A n n u a l R e p o r t 2 0 0 2 - 2 0 0 3
Postal Stamp issued on 28th December, 2002
Commemorative First Day Cover issued by Philately Division, Department of Posts, Government of India
on 28th December, 2002, the 70th Birth Anniversary of Shri Dhirubhai H. Ambani
GROWTH IS LIFE
Reliance’s Achievements
There is truth in the idea of an eternal guiding light. There is an idea in the truth of purpose.
Dhirubhai H. Ambani embodies the first, and his vision empowers the second.
Last year we mourned the tragic and untimely passage of Reliance’s founder-chairman, and the
world mourned with us.
We at Reliance vowed to continue on the path that Dhirubhai’s unparalleled vision had charted for
us.
The path is one of self-belief and destiny. It is a path of constant challenge. It is a path where
change brings with it a thirst for knowledge, the fulfillment of achievement and a sense of history.
Many years ago, Dhirubhai had looked into the future and seen a time when natural treasures
from beneath the land and the oceans would enrich India, and give his beloved nation a greater
sense of pride and security.
He looked ahead, and he saw a time when every Indian would be adequately clothed, fed, and
learned, and communicate with the world at will, at virtually the speed of light.
He saw an Indian century.
We at Reliance had in this past year the rare honour to fulfill the wishes of our founder. As a
company, we had the great privilege of the care of our well-wishers, and success in grand
endeavours that Dhirubhai envisioned.
It was a year when Reliance redefined business.
The Year 2002-03
• The merger of Reliance Petroleum with Reliance Industries was the largest merger in India’s
corporate history.
• Reliance acquired management control of IPCL, marking India’s largest disinvestment
transaction.
• The discovery of gas by Reliance in the Krishna-Godavari basin was the world’s largest gas
find in 2002.
• Reliance Infocomm launched the largest infocomm infrastructure and services initiative by a
new entrant anywhere in the world.
• Reliance acquired management control of BSES in the largest acquisition in the Indian
power sector.
Reliance Industries Limited
3
Page
Contents
GROWTH IS LIFE
5
6
7
11
13
14
16
17
35
45
47
53
55
56
57
58
74
86
88
91
92
93
94
Highlights
Company Information
Notice
Letter to Shareholders
Financial Highlights
Reliance Brands
Product Flow Chart
Management Discussion and Analysis
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
Notes on Accounts
Statement of Interest in Subsidiaries
Cash Flow Statement
Auditors’ Report on Consolidated Financial Statements
Consolidated Balance Sheet
Consolidated Profit and Loss Account
Schedules Forming Part of Consolidated Balance Sheet and Profit & Loss Account
104
Notes on Consolidated Accounts
116
Consolidated Cash Flow Statement
118
Reconciliation of Consolidated Net Profit with US GAAP
121
Circular to Shareholders
122
Dhirubhai Ambani Scholars Scheme
125
Nomination Form
127
Attendance Slip and Proxy Form
4
Reliance Industries Limited
GROWTH IS LIFE
Highlights – 2002-2003
Gross Turnover - Rs 65,061 crore
(US $ 13,701 million)
Gross Profit - Rs 9,366 crore
(US $ 1,973 million)
Cash Profit - Rs 7,565 crore
(US $ 1,593 million)
Net Profit - Rs 4,104 crore
(US $ 864 million)
Compounded Annual Net Profit
growth over 5 years - 19%
Total Assets - Rs 63,737 crore
(US $ 13,422 million)
India’s World Class Corporation
Reliance Industries Limited
5
Board of Directors
Mukesh D. Ambani
Chairman & Managing Director
Anil D. Ambani
Vice-Chairman & Managing Director
Nikhil R. Meswani
Executive Director
Hital R. Meswani
Executive Director
H.S. Kohli
Executive Director
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
S. Venkitaramanan
Secretaries
Vinod M. Ambani
Rohit C. Shah
Surendra Pipara
Solicitors & Advocates
Kanga & Co.
Auditors
Chaturvedi & Shah
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. + 91-22-22847000
Fax: + 91-22-22042268
E-Mail: investor_relations@ril.com
Internet: http://www.ril.com
GROWTH IS LIFE
Bankers
ABN AMRO Bank
Allahabad Bank
Andhra Bank
Bank of America
Bank of Baroda
Bank of India
Canara Bank
Central Bank of India
Citibank N.A.
Corporation Bank
Deutsche Bank
Dena Bank
HDFC Bank
Hongkong Bank
ICICI Bank
IDBI Bank
Indian Bank
Indian Overseas Bank
Oriental Bank of Commerce
Punjab National Bank
State Bank of India
State Bank of Saurashtra
Standard Chartered Grindlays Bank
Syndicate Bank
Union Bank of India
Vijaya Bank
Manufacturing facilities
Hazira Complex
Village Mora, Bhatha P.O.
Surat-Hazira Road
Surat 394 510, Gujarat State, India.
Jamnagar Complex
Village Meghpar/Padana, Taluka Lalpur
Dist. Jamnagar 361 280
Gujarat State, India.
Naroda Complex
103/106, Naroda Industrial Estate
Naroda, Ahmedabad 382 320
Gujarat State, India.
Patalganga Complex
B-4, Industrial Area, Patalganga
Off Bombay-Pune Road
Near Panvel, Dist. Raigad 410 207
Maharashtra State, India.
Registrar & Transfer Agents
Karvy Consultants Limited
46, Avenue 4, Street No.1, Banjara Hills
Hyderabad - 500 034, India.
Tel. Nos. + 91-40-23320666,23320711,
23323031, 23323037
Fax No. + 91-40-23323058
E-Mail: rilinvestor@karvy.com
Internet: http://www.karvy.com
Tulsiani Chambers
10th Floor, Nariman Point
Mumbai 400 021, India.
Tel. Nos. + 91-22-22847624/22847600/22847645
Fax No. + 91-22-22847603
6
Reliance Industries Limited
GROWTH IS LIFE
Notice
Notice is hereby given that the Twenty Ninth Annual General
Meeting of the Members of RELIANCE INDUSTRIES LIMITED
will be held on Monday, the 16th day of June, 2003, 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 audited Balance Sheet as at
31st March, 2003, 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 a dividend on Equity Shares.
3. To appoint a Director in place of Shri Nikhil R. Meswani,
who retires by rotation and being eligible, offers himself for
re-appointment.
4. To appoint a Director in place of Shri H.S. Kohli, who
retires by rotation and being eligible, offers himself for re-
appointment.
5. To appoint a Director in place of Shri Y.P. Trivedi, who
retires by rotation and being eligible, offers himself for re-
appointment.
6. To appoint Messrs. Chaturvedi & Shah, Chartered
Accountants and Messrs. Rajendra & Co., Chartered
Accountants, the retiring Auditors of the Company, 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:
to
the
is hereby accorded
“RESOLVED THAT in accordance with the provisions of
Sections 198, 269 and 309 read with Schedule XIII and all
other applicable provisions of the Companies Act, 1956
(including any statutory modification(s) or re-enactment
thereof, for the time being in force), the consent of the
Company be and
re-
appointment of Shri Mukesh D. Ambani, as Chairman and
Managing Director of the Company, for a period of 5 (five)
years with effect from 19th April, 2004, on the terms and
conditions including remuneration as are set out in the
agreement to be entered into between the Company and
Shri Mukesh D. Ambani, a draft whereof is placed before
is hereby specifically
this meeting which agreement
sanctioned with
the Board of Directors
to
(hereinafter referred to as “the Board” which term shall be
deemed
the Remuneration Committee
constituted by the Board) to alter and vary the terms and
conditions of the said appointment and/or remuneration
and/or agreement, subject to the same not exceeding the
limits specified in Schedule XIII to the Companies Act,
1956, including any statutory modification or re-enactment
thereof for the time being in force or as may hereafter be
made by the Central Government in that behalf from time
to time, or any amendments thereto as may be agreed to
between the Board and Shri Mukesh D. Ambani.
include
liberty
to
to
the
is hereby accorded
“RESOLVED THAT in accordance with the provisions of
Sections 198, 269 and 309 read with Schedule XIII and all
other applicable provisions of the Companies Act, 1956
(including any statutory modification(s) or re-enactment
thereof, for the time being in force), the consent of the
Company be and
re-
appointment of Shri Anil D. Ambani, as Vice Chairman and
Managing Director of the Company, for a period of 5 (five)
years with effect from 1st May, 2004, on the terms and
conditions including remuneration as are set out in the
agreement to be entered into between the Company and
Shri Anil D. Ambani, a draft whereof is placed before this
meeting which agreement
specifically
sanctioned with
the Board of Directors
to
(hereinafter referred to as “the Board” which term shall be
deemed
the Remuneration Committee
constituted by the Board) to alter and vary the terms and
conditions of the said appointment and/or remuneration
and/or agreement, subject to the same not exceeding the
limits specified in Schedule XIII to the Companies Act,
1956, including any statutory modification or re-enactment
thereof for the time being in force or as may hereafter be
made by the Central Government in that behalf from time
to time, or any amendments thereto as may be agreed to
between the Board and Shri Anil D. Ambani.
is hereby
include
liberty
to
RESOLVED FURTHER THAT the Board be and is hereby
authorised to take all such steps as may be necessary,
proper or expedient to give effect to this resolution.”
9. To consider and if thought fit, to pass, with or without
modification(s), the following resolution as an Ordinary
Resolution:
“RESOLVED THAT in accordance with the provisions of
Sections 198, 269 and 309 read with Schedule XIII and all other
applicable provisions of the Companies Act, 1956 (including any
statutory modification(s) or re-enactment thereof, for the time
being in force), the consent of the Company be and is hereby
accorded to the re-appointment of Shri Nikhil R. Meswani, as a
Whole time Director designated as Executive Director of the
Company, for a period of 5 (five) years with effect from 1st July,
2003, on the terms and conditions including remuneration as
are set out in the agreement to be entered into between the
Company and Shri Nikhil R. Meswani, a draft whereof is placed
before this meeting which agreement is hereby specifically
sanctioned with liberty to the Board of Directors (hereinafter
referred to as “the Board” which term shall be deemed to include
the Remuneration Committee constituted by the Board) to alter
and vary the terms and conditions of the said appointment and/
or remuneration and/or agreement, subject to the same not
exceeding
the
Companies Act, 1956, including any statutory modification or
re-enactment thereof for the time being in force or as may
hereafter be made by the Central Government in that behalf
from time to time, or any amendments thereto as may be
agreed to between the Board and Shri Nikhil R. Meswani.
in Schedule XIII
limits specified
the
to
RESOLVED FURTHER THAT the Board be and is hereby
authorised to take all such steps as may be necessary,
proper or expedient to give effect to this resolution.”
RESOLVED FURTHER THAT the Board be and is hereby
authorised to take all such steps as may be necessary,
proper or expedient to give effect to this resolution.”
8. To consider and if thought fit, to pass, with or without
modification(s), the following resolution as an Ordinary
Resolution:
Place: Mumbai,
Dated: 23rd April, 2003.
By Order of the Board of Directors
Surendra Pipara
Joint Company Secretary
Reliance Industries Limited
7
GROWTH IS LIFE
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. An Explanatory Statement pursuant to Section 173(2)
of the Companies Act, 1956, relating to the Special
Business to be transacted at the meeting is annexed
hereto.
3. Shareholders are requested to bring their copy of Annual
Report to the Meeting.
4. Members/Proxies should
attending the meeting.
fill
the Attendance Slip
for
5.
In case of Joint holders attending the meeting, only such
joint holder who is higher in the order of names will be
entitled to vote.
6. Members who hold shares in dematerialised form are
requested to write their Client ID and DP ID numbers and
those who hold shares in physical form are requested to
write
for
attending the meeting.
the attendance slip
their Folio Number
in
7. All documents referred to in the accompanying Notice and
Explanatory Statement are open for inspection at the
Registered Office of the Company on all working days,
except Saturdays between 11.00 a.m. and 1.00 p.m. upto
the date of the Annual General Meeting.
8.
(a) The Company has already notified closure of Register
of Members and Transfer Books thereof from Tuesday,
the 27th May, 2003 to Saturday, the 31st May, 2003
(both days inclusive) for determining the names of
members eligible for dividend, if approved, on equity
shares. In respect of shares held in Electronic form,
the dividend will be paid on the basis of particulars of
beneficial ownership furnished by the Depositories for
this purpose.
(b) The dividend on Equity Shares, as recommended by the
Board of Directors, if declared at the Annual General
Meeting, will be paid on or after 16th June, 2003.
(c) Members may please note that the Dividend Warrants
are payable at par at the designated branches of the
Bank printed on reverse of the Dividend Warrant for an
initial period of 3 months only. Thereafter, the Dividend
Warrant on revalidation is payable only at limited
centres/branches. The members are,
therefore,
advised to encash Dividend Warrants within the initial
validity period.
9.
(a) In order
to provide protection against
fraudulent
encashment of the warrants, shareholders holding
shares in physical form are requested to intimate the
Company under the signature of the Sole/First joint
holder, the following information to be incorporated on
the Dividend Warrants:
(i) Name of the Sole/First joint holder and the Folio
Number.
(ii) Particulars of Bank Account, viz.:
(a) Name of the Bank
(b) Name of Branch
(c) Complete address of the Bank with Pin Code
Number
(d) Account type, whether Savings (SB) or Current
Account (CA)
(e) Bank Account number allotted by the Bank
that
(b) Shareholders holding shares in electronic form may
their Bank account details as
kindly note
furnished by their Depositories to the Company will
be printed on their Dividend Warrants as per the
applicable regulations of the Depositories and the
Company will not entertain any direct request from
such shareholders for deletion of/change in such
Bank details. Further, instructions, if any, already
given by them in respect of shares held in physical
form will not be automatically applicable to shares
held in the electronic mode. Shareholders who
wish to change such Bank Account details are
therefore requested to advise their Depository
Participants about such change, with complete
details of Bank Account.
10. Electronic Clearing Service (ECS) Facility
With respect to payment of dividend, the Company
provides the facility of ECS to all shareholders, holding
shares in electronic and physical forms, residing in the
following cities:
Agra, Ahmedabad, Amritsar, Bangalore, Bhopal,
Bhubaneshwar, Chandigarh, Chennai, Coimbatore,
Cochin, Delhi, Guwahati, Indore, Hyderabad, Jaipur,
Kanpur, Kolhapur, Kolkata, Lucknow, Ludhiana,
Madurai, Mangalore, Mumbai, Nagpur, Panaji, Patna,
Rajkot, Surat, Vadodara and Thiruvananthapuram.
Shareholders holding shares in the physical form who
wish to avail ECS facility, may authorise the Company
with their ECS mandate in the prescribed form, which
can be downloaded
the Company’s website
(www.ril.com under the section ‘Investor Relations’) or
can be obtained from the Registrar and Transfer Agents,
M/s. Karvy Consultants Limited. Requests for payment of
dividend through ECS for the year 2002-2003 should be
lodged with M/s. Karvy Consultants Limited on or before
5th June, 2003.
from
to
11. The Company has already transferred all unclaimed
dividends declared upto the financial year ended 31st
March, 1995 to the General Revenue Account of the
Central Government as required by the Companies
Unpaid Dividend (Transfer
the General Revenue
Account of
the Central Government) Rules, 1978.
Shareholders who have so far not claimed or collected
their dividends up to the aforesaid financial year are
requested to claim their dividend from the Registrar of
Companies, Maharashtra, CGO Complex, 2nd Floor, “A”
Wing, CBD-Belapur, Navi Mumbai - 400 614, Telephone
(091)
prescribed
6802,
form which will be furnished on receipt of request
by
the Registrar and Transfer Agents, M/s. Karvy
Consultants Limited.
(022)
2757
the
in
8
Reliance Industries Limited
GROWTH IS LIFE
12. Pursuant to the provisions of Section 205A(5) of the
Companies Act, 1956, dividend for the financial year
ended 31st March, 1996 and thereafter, which remain
unclaimed for a period of 7 years will be transferred by the
Company to the Investor Education and Protection
Fund (IEPF) established by the Central Government
pursuant to Section 205C of the Companies Act, 1956.
Information in respect of such unclaimed dividend when
due for transfer to the said Fund is given below:-
Financial year Date of
ended
declaration of
Dividend
31.03.1996
31.03.1997
31.03.1998
31.03.1999
31.03.2000
31.03.2001
31.03.2002
18.07.1996
26.06.1997
26.06.1998
24.06.1999
30.03.2000
15.06.2001
31.10.2002
Last date for
claiming
unpaid
Dividend
17.07.2003
25.06.2004
25.06.2005
23.06.2006
29.03.2007
14.06.2008
30.10.2009
Due date for
transfer to
IEP Fund
14.08.2003
23.07.2004
25.07.2005
21.07.2006
27.04.2007
14.07.2008
27.11.2009
to seek
Shareholders who have not so far encashed the dividend
warrant(s) are requested
issue of duplicate
warrant(s) by writing to the Company’s Registrar and
Transfer Agents, M/s. Karvy Consultants Limited
immediately. Shareholders are requested to note that
no claims shall lie against the Company or the said
Fund in respect of any amounts which were unclaimed
and unpaid for a period of seven years from the dates
that they first became due for payment and no payment
shall be made in respect of any such claims.
13. Non-Resident Indian Shareholders are requested to inform
M/s. Karvy Consultants Limited immediately:
a) The change in the Residential status on return to India
for permanent settlement.
b) The particulars of the Bank Account maintained in India
with complete name, branch, account type, account
number and address of the Bank, if not furnished
earlier.
14. Corporate Members intending to send their authorised
representatives are requested to send a duly certified copy
of the Board Resolution authorising their representatives to
attend and vote at the Annual General Meeting.
15. Consequent upon the introduction of Section 109A of the
Companies Act, 1956, shareholders are entitled to make
nomination in respect of shares held by them in physical
form. Shareholders desirous of making nominations are
requested to send their requests in Form 2B (which will be
made available on request) to the Registrar and Transfer
Agents, M/s. Karvy Consultants Limited. The said Form 2B
can also be down-loaded from the Company’s web site
www.ril.com.
16. Re-appointment of Directors:
At the ensuing Annual General Meeting, Shri Nikhil R.
Meswani, Shri H.S. Kohli and Shri Y.P. Trivedi, retire
by rotation and being eligible offer themselves for re-
appointment. The information or details pertaining to
these Directors to be provided in terms of Clause 49 of
the Listing Agreement with the Stock Exchanges are
furnished in the statement on Corporate Governance
published in this Annual Report.
EXPLANATORY STATEMENT UNDER SECTION 173(2)
OF THE COMPANIES ACT, 1956
The Explanatory Statement for Item Nos. 7 to 9 of the
accompanying Notice set out hereinabove is as under:
Item Nos.7, 8 and 9
The present terms of office of Shri Mukesh D. Ambani as
Chairman and Managing Director, Shri Anil D. Ambani as
Vice Chairman and Managing Director and Shri Nikhil R.
Meswani as Wholetime Director designated as Executive
Director will be expiring on 18th April, 2004, 30th April, 2004
and 30th June, 2003, respectively. Subject to shareholders’
approval, the Board of Directors, at their meeting held on
23rd April, 2003, have re-appointed the aforesaid Directors
for a further period of 5 years from the expiry date of their
respective term, on the remuneration determined by the
Remuneration Committee of the Board of Directors.
recommended
The Remuneration Committee of the Board of Directors
has
remuneration as was
previously approved by the shareholders in respect of
each of the above Directors.
the same
The broad particulars of remuneration payable to and the
terms of the respective appointments of Shri Mukesh D.
Ambani, Shri Anil D. Ambani and Shri Nikhil R. Meswani
during the tenure of their respective re-appointments are
as under:
Name and designation
Salary
Perquisites
(Rs per month) and allowances
( Rs per month)
Shri Mukesh D. Ambani
Chairman & Managing Director
Shri Anil D. Ambani
Vice Chairman & Managing Director
Shri Nikhil R. Meswani
Executive Director
5,00,000
4,00,000
5,00,000
4,00,000
1,25,000
2,00,000
The perquisites and allowances payable to the aforesaid
Directors shall
include accommodation (furnished or
otherwise) or house rent allowance in lieu thereof; house
maintenance allowance together with reimbursement of
for utilisation of gas,
expenses and/or allowances
electricity, water,
repairs; medical
furnishing and
reimbursement; leave travel concession for self and family
including dependents; club fees, medical insurance and
the
such other perquisites and/or allowances, upto
amounts specified above, subject to an overall ceiling of
remuneration stipulated in Sections 198 and 309 of the
Companies Act, 1956. The said perquisites and
allowances shall be evaluated, wherever applicable, as
per the Income Tax Act, 1961 or any rules thereunder
(including any statutory modification(s) or re-enactment
thereof, for the time being in force). However, the
Company’s
Fund,
Superannuation or Annuity Fund, to the extent these
singly or together are not taxable under the Income Tax
Act, and gratuity payable and encashment of leave at the
end of the tenure, as per the rules of the Company, shall
not be included in the computation of limits for the
remuneration which
includes salary, perquisites and
commission.
contribution
Provident
to
In addition to the salary, perquisites and allowances as
above, Shri Mukesh D. Ambani, Chairman & Managing
Reliance Industries Limited
9
GROWTH IS LIFE
to
Director, Shri Anil D. Ambani, Vice-Chairman & Managing
Director and Shri Nikhil R. Meswani, Executive Director of
the Company, shall also be entitled
receive
commission. Commission shall be payable to the two
Managing Directors (Shri Mukesh D. Ambani and Shri Anil
D. Ambani) and the two Wholetime Directors (Shri Nikhil
R. Meswani and Shri Hital R. Meswani) in proportion to
their salaries (excluding perquisites and allowances)
subject to the condition that at any time the overall yearly
remuneration payable collectively
two
Managing Directors and two Wholetime Directors shall not
exceed 0.67% of the net profits of the Company as
computed under Section 349 of the Companies Act, 1956
(including any statutory modification(s) or re-enactment
thereof for the time being in force) or any amendment
made thereto.
the said
to
in
to
The terms and conditions set out for re-appointment
and payment of remuneration herein and/or
the
respective Agreements may be altered and varied from
time to time by the Board of Directors of the Company as it
may, at its discretion deem fit. The Board is also entitled to
the salary, perquisites and allowances and
revise
commission payable
the said Managing Directors
and Wholetime Directors of the Company or any of
them at any
the overall yearly
remuneration payable to the said Managing Directors
and Wholetime Directors shall not exceed 0.67% of
the net profits of the Company as computed under
Section 349 of the Companies Act, 1956. (including
any statutory modification(s) or re-enactment
thereof
for the time being in force) or any amendment made
thereto.
time, such
that
The draft Agreements to be entered into between the
Company and each of Shri Mukesh D. Ambani, Shri Anil
D. Ambani, and Shri Nikhil R. Meswani respectively
incorporating the above particulars of remuneration, are
available for inspection at the Registered Office of the
Company on all working days excluding Saturdays, upto
the date of the ensuing Annual General Meeting between
11.00 a.m. and 1.00 p.m.
the contract/agreement between
The above may also be treated as an abstract of the
terms of
the
Company and Shri Mukesh D. Ambani, Shri Anil D.
Ambani, and Shri Nikhil R. Meswani respectively
pursuant to Section 302 of the Companies Act, 1956.
in
to
interested
Shri Mukesh D. Ambani, Shri Anil D. Ambani, and
Shri Nikhil R. Meswani are
the
their respective re-
resolutions which pertain
appointments and/or remuneration payable to each of
them. Further Shri Mukesh D. Ambani and Shri Anil
D. Ambani may also be deemed to be interested in the
resolution pertaining to the re-appointment of and/or
remuneration payable to the other, as they are related
to each other. Further, Shri Hital R. Meswani may also
resolution
be deemed
pertaining
and/or
remuneration payable to Shri Nikhil R. Meswani, as
they are related to each other. Save and except the
above, none of the other Directors of the Company is,
in any way, concerned or interested in the resolutions.
to be
the
re-appointment
interested
the
of
to
in
Your Directors commend the resolutions set out at
Item Nos.7 to 9 of the Notice for your approval.
By Order of the Board of Directors
The respective Agreements may be terminated by either
party (the Company or the concerned Managing Director
or Wholetime Director) by giving three months’ prior notice
in writing.
Place: Mumbai,
Dated: 23 rd April, 2003.
Surendra Pipara
Joint Company Secretary
10
Reliance Industries Limited
GROWTH IS LIFE
Letter to Shareholders
Dear fellow Reliance shareowners,
The year 2002-2003 was an eventful year for our company. It
was a year when the economic landscape of India and the
global language of business were emphatically redefined. It
was a year when fortitude, foresight and flexibility yet again
proved to be prime ingredients for an acceptable future. It was
a year when Reliance came to embody resilience and renewal.
Dhirubhai H. Ambani, our founder-chairman, left for his
heavenly abode on July 6, 2002. The stories of his legendary
achievements will enthrall generations after us. In one lifetime,
and without the benefits of a formal education, he started out
with nothing to his name except extraordinary vision and
determination, and within 25 years made Reliance one of the
world's 500 largest companies.
Dhirubhai may have left us. Yet, we at Reliance are committed
to the future growth of Reliance and India, in line with his
vision and inspiration - thinking big, and thinking world-class
in every respect.
We are committed to living by the principles, values and
philosophies he stood for, and taking forward his abiding
philosophy of placing trust in people and nurturing long-term
relationships.
It is an extraordinary challenge to live up to his expectations.
But it is a challenge we must accept and succeed in
- Dhirubhai would expect no less from us.
A Turbulent Environment
The world, as we knew it changed in 2001. The turmoil of
9/11 and its aftermath resonated across the world. Nations
were left searching for elusive answers and businesses for
difficult profits.
Over the past year, geopolitical tensions in the Middle East,
South Asia and East Asia continued to dampen business
sentiment. Wars within humankind and against deadly viruses
escalated without warning. Markets collided with one another,
commodity prices stayed volatile, and fundamental changes
overwhelmed corporations.
It would be all too easy to recoil from this turbulent change.
Yet, we believe all this only reflects the impact of globalisation
- and the promise of an abundant future.
power will soon be freely available with the passage of a
landmark Electricity Bill.
And as India redefined its aspirations in a difficult year, your
company redefined the landscape of the future.
Reliance enhanced its status as India's largest private sector
company. Indeed, according to latest available information,
Reliance is now likely to be ranked among the largest
175 companies in the world by net profits, and among
the largest 400 companies by sales, in the forthcoming
Fortune Global 500 listing.
In FY 2002-2003 Reliance recorded a gross turnover of Rs
65,061 crore (US$ 13.7 billion), cash profit of Rs 7,565 crore
(US$ 1.6 billion), net profit of Rs 4,104 crore (US$ 864
million), net worth of Rs 30,327 crore (US$ 6.4 billion), total
assets of Rs 63,737 crore (US$ 13.4 billion), and market
capitalisation of Rs 38,603 crore (US$ 8.1 billion).
A New Chapter of Growth
Strong financial performance in uncertain times is of course
only one part of our exciting story, a chapter of success
scripted by Dhirubhai's unwavering vision and your
unwavering support these past 25 years. Numbers do not
always fully reflect the future. That chapter of corporate
growth needs more telling.
Scant days after Dhirubhai's passing, Reliance discovered
natural gas in the very first well it drilled in the Krishna-
Godavari basin, off the coast of Andhra Pradesh. A fitting
tribute to a great entrepreneur, the strike at the block
designated KG-D6 is acknowledged as among the largest in
the world for the year ended March 2003.
Preliminary estimates of in-place reserves are placed at more
than 10 trillion cubic feet of gas - adequate to produce 40
million cubic meters of gas per day, which is over 60 per cent
of India's total production of gas at present.
With acreage in excess of 280,000 sq km still to explore in 31
more onshore and offshore, deep and shallow water blocks,
your company expects to see significant further upside, which
will soon propel us into the premier league of global integrated
energy conglomerates.
in
immense potential
We see
this churning. We see
opportunities that will elevate Reliance and India to a higher
level of performance and promise. The potential of Indian
markets and of Indian human resources no longer remain a
mystery - India has arrived on the world stage, and the
momentum is now unstoppable.
it
that
fitting
is only
took a globally
It
turbulent year
such as 2002-03 for India to record its highest foreign
exchange reserves of over US$ 75 billion. And, for domestic
interest rates to drop to historic single digit lows, never
witnessed before.
It was in this turbulent year that the process for rationalisation
of taxes was initiated in India; the Value Added Tax (VAT) is on
its way to be implemented. Telecommunications is no longer a
luxury, better roads girdle the nation, and reliable and quality
Reliance Industries Limited
11
GROWTH IS LIFE
The gas discoveries will also substantially allay India's energy
security concerns, and contribute significantly to economic
and geopolitical confidence of the nation.
Alongside, Reliance is actively pursuing its plans to establish
a countrywide retail network for marketing of transportation
fuels such as diesel and gasoline. We have received
government approvals for setting up 5,800 retail outlets.
These retail outlets will over time be seamlessly integrated
into a value chain that begins with exploration and production
of oil and gas - and then travels downstream to Reliance's
refinery in Jamnagar - the world's largest grassroots refinery
and the 5th largest refinery in the world at a single location -
and ultimately reaches the end consumer.
A parallel energy value chain is being implemented even as
you read this letter. In January 2003, Reliance acquired BSES
Ltd, India's leading private sector utility company, engaged in
the distribution of electricity in suburban Mumbai, Delhi, and
Orissa, and with generation plants
the states of
Maharashtra, Kerala and Andhra Pradesh. This was the
largest ever acquisition in the power sector in India.
in
BSES will spearhead Reliance's foray to emerge as India's
leading integrated power sector company in generation,
transmission and distribution - taking gas from the well-head,
and converting it into power at your wall-socket.
During the year, we also completed the acquisition of IPCL,
India's second largest petrochemicals company, and the
country's 19th largest company in terms of overall sales. This
acquisition, India's largest disinvestment transaction in 2002-
03, positions Reliance, together with IPCL, to compete even
more effectively in the domestic and global market from a
consolidated base that leverages in-house R&D strengths,
financial flexibility and customer orientation.
India's most
In December 2002, our group company, Reliance Infocomm
and
unveiled
communication
to offer
every Indian affordable options to stay connected in a
networked world.
technology project
that seeks
information
extensive
Reliance Infocomm has built a nationwide optic fibre network
of 60,000 km covering 90 per cent of India's population. The
broadband network is digital state-of-the-art, and in a single
move catapults India from megabit to terabit data, voice and
image communication capability.
Reliance Infocomm launched nationwide mobile services
under the brand name Reliance IndiaMobile. The service
attracted stupendous initial response, and within the first ten
weeks of the launch Reliance gathered a record subscriber
base of over a million. With the success of this commercial
launch, Reliance Infocomm will soon move into the second
stage of its three stage plan to redefine India's communications
paradigm, the largest such launch initiative in the world.
A Better Future
At every step in our journey, we are committed to build
complete value propositions for our customers, enhance
return on capital employed, and create significant value for
our shareholders. We are committed to achieve and extend
leadership in all our businesses on a global scale and through
global operations.
We will continue to impress the highest quality standards in
the world, and untiringly focus on productivity, cost reduction
and efficiencies. These will continue to be reflected in our
production
energy
conservation, human resource development, and health,
safety and environment practices.
financial management,
processes,
in empowering colleagues
through greater
We believe
knowledge, opportunity,
responsibility, accountability and
reward. This is the bedrock of all growth at Reliance, where
growth is life. It is the benchmark by which we gauge best
practices as ideal employers and enablers in India and
globally.
We are also committed to achieve all this as corporate citizens
who implicitly believe in partnership with society, respect for
the environment and harmony with the world. There must be
common cause for a better future.
In keeping with this belief system, Reliance encourages,
funds and develops numerous education, health and human
capital initiatives. While many of these initiatives are now
recognised in India and abroad as model approaches, we
derive greater inspiration for our mission of partnership with
society when graduates of Reliance-funded institutions of
higher learning in cities, children in Reliance-sponsored
schools in villages, and patients in Reliance-led hospitals
emerge to lead lives of aspiration, good health and fulfillment.
This interplay of purpose and performance - and your belief in
Reliance - leads us to remain confident in our future.
Dhirubhai's vision brought us to the threshold of the next great
phase of growth and returns. Now, our collective endeavour
will ensure it, for Reliance and for each of you, dear fellow
shareholders.
The future belongs to us all.
Mukesh D. Ambani
Chairman & Managing Director
Anil D. Ambani
Vice Chairman & Managing Director
12
Reliance Industries Limited
GROWTH IS LIFE
Financial Highlights
Consistent and robust growth
(Rs in crore)
2002-03
01-02
00-01
99-00
98-99
97-98
96-97
95-96
94-95
93-94 1985
$ Mn
Turnover & Inter Divisional
Transfers
13,701
65,061
57,120
28,008
20,301
14,553
13,404
Total Income
13,912
66,063
57,902
28,391
20,988
15,161
13,740
8,730
9,020
7,786
8,058
7,019
7,331
5,345
5,555
733
744
3,318
2,887
1,948
1,752
1,622
1,159
139
Earnings Before Depreciation,
Interest and Tax (EBDIT)
Depreciation
Profit After Tax
1,973
9,366
8,658
597
864
2,837
2,816
4,104
3,243
Taxes paid to the Government
2,782
13,210
10,470
Equity Dividend %
Dividend Payout
Equity Share Capital
Equity Share Suspense
50
147
294
–
50
698
47.5
663
1396
1,054
1,053
1,053
–
342
–
–
5,562
1,565
2,646
4,277
42.5
448
4,746
1,278
2,403
3,719
40
385
855
1,704
2,893
37.5
350
933
–
667
1,653
3,021
35
327
932
–
410
1,323
2,490
65
299
458
–
337
1,305
2,234
60
276
458
–
Reserves and Surplus
6,093
28,931
26,416
13,712
12,636
11,183
10,863
Net Worth
6,387
30,327
27,812
14,765
13,983
12,369
11,983
8,013
8,471
7,747
8,405
Gross Fixed Assets
11,066
52,547
48,261
25,868
24,662
22,088
19,918
14,665
11,374
278
1,065
2,147
55
199
456
–
6,731
7,193
8,390
6,585
255
576
37
71
1,391
373
51
138
318
–
4,011
4,335
5,132
3,600
50
25
52
–
254
311
736
607
Net Fixed Assets
Total Assets
7,178
34,086
33,184
14,027
15,448
15,396
14,973
11,173
9,233
13,422
63,737
56,485
29,875
29,369
28,156
24,388
19,536
15,038
11,529
8,121
1,046
Market Capitalisation
8,129
38,603 41,989#
41,191
33,346
12,176
16,518
14,395
9,783
12,027
10,718
906
Number of Employees
12,915
12,864
15,083
15,912
16,640
17,375
16,778
14,255
12,560
11,873
9,066
Key indicators
2002-03
01-02
00-01
99-00
98-99
97-98
96-97
95-96
94-95
93-94
1985
Earnings Per Share - Rs
Cash Earning Per Share - Rs
Gross Turnover Per Share - Rs
Book Value Per Share - Rs
$
0.6
1.1
9.8
4.6
29.3
23.4
54.0
50.8
25.1
40.0
465.9 409.1#
265.8
217.2 199.2#
140.1
22.4
34.6
192.7
129.9
18.0
27.1
155.9
129.8
17.6
24.7
143.6
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
6.9
10.6
70.5
29.5
Debt : Equity Ratio
0.60:1 0.60:1 0.64:1
0.72:1
0.82:1
0.86:1
0.68:1
0.83:1
0.49:1
0.35:1
0.58:1
1.66:1
EBDIT/ Gross Turnover %
14.4
14.4
15.2
21.6*
23.8*
Net Profit Margin %
6.3
6.3
5.7
RONW % **
14.8
14.8
16.1
10.3
20.0
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
19.0
9.7
30.5
1US$ = Rs 47.485 (Exchange rate as on 31.03.2003)
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
* Gross Turnover excludes merchant exports
** Adjusted for CWIP and revaluation
# Based on post merger 139,63,77,536 number of outstanding equity shares.
Reliance Industries Limited
13
GROWTH IS LIFE
Reliance’s Major Products and Brands
Business/
Brand
Product
Brand Logo
End Uses
Technology
Partner
Oil and Gas
Crude Oil and Natural Gas
Refining
Liquefied Petrochem Gas
(LPG)
Propylene
Naphtha
Gasoline
Jet / Aviation Turbine Fuel /
Superior Kerosene Oil
High Speed Diesel
Sulfur
Petroleum Coke
Polypropylene (PP)
Polymers
Repol
Relene
High Density
Polyethylene (HDPE)
Reclair
Linear Low density
Polyethylene (LLDPE)
Reon
Polyvinyl Chloride
(PVC)
Relpipe
Poly-Olefin
(HDPE & PP) Pipes
Chemical
Relab
Linear Alkyl
Benzene (LAB)
Refining, power, fertilisers and
petrochemicals
Domestic and industrial fuel
Feedstock for polypropylene
Feedstock for petrochemicals such
as ethylene, propylene & fertilisers
etc. and as fuel in power plants
Transport fuel
Avaition & domestic fuels
Transport fuel
Feedstock for fertilisers, pharmaceuticals
Fuel for power plants and cement plants
Woven sacks for cement, foodgrains,
sugar, fertilisers; leno bags for fruits
& vegetables; TQ & BOPP films and
containers for packaging textiles,
processed food, FMCG; office stationary;
components for automobile and consumer
durables; moulded furniture & luggage;
houseware; geotextiles; fibres for
socks, sports wear; soft luggage
Woven sacks; raschel bags for fruits &
vegetables; containers for packaging
edible oil, processed food, FMCG,
lubricants, detergents, chemicals,
pesticides; industrial crates &
containers; carrier bags; houseware;
ropes & twines; pipes for water supply,
irrigation; process industry & telecom
Films for packaging milk, edible oil, salt,
processed food; rotomoulded containers
for storage of water; chemical storage
and general purpose tanks; protective
films and pipes for agriculture; cable
sheathing; lids & caps; master batches
Dow-UCC,USA.
Novacor, Canada.
Novacor, Canada.
Pipes & fittings; door & window profiles;
insulation & sheathing for wire & cables; USA.
rigid bottles & containers for packaging
applications; footwear; flooring, partitions,
roofing; I.V. fluid & blood bags
Geon Company,
Irrigation, water supply, drainage,
industrial effluents, telecom cable
ducts, gas distribution
Detergents
UOP, USA
Acrylic
Recrylon
Recrylic
14
Wet spun acrylic fibre
Dry spun
acrylic fibre
Hosiery, dress material, blanket,
carpet & furnishing fabric
Shawl, sportswear, sock, hosiery
& upholstery
Asahi, Japan
DuPont, USA
Reliance Industries Limited
GROWTH IS LIFE
Product
Brand Logo
End Uses
Business/
Brand
Polyester
Recron
Recron
Stretch
Recron
Coutluk
Recron
Dyefast
Recron
Superblack
Recron
Superdye
Recron
Fibrefill
Texturised Yarn
Twisted/Dyed Yarn
Staple Fibre
Filament Yarn
Air Covered Yarn
Texturised Yarn
Easy Dyeable Yarn
Dope Dyed Staple
Fibre
Cationic Dyeable
Staple Fibre
Fibrefill
Recron 3S
Speciality Product
Relpet
Polyethylene
Terephthalate (PET)
Fibre
Intermediates
Paraxylene (PX)
Purified Terephthalic
Acid (PTA)
Mono Ethylene
Glycol (MEG)
Textiles
Vimal
Harmony
Suitings, Shirtings
Dress material, Sarees
Furnishing fabrics,
Day curtains,
Automotive
upholstery
RueRel
Suitings
V2
Ready-to-stitch,
Take away fabric
Reance
Readymade Garments
SlumbeRel
Fiber filled pillows &
Sleep products
Technology
Partner
E.I. DuPont,USA
Zimmer,Germany
Barmag,Germany
Toray, Japan
Murata, Japan
ICI, UK
Rieter, Switzerland
E.I. DuPont, USA
TM
TM
TM
TM
S t r e t c h
C o t l u k
D y e f a s t
TM
Superblack
TM
Superdye
TM
F i b r e f i l l
TM
3S
Apparels, home textiles,
industrial sewing threads,
automotive upholstery
Blouse material, denim, shirting,
suiting, dress material, T-shirts,
sportswear, swimwear
Dress material, shirting, suiting,
furnishing fabric, curtain, bed sheet
Ladies outerwear, feather yarn for
knitted cardigan, decorative fabric &
home furnishing
Apparel, automotive, non-woven &
interlling
Woven & knitted apparel, furnishing
& home textile
Pillow, cushion, quilt, mattress,
non-woven, furniture, toy
Construction industry (concrete/mortar),
asbestos cement (sheet & pipe), paper
industry (conventional & speciality),
battery industry
Packaging-water, soft drinks, beverages,
confectionary, pharmaceutical,
agro-chemical, food products
E.I. DuPont, USA
Sinco, Italy
UOP, USA
ICI, UK / DuPont
ABB Lummus
Crest Netherlands
(Shell process)
Raw material - PTA
Raw material - Polyester
Raw material - Polyester
Fabrics
Furnishing, home textiles
Fabrics
Fabric
Suits, shirts & trousers
Sleep products
E.I. DuPont, USA
Reliance Industries Limited
15
GROWTH IS LIFE
Product Flow Chart
16
Reliance Industries Limited
GROWTH IS LIFE
Management Discussion and Analysis
Forward-Looking Statements
'believes',
This report contains forward-looking statements, which may
be identified by their use of words like 'plans', 'expects', 'will',
'anticipates',
'estimates' or
'intends',
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.
'projects',
on
are
based
statements
Forward-looking
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,
performance 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
Landmark Events in FY 2002-03
• Reliance Petroleum Limited merges with Reliance
Industries Limited
• Reliance completes the acquisition of IPCL
• Reliance discovers natural gas in the Krishna-Godavari
basin
• Reliance Infocomm launches nation-wide mobile services
• Reliance acquires management control of BSES
During the year, the amalgamation of Reliance Petroleum
Limited (RPL) with Reliance Industries Limited (RIL) was
completed, creating the only company in the world with fully
integrated world scale operations in oil and gas exploration
& production
(R&M),
petrochemicals, power and textiles with global ranking in all its
major businesses.
refining & marketing
(E&P),
The merger has enhanced Reliance’s status as India's largest
private sector company on all financial parameters, including
sales, assets, net worth, cash profits and net profits.
The merger places Reliance in the reckoning for a place in the
Fortune Global 500 list of the world's largest corporations.
RIL is expected to rank amongst the top 175 companies in the
world in terms of net profit, among the top 275 in terms of net
worth, among the top 400 in terms of total assets, and among
the top 400 in terms of sales, in the forthcoming Fortune
Global 500 rankings.
During the year, the Company also completed the acquisition
of IPCL, India's second largest petrochemicals company, and
the country's 19th largest company in terms of overall sales.
This acquisition positions Reliance, together with IPCL, to
compete from a stronger base in the global market, where
major petrochemical companies typically follow a strategy of
market consolidation. Together with IPCL, Reliance will rank
as the 11th largest polymer producer in the world.
These mergers and acquisitions are in line with global trends
of consolidation to enhance size, scale, integration, global
competitiveness and financial flexibility, and will contribute to
the achievement of RIL's objectives of attaining peer group
leadership in terms of asset base, revenue, production
volume, market share, and shareholder returns.
improved significantly after
IPCL's performance has
the
company was acquired by Reliance. The improved results
reflect the success of the business integration process
between IPCL and Reliance, and demonstrate the inherent
potential of IPCL and its people, which Reliance will continue
to draw on to enhance overall shareholder value.
The business integration process between IPCL and Reliance
is making good progress on all fronts - feedstock integration,
production, marketing and distribution, logistics, financial
management, personnel, and
technology.
Reliance is confident that the full benefits of this exercise will
be visible in the near future, and will reflect in improved
financial performance for IPCL in the longer term.
information
Gas Discovery - One of the biggest in 2002
During the year under review, Reliance discovered natural gas
in the very first exploration well it drilled in the deep-water
exploration block KG-D6 in the Krishna-Godavari basin off
Andhra Pradesh coast. This reserve is among the largest
strikes in the world in 2002-03. Preliminary estimates of in-
place reserves are placed at approximately 10.5 trillion cubic
feet of gas. These gas finds will translate to production of over
40 million cubic meters of gas per day, which is over 60% of
India’s total gas production presently.
This significant success was the result of an aggressive
schedule. It took mere 20 months from Reliance receiving the
exploration license to the discovery of natural gas, the first
ever by an Indian private sector company. The reserves will
propel Reliance to the league of integrated global energy
conglomerates. Reliance continues to explore this, and other
blocks and expects to see further upside.
Reliance Infocomm - Successful launch of nationwide
services
Reliance's Founder-Chairman Dhirubhai Ambani had a dream
of harnessing the power of information technology and
communication to build a new India. Reliance Infocomm is a
major initiative to translate this dream into reality.
Reliance Infocomm has built a nationwide optic fibre network
of 60,000 km covering 90 per cent of India's population. The
network is 100 per cent digital state-of-the-art, capable of
carrying terabits of data per second across the country. This is
the largest private information and communications network in
the country and in one sweeping move, leapfrogs India from
megabit to terabit capacities.
Reliance Infocomm has launched nationwide mobile services
under the brand name Reliance IndiaMobile. The service
attracted stupendous initial response, and within the first ten
weeks of the launch, Reliance Infocomm has acquired a
subscriber base of over a million. Reliance Infocomm will
thereafter launch nationwide fixed line and data services
connecting millions of enterprise buildings and homes.
Reliance Industries Limited
17
GROWTH IS LIFE
Acquisition of BSES
During the year, BSES Ltd became part of the Reliance Group.
This marked the beginning of a new relationship and signalled
another step in fulfilling the vision of Reliance's founder and
visionary Chairman Dhirubhai Ambani to establish Reliance
as India's fully integrated energy company with interests in oil
and gas exploration and production, refining and marketing of
petroleum products, petrochemicals, and power generation,
transmission and distribution.
Following the second open offer to BSES shareholders made
by Reliance in a fair and transparent manner under SEBI
Takeover Regulations, the equity stake of Reliance in BSES
has increased to over 58 per cent, making it the single largest
shareholding group in the company.
Reflecting the philosophy of Dhirubhai, BSES aims at a
leadership role in creating world-class power infrastructure in
the country, in pace with regulatory changes and reforms in
the power sector. The proven management skills and
established project execution capabilities of Reliance
combined with the experience of BSES will create value for
millions of consumers by providing reliable and good quality
power at competitive prices and achieving best-practice
international standards of quality, safety and customer
service.
Continued Leadership as India's No. 1 business group
During the year, Reliance consolidated its position as the
largest business group
financial
parameters, including sales, profits, net worth and assets.
India, on all major
in
Contribution to Indian Economy
Reliance enjoys a pre-eminent position in India's economy
with group revenues of nearly 3.5 per cent of India's GDP. The
group's leadership position in India is also reflected in its all
round contribution to the national economy.
The group contributes:
•
•
5 per cent of India's total exports
10 per cent of the Government of India's indirect tax
revenues
RIL alone accounts for:
•
•
•
10 per cent of the total profits of the private sector in India
30 per cent of the profits of the entire corporate sector
in India
7 per cent of the total market capitalisation in India
• Weightage of 15 per cent in the BSE Sensex
• Weightage of 12 per cent in the Nifty Index
One out of every four investors in India is a Reliance
shareholder.
Export Performance
Reliance maintained its position as India's largest exporter.
Reliance exported products worth US$ 2,424 million
(Rs 11,510 crore) during the year, accounting for 18 per cent
of its gross turnover.
Leadership rankings in all major businesses
Reliance enjoys global leadership rankings in all its major
businesses.
• Reliance is India's largest private sector E&P player with
nearly 290,000 sq kms of awarded exploration and
production acreage, in 35 offshore and onshore, deep and
shallow water blocks, including one in Yemen
• Reliance's 27 million tonne refinery at Jamnagar, which
accounts for 24 per cent of India's refining capacity, is the
world's largest grassroots refinery and the 5th largest
refinery at any single location
Reliance is also the world's:
•
•
•
•
2nd largest producer of polyester fibre and yarn
3rd largest producer of paraxylene (PX)
5th largest producer of purified terepthalic acid (PTA), and
7th largest producer of polypropylene (PP)
In India, Reliance enjoys leading market shares for all its
major businesses. Reliance has a market share of 51 per cent
in polyester, 48 per cent in polymers and 78 per cent in fibre
intermediates.
Operating Environment and Performance
FY 2002-03 began with the global economy still reeling in the
aftermath of the 9/11 terrorist attacks. Uncertainties caused
by geo-political tensions in various regions across the world
further impacted the business environment and adversely
affected global business confidence.
The interplay of these events resulted in very high volatility in
international prices of major feedstock and commodities
throughout the year.
Reliance has maintained its strong financial performance in
these uncertain times. Reliance's world-scale operations,
market
focus on
productivity, cost reduction and efficiencies contributed to
stability in Reliance's operating margins.
leadership position, and continuing
During
the year, Reliance's major petrochemical plants
operated at 111 per cent capacity utilisation and the refinery
achieved an utilisation rate of 106 per cent.
