SEND THE SHARE CERTIFICATES/
DOCUMENTS TO THE COMPANY OR OUR REGISTRAR
& TRANSFER AGENT, M/s. KARVY CONSULTANTS
LIMITED.

In case you need any additional Information on this matter, please
feel free to contact our special advisory cell at:

Demat Advisory Cell
Karvy Consultants Limited
46, Avenue 4, Street No.1, Banjara Hills,
Hyderabad - 500 034, India.
Telephone Nos. 91-40-3320251/3320751/3312454.
e-mail: rilinvestor@karvy.com

In order to serve you better, we are providing a feed back form to you
through the DPs, wherein you are kindly requested to provide your
contact details such as Phone (office- residence), Fax, Cellphone
numbers and e-mail address.

For any specific / latest information and the validity period of the
special offer you may contact the DP.

In case you have already dematerialised your holdings kindly ignore
this communication.

Disclaimer:
At present there are TWO depositories and various depository
participants (DPs) who are providing the demat services. The special
offer mentioned above is provided by select DPs for the benefit of
our shareholders and valid for a certain period. However, It is not
mandatory to open demat account only with these select DPs, and
the shareholders are free to select any of the Depositories / DPs for
converting and holding their securities in demat form. While utmost
care will be taken during the process, the Company does not
guarantee the completeness, quality or accuracy of the services,
and disclaim all costs, liabilities, losses and damages, if any, arising
out of the dematerialisation process and the special offer.

Reliance Industries Limited

00288021.p65

May 23, 2001 @ 10:03 am

SPECIAL TARIFF FOR DEMATERIALISATION BY “RELIANCE GROUP” SHARE HOLDERS
(applicable only for Reliance group shares)

GROWTH IS LIFE

SCHEDULE - I

Heading

Account Opening

Account Closing

Annual Maintenance /
Custody for 1st year

Annual Maintenance
(AMC) / Custody from
2nd year onwards

Dematerialisation

Postage for demat

IDBI Bank

Karvy Consultants

Standard Chartered

FREE

Will be charged by the DP at
prevailing rates at that time.
Current tariff is Rs. 200/- p.a.

Will be charged by the DP at
prevailing rates at that time.
Current tariff is Rs. 375/- p.a.

FREE

FREE upto Sep 2001

Will be charged by the DP at
prevailing rates at that time.
Current tar iff is maximum of
Rs. 500/- per quarter

FREE upto 30 June 2001

FREE

Rematerialisation

NSDL charges at actual

0.12%, minimum of Rs. 50/-

Transaction (Purchase)

0.04% on the value, minimum of
Rs. 15/- per transaction

0.05% on the value, minimum
of Rs. 25/- per transaction

Transaction (Sales)

0.04% on the value, minimum of
Rs. 15/- per transaction

0.05% on the value, minimum
of Rs. 25/- per transaction

Transaction (Off-Mkt)

0.04% on the value, minimum of
Rs. 15/- per transaction

0.04% on the value, minimum
of Rs. 25/- per transaction

Mode of payment
of fees to DP

Through existing and prospective
Savings - Current account of
IDBI Bank

After the transaction /
event through Bill

1) Through ECS mandate
2) Through existing SCB A/c
3) Through SCB credit card A/c

Documentation Charges

At actual

1) OD facility upto 65% on RIL &

RPL shares.

1) DP on the Net
2) Statement of Holding provided

2) Single scrip lending facility upto

alongwith market price

Additional offer(s)

50% on RIL & RPL.

3) Attractive rate of interest, easy

3) News letter and stock market,
IPO review through e-mail

documentation & quick disbursal 4) Other personal finance

schemes

2) Special

1) OD
on

facility upto 65%
securities
demat
scrip
borrowing facility on Reliance
Industries and Reliance
Petroleum

single

with

special

3) Pre-approved Global Credit
offer
4) NO requirement of Savings
SCB.
(Above offers are subject to
terms and conditions)

account

with

NOTE

Above offer is only for existing/
prospective Savings - Current
A/c holders of IDBI Bank and
and valid till September 2001

1) AMC will be charged
from
for all accounts
October 2001 onwards
2) The above offer is valid

only till 30/06/2001

Please refer to the DPs for tariff for pledge services.

Estimated cost to maintain a demat account on the above tariff for an average value of Rs. 60,000/- p.a.

First year (365 days)

FREE (upto June 2001)

2nd year onwards

Rs.200.00

Rs.375.00

Rs. 360
October 2001 onwards

for a year

from

Reliance Industries Limited

00288021.p65

May 23, 2001 @ 10:03 am

To,
Reliance Industries Limited
C/o Karvy Consultants Ltd.
46, Avenue 4, Street No.1
Banjara Hills
Hyderabad 500 034

GROWTH IS LIFE

Nomination Form
[To be filled in by individual(s)]

From

Folio No.

No. of Shares

I am / we are holder(s) of Shares of the Company as mentioned above. I/We nominate the following person in whom all rights
of transfer and/or amount payable in respect of Equity Shares shall vest in the event of my/our death.

Nominee’s name

Age

To be furnished in case the nominee is a minor

Date of Birth

Guardian’s Name *

Occupation of
Nominee Tick ((cid:252)

)

Nominee’s
Address

Telephone No.

Email Address

Service

Professional

Business

Farmer

Student

Household

Others

Pin Code

Fax No.

Std Code

Specimen signature of Nominee /
Guardian (in case nominee is minor)

* To be filled in case nominee is a minor

Kindly take the aforesaid details on record.

Name and address of equity shareholder
{as appearing on the Certificate(s)}

Signature
(as per specimen with company)

Date..................................

Name and Address

Signature

Date..................................

Thanking you,
Yours faithfully,

Sole/1st holder
(address)

2nd holder

3rd holder

4th holder

Witnesses (two)

Reliance Industries Limited

00288021.p65

May 23, 2001 @ 10:03 am

"
INSTRUCTIONS :

GROWTH IS LIFE

Please read the instructions given below very carefully and follow the same to the letter. If the form is not filled as
per instructions, the same will be rejected.

The nomination can be made by individuals only. Non individuals including society, trust, body corporate, part-
nership firm, Karta of Hindu Undivided Family, holder of power of attorney cannot nominate. If the Shares are
held jointly all joint holders shall sign (as per the specimen registered with the Company) the nomination form.

A minor can be nominated by a holder of Shares and in that event the name and address of the Guardian shall be
given by the holder.

The nominee shall not be a trust, society, body corporate, partnership firm, Karta of Hindu Undivided Family, or
a power of attorney holder. A non-resident Indian can be a nominee on re-patriable basis.

Transfer of Shares in favour of a nominee and repayment of amount to nominee shall be a valid discharge by a
company against the legal heir.

Only one person can be nominated for a given folio.

Details of all holders in a folio need to be filled; else the request will be rejected.

The nomination will be registered only when it is complete in all respects including the signature of (a) all regis-
tered holders (as per specimen lodged with the company) and (b) the nominee.

Whenever the Shares in the given folio are entirely transferred, transpositioned or dematerialised with some other
folio, then this nomination will stand rescinded.

10.

Upon receipt of a duly executed nomination form, the Registrar and Transfer Agent of the company will register
the form and allot a registration number. The registration number and folio no. should be quoted by the nominee
in all future correspondence.

11.

The nomination can be varied or cancelled by executing fresh nomination form.

12.

13.

14.

The company will not entertain any claims other than those of a registered nominee, unless so directed by
a Court.

The intention regarding nomination / nomination form shall be filed in duplicate with the Registrar and Transfer
Agents of the Company who will return one copy thereof to the Shareholders.

For shares held in dematerialised mode nomination is required to be filed with Depository Participant in their
prescribed form.

FOR OFFICE USE ONLY

Nomination Registration Number

Date of Registration

Checked by (Name and Signature)

Reliance Industries Limited

00288021.p65

May 23, 2001 @ 10:03 am

GROWTH IS LIFE

Directors’ Report

To,
The Members,
Your Directors present the 17th Annual Report together with the
audited Statement of Accounts for the financial year ended 31st
March, 2001.
Operations
The Company has incurred loss of Rs. 2.10 lacs as against profit
of Rs. 0.10 lacs in the previous year. Your Directors have not
recommended any dividend for the financial year under review.
Change in the name of the Company
During the year the Company has changed its name from Devti
Fabrics Limited to Vimal Fabrics Limited. The fresh Certificate of
Incorporation
from
Registrar of Companies, Maharashtra, on 13th March, 2001.
Directors
Shri J. B. Dholakia retires by rotation and being eligible offers
himself for re-appointment.
Directors' Responsibility Statement
Pursuant to the requirement under Section 217(2AA) of the
Companies Act, 1956, with respect to Directors' Responsibility
statement, it is hereby confirmed:
(i) That in the preparation of the accounts for the financial year
ended 31st March, 2001,
the applicable accounting
standards have been followed along with proper explanation
relating to material departures;

the change of name was received

for

(ii) That the Directors have selected such accounting policies
and applied them consistently and made judgements and
estimates that were reasonable and prudent so as to give a
true and fair view of the state of affairs of the Company at
the end of the financial year and of the profit or loss of the
Company for the year under review;

(iii) That the Directors have taken proper and sufficient care for
the maintenance of adequate accounting
in
accordance with the provisions of the Companies Act, 1956
for
the Company and
for safeguarding
preventing and detecting fraud and other irregularities;

the assets of

records

(iv) That the Directors have prepared the accounts for the
financial year ended 31st March, 2001 on a 'going concern'
basis.

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.

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. The notes to the accounts referred to
in the Auditors’ Report are self explanatory and, therefore, do
not call for any further comments.

Acknowledgement

Your Directors wish
immense
to place on
appreciation for the assistance and co-operation received from
various Statutory Authorities.

record

their

Mumbai
Dated : 26th April, 2001

For and on behalf of the Board

V. M. Ambani

N. M. Sanghavi

J. B. Dholakia

}

Directors

00288031.p65 May 23, 2001 @ 10:03 am

Vimal Fabrics Limited

GROWTH IS LIFE

Auditors’ Report

To,
The Members of Vimal Fabrics Limited.

We have audited the attached Balance Sheet of Vimal Fabrics
Limited as at 31st March, 2001, 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.

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, and based on
information and
explanations given to us, none of the directors are
disqualified as on 31st March 2001
from being
appointed as directors in terms of clause (g) of sub-
section (1) of section 274 of the Companies Act, 1956.

f) Although the Company had incurred substantial losses
in the past resulting in the erosion of its net worth, the
accounts of the Company are prepared on going
concern basis. Subject to 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
Companies Act, 1956, in the manner so required and
give a true and fair view :

required by

the

In our opinion proper books of account as required by
law have been kept by the Company, so far as
appears from our examination of such books.

The Balance Sheet and Profit and Loss Account
referred to in this Report are in agreement with the
books of account.

ii)

in so far as it relates to the Balance Sheet, of the
state of affairs of the Company as at 31st March,
2001 and

in so far as it relates to the Profit and Loss
Account, of the 'Loss' of the Company for the
year ended on that date.

In our opinion, the Balance Sheet and Profit and Loss
Account complies with
the
mandatory accounting standards referred to in Section
211 (3C) of the Companies Act, 1956.

requirements of

the

For Chaturvedi & Shah
Chartered Accountants

H.P. Chaturvedi
Partner

Mumbai
Dated : 26th April, 2001

For Rajendra & Co.
Chartered Accountants

R.J. Shah
Partner

Vimal Fabrics Limited

00288031.p65 May 23, 2001 @ 10:03 am

GROWTH IS LIFE

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

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 during the year. In our opinion, the
frequency of such verification is reasonable.

In our opinion, the procedures of physical verification of
stocks followed by the Management are reasonable and
adequate in relation to the size of the Company and the
nature of its business.

5. As explained to us, there were no material discrepancies

noticed on physical verification of the stocks.

10.

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 the normally accepted accounting
principles and is on same basis as in the preceding year. We
are informed that, in the opinion of the management, there is
no diminution in the value of the said materials.

The Company has taken an interest free unsecured loans
from its Holding Company. It has not taken any other loan,
secured or unsecured, from companies, firms or other
parties as listed in the register maintained under Section
301 of the Companies Act, 1956, or from companies under
the same management within the meaning of Section
370(1B) of the Companies Act, 1956. The terms and
conditions of the loan are not, in our opinion, prima-facie
prejudicial to the interests of the Company.

The Company has not granted any loans, secured or
unsecured to companies, firms, or other parties listed in the
register maintained under Section 301 of the Companies
Act, 1956 or to companies under the same management
within the meaning of Section 370 (1B) of the Companies
Act, 1956.

The Company has not given any loans and advances in the
nature of loans.

In our opinion and according
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.

the

11.

the

In our opinion and according
information and
explanations given to us, there are no transactions of
purchase of goods or materials and sale of goods, materials
and services made in pursuance of contracts or arrangement
entered in the register maintained under Section 301 and
aggregating during the year to Rs.50,000/- or more in respect
of each party.

12. As explained to us, 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 Duty
were outstanding as at 31st March, 2001 for a period of more
than six months from the date they became payable.

19. According to the information and explanations given to us,
no personal expenses of 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 Chaturvedi & Shah
Chartered Accountants

H.P. Chaturvedi
Partner

Mumbai
Dated : 26th April, 2001

For Rajendra & Co.
Chartered Accountants

R.J. Shah
Partner

00288031.p65 May 23, 2001 @ 10:03 am

Vimal Fabrics Limited

GROWTH IS LIFE

Balance Sheet as at 31st March, 2001

Schedule

As at
31st March, 2001
Rs.

Rs.

(Rs. in lacs)
As at
31st March, 2000
Rs.

Rs.

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

‘A’

‘B’

‘C’

‘D’

‘E’

‘I’

21.01

1,215.68

1,236.69

1,271.88

1,292.89

30.46
13.33

16.02

17.13

1.92
70.96
0.67

73.55
13.75

87.30

7.10

23.01

1,197.66

1,236.69

80.20

1,195.56

1,292.89

30.46
14.44

1.92
13.50
0.31

15.73
13.67

29.40

6.39

As per our Report of even date

For and on behalf of the Board

For Chaturvedi & Shah
Chartered Accountants

For Rajendra & Co.
Chartered Accountants

H.P. Chaturvedi
Partner

Mumbai
Dated : 26th April, 2001

R.J. Shah
Partner

Vimal Fabrics Limited

V.M. Ambani

N.M. Sanghavi

J.B. Dholakia

}

Directors

00288031.p65 May 23, 2001 @ 10:03 am

Profit and Loss Account for the year ended 31st March, 2001

GROWTH IS LIFE

Schedule

2000-2001

(Rs. in lacs)

1999-2000

Rs.

INCOME

Sales

Other Income

Variation in stock

EXPENDITURE

Purchases

‘F’

‘G’

Manufacturing and Other Expenses

‘H’

Depreciation

Profit / (Loss) for the year

Add : Balance brought forward from last year

Balance carried to Balance Sheet

Notes on Accounts

‘I’

10.18

3.09

9.37

4.89

1.11

128.35

0.01

(4.58)

13.27

123.78

116.84

5.73

1.11

15.37

(2.10)

(1,195.56)

(1,197.66)

123.68

0.10

(1,195.66)

(1,195.56)

As per our Report of even date

For and on behalf of the Board

For Chaturvedi & Shah
Chartered Accountants

For Rajendra & Co.
Chartered Accountants

H.P. Chaturvedi
Partner

Mumbai
Dated : 26th April, 2001

R.J. Shah
Partner

V.M. Ambani

N.M. Sanghavi

J.B. Dholakia

}

Directors

Vimal Fabrics Limited

00288031.p65 May 23, 2001 @ 10:03 am

GROWTH IS LIFE

Schedules Forming Part of the Balance Sheet

SCHEDULE ‘A’

SHARE CAPITAL

Authorised:

2,50,000 Equity Shares of Rs. 10 each

Issued, Subscribed and Paid up:

2,10,070 Equity Shares of Rs. 10 each fully paid up

(Held by Reliance Industries Limited,
the Holding Company)

As at
31st March, 2001
Rs.

