GROWTH IS LIFE
A n n u a l R e p o r t 2 0 0 3 - 2 0 0 4
Reliance Industries Limited
1
GROWTH IS LIFE
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Reliance Industries Limited
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GROWTH IS LIFE
" If you can dream it, you can do it. "
Dhirubhai H. Ambani
(28th December, 1932 - 6th July, 2002)
Reliance Group - Founder and Visionary
Reliance Industries Limited
3
Page
Contents
GROWTH IS LIFE
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127
Highlights
Company Information
Notice
Letter to Shareholders
Financial Highlights
Reliance’s Major Products and Brands
Product Flow Chart
Management Discussion and Analysis
Corporate Governance and Shareholder Information
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
Cash Flow Statement
Statement of Interest in Subsidiaries
Auditors' Report on Consolidated Financial Statements
Consolidated Balance Sheet
Consolidated Profit and Loss Account
Schedules forming part of Consolidated Balance Sheet and Profit and Loss Account
Notes on Consolidated Accounts
Consolidated Cash Flow Statement
Reconciliation of Consolidated Net Profit with US GAAP
Circular to Shareholders
Nomination Form
ECS Mandate Format
Attendance Slip and Proxy Form
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Reliance Industries Limited
GROWTH IS LIFE
Highlights – 2003-2004
Gross Turnover - Rs. 74,418 crore
(US$ 17,022 Million)
Gross Profit - Rs. 10,983 crore
(US$ 2,512 million)
Cash Profit - Rs. 9,197 crore
(US$ 2,104 million)
Net Profit - Rs. 5,160 crore
(US$ 1,180 million)
Compounded Annual Net Profit
Growth over 5 years - 17%
Total Assets - Rs. 71,157 crore
(US$ 16,277 million)
First Private Sector Company in India
to record a Net Profit of Over US$ 1 Billion
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
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
Surendra Pipara
Solicitors & Advocates
Kanga & Co.
Auditors
Chaturvedi & Shah, Member, Nexia International
Rajendra & Co.
International Accountants
Deloitte Haskins & Sells
Member – Deloitte Touche and
Tohmatsu (DTT)
Registered Office
3rd Floor, Maker Chambers IV
222, Nariman Point
Mumbai 400 021, India
Tel. Nos. +91-22-30325000
Fax No. +91-22-30322268
E-mail: investor_relations@ril.com
Website: www.ril.com
GROWTH IS LIFE
Bankers
ABN AMRO Bank
Allahabad Bank
Andhra Bank
Bank of America
Bank of Baroda
Bank of India
Bank of Maharashtra
Canara Bank
Central Bank of India
Citibank N.A.
Corporation Bank
Credit Lyonnnais
Deutsche Bank
HDFC Bank
Hongkong Bank
ICICI Bank
IDBI Bank
Indian Bank
Indian Overseas Bank
Oriental Bank of Commerce
Punjab National Bank
State Bank of Hyderabad
State Bank of India
State Bank of Patiala
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
District 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, District Raigad - 410 207,
Maharashtra State, India.
Registrar & Transfer Agents
Karvy Computershare Private 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
Webstie: www.karvy.com
Tulsiani Chambers
10th Floor, Nariman Point
Mumbai 400 021, India
Tel. Nos. +91-22-30325645/30325624
Fax No. +91-22-22855731
6
Reliance Industries Limited
GROWTH IS LIFE
Notice
Notice is hereby given that the Thirtieth Annual General
Meeting of the Members of RELIANCE INDUSTRIES
LIMITED will be held on Thursday, the 24th day of June,
2004, at 11.00 a.m., at Birla Matushri Sabhagar, 19, Marine
Lines, Mumbai 400 020, to transact the following business:
6. All documents referred to in the accompanying Notice
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.
Ordinary Business:
1. To consider and adopt the audited Balance Sheet as
at 31st March, 2004, Profit and Loss Account for the
year ended on that date and the Reports of the Board
of Directors and Auditors thereon.
2. To declare dividend on Equity Shares.
3. To appoint a Director in place of Shri M. L. Bhakta,
who retires by rotation and being eligible, offers himself
for re-appointment.
4. To appoint a Director in place of Dr. D.V. Kapur, who
retires by rotation and being eligible, offers himself for
re-appointment.
5. To appoint a Director in place of Shri M.P. Modi, 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.
By Order of the Board of Directors
Surendra Pipara
Joint Company Secretary
Mumbai
Dated: 29th April, 2004.
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. Shareholders are requested to bring their copy of
Annual Report to the Meeting.
3. Members/Proxies should fill the Attendance Slip for
attending the meeting.
4.
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.
5. 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 their Folio Number in the attendance
slip for attending the meeting.
7.
(a) The Company has already notified closure of
Register of Members and Transfer Books thereof
from Saturday, the 22nd May, 2004 to Saturday, the
29th May, 2004 (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, if declared at the
Annual General Meeting, will be paid on or after
24th June, 2004.
(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.
8.
(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
(b) Shareholders holding shares in electronic form may
kindly note that their Bank Account details as
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.
Reliance Industries Limited
7
GROWTH IS LIFE
9. Shareholders are requested to note that pursuant to
the approval granted by the Securities and Exchange
Board of India, the license of the Registrar and
Transfer Agents of the Company has been changed
from Karvy Consultants Limited
to Karvy
Computershare Private Limited. Accordingly Karvy
Computershare Private Limited, having their address
at: 46, Avenue 4, Street No.1, Banjara Hills,
Hyderabad 500 034, are the Registrar and Transfer
Agents of the Company.
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:
Ahmedabad, Bangalore, Bhubhaneshwar,
Chandigarh, Chennai, Guwahati, Hyderabad, Jaipur,
Kanpur, Kolkata, Mumbai, Nagpur, New Delhi, Pune
and Thiruvananthapuram.
Shareholders holding shares in the physical form who
wish to avail ECS facility, may authorize the Company
with their ECS mandate in the prescribed form, which
can be downloaded from 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 Computershare Private Limited.
Requests for payment of dividend through ECS for
the year 2003-2004 should be lodged with
M/s. Karvy Computershare Private Limited on or
before 5th June, 2004.
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 to 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) (022) 2757
6802, in the prescribed form which will be furnished
on receipt of request by the Registrar and Transfer
Agents, M/s. Karvy Computershare Private Limited.
12. Pursuant to the provisions of Section 205A(5) of the
Companies Act, 1956, dividend for the financial year
ended 31st March, 1997 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. The Company has already
transferred the unclaimed dividend for the year ended
31st March, 1996 to the IEPF.
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
31.03.1997
31.03.1998
31.03.1999
31.03.2000
31.03.2001
31.03.2002
31.03.2003
26.06.1997
26.06.1998
24.06.1999
30.03.2000
15.06.2001
31.10.2002
16.06.2003
Last date for
claiming
unpaid
Dividend
25.06.2004
25.06.2005
23.06.2006
29.03.2007
14.06.2008
30.10.2009
15.06.2010
Due date for
transfer to
IEP Fund
23.07.2004
25.07.2005
21.07.2006
27.04.2007
14.07.2008
27.11.2009
15.07.2010
Shareholders who have not so far encashed the
dividend warrant(s) are requested to seek issue of
duplicate warrant(s) by writing to the Company’s
Registrar and Transfer Agents, M/s. Karvy
Computershare Private 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 Computershare Private 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 Computershare Private
Limited. The said Form 2B can also be downloaded from
the Company’s web site www.ril.com.
16. Re-appointment of Directors:
At the ensuing Annual General Meeting, Shri M.L.
Bhakta, Dr. D.V. Kapur and Shri M.P. Modi, 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.
8
Reliance Industries Limited
GROWTH IS LIFE
Letter to Shareholders
Dear fellow Reliance shareowners,
The year 2003-04 was another turbulent year for the global
economy. Hostilities in the Middle East, and the spread of
the deadly SARS epidemic in China and the Asia Pacific
region, contributed to increased economic uncertainty,
particularly during the first half of the year. Towards the
end of the year, rising crude prices, fears of a slowdown in
China, and the likelihood of higher global interest rates,
added to concerns on the general outlook for businesses
worldwide.
Reflecting its new confidence, India stood out in this volatile
environment as a beacon of hope, growth and prosperity.
GDP growth accelerated to 8.1 per cent. The Indian rupee
appreciated 8 per cent in value against the US Dollar.
Interest rates remained at historic lows. Our foreign
exchange reserves increased to US$ 113 billion as on
March 31, 2004 – the 6th highest in the world, and ahead of
even developed countries like the UK, Canada and Italy.
For Reliance, 2003-04 proved to be another landmark year.
Reinforcing its leadership, and setting new milestones of
growth, Reliance Industries became India’s first private
sector company to cross the US$ 1 billion mark in net
profits.
Reliance’s net profit for the year was Rs 5,160 crore (US$
1,180 million), the highest ever achieved in the private
sector by any Indian company.
We now rank among the top 150 companies in the world,
in terms of net profits.
Reliance Industries’ revenues for the year were Rs 74,418
crore (US$ 17,022 million).
Our cash profit was Rs 9,197 crore (US$ 2,104 million).
Reliance’s exports were Rs 14,969 crore (US$ 3,424
million) during the year.
people. This will fuel the growth in domestic demand and
consumption on a sustained basis.
These exciting developments translate into immense
opportunity for Reliance.
We have major interests in both, the manufacturing and
services sectors, which will be contributing to India’s
sustained economic growth.
The existing scale of our operations, our demonstrated
project execution and management capabilities, our strong
cash flows, and our unique reservoir of human and
intellectual capital, have created an unparalleled platform
to pursue future growth.
We are committed to growing, and enhancing our
leadership in, each of our businesses, thereby contributing
to the economic development of the country.
Our Future Investments
Our major investments in the future are being made in the
energy chain, and the information and communications
business.
We are India’s largest private sector player in the upstream
oil and gas exploration and production sector. In the year
2002, we discovered natural gas in the very first exploration
well drilled in the deep-water exploration block KG-D6 in
the Krishna-Godavari basin, off Andhra Pradesh coast.
The in-place reserves have been estimated at 14 trillion
cubic feet of gas, based on the initial 8 wells drilled in the
first exploratory drilling campaign, adequate to produce upto
60 million cubic meters of gas per day.
During the year 2003-04, we have commenced the second
exploratory drilling campaign in the KG-D6 block. Two wells
have been drilled during the year, and both wells have
struck gas. The extent of discovery from these two wells is
being ascertained.
Reliance’s market capitalisation was Rs 75,132 crore (US$
17.2 billion), making it India’s most valuable private sector
company.
We will be making substantial investments over the next
few years, to develop these significant finds, and bring gas
to energy deficit customers across the country.
These glorious achievements are the result of the
extraordinary vision and inspiration of our legendary
founder, Dhirubhai Ambani. He taught Reliance to think
big, and think world class in every respect. He accepted
only excellence. He truly believed and practiced the
philosophy - “Growth is Life.”
We are committed to the continuing future growth of
Reliance in line with his thinking, his principles, and his
values.
Future Growth Opportunities
India is marching forward to meet its second tryst with
destiny, to become an economic superpower.
Sustained domestic growth in the future will bring
improvement in standards of living for over a billion Indians.
International markets are beckoning Indian corporations.
Competitiveness of Indian products and services is well
recognised the world over.
Global outsourcing of services to India from higher cost
developed economies is leading to transfer of incomes on
an unprecedented, and increasing, scale to millions of our
Reliance Industries Limited
9
GROWTH IS LIFE
Our investments in the upstream oil and gas business will
bring increased energy and economic security and higher
geopolitical confidence for the country, contribute to
increased competitiveness of Indian industry, and lead to
significant improvement in profitability for Reliance.
In the downstream business, our refinery at Jamnagar has
become the third largest in the world, after completion of
the debottlenecking programme, leading to enhanced
benefits of scale and productivity.
We are now making investments to build a retail presence
across the country, for the marketing of transportation fuels,
diesel and gasoline, thereby becoming an integrated
refining and marketing company.
The entry into retail marketing of petroleum products will
complete our integration across the value chain, from crude
oil to the end customer, deliver superior value to millions
of customers, and contribute to further enhancement of
overall shareholder value.
The petrochemicals business has shown clear signs of
entering into an upcycle. We enjoy leadership rankings in
this business, not just in India, but globally.
Over the next few years, we are making investments to
increase our existing manufacturing capacities by up to
20 per cent, from the existing 12 million tonnes per annum
to over 14 million tonnes per annum. Upon completion of
the proposed expansion plan, Reliance will become the
world’s largest producer of polyester fibre and yarn.
The increase in the scale of our petrochemicals business,
and improving business conditions, are expected to
increase contribution of this segment to revenues and
profitability.
In the last two years, we made two significant acquisitions
in the energy business, namely, IPCL and Reliance Energy
(formerly BSES).
The integration of both companies into the Reliance group
has been completed seamlessly, leading to considerable
synergies and benefits, and enhancement of value for all
stakeholders.
IPCL, India’s second largest petrochemicals company, has
seen a remarkable turnaround in its overall performance
from the time of acquisition by Reliance. IPCL’s production
has seen a sharp jump of 24 per cent, and its net profits
have increased by 155 per cent over the last two years.
Reliance Energy Ltd. (REL) has reported a 127 per cent
increase in its net profits in the very first year after
acquisition by Reliance, and has become India’s most
valuable power company, with market capitalization of Rs.
13,400 crore (US$ 3,064 million) as on March 31, 2004.
Pursuant to the enactment of the Electricity Act, 2003
ushering in comprehensive reforms, REL is now
implementing growth plans to enhance its leadership
across the full spectrum of generation, transmission,
distribution and trading of power, and to provide reliable,
quality, competitive, clean, green power to millions of
customers across the country.
REL’s integrated growth philosophy is “Well Head to Wall
Socket” – taking gas from the well-head, and delivering
power at the wall socket.
On the information and communications front, Reliance
Infocomm (RIC) commercially launched its services in May
2003, and within the first 7 months, emerged as India’s
largest mobile service operator. As of the end of March
2004, RIC had almost 7 million subscribers.
The successful rollout of the Infocomm services fulfils the
vision of our founder, Dhirubhai Ambani, to provide
affordable telecommunications services to tens of millions
of our citizens across the entire country, providing them
the ability to stay connected in today’s networked world.
In January 2004, RIC acquired the undersea cable
company, FLAG Telecom. This international acquisition –
the first by Reliance - provides RIC with a gateway to global
markets, and makes RIC the only Indian operator to own
an international undersea cable network with a truly global
footprint.
The second phase of the Infocomm project will soon usher
in a Broadband revolution, providing 100 mbps Ethernet
links to corporate customers. RIC will also launch a
consumer convergence revolution, providing high speed
Ethernet links to homes, thereby reconfiguring and
transforming the entire communications paradigm in India.
Looking Forward
We are committed to maximization of value for all of you,
our dear fellow Reliance shareowners.
During the year 2003-04, Reliance Industries added market
capitalization of Rs. 36,500 crore (US$ 8,355 million) – the
largest such addition across all private sector companies
in India.