Reliance's
total production volume of oil & gas and
petrochemicals, including toll conversion, touched 11.8 million
tonnes, an increase of 3 per cent compared to the previous year.
Reliance's refinery processed 28.56 million tonnes of crude
during the year.
Reliance produced 372,100 tonnes of oil and 716,700 MTOE
of gas.
Financial Review
Reliance's gross turnover for the year ended March 31, 2003
increased to Rs 65,061 crore (US$ 13,701 million), compared
to Rs 57,120 crore in the previous year, registering a growth of
14 per cent.
Gross turnover includes inter-divisional transfers of Rs 14,965
crore (US$ 3,152 million), compared to Rs 11,716 crore
last year.
Domestic sales accounted for 82 per cent of gross turnover.
Manufactured exports, including deemed exports, increased
to Rs 11,510 crore (US$ 2,424 million), from Rs 11,200 crore
the previous year.
18
Reliance Industries Limited
GROWTH IS LIFE
Operating profit (PBDIT) increased 8 per cent to Rs 9,366
crore (US$ 1,972 million) during the year, up from Rs 8,658
crore in the previous year.
Despite a volatile environment, the company maintained its
operating margin at 13 per cent.
The operating margin factors in gains from higher volumes,
higher degree of integration and value addition, greater focus
on speciality products, continued focus on costs, productivity
and efficiency; partially offset by higher crude prices and
rupee appreciation.
Other income for the year stood at Rs 1,001 crore (US$ 211
million), mainly representing interest and dividend income.
Interest expenditure decreased 15 per cent to Rs 1,555 crore
(US$ 328 million) caused by repayment / pre-payment /
refinancing of higher cost long term debts and ongoing
prudent financial and cash flow management.
Depreciation was at Rs 2,837 crore (US$ 597 million)
compared to Rs 2,816 crore for the corresponding period in
the previous year. The higher charge was on account of
change in the method of depreciation of certain assets from
straight-line method (SLM) to written down value (WDV)
method and adoption of guidance note issued by the Institute
of Chartered Accountants of India on Accounting for Oil and
Gas Producing Activities. The incremental depreciation on
account of the above was Rs 122 crore (US$ 26 million).
Excluding the impact of these changes, there has been a
reduction in the depreciation, primarily reflecting the impact of
depreciation being charged on Written Down Value method on
petrochemical plants.
Reliance's corporate tax liability for the year was Rs 246 crore
(US$ 52 million), which was limited to the impact of the
Minimum Alternative Tax (MAT). There was a deferred tax
liability of Rs 624 crore (US$ 131 million) for the year.
Cash profits
to Rs 7,565 crore
(US$ 1,593 million) from Rs 7,055 crore in the previous year.
increased 7 per cent
Net profit for the year recorded an increase of 45 per cent to
Rs 4,104 crore (US$ 864 million) compared to net profit
(excluding extraordinary gains) of Rs 2,831 crore for the
previous year.
The profit for the year would have been higher by Rs 122 crore
(US$ 26 million), had there been no change in the method of
providing depreciation.
Total assets increased during the year to Rs 63,737 crore
(US$ 13,422 million).
Reliance contributed a total of Rs 13,210 crore (US$ 2,782
million) to the national exchequer in the form of various taxes.
Reliance's operations have helped India save precious foreign
exchange amounting to Rs 24,392 crore (US$ 5,137 million).
Resources & Liquidity
Reliance continues to maintain its conservative financial
profile, as reflected in both, its domestic and international
ratings.
Reliance's long-term debt is rated 'AAA' from CRISIL, the
highest rating awarded by the agency. FITCH Ratings India
has also awarded 'Ind AAA' debt rating for the company,
indicating the highest credit quality.
Reliance's international debt carries ratings of BB from S&P,
and Ba2 from Moody's.
Reliance's short-term debt programme
is rated P1+ by
CRISIL, the highest credit rating that may be assigned to this
category of instruments.
Reliance's gross debt equity ratio, including long-term and
short-term debt as on March 31, 2003, is a conservative
0.6, despite the increase in total assets to Rs 63,737 crore
(US$ 13,422 million).
The company's long-term debt as on March 31, 2003 stood at
Rs 18,416 crore (US$ 3,878 million). Of this debt, 43 per cent
represented foreign currency denominated debt.
Reliance's exports and foreign exchange denominated oil and
gas revenues provide a cover of more than 25 times its annual
interest obligations on foreign currency denominated debt.
Reliance funds its long-term and project related financing
requirements from a combination of internally generated cash
flows and external sources.
Reliance had issued over US$ 1.3 billion (Rs 6,000 crore) of
debt securities in international capital markets since 1995,
with maturities ranging from 7 years to 100 years.
Reliance bought back a total of US$ 273 million (Rs 1,297
crore) of its offshore bonds during the year. These were
refinanced partly through internal accruals and partly through
syndicated term loan facilities raised in Japanese Yen and
Pound Sterling, leading to substantial savings.
The paid up equity share capital of the company increased to
Rs 1,396 crore (US$ 294 million), as a result of the merger of
RPL with RIL.
Reliance has so far bought back and cancelled US$ 723
million (Rs 3,434 crore) of its bonds, which represents about
56 per cent of the total issued.
Earnings Per Share (EPS) were Rs 29.3 (US$ 0.6) and Cash
Earnings Per Share (CEPS) were Rs 54.0 (US$ 1.1).
A dividend of 50 per cent has been proposed, subject to the
approval of shareholders. The dividend payout of Rs 788
crores (US$ 166 million) including dividend tax for the year, is
the largest payout in the Indian private sector. The company
has for the past 11 years consistently increased dividends.
Capital expenditure during the year was Rs 3,704 crores
(US$ 780 million), primarily on account of normal capital
expenditure and oil & gas activities.
The average final maturity of RIL's total long-term debt is
nearly 7 years. The average final maturity of the company's
long-term foreign exchange debt is about 10 years.
Reliance continued to demonstrate flexibility and innovation
to take advantage of declining interest rates in India. During
the year, Reliance successfully refinanced rupee loans by
issuing debt paper in the domestic market for Rs 2,690 crore
(US$ 566 million).
Reliance meets its working capital requirements through
commercial rupee credit lines provided by a consortium of
Reliance Industries Limited
19
GROWTH IS LIFE
Indian and foreign banks. The credit lines are fixed annually
and renewed on a quarterly basis. In addition, Reliance issues
short term debt in the form of fixed and floating rate bonds in
Indian Rupees.
The Panna-Mukta fields currently produce over 26,000 barrels
of crude oil and and 2.4 MMSCMD of gas. The Tapti field
produces 5.4 MMSCMD of gas, and during the year produced
around 72 billion cubic feet of gas.
During the year, Reliance borrowed foreign currency at low
cost by way of buyer's credit, export credit, and FCNR-B
loans, which substantially reduced short-term interest cost.
Reliance also undertakes liability management transactions
and enters into other structured derivatives arrangements
such as interest rate and currency swaps. This is practiced on
an ongoing basis to reduce overall cost of debt and diversify
liability mix.
RIL's current cash flow levels, for less than two years, are
adequate to extinguish its entire net debt, reflecting its
inherent financial strength and conservatism.
Business Review
Oil & Gas
India is an energy-starved country that depends on imports
for nearly 70 per cent of its annual crude oil requirement.
India's annual crude oil production is 32 million tonnes, far
short of the annual consumption of 107 million tonnes. The
remainder is imported, making crude oil India's single largest
import item.
Similarly, India currently produces just 65 million standard
cubic meter of gas per day (MMSCMD) while the demand is
151 MMSCMD, leaving a huge deficit of 86 MMSCMD. The
demand for natural gas is expected to increase further to 231
MMSCMD by 2006-07.
At present, the public sector companies dominate the oil and
gas industry in the country.
Oil and gas interests form a key operating division of RIL.
Reliance believes it is in a position to greatly contribute to
India's oil and gas needs and emerge as a leading player in
the energy sector.
Reliance is the country's largest private sector Exploration
and Production (E&P) player, with aggregate exploration and
production acreage of nearly 290,000 sq km in 32 exploration
blocks in India, and also one block in Yemen. Reliance is the
operator in 30 domestic exploration blocks spanning East and
West coasts of India.
Of these, 12 exploration blocks were awarded through a
process of competitive international bidding under the first
round of the New Exploration Licensing Policy (NELP-I), and
4 blocks were awarded in NELP-II. The Production Sharing
Contracts with the Government for all these blocks have been
signed. Reliance has recently won exploration rights for
additional 9 blocks under
third round,
designated NELP-III, the Production Sharing Contracts for
which have also been signed.
latest and
the
Two exploration blocks were awarded prior to NELP, where
Reliance partners include ONGC Ltd. and Oil India Ltd.
Reliance has also acquired operatorship in 3 exploration
blocks from Tullow of UK and is in advanced stages of
acquiring operatorship of 2 more blocks from Tullow.
Reliance also holds a 30 per cent interest in an unincorporated
joint venture with British Gas and ONGC to develop proven oil
and gas fields viz. Panna-Mukta and Tapti. British Gas has a 30
per cent share and ONGC the balance 40 per cent.
2000-01
2001-02
2002-03
(Production)
Oil (tonnes)
418,000
411,000
372,100
Gas (MTOE)
688,000
666,500
716,700
in
During the year, Reliance discovered natural gas in the very
first exploration well it drilled in the deep-water exploration
block KG-D6
the Krishna-Godavari basin off Andhra
Pradesh coast. The discovery has been named “Dhirubhai”.
This reserve is among the largest strikes in the world in 2002-
03. Preliminary estimates of in-place reserves are placed at
more than 10 trillion cubic feet of gas. Work has begun for
production of gas from this block.
This significant success was the result of an aggressive
schedule. It took mere 20 months from Reliance receiving the
exploration license to the discovery of natural gas, the first
ever by an Indian private sector company. The reserves will
escalate Reliance to the league of integrated global energy
conglomerates.
Reliance has since successfully drilled eight wells all of which
have struck gas. Development, production and marketing
plans are being aggressively chalked out. The discovery is a
major step towards reducing India's vast demand-supply gap
in energy. The discovery will enhance energy security for India
and trigger higher levels of economic growth and development.
In turn, this will lead to greater national energy security.
in
Reliance sees considerable promise
the exploration
acreage held by it and expects the share of oil and gas
revenues to consistently increase in its overall business
portfolio. To that end, Reliance is deploying state-of-the-art
technology for the project, covering activities such as seismic
studies, processing and interpretation of data, and drilling.
Reliance has also initiated new exploratory drilling on the
West Coast.
Refining & Marketing
Indian petroleum refining and marketing (R&M) industry has
been dominated by the public sector companies. India has 17
refineries, predominantly located in the west and south of the
country. The aggregate capacity of these refineries is 116 million
tonnes a year, according to the latest published industry data.
Reliance's refinery in Jamnagar is the first and the only
refinery to be set up in the private sector in India, after oil
sector reforms were initiated. The Jamnagar refinery, set up
with an annual capacity of 27 million tonnes, is the 5th largest
refinery in the world at any single location and accounts for
24 per cent of India's refining capacity.
industry. From April 1, 2002,
The FY 2002-03 represented a landmark year in the history of
the
India's petroleum
Administered Price Mechanism (APM)
for
nearly three decades was dismantled. The retail prices of
transportation fuels are now market determined. The oil pool
account has been dismantled and the deficit in the account
settled by issuing oil bonds to public sector oil marketing
that prevailed
20
Reliance Industries Limited
GROWTH IS LIFE
companies. Liquified petroleum gas (LPG) for domestic use
and Kerosene sold through the public distribution system will
continue to be subsidised. It is expected that this subsidy will
be phased out over the next 3-5 years.
utilisation, which compares
the capacity
utilisation rates for other refineries both in India and abroad-
89 per cent for North America, 86 per cent for Europe and 86
per cent for the Asia-Pacific region.
favourably with
Through a Gazette Notification, the Government of India
to
has authorised any company
invest Rs 2,000 crore (US$ 400 million) in exploration &
production,
to market
transportation fuels.
investing or proposing
refining, pipelines or
terminals,
international
industry environment continued
The
to be
characterised by extreme price volatility throughout the year.
This was precipitated by major events such as the general
strike in Venezuela leading to "Force Majeure" on crude oil
and product exports by the country's State Oil Company, the
war in Iraq and ethnic clashes in Nigeria.
Tension in the Middle East kept crude prices high throughout
the year, well above US$ 25/bbl. The Marker crude prices
fluctuated between US$ 23.3/bbl to US$ 30/bbl for Dubai, US$
24.1/bbl to US$ 30/bbl for Dated Brent and US$ 25.5/bbl to
US$ 35.7/bbl for WTI during the year.
In March 2003, tension in the Middle East was heightened
with the launch of an attack on Iraq by Coalition forces. Energy
security issues have gained prominence in the wake of these
developments. The importance of Reliance's refinery, which
accounts for 24 per cent of India's refining capacity, has once
again been highlighted in the crucial aspect of the national
energy security.
During the year, the relative strength of product prices over
crude helped in strengthening refining margins. This was
also supported by depletion of product inventories and
discretionary throughput cuts in certain regions.
The domestic demand for petroleum products during the year
ended March 2003 was provisionally placed at around 102
millon tonnes, showing a growth of about 1.4 per cent. The
two-year negative growth trend in demand for high-speed
diesel (HSD), which accounts for nearly 40 per cent of the
total consumption of petroleum products has been arrested.
During the year, HSD demand registered a marginal growth of
0.6 per cent, against a drop of 3.4 per cent in the previous
year. LPG and MS consumption increased as well, and
registered near double-digit growth rates of 11.7 per cent
and 8.6 per cent respectively during the year. Naphtha
consumption declined 9.9 per cent, while kerosene
consumption fell by 4.2 per cent.
it began commercial operations
During the year ended March 2003, Reliance's refinery
undertook its first ever planned shutdown of certain units,
in April 2000.
since
Opportunities were taken to coincide this planned shutdown
with the first phase of the Yield and Quality improvement
program, which will enable the refinery to gain further
flexibility in processing different varieties of crude, capture
international markets, and
in
product quality premiums
operate at increased capacity.
All refinery units where planned shutdown was effected are
now operating satisfactorily. Moreover, despite the shutdown,
the refinery achieved a capacity utilisation of 87 per cent in
the third quarter of FY 2002-03. Capacity utilisation increased
to 116 per cent in the fourth quarter. For the full year ended
March 2003, the refinery operated at 106 per cent capacity
Crude Processed
(million tonnes)
2000-01
2001-02
2002-03
25.7
28.96
28.56
Capacity utilisation
95%
107%
106%
Reliance exported 6.57 million tonnes of refining products
during the year under review, compared to 8.63 million tonnes
during the corresponding year-ago period.
During the year, Reliance sold 59 per cent of its refinery
production in the domestic market, of which 76 per cent was
sold to public sector oil marketing companies. Reliance's
captive consumption accounted for 17 per cent and the
remaining 24 per cent of refined products was exported
across the world.
the year, Reliance
During
finalised product off-take
three public sector oil marketing
arrangements with
companies, IOC, HPCL and BPCL for about 13 million tonnes
per year of LPG, MS, SKO and HSD for a period of two years
beginning April 1, 2002.
into
to enter
retail marketing of
Reliance proposes
transportation fuels through developing its own distribution
and marketing infrastructure and / or aquisition of marketing
and distribution assets. In May 2002, Reliance received
approvals for setting up of about 5,800 retail outlets, and work
has already begun for setting up these outlets in phased
manner.
the
As part of the ongoing process of disinvestment of Public
invited
Sector Companies,
Expressions of
through
strategic sale of its stake in HPCL, an integrated R&M
company. Reliance has submitted
the
disinvestment of 34 per cent stake in HPCL, which the
Government of India proposes to sell to a strategic investor.
Indian Government has
for disinvestment
Interest (EOI)
its EOI
for
This downstream integration combined with world-class retail
value and customer experience will enhance
long-term
shareholder value.
Petrochemicals
Polymers (PP, PE & PVC)
Polymer consumption in India remains one of the lowest in the
world at 4 kg per person/year, which
is much below
consumption levels in developed countries like USA, which has
a consumption of 115 kg per person/year. India's consumption
is only around 1/5th of China's consumption of 20 kg per
person/year. The World per capita consumption is estimated to
be 24 kg and that of Asia 13 kg per person per year.
Overall demand of resin in the downstream processing
industry decreased by 5 per cent during the year to 2.88
million tonnes, reflecting the impact of general slowdown in
the economy and price volatility witnessed by the polymer
industry during the year.
(Production in tonnes)
2000-01
2001-02
2002-03
Polymers
1,541,000
1,702,000
1,769,000
Reliance Industries Limited
21
GROWTH IS LIFE
The overall operating rate of Reliance's polymer plants was
114 per cent during the year. Significant increase was
achieved in PE, where production grew by 17 per cent during
the year. Also, during the year, additional capacity for PP was
created through debottlenecking at Jamnagar to effectively
take production capability to 1.16 million tonnes per annum.
During the year, IPCL's manufacturing and business activities
were fully integrated with Reliance. This involved seamless
integration of all functions between the two companies. The
process of integration allowed optimal use of manufacturing
the companies employing diverse
resources at both
for different products and optimisation of
technologies
marketing
locations. This enabled
infrastructures at all
substantial benefits to both Reliance and IPCL.
With the acquisition of IPCL, Reliance has been able to
substantially expand its PE product portfolio that now includes
conventional low-density polyethylene (LDPE), which has
niche application areas. The aggregate production capacity of
PE with this acquisition has increased to about 1.0 million
tonnes per annum. The full range of PE products are now
available from one source. PE is now produced employing 5
different technologies at 4 different sites in various grades
covering a wide range of end-use applications. Supplies to
customers are carried out directly from these sites, as well as
through
ready
availability even at remote locations.
the vast distribution network ensuring
To further strengthen its presence in the export market,
Reliance opened new offices in Indonesia and Turkey during
the year.
During the year, Reliance set up the Polymer Pipe Business to
take advantage of
the world-class pipe-manufacturing
infrastructure at Hazira and to develop the polyolefin pipe
market in the country. In September 2002, Reliance launched
the 'Relpipe' brand of high-density polyethylene (HDPE) pipes
and joined the select band of polymer pipe manufacturers in
the world.
Through speciality product development
the
company also introduced a multi-layer co-extruded HDPE pipe
with extra smooth inner surface, under the trademark 'Xflo',
which enables substantial energy savings in pumping water to
homes and fields.
initiatives,
'Relpipe' is well accepted by the market, and Reliance is
helping to set new standards of pipe quality and reliability. This
is in keeping with Reliance's best-practice corporate policy of
innovation,
the
consumer.
research and development
to benefit
Polyester (PFY, PSF & PET)
With the year 2005 approaching, the end of quotas for textile
products is in sight. Companies operating various elements
of the textile chain are preparing to face the challenges of a
new and more dynamic world textile industry in the quota
free regime.
Reliance, an integrated polyester manufacturer with global
economies of scale, further consolidated its position in the
global polyester industry during the year. Reliance remains the
world's second largest polyester fibre and yarn manufacturer.
India's textile industry too is preparing to face the post quota
regime in 2005. The Government of India has proposed major
fiscal changes in the latest Union Budget to boost this effort.
These are:
• Rationalisation of duty structure among various fibres
used in textiles
• Completion of the CENVAT chain in the textile industry
• Reduction of
import duty
for
important
textile
manufacturing machines
These measures will increase consumption of textile fibres
of all types and consolidate textile-manufacturing processes
in the country.
Reliance is also addressing the requirements of a quota-free
textile world. During the year, Reliance expanded its filament
yarn and staple fibre capacity, and launched many new
specialised products to cater to the needs of the textile
industry.
In India, the demand for polyester fibre yarn (PFY), polyester
staple fibre (PSF) and polyethylene terephthalate (PET)
touched nearly 1.5 million tonnes during the period under
review, reflecting a 10 per cent growth over the previous year.
Reliance continued to be the largest manufacturer of these
products and maintained its leadership position with a market
share of 51 per cent.
During the year, Reliance's total polyester production volume
increased by 5 per cent to 851,000 tonnes. New capacities of
50,000 tonnes per year of filament yarn and 40,000 tonnes per
year of staple fibre were commissioned in the last quarter of
FY 2002-03. These capacities were commissioned ahead of
schedule and within the budget. Being the first full year of
operations for these new capacities, the current year will see
substantial addition to total production volume.
Last year, Reliance had announced an expansion of PET
capacity from 80,000 tonnes a year to 300,000 tonnes a year
by building
first plant based on DuPont's
revolutionary NG-3 technology. This expansion project is
going ahead on schedule and is expected to be commissioned
in the current financial year.
the world's
The domestic market for bottle grade PET resin is growing at
more than 25 per cent a year. During the year under review,
Reliance launched speciality bottle grade resins that improve
productivity of downstream industry through reduction in
energy
product
performance.
improvement
consumption
and
in
Polyester
2000-01
725,000
2001-02
812,000
2002-03
851,000
(Production in tonnes)
The period under review was also the first full year of
operation for the Lycra® business. Reliance has made major
inroads in developing new Lycra® based products and also
introduced Lycra® to traditional textile companies. Lycra® is
the most widely used stretch fibre and is a registered
trademark of DuPont. It is mostly used in the manufacture of
comfort fabric in sports wear, innerwear and other apparels.
Some of the new products launched this year are Recron®
Cotluk (provides cotton look and feel to polyester), Recron®
Stretch (stretches according to body movement), Recron®
Dyefast (reduces dyeing cost for processors) and super
speciality products
retardant and moisture
flame
management products. These products are sold at a premium
like
22
Reliance Industries Limited
GROWTH IS LIFE
and are expected to increase the profitability of the company
in future.
Retailing being one of the thrust areas, Reliance provided
necessary support to Recron® fibrefill pillow manufacturers to
launch certified pillows with the objective of providing comfort
at an affordable cost. More customer friendly fibrefill products
developed by a new in-house R&D centre will be launched in
the near future.
Polyester Intermediates (PX, PTA & MEG)
Reliance is the world's 3rd largest producer of paraxylene
(PX), and is the largest producer of purified terepthalic acid
(PTA) in India. Reliance is the largest manufacturer of
polyester intermediates in India with overall market share of
78 per cent.
Reliance is the only producer of PX, while there are 2 PTA and
4 mono ethylene glycol (MEG) producers in the country.
the year, production of
During
the domestic polyester
intermediates industry grew by 9 per cent. Demand for fibre
intermediates grew in line with polyester demand at 10 per cent.
Reliance's production volumes for fibre intermediates (PX,
PTA and MEG) crossed the 3 million tonnes mark, registering
a growth of 7 per cent. The captive consumption of polyester
intermediates was over 50 per cent during the year.
(Production in tonnes)
2000-01
2001-02
2002-03
Polyester
Intermediates
2,833,000
2,882,000
3,075,000
Cracker Products
Reliance operates a grassroots multi-feed cracker at its
Hazira petrochemicals complex. The cracker is among the
largest in the world. During the year, Reliance's ethylene
production grew by 5 per cent and propylene production grew
by 6 per cent over the previous year.
(Production in tonnes)
2000-01
2001-02
2002-03
Ethylene and
Propylene
1,094,000
1,127,000
1,185,000
Reliance has announced plans
its cracker
capacity by 33 per cent to 1 million tonnes a year. This will be
achieved through debottlenecking.
increase
to
With the acquisition of IPCL, synergies across RIL and IPCL
in the field of intermediate streams were exploited to increase
value in both companies. Reliance's Hazira cracker provided
an abundant source of supplementary feedstock to IPCL at
Vadodara and facilitated IPCL to optimise the production of
high value products, especially in the C4 chain.
Production of Benzene, Toluene and other by-products was
consistent with feedstock characteristics. Naphtha feedstock
from Reliance's refinery at Jamnagar was optimised to
enhance overall cracker productivity.
Reliance registered a collective growth of 23 per cent in
Benzene production, mainly on account of process
improvements at
its
leadership position in the domestic market with a share of
over 50 per cent. During the year, Reliance exported nearly
Jamnagar. Reliance maintained
23 per cent of Benzene to Styrene manufacturers in South
East Asia, Europe and the US, which reflects the global
quality and acceptability of its product.
Reliance produces premium grade Toluene at Hazira, suitable
for producing toluene di-isocyanate, benzoic acid and chloro
toluenes. The acquisition of IPCL also provided an opportunity
to upgrade low value impure intermediate streams at IPCL into
saleable products. This resulted in 13 per cent growth in
Toluene production over the previous year.
LPG Business
During the year, Reliance's Hazira cracker produced 171,800
tonnes of LPG that meets Bureau of Industrial Standards
(BIS) specifications.
During the year, Reliance increased its LPG production
capacity by commissioning a LPG separation unit at its
paraxylene plant at Patalganga. This unit with an installed
capacity of 58 tonnes per day separates high value products
such as propane and butane from the fuel gas stream. This
new unit produced 15,000 tonnes of LPG during the year.
Since the launch of 'Reliance Gas' in 1998, an established
customer base of over 8.5 lakh for the packed LPG is now a
reality in the states of Maharashtra, Gujarat, Madhya Pradesh
and Rajasthan. Nearly 65 per cent of these customers are in
rural areas, which include enclaves with a population of less
than 5,000. The distribution network of 117 well-trained
distributors and 5,100 distribution outlets provides unmatched
customer support.
(Sales in tonnes)
2000-01
2001-02
2002-03
LPG
158,600
172,350
190,700
Chemicals
Reliance is the largest producer of linear alkyl benzene (LAB)
in the country. The acquisition of IPCL, which has a LAB
capacity of 43,500 tonnes during the year, strengthened the
leadership position of Reliance in India.
Reliance is the most competitive producer of LAB in the
country owing to its economies of scale, backward integration
and proximity to markets. The revival witnessed in the
domestic detergent industry during the year augurs well for
the growth prospects of LAB - the surfactant widely used in all
types of detergent formulations.
During the year, Reliance exported about 35 per cent of its
LAB production across South-East Asia, the Middle East,
Europe and Latin America.
Reliance is also the country's largest producer of Normal
Paraffin, accounting for 37 per cent of domestic production
during the year. Reliance produces three different grades of
paraffin, which are primarily used by the domestic chlorinated
paraffin wax (CPW)
industry and producers of various
industrial oils.
(Production in tonnes)
2000-01
2001-02
2002-03
LAB and
Normal Paraffin
233,000
232,500
233,200
Reliance Industries Limited
23
GROWTH IS LIFE
Textiles
Reliance's Textile Complex at Naroda, Gujarat is one of India's
largest and most modern textile complexes. Reliance textile
products are sold under the brand names of Vimal, Harmony,
Reance, RueRel, Slumberel and V2. Reliance's flagship brand
Vimal is one of India's largest selling brands of premium
textiles.
The Textile Division's R&D cell developed many new products
such as polynosic blended high value
fabrics; high
performance shrink-resist machine washable wool blended
fabrics; and light-weight, wash-fast, flame-retardant knitted
net fabrics. The R&D also developed new processes such as
optimisation of disperse dyeing cycle using rapid disperse
dyes, and substitution of transfer printing on knitted velour.
R&D efforts of the Textile Division are aimed at continually
developing cost-efficient processes and new product lines to
remain competitive.
Textile division consolidated its position further in key markets
like Europe, USA, Far East, Middle East, etc. Besides
continuing the thrust on exports, an attempt was made during
the year to sell directly to the final consumer in the form of pre-
cut, pre-packed goods. This category of goods was sub-
branded as V2. Going by the enthusiastic response, efforts
will be made to introduce more such cash & carry products.
This activity is aimed at compressing the business cycle and,
countering the longer credit regime prevalent in the textile
business.
The annual Harmony Show organised by Reliance's textile
division serves as a platform to launch young talent, and
brings to the art lover a wide representation of contemporary
Indian art. The eighth Harmony Show in April 2003 displayed
works of 125 artists selected after a now-established deluge
of nominations from across the country.
Last year's Show provided a catalytic platform to 'Aseema', a
non-governmental organisation engaged in the rehabilitation
of street children. With Harmony's active co-operation and
considerable contribution in renovating and refurbishing key
areas, the children at Aseema can today walk into a school
that is bright, cheerful and healthy. The Harmony Show
continues its support of Aseema in rehabilitation of street
children and in the mission to uphold every child's right
to education.
Opportunities
Reliance has a promising portfolio of business assets,
requisite financial strengths and project execution capabilities
to capture new growth opportunities.
the upstream
petroleum sector, the key to success will lie in the ability to
identify, access and focus on opportunities that offer material
and superior returns. Reliance is confident it has chosen the
right path and that its progress in exploration and production
underscores sound judgement.
In
The retail marketing of petroleum products will represent a
significant part of Reliance's future overall operations as the
sector is being opened up for private competition. Reliance's
strategy in this business area is to maximise the commercial
value of the company's refined petroleum products by building
markets and adding value.
Reforms in the domestic hydrocarbon sector, including the
proposed strategic sale of HPCL, present an opportunity for
Reliance to consolidate and expand its interests.
Domestic demand in most Reliance products has registered
double-digit growth levels for the past several years. This trend
of long-term demand growth is expected to continue given low
per capita consumption and economic growth that is generally
forecast to grow by 5-6 per cent a year over the next few years.
This augurs well for the existing business portfolio of Reliance
and provides impetus for value-addition.
global
demonstrated
Reliance's
and
international quality of products and its superior logistic
capabilities, provide immense opportunities in global markets.
Reliance will continue to pursue these opportunities while
maintaining its focus on domestic markets.
competitiveness
Reliance will address new opportunities by leveraging its
existing market leadership position and its demonstrated
strengths of conceptualising and implementing large, complex
projects, flexibility in financing, and a growing pool of in-house
intellectual capital resources.
In addition, Reliance is harnessing attractive opportunities for
profitable growth in new areas of interest such as power and
in BSES and Reliance
infocom,
Infocomm.
interests
through
its
Reliance's overall strategy is to enhance shareholder value by
achieving superior
from a distinctive set of
opportunities through a disciplined approach to long-term
investment growth.
Challenges
returns
In the oil & gas E&P business, Reliance faces the challenge
of undertaking a comprehensive development programme
spanning an area of nearly 290,000 sq km encompassing
onshore and offshore, shallow and deep-water blocks.
Reliance is working with leading international technology
and service providers for accomplishing its objectives in
this business. Moreover, the recent from-scratch success
achieved in a deep-water block, the first ever by an Indian
private sector company, will boost exploration efforts.
Reliance faces the challenge of normal market competition
from domestic as well as international companies in its
existing businesses of petroleum refining and manufacture of
petrochemicals. Even under volatile and difficult global
operating conditions, Reliance has consistently recorded
superior performance. It is expected that the company's sound
business strategies, strong customer franchise, high quality of
products and globally competitive cost positions will continue
to enable it to consolidate leadership in the domestic market
while strengthening its position in the global arena.
India's petroleum
the deregulation of
Following
retail
marketing business, Reliance is setting up state-of-the-art
retail outlets of its own to reach out to customers across India.
While public sector oil companies enjoy an advantage of
existing distribution infrastructures for retail marketing of
its
petroleum products, Reliance
organisational strengths to establish an appropriate retail-
marketing network. This will provide an opportunity to expand
and further integrate the energy value chain.
leverage
intends
to
To remain competitive and enhance overall shareholder
value, Reliance has consciously pursued the strategy of
moving up the value chain in all its businesses. This strategy
is expected to provide a competitive edge in the market and
enhance margins.
24
Reliance Industries Limited
GROWTH IS LIFE
Outlook
Reliance's overall operating earnings presently depend
largely on the profitability of its refining and petrochemicals
businesses, the core of its business portfolio. Both these
businesses being global in nature, the outlook for margins and
profitability depends upon overall global economic outlook,
global demand-supply scenario and trends in feedstock and
product prices.
Reliance continuously works towards honing its competitive
strengths and consolidating customer relationships so that the
company outpaces the competition and remains amongst the
most profitable companies globally.
Any upturn in the petrochemicals cycle, as and when it
occurs, can significantly enhance Reliance's profitability,
given its scale of operations and globally competitive cost
positions. However, unprecedented volatility and/or firmness
in key raw material prices, as a result of geo-political and/or
economic events, can have an adverse impact on margins and
profitability of the company.
The petrochemical business is expected to grow broadly in
line with industry trends over the medium to long term. Various
possible routes such as low gestation capacity expansion,
cost efficient debottlenecking, and/or attractive acquisitions at
to achieve higher
competitive costs, will be explored
production volumes.
During the year, the Company carried out the first phase of a
Yield and Quality improvement program at its refinery, which
will offer further flexibility in processing different varieties of
crude. This will enable Reliance to capture quality premium in
international markets and to operate at increased capacity.
into
fuels
through development of
retail marketing of
Reliance's proposed entry
its own
transportation
distribution and marketing infrastructure and acquisition of
marketing & distribution assets, if any, combined with a world-
class retail customer experience will achieve downstream
integration. This process will also add a new revenue stream
to Reliance's existing business portfolio and enhance long-
term shareholder value in the coming years.
Reliance is making significant E&P investments in a well-
balanced and promising portfolio of oil and gas properties in
India. A focused exploration effort is being carried out to
capture additional growth opportunities. The Company
anticipates an increase in oil and gas output over the coming
years from ongoing projects. The oil & gas business has the
potential to provide a higher contribution to Reliance's overall
business profile, in the medium to long term.
Reliance's interests in Reliance Infocomm, and the acquisition
of IPCL and BSES have the potential to generate significant
value for shareholders, in the medium to long term.
Risks and Concerns
Petroleum and petrochemical products are internationally
traded commodities and their prices are subjected to global
market
that
influence price volatility. With these two businesses presently
accounting for the major proportion of Reliance's revenues,
forces of demand-supply and other
factors
changes in global price levels have an impact on the
Company's performance.
resilient
However, Reliance has historically been
to
the fluctuations of economic and industry cycles/downturns.
Reliance's high levels of integration, globally competitive
operations and domestic leadership position have helped
the company in mitigating the adverse impact of generic
industry
factors. The Company's conscious efforts
on maintaining a judicious mix of markets for its sales
and
to
be effective.
thrust on speciality products have also proved
risk
The impact of import tariffs on Reliance's major products have
significantly reduced over the past decade. According to
current expectations, the impact of any further import tariff
reduction on Reliance products is unlikely to be material in the
future, as import tariffs are already at or close to target levels
announced by the Government.
liberalisation,
Since the early 1990s, successive Indian governments have
including
pursued policies of economic
significant reduction in restrictions on the private sector.
However, the role of government in the economy remains
significant. There is a risk that the pace of liberalisation
and the reforms process could change, and specific laws and
including Reliance, could
policies affecting companies,
change as well.
Foreign exchange rate volatility has an impact on the business
of the Company and on foreign currency debt held by
liability management
the Company. Reliance undertakes
transactions and other structured derivatives such as interest
rate swaps and currency swaps on an ongoing basis, to hedge
and diversify its foreign exchange liability.
Growing foreign exchange reserves over the past several
years have lent stability to India's currency, thus minimising
potential for adverse impact caused by any unfavourable
foreign exchange rate movements. The company's growing
export revenues, and foreign exchange denominated oil and
gas revenues, provide more than sufficient cover for its annual
external debt service obligations.
As part of its overall risk management strategy, Reliance
consistently insures its assets and operations against a wide
range of risks. Reliance also adopts appropriate technologies,
manufacturing practices, HRD policies, and a suitable HSE
framework to manage potential operational risks.
Adequacy of Internal Controls
An extensive system of internal controls is practiced by
Reliance to ensure that all its assets are safeguarded
and protected against
from unauthorised use or
disposition, and that transactions are authorised, recorded,
and reported correctly.
loss
The Company has an internal control system that is geared
towards achieving efficiency in operations, optimum utilisation
of resources, effective monitoring, and compliance with all
applicable laws and regulations.
internal audits, reviews by
An extensive programme of
management, and documented policies, guidelines and
Reliance Industries Limited
25
GROWTH IS LIFE
procedures, supplements the internal control systems that are
designed to ensure reliability of financial and all other records
to prepare financial statements and other data, and to
maintain accountability of assets.
internal
The effectiveness and efficiency of Reliance's
implementation
control systems have
of SAP/ R3 financial and business management systems,
which provide a high level of system-based checks and
controls.
improved with
the
Internal audit
regular basis.
financial, operating and
locations, businesses and
and services spanning all
includes
functions, on a
evaluation of all
information
technology system controls. In addition to the in-house
team,
international
professional firms are on Reliance's internal audit panel.
the
Top management and
Board review the findings and recommendations of the
internal audit panel.
the Audit Committee of
national
leading
several
and
Reliance has
systems
robust and
independent
internal audit
the entire gamut of operations
to monitor
Reliance Telecom
Reliance Telecom Limited (RTL) is promoted by the Reliance
Group.
the Ahmedabad High Court
The Company has
two divisions - Basic and Cellular
telephony services. The company has filed an application
with
its
Basic Services in Gujarat with effect from March 6, 2003.
The approval from the Court on the scheme of demerger
is awaited.
for demerger of
RTL provides cellular services, using GSM standard, in 7
telecom circles encompassing 15 states of India. RTL has met
its rollout obligation by covering 50 per cent of District
Headquarters in 5 applicable circles. The total subscriber
base was over 5,40,000 at the end of the year under review,
registering a year on year growth of 42 per cent.
financial
performance marked
significant
RTL's
improvement over the previous year, and cash generation of
over Rs 100 crore was used to meet its capital expenditure
obligations besides repayment of its existing loans.
a
During the year, the Government permitted cellular operators
to expand operations in Assam and North East circles.
RTL is planning to expand services in commercially viable
areas in this region.
RTL has commenced national roaming
domestic operators and will
international roaming facility covering all major countries.
facility with all
commencing
soon be
Reliance Infocomm
reflects
In December 2002, Reliance Infocomm ushered a digital
revolution in India. The company's catchline 'A New Way of
Life'
the dream of Reliance Founder-chairman
Dhirubhai Ambani to place the power of information and
communication
the hands of common people at an
affordable cost.
in
Infocomm has created an overarching digital
Reliance
infrastructure using state-of-the-art
the
strength of a 60,000 km terabit capacity optic fibre network
linking more than 600 cities and towns in India. The goal of
Reliance Infocomm is to progressively expand its optic fibre
network and eventually cover 116,000 km, with the ability to
seamlessly connect every individual, home, and office in all
640,000 villages and 2,500 towns and cities of India.
technology on
Reliance Infocomm will offer revolutionary data, video and
largest and most complex
value-added services
rollout
technology
and communication. The services are being launched in
three phases.
the global history of
information
the
in
in
The first phase will trigger a mobile revolution in the form of
Reliance IndiaMobile services through a nationwide wireless
network that will reach out to 90 per cent of India's population.
Eventually, the communication wave will reach every Indian.
This revolution will enable every individual to talk, shop, bank,
transact, entertain and be informed, while on the move.
The second phase will usher an enterprise netway revolution
by initially providing 100 mbps Ethernet links to every
desktop and device in half a million enterprise buildings.
This will eventually extend to 10 million buildings. This
revolution will empower every enterprise by making
transactions efficient, functions seamless and new economic
opportunities abundant.
In the third phase, Reliance Infocomm will launch a consumer
convergence revolution by providing high speed Ethernet
links to 80 million homes initially and eventually to every
home. This revolution will provide every home with a range of
television
audio
conferencing, video conferencing and video on demand.
high-speed
telephony,
channels,
26
Reliance Industries Limited
GROWTH IS LIFE
in
Indian
languages, email access,
The Reliance IndiaMobile service is revolutionalising the
mobile experience of Indian consumers by offering a host of
the mobile phone such as enhanced
applications on
messaging
Internet
surfing, access to real time political, financial and sports
news, games and video streaming. The service enables
users to send text messages in Indian languages, access
their email and other Internet accounts, surf the net at speeds
of up to 144 kbps, be the first to get breaking news, view clips
from the latest movies and experience many other exciting
applications.
The Reliance IndiaMobile service is available only on CDMA
2000 1X handsets especially imported by Reliance. These are
light, sleek, Java enabled, multi-media ready phones with
polyphonic sound, and with features like 3-way conferencing,
call forwarding, in-built phonebook memory, special lifestyle
features such as organizers, calendars, world clock and
lithium ion battery for long talk time.
The Reliance
IndiaMobile service has created a new
benchmark in customer acquisition in the communications
industry by signing up over one million subscribers in just ten
weeks of opening its offer only from 111 cities.
Further, Reliance IndiaMobile has captured nearly 60 per cent
of the incremental post-paid market or 25 per cent of the total
postpaid segment, all in a matter of just ten weeks.
Reliance Industries is the lead investor in Reliance Infocomm.
The overall capex for Reliance Infocomm has been estimated
at Rs 18,000 crore (US$ 3.5 billion) compared to the initially
announced Rs 25,000 crore (US$ 5 billion). The revision is
attributed mainly to the sharp fall in telecom equipment costs
globally. Despite downward revision in capex estimates, the
overall scope of the infocom project has increased.
Power Initiatives - BSES
During the year, BSES Ltd became part of the Reliance
Group. This marked the beginning of a new relationship and
signalled another step in fulfilling the vision of Reliance's
to
founder and visionary Chairman Dhirubhai Ambani
establish Reliance as India's fully integrated energy company
with interests in oil and gas exploration and production,
refining and marketing of petroleum products, petrochemicals
and power generation, transmission and distribution.
Following the second open offer to BSES shareholders made
by Reliance in a fair and transparent manner under SEBI
Takeover Regulations, the equity stake of Reliance in BSES
has increased to over 58 per cent, making it the single largest
shareholding group in the company.
Reflecting the philosophy of Dhirubhai, BSES aims at a
leadership role in creating world-class power infrastructure in
the country in pace with regulatory changes and reforms in
the power sector. The proven management skills and
established project execution capabilities of Reliance
combined with the experience of BSES will create value for
millions of consumers by providing reliable and good quality
power at competitive prices and achieving best-practice
international standards of service, quality, safety and
customer service.
BSES, with its corporate lineage going back to 1929 is a utility
engaged in the generation, transmission and distribution of
power in suburban Mumbai, major part of Orissa and Delhi.
BSES presently supplies over 15 billion units of power to over
5 millions customers, and is ranked among India’s top 25
listed private sector companies on all major
financial
parameters.
BSES generating plants
include a 500 MW coal-fired
power station at Dahanu near Mumbai, a 220 MW gas-fired
power station at Samalkot near Visakhapatnam and a
165 MW naphtha-fired power station at Kochi. While
the power from Dahanu is entirely consumed in BSES'
distribution grid in Mumbai, Samalkot and Kochi plants
supply power to State Electricity Boards in Andhra Pradesh
and Kerala.
India is a power deficient country with an average energy
shortage of about 7 per cent of total energy requirement
and peak shortage of 12 per cent of peak capacity
requirement. The power sector capacity in the country is
dominated by State (60 per cent) and Central utilities (30 per
cent) with private sector contribution being very small (10 per
cent). The installed generation capacity in the country at
present is about 105,000 MW with an adverse thermal:
hydel mix.
Apart from capacity shortage, the power sector in the country
is plagued by high transmission and distribution losses, lack
of grid discipline, excessive workforce, ageing transmission &
distribution systems, and lack of commercial orientation. This
resulted in aggregate losses of State Electricity Boards in the
year 2001-02 touching a worryingly high Rs 24,000 crore.
However, the situation is beginning to change with reforms at
all levels introduced by State governments and the Central
government.
legislations
in Parliament, which seeks
in
The Central Government has introduced a New Electricity
to consolidate various
Bill
central and state
the electricity sector,
free the sector from controls, and introduce competition
tranmission and distribution of power
in generation,
the
for
the
Bill will catalyse
emergence of a strong and vibrant power sector
in
the country.
the benefit of consumers. The enactment of
facilitate
the reform process and
Reliance Industries Limited
27
GROWTH IS LIFE
Energy Conservation
Reliance has a comprehensive policy on energy conservation.
During the year under review, innovative energy conservation
was practiced at all manufacturing locations. Better operating
practices, improved operating efficiencies, optimum utilisation
of resources, increased automation, introduction of advanced
controls, new techniques, and higher capacity utilisation,
among other methods brought about significant reduction in
consumption of primary fuels.
The Hazira complex has shown a consistent reduction in
energy consumption per ton of product. This is detailed below:
2000-01
2001-02
2002-03
Fuel MMkcal / MT
2.20
2.19
2.12
Fuel consumption and
loss as a percentage of crude
processed is a parameter of specific energy consumption in
refinery operations. Jamnagar has shown a marginal increase
in percentage fuel and loss on crude processed for the current
year due to the turnaround in Dec 2002.
2000-01
2001-02
2002-03
Fuel Loss on
crude processed
10.66 %
9.99 %
10.07 %
In the area of renewable energy, a digester unit based on
technology supplied by the Sardar Patel Renewable Energy
Research Institute was set up in ETP for producing biogas
from canteen waste. The biogas is utilised as fuel in the DTA
vaporizer of the polyester complex.
During the year, Jamnagar refinery participated in many
benchmarking studies to redefine its objectives for energy
conservation. Solomon Associates carried out benchmarking
study for the Jamnagar refinery in 2002 and the energy
intensity index improved from 69.5 per cent to 66.1 per cent.
The refinery also participated in the benchmarking study of
Shell in 2002 and its energy and loss index improved further
from 94.3 per cent to 88.7 per cent.
Reliance's energy conservation efforts yielded many awards
to its manufacturing sites during the year:
•
"National Energy Conservation" award from the Ministry of
Power, Government of India for the year 2001- 02 to both
Patalganga and Hazira complexes
• Confederation of Indian Industries (CII) "Energy Efficient
Unit" award for the year 2001-02 to Patalganga complex
•
•
Petroleum Conservation Research Association Award
(PCRA) to Hazira complex for its "exemplary work in
energy conservation" for the third consecutive year in
2001-02
Third consecutive CII award for "Excellence in Energy
Conservation" to Hazira complex in 2001-2002
Research and Development
Research and Development (R&D) activities are an integral
part of Reliance's overall operations and are directed towards
the corporate objective of growth and excellence.
FY 2002-03 saw a surge in Reliance's R&D efforts across
various manufacturing sites and research centres.
The R & D centre at Hazira achieved major breakthroughs
in polymers. These
five
international patents, which are in the process of being filed.
initiatives have culminated
in
• Catalysts processes and performance
improvements
for PP
•
Process development of inorganic support for polyolefin
catalysts
• Development of bifunctional aliphatic donors
for
polyolefins catalysts
•
Low cost antipolymerant for naphtha cracking
Reliance continues to pursue various programmes at National
the Research
Chemical Laboratory (NCL), Pune under
Alliance Agreement (RAA); one of the programmes designed
to develop nucleating agents for polypropylene from bio-
diversified resources in India has resulted in 3 joint (RIL-NCL/
CSIR) patents.
Research (CSIR) for developing breakthrough technology in
key areas from laboratory to commercial scale. Reliance will
be offered
for commercial
to
the
development. The key areas are:
right
IPR
first
the
•
•
Functionalisation of alkanes involving acetic acid and
ethylene
from
ethane, detergent alcohol from C11-13 alkanes
from ethane, vinyl chloride monomer
Lactic acid and lactic acid-based polymers to make value
added polymeric materials from renewable resources
Indian
Reliance continues to sponsor and participate in various
R&D efforts at premier institutes in India and abroad including
the
Institute of Technology, Mumbai; Jawaharlal
Nehru Centre for Advanced Scientific Research, Bangalore;
MBT, Pune; National Chemical Laboratories; University of
Massachusetts, USA; and Polymer Institute Brno, Czech
Republic.
For the first time in India, outsourced programme at MBT Pune
has resulted in coveted international publication elucidating
combinatorial chemistry application in Catalysis.
At
the Reliance Technology Centre (RTC) pilot plants
are being set up to develop differentiated polyester products.
These plants would have
study batch
polycondensation, continuous polycondensation and spinning.
facilities
to
Reliance has recently entered into an agreement under the
New Millennium
Initiative
(NMITLI) alongwith the Council of Scientific & Industrial
Indian Technology Leadership
At the Patalganga complex, innovative ideas in process
development resulted in major achievements. The highlights
include:
28
Reliance Industries Limited
GROWTH IS LIFE
•
In-house development and
recovery scheme from off-gases in the paraxylene plant
implementation of LPG
• Development and implementation of energy optimization
scheme in the Tatoray section of the paraxylene plant
using PINCH technology
•
Process development for water and catalyst recovery
from mother liquor in the PTA plant, in collaboration with
UICT, Mumbai
• Development of a model
for oxidation reactor and
purification crystallisers based on computational fluid
dynamics (CFD), in collaboration with UICT, Mumbai
• Development of a mathematical model for paraffin to
olefin conversion in the LAB plant in consultation with
NCL, Pune
The Jamnagar complex saw development and implementation
of many novel schemes. A few of these were:
• Conversion of diesel hydrotreater
to heavy naphtha
hydrotreater
•
In-house design and development activities to enable
successful capacity enhancement of the SHP / TAME
plant by 125 per cent
• Decoking of the coker plant furnace using 'Pigging'
technique resulted in lower downtime and higher capacity
utilisation
•
In-house development of process
debottlenecking of
the gas processing
know-how
facility
for
in
the aromatics complex. This scheme leads to higher
hydrogen export and LPG recovery. The scheme is under
execution
•
Advanced
implemented in many plants
Process Control
(APC),
successfully
Major R & D activities at Hazira petrochemical complex
included:
• Optimisation of oxidation reactor process conditions
in
reduce specific consumption of acetic acid
to
PTA plant
•
Process development for treating catalyst plant to produce
TiO2 by-product in FCP plant
• Organic stripping column modification for burning volatile
in
from esterification process
organic components
dowtherm vaporisers in POY plant
•
•
Installation and commissioning of Gel permeation
chromatography
for study of polymer
products
techniques
State-of-the-art Polypropylene Pilot Plant commissioned
at Hazira for enhancing technology envelop. The pilot plant
runs have already yielded two new/improved grades of PP
for demanding market/customer needs
In addition, as a part of ongoing exercises several
development activities were carried out to reduce costs,
improve safety, cut energy consumption and optimise
processes.