(Rs. in lacs)
As at
31st March, 2000
Rs.

25.00

21.01

25.00

21.01

(Rs. in lacs)

SCHEDULE ‘B’
FIXED ASSETS

Description

Buildings

Furniture and Fixture

Vehicles

Total

Previous Year

SCHEDULE ‘C’

CURRENT ASSETS

Gross Block

Depreciation

Net Block

As at
1.4.2000
Rs.

Additions

Rs.

Deduc-
tions
Rs.

As at
31.3.2001
Rs.

As at
1.4.2000
Rs.

For the
year
Rs.

Deduc-
tions
Rs.

Up to
31.3.2001
Rs.

As at
31.3.2001
Rs.

As at
31.3.2000
Rs.

27.48

2.97

0.01

30.46

30.83

0.37

27.48

11.45

2.97

0.01

30.46

1.87

0.01

13.33

12.58

0.92

0.19

1.11

0.36

12.37

2.06

0.01

14.44

13.33

15.11

0.91

16.02

17.13

16.03

1.10

17.13

Inventories
(as verified, valued and certified by the management)

Raw materials

Sundry Debtors (Unsecured, considered good)*

Over Six months
Others

Cash and Bank Balances

Balance with Scheduled Banks:
In Current Account

As at
31st March, 2001

(Rs. in lacs)
As at
31st March, 2000

Rs.

1.92

13.50
-

36.60
34.36

13.50

0.31

15.73

70.96

0.67

73.55

* Includes Rs. 12.31 lacs due from Reliance Petroleum Ltd., a Company under the same management

(previous year Rs. 12.30 lacs)

Vimal Fabrics Limited

00288031.p65 May 23, 2001 @ 10:03 am

GROWTH IS LIFE

Schedules Forming Part of the Balance Sheet

SCHEDULE ‘D’
LOANS AND ADVANCES

(Unsecured, considered good)

Advances recoverable in cash or in kind
or for value to be received
Deposits

SCHEDULE ‘E’
CURRENT LIABILITIES AND PROVISIONS

Current Liabilities

Sundry Creditors
Other Liabilities

As at
31st March, 2001
Rs.

(Rs. in lacs)
As at
31st March, 2000
Rs.

13.67

0.08
13.67

13.75

As at
31st March, 2001
Rs.

(Rs. in lacs)
As at
31st March, 2000
Rs.

0.34
6.05

6.39

0.56
6.54

7.10

Schedules Forming Part of the Profit and Loss Account

SCHEDULE ‘F’
OTHER INCOME

Profit on sale of fixed assets
Excess provision for expenses no longer required (net)

SCHEDULE ‘G’
VARIATION IN STOCK

Stock at close

Stock at Commencement

2000-2001
Rs.
–
3.09

3.09

2000-2001
Rs.
–

–

SCHEDULE ‘H’
MANUFACTURING AND OTHER EXPENSES

2000-2001

Raw Materials Consumed

Stock at commencement
Add : Purchases

Less : Stock at close

Establishment Expenses

Electric Power, fuel and water
Insurance
Rates and taxes
Payment to Auditors
General Expenses

Rs.

1.92
–

1.92
1.92

4.28
0.06
0.01
0.26
0.28

Rs.

–

4.89

(Rs. in lacs)
1999-2000
Rs.
0.01
_

0.01

(Rs. in lacs)
1999-2000
Rs.
_

4.58

(4.58)

(Rs. in lacs)

1999-2000

Rs.

1.92
–

1.92
1.92

4.50
0.25
0.44
0.37
0.17

Rs.

–

5.73

00288031.p65 May 23, 2001 @ 10:03 am

Vimal Fabrics Limited

GROWTH IS LIFE

Notes on Accounts

SCHEDULE ‘I’

1. SIGNIFICANT ACCOUNTING POLICIES

a) Basis of preparation of Financial Statements

ii)

The Financial Statements have been prepared under the Historical Cost Convention, in accordance with the generally
accepted accounting principles and the provisions of the Companies Act, 1956 as adopted consistently by the
Company. The same are prepared on a going concern basis.
The Company follows mercantile system of accounting and recognises significant items of income and expenditure on
accrual basis.

b) Fixed Assets and Depreciation

Fixed assets are stated at acquisition cost less accumulated depreciation.

i)
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.

Inventories
Raw Material is valued at cost.

The previous year’s figures have been reworked, regrouped, rearranged and reclassified wherever necessary.

3. Consequent to fresh Certificate of Incorporations dated 13th March, 2001, received from the Registrar of Companies

Maharashtra, name of the company has been changed from ‘Devti Fabrics Limited’ to ‘Vimal Fabrics Limited’.

4. Auditors’ Remuneration:

(a) Audit fees
(b) Tax audit fees

2000-2001
Rs.

0.26
–

0.26

(Rs. in lacs)
1999-2000
Rs.

0.26
0.11

0.37

5. 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.

6. Contingent Liability

Claims against the company/disputed liabilities
not acknowledged as debts for ex-employees.

Licensed and Installed Capacity

As at

31st March, 2001

Rs.

(Rs. in lacs)

As at
31st March, 2000
Rs.

13.99

Licensed Capacity

Installed Capacity

31.3.2001

31.3.2000

31.3.2001

31.3.2000

N.A.

8. Quantitative Information

UNIT

Quantity

Rs./lacs

Quantity

Rs./lacs

2000-2001

1999-2000

a) Opening

Fabrics
b) Closing stock
Fabrics
c) Purchases

Fabrics(Net of purchase return)
Pillows

d) Sales

Fabrics (Net of sales return)
Pillows

Mtrs/lacs

Mtrs/lacs
Nos.

–

0.08
–

–

9.37
–

10.18
–

0.09

–

1.07
32

1.16
32

stock
4.58

–

116.79
0.05

128.29
0.06

Vimal Fabrics Limited

00288031.p65 May 23, 2001 @ 10:03 am

GROWTH IS LIFE

Notes on Accounts

SCHEDULE ‘I’ (Contd.)

9. 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.

3 1 5

9 3

State Code

Balance Sheet Date

3 1

- 0 3 -

0 1

2. Capital raised during the year: (Rs. in lacs)

Public Issue

Bonus Issue

N I

Rights Issue

Private Placement

3. Position of mobilisation and deployment of funds: (Rs. in lacs)

1 1

N I L

2 3 6 .

6 9

Total Assets

1 2 3 6 . 6 9

2 1 .

0 1

Reserves and Surplus

N I L

N I

Unsecured Loans

1 2 1 5 . 6 8

Total Liabilities

Source of Funds:

Paid-up Capital

Secured Loans

Application of Funds:

Net Fixed Assets

Net Current Assets

1 6 .

0 2

Investments

2 3 .

0 1

Miscellaneous
Expenditure

Accumulated Losses

1 9 7 .

6 6

4. Performance of Company: (Rs. in lacs)

Turnover/Income

1 3 .

2 7

Total Expenditure

Profit/(Loss) before tax

Earnings per Share (Rs)

(2 .

1 0)

Profit/(Loss) after tax

N I

Dividend Rate (%)

5. Generic names of principal products, services of the Company:

Item Code No.

5 5

1 5 1 1. 0 0

Product Description

F A B R I C S

N I L

1 5 . 3 7

(2 . 1 0)

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

H.P. Chaturvedi
Partner

Mumbai
Dated : 26th April, 2001

R.J. Shah
Partner

V.M. Ambani

N.M. Sanghavi

J.B. Dholakia

}

Directors

Vimal Fabrics Limited

00288031.p65 May 23, 2001 @ 10:03 am

GROWTH IS LIFE

Directors’ Report

To,
The Members,

Your Directors present the 15th Annual Report together with the Audited Statement of Accounts for the year ended 31st March, 2001.

Financial Results

Profit before taxation
Less: Provision for taxation

Profit after taxation

2000-2001
Rs.

Rs.

26.81
–

26.81

Add :

Taxes for the earlier years
Balance brought forward from last year

–
7,810.75

(33.23)
926.87

(Rs. in lacs)
1999-2000
Rs.

Rs.

7,467.11
550.00

6,917.11

893.64

7,810.75

7,837.56

Balance carried forward to Balance sheet

Income
During the year, the Company has received dividend income of
Rs.1,181.55 Lacs from its investments.

Dividend
The Directors have not recommended dividend on Equity
shares for the financial year ended 31st March, 2001.

Directors
Shri Satish Seth retires by rotation and being eligible offers
himself for re-appointment.

Directors' Responsibility Statement
Pursuant to the requirement under Section 217(2AA) of the
Companies Act, 1956, with respect to Directors' Responsibility
statement, it is hereby confirmed:
(i) That in the preparation of the accounts for the financial
year ended 31st March, 2001, the applicable accounting
standards have been
followed along with proper
explanation relating to material departures;

(ii) That the Directors have selected such accounting policies
and applied them consistently and made judgements and
estimates that were reasonable and prudent so as to give
a true and fair view of the state of affairs of the Company
at the end of the financial year and of the profit or loss of
the Company for the year under review;

(iii) That the Directors have taken proper and sufficient care
for the maintenance of adequate accounting records in
accordance with the provisions of the Companies Act,
1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
(iv) That the Directors have prepared the accounts for the
financial year ended 31st March, 2001 on a 'going
concern' basis.

Constitution of Audit Committee
As required by the provisions of Section 292A of the
Companies Act, 1956, the Board of Directors has constituted

Mumbai
Dated : 26th April, 2001

Audit Committee comprising of three directors i.e. Shri Alok
Agarwal, Shri S. Seth, and Shri Sandeep Junnarkar.

Conservation Of Energy, Technology Absorption And
Foreign Exchange Earnings And Outgo
Being an investment company, there are no particulars
furnished in this report as required under Section 217(1)(e) of
the Companies Act, 1956, relating to conservation of energy
and technology absorption. There was no foreign exchange
earnings or outgo during the year.

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
Bank)
Public Deposits
of
Directions, 1988.

(Reserve

Auditors
Messrs. Chaturvedi and Shah and Messrs. Rajendra and 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.

Acknowledgement
Your Directors wish to place on record their immense
appreciation for the assistance and co-operation received from
various Statutory Authorities.

For and on behalf of the Board

Alok Agarwal

S. Seth

Sandeep Junnarkar

}

Directors

Reliance Industrial Investments and Holdings Limited

00288041.p65 May 23, 2001 @ 10:04 am

GROWTH IS LIFE

Auditors’ Report

To,
The Members of Reliance Industrial Investments and
Holdings Limited.

We have audited the attached Balance Sheet of Reliance Industrial
Investments and Holdings Limited as at 31st March, 2001, and the
Profit and Loss Account of the Company for the year ended on that
date annexed thereto and report that:

As required by
the Manufacturing and Other Companies
(Auditors' Report) Order, 1988 issued by the Company Law
Board in terms of Section 227 (4A) of the Companies Act, 1956,
we enclose in the Annexure a statement on the matters specified
in paragraphs 4 and 5 of the said order.

Further to our comments in the Annexure referred to in
paragraph 1 above, we report that

a) We have obtained all the information and explanations
which to the best of our knowledge and belief were
necessary for the purpose of our audit.

In our opinion proper books of account as required by law
have been kept by the Company, so far as appears from
our examination of such books.

For Chaturvedi & Shah
Chartered Accountants

Rajesh D. Chaturvedi
Partner

Mumbai
Dated : 26th April, 2001

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 based on information and explanations
given to us, none of the directors are disqualified as on 31st
March 2001 from being appointed as directors in terms of
clause (g) of sub-section (1) of section 274 of
the
Companies Act, 1956.

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, 2001 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

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. According to information and explanations given to us,
the fixed assets have been physically 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 its
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, or to
the companies under the same management within the meaning
of section 370 (1B) of the Companies Act, 1956.
In respect of the loans and advances in the nature of loans given
to
by
repayment of principal amounts and interest has been charged

there are no specific stipulations as

the Company,

wherever stipulated.
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, 2001 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. According to the information and explanations given to us, the
provisions of any special statute applicable to Chit-Fund, Nidhi
or Mutual Benefit Society are not applicable to the Company.
14. In our opinion, the Company has maintained proper records and
made timely entries in respect of investments dealt in or traded by
the Company. The Company's investments are held in its own
name, save and except, those in the process of being transferred
in its name.

For Rajendra & Co.
Chartered Accountants

R.J. Shah
Partner

Reliance Industrial Investments and Holdings Limited

For Chaturvedi & Shah
Chartered Accountants

Rajesh D. Chaturvedi
Partner

Mumbai
Dated : 26th April, 2001

00288041.p65 May 23, 2001 @ 10:04 am

GROWTH IS LIFE

Balance Sheet as at 31st March, 2001

Schedule

As at
31st March, 2001
Rs.

Rs.

(Rs. in lacs)
As at
31st March, 2000
Rs.

Rs.

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

‘A’
‘B’

‘C’
‘D’

‘E’

‘F’

‘G’

Less : Current Liabilities and Provisions

‘H’

Current Liabilities
Provisions

Net Current Assets

TOTAL

Notes on Accounts

‘K’

14,750.44
8,232.72

1,799.31
173,649.80

14,750.44
8,205.91

22,983.16

22,956.35

5,052.05
170,257.50

175,449.11

198,432.27

175,309.55

198,265.90

5.04
0.33

5.04
0.18

4.71

198,858.22

4.86

197,966.56

1.72

641.96

643.68

523.52
550.82

1,074.34

4.53

1,043.97

1,048.50

203.41
550.61

754.02

(430.66)

198,432.27

294.48

198,265.90

As per our Report of even date

For and on behalf of the Board

For Chaturvedi & Shah
Chartered Accountants

For Rajendra & Co.
Chartered Accountants

Alok Agarwal

S. Seth

Rajesh D. Chaturvedi
Partner

R.J. Shah
Partner

Mumbai
Dated : 26th April, 2001

}

Directors

Assistant
Secretary

Sandeep Junnarkar

Kalpana Srinivasan

Reliance Industrial Investments and Holdings Limited

00288041.p65 May 23, 2001 @ 10:04 am

Profit and Loss Account for the year ended 31st March, 2001

GROWTH IS LIFE

Schedule

2000-2001

(Rs. in lacs)

1999-2000

Rs.

INCOME

Income on Investments

‘I’

2,615.78

Miscellaneous receipts (Rs. 48/-)

Interest received
[Tax Deducted at source Rs. 0.22 lacs
previous year Rs. NIL]

EXPENDITURE

Establishment and Other Expenses

‘J’

Discount on debentures

Provision for diminution in market value
of investments

Interest :

Debentures

Others

Depreciation

Profit before tax

Less: Provision for taxation

Profit after tax

–

1.24

12.62

247.26

–

2,309.18

21.00
0.15

Add : Taxation for earlier years

Balance brought forward from last year

–
7,810.75

Balance carried to Balance Sheet

Notes on Accounts

‘K’

7,980.39

2.74

1,335.02

2,617.02

9,318.15

32.05

213.28

300.74

–

1,304.83
0.14

(33.23)
926.87

2,590.21

26.81

–

26.81

7,810.75

7,837.56

1,851.04

7,467.11

550.00

6,917.11

893.64

7,810.75

As per our Report of even date

For and on behalf of the Board

For Chaturvedi & Shah
Chartered Accountants

For Rajendra & Co.
Chartered Accountants

Alok Agarwal

S. Seth

Rajesh D. Chaturvedi
Partner

R.J. Shah
Partner

Mumbai
Dated : 26th April, 2001

}

Directors

Assistant
Secretary

Sandeep Junnarkar

Kalpana Srinivasan

Reliance Industrial Investments and Holdings Limited

00288041.p65 May 23, 2001 @ 10:04 am

GROWTH IS LIFE

Schedules Forming Part of the Balance Sheet

SCHEDULE ‘A’

SHARE CAPITAL

Authorised:

As at
31st March, 2001

Rs.