We thank each one of you, our over 2.3 million
shareholders, for your unstinted support and loyalty, which
has made this possible.
We are focused on delivering superior value to customers
in all our businesses, ensuring international quality for all
our products and services.
We are committed to enhancing the scale, competitiveness,
efficiency and productivity of our businesses, benchmarked
to global, world-class standards.
We will always maintain our conservative financial profile,
ensuring a high degree of liquidity and financial flexibility
at all times.
The health, safety, well-being and development of our
people transcends all our financial objectives.
We are committed to achieve our goals as responsible
citizens, respecting and protecting the environment, and
making our humble contributions to healthcare, education,
welfare of society and development of the community.
We believe these commitments and beliefs will contribute
to the successful accomplishment of all our future growth
endeavors.
Mukesh D. Ambani
Chairman & Managing Director
Anil D. Ambani
Vice Chairman & Managing Director
10
Reliance Industries Limited
GROWTH IS LIFE
Financial Highlights
Consistent and Robust Growth
2003-04
’02-03
’01-02
’00-01
’99-00
’98-99
’97-98
’96-97
’95-96
’94-95
1985
(Rs. in crore)
$ Mn
Turnover & Inter Divisional
Transfers
17,022
74,418
65,061
57,120
28,008
20,301
Total Income
17,283
75,556
66,063
57,902
28,391
20,988
14,553
15,161
13,404
13,740
Earnings Before Depreciation,
Interest and Tax (EBDIT)
2,512
10,983
Depreciation
Profit After Tax
Taxes paid to the Government
Equity Dividend %
Dividend Payout
Equity Share Capital
Equity Share Suspense
Reserves and Surplus
Net Worth
Gross Fixed Assets
Net Fixed Assets
Total Assets
9,366
2,837
4,104
8,658
2,816
3,243
3,247
5,160
12,903
13,210
10,470
52.5
733
50
698
47.5
663
5,562
1,565
2,646
4,277
42.5
448
4,746
1,278
2,403
3,719
40
385
1,396
1,396
1,054
1,053
1,053
-
33,057
34,453
-
342
-
-
28,931
26,416
13,712
12,636
30,327
27,812
14,765
13,983
743
1,180
2,951
168
319
-
7,561
7,881
13,006
56,860
52,547
48,261
25,868
24,662
8,039
35,146
34,086
33,184
14,027
15,448
16,277
71,157
63,737
56,485
29,875
29,369
Market Capitalisation
17,186
75,132
38,603
41,989
41,191
33,346
Number of Employees
11,358
12,915
12,864
15,083
15,912
Key Indicators
3,318
855
1,704
2,893
37.5
350
933
-
11,183
12,369
22,088
15,396
28,156
12,176
16,640
8,730
9,020
1,948
410
1,323
2,490
65
299
458
-
8,013
8,471
7,786
8,058
1,752
337
1,305
2,234
60
276
458
-
7,747
8,405
2,887
667
1,653
3,021
35
327
932
-
10,863
11,983
7,019
7,331
733
744
1,622
139
278
1,065
2,147
55
199
456
-
6,731
7,193
8,390
6,585
37
71
373
50
25
52
-
254
311
736
607
19,918
14,665
11,374
14,973
11,173
9,233
24,388
19,536
15,038
11,529
1,046
16,518
14,395
9,783
12,027
906
17,375
16,778
14,255
12,560
9,066
2003-04
’02-03
’01-02
’00-01
’99-00
’98-99
’97-98
’96-97
’95-96
’94-95
1985
Earnings Per Share - Rs.
Cash Earning Per Share - Rs.
$
0.8
1.5
36.8
65.7
29.3
54.0
23.4
50.8
Gross Turnover Per Share - Rs.
12.2
532.9
465.9
409.1
Book Value Per Share - Rs.
5.6
246.7
217.2
199.2
25.1
40.0
265.8
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
6.9
10.6
70.5
29.5
Debt : Equity Ratio
0.56:1
0.56:1
0.60:1
0.64:1
0.69:1
0.82:1
0.86:1
0.68:1
0.83:1
0.49:1
0.35:1 1.66:1
EBDIT/ Gross Turnover %
14.8
14.8 14.4
15.2
19.9
Net Profit Margin %
RONW % *
6.9
17
6.9
17
6.3
14.8
5.7
12.7
9.4
20.0
23.4
11.8
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
19.0
9.7
30.5
1US$ = Rs. 43.7175 (Exchange rate as on 31.03.2004)
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
* Adjusted for CWIP and revaluation
Reliance Industries Limited
11
GROWTH IS LIFE
Reliance’s Major Products and Brands
12
Reliance Industries Limited
GROWTH IS LIFE
Reliance Industries Limited
13
GROWTH IS LIFE
Product Flow Chart
14
Reliance Industries Limited
GROWTH IS LIFE
Management Discussion and Analysis
Forward-Looking Statements
This report contains forward-looking statements, which may
be identified by their use of words like ‘plans’, ‘expects’, ‘will’,
‘anticipates’, ‘believes’, ‘intends’, ‘projects’, ‘estimates’ or
other words of similar meaning. All statements that address
expectations or projections about the future, including but
not limited to statements about the Company’s strategy for
growth, product development, market position, expenditures,
and financial results, are forward-looking statements.
Forward-looking statements are based on certain
assumptions and expectations of future events. The
Company cannot guarantee that these assumptions and
expectations are accurate or will be realised. The
Company’s actual results, 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
Continued Leadership as India’s No. 1 business group
During the year, Reliance scaled new peaks and set several
new records at the corporate, and the group level. Reliance
continued to enjoy its position as the largest business group
in India, on all major financial parameters, including sales,
profits, net worth and assets.
First Indian private sector company to record Net Profit
over US$ 1 billion
During the year, Reliance scaled a unique milestone of
becoming the first Indian private sector company to record
a net profit of over US$ 1 billion. Reliance’s net profit for the
year ended March 31, 2004 was Rs. 5,160 crore (US$ 1,180
million), an increase of 26 per cent.
Contribution to Indian Economy
Reliance enjoys a pre-eminent position in India’s economy,
with group revenues equivalent to about 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:
(cid:79) Over 6 per cent of India’s total exports
(cid:79) Nearly 10 per cent of the Government of India’s indirect
tax revenues
RIL alone accounts for:
(cid:79)
(cid:79)
(cid:79)
17 per cent of the total profits of the private sector in
India
7 per cent of the profits of the entire corporate sector in
India
6 per cent of the total market capitalisation in India
(cid:79) Weightage of 13 per cent in the BSE Sensex
(cid:79) Weightage of 10 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,
reflecting its global competitiveness and the international
quality of its products. Reliance’s products worth US$ 3,424
million (Rs. 14,969 crore) were exported during the year,
accounting for 20 per cent of its gross turnover.
Leadership rankings in all major businesses
Reliance enjoys global leadership rankings in all its major
businesses.
(cid:79) Reliance is India’s largest private sector E&P player with
nearly 300,000 sq kms of awarded exploration acreage,
in 30 domestic offshore and onshore, deep and shallow
water blocks. This is in addition to its two producing
blocks (Panna-Mukta and Tapti) in India, and one
exploration block in Yemen.
(cid:79) Reliance’s refinery at Jamnagar, which accounts for 28
per cent of India’s refining capacity, is the world’s largest
grassroots refinery, and the 3rd largest refinery at any
single location.
Reliance is also the world’s:
(cid:79)
(cid:79)
(cid:79)
(cid:79)
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 50 per
cent in polyester, 47 per cent in polymers and 78 per cent in
fibre intermediates.
reflects
Operating Environment and Performance
During the year, geo-political tensions continued to dampen
the business sentiment in various regions across the world.
The deadly SARS epidemic added to uncertainties, and
dented the economic environment during the first half,
especially in China and the Asia-Pacific region. However,
during the second half of the year, petrochemical prices
improved, and there were clear signals of the business
entering into an upcycle.
The year under review was characterised by sustained high
crude oil prices, leading to increased feedstock prices.
Reliance’s ability to maintain its cash flows and profits in
this uncertain environment
the global
competitiveness of its operations; its leadership in domestic
markets, and a healthy presence in export markets.
Reliance’s extensive marketing and distribution network,
international product quality, product development efforts,
strong customer bonding, and competitive pricing approach
have ensured that imports into the country for Reliance’s
products have remained at marginal levels.
During the year, Reliance’s major petrochemical plants
operated at 101 per cent capacity utilization, and the refinery
achieved an utilisation rate of 109 per cent. Reliance’s total
production volume of oil and gas and petrochemicals,
including toll conversion, touched 12.4 million tonnes, an
increase of 4 per cent compared to the previous year.
Reliance’s refinery processed 29.6 million tonnes of crude
oil during the year.
Reliance produced 353,000 tonnes of crude oil and 787,000
MTOE of gas.
Reliance Industries Limited
15
GROWTH IS LIFE
Financial Review
Reliance’s gross turnover for the year ended March 31, 2004
increased to Rs. 74,418 crore (US$ 17,022 million),
compared to Rs. 65,061 crore in the previous year,
registering growth of 14 per cent.
Gross turnover includes inter-divisional transfers of Rs.
18,171 crore (US$ 4,156 million), compared to Rs. 14,965
crore last year.
Domestic sales accounted for 80 per cent of gross turnover.
Manufactured exports, including deemed exports, increased
to Rs. 14,969 crore (US$ 3,424 million), from Rs. 11,510
crore in the previous year.
Operating profit (PBDIT) increased 17 per cent to Rs. 10,983
crore (US$ 2,512 million) during the year, up from Rs. 9,366
crore in the previous year.
The Company’s operating margin improved during the year
to 13.4 per cent, against 12.9 per cent for the previous year,
on account of:
(cid:79)
(cid:79)
(cid:79)
(cid:79)
(cid:79)
higher product selling prices;
higher degree of integration and value addition;
higher volumes;
greater focus on speciality products;
continued focus on costs, productivity and efficiency;
partially offset by
(cid:79)
higher crude prices and rupee appreciation.
Other income for the year stood at Rs. 1,138 crore (US$
260 million), mainly representing interest income and income
from preference shares.
Interest expenditure decreased 8 per cent to Rs. 1,435 crore
(US$ 328 million), due to repayment / pre-payment /
refinancing of higher cost long term debts and continuing
prudent financial and cash flow management.
Depreciation was Rs. 3,247 crore (US$ 743 million),
compared to Rs. 2,837 crore for the previous year. The
higher charge was in relation to normal capital expenditure
and additions for refinery debottlenecking.
Reliance’s corporate tax liability for the year was Rs. 351
crore (US$ 80 million), which was limited to the impact of
the Minimum Alternative Tax (MAT). There was a deferred
tax liability of Rs. 790 crore (US$ 181 million) for the year.
Cash profits increased 22 per cent to Rs. 9,197 crore (US$
2,104 million), from Rs. 7,565 crore in the previous year.
Net profit for the year increased by 26 per cent to Rs. 5,160
crore (US$ 1,180 million), compared to Rs. 4,104 crore in
the previous year.
The total paid up equity share capital stood at Rs. 1,396
crore (US$ 319 million).
Earnings Per Share (EPS) were Rs. 36.8 (US$ 0.84) and
Cash Earnings Per Share (CEPS) were Rs. 65.7 (US$ 1.50).
A dividend of 52.50 per cent has been proposed, subject to
the approval of shareholders. The dividend payout of Rs.
825 crore (US$ 189 million), including dividend tax, for the
year, is the largest payout in the Indian private sector. The
Company has consistently increased dividends for the past
12 years.
Capital expenditure during the year was Rs. 4,319 crore
(US$ 988 million), primarily on account of normal capital
expenditure, refinery debottlenecking, and oil & gas activities.
Total assets increased during the year to Rs. 71,157 crore
(US$ 16,277 million).
Reliance contributed a total of Rs. 12,903 crore (US$ 2,951
million) to the national exchequer in the form of various taxes.
Reliance’s operations have helped India save foreign
exchange amounting to Rs. 26,134 crore (US$ 5,978 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. During the year, Moody’s changed
the outlook on RIL’s debt ratings from negative to stable.
S&P also revised its outlook on Reliance’s foreign currency
ratings from negative to stable.
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, 2004, is a conservative
0.56, despite the increase in total assets to Rs. 71,157 crore
(US$ 16,277 million).
The Company’s long-term debt as on March 31, 2004 stood
at Rs. 15,757 crore (US$ 3,604 million). Of this debt, 37 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$ 21 million (Rs. 98 crore)
of its offshore bonds during the year. The bonds were bought
back partly through internal accruals.
Reliance has so far bought back and cancelled US$ 744
million (Rs. 3,532 crore) of its bonds, which represents about
57 per cent of the total issued.
The average final maturity of RIL’s total long-term debt is
nearly 6.5 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. 800 crore
(US$ 178 million).
Reliance meets its working capital requirements through
commercial rupee credit lines provided by a consortium of
Indian and foreign banks. The credit lines are fixed annually
16
Reliance Industries Limited
and renewed on a quarterly basis. In addition, Reliance
issues short term debt in the form of fixed and floating rate
bonds / loans in Indian Rupees.
and transfer of operatorship. Three blocks have been
relinquished as the expected deposits were found to be sub-
economic.
GROWTH IS LIFE
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
Exploration & Production
Exploration
India’s expected strong economic growth is likely to provide
ample opportunities for growth in the primary energy sector.
India currently produces about 33 million tonnes of crude oil
annually against the annual requirement of 115 million
tonnes. The balance is imported, making crude oil India’s
single largest item of imports.
During 2003-04, India’s oil import bill surged by 16 per cent to
about US$ 20 billion (Rs. 93,500 crore), on account of
increased demand for petroleum products in the country, and
higher prices.
Gas consumption in India has been constrained due to the
low availability of gas in the country. This is reflected by the
share of gas at a meagre 8 per cent in the primary energy
mix, as compared to the global average of around 24 per
cent.
Currently, India produces about 80 million standard cubic
meter of gas per day (MMSCMD), against the estimated
demand of 151 MMSCMD, indicating a large demand-supply
gap in the country. The demand for natural gas is expected
to rise to 231 MMSCMD by 2006-07 as per the Government
policy paper “Hydrocarbon Vision 2025”.
This clearly brings out the huge demand supply gap in the
domestic oil and gas industry. With the share of the private
sector in domestic oil and natural gas production likely to
grow, Reliance is poised to be the leading private sector
player in the E&P industry.
RIL is the largest exploration acreage holder among the
private sector companies in India, with 30 domestic
exploration blocks covering an area of about 300,000 sq.
kms. This is in addition to its interest in one exploration block
in Yemen. In addition, Reliance also has 5 coal bed methane
(CBM) blocks covering an area of 4,000 sq. kms.
12 exploration blocks were awarded under the first round of
the New Exploration Licensing Policy (NELP-I) of the
Government of India. In the second round, NELP II, Reliance
won another 4 exploration blocks. Reliance has further been
awarded 9 blocks under the third round of NELP, covering
an area of 113,000 sq. kms. The Company has secured
one block under the fourth round of NELP.