Quality
Reliance is committed to continuous improvement in quality
for the entire range of its products. Reliance has full-fledged
laboratory services at all its complexes employing around 800
international analytical methods and nearly 1,600 instruments
in 25 analytical facilities.
Each analytical laboratory engages and adopts the most
modern trends in the analytical field and provides reliable
service to meet customer satisfaction. A centralised Quality
division facilitates the interaction between various sites and
groups,
to share and
communicate knowledge.
including various units of
IPCL,
During the year under review, the focus was particularly on
activities with specific importance to management systems
and process support studies. Six new facilities were created at
Hazira to evaluate the quality of PE pipe, PET, and furniture
grade PP. Several studies were also conducted to rectify
process problems and improve the quality and yield of the
final product.
Along with manufacturing facilities, the respective laboratories
were also credited with ISO 9000 and 14000 certification. The
Polyester testing laboratory at Coimbatore achieved the
distinction of NABL certification as an independent testing
laboratory. The
laboratory at Jamnagar has
successfully implemented the ISO 17025 system with final
certification audit due in May 2003.
refinery
Reliance's efforts in quality received many accolades during
the year, which included:
• Golden Certificate from Shell Main Products Correlation
Scheme
to
Jamnagar refinery laboratory from among more than 100
laboratories in the world
for best analytical
laboratory
(SMPCS)
•
•
TQM Merit award
Trainer award
for polymer
laboratories and Top
IMC Ramakrishna Bajaj National Quality Award - 2002 for
the Hazira Complex
Health
is
to
provide
committed
Reliance
and
modern occupational health and medical services
to
its employees. Well-equipped occupational health
all
centers have been established at Patalganga, Hazira,
Jamnagar and Naroda
to preventive and
curative health.
for catering
adequate
The occupational health services, manned by qualified
doctors and
in
trained paramedical staff are
continuously improving the health standards by providing
state-of-the-art preventive and curative services. They are
also involved in various health promotion activities as well as
continuous improvement in workplace environment.
involved
Reliance Industries Limited
29
GROWTH IS LIFE
The occupational health activities of these centers include
pre-employment medical examinations, periodic medical
check-ups of employees, school health check-ups, preventive
immunisations, health audits, biological monitoring and
comparative studies of interdepartmental health. Periodic
health risk assessment studies for exposure to various
chemicals are also carried out in the plants.
Health education and awareness are accorded high priority.
Reliance has evolved an effective multi-disciplinary approach
for creating health awareness programmes to address issues
lifestyle
like hypertension, diabetes, heart disease, and
management.
The medical centers also participate in various medical
camps organised for the benefit of local communities, and are
integral part of on-site and off-site disaster
also an
management teams.
Safety
to safety
is of paramount
importance at
Commitment
Reliance. During the year, the Health, Safety and Environment
(HSE) policy was revised
to reflect company's position
on HSE issues and to strive to be a leader in management
of HSE.
New work permit procedures, developed last year, have now
been fully implemented in Patalganga and Hazira complexes.
The Jamnagar complex is in the process of switching over to
the new procedures. The new procedures provide for more
checks and responsibility according to the hazard potential of
each activity. All sites now carry out Risk Assessment / Job
Safety Analysis for all major maintenance and first-time
activities.
There has been an increased emphasis on safety of contract
workers by way of increased training. Training man-hours for
contractors showed a quantum jump during the year.
(Safety training man-hours for contractors)
Site
Patalganga
Hazira
Jamnagar
2001-02
2002-03
2,483
15,565
24,066
6,188
31,585
57,278
During the planned shutdown in Jamnagar, more than 11,000
additional contract workers were
requisitioned, and all
these workers underwent fire and safety training before taking
up work.
The British Safety Council conducted a Safety and Health
Management audit at Hazira and Patalganga in December
2002 and at Jamnagar in April 2003, and awarded the highest
Five Star rating to all the complexes.
Environment
At Reliance, clean environment for sustainable development
is of prime concern, and is an important business objective,
achieved by every employee's contribution and responsibility
towards environmental performance.
A layered system of environmental monitoring and audit is
followed in compliance with all environmental protection laws
of the land through all project stages - from planning to
commissioning and production.
The HSE group at each manufacturing complex regularly
monitors and audits specific maintenance systems to ensure
regulatory compliance.
The Jamnagar refinery complex is currently in the process
of
the Environment Management System
conforming to ISO 14000.
implementing
The refinery complex operates without any burden on local
water resources of the region and the integrated desalination
plant of the refinery produces desalinated water for use in
process and domestic applications. Reliance supplied 3,500
lakh litres of potable drinking water from the desalination plant
to Jamnagar city during the summer of 2002. The refinery
complex has been getting a rebate from the State Pollution
Control Board in the Water Cess consecutively for the past
two years.
Reliance places great emphasis in developing greenery and
landscaping as an in-built environmental protection measure.
Treated effluents are used for enhancing greenery. In addition,
various biological sludges and organic solid waste are
composted and processed biologically to generate natural
fertilizer. A combination of these efforts and recycling of paper
have resulted in halving solid waste.
To conserve water and land resources, hay filters have been
installed to filter out dust particles and trees have been
planted in windward directions to arrest the flow of dust.
The Hazira complex is the first integrated petrochemicals
for
complex
ISO 14000 certification
its
the Environmental Management
System (EMS).
implementation of
India with
in
The complex has adopted 'waste to resource' methods for
continual improvement in environmental sustainability. As part
of this effort, canteen waste is being treated in a digester unit
to produce biogas, which
the
petrochemical complex.
is utilised as
fuel
in
Several measures have been adapted to conserve precious
water resources, including the recycling of treated effluent to
the maximum possible extent, and adoption of a drip irrigation
and sprinkler system for greenbelt development.
30
Reliance Industries Limited
GROWTH IS LIFE
A vermiculture plant set up to convert in-house garden waste
into organic fertiliser has operated at full capacity during the
year and about 40 MT of vermicast (vermiculture based
fertiliser) was produced and utilised within the complex as
partial substitute for other fertilisers.
For the second consecutive year, the Hazira complex was
awarded
Environment
Excellence Award (instituted by Greentech Foundation) in the
petrochemical category.
Indo-German Greentech
the
The Patalganga
complex has also developed and
implemented a number of sustainable environmental
schemes, and continued improvement resulted in ISO 14000
certification of the Patalganga complex in May 2002.
In addition, Patalganga clocked a
The continual
improvement at Patalganga has steadily
reduced water consumption levels. Recycling and reuse
of treated wastewater reduces the requirement of fresh
water.
in
in solid wastes and recycling
air emissions, reduction
through vermi-composting, among
of biological waste
initiatives
other measures. During
installation of Low-NOx burners
were
levels; energy
in process heaters
to
integration
fuels
in boilers and gas
recovery of metals
from solid waste.
in plants; use of clean
the year various
taken such as
turbines; and
reduce NOx
improvement
reduction
Human Resource Development
A five-point scalable approach sums up HR practices at
Reliance. The company believes in empowering colleagues
through greater knowledge, opportunity,
responsibility,
accountability and reward. This is the bedrock of all growth at
Reliance, where growth is life. It is the benchmark by which it
gauges best practices as ideal employers and enablers in
India and globally.
takes
immense pride
Reliance
in providing an equal
opportunity work environment, and places great emphasis on
identifying, nurturing and freeing up talent. This involves a
practice of encouraging youth, urging experienced colleagues
to mentor people and processes, and inculcating a can-do
culture that moulds itself to evolving personal aspirations and
corporate goals throughout the career of an individual.
RIL is a young company with an average age of 38 years for its
12,915 employees, as on March 31, 2003.
Break-up of professional workforce
Ph.D.
MBAs
Engineers
CA/ ICWAs
Age Profile
Upto 25 years
26 - 35 years
36 - 45 years
46 - 55 years
56 + years
2%
12%
80%
6%
4%
42%
35%
17%
2%
With steady organic growth and consolidation of businesses in
its chosen areas, Reliance offers a wide spectrum of
cross-company, cross-discipline and cross-country career
opportunities for employees. With increasing globalisation of
its businesses, this also extends to international opportunities
across major markets and areas of business.
Learning and relevance are key principles at Reliance. And in
order to ensure it, the company offers comprehensive world-
class training and development resources. Employees are
supported by an excellent system of assessment, career
mapping, aptitude tests and other training needs. During the
year, over 1,636 training programs covered 7,422 employees.
In association with the Indian Institute of Management,
Bangalore (IIM-B), Reliance has created a customised
management course for its engineers. The eighth and ninth
batch comprising 80 engineers have gone to IIM-B. Graduates
of previous courses, prepared for accelerated careers in the
Company
important sectoral
responsibilities. Typically, they are 27-30 years old when they
assume major responsibilities. To ensure skill sets are
constantly upgraded, Reliance has from this year begun
advanced courses
that
in management
graduated from the IIM-B program five years ago.
today occupy positions of
the class
for
Reliance has moved
to a Key Result Area oriented
performance appraisal system and a performance linked
incentive scheme. International consultants have designed a
scheme for Reliance that matches or betters systems in
similar synergistic operations anywhere in the world. Reliance
has already
in manufacturing
operations and will expand it to other businesses.
the scheme
implemented
The Company in the past year launched SAP-HR to provide an
effective interface between HR and employees across India
and the world.
Reliance encourages individuals to go beyond the scope of
their work, undertake voluntary projects that enable them to
learn and contribute innovative ideas in meetings goals of the
company.
Reliance Industries Limited
31
GROWTH IS LIFE
Social Responsibility and Community Development
that corporate
implicitly believes
Reliance
responsibility
extends beyond the ambit of a company's facilities and offices.
And that true corporate citizenship must include common
this belief system,
In keeping with
cause with society.
Reliance encourages,
funds and develops numerous
education, health and human capital initiatives. While many of
these initiatives are now recognised in India and abroad as
model approaches, we derive greater inspiration for our
mission of partnership with society when graduates of
Reliance-funded
in cities,
children
in villages, and
patients in Reliance-led hospitals emerge to lead lives of
aspiration, good health and fulfillment.
in Reliance-sponsored schools
institutions of higher
learning
Educational Initiatives
Dhirubhai Ambani
Information
Communication Technology (DA-IICT), Gandhinagar
Institute
of
and
DA-IICT, an initiative of Reliance Group and the Dhirubhai
Ambani Foundation (DAF), was established in 2001 to impart
state-of-the-art education in information and communication
technology and provide an interface with other disciplines.
The Government of Gujarat, through a special enactment in
March 2003, has accorded University status to DA-IICT.
offers
various
educational
DA-IICT
at
undergraduate, postgraduate and doctoral levels in the area
of information and communication technology, information
technology
in agriculture, and digital media. Student
enrolment at DA-IICT for the 2003-2004 academic year is
about 950.
programs
teaching and research assistants. DA-IICT
DA-IICT plans to grow to a 1,300-student campus by 2004-05,
with 70 full-time faculty, a sizeable number of visiting faculty,
is also
and
preparing to offer a wide range of training and research
programs, and to focus on continuing education programs for
working executives and practicing professionals.
Dhirubhai Ambani University of Science and Technology,
Jamnagar
DAF with the support of Reliance Group has plans to establish
a university at Jamnagar. To be named the Dhirubhai Ambani
University of Science and Technology (DAUST), it will offer
world-class education in emerging areas of science and
technology. DAUST will focus on educational and research
programs in areas like bio-science and engineering, computer
science and engineering, energy engineering, food science
and engineering,
infrastructure engineering, materials
science and engineering, and ocean engineering.
Dhirubhai Ambani International School, Mumbai
Situated in the Bandra-Kurla Complex, Mumbai, the Dhirubhai
Ambani International School is funded by the J.H.Ambani
International School was
Foundation. Dhirubhai Ambani
established with the principal objective to provide the highest
quality of education to about 1,000 students.
The school, under one roof, caters to the education needs of
children aged 4 to 17, and provides education compatible with
leading schools
India and abroad. Fully equipped
laboratories and a learning centre complete with internet
capability provide every facility needed for modern, enriching
education.
in
In their early years, students follow a pre-primary, primary and
middle school curriculum devised by the school. A choice
between ICSE and the University of Cambridge's International
is
General Certificate of Secondary Education (IGCSE)
available to standards 8, 9 and 10. For standards 11 and 12,
the school, now an accredited International Baccalaureate
World School, offers the exciting and challenging Diploma
Programme.
Scholarships
trust with
its shareholders'
During the year, Reliance marked 25 momentous years of
relationship and
that
numbers in excess of 3 million. To commemorate this special
'Dhirubhai Ambani
instituted
relationship, Reliance
the
Scholars Scheme'
scheme, 1,000 scholarships ranging
to
Rs. 15,000 will be awarded to meritorious children of the
shareholders of Reliance Group companies.
the
for undergraduate study. Under
from Rs. 7,000
family
The Dhirubhai Ambani Foundation has for the past seven
years presented merit awards and scholarships to district
level meritorious students for SSC and HSC examinations.
During the year under review, 558 meritorious students - 63 of
them physically challenged - from a total of 62 districts of
Maharashtra, Guajrat, Goa and the Union Territories of
Daman, Diu, and Dadra Nagar Haveli were presented with
scholarships.
Under the 'Reliance Kargil Scholarship Scheme', education
the Kargil war as well
of 111 children of martyrs of
as disabled soldiers were supported
the second
consecutive year.
for
Healthcare Initiatives
Sir Hurkisondas Nurrotumdas Hospital and Research
Centre (HNHRC), Mumbai
joined
DAF has
the management of Sir Hurkisondas
Nurrotumdas Hospital and Research Centre
(HNHRC),
in 1925, and Sir Hurkisondas Nurrotumdas
established
Medical Research Society (HNMRS) a 29-year-old institution
involved in clinical research with a social bearing.
At present HNHRC offers tertiary level healthcare facilities
including cardiology, cardio-thoracic surgery, neurology
and neuro-surgery, oncology, urology, nephrology, and
gastroenterology, with over 150 consultants in various areas
of specialisation and super-specialisation. The staff of about
1,000, including paramedical and other support staff at
HNHRC also provides free and subsidised out-patient and
in-patient treatment for the poor.
HNHRC offers postgraduate diplomas in various specialties
awarded by the College of Physicians and Surgeons (CPS)
and Diplomate of National Board (DNB). HNHRC also
offers M.Sc. and Ph.D programs. In addition, HNHRC runs a
Nursing School.
HNHRC has been instrumental in executing many community-
oriented programs. These include free camps such as Senior
Citizens Screening Camp, Vascular Surgery Camp, Cancer
Awareness & Detection Camp, Diabetic & Hypertensive
Retinopathy Camp and an Immunisation Programme. In all,
nearly 1,400 persons benefited from these camps.
32
Reliance Industries Limited
GROWTH IS LIFE
Sir Hurkisondas Nurrotumdas Medical Research Society
(HNMRS), Mumbai
Reliance also supports the scientific research activities of
Sir Hurkisondas Nurrotumdas Medical Research Society
(HNMRS). At HNMRS, researchers are motivated to move out
of the four walls of hospitals to carry out community-based
studies. Recent projects include a study on the prevalence of
respiratory disorders among taxi drivers, Type-2 diabetes in a
neighbouring municipal ward, and repeated surveys of a
population to monitor cardiovascular health status. Over 100
research projects have been completed, many of them
multidisciplinary. In all, 110 papers have so far been published
in established scientific journals, about half of them in
international journals. The work of HNMRS has received wide
appreciation from the scientific community.
Dhirubhai Ambani Hospital, Lodhivali, Raigad
This state-of-the-art general hospital was established five
years ago and has since served the population in the
industrial and rural areas of Raigad district, Maharashtra.
Besides taking care of hospitalisation requirements, the
hospital provides poor patients and senior citizens free
outpatient and subsidised in-patient treatment.
The Dhirubhai Ambani hospital, a comprehensive health
care center, has also saved lives of numerous highway
accident victims by providing prompt, specialised and free life
saving treatment.
Community Development
At its manufacturing locations, Reliance runs schools that
provide quality education to the children of employees, and
also to children living in nearby areas. Free transport is
provided to all, enabling students living in nearby villages to
attend school everyday.
During the year under review, community services carried out
at Jamnagar include construction of tar road in 11 nearby
villages; construction of community halls, panchayat buildings
and aanganwadi in several villages; supply of fodder to nearby
villages; organisation of blood donation camps and health
diagnostic camps; and supply of drinking water.
At Hazira, community services include donation of computers
to all primary schools and three high schools of the area;
organising inter-school and inter-village sports and cultural
competitions; awards to motivate meritorious students; mobile
health van services and several medical camps; and initiatives
to provide self-employment opportunities to women and
physically handicapped persons.
The Hazira complex was awarded a trophy for highest
number of blood donations in Surat district for the fourth
consecutive year.
To improve the quality of life of the community, Reliance's
Patalganga complex during
the year undertook several
initiatives in nearby areas such as construction of school
rooms and community hall; providing drinking water
to
villages; women's
vocational
development
familiarisation schemes;
education programs and
health and hygiene awareness programs; child education
programs and managing crèches; free medical camps; and
planting trees.
schemes;
trade
Foreign Exchange Savings, Taxes Paid and Exports
Foreign Exchange Savings
Reliance contributes to savings of precious foreign exchange
for the country by manufacturing products that are import
substitutes.
During the year, the company's operations have helped the
nation save valuable foreign exchange to the tune of Rs
24,392 crore (US$ 5,137 million), an increase of 21 per cent
over the previous year's figure of Rs 20,169 crore.
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 13,210 crore (US$
2,782 million) in the form of various taxes and duties against
Rs 10,470 crore paid during the last year.
In line with the continued growth in production and sales
volumes, Reliance's payment of duties and taxes has risen
consistently over the years, despite the decline in the rates of
custom and excise duties.
Exports
the year, Reliance's exports,
During
including deemed
exports, increased to Rs 11,510 crore (US$ 2,424 million),
from Rs 11,200 crore in the previous year, recording an annual
growth of 3 per cent. Reliance continued to maintain its
leadership position as the largest exporter in the country.
Reliance exports its products to over 100 countries, including
the most quality conscious customers in the US and Europe.
This demonstrates Reliance's global competitiveness, the
world-class quality of its products, and superior logistics
capabilities.
The strong growth in exports has been achieved while
retaining the thrust on the domestic markets, with exports still
representing only 18 per cent of Reliance's gross turnover.
Reliance has set up new export offices in China, UAE,
Vietnam, Turkey and Indonesia.
Reliance Industries Limited
33
GROWTH IS LIFE
Awards and Accolades
Reliance's commitment to excellence won several national
and international awards and rankings for the company.
Reliance also received many accolades for the management's
outstanding performance.
Corporate Ranking
25 in Asia in a CFO Asia Best Annual Reports Survey in March
2003.
In a FinanceAsia poll in March 2003, RIL was ranked
number one in India in the 'Best Financial Management'
category.
RIL was the only Indian company to feature among Asia's ten
most creditworthy companies in The Asset Annual Benchmark
Survey of Asia's Best Credits in 2002.
RIL received the inaugural best export performance award
for FY 2000-01 from the Government of Maharashtra in
March 2003.
Reliance Group emerged as India's 'Most Admired Business
House' for the second consecutive year in the Business
Barons - TNS Mode Opinion Poll for 2002.
RIL was ranked number one for 'Financial Soundness' and
'Long Term Vision', and number two in 'Overall Leadership', in
a Far Eastern Economic Review (FEER) survey, Review 200:
Asia's Leading Companies, in December 2002.
An Asiamoney survey in December 2002 - January 2003
ranked RIL among the top five companies in the 'Overall Best
Managed Company' category.
RIL featured in the 'World's Most Respected Companies' list
published by Financial Times based on a global survey and
research done by PricewaterhouseCoopers. In the same
survey Reliance was ranked among the world's 10 most
respected energy and chemical companies, and also topped
the list of 'Most respected Indian companies'.
RIL was ranked at number three in 'India's Most Respected
Companies' list published by Businessworld in January 2003.
The 2001-02 annual report of RIL was judged the Best
Annual Report among Indian companies and among the best
Recognition for Management
Reliance Founder-chairman Dhirubhai H. Ambani (1932-2002)
'Lifetime Achievement
was posthumously conferred
to
for his outstanding contribution
Award' by Petrotech
Downstream Petroleum Industry in India, in January 2003.
the
RIL Chairman & Managing Director Mukesh D. Ambani and
Vice-Chairman & Managing Director Anil D. Ambani were
conferred 'The Entrepreneur of the Decade Award' by the
Bombay Management Association in October 2002.
Dhirubhai H. Ambani, Mukesh D. Ambani and Anil D. Ambani
were rated as 'India's Most Admired CEOs' for the fourth
consecutive year in the Business Barons - TNS Mode Survey,
in July 2002.
Mukesh D. Ambani was ranked 33rd among the 'Top 50 Most
Respected Business Leaders of the World' in a survey
conducted by Pricewaterhouse Coopers and published in
Financial Times, London, January 2003.
Mukesh D. Ambani was conferred the 'Membership Award' by
The Textile Association of India in December 2002.
34
Reliance Industries Limited
GROWTH IS LIFE
Corporate Governance
to
review
Reliance’s Corporate Governance Principles uphold its global
forefront of corporate governance best
standing at
the
practices. Reliance continues
its corporate
governance practices to ensure that they continue to reflect
domestic and international developments to position itself to
conform to the best corporate governance practices. It takes
feedback into account in its periodic reviews of the guidelines
their continuing relevance, effectiveness and
to ensure
international
the needs of
to
responsiveness
investors and all other stakeholders.
local and
Principles
Reliance’s corporate governance practices focus on the
following main principles.
Recognising the respective roles and responsibilities of
Board and management
To establish an effective mechanism for overseeing the affairs,
keeping in view the Company’s size, complexity, geographical
operations and corporate tradition & culture, the Reliance’s
framework is designed to:
•
•
•
enable the Board to provide strategic guidance for the
Company and effective overseeing of the management;
define the respective roles and responsibilities of senior
executives and officers to ensure accountability; and
ensure a balance of authority such that no single individual
has unfettered powers.
Having a Board of appropriate composition, size and
commitment to adequately discharge its responsibilities and
duties
To ensure effectiveness of the Board, facilitating efficient
discharge of duties and adding value in the context of the
Company’s circumstances, the Board periodically reviews its
composition and size for ensuring a strong element of
independence and commitment. Accordingly the Board is
structured in such a way that :
•
•
•
it has a proper understanding of, and competence to deal
with, the current and emerging issues of the business and
the benefit of a variety of perspectives and skills.
it has the appropriate mix of executive and non-executive
directors ensuring Directors’ commitment and time to
participate in the affairs fully.
it can effectively review and challenge the performance of
management and exercise independent judgement.
The Directors are elected by the shareholders. However the
Board plays an important role in the selection of candidates for
shareholders’ approval. Reliance’s policy does not prescribe
any term limit for Directors, as the term limits, while could help
fresh ideas and view points of new entrants, they have the
disadvantage of losing the valuable contribution of directors
who over the time have developed insight in to the Company
and its affairs.
Independent verification and safeguarding integrity of the
Company’s financial reporting
the
To ensure
the
Company’s financial position, the Company has put in place a
structure of review and authorisation apart from strong
factual presentation of
truthful and
internal audit process. For this purpose, the Board has also
constituted an Audit Committee, which is charged with paying
particular attention to the management processes supporting
external reporting, the performance and objectivity of the
internal
and
and
independence of the external auditors.
performance
function,
audit
the
Timely and balanced disclosure of all material
information concerning the Company
To give investors an equal and timely access to material
information, and to ensure that Company announcements are
factual, balanced and in compliance with the applicable
provisions of law, the Company has put in place a mechanism
to ensure that:
• all investors have equal and timely access to material
its
information concerning
financial position, performance and governance.
the Company –
including
• Company announcements are factual and presented in a
clear and balanced way, disclosing both positive and
negative information.
Highest importance to Investor Relations
To ensure long term shareholder value creation and to
promote shareholder participation
in corporate affairs,
Reliance has established and maintained communication
strategies, including a policy for clarity in notices of meetings.
Reliance also maintains its corporate website www.ril.com for
convenient access by the shareholders to all the material
information about the Company. Reliance’s endeavours are to
empower its shareholders by:
• communicating effectively with them.
• giving them appropriate information about the Company.
• making it easy for them to participate in general meetings.
Sound system of risk management and internal control
To establish and maintain a system of risk management and
internal control, the Company has set up a policy which
includes a review of the risk management system, and
maintenance of a risk profile (both financial and non-financial
risks). Reliance has set up an effective internal audit function,
the external auditors,
independent of
the
risk management system. Audit
the
effectiveness of
Committee of the Board oversees the risk management and
internal control systems. This system is designed to:
review
to
•
•
identify, assess, monitor and manage risks.
inform investors of material changes to the Company’s risk
profile.
Fair review, active encouragement and management
effectiveness
to
is subject
the overall
consistent effectiveness of
To ensure
management, the performance of the senior executives and
officers
includes equipping
individuals with the knowledge and information they need to
discharge
their responsibilities effectively, and reviewing
individual and collective performance regularly. Performance
evaluation process is fair and transparent and uses both
measurable and qualitative indicators.
review. This
Reliance Industries Limited
35
GROWTH IS LIFE
Efficient Executive Remuneration Policy
The Company has adopted a remuneration policy that attracts
and maintains talented and motivated executives so as to
encourage enhanced performance of the Company. The
remuneration policy envisages a clear relationship between
performance and remuneration, including the link between
remuneration paid and the overall corporate performance.
Remuneration of managing directors and whole time directors
is determined by the Remuneration Committee of Directors
within the permissible limits under the applicable provisions of
law and is approved by Shareholders. Non Executive Directors
are paid sitting fees within the limits prescribed under law.
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
- Our Code of Conduct for Prevention of Insider Trading
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
that excludes
considerations of personal advantage.
in a manner
laws, and
The “Code of Ethics” policy document contains policy on the
following:
Payments and Gifting
• Conflict of Interest
•
• Receipt of Gifts
•
•
Purchases through suppliers
Appointment of full-time agents,
consultants and representatives
Political Contributions
•
The “Business Policies” document contains policy on the
following:
•
•
•
Fair Market Practices
Inside Information
Financial, Records and Accounting Integrity
External Communication
•
• Work Ethics
•
• Health Safety and Environment
• Quality
Personal Conduct
The “Code of Conduct for Prevention of Insider Trading”
contains policies prohibiting insider trading.
The Company’s shares are listed on ten Stock Exchanges
in India and GDRs are listed on Luxembourg Stock
Exchange. In accordance with Clause 49 of the listing
agreement with the domestic stock exchanges and
best practices followed
internationally on Corporate
Governance, the details of compliance by the Company
are as under:
1. Company’s philosophy on Corporate Governance
As discussed above, 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 interactions with its stakeholders,
the government and
including shareholders, employees,
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 13 directors The
composition and category of Directors is as follows:
Category
Name of the Directors
Promoter/
Executive Directors
D.H. Ambani*
Chairman
(upto 6th July, 2002)
M.D. Ambani**
Chairman & Managing Director
(from 31st July, 2002)
A.D. Ambani***
Vice Chairman & Managing Director
(from 31st July, 2002)
N.R. Meswani
Executive Director
H.R. Meswani
Executive Director
R.H. Ambani
H.S. Kohli
Executive Director
Promoter Non-
Executive Director
Non-Promoter
Executive Director
Independent Directors M.L. Bhakta
Y.P. Trivedi
T.R.U. Pai
U. Mahesh Rao
(Nominee Director -GIC)
Dr. D.V. Kapur
M.P. Modi
S. Venkitaramanan
D.H. Ambani, passed away on 6th July, 2002
*
** M.D. Ambani, Vice Chairman & Managing Director, upto
30th July, 2002.
*** A.D. Ambani, Managing Director, upto 30th July, 2002.
Brief Resume of the Directors being reappointed at the
ensuing Annual General Meeting, nature of their expertise
in specific functional areas and names of companies in
36
Reliance Industries Limited
which they hold directorship and the membership of the
committees of the Board are furnished hereunder:
GROWTH IS LIFE
from
from
backward
integration
technologies
A. Shri Mukesh D. Ambani holds a Bachelor’s Degree
in Chemical Engineering
the University of
Mumbai and MBA from Stanford University, USA. He
joined Reliance in 1981 and sharpened his skills and
capabilities under the able guidance of the founder
Chairman, late Shri Dhirubhai H. Ambani. He initiated
Reliance’s
textiles
into polyester fibres and further into petrochemicals.
In this process, he directed the creation of 51
new, world-class manufacturing
involving
facilities
diverse
that have raised Reliance’s
manufacturing capacities from less than a million
tonnes to nine million tonnes per year. He is credited
with having brought about financial innovations in the
Indian capital markets. He pioneered India’s first
forays into overseas capital markets with international
public offerings of global depository
receipts,
convertibles and bonds. He directed Reliance in its
efforts to raise, since 1991 around US$ 2 billion
from overseas financial markets; with a 100 year
yankee bond issue in January 1997 being the high
point. He directed and led the creation of the world’s
largest grass root petroleum refinery in Jamnagar,
India, with a capacity of 5,40,000 barrels a day
integrated with petrochemicals, power generation,
port and related infrastructure, at an investment
of Rs 25,000 crore (nearly US$ 6 billion). He
the Reliance Group
has steered
its current
textiles –petroleum-
leading
status as
petrochemicals-power-telecom player. He
is a
member of the Prime Minister’s Advisory Council on
Trade and Industry, Government of India, Council of
Scientific and
India,
Board of Governors of National Council of Applied
Economic Research
(NCAER), Advisory Council
of Indian Banks’ Association and is the Chairman,
Board of Trustees of the Indian Institute of Software
Engineering, Mumbai.
Industrial Research (CSIR),
India’s
to
His achievements:
(cid:79) Rated No.1 among the top 50 Power People in the
India Today,
2003 Power List published by
February 2003.
(cid:79) Ranked 33rd among the Top 50 Most Respected
Business Leaders of the World, tops among the
three Indian CEOs featured in a survey conducted
by Pricewaterhouse Coopers and published in
Financial Times, London, January 2003.
(cid:79) Conferred
‘Membership Award’ by The Textile
Association (India), December 2002.
(cid:79) Conferred
‘The Entrepreneur of
the Decade
Award’ by the Bombay Management Association,
October 2002.
fourth consecutive year
(cid:79) Rated as one of ‘India’s Most Admired CEOs’ for
the
the Business
Barons-Taylor Nelson Sofres-Mode Survey, July,
2002 and also emerged as one of the Super Six
world-class Indian CEOs;
in
(cid:79) Recipient of Ernst and Young Entrepreneur of the
Year Award-2000;
(cid:79) Honoured by University Department of Chemical
Technology (UDCT), University of Bombay as
“Distinguished Alumnus of the Decade” December,
1999;
(cid:79) Conferred the ‘Business of the Year 1997’ award by
Business India, December 1997;
(cid:79) Recognised as ‘Global Leader for Tomorrow’ in
1994 by the World Economic Forum, Switzerland;
and
(cid:79) Named in ‘Time Roster of Young Leaders for the
New Millenium’ by Time magazine-December,
1994.
Infocomm Limited. He
He is a Director on the Boards of Reliance Europe
Limited and Reliance
is
Managing Director of Reliance Communications
Infrastructure Limited and Chairman of
Indian
Petrochemicals Corporation Limited. He is also a
member of the Shareholders’/Investors’ Grievance
Committee of the Board.
B. Shri Anil D. Ambani holds a Bachelor’s Degree in
Science from the University of Mumbai and MBA from
The Wharton School, University of Pennsylvania,
USA. He joined Reliance in 1983 as co-Chief
Executive Officer and sharpened his skills and
capabilities under the able guidance of the founder
Chairman, late Shri Dhirubhai H. Ambani. He is
credited with having pioneered many
financial
innovations in the Indian capital markets. He
pioneered India’s first forays into overseas capital
markets with international public offerings of global
depository receipts, convertibles and bonds. He
directed Reliance in its efforts to raise, since 1991,
around US$ 2 billion from overseas financial markets;
with a 100-year Yankee bond issue in January 1997
being the high point. With an investment of over Rs
36,000 crores (US$ 9 billion) in petroleum refining,
petrochemicals, power generation, telecommunication
services and a port terminal in a three-year time
frame, he steered the Reliance Group to its current
status
textiles-petroleum-
petrochemicals-power-infocom-telecom player. He is
a Member of the Wharton Board of Overseers, The
Wharton School, USA. He has been nominated by the
Government of India as a Member of the Board of
Governors of the Indian Institute of Management,
Ahmedabad.
leading
India’s
as
His achievements:
(cid:79) Rated No.1 among the top 50 Power People in the
India Today,
2003 Power List published by
February 2003.
(cid:79) Conferred ‘The Entrepreneur of the Decade Award’
by the Bombay Management Association, October
2002.
(cid:79) Rated as one of ‘India’s Most Admired CEOs’ for
the fourth consecutive year in the Business Barons
- Taylor Nelson Sofres - Mode Survey, July 2002
and also emerged as one of the Super Six world-
class Indian CEOs.
(cid:79) Awarded the First Wharton Indian Alumni Award by
the Wharton India Economic Forum (WIEF) in
Reliance Industries Limited
37
GROWTH IS LIFE
recognition of his contribution to the establishment
of Reliance as a global leader in many of its
business areas, December, 2001.
(cid:79) Named amongst ‘The Power 50 - India’s 50 most
powerful decision-makers in Politics, Business &
Finance’, Business Barons, August, 1999.
(cid:79) Selected by Asiaweek magazine for its list of
‘Leaders of
in Business and
the Millennium
Finance’ and was introduced as the only ‘new hero’
in Business and Finance from India, June, 1999.
(cid:79) Leading business magazine Business Barons
included him in its list of ‘India’s 25 Most Influential
Business and Financial Leaders’, June, 1998.
(cid:79) Conferred the ‘Businessman of the Year 1997’
leading business magazine
India’s
award by
Business India, December, 1997.
the Boards of
is a Director on
He
Indian
Petrochemicals Corporation Limited, Reliance Europe
Limited and Indian School of Business, Hyderabad.
He is Chairman and Managing Director of BSES
Limited. He is also a member of the Shareholders’/
Investors’ Grievance Committee of the Board.
C. Shri Nikhil R. Meswani a Chemical Engineer from
for Chemical Technology
University Department
(UDCT), is the son of Shri Rasiklal Meswani (late), one
of the founder Directors of the Company. He joined
Reliance at an early age and since 1990, he is an
Executive Director on the Board of Reliance, with
the entire petrochemicals
overall responsibility of
division. He has contributed to the growth of the
petrochemicals division of Reliance to its present
position as market leader in India and one amongst
the top ten petrochemical companies in the world. Shri
Meswani is currently Chairman of Asian Chemical
Fibre
Industries Federation and President of
Association of Synthetic Fibre Industry. He is also a
Member of Young President’s Organisation (YPO) and
a Director of
Indian Petrochemicals Corporation
Limited.
D. Shri H.S.Kohli, was appointed as a Whole-time
Director designated as ‘Executive Director’ of the
Company for a period of five years with effect from 1st
April, 2000. An M.S (Chem), he has wide experience in
implementing
of Petrochemical
operation
complexes. He is working in the Company since 1991
at its Hazira Complex. He is also the Occupier of the
Company’s
factories at Hazira, Patalganga and
Jamnagar. Currently he is incharge of the Company’s
manufacturing division at Hazira. He is also a Director
of Reliance Assam Petrochemicals Limited.
and
E. Shri Yogendra P. Trivedi, an Advocate of the Supreme
Court and a Tax Consultant, is a Director of the
Company since 16th April, 1992. He has vast
experience in finance and taxation. He is a member of
various clubs and associations and holding important
positions
fields: Economic, Political,
Professional, Commercial, Education, Medical, Sports
and Social. He has received various awards and
merits for his contribution in various fields. He is also
a Director of Safari Industries Ltd, Siltap Chemicals
in various
Ltd,
Zandu
Station
Ltd, Birla Kennametal Ltd, Monica Travels Pvt Ltd, Sai
Pharmaceutical
Service
Works Ltd, Zodiac Clothing Co. Ltd, Ripples Club,
Metro Exporters Pvt. Ltd,
Clare Mont Trading
Pvt. Ltd, Telstar Travels Pvt. Ltd, Trivedi Consultants
Pvt. Ltd, and Bloomingdale Estates Pvt. Ltd.
the Audit Committee,
He
Shareholders’/Investors’ Grievance Committee and
the Remuneration Committee of the Board.
is also a member of
3. Board Meetings
its Committee Meetings and
Procedures
A.
Institutionalised decision making process
With a view to institutionalise all corporate affairs and
setting up systems and procedures
for advance
planning for matters requiring discussion/ decisions
by the Board, the Company has defined guidelines
for the meetings of Board of Directors and Committees
thereof. These Guidelines seek to systematize the
decision making process at the meetings of Board/
Committees,
informed and most efficient
manner.
in an
B. Scheduling and selection of Agenda Items for
Board Meetings
(i) The Company holds minimum of
four Board
Meetings in each year, which are pre-scheduled
after the end of each financial quarter. Apart from
the four pre-scheduled Board Meetings, additional
Board Meetings will be convened by giving
appropriate notice at any time to address the
specific needs of the Company. The Board may
also approve permitted urgent matters by passing
resolutions by circulation.
(ii) The meetings are usually held at the Company’s
Registered Office in Mumbai.
(iii) All divisions/departments
in
regard
the Company are
encouraged to plan their functions well in advance,
requiring
particularly with
discussion/approval/decision
Board/
Committee Meetings. All such matters are
in
communicated
advance so that the same could be included in
the Agenda for the Board Meetings.
to matters
the
in
the Company Secretary
to
(iv) The Board
for
the preceding
is given presentations covering
Finance, Sales and Marketing, and the major
the
business segments and operations of
Company, before taking on record the results
of
financial
the Company
quarter at each of
the pre-scheduled Board
Meeting. The Board’s annual agenda includes
the
recommending dividend keeping
dividend policy, determining directors who shall
retire by rotation and recommending appointment
of Directors/Auditors, authentication of annual
accounts and approving Directors Report, long-
term strategic plan for the Company and the
principal issues that the Company expects to face
in the future. Board Meetings also note and review
functions of its Committees.
in view
(v) The Chairman of the Board and the Company
Secretary in consultation with other concerned
persons in the senior management, finalise the
agenda papers for the Board Meetings.
38
Reliance Industries Limited
C. Board Material Distributed in Advance
5. Number of Board Meetings held and the dates on
GROWTH IS LIFE
(i) Agenda papers are circulated to the Directors, in
advance, in the defined Agenda format. All material
information is incorporated in the Agenda Papers
for facilitating meaningful, informed and focussed
is not
discussions at
practicable to attach any document to the Agenda,
the same are placed on the table at the meeting
with specific reference to this effect in the Agenda.
the meeting. Where
it
(ii) In
and
special
exceptional
circumstances,
additional or supplementary item(s) on the agenda
are permitted. Sensitive subject matters may be
discussed at the meeting without written material
being circulated in advance or at the meeting.
D. Recording minutes of proceedings at Board
Meeting
The Company Secretary records the minutes of the
proceedings of each Board and Committee Meetings.
Draft minutes are circulated to all the members of the
comments. The minutes of
Board
proceedings of a meeting are entered in the Minutes
Book within 30 days from the conclusion of the
meeting.
their
for
E. Post meeting follow up mechanism
The Guidelines for Board and Committee meetings
facilitate an effective post meeting follow-up, review
and
taken on
for
decisions of the Board and Committees.
reporting process
the action
F. Compliance
The Company Secretary while preparing the agenda,
notes on agenda, minutes etc. of the meeting(s) and
holding and conducting the meetings, is responsible
to all
is required
for and
the applicable provisions of
the
Companies Act, 1956 and the Secretarial Standards
recommended by the Institute of Company Secretaries
of India, New Delhi.
to ensure adherence
law
including
4. 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 Directorships and Committee
Membership/ Chairmanship
Board
Meetings
Last AGM Other
Committee
Committee
Directorships Memberships 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
0
7
7
6
7
6
6
7
6
5
5
6
6
7
N.A.
Present
Present
Present
Present
Present
Present
Present
Present
Present
LOA
Present
Present
Present
* D.H. Ambani passed away on July 6, 2002
LOA - Leave of absence
0
4
4
1
0
1
7
6
12
5
9
7
11
3
0
1
1
1
0
0
1
6
7
2
4
10
5
3
0
0
0
1
0
0
1
3
2
0
0
1
3
2
which held
7 (Seven) Board Meetings were held during the year, as
against the minimum requirement of 4 meetings. The
dates on which the meetings held were as follows: 23rd
April, 2002, 31st July, 2002, 2nd September, 2002, 30th
September, 2002, 31st October, 2002, 20th December,
2002 and 31st January, 2003. The maximum time gap
between any two meetings was not more than three
calendar months. None of the Directors of the Company
was a member of more than ten Comiittees nor was the
Chairman of more
five Committees across all
Companies in which he was a Director.
than
6. Board Committees
A. Standing Committees
The Company has the following standing Committees of
the Board.
(i) Audit Committee
The Board of Directors of the Company has constituted an
Audit Committee, comprising four independent, Non-
Executive Directors viz. Shri Y.P. Trivedi, Chairman
(having financial and accounting knowledge), Shri S.
Venkitaramanan, Shri U. Mahesh Rao and Shri T.R.U. Pai.
The constitution of Audit Committee also meets with the
requirements under Section 292A of the Companies Act,
1956.
The terms of reference stipulated by the Board of
Directors to the Audit Committee are, as contained in
Clause 49 of the Listing Agreement and Section 292A of
the Companies Act, 1956, 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.
in draft audit
judgement by management,
report,
c. Reviewing with management the half-yearly and 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
(iii)
(iv) significant
qualifications
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 and compliance 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.
Reliance Industries Limited
39
GROWTH IS LIFE
internal auditors
g. Reviewing the findings of any internal investigations by
is
the
suspected fraud or irregularity or a failure of internal
control systems of a material nature and reporting the
matter to the Board.
into matters where
there
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
to
During the year, the Committee has met 5 times, as
against the minimum requirement of 3 meetings. The
Statutory Auditors and the Cost Auditors of the Company
were also invited to attend the Audit Committee meetings.
Attendance of each Member of Audit Committee
meetings held during the year
Name of Member of
Audit Committee
Shri Y.P. Trivedi, Chairman
Shri S. Venkitaramanan
Shri U. Mahesh Rao
Shri T.R.U. Pai
Attendance particulars (Present)
8th June, 2002, 30th September, 2002,
30th October, 2002 and 30th January, 2003
23rd April, 2002, 8th June, 2002 and
30th January, 2003
23rd April, 2002, 8th June, 2002,
30th September, 2002, 30th October,
2002 and 30th January, 2003
8th June, 2002, 30th September,
2002 and 30th October, 2002.
(ii) Remuneration Committee
The Board of Directors of the Company has constituted a
Remuneration Committee, comprising of 4 independent,
Non-Executive Directors
viz. Shri M.L. Bhakta
(Chairman), Shri Y.P. Trivedi, Shri U. Mahesh Rao and Shri
S. Venkitaramanan.
The Remuneration Committee has been constituted to
recommend/review
the
Managing/ Whole time Directors, based on performance
and defined criteria.
the remuneration package of
The remuneration policy is directed towards rewarding
performance based on review of achievements on a
in
periodical basis. The
consonance with the existing Industry practice.
remuneration policy
is
Since there was no proposal for enhancement in the
remuneration of the Directors, the Committee did not
meet any time during the year under review.
Details of remuneration to Directors for the year
The aggregate value of salary and perquisites including
commission payable for the year ended 31st March, 2003
to the Managing Directors/Wholetime Directors is as
follows: Late Shri D.H. Ambani, Rs. 4.50 crores, Shri
M.D. Ambani, Chairman and Managing Director, Rs. 12.18
crores, Shri A.D. Ambani, Vice Chairman and Managing
Director, Rs. 12.15 crores, Shri N.R. Meswani, Executive
Director, Rs. 3.14 crores, Shri H.R. Meswani, Executive
Director, Rs. 3.13 crores. The aggregate value of salary
and perquisites paid to Shri H.S. Kohli, Executive Director
was Rs. 0.27 crore. The above amounts
include
Fund,
Provident
Company’s
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.
contribution
to
The Company pays sitting fees to all the Non-Executive
Directors at the rate of Rs. 5000 for attending each
meeting of the Board and/or Committee thereof. The
sitting fees paid for the year ended 31st March, 2003 to
the Directors are as follows:- Shri R.H. Ambani, Rs.
30,000; Shri M.L. Bhakta, Rs.90,000; Shri Y.P. Trivedi,
Rs.1,15,000; Shri T.R.U. Pai, Rs. 45,000; Shri S.
Venkitaramanan, Rs. 40,000; Shri U. Mahesh Rao, Rs.
55,000; Dr. D.V. Kapur, Rs.35,000 and Shri M.P. Modi, Rs.
40,000.
The Company has paid Rs. 8.65 Lacs as professional fees
to Messrs. Kanga & Co., a firm in which Shri M.L. Bhakta,
Director of the Company, is a partner.
(iii) Shareholders’/ Investors’ Grievance Committee
Grievance
inter alia, approves
The Board of Directors of the Company has constituted a
Shareholders’/Investors’
Committee,
comprising of Shri M.L. Bhakta (Chairman), Shri Y.P.
Trivedi, Shri M.D. Ambani and Shri A. D. Ambani. The
issue of duplicate
Committee,
certificates and oversees and
reviews all matters
connected with the securities transfers. The Committee
also looks into redressal 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
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.
recommends measures
In pursuance of the Securities and Exchange Board of
India (Prohibition of Insider Trading) Regulations, 1992
(duly amended), the Board has approved the “Code
of Conduct
Insider Trading” and
authorised the Committee to implement and monitor the
various requirements as set out in the Code.
for Prevention of
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 16285. Outstanding complaints as on 31st
March, 2003 were Nil. 213 requests for transfers and
1618 requests for dematerialisation were pending for
approval as on 31st March, 2003, which were approved
and dealt with by 1st April, 2003 and 3rd April, 2003
respectively.
40
Reliance Industries Limited
GROWTH IS LIFE
(iv) Finance Committee
The Board of Directors of the Company has constituted
the Finance Committee to make recommendations to the
Board relating to capital structure and the issuance of
securities,
review banking arrangements and cash
management, and review and approve certain short-term
and long-term investment and other financial transactions.
The Finance Committee meets as and when the need to
consider any matter assigned to it arises. Time schedule
for holding the meetings of the Finance Committee is
finalised, in consultation with the Committee Members
B. Functional Committees
The Board may, from time to time, constitute one or more
Functional Committees delegating powers and duties with
respect
to specific purposes. Meetings of such
Committees will be held as and when the need for
discussing the matter concerning the purpose arises.
Time schedule for holding the meetings of such functional
committee(s) are
the
Committee Members.
in consultation with
finalized
C. Procedures at Committee Meetings
Company’s guidelines relating to Board Meetings are
applicable to Committee Meetings as far as may be
practicable. Each Committee has the authority to engage
outside experts, advisers and counsels to the extent it
considers appropriate to assist the Committee in its work.
Minutes of the proceedings of the each of the committee
meeting are placed before the Board for its perusal and
noting.
7. Annual General Meetings
Location and time for last 3 Annual General Meetings
were as follows:
Year
Location
Date
Time
1999-00 Birla Matushri Sabhagar, 13th June, 2000
11.00 a.m.
19 Marine Lines,
Mumbai 400 020
2000-01 Same as above
2001-02 Same as above
15th June, 2001
11.00 a.m.
31st October, 2002 11.00 a.m.
During the year ended 31st March, 2003, there have
the Company’s
been no
resolutions passed by
shareholders
the ensuing
through postal ballot. At
Annual General Meeting, there is no resolution proposed
to be passed by postal ballot.
8. 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.