(Rs. in lacs)
As at
31st March, 2000

Rs.

14,99,90,000

Equity Shares of Rs. 10 each.

14,999.00

10,000

11% Non-Cumulative Redeemable
Preference Shares of Rs. 10 each

Issued, Subscribed and Paid up:

14,75,04,400

Equity Shares of Rs. 10 each fully paid up
(Held by Reliance Industries Limited,
the Holding Company)

Note: Refer Note of Schedule ‘D’ in respect of option on unissued share capital.

1.00

15,000.00

1.00

15,000.00

14,750.44

SCHEDULE ‘B’

RESERVES AND SURPLUS

General Reserves:

As per last Balance Sheet

Profit and Loss Account

SCHEDULE ‘C’

SECURED LOANS

As at
31st March, 2001

(Rs. in lacs)

As at
31st March, 2000

Rs.

395.16
7,837.56

8,232.72

Rs.

395.16
7,810.75

8,205.91

As at
31st March, 2001

(Rs. in lacs)
As at
31st March, 2000

Rs.

12,40,000

Secured, Redeemable, Non-Interest
Bearing, Non-Convertible Debentures

Redemption value
Less : Discount to be written off in future

3,720.00
1,920.69

3,720.00
2,167.95

Secured loan from a Bank

1,799.31

–

1,799.31

1,552.05

3,500.00

5,052.05

NOTE:

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.

The loan referred to in B above - repayable within one year Rs. Nil, previous year Rs. 3500.00 lacs.

Reliance Industrial Investments and Holdings Limited

00288041.p65 May 23, 2001 @ 10:04 am

GROWTH IS LIFE

Schedules Forming Part of the Balance Sheet

SCHEDULE ‘D’

UNSECURED LOANS

A. Zero Coupon Convertible Unsecured

Redeemable Debentures of Rs. 5,000 each

8.25 % Fully-Convertible Unsecured Debentures of
Rs. 100 each.

Loans from Holding Company

Interest accrued and due

As at
31st March, 2001

Rs.

44,157.15

(Rs. in lacs)

As at
31st March, 2000

Rs.

44,157.15

27,990.00

99,715.35

1,787.30

173,649.80

98,110.35

–

170,257.50

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 changed from 0% p.a. to 8.25% p.a. w.e.f. 01.04.2000 with the consent of the
debentureholders for the remaining tenure of the Debenture.

SCHEDULE ‘E’

FIXED ASSETS

Description

Building

Computer

Total

Previous Year

As at
1.4.2000
Rs.

4.57

0.47

5.04

4.57

Gross Block
Additions

Rs.

—

0.47

As at
31.3.2001
Rs.

As at
1.4.2000
Rs.

4.57

0.47

5.04

0.12

0.06

0.18

0.04

Depreciation
For the Year

Rs.

0.07

0.08

0.15

0.14

(Rs. in lacs)

Net Block

As at
31.3.2001
Rs.

As at
31.3.2000
Rs.

0.19

0.14

0.33

0.18

4.45

0.41

4.86

4.38

0.33

4.71

4.86

Reliance Industrial Investments and Holdings Limited

00288041.p65 May 23, 2001 @ 10:04 am

GROWTH IS LIFE

Schedules Forming Part of the Balance Sheet

SCHEDULE ‘F’

INVESTMENTS

Investments : (Valued, Verified and Certified by Management)

(A)

Long Term Investments
Quoted:
Equity Shares - Fully paid-up

As at
31st March, 2001
Rs.
Rs.

(Rs. in lacs)

As at
31st March, 2000
Rs.
Rs.

1,36,22,707
–
(8,82,370)

BSES Ltd. of Rs. 10 each
Kothari Sugars and Chemicals Ltd.
of Rs. 10 each

21,488.66
–

Larsen and Toubro Ltd. of Rs. 10 each

9,530.19

21,488.64
337.30

10,906.58

92,91,438
(1,06,63,308)

105,54,65,700
(95,96,69,700)

40,37,000
(–)

Reliance Petroleum Ltd. of Rs. 10 each

151,126.61

136,757.21

India Polyfibres Ltd. of Rs. 10 each

405.49

–

Warrant Equity Shares (WES) - Fully paid-up

–
(9,57,96,000)

WES 2000 of Reliance Petroleum Ltd.
of Rs. 15 each.

9,57,96,000

WES 2001 of Reliance Petroleum Ltd.
of Rs. 15 each.

–

14,369.40

Unquoted:
Equity Shares - Fully paid-up

1,700

3,500

22,900
150
(1,150)
185
(1,200)
1,26,90,000
(–)

Farvision Securities Private Ltd. of
Rs. 100 each
Neha Real Estates Private Limited of
Rs. 10 each
Observer (India) Ltd. of Rs. 10 each
Reliance Aromatics and Petrochemicals
Pvt. Ltd. of Rs. 10 each
Reliance Energy and Project Development
Pvt. Ltd. of Rs. 10 each
Reliance Salgoacar Power Company
Limited of Rs. 10 each

9.35

24.69

3.79
0.01

0.02

1,269.00

Reliance Telecom Ltd. of Rs. 10 each

0.01

Preference Shares - Fully paid-up

63,10,000
(–)

14% Cumulative Redeemable Preference
shares (Series I) of Reliance Salgaocar
Power Company Ltd. of Rs. 10 each.

182,550.95

169,489.73

14,369.40

28,738.80

9.35

24.69

3.79
0.11

0.12

0.01

1,306.87

631.00

38.07

–

TOTAL (A)

198,858.22

198,266.60

(B)

Current Investments
Quoted:
Equity Shares - Fully paid-up

_
(200)

2,500

HDFC Bank Ltd. of Rs. 10 each

M H Mills and Industries Ltd. of Rs. 10 each

0.94

0.02

0.94

Debentures - Fully Paid-up
1,250

14% Non-Convertible Debentures of
M H Mills and Industries Ltd. of Rs. 45 each.

TOTAL (B)

TOTAL (A+B)

Less : Provision for diminution in the value of investments

0.94

0.56

1.50

198,859.72

1.50

198,858.22

0.96

0.56

1.52

198,268.12

301.56

197,966.56

Reliance Industrial Investments and Holdings Limited

00288041.p65 May 23, 2001 @ 10:04 am

GROWTH IS LIFE

Schedules Forming Part of the Balance Sheet

SCHEDULE ‘F’ (Contd.)

The Company's investment in Reliance Petroleum Limited, a Company under the same management is towards promoters'
contribution. This investment (excluding investment in 19,15,92,000 Equity shares) is subject to lock in up to June 30, 2001 and
the Company has given an undertaking to Financial Institutions for non-disposal of the said investment, till the loans granted by
them to Reliance Petroleum Limited are outstanding.

The Company's investment in Reliance Salgaocar Power Company Limited, is towards promoters' contribution. Its investment in
equity shares to the extent of 84,60,000 shares are subject to non-disposal undertaking given to Financial Institutions till the
loans granted by them to Reliance Salgaocar Power Company Limited are outstanding or till their Project is completed,
whichever is later.

AGGREGATE VALUE OF

Quoted Investments
Unquoted Investments

As at 31st March, 2001

Book Value

Market Value

As at 31st March, 2000
Book Value Market Value

Rs.

196,920.35
1,937.87

198,858.22

603,710.45

197,928.49
38.07

197,966.56

745,710.26

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

SCHEDULE ‘H’

CURRENT LIABILITIES AND PROVISIONS

Current Liabilities

Sundry Creditors

Provisions

For Taxation
For Gratuity
For Leave encashment

As at
31st March, 2001
Rs.

Rs.

(Rs. in lacs)

As at
31st March, 2000
Rs.

Rs.

0.04

1.68

25.76
616.20

0.03

4.50

1.72

4.53

427.14
616.83

641.96

643.68

1,043.97

1,048.50

As at
31st March, 2001
Rs.

Rs.

(Rs. in lacs)

As at
31st March, 2000
Rs.

Rs.

523.52

203.41

550.00
0.28
0.54

550.00
0.17
0.44

550.82

1,074.34

550.61

754.02

Reliance Industrial Investments and Holdings Limited

00288041.p65 May 23, 2001 @ 10:04 am

GROWTH IS LIFE

Schedules Forming Part of the Profit and Loss Account

SCHEDULE ‘I’

INCOME ON INVESTMENTS

2000-2001

(Rs. in lacs)

1999-2000

Dividend

From Long Term Investments

Profit on Sale of Investments (Net)
From Long Term Investments
From Current Investments

SCHEDULE ‘J’

ESTABLISHMENT AND OTHER EXPENSES

Salary, Wages and Bonus
Contribution to Super annuation, Gratuity etc.
Legal and Professional charges
Trusteeship Fee
Filing Fees(Previous year Rs. 360/-)
Travelling expenses
Custodian fees and demat charges
Miscellaneous expenses

Auditors’ Remuneration :

Audit Fees
Tax Audit Fees

Rs.

1,181.55

1,314.18

1,433.78
0.45

6,666.21
–

1,434.23

2,615.78

2000-2001

Rs.

1.05
0.53

Rs.
4.33
0.36
0.03
1.00
0.01
0.07
5.01
0.23

1.58

12.62

Rs.

1.05
0.53

6,666.21

7,980.39

(Rs. in lacs)

1999-2000

Rs.
5.71
0.37
0.18
1.00
–
0.22
22.52
0.47

1.58

32.05

SCHEDULE ‘K’

1. Significant accounting policies:-

a) Basis of Preparation of Financial Statements

Notes on Accounts

ii)

The financial statements have been prepared under the historical cost convention, in accordance with the generally
accepted accounting principles and the provisions of the Companies Act, 1956 as adopted consistently by the
Company.
The Company
and expenditure on accrual basis.

follows mercantile system of accounting and

recognises significant

items of

income

b) Fixed Assets and Depreciation

Fixed Assets are stated at cost of acquisition less accumulated depreciation.

i)
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.

Investments

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.

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.

100

Reliance Industrial Investments and Holdings Limited

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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.

4 1 0

8 1

State Code

1 1

Balance Sheet Date

3 1

- 0 3 -

0 1

2. Capital raised during the year: (Rs. in lacs)

Public Issue

Bonus Issue

N I

Rights Issue

Private Placement

N I L

3. Position of mobilisation and deployment of funds: (Rs. in lacs)

Total Liabilities

1 9 8

4 3 2 .

2 7

Total Assets

1 9

8 4 3 2 . 2 7

Source of Funds:

Paid-up Capital

1 4

7 5 0 .

4 4

Reserves and Surplus

8 2 3 2 . 7 2

Secured Loans

7 9 9 .

3 1

Unsecured Loans

1 7

3 6 4 9 . 8 0

Application of Funds:

Net Fixed Assets

4 .

7 1

Investments

1 9

8 8 5 8 . 2 2

Net Current Assets

(4 3 0 .

6 6)

Accumulated Losses

N I

Miscellaneous
Expenditure

N I L

4. Performance of Company: (Rs. in lacs)

Turnover/Income

6 1 7 .

0 2

Total Expenditure

2 5 9 0 . 2 1

Profit before Tax

2 6 .

8 1

Profit after Tax

Earnings per Share (Rs)

0 .

0 2

Dividend Rate(%)

2 6 . 8 1

N I L

5. Generic names of principal products, services of the Company:

Item Code No.

Product Description

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

Alok Agarwal

S. Seth

Rajesh D. Chaturvedi
Partner

R.J. Shah
Partner

Mumbai
Dated : 26th April, 2001

}

Directors

Assistant
Secretary

Sandeep Junnarkar

Kalpana Srinivasan

Reliance Industrial Investments and Holdings Limited

101

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Directors’ Report

To,
The Members,
Your Directors present the 2nd Annual Report together with the
Audited Statement of Accounts for the year ended 31st March,
2001.
Operations
During the year under review your Company has incurred a loss
of Rs. 0.43 lacs as against profit of Rs. 0.10 lacs in the previous
year. Your Directors have not recommended any dividend on
equity shares for the financial year under review.

Directors
Shri L. V. Merchant , Director of the Company, retires by rotation
and being eligible, offers himself for re- appointment.
Shri Surendra Pipara, was appointed as an Additional Director,
with effect from 22nd March, 2001. He holds office upto the date
of ensuing Annual General Meeting and
for
reappointment. The Company has received a notice under
section 257 of
the Companies Act, 1956, proposing his
appointment as a Director, subject to retirement by rotation.
Directors' Responsibility Statement
Pursuant to the requirement under Section 217(2AA) of the
Companies Act, 1956, with respect to Directors' Responsibility
statement, it is hereby confirmed:
(i) That in the preparation of the accounts for the financial year
ended 31st March, 2001,
the applicable accounting
standards have been followed along with proper explanation
relating to material departures;

is eligible

(ii) That the Directors have selected such accounting policies
and applied them consistently and made judgements and
estimates that were reasonable and prudent so as to give a
true and fair view of the state of affairs of the Company at
the end of the financial year and of the profit or loss of the
Company for the year under review;

(iii) That the Directors have taken proper and sufficient care for
in

the maintenance of adequate accounting

records

the assets of

accordance with the provisions of the Companies Act, 1956
for safeguarding
for
the Company and
preventing and detecting fraud and other irregularities;
(iv) That the Directors have prepared the accounts for the
financial year ended 31st March, 2001 on a 'going concern'
basis.
Personnel
The Company has not paid any remuneration attracting the
provisions of Companies (Particulars of Employees) Rules, 1975
read with Section 217(2A) of the Companies Act, 1956. Hence,
no information is required to be appended to this report in this
regard.
Conservation of Energy, Technology Absorption and Foreign
Exchange Earnings and Outgo
Being an investment company, there are no particulars furnished
in this report as required under Section 217(1)(e) of the
Companies Act, 1956, relating to conservation of energy and
technology absorption. There was no foreign exchange earnings
or outgo during the year.
Deposits
The Company has not accepted any public deposit during the
year. Hence, no information is required to be appended to this
terms of Non-Banking Financial Companies
report
Acceptance of Public Deposits (Reserve Bank) Directions, 1988.
Auditors
Messrs. Chaturvedi and Shah and Messrs. Rajendra and 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.
Acknowledgement
immense
to place on
Your Directors wish
appreciation for the assistance and co-operation received from
various Statutory Authorities.

record

their

Mumbai
Dated : 26th April, 2001

For and on behalf of the Board

L.V. Merchant

M. D. Sudharsan

Surendra Pipara

}

Directors

102

Reliance Ventures Limited

00288051.p65 May 23, 2001 @ 10:05 am

GROWTH IS LIFE

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

To,
The Members of Reliance Ventures Limited.
We have audited the attached Balance Sheet of Reliance
Ventures Limited as at 31st March, 2001 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.
Further to our comments in the Annexure referred to in
paragraph 1 above, we report that:
a) We have obtained all the information and explanations
which to the best of our knowledge and belief were
necessary for the purpose of our audit.
In our opinion, proper books of account as required by
law have been kept by the Company so far as
appears from our examination of such books.
The Balance Sheet and Profit and Loss Account
referred to in this Report are in agreement with the
books of account.