The Company and various partners, including ONGC Ltd.
and Oil India Ltd., were awarded two exploration blocks prior
to NELP. The Company has also acquired the operating
rights of five exploration blocks from Tullow Oil plc, a UK
company, subject to Government approval of assignment
During the year, Reliance acquired more than 25,000 line
kms of 2D seismic data and more than 6,000 sq. kms. of 3D
seismic data. Processing and interpretation of acquired data
have been taken up in an accelerated manner.
In 2002, 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. The discovery was named “Dhirubhai”. The in-place
reserves are estimated at 14 trillion cubic feet of gas based
on initial 8 wells drilled in the first exploratory drilling
campaign.
During the year, Reliance commenced the second
exploratory drilling campaign in the discovery block KG-
DWN-98/3 in the Krishna Godavari Basin. Two wells have
been drilled during the year and both the wells have struck
gas. The extent of discovery is being ascertained.
The pre-development activities have also been taken up
simultaneously, to bring the gas to energy-deficit consumers
in the country. Reliance has also taken up exploration in the
remaining area of the block to assess its full potential.
Some of the internationally reputed vendors who have been
involved in the project are Schlumberger, Western Geco,
PGS, Aker Kvaerner, Bechtel, Haliburton, Transocean,
Baker Hughes, Weatherford, etc.
Reliance also has a 25 per cent interest (including 3.75 per
cent carry) in an offshore exploration block in Yemen.
Reliance has received encouraging results in this first
overseas exploration venture. Based on three wells drilled
in the block so far, Reliance’s share of oil is estimated to be
70 million barrels.
Production
RIL has a 30 per cent participating interest in an
unincorporated Joint Venture with British Gas and ONGC,
for the proven Panna-Mukta and Tapti oil and gas fields.
British Gas and ONGC own 30 and 40 per cent respectively.
Panna-Mukta fields currently produce over 26,000 bbl of
crude oil per day, and about 3.5 MMSCMD of natural gas,
while Tapti field produces about 5 MMSCMD of natural gas.
During the financial year, Reliance’s share of production was
353,000 tonnes of crude oil and 787,000 tonnes oil
equivalent of natural gas. This denotes a 5 per cent increase
in production over the last year’s level for the two fields put
together.
The JV is taking steps for extending the plateau rate of the
two fields.
Refining & Marketing
The FY 2003-04 was the second year after the dismantling
of the Administered Pricing Mechanism (APM) beginning
April 2002. Subsequent to the dismantling of APM, the prices
of transportation fuels are to be market determined.
The subsidies on domestic LPG and public distribution
system (PDS) Kerosene have been transferred to the Union
Budget, and these are to be phased out in the next few
years.
In October 2003, Government of India approved the Auto
Reliance Industries Limited
17
GROWTH IS LIFE
Fuel Policy. As per the policy, Bharat Stage II and Euro III
compliant fuel / vehicles will be introduced in the entire
country by 1st April 2005 and 1st April 2010 respectively. In
respect of eleven major cities, the applicable dates in relation
to compliance with Bharat Stage II and Euro III have been
moved forward to 1st April 2003 and 1st April 2005
respectively. In addition, it has been proposed that Euro IV
compliant fuels will be introduced in these eleven cities from
1st April 2010 on an experimental basis. Reliance is well
positioned to meet these increasingly tightening
specifications with its world-class refinery configuration and
its ability to meet the most stringent specifications.
The current refining capacity in India stands at 117 million
tonnes per annum and with the exception of Reliance’s
refinery, all the refining capacity in India is in the public sector.
The marketing segment hitherto was dominated by the four
Government owned companies – IOC, HPCL, BPCL and
IBP. Pursuant to the Gazette Notification of 8th March 2002
authorizing companies investing or proposing to invest at
least Rs. 2,000 crore in exploration, production, refining,
pipelines or terminals, to market transportation fuels, five
more companies – Essar, MRPL, Numaligarh, ONGC and
Reliance have been granted marketing rights for
transportation fuels. In addition, an in-principle approval has
been granted to Shell India to set up retail outlets subject to
fulfillment of certain conditions. The transportation fuel-
marketing sector is thus poised for change, with slated entry
of new state-of-the-art retailing practices, offering a wide
variety of consumer choices and services.
The year under review witnessed various applications for
setting up of petroleum product pipelines in response to the
December 2002 Petroleum Product Pipeline Policy, which
provides a mechanism for common carriage of petroleum
products.
As per this policy, any company planning to lay a pipeline
originating from a port, or a pipeline exceeding 300 kms in
length originating from a refinery, must publish its intention
and allow other interested companies to take capacity in
the pipeline on a take-or-pay or other mutually agreed basis.
Companies laying new pipelines are required to provide at
least 25 per cent extra capacity beyond that needed by
themselves, for other users. The advantages of pipeline
transportation over other modes are well proven, and in the
developed countries, this mode accounts for over 60 per
cent share of total products transported against only 30 per
cent in India. With several proposed pipelines under the new
policy, the share of pipelines in the transportation of
petroleum products in India should see a quantum jump in
the coming years.
During the year under review, crude oil prices remained firm
and volatile throughout the year due to geo-political
uncertainties in Iraq, unrest in Venezuela and Nigeria, and
lower level of stocks in US.
Crude oil stocks in the US dropped below the 270 million
barrel level, a level traditionally equated with minimum
operating inventories, and were at their lowest level since
1975. Worldwide, the crude oil demand also increased to
78.4 million barrels per day during the calendar year 2003,
compared to 77.0 million barrels per day during the
corresponding period, registering a growth rate of 1.9 per
cent.
The daily average price of Dubai crude oil for the year 2003-
04 was US$ 27 per barrel and fluctuated between a minimum
of US$ 22.56 per barrel to a maximum of US$ 32 per barrel.
Similarly, WTI and Brent crude oil prices recorded a
maximum of US$ 38.2 per barrel and US$ 35 per barrel
respectively, and their daily average prices for the year under
review were US$ 31.47 per barrel and US$ 29 per barrel
respectively.
Refineries across all regions achieved higher gross margins
compared to the previous year, due to the relative product
prices strength over that of crude oil. The Singapore refinery
margins for 2003-04 were US$ 4.0 per barrel, compared to
US$ 2.2 per barrel during 2002-03.
For the first six months of the year under review, petroleum
product consumption in India showed negative growth of about
1.8 per cent, but during the second half, registered a 5.1 per
cent growth. The domestic demand of petroleum products
for the year as a whole was 107.7 million tonnes, against
104.1 million tonnes, showing year on year growth of 3.4 per
cent compared to 3.2 per cent in the previous year.
High speed diesel (HSD), which accounts for nearly 40 per
cent of the total demand for petroleum products, showed a
negative growth of 3.7 per cent in the first half, but a positive
growth of 6.5 per cent in the second half, thus registering an
overall growth of 1.5 per cent.
LPG continued to maintain its double-digit growth rate, and
during the year achieved a growth rate of 11.4 per cent,
with consumption for the year reaching 9.3 million tonnes.
The motor spirit (MS) growth rate slowed down, and during
the year registered a demand growth rate of 4.8 per cent,
compared to demand growth rate of 8.0 per cent during the
corresponding previous period.
Aviation fuel demand increased by 10.1 per cent compared
to 0.4 per cent during the previous year. Naphtha and
Kerosene consumption declined 1.4 per cent and 2.0 per
cent respectively.
During the year, Reliance’s refinery took its second planned
shutdown of certain units, since it began commercial
operations in April 2000. This opportunity was also utilised
to complete the final phase of Yield and Quality improvement
program, which will enable the refinery to gain further
flexibility in processing still wider varieties of crude oils,
capture product quality premiums in the international
markets, and operate at increased capacity.
As a part of the program, the refinery was further de-
bottlenecked and capacity was enhanced to 660,000 barrels
per day of crude processing capacity. Reliance’s Jamnagar
refinery is now the 3rd largest refinery in the world at any
single location.
The refinery recorded 109 per cent capacity utilization based
on the original nameplate design capacity of 27 MMTPA for
the period under review. The refinery processed 29.6 million
tons of crude during the period under review. This capacity
utilisation compares favourably with the utilisation rates for
other refineries, both in India and abroad, at 91 per cent for
North America, 87 per cent for Europe, and 88 per cent for
Asia-Pacific region. The full impact of the increased capacity
is expected to be reflected from FY 2004-05 onwards.
During the year, the refinery was ranked best in Shell’s
Benchmarking for the third consecutive year in ‘Energy and
18
Reliance Industries Limited
GROWTH IS LIFE
Loss’ performance from amongst 50 refineries worldwide.
Reliance’s refinery has consistently lowered “Corrected
Energy and Loss Index” (CEL) during the past 3 years,
decreasing from 95.6 CEL Index in 2000 to 88.7 CEL Index
during the current year. The lowest CEL Index shows
reduction in energy loss and places Reliance as the world
leader in energy performance. Reliance’s performance in
Shell’s Benchmarking was also at No.1 in Operating Cost,
Manpower Cost, Maintenance Cost and Plant Utilisation.
Reliance was also ranked No.1 in ‘Energy Performance’
amongst large complex group refineries in the Asia-Pacific
region, in the Solomon Benchmarking. The Energy Intensity
Index (EII) of Reliance’s refinery was the best at 64, among
large and complex group refineries in the Asia-Pacific region.
Reliance’s performance in Solomon Benchmarking was also
at No.1 in Personnel Cost Index, Maintenance Index, Cash
Operating Expense, Net Cash Margin and Return on
Investment amongst 71 refineries in the Asia-Pacific region.
Reliance exported 7.61 million tonnes of refining products
to more than 20 countries across the globe. Reliance has
sold about 55 per cent of its refinery production to domestic
markets during the year, of which 72 per cent was to public
sector companies. Reliance’s captive consumption
accounted for about 20 per cent of the total production.
The Government of India had invited Expression of Interest
(EOI) for the divestment through strategic sale of its stake
in Hindustan Petroleum Corporation Limited (HPCL), an
integrated Refining and Marketing company. Reliance had
submitted its EOI and was short-listed to carry out the due
diligence exercise. Before the completion of this exercise,
the process was put on hold due to a Supreme Court
judgment that the said process has to be first approved by
the Parliament.
In the meanwhile, the work on setting up of retail outlets at
various locations continues as planned. Reliance already
has the necessary approvals for setting up 5,849 retail outlets
in India.
Reliance has so far commissioned 11 outlets. During
2004-05, Reliance is expected to set up upto 2,000 retail
outlets on a nation-wide basis. With phased completion of
the setting up of various retail outlets, Reliance will have a
significant presence in retail marketing of transportation fuels
across the country.
Reliance expects to bring about a major shift in the retailing
of transportation fuels. These retail outlets would have state-
of-the-art supply chain management and fleet management
systems. This will leverage Reliance Infocomm’s information
technology and communications infrastructure.
Petrochemicals
Polymers (PE, PP and PVC)
Polymer consumption in India remains among the lowest in
the world at 4 kg per person per year, which is much below
the consumption levels in developed countries like USA /
Europe (~ 100 kg). Within the region too, India’s consumption
is very low compared to China (23 kg), ASEAN countries
(17 kg) and a world average of 25 kg.
Based on domestic and global economic revival and robust
growth in end-use sectors, polymer sector demand growth
in India during the year was a healthy 12 per cent. RIL
maintained its leadership position, with a market share of
47 per cent, and a combined market share of 69 per cent
along with IPCL.
(RIL’s production in tonnes)
2001-02
2002-03
2003-04
Polymers
1,702,000
1,769,000
1,859,000
Polyethylene (PE)
Global demand for PE increased by 5 per cent to 58 million
tonnes in 2003. Global operating rates were approximately
87 per cent, an increase of 2 per cent due to strong demand.
Film and Sheet remained the largest end use segment of
PE globally, representing 50 per cent of total PE
consumption. Domestic demand for PE increased by 14 per
cent during the year to 1.51 million tonnes.
The operating rate of Reliance’s PE Plants was 104 per
cent during the year. RIL and IPCL together maintained a
domestic market share of 54 per cent in PE.
Global PE prices started recovering towards the beginning
of third quarter due to higher ethylene prices and strong PE
demand. This enabled Reliance to secure better margins
and higher sales realisations due to optimised grade mix
and feedstock integration between Reliance and IPCL
facilities.
The wide gap between Indian and global per capita
consumption illustrates the significant growth opportunities
for Indian PE Industry. As regions such as South East Asia,
China and the Indian subcontinent move towards a more
consumer based economy, PE usage should increase.
Changes in tariff rates under WTO regulations, coupled with
preferential tariff arrangements between various bilateral
trade blocks, will influence PE resin trade flow in Asia.
Robust domestic demand is forecast for the next year on
the back of strong economic growth. Significant opportunities
exist in micro irrigation applications, pressure pipes for water
and gas distribution and high-end lubricant and pesticide
packaging. Reliance will focus on consolidating its presence
in speciality grades and leverage its strength as a single
window supplier of all PE products.
Polypropylene (PP)
In 2003, global polypropylene consumption grew by 3 per cent
from an average level of 5.5 per cent. However, with global
economic recovery, it is estimated to grow by 6.2 per cent in
2004.
During 2003-04, the domestic PP demand grew by 9 per
cent in spite of higher polymer prices. PP prices were strong
in the second half of 2003, resulting in improved realisations
in domestic as well as export markets. Export volume for
PP increased by 30 per cent year on year. All the plants
operated above the rated capacities during the year.
The combined capacities of IPCL and RIL have made
Reliance the 7th largest PP producer in the world with a share
of 3.6 per cent of global PP capacity. The buoyant domestic
economy, the Golden Quadrilateral project and increased
export demand for end products has led to higher usage of
speciality grades in sectors such as automotive, appliances,
infrastructure and packaging.
The industry is poised to grow at the rate of 9 per cent and
the domestic consumption is forecast at 1.2 million tonnes
during 2004-05. Automotive, appliances, geo-textiles, and
packaging sectors will mainly drive demand growth. Exports
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will be driven primarily by increased demand from China
and South East Asian countries.
Poly Vinyl Chloride (PVC)
PVC consumption in India has registered a robust growth of
16 per cent in the current year to reach 900,000 tonnes per
annum. However, this translates into per capita consumption
of less than 1 kg per annum, compared to world average of
4.7 kg per annum, signifying the huge untapped potential.
Global demand for PVC has reached 28 million tonnes, with
operating rates reaching 86 per cent.
Demand for PVC in India primarily constitutes of pipes and
fittings catering to irrigation and potable water distribution
systems. The other significant markets for PVC are wires
and cables, footwear and calendered products. Building and
construction, globally a large outlet for PVC products, is yet
to make significant contribution to the demand for PVC in
India. Similarly, applications for sewerage and drainage
systems are yet to take off in the country.
Driven by an upswing in global ethylene prices, prices for
PVC, EDC and VCM started rising at the beginning of the
second half of the fiscal year. This enabled Reliance to
achieve better margins in this business, with prudent
planning of EDC imports. Greater feedstock integration and
optimised product mix across RIL and IPCL manufacturing
sites also enabled Reliance to improve profitability.
The operating rate of Reliance’s PVC plant was 109 per
cent during the year.