SEBI has imposed a monetary penalty of Rs. 4.75
lakhs on the Company for the alleged non-disclosure
under Regulation 7(1) of the Securities and Exchange
Board of India (Substantial Acquisition of Shares and
respect of
Takeovers) Regulations, 1997,
acquisition of shares of a listed Company. The
Company has preferred an appeal to the Hon’ble
Securities Appellate Tribunal against the said order of
SEBI and the said appeal is pending.
in
9. Means of communication
Half-yearly un-audited financial results
Half yearly un-audited financial results for the half year
to each
ended 30th September, 2002 were sent
household of shareholders.
Quarterly results
results were published
‘Financial
The quarterly
Express’ and ‘Tarun Bharat’, alongwith the official news
release, and the detailed presentations made to the
media, analysts,
investors, etc. were
displayed on the corporate website, www.ril.com
institutional
in
The Management Discussion and Analysis (MD&A) is a
part of the annual report, and each quarterly official
media release.
Reliance Industries Limited
41
10. General Shareholder Information
10.1 Annual General Meeting
Date and Time
Venue
10.2. Financial Calendar (tentative)
GROWTH IS LIFE
: Monday, the 16th June, 2003 at 11.00 a.m.
: Birla Matushri Sabhagar, 19, Marine Lines, Mumbai 400 020
Results for the quarter ending June 30, 2003
Results for the quarter ending September 30, 2003
Results for the quarter ending December 31, 2003
Results for the year ending March 31, 2004
Annual General Meeting
:
:
:
:
:
Last week of July, 2003
Last week of October, 2003
Last week of January, 2004
Last week of April, 2004
June, 2004
10.3. Book closure date
: Tuesday, the 27th May, 2003 to Saturday, the 31st May, 2003 (both
days inclusive), for payment of dividend
10.4. Dividend payment date
: On or after 16th June, 2003.
10.5.
(a) Listing of Equity Shares on Stock Exchanges at
: Mumbai • Ahmedabad • Bangalore • Calcutta • Chennai •
Cochin • Kanpur, New Delhi • Pune and the National Stock
Exchange (NSE).
Note:
(i) Annual listing fees for the year 2003-04, as applicable,
will be paid to the concerned Stock Exchanges.
(ii) The Company has made applications to all the Stock
Exchanges, other than BSE and NSE, for delisting of
its equity shares.
Luxembourg Stock Exchange and traded on PORTAL
System (NASDAQ, USA) and SEAQ System (London
Stock Exchange).
• Trading Symbol - Bombay Stock Exchange : ‘RIL500325’
• Trading Symbol - National Stock Exchange : ‘RELIANCE EQ’
ISIN No. INE002A01018
:
:
:
(b) Listing of Global Depository Receipts (GDRs) at
10.6
(a) Stock Code
(b) Demat ISIN Numbers in NSDL & CDSL
for Equity Shares
10.7. Stock Market Data (In Rs./per share)
Month
April, 2002
May, 2002
June, 2002
July, 2002
August, 2002
September, 2002
October, 2002
November, 2002
December, 2002
January, 2003
February, 2003
March, 2003
Bombay Stock Exchange (BSE)
Month’s Low
Month’s High
National Stock Exchange (NSE)
Month’s High
Month’s Low
312.95
295.80
291.80
279.00
256.50
270.95
269.20
296.00
306.35
302.00
303.70
301.20
271.00
248.05
262.05
238.75
229.40
251.00
218.05
251.65
286.00
263.20
276.50
274.00
319.90
295.40
291.40
278.95
260.00
270.95
269.40
295.80
306.40
310.00
303.75
301.20
272.65
248.60
262.20
238.80
229.60
252.00
218.05
251.75
282.20
263.30
276.55
274.10
10.8. Share price performance in comparison to broad based indices – BSE Sensex and NSE Nifty
a) RIL share price performance relative to BSE Sensex based on share price on 31st March, 2003
Period
Percentage Change in
Financial Year 2002-2003
3 years
5 years
RIL share price
Sensex
RIL relative to Sensex
-8
-12
56
-12
-39
-22
4
27
78
42
Reliance Industries Limited
b) RIL share price performance relative to Nifty based on share price on 31st March, 2003
Period
Percentage Change in
GROWTH IS LIFE
Financial Year 2002-2003
3 years
5 years
10.9. Registrars and Transfer Agents
(Share transfers and communications
regarding share certificates, dividends
and change of address)
10.10. Share Transfer System
-7
-12
59
:
RIL share price
Nifty
-13
-36
-12
RIL relative to Nifty
6
24
71
Karvy Consultants Ltd.
46, Avenue 4, Street No.1
Banjara Hills, Hyderabad 500 034
E-Mail: rilinvestor@karvy.com
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 30 days from the date of such option letter.
10.11. Distribution of Shareholding as on 31st March, 2003
10.12. Dematerialisation of Shares
Over 90.17% of the Company’s paid-up equity share capital has been dematerialised up to 31st March, 2003. Trading in
Equity Shares of the Company is permitted only in dematerialised form 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 2002-2003 is given below:
In No. of shares (in lakhs)
In value terms
(Rs. crores)
($ Million)
Bombay Stock
Exchange (BSE)
18.03
49.48
10.42
National Stock
Exchange (NSE)
34.80
95.88
20.19
BSE + NSE
52.83
145.36
30.61
10.13. Outstanding GDR/Warrants and Convertible Instruments
Outstanding GDRs as on 31st March, 2003 represent 8,05,34,365 shares, i.e. 5.77% of the paid up equity share capital of the
Company. There are no other outstanding instruments, which are convertible into equity shares of the Company.
10.14. 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.
••••• Naroda Complex
103/106, Naroda Industrial Estate Naroda,
Ahmedabad - 382 320
Gujarat State, India.
••••• Jamnagar Complex
Village Meghpar/Padana, Taluka Lalpur,
District Jamnagar - 361 280
Gujarat State, India.
Reliance Industries Limited
43
10.15 Address for Correspondence
GROWTH IS LIFE
(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.
• 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
(ii) Any query on Annual Report
Secretarial Department
Old ICI Godown, Fosbery Road
Off. Reay Road Station (East), Mumbai-400 033
• For Shares held in Demat form
To the Depository Participant
10.16 Transfer of unclaimed amounts to Investor Education and Protection Fund
The investors are advised to claim the un-encashed dividends lying in the unpaid dividend accounts of the Company before the due
date (as indicated the Notes to the Notice) for crediting the same by the Company to the Investor Education and Protection Fund.
During the year under review the Company has credited a sum of Rs. 25,86,56,614 to the Investor Eduction and Protection Fund
pursuant to Section 205C of the Companies Act, 1956 and the Investor Education and Protection Fund (Awareness and Protection
of Investor) Rules, 2001.
10.17 List of Investor Service Centres of Karvy Consultants Ltd.
CITY / CENTRE
STD CODE
PHONE NO
CITY / CENTRE
STD CODE
PHONE NO
AGRA
AHMEDABAD
ALIGARH
ALLAHABAD
ANANTAPUR
ANKLESWAR
AURANGABAD
BANGALORE
BAREILLY
BELGAUM
BELLARY
BHARUCH
BHAVNAGAR
BHIMAVARAM
BHOPAL
BHUBANESWAR
CALICUT
CHANDIGARH
CHENNAI
CHILAKALURIPET
COIMBATORE
CUTTACK
DEHRADUN
DINDIGUL
DURGAPUR
ELURU
ERODE
GHAZIABAD
GOBICHETTIPALAYAM
GORAKHPUR
GUNTUR
HALDIA
HUBLI
HYDERABAD
INDORE
JAIPUR
JAMNAGAR
JAMSHEDPUR
JUNAGADH
KAKINADA
KANPUR
KARAIKUDI
KARUR
0562
079
0571
0532
08554
02646
0240
080
0581
0831
0839
02642
0278
08816
0755
0674
0495
0172
044
08647
0422
0671
0135
0451
0343
08812
0424
0120
0425
0551
0863
03224
0836
040
0731
0141
0288
0657
0285
0884
0512
04565
04324
2526660
6420422
2429272
2561073
249601
243291
2363517
6621184
2476797
2402544
2254531
242082
2525005
231766
2559332
2539287
2760882
2371726
28153445
257501
2237501
2335187
2713351
2436077
2586375
227851
2225601
2796496
2226275
2346519
2326684
276755
2353961
23312454
2269891
2375099
2557862
2487020
2624154
2387382
2558317
437192
241892
0484
KOCHI
033
KOLKATA
0522
LUCKNOW
0452
MADURAI
0824
MANGALORE
0484
MATTANCHERRY
022
MUMBAI - NARIMAN POINT
022
MUMBAI - ANDHERI
0821
MYSORE
0268
NADIAD
0253
NASHIK
0861
NELLORE
011
NEW DELHI
0491
PALGHAT
0832
PANJIM
0612
PATNA
0413
PONDICHERRY
08564
PRODDATUR
020
PUNE
0883
RAJAHMUNDRY
0281
RAJKOT
0651
RANCHI
05446
RENUKOOT
0661
ROURKELA
0427
SALEM
0818
SHIMOGA
0261
SURAT
04362
THANJAVUR
04546
THENI
0877
TIRUPATI
0421
TIRUPUR
0487
TRICHUR
0431
TRICHY
0471
TRIVANDRUM
0816
TUMKUR
0825
UDUPI
0265
VADODARA
02692
VALLABH-VIDHYANAGAR
0542
VARANASI
0866
VIJAYAWADA
0891
VISHAKAPATNAM
VISHAKAPATNAM – GAJUWAKA 0891
2310884
24644891
236819
2350855
2492302
2223243
22847645
26730799
2524292
2563210
2577811
2349935
23324401
2547143
2426870
2321354
2220636
250822
25530204
2434468
2239403
2309386
253179
2510770
2335700
2228795
8357356
279407
261285
2252756
2205865
2322483
2791322
2725989
2261891
2530962
2225469
239407
2225365
2495200
2752915
2511685
44
Reliance Industries Limited
GROWTH IS LIFE
Directors’ Report
Your Directors are pleased to present the 29th Annual Report and the audited accounts for the year ended 31st March, 2003.
Financial Results
The performance of the Company for the financial year ended 31st March, 2003 is summarised below :
Gross profit before interest, depreciation and
extraordinary income
Less:
Interest
Depreciation
Less : Transfer from General Reserve
Profit before Tax and extraordinary Income
Add : Extraordinary Income
Profit before Tax
Less: Provision for Current Taxation
Provision for Deferred Tax
Profit after Tax
Add:
Balance in Profit and Loss Account
On Amalagamation
Deferred Tax Liability for earlier years
Investment Allowance (Utilised) Reserve Written Back
Amount Available for Appropriation
Appropriations :
Capital Redemption Reserve
Debenture Redemption Reserve
Capital Reserve
General Reserve
Interim dividend on Preference Shares
Proposed dividend on Equity Shares
Tax on dividend
Balance carried to Balance Sheet
2002-2003
Rs Cr US$ Mn*
1,973
9,366.46
2001-2002
Rs Cr
8,658.24
US$ Mn
1,774
1,555.16
328
1,825.10
374
3,452.79
615.70 2,837.09
4,974.21
—
4,974.21
245.90
624.00
4,104.31
2,726.23
—
—
—
6,830.54
400.00
279.75
—
2,000.00
20.08
698.19
89.46
3,343.06
6,830.54
597
1,048
—
1,048
52
132
864
574
—
—
—
1,438
84
59
—
421
4
147
19
704
1,438
3,435.82
619.68
2,816.14
4,017.00
411.70
4,428.70
190.00
996.00
3,242.70
2,160.65
1,071.50
(1,064.82)
122.07
5,532.10
—
137.64
4.95
2,000.00
—
663.28
—
2,726.23
5,532.10
577
823
84
907
39
204
664
443
220
(218)
25
1,134
—
28
1
410
—
136
—
559
1,134
* 1 US $ = Rs 47.485 Exchange rate as on 31st March, 2003 (Previous year as on 31st March, 2002 1 US $ = Rs 48.80)
Dividends
The Directors have recommended a dividend of Rs 5 per
Equity Share on 139,63,77,536 Equity Shares of Rs 10 each
for the financial year ended 31st March, 2003, which if
approved at the forthcoming Annual General Meeting, will be
paid to (i) all those Equity Shareholders whose names appear
in the Register of Members as on 31st May, 2003 and (ii) to
those whose names as beneficial owners are furnished by
National Securities Depository Limited and Central Depository
Services (India) Limited.
to pay stable dividend
The dividend pay out for the year under review has been
formulated in accordance with the Company’s policy of
striving
term
performance, keeping in view the Company’s need for capital,
its growth plans and the intent to finance such plans through
internal accruals to the maximum. Your Directors believe that
this would increase shareholder value and eventually lead to a
higher return threshold.
linked
long
to
The Directors have declared interim dividend at the stipulated
rates on 2,00,00,000 - 6.90% Redeemable Cumulative Non-
Convertible Preference Shares (Series 1) of Rs 100/- each,
1,00,00,000-6.80% Redeemable Cumulative Non Convertible
Preference Shares
(Series 2) of Rs 100/- each and
1,00,00,000-6.80% Redeemable Cumulative Non-Convertible
Preference Shares (Series 3) of Rs 100/- each, which has
been paid to the registered holders of Preference Shares. The
above dividend shall be considered as final dividend.
Equity Share Capital
The Company, during the year, has issued 34,26,20,509
Equity Shares of Rs 10 each to the Shareholders of the
erstwhile Reliance Petroleum Limited (RPL) consequent upon
the amalgamation of RPL with the Company.
Preference Share Capital
The Company, during the year issued 2,00,00,000 - 6.90%
Redeemable Cumulative Non-Convertible Preference Shares
(Series 1) of Rs 100/- each, 1,00,00,000 - 6.80% Redeemable
Cumulative Non-Convertible Preference Shares (Series 2) of
Rs 100/- each and 1,00,00,000 - 6.80% Redeemable
Cumulative Non-Convertible Preference Shares (Series 3) of
Rs 100/- each. The entire Preference Share Capital of Rs 400
crore was redeemed during the year.
Financial Condition and Results of Operation
Management Discussion and Analysis of Financial Condition
and Results of Operation of the Company for the year under
review, as stipulated in Clause 49 of the Listing Agreement
with the Stock Exchanges, is given as a separate statement in
the Annual Report.
Reliance Industries Limited
45
GROWTH IS LIFE
in
into various contracts
The Company has entered
refining, petrochemicals and
the areas of oil & gas,
telecommunication businesses. While benefits
from such
contracts will accrue in the future years, the Board of
Directors shall periodically review their progress.
Subsidiary Companies
the year, Vimal Fabrics Limited
During
and Reliance
Petroinvestments Limited have ceased to be subsidiaries of
the Company and Reliance Communications Inc., Reliance
(Subsidiaries of Reliance
Communications UK Limited
Infrastructure
Inc.) and Gas Transportation &
Infocom
Company Limited became subsidiaries of the Company.
In terms of approval granted by the Central Government under
Section 212(8) of the Companies Act, 1956, a copy of the
Balance Sheet, Profit and Loss Account, Report of the Board
of Directors and the Report of the Auditors of the Subsidiary
Companies have not been attached with the Balance Sheet of
the Company. The Company will make available these
documents/details upon request by any member of the
the same. However,
in obtaining
Company
pursuant
the
Institute of Chartered Accountants of India, Consolidated
Financial Statements presented by the Company includes the
financial information of its subsidiaries.
to Accounting Standard AS-21
issued by
interested
Acquisition of Control in BSES Limited
In January, 2003, the Company and Reliance Power Ventures
Limited (RPVL) a wholly owned subsidiary of the Company
along with persons acting in concert, made an Open Offer to
the shareholders of BSES Limited (BSES), inter alia, to
acquire up to 32,281,460 equity shares of BSES representing
20% of the its fully diluted equity share capital, at a price of
Rs. 230.10 per share, in terms of the Securities and Exchange
Board of
India (Substantial Acquisition of Shares and
Takeovers) Regulations, 1997 (the “Regulations”). The Offer
opened on January 17, 2003 and closed on February 15,
2003.
the Company and
Upon successful completion of the Offer the aggregate
shareholding of the Company along with all persons acting in
concert in the paid up equity share capital of BSES increased
to 58.22%. The shareholding of
its
Subsidiaries in BSES was at 55.20%. BSES accordingly
became subsidiary of the Company effective March 17, 2003.
However, consequent upon transfer of 78,00,000 equity
shares representing 5.66% of the paid up equity capital of
BSES, by RPVL to Reliance Capital Limited (RCL) a Reliance
Group Company, the shareholding of the Company and its
subsidiaries in BSES reduced to 49.53% and consequently
BSES ceased to be subsidiary of the Company with effect from
the
29th March, 2003. The aggregate shareholding of
Company along with all persons acting in concert in BSES
remains unchanged at 58.22%. Thus your Company has,
during
review, acquired control and
management of BSES.
the year under
Fixed Deposits
The Company has not accepted any fixed deposits during
the year.
Directors
Shri Nikhil R. Meswani, Shri H.S. Kohli and Shri Y.P. Trivedi,
retire by rotation and being eligible, offer themselves for
reappointment at the ensuing Annual General Meeting.
Brief resume of the above Directors, nature of their expertise
in specific functional areas and names of companies in which
they hold the directorship and the membership/chairmanship
of committees of the Board, as stipulated under Clause 49 of
the Listing Agreement with the Stock Exchanges, are given in
the section on Corporate Governance elsewhere in the Annual
Report.
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 that:
(i)
in the preparation of the annual accounts the applicable
accounting standards have been followed along with
proper explanations relating to material departures;
(ii) the Directors have selected such accounting policies and
applied them consistently and made judgements and
estimates that are reasonable and prudent so as to give a
true and fair view of the state of affairs of the Company as
at 31st March 2003 and of the profit of the Company for the
year ended on that date.
(iii) 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 the assets of the Company and for
preventing and detecting fraud and other irregularities;
and
records
(iv) the Directors have prepared the annual accounts of the
Company on a ‘going concern’ basis.
Consolidated Financial Statements
In accordance with
the Accounting Standard AS-21 on
Consolidated Financial Statements read with Accounting
Standard AS-23 on Accounting for Investments in Associates,
your Directors have pleasure in attaching the Consolidated
Financial Statements which form part of the Annual Report
and Accounts.
Auditors
Messrs. Chaturvedi & Shah and Messrs. Rajendra & Co.,
Chartered Accountants, Statutory Auditors of the Company,
hold office until the conclusion of the forthcoming Annual
General Meeting and are eligible for re-appointment. The
Company has received letters from them to the effect that their
appointments, if made, would be within the prescribed limits
under Section 224(1-B) of the Companies Act, 1956.
Cost Auditors
The Central Government had directed an audit of the cost
accounts maintained by the Company in respect of its
Textiles, Polyester and Chemicals businesses. The Central
Government has approved the appointment of Shri S.N.
Bavadekar and Messrs V.J. Talati & Co., Cost Accountants,
for conducting the cost audit of the above businesses for the
financial year ended on 31st March, 2003.
International Accountants
firm of Deloitte Touche Tohmatsu
The report submitted by Messrs Deloitte Haskins and Sells,
International
member
(DTTI), appointed as
the
Company, for the year under review to the Board of Directors,
is circulated with this report for the information of members.
International Accountants of
46
Reliance Industries Limited
GROWTH IS LIFE
Personnel
As required by the provisions of Section 217(2A) of the
Companies Act, 1956, read with the Companies (Particulars of
Employees) Rules, 1975 as amended, the names and other
particulars of the employees are set out in the Annexure to the
Directors’ Report. However, as per the provisions of Section
219(1)(b)(iv) of the Companies Act, 1956, the Report and
Accounts is being sent to all the shareholders of the Company
excluding
information. Any shareholder
interested in obtaining such particulars may write to the
Company Secretary at the Registered Office of the Company.
the aforesaid
Energy Conservation, Technology Absorption and Foreign
Exchange earnings and outgo
The information relating to energy conservation, technology
absorption, foreign exchange earnings and outgo required to
be disclosed under The Companies (Disclosure of Particulars
in the Report of Board of Directors) Rules, 1988 is given in
Annexure forming part of this report.
Corporate Governance
Governance. A separate section on Corporate Governance
and a Certificate from the Auditors of the Company regarding
compliance of conditions of Corporate Governance as
stipulated under Clause 49 of the Listing Agreement with the
Stock Exchanges, form part of the Annual Report.
Acknowledgment
the assistance and co-operation received
Your Directors would like to express their grateful appreciation
for
the
Financial
Institutions, Banks, Government Authorities,
Customers, Vendors and Shareholders during the year under
review. Your Directors also wish to place on record their deep
sense of appreciation for the committed services of the
Executives, Staff and Workers of the Company.
from
For and on behalf of the Board of the Directors
Mukesh D. Ambani
Chairman & Managing Director
Your Company is one of the pioneers in the country in
implementing the best international practices of Corporate
Place : Mumbai,
Dated: 23rd April, 2003.
Annexure to Directors’ Report
Particulars required under the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988.
A. CONSERVATION OF ENERGY
(a) Energy Conservation measures taken
1. Use of pump in VCM column bottom to recover the
heat of effluent.
2. Providing
intermediate
flash
vessel
for HP
condensate in PTA 1 & 2 plant.
3. Fan speed reduction of PTA mother liquor air blower.
4. Control logic on POY/PET vacuum jet system to save
steam consumption.
5.
Jet water pump Optimisation in Polyester CP-1.
6. Single Organic Stripper Column operation for CP-1 to
CP-5 and one for CP 6 and CP 7.
7. FF CP-8 polymerization spare jet optimisation for
steam consumption reduction.
8. PSF Draw line AHU Fans optimisation for reduction
in power consumption.
9. Optimisation of lighting fixtures in PSF plant.
10. Installation of booster pump at Ethylene terminal
thereby
terminal
return water,
using propylene
stopping CPP CT booster pump.
11. Replacement of C2R turbine condensate export
valve.
12. Reduction in decoking by one hour after plant air
maximisation for steam consumption reduction in
cracker plant.
15. Use of MP steam
in place of HP steam
for
Atomization in Vaporizer of PE plant.
16. Warm water pump Optimisation in RELPIPE plant.
17. Installation of GD in Gas Turbine 1&2.
18. Insulation of phase-1 return condensate header in
Captive power plant.
19. Installation of fogging in 6 gas turbines.
20. Optimisation of DM water pump for POY and Phase-1
header in CPP.
21. Soot blowing in the five BHEL boilers.
22. BHEL Boiler Modification to improve free steam
generation.
23. Installation of Autotransformer for electrical energy
conservation.
24. Energy Benchmarking by Shell completed for the
years 2000, 2001 & 2002. RIL’s Jamnagar Refinery
tops the list of about 55 Shell refineries all over the
world for the year 2000 & 2001 and is also expected
to top in 2002. Reliance has the lowest corrected
Energy index & Energy & Loss Index, indicating
highest Energy Efficiency.
25. Daily Flare Analysis & monitoring of Flare loss from
various valves of individual units by Acoustic meter
on a continuous basis, to minimise Flare Loss.
26. Daily monitoring of Fuel consumption & loss for the
Refinery.
27. Weekly monitoring of Heater Efficiencies of all Fired
Heaters.
13. Reduction of polishing by 2 hours from the present
28. Use of MP Steam in place of HP Steam in Stripper
practice of 10 hours in cracker plant.
Reboilers in CDU.
14. Use of MP steam in place of HP steam for reactor
feed heater, HP tracers and export of MP steam in
Octane run in PE plant.
29. VDU ejector Off gases rerouted to CDU furnaces.
30. Installation of Removable insulation pads for high
temperature pumps & strainers, valves, channel end
Reliance Industries Limited
47
GROWTH IS LIFE
covers and
convection heat losses & improved heat recovery.
in Coker
flanges
to reduced
lead
31. Savings in Fuel due to installation of new improved
design Air Preheater in HMU-2.
32. Rerouting of Rich Amine Flash gases to Sat gas
Header.
33. Stopping all FG purges to flare & reduction of MP
Steam to flare.
34. Offline & online water washing of Gas Turbine
compressor blades.
35. Steam trap audit conducted in 2002 and about 1500
traps rectified which resulted in savings in LP, MP &
HP Steam.
36. Successfully completed Trial run for replacing Steam
traps in LP Steam tracers from TD type to BPT type
leading to savings in increased heat recoveries.
37. Successfully replaced 26 fans in FCC from Aluminum
blades to FRP blades leading to power savings.
38. Usage of Insulating Heat paint on bare Exchanger
End covers has been done leading to reduced
convection heat losses.
(b) Additional Investment/proposals being implemented
for reduction of consumption of Energy
1. Replacement of DH column fan blades by FRP.
2. Suction chilling of Process Air Compressor in PTA-1.
3. Avoid Double pumping in DM Water pump in PTA
plant.
4. Avoid double pumping in acetic acid service in PTA
plant.
5. Use of 17 barg Steam in place of SHP steam in
crystalliser in PTA plant.
6. De-superheater water preheating with process
condensate in PTA plant for SHP steam saving.
7. Process Air Compressor Expander inlet pressure
drop reduction for electrical energy reduction.
8. Use of PTA process steam in Polyester Stripping
column.
9. Gas Turbine 1 & 2 by pass stack damper double
sealing arrangement to minimise stack losses.
10. Ethylene tower vapor feed directly to VCM plant.
11. Process Fans replacement from solid metallic/GRP
to hollow FRP.
12. Increasing supplementary firing efficiency by HRSG
modification.
13. Use of Hot recycle solvent to preheat reactor feed in
PE-II plant.
14. Optimization of feed tray location in Hiboil column of
VCM plant.
15. Use of flash steam in stripper in PE-I &II.
16. Replacement of dryer MP steam with LP Steam in
PVC plant.
17. Use of LP Steam instead of MP steam in Glycol
bleed flasher-II Reboiler in MEG plant.
18. Installation of condensate pot for E-607 of MEG
column Reboiler.
19. Use of process steam for new 500 TR VAR machine
in MEG-II.
20. Preheating of heads column feed using VCM column
bottom steam.
21. Provision of Isolation valves and bypass facilities in
Crude Preheat train will save 5,655 T/year of Fuel Oil
in CDU heaters due
in Preheat
temperature.
increase
to
22. Stripper gases to bypass HP receiver and route to
Primary Absorber will save 40 KT /year of MP Steam.
23. Recovery of heat from hot HK stream going to
tankage to heat crude upstream of Desalter before
routing to storage.
24. Reduction of CDU feed pump power consumption by
changing the pump impellers for 6 feed pumps will
result in power reduction equivalent to 909 tons/
annum of Fuel Oil.
25. Installation of second Feed Water/Effluent Desalter
Exchanger in order to recover more heat hence
reduces Heater duty equivalent to 3030 tons/annum
of Fuel Oil.
26. Savings in fuel due to new improved design of Air
Preheater in HMU-result in savings equivalent to 380
tons/annum of Fuel Oil.
27. Maximizing heat recovery from HCGO & LCGO pump
around will result in heat recovery equivalent to
181182 tons/annum of Fuel Oil.
28. Provision of Intercooler in Primary Absorber will lead
to savings equivalent to 2,468 tons/annum of Fuel
Oil.
29. Changing of
/Rich Amine
the existing Lean
Exchanger in ATU which has a high warm approach
to new plate type exchanger to recover more heat will
result in savings of upto 12727 tons/annum of
equivalent Fuel Oil.
30. Using process condensate to heat deaerator makeup
will result in Heat recovery equivalent to 13333 tons/
annum of equivalent Fuel Oil.
31. Development of Simulator & Optimizer for Fuel &
Steam/Power will result in savings to the tune of
3,571 tons/annum of equivalent Fuel Oil.
32. Inlet Air fogging in Gas Turbines in CPP (8 Gas
Turbines) will lead to savings equivalent to 28,118
tons/annum of Fuel Oil.
33. Online water wash of GT compressors will lead to
savings equivalent to 4,583 tons/annum of Fuel Oil.
34. Main Flare gas and LLP flare gases recovery and
rerouting them back to Fuel Gas header will lead to
savings of equivalent to 21,429 tons/annum of Fuel
Oil.
35. Acid Flare gas Recovery by rerouting the gases to
SRU will lead to benefits equivalent to 2,917 tons/
annum of Fuel Oil.
(c)
Impact of measures at (a) & (b) above for reduction in
consumption of energy and on the cost of production
of goods.
1. As a result of various energy conservation measures
taken, the company saved energy equivalent to Rs
24 crore/annum.
2. The additional
/ proposals being
implemented for reduction in energy consumption
investment
48
Reliance Industries Limited
GROWTH IS LIFE
have potential
equivalent to Rs 179 crore/annum.
to
reduce energy consumption
(d) Total Energy Consumption and Energy Consumption per
unit of production as per Form ‘A’ attached hereto
B.
TECHNOLOGY ABSORPTION
Efforts made in technology absorption – as per Form
B given below:
Form B
1. Research and Development (R & D)
a. Specific Areas in which Research and Development
(R&D) is being carried out by the Company
(i)
Improved Chemical formulation for caustic tower
anti-polymerant trials in Cracker plant.
(ii) Optimization of Oxidation Reactor Process
Conditions to reduce specific consumption of
acetic acid in PTA plant.
(iii) Proposal to provide off gas foil agitator in 3rd
and 4th Crystallizers of Purification Section to
avoid solid deposition on wall of vessel and
thereby reduce frequency of flush in PTA plant.
(iv) Commercial catalyst production based on in-
house R & D efforts and substitute the import of
catalyst.
(v) Process development for treating catalyst plant
waste to produce by-product.
(vi) Organic Stripping Column modification
for
burning volatile organic components
from
Esterification process in Dowtherm vaporizers in
POY plant.
(vii) Installation
and
commissioning
permeation chromatography
study of polymer products.
of Gel
for
techniques
(viii) Installation of PET applications lab for product
characterization in PET plant.
(ix) Production of Re-Heat grade PET resin for
reduction of processing time at the end user for
PET applications.
b. Benefits derived as a result of the above efforts
(i) Chemical formulation for caustic tower anti-
polymerant trials in cracker plant can result in
benefit of Rs 60 lakh/annum.
(ii) Reduced specific consumption of acetic acid in
PTA plant is equivalent to Rs 285 lakh/annum.
(iii)
Indigenous catalyst has resulted in improved
productivity,
import
substitution.
product
quality
and
(iv) Reduced effluent load in catalyst plant due to
byproduct recovery.
(v) Organic Stripping Column modification results in
improved environmental performance.
(vi) GPC installation will help in characterisation
study of the polymer grades to improve in quality
to reduce customer complaints.
(vii) Installation of PET applications lab for product
in
characterization
effective and
the
production process to suit the requirements of
PET customers.
immediate control over
in PET plant
resulted
(viii) Production of Re-Heat grade PET
increased
countries.
the market share
c. Future plan of action
resin
in western
(i) Development of terpolymer PP with improved
source
properties, which will
manufactured in India for soft film sector.
only
be
(ii) VOC burning in Dowtherm vaporizers of POY
two
replacement of burners
in
plant by
vaporizers.
(iii) Biolene trial for ETP performance improvement.
(iv)
Identification of suitable sulphur guard bed for
ethylene feed to EO reactor.
d. Expenditure on R & D
Rs Crore
a) Capital
b) Recurring
Total
c)
Total R&D Expenditure as a
Percentage of Total Turnover
31.74
9.32
41.06
0.08%
2.
Technology absorption, adaptation and innovation
a. Efforts made towards technology absorption,
adaptation and innovation
(i)
(ii)
(iii)
Installation of 80 U coils in Naphtha cracking
furnaces of cracker plant for increasing the yield
and run length.
Installation of 3rd Charge gas drier in cracker
plant for reducing overall pressure drop and
SHP steam consumption in CGC turbine by
0.5 TPH.
Integration of Aromatics & Cracker cooling tower
to utilize the capacity and to bring down the
supply temperature of Cracker cooling tower by
about 1.5°C.
(iv) Utilization C5 cut as
recycling
instead
of
increasing
productivity of Cracker by increasing the fresh
naphtha feed rate.
fuel
in Cracker,
in CPP
thus
(v) Provision and Commissioning of Oxygen
in higher
in PTA2
resulting
Enrichment
productivity.
(vi) EO
reactor/ coolant
to
increase the circulation flow and reduce vapor
fraction in the reactor in MEG plant.
loop modification
(vii) Scheme
for recovery of MEG
residue to the tune of 650-900 tons/annum.
from Glycol
(viii) Development of alternative
to
improve product quality, and reduce operating
cost in PVC, PE and PP plant.
chemicals
(ix) Optimization of water to monomer ratio in K-67,
K 57, K 60 grades to improve productivity in PVC
plant.
(x) Trials of usage of Iron chelating agent along with
primary & secondary suspending agents
conducted in PVC plant, K6711 to improve
product quality and reduce lump formation in
reactors.
(xi) PVC line-II dryer ID fan upgradation done to
improve product quality and dryer area reliability.
Reliance Industries Limited
49
(xii)
Fogging system commissioned in air stream from
primary cyclone separator to wet scrubber to
improve
Suspended
particulate matter (SPM) level reduced in PVC
Dryer vent gases.
scrubbing
efficiency.
(xiii) Capacity increase in VCM plant.
(xiv) Capacity enhancement by
revamping of
the
polyethylene plant.
(xv)
Scheme for improving the solvent recovery by
addition of the third component as a part of
extractive distillation in PE plant.
(xvi) Grade improvement in polyethylene products.
(xvii) New grade developed for fishing net applications.
(xviii) Cast film grade improvement done by improving
the additives packages.
(xix) Octene grade odor reduced and dart improved by
enhancing the stripping efficiency.
(xx)
(xxi)
(xxii)
New grade developed for the application of sink
and table top with low blush properties, cast & TQ
film for high speed machines, 11 MFI fibre grade
for making multifilament FDY yarns and staple
fibres.
Increase
in PP plant
rate of production
controlling catalyst particle size at Catalyst plant.
in
Installation of Nucleonic Level Measurement in
Esterification in Esterification-I (POY CP-1 & CP-2).
(xxiii) Change-over of chilled water
from
Phosphate based to NaMo (Sodium Molybdate)
based for effective corrosion & deposition control.
treatment
(xxiv)
Installation of new Instrument Air Dryer to increase
the Instrument Air header pressure for catering to
CP-9 and NG-3 operations
(xxv)
Installation of
reactor.
lump breaker
in PET process
(xxvi) Start up of CP-9 plant producing POY and PSF
using DuPont technology for POY and Zimmer
technology for PSF Spinning.
(xxvii) Online compressor washing facility incorporated in
all Gas Turbines to reduce degradation due to
compressor fouling and sustain the Base load
capability.
(xxviii) Manually operated Guillotine Damper in one GT
has been replaced by most sophisticated auto
operated Guillotine Damper.
(xxix) GT
inlet air cooling by applying Fogging
Technology implemented in 6 Gas Turbines.
(xxx) Modification done
improvement
and
additional steam generation.
in 3 HRSGs
efficiency
for capacity
into
resulted
GROWTH IS LIFE
(xxxv) Scheme developed for treated effluent recycle
from Effluent Treatment plant to POY CP Jet
Cooling Tower.
(xxxvi) System installed for separating dow from Reflux
Water of CP 6 for dow recovery.
b. Benefits Derived as a result of the above efforts
(i)
Product development / Improvement and Cost
reduction
•
•
•
Installation of 80 U coils in Naphtha cracking
furnaces for increasing the yield and run
length will result in Rs 14 crore/annum.
Installation of 3rd Charge gas drier in cracker
plant has resulted
in 0.5 T/hr of steam
equivalent to Rs 45 lakh/annum.
Integration of Cooling Tower of aromatics and
cracker resulted in saving of Rs 141 lakh.
• Provision and Commissioning of Oxygen
Enrichment
in higher
productivity to the tune of Rs 12 crore/annum.
in PTA2
resulted
• EO reactor coolant loop modification resulted
in the higher productivity of 10-15 TPD in MEG
plants.
• Recovery of MEG from Glycol residue will
result in savings equivalent to Rs 110-150 lakh.
• Development of alternate source cost effective
catalyst,
for
polyethylene plant gave benefits of Rs 100
lakh/annum.
additives
chemical
and
• Optimization of water to monomer ratio in PVC
plant resulted in 0.35 MT per batch in PVC
plant.
• Usage of Iron chelating agent in PVC plant
resulted in improvement in product quality and
reduced lump formation in reactors.
• PVC line-II dryer ID fan upgradation resulted
in dryer area reliability.
•
Fogging system commissioned in air stream
and suspended particulate matter (SPM) level
reduced by almost 15% in PVC Dryer vent
gases.
• VCM plant capacity increase had resulted in
benefit of Rs 17 crore/annum.
• Capacity enhancement of the polyethylene
plant resulted in additional contribution of
Rs 33 crore.
• Scheme for the recovery of the solvent by the
addition of the third component has a potential
and import substitution equivalent of Rs 130
lakh/annum.
• New grade developed in PP plant helped in
better market penetration and customer
satisfaction.
• Successful
trials with new additives and
from different vendors
reduction as well as
additives/chemicals
helped
improvement in product quality.
in cost
• Rise in production in PP plant to the tune of
15-25 TPD due to change in catalyst particle
size from catalyst plant.
(xxxi)
Insulation of Return condensate header has
resulted into LP steam saving.
(xxxii) Recovery of Boiler sample cooler water and used
as Cooling Tower make up.
(xxxiii) Recovery and recycling of CBD
from BHEL
HRSGs to Cooling Towers and used as Cooling
Tower make-up resulted in water saving.
(xxxiv) DM-3 Activated Carbon Filters back wash water
recovered through Dyna-sand filter and used as
Cooling Tower make-up.
50
Reliance Industries Limited
GROWTH IS LIFE
•
Installation of Nucleonic Level Measurement in
POY plant resulted in better control over
esterification
rates with proper
residence time and eliminating level variations.
reaction
• Chilled water treatment from Phosphate based
to NaMo resulted in corrosion control on
chiller units.
New Instrument Air Dryer Increased reliability
of
terms of air
Instrument air quality
pressure and improved reliability.
in
•
Installation of lump breaker in PET process
reactor increased productivity in PET plant by
elimination of
formation, which was
limiting the reactor capacity.
lump
• Reliability of LP Air availability at constant
pressure conditions and at variation of power
frequency with synchronized power grid
operation.
• Online compressor washing
in all
in power output
Gas Turbines
enhancement equivalent to Rs 4 crore/annum.
resulted
facility
• Air fogging in GT has resulted into increased
power generation capability resulting in Rs 4
crore/annum from the investment of Rs 6
crore.
• Auto operated Guillotine Damper in GT’s has
resulted into steam saving during start-up &
shutdown equivalent to the benefit of Rs 34.7
lakh/annum.
• Alternative cost effective fuel firing in GT’s
resulted in saving of Rs 22 crore/annum.
• Capacity and efficiency
in
HRSG’s
steam
generation of 3 MT/hr per HRSG and net
saving is Rs 5.91 crore/annum.
into additional
improvement
resulted
• Water conservation and condensate recovery
schemes had resulted in total savings of Rs
97.7 lakh/annum.
•
recycle
effluent
from Effluent
Treated
Treatment plant to POY CP Jet Cooling Tower
resulted in Saving of 10 m3/hr of filter water
equivalent to Rs 7 lakh/annum.
• With
the
installation of separation system,
Dowtherm is recovered from process waste
water lead to the saving of Rs 1.5 crore/annum.
(ii) Import substitution
• Reduced imported catalyst to the tune of
Rs 35 crore/annum by substitution with
indigenous catalyst.
• Approximately Rs. 125
import
substitution done by in house manufacturing
and refurbishing of spare parts.
lakh worth
c.
Information regarding Imported Technology
Product
Technology from
Year
of import
Status of
implementation/
absorption
Polyester Staple Dupont (U.S.A.)/
Chemtex U.S.A.
Fibre Fill
UOP Inter America
Paraxylene
Inc.-U.S.A.
Union Carbide U.K.
Polypropylene
1998
1999
1999
Full
Full
Full
C.
FOREIGN EXCHANGE EARNINGS AND OUTGO
1. Activities
relating
to export,
to
increase exports, Developments of New export
markets for Products and Services and Export
Plan.
initiatives
The company has continued to maintain focus and
avail of export opportunities based on economic
considerations. During the year, the Company has
exports (FOB Value) worth Rs 10,626.29 Crore (US
$ 2237.82 million)
2.
Total Foreign exchange used and earned
a.
b.
Total Foreign Exchange earned
Total savings in foreign exchange
Through products manufactured by
the Company and deemed exports
(US$ 8,590 million)
Sub Total (a+b)
c.
Total Foreign Exchange used
Rs Crore
10,629.33
40,791.74
51,421.07
31,799.72
Form 'A'
Form for disclosure of Particulars with respect to
Conservation of Energy
A. Power & Fuel Consumption
2002-03
2001-02
45.71
2.03 #
4.44
59.03
3.25 #
5.50
1
Electricity
a) Purchased Units ( lakh) **
Total Cost ( Rs In Crore)
Rate/Unit (Rs)
b) Generation by/through third party captive
power facilities through Steam
Turbine/Generator **
Units (lakh)
22,540.20
22,117.45
KWH per unit of fuel
5.45
5.28
Total Cost (Rs In Crore)
614.58
611.58
Cost/Unit (Rs)
c) Own Generation
i) Through Diesel Generator
Units (lakh)
KWH per unit of fuel
Fuel Cost/Unit (Rs)
ii) Through Steam Turbine/Generator
Units (lakh)
KWH per unit of fuel
Fuel Cost/Unit (Rs)
2
Coal
Quantity (tonnes)
Total Cost (Rs In crore)
Average rate per Unit (Rs)
3
Furnace Oil
2.73
2.77
62.18
6.04
2.13
50.21
3.28
4.00
24,333.34
4.15
22,962.95
3.58
1.91
1.88
NIL
NIL
NIL
NIL
NIL
NIL
Quantity ( K.Ltrs)
146,391.24
152,918.04
Total Cost (Rs In crore)
133.65
113.24
Average rate per Ltr. ( Rs)
9.13
7.41
Reliance Industries Limited
51
GROWTH IS LIFE
2002-03
2001-02
2002-03
2001-02
4
Diesel Oil / GT Fuel
Quantity ( K.Ltrs )
1,208,203.28
929,656.56
Total Cost ( Rs. In crores )
Average rate per Ltr.( Rs)
1,019.65
8.44
904.82
9.73
B. Consumption per unit of production
Product
Electricity (KWH)
5
Others
Gas
Quantity (1000 M3)
Total Cost (Rs. In crores)
Average rate per 1000M3 (Rs)
# Excluding Demand Charges
1,128,823.35 1,010,051.77
772.11
7,644.22
1,043.35
9,242.83
Furnace Oil/
HSD/HFHSD (Ltrs)
LSHS (kgs)
Gas (SM3)
Fabrics (per 1000 mtrs)
Current
Year
4282
PFY (per MT)
PSF (per MT)
PTA (per MT)
LAB (per MT)
MEG (per MT)
PVC (per MT)
HDPE (per MT)
PP (per MT)
FF (per MT)
Cracker (per MT)
PET (per MT)
PX (per MT)
Petro-products (per MT)
840
480
389
627
584
540
327
329
855
144
301
270
61
Previous Current
Year
3575
889
484
408
604
596
543
317
341
752
161
278
244
55
Year
2
65
47
8
307
-
-
-
-
-
-
-
17
-
Previous
Year
4
Current
Year
-
41
27
8
308
-
-
-
-
-
-
-
2
-
12
10
-
207
-
-
-
-
-
-
-
-
-
Previous Current
Year
-
2
-
5
148
-
-
-
-
-
-
-
-
-
Year
641
-
-
-
-
-
-
-
-
352
-
-
-
-
Previous
Year
623
38
35
-
-
-
-
-
-
53
-
82
-
-
Place : Mumbai,
Dated: 23rd April, 2003.
Auditors' Report on Corporate Governance
For and on behalf of the Board of the Directors
Mukesh D. Ambani
Chairman & Managing Director
To the Members,
RELIANCE INDUSTRIES LIMITED
We have examined the compliance of conditions of Corporate
Governance by Reliance Industries Limited, for the year
ended on 31st March, 2003, as stipulated in Clause 49 of the
Listing Agreement
the said Company with stock
exchanges.
of
The compliance of conditions of Corporate Governance is the
responsibility of the Management. Our examination has been
limited to a review of the procedures and implementations
thereof adopted by the Company for ensuring compliance with
the conditions of the Corporate Governance as stipulated in
the said Clause. It is neither an audit nor an expression of
opinion on the financial statements of the Company.
In our opinion and to the best of our information and according
the
to
to us, and based on
the explanations given
For Chaturvedi & Shah
Chartered Accountants
D.Chaturvedi
Partner
Mumbai
Dated: 23rd April, 2003
representations made by the Directors and the Management,
we certify that the Company has complied with the conditions
of Corporate Governance as stipulated in Clause 49 of the
above mentioned Listing Agreement.
As required by the Guidance Note issued by the Institute of
Chartered Accountants of India we have to state that no
investor grievances were pending for a period of one month
against the Company as per the records maintained by the
Shareholders / Investor's Grievance Committee.
We further state that such compliance is neither an assurance
as to the future viability of the Company nor of the efficiency
or effectiveness with which the management has conducted
the affairs of the Company.
For Rajendra & Co.
Chartered Accountants
R.J.Shah
Partner
52
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, 2003 and the Profit
and Loss Account for the year ended on that date annexed
thereto and Cash Flow Statement for the period ended on that
date. 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.
1. We conducted our audit in accordance with the Auditing
Standards generally accepted in India. Those standards
require that we plan and perform the audit to obtain
reasonable assurance about whether
financial
statements are free of material misstatements. An audit
includes examining, on a test basis, evidence supporting
the amounts and disclosures in financial statements. An
audit also includes assessing the accounting principles
used and significant estimates made by the management,
as well as evaluating the overall financial statement
presentation. We believe
that our audit provides a
reasonable basis for our opinion.
the
2. As required by the Manufacturing and Other Companies
(Auditors' Report) Order, 1988 issued by the Central
Government of India in terms of sub-section (4A) of
section 227 of the Companies Act, 1956, we enclose in the
Annexure hereto a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
3. Further to our comments in the Annexure referred to in
paragraph 2 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 purposes of our audit;
b)
In our opinion, proper books of account, as required by
law, have been kept by the Company, so far as appears
from our examination of those books;
c) The Balance Sheet and Profit and Loss Account dealt
with by this report are in agreement with the books of
account;
d)
e)
f)
In our opinion the Balance Sheet and Profit and Loss
Account dealt with by this report comply with the
in
mandatory Accounting Standards
sub-section (3C) of section 211 of the Companies
Act, 1956;
referred
In our opinion, and based on
information and
explanations given to us, none of the directors are
disqualified as on 31st March, 2003 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
financial statements 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 present a true and fair
view in conformity with the accounting principles
generally accepted in India:
(i)
(ii)
in so far as it relates to Balance Sheet, of the state
of affairs of the Company as at 31st March, 2003;
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; and
(iii)
In so far as it relates to the Cash Flow Statement,
of the cash flows of the company for the year
ended on that date.
For Chaturvedi & Shah
Chartered Accountants
D.Chaturvedi
Partner
Mumbai
Dated: 23rd April, 2003
For Rajendra & Co.
Chartered Accountants
R.J.Shah
Partner
Annexure to Auditors' Report
the basis of
1. The Company has maintained proper records showing full
particulars including quantitative details and situation of
information available.
fixed assets on
According to the information and explanations given to us,
the fixed assets have been physically verified by the
management during the year in a phased periodical
manner which in our opinion is reasonable, having regard
to the size of the Company and nature of the assets. No
material discrepancies were noticed on such verification.
2. None of the fixed assets have been revalued during
the year.
3. As explained to us, the stock of stores, spare parts, raw
materials and finished goods have been physically verified
by the management at regular intervals during the year. In
our opinion,
is
reasonable having regard to the size of the Company and
the nature of its business.
frequency of such verification
the
4.
In our opinion and according to the information and
explanations given to us, the procedures of physical
verification of stocks followed by the management are
reasonable and adequate in relation to the size of the
Company and the nature of its business.
Reliance Industries Limited
53
GROWTH IS LIFE
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
the normally accepted accounting
accordance with
principles and is on the same basis as in the preceding year.
7. The company has not taken any loans, 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 as defined under sub-section (1B) of
Section 370 of the Companies Act. 1956.
8. The company has not given any loans, secured or
unsecured, to companies, firms or other parties as listed
in the register maintained under Section 301 of the
Companies Act, 1956, or to the companies under the
same management as defined under sub-section (1B) of
Section 370 of the Companies Act, 1956, except for
debentures held where the rate of interest and other
terms and conditions are not prima facie prejudicial to the
interests of the company. In respect of interest free loans
given to subsidiaries where there are no stipulations
regarding repayment, in our opinion, having regard to the
these companies and
long
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.
involvement with
term
9.