For Chaturvedi & Shah
Chartered Accountants

Rajesh D. Chaturvedi
Partner
Mumbai
Dated : 26th April, 2001

1. As the Company has no Fixed Assets during the year,
clauses 4(A) (i) and (ii) of the said Order are not applicable.
2. Since the Company has not carried out any manufacturing
and / or trading activity, items (iii), (iv), (v), (vi), (xi), (xii), (xiv)
and (xvi) of the clause A and item (ii) of the clause D of
paragraph 4 of the aforesaid Order are not applicable.
The Company has taken interest-free unsecured loans from
its holding Company. It has not taken any loans, secured or
unsecured from companies, firms or other parties listed in
the register maintained under Section 301 of the Companies
Act, 1956, or from companies under the same management
within the meaning of sub section (1B) of Section 370 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.
The Company has not granted any loan, secured or
unsecured to companies, firms, or other parties listed in the
Register maintained under Section 301 of the Companies
Act, 1956, or to Companies under the same management
within the meaning of sub section (1B) of Section 370 of
the Companies Act, 1956.
The Company has not given any loans or advances in the
nature of loans during the year, and hence clause regarding
repayment is not applicable.
In our opinion and according
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.
In our opinion and according to the information and

the

For Chaturvedi & Shah
Chartered Accountants

Rajesh D. Chaturvedi
Partner
Mumbai
Dated : 26th April, 2001

00288051.p65 May 23, 2001 @ 10:05 am

the

requirements of

In our opinion, the Balance Sheet and Profit and Loss
the
Account complies with
mandatory accounting standards referred to in Section
211(3C) of the Companies Act, 1956.
In our opinion, and based on
information and
explanations given to us, none of the directors are
from being
disqualified as on 31st March 2001
appointed as directors in terms of clause (g) of sub-
section (1) of section 274 of the Companies Act, 1956.
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
2001, and
in so far as it relates to the Profit and Loss
Account, of the 'Loss' of the Company for the
year ended on that date.

ii)

For Rajendra & Co.
Chartered Accountants

R.J. Shah
Partner

explanations given to us, the Company has not accepted
any deposits from public.
In our opinion
internal audit
arrangement commensurate with its size and the nature of its
business.

the Company has an

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, 2001 for a period of more than
six months from the date they became payable.
information and
In our opinion and according
explanations given to us, no personal expenses of Directors
have been charged to revenue account.

the

11.

12. The Company is not a Sick Industrial Company within the
meaning of clause (0) of sub section (1) of section 3 of the
Sick Industrial Companies (Special Provisions) Act, 1985.

13. According to the information and explanations given to us,
the provisions of any special statute applicable to Chit-
Fund, Nidhi or Mutual Benefit Society are not applicable to
the Company.
In our opinion, the Company has maintained proper records
and made timely entries in respect of investments made by
the Company. The Company's investments are held in its
own name.

14.

For Rajendra & Co.
Chartered Accountants

R.J. Shah
Partner

Reliance Ventures Limited

103

GROWTH IS LIFE

Balance Sheet as at 31st March, 2001

SOURCES OF FUNDS:

Shareholders' Funds
Share Capital

Reserves and Surplus:
Profit and Loss account

Loan Funds
Unsecured loan from the Holding Company

Total

APPLICATION OF FUNDS:

Investments

Current Assets, Loans and Advances
Current Assets
Cash and Bank balances
Loans and Advances

Less : Current Liabilities and Provisions

Current Liabilities
Sundry Creditors
Provisions
Provision for taxation

Net Current Assets
Miscellaneous Expenditure
(To the extent not written off or adjusted)

Profit and Loss Account

Total

Schedule

As at
31st March, 2001
Rs.

Rs.

(Rs. in lacs)
As at
31st March, 2000
Rs.

Rs.

‘A’

202.00

–

202.00

0.10

202.00

1,42,721.72

1,42,923.72

202.10

1,41,733.62

1,41,935.72

‘B’

‘C’

1,41,988.12

1,41,933.62

0.35
934.19

934.54

0.13

0.02

0.15

0.94
0.09

1.03

0.06

0.02

0.08

934.39
0.88

0.33

1,42,923.72

0.95
1.15

–

1,41,935.72

Notes on Accounts

‘D’

As per our Report of even date

For and on behalf of the Board

L.V. Merchant

M. D. Sudharsan

Surendra Pipara

}

Directors

For Chaturvedi & Shah
Chartered Accountants

For Rajendra & Co.
Chartered Accountants

Rajesh D. Chaturvedi
Partner

R.J. Shah
Partner

Mumbai
Dated : 26th April, 2001

104

Reliance Ventures Limited

00288051.p65 May 23, 2001 @ 10:05 am

Profit and Loss Account for the Year ended 31st March, 2001

GROWTH IS LIFE

INCOME

Interest
[Tax Deducted at source Rs. NIL,
previous year Rs. 0.09 lacs]

EXPENDITURE

Audit fees

Filing fees

General Expenses

Preliminary Expenditure written off

Profit / (Loss) before tax

Less: Provision for taxation

Profit / (Loss) after tax

Add: Balance brought forward from last year

Balance carried to Balance Sheet

Schedule

2000-2001

Rs.

0.13

0.02

0.01

0.27

(Rs. in lacs)

1999-2000

Rs.

0.06

0.03

0.02

0.18

Rs.

0.41

0.29

0.12

0.02

0.10

–

0.10

Rs.

–

0.43

(0.43)

–

(0.43)

0.10

(0.33)

Notes on Accounts

‘D’

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 : 26th April, 2001

L.V. Merchant

M. D. Sudharsan

Surendra Pipara

}

Directors

00288051.p65 May 23, 2001 @ 10:05 am

Reliance Ventures Limited

105

GROWTH IS LIFE

Schedules Forming Part of the Balance Sheet

SCHEDULE ‘A’

SHARE CAPITAL

Authorised:

20,20,000

Equity Shares of Rs. 10 each.

4,80,000 Unclassified Shares of Rs. 10 each

Issued, Subscribed and Paid up:

20,20,000

Equity Shares of Rs. 10 each fully paid up
(Held by Reliance Industries Limited,
the Holding Company)

SCHEDULE ‘B’

INVESTMENTS

Long Term Investments (other Investments)

Unquoted
In Equity Shares - fully paid up

As at
31st March, 2001

(Rs. in lacs)
As at
31st March, 2000

Rs.

202.00

48.00

250.00

202.00

Rs.

202.00

48.00

250.00

202.00

As at
31st March, 2001
Rs.

Rs.

(Rs. in lacs)

As at
31st March, 2000
Rs.

Rs.

50,000 Rosche Trading Pvt. Ltd. of Rs.10 each

5.00

(-)

In Preference Shares - partly paid up

90,000 Rosche Trading Pvt. Ltd. of Rs.100 each,

49.50

(-) Rs.55 paid up

–

In Debentures - fully paid up
(Zero coupon Optionally Fully Convertible Debentures
of Rs.1000 each)

42,00,000 Reliance Polyolefins Pvt. Ltd.

3,21,000 Reliance Chemicals Pvt. Ltd. (Series I)

42,000.00

3,210.00

28,84,042 Reliance Chemicals Pvt. Ltd. (Series II)

28,840.42

33,94,160 Reliance Aromatics and Petrochemicals

33,941.60

Pvt. Ltd.

33,94,160 Reliance Energy & Project Development

33,941.60

Pvt. Ltd.

42,000.00

3,210.00

28,840.42

33,941.60

1,41,933.62

1,41,988.12

1,41,933.62

106

Reliance Ventures Limited

00288051.p65 May 23, 2001 @ 10:05 am

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Schedules Forming Part of the Balance Sheet

SCHEDULE ‘C’

CURRENT ASSETS, LOANS AND ADVANCES

Current Assets

Cash and Bank Balances

Balance with Bank

As at
31st March, 2001
Rs.

Rs.

(Rs. in lacs)

As at
31st March, 2000
Rs.

Rs.

In Current Account with a Scheduled Bank

0.35

0.94

Loans and Advances

Debenture application money

Advance payment of taxes

SCHEDULE ‘D’

1. Significant Accounting Policies

a) General

934.10

0.09

934.19

934.54

0.09

1.03

Notes on Accounts

The financial statements have been prepared in accordance with the generally accepted accounting principles and the
provisions of the Companies Act, 1956.

b) Revenue recognition

The Company follows mercantile system of accounting and recognises significant items of income and expenditure on
accrual basis.

Investments

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 management opinion.

d) Preliminary expenses are amortised over a period of five years on pro-rata basis.

2. The Current financial year is for the period of twelve months, whereas the previous year was for a period from 27th July, 1999 to

31st March, 2000. The current financial year's figures to that extent are not comparable.

3. Contingent Liabilities

As at
31st March, 2001
Rs./lacs

Uncalled liabilities on partly paid Preference shares

40.50

As at
31st March, 2000
Rs./lacs

–

4. As the Company is not a manufacturing company, information required under paragraphs 3 and 4 of Schedule VI of the Compa-

nies Act, 1956 are given to the extent applicable.

00288051.p65 May 23, 2001 @ 10:05 am

Reliance Ventures Limited

107

GROWTH IS LIFE

Notes on Accounts

Schedule 'D' (contd..)

Balance sheet abstract and Company's General Business Profile as per Part IV of Schedule VI to the Companies Act,
1956.

1. Registration Details:

Registration No.

1 2 1 0

0 9

State Code

1 1

Balance Sheet Date

3 1

- 0 3 -

0 1

2. Capital raised during the year: (Rs. in lacs)

Public Issue

Bonus Issue

N I

Rights Issue

Private Placement

N I L

3. Position of mobilisation and deployment of funds: (Rs. in lacs)

Total Liabilities

1 4 2

9 2 3 .

7 2

Total Assets

1 4

2 9 2 3 . 7 2

Source of Funds:

Paid-up Capital

Secured Loans

Application of Funds:

2 0 2 .

0 0

Reserves and Surplus

N I L

N I

Unsecured Loans

1 4

2 7 2 1 . 7 2

Net Fixed Assets

N I

Investments

1 4

1 9 8 8 . 1 2

Net Current Assets

9 3 4 .

3 9

Accumulated Losses

0 .

3 3

Miscellaneous
Expenditure

4. Performance of Company: (Rs. in lacs)

Turnover/Income

N I

Total Expenditure

Profit/(Loss) before Tax

(0 .

4 3)

Profit/(Loss) after Tax

Earnings per Share (Rs)

N I

Dividend per Share (Rs)

5. Generic names of principal products, services of the Company:

Item Code

Product Description

N A

0 . 8 8

0 . 4 3

(0 . 4 3)

N I L

As per our Report of even date

For and on behalf of the Board

L.V. Merchant

M. D. Sudharsan

Surendra Pipara

}

Directors

For Chaturvedi & Shah
Chartered Accountants

For Rajendra & Co.
Chartered Accountants

Rajesh D. Chaturvedi
Partner

R.J. Shah
Partner

Mumbai
Dated : 26th April, 2001

108

Reliance Ventures Limited

00288051.p65 May 23, 2001 @ 10:05 am

GROWTH IS LIFE

Directors’ Report

To,
The Members,

Your Directors present the first Annual Report together with the
Audited Statement of Accounts for the period ended 31st
March, 2001.
Operations
During the year under review, the Company has earned a profit
of Rs. 0.84 lacs. Your Directors have not recommended any
dividend on equity shares for the period under review.
Wholly Owned Subsidiary
Reliance Industries Limited has acquired entire equity share
capital on 13th May, 2000. The Company had therefore become
a deemed public company under section 43A of the Companies
Act, 1956 being
the wholly owned subsidiary of Reliance
Industries Limited.
Registration as Non-Banking Financial Company
The Company received the certificate of registration under
Section 45(1)A of the Reserve Bank of India Act, 1934, to
commence the business of Non-Banking Financial institution on
24th May, 2000.
Change of Name
The Company changed its name to Reliance Power Ventures
Limited with effect from 17th May, 2000.
Directors
Shri S. Seth, Shri Atul Dayal and Shri Rohit Shah, were
appointed as Additional Directors, with effect from 13th May,
2000. They hold office upto the date of ensuing Annual General
Meeting and are eligible for reappointment. The Company has
received a notice under section 257 of the Companies Act, 1956,
proposing their appointment as Directors, subject to retirement
by rotation.
Shri R Santhana Raman and Shri Prakash Beria, resigned as
Directors of the Company on 13th May, 2000. The Board wishes
to place on record the valuable services rendered by them
during their tenure as Directors.
Directors' Responsibility Statement
Pursuant to the requirement under Section 217(2AA) of the
Companies Act, 1956, with respect to Directors' Responsibility
statement, it is hereby confirmed:
(i) That in the preparation of the accounts for the financial year
ended 31st March, 2001,
the applicable accounting
standards have been followed along with proper explanation
relating to material departures;

(ii) That the Directors have selected such accounting policies
and applied them consistently and made judgements and
estimates that were reasonable and prudent so as to give
a true and fair view of the state of affairs of the Company
at the end of the financial year and of the profit or loss of
the Company for the year under review;

(iii) That the Directors have taken proper and sufficient care for
the maintenance of adequate accounting
in
accordance with the provisions of the Companies Act, 1956
for safeguarding
for
the Company and
preventing and detecting fraud and other irregularities;
the accounts

for
the financial year ended 31st March, 2001 on a 'going
concern' basis.

the Directors have prepared

the assets of

(iv) That

records

Personnel
The Company has not paid any remuneration attracting the
provisions of Companies (Particulars of Employees) Rules, 1975
read with Section 217(2A) of the Companies Act, 1956. Hence,
no information is required to be appended to this report in this
regard.
Conservation of Energy, Technology Absorption and Foreign
Exchange Earnings and Outgo
Being an investment company, there are no particulars furnished
in this report as required under Section 217(1)(e) of the
Companies Act, 1956, relating to conservation of energy and
technology absorption. There was no foreign exchange earnings
or outgo during the year.
Deposits
The Company has not accepted any public deposit during the
year. Hence, no information is required to be appended to this
report
terms of Non-Banking Financial Companies
Acceptance of Public Deposits (Reserve Bank) Directions, 1988.
Auditors
Messrs. Chaturvedi and Shah and Messrs. Rajendra and 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.
Acknowledgement
Your Directors wish
immense
to place on
appreciation for the assistance and co-operation received from
various Statutory Authorities.

record

their

For and on behalf of the Board

S. Seth

Atul Dayal

Rohit Shah

}

Directors

Reliance Power Ventures Limited

109

Mumbai
Dated : 26th April, 2001

00288071.p65 May 23, 2001 @ 10:05 am

GROWTH IS LIFE

Auditors’ Report

To,
The Members of Reliance Power Ventures Limited.
We have audited the attached Balance Sheet of Reliance Power
Ventures Limited as at 31st March, 2001 and the Profit and
Loss Account of the Company for the period ended on that date
annexed thereto and report that:
1. As required by the Manufacturing and Other
Companies (Auditors' Report) Order, 1988, issued by the
Company Law Board in terms of Section 227(4A) of the
Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and
5 of the said Order.
Further to our comments in the Annexure referred to in
paragraph 1 above, we report that:
a) We have obtained all the information and explanations
which to the best of our knowledge and belief were
necessary for the purpose of our audit.
In our opinion, proper books of account as required by
law have been kept by the Company so far as
appears from our examination of such books.
The Balance Sheet and Profit and Loss Account
referred to in this Report are in agreement with the
books of account.