The wide gap between global and Indian per capita
consumption is indicative of significant growth opportunities
in the domestic industry. Price levels are currently high, but
demand is expected to show continued healthy growth in
the coming years due to overall buoyancy in the Indian
economy. Many new applications are being promoted
replacing conventional materials like cast iron pipes, GI
pipes, and wooden profiles in the construction field. Micro
irrigation projects being aggressively promoted by
government will also offer significant opportunities for PVC
pipes. The significant planned investments to upgrade
infrastructure will also help grow PVC demand in India.
Polyester (PFY, PSF and PET)
With the countdown to the year 2005 started, the textile
industry in India and world over are finalising their strategies
to face a quota free textile world. Technically, from January
1, 2005 any country can export textile products to any other
country without any restriction. Historically, quotas were fixed
by developed countries, which curtailed growth of exports
from many countries including India.
Reliance, an integrated polyester producer, is well positioned
to consolidate its position as the world’s second largest
polyester (fibre and yarn) producer, and benefit from the
opportunities that lie ahead.
In an effort to help the Indian textile industry to renovate,
Government had announced measures like tax reforms,
loans on concessional interest rates, common infrastructure
facilities etc. In line with the policy, this year also, the
Government announced capital subsidy for upgradation of
power looms, in addition to the textile upgradation fund
sanctions in earlier years. Such measures will help the
downstream industry to improve economies of scale with
the latest state-of-the-art machines.
The Government has also announced initiatives to establish
centers of excellence like apparel parks, weaving parks and
processing parks in various textile hubs all over the country.
In the interim budget, the special additional duty was
removed, thereby reducing the cost of yarn to consumers.
These measures are expected to increase consumption of
fibre and yarn in general and polyester in particular.
The domestic demand for polyester increased from 1.6
million tonnes to 1.8 million tonnes during the year under
review, an increase of 11 per cent over the previous year.
Reliance continues to be the market leader and maintains
an overall 50 per cent market share in polyester fibre and
yarn.
During the year, Reliance’s total production volume
increased by 9 per cent to 925,000 tonnes. This was the
first full year of operation of new capacities of 50,000 tonnes
of filament yarn and 40,000 tonnes per year of staple fibre
that were commissioned in the latter half of financial year
2002-03.
(Production in tonnes)
2001-02
812,000
2002-03
851,000
2003-04
925,000
Polyester
During the year, Reliance entered into a strategic alliance
with Bongaigaon Refinery & Petrochemicals Ltd. (BRPL), a
subsidiary company of Indian Oil Corporation Ltd. The
alliance covers the petrochemicals facilities of BRPL site at
Dhaligaon, Assam consisting of 34,200 tonnes per annum
of PSF capacity, together with 45,000 tonnes per annum of
Dimethyl Terephthalate (DMT) capacity, which is used as
feedstock for PSF production.
Under this alliance, Reliance is providing technical and
manufacturing support for achieving both, full capacity
utilisation and quality excellence. In addition, Reliance is
responsible for marketing the entire output. Both the DMT
and PSF plants of BRPL are now operating at full capacity.
These additional volumes have helped to improve Reliance’s
market share, and assisted BRPL to utilise capacity, which
was previously idle.
The Company commissioned a new state-of-the-art Reliance
Technology Center (RTC) at Patalganga, near Mumbai in
June, 2003. This world-class facility incorporates the latest
polyester research equipment as well as pilot lines for high
speed POY, FDY, PSF, bicomponent spinning and several
unique polymerisation pilot plants.
Downstream pilot facilities include plants to simulate
customers’ operations in bottle processing, yarn texturing,
weaving and poly-cotton spinning. These facilities will
provide innovative polyester products in the years to come.
Reliance also entered into a strategic R&D alliance with
DuPont Polyester Technologies (now Invista Performance
Technologies). The alliance will focus on developing
innovative technologies for PET resin, polyester filament,
and polyester staple fibre.
Teams from Reliance and IPCL have jointly modernised
the existing acrylic staple fibre (ASF) capacities at IPCL
Vadodara. Marketing of the output under the brand names
of Recrylic and Recrylon in both domestic as well as
overseas markets by Reliance has enabled IPCL plants to
operate at full capacity.
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Recrylic is ideal for manufacturing shawls, sports wear,
socks, and hosiery. Recrylon is preferred for manufacturing
hosiery, blankets, carpets, furnishing fabric, and dress
materials, among other applications. Both fibres have
superior moth resistant capabilities with low specific gravity
and high bulk, which enables production of lightweight
garments.
This year, the Reliance Testing Center at Coimbatore was
accredited as per the latest version ISO/ IEC 17025. This
version of accreditation covers both management as well
as technical competence requirements of the laboratory. In
the quota free regime, when only quality conscious mills will
be preferred by overseas buyers, test reports from such
accredited centers will help Reliance’s customers in
developing new businesses.
The Indian PET bottle resin market grew by 7.5 per cent to
86,000 tonnes even though the largest consumer, the
carbonated soft drinks market, was stagnant. Reliance, with
a market share of 52 per cent, is the largest player in India.
During the year, Reliance received global approval from
Coca Cola for Relpet, Reliance’s brand of PET bottle grade
resin.
Reliance also launched PET application laboratory for the
development of innovative applications in PET bottle grade
resin. The in-house R&D team developed special grade PET
resin for hotfill and reheat applications. Packaging systems
made out of these speciality grade resins can be used for
filling hot liquids. PET capacity expansion from 80,000
tonnes per year to 300,000 tonnes per year is expected to
be commissioned in the current financial year.
On the retail front, Reliance launched “Recron Certified”
cushions on the back of a pillow launch, which was done
last year. More such speciality and value added products
are expected to be launched with the help of Reliance
Technology Centre in the coming years. During the year,
“Recron Certified” pillows became the leading brand in the
branded pillow market. Currently, “Recron Certified” products
are marketed through 3,000 retail outlets in over 350 towns
in India.
Polyester Intermediates (PX, PTA, and MEG)
Reliance is the world’s 3rd largest producer of paraxylene
(PX), and largest producer of purified terepthalic acid (PTA)
in India. In India, Reliance is the largest manufacturer of
polyester intermediates with market share ranging from 70
to 100 per cent.
Reliance is the only producer of PX, while there are 2 PTA
and 4 MEG producers in India. Out of 4 MEG producers,
one remained closed during the year. Reliance’s PTA and
MEG plant utilisation rates were above 100 per cent.
Reliance’s production volumes for fibre intermediates (PX,
PTA and MEG) decreased by 2 per cent to 3.03 million
tonnes in FY 2003-04, due to unforeseen shutdown of the
paraxylene plant at Jamnagar during the first quarter. Over
50 per cent of the total production of fibre intermediates was
captively consumed by RIL.
(Production in tonnes)
2001-02
2002-03
2003-04
Polyester
Intermediates
2,882,000
3,075,000
3,026,000
The future of fibre intermediates is directly linked to the
growth of the polyester sector. Low per capita consumption
of polyester in India offers excellent growth opportunities in
the future. For instance, the per capita consumption of
polyester in India is very low at 2.12 kg as compared to
America - 7.01 kg, China - 8.09 kg, and global average of
5.5 kg.
Over the last few years, the growth in the polyester sector
has emerged mainly from China and India. Polyester
production is expected to grow by at least 6 to 7 per cent for
the next 2-3 years.
New PTA capacity additions over the last few years have
been fully absorbed in the market, in line with the
requirements of polyester capacity additions. New capacities
in PTA are being planned to cater to global polyester capacity
expansions.
Petrochemicals Expansion Plans
Over the next 2-3 years, Reliance will be making significant
investments in its core business of petrochemicals. Reliance
will be adding over 2 million tonnes of additional capacities
during this period. This includes increase in capacity of PTA
by 532,000 tpa, POY by 310,000 tpa, PSF by 240,000 tpa,
PP by 280,000 tpa, and aromatics by 481,000 tpa. Reliance
will also set up a new Styrene plant with a capacity of 550,000
tpa.
Post these expansions, Reliance will become the world’s
largest producer of polyester fibre and yarn, and the 3rd
largest producer of PTA.
Cracker Products
Ethylene and Propylene
Reliance operates one of the world’s largest grassroots,
multi-feed cracker at its Hazira petrochemicals complex.
During the year, Reliance produced 1,195,000 tonnes of
ethylene and propylene, registering a marginal growth of
0.8 per cent over the previous year.
(Production in tonnes)
2001-02
2002-03
2003-04
Ethylene and
Propylene
1,127,000
1,185,000
1,195,000
Reliance has announced plans to increase its cracker
capacity by 33 per cent, to 1 million tonnes per year, through
debottlenecking in phases.
The Company is in the process of implementing facilities for
the extraction of Butadiene, a high value commodity
intermediate (used mainly for synthetic rubbers) from its C4
stream.
Inter site synergy between the various RIL and IPCL
locations were further optimised during the year to enhance
values in both the companies. RIL Hazira provided a natural
destination of the surplus monomers (ethylene) produced
in IPCL. Other low value streams from IPCL gas crackers
were also upgraded to their full commercial potential at
Hazira cracker.
Aromatics
Production of Benzene, Toluene and other by-products was
consistent with feedstock characteristics and were
augmented with supplemental feedstocks from other sites.
Benzene production at 368,000 tonnes during the year
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represented a 6 per cent increase. Reliance maintained its
leadership in the domestic market with a share of over 66
per cent. During the year, Reliance exported nearly 75,000
tonnes of Benzene to Styrene manufacturers in South East
Asia, Europe, and the US, which reflects the high
acceptability of its product internationally.
Reliance’s leadership position in domestic Toluene market
was sustained with market share of over 60 per cent. The
Hazira site registered an increase of Toluene production by
12 per cent, to 106,000 tonnes, achieved mainly through
inter site integration.
LPG Business
Packed Business:
Since the start of “Reliance Gas” packed business in 1998,
a customer base of over 9.0 lakh has been established in
the states of Gujarat, Maharashtra, MP and Rajasthan. More
than 65 per cent of these are in rural areas. The well-trained
Reliance distribution network of 116 distributors and 5,100
distribution outlets are able to reach and service villages
upto a population of 5,000.
During the year 2003-04, “Reliance Gas” sale was around
75,000 MT.
Bulk Business:
During the year 2003–04, RIL sold around 164,000 tonnes
of LPG from its Hazira Cracker. Of this, 35,000 tonnes was
sold to the manufacturing industry and 129,000 tonnes was
sold to the bottler segment.
Around 20,000 tonnes of LPG was also sold from Patalganga
unit to industries and bottlers.
2001-02
2002-03
2003-04
(Sales in tonnes)
190,700
184,100
172,350
LPG
Chemicals
Reliance continues to be the largest manufacturer of Linear
Alkyl Benzene (LAB), a detergent intermediate, in the
country. The integration of activities with LAB business of
IPCL initiated in the previous year enabled optimum use of
manufacturing and marketing infrastructure, yielding
substantial benefits to both companies during the year.
The total production of LAB and Normal Paraffin (NP) at
Reliance during the year reached a record 246,600 tonnes,
6 per cent higher than the previous year’s level. The domestic
LAB market witnessed a 3 per cent growth during the year.
The attractive value propositions currently being offered in
the competitive downstream detergent industry are expected
to boost detergent consumption in the country, and in turn
improve the prospects for LAB demand growth in the coming
year.
Reliance exported 27 per cent of LAB production (RELAB)
during the year to countries in South East Asia, Middle East
and Europe, retaining and expanding the customer base in
these logistically convenient markets. The quality of RELAB
is considered at par with the best in the international markets
by our customer segment.
The feed-stock requirement of the LAB plant is fully met
captively by the Normal Paraffin plant. Besides, Reliance
offers three different grades of normal paraffins to suit the
specific needs of the domestic Chlorinated Paraffin Wax
industry. Some of these paraffins are also used in the
speciality oil industry.
(Production in tonnes)
2001-02
2002-03
2003-04
233,200
246,600
232,500
LAB and Normal
Paraffin
Textiles
Reliance’s Textile Complex at Naroda, Ahmedabad is one
of India’s largest and most modern textile complexes.
Reliance’s textile products are sold under the brand names
of Only Vimal,Harmony, Reance, RueRel, Slumberel and
V2 (pre-cut, pre-packed products). Reliance’s flagship brand,
ONLY VIMAL is one of India’s largest selling brands of
premium textiles.
In a recently conducted survey by The Economic Times
Brand Equity, ONLY VIMAL was voted as ‘India’s most
trusted fabric brand’.
Reliance’s premium product quality ensures a ready export
market for its textile products. Reliance’s premium textile
products have found acceptance even in the most
demanding markets in the developed economies of the
West.
The Textile Division’s in-house R&D developed many new
products / processes such as flourescent shades on
polyester fabrics, extended laundering colour-fast fabrics in
dope dyed fibres, water and oil repellent finishes on Poly
Wool and Lycra stretch fabrics, wash-fast, flame-retardant
fabrics, etc. R&D efforts in future will be directed towards
development of water-proof, weather colour-fast fabrics for
outdoor application, Chintz finishes, stain repellent and stain
release properties together, tri-blends fabrics etc.
It has been nine years since the inception of the Harmony
Show. Hosted by Reliance’s Textile Division, this show has
over the years played a catalytic role in bringing young artists
into the limelight, while honouring the country’s great
masters. The Harmony Show has succeeded in giving the
art lover a truly wide representation of Indian art today.
Reinventing each year, the show in its ninth year added a
new section – ‘The Golden Light’ to promote photographers
from across the country, with a focus on Senior Citizens.
Since its inception, the exhibition has gradually evolved into
a social and corporate catalyst for art and is already
considered one of the most happening events in
contemporary art.
As a part of restructuring plan, the Textile Division
announced a second VRS scheme. The VRS package
offered to its staff and all category of workers resulted in
participation by 1,289 people, with an outgo of approximately
Rs. 38 crore. The scheme was completed amicably within a
span of two weeks.
Opportunities
Reliance is one of the leading players in the Indian
petrochemicals and refining sector. With the requisite
financial strength and project execution capabilities, Reliance
will continue to make investments in the upstream and the
downstream energy and petroleum sector.
Reliance will participate in a major way in India to increase
the availability of an indispensable commodity – energy. The
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strategy for upstream exploration and production business
will be to identify and pursue all attractive opportunities,
invest in projects that deliver superior returns, and maximize
profitability of existing E&P operations. Reliance will capture
the growth opportunities by capitalising growing natural gas
and power markets in the country.
In the downstream petroleum sector, retail marketing of
petroleum products provides a huge growth opportunity for
Reliance in the future. Reliance is in the process of entering
into retail marketing of transportation fuels by developing its
own distribution and marketing infrastructure. Reliance has
already started setting up of retail outlets at various locations
across the country. This downstream integration combined
with world-class retail value and customer experience will
enhance long-term shareholder value.
Reliance will continue to maintain its leadership position in
the Indian petrochemicals industry going forward. The
demand for petrochemical products has grown in double
digits for the past several years. The domestic demand for
the next few years for polymers is forecast to be around 10
per cent supported by strong economic growth. Reliance
will be expanding its capacities in the petrochemicals
business by around 15-20 per cent over the next 3-4 years
to capture this new demand.