In respect of outstanding loans and advances in the
nature of loans given by the Company to parties other
than to subsidiaries as referred to in Paragraph 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 and
explanations given to us, there are adequate internal control
procedures commensurate with the size of the Company
and the nature of its business for the purchase of stores, raw
including components, plant and machinery,
materials
equipment and other assets and for the sale of goods.
11. In our opinion and according to the information and
explanations given to us there are no transactions of
purchase of goods and materials and of 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
For Chaturvedi & Shah
Chartered Accountants
D.Chaturvedi
Partner
Mumbai
Dated: 23rd April, 2003
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
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.
regular procedure
for
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 realizable 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
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, 2003 for a period of
more than six months from the date of becoming payable.
19. According to the information and explanations given to us
and on the basis of records examined by us, no personal
expenses of employees or directors have been charged to
Revenue Account other
those payable under
contractual obligations 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
54
Reliance Industries Limited
GROWTH IS LIFE
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, 2003, the Profit and Loss Account
and the Cash Flow Statement 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 in India and Accounting
Standards referred to in Section 211(3C) of the Companies
Act, 1956.
Respective Responsibilities of the Management and
Auditors
these
financial statements. The
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, 1956) who submit separately their report 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.
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
the
management in the preparation of the financial statements
and whether the accounting policies are appropriate to the
circumstances to the company, consistently applied and
judgements made by
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)
(ii)
In the case of the Balance Sheet, of the state of affairs
of the Company as at 31st March, 2003;
In the case of the Profit and Loss Account, of the profit
for the year ended on that date; and
(iii)
In the case of Cash Flow Statement, of the cash flows
for the year ended on that date.
For Deloitte Haskins & Sells
Chartered Accountants
P. R. Barpande
Partner
Mumbai
Dated: 23rd April, 2003
Reliance Industries Limited
55
GROWTH IS LIFE
Balance Sheet as at 31st March, 2003
Schedule
As at
31st March, 2003
Rs.
Rs.
(Rs. in crore)
As at
31st March, 2002
Rs.
Rs.
SOURCES OF FUNDS
Shareholders’ Funds
Share Capital
Equity Share Suspense
Reserves and Surplus
Deferred Tax Liability
Loan Funds
Secured Loans
Unsecured Loans
TOTAL
APPLICATION OF FUNDS
Fixed Assets
Gross Block
Less: Depreciation
Net Block
Capital Work-in-Progress
Investments
Current Assets, Loans and Advances
Current Assets
Inventories
Sundry Debtors
Cash and Bank Balances
Other Current Assets
Loans and Advances
Less: Current Liabilities and Provisions
Current Liabilities
Provisions
Net Current Assets
Miscellanous Expenditure
(to the extent not written off or adjusted)
TOTAL
Significant Accounting Policies
Notes on Accounts
1395.92
—
28,978.49
11,776.86
7,981.45
50,552.99
18,461.16
32,091.83
1,994.44
7,510.41
2,975.49
147.21
562.06
11,195.17
11,732.85
22,928.02
9,490.89
1,475.73
10,966.62
1,053.56
342.29
26,479.41
30,374.41
2,684.82
27,875.26
2,060.82
14,188.89
4,739.59
19,758.31
52,817.54
18,928.48
48,864.56
46,727.32
15,076.92
31,650.40
1,533.31
34,086.27
6,722.72
33,183.71
3,850.16
4,974.07
2,722.46
1,760.71
372.85
9,830.09
9,620.57
19,450.66
6,472.29
1,210.54
7,682.83
11,961.40
47.15
11,767.83
62.86
52,817.54
48,864.56
‘A’
‘B’
‘C’
‘D’
‘E’
‘F’
‘G’
‘H’
‘I’
‘N’
‘O’
As per our Report of even date
For and on behalf of the Board
For Chaturvedi & Shah
Chartered Accountants
For Rajendra & Co.
Chartered Accountants
D. Chaturvedi
Partner
R. J. Shah
Partner
Mumbai
Dated: 23rd April, 2003
M.D. Ambani
A.D. Ambani
N.R. Meswani
H.R. Meswani
H.S. Kohli
U. Mahesh Rao
S. Venkitaramanan
M.L. Bhakta
T. Ramesh U. Pai
Y.P. Trivedi
Dr. D.V. Kapur
M.P. Modi
V.M. Ambani
56
Reliance Industries Limited
}
}
Executive
Directors
- Nominee Director
Directors
- Company Secretary
- Chairman & Managing Director
- Vice-Chairman & Managing Director
Profit and Loss Account for the year ended 31st March, 2003
GROWTH IS LIFE
Schedule
2002-2003
Rs.
Rs.
Rs.
(Rs. in crore)
2001-2002
Rs.
65,061.44
14,965.63
50,095.81
4,198.02
57,119.57
11,715.69
45,403.88
3,314.98
INCOME
Turnover and Inter Divisional Transfers
Less: Inter Divisional Transfers
Turnover
Less: Excise Duty Recovered on Sales
Net Turnover
Other Income
Variation in Stocks
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 and Extra Ordinary Income
Add :
Extra Ordinary Income
Profit Before Tax
Provision for Current Taxation
Provision for Deferred Tax
Profit after Tax
Add :
Balance brought forward from Previous year
On Amalgamation
Deferred Tax liability for Earlier Years
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(paid)
Proposed Dividend on Equity Shares
Tax on Dividend
Balance Carried to Balance Sheet
Basic and Diluted Earnings per Share of Rs. 10 each (in Rupees)
[Ref. Note 11, Schedule ‘O’]
- Before extra ordinary items
- After extra ordinary items
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: 23rd April, 2003
3,452.79
615.70
400.00
279.75
—
2,000.00
20.08
698.19
89.46
45,897.79
1,001.21
2,435.49
49,334.49
3,420.75
36,547.28
1,555.16
2,837.09
44,360.28
4,974.21
—
4,974.21
245.90
624.00
4,104.31
2,726.23
—
—
—
6,830.54
3,487.48
3,343.06
29.25
29.25
3,435.82
619.68
—
137.64
4.95
2,000.00
—
663.28
—
42,088.90
782.34
(907.83)
41,963.41
1,697.84
31,607.33
1,825.10
2,816.14
37,946.41
4,017.00
411.70
4,428.70
190.00
996.00
3,242.70
2,160.65
1,071.50
(1,064.82)
122.07
5,532.10
2,805.87
2,726.23
20.39
23.36
‘N’
‘O’
For and on behalf of the Board
- Chairman & Managing Director
- Vice-Chairman & Managing Director
M.D. Ambani
A.D. Ambani
N.R. Meswani
H.R. Meswani
H.S. Kohli
U. Mahesh Rao
S. Venkitaramanan
M.L. Bhakta
T. Ramesh U. Pai
Y.P. Trivedi
Dr. D.V. Kapur
M.P. Modi
V.M. Ambani
}
}
Executive
Directors
- Nominee Director
Directors
- Company Secretary
Reliance Industries Limited
57
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
SCHEDULE ‘A’
SHARE CAPITAL
Authorised:
250 00 00 000 Equity Shares of Rs. 10 each
(120 00 00 000)
50 00 00 000 Preference Shares of Rs. 10 each
(10 00 00 000) Preference shares of Rs. 100 each
As at
31st March, 2003
Rs.
Rs.
2,500.00
500.00
(Rs. in crore)
As at
31st March, 2002
Rs.
Rs.
1,200.00
1,000.00
3,000.00
2,200.00
Issued, Subscribed and Paid up:
139 63 77 536 Equity Shares of Rs. 10 each fully
(105 37 57 027) paid up
Less: Calls in arrears - by others
1,396.38
0.46
1,053.76
0.20
TOTAL
Notes:
1. Of the above Equity Shares:
1,395.92
1,395.92
1,053.56
1,053.56
(a)
(b)
(c)
48 17 70 552
(48 17 70 552)
52 31 98 799
(18 05 78 290)
Shares were allotted as Bonus Shares by capitalisation of Share Premium and Reserves.
Shares were allotted pursuant to Schemes of Amalgamation without payments being received in
cash and includes 10,46,60,154 Shares allotted to the Petroleum Trust, the sole beneficiary of
which is Reliance Industrial Investments and Holdings Limited, a wholly owned subsidiary of the
Company
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 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 during the year has issued and redeemed Preference Shares aggregating to Rs. 400.00 crore, at par.
4. The Authorised share capital has increased to Rs. 3,000 crore consisting of 250,00,00,000 equity shares of Rs. 10 each and
50,00,00,000 Preference Shares of Rs. 10 each in terms of the Scheme of Amalgamation sanctioned by order dated 7th June,
2002 of The Hon’ble High Court of Bombay and the order dated 13th September, 2002 of the Hon’ble High Court of Gujarat.
58
Reliance Industries Limited
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
SCHEDULE ‘B’
RESERVES AND SURPLUS
As at
(Rs. in crore)
As at
31st March, 2003
31st March, 2002
Rs.
Rs.
Rs.
Rs.
Revaluation Reserve
As per last Balance Sheet
Less: Deduction on retirement of Revalued Assets
2,738.50
2.69
2,770.78
32.28
Capital Reserve
As per last Balance Sheet
Add : On Amalgamation
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 : On Amalgamation
Less: Premium on Redemption of Debentures/Bonds
Less: Calls in arrears - by others
Debenture Redemption Reserve
As per last Balance Sheet
Add : On Amalgamation
Add : Transferred from Profit and Loss Account
Investment Allowance (Utilised) Reserve
As per last Balance Sheet
Less: Transferred to Profit and Loss Account
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), 3(b) and 3(c), Schedule ‘O’]
Add : Transferred from Profit and Loss Account
291.28
—
—
485.07
400.00
16,153.81
—
16,153.81
180.79
15,973.02
2.55
1,120.27
—
279.75
76.63
—
2,881.85
615.70
2,266.15
2,000.00
Profit and Loss Account
TOTAL
* Cumulative amount transferred on account of Depreciation on Revaluation
Rs. 2,417.99 crore (Previous Year Rs. 2,301.38 crore)
2,735.81
2,738.50
285.68
0.65
4.95
291.28
291.28
485.07
—
885.07
485.07
5,449.22
10,739.67
16,188.89
35.08
16,153.81
4.23
15,970.47
16,149.58
852.46
130.17
137.64
1,400.02
1,120.27
76.63
10.00
76.63
10.00
198.70
122.07
1,501.53
619.68
881.85
2,000.00
4,266.15
3,343.06
28,978.49
2,881.85
2,726.23
26,479.41
Reliance Industries Limited
59
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
SCHEDULE ‘C’
SECURED LOANS
A) DEBENTURES
1
2
Non-Convertible Debentures
Deep Discount Debentures
Less : Unamortised Discounts
B) TERM LOANS
1.
2.
From Banks
Foreign Currency Loans
From Financial Institutions
Rupee Loans
C) WORKING CAPITAL LOANS
From Banks
Rupee Loans
TOTAL
Notes:
As at
31st March, 2003
Rs.
Rs.
(Rs. in crore)
As at
31st March, 2002
Rs.
Rs.
10,037.08
607.50
83.63
523.87
—
23.64
8,551.58
600.00
137.98
462.02
10,560.95
9,013.60
4,289.07
167.20
23.64
4,456.27
1192.27
11,776.86
719.02
14,188.89
1.
(a) Debentures referred to in A above to the extent of Rs. 4161.14 crore are secured by way of first mortgage / charge in
favour of the Trustees 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. 992.25 crore are secured by way of first mortgage / charge in
favour of the Trustees on all the properties situated at Patalganga, District Raigad in the State of Maharashtra and on
the properties of petrochemicals complex 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. 40.00 crore 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 to the extent of Rs. 4215.00 crore are secured by way of first mortgage / charge in
favour of the Trustees on all the properties, both present and future, excluding book debts, office premises and certain
other properties specifically excluded of the Refinery Division of the Company.
(e) Debentures referred to in A above to the extent of Rs. 1152.56 crore are to be secured by way of first mortgage / charge
in favour of the Trustees on all the properties, both present and future, excluding book debts, office premises and certain
other properties specifically excluded of the Refinery Division of the Company.
(f) Debentures referred to in A above consisting of:
(1)13% Debentures of Rs. 100 each, aggregating Rs. 145.00 crore are redeemable at par as follows: viz Rs. 45 crore
on 11th October, 2009 and Rs. 100 crore on 17th November, 2009. (2) 14.08% Debentures of Rs. 33.33 each
aggregating Rs. 29.17 crore are redeemable at par on the expiry of the seventh year from the date of allotment;
i.e. 31st March, 2004. (3) 13.5% Debentures of Rs. 80,00,000 each, aggregating Rs. 40.00 crore are redeemable
at par in two annual instalments on the expiry of the sixth and seventh year from the date of allotment; i.e.
commencing from 15th September, 2003. (4) 12.25% Debentures of Rs. 66,66,667 each aggregating Rs. 216.67
crore, are redeemable at par in two annual instalments on the expiry of sixth and seventh year from the date of
allotment; commencing from 1st January, 2004. (5) 12.5% Debentures of Rs. 1,00,00,000 each aggregating Rs.
110.00 crore are redeemable at par on the expiry of seventh year from the date of allotment i.e. 1st January, 2005.
(6) 13.75% Debentures of Rs. 1,00,00,000 each aggregating Rs. 110.00 crore are redeemable at par on the expiry
of the tenth year from the respective dates of allotment i.e. 1st January, 2008. (7) 13.75% Debentures of Rs.
1,00,00,000 each aggregating Rs. 80.00 crore are redeemable at par on the expiry of the tenth year from the
respective dates of allotment, i.e. 1st January, 2008. (8) 14.75% Debentures of Rs. 1,00,00,000 each aggregating
Rs. 166.00 crore are redeemable at par in three equal annual instalments, on expiry of eighth, ninth and tenth year
from the respective dates of allotment; commencing from 13th February, 2006. (9) 14.25% Debentures of Rs.
1,00,00,000 each aggregating Rs. 200.00 crore are redeemable at par on the expiry of the tenth year from the date
of allotment; i.e 27th May, 2008. (10) 15.03% Debentures of Rs. 1,00,00,000 each aggregating Rs. 150.00 crore are
redeemable at par on
i.e 12th June, 2008.
(11) 15.03 % Debentures of Rs. 25,00,000 each aggregating Rs. 66.25 crore which are redeemable at par on the
the date of allotment;
the expiry of
tenth year
from
the
60
Reliance Industries Limited
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
SCHEDULE ‘C’ (Contd.)
expiry of the tenth year from the date of allotment; i.e. 25th June, 2008. (12) 14.25% Debentures of Rs. 1,00,00,000
each aggregating Rs. 150.00 crore are redeemable at par on the expiry of the tenth year from the date of allotment;
i.e. 9th September, 2008. (13) 15.03% Debentures of Rs. 1,00,00,000 each aggregating Rs. 21.00 crore are
redeemable at par on the expiry of the tenth year from the date of allotment; i.e. 27th September, 2008.
(14) 15.03% Debentures of Rs. 1,00,00,000 each aggregating Rs. 100.00 crore are redeemable at par on the expiry
of the tenth year from the date of allotment; i.e. 4th October, 2008. (15) 14.25% Debentures of Rs. 1,00,00,000 each
aggregating Rs. 100.00 crore are redeemable at par on the expiry of the tenth year from the date of allotment; i.e.
26th November, 2008. (16) 15.03% Debentures of Rs. 1,00,00,000 each aggregating Rs. 25.00 crore are
redeemable at par on the expiry of the tenth year from the date of allotment; i.e. 20th October, 2008. (17) 11.50
% Debentures of Rs. 1,00,00,000 each aggregating Rs. 195.00 crore are redeemable at par on the expiry of the
fifty four months from the date of allotment; i.e. 12th November, 2003. (18) Deep Discount Debentures aggregating
Rs. 521.31 crore are redeemable at par on the expiry of sixty months from the date of allotment; i.e. 1st June, 2004.
(19) 12.70% Debentures of Rs. 1,00,00,000 each aggregating Rs. 100.00 crore are redeemable at par in 15th
December, 2007. (20) 12.36% Debentures of Rs. 1,00,00,000 each aggregating Rs. 51.00 crore are redeemable at
par on the expiry of fifth year from the respective dates of allotment; commencing from 24th August, 2004. (21)
12.35% Debentures of Rs. 1,00,00,000 each aggregating Rs. 45.00 crore are redeemable at par on the expiry of
fifth year from the date of allotment; i.e. 30th August, 2004. (22) Debentures of Rs. 50,00,000 each aggregating Rs.
92.00 crore carrying an interest rate linked to the interest rate as announced by CRISIL, which are redeemable at
par on the expiry of fifth year from the date of allotment; i.e. 10th February, 2005. (23) 10.85% Debentures of Rs.
1,00,00,000 each aggregating Rs. 50.00 crore are redeemable at par on the expiry of fifth year from the date of
allotment; i.e. 24th February, 2005. (24) 11.00% Debentures of Rs. 1,00,00,000 each aggregating Rs. 75.00 crore
are redeemable at par on the expiry of third year from the date of allotment; i.e. 11th July, 2003. (25) 12.10%
Debentures of Rs. 1,00,00,000 each aggregating Rs. 155.00 crore are redeemable at par on the expiry of fifth year
from the date of allotment; i.e. 15th September, 2005. (26) MIBOR Linked Debentures of Rs. 1,00,00,000 each
aggregating Rs. 60.00 crore are redeemable at par on the expiry of third year from the date of allotment; i.e. 12th
October, 2003. (27) 10.90% Debentures of Rs. 1,00,00,000 each aggregating Rs. 100.00 crore are redeemable at
par on the expiry of third year from the date of allotment; i.e. 19th January, 2004. (28) 9.90% Debentures of Rs.
1,00,00,000 each aggregating Rs. 50.00 crore are redeemable at par on the expiry of fifth year from the date of
allotment; i.e. 15th June, 2006. (29) 9.90% Debentures of Rs. 1,00,00,000 each aggregating Rs. 50.00 crore are
redeemable at par on the expiry of fifth year from the date of allotment; i.e. 21st June, 2006. (30) 9.60% Debentures
of Rs. 1,00,00,000 each aggregating Rs. 50.00 crore are redeemable at par on the expiry of fifth year from the date
of allotment; i.e. 22nd June, 2006. (31) 9.55% Debentures of Rs. 1,00,00,000 each aggregating Rs. 50.00 crore are
redeemable at par on the expiry of fifth year from the date of allotment; i.e. 11th July, 2006. (32) 9.60% Debentures
of Rs. 1,00,00,000 each aggregating Rs. 50.00 crore are redeemable at par on the expiry of fifth year from the date
of allotment; i.e. 12th July, 2006. (33) 8.45% Debentures of Rs. 10,00,000 each aggregating Rs. 100.00 crore are
redeemable at par on the expiry of fifth year from the date of allotment; i.e. 29th March, 2007. (34) 8.25%
Debentures of Rs. 10,00,000 each aggregating Rs. 140.00 crore are redeemable at par on the expiry of fourth year
from the date of allotment; i.e. 20th May, 2006. (35) 8.70% Debentures of Rs. 10,00,000 each aggregating Rs.
100.00 crore are redeemable at par on the expiry of four years and ten months from the date of allotment; i.e. 19th
April, 2007. (36) 9.25% Debentures of Rs. 10,00,000 each aggregating Rs. 1000.00 crore are redeemable at par
in four equal annual instalments starting from the end of ninth year from the respective date of allotment; i.e. 17th
June, 2011. (37) 8.65% Debentures of Rs. 10,00,000 each aggregating Rs. 100.00 crore are redeemable at par on
the expiry of four years and eleven months from the date of allotment; i.e. 2nd May, 2007. (38) 8.65% Debentures
of Rs. 10,00,000 each aggregating Rs. 100.00 crore are redeemable at par on the expiry of four years and eleven
months from the date of allotment; i.e. 2nd June, 2007. (39) 8.00% Debentures of Rs. 10,00,000 each aggregating
Rs. 100.00 crore are redeemable at par on the expiry of fifth year from the date of allotment; i.e. 19th June, 2007.
(40) Benchmark Rate plus 0.90% Debentures of Rs. 10,00,000 each aggregating Rs. 50.00 crore are redeemable
at par on the expiry of four years and eleven months from the date of allotment; i.e. 9th July, 2007. (41) 7.70%
Debentures of Rs. 10,00,000 each aggregating Rs. 100.00 crore are redeemable at par on the expiry of fourth year
from the date of allotment; i.e. 7th August, 2006. (42) 6.20% Debentures of Rs. 10,00,000 each aggregating Rs.
450.00 crore are redeemable at par on the expiry of four years and eleven months from the date of allotment; i.e.
20th November, 2007. (43) 6.20% Debentures of Rs. 10,00,000 each aggregating Rs. 50.00 crore are redeemable
at par on the expiry of four years and eleven months from the date of allotment; i.e. 20th November, 2007. (44)
6.45% Debentures of Rs. 10,00,000 each aggregating Rs. 400.00 crore are redeemable at par on the expiry of tenth
year from the date of allotment; i.e. 20th December, 2012. (45) 6.50% Debentures of Rs. 10,00,000 each
aggregating Rs.250.00 crore are redeemable at par on the expiry of tenth year from the date of allotment; i.e. 31st
January, 2013. (46) Deep Discount Debentures of Rs. 10,00,000 each aggregating Rs. 1.31 crore are redeemable
at par on the expiry of tenth year from the date of allotment; i.e. 31st January, 2013. (47) Deep Discount Debentures
of Rs. 10,00,000 each aggregating Rs. 1.25 crore are redeemable at par on the expiry of twentieth year from the
date of allotment; i.e. 31st January, 2023. (48) 13.5% Debentures of Rs.1,00,00,000 each aggregating Rs.150 crore
are redeemable at par in 5 annual installments of 10%, 10%, 10%, 35% and 35% commencing from 30th March
2005. (49) 13.5% Debentures of Rs.1,00,00,000 each aggregating Rs.190 crore are redeemable at par in 5 annual
installments of 10%, 10%, 10%, 35% and 35% commencing from 31st March 2005. (50) 13% Debentures of
Rs.1,00,00,000 each aggregating Rs.100 crore are redeemable at par in 5 annual installments of 10%, 10%, 10%,
35% and 35% commencing from 15th June 2005. (51) 13% Debentures of Rs.1,00,00,000 each aggregating Rs.100
crore are redeemable at par in 5 annual installments of 10%, 10%, 10%, 35% and 35% commencing from 28th June
2005. (52) 12.75% Debentures of Rs.1,00,00,000 aggregating 221 crore are redeemable at par in 5 annual
Reliance Industries Limited
61
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
SCHEDULE ‘C’ (Contd.)
installments of 10%, 10%, 10%, 35% and 35% commencing from 10th August 2005. (53) 13.55% Debentures of
Rs.1,00,00,000 each aggregating Rs.70 crore are redeemable at par in 5 annual installments of 10%, 10%, 10%,
35% and 35% commencing from 12th August 2005. (54) 13% Debentures of Rs.1,00,00,000 each aggregating
Rs.105 crore are redeemable at par in 17th September 2004. (55) 13.5% Debenture of Rs.1,00,00,000 is
redeemable at par in 3 annual installments of 30%, 30% and 40% commencing from 17th September 2007. (56)
13.25% Debenture of Rs.1,00,00,000 is redeemable at par in 3 annual installments of 30%, 30% and 40%
commencing from 17th September 2005. (57) 12.75% Debentures of Rs.1,00,00,000 aggregating 165 crore are
redeemable at par in 5 annual installments of 10%, 10%, 10%, 35% and 35% commencing from 17th September,
2005. (58) 13.5% Debenture of Rs.1,00,00,000 each aggregating Rs.145 crore are redeemable at par in 3 annual
installments of 30%, 30% and 40% commencing
from 20th September 2007. (59) 13.5% Debenture of
Rs.1,00,00,000 each aggregating Rs.272 crore are redeemable at par in 3 annual installments of 30%, 30% and
40% commencing from 1st October, 2007. (60) 13.5% Debenture of Rs.1,00,00,000 each aggregating Rs.155 crore
are redeemable at par in 3 annual installments of 30%, 30% and 40% commencing from 11th October, 2007. (61)
13.5% Debentures of Rs.1,00,00,000 each aggregating Rs.300 crore are redeemable at par in 5 annual installments
of 10%, 10%, 10%, 35% and 35% commencing from 29th September 2005. (62) 13.5% Debentures of Rs.25,00,000
each aggregating Rs.125 crore are redeemable at par in 5 annual installments of 10%, 10%, 10%, 35% and 35%
commencing from 25th October 2005. (63) 11.75% Debentures of Rs.1,00,00,000 each aggregating Rs.300 crore
are redeemable at par in 5 annual installments of 10%, 10%, 10%, 35% and 35% commencing from 30th May, 2006.
(64) 12.25% Debentures of Rs.1,00,00,000 each aggregating Rs.200 crore are redeemable at par in 5 annual
installments of 10%, 10%, 10%, 35% and 35% commencing from 22nd August 2006. (65) 11.50% Debentures of
Rs.1,00,00,000 each aggregating Rs.410 crore are redeemable at par in 6th February 2006. (66) 11.20%
Debentures of Rs.1,00,00,000 each aggregating Rs.175 crore are redeemable at par in 24th February 2004. (67)
11.50% Debentures of Rs.1,00,00,000 each aggregating Rs.500 crore are redeemable at par in three equal annual
installments commencing from 1st March 2006. (68) 11.30% Debentures of Rs.1,00,00,000 each aggregating Rs.50
crore are redeemable at par in 1st March 2006. (69) 11.15% Debentures of Rs.1,00,00,000 each aggregating Rs.45
crore are redeemable at par in 2nd May 2006. (70) 11.10% Debentures of Rs.1,00,00,000 each aggregating Rs.50
crore are redeemable at par in 30th April 2006. (71) 11.00% Debentures of Rs.1,00,00,000 each aggregating Rs.20
crore are redeemable at par in 9th May 2006. (72) 11.05% Debentures of Rs.1,00,00,000 each aggregating Rs.100
crore are redeemable at par in 9th May 2006. (73) 10.95% Debentures of Rs.1,00,00,000 each aggregating Rs.25
crore are redeemable at par in 15th May 2006. (74) 9.95% Debentures of Rs.1,00,00,000 each aggregating Rs.50
crore are redeemable at par in 8th June 2003. (75) 10.00% Debentures of Rs.1,00,00,000 each aggregating Rs.40
crore are redeemable at par in 15th June 2006. (76) 10.00% Debentures of Rs.1,00,00,000 each aggregating Rs.50
crore are redeemable at par in 20th June 2006. (77) 10.00% Debentures of Rs.1,00,00,000 each aggregating Rs.50
crore are redeemable at par in 10th July, 2006. (78) 9.90% Debentures of Rs.1,00,00,000 each aggregating Rs.50
crore are redeemable at par in 18th July 2006.
2.
(a) Foreign currency loans to the extent of Rs.3561.38 crore, from Banks which was secured by first pari passu mortgage
and charge on the immovable and movable properties, both present and future, excluding book debts, office premises
and certain other properties specifically excluded of the refinery division of the Company, was converted during the year
from secured borrowing into unsecured.
(b) Rupee Term Loan referred to in B(2) above is secured/to be secured only on the dwelling units constructed/to be
constructed for the employees of the Company.
3.
4.
Working Capital Loans from Banks referred to in C above to the extent of Rs. 1192.27 crore 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.
Debentures of Rs. 802.50 crore are redeemable at par within one year.
SCHEDULE ‘D’
UNSECURED LOANS
A. Long Term:
i)
ii)
From Banks
From Others
B. Short Term:
From Banks
TOTAL
As at
31st March, 2003
Rs.
Rs.
(Rs. in crore)
As at
31st March, 2002
Rs.
Rs.
5,851.50
1,979.95
1,429.25
3,310.34
7,831.45
150.00
7,981.45
4,739.59
—
4,739.59
62
Reliance Industries Limited
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
SCHEDULE ‘E’
FIXED ASSETS
Description
As At
Additions
Deductions/
As at
Upto
For the
Deductions/
Upto
As At
As At
Gross Block
Depreciation
(Rs. in crore)
Net Block
1-4-2002
Rs.
56.68
159.74
1,067.83
2,514.16
40,434.96
729.24
546.79
175.12
104.51
214.78
46.92
646.97
Adjustments
31-3-2003
31-3-2002
Rs.
Rs.
Rs.
Rs.
0.11
70.77
6.06
211.25
3,393.92
47.80
141.27
25.65
49.06
—
—
—
—
0.01
17.43
1.05
79.00
0.30
1.66
1.27
15.35
—
—
—
56.79
230.50
4.19
—
1,056.46
2,724.36
236.29
503.31
197.74
124.99
43,749.88
13,393.71
2,923.93
776.74
686.40
199.50
138.22
214.78
46.92
646.97
347.40
167.05
74.86
52.47
160.74
29.93
100.29
66.92
47.40
22.20
19.20
7.57
2.75
33.15
Year
Rs.
0.53
—-
Adjustments
31-3-2003
31-3-2003
31-3-2002
Rs.
Rs.
Rs.
Rs.
—
—
—
0.19
55.83
0.06
0.62
0.69
10.46
—
—
—
4.72
—
434.03
628.11
52.07
230.50
52.49
159.74
622.43
2,096.25
831.54
2,010.85
16,261.81
27,488.07
27,041.25
414.26
213.83
96.37
61.21
168.31
32.68
133.44
362.48
472.57
103.13
77.01
46.47
14.24
513.53
381.84
379.74
100.26
52.04
54.04
16.99
546.68
46,697.70
3,945.89
116.07
50,527.52
15,070.24
3,446.38*
67.85
18,448.77
32,078.75
31,627.46
19.64
9.98
29.62
0.78
—
0.78
4.93
—
4.93
15.49
9.98
25.47
5.02
1.66
6.68
4.42
1.99
6.41
0.70
—
0.70
8.74
3.65
12.39
6.75
6.33
13.08
14.62
8.32
22.94
46,727.32
3,946.67
121.00
50,552.99
15,076.92
3,452.79
68.55
18,461.16
32,091.83
31,650.40
OWN ASSETS:
Leasehold Land
Freehold Land
Development Rights /
Producing Properties
Buildings
Plant and Machinery
Electrical Installations
Equipments
Furniture and Fixtures
Vehicles
Ships
Aircrafts & Helicopters
Jetties
Sub-Total
LEASED ASSETS:
Plant and Machinery
Ships
Sub-Total
Total
Previous Year
25,355.99
21,648.54**
277.21
46,727.32
11,841.53
3,435.82
200.43
15,076.92
31,650.40
Capital Work-in-Progress
NOTES :
1994.44
1,533.31
a)
b)
Leasehold Land includes Rs. 0.21 crore in respect of which lease-deeds are pending execution.
Buildings include :
i)
ii)
Cost of shares in Co-operative Societies Rs. 0.01 crore ( Previous Year Rs. 0.01 crore).
Rs. 93.20 crore incurred towards purchase/acquisition of 1,94,819 Equity Shares of Re. 1 each of M/s. Mature Trading & Investments Pvt. Ltd. with a right of occupancy
of certain area of a commercial premises.
c)
Capital Work-in-Progress includes :
i)
ii)
Rs. 76.47 crore on account of pre-operative expenses. (Previous Year Rs. 64.86 crore)
Rs. 133.97 crore on account of cost of construction materials at site. (Previous Year Rs. 477.04 crore).
iii) Rs. 279.18 crore on account of advance against Capital Expenditure. (Previous Year Rs.197.62 crore).
d)
e)
Additions and Capital Work in Progress is net of Rs. 13.91 crore on account of exchange difference during the year.(Previous Year Rs. 294.29 crore- Additions).
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.
f)
Gross Block includes Rs. 2,735.81 crore (Previous Year Rs. 2,738.50 crore) being the amount added on revaluation of Plant and Machinery as at 01-04-1997
* Refer to Note 3(a), 3(b) and 3(c), Schedule 'O'
** Includes fair value assets of Rs. 19,352.22 crore added on amalgamation of Reliance Petroleum Limited based on valuer’s report.
Reliance Industries Limited
63
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
SCHEDULE ‘F’
INVESTMENTS
A. LONG TERM INVESTMENTS
Government and other securities
Unquoted
Indira Vikas Patra
Kisan Vikas Patra
(Deposited with Sales Tax Dept.)
(Rs. 20,000 Previous Year Rs. 20,000)
7 years National savings certificate
(Deposited with Sales Tax Dept.)
(Rs. 12,000 previous year Rs. 1,000)
Trade Investments
In Equity Shares Unquoted, fully paid up
5
Bombay Gujarat Art Silk Vepari Mahajan
(5) Co-operative Shops and Warehouse Society Ltd.,
of Rs. 200 each, (Rs 1,000; Previous Year Rs. 1,000)
60 New Piece Goods Bazar Co. Ltd., of Rs. 100 each,
(60)
15
(Rs. 17,000; Previous Year Rs. 17,000)
Pandesara Industrial Co-operative Society Ltd., of
(15) Rs. 100 each (Rs. 1,500; Previous Year Rs. 1,500)
165
(165)
20
(20)
The Art Silk Co-operative Society Ltd., of Rs. 100 each,
(Rs. 16,500; Previous Year Rs. 16,500)
The Bombay Market Art Silk Co-operative
(Shops and Warehouses) Society Ltd., of
Rs. 200 each, (Rs. 4,000; Previous Year Rs. 4,000)
Petronet V. K. Ltd., of Rs.10 each
1,30,00,000
(1,30,00,000)
29,38,000
(26,000)
1,00,00,000
(1,00,00,000)
Petronet C.I. Ltd., of Rs.10 each
Petronet India Ltd., of Rs.10 each
In Equity Shares Unquoted, partly paid up
225 Crimpers Industrial Co-operative Society Ltd., of
(225) Rs.100 each, Rs. 25 paid up
(Rs. 5,625; Previous Year Rs. 5,625)
Other Investments
In Equity Shares - Quoted, fully paid up
BSES Ltd., of Rs.10 each
15,51,549
(15,51,549)
6,00,89,966 Reliance Capital Ltd., of Rs. 10 each
(6,01,23,886)
69,80,000 Reliance Industrial Infrastructure Ltd., of
(69,80,000) Rs. 10 each
As at
31st March, 2003
Rs.
Rs.
(Rs. in crore)
As at
31st March, 2002
Rs.
Rs.
0.51
0.51
—
—
—
—
—
—
—
13.00
2.94
10.00
25.94
—
—
33.73
485.80
16.58
536.11
0.51
0.51
—
—
—
—
—
—
—
13.00
0.03
10.00
23.03
—
—
25.94
23.03
33.73
486.25
16.58
536.56
64
Reliance Industries Limited
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
SCHEDULE ‘F’ ( contd.)
INVESTMENTS
As at
31st March, 2003
Rs.
Rs.
(Rs. in crore)
As at
31st March, 2002
Rs.
Rs.
In Equity Shares - Unquoted, fully paid up
51,02,080 Reliance Telecom Ltd., of Rs. 10 each
(51,02,080)
31,50,00,000 Reliance Infocomm Ltd., of Re 1 each
(31,50,00,000)
(Company under the same management)
2,55,00,175 Reliance General Insurance Company Ltd.,
(2,55,00,175)
of Rs. 10 each
500,175 Reliance Life Insurance Company Ltd., of
(500,175) Rs. 10 each
5.10
31.50
25.50
0.50
90,00,00,000 Reliance Communications Infrastructure Ltd.,
2,331.00
(81,00,00,000)
1,000
of Re 1 each
(Company under the same management)
Air Control and Chemical Engineering Co. Ltd., of
(1,000) Rs. 100 each
118 Reliance Petroproducts Private Ltd., of Rs. 10 each,
(118)
(Rs. 1,180; Previous Year Rs. 1,180)
11,08,500 Reliance Europe Ltd of Sterling Pound 1 each
(11,08,500)
0.01
—
3.93
145 Reliance Global Trading Private Ltd., of Rs. 10 each,
—
(145)
(Rs. 1,450; Previous Year Rs. 1,450)
5.10
31.50
25.50
0.50
81.00
0.01
—
3.93
—
2,397.54
147.54
In Equity Shares Unquoted, partly paid up
226 Reliance Global Trading Private Ltd., of Rs.10 each,
(226) Rs. 2.50 paid up (Rs. 565; Previous Year Rs. 565)
182 Reliance Petroproducts Private Ltd., of Rs. 10 each,
(182) Rs.2.50 paid up (Rs. 455; Previous Year Rs. 455)
In Preference Shares Unquoted, fully paid up
— 14% Cumulative Redeemable Preference Shares of
(1,08,00,000) Reliance Ports and Terminals Ltd., of Rs. 100 each
— 14% Cumulative Redeemable Preference Shares of
(37,50,000)
86,00,000
Reliance Utilities & Power Ltd., of Rs. 100 each
6% Cumulative Redeemable Preference Shares of
(86,00,000 ) Reliance Enterprises Ltd., of Rs. 100 each
2,18,90,000
14% Cumulative Redeemable Preference Shares of
(2,18,90,000) Reliance Salgaocar Power Ltd., of Rs. 10 each
—
—
—
—
—
86.00
21.89
12,69,000
9% Cumulative Redeemable Preference Shares of
12.69
(12,69,000) Goa Trading Private Ltd., of Rs. 100 each
120.58
In Debentures Unquoted, fully paid up
—
—
—
108.00
37.50
86.00
21.89
12.69
266.08
6,40,140 Deep Discount Bonds of Reliance Communications
1,600.02
1,600.02
(6,40,140)
Infrastructure Ltd.,
of Maturity Value of Rs. 1,00,000 each.
(Company under the same management)
13,752 Deep Discount Bonds of Reliable Internet
(13,752)
Services Ltd., of Maturity Value of Rs. 1,00,000 each.
70.00
70.00
1,670.02
1,670.02
4,724.25
2,620.20
Reliance Industries Limited
65
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
SCHEDULE ‘F’ ( contd.)
INVESTMENTS
As at
31st March, 2003
Rs.
Rs.
(Rs. in crore)
As at
31st March, 2002
Rs.
Rs.
In Equity Shares of Subsidiary Companies - Unquoted, fully paid up
-
(2,10,070)
Vimal Fabrics Ltd., of Rs.10 each
—
14,75,04,400 Reliance Industrial Investments and Holdings Ltd.,
147.50
(14,75,04,400)
of Rs.10 each
20,20,000 Reliance Power Venture Ltd., of Rs. 10 each
(20,20,000)
20,20,000 Reliance Ventures Ltd., of Rs. 10 each
(20,20,000)
45,000 Reliance LNG Ltd., of Rs. 10 each
(45,000)
11,120 Reliance Infocom BV., of 100 EURO Each
(11,120)
- Reliance Petroinvestments Ltd., of Rs. 10 each
(88,77,551)
2.02
2.02
0.05
4.48
—
20,20,200 Reliance Strategic Investments Ltd., of Rs.10 each
2.02
(20,20,200)
Reliance Technologies LLC (Refer Note 1)
—
158.09
In Debentures of Subsidiary Companies - Unquoted, fully paid up
2,79,90,000
(2,79,90,000)
8,83,143
8.25% Unsecured Convertible Debentures of Reliance
Industrial Investments and Holdings Ltd., of
Rs. 100 each
6.50% Unsecured Optionally Convertible
279.90
441.58
(8,83,143) Debentures of Reliance Industrial Investments
and Holdings Ltd., of Rs. 5,000 each (Refer Note 3)
0.21
147.50
2.02
2.02
0.05
4.48
8.22
2.02
17.54
184.06
279.90
441.58
TOTAL (A)
B. CURRENT INVESTMENTS
Other Investments in Units Quoted
721.48
721.48
879.57
5,630.27
905.54
3,549.28
85,600 Unit Scheme 1964, Unit Trust of India (Refer Note 4)
0.08
(85,600)
-
(1,59,900)
of Rs. 10 each (Deposited with Mumbai Port Trust)
SBI Magnum Multiplier Plus 1993
of Rs. 10 each. (Refer Note 2)
Other Investments in Units Unquoted
3,04,81,268 Reliance Liquid Fund - Cash Plan of Rs. 10 each
(-)
33,33,449 Reliance Liquid Fund - Treasury Plan of Rs. 10 each
(-)
3,75,15,484 Reliance Income Fund - Growth Plan of Rs. 10 each
(-)
—
0.08
32.70
4.88
70.01
60,31,02,631 Reliance Liquid Fund - Super Cash Plan of Rs. 10 each
(23,91,77,917)
10,61,04,097 Reliance Monthly Income Plan of Rs. 10 each
622.07
139.84
(-)
22,01,15,723 Reliance Short Term Fund - Growth Plan of Rs. 10 each
222.87
(-)
0.08
0.16
0.24
—
—
—
300.64
—
—
TOTAL (B)
TOTAL (A+B)
1,092.37
300.64
1,092.45
6,722.72
300.88
3,850.16
66
Reliance Industries Limited
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
SCHEDULE ‘F’ ( contd.)
Notes:
1. Investment in Reliance Technologies LLC of Rs. 17.54 crore representing 90% Membership Interest has been written off.
2. 33,920 Equity Shares of Reliance Capital Limited and 159,900 Units of SBI Magnum Multiplier Plus 1993 have been
written off owing to bad delivery.
3. Interest on Optionally Convertible Debentures of Reliance Industrial Investments and Holdings Limited has been
changed from 0% to 6.50% with effect from 1st April, 2002.
4 Investment in units, Units scheme 1964 of Unit Trust of India is net of provision for diminution in value of
Rs. 0.05 crore.
INVESTMENTS
AGGREGATE VALUE OF
Quoted Investments
Unquoted Investments
As at
31st March, 2003
Book Value
Rs.
Market Value
Rs.
(Rs. in crore)
As at
31st March, 2002
Book Value Market Value
Rs.
Rs.
536.19
6186.53
349.89
536.80
3,313.36
373.69
The Company has not provided for diminution in market value of long term quoted investments as the decline in market value is
considered temporary and these are held as strategic investments.
Movements during the year
Purchased and Sold
Equity Shares
Reliance Petroinvestments Pvt. Ltd.
Zero Coupon Unsecured Non Convertible Debentures
Vimal Fabrics Ltd
Face Value
Rs.
Nos.
Cost
(Rs. in crore)
10
3
-
(Rs. 30)
1,000
1,18,000
11.80
Assets Backed Notes
MBLRS TR6 ICICI SR-A
MBLRS TR6 ICICI SR-B
MBLRS TR6 ICICI SR-C
MBLRS TR6 ICICI SR-D
MBLRS TR6 ICICI SR-D
MBLRS TR6 ICICI SR-D
MBLRS TR7 ICICI SR-A
MBLRS TR7 ICICI SR-B
MBLRS TR7 ICICI SR-C
MBLRS ICICI
Mutual Fund Units
Reliance Liquid Fund - Cash Plan Growth Option
Reliance Liquid Fund - Treasury Plan Growth Option
Reliance Income fund - Growth Plan
Reliance Liquid Fund - Super Cash Plan - Growth Option
Reliance Monthly Income Plan - Growth Plan
Reliance Short Term Fund - Growth Plan
1 88 85 358
1 88 85 358
3 77 70 716
3 77 70 717
3 77 70 716
3 82 37 888
2 96 12 775
2 96 12 775
2 96 12 775
100
100
100
61
39
39
100
100
100
188.85
188.85
377.71
230.40
147.31
149.13
296.13
296.13
296.13
1,467.16
Face Value
Rs.
Nos.
(In crore)
Cost
(Rs. in crore)
10
10
10
10
10
10
1,087.20
522.05
17.58
600.40
3.81
13.34
11,313.08
4,372.62
318.00
6,111.93
49.59
134.13
Reliance Industries Limited
67
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
SCHEDULE ‘G’
CURRENT ASSETS
INVENTORIES
Stores, Chemicals and Packing Materials
Raw Materials
Stock-in-Process
Finished Goods/Traded Goods
SUNDRY DEBTORS (Unsecured) #
Over six months
Considered good
Considered doubtful
Less : Provision
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
OTHER CURRENT ASSETS
Interest Accrued on Investments
TOTAL
As at
31st March, 2003
Rs.
Rs.
(Rs. in crore)
As at
31st March, 2002
Rs.
Rs.
1,004.06
2,391.52
939.55
3,175.28
15.50
113.23
128.73
113.23
15.50
2,959.99
2.32
134.21
10.68
844.34
2,450.39
519.83
1,159.51
7,510.41
4,974.07
112.06
108.47
220.53
108.47
112.06
2,610.40
2,975.49
2,722.46
1.49
187.34
1,571.88
147.21
1,760.71
562.06
11,195.17
372.85
9,830.09
# Sundry Debtors include Rs. 10.26 crore (Previous Year Rs. 166.57 crore) from Reliance Communications Infrastructure Limited and Rs.
3.14 crore (Previous Year Rs. 0.10 crore) from Reliance Infocomm Limited, companies under the same management.
SCHEDULE ‘H’
LOANS AND ADVANCES
UNSECURED - (CONSIDERED GOOD)
Loans and advances to subsidiary companies
Advances recoverable in cash or in kind or for
value to be received
Deposits
Balance with Customs, Central Excise Authorities, etc.
TOTAL
As at
31st March, 2003
Rs.
6,716.12
2,767.29
2,058.88
190.56
11,732.85
(Rs. in crore)
As at
31st March, 2002
Rs.
2,988.98
5,488.11
999.33
144.15
9,620.57
Advances include:
(i) Rs 0.35 crore (Previous year Rs. 0.20 crore) to Officers of the Company (Maximum amount outstanding at any time during the
year Rs. 0.37 crore).
(ii) Rs. 2.83 crore (Previous Year Rs 109.14 crore) towards Shares / Debentures Application money pending allotment.
(iii) Rs. Nil (Previous Year Rs. 2,213.00 crore) towards equity share application money pending allotment to Reliance
Communications Infrastructure Limited (Maximum amount outstanding at any time during the year Rs. 2,213.00 crore) and
Rs. 888.00 crore (Previous Year Rs. Nil) towards Debenture application/Call Money pending allotment to Reliance Infocomm
Limited (Maximum amount outstanding at any time during the year Rs. 888.00 crore), companies under the same management.
(iv) Rs. 40.10 crore (Previous Year Rs. 42.29) receivable from Reliance Communication Infrastructure Limited (Maximum amount
68
Reliance Industries Limited
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
SCHEDULE ‘H’ (Contd.)
outstanding at any time during the year Rs. 42.29 crore) and Rs. 15.53 crore (Previous Year Rs. 16.39 crore) receivable from
Reliance Infocomm Limited (Maximum amount outstanding at any time during the year Rs. 16.39 crore), companies under the
same management, towards net investment in finance Leases given.
SCHEDULE ‘I’
CURRENT LIABILITIES AND PROVISIONS
CURRENT LIABILITIES
Sundry Creditors - Small scale Industries
- Others
Liability for Leased assets
Unpaid dividend #
Unpaid matured debentures #
Unpaid Call Money #
Interest accrued on above #
Interest accrued but not due on loans
PROVISIONS
Provision for Wealth Tax
Provision for Income Tax
Provision for Gratuity, Superannuation and Leave Encashment
Proposed Dividend
Tax on Dividend
As at
31st March, 2003
Rs.
Rs.
(Rs.in crore)
As at
31st March, 2002
Rs.
Rs.