For Chaturvedi & Shah
Chartered Accountants

Rajesh D. Chaturvedi
Partner
Mumbai
Dated : 26th April, 2001

the

requirements of

In our opinion, the Balance Sheet and Profit and Loss
the
Account complies with
mandatory accounting standards referred to in Section
211(3C) of the Companies Act, 1956.
In our opinion, and based on
information and
explanations given to us, none of the directors are
disqualified as on 31st March 2001
from being
appointed as directors in terms of clause (g) of sub-
section (1) of section 274 of the Companies Act, 1956.
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
2001, and
in so far as it relates to the Profit and Loss
Account, of the 'Profit' of the Company for the
period ended on that date.

ii)

For Rajendra & Co.
Chartered Accountants

Apurva R. Shah
Partner

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. As the Company has no Fixed Assets during the year,
clauses 4(A) (i) and (ii) of the said Order are not applicable.
2. Since the Company has not carried out any manufacturing
and / or trading activity, items (iii), (iv), (v), (vi), (xi), (xii), (xiv)
and (xvi) of the clause A and item (ii) of the clause D of
paragraph 4 of the aforesaid Order are not applicable.
The Company has taken interest-free unsecured loans from
its holding Company. It has not taken any loans, secured or
unsecured from companies, firms or other parties listed in
the register maintained under Section 301 of the Companies
Act, 1956, or from companies under the same management
within the meaning of sub section (1B) of Section 370 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.
The Company has not granted any
loan, secured or
unsecured to companies, firms, or other parties listed in the
Register maintained under Section 301 of the Companies
Act, 1956, or to Companies under the same management
within the meaning of sub section (1B) of Section 370 of
the Companies Act, 1956.
The Company has not given any loans or advances in the
nature of loans during the year, and hence clause regarding
repayment is not applicable.
In our opinion and according
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.
In our opinion and according to the information and
explanations given to us, the Company has not accepted any

the

deposits from public.
In our opinion
internal audit
arrangement commensurate with its size and the nature of its
business.

the Company has an

9. According to the information and explanations given to us,
the Employees' Provident Fund and
the provisions of
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, 2001 for a period of more than
six months from the date they became payable.
In our opinion and according
information and
explanations given to us, no personal expenses of Directors
have been charged to revenue account.

the

11.

12. The Company is not a Sick Industrial Company within the
meaning of clause (0) of sub section (1) of section 3 of the
Sick Industrial Companies (Special Provisions) Act, 1985.

13. According to the information and explanations given to us,
the provisions of any special statute applicable to Chit-Fund,
Nidhi or Mutual Benefit Society are not applicable to the
Company.
In our opinion, the Company has maintained proper records
and made timely entries in respect of investments made by
the Company. The Company's investments are held in its
own name, save and except, those in the process of being
transferred in its name.

14.

For Chaturvedi & Shah
Chartered Accountants

Rajesh D. Chaturvedi
Partner
Mumbai
Dated : 26th April, 2001

110

00288071.p65 May 23, 2001 @ 10:05 am

For Rajendra & Co.
Chartered Accountants

Apurva R. Shah
Partner

Reliance Power Ventures Limited

GROWTH IS LIFE

Balance Sheet as at 31st March, 2001

Schedule

(Rs. In lacs)

As at
31st March, 2001

Rs.

SOURCES OF FUNDS

Shareholders' Funds
Share Capital
Reserves and Surplus:
Profit and Loss Account

Loan Funds
Unsecured loan from the Holding Company

Total

APPLICATION OF FUNDS

Investments

Current Assets, Loans and Advances
Current Assets
Cash and Bank balances

Loans and Advances

Less : Current Liabilities and Provisions

Current Liabilities
Sundry Creditors
Provisions
Provision for taxation

Net Current Assets

Miscellaneous Expenditure
(To the extent not written off or adjusted)

Total

Notes on Accounts

‘A’

‘B’

‘C’

‘D’

‘E’

202.00

0.84

0.78

0.39

1.17

460.59

0.57

461.16

202.84

48,605.50

48,808.34

49,267.31

(459.99)

1.02

48,808.34

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

Apurva R. Shah
Partner

S. Seth

Atul Dayal

Rohit Shah

}

Directors

Mumbai
Dated : 26th April, 2001

00288071.p65 May 23, 2001 @ 10:05 am

Reliance Power Ventures Limited

111

Profit and Loss Account for the Period ended 31st March, 2001

GROWTH IS LIFE

Schedule

(Rs. In lacs)

For the period
19-1-2000 to 31-3-2001
Rs.
Rs.

INCOME

Interest
(Tax Deducted at source Rs. 0.39 lacs)

Miscellaneous income

EXPENDITURE

Audit fees

Filling fees

Professional fees

General expenses

Preliminary Expenditure written off

Profit before tax

Less : Provision for Taxation

Balance carried to Balance Sheet

Notes on Accounts

‘E’

1.76

0.21

0.13

0.01

0.04

0.06

0.32

1.97

0.56

1.41

0.57

0.84

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

Apurva R. Shah
Partner

S. Seth

Atul Dayal

Rohit Shah

}

Directors

Mumbai
Dated : 26th April, 2001

112

Reliance Power Ventures Limited

00288071.p65 May 23, 2001 @ 10:05 am

GROWTH IS LIFE

Schedules Forming Part of the Balance Sheet

SCHEDULE ‘A’

SHARE CAPITAL

Authorised:

21,00,000
4,00,000

Equity Shares of Rs.10 each
Unclassified Shares of Rs.10 each

Issued, Subscribed and Paid up:

20,20,000

Equity Shares of Rs.10 each fully paid up
(held by Reliance Industries Limited,
the Holding Company)

SCHEDULE ‘B’

INVESTMENTS

Long Term Investments
Quoted
In Equity Shares - fully paid up

2,02,38,252 BSES Limited of Rs. 10 each

(Rs. in lacs)
As at

31st March, 2001
Rs.

210.00
40.00

250.00

202.00

(Rs. in lacs)
As at

31st March, 2001
Rs.

49,267.31

AGGREGATE VALUE OF

As at 31st March, 2001

Quoted Investments
Unquoted Investments

Book Value
Rs.
49,267.31
—

49,267.31

Market Value
Rs.
38,017.56

00288071.p65 May 23, 2001 @ 10:05 am

Reliance Power Ventures Limited

113

GROWTH IS LIFE

Schedules Forming Part of the Balance Sheet

SCHEDULE ‘C’

CURRENT ASSETS, LOANS AND ADVANCES

Current Assets
Cash and Bank Balances
Balance with Bank
In Current Account with a Scheduled Bank

Loans and Advances
Advances payment of taxes

SCHEDULE ‘D’

MISCELLANEOUS EXPENDITURE

Preliminary Expenses
Less: Written off during the period

(Rs. in lacs)
As at

31st March, 2001
Rs.

0.78

0.39

1.17

(Rs. in lacs)
As at

31st March, 2001
Rs.

1.34
0.32

1.02

Notes on Accounts

SCHEDULE 'E'

1. SIGNIFICANT ACCOUNTING POLICIES

a) General

The financial statements have been prepared in accordance with the generally accepted accounting principles and the
provisions of the Companies Act, 1956.

b) Revenue recognition

The Company follows mercantile system of accounting and recognises significant items of income and expenditure on
accrual basis.

Investments
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 management opinion.

d) Preliminary expenses are amortised over a period of five years on pro-rata basis.

The Company was incorporated on 19th January, 2000 and the Accounts are therefore prepared for the period 19th
January, 2000 to 31st March, 2001. This being the first financial year of the Company, no corresponding figures for the
previous year are available.

3. Consequent to fresh Certificate of Incorporation dated 17th May, 2000 received from the Registrar of Companies

Maharashtra, name of the Company has been changed from "Tex-Style Synthetics Private Limited" to "Reliance Power
Ventures Private Limited" and was further changed to "Reliance Power Ventures Limited", since the company had become
a wholly owned subsidiary of a public limited company.

4. As the Company is not a manufacturing company, information required under paragraphs 3 and 4 of Schedule VI of the

Companies Act, 1956 are given to the extent applicable.

114

Reliance Power Ventures Limited

00288071.p65 May 23, 2001 @ 10:05 am

GROWTH IS LIFE

Notes on Accounts

Schedule 'E' (contd..)

Balance sheet abstract and Company's General Business Profile as per Part IV of Schedule VI to the Companies Act,
1956.

1. Registration Details:

Registration No.

1 2 3 7

3 1

State Code

1 1

Balance Sheet Date

3 1

- 0 3 -

0 1

2. Capital raised during the year: (Rs. in lacs)

Public Issue

Bonus Issue

N I

Rights Issue

N I L

Private Placement

2 0 2 . 0 0

3. Position of mobilisation and deployment of funds: (Rs. in lacs)

Total Liabilities

4 8

8 0 8 .

3 4

Total Assets

8 8 0 8 . 3 4

Source of Funds:

Paid-up Capital

Secured Loans

Application of Funds:

2 0 2 .

0 0

Reserves and Surplus

0 . 8 4

N I

Unsecured Loans

8 6 0 5 . 5 0

Net Fixed Assets

N I

Investments

9 2 6 7 . 3 1

Net Current Assets

(4 5 9 .

9 9)

Accumulated Losses

N I

Miscellaneous
Expenditure

4. Performance of Company: (Rs. in lacs)

Turnover/Income

Profit before Tax

1 .

9 7

Total Expenditure

1 .

4 1

Profit after Tax

Earnings per Share (Rs)

0 .

0 4

Dividend per Share (Rs)

5. Generic names of principal products, services of the Company:

Item Code

Product Description

N A

1 . 0 2

0 . 5 6

0 . 8 4

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

Rajesh D. Chaturvedi
Partner

Apurva R. Shah
Partner

S. Seth

Atul Dayal

Rohit Shah

}

Directors

Mumbai
Dated : 26th April, 2001

00288071.p65 May 23, 2001 @ 10:05 am

Reliance Power Ventures Limited

115

GROWTH IS LIFE

Directors’ Report

To
The Members,

Your Directors present the First Annual Report together with the
Audited Statement of Accounts for the period 17th August, 2000 (Date
of incorporation) to 31st March, 2001.

Operations

The Company received the certificate of registration under provisions
of sub section (2A) of Section 3 of The Insurance Act, 1938, issued
by Insurance Regulatory and Development Authority to commence
the business of General Insurance Company on 23rd October, 2000.

During the period, the Company has booked the gross direct premium
of Rs.106.73 lacs and income from investments of Rs. 508.26 lacs
and earned a profit of Rs.45.08 lacs. Your Company has not
recommended any dividend on equity shares for the period under
review.

The Company has set up representative office in ten locations viz.,
Baroda, Bangalore, Chennai, Hyderabad, Kolkata, Lucknow,
Ludhiana, Mumbai, New Delhi and Pune.

Wholly Owned Subsidiary

The Company has become the wholly owned subsidiary of Reliance
Industries Limited with effect from 22nd August, 2000.

Change of Name

The Company changed its name to Reliance General Insurance
Company Limited with effect from 12th October, 2000.

Directors

Shri Sandeep Tandon, Director of the Company, retires by rotation
and being eligible, offers himself for re-appointment.

Shri S.K. Kanwar and Shri Atul Dayal were appointed as Additional
Directors on 17th August, 2000, in terms of Section 260 of the
Companies Act, 1956. They shall hold office upto the date of ensuing
Annual General Meeting. Necessary resolutions have been set out
in the notice for appointment of Shri S.K. Kanwar and Shri Atul Dayal
at the ensuing Annual General Meeting. Shri Surendra Pipara and
Ms. Mangal K. Kulkarni, have resigned from the board of the company.

Directors’ Responsibility Statement

Pursuant to the requirement under Section 217(2AA) of the
Companies Act, 1956 and under the Insurance Act, 1938 with respect
to Directors’ Responsibility Statement, it is hereby confirmed:

(i) That in the preparation of the accounts for the financial period
ended 31st March, 2001, the applicable accounting standards
have been followed along with proper explanation relating to
material departures;

(ii) That the Directors have selected such accounting policies and
applied them consistently and made judgements and estimates
that were reasonable and prudent so as to give a true and fair
view of the state of affairs of the Company at the end of the
financial period and of the profit or loss of the Company for the
period under review;

(iii) That the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with
the provisions of the Companies Act, 1956 and the Insurance
Act, 1938 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;

(iv) That the Directors have prepared the accounts for the financial
period ended 31st March, 2001 on a ‘going concern’ basis.

Constitution of Audit Committee

As required by the provisions of Section 292A of the Companies
Act, 1956, the Board of Directors has constituted an Audit Committee.
comprising of three Directors viz Shri Sandeep Tandon, Shri S.K.
Kanwar and Shri Atul Dayal.

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.

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 public deposit during the year.

Auditors

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.
Acknowledgement
Your Directors wish to place on record their immense appreciation
for the assistance and cooperation received from various Statutory
Authorities. Your Directors wish to place on record their deep sense
of appreciation for the devoted services of the executives, and staff
of the Company for its success.

For and on behalf of the Board

Sandeep Tandon
Director

S.K. Kanwar
Director

Atul Dayal
Director

(v) That an internal audit system commensurate with the size and

nature of the business exists and is operating effectively.

Mumbai
Dated : 26th April, 2001

116

Reliance General Insurance Company Limited

00288091.p65

GROWTH IS LIFE

Auditors’ Report

To,
The Members,
Reliance General Insurance Company Limited,

We have audited the attached Balance Sheet of Reliance General
Insurance Company Limited as at 31st March 2001 and also the
Revenue Accounts, Profit and Loss Account and Receipts and
Payments Account of the company for the period ended on that date
annexed thereto and 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 and have found them satisfactory.

In our opinion, proper Books of Account as required by law,
have been maintained by the company, so far as appears from
our examination of the Books of the Company.

The Balance Sheet, Revenue Accounts, Profit and Loss Account
and Receipts and Payments Account referred to in this report
are in agreement with the books of accounts.

Investments have been valued in accordance with the provisions
of the Insurance Regulatory and Development Act, 1999 and
Regulations framed there under.

e) We have verified the cash and bank balances and the
investments of the company by actual inspection or by obtaining
confirmation wherever necessary.

f) We have reviewed the Management Report attached hereto
and in our opinion there is no apparent mistake or material
inconsistencies with the financial statements.

In our opinion, and according to the information and explanation
given to us, the company has complied with the terms and
conditions of the Registration stipulated by the Insurance
Regulatory and Development Authority.

In our opinion the accounting policies selected by the company
are appropriate and the said policies, Balance Sheet, Revenue
Accounts, Profit and Loss Account and Receipts and Payments
Account are in compliance with the mandatory Accounting
Standards referred to in section 211 (3C) of the Companies
Act, 1956 to the extent applicable and with accounting principles
as prescribed in the relevant Regulations framed under the
Insurance Regulatory and Development Act,1999.

In our opinion, and based on information and explanations given
to us, none of the directors are disqualified as on 31 st March
2001 from being appointed as directors in terms of clause (g)
of sub-section (1) of Section 274 of the Companies Act 1956.

In our opinion and to the best of our information and according
to the explanations given to us, the said Balance Sheet, Revenue
Accounts, Profit and Loss Account and Receipts and Payments
Account read together with the notes thereon give the
information required by the Insurance Act 1938, the Insurance
Regulatory and Development Act, 1999 and the Companies
Act 1956, to the extent applicable, and in the manner so required
and present a true and fair view:

ii)

In so far as it relates to the Balance Sheet of the state of
affairs of the company as at 31st March 2001, and,

In so far as it relates to Revenue Accounts, of the ‘Deficit’ of
the company for the financial period ended on that date,

iii) In so far as it relates to the Profit and Loss Account, of the
‘Profit’ of the company for the financial period ended on that
date, and

iv) In so far as it relates to the Receipts and Payments Account
of the receipts and payments of the company for the period
ended on that date.