The demonstrated global competitiveness and international
quality of products, and its superior logistic capabilities,
continuously provide the Company with new opportunities
in domestic as well as international markets. Reliance will
keep examining and pursuing these new opportunities for
growth.
Reliance continues to participate in the attractive growth
opportunities in the power and infocom sectors. Reliance’s
investments in Reliance Infocomm and Reliance Energy
have the potential to generate significant value for
shareholders, in the medium to long term.
Challenges
Reliance faces normal markets competition in all its
businesses from Indian as well as international companies.
Reliance’s globally competitive cost positions and sound
business strategies have enabled it to retain its leading
market positions. Reliance has maintained its operating
margins and consistently improved its financial performance
through the cycles of commodities business. Reliance has
consistently delivered superior value to its customers.
Reliance has a portfolio of about 300,000 sq. kms. of
exploration acreage encompassing onshore and offshore,
shallow and deep-water blocks. Reliance faces the challenge
of undertaking a comprehensive development programme
for some of these blocks. For accomplishing its objective in
E&P business, Reliance has been working with the leading
international technology and service providers for the
development of the KG-D6 block where it discovered large
gas reserves in the year 2002.
The government owned oil companies in India currently
dominate the retail marketing of petroleum products.
Following deregulation, Reliance has been granted the
marketing rights to set up over 5,849 retail outlets across
the country. Reliance will leverage its project execution skills
and organisational strength in setting up the marketing
network. Reliance will create state-of-the-art retail outlets,
offering a wide variety of consumer choices and services, in
the hitherto controlled marketing segment.
The import duty reduction on some of the products in the
recent interim budget has marginal impact on Reliance’s
operations. However, Reliance will compete through its
operational excellence, technical superiority, extensive
marketing and distribution network, and deep customer
relationship to maintain its unique position in the global
marketplace.
Reliance endeavours to enhance its competitive advantage,
through a process of continuous improvements, and by
implementing appropriate business strategies.
Reliance’s various businesses have grown significantly in
size and scale in the recent years. Reliance’s coherent
business strategy and disciplined financial framework have
provided stability and platform for growth in a volatile global
environment.
Outlook
Currently, the petrochemicals and refining business account
for nearly 97 per cent of Reliance’s annual revenues. The
outlook for margins and profitability for both these businesses
depends on the overall global economic outlook, the global
demand-supply scenario, and trends in feedstock and
product prices. Reliance is one of the most profitable and
fully integrated petrochemicals companies globally. Reliance
is likely to benefit most from an upturn in the petrochemicals
cycle, given its scale of operations and its globally
competitive cost positions.
However, sustained firmness in feedstock prices, primarily
crude, as a result of geo-political reasons, can have an
adverse impact on Reliance’s margins and profitability.
Reliance’s production volumes in both refining and
petrochemicals are expected to grow broadly in line with
industry trends, over the medium to long term. In
petrochemicals, Reliance will be increasing its capacities
by 15 to 20 per cent over the next 2-3 years.
During the year, Reliance’s refinery completed the final
phase of Yield and Quality improvement program, which
will enable the refinery to gain further flexibility in processing
still wider varieties of crude oil, capture product quality
premiums in the international markets, and operate at
increased capacity.
Reliance is also entering into retail marketing of
transportation fuels. Reliance already has the necessary
approvals for setting up 5,849 retail outlets in India. Reliance
has so far commissioned 11 outlets. With phased completion
of the setting up of various retail outlets, Reliance will have
a significant presence in retail marketing of transportation
fuels across the country.
These retail outlets will have state-of-the-art supply chain
management and fleet management systems. This will
leverage Reliance Infocomm’s information technology and
communications infrastructure. Reliance expects to bring
about a major shift in the retailing of transportation fuels. It
aims to achieve higher productivity per outlet and enhanced
customer experience. This will help improve margins, overall
return on capital and, consequently, shareholder value.
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Reliance also has a well-balanced portfolio of E&P blocks
in India and is the largest exploration acreage holder among
the Private sector companies, covering an area of about
300,000 sq. kms. Reliance is making significant investments
in E&P business. This business has the potential to provide
a higher contribution to Reliance’s overall business profile,
in the medium to long term.
Reliance’s investments in infocom, telecom, and power
businesses will provide additional revenue streams, thereby
positively impacting its overall business and earnings profile.
Risks and Concerns
Reliance is a global scale player in the petrochemicals and
petroleum products, which also contribute large portion of
its revenues. The Company is exposed to risk of price
fluctuation on raw materials as well as finished products in
all its businesses.
However, Reliance’s high levels of integration, globally
competitive operations, and leadership position in the
domestic markets have helped the Company in addressing
any adverse impact arising out of volatility in commodity
markets. Also, these risks are not significant considering
Reliance’s efficient inventory management system and well-
crafted strategy of procuring raw materials, mainly crude
oil, through a mix of long-term and spot contracts.
Any further reduction in import tariffs on key raw materials
and products in both petrochemicals and petroleum
businesses may adversely impact the cost structure and/or
selling prices of products in the domestic markets, thereby
potentially affecting margins.
However, despite substantial tariff reduction since economic
reforms began in early 1990s, Reliance’s profitability has
consistently increased year on year. Reliance currently
prices most of its products below the import parity price
levels, which adds to the Company’s pricing flexibility in the
event of import tariff reductions.
Also, the impact of further import tariff reductions on
Reliance’s products is not likely to be substantial in the future,
as import tariffs on Reliance’s major products have already
been reduced to WTO bound rates, or very close to those
levels.
The Company is exposed to foreign exchange risk as its
selling price of products are linked to the landed cost of
imported products. Also, any volatility in foreign exchange
rate has an impact on its exports business and foreign
currency debt held by the Company. Reliance undertakes
liability management transactions and other structured
derivatives such as interest rate swaps and currency swaps
on an ongoing basis to manage its foreign exchange rate
risks.
Adequacy of Internal Controls
Reliance has a proper and adequate system of internal
controls to ensure that all assets are safeguarded, and
protected against loss from unauthorised use or disposition,
and that transactions are authorised, recorded, and reported
correctly.
The Company has an extensive system of internal controls
which ensures optimal utilisation and protection of resources,
IT security, accurate reporting of financial transactions and
compliance with applicable laws and regulations as also
internal policies and procedures.
The internal control system is supplemented by extensive
internal audits, regular reviews by management, and well-
documented policies and guidelines to ensure reliability of
financial and all other records to prepare financial statements
and other data.
Reliance has successfully implemented SAP/ R3 financial
and business management systems. These systems
facilitate effective checks and controls as well as tight
monitoring on a continuous basis.
Reliance has independent internal audit systems to monitor
the entire operations and services spanning all locations,
businesses and functions on a regular basis. The top
management and the Audit Committee of the Board review
the findings and recommendations of the internal audit panel.
Reliance Telecom
Reliance Telecom Limited (RTL) is promoted by the Reliance
Group.
RTL provides Cellular Services in 7 Telecom Circles
encompassing 10 States of India.
The basic services business of the company was demerged
from RTL w.e.f. 6th March 2003 pursuant to the scheme of
demerger approved by the Gujarat High Court. The company
has completed all necessary formalities and the final
approval from DoT has also been obtained.
Competition has become intense in all the circles. BSNL
has commenced operations in major towns of Assam and
North East circles during the later part of the year 2003-04.
Despite stiff competition, RTL’s subscriber base increased
by 46 per cent during the year to 7.9 lakh.
International Roaming was implemented from 1st December
2003 in all RTL circles, except Assam and North East where
there is a restriction on international roaming. Roaming with
more than 300 operators across the globe has been opened
up through sponsor network using the signalling and billing
solution from Roamware.
In October 2003, Department of Telecommunications (DoT)
directed RTL to discontinue its pre-paid business in Assam
and North East circles and also to migrate all its existing
pre-paid subscribers to post-paid by 31st January 2004. This
exercise has been successfully completed.
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Reliance Infocomm
The telecom sector has been recognised as one of the
fastest growing sectors of the Indian economy. However,
even with its current high growth rate, India has one of the
lowest telecom penetrations in the world, at 7 per cent
against a world average of close to 37 per cent. This points
to the huge opportunity that still exists for sustaining this
rapid growth in the foreseeable future. Further, the emerging
trends of convergence of voice, data and video offer unique
opportunities for new players to create a converged business
model.
Recognising the crucial role to be played by the sector in
India’s development, the Government has initiated a number
of changes in the regulatory and policy framework in order
to facilitate a world-class telecommunications infrastructure
in India. The introduction of Unified Access Services License
has been a step in this direction.
Reliance Infocomm (RIC) has licenses to offer telecom
services in 20 circles under the Unified Access license. In
addition, it has received the Letter of Intent for the J&K circle.
This has enabled RIC to offer services across the length
and breadth of India’s vast geography through its next
generation fibre optic network backbone spanning 60,000
route kms. RIC is currently offering its wireless services in
1,100 towns and cities across India.
RIC commercially launched its services in May 2003 and
within the first 7 months emerged as India’s largest mobile
service operator. As of the end of March 2004, RIC had
almost 7 million subscribers. Most of this was in the post-
paid segment as RIC launched its pre-paid services only in
February 2004. Within this period the “Reliance IndiaMobile”
brand emerged as the most trusted telecom brand in the
country. (Source: A.C. Nielson, ORG - MARG).
RIC created history in the Indian market by lowering the
entry barrier of going mobile not just through low tariffs but
also through its innovative ‘501’ payment option under the
“Monsoon Hungama” scheme, launched in July 2003. One
million customers applied for subscription within 10 days of
the scheme’s launch making it the most successful scheme
in Indian telecoms.
RIC also offered for the first time in India high-speed mobile
data services though its R-World mobile portal. This portal
leverages the high-speed data capability of the next
generation CDMA 1X network. It provides 70 applications
such as news, astrology, T.V. guides, movie clips etc. and
35 games and logs more than 1 billion hits a month.
RIC is aggressively expanding the reach of its network in
order to reach more subscribers by extending its services
to cover an additional 3,800 towns. It is estimated that the
mobile market in India will grow to 140 million subscribers
by FY 2008. RIC expects to retain market leadership in this
segment.
The second phase of the Infocomm project will usher a
Broadband revolution by providing 100 mbps Ethernet links
to its corporate customers. This revolution will empower the
enterprise by making transactions efficient, functions
seamless and new economic opportunities abundant. The
enterprise broadband service is in the process of being rolled
out in 30 towns and would then be extended to cover 200
towns in phases. The services planned include POTS (Plain
Old Telephone Lines), Leased lines, International Private
Leased Circuits, Virtual Private Network, Video Phone, Audio
and Video Conferencing, among others.
RIC will also launch a consumer convergence revolution by
providing high speed Ethernet links to homes. This
revolution, called “Netway”, will provide homes with a range
of television channels, high-speed telephony, audio
conferencing, video conferencing, video on demand, Juke
box, time shifted TV, T-commerce, and Surveillance
services. All content and interfaces will be enabled to cater
to India’s diverse languages. These services would be
accessed through a set top box connected to a TV or a PC.
The set top box is a versatile access device with an in-built
hard disk for storing content of customer’s choice.
In January 2004, Reliance Infocomm (RIC) acquired 100
per cent of the undersea cable company, FLAG Telecom
for US$ 211 million through Reliance Gateway Net Limited,
a wholly owned subsidiary of RIC. This acquisition provides
RIC with an international gateway to global markets. The
FLAG acquisition also makes RIC the only Indian operator
to own an international undersea cable network with a truly
global footprint.
FLAG Telecom is a leading global telecom company
providing an innovative range of products and services to
the international carrier community, ASPs and ISPs. It has
over 180 customers, which include a number of the world’s
leading international carriers. FLAG connects 16 of the
world’s top 20 business centers and 75 per cent of the world’s
population through its 55,000 km fibre optic network.
In February 2004, FLAG announced that it would build
FALCON, a new high-capacity resilient loop cable system
providing multiple landings throughout the Gulf region, with
submarine links stretching to Egypt in the west and to Hong
Kong in the east.
Reliance Energy
In January 2003, pursuant to the second open offer to BSES
shareholders made by Reliance in a fair and transparent
manner under SEBI Takeover Regulations, BSES Ltd
became part of the Reliance Group.
During the year under review, BSES Limited was renamed
Reliance Energy Limited. This change reflects the ownership
of the Reliance group, consequent upon the change in
control, and provides the company an opportunity to leverage
the brand equity of the Reliance name.
Reliance Energy is India’s leading private sector utility group,
with aggregate estimated group revenues of Rs. 7,700 crore
(US$ 1.8 billion), and total assets of Rs. 9,800 crore
(US$ 2.2 billion).
Reliance Industries Limited
25
GROWTH IS LIFE
The group distributes nearly 16,000 million units of power
to over 5 million consumers in Mumbai, Delhi, Orissa and
Goa, across an area covering 1,24,300 sq. kms.
Reliance Energy generates 941 MW of power, through its
power plants located in Maharashtra, Andhra Pradesh,
Kerala, Karnataka and Goa.
Reliance Energy is ranked amongst India’s top 20 listed
private companies in terms of all major financial parameters,
including assets, sales, profits and market capitalisation.
Reliance Energy is India’s most valuable power company
today, with market capitalisation of Rs. 13,400 crore (US$ 3
billion).
The Indian power sector is currently dominated by State/
Central utilities. The installed generation capacity in the
country at present is about 110,000 MW.
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.
To bridge this deficit, and cater to future demand, the country
needs additional power generation capacity of approximately
100,000 MW over the next few years. This is equivalent to
the entire existing generation capacity in the country.
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
and distribution systems, and lack of commercial orientation.
It is against this backdrop that Parliament has recently
enacted the Electricity Act 2003, the single most important
piece of legislation for the power sector in India. The Act
aims at liberalising the power sector, by creating a vibrant
and progressive legislative framework to facilitate India’s
accelerated economic growth.
Some of the key features of the Act, which would radically
alter the power sector landscape include liberalisation of
the generation sector, introduction of competition in
transmission and distribution through open access,
mandatory unbundling of SEBs leading to privatisation,
introduction of trading as a separate market function,
preparation of national policies on tariff, rural electrification,
renewable energy development, strengthening of the roles
of regulatory commissions, constitution of appellate tribunal,
and stringent anti-theft measures to curb the incidence of
high commercial losses.
The enactment of the Electricity Act 2003 has opened up
new opportunities in the Indian power sector.
Reliance Energy is exploring opportunities to expand the
customer base in its distribution business through new
licenses, through open access on existing networks, and /
or through participation in the privatisation process of state
owned distribution assets. The company plans to set up gas,
wind and hydro based power generation projects, to match
its distribution capability. The company is also exploring
growth opportunities in trading and transmission of power.
Reliance Energy is sponsoring a 3,740 MW gas based mega
power project near Dadri in the state of Uttar Pradesh. With
an initial investment outlay of more than Rs. 10,000 crore
(US$ 2.2 billion), the power project, to be developed in
phases, will also be the world’s largest gas based power
generating plant at a single location.