2.69 @
9,002.89 *
13.99
45.93
45.23
0.01
1.83
378.32
30.16
570.90
87.02
698.19
89.46
1.46
6,021.90
24.70
35.00
***
***
***
389.23
9,490.89
6,472.29
24.16
486.80
36.30
663.28
—
TOTAL
1,475.73
10,966.62
1,210.54
7,682.83
@Small scale industrial undertakings to whom amounts are due have been determined based on the information available with the
Company and are as follows:
Aakash Engineers, Accurate Paper Tube, Aditya Forge Ltd, Aditya Industries, Aksh India Ltd, Akshar Precision Tubes Pvt. Ltd,Alliance Fittings & Forgings Limited,
Ambika Industries, Amit & Amit, Anthia Machine Tools, Arham Steels Pvt Ltd, Art Products, Atisha Engineers, Atul Corporation, Auto Strap India, Baliga Lighting
Equipment, Balsara Fasteners Pvt. Ltd., Bisil India, Bliss,Anand Pvt Ltd, Capitol Engineering Works, Ceag Flameproof Control Gears P Ltd, Champion Enterprises,
Chem-Vac Engineers, Comet Brass Products, Comet Engineers, Cub Fabricators & Engineers, Dabir Industries, Deeaar Laboratory, Dhwani Polyprints, Dinsons Self
Stick, Dol Electric Company Pvt Ltd, East India Bearing Co(P) Ltd., Eby Fasteners, Elasto Polymer Processors, Electronic Instruments Co.,EPE Process Filters &
Accumula, Essem Jetting Systems Pvt. Ltd, Excelsior Electronic Auto, Fluorocarbon Processing Industries, Fluoropolymer Processor, Fourwents Engg. Co.,Furus
Packaging Pvt. Ltd, Gajjar Engineering Corporation, Geeta Engg (Jam) Pvt. Ltd., Globe Electrical Industries, Gokul Associates, Gowrishankar Chemicals, Hariwansh
Packaging Produc, Heliflex Hydraulic & Engg. Co, Hindustan Abrasive, Hivelm Industries, Industrial Engineering Corporation Industrial Engineers, Kantilal Chunilal
& Sons, Appliances Pvt Ltd, Khanna Brothers(Kanpur), Kishore Motor Garage, Kishore Motor Stores, Komet Wire Ind. P. Ltd., Laxmi Air Control (P) Ltd, Lotus Fibres,
M J Jadeja, M K System & Plant (India) Pvt., Markcon Enterprises, Mahavir Battery Charging Stat, Mayur Water Supplier, Micro Engineering Pvt Ltd, Modern Traders,
MS Fittings Mfg Co, MTL Instruments Pvt Ltd, Multitex Filters Pvt. Ltd, Naman Electricals, Narlab, National Radiators, Neha Industries, New Marine Engg. Works,
P Samir & Co., Paradise Rubbers Pvt.Ltd., Parag Fans & Cooling Systems Ltd., Paras Enterprise, Patalganga Packaging, Perfect Pack Corpn, Pla Chem Industries,
Pooja Paper Crafts, Pooja Paper Tube, Powerflex Industries, Precise Tools, President Engineering Works -M, Press Information And Translation, Programmed Engg
Products Pvt Ltd, R D Brothers, Ranjit Iron & Hardware Stores, Ravine Hi-Tech Lubricants, Revathi Electronic & Control, Riddhi Forms Pvt Ltd, Ruchit Enterprises,
Rushil Electricals, S M Enterprises, S S Engineering Works, Sachi Agency, Sagaon Energy EquipmentPvt Ltd, Sanghvi Packaging Industries, Sarigam Containers,
Scientific Device (Bombay) Pvt. Ltd., Shah Bhogilal Hethalal & Bros., Shail International, Shree Krishna Packaging, Shree Tools, Shreeji Industries, Sip Tools, Sri
Saibaba Cotton Waste Spg. Mills,Siriram Filteration & Engg. Co, South Gujarat Paper Tubes, Starvox Electronics Limited, Sterdill Equipments Pvt Ltd, Sucheta
Enterprises, Suresh Electric Corpn, Technotimber, Tex Tube Mfg Co, Texpart Industries, Tos Engineers, Tube Turn (India) Pvt. Limited, U.K.Enterprisers, Universal
Oil Seals Mfg.Co., Urja Enterprise, V M Corporation, Veeplex Electrical Industries, Vibronics Private Limited, Vishal Industrial Gases, Vishal Udyog
The outstandings are within the period of agreed terms.
*
#
Includes for capital expenditure Rs. 717.48 crore. (Previous Year Rs. 176.16 crore)
These figures do not include any amounts, due and outstanding, to be credited to Investor Education and Protection Fund.
*** Figures for previous year have not been disclosed as the disclosure requirement came into force with effect from 13th
November 2002.
Reliance Industries Limited
69
GROWTH IS LIFE
Schedules forming part of the Profit and Loss Account
SCHEDULE ‘J’
OTHER INCOME
Dividends :
From Current Investments
From Long Term Investments
[Tax Deducted at source Rs.11.79 crore;
(Previous Year Rs. Nil)]
Interest Received :
From Current Investments
From Long Term Investments
From Others
[Tax Deducted at source Rs.78.18 crore;
(Previous Year Rs. 56.53 crore)]
Profit/(Loss) on Sale of Investments (net)
Long Term
Current
Profit on Sale of Fixed Assets
Discount on Buyback of Bonds/Redemption of Debentures
Miscellaneous Income
TOTAL
SCHEDULE ‘K’
VARIATION IN STOCKS
STOCK-IN-TRADE (at close)
Finished goods/Traded goods
Stock-in-process
STOCK-IN-TRADE (at commencement)
Finished goods
Stock-in-process
Add : On Amalgamation
Finished goods
Stock-in-process
TOTAL
Rs.
0.11
112.33
147.14
322.66
235.80
(10.15)
36.31
(Rs. in crore)
2002-2003
2001-2002
Rs.
Rs.
0.01
23.77
Rs.
112.44
23.78
5.08
310.94
225.09
705.60
541.11
(4.26)
39.43
26.16
2.52
—
154.49
1,001.21
35.17
4.08
4.95
173.25
782.34
2002-2003
(Rs. in crore)
2001-2002
Rs.
Rs.
Rs.
Rs.
3,175.28
939.55
1,159.51
519.83
1,679.34
—
—
—
1,159.51
519.83
4,114.83
1,679.34
1,023.43
177.74
1,201.17
603.60
782.40
1,386.00
1,679.34
2,435.49
2,587.17
(907.83)
70
Reliance Industries Limited
GROWTH IS LIFE
Schedules forming part of the Profit and Loss Account
SCHEDULE ‘L’
MANUFACTURING AND OTHER EXPENSES
RAW MATERIALS CONSUMED
MANUFACTURING EXPENSES
2002-2003
Rs.
Rs.
Rs.
30,856.93
(Rs. in crore)
2001-2002
Rs.
26,489.41
Stores, Chemicals and Packing Materials
Electric Power, Fuel and Water
Machinery Repairs
Building Repairs
Labour, Processing and Machinery Hire Charges
Excise Duty provided on stocks
Lease Rent
Exchange Differences (Net)
1,135.34
719.40
106.01
30.60
146.35
193.60
15.80
(176.24)
1,120.41
739.62
102.23
28.35
146.20
(33.04)
47.91
123.35
PAYMENTS TO AND PROVISIONS
FOR EMPLOYEES (including Managerial Remuneration)
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 including defeased
Provision for Doubtful Debts (net)
ESTABLISHMENT EXPENSES
Insurance
Rent
Rates and Taxes
Other Repairs
Travelling Expenses
Payment to Auditors
Professional Fees
Loss on Sale / Discarding of Assets
General Expenses*
Wealth Tax
Charity and Donations
466.45
99.11
86.17
159.98
141.97
944.87
476.19
4.76
223.09
124.03
122.96
71.99
57.53
4.56
188.79
23.54
279.17
6.00
42.33
2,170.86
2,275.03
651.73
440.50
57.15
71.73
23.85
122.43
960.78
213.94
51.67
569.38
1,727.77
1,372.67
120.62
20.43
101.86
62.71
46.36
3.66
198.89
18.27
293.78
6.00
30.07
Less : Preoperative Expenses of Projects Under Commissioning (net)
TOTAL
* Includes investments written off Rs.18.15 crore
SCHEDULE ‘M’
INTEREST
Debentures
Fixed Loans
Others
TOTAL
1,143.99
36,551.28
4.00
36,547.28
2002-2003
Rs.
1,272.72
196.60
85.84
1,555.16
902.65
31,609.14
1.81
31,607.33
(Rs. in crore)
2001-2002
Rs.
1,377.65
299.12
148.33
1,825.10
Reliance Industries Limited
71
GROWTH IS LIFE
Significant Accounting Policies
SCHEDULE ‘N’
SIGNIFICANT ACCOUNTING POLICIES
A. Basis of Preparation of Financial Statements
The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting
principles in India and the provisions of the Companies Act, 1956, except for certain fixed assets which have been revalued.
B. Use of Estimates
The presentation of financial statements 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 amount of revenues and expenses during the reporting period.
Difference between the actual result and estimates are recognised in the period in which the results are known/materialised.
C. Own 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 attributable to the fixed assets are capitalised.
D. Leased Assets
a) Operating Leases: Rentals are expensed with reference to lease terms and other considerations
b)
(i) Finance leases prior to 1st April 2001: Rentals are expensed with reference to lease terms and other considerations.
(ii) Finance leases on or after 1st April, 2001: The lower of the fair value of the assets and present value of the minimum lease
rentals is capitalised as fixed assets with corresponding amount shown as lease liability. The principal component in the lease
rental is adjusted against the lease liability and the interest component is charged to profit and loss account.
c) However, rentals referred to in (a) or (b) (i) above and the interest component referred to in (b) (ii) above pertaining to the period upto
the date of commissioning of the assets are capitalised.
d) All assets given on finance lease are shown as receivables at an amount equal to net investment in the lease. Initial direct costs in
respect of lease are expensed in the year in which such costs are incurred. Income from lease assets is accounted by applying the
interest rate implicit in the lease to the net investment.
E. Depreciation
Depreciation on fixed assets has been provided on written down value method at the rates and in the manner prescribed in Schedule XIV
to the Companies Act, 1956 except: on fixed assets pertaining to crude oil refining and marketing infrastructure for petroleum products,
depreciation has been charged on straight line method (SLM); on fixed bed catalyst depreciation has been provided over its useful life
ranging from 2 to 9 years; 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 and insurance spares, 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 vis a vis the proved reserves (net of reserves to be retained to cover abandonment
costs as per the production sharing contract) considering the estimated future expenditure on developing the reserves; premium on
leasehold land is amortised over the period of lease; cost of jetty has been amortised over the period of agreement of right to use,
provided however that the aggregate amount amortised 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; on assets acquired under finance lease from 1st April
2001 depreciation is spread over the lease term.
F. 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 at the date of transaction as
increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction, such
difference having been recognised over the life of the contract.
(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.
G.
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.
72
Reliance Industries Limited
GROWTH IS LIFE
Significant Accounting Policies
SCHEDULE ‘N’ (Contd.)
H.
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 them to their respective present location and condition. Cost of raw materials, process
chemicals, stores and spares, 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.
I. Turnover
Turnover includes sale of goods, services, sales tax and excise duty and sales during trial run period, adjusted for discounts (net) and
gain / loss on corresponding hedge contracts.
Income from services includes fees accrued on rendering of services, the cost of which is charged to revenue in the year of delivery.
J. Excise Duty and Sales Tax
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. Sales tax charged to Profit and Loss Account includes payments made for assignment of deferred sales tax
liabilities.
K. Employee Retirement Benefits
Company's contributions to Provident Fund and Superannuation Fund are charged to Profit and Loss Account. Gratuity and Leave
Encashment Benefit are charged to Profit and Loss Account on the basis of actuarial valuation.
L. Research and Development Expenses
Expenditure relating to capital items is debited to fixed assets and depreciated at applicable rates. Revenue expenditure is charged to
Profit and Loss Account of the year in which they are incurred.
M. Borrowing Costs
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.
N. Commodity Hedging Transactions
The commodity hedging contracts are accounted on the date of their settlement and realised gain/ loss in respect of settled contracts are
recognised in the profit and loss account, along with the underlying transactions.
O. Accounting for Oil and Gas Joint Ventures
All Oil and Gas Joint Ventures are in the nature of Jointly Controlled Assets. Accordingly 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.
The Company has adopted, with effect from 1-4-2002, the Full Cost Method for accounting for acquisition, exploration and development
costs.
P. Provision for Current and Deferred Tax
Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961.
Deferred tax resulting from "timing difference" between book and taxable profit is accounted for using the tax rates and laws that have
been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognised and carried forward only to the
extent that there is a reasonable certainty that the assets will be realised in future.
Q. Employee Separation Costs
Compensation to employees who have opted for retirement under the voluntary retirement scheme of the Company is amortised over 60
months
R.
Issue Expenses
Issue expenses pertaining to the projects are capitalised.
S. Premium on Redemption of Bonds / Debentures:
Premium on redemption on Bonds / Debentures are adjusted against the Securities Premium Account.
T. Contingent Liabilities:
These are disclosed by way of notes on the Balance Sheet. Provision is made in the accounts in respect of those contingencies which
are likely to materialise into liabilities after the year end, till the finalisation of accounts and have material effect on the position stated in
the Balance Sheet.
Reliance Industries Limited
73
GROWTH IS LIFE
Notes on Accounts
SCHEDULE ‘O’
1.
2.
3
The previous year's figures have been reworked, regrouped, rearranged and reclassified wherever necessary.
Turnover includes Income from Services of Rs.352.27 crore (Previous Year Rs. 330.00 crore)
(a) The company has changed the method of depreciation from straight line method to written down value method, with effect
from 1-4-2002 for Polypropylene and Petrochemical support services situated at Jamnagar, to provide for timely
replacement.
In compliance with the Accounting Standards (AS-6), issued by the Institute of Chartered Accountants of India,
depreciation has been recomputed from the date of commissioning of these assets at WDV rates applicable to those years.
Consequent to this there has been an additional charge for depreciation during the year of Rs.384.93 crore which relates
to the previous year and an equivalent amount has been withdrawn from the General Reserve and credited to Profit and
Loss Account.
Had there been no change in the method of depreciation, the charge for the year would have been lower by Rs. 96.72 crore
excluding the charge relating to the previous years.
Consequently, the Net Block of fixed assets and Reserves and Surplus are lower by Rs. 481.65 crore.
(b) The Gross Block of Fixed Assets include Rs. 2735.81 crore (Previous Year Rs 2738.50 crore) 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.
Rs.116.61 crore (Previous Year Rs. 169.52 crore) and an equivalent amount has been withdrawn from General Reserve
and credited to the Profit and Loss Account.
(c) The company has changed the method of depreciation on development rights and producing properties with effect from
1-4-2002 by adoption of Full Cost Method given in the Guidance Note on Accounting for Oil and Gas Producing Activities
issued by the Institute of Chartered Accountants of India. In the past, depreciation was provided without considering
undeveloped proved reserves and its estimated future development costs.
In compliance with the Guidance Note, depreciation has been recomputed with retrospective effect.
Consequently, there has been an additional charge of depreciation during the year of Rs.114.16 crore, which relates to the
period upto 31st March, 2002 and an equivalent amount has been withdrawn from General Reserve and credited to the
Profit and Loss Account.
The depreciation charge for the current year is higher by Rs.24.52 crore and the Net Block and Reserves and Surplus are
lower by Rs.138.68 crore.
4.
The expenditure 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.Nil (Previous year Rs 133.61 crore).
5.
(a) Payment to Auditors:
(i) Audit Fees
(ii) Tax Audit Fees
(iii) For Certification and Consultation in finance and tax matters
(iv) Expenses Reimbursed
(b) Cost Audit Fees
6. Managerial Remuneration:
Salaries
i)
ii) Perquisites
iii) Sitting Fees
iv) Commission
v)
vi) Contribution to Provident Fund and Superannuation Fund
vii) Provision for gratuity
Leave Salary/Encashment
74
Reliance Industries Limited
2002-03
1.73
0.54
2.01
0.22
4.50
0.06
2002-03
1.81
1.62
—
29.86
1.55
0.46
0.07
35.37
(Rs in crore)
2001-02
1.47
0.53
1.41
0.21
3.62
0.04
(Rs in crore)
2001-02
2.35
2.04
0.03
30.12
—
0.59
0.45
35.58
GROWTH IS LIFE
Notes on Accounts
SCHEDULE ‘O’ (Contd.)
Computation of net profit in accordance with Section 198 read with Section 309(5) of the Companies Act, 1956
Add
Less
Profit before Taxation
Depreciation as per accounts
Provision for Doubtful Debts (net)
Loss on Sale of Assets
Investments Written off
Managerial Remuneration
Depreciation as per Section 350 of Companies Act, 1956
Profit on buyback of bonds/Redemption of Debentures
Profit on sale of Fixed Assets
Profit on Sale of Investments
Net Profit for the year
Salaries, Perquisites and Commission @ 1.00% p. a.
upto 6th July 2002 and @0.67% p. a. thereafter
Less:
Salaries and Perquisites of the Directors eligible for commission
Balance Commission
2002-03
4,974.21
2,837.09
4.76
23.54
18.15
33.41
7,891.16
3,452.79
-
2.52
26.16
4,409.69
33.41
3.55
29.86
(Rs in crore)
2001-02
4,428.70
2,816.14
51.67
18.27
-
35.30
7,350.08
3,435.82
4.95
4.08
393.51
3,511.72
35.12
5.00
30.12
7. A sum of Rs. 3.73 crore (net credit) (Previous Year Rs. 7.07 crore (net debit)) is adjusted to general expenses representing Net
Prior Period Items.
8.
(a) Fixed assets taken on finance lease prior to April 1, 2001, amount to Rs.250.72 crore. (Previous year Rs. 330.23 crore).
Future obligations towards lease rentals under the lease agreements as on 31st March 2003 amount to Rs.21.50 crore.
(Previous year Rs. 97.13 crore)
Within one year
Later than one year and not later than five years
Later than five years
TOTAL
2002-03
9.27
10.54
1.69
21.50
(Rs. in crore)
2001-02
27.52
67.05
2.56
97.13
(b) The Company has acquired certain items of Plant and Machinery and Ships on finance lease on or after April 1, 2001,
amounting to Rs. 25.47 crore (Previous Year Rs 29.62 crore). The minimum lease rentals outstanding as of 31st March 2003
in respect of these assets are as follows:
Due
Total Minimum
Lease Payments
outstanding
as on 31.03.2003
Future Interest
on outstandings
(Rs. in crore)
Present Value
of Minimum
Lease Payments
2002-03
2001-02
2002-03
2001-02
2002-03
2001-02
Within one year
7.71
Later than one year and not later than five years
6.89
Later than five years
Total
—
14.60
8.93
18.69
0.37
27.99
0.36
0.25
—
0.61
0.51
2.60
0.18
3.29
7.35
6.64
—
13.99
8.42
16.09
0.19
24.70
(c) General Description of Lease terms:
(i)
Lease rentals are charged on the basis of agreed terms.
(ii) Assets are taken on lease over a period of 3 to 15 years.
Reliance Industries Limited
75
GROWTH IS LIFE
Notes on Accounts
SCHEDULE ‘O’ (Contd.)
9.
(a)
(i) Assets given on finance lease on or after 1st April 2001
Particulars
Total
Not later than
one year
Later than one
year and not later
than five years
(Rs. in crore)
Later than
five years
2002-03
2001-02 2002-03 2001-02 2002-03
2001-02 2002-03 2001-02
Gross Investment
101.56
112.93
11.37
11.37
45.49
45.49
44.70
56.07
Less: Unearned Finance Income
45.93
54.25
Present Value of Minimum Lease Rental
(ii) General Description of Lease terms:
55.63
58.68
7.89
3.48
8.32
3.05
25.88
28.32
12.16
17.61
19.61
17.17
32.54
38.46
• Lease rentals are charged on the basis of agreed rate of interest.
• Assets are given on lease for a period of 10 years.
(b)
(i) Plant and Machinery given on operating lease during the year amounts to Rs.25.47 crore (Previous Year Rs. Nil).
(ii) Depreciation on Assets given on operating lease Rs.3.53 crore (Previous Year Rs. Nil).
(iii) Future lease rentals receivable within a period of one year for such assets are Rs.7.94 crore (Previous Year Rs. Nil)
(c) Miscellaneous income includes income from finance lease of Rs.8.33 crore (Previous Year Rs. 0.59 crore) and income from
operating lease of Rs.9.73 crore (Previous Year Rs. Nil).
10.
The deferred tax liability as at 31st March 2003 comprise of the following:
a. Deferred Tax Liability
(i) Related to fixed assets
b. Deferred Tax Assets
As at
31st March,2003
(Rs. in crore)
As at
31st March,2002
2,955.94
2,289.70
(i) Disallowance under the Income Tax Act 1961
(ii) Provision for doubtful debts
229.43
41.69
188.90
39.98
c. Provision for deferred tax (net)
11. EARNINGS PER SHARE (EPS)
a) Net profit available for equity shareholders (Rs. crore)
(Numerator used for calculation)
b) Weighted Average number of equity shares
used as denominator for calculating EPS
c) Basic and Diluted Earnings per share of Rs.10 each (Rs.):
271.12
2,684.82
2002-03
4,084.23
228.88
2,060.82
2001-02
3,242.70
139,63,77,536
138,83,25,291
i) before Extraordinary Items
ii) after Extraordinary Items
29.25
29.25
20.39
23.36
76
Reliance Industries Limited
GROWTH IS LIFE
Notes on Accounts
SCHEDULE ‘O’ (Contd.)
12.
As per Accounting Standard 18, issued by the Institute of Chartered Accountants of India, the disclosures of transactions
with the related parties as defined in the Accounting Standard are given below:
(i)
List of related parties with whom transactions have taken place and relationships:
Sr No.
Name of the Related Party
Relationship
1
2
3
4
5
6
7
8
9
Vimal Fabrics Limited
(Subsidiary upto 23rd December, 2002)
Reliance Industrial Investments and Holdings Limited
Reliance Power Ventures Limited
Reliance Ventures Limited
Reliance Strategic Investments Limited
Reliance Infocom Inc.
Reliance Communications Inc.
Reliance Communications (UK) Ltd.
Reliance Technologies LLC
10
11.
Reliance Infocom BV
Reliance LNG Limited
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
Gas Transport & Infrastructure Limited
Reliance Life Insurance Company Limited
Reliance General Insurance Company Limited
Reliance Capital Limited
BSES Limited
(Subsidiary from 17th March, 2003 to 29th March, 2003)
Reliance Infocomm Limited
Reliance Communications Infrastructure Limited
Reliance Telecom Limited
Reliance Industrial Infrastructure Limited
Reliance Europe Limited
Reliance Petroinvestments Limited
(Subsidiary upto 17th April, 2002)
Reliance Rubber and Chemicals Private Limited
Indian Petrochemicals Corporation Limited
Reliance Salgaocar Power Company Limited
Reliance Enterprises Limited
Reliance Global Trading Private Limited
Reliance Utilities and Power Limited
Reliance Ports and Terminals Limited
Unincorporated Oil and Gas Joint Ventures
Late Sh. Dhirubhai H Ambani
Sh. Mukesh D Ambani
Sh. Anil D Ambani
Sh. Nikhil R Meswani
Sh. Hital R Meswani
Sh. H S Kohli
Smt K D Ambani
Sh R H Ambani
Dhirubhai Ambani Foundation
Jamnaben Hirachand Ambani Foundation
Hirachand Govardhandas Ambani Public Charitable Trust
Subsidiary Companies
Associate Companies
and Joint Ventures
Key Management Personnel
Relatives of Key
Management Personnel
Others
Reliance Industries Limited
77
GROWTH IS LIFE
Notes on Accounts
SCHEDULE ‘O’ (Contd.)
(ii)
Transactions during the year with related parties:
Sr.No. Nature of Transaction
Subsidiaries Associates
(Excluding reimbursements)
Others
(Rs in crore)
Total
Key
Management
Relatives
of Key
Personnel Management
Personnel
(2.25)
(0.08)
A)
Loans Taken
Balance as at 1st April, 2002
Taken during the year
Repaid during the year
Balance as at 31st March, 2003
B)
Fixed Assets/ Capital Work in Progress
Balance of Assets taken on Lease as on 1st April, 2002
Assets taken on Lease during the year
Balance of Assets taken on Lease
as at 31st March,2003
Assets given on Lease during the year
Assets purchased during the year
Assets sold during the year
C)
Investments
Balance as at 1st April, 2002
Purchased/Adjusted during the year
Sold during the year
Balance as at 31st March,2003
D)
Interest accrued on Investments
E)
Sundry Debtors as at 31st March, 2003
905.52
11.83
(99.46)
12.01
879.57
(905.52)
51.79
(18.38)
10.00
1,706.43
(31.40)
563.90
(65.59)
218.03
(10.00)
207.43
0.78
(29.62)
123.73
(207.43)
58.88
(58.68)
11.87
(4.66)
2,537.70
2,250.00
(406.54)
145.71
(78.00)
4,641.55
(2,537.70)
490.58
(398.47)
149.20
(166.94)
F)
(a)
Loans & Advances
Loans Given
Balance as at 1st April, 2002
Given during the year
Returned during the year
Balance as at 31st March, 2003
2,988.98
5,559.62
(257.96)
1,832.48
(191.57)
6,716.12
(2,988.98)
1,332.42
3,964.87
(14,006.73)
5,213.88
(12,833.16)
83.41
(1,332.42)
(b)
Advances recoverable in cash or kind
Balance as at 1st April, 2002
Given during the year
72.24
Returned/Adjusted during the year
Balance as at 31st March, 2003
72.24
2,322.14
1,396.93
(2,235.46)
2684.23
(53.70)
1,034.84
(2,322.14)
78
Reliance Industries Limited
10.00
1,706.43
(31.40)
563.90
(65.59)
218.03
(10.00)
207.43
0.78
(29.62)
123.73
(207.43)
58.88
(58.68)
11.87
(6.91)
(0.08)
3,443.22
2,261.83
(506.00)
157.72
(78.00)
5,521.12
(3,443.22)
542.37
(416.85)
149.20
(166.94)
4,321.40
9,524.49
(14,264.69)
7,046.36
(13,024.73)
6,799.53
(4,321.40)
2,322.14
1,469.17
(2,235.46)
2,684.23
(53.70)
1,107.08
(2,322.14)
GROWTH IS LIFE
Notes on Accounts
SCHEDULE ‘O’ (Contd.)
Sr.No. Nature of Transaction
Subsidiaries Associates
(Excluding reimbursements)
Others
(Rs in crore)
Total
Key
Management
Relatives
of Key
Personnel Management
Personnel
(c)
Deposits
Balance as at 1st April, 2002
Given during the year
Returned during the year
Balance as at 31st March, 2003
G)
Sundry Creditors
Balance as at 31st March, 2003
H)
Turnover
I)
J)
Sale of Investments
Other Income
Dividend
Interest Received
Lease Rental Income
Miscellaneous Income
K)
Purchases
L)
Expenditure
Interest Paid
Payments to and provisions for Directors
Directors’ Sitting Fees (Rs. 30,000)
Previous Year (Rs. 28,690)
Electric Power, Fuel and water
Rent
Telephone Charges
Lease Rentals
Professional Fees
Charter Hire Charges
Insurance Premium
Premium on Redemption
(0.12)
4.44
(-)
124.03
(23.09)
636.84
736.46
(40.00)
210.05
(2.83)
1,163.25
(636.84)
1,755.17
(1,155.31)
1,369.38
(582.22)
112.33
(20.29)
412.66
(415.66)
8.32
(0.59)
49.03
(98.00)
171.24
(0.09)
4.00
(40.93)
-
409.86
(420.13)
2.16
(3.00)
-
(2.99)
15.42
(56.69)
22.60
(18.09)
22.53
(10.52)
38.65
(49.55)
0.02
35.37
(35.58)
636.84
736.46
(40.00)
210.05
(2.83)
1,163.25
(636.84)
1,755.17
(1,155.43)
1,369.38
(582.22)
4.44
(-)
112.33
(20.29)
536.69
(438.75)
8.32
(0.59)
49.03
(98.00)
171.24
(0.09)
4.00
(40.93)
35.37
(35.58)
-
409.86
(420.13)
2.16
(3.00)
-
(2.99)
15.42
(56.69)
22.60
(18.09)
22.53
(10.52)
38.65
(49.55)
0.02
Reliance Industries Limited
79
GROWTH IS LIFE
Notes on Accounts
SCHEDULE ‘O’ (Contd.)
Sr.No. Nature of Transaction
Subsidiaries Associates
(Excluding reimbursements)
Others
(Rs in crore)
Total
Key
Management
Relatives
of Key
Personnel Management
Personnel
Assignment of Liability
Tank Farm Charges
Hire Charges
Donations
Warehousing and Distribution Charges
Investments written off
Others
17.54
0.38
M)
Guarantees Issued
Financial Guarantees
Performance Guarantees
404.53
(167.09)
6.30
(6.20)
22.54
(46.55)
753.43
(830.51)
0.45
18.09
(1.25)
455.26
(624.40)
5,102.77
(3,548.77)
31.55
(26.89)
404.53
(167.09)
6.30
(6.20)
22.54
(46.55)
31.55
(26.89)
753.43
(830.51)
17.99
18.47
(1.25)
455.26
(624.40)
5,102.77
(3,548.77)
Note:
Figures in brackets represent previous year’s amounts.
(iii) Loans and advances in the nature of Loans given to Subsidiaries and Associates etc:
A) Loans and Advances in the nature of Loans
Sr No. Name of the Company
1.
2.
3.
4.
5.
Reliance Industrial Investments
& Holdings Limited
Reliance Ventures Limited
Reliance Power Ventures Limited
Recron Synthetics Limited
Reliance Industrial Infrastructure Limited
Subsidiary
Subsidiary
Subsidiary
Other
Associate
Notes:
(Rs. in crore)
As at 31st March,2003 Maximum Balance
during the year
830.19
4,684.16
1,185.64
132.20
118.41
830.19
4,684.16
1366.97
132.20
118.41
1.
2.
3.
4.
Loans and Advances shown above, to Subsidiaries fall under the category of ‘Loans & Advances in nature of Loans
where there is no repayment schedule’.
Loans and Advances to Recron Synthetics Limited is at zero percent repayable in 2013.
ICDs are not considered as they are repayable on demand and interest is charged at market rates.
Loans to employees as per Company’s policy are not considered.
B) Investment by the loanee in the shares of the company
*None of the loanees have, per se, made investments in shares of the Company. However the following companies have been
allotted shares of the company as a result of amalgamation of Reliance Petroleum Limited with the company under the scheme
approved by the Hon’ble High Courts of Bombay and Gujarat.
Sr No. Name of the Company
1.
*Reliance Industrial Investments & Holdings Limited,
sole beneficiary of Petroleum Trust
*Reliance Chemicals Limited
*Reliance Aromatics & Petrochemicals Private Limited
*Reliance Energy & Project Development Private Limited
*Reliance Polyolefins Private Limited
Reliance Industrial Infrastructure Limited
2.
3.
4.
5.
6.
No. of Shares
104,660,155
14,568,373
16,029,091
16,029,091
19,090,909
86,000
(Rs. in crore)
Amount
1654.96
320.50
339.42
339.42
420.00
1.12
80
Reliance Industries Limited
GROWTH IS LIFE
Notes on Accounts
SCHEDULE ‘O’ (Contd.)
13 (a) Disclosure of the Company’s Interest in Oil and Gas Joint Ventures:
Sr No
Name of the Fields
in the Joint Ventures
% Interest
Sr No
Name of the Fields
in the Joint Ventures
% Interest
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
Panna Mukta
Tapti
GK-OSN-97/1
NEC-OSN-97/2
KK-OSN-97/2
MB-OSN-97/3
KG-OSN-97/4
MB-OSN-97/2
KG-OSN-97/3
KG-OSN-97/2
SR-OSN-97/1
KG-DWN-98/1
KG-DWN-98/3
MN-DWN-98/2
GS-OSN-2000/1
KKD-DWN-2000/1
KKD-DWN-2000/3
30%
30%
90%
90%
90%
90%
90%
90%
90%
90%
90%
90%
90%
90%
90%
90%
90%
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
GK-OSJ-3
GK-OSJ-1
GK-OS-5
KG-ON-1
GK-ON-90/2
CB-ON/1
AS-ONN-2000/1
KG-DWN-2001/1
CY-DWN-2001/2
KK-DWN-2001/1
CY-PR-DWN-2001/3
KK-DWN-2001/2
PR-DWN-2001/1
CY-PR-DWN-2001/4
KG-OSN-2001/2
KG-OSN-2001/2
Yemen
60%
50%
40%
40%
40%
40%
90%
90%
90%
90%
90%
90%
90%
90%
90%
90%
17%
13 (b) Net Quantities of an enterprise’s interest in proved reserves and proved developed reserves:
Oil:
Proved Reserves
(Million MT)
Proved Developed Reserves
(Million MT)
Beginning of the year 2002-03
Additions
Deletions
Production
Closing balance for the year 2002-03
Gas:
5.34
Nil
Nil
0.37
4.97
4.39
Nil
Nil
0.37
4.02
Proved Reserves
(Million M3)
Proved Developed Reserves
(Million M3)
Beginning of the year 2002-03
Additions
Deletions
Production
Closing balance for the year 2002-03
23,268
60,399
Nil
943
82,724
All the above quantities of Oil and Gas reserves are within India.
14,076
Nil
Nil
943
13,133
14.
15.
As per Accounting Standards 21 on “Consolidated Financial Statements” and Accounting Standard 23 on “Accounting
for Investments in Associates in Consolidated Financial Statements” issued by the Institute of Chartered Accountants of India,
the company has presented consolidated financial statements separately, including subsidiaries and associates, in this
annual report.
Miscellaneous expenditure (to the extent not written off or adjusted) of Rs 47.15 crore (Previous Year 62.86 crore) represents
un-amortised portion of amount disbursed on account of employee separation scheme announced in Naroda during the year
2001-02.
16.
PROJECT DEVELOPMENT EXPENDITURE
(in respect of Projects upto 31st March 2003, included under Capital work in progress)
Add:
Opening Balance
On Amalgamation
Project Development Expenditure transferred
from Profit and Loss Account
Interest Capitalised
Less
Project Development Expenses Capitalised during the year
Closing Balance
Reliance Industries Limited
2002-03
64.86
(Rs. in crore)
2001-02
6.52
83.84
4.00
84.85
1.81
67.49
88.85
153.71
77.24
76.47
69.30
159.66
94.80
64.86
81
GROWTH IS LIFE
Notes on Accounts
SCHEDULE ‘O’ (Contd.)
17. Additional Information
(A) Estimated amount of contracts remaining to be
executed on Capital accounts and not provided for:
(i)
(ii)
In respect of joint ventures
In respect of others
(B) Uncalled liability on partly paid Shares/ Warrant Equity
Shares (Rs. 19,935)
(C) Contingent Liabilities
(i) Outstanding guarantees furnished to Banks and
Financial Institutions including in respect of Letters of credit
(a) In respect of joint ventures
(b) In respect of others
(ii) Guarantees to Banks and Financial Institutions against
credit facilities extended to third parties
(a) In respect of joint ventures
(b) In respect of others
(iii) Liability in respect of bills discounted with Banks
(a) In respect of joint ventures
(b) In respect of others (including third party bills discounting)
(iv) Claims against the Company / disputed liabilities
not acknowledged as debts
(a) In respect of joint ventures
(b) In respect of others
(v) Performance Guarantees
As at 31st
March 2003
399.20
1,941.46
—
—
207.62
—
455.26
—
502.03
133.10
261.03
(Rs. in crore)
As at 31st
March 2002
254.68
198.44
—
—
235.50
—
624.40
—
19.19
112.86
244.46
(vi) Sales tax deferral liability assigned
(a) In respect of joint ventures
(b) In respect of others
—
3,548.77
2,511.71
(D) The Income-Tax assessments of the Company have been completed up to Assessment Year 2000-2001. The disputed
demand outstanding up to the said Assessment Year is Rs. 306.44 crore. 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.
166.21
4,936.56
3,700.71
18. LICENSED AND INSTALLED CAPACITY
(As certified by the Management)
Licensed Capacity
Installed Capacity
A
B
Refining of Crude Oil
Ethylene
(i)
(ii) Propylene
(iii) Benzene
(iv) Toluene
(v) Xylene
(vi) Butadine & Other C4s
C (i)
Paraxylene
(ii) Orthoxylene
D (i) Mono Ethylene Glycol
(ii) Higher Ethylene Glycol
(iii) Ethylene Oxide
Poly Vinyl Chloride
High/Linear Low Density Poly Ethylene
E
F
G High Density Polyethylene Pipes
H Polypropylene
I
J
K
L
M Polyester Staple Fibre Fill
N Man-made Fibre Spun Yarn on worsted system
O Man-made fibre on cotton system (Spindles)
P
Purified Terephthalic Acid
Polyester Filament Yarn/Polyester Chips
Polyester Staple Fibre/ Polyester Chips
Poly Ethylene Terephthalate
(i) Man-made Fabrics (Looms)
(ii) Knitting M/C
UNIT
Mill. MT
MT
MT
MT
MT
MT
MT
MT
MT
MT
MT
MT
MT
MT
MT
MT
MT
MT
MT
MT
MT
Nos
Nos
Nos
Nos
MT
2002-2003
N.A.
750,000*
365,000*
291,000*
197,000*
165,000*
225,000*
1,646,000*
150,000*
300,000*
37,500*
50,000*
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
22
N.A.
2001-2002
N.A.
750,000*
365,000*
291,000*
197,000*
165,000*
225,000*
1,646,000*
150,000*
600,000*
37,500*
50,000*
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
22
N.A.
2002-2003
27
750,000
365,000
291,000
197,000
165,000
225,000
1,646,000
150,000
300,000
37,500
50,000
300,000
435,000
80,000
10,50,000
12,80,000
197,300+
300,000
80,000
30,000
24,094
23,040
323
20
115,000
2001-2002
27
750,000
365,000
291,000
197,000
165,000
225,000
1,646,000
150,000
300,000
37,500
50,000
300,000
400,000
80,000
1,000,000
975,000
152,300+
235,000
80,000
30,000
24,094
23,040
323
20
100,000
Linear Alkyl Benzene
Q
NA - 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
* Licensed Capacity is reduced for delicensed products, for which Letter of Intents are held, vide notification No.431 dated 28th June, 2001.
82
Reliance Industries Limited
GROWTH IS LIFE
Notes on Accounts
SCHEDULE ‘O’ (Contd.)
19.
(a) The Department of Company Affairs, Government of India vide its Order No. 46/02/2003-CL-III dated 16th April, 2003 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.
(b) The Department of Company Affairs, Government of India vide its Order No.47/112/2002-CL-III dated 9th April, 2003 issued
under Section 212 (8) of the Companies Act, 1956 has exempted the Company from attaching the Balance Sheet and Profit
and Loss Account of Subsidiaries under Section 212 (1) of the Companies Act, 1956.
20. PRODUCTION MEANT FOR SALE
Products
Crude Oil
Gas
Petroleum Products
Ethylene
Propylene
Benzene
Toluene
Xylene
Orthoxylene
Paraxylene
Ethylene Glycol
PVC
PE
PP
PTA
Polyester Filament Yarn
Polyester Staple Fibre
PET
Fibre Fill
Fabrics
Normal Paraffin
LAB
Unit
MT
BBTU
’000 MT
MT
MT
MT
MT
MT
MT
MT
MT
MT
MT
MT
MT
MT
MT
MT
MT
Mtrs in Lacs
MT
MT
21. VALUE OF IMPORTS ON CIF BASIS IN RESPECT OF
Raw Materials
Stores & spares, dyes and chemicals
Capital goods
Traded goods
22. EXPENDITURE IN FOREIGN CURRENCY
Interest on foreign currency loans
Technical know-how and engineering fees
Oil and gas activity
Professional fees
Freight and forwarding
Other matters
Reliance Industries Limited
2002-2003
2001-2002
3,56,101
3,97,100
29,113
22,773
2,142
—
27,295
24,422
51,476
2,792
3,06,410
1,86,386
94,420
50,354
1,91,722
5,31,803
2,22,881
2,86,008
4,34,273
85,434
35,891
1,56,768
7,07,088
2,32,370
2,88,864
3,70,055
10,41,251
10,36,258
6,99,207
2,78,090
2,97,770
77,094
23,949
176.73
9,962
6,14,226
2,82,250
2,88,415
78,143
14,178
202.74
19,511
1,15,492
1,06,064
2002-2003
(Rs. in crore)
2001-2002
27,942.14
583.81
964.84
1,253.51
24,567.77
584.23
117.90
–
2002-2003
(Rs. in crore)
2001-2002
474.17
96.23
30.34
95.46
130.06
121.76
504.82
78.96
50.54
96.57
155.50
161.45
83
GROWTH IS LIFE
Notes on Accounts
SCHEDULE ‘O’ (Contd.)
23. VALUE OF RAW MATERIALS CONSUMED
Imported
Indigenous
2002-2003
2001-2002
Rs in
crore
% of
Consumption
Rs in
crore
% of
Consumption
30,129.79
727.14
97.64
2.36
25,286.57
1,202.84
95.46
4.54
30,856.93
100.00
26,489.41
100.00
24. VALUE OF STORES, CHEMICALS AND PACKING MATERIALS CONSUMED
2002-2003
2001-2002
Rs in
crore
% of
Consumption
591.31
544.03
52.08
47.92
Rs in
crore
683.84
436.57
% of
Consumption
61.03
38.97
1,135.34
100.00
1,120.41
100.00
Imported
Indigenous
25. EARNINGS IN FOREIGN EXCHANGE
FOB value of exports
Interest
26. EXPENDITURE ON RESEARCH AND DEVELOPMENT
Revenue Expenditure including amortisation of
deferred cost and unamortised deferred research
and development expenditure
Capital Expenditure on Research and Development
Total
27. REMITTANCE IN FOREIGN CURRENCY ON ACCOUNT OF DIVIDEND
The Company has paid dividend in respect of shares held by
Non-Residents on repatriation basis. This inter-alia includes
portfolio investment and direct investment, where the amount
is also credited to Non-Resident External Account (NRE A/c).
The exact amount of dividend remitted in foreign currency
cannot be ascertained. The total amount remittable in this
respect is given herein below:
(a) Number of Non-Resident Shareholders
(b) Number of Equity Shares held by them
(c)
(i) Amount of Dividend Paid (Gross) (Rs. in crore)
Tax Deducted at Source Rs. 20.24 crore (Previous Year Nil)
2002-2003
Rs.
10,626.29
3.04
(Rs. in crore)
2001-2002
Rs.
9,965.37
0.48
2002-2003
Rs.
(Rs. in crore)
2001-2002
Rs.
9.32
74.94
31.74
41.06
15.20
90.14
2002-2003
2001-2002
18,747
19,665
22,61,08,487
62,01,32,501
107.40
126.24
(ii) Year to which dividend relates
2001-2002
2000-2001
Note :
The amount of dividend for the year 2000-2001 includes Rs. 18.31 crore paid to 2,099 shareholders of erstwhile RPL
holding 36,61,86,482 shares, for the financial year ended March 31, 2001.
84
Reliance Industries Limited
GROWTH IS LIFE
Notes on Accounts
28. BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE
I.
Registration Details
Registration No. :
1 1
- 1
9 7
8 6
State Code:
1 1
Balance Sheet Date :
3 1
- 0
3 -
0 3
II. Capital Raised/Redeemed during the year (Amount Rs. crore)
Public Issue :
Bonus Issue :
N I
N I
L
L
Rights Issue :
N I L
Private Placement :
(Preference Shares) (Refer Note 3 to Schedule ‘A’)
4 0 0 . 0 0
Conversion of Bonds :
N I
L
Exercise of warrants
N I L
III. Position of Mobilisation and Deployment of Funds (Amount Rs. crore)
Total Liabilities :
5 2
8 1
7 .
5 4
Total Assets :
5
2 8 1 7 . 5 4
Sources of Funds
Paid-up Capital :
1
3 9
5 .
9 2
Reserves and Surplus :
2
8 9 7 8 . 4 9
Equity Share Suspense
N I
L
Deferred Tax Liability :
2 6 8 4 . 8 2
Secured Loans :
1 1
7 7
6 .
8 6
Unsecured Loans :
7 9 8 1 . 4 5
Application of Funds
Net Fixed Assets :
3 4
0 8
6 .
2 7
Investments :
6 7 2 2 . 7 2
Net Current Assets:
1 1
9 6
1 .
4 0
Miscellaneous Expenditure
4 7 . 1 5
IV. Performance of Company (Amount Rs. crore)
Turnover and Inter divisional
transfers :
6 5
0 6
1 .
4 4
Net Turnover :
4 5
8 9
7 .
7 9
Total Expenditure :
4
4 3 6 0 . 2 7
Profit Before Tax :
4
9 7
4 .
2 1
Profit After Tax :
4 1 0 4 . 3 1
Earnings per share in Rs.
2
9 .
2 5
Dividend : Rs. per share
5 . 0 0
V. Generic Names of Three Principal Products of Company (as per monetary terms)
Item Code No. (ITC Code) :
2 7
.
1 0
Product Description :
B U L K
P E T R O L E U M
P R O D U C T S
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 )
As per our Report of even date
For and on behalf of the Board
For Chaturvedi & Shah
Chartered Accountants
For Rajendra & Co.
Chartered Accountants
D. Chaturvedi
Partner
R. J. Shah
Partner
Mumbai
Dated: 23rd April, 2003
M.D. Ambani
A.D. Ambani
N.R. Meswani
H.R. Meswani
H.S. Kohli
U. Mahesh Rao
S. Venkitaramanan
M.L. Bhakta
T. Ramesh U. Pai
Y.P. Trivedi
Dr. D.V. Kapur
M.P. Modi
V.M. Ambani
}
}
Executive
Directors
- Nominee Director
Directors
- Company Secretary
- Chairman & Managing Director
- Vice-Chairman & Managing Director
Reliance Industries Limited
85
GROWTH IS LIFE
Statement Pursuant to Section 212 of the Companies Act, 1956,
relating to Company’s Interest in Subsidiary Companies.
1
2
3
4
Name
of
the
Subsidiary
Company
Reliance
Industrial
Investments
and
Holdings
Limited
Reliance
Ventures
Limited
Reliance
Power
Ventures
Limited
Reliance
Strategic
Investments
Limited
The Financial Year of the Subsidiary
Companies ended on
31st March, 2003
31st March, 2003
31st March, 2003
31st March, 2003
Date from which they became Subsidiary Companies
30th December, 1988
7th October, 1999
13th May, 2000
28th December, 2001
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
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
20,20,000
Equity Shares of
the face value of
Rs.10 each fully
paid-up
b.
Extent of Interest of holding Company at the end of
the financial year of the Subsidiary Companies
100%
100%
100%
100%
The net aggregate amount of the Subsidiary
Companies Profit / (Loss) so far as it concerns
the members of the Holding Company
Not dealt with in the Holding Company’s accounts:
For the financial year ended 31st March, 2003
For the previous Financial years of the Subsidiary
Companies since they became the Holding
Company’s subsidiaries
Rs.22.87 lacs
(Rs.241.08 lacs)
Rs.2.82 lacs
(Rs.0.21 lacs)
Rs.11993.55 lacs
(Rs.0.88 lacs)
Rs.857.52 lacs
Rs.0.41 lacs
Dealt with in Holding Company’s accounts:
For the financial year ended 31st March, 2003
NIL
NIL
For the previous Financial years of the Subsidiary
Companies since they became the Holding
Company’s subsidiaries
Rs.2673.89 lacs
NIL
NIL
NIL
NIL
NIL
a.
i)
ii)
b.
i)
ii)
86
Reliance Industries Limited
GROWTH IS LIFE
Statement Pursuant to Section 212 of the Companies Act, 1956,
relating to Company’s Interest in Subsidiary Companies.
Reliance
LNG
Limited
Gas Transportation
and Infrastructure
Company
Limited
Reliance
Infocom B.V.
Reliance
Infocom Inc.
Reliance
Technologies, LLC
Reliance
Communications
(U.K.) Limited
Reliance
Communications
Inc.
(See Foot Note 1)
(See Foot Note 2)
31st March, 2003
31st March, 2003
31st March, 2003
31st March, 2003
31st March, 2003
31st March, 2003
31st March, 2003
2nd January, 2002
19th March, 2003
31st December 2000
31st December 2000
2nd May, 2000
13th December, 2002
21st October, 2002
45,000
Equity Shares of
the face value of
Rs.10 each fully
paid-up
(See
Foot
Note 4)
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 BV.
1000 shares of face value of
US$ 1 fully paid-up, held
by Reliance Infocom B.V.
100 shares of face value of
US$ 100 fully paid-up, held
by Reliance Infocom Inc.
90%
(See Foot Note 4)
100%
100%
90%
100%
100%
Rs.0.04 lacs
Not Applicable
EURO 12843
Rs.0.06 crores
USD $ 40222.52
Rs.0.19 crores
(USD $ 132224.11) NIL
(Rs.0.62 crores)
(USD $ 9861)
(Rs.0.04 crores)
(Rs.0.11 lacs)
Not Applicable
(EURO 5878)
(Rs.0.02 crores)
US$ 8,891
Rs.0.04 crores
(USD $ 3662368.20) Not Applicable
(Rs.17.87 crores)
Not Applicable
NIL
NIL
Not Applicable
NIL
US$12,500
Rs.0.06 crores
Not Applicable
NIL
NIL
NIL
NIL
NIL
NIL
Not Applicable
Not Applicable
Notes :
1.
2.
3.
4. Gas Transportation and Infrastructure Company Limited became subsidiary in terms of section 4 (1) (a) of the Companies Act, 1956.
5.
100% Subsidiary of Reliance Infocom BV.
Reliance Communications Inc. is a subsidiary of Reliance Infocom Inc.
Figures in brackets represent losses.
Following companies ceased to be subsidiaries of the Company during the year:
a. Vimal Fabrics Limited.
b. Reliance Petroinvestments Limited.
BSES Limited was subsidiary of the Company from 17th March, 2003 to 29th March, 2003.
6.
For and on behalf of the Board
Mumbai
Dated: 23rd April, 2003
M.D. Ambani
A.D. Ambani
N.R. Meswani
H.R. Meswani
H.S. Kohli
U. Mahesh Rao
S. Venkitaramanan
M.L. Bhakta
T. Ramesh U. Pai
Y.P. Trivedi
Dr. D.V. Kapur
M.P. Modi
V.M. Ambani
}
}
Executive
Directors
- Nominee Director
Directors
- Company Secretary
- Chairman & Managing Director
- Vice-Chairman & Managing Director
Reliance Industries Limited
87
GROWTH IS LIFE
Cash Flow Statement Annexed to the Balance Sheet
for the period April 2002-March 2003
A: CASH FLOW FROM OPERATING ACTIVITIES :
Net Profit before tax as per Profit and Loss Account
4,974.21
4,428.70
2002-2003
(Rs. in crore)
2001-2002
Rs.