For Chaturvedi & Shah
Chartered Accountants

Rajesh D Chaturvedi
Partner

Mumbai
Dated : 26th April, 2001

For Rajendra & Co.
Chartered Accountants

Apurva R Shah
Partner

Reliance General Insurance Company Limited

117

00288091.p65

GROWTH IS LIFE

Balance Sheet as at 31st March, 2001

Schedule
Nos.

As at 31st March, 2001
(Rs. ‘000)

102 00 07
45 08

102 45 15

97 44 56

1 43 43

2 07 27

1 49 89

102 45 15

Nil
Nil
Nil
Nil
Nil
Nil

SOURCES OF FUNDS
Share Capital
Reserve and Surplus

TOTAL

APPLICATION OF FUNDS

Investments
Fixed Assets
Gross Block
Less: Depreciation
Net Block

Current Assets
Cash and Bank Balances
Advances and other assets

TOTAL (A)

Current Liabilities and Provisions
Current Liabilities
Provisions

TOTAL (B)

Net Current Assets- TOTAL (A - B)
Miscellaneous Expenditure
(to the extent not written off or adjusted)

TOTAL

Significant Accounting policies

Notes on Accounts

1 48 05
4 62

85 11
2 59 70

3 44 81

1 37 53
1

1 37 54

1
2

3
4

5
6

7
8

CONTINGENT LIABILITIES
Partly paid-up investments
Claims, other than against policies, not acknowledged as debts by the company
Underwriting commitments outstanding
Guarantees given by or on behalf of the Company
Statutory demands/liabilities in dispute, not provided for
Reinsurance obligations

As per our Report of even date

For and on behalf of the Board

For Chaturvedi & Shah
Chartered Accountants

Rajesh D Chaturvedi
Partner

Mumbai
Dated : 26th April, 2001

For Rajendra & Co.
Chartered Accountants

Apurva R Shah
Partner

Sandeep Tandon
Director

S.K. Kanwar
Director

Atul Dayal
Director

Vijay Pawar
Principal Officer

118

Reliance General Insurance Company Limited

00288091.p65

Fire Revenue Account for the Period Ended 31st March, 2001

GROWTH IS LIFE

Schedule
Nos.

Current Period
(Rs.’000)

INCOME
Premiums earned (net) (Rs. 597)
Change in provision for Unexpired-risk (Rs.299)

TOTAL (A) (Rs. 298)

EXPENDITURE
Commission
Operating expenses relating to insurance business

TOTAL (B)

Operating profit/(loss) from Fire business (A-B)

11
12

-
-

( 10 71)
3 78 11

3 67 40

(3 67 40)

Miscellaneous Revenue Account for the Period ended 31st March, 2001

Schedule
Nos

Current Period
(Rs.’000)

INCOME
Premiums earned (net)
Change in provision for Unexpired-risk

TOTAL (A)

EXPENDITURE
Commission
Operating expenses relating to insurance business

TOTAL (B)

Operating profit/(loss) from Miscellaneous business (A-B)

Significant Accounting policies

Notes on Accounts

11
12

2
( 1)

( 37)
53 23

52 86

( 52 85)

As required by Section 40C(2) of the Insurance Act,1938, we certify that, all expenses of management, wherever incurred, whether
directly or indirectly, in respect of Fire and Miscellaneous Insurance Business have been fully debited in the Fire Insurance Revenue
Account and Miscellaneous Revenue Account respectively as expenses.

As per our Report of even date

For and on behalf of the Board

For Chaturvedi & Shah
Chartered Accountants

Rajesh D Chaturvedi
Partner

Mumbai
Dated : 26th April, 2001

For Rajendra & Co.
Chartered Accountants

Apurva R Shah
Partner

Sandeep Tandon
Director

S.K. Kanwar
Director

Atul Dayal
Director

Vijay Pawar
Principal Officer

Reliance General Insurance Company Limited

119

00288091.p65

Profit and Loss Account for the period ended 31st March, 2001

GROWTH IS LIFE

Scehdule

Nos.

Current Period

(Rs. ‘000)

INCOME

Operating Profit/(Loss)

Fire Insurance

Miscellaneous Insurance

Income from Investments

Interest, Dividend & Rent - Gross

Profit on sale of investments

TOTAL (A)

EXPENDITURE

Provision for diminution in the value of investments

Preliminary Expenses written off

TOTAL (B)

Profit Before Tax Total (A-B)

Less: Provision for Taxation

Proft After Tax

Balance carried forward to Balance sheet

Significant Accounting policies

Notes on Accounts

(3 67 40)

( 52 85)

4 68 79

39 47

(4 20 25)

5 08 26

88 01

5 46

37 47

42 93

45 08

As per our Report of even date

For and on behalf of the Board

For Chaturvedi & Shah
Chartered Accountants

Rajesh D Chaturvedi
Partner

Mumbai
Dated : 26th April, 2001

For Rajendra & Co.
Chartered Accountants

Apurva R Shah
Partner

Sandeep Tandon
Director

S.K. Kanwar
Director

Atul Dayal
Director

Vijay Pawar
Principal Officer

120

Reliance General Insurance Company Limited

00288091.p65

GROWTH IS LIFE

Schedules Forming Part of the Financial Statements

SCHEDULE – 1
SHARE CAPITAL

Authorised Capital

20,00,00,000 Equity Shares of Rs10 each
Issued, Subscribed and Paid-up Capital

PATTERN OF SHAREHOLDING
[As certified by the Management]
Shareholder

Promoters
- Indian - M/s Reliance Industries Limited (Holding Company)
- Foreign

SCHEDULE – 2

RESERVES AND SURPLUS
Balance in Profit and Loss Account

SCHEDULE- 3
INVESTMENTS

LONG TERM INVESTMENTS
Central Government securities
Debentures/Bonds

SHORT TERM INVESTMENTS
Debentures (Includes Rs.10 crores of Holding Company)
Short Term Deposits (Includes Rs. 0.60 crores in Holding Company)

Investments in India
Investments outside India

SCHEDULE - 4
FIXED ASSETS

Particulars

Additions Deductions

As at
31-03-2001

For The
Period

Cost / Gross Block

As at 31st March, 2001
(Rs.’000)

200 00 00

102 00 07

No. of Shares

% of Holding

10,20,00,700
Nil
10,20,00,700

100%
Nil
100%

(Rs.’000)

As at 31st March, 2001
(Rs.’000)

38 92 73
23 91 83

30 00 00
4 60 00

45 08

62 84 56

34 60 00

97 44 56

97 44 56
Nil

97 44 56

Depreciation

On Sales/
Adjust-
ments

Up To
31-03-2001

(Rs in ‘000)

Net Block

As at
31-03-2001

Furniture & Fittings
Computers
Vehicles
Office Equipment

TOTAL

4 20
10 20
1 11 78
21 87

1 48 05

–
–
–
–

–

4 20
10 20
1 11 78
21 87

1 48 05

31
22
3 01
1 08

4 62

–
–
–
–

–

31
22
3 01
1 08

4 62

3 89
9 98
1 08 77
20 79

1 43 43

Reliance General Insurance Company Limited

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Schedules Forming Part of the Financial Statements

(Rs.’000)

As at 31st March, 2001
(Rs.’000)

SCHEDULE- 5
CASH AND BANK BALANCES
Cash (including cheques, drafts and stamps)
Bank Balances- Current Accounts

Cash and Bank balances in India
Cash and Bank balances outside India

SCHEDULE – 6
ADVANCES AND OTHER ASSETS
ADVANCES
Pre-payments
Advance Tax paid and Tax Deducted at Source
Rental and Telephone Deposits
Advances to Staff
Other Advances

OTHER ASSETS
Income Accrued on Investments
Due from Holding Company

SCHEDULE – 7

CURRENT LIABILITIES
Unearned Premium
Balances due to other Insurance companies
Premiums received in Advance
Sundry Creditors

SCHEDULE –8
PROVISIONS
Reserve for Unexpired Risks

SCHEDULE – 9

MISCELLANEOUS EXPENDITURE
(To the extent not written off or adjusted)

Preliminary Expenditure
Company incorporation expenses
Pre-operative Expenses

Less : Written off during the year

Balance carried forward to Balance Sheet

50
1 41
29 01
28 71
11 80

1 79 79
8 48

41 94
43 17

85 11

85 11
Nil

85 11

71 43

1 88 27

2 59 70

6 82
40 37
53 81
36 53

1 37 53

1 41 10
46 26

1 87 36
37 47

1 49 89

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Schedules Forming Part of the Financial Statements

SCHEDULE –10

PREMIUM EARNED [NET]
Premium from direct business written
Less : Premium on reinsurance ceded

Sub-Total
Adjustment for changes in Unearned Premium
Adjustment for changes in premium received in advance

Total Premium Earned (Net) (Fire Rs.597)

Premium Income from business effected
In India (Fire Rs.597)
Outside India

Total Premium Earned (Net)

SCHEDULE-11

COMMISSION

Commission paid
Direct
Less: Commission on Re-Insurance Ceded

Net Commission

SCHEDULE-12

OPERATING EXPENSES RELATED TO INSURANCE BUSINESS
Employees’ remuneration & welfare benefits
Company’s contribution to PF & others
Staff Welfare
Travel, conveyance and vehicle running expenses
Rents, rates & taxes
Repairs
Printing & stationery
Communication
Professional charges
Audit fees

(a) Audit fees
(b) Tax Audit fees

Training and conference expenses
Entertainment Expenses
Offfice maintenance expenses
Recruitment expenses
Depreciation on Assets
Miscellaneous Expenses

TOTAL

Allocated to Revenue Account

Fire
Miscellaneous

TOTAL

(Rs.’000)

As at 31st March, 2001
(Rs.’000)

Fire
93 56
44 59

48 97
( 87)
( 48 10)

-
Nil

Miscellaneous
13 17
1 49

11 68
( 5 95)
( 5 71)

2
Nil

Fire

Miscellaneous

Nil
10 71

( 10 71)

10
5

3 78 11
53 22

Nil
37

( 37)

39 97
2 74
39 11
41 64
14 21
1 59
74
3 69
35 87

15
6 89
1 08
2 12 33
25 98
4 62
72

4 31 33

Reliance General Insurance Company Limited

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Schedules Forming Part of the Financial Statements

SCHEDULE – 13

Significant Accounting Policies forming part of the financial statements as at 31st March 2001

1. Basis of preparation of financial statements

1.1.

The balance sheet, profit and loss account, and revenue accounts are drawn up in accordance with the Insurance Regulatory &
Development Authority Regulations read with relevant provisions of the Insurance Act, 1938 and the Companies Act, 1956. Financial
statements have been prepared under historical cost convention in accordance with the generally accepted accounting principles,
and conform to the statutory provisions in regard to general insurance operations in India.

1.2.

The Company generally follows mercantile system of accounting and recognises significant items of income and expenditure on
accrual basis.

2. Revenue Recognition

2.1

Premium

In the case of insurance policies, premium is recognised as income over the contract period: Premium relating to the contact period
beyond the accounting year is transferred to “unearned premium” account.

2.2

Investment Income

Investment income relating to policyholders’ funds is taken to respective Revenue Accounts and investment income relating to
shareholders’ funds is taken to Profit & Loss Account.

Investments

3.1.

Investment in debt securities including government securities is shown in the Balance sheet at cost subject to Amortisation over the
maturity period.

3.2.

Impairment in value of investments based on realisable value of investments is considered in Profit & Loss Account.

Fixed Assets

4.1.

Fixed assets are stated at cost less accumulated depreciation.

4.2. Depreciation on fixed assets is provided on Straight Line Method at the rates and the manner provided in Schedule XIV of the

Companies Act, 1956. Assets purchased for value up to Rs. 5000 is written off in the year of purchase.

Expenses of management

5.1. Expenses of management other than policy stamps and reinsurance expenses are apportioned to revenue accounts on the basis of

Gross Direct Premium at the end of the year.

5.2. Provisions for Contribution to Gratuity Fund, Superannuation fund, encashment of leave & retirement benefits are accounted on the

basis of annual actuarial valuation.

Provision for unexpired risk

Provision for unexpired risk is made at 50% of net earned premium.

7. Amortisation of Expenses

Preliminary expenses are amortised over a period of five years after the commencement of business.

124

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Notes on Accounts

SCHEDULE – 14

There are no encumbrances to assets of the company in and outside India

There are no commitments made and outstanding for Loans and Investments. The commitment made for purchase of Fixed Assets is for
Rs 0.31 crores.

There are no claims paid to claimants in/outside India

Value of contracts in relation to investments for:

(i) Purchases where deliveries are pending - nil

(ii) Sales where payments are overdue - nil.

5) Cost of securities amounting to Rs. 0.02 crores was written down based on the realisable value and cost of securities amounting to Rs. 0.04

crores was amortised based on ‘held to maturity’.

Provision for Claims Incurred But Not Reported (IBNR) has not been made, as there are no claims incurred under the policies during the
year.

7) Government Securities with a face value of Rs 0.10 crores (Market Value as on 31st March 2001 Rs 0.11crores) has been held as deposit
in Subsidiary General Ledger Account with M/s HDFC Bank, New Delhi towards Deposit under Section 7 of the Insurance Act, 1938
pending the opening of the Subsidiary General Ledger Account with Reserve Bank of India, New Delhi.

Expenditure incurred during the period prior to Registration with Insurance Regulatory & Development Authority is treated as ‘pre-operation
expenses’; detailed as under:

Professional Fees

Rent

Travel and Conveyance

Recruitment Expenses

Miscellaneous Expenses

Total

Sector-wise break-up of gross direct premium written is as under:

Sector

Rural

Social

Other

Total

Rs. 0.39 crores

Rs. 0.02 crores

Rs. 0.03 crores

Rs. 0.01 crores

Rs. 0.46 crores

Amount

Percentage

nil

Rs 1.07 crores

nil

100.00

The obligation under Insurance Regulatory & Development Authority (Obligations of Insurers to Rural or Social Sectors) Regulations, 2000
for the current year is to be fulfilled in the next year.

10) There is no investment income under for the policy holders’ funds during the year.

11) Figures are given in thousands of rupees as per Insurance Regulatory & Development Authority Regulations, 2000 and figures below

rupees one thousand are shown in brackets wherever necessary.

12) The Company was incorporated on 17th August 2000 and the accounts are therefore prepared for the period 17th August 2000 to 31st March

2001. This being the first financial year of the Company, no corresponding figures for the previous year are available.

Reliance General Insurance Company Limited

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Notes on Accounts

13) Balance Sheet Abstract and Company’s General Business Profile:

1. Registration Details:

Registration No.

1 1

1 2 8 3

0 0

State Code

Balance Sheet Date

3 1

- 0 3 -

0 1

2. Capital raised during the year: (Amount in Rs. Thousands)

Public Issue

Rights Issue

Bonus Issue

N I

Private Placement

0 2 0 0

0 7

3. Position of mobilisation and deployment of funds: (Amount in Rs. Thousands)

Total Liabilities

Total Assets

Source of Funds:

0 2 4 5

1 5

0 2 4 5

1 5

Paid-up Capital

0 2 0 0

0 7

Reserves and Surplus

Secured Loans

Unsecured Loans

Application of Funds:

Net Fixed Assets

Investments
Net Current Assets
Miscellaneous

Expenditure

4 5

0 8

N I

1 4 3

4 3

9 7 4 4
2 0 7

5 6
2 7

1 4 9

8 9

4. Performance of Company: (Amount in Rs. Thousands)

Turnover

5 1 9

3 6

(Net Premium, income from investments and other incomes)

Total Expenditure

Profit/(Loss) before Tax

Profit/(Loss) after Tax

Earnings per Share (Rs.)