Reliance Energy aims at a leadership role in creating world-
class power infrastructure in the country in pace with
regulatory changes and reforms in the domestic power
sector. The proven management skills and established
project execution capabilities of Reliance 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.
Energy Conservation
Reliance consistently pursues reduction in specific energy
consumption in its manufactured goods on an ongoing basis.
The specific energy consumption or the energy consumption
per unit of product has fallen at all the manufacturing
complexes. The specific energy consumption has fallen by
3 per cent at Patalganga complex and by 4.2 per cent at
Hazira complex as shown in the table below.
Patalganga
Hazira
Energy Index (MMkcal / MT)
2001-02
3.23
2002-03
3.27
2003-04
3.17
2.19
2.12
2.03
Fuel consumption and loss, as a percentage of crude
processed is a parameter of specific energy consumption
in refinery operations. There has been significant reduction
in percentage fuel and loss on crude processed at Jamnagar
during the year, as shown below:
Fuel and Loss
(wt % on crude processed)
2001-02
9.99 %
2002-03
10.07 %
2003-04
9.95 %
The target is now high end energy conservation schemes.
These include inlet air chilling of gas turbines and process
air compressors, use of “not so clean” fuels in the turbines
and furnaces, pinch studies in high energy consuming
plants, installation of variable speed drives, etc.
The Patalganga complex has already completed two pinch
studies in LAB and PX plants and has implemented the study
recommendations. Also at Hazira, in the PTA plant, suction
chilling of air in the process compressors has been
completed resulting in reduced energy consumption and
higher production. Fogging of inlet air to the gas turbine has
been completed in all the machines at Hazira and Jamnagar.
Energy conservation continues to attract high priority and
investments. The total investment in energy conservation
26
Reliance Industries Limited
GROWTH IS LIFE
projects has gone up from Rs. 25 crore in 2001-02 to
Rs. 77 crore in 2003-04 as seen in the table below:
Investments and Savings on Energy Conservation Schemes:
Description
Investment
(Rs. crore)
Savings of Energy
(Trillion calorie /year)
Returns
(Rs. crore/ year)
Patalganga
Hazira
Jamnagar
01-02 02-03 03-04 01-02 02-03 03-04 01-02 02-03 03-04
20.04
1.25
3.86
3.96
8.93 45.57
1.54 10.67 27.90
103
295
72
356
220
266
656
347
817
13.66
3.17
9.44 42.71 24.15 31.34 52.92 27.94 65.92
These investments have helped to conserve energy by 2,867
trillion calories per year resulting in a saving of about
Rs. 271 crore per year.
Reliance Jamnagar won the Indian Chemical Manufacturers
Association (ICMA) Award for “Excellence in Energy
Conservation and Management” for the year 2003. ”
The Energy Conservation Act 2001 implemented by the
Bureau of Energy Efficiency (BEE), a statutory body under
Government of India, envisages creation of professionally
qualified energy managers and auditors with expertise in
energy management, financing and implementation of
energy efficiency projects, and policy analysis.
To create a cadre of qualified energy managers in the
company, a company wide training was organised for all
potential energy managers of RIL and IPCL in collaboration
with National Productivity Council during the year.
Research and Development
2003-04 saw continual improvements in R&D efforts in
polymer sector in terms of new product development, quality
enhancement, and introduction of new grades and
applications along with activities for creation of Intellectual
Property.
The R&D centre at Hazira achieved major breakthroughs
in polymer research. Four international patents have been
filed / are being filed in the fields of polyolefin catalysts,
high performance donors and inorganic support for
polyolefin catalysts. In addition, significant progress has
been achieved in following research projects:
(cid:79) Novel process for third generation nucleating/clarifying
agent
(cid:79) PP catalyst performance improvement
(cid:79) Efficiency enhancement studies of pre-treatment
biodigestors
Reliance continues to pursue various programmes at
National Chemical Laboratory (NCL), Pune under the
Research Alliance Agreement (RAA). Major ongoing
projects with NCL include inter alia Nanocomposites and
Advance Studies of Catalysts/Polymers. A programme on
Nanocomposites has been initiated for developing novel
clay materials from Indian clays and development of
Nanocomposites grades of polyolefins.
Acknowledging the efforts put in by Reliance in the field of
R&D, an RIL representative has been inducted as “Member
Expert in Research Council of National Chemical
Laboratory, Pune.”
Reliance continues its research under the New Millennium
Indian Technology Leadership Initiative (NMITLI) along with
the Council of Scientific and Industrial Research (CSIR) for
developing break through technologies. The key areas of
RIL interest in the NMITLI programme are:
(cid:79) Functionalisation of alkanes involving acetic acid and
ethylene from ethane, vinyl chloride monomer from
ethane, detergent alcohol from C11- C13 alkanes
Lactic acid and lactic acid-based polymers to make value
added polymeric materials from renewable resources
(cid:79)
Recognising Company’s contribution to the initiatives, an
RIL nominee has been appointed as “Member of High
Powered Committee for NMITLI ”.
Reliance continues to sponsor and participate in various
R&D efforts at premier institutes in India and abroad including
the Indian Institute of Technology, Mumbai and Chennai;
Jawaharlal Nehru Centre for Advanced Scientific Research,
Bangalore; VLifesciences, Pune; RG Specchem, University
of Massachusetts, USA; and Polymer Institute Brno, Czech
Republic.
The combinatorial chemistry programme with VLifesciences
has progressed to understand the performance of catalyst
systems for polyolefins and has resulted in two publications
of high impact in reputed international journals.
Following projects have been completed by students at the
Centre for Polymer Science and Engineering, IIT Delhi, under
the guidance of “Reliance Emeritus Professor” (Reliance
Chair at IIT Delhi)
(cid:79) Studies on grafting of natural rubber and its blends with
Poly (Styrene-co-Acrylonitrile)
(cid:79) Effect of sulfonation on the properties of Polyetherimides
(cid:79) Effect of structure on thermal properties of Poly (Arylene
Ether Sulphone)s
(cid:79) Banana Fibres: Modifications, characterisation and
application in fibrous composites
(cid:79) Studies on sulfonation of Poly (Phenylene Oxide)
During the year, RIL’s R&D center developed more than 10
new grades in polymers and about 40 applications to meet
emerging needs of the market place.
The R&D activities of the polyester sector are carried out at
the ‘Reliance Technology Centre’ located at Patalganga.
These are aimed at new product development, process
technology upgradation and operations support for the staple
fibres, filament yarns and PET resin businesses.
The R&D focus areas include:
(cid:79) Novel copolyesters for fibres and packaging applications
(cid:79) Specialty functional fibres and filaments
(cid:79) Proprietary finishes for fibres and filaments
(cid:79) Dope dyed fibres and filaments
Reliance Industries Limited
27
(cid:79) Differentiated products through innovative use of
successfully demonstrated.
GROWTH IS LIFE
speciality additives
(cid:79) Polyester recycling technologies
(cid:79) New generation polymerisation and spinning processes
The new RTC building, housing state-of-the-art analytical
instruments, polymer/fibre processing and testing facilities,
was inaugurated in June 2003.
The pilot plant for the new generation polyesterification
process, PET blow molding facility and speciality melt
spinning research machine were commissioned in this
financial year. The interdisciplinary R&D team presently
consists of 55 scientists and engineers including post-
graduates with expertise in organic and physical chemistry
of polymers, analytical chemistry, polymer physics, chemical
engineering, polymer processing, fibre science & technology,
and textile technology.
During the year, Recron ‘Superblack’ dope dyed staple fibres
with superior mechanical properties and jet black colour with
blue undertone, developed at RTC, were commercialised.
Scale-up trials were successfully carried out for producing
staple fibres that can be easily dyed, using a proprietary
technology developed in RTC called ‘Recron Dyefast’.
These fibres can be dyed at boiling water temperature, not
requiring the expensive HTHP dyeing machines, and
therefore, will open up the large handloom and powerloom
fabric markets for polyester fibres.
Speciality high-bulk, self-crimping FDY products, developed
at RTC, were also successfully field-tested. Researchers
at RTC developed and successfully commercialised
proprietary finish systems for the ‘Recron 3S’ polyester fibres
for use as secondary reinforcement in cement concrete. A
new PET resin grade for ‘Hot Fill’ applications was also
During the year, the following R&D projects were taken up
at the Patalganga complex in collaboration with UICT
Mumbai.
(cid:79) Kinetic study on acetic-acid-burn in the pilot oxidation
reactor.
(cid:79) Kinetic study on paraxylene oxidation in the pilot
oxidation reactor.
(cid:79) Feasibility study of oxidation of paratoluic acid in water
in pilot plant.
(cid:79) Development of simulation model for acetic acid
dehydration by azeotropic distillation using three different
entrainers viz paraxylene, n-butyl acetate and n-propyl
acetate.
Several new in-house designs and novel ideas were
implemented during the year at the Jamnagar complex.
These resulted in improved operational efficiency, improved
quality, reduced energy losses and energy consumption,
and increased production capacities in several units. In the
current year, the R&D efforts will focus on:
(cid:79) Catalyst development for FCC to substantially increase
LPG/Propylene yield
(cid:79)
(cid:79)
In-house development of process design package for
increasing Coker capacity
In-house development of optimizer for CPP to reduce
overall fuel consumption
(cid:79) Development of VGO UU catalyst for handling high
Nitrogen feedstock
(cid:79) Application of real time optimizer in FCC and aromatics
units
Quality
Reliance’s continued commitment to excellence and its
efforts to continually enhance the quality of all its products
and services contribute to Company’s leadership in its major
businesses.
At all its manufacturing locations, Reliance has full-fledged
state-of-the-art laboratories employing latest international
analytical methods. A centralised division facilitates the
interaction between various sites of Reliance and IPCL to
share and communicate latest developments and
knowledge.
During the year, five new analytical facilities were created
at terminal storage and supply facilities for petroleum
products. These facilities will keep a strict quality control
over receipt and off take of various petroleum products
dispatched to retail outlets. As a part of Reliance’s alliance
with BRPL, Reliance’s PSF laboratories coordinated with
BRPL to establish new testing procedure for polyester fibres.
During the year 2003-04, Total Quality Management was
introduced in all the laboratories in the Jamnagar complex.
Similarly, ‘Five S’ implementation programme was
introduced in thirteen laboratories at Hazira complex.
A Quality Week was celebrated by Hazira complex in
November 2003, a first such celebration by any of Reliance’s
complex. All the sites of Reliance and IPCL participated to
make the event a great success. A ‘Laboratory of the year’
contest was also organised during this to judge the best
laboratory among all the Reliance’s laboratories.
Reliance’s efforts in quality received many accolades and
recognition during the year, which included:
(cid:79)
(cid:79)
‘Excellent’ ranking, for third time in succession, in the
International correlation scheme organised by Shell Main
Products Correlation Scheme to Reliance Jamnagar.
Including the 7 Golden Certificates won this year,
Reliance has won 24 Golden Certificates in last 3 years.
Jamnagar refinery achieved the conformance in
Proficiency of testing the Knock characteristics of
gasoline and diesel fuels, conducted by Institute of
Petroleum, London.
(cid:79) Reliance’s refinery laboratory at Jamnagar, was
accredited with ISO/IEC 17025 by National Accreditation
Board for Testing and Calibration Laboratories (NABL).
(cid:79) Reliance Jamnagar was approved for supply of ATF and
Jet A-1 fuels by CEMILAC (Centre for Military
Airworthiness and Certification) on the basis of high level
of Quality Confidence and Control Measures maintained
during production, storage, transfer and distribution.
28
Reliance Industries Limited
GROWTH IS LIFE
Health
Health is an integral part of all Reliance establishments.
Modern occupational health and medical services are
accessible to all employees through well-equipped
occupational health centers at all manufacturing sites. The
occupational health centers, besides carrying out pre-
employment and periodic medical check ups and other
routine preventive services also perform specialised tests
like biological monitoring, health risk assessment studies
and audits for exposure to various hazardous chemicals.
Reliance accords high priority to health education and
awareness. The medical departments continuously arrange
health awareness programs to address issues like
hypertension, diabetes, heart disease and stress. They are
also at the forefront in organisation of health promotion
activities for continuous improvement in workplace
environment.
Project CASH, Change Agents for Safety and Health, is
one such new initiative in occupational health and safety,
introduced across all manufacturing sites of the Reliance
group in the current year. Its objective is to bring about a
positive change and continual improvement in occupational
health practices at work place.
The project will lead to prevention of work related diseases
and injuries, and create further improvement leading to safe
and healthy work environment and reduction in absenteeism,
ultimately leading to improvement in productivity. The
programme aims to improve the work environment, and also
to enable technical people for bringing out attitudinal and
behavioral change in the occupational health awareness and
practices among the employees.
The pilot projects were successfully implemented at various
manufacturing locations of Reliance group. These projects
have already shown a positive impact on the occupational
health and safety scenario at these sites resulting in better
work environment, thus improving productivity and
profitability. The Dhirubhai Ambani Trophy, introduced this
year, recognises excellence in occupational health
performance amongst manufacturing sites of the Reliance
group.
The medical departments are active in organising outreach
medical camps for the benefit of local communities, and also
take part in onsite and offsite disaster management teams
for emergency preparedness.
Safety
Safety and security of the personnel, assets and the
environmental protection are on top of the agenda of all
Reliance manufacturing businesses. Every business issue
is discussed with safety in mind, and every solution complies
with our safety policy “Safety of persons overrides all
Production targets.”
Inter-site safety meet is now an annual event at Reliance.
The inter-site meet helps to network safety professional
across all sites with external experts, and also helps to share
case histories. Inter-site Safety Meet 2003 was held at
Jamnagar in August 2003. Participants of Reliance and IPCL
manufacturing sites and Reliance Infocomm attended the
meet. Besides reviewing the safety performance of the sites,
discussions were held on job specific risk assessment, near
miss reporting, control of substances hazardous to health,
electrical safety and inherent process safety.
Reliance manufactures and transports variety of chemicals
that are hazardous in nature. Besides, Reliance is also
entering into petroleum retailing business. Accordingly, more
stress is given into the safety-related issues of product
transportation safety. Personnel from Reliance logistics and
the manufacturing sites have teamed up to improve safety
in the journey management of the vehicles through driver
training, vehicle integrity check, road journey emergency
management, and loading and unloading operations.
Safety audit of chlorine handling unit at Hazira was
conducted by EUROCHLOR, Belgium and also by M/s
Central Labour Institute, Mumbai. The Eurochlor audit team
observed that the housekeeping of the unit is very good
and the organisation for HSE is good.
During the year, Hazira Site won the Sword of Honour in the
Health and Safety audit conducted by British Safety Council.
RIL Hazira was one of only 21 organisations worldwide
presented with Swords of Honour, recognised as the
pinnacle of safety achievement. The Sword of Honour
recognises organisations that have implemented safety
systems that are among the best in the world. This award
for excellence and commitment to health and safety puts
Reliance Hazira amongst the elite companies of the world
practicing the highest standards of safety.