Rs.
Rs.
Rs.
Adjusted for :
Miscellaneous expenditure written off
Extra-Ordinary items
Net Prior Year Adjustments
Provision for Doubtful Debts (net)
Investment written off/Provision for Diminution in
value of Investments
Profit/(Loss) on Sale of Discarded Assets
Depreciation
Transferred from General Reserve
Discount on Buyback of Bonds/Redemption of Debentures
Effect of Exchange Rate Change
Profit on Sale of Investments
Dividend Income
Interest/Other Income
Interest Expenses
15.72
-
(3.73)
5.22
18.15
21.02
3,452.79
(615.70)
-
(34.15)
(26.16)
(112.44)
(705.60)
1,555.16
Operating Profit before Working Capital Changes
Adjusted for :
Trade and Other Receivables
Inventories
Trade Payables
(2,226.76)
(2,536.34)
3,001.75
Cash Generated from Operations
Net Prior Year Adjustments
Taxes Paid
Extra-Ordinary items
Net Cash From Operating Activities
B: CASH FLOW FROM INVESTING ACTIVITIES :
Purchase of Fixed Assets
Sale of Fixed Assets
Purchase of Investments
Sale of Investments
Movement in Loans
Interest Income
Dividend Income
Net Cash Used in Investing Activities
-
(411.70)
7.07
51.67
0.05
14.19
3,435.82
(619.68)
(4.95)
76.88
(35.17)
(23.78)
(541.11)
1,825.10
(544.62)
307.61
(383.50)
3,774.39
8,203.09
(620.51)
7,582.58
(7.07)
(105.87)
53.36
7,523.00
(1,681.53)
62.59
(14,830.11)
15,826.55
(3,568.81)
239.19
23.78
(3,928.34)
3,570.28
8,544.49
(1,761.35)
6,783.14
3.73
(144.56)
-
6,642.31
(3,704.25)
27.20
(29,186.07)
26,321.53
(555.87)
409.49
112.44
(6,575.53)
88
Reliance Industries Limited
GROWTH IS LIFE
Cash Flow Statement Annexed to the Balance Sheet
for the period April 2002-March 2003
Rs.
2002-2003
Rs.
(Rs. in crore)
2001-2002
Rs.
Rs.
C: CASH FLOW FROM FINANCING ACTIVITIES :
Proceeds from Issue of Share Capital (net)
Redemption of Preference Share Capital
Proceeds from Long Term Borrowings
Repayment of Long Term Borrowings
Short Term Loans
Dividends Paid
Interest Paid
Net Cash used in Financing Activities
Net Increase/(Decrease) in Cash and Cash Equivalents
Opening Balance of Cash and Cash Equivalents
On Amalgamation
1,760.71
—
401.74
(400.00)
7,733.08
(7,625.55)
579.31
(672.43)
(1,696.43)
(1,680.28)
(1,613.50)
1,760.71
2.11
—
15,717.89
(14,210.94)
(1,061.91)
(685.35)
(1,739.02)
(1,977.22)
1,617.44
100.63
42.64
143.27
Closing Balance of Cash and Cash Equivalents
147.21
1,760.71
As per our Report of even date
For and on behalf of the Board
For Chaturvedi & Shah
Chartered Accountants
For Rajendra & Co.
Chartered Accountants
D. Chaturvedi
Partner
R. J. Shah
Partner
Mumbai
Dated: 23rd April, 2003
M.D. Ambani
A.D. Ambani
N.R. Meswani
H.R. Meswani
H.S. Kohli
U. Mahesh Rao
S. Venkitaramanan
M.L. Bhakta
T. Ramesh U. Pai
Y.P. Trivedi
Dr. D.V. Kapur
M.P. Modi
V.M. Ambani
}
}
Executive
Directors
- Nominee Director
Directors
- Company Secretary
- Chairman & Managing Director
- Vice-Chairman & Managing Director
Reliance Industries Limited
89
GROWTH IS LIFE
90
Reliance Industries Limited
GROWTH IS LIFE
CONSOLIDATED FINANCIAL STATEMENTS
AND NOTES
Auditors' Report on Consolidated Financial Statements
TO THE BOARD OF DIRECTORS
RELIANCE INDUSTRIES LIMITED
We have examined the attached Consolidated Balance Sheet
of Reliance Industries Limited ("the Company") and its
subsidiaries as at 31st March, 2003, and the Consolidated
Profit and Loss Account for the year then ended annexed
thereto and the Consolidated Cash Flow Statement for the
period ended on that date. These financial statements are the
Our
responsibility of
responsibility is to express an opinion on these financial
statements based on our audit.
the Company's Management.
the audit
financial reporting
that we plan and perform
We conducted our audit
in accordance with generally
accepted auditing standards in India. These Standards
to obtain
require
reasonable assurance whether the financial statements are
prepared, in all material respects, in accordance with an
identified
free of
material misstatements. 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 the overall financial
statements. We believe that our audit provides a reasonable
basis for our opinion.
framework and are
the
We did not audit
financial statements of certain
subsidiaries, whose financial statements reflect total assets
(net) of Rs.16.99 crores as at 31st March, 2003 and total
revenues of Rs.12.58 crores for the year then ended. These
financial statements have been audited by other auditors
For Chaturvedi & Shah
Chartered Accountants
D. Chaturvedi
Partner
Mumbai
Dated: 23rd April, 2003
whose reports have been furnished to us, and our opinion , in
so far as it relates to the amounts included in respect of these
subsidiaries, is based solely on the report of the other
auditors.
We report that the consolidated financial statements have
been prepared by the Company in accordance with the
requirements of Accounting Standard (AS) 21, Consolidated
Financial Statements, issued by the Institute of Chartered
Accountants of India and on the basis of the separate audited
financial statements of the Company and its subsidiaries
included in the consolidated financial statements.
On the basis of the information and explanations given to us
and on the consideration of the separate audit reports on
individual audited financial statements of the Company and its
subsidiaries, we are of the opinion that the said consolidated
financial statements give a true and fair view in conformity
with the accounting principles generally accepted in India :
(a) in the case of the Consolidated Balance Sheet, of the
consolidated state of affairs of the Company and its
subsidiaries as at 31st March, 2003;
(b) in the case of the Consolidated Profit and Loss Account,
of the consolidated results of operations of the Company
and its subsidiaries for the year then ended and
(c) in the case of the Consolidated Cash Flow Statement, of
the consolidated cash flows of the company and its
subsidiaries for the year then ended.
For Rajendra & Co.
Chartered Accountants
R.J. Shah
Partner
Reliance Industries Limited
91
GROWTH IS LIFE
Consolidated Balance Sheet as at 31st March, 2003
Schedule
As at
31st March, 2003
Rs.
Rs.
(Rs. in crore)
As at
31st March, 2002
Rs.
Rs.
SOURCES OF FUNDS
Shareholders’ Funds
Share Capital
Equity Share Suspense
Reserves and Surplus
Minority Interest
Deferred Tax Liability
Loan Funds
Secured Loans
Unsecured Loans
TOTAL
APPLICATION OF FUNDS
Fixed Assets
Gross Block
Less: Depreciation
Net Block
Capital Work-in-Progress
Investments
In Associates
In Others
Current Assets, Loans and Advances
Current Assets
Inventories
Sundry Debtors
Cash and Bank Balances
Other Current Assets
Loans and Advances
Less: Current Liabilities and Provisions
Current Liabilities
Provisions
Net Current Assets
Miscellanous Expenditure
(to the extent not written off or adjusted)
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: 23rd April, 2003
92
‘A’
‘B’
‘C’
‘D’
‘E’
‘F’
‘G’
‘H’
‘M’
‘N’
1,395.92
—
29,139.79
11,801.04
7,981.45
50,597.87
18,461.57
32,136.30
2,010.63
6,009.79
4,332.09
7,510.41
2,978.11
150.12
464.08
11,102.72
8,398.93
19,501.65
9,558.59
1,475.92
11,034.51
30,535.71
0.06
2,684.88
19,782.49
53,003.14
1,053.56
342.29
26,580.91
14,209.75
4,739.59
46,727.47
15,076.94
31,650.53
1,533.31
27,976.76
0.07
2,060.83
18,949.34
48,987.00
34,146.93
33,183.84
3,263.04
3,723.86
10,341.88
6,986.90
4,974.07
2,725.54
1,763.56
409.74
9,872.91
6,590.99
16,463.90
6,499.90
1,210.63
7,710.53
8,467.14
47.19
8,753.37
62.89
53,003.14
48,987.00
For and on behalf of the Board
- Chairman & Managing Director
- Vice-Chairman & Managing Director
M.D. Ambani
A.D. Ambani
N.R. Meswani
H.R. Meswani
H.S. Kohli
U. Mahesh Rao
S. Venkitaramanan
M.L. Bhakta
T. Ramesh U. Pai
Y.P. Trivedi
Dr. D.V. Kapur
M.P. Modi
V.M. Ambani
Reliance Industries Limited
}
}
Executive
Directors
- Nominee Director
Directors
- Company Secretary
Consolidated Profit and Loss Account for the year ended 31st March, 2003
GROWTH IS LIFE
Schedule
2002-2003
Rs.
Rs.
Rs.
(Rs. in crore)
2001-2002
Rs.
65,073.72
14,965.63
50,108.09
4,198.02
57,126.48
11,715.69
45,410.79
3,314.98
INCOME
Turnover and Inter Divisional Transfers
Less: Inter Divisional Transfers
Turnover
Less: Excise Duty Recovered on Sales
Net Turnover
Other Income
Share in Associates
Variation in Stocks
EXPENDITURE
Purchases
Manufacturing and Other Expenses
Interest
Depreciation
Less : Transferred from General Reserve
[Refer Note 9(a), 9(b) and 9(c), Schedule ‘N’]
Profit Before Tax and Extra Ordinary Income
Add :
Extra Ordinary Income
Profit Before Tax
Provision for Current Taxation
Provision for Deferred Tax
‘I’
‘J’
‘K’
‘L’
3,453.17
615.70
Profit after Tax (before adjustment for Minority Interest)
Add :
Share of Loss transferred to Minority
Profit after Tax (after adjustment for Minority Interest)
Add :
Balance brought forward from last year
Dividend Adjustment on Consolidation
On Amalgamation
Deferred Tax liability for Earlier Years
Taxation for earlier years
Investment Allowance (Utilised) Reserve Written Back
Share in Associates
Amount Available For Appropriations
APPROPRIATIONS
Capital Redemption Reserve
Debenture Redemption Reserve
Capital Reserve
General Reserve
Interim Dividend on Preference Shares (paid)
Proposed Dividend on Equity Shares
Tax on Dividend
400.00
281.08
—
2,000.00
20.08
698.19
89.46
Balance Carried to Balance Sheet
Basic and Diluted Earning per Share of Rs. 10 each (In Rupees)
[Ref. Note 20, Schedule ‘N’]
- Before extra ordinary items
- After extra ordinary items
45,910.07
806.48
79.81
2,435.49
49,231.85
3,420.75
36,541.77
1,558.48
2,837.47
44,358.47
4,873.38
—
4,873.38
246.07
624.00
4,003.31
—
4,003.31
2,818.47
49.71
—
—
—
87.73
6,959.22
3,488.81
3,470.41
28.53
28.53
3,435.84
619.68
—
142.95
4.95
2,000.00
—
663.28
—
42,095.81
831.79
—
(907.83)
42,019.77
1,697.84
31,624.59
1,827.97
2,816.16
37,966.56
4,053.21
411.70
4,464.91
190.03
996.01
3,278.87
1.03
3,279.90
2,219.81
—
1,071.50
(1,064.82)
1.19
122.07
—
5,629.65
2,811.18
2,818.47
20.66
23.62
Significant Accounting Policies
Notes on Accounts
As per our Report of even date
‘M’
‘N’
For and on behalf of the Board
For Chaturvedi & Shah
Chartered Accountants
For Rajendra & Co.
Chartered Accountants
D. Chaturvedi
Partner
R. J. Shah
Partner
Mumbai
Dated: 23rd April, 2003
M.D. Ambani
A.D. Ambani
N.R. Meswani
H.R. Meswani
H.S. Kohli
U. Mahesh Rao
S. Venkitaramanan
M.L. Bhakta
T. Ramesh U. Pai
Y.P. Trivedi
Dr. D.V. Kapur
M.P. Modi
V.M. Ambani
}
}
Executive
Directors
- Nominee Director
Directors
- Company Secretary
- Chairman & Managing Director
- Vice-Chairman & Managing Director
Reliance Industries Limited
93
Schedules forming part of the Consolidated Balance Sheet
GROWTH IS LIFE
SCHEDULE ‘A’
SHARE CAPITAL
Authorised:
250 00 00 000 Equity Shares of Rs. 10 each
(120 00 00 000)
50 00 00 000 Preference Shares of Rs. 10 each
(10 00 00 000) Preference shares of Rs. 100 each
As at
31st March, 2003
Rs.
Rs.
2,500.00
500.00
(Rs. in crore)
As at
31st March, 2002
Rs.
Rs.
1,200.00
1,000.00
3,000.00
2,200.00
Issued, Subscribed and Paid up:
139 63 77 536 Equity Shares of Rs. 10 each fully
(105 37 57 027) paid up
Less: Calls in arrears - by others
1,396.38
0.46
1,053.76
0.20
TOTAL
Notes:
1. Of the above Equity Shares:
1,395.92
1,395.92
1,053.56
1,053.56
(a)
48 17 70 552
(48 17 70 552)
(b)
52 31 98 799
(18 05 78 290)
Shares were allotted as Bonus Shares by capitalisation of Share Premium and Reserves.
Shares were allotted pursuant to Schemes of Amalgamation without payments being received in
cash and includes 10,46,60,154 Shares allotted to the Petroleum Trust, the sole beneficiary of which
is Reliance Industrial Investments and Holdings Limited, a wholly owned subsidiary of the Company
(c)
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 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 during the year has issued and redeemed Preference Shares aggregating to Rs. 400.00 crore, at par.
4. The Authorised share capital has increased to Rs. 3,000 crore consisting of 250,00,00,000 equity shares of Rs. 10 each and
50,00,00,000 Preference Shares of Rs. 10 each in terms of the Scheme of Amalgamation sanctioned by order dated 7th June,
2002 of Hon’ble High Court of Bombay and the order dated 13th September, 2002 of the Hon’ble High Court of Gujarat.
94
Reliance Industries Limited
GROWTH IS LIFE
Schedules forming part of the Consolidated Balance Sheet
SCHEDULE ‘B’
RESERVES AND SURPLUS
As at
(Rs. in crore)
As at
31st March, 2003
31st March, 2002
Rs.
Rs.
Rs.
Rs.
Revaluation Reserve
As per last Balance Sheet
Less: Deduction on retirement of Revalued Assets
2,738.50
2.69
2,770.78
32.28
Capital Reserve
As per last Balance Sheet
Add : On Amalgamation
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 : On Amalgamation
Less: Premium on Redemption of Debentures/Bonds
Less: Calls in arrears - by others
Debenture Redemption Reserve
As per last Balance Sheet
Add : On Amalgamation
Add : Transferred from Profit and Loss Account
Investment Allowance (Utilised) Reserve
As per last Balance Sheet
Less: Transferred to Profit and Loss Account
Taxation Reserve
As per last Balance Sheet
General Reserve
As per last Balance Sheet
Less: Transferred to Profit and Loss Account *
[Refer Note 9(a), 9(b) and 9(c), Schedule ‘N’]
Add : Transferred from Profit and Loss Account
Share in Reserves of Associates
Revaluation Reserves
Capital Reserves
Profit and Loss Account
TOTAL
291.28
—
—
485.07
400.00
16,153.81
—
16,153.81
180.79
15,973.02
2.55
1,125.58
—
281.08
76.63
—
2,885.80
615.70
2,270.10
2,000.00
9.71
13.65
2,735.81
2,738.50
285.68
0.65
4.95
291.28
291.28
485.07
—
885.07
485.07
5,449.22
10,739.67
16,188.89
35.08
16,153.81
4.23
15,970.47
16,149.58
852.46
130.17
142.95
1,406.66
1,125.58
76.63
10.00
76.63
10.00
198.70
122.07
1,505.48
619.68
885.80
2,000.00
4,270.10
2,885.80
23.36
3,470.41
29,139.79
—
—
—
2,818.47
26,580.91
* Cumulative amount transferred on account of Depreciation on Revaluation
Rs. 2,417.99 crore (Previous Year Rs. 2,301.38 crore)
Reliance Industries Limited
95
Schedules forming part of the Consolidated Balance Sheet
GROWTH IS LIFE
SCHEDULE ‘C’
SECURED LOANS
A) DEBENTURES
1
2
Non-Convertible Debentures
Deep Discount Debentures
Less : Unamortised Discounts
B) TERM LOANS
1.
2.
From Banks
Foreign Currency Loans
From Financial Institutions
Rupee Loans
C) WORKING CAPITAL LOANS
From Banks
Rupee Loans
TOTAL
Notes:
As at
31st March, 2003
Rs.
Rs.
(Rs. in crore)
As at
31st March, 2002
Rs.
Rs.
10,037.08
644.70
96.64
548.06
—
23.64
8,551.58
637.20
154.32
482.88
10,585.14
9,034.46
4,289.07
167.20
23.64
4,456.27
1192.26
11,801.04
719.02
14,209.75
1.
(a) Debentures referred to in A above to the extent of Rs. 4161.14 crore are secured by way of first mortgage / charge in
favour of the Trustees 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. 992.25 crore are secured by way of first mortgage / charge in
favour of the Trustees on all the properties situated at Patalganga, District Raigad in the State of Maharashtra and on
the properties of petrochemicals complex 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. 40.00 crore 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 to the extent of Rs. 4215.00 crore are secured by way of first mortgage / charge in
favour of the Trustees on all the properties, both present and future, excluding book debts, office premises and certain
other properties specifically excluded of the Refinery Division of the Company.
(e) Debentures referred to in A above to the extent of Rs. 1152.56 crore are to be secured by way of first mortgage / charge
in favour of the Trustees on all the properties, both present and future, excluding book debts, office premises and certain
other properties specifically excluded of the Refinery Division of the Company.
(f) Debentures referred to in ‘A’ (2) above, includes Rs.24.18 crore, secured by way of mortgage of residential property
situated at Thane, in the State of Maharashtra and some of the Investments of the subsidiary of the Company, Reliance
Industrial Investments and Holdings Limited.
(g) Debentures referred to in A above consisting of:
(1) 1.13% Debentures of Rs. 100 each, aggregating Rs. 145.00 crore are redeemable at par as follows: viz Rs. 45
crore on 11th October, 2009 and Rs. 100 crore on 17th November, 2009. (2) 14.08% Debentures of Rs. 33.33 each
aggregating Rs. 29.17 crore are redeemable at par on the expiry of the seventh year from the date of allotment;
i.e. 31st March, 2004. (3) 13.5% Debentures of Rs. 80,00,000 each, aggregating Rs. 40.00 crore are redeemable
at par in two annual instalments on the expiry of the sixth and seventh year from the date of allotment; i.e.
commencing from 15th September, 2003. (4) 12.25% Debentures of Rs. 66,66,667 each aggregating Rs. 216.67
crore, are redeemable at par in two annual instalments on the expiry of sixth and seventh year from the date of
allotment; commencing from 1st January, 2004. (5) 12.5% Debentures of Rs. 1,00,00,000 each aggregating Rs.
110.00 crore are redeemable at par on the expiry of seventh year from the date of allotment i.e. 1st January, 2005.
(6) 13.75% Debentures of Rs. 1,00,00,000 each aggregating Rs. 110.00 crore are redeemable at par on the expiry
of the tenth year from the respective dates of allotment i.e. 1st January, 2008. (7) 13.75% Debentures of Rs.
1,00,00,000 each aggregating Rs. 80.00 crore are redeemable at par on the expiry of the tenth year from the
respective dates of allotment, i.e. 1st January, 2008. (8) 14.75% Debentures of Rs. 1,00,00,000 each aggregating
Rs. 166.00 crore are redeemable at par in three equal annual instalments, on expiry of eighth, ninth and tenth year
from the respective dates of allotment; commencing from 13th February, 2006. (9) 14.25% Debentures of
96
Reliance Industries Limited
GROWTH IS LIFE
Schedules forming part of the Consolidated Balance Sheet
SCHEDULE ‘C’ (Contd.)
Rs. 1,00,00,000 each aggregating Rs. 200.00 crore are redeemable at par on the expiry of the tenth year from the
date of allotment; i.e 27th May, 2008. (10) 15.03% Debentures of Rs. 1,00,00,000 each aggregating Rs. 150.00
crore are redeemable at par on the expiry of the tenth year from the date of allotment; i.e 12th June, 2008.
(11) 15.03 % Debentures of Rs. 25,00,000 each aggregating Rs. 66.25 crore which are redeemable at par on the
expiry of the tenth year from the date of allotment; i.e. 25th June, 2008. (12) 14.25% Debentures of Rs. 1,00,00,000
each aggregating Rs. 150.00 crore are redeemable at par on the expiry of the tenth year from the date of allotment;
i.e. 9th September, 2008. (13) 15.03% Debentures of Rs. 1,00,00,000 each aggregating Rs. 21.00 crore are
redeemable at par on the expiry of the tenth year from the date of allotment; i.e. 27th September, 2008.
(14) 15.03% Debentures of Rs. 1,00,00,000 each aggregating Rs. 100.00 crore are redeemable at par on the expiry
of the tenth year from the date of allotment; i.e. 4th October, 2008. (15) 14.25% Debentures of Rs. 1,00,00,000 each
aggregating Rs. 100.00 crore are redeemable at par on the expiry of the tenth year from the date of allotment; i.e.
26th November, 2008. (16) 15.03% Debentures of Rs. 1,00,00,000 each aggregating Rs. 25.00 crore are
redeemable at par on the expiry of the tenth year from the date of allotment; i.e. 20th October, 2008. (17) 11.50
% Debentures of Rs. 1,00,00,000 each aggregating Rs. 195.00 crore are redeemable at par on the expiry of the
fifty four months from the date of allotment; i.e. 12th November, 2003. (18) Deep Discount Debentures aggregating
Rs. 521.31 crore are redeemable at par on the expiry of sixty months from the date of allotment; i.e. 1st June, 2004.
(19) 12.70% Debentures of Rs. 1,00,00,000 each aggregating Rs. 100.00 crore are redeemable at par in 15th
December, 2007. (20) 12.36% Debentures of Rs. 1,00,00,000 each aggregating Rs. 51.00 crore are redeemable at
par on the expiry of fifth year from the respective dates of allotment; commencing from 24th August, 2004. (21)
12.35% Debentures of Rs. 1,00,00,000 each aggregating Rs. 45.00 crore are redeemable at par on the expiry of
fifth year from the date of allotment; i.e. 30th August, 2004. (22) Debentures of Rs. 50,00,000 each aggregating Rs.
92.00 crore carrying an interest rate linked to the interest rate as announced by CRISIL, which are redeemable at
par on the expiry of fifth year from the date of allotment; i.e. 10th February, 2005. (23) 10.85% Debentures of Rs.
1,00,00,000 each aggregating Rs. 50.00 crore are redeemable at par on the expiry of fifth year from the date of
allotment; i.e. 24th February, 2005. (24) 11.00% Debentures of Rs. 1,00,00,000 each aggregating Rs. 75.00 crore
are redeemable at par on the expiry of third year from the date of allotment; i.e. 11th July, 2003. (25) 12.10%
Debentures of Rs. 1,00,00,000 each aggregating Rs. 155.00 crore are redeemable at par on the expiry of fifth year
from the date of allotment; i.e. 15th September, 2005. (26) MIBOR Linked Debentures of Rs. 1,00,00,000 each
aggregating Rs. 60.00 crore are redeemable at par on the expiry of third year from the date of allotment; i.e. 12th
October, 2003. (27) 10.90% Debentures of Rs. 1,00,00,000 each aggregating Rs. 100.00 crore are redeemable at
par on the expiry of third year from the date of allotment; i.e. 19th January, 2004. (28) 9.90% Debentures of Rs.
1,00,00,000 each aggregating Rs. 50.00 crore are redeemable at par on the expiry of fifth year from the date of
allotment; i.e. 15th June, 2006. (29) 9.90% Debentures of Rs. 1,00,00,000 each aggregating Rs. 50.00 crore are
redeemable at par on the expiry of fifth year from the date of allotment; i.e. 21st June, 2006. (30) 9.60% Debentures
of Rs. 1,00,00,000 each aggregating Rs. 50.00 crore are redeemable at par on the expiry of fifth year from the date
of allotment; i.e. 22nd June, 2006. (31) 9.55% Debentures of Rs. 1,00,00,000 each aggregating Rs. 50.00 crore are
redeemable at par on the expiry of fifth year from the date of allotment; i.e. 11th July, 2006. (32) 9.60% Debentures
of Rs. 1,00,00,000 each aggregating Rs. 50.00 crore are redeemable at par on the expiry of fifth year from the date
of allotment; i.e. 12th July, 2006. (33) 8.45% Debentures of Rs. 10,00,000 each aggregating Rs. 100.00 crore are
redeemable at par on the expiry of fifth year from the date of allotment; i.e. 29th March, 2007. (34) 8.25%
Debentures of Rs. 10,00,000 each aggregating Rs. 140.00 crore are redeemable at par on the expiry of fourth year
from the date of allotment; i.e. 20th May, 2006. (35) 8.70% Debentures of Rs. 10,00,000 each aggregating Rs.
100.00 crore are redeemable at par on the expiry of four years and ten months from the date of allotment; i.e. 19th
April, 2007. (36) 9.25% Debentures of Rs. 10,00,000 each aggregating Rs. 1000.00 crore are redeemable at par
in four equal annual instalments starting from the end of ninth year from the respective date of allotment; i.e. 17th
June, 2011. (37) 8.65% Debentures of Rs. 10,00,000 each aggregating Rs. 100.00 crore are redeemable at par on
the expiry of four years and eleven months from the date of allotment; i.e. 2nd May, 2007. (38) 8.65% Debentures
of Rs. 10,00,000 each aggregating Rs. 100.00 crore are redeemable at par on the expiry of four years and eleven
months from the date of allotment; i.e. 2nd June, 2007. (39) 8.00% Debentures of Rs. 10,00,000 each aggregating
Rs. 100.00 crore are redeemable at par on the expiry of fifth year from the date of allotment; i.e. 19th June, 2007.
(40) Benchmark Rate plus 0.90% Debentures of Rs. 10,00,000 each aggregating Rs. 50.00 crore are redeemable
at par on the expiry of four years and eleven months from the date of allotment; i.e. 9th July, 2007. (41) 7.70%
Debentures of Rs. 10,00,000 each aggregating Rs. 100.00 crore are redeemable at par on the expiry of fourth year
from the date of allotment; i.e. 7th August, 2006. (42) 6.20% Debentures of Rs. 10,00,000 each aggregating Rs.
450.00 crore are redeemable at par on the expiry of four years and eleven months from the date of allotment; i.e.
20th November, 2007. (43) 6.20% Debentures of Rs. 10,00,000 each aggregating Rs. 50.00 crore are redeemable
at par on the expiry of four years and eleven months from the date of allotment; i.e. 20th November, 2007. (44)
6.45% Debentures of Rs. 10,00,000 each aggregating Rs. 400.00 crore are redeemable at par on the expiry of tenth
year from the date of allotment; i.e. 20th December, 2012. (45) 6.50% Debentures of Rs. 10,00,000 each
aggregating Rs.250.00 crore are redeemable at par on the expiry of tenth year from the date of allotment; i.e. 31st
January, 2013. (46) Deep Discount Debentures of Rs. 10,00,000 each aggregating Rs. 1.31 crore are redeemable
at par on the expiry of tenth year from the date of allotment; i.e. 31st January, 2013. (47) Deep Discount Debentures
of Rs. 10,00,000 each aggregating Rs. 1.25 crore are redeemable at par on the expiry of twentieth year from the
date of allotment; i.e. 31st January, 2023. (48) 13.5% Debentures of Rs.1,00,00,000 each aggregating Rs.150 crore
are redeemable at par in 5 annual installments of 10%, 10%, 10%, 35% and 35% commencing from 30th March
2005. (49) 13.5% Debentures of Rs.1,00,00,000 each aggregating Rs.190 crore are redeemable at par in 5 annual
Reliance Industries Limited
97
GROWTH IS LIFE
Schedules forming part of the Consolidated Balance Sheet
SCHEDULE ‘C’ (Contd.)
installments of 10%, 10%, 10%, 35% and 35% commencing from 31st March 2005. (50) 13% Debentures of
Rs.1,00,00,000 each aggregating Rs.100 crore are redeemable at par in 5 annual installments of 10%, 10%, 10%,
(51) 13% Debentures of Rs.1,00,00,000 each aggregating
35% and 35% commencing from 15th June 2005.
Rs.100 crore are redeemable at par in 5 annual installments of 10%, 10%, 10%, 35% and 35% commencing from
28th June 2005. (52) 12.75% Debentures of Rs.1,00,00,000 aggregating 221 crore are redeemable at par in 5 annual
installments of 10%, 10%, 10%, 35% and 35% commencing from 10th August 2005. (53) 13.55% Debentures of
Rs.1,00,00,000 each aggregating Rs.70 crore are redeemable at par in 5 annual installments of 10%, 10%, 10%,
35% and 35% commencing from 12th August 2005. (54) 13% Debentures of Rs.1,00,00,000 each aggregating
Rs.105 crore are redeemable at par in 17th September 2004. (55) 13.5% Debenture of Rs.1,00,00,000 is
redeemable at par in 3 annual installments of 30%, 30% and 40% commencing from 17th September 2007. (56)
13.25% Debenture of Rs.1,00,00,000 is redeemable at par in 3 annual installments of 30%, 30% and 40%
commencing from 17th September 2005. (57) 12.75% Debentures of Rs.1,00,00,000 aggregating 165 crore are
redeemable at par in 5 annual installments of 10%, 10%, 10%, 35% and 35% commencing from 17th September,
2005. (58) 13.5% Debenture of Rs.1,00,00,000 each aggregating Rs.145 crore are redeemable at par in 3 annual
installments of 30%, 30% and 40% commencing
from 20th September 2007. (59) 13.5% Debenture of
Rs.1,00,00,000 each aggregating Rs.272 crore are redeemable at par in 3 annual installments of 30%, 30% and
40% commencing from 1st October, 2007. (60) 13.5% Debenture of Rs.1,00,00,000 each aggregating Rs.155 crore
are redeemable at par in 3 annual installments of 30%, 30% and 40% commencing from 11th October, 2007. (61)
13.5% Debentures of Rs.1,00,00,000 each aggregating Rs.300 crore are redeemable at par in 5 annual installments
of 10%, 10%, 10%, 35% and 35% commencing from 29th September 2005. (62) 13.5% Debentures of Rs.25,00,000
each aggregating Rs.125 crore are redeemable at par in 5 annual installments of 10%, 10%, 10%, 35% and 35%
commencing from 25th October 2005. (63) 11.75% Debentures of Rs.1,00,00,000 each aggregating Rs.300 crore
are redeemable at par in 5 annual installments of 10%, 10%, 10%, 35% and 35% commencing from 30th May, 2006.
(64) 12.25% Debentures of Rs.1,00,00,000 each aggregating Rs.200 crore are redeemable at par in 5 annual
installments of 10%, 10%, 10%, 35% and 35% commencing from 22nd August 2006. (65) 11.50% Debentures of
Rs.1,00,00,000 each aggregating Rs.410 crore are redeemable at par in 6th February 2006. (66) 11.20%
Debentures of Rs.1,00,00,000 each aggregating Rs.175 crore are redeemable at par in 24th February 2004. (67)
11.50% Debentures of Rs.1,00,00,000 each aggregating Rs.500 crore are redeemable at par in three equal annual
installments commencing from 1st March 2006. (68) 11.30% Debentures of Rs.1,00,00,000 each aggregating Rs.50
crore are redeemable at par in 1st March 2006. (69) 11.15% Debentures of Rs.1,00,00,000 each aggregating Rs.45
crore are redeemable at par in 2nd May 2006. (70) 11.10% Debentures of Rs.1,00,00,000 each aggregating Rs.50
crore are redeemable at par in 30th April 2006. (71) 11.00% Debentures of Rs.1,00,00,000 each aggregating Rs.20
crore are redeemable at par in 9th May 2006. (72) 11.05% Debentures of Rs.1,00,00,000 each aggregating Rs.100
crore are redeemable at par in 9th May 2006. (73) 10.95% Debentures of Rs.1,00,00,000 each aggregating Rs.25
crore are redeemable at par in 15th May 2006. (74) 9.95% Debentures of Rs.1,00,00,000 each aggregating Rs.50
crore are redeemable at par in 8th June 2003. (75) 10.00% Debentures of Rs.1,00,00,000 each aggregating Rs.40
crore are redeemable at par in 15th June 2006. (76) 10.00% Debentures of Rs.1,00,00,000 each aggregating Rs.50
crore are redeemable at par in 20th June 2006. (77) 10.00% Debentures of Rs.1,00,00,000 each aggregating Rs.50
crore are redeemable at par in 10th July, 2006. (78) 9.90% Debentures of Rs.1,00,00,000 each aggregating Rs.50
crore are redeemable at par in 18th July 2006.
2.
(a) Foreign currency loans to the extent of Rs.3561.38 crore, from Banks which was secured by first pari passu mortgage
and charge on the immovable and movable properties, both present and future, excluding book debts, office premises
and certain other properties specifically excluded of the refinery division of the Company, was converted during the year
from secured borrowing into unsecured.
(b) Term Loan referred to in B(2) above is secured/to be secured only on the dwelling units constructed/to be constructed
for the employees of the Company.
3.
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.
Debentures of Rs. 802.50 crore are redeemable at par within one year.
SCHEDULE ‘D’
UNSECURED LOANS
A. Long Term:
i)
ii)
From Banks
From Others
B. Short Term:
From Banks
TOTAL
As at
31st March, 2003
Rs.
Rs.
(Rs. in crore)
As at
31st March, 2002
Rs.
Rs.
5,851.50
1,979.95
1,429.25
3,310.34
7,831.45
150.00
7,981.45
4,739.59
—
4,739.59
98
Reliance Industries Limited
Schedules forming part of the Consolidated Balance Sheet
GROWTH IS LIFE
SCHEDULE ‘E’
FIXED ASSETS
Description
As At
Additions/
Deductions/
As at
Upto
For the
Deductions/
Upto
As At
As At
Gross Block
Depreciation
(Rs. in crore)
Net Block
1-4-2002
Adjustments
Adjustments
31-3-2003
1-4-2002
Rs.
Rs.
Rs.
Rs.
Rs.
56.68
159.74
1,067.83
2,514.20
40,434.96
729.24
546.89
175.13
104.51
214.78
46.92
646.97
0.11
70.77
6.06
211.25
3,437.78
47.82
141.91
25.87
49.06
—
—
—
—
0.01
17.43
1.05
79.01
0.30
1.66
1.27
15.35
—
—
—
56.79
230.50
4.19
—
1,056.46
2,724.40
236.29
503.31
197.74
124.99
43,793.73
13,393.71
2,923.92
776.76
687.14
199.73
138.22
214.78
46.92
646.97
347.40
167.07
74.86
52.47
160.74
29.93
100.29
66.94
47.66
22.31
19.20
7.57
2.75
33.15
Year
Rs.
0.53
—-
Adjustments
31-3-2003
31-3-2003
31-3-2002
Rs.
Rs.
Rs.
Rs.
—
—
—
0.19
55.82
0.06
0.62
0.69
10.46
—
—
—
4.72
—
434.03
628.11
52.07
230.50
52.49
159.74
622.43
2,096.29
831.54
2,010.89
16,261.81
27,531.92
27,041.25
414.28
214.11
96.48
61.21
168.31
32.68
133.44
362.48
473.03
103.25
77.01
46.47
14.24
513.53
381.84
379.82
100.27
52.04
54.04
16.99
546.68
46,697.85
3,990.63
116.08
50,572.40
15,070.26
3,446.76*
67.84
18,449.18
32,123.22
31,627.59
19.64
9.98
29.62
0.78
—
0.78
4.93
—
4.93
15.49
9.98
25.47
5.02
1.66
6.68
4.42
1.99
6.41
0.70
—
0.70
8.74
3.65
12.39
6.75
6.33
13.08
14.62
8.32
22.94
46,727.47
3,991.41
121.01
50,597.87
15,076.94
3,453.17
68.54
18,461.57
32,136.30
31,650.53
OWN ASSETS:
Leasehold Land
Freehold Land
Development Rights /
Producing Properties
Buildings
Plant & Machinery
Electrical Installations
Equipments
Furniture & Fixtures
Vehicles
Ships
Aircrafts & Helicopters
Jetties
Sub-Total
LEASED ASSETS:
Plant & Machinery
Ships
Sub-Total
Total
Previous Year
25,356.42
21,648.57**
277.52
46,727.47
11,841.67
3,435.84
200.57
15,076.94
31,650.53
Capital Work-in-Progress
NOTES :
2,010.63
1,533.31
a)
b)
Leasehold Land includes Rs. 0.21 crore in respect of which lease-deeds are pending execution.
Buildings include :
i)
ii)
Cost of shares in Co-operative Societies Rs. 0.01 crore ( Previous Year Rs. 0.01 crore).
Rs. 93.20 crore incurred towards purchase/acquisition of 1,94,819 Equity Shares of Re. 1 each of M/s. Mature Trading & Investments Pvt. Ltd. with a right of occupancy
of certain area of a commercial premises.
c)
Capital Work-in-Progress includes :
i)
ii)
Rs. 76.47 crore on account of pre-operative expenses. (Previous Year Rs. 64.86 crore)
Rs. 133.97 crore on account of cost of construction materials at site. (Previous Year Rs. 477.04 crore).
iii) Rs. 279.18 crore on account of advance against Capital Expenditure. (Previous Year Rs.197.62 crore).
d)
e)
Additions and Capital Work in Progress include Rs. 13.91 crore on account of exchange difference during the year. (Previous Year Rs. 294.29 crore).
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.
f)
Gross Block includes Rs. 2,735.81 crore (Previous Year Rs. 2,738.50 crore) being the amount added on revaluation of Plant & Machinery as at 01-04-1997
* Refer to Note 9(a), 9(b) & 9(c), Schedule 'N
** Includes fair value assets of Rs.19,352.22 crore added on amalgamation of Reliance Petroleum Limited based on valuer’s report.
Reliance Industries Limited
99
GROWTH IS LIFE
Schedules forming part of the Consolidated Balance Sheet
SCHEDULE ‘F’
CURRENT ASSETS
INVENTORIES
Stores, Chemicals and Packing Materials
Raw Materials
Stock-in-Process
Finished Goods/Traded Goods
SUNDRY DEBTORS (Unsecured) #
Over six months
Considered good
Considered doubtful
Less : Provision
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
OTHER CURRENT ASSETS
Interest Accrued on Investments
TOTAL
As at
31st March, 2003
Rs.
Rs.
(Rs. in crore)
As at
31st March, 2002
Rs.
Rs.
1,004.06
2,391.52
939.55
3,175.28
15.50
113.23
128.73
113.23
15.50
2,962.61
3.04
134.28
12.80
844.34
2,450.39
519.83
1,159.51
7,510.41
4,974.07
112.06
108.47
220.53
108.47
112.06
2,613.48
2,978.11
2,725.54
1.49
190.19
1,571.88
150.12
1,763.56
464.08
11,102.72
409.74
9,872.91
# Sundry Debtors include Rs. 10.26 crore (Previous Year Rs. 166.57 crore) from Reliance Communications Infrastructure Limited and Rs.
3.14 crore (Previous Year Rs. 0.10 crore) from Reliance Infocomm Limited, companies under the same management.
SCHEDULE ‘G’
LOANS AND ADVANCES
UNSECURED - (CONSIDERED GOOD)
Advances recoverable in cash or in kind or for
value to be received
Deposits
Balance with Customs, Central Excise Authorities, etc.
TOTAL
As at
31st March, 2003
Rs.
(Rs. in crore)
As at
31st March, 2002
Rs.
6,149.34
2,058.92
190.67
8,398.93
5,447.33
999.51
144.15
6,590.99
Advances include:
(i) Rs 0.35 crore (Previous year Rs. 0.20 crore) to Officers of the Company (Maximum amount outstanding at any time during the
year Rs. 0.37 crore).
(ii) Rs. 2.83 crore (Previous Year Rs 109.14 crore) towards Shares / Debentures Application money pending allotment.
(iii) Rs. Nil (Previous Year Rs. 2,213.00 crore) towards equity share application money pending allotment to Reliance
Communications Infrastructure Limited (Maximum amount outstanding at any time during the year Rs. 2213.00 crore) and
Rs. 888.00 crore (Previous Year Rs. Nil) towards Debenture application/Call Money pending allotment to Reliance Infocomm
Limited (Maximum amount outstanding at any time during the year Rs.888 crore), companies under the same management.
(iv) Rs. 40.10 crore (Previous Year Rs. 42.29) receivable from Reliance Communication Infrastructure Limited (Maximum amount
outstanding at any time during the year Rs.42.29 crore) and Rs. 15.53 crore (Previous Year Rs. 16.39 crore) receivable from
Reliance Infocomm Limited (Maximum amount outstanding at any time during the year Rs. 16.39 crore), companies under the
same management, towards net investment in finance Leases given.
100
Reliance Industries Limited
GROWTH IS LIFE
Schedules forming part of the Consolidated Balance Sheet
SCHEDULE ‘H’
CURRENT LIABILITIES AND PROVISIONS
CURRENT LIABILITIES
Sundry Creditors - Small scale Industries
- Others
Liability for Leased assets
Unpaid dividend
Unpaid matured debentures
Unpaid Call Money
Interest accrued on above
Interest accrued but not due on loans
As at
31st March, 2003
Rs.
Rs.
(Rs.in crore)
As at
31st March, 2002
Rs.
Rs.
2.69
9,070.59 *
13.99
45.93**
45.23**
0.01**
1.83**
378.32
1.46
6,049.51
24.70
35.00
***
***
***
389.23
9,558.59
6,499.90
PROVISIONS
Provision for Wealth Tax
Provision for Income Tax
Provision for Gratuity, Superannuation and Leave Encashment
Proposed Dividend
Tax on Dividend
30.16
571.07
87.04
698.19
89.46
24.16
486.88
36.31
663.28
—
TOTAL
1,475.92
11,034.51
1,210.63
7,710.53
* Includes for capital expenditure Rs. 717.48 crore. (Previous Year Rs. 176.16 crore)
** These figures do not include any amounts, due and outstanding, to be credited to Investor Education and Protection Fund.
***Figures for previous year have not been disclosed as the disclosure requirement came into force with effect from 13th November 2002.
Reliance Industries Limited
101
Schedules forming part of the Consolidated Profit and Loss Account
GROWTH IS LIFE
SCHEDULE ‘I’
OTHER INCOME
Dividends :
From Current Investments
From Long Term Investments
[Tax Deducted at source Rs.14.37 crore;
(Previous Year Rs. Nil)]
Interest Received :
From Current Investments
From Long Term Investments
From Others
[Tax Deducted at source Rs. 79.16 crore;
(Previous Year Rs. 56.53 crore)]
Profit/(Loss) on Sale of Long Term Investments (net)
Profit/(Loss) on Sale of Current Investments (net)
Profit on Sale of Fixed Assets
Discount on Buyback of Bonds/Redemption of Debentures
Miscellaneous Income
TOTAL
SCHEDULE ‘J’
VARIATION IN STOCKS
STOCK-IN-TRADE (at close)
Finished goods/Traded goods
Stock-in-process
STOCK-IN-TRADE (at commencement)
Finished goods
Stock-in-process
Add : On Amalgamation
Finished goods
Stock-in-process
TOTAL
Rs.
0.11
92.69
147.14
209.22
163.58
0.66
36.31
(Rs. in crore)
2002-2003
2001-2002
Rs.
Rs.
0.07
96.55
Rs.
92.80
96.62
5.08
287.85
225.25
(4.24)
38.78
519.94
36.97
2.52
—
154.25
806.48
518.18
34.54
4.17
4.95
173.33
831.79
2002-2003
(Rs. in crore)
2001-2002
Rs.
Rs.
Rs.
Rs.
3,242.09
872.74
1,159.51
519.83
1,679.34
—
—
—
1,159.51
519.83
4,114.83
1,679.34
1,023.43
177.74
1,201.17
603.60
782.40
1,386.00
1,679.34
2,435.49
2,587.17
(907.83)
102
Reliance Industries Limited
Schedules forming part of the Consolidated Profit and Loss Account
GROWTH IS LIFE
SCHEDULE ‘K’
MANUFACTURING AND OTHER EXPENSES
RAW MATERIALS CONSUMED
MANUFACTURING EXPENSES
2002-2003
Rs.
Rs.
Rs.
30,856.93
(Rs. in crore)
2001-2002
Rs.
26,489.41
Stores, Chemicals and Packing Materials
Electric Power, Fuel and Water
Machinery Repairs
Building Repairs
Labour, Processing and Machinery Hire Charges
Excise Duty provided on stocks
Lease Rent
Exchange Differences (Net)
1,135.34
719.40
106.01
30.60
146.35
193.60
15.80
(176.56)
1,120.41
739.66
102.23
28.35
146.20
(33.04)
47.91
123.47
PAYMENTS TO AND PROVISIONS
FOR EMPLOYEES (including Managerial Remuneration)
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 including defeased
Provision for Doubtful Debts (net)
ESTABLISHMENT EXPENSES
Insurance
Rent
Rates and Taxes
Other Repairs
Travelling Expenses
Payment to Auditors
Professional Fees
Loss on Sale / Discarding of Assets
General Expenses
Wealth Tax
Charity and Donations
475.55
99.11
86.17
159.98
141.97
944.87
476.19
4.76
223.34
124.70
123.17
71.99
58.14
4.70
189.48
23.67
262.47
6.00
42.33
2,170.54
2,275.19
660.83
440.56
57.16
71.73
23.86
122.42
960.78
213.94
51.67
569.45
1,727.77
1,372.67
120.62
20.43
101.88
62.71
46.36
3.69
199.19
18.27
310.46
6.00
30.07
Less : Preoperative Expenses of Projects Under Commissioning (net)
TOTAL
SCHEDULE ‘L’
INTEREST
Debentures
Fixed Loans
Others
TOTAL
1,129.99
36,546.06
4.29
36,541.77
2002-2003
Rs.
1,276.04
196.60
85.84
1,558.48
919.68
31,626.40
1.81
31,624.59
(Rs. in crore)
2001-2002
Rs.
1,380.52
299.12
148.33
1,827.97
Reliance Industries Limited
103
GROWTH IS LIFE
Notes on Consolidated Accounts
SCHEDULE ‘M’
SIGNIFICANT ACCOUNTING POLICIES TO THE CONSOLIDATED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT
1. Principles of consolidation
The consolidated financial statements relate to Reliance Industries Limited ('the Company') and its subsidiary companies. The
consolidated financial statements have been prepared on the following basis:
(i) The financial statements of the Company and its subsidiary companies are combined on a line-by-line basis by adding
together the book values of like items of assets, liabilities, income and expenses, after fully eliminating intra-group
balances and intra-group transactions resulting in unrealised profits or losses in accordance with Accounting Standard
(AS) 21 - "Consolidated Financial Statements" issued by the Institute of Chartered Accountants of India.
(ii)
In case of foreign subsidiaries, revenue items are consolidated at the average rate prevailing during the year. All assets and
liabilities are converted at rates prevailing at the end of the year. Any exchange difference arising on consolidation 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.
(iii) The difference between the cost of investment in the subsidiaries, over the net assets at the time of acquisition of shares
in the subsidiaries is recognised in the financial statements as Goodwill or Capital Reserve as the case may be.
(iv) The difference between the proceeds from disposal of investment in a subsidiary and the carrying amount of its assets less
liabilities as of the date of disposal is recognised in the consolidated statement of Profit and Loss account as the profit or
loss on disposal of investment in subsidiary.
(v) Minority Interest's share of net profit of consolidated subsidiaries for the year is identified and adjusted against the income
of the group in order to arrive at the net income attributable to shareholders of the company.
(vi) Minority Interest's share of net assets of consolidated subsidiaries is identified and presented in the consolidated balance
sheet separate from liabilities and the equity of the company's shareholders.
(vii) In case of associates where the company directly or indirectly through subsidiaries holds more than 20% of equity,
Investments in associates are accounted for using equity method in accordance with Accounting Standard (AS) 23 -
"Accounting for investments in associates in consolidated financial statements" issued by the Institute of Chartered
Accountants of India.
(viii) The Company accounts for its share in the change in the net assets of the associates, post acquisition, after eliminating
unrealised profits and losses resulting from transactions between the Company and its associates to the extent of its
share, through its profit and loss account to the extent such change is attributable to the associates’ profit and loss account
and through its reserves for the balance, based on available information.