Dividend Rate(%)

4 7 4

2 8

4 5

0 8

4 5

0 8

0 .

0 4

5. Generic names of three principal products, services of the Company (As per monetary terms):

Item Code No.

N O T

A P P L

I C A B L E

Product Description

G E N E R A L

I N S U R A N C E

As per our Report of even date

For and on behalf of the Board

For Chaturvedi & Shah
Chartered Accountants

Rajesh D Chaturvedi
Partner

Mumbai
Dated : 26th April, 2001

For Rajendra & Co.
Chartered Accountants

Apurva R Shah
Partner

Sandeep Tandon
Director

S.K. Kanwar
Director

Atul Dayal
Director

Vijay Pawar
Principal Officer

126

Reliance General Insurance Company Limited

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Receipts and Payments Account for the period ended 31st March, 2001

GROWTH IS LIFE

Cash flows from operating activities

Direct Premiums received
Coinsurance Accounts (Net)
Expenses of Management
Preliminary Expenses
Staff Loans and Advances given
Other Receipts

Net Flow

Cash flows from investing activities

Purchase of investments
Sale of investments
Purchase of fixed Assets
Interest received

Net Flow

Cash flows from financing activities

Proceeds from issue of Share Capital

Cash and cash equivalents at the end of period

As at 31st March, 2001

(Rs. ‘000)

1 07 01
5 38
(4 21 64)
(1 87 37)
( 65 56)
12 74

(209 75 26)
112 60 07
(1 42 56)
2 92 23

(5 49 44)

(95 65 52)

102 00 07

85 11

As per our Report of even date

For and on behalf of the Board

For Chaturvedi & Shah
Chartered Accountants

Rajesh D Chaturvedi
Partner

Mumbai
Dated : 26th April, 2001

For Rajendra & Co.
Chartered Accountants

Apurva R Shah
Partner

Sandeep Tandon
Director

S.K. Kanwar
Director

Atul Dayal
Director

Vijay Pawar
Principal Officer

Reliance General Insurance Company Limited

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Directors’ Report

To the Members,

Your Directors present the First Annual Report together with the
Audited Statement of Accounts for the period 17th August, 2000 (Date
of incorporation) to 31st March, 2001.

Operations

The Company has applied for registration with Insurance Regulatory
and Development Authority on 24th August, 2000 and has received
in principle approval on 11th January, 2001. The final registration will
be received on completion of certain formalities. The Company is in
the process of preparing the business process, formulating systems,
procedures etc.

Since the operation of the business has not commenced, Revenue
and Profit and Loss Account for the period are not prepared. Your
Directors have not recommended any dividend on equity shares for
the period under review.

Change of Name

The Company changed its name to Reliance Life Insurance Company
Limited with effect from 12th October, 2000.

The Company has become a wholly owned subsidiary of Reliance
Industries Limited with effect from 22nd August, 2000.

Directors

Shri Sandeep Tandon, Director of the Company, retires by rotation
and being eligible, offers himself for re- appointment.

Shri S K Kanwar and Shri Sandeep Junnarkar were appointed as
Additional Directors on 17th August, 2000, in terms of Section 260 of
the Companies Act, 1956. They shall hold office upto the date of
ensuing Annual General Meeting. Necessary resolutions have been
set out in the notice for appointment of Shri S K Kanwar and Shri
Sandeep Junnarkar at the ensuing Annual General Meeting. Shri
Surendra Pipara and Ms. Mangal K. Kulkarni, have resigned from
the board of the company.

Directors’ Responsibility Statement

Pursuant to the requirement under Section 217(2AA) of the
Companies Act, 1956 and under the Insurance Act, 1938 with respect
to Directors’ Responsibility Statement, it is hereby confirmed:

(ii) That the Directors have selected such accounting policies and
applied them consistently and made judgements and estimates
that were reasonable and prudent so as to give a true and fair
view of the state of affairs of the Company at the end of the
financial period and of the profit or loss of the Company for the
period under review;

Act, 1938 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;

(iv) That the Directors have prepared the accounts for the financial
period ended 31st March, 2001 on a ‘going concern’ basis.

(v) That an internal audit system commensurate with the size and

nature of the business exists and is operating effectively.

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 public deposit during the year.

Auditors
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.

Acknowledgement
Your Directors wish to place on record their immense appreciation
for the assistance and cooperation received from various Statutory
Authorities. Your Directors wish to place on record their deep sense
of appreciation for the devoted services of the executives, and staff
of the Company for its success.

For and on behalf of the Board

Sandeep Tandon
Director

S.K. Kanwar
Director

Sandeep Junnarkar
Director

(iii) That the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with
the provisions of the Companies Act, 1956 and the Insurance

Mumbai
Dated : 26th April, 2001

128

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GROWTH IS LIFE

Auditors’ Report

To,
The Members,
Reliance Life Insurance Company Limited,

We have audited the attached Balance Sheet of Reliance Life
Insurance Company Limited as at 31st March 2001 and also Receipts
and Payments Account of the company for the period ended on that
date annexed thereto and report that :-

The company has not obtained the final registration from the
Insurance Regulatory and Development Authority and since
the operation of the business has not commenced, Revenue
Account and Profit and Loss Account for the period are not
prepared.

b) 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 and have found them satisfactory.

In our opinion, proper Books of Account as required by law,
have been maintained by the company, so far as appears from
our examination of the Books of the Company.

The Balance Sheet and the Receipts and Payments Account
referred to in this report are in agreement with the books of
accounts.

e) We have verified the bank balances of the company by obtaining

confirmation.

f) We have reviewed the Management Report attached hereto
and in our opinion there is no apparent mistake or material
inconsistencies with the financial statements.

For Chaturvedi & Shah
Chartered Accountants

Rajesh D Chaturvedi
Partner

Mumbai
Dated : 26th April, 2001

In our opinion the accounting policies selected by the company
are appropriate and the said policies, Balance Sheet and
Receipts and Payments Account are in compliance with the
mandatory Accounting Standards referred to in section 211 (3C)
of the Companies Act, 1956 to the extent applicable and with
accounting principles as prescribed in the relevant Regulations
framed under the Insurance Regulatory and Development
Act,1999.

In our opinion, and based on information and explanations given
to us, none of the directors are disqualified as on 31st March
2001 from being appointed as directors in terms of clause (g)
of sub-section (1) of Section 274 of the Companies Act 1956.

In our opinion and to the best of our information and according
to the explanations given to us, the said Balance Sheet and
Receipts and Payments Account read together with the notes
thereon give the information required by the Insurance Act 1938,
the Insurance Regulatory and Development Act, 1999 and the
Companies Act 1956, to the extent applicable, and in the manner
so required and present a true and fair view:

ii)

In so far as it relates to the Balance Sheet of the state of
affairs of the Company as at 31st March 2001, and

In so far as it relates to the Receipts and Payments Account
of the receipts and payments of the company for the period
ended on that date.

For Rajendra & Co.
Chartered Accountants

Apurva R Shah
Partner

00288101.p65

Reliance Life Insurance Company Limited

129

GROWTH IS LIFE

Balance Sheet as at 31st March, 2001

Schedule
Nos.

As at 31st March, 2001
(Rs. ‘000)

SOURCES OF FUNDS

Shareholders’ Funds:
Share Capital

TOTAL

APPLICATION OF FUNDS

Fixed Assets
Gross Block
Less: Depreciation
Net Block

Current Assets
Cash and Bank Balances
Advances and other assets

Less: Current Liabilities

Sub Total

Net Current Assets

Miscellaneous Expenditure
( to the extent not written off or adjusted)

TOTAL

Significant Accounting policies

Notes on Accounts

26 10
146

39
15 97

16 36
1 42 04

3
4

200 07

24 64

( 1 25 68)

3 01 11

2 00 07

Nil
Nil
Nil
Nil
Nil
Nil

As per our Report of even date

For and on behalf of the Board

For Chaturvedi & Shah
Chartered Accountants

For Rajendra & Co.
Chartered Accountants

Sandeep Tandon
Director

Rajesh D Chaturvedi
Partner

Apurva R Shah
Partner

S.K. Kanwar
Director

Sandeep Junnarkar
Director

Mumbai
Dated : 26th April, 2001

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Schedules Forming Part of the Financial Statements

SCHEDULE-1
SHARE CAPITAL
Authorised Capital
20,00,00,000 Equity Shares of Rs10 Each
Issued, subscribed and paidup Capital
20,00,700 Equity Shares of Rs10 Each

SCHEDULE -1A
PATTERN OF SHAREHOLDING
(As certified by the Management)

Promoters
- Indian - M/S Reliance Industries Limited (Holding Company)

SCHEDULE - 2
FIXED ASSETS

Particulars

Additions Deductions

As at
31-03-2001

For The
Period

Cost / Gross Block

As at 31st March, 2001
(Rs. ‘000)

200 00 00

2 00 07

No. of Shares

20,00,700

As at 31st March, 2001
% of holding

100%

Depreciation

On Sales/
Adjust-
ments

Up To
31-03-2001

(Rs in ‘000)

Net Block

As at
31-03-2001

Furniture & Fittings
Computers
Vehicles
Office Equipment
Others (Specify nature)

TOTAL

1 22
1 19
19 08
4 61
–

26 10

–
–
–
–
–

–

1 22
1 19
19 08
4 61
–

26 10

28
3
57
58
–

1 46

–
–
–
–
–

–

28
3
57
58
–

1 46

94
1 16
18 51
4 03
–

24 64

SCHEDULE -3
CASH AND BANK BALANCES
Bank Balances Current Account
CASH AND BANK BALANCES

- In India
- Outside India

SCHEDULE - 4
ADVANCES AND OTHER ASSETS
ADVANCES
Rental and Telephone Deposits
Advances to Staff
Other Advances

SCHEDULE - 5
CURRENT LIABILITIES
Sundry creditors
Due to holding company

SCHEDULE-6

MISCELLANEOUS EXPENDITURE
(To the extent not written off or adjusted)
Preliminary Expenses
Company Incorporation Expenses
Pre-operative Expenses

As at 31st March, 2001
(Rs’000)

39
-

1 32
14 39
26

15 97

8 97
1 33 07

1 42 04

1 41 10
1 60 01

3 01 11

00288101.p65

Reliance Life Insurance Company Limited

131

GROWTH IS LIFE

Schedules Forming Part of the Financial Statements

SCHEDULE - 7

Significant accounting policies forming part of financial statements for the period ending 31st March, 2001

1. Basis of preparation of financial statements

1.1. The balance sheet, profit and loss account, and revenue accounts are drawn up in accordance with the Insurance Regulatory &
Development Authority Regulations read with relevant provisions of Insurance Act, 1938 and Companies Act, 1956. Financial statements
have been prepared under historical cost convention in accordance with the generally accepted accounting principles, and confor m to
the statutory provisions in regard to Life Insurance operations in India

1.2. The Company generally follows mercantile system of accounting and recognises significant items of income and expenditure on

accrual basis.

Fixed Assets

2.1. Fixed assets are stated at cost less accumulated depreciation.

2.2. Depreciation on fixed assets is provided on Straight Line Method at the rates and the manner provided in Schedule XIV of the

Companies Act, 1956. Assets purchased for value up to Rs. 5000/- is written off during the year of purchase.

3. Amortisation of Expenses

Preliminary expenses including pre-operative expenses are amortised over a period of five years after the commencement of business.

Notes on Accounts

SCHEDULE - 8

The company has applied for registration with the Insurance Regulatory & Development Authority and the same is pending .

Since the operation of the business has not commenced, Revenue Account and Profit & Loss Account for the period are not prepared, and
expenditure incurred during the period, as detailed under, are treated as ‘pre-operation expenses’ and carried to the Balance Sheet.

Office Maintenance Expenses

Professional Charges

Employees’ Remuneration

Travelling and Conveyance

Rent

Miscellaneous

Total

Rs.0.71 crores

Rs.0.50 crores

Rs.0.22 crores

Rs.0.08 crores

Rs.0.01 crores

Rs.0.08 crores

Rs.1.60 crores

All expenses incurred during the year are towards preparation of feasibility report, project report, writing down of business processes,
procedures, and systems for the proposed insurance business. These expenses are taken as preliminary expenditure and capitalised
pending the commencement of business.

There are no commitments made and outstanding for Loans, Investments and Fixed Assets.

The Company was incorporated on 17th August, 2000 and the accounts are therefore prepared for the period 17th August, 2000 to
31st March, 2001. This being the first financial year of the Company, no corresponding figures for the previous year are available.

132

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GROWTH IS LIFE

Notes on Accounts

6) Balance Sheet Abstract and Company’s General Business Profile:

1. Registration Details:

Registration No.

1 1

1 2 8 3

0 1

State Code

1 1

Balance Sheet Date

3 1

- 0 3 -

0 1

2. Capital raised during the year: (Amount in Rs. Thousands)

Public Issue

Rights Issue

Bonus Issue

N I

Private Placement

2 0 0

0 7

3. Position of mobilisation and deployment of funds: (Amount in Rs. Thousands)

Total Liabilities

Total Assets

Source of Funds:

Paid-up Capital

Reserves and Surplus

Secured Loans

Unsecured Loans

Application of Funds:

Net Fixed Assets

Investments

2 0 0

0 7

2 0 0

0 7

2 0 0

0 7

N I

2 4

6 4

N I

)

Net Current Assets

(

1 2 5 6

Miscellaneous
Expenditure

3 0 1

1 1

4. Performance of Company: (Amount in Rs. Thousands)

Turnover

Total Expenditure

Profit/(Loss) before Tax

Profit/(Loss) after Tax

Earnings per Share (Rs.)

Dividend Rate(%)

N I

5. Generic names of three principal products, services of the Company (As per monetary terms):

Item Code No.

Product Description

N 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

Sandeep Tandon
Director

Rajesh D Chaturvedi
Partner

Apurva R Shah
Partner

S.K. Kanwar
Director

Sandeep Junnarkar
Director

Mumbai
Dated : 26th April, 2001

00288101.p65

Reliance Life Insurance Company Limited

133

Receipts and Payments account for the period ended 31st March, 2001

GROWTH IS LIFE

Particulars

Cash flows from operating activities

Incorporation Expenses
Pre-Operative Expenses
Staff Loans and Advances given
Deposits and Advances given

Net Flow

Cash flows from investing activities

Purchase of fixed Assets

Net Flow

Cash flows from financing activities

Proceeds from issue of Share Capital

Cash and cash equivalents at the end of period

As at 31st March, 2001

(Rs. ‘000)

(1 41 10)
( 16 51)
( 14 39)
( 1 58)

(26 10)

(1 73 58)

(26 10)

2 00 07

As per our Report of even date

For and on behalf of the Board

For Chaturvedi & Shah
Chartered Accountants

For Rajendra & Co.
Chartered Accountants

Sandeep Tandon
Director

Rajesh D Chaturvedi
Partner

Mumbai
Dated : 26th April, 2001

Apurva R Shah
Partner

S.K. Kanwar
Director

Sandeep Junnarkar
Director

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Independent Auditors’ Report

To,
The Members of Reliance Technologies LLC
We have audited the accompanying balance sheet of Reliance
Technologies LLC, a Delaware Company as of March 31,2001,
and the related statements of income, members equity and cash
flows since inception through March 31,2001.These financial
statements are the responsibility of the company's management.
Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with U.S generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance about
free of material
whether
the
misstatement. An audit
test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation.

financial statements are

includes examining, on

We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
presents fairly, in all material respects, the financial position of
Reliance Technologies, LLC , since inception through March
31,2001, and the results of its operations and its cash flows
since inception through March 31,2001 in conformity with U.S.
generally accepted accounting principles.