For the second time, Reliance’s petrochemical plant at
Hazira has bagged this prestigious award. Earlier, it had
won the award in 1994. In the past, Reliance’s Patalganga
complex has won the Sword of Honour four times. Earlier,
all the three Reliance sites won the five star award in the
audit done by British Safety Council.
Indian Chemical Manufacturers Association has conferred
the ICMA Award for Excellence in Management of Health,
Safety and Environment for the year 2002-2003 on Reliance
Industries Limited. This award was for composite Company
performance and included all operating sites of Reliance
Industries limited (Naroda, Patalganga, Hazira, Jamnagar).
Confederation of Indian Industry (CII), Maharashtra State
has conferred its state level Award in Industrial Safety and
Health (large industry category) on Reliance Industries,
Patalganga complex for the year 2003.
Reliance Industries Limited
29
GROWTH IS LIFE
Environment
Sustainable development and a clean environment
integrated with the business objective is the focus of
operations at Reliance. This is achieved by every
employee’s contribution and responsibility towards the
organizational performance.
All projects are planned and designed with environment
protection as an integral part to ensure a safe and clean
environment for sustainable development. The layered
environmental monitoring systems and audits ensure
compliance to all the environmental protection laws of the
land, through all project stages from planning, construction,
commissioning and production. These monitoring systems
and audits, specific to each manufacturing unit, are
conducted internally by the Environment Health and Safety
(EH&S) Group at each manufacturing complex.
Jamnagar
The Jamnagar refinery has obtained the ISO 14001
Certification for its Environment Management System.
At the refinery complex, various systems and schemes are
implemented to reduce the fresh water requirement per ton
of crude processed. Flare gases are being recovered
resulting in reduction of emissions to the environment and
financial benefit due to the recovery. A scientifically designed
secured landfill facility has been commissioned for the
disposal of hazardous wastes. As a recognition of continual
improvement and overall compliance to the regulations, the
Gujarat Pollution Control Board has renewed the various
pollution permits for a period of five years.
Annual Reduction in raw water consumption / tonne of
crude processed at Jamnagar Refinery
2001-02
2002-03
2003-04
Water consumption per
tonne of crude processed
(cubic meters)
0.59
0.57
0.56
As an environmentally responsible corporate entity, the
refinery division aims and is working at developing the
greening of the refinery complex, so that the trees planted
will continuously sequester the carbon di-oxide generated
by the refinery complex in its processes. In achieving this
continuous sequestration, phase-wise greenery
development is being implemented, and the refinery complex
has during the year planted more than 25,000 trees to the
already existing 2.3 million trees.
In recognition of outstanding achievements in Environment
Protection, the refinery division was awarded the Greentech
Gold Award for excellence in Environment Management in
the Petroleum Sector for the year 2002-03.
Hazira
The Hazira Petrochemical Complex is in the process of
integrating the various systems under ISO 14001, ISO 9002
and OHSAS 18001. The integrated system is proposed to
be audited by the certification agency in September 2004.
As a responsible corporate division towards sustainable
global environment, Reliance’s Hazira division, during the
year, commissioned refrigerant recovery instruments for
complete recovery of refrigerants that can effect the ozone
layer during the year. Asbestos, a hazardous material used
in asbestos blankets for fire fighting, has been replaced with
non-asbestos blankets. A hazardous waste incinerator has
been commissioned at the site, in line with the Central
Pollution Control Board Standards to incinerate solid as well
as liquid waste.
A unique facility viz. ‘Tubelight Crusher’ has been
commissioned to crush the fused tube lights, containing
mercury. The crushed powder is packed and sealed in
drums and sent for disposal in the hazardous waste facility.
For sustainable development and further improvement in
environmental performance, the Hazira complex is
conducting various environment related studies in
association with M/s National Environmental Engineering
Research Institute, Nagpur and the National Institute of
Oceanography, Mumbai.
The effluent being generated at the complex is being treated
to be 60 per cent below the permissible standard, so that
the treated effluent can be reused and recycled to the
maximum extent possible in different applications within the
complex.
Annual reduction in water consumption at Hazira
Water consumption
(cubic meters/MT)
2001-02 2002-03
2003-04
5.4
5.2
4.9
Annual Reduction in effluent generation at Hazira
Effluent generation
(cubic meters/MT)
2001-02
2002-03
2003-04
2.03
1.73
1.61
In the continual commitment to improving the greenery of
the area, the Hazira complex has planted 10,000 trees in
2003-04 taking the overall number to 1,83,000 trees. An
area of 2 Hectares was taken under landscaping in the
financial year to cover a total of 32 Hectares under
landscaping.
The Hazira complex was honoured with the award for
Excellence in Management of Health, Safety and
Environment by ICMA.
Patalganga
The Patalganga complex has implemented various schemes
demonstrating continual improvement in its environment
performance in line with its ISO 14000 Certification.
These schemes have resulted in a steady decline in water
consumption per tonne of product, and the treated
wastewater is recycled and reused within the complex for
various activities. The biological solids from the effluent
treatment plant are anaerobically digested, and the resulting
biogas is used in the heaters. The biological sludge from
the effluent treatment plant (ETP) is dried using the waste
flue gases and composted for use as bio-fertilizer.
The environment commitment of the Patalganga complex
towards the industry and community is demonstrated in the
sharing of environmental experiences at the various inter-
site meets, and training and development of various systems.
The environmental awareness is shared with contract
workers, including an environmental awareness curriculum
30
Reliance Industries Limited
GROWTH IS LIFE
in the schools and lectures on environment systems to the
industry and institutions.
approved the facilities, and accorded their Consents under
the Air and Water Acts.
The Patalganga Complex was also honoured with the award
for Excellence in Management of Health, Safety and
Environment by ICMA.
With the expansions in petroleum business, RIL has
developed hydrocarbon terminals in different regions of the
country, with integration of the environment protection
features for air and water emissions in the design of the
facilities. The various State Pollution Control Boards have
Gas Transportation and Infrastructure Company Limited, a
wholly owned subsidiary of Reliance is in the pre-project
activities for setting up of gas / hydrocarbon pipeline network
through out the country. The environment and safety features
of the pipelines have been integrated into the design to have
utmost safety for the facilities, local community and the
environment.
Human Resource Development
At Reliance, our passion is to improve daily living and to
create a workplace where every person can reach his or
her full potential. As a leading global Company, we offer
opportunities worldwide. And our work environment gives
employees the freedom to explore and make the most of
them.
It is Reliance’s endeavor to create an environment where
people can use all of their capabilities in support of the
business. Therefore, we encourage our employees to
balance their work and personal responsibilities.
RIL is a young Company with an average age of 37 years
for its 11,358 employees, as on March 31, 2004.
Breakup of professional workforce
Ph.D.
MBAs
Engineers
CA/CS/ICWAs
Age Profile
Upto 25 years
26 - 35 years
36 - 45 years
46 - 55 years
56 + years
2%
12%
79%
7%
5%
43%
36%
14%
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 this, 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 1,448 training
programs were conducted, covering 7,919 employees.
Reliance is associated with Indian Institute of Management
(IIM) – Bangalore and Indian Institute of Technology (IIT) -
Mumbai with an aim to enhance the professional and
technical education of its employees. About 250 Engineers
have been trained by IIM-B in a tailor-made Management
Course - MPRE (Management Programme for Reliance
Engineers) and about 75 BSCs/ Diploma Holders have been
qualified by IIT-Mumbai as ‘Reliance Engineers’.
Reliance has embarked on a Key Result Area (KRA) based
performance appraisal system, and a performance linked
incentive scheme for all its manufacturing locations and
businesses, that has been vetted by international
consultants.
Reliance encourages individuals to go beyond the scope of
their work, undertake voluntary projects that enable them
to learn, and contribute innovative ideas in meeting goals
of the Company.
Social Responsibility and Community Development
As a responsible corporate citizen, Reliance believes that
its corporate responsibilities extend beyond the areas of its
manufacturing facilities and offices. Reliance also believes
that for ensuring sustainable all round growth, organisation
growth objectives need to be in line with overall development
imperatives of society and the community at large.
Reliance encourages, funds and develops numerous
education, health, human capital and infrastructure
initiatives. These initiatives are undertaken through various
organisations, including corporates and trusts. Reliance’s
commitment to corporate social responsibility has received
a firm footing through the formation of Dhirubhai Ambani
Foundation (DAF), which initiates community welfare and
development projects especially in healthcare and
education.
Educational Initiatives
Dhirubhai Ambani Institute of Information and
Communication Technology (DA-IICT), Gandhinagar
DA-IICT commenced its educational programs in August
2001. The institute was conferred the status of a statutory
university by enactment of the Dhirubhai Ambani Institute
of Information and Communication Technology Act 2003,
by the Government of the Gujarat.
Starting with a four year B.Tech. Programme in Information
and Communication Technology (ICT) in 2001, today the
Institute offers, in addition a two-year M.Tech. in ICT, a two
year MS-IT, a two year MS (IT in Agriculture) and a PhD
program. The B.Tech. Programme admits 240 students from
approximately 25,000 applicants from all over the country.
Reliance Industries Limited
31
GROWTH IS LIFE
Its lush green fifty-acre campus is students’ delight in terms
of infra-structural support facilities. Apart from excellent,
well-equipped laboratories, library and classrooms, the
campus provides facilities for the indoor and outdoor sports
and cultural activities to the 950 students currently on its
rolls.
During the year 24 special lectures were organised.
Summer internship with the industry provided excellent
opportunities to the students in practicing academic
concepts in real world situation.
During the year, one of the students won IBM Global Linux
Challenge Award. A few students also bagged the Reliance
Infocomm National Mobile Application Award in addition to
winning prizes in competitions held by technical institutions
like IITs, in their technical festivals. Many applications related
to Reliance IndiaMobile service of Reliance Infocomm
developed by students have been launched commercially.
Research in the area of sensor network, mobile
communications, and network security has been initiated
at the Institute and several papers have been presented in
various conferences.
Enthused by the students’ performance, Reliance Infocomm
has set up a development laboratory in the campus to
develop many innovative applications based on interactive
voice response system in English and ten other Indian
Languages, in addition to mobile applications.
DA-IICT also conducts a 15 to 30 days summer camp every
year. It was organised in May 2003 for students of Gujarat.
The camp provides the young minds an opportunity to get
hands on experience on various advanced computer
facilities, participate in Electronics Hobby Centre and take
part in other personality development oriented activities.
Dhirubhai Ambani International School (DAIS)
Dhirubhai Ambani International School (DAIS) is a major
initiative of the Reliance Group in the field of education and
reflects the commitment of Dhirubhai Ambani Foundation
to provide world-class school education in India. The School
prepares students for the Indian Certificate of Secondary
Education (ICSE) Examinations, Cambridge University’s
International General Certificate of Secondary Education
(IGCSE) Examinations and the International Baccalaureate
Diploma (IB) Examinations.
DAIS commenced its academic session in March 2003.
During the academic year 2003-04, 640 students studied
in Classes LKG to Class VIII and Class XI. The number of
students has risen to 820 in the academic year 2004-05,
and is slated to rise to about 1,000 by the academic year
2005-06.
At Dhirubhai Ambani International School, learning is a
creative experience where every child learns in an
environment of joy and motivation – one that nourishes latent
talents and develops full potential. The School aspires to
help every child grow with a healthy body and an inquisitive
mind, equip them to deal with the challenges of life and
encourage them to shape as responsible and sensitive
global citizens. These are the hallmarks of the School’s
educational philosophy.
Located at Bandra-Kurla Complex, Mumbai, the School has
world-class infrastructure and support systems and about
80 faculty members with rich experience in national and
international curricula.
In its very first year, the School has made remarkable strides
in the academic field as well as other activities devised to
benefit students in a comprehensive manner. The Inaugural
Sports Festival in January 2004 became a grand celebration
of partnership amongst students, teachers, and well wishers
of the school.
Some of the other notable events during the academic year
2003-2004 include: visit of eminent personalities like - Doug
Allen, Sunjoy Monga, Ustad Amjad Ali Khan and
representatives from various International Universities to the
School, students’ participation in Students League of Nations
in Geneva and Model United Nations in the Hague, students’
visits to national parks, science centers, orphanages and
old age homes. Regular parent-teacher meetings to review
each student’s progress and achievements and celebration
of every major festival have become a hallmark of vibrant
interactions at the DAIS.
A Seminar on ‘Educational Challenges in an Emerging India’
was held at the School on March 16, 2004 in cooperation
with the International Baccalaureate Organisation. It marked
the School’s participation in collective efforts to address
major challenges in the field of education. Thus, in a short
span of one year, the Dhirubhai Ambani International School
has become a pride of the city of Mumbai.
Scholarships
The Dhirubhai Ambani Foundation for the 8th year in 2003
presented SSC Merit Rewards and Undergraduate
Scholarships to 554 district level meritorious students, 65 of
them physically challenged, at SSC and HSC examination.
They represent each of the total of 62 districts of
Maharashtra, Gujarat, Goa and the Union Territories of
Daman, Diu, and Dadra Nagar Haveli.
‘Reliance Kargil Scholarship Scheme’ launched with the
generous contribution of Reliance employees, continued to
support for the third year, the education of 383 children from
103 families of martyrs of the Kargil war as well as disabled
soldiers.
The relevance and importance of education had always been
uppermost in the mind of Shri Dhirubhai Ambani with due
emphasis on students from rural area. He firmly believed
that given proper encouragement the human resource
potential of India could be developed. Dhirubhai Ambani
Scholars Scheme was therefore announced in 2003 to
commemorate silver jubilee of listing of the Company on
the Bombay Stock Exchange. Under the scheme 936
meritorious children of Reliance shareholders, spread all
over India, have been selected for the scholarship. More
than 50 per cent of them have joined engineering colleges
while 11 per cent are pursuing degree courses in medicine.
The rest of the Scholars are pursuing degree or diploma
courses in Commerce, Arts, Agriculture or Education
streams. These ‘Dhirubhai Ambani Scholars’ will receive the
scholarship every year till completion of their degree/ diploma
course, provided they secure minimum of 60 per cent marks
in annual university examinations. Each one of them is
entitled for scholarship ranging between Rs. 7,000/- to Rs.
15,000/- per annum depending upon the course chosen for
the undergraduate studies.
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Healthcare initiatives
Sir Hurkisondas Nurrotumdas Hospital and Research
Centre (HNH&RC), Mumbai
DAF has joined the management of Sir Hurkisondas
Nurrotumdas Hospital and Research Centre (HNH&RC),
established in 1925, and Sir Hurkisondas Nurrotumdas
Medical Research Society (HNMRS), involved in clinical
research with a social bearing.
At present HNH&RC offers tertiary level healthcare facilities
including cardiology, cardio-thoracic surgery, neurology and
neuro-surgery, oncology, urology, nephrology, paediatric and
neonatal surgery, gastroenterology, micro-ear surgery,
retinal surgery, etc., with over 220 consultants in various
areas of specialisation. The staff of about 1,000, including
paramedical and other support staff at HNH&RC also
provides free and subsidised out-patient and in-patient
treatment for the poor. Upgradation of technology is an on-
going process with the hospital.
HNH&RC offers postgraduate qualifications in various
specialities awarded by the College of Physicians and
Surgeons (CPS) and Diplomate of National Board (DNB).
HNH&RC also offers M.Sc. and Ph.D. programs. In addition,
HNH&RC runs a Nursing School.
HNH&RC has been instrumental in executing many
community-oriented programs. These include free camps
such as paediatrics, eye, cardiac, women’s health, lifestyle
and obesity, etc.
Sir Hurkisondas Nurrotumdas Medical Research Society
(HNMRS), Mumbai
Reliance group 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 studies focusing on children such
as identification of ear disorders in asymptomatic children,
survey of supplementation by following up newborn infants
upto 3 months of age. A study on GAD65 antibody in children
with Insulin Dependent Diabetes was concluded recently.
HNMRS also undertook technologically challenging research
projects aimed at developing human adipogenic cell line
helpful in understanding the pathogenesis of diabetes in
Indian population. Community based studies related to the
early detection of Type 2 diabetes, revealed increased
prevalence of insulin resistance, a well-known cardiovascular
risk factor among urban Indians. Microbiological studies on
transfusion transmitted viruses, has made good progress
and won a first prize and gold medal at the All India
Microbiology Conference. Studies on tuberculosis in patients
with AIDS and hospital based pseudomonas infection will
be concluded soon. The work of HNMRS has received wide
appreciation.
Dhirubhai Ambani Hospital, Lodhivali, Raigad
This state-of-the-art general hospital was established six
years ago and has since then provided comprehensive
healthcare services to 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.
It has saved lives of numerous highway accident victims by
providing prompt, specialised and free life saving treatment.
A total of 465 highway accident cases were treated last year.
For the medical practitioners of the area, the hospital
conducts Continuing Medical Education (CME) programs.
This year three such programs were conducted and 120
doctors participated.
Community Development
At all of Reliance’s manufacturing locations, a very high
importance is given to improve the quality of life in
surrounding communities. These community development
programs focus on key areas of healthcare, education, child
welfare, and infrastructure development.
Reliance extends medical services at all its locations. The
service includes free outdoor medical services for nearby
communities, outreach mobile medical services, family
planning camps, blood donation drives, antenatal check-
ups, vaccination centers, pulse polio camps, school health
check-up, diagnostic multi-disciplinary camp, eye camps,
etc.
Over 1,200 persons have benefited from the eye camps
that Reliance Patalganga conducts each year in
collaboration with Lions club. Last year, over 15,000 people
benefited form the unique mobile van service of Hazira
Complex, which provides Medical Dispensary at the doorstep
in the nearby villages of Mora, Damka, Suvali, Bhatlai,
Junagam, Vasava and Rajagiri. Hazira complex also had
the distinction of retaining the trophy in 2003 for highest
number of blood donations for the 4th consecutive year in
Surat District.
Reliance runs its own schools at its manufacturing
complexes. These schools provide high quality education
to the children of the employees and also to the children of
the neighbouring communities. All these schools are
equipped with modern amenities like well-stocked libraries,
computers, laboratories, and playgrounds and sports
facilities. Transportation services are also provided to
students – for example, a fleet of 25 buses at Patalganga
enables over 1,000 students from nearby villages to attend
school everyday.
Apart from running its own schools, Reliance provides
support to the schools in nearby areas in the form of - school
building construction, providing computers, printers and
playing equipment, and felicitation of meritorious students.
Hazira Complex has also provided computing infrastructure
to the Panchayats of adjoining Mora, Damka and Kawas
villages to update revenue records benefiting over 22,000
villagers.
To inculcate a competitive spirit among children and thereby
building a strong base for meeting challenges in the future,
Reliance also provides necessary infrastructure, help and
support to organise various inter-school /inter-village
competitions for essay writing, singing, elocution, and sports
such as volleyball, tennis, cricket, athletics etc.
During the year, a state level table tennis tournament was
organised at J H Ambani School in Patalganga Complex
Township. In this tournament, more than 900 students from
30 schools from all over Maharashtra participated.
Reliance’s Jamnagar complex, in its unique bid to extend a
helping hand to surrounding communities when in crisis,
supplied nearly 8 million gallons of drinking water to Jam
Reliance Industries Limited
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GROWTH IS LIFE
Khambhalia during the summer of 2003. Reliance also
constructed a drinking water storage sump of 20-lakh litre
capacity near Jam Khambhalia railway station in a record
time to augment the storage facility for the town so that water
could be arranged through rail tankers when required.
Reliance continued to supply drinking water to the water-
scarce village of Moti Khavdi in the vicinity of Reliance
refinery. The supply of five water tankers per day continued
for about seven months during the year. Reliance also
sponsored laying of a water supply line for Moti Khavdi.
Assistance to village Sikka near Marine Tank Farm area
was provided to mobilise drinking water supply. Assistance
to Padana village was provided to repair the village’s
submersible pump during the year. Similarly, Hazira complex
supplied over 4 million gallon of drinking water to the
adjoining Mora village benefiting over 12,000 people.
Reliance continued to supply fodder for cows in seven
villages surrounding the refinery during the year. Moti
Khavadi, Nani Khavadi, Padana, Meghpaar, Sikka, Gagva
and Pipali are the villages where fodder is supplied to the
cow-sheds regularly.
Reliance Rural Development Trust (RRDT), in tune with the
Government of Gujarat, is creating village infrastructure
under the Gokul Gram Yojana of the Government of Gujarat.
During the year, Reliance completed 1,022 structures viz.
community hall, aaganwadis, panchayat offices and roads
in the villages. Another 351 works were in progress during
the year. During the year, seven new districts were added
in the gamut, and now works in 23 districts of the Gujarat.
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. 26,134 crore (US$ 5,978 million), an increase of 7 per
cent over the previous year’s figure of Rs. 24,392 crore.
Taxes Paid
Reliance is one of India’s largest contributors to the national
exchequer, primarily by way of payment of taxes and duties
to various government agencies.
During the year, Reliance paid a total of Rs. 12,903 crore
(US$ 2,951 million) in the form of various taxes and duties.
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
During the year, Reliance’s exports, including deemed
exports, increased to Rs. 14,969 crore (US$ 3,424 million),
from Rs. 11,510 crore in the previous year, recording an
annual growth of 30 per cent. Reliance continued to maintain
its leadership position as the largest exporter in the country.
Reliance exports its products to nearly 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 20 per cent of Reliance’s gross
turnover.
Awards and Recognition
Reliance’s commitment to excellence won several national
and international awards, rankings and recognition for the
Company and accolades for the management’s outstanding
performance.
Corporate
Rankings
In the Forbes list of 2000 top firms worldwide based on
composite sales, profits, assets and market value, Reliance
Industries ranked at No.303, in March 2004.
Reliance ranked at No. 2 in ‘India’s Most Respected
Companies’ list in a prestigious PricewaterhouseCoopers
Survey published in the Financial Times (London) in January
2004.
Reliance emerged at No. 2 in the category of ‘Overall Best
Managed Company’ of India in Asiamoney (Hong Kong) in
December 2003.
Reliance ranked high in the ‘Survey of India’s Most Trusted
Brands 2003’ conducted by AC Nielsen ORG-MARG with
Brand Equity and the Economic Times Intelligence Group:
(cid:79) Only Vimal voted as ‘India’s Most Trusted Fabric Brand’
(cid:79) Reliance IndiaMobile is Most Trusted Telecom Brand
in the country
(cid:79) Reliance Mutual Fund ranked third in ‘Money Marketing’
Reliance Industries ranked 31st in the BusinessWeek’s list
of top 200 Emerging Markets companies of the world in
July 2003.
Reliance Industries ranked 306th in the Forbes Global 500,
a ranking of World’s Largest Public Companies in July 2003.
RIL was the only Indian private sector Company to feature
in this prestigious list last year.
Reliance Group emerged as the ‘Most Admired Business
House’ for the third consecutive year in the ‘Business Barons
– TNS Mode Opinion Poll’ for 2003 while Reliance Industries
emerged at No. 2 position amongst ‘Most Admired
Companies’ in July 2003.
Reliance Industries emerged as the ‘Best Managed
Company’ in India in a study by Business Today and A.T.
Kearney in June 2003.
34
Reliance Industries Limited
GROWTH IS LIFE
Corporate Governance
Reliance was awarded ‘The Third ICSI National Award for
Excellence in Corporate Governance 2003’ from the Institute
of Company Secretaries of India, in December 2003.
Reliance featured amongst Asia’s Top 5 companies in the
Energy Sector in a Corporate Governance Poll by
Asiamoney in September 2003.
Others Try To Emulate’ and; No. 5 in ‘Innovative in
Responding to Customer Needs’ in Far Eastern Economic
Review (FEER) Survey, Review 200: Asia’s Leading
Companies in December 2003.
Reliance Industries Ltd. ranked at No.1 in ‘bt 500 India’s
Most Valuable Companies’, Business Today in November
2003.
Health, Safety and Environment (HSE)
Quality
Reliance’s petrochemical plant in Hazira was awarded the
‘Sword of Honour’ by the British Safety Council for
excellence in safety in December 2003.
Reliance’s Jamnagar Complex received the ‘Environment
Excellence Gold Award’ from the Greentech Foundation for
excellent performance in caring for the environment during
the year 2002-03 in December 2003.
RIL Hazira was awarded the ‘Greentech Safety Gold Award’
for the year 2003 in the petroleum sector for its best
performance in safety management, in June 2003.
The British Safety Council, UK, conferred Reliance
Jamnagar Complex with a ‘Five Star’ rating for best practices
followed in Health and Safety in May 2003.
Energy Management
The Confederation of Indian Industry (CII) presented the
National Award for Excellence in Energy Management 2003
to Reliance Jamnagar Complex for its innovative project
‘FCC Fuel Gas-to-Turbines in Power Plant’ in October 2003.
Reliance’s refinery at Jamnagar was ranked best in Shell
Benchmarking for the third consecutive year in ‘Energy and
Loss’ performance from amongst 50 refineries worldwide
in June 2003.
Reliance was ranked No.1 in ‘Energy Performance’ amongst
large complex group refineries in Asia-Pacific region in
Solomon Benchmarking, a world-renowned energy
benchmarking by Solomon Associates of USA, in
September 2003. Reliance EII (Energy Intensity Index) was
best at 64 among large and complex group refineries in the
Asia-Pacific region.
Corporate Social Responsibility (CSR)
Reliance received the Golden Peacock Award for Corporate
Social Responsibility Award in recognition of its social
initiatives by the Institute of Directors in November 2003.
Financial Soundness
Reliance emerged as the only Indian Company among
global companies to create ‘Most Value for Shareholders’
in a PricewaterhouseCoopers Survey published in the
Financial Times in January 2004.
The Central Laboratory at Jamnagar Complex won 6 Gold
certificates from Shell Global Solutions, Netherlands, under
SMPCS (Shell Main Products Correlation Scheme) Quality
Pacesetting for its excellence in testing of fuel products in
December 2003. Reliance Jamnagar Complex features in
the “Excellent” category as per Shell Global Solutions
ranking.
Exports
RIL won The Synthetic & Rayon Textiles Export Promotion
Council (SRTEPC) Awards in December 2003 in the
following categories:
(cid:79) Best Overall Export Performance in the category of SRTEPC
Special Award
(cid:79) Best Export Performance in the category of Polyester Staple
Fibre (PSF)
(cid:79) Best Export Performance in the category of Polyester
Filament Yarn (PFY)
The Federation of Indian Export Organisations (FIEO)
awarded Reliance Industries Limited with the Niryat Shree
– Gold Trophy for the financial year 2000-01 and Niryat
Shree – Silver Trophy for 2001-02.
Management
Chairman and Managing Director of Reliance Industries
Limited, Shri Mukesh D. Ambani and Vice Chairman and
Managing Director of Reliance Industries, Shri Anil D.
Ambani ranked No.1 for the second consecutive year, in
The Power List 2004 published by India Today in March
2004.
Shri Mukesh D. Ambani and Shri Anil D. Ambani were
together rated as one of ‘India’s Most Admired CEOs’ for
the fifth consecutive year in the Business Barons - TNS Mode
opinion poll in July 2003.
Shri Mukesh D. Ambani was honoured with the ‘Gujarat
Garima’ award by the Government of Gujarat in January
2004.
Shri Mukesh D. Ambani was conferred the ‘BS Entrepreneur
of the year 2002’ award by Business Standard, in June 2003.
Reliance Industries was ranked No.2 in ‘Overall Leadership’,
‘Financial Soundness’, ‘Long-Term Vision’, ‘Companies That
Shri Anil D. Ambani was voted ‘MTV Youth Icon of the Year’
in September 2003.
Reliance Industries Limited
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Corporate Governance
Reliance is one of the pioneers in the country in
implementing the best international practices of Corporate
Governance. In recognition of this pioneering effort, the
Institute of Company Secretaries of India has bestowed
on the Company the National Award for Excellence in
Corporate Governance for the year 2003.
Reliance’s Corporate Governance Principles uphold its
global standing at the forefront of corporate governance
best practice. Reliance continues to review 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 to ensure their continuing relevance,
effectiveness and responsiveness to the needs of local and
international investors and all other stakeholders.
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:
(cid:79)
(cid:79)
(cid:79)
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
its
responsibilities and duties
to adequately discharge
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 :
(cid:79)
(cid:79)
(cid:79)
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, they
have the disadvantage of losing the contribution of directors
who over time have developed insight in to the Company
and its affairs.
Independent verification and safeguarding integrity of
the Company’s financial reporting
To ensure the truthful and factual presentation of the
Company’s financial position, the Company has put in place
a structure of review and authorisation apart from strong
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 audit function, and the
performance and independence of the external auditors.
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:
(cid:79)
all investors have equal and timely access to material
information concerning the Company – including its
financial position, performance and governance.
(cid:79) 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 material information about the Company. Reliance’s
endeavors are to empower its shareholders by:
(cid:79)
(cid:79)
communicating effectively with them.
giving them appropriate information about the
Company.
(cid:79) 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, independent of the external auditors, to
review the effectiveness of the risk management system.
Audit Committee of the Board oversees the risk
management and internal control systems. This system is
designed to:
36
Reliance Industries Limited
GROWTH IS LIFE
(cid:79)
(cid:79)
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 ensure consistent effectiveness of the overall
management, the performance of the senior executives and
officers is subject to review. This 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.
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 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.
holds is that the other persons’ interests count as much as
their own.
The “Code of Ethics” and the “Business Policies” are in
alignment with Reliance’s Values and Commitments. The
essence of these documents is that each employee should
conduct the Company’s business with integrity, in
compliance with applicable laws, and in a manner that
excludes considerations of personal advantage.
The “Code of Ethics” policy document contains the policy
on the following:
(cid:79) Conflict of Interest
(cid:79) Payments and Gifting
(cid:79) Receipt of Gifts
(cid:79) Purchases through suppliers
(cid:79) Appointment of full-time agents, consultants and
representatives
(cid:79) Political Contributions
The “Business Policies” document contains the policy on
the following :
(cid:79) Fair Market Practices