(ix) The difference between the cost of investment in the associates and the share of net assets at the time of acquisition of
shares in the associates is identified in the financial statements as Goodwill or Capital Reserve as the case may be.
(x) As far as possible, the consolidated financial statements are prepared using uniform accounting policies for like
transactions and other events in similar circumstances and are presented in the same manner as the Company's separate
financial statements.
2.
Investments other than in subsidiaries and associates have been accounted as per Accounting Standard 13 on Accounting for
Investments.
3. Other significant accounting policies
These are set out under "Significant Accounting Policies" as given in the Unconsolidated Financial Statements of Reliance
Industries Limited and its subsidiaries.
104
Reliance Industries Limited
GROWTH IS LIFE
Notes on Consolidated Accounts
SCHEDULE ‘N’
NOTES ON ACCOUNTS TO CONSOLIDATED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT:
1.
The subsidiary companies considered in the consolidated financial statements are :
Name of the subsidiaries
Country of
incorporation
Proportion of
ownership interest
Reliance Industrial Investments and Holdings Limited
Reliance Power Ventures Limited
Reliance Ventures Limited
Reliance Strategic Investments Limited
Reliance Infocom Inc.
Reliance Technologies LLC
Reliance Infocom BV
Reliance Communications Inc.
Reliance Communications (UK) Ltd.
Gas Transportation and Infrastructure Company Limited
Reliance LNG Limited
India
India
India
India
U.S.A.
U.S.A.
Netherlands
U.S.A
U.K.
India
India
2.
The significant associate companies considered in the consolidated financial statements are
100%
100%
100%
100%
100%
90%
100%
100%
100%
-
90%
Name of the associate companies
Reliance Capital Limited
Reliance Industrial Infrastructure Limited
BSES Limited
Reliance Communications Infrastructure Limited*
Reliance Telecom Limited*
Reliance General Insurance Company Limited
Reliance Life Insurance Company Limited
Reliance Europe Limited*
Reliance Petroinvestments Limited
Reliance Salgaocar Power Company Limited
* Accounted for based on unaudited financial results.
Country of
incorporation
Proportion of
ownership interest
India
India
India
India
India
India
India
U.K.
India
India
46.71 %
46.23 %
49.53 %
45.00 %
25.60 %
25.00 %
25.00 %
50.00 %
50.00 %
50.00 %
3.
The carrying amount of investments includes goodwill (net of Capital Reserve) arising on acquisition of the associates of Rs. 456.53
crore.
Reliance Industries Limited
105
GROWTH IS LIFE
Notes on Consolidated Accounts
SCHEDULE ‘N’ (Contd.)
4.
5.
Investments in subsidiaries disposed off during the year namely Vimal Fabrics Limited and Reliance Petroinvestments Limited
have not been included in preparation of the consolidated financial statements.
The financial statements of Reliance Infocom Inc., and Reliance Technologies LLC, Reliance Communications Inc have been
prepared under US GAAP and Reliance Communications (UK) Ltd has been prepared under UK GAAP and Reliance Infocom
BV has been prepared under Netherlands GAAP. The differences in accounting policies between the company and its
subsidiaries are not material.
6. As required by Accounting Standard (AS-23) on Accounting for Investments in Associates in Consolidated Financial
Statements issued by the Institute of Chartered Accountants of India, the carrying amount of investments in Associates at the
beginning of the year have been restated by applying “Equity Method” of accounting from the date of acquisition of the
associates and corresponding adjustment has been made to the retained earnings at the beginning of the year after eliminating
unrealised profits, if any.
7. As this is the first year of adoption of Accounting Standard (AS 23) on Accounting for Investments in Associates in Consolidated
Financial Statements issued by the Institute of Chartered Accountants of India, figures for the previous year are therefore not
comparable to that extent.
8.
9
Turnover includes Income from Services of Rs 364.56 crore (Previous Year Rs. 336.91 crore).
(a) The company has changed the method of depreciation from straight line method to written down value method, with effect
from 1-4-2002 for Polypropylene and Petrochemicals Support services situated at Jamnagar, to provide for timely
replacement.
In compliance with the Accounting Standards (AS-6), issued by the Institute of Chartered Accountants of India,
depreciation has been recomputed from the date of commissioning of these assets at WDV rates applicable to those years.
Consequent to this there has been an additional charge for depreciation during the year of Rs. 384.93 crore due to the said
change which relates to the previous year and an equivalent amount has been withdrawn from the General Reserve and
credited to Profit and Loss Account.
Had there been no change in the method of depreciation, the charge for the year would have been lower by Rs. 96.72 crore
excluding the charge relating to the previous years.
Consequently, the Net Block of Fixed Assets and Reserves and Surplus are lower by Rs. 481.65 crore.
(b) The Gross Block of Fixed Assets include Rs. 2735.81 crore (Previous Year Rs 2738.50 crore) 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.
116.61 crore (Previous Year Rs. 169.52 crore) and an equivalent amount has been withdrawn from General Reserve and
credited to the Profit and Loss Account.
(c) The company has changed the method of depreciation on development rights and producing properties with effect from
1-4-2002 by adoption of Full Cost Method given in the Guidance Note on Accounting for Oil and Gas producing activities
issued by the Institute of Chartered Accountants of India. In the past, depreciation was provided without considering
undeveloped proved reserves and the estimated future expenditure on its development.
In compliance with the Guidance Note, depreciation has been recomputed with retrospective effect.
Consequently, there has been an additional charge of depreciation during the year of Rs.114.16 crore, which relates to the
period upto 31st March, 2002 and an equivalent amount has been withdrawn from General Reserve and credited to the
Profit and Loss Account.
The depreciation charge for the current year is higher by Rs.24.52 crore and the Net Block and Reserves and Surplus are
lower by Rs.138.68 crore.
10. The expenditure 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. Nil. (Previous year Rs 133.61 crore).
106
Reliance Industries Limited
GROWTH IS LIFE
Notes on Consolidated Accounts
SCHEDULE ‘N’ (Contd.)
11. Managerial Remuneration:
Salaries
i)
ii) Perquisites
iii) Sitting Fees
iv) Commission
v)
vi) Contribution to Provident Fund and Superannuation Fund
vii) Provision for gratuity
Leave Salary/Encashment
2002-03
1.81
1.62
-
29.86
1.55
0.43
0.08
35.37
(Rs in crore)
2001-02
2.35
2.04
0.03
30.12
—
0.59
0.45
35.58
12. A sum of Rs. 3.73 crore (net credit) (Previous Year Rs. 7.07 crore (net debit)) is adjusted to general expenses representing Net
Prior Period Items.
13.
(a) Fixed assets taken on finance lease prior to April 1, 2001, amount to Rs.250.72 crore. (Previous year Rs. 330.23 crore).
Future obligations towards lease rentals under the lease agreements as on 31st March 2003 amount to Rs.21.50 crore.
(Previous year Rs. 97.13 crore)
Within one year
Later than one year and not later than five years
Later than five years
TOTAL
2002-03
9.27
10.54
1.69
21.50
(Rs. in crore)
2001-02
27.52
67.05
2.56
97.13
(b) The Company has acquired certain items of Plant and Machinery and Ships on finance lease after April 1, 2001, amounting
to Rs. 25.47 crore (Previous Year Rs 29.62 crore). The minimum lease rentals outstanding as of 31st March 2003 in respect
of these assets are as follows:
Due
Total Minimum
Lease Payments
outstanding
as on 31.03.2003
Future Interest
on outstandings
(Rs. in crore)
Present Value
of Minimum
Lease Payments
2002-03
2001-02
2002-03
2001-02
2002-03
2001-02
Within one year
7.71
Later than one year and not later than five years
6.89
Later than five years
Total
0.00
14.60
8.93
18.69
0.37
27.99
0.36
0.25
0.00
0.61
0.51
2.60
0.18
3.29
7.35
6.64
0.00
13.99
8.42
16.09
0.19
24.70
(c) General Description of Lease terms:
(i)
Lease rentals are charged on the basis of agreed terms.
(ii) Assets are taken on lease over a period of 3 to 15 years.
Reliance Industries Limited
107
GROWTH IS LIFE
Notes on Consolidated Accounts
SCHEDULE ‘N’ (Contd.)
14. a)
(i) Assets given on finance lease on or after 1st April 2001
Particulars
Total
Not later than
one year
Later than one
year and not later
than five years
(Rs. in crore)
Later than
five years
2002-03
2001-02 2002-03 2001-02 2002-03
2001-02 2002-03 2001-02
Gross Investment
101.56
112.93
11.37
11.37
45.49
45.49
44.70
56.07
Less: Unearned Finance Income
45.93
54.25
Present Value of Minimum Lease Rental
55.63
58.68
7.89
3.48
8.32
3.05
25.88
28.32
12.16
17.61
19.61
17.17
32.54
38.46
(ii) General Description of Lease terms:
• Lease rentals are charged on the basis of agreed rate of interest.
• Assets are given on lease for a period of 10 years.
(b)
(i) Plant and Machinery given on operating lease during the year amounts to Rs.25.47 crore (Previous Year Rs. Nil).
(ii) Depreciation on Assets given on operating lease Rs.3.53 crore (Previous Year Rs. Nil).
(iii) Future lease rentals receivable within a period of one year for such assets are Rs.7.94 crore (Previous Year Rs. Nil)
(c) Miscellaneous income includes income from lease of Rs.11.05 crore (Previous Year Rs. 0.59 crore).
15.
The deferred tax liability as at 31st March 2003 comprise of the following:
a. Deferred Tax Liability
(i) Related to fixed assets
b. Deferred Tax Assets
As at
31st March,2003
(Rs. in crore)
As at
31st March,2002
2,956.00
2,289.71
(i) Disallowance under the Income Tax Act 1961
(ii) Provision for doubtful debts
229.43
41.69
188.90
39.98
c. Provision for deferred tax (net)
271.12
2,684.88
228.88
2,060.83
108
Reliance Industries Limited
GROWTH IS LIFE
Notes on Consolidated Accounts
SCHEDULE ‘N’ (Contd.)
16. Segment Information:
The company has identified three reportable segments viz. Petrochemicals, Refining and others. Segments have been identified and
reported taking into account nature of products and services, the differing risks and returns and the internal business reporting systems. The
accounting policies adopted for segment reporting are in line with the accounting policy of the company with following additional policies for
segment reporting.
(a) Revenue and expenses have been identified to a segment on the basis of relationship to operating activities of the segment.
Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been
disclosed as "Unallocable".
(b) Segment assets and segment liabilities represent assets and liabilities in respective segments. Investments, tax related assets and
other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as "Unallocable".
(i) Primary Segment Information :
(Rs. in crore)
a) As per Accounting Standard on Segment Reporting (AS-17), issued by the Institute of Chartered Accountant of India, the Company
has reported segments information on consolidated basis including businesses conducted through its subsidiaries.
b)
The reportable Segments are further described below:
— The petrochemicals segment includes production and marketing operations of petrochemical products namely, High and Low
density Polyethylene, Polypropylene, Polyvinyl Chloride, Polyester Yarn, Polyester Fibres, Purified Terephthalic Acid, Paraxylene,
Ethylene Glycol, Olefins, Aromatics, Linear Alkyl Benzene and Polyethylene Terephthalate.
— The refining segment includes production and marketing operations of the Petroleum refinery.
— The businesses, which were not reportable segments during the year, have been grouped under the "Others" segment. This
mainly comprises of :
• Oil and Gas • Textile
• Infocom business conducted through subsidiaries viz. Reliance Infocom Inc., Reliance Infocom B.V. and Reliance Technologies LLC.
Reliance Industries Limited
109
GROWTH IS LIFE
Notes on Consolidated Accounts
SCHEDULE ‘N’ (Contd.)
(ii) Secondary Segment Information :
1. Segment Revenue - External Turnover
- Within India
- Outside India
Total Revenue
2. Segment Assets
- Within India
- Outside India
Total Assets
3. Segment Liability
- Within India
- Outside India
Total Liability
4. Capital Expenditure
- Within India
- Outside India
Total Expenditure
2002-2003
39,256.15
10,851.94
50,108.09
62,669.74
1,320.72
63,990.46
11,031.97
2.54
11,034.51
4,468.73
—
4,468.73
(Rs. in crore)
2001-2002
34,441.92
10,968.87
45,410.79
55,421.54
1,275.99
56,697.53
7,707.70
2.83
7,710.53
1,658.85
0.03
1,658.88
17.
(a) Disclosure of the Company’s Interest in Oil and Gas Joint Ventures:
Sr No
Name of the Fields
in the Joint Ventures
% Interest
Sr No
Name of the Fields
in the Joint Ventures
% Interest
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
Panna Mukta
Tapti
GK-OSN-97/1
NEC-OSN-97/2
KK-OSN-97/2
MB-OSN-97/3
KG-OSN-97/4
MB-OSN-97/2
KG-OSN-97/3
KG-OSN-97/2
SR-OSN-97/1
KG-DWN-98/1
KG-DWN-98/3
MN-DWN-98/2
GS-OSN-2000/1
KKD-DWN-2000/1
KKD-DWN-2000/3
30%
30%
90%
90%
90%
90%
90%
90%
90%
90%
90%
90%
90%
90%
90%
90%
90%
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
GK-OSJ-3
GK-OSJ-1
GK-OS-5
KG-ON-1
GK-ON-90/2
CB-ON/1
AS-ONN-2000/1
KG-DWN-2001/1
CY-DWN-2001/2
KK-DWN-2001/1
CY-PR-DWN-2001/3
KK-DWN-2001/2
PR-DWN-2001/1
CY-PR-DWN-2001/4
KG-OSN-2001/2
KG-OSN-2001/2
Yemen
60%
50%
40%
40%
40%
40%
90%
90%
90%
90%
90%
90%
90%
90%
90%
90%
17%
110
Reliance Industries Limited
GROWTH IS LIFE
Notes on Consolidated Accounts
SCHEDULE ‘N’ (Contd.)
17.
(b) Net Quantities of an enterprise’s interest in proved reserves and proved developed reserves:
Oil:
Proved Reserves
(Million MT)
Proved Developed Reserves
(Million MT)
Beginning of the year 2002-03
Additions
Deletions
Production
Closing balance for the year 2002-03
Gas:
5.34
Nil
Nil
0.37
4.97
4.39
Nil
Nil
0.37
4.02
Proved Reserves
(Million M3)
Proved Developed Reserves
(Million M3)
Beginning of the year 2002-03
Additions
Deletions
Production
Closing balance for the year 2002-03
23,268
60,399
Nil
943
82,724
All the above quantities of Oil and Gas reserves are within India.
14,076
Nil
Nil
943
13,133
18.
Miscellaneous expenditure (to the extent not written off or adjusted) of Rs 47.15 crore (Previous Year 62.86 crore) represents
un-amortised portion of amount disbursed on account of employee separation scheme announced in Naroda during the year
2001-02.
19.
PROJECT DEVELOPMENT EXPENDITURE
(in respect of Projects upto 31st March 2003, included under Capital work in progress)
2002-03
(Rs. in crore)
2001-02
Add:
Opening Balance
On Amalgamation
Project Development Expenditure transferred
from Profit and Loss Account
Interest Capitalised
4.29
84.85
Less
Project Development Expenses Capitalised during the year
Closing Balance
64.86
—
89.14
154.00
77.24
76.76
1.81
67.49
6.52
83.84
69.30
159.66
94.80
64.86
20.
EARNINGS PER SHARE (EPS)
a) Net profit available for equity shareholder (Rs. crore)
(Numerator used for calculation)
b) Weighted Average number of equity shares
used as denominator for calculating EPS
c) Basic and Diluted Earnings per share of Rs.10 each (Rs.):
2002-03
3,983.31
2001-02
3,279.90
139,63,77,536
138,83,25,291
i) before Extraordinary Items
ii) after Extraordinary Items
28.53
28.53
20.66
23.62
Reliance Industries Limited
111
GROWTH IS LIFE
Notes on Consolidated Accounts
SCHEDULE ‘N’ (Contd.)
21. Additional Information
(A) Estimated amount of contracts remaining to be
executed on Capital accounts and not provided for:
(i)
In respect of joint ventures
(ii)
In respect of others
(B) Uncalled liability on partly paid Shares/ Warrant Equity
Shares
(C) Contingent Liabilities
(i) Outstanding guarantees furnished to Banks and
Financial Institutions including in respect of Letters of credit
(a) In respect of joint ventures
(b) In respect of others
(ii) Guarantees to Banks and Financial Institutions against
credit facilities extended to third parties
(a) In respect of joint ventures
(b) In respect of others
(iii) Liability in respect of bills discounted with Banks
(a) In respect of joint ventures
(b) In respect of others (including third party bills discounting)
(iv) Claims against the Company / disputed liabilities
not acknowledged as debts
(a) In respect of joint ventures
(b) In respect of others
(v) Performance Guarantees
(a) In respect of joint ventures
(b) In respect of others
(vi) Sales tax deferral liability assigned
As at 31st
March 2003
(Rs. in crore)
As at 31st
March 2002
399.20
1,958.82
0.41
—
207.62
—
455.26
—
502.03
133.10
261.03
254.68
199.98
0.41
—
235.50
—
624.40
—
19.19
112.86
244.46
166.21
4,936.56
3,700.71
—
3,548.77
2,511.71
(D) The Income-Tax assessments of the Company have been completed up to Assessment Year 2000-2001. The disputed
demand outstanding up to the said Assessment Year is Rs. 307.97 crore. 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.
112
Reliance Industries Limited
GROWTH IS LIFE
Notes on Consolidated Accounts
SCHEDULE ‘N’ (Contd.)
22. Related Party Disclosures:
(i) List of Related Parties with whom transactions have taken place and Relationships :
Sr No. Name of the Related Party
Relationship
1.
2.
3.
4.
5.
6.
7.
8.
9.
Reliance Life Insurance Company Limited
Reliance General Insurance Company Limited
Reliance Capital Limited
BSES Limited
(Subsidiary from 17th March, 2003 to 29th March, 2003)
Reliance Infocomm Limited
Reliance Communications Infrastructure Limited
Reliance Telecom Limited
Reliance Industrial Infrastructure Limited
Reliance Europe Limited
10.
Reliance Petroinvestments Limited
(Subsidiary upto 17th April, 2002)
Reliance Rubber and Chemicals Private Limited
Indian Petrochemicals Corporation Limited
Reliance Salgaocar Power Company Limited
Reliance Enterprises Limited
Reliance Global Trading Private Limited
Reliance Utilities and Power Limited
Reliance Ports and Terminals Limited
Unincorporated Oil and Gas Joint Ventures
Late Sh. Dhirubhai H Ambani
Sh. Mukesh D Ambani
Sh. Anil D Ambani
Sh. Nikhil R Meswani
Sh. Hital R Meswani
Sh. H S Kohli
Smt K D Ambani
Sh R H Ambani
Dhirubhai Ambani Foundation
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
Associate Companies
and Joint Ventures
Key Management Personnel
Relatives of Key
Management Personnel
Jamnaben Hirachand Ambani Foundation
Others
Hirachand Govardhandas Ambani Public Charitable Trust
Reliance Industries Limited
113
GROWTH IS LIFE
Notes on Consolidated Accounts
SCHEDULE ‘N’ (Contd.)
(ii) Transactions during the year with related parties:
Sr.
No.
Nature of Transaction
(Excluding Reimbursements)
A)
B)
Loans
Balance as at 1st April, 2002
Taken during the year
Repaid during the year
Balance as at 31st March, 2003
Fixed Assets/ Capital Work in Progress
Balance of Assets taken on Lease as at 1st April, 2002
Assets taken on Lease during the year
Balance of Assets taken on Lease as at 31st March, 2003
Assets given on Lease during the year
Assets purchased during the year
Assets sold during the year
C)
Investments
Balance as at 1st April, 2002
Purchased/Adjusted during the year
D)
E)
F)
(a)
Sold during the year
Balance as at 31st March, 2003
Interest accrued on Investments
Sundry Debtors as at 31st March, 2003
Loans & Advances
Loans
Balance as at 1st April, 2002
Given during the year
Returned during the year
Balance as at 31st March, 2003
(b)
Advances recoverable in cash or in kind
Balance as at 1st April, 2002
Given during the year
Returned/Adjusted during the year
Balance as at 31st March, 2003
(c)
Deposits
Balance as at 1st April, 2002
Given during the year
Returned during the year
Balance as at 31st March, 2003
Associates
Key
Management
Personnel Management
Relatives
of Key
Personnel
(Rs. in crore)
Others
Total
(2.25)
(0.08)
10.00
1,710.52
(31.40)
563.90
(65.59)
222.12
(10.00)
207.43
0.78
(29.62)
123.73
(207.43)
58.88
(58.68)
11.87
(4.66)
2,537.70
4,389.96
(406.54)
1,645.53
(78.00)
6,090.67
(2,537.70)
490.58
(398.47)
149.20
(166.94)
1,332.42
6,634.75
(14,006.73)
5,245.99
(12,833.16)
2,721.18
(1,332.42)
2,322.14
1,396.93
(2,235.46)
2,684.23
(53.70)
1,034.84
(2,322.14)
636.84
736.46
(40.00)
210.05
(2.83)
1,163.25
(636.84)
10.00
1,710.52
(31.40)
563.90
(65.59)
222.12
(10.00)
207.43
0.78
(29.62)
123.73
(207.43)
58.88
(58.68)
11.87
(6.91)
(0.08)
2,537.70
4,389.96
(406.54)
1,645.53
(78.00)
6,090.67
(2,537.70)
490.58
(398.47)
149.20
(166.94)
1,332.42
6,634.75
(14,006.73)
5,245.99
(12,833.16)
2,721.18
(1,332.42)
2,322.14
1,396.93
(2,235.46)
2,684.23
(53.70)
1,034.84
(2,322.14)
636.84
736.46
(40.00)
210.05
(2.83)
1,163.25
(636.84)
114
Reliance Industries Limited
GROWTH IS LIFE
Notes on Consolidated Accounts
SCHEDULE ‘N’ (Contd.)
(ii) Transactions during the year with related parties:
Sr.
No.
Nature of Transaction
(Excluding Reimbursements)
Associates
Key
Management
Personnel Management
Relatives
of Key
Personnel
(Rs. in crore)
Others
Total
35.37
(35.58)
G)
H)
I)
J)
K)
L)
Sundry Creditors
Balance as at 31st March, 2003
Turnover
Sale of Investments
Other Income
Dividend
Interest Received
Lease Rental Income
Miscellaneous Income
Purchases
Expenditure
Interest Paid
Payments to and provisions for Directors
Sitting Fees (Rs. 30,000 Previous year Rs 28,690)
Electric Power, Fuel and Water
Rent
Telephone Charges
Lease Rentals
Professional Fees
Charter Hire Charges
Insurance Premium
Premium on Redemption
Assignment of Liability
Tank Farm Charges
Hire Charges
Donations
Warehousing and Distribution Charges
Investment written off
Others
M)
Guarantees Issued
Financial Guarantees
Performance Guarantees
1,755.17
(1,155.31)
1,369.38
(583.72)
179.40
132.82
(34.31)
434.93
(415.66)
8.32
(0.59)
55.06
(98.01)
171.24
(0.09)
4.00
(40.93)
(—)
409.86
(420.13)
2.16
(3.00)
(2.99)
15.42
(56.69)
22.60
(18.09)
22.53
(10.52)
38.65
(49.55)
0.02
404.53
(167.09)
6.30
(6.20)
22.54
(46.55)
753.43
(830.51)
0.45
18.09
(1.25)
455.26
(624.40)
5,102.77
(3,548.77)
Reliance Industries Limited
1,755.17
(1,155.31)
1,369.38
(583.72)
179.40
132.82
(34.31)
434.93
(415.66)
8.32
(0.59)
55.06
(98.01)
171.24
(0.09)
4.00
(40.93)
35.37
(35.58)
(—)
409.86
(420.13)
2.16
(3.00)
(2.99)
15.42
(56.69)
22.60
(18.09)
22.53
(10.52)
38.65
(49.55)
0.02
404.53
(167.09)
6.30
(6.20)
22.54
(46.55)
31.55
(26.89)
753.43
(830.51)
0.45
18.09
(1.25)
455.26
(624.40)
5,102.77
(3,548.77)
115
31.55
(26.89)
GROWTH IS LIFE
Consolidated Cash Flow Statement Annexed to the Balance Sheet
for the period April 2002-March 2003
A: CASH FLOW FROM OPERATING ACTIVITIES :
Net Profit after tax as per Profit and Loss Account
4,873.38
4,465.94
2002-2003
(Rs. in crore)
2001-2002
Rs.
Rs.
Rs.
Rs.
Adjusted for :
Minority Interest Share of Loss
Extra-ordinary items
Share in Income of Associates
Net Prior Year Adjustments
Miscellaneous Expenses written off
Provision for Doubtful Debts
Provision for Diminution in value of Investments
Discount on Buyback of Bonds/Redemption of Debentures
Profit/(Loss) on Sale of Discarded Assets
Depreciation
Transferred from General Reserve
Effect of Exchange Rate Change
Profit on Sale of Investments
Dividend Income
Interest/Other Income
Interest Expenses
—
—
(79.81)
(3.73)
15.72
5.22
0.60
—
21.02
3,453.17
(615.70)
(34.10)
(36.32)
(132.95)
(519.94)
1,558.48
Operating Profit before Working Capital Changes
Adjusted for :
Trade and Other Receivables
Inventories
Trade Payables
(5,511.45)
(2,536.34)
2,996.14
Cash Generated from Operations
Net Prior Year Adjustments
Taxes Paid
Extra-Ordinary items
Net Cash From Operating Activities
B: CASH FLOW FROM INVESTING ACTIVITIES :
Purchase of Fixed Assets
Sale of Fixed Assets
Purchase of Investments
Sale of Investments
Movement in Loans
Interest Income
Dividend Income
Net Cash Used in Investing Activities
(1.03)
(411.70)
—
7.07
0.01
51.67
0.05
(4.95)
14.09
3,435.84
(619.68)
77.00
(89.25)
(32.36)
(518.18)
1,827.97
(549.68)
307.63
(368.83)
3,736.55
8,202.49
(610.88)
7,591.61
(7.07)
(105.18)
53.36
7,532.72
(1,681.70)
62.99
(14,996.22)
15,864.81
(3,502.41)
216.77
43.87
(3,991.89)
3,631.66
8,505.04
(5,051.65)
3,453.39
3.73
(149.15)
—
3,307.97
(3,757.06)
27.20
(29,607.12)
26,349.95
(3,814.78)
389.67
132.95
(10,279.19)
116
Reliance Industries Limited
GROWTH IS LIFE
Consolidated Cash Flow Statement Annexed to the Balance Sheet
for the period April 2002-March 2003
Rs.
2002-2003
Rs.
(Rs. in crore)
2001-2002
Rs.
Rs.
C: CASH FLOW FROM FINANCING ACTIVITIES :
Proceeds from Issue of Share Capital (net)
Redemption of Preference Share Capital
Proceeds from Long Term Borrowings
Repayment of Long Term Borrowings
Short Term Loans
Dividend 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
On Amalgamation
1,763.56
—
Closing Balance of Cash and Cash Equivalents
401.74
(400.00)
11,462.60
(4,366.72)
579.31
(622.72)
(1,696.43)
—
5,357.78
(1,613.44)
1,763.56
150.12
2.24
—
15,717.89
(14,210.94)
(1,061.91)
(632.58)
(1,739.02)
0.45
(1,923.87)
1,616.96
146.60
1,763.56
103.96
42.64
As per our Report of even date
For and on behalf of the Board
For Chaturvedi & Shah
Chartered Accountants
For Rajendra & Co.
Chartered Accountants
D. Chaturvedi
Partner
R. J. Shah
Partner
Mumbai
Dated: 23rd April, 2003
M.D. Ambani
A.D. Ambani
N.R. Meswani
H.R. Meswani
H.S. Kohli
U. Mahesh Rao
S. Venkitaramanan
M.L. Bhakta
T. Ramesh U. Pai
Y.P. Trivedi
Dr. D.V. Kapur
M.P. Modi
V.M. Ambani
}
}
Executive
Directors
- Nominee Director
Directors
- Company Secretary
- Chairman & Managing Director
- Vice-Chairman & Managing Director
Reliance Industries Limited
117
GROWTH IS LIFE
Reconciliation of Net Profit determined under
Indian GAAP to Consolidated Net Income in accordance with US GAAP
The following reconciliation between Net Profit determined under generally accepted accounting principles in India (“Indian GAAP”)
to Consolidated Net Income in accordance with accounting principles generally accepted in the United States of America (“US
GAAP”) has been provided as additional disclosure on a voluntary basis to assist readers who may be unfamiliar with Indian GAAP.
However, as the company is not subject to US SEC reporting & disclosure requirements and major part of the revenue of the
Company is earned in India, the accounts should be read as per Indian GAAP.
Reconciliation of Profit determined under Indian GAAP with Net Income according to US GAAP.
Year ended 31st March, 2003
Notes
Rs.
(crore)
US $
(Millions)
Net Profit determined under Indian GAAP
Adjustments for Consolidation
Consolidated Net Profit after tax determined under Indian GAAP
Adjustments to conform with US GAAP
Affiliates and Subsidiaries
Leases
Indirect Preoperative Expenses
Foreign Currency and Hedging
Depreciation
Deferred Income Tax
Issue Expenses
Employee Benefits
Cumulative effect of change in accounting principle
(net of Rs. 120 crores of deferred income taxes)
Loss on early extinguishment of debt
Consolidated net income in accordance with US GAAP
4104
(101)
4003
(218)
(3)
(4)
14
148
(4)
(3)
(16)
(217)
(181)
3519
864
(21)
843
(46)
(1)
(1)
3
31
(1)
(1)
(3)
(45)
(38)
741
1
2
3
4
5
6
7
8
9
10
1 US $= Rs. 47.485 (Exchange rate as on 31.03.2003)
Notes to Reconciliation of Net profit determined under Indian GAAP with Consolidated Net Income according to US GAAP.
The following notes show the difference between Indian and US GAAP and necessary adjustments to arrive at consolidated net
income under the US GAAP.
1. Share in income of Affiliates and Subsidiaries
a. Amalgamation of Reliance Petroleum Ltd. (RPL) with the Company
On 8th April, 2002 and 15th April, 2002 respectively, shareholders of the Company and RPL approved a scheme of
amalgamation, which was subsequently sanctioned by order dated 7th June, 2002 of the Honourable High Court of Bombay
and order dated 13th September, 2002 of the Honourable High Court of Gujarat. This transaction was consummated in
September, 2002.
Under Indian GAAP, the consolidated net profit after tax includes the accounts of RPL from the legal date of merger. Under
US GAAP, as the transaction was consummated on 13th September, 2002, RPL has been included on the equity basis of
accounting upto that date.
b. Affiliates and Subsidiaries
2.
3.
4.
Under Indian GAAP and US GAAP the company’s consolidated financial statements include its share of earnings of
affiliates and subsidiaries which is consistent with US GAAP. However, the net income under US GAAP includes the
earnings of subsidiaries and affiliates determined in accordance with US GAAP.
Leases
Under Indian GAAP in respect of leases entered into before 31st March, 2001, no distinction is made between an operating and
a capital lease. Under US GAAP, leases are classified into operating or capital, based on the underlying characteristics of the
lease. Capital leases are accounted for as though the company had entered into an obligation and invested in an asset, resulting
in the charge to operations being the aggregate of depreciation on the asset and interest on the outstanding obligation. Under
Indian GAAP, for leases entered prior to 31st March, 2001 the charge to operations consists of the lease rental. Adjustment has
been made for reversal of lease rental and the revenue charge of depreciation and interest for capital leases. For leases entered
into after 31st March, 2001 the treatment under US GAAP and Indian GAAP is the same.
Indirect Preoperative Expenses
Under Indian GAAP certain indirect expenses incurred during construction are capitalised. Under US GAAP, such indirect costs
are expensed as incurred.
Foreign Currency and Hedging
Under Indian GAAP foreign exchange difference relating to acquisition of fixed assets is adjusted to the carrying cost of such
assets. Other foreign exchange differences are recognized in the profit and loss account. Under US GAAP, all gains or losses
arising out of foreign exchange differences are required to be included in the determination of net income.
The Company also enters into derivative contracts to manage its exposures to fluctuations in interest rates, foreign currencies
and commodity prices. Substantially all such contracts are regulated by agencies of the Government and may be entered into
only for the purposes of hedging. In order to comply with regulations, the company maintains extensive documentation to
118
Reliance Industries Limited
GROWTH IS LIFE
demonstrate that each such contract qualifies for, and is effective as, a hedge of cash flows or foreign currency exposures.
Under Indian GAAP, the gain or loss on such derivative contracts are generally recognised when the underlying hedge
transaction settles, or upon earlier termination of the hedge.
Under US GAAP, the accounting for hedge contracts depends upon the nature of the hedge. For a derivative designated as
hedging an exposure to variable cash flow of a forecasted transaction, the effective portion of the derivative’s gain or loss is
recognised in income when the forecasted transaction affects earnings, or upon earlier termination of the hedge.
5. Depreciation
Under Indian GAAP, indirect preoperative expenses incurred during construction are capitalised. Under US GAAP, such indirect
costs must be expensed as incurred. Depreciation has been adjusted to take account of the US GAAP adjustments to fixed
assets for indirect preoperative expenses and foreign currencies.
6. Deferred Income Tax
The provision for taxation under Indian GAAP consists of the estimated tax currently payable and deferred income taxes for
timing differences between accounting income and taxable income at the substantively enacted income tax rates.
US GAAP requires that a provision for such deferred income taxes be made for the future tax effects of temporary differences
between book and tax basis of assets at the enacted tax rates.
Accordingly, the reconciliation provides for an adjustment to reflect the differences due to tax rates and the tax effect of US
GAAP adjustments.
Issue Expenses
Under Indian GAAP, debt issue expenses may be capitalized or charged to share premium. Under US GAAP, debt issue cost are
amortized over the life of the debt.
7.
8. Employee benefits
Under Indian GAAP, provision for leave encashment is accounted for on actuarial valuation basis. Compensation to employees
who have opted for voluntary retirement scheme of the company is amortized over 60 months. Under US GAAP provision for
leave encashment is accounted on actual basis. Compensation towards voluntary retirement scheme was charged in the year
in which the employees accept the offer.
9. Cumulative effect of change in accounting principle
In order to provide for the timely replacement of assets, the Company has changed the method of depreciation for
polypropylene and Petrochemical support services situated at Jamnagar from Straight Line to Written Down value method with
effect from 1st April, 2002. The new method has been applied retrospectively to fixed asset acquisitions of prior years.
Under Indian GAAP, consequent to this, there is an additional charge for depreciation during the year relating to previous years
and an equivalent amount has been withdrawn from General Reserve and credited to Profit & Loss Account.
Under US GAAP, the cumulative effect of the change in depreciation method for previous years has reduced the consolidated
net income by Rs. 217 crores (net of Rs. 120 crores in deferred income taxes) after taking into account the adjustments to fixed
assets for indirect preoperative expenses and foreign currencies. Had there been no change in the method of depreciation, the
charge for the year would have been lower by Rs. 314 crores.
10. Loss on extinguishment of debt
Under Indian GAAP, debt extinguishment premiums are adjusted against Securities Premium Account. Under US GAAP such
premiums for early extinguishment of debt are expensed as incurred, and generally reported as extraordinary items.
As per our report of even date
For Deloitte Haskins & Sells
Chartered Accountants
P. R. Barpande
Partner
Mumbai
23rd April, 2003
For and on behalf of the Board
A.D. Ambani
N.R. Meswani
Vice-Chairman & Managing Director
Executive Director
International Accountants’ Report
To the Board of Directors of
RELIANCE INDUSTRIES LIMITED
We have audited the balance sheet of Reliance Industries Limited as of 31st March, 2003 and the Profit and Loss account for the
year then ended and have issued our report thereon dated 23rd April, 2003. Our audit also included the accompanying
Reconciliation of Net Profit under Indian GAAP to Consolidated Net Income in accordance with US GAAP (“the Reconciliation”). This
Reconciliation is the responsibility of the Company’s management. Our responsibility is to express an opinion based on our audit. In
our opinion, such Reconciliation, when considered in relation to the basic financial statements taken as a whole, presents fairly in all
material respects, the information set forth therein.
Mumbai
Dated: 23rd April, 2003
For Deloitte Haskins & Sells
Chartered Accountants
P. R. Barpande
Partner
Reliance Industries Limited
119
GROWTH IS LIFE
120
Reliance Industries Limited
GROWTH IS LIFE
Circular to the Shareholders
Dear Shareholder(s)
We are happy to inform you that over 91% of the equity share capital of our Company is held in dematerialised form.
We request those Investors still holding shares in physical form to convert their shares in dematerialised form.
Why dematerialise Shares?
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. Registered Brokers at the Stock Exchange prefer demated Stock for dealing.
4. Safety
Securities in dematerialised form reduce all risk of loss of certificates. Under your specific instructions the same
can be kept in “Frozen Mode” by your Depository Participant (DP).
How to dematerialise Shares?
Please follow the following procedure for dematerialising your shares:
•
•
•
•
Open a Demat Account with any of the Depository Participants (DPs).
Submit Demat Request Form (DRF) duly signed by all the holders alongwith the share certificates only to the DPs.
Obtain acknowledgement from the DP for having accepted the share certificates.
Receive a confirmation statement of holding from your DP within 15 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.
Demat Advisory Cell
Karvy Consultants Limited
46, Avenue 4, Street No.1, Banjara Hills,
Hyerabad 500034, India
Telephone Nos: 91-040-23320251/23320751/23312454
e-mail: rilinvestor@karvy.com
In case you have already dematerialised your holdings kindly ignore this communication.
Reliance Industries Limited
121
GROWTH IS LIFE
DHIRUBHAI AMBANI SCHOLARS SCHEME FOR THE
MERITORIOUS CHILDREN OF SHAREHOLDERS OF
RELIANCE INDUSTRIES LIMITED
1.
Introduction
Reliance Industries Limited, to commemorate “Shareholders’ Day” on the occasion of the 25th year of listing on The Stock
Exchange Mumbai (BSE), announced scholarships for 1000 of the most deserving and meritorious children of Reliance
shareholders.
Late Shri Dhirubhai H. Ambani, the Founder Chairman of Reliance Industries Limited was convinced that India could become
an economic superpower within a short period of time and he wanted Reliance to play an important role in realising this goal.
Late Shri Dhirubhai Ambani strongly believed “Give the youth a proper environment. Motivate them. Extend them the support
they need. Each one of them has infinite source of energy. They will deliver.”
As a tribute to the Founder Chairman and in keeping with his vision, “DHIRUBHAI AMBANI SCHOLARS SCHEME” for the
meritorious children of the shareholder of the Reliance Industries Limited, Reliance Capital Limited and Reliance
Industrial Infrastructure Limited, pursuing Undergraduate studies at any University of repute in India has been
instituted.
The scheme as approved by the Company will be administered and implemented by Dhirubhai Ambani Foundation (DAF)
registered under Bombay Public Trusts Act.
2. Objectives
The principal objective of the Scheme is to encourage and assist bright and meritorious students securing high ranks/marks
consistently and wanting to pursue undergraduate studies in India thus contributing to the enhancement of the Human
Resource potential of India. The Scheme envisages introduction of scholarships, subject to eligibility criteria and conditions, to
1000 (One Thousand) dependant children of the shareholders of Reliance Industries Limited or Reliance Capital Limited or
Reliance Industrial Infrastructure Limited.
3. Salient features of the Scheme
a. Eligibility:
i)
Parent/student himself should have held minimum of 50 shares of any one of the companies viz. Reliance Industries
Limited or Reliance Capital Limited or Reliance Industrial Infrastructure Limited or erstwhile Reliance Petroleum
Limited (holding 550 shares and converted into 50 shares of Reliance Industries Limited) for minimum of five
consecutive years on the date of application for scholarship. Applicant holding shares in all or two companies can
apply under any one company only.
ii) Applicant student should have secured minimum 70% marks at HSC or equivalent examination of a Govt. recognised
Board in June, 2003.
iii) Applicant student should be of an age of 18 years or below as on date of appearing for the examination.
b. Number of Scholarships.
A total of 1000 scholarships for meritorious applicant students, comprising of 200 each for Arts and Commerce streams
and 600 for Science stream.
c. Scholarship Amount
Scholarship payable for Degree/Diploma Course is as follows:
Degree/Diploma*
Max Tuition Fees
p.a
Agriculture
Engineering
Medical
Pharmacy
Law/Commerce/Arts
Rs.
2,000/-
4,000/-
6,000/-
3,000/-
1,500/-
Max Reimbursement
for purchase of
Text books p.a.
Rs.
Max
Maintenance
Allowance p.a.
Rs.
Total
Maximum
Scholarship p.a.
Rs.
2,000/-
2,500/-
3,000/-
2,500/-
1,500/-
6,000/-
6,000/-
6,000/-
4,000/-
4,000/-
10,000/-
12,500/-
15,000/-
9,500/-
7,500/-
* Any other degree/diploma course at the discretion of the Company.
The Scholarship will continue till graduation, provided that the scholars secures minimum of 60% marks in each
academic year.
Shareholders desiring to avail this Scholarship for self or children may please fill up the attached Scholarship Application
and submit the same on RIL website viz. www.ril.com or apply through e-mail to “DAF_courthouse@ril.com” or application
sent through registered post to M/s. Karvy Consultants Limited, 46, Avenue 4, Street No.1, Banjara Hills, Hyderabad - 500 034.
The Foundation will be pleased to grant Scholarship to the deserving candidates.
Please also refer to the terms and conditions on the reverse of the Application Form.
122
Reliance Industries Limited
GROWTH IS LIFE
Information to be provided by the Shareholders applying for
Dhirubhai Ambani Scholars Scheme (DASS)
*Shareholder must hold at least 50 shares of the Company for the minimum period of 5 years as on the date of application.
First Holder
Second Holder
Third Holder
Name(s) of the Shareholder
As per Company’s record
Address Line 1
Address Line 2
City / Town / Village
State
District
PIN Code
E-Mail Address
Std. Code - Telephone Nos.
Details of Shareholding
Electronic Holding : Name of the DP
DP ID
Physical Holding :
Client ID
M. Folio No.
Name of the Company
Reliance Industries Limited
Reliance Industrial Infrastrature Limited
Reliance Capital Limited
No. of Shares held
Date of Registration of Shares in your name
Candidate’s information
Name of the Candidate
Relationship with Shareholder
Date of Birth
Faculty
(DD – MM – YYYY)
Self
Arts
Son
Daughter
Science
Commerce
Name of the Board which conducted HSC / Std Xll Examination
Month & Year of Passing the Examination
(MM – YYYY)
Examination Seat No.
Name & Address of Examination Centre
RESULT OBTAINED IN THE HSC OR EQUIVALENT EXAMINATION
Details
Subject Name
Max. Marks
Marks Obtained
1
2
3
4
5
6
7
8
9
10
TOTAL
%
Overall percentage of marks secured at SSC / Std. X Board Examination (%)
POST HSC STUDIES PROPOSED
Degree / Diploma
Name of the College / Institute in which admission is secured
University
Please do not attach any enclosure with this Application.
Original Marksheet will be called for from the shortlisted applicants.
Reliance Industries Limited
123
Signature of the Sole/First Shareholder
(cid:1)
GROWTH IS LIFE
Terms & Conditions
1] Please fill in the form in English using BLOCK Letters.
2] Applicant student and / or parents of the applicant should be a shareholder of any of the Company i.e.
Reliance Industries Limited (RIL), Reliance Capital Limited (RCL) or Reliance Industrial Infrastructure
Limited (RIIL) holding 50 shares or shareholder of erstwhile Reliance Petroleum Limited (holding 550
shares and converted 50 shares in Reliance Industries Limited) since June,1998. Transmission of
shares during the period will be ignored for the purpose of calculation of continuity of five years. In case
of Conversion of shares from physical to dematerialisation, if the shares are held by the same person
will be eligible to apply for scholarship.
3]
The Scholarship is meant for student who has appeared for HSC or equivalent XII standard
examination held in March/April, 2003 under the Faculty of Arts/Science/Commerce/Vocational
streams strudents will be considered according to there subjects in respective streams at HSC
examination.
4] Student should be of Indian Nationality and below 18 years of age as on the date of appearing for
HSC/XII examination .
5] Student must have secured a minimum of 70% overall average marks in HSC/XII examination .
6] Applicants who desires to apply must submit their application by July 15, 2003 either on RIL Website,
viz. www.ril.com or apply through E-mail to “DAF_courthouse@ril.com” or manual applications sent by
Registered Post Acknowledgement Due only to M/s Karvy Consultants Limited, 46, Avenue 4, Street
No 1, Banjara Hills, Hyderabad 500 034.
7] Please note that no enclosures be sent along with the Application Form and only the short listed
applicants will be intimated separately who are required to forward the necessary documents/
certificates.
8] Any
future
communication
on
regards
“DAF_courthouse@ril.com” or to Dhirubhai Ambani Foundation, Court House, 4th Floor, Dhobi Talao,
Mumbai - 400 002.
addressed ONLY
preferably
this
be
in
9]
The application is liable to be rejected if the details furnished by the Applicant are incorrect/incomplete.
10] A final list of short listed stream-wise applicants for the scholarship will be announced on the Website
of RIL. The selected applicants will also be intimated through a letter from the Foundation on the
address given in the application form.
11] The decision of the CEO of The Foundation shall be final and binding on all.
12] Please refer the RIL Website,viz. www.ril.com for all detailed information about the Scheme.
124
Reliance Industries Limited
To,
From
Name of shareholder and address
Nomination Form
[To be filled in by individual(s)]
Reliance Industries Limited
C/o Karvy Consultants Ltd.
46, Avenue 4, Street No.1
Banjara Hills
Hyderabad 500 034
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 & Address*
Occupation of
Nominee Tick ((cid:1))
1
5
Service
Professional
2
6
Business
3
Student
4
Household
Farmer
7 Others
Nominee’s
Address
Telephone No.
Email Address
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.
Thanking you,
Yours faithfully,
Pin Code
Fax No.
Std Code
Date..................................
Name and address of equity shareholder {as appearing on the Certificate(s)}
Signature (as per specimen with company)
Sole/1st holder
(address)
2nd holder
3rd holder
4th holder
Witnesses (two)
1.
2.
(cid:1)
Name and Address
Signature & Date
Reliance Industries Limited
125
INSTRUCTIONS :
1.
2.
3.
4.
5.
6.
7.
8.
9.
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. This facility is not available to non individuals including
society, trust, body corporate, partnership firm, Karta of Hindu Undivided Family and holders of power of
attorney. If the Shares are held jointly all joint holders must 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
should be given by the holder.
The nominee can 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 shall be a valid discharge by the Company against the legal heir(s).
Only one person can be nominated for a given folio.
Details of all holders in a folio need to be filled in, 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
registered holders (as per specimen lodged with the Company) and (b) the nominee.
This nomination will stand rescinded whenever the Shares in the given folio are entirely transferred or
dematerialised.
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 claim other than that of a registered nominee, unless so directed by
any competent court.
The intimation regarding nomination / nomination form should 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 the Depository Participant in
their prescribed form.
FOR OFFICE USE ONLY
Nomination Registration Number
Date of Registration
Checked by (Name and Signature)
126
Reliance Industries Limited
ATTENDANCE SLIP
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 Slip at the venue of the meeting.
DP Id*
Client Id*
Master Folio No.
NAME AND ADDRESS OF THE SHAREHOLDER
No. of Share(s) held:
I hereby record my presence at the 29TH ANNUAL GENERAL MEETING of the Company held on Monday, the
16th June, 2003 at 11.00 a.m. at Birla Matushri Sabhagar, New Marine Lines, Mumbai 400 020.
Signature of the shareholder or proxy
* Applicable for investors holding shares in electronic form.
————————————————————————————————————————————————
—
Registered Office: 3rd Floor, Maker Chambers IV, 222, Nariman Point, Mumbai 400 021
PROXY FORM
DP Id*
Client Id*
Master Folio No.
of
I/We ……………..………………………………………………………………………………………….
…………………………………………………............being a member/members of Reliance Industries Limited
hereby
appoint.......……..……………………………………………………………………………………of
……………………………………………………………………………………........……..……..............…or failing him
……………………………………...…………………………... of …………………..…….....................… or failing him
…………………………………………..........…………………of …………………………………………………...........
as my/our proxy to vote for me/us and on my/our behalf at the 29th Annual General Meeting to be held on
Monday, the 16th June, 2003 at 11.00 a.m. or at any adjournment thereof.
Affix a 30
paise
revenue
stamp
Signed this…………………………. day of …………………………………….. 2003
* Applicable for investors holding shares in electronic form.
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 Industries Limited
127
Book Post
To,
If undelivered please return to:
Karvy Consultants Limited
46, Avenue 4, Street No. 1
Banjara Hills
Hyderabad 500 034
India
Tel. Nos.: +91-40-23320666/23320711/23323037
Fax No.: +91-40-23323058
E-mail: rilinvestor@karvy.com
Growth is Life
www.ril.com