JAMES F. SEXTON & ASSOC., LTD.
CERTIFIED PUBLIC ACCOUNTANTS

April 26, 2001

Balance Sheet as at March 31, 2001

As at March 31, 2001
(US $ )

ASSETS
CURRENT ASSETS

Cash
Capital Subscription Receivable

Total Current Assets

OTHER ASSETS

Organizational Expense
Amortization Allowance
Investment - eVision, LLC

Total Other Assets

TOTAL ASSETS

LIABILITIES AND MEMBERS' EQUITY

CURRENT LIABILITIES

Accrued Expenses

Total Current Liabilities

MEMBERS' EQUITY

Members' Contributed Capital
Current Period Loss

Total Members' Equity

TOTAL LIABILITIES AND MEMBERS' EQUITY

39,803
5,555

45,358

3,000
(550)
2,057,000

2,059,450

2,104,808

14,274

4,055,555
(1,965,021)

2,090,534

2,104,808

The accompanying notes are an integral part of the financial statements

Reliance Technologies, LLC.

135

00288111.p65 May 23, 2001 @ 10:08 am

Statement of Income and Members’ Equity Inception through March 31, 2001

GROWTH IS LIFE

Revenue

Operating Expenses

Bank Service Charges
Legal & Professional
Amortization Expense
License & Taxes

Total Operating Expenses

Operating Income (Loss)

Other Income (Expense)

Interest Income
Equity in loss of eVision, LLC

Total Other Income (Expense)

Net Income (Loss)

Members’ Initial Capital

Members’ Equity-Ending

2000-2001
(US $)

150
28,212
550
100

29,012

(29,012)

6,991
(1,943,000)

(1,936,009)

(1,965,021)

4,055,555

2,090,534

Statement of Cash Flows Inception through March 31, 2001

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss
Adjustments to reconcile net loss to net cash
provided by (used in ) operating activities:

Amortization
Equity in loss of eVision. LLC.
Increase (decrease) in capital subscription receivable
Increase (decrease) in accrued expenses

Net cash Provided By (Used in) Operating Activities

CASH FLOWS FROM INVESTING ACTIVITIES

Investment in eVision, LLC.
Organizational costs
Proceeds from members’ capital

Net Cash Provided by (Used in) Investing Activities

NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS

Cash and Cash Equivalents
Beginning of the year
End of the year

Amounts included in Operating Expenses Above

Interest Expenses
Income Taxes

2000-2001
(US $)

(1,965,021)

550
1,943,000
(5,555)
14,274

(12,752)

(4,000,000)
(3,000)
4,055,555

52,555

39,803

-
39,803

-
-

The accompanying notes are an integral part of the financial statements

136

Reliance Technologies, LLC.

00288111.p65 May 23, 2001 @ 10:08 am

GROWTH IS LIFE

Notes on Financial Statements

Note 1. Summary of Significant Accounting Policies

Nature of Business

The Company was formed in Delaware to make business investments and is not involved in any other business activity.

Cash Equivelents
Holdings in highly liquid investments with maturities of three months or less when purchased are considered to be cash equivale nts.

Investment in Affiliate
The companay’s investments in 20% to 50%-owned affiliates are accounted for using the equity method.

Amortization
Organization costs are amortized using the straight-line method over five years.

Income Tax Status
The Company is treated for federal income tax purposes as a pass-through entry. Shares of income, deduction, etc are taken into account

by the respective members for federal income tax purposes. Therefore, no provision, liability or benefit for federal income taxes has been
included in the financial statements.

Use of Estimates
The preparation of financial statements in confomity with generally accepted accounting principles requires management to make estimates

and assumptions that affect the amounts reported in the consolidated financial statements and accompaying notes. Actual results could
differ from those estimates.

Concentration of Risk
The Company, has invested in the development stage company described below. The future value of the investement is uncertain.

Note 2.

Investment in Affiliate

The Company’s investment in affiliate consists initially of approximately 34% interest in eVision LLC, a developer of visual recognition
technology designed for media creators, media users and their customers. Condensed eVision LLC, financial data for the nine months ended

March 31, 2001 is summarized below:

Current assets
Fixed assets (Net)

Other assets

Current liabilities

Members’ equity

Revenue

Operating expenses
Other income-interest
Net (loss)

(US $)
2,059,400
266,200

37,800

270.900

2,092,600

2,230,700
117,000
(2,113,700)

The Company recorded the amount of US $1,943,000 as the loss for nine months ended March 31, 2001 applicable to its interest under the
equity method of accounting for the investment.

Note 3. Membership ownership

The company ownership consists of two members, Reliance Industries Limited (90% interest) and Ram Tech Holdings, Inc. (10% interest)
whose membership contribution amounted to US $3,650,000 and US $405,555 respectively, which includes US $5,555 paid in May 2001 by
Ram Tech Holdings.

00288111.p65 May 23, 2001 @ 10:08 am

Reliance Technologies, LLC.

137

GROWTH IS LIFE

Independent Auditors’ Report

Board of Directors and Stockholder
Reliance Infocom, Inc.
New York,
We have audited the accompanying balance sheet of Reliance
Infocom, Inc. as of March 31, 2001, and the related statements
of operations and accumulated deficit and cash flows for the
period from September 21, 2000 (inception) through March 31,
2001. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards
generally accepted in the United States. Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating
financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

the overall

In our opinion, the financial statements enumerated above
present fairly, in all material respects, the financial position of
Reliance Infocom, Inc. as of March 31, 2001, and the results of
its operations and its cash flows for the period from September
21, 2000 (inception) through March 31, 2001 in conformity with
accounting principles generally accepted in the United States.

RICHARD A. EISNER & COMPANY, LLP
ACCOUNTANTS AND COUNSULTANTS

New York,
April 30, 2001

Balance Sheet as at March 31, 2001

As at March 31, 2001
(US $)

ASSETS
Current assets:
Cash
Accounts receivable from affiliate
Prepaid expenses and other current assets

Total current assets

Property and equipment, net
Security deposits

LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:

Accounts payable and accrued expenses

Commitments (Notes C and D)

Stockholder's equity:

Common stock - no par value, 1,000 shares authorised
and 100 shares issued and outstanding
Accumulated deficit

Total stockholder's equity

138

Reliance Infocom Inc.

00288081.p65 May 23, 2001 @ 10:06 am

514,951
375,000
9,260

899,211

14,540
8,699

922,450

23,724

900,000
(1,274)

898,726

922,450

GROWTH IS LIFE

Statement of Operations and Accumulated Deficit

For the Period From September 21, 2000 (Inception) Through March 31, 2001

Revenue from consulting services
Interest income

General and administrative expenses

Net loss and accumulated deficit

2000-01
(US $)

3,75,000
12,780

3,87,780

3,89,054

(1,274)

Statement of Cash Flows

For the Period From September 21, 2000 (Inception) Through March 31, 2001

Cash flows from operating activities:

Net loss
Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization
Changes in:
Accounts receivable from affiliate
Prepaid expenses and other current assets
Accounts payable and accrued expenses

Net cash used in operating activities

Cash flows from investing activities:

Purchases of property and equipment
Security deposit

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from the issuance of common stock

Net increase in cash and balance at end of period

2000-01
(US $)

(1,274)

1,601

(3,75,000)
(9,260)
23,724

(3,60,209)

(16,141)
(8,699)

(24,840)

9,00,000

5,14,951

00288081.p65 May 23, 2001 @ 10:06 am

Reliance Infocom Inc.

139

GROWTH IS LIFE

Notes on Financial Statements

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Reliance Infocom, Inc. (the "Company") is a Delaware corporation incorporated on September 21, 2000 as a wholly-owned subsidiary
of Reliance Infocom B.V. ("B.V"). On October 17, 2000, 100 shares of common stock were issued to B.V. in exchange for $900,000.
During the period ended March 31, 2001, the Company performed information technology consulting services for an affiliate. Revenue
from such services represents 100% of the consulting revenue earned.

[1] Property and equipment:

Property and equipment are carried at cost. Depreciation is provided using the straight-line method over the useful lives of the assets.

[2] Revenue recognition:

Consulting revenue is recognized as services are performed.

[3] Income taxes:

The liability method is used in accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based
on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and
laws that will be in effect when the differences are expected to reverse.

[4] Use of estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.

NOTE B - PROPERTY AND EQUIPMENT

Property and equipment are summarized as follows:

As at March 31, 2001
(US $)

Estimated Useful

Life

Equipment
Furniture and fixtures

Less: accumulated depreciation and amortization

5 years
7 years

13,639
2,502

16,141
1,601

14,540

NOTE C - LEASES

The Company is obligated under two operating leases for office space. The lease in New York began on February 1, 2001 and expires
on January 31, 2002. The monthly rent is US $3,175. The lease in Maryland is a month to month lease that began on November 1,
2000. The monthly rent is US $2,624. Rent expense under the leases amounted to US $22,100 for the period from September 21,
2000 to March 31, 2001.

NOTE D - EMPLOYMENT CONTRACTS
The Company has two employment agreements which provide for annual payments of US $432,000. Neither agreement provides for
a specific term, however, the agreements provide for termination payments aggregating US $244,000 in the event the employees are
terminated without cause.

NOTE E - PENSION PLAN
The Company has adopted a 401(k) salary deferral plan covering all eligible employees as defined in the plan. The Company has
elected not to make discretionary matching contributions.

140

Reliance Infocom Inc.

00288081.p65 May 23, 2001 @ 10:06 am

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ANNEXURE TO THE DIRECTORS’ REPORT – RELIANCE GENERAL INSURANCE COMPANY LIMITED

Statement persuant to Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 19 75, for the period ended 31st March, 2001,

forming part of the Directors’ Report.

NAME

Sr.
No

DESIGNATION

QUALIFICATION

AGE
(Years)

Date
of
Joining

GROSS REMUN-
ERATION
(Rs.)

PREVIOUS
EXPERIENCE
(Years)

PREVIOUS EMPLOYMENT-DESIGNATION

10.

11.

12.

13.

Ajay Shukla

Arvind Naaz

General Manager - Agency Development

BSc, AIII

Vice President - Operations

Gowri Swaminathan

Vice President - Operations

H N Pathak

Vice President - Operations

MSc

MSc, FIII

ME, AIII

K A Somasekharan

Vice President - Operations

BCom, LLB, AIII

K V Prasad

P K Bandal

R Kannan

S R Das

General Manager - Operations

MCom, ICWA, FIII

General Manager - Operations

BCom

Vice President - Audit & Compliance

MSc, AICWA, FIII

Vice President - Reinsurance

MSc, AIII, IIA

S Saranathan

Vice President - Finance & Accounts

ACA, ICWA(I), FIII

Surendra Kumar Gupta

Vice President - Operations

BSc, MSc, PGDPM, FIII

Tapan Kumar Bhattacharya

Vice President - Reinsurance

BCom, ACA,LFIII

Vijay Pawar

President and Principal Officer

BSc, MA, LLB, LIII

1/3/01

125179

163502

129217

157435

146916

123590

116422

134033

112751

102974

149853

112276

153311

Reliance Industries Limited -Senior Manager

Note:
1.

The Information above is for part of the year.

2. Employment is contractual and terminable by notice on either side. None of the employees mentioned above is related to any Director of the Company.

3. Remuneration includes salary, bonus, various allowances, contribution to provident fund and superannuation fund and taxable value of perquisites but excludes gratuity provision.

Information about qualification and previous employement is based on particulars furnished by the concerned employee.

Mumbai

Dated : 26th April, 2001

For and on behalf of the Board

Sandeep Tandon
Director

S.K. Kanwar
Director

Atul Dayal
Director

R
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ANNEXURE TO THE DIRECTORS’ REPORT – RELIANCE LIFE INSURANCE COMPANY LIMITED

Statement persuant to Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, for the period ended 31st March, 2001,

forming part of the Directors’ Report.

NAME

Sr.
No

DESIGNATION

QUALIFICATION

AGE
(Years)

Date
of
Joining

GROSS REMUN-
ERATION
(Rs.)

PREVIOUS
EXPERIENCE
(Years)

PREVIOUS EMPLOYMENT-DESIGNATION

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Ashok Kumar

Vice President

LLB, PGDHRD,PGDBA

Balaram Sarma

Vice President

BSc Maths

Debapriya Ray

Vice President

BSc,MA, PGDBA

E C J Augustine

Vice President

BSc, MSc

G D Bhalla

M S Sidhu

Vice President

Pawan Kumar Verma

Vice President

BA, MBA

R C Rao

Appointed Actuary

AIA, FAFI

V Anantha Krishnan

Vice President

BCom, MBA

1/3/01

167160

110855

103535

129058

123334

106946

123385

167411

106785

22 Years

21 Years

23 Years

22 Years

24 Years

23 Years

22 Years

41 Years

24 Years

Reliance Industries Limited -Senior Manager

Consultant

Reliance Industries Limited -Senior Manager

Note:

The Information above is for part of the year.

2. Employment is contractual and terminable by notice on either side. None of the employees mentioned above is related to any Director of the Company.

3. Remuneration includes salary, bonus, various allowances, contribution to provident fund and superannuation fund and taxable value of perquisites but excludes gratuity provision.

Information about qualification and previous employement is based on particulars furnished by the concerned employee.

R
O
W
T
H

I
S

F
E

Mumbai

Dated : 26th April, 2001

For and on behalf of the Board

Sandeep Tandon
Director

S.K. Kanwar
Director

Sandeep Junnarkar
Director

GROWTH IS LIFE

ATTENDANCE SLIP

Reliance Industries Limited
Registered Office: 3rd floor, Maker Chambers IV, 222, Nariman Point, Mumbai 400 021.

PLEASE FILL ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE OF THE MEETING HALL.
Joint shareholders may obtain additional Attendance Slip at the Venue of the meeting

DP. Id*

Client Id*

NAME AND ADDRESS OF THE SHAREHOLDER
No. of Share(s) held:

Master Folio No.

I hereby record my presence at the 27TH ANNUAL GENERAL MEETING of the company held on Friday, the
15th June, 2001 at 11.00 a.m. at Birla Matushri Sabhagarh, New Marine Lines, Mumbai 400 020.

Signature of the shareholder or proxy

* Applicable for investors holding shares in electronic form.

TEAR HERE

Reliance Industries Limited
Registered Office: 3rd floor, Maker Chambers IV, 222, Nariman Point, Mumbai 400 021.

DP. Id*

Client Id*

I/We

hereby appoint

PROXY FORM

Master Folio No.

being a member/members of Reliance Industries Limited

or failing him

as my/our proxy to vote for me/us and on my/our behalf at the 27th Annual General Meeting to be held on
Friday, the 15th June, 2001. at 11.00 a.m. or at any adjournment thereof.

Signed this

day of

2001.

* Applicable for investors holding shares in electronic form.

Affix a 30
paise

Revenue
Stamp

Note:

(1) The Proxy in order to be effective should be duly stamped, completed and signed and must be deposited at the Registered Office of the
Company not less than 48 hours before the time for holding the aforesaid meeting. The Proxy need not be a member of the Company.

(2) Members holding shares under more than one folio may use photocopy of this Proxy Form for other folios. The Company shall provide additional

forms on request.

Reliance Infocom Inc.

143

00288081.p65 May 23, 2001 @ 10:06 am

GROWTH IS LIFE

Book Post

To,

If undelivered please return to:

Karvy Consultants Limited
46, Avenue 4, Street No. 1
Hyderabad 500 034
India.
Tel. Nos.: 91-40-3320666/3320711/3323037
Fax No.: 91-40-3323058
E-mail: rilinvestor@karvy.com

144

Reliance Infocom Inc.

00288081.p65 May 23, 2001 @ 10:06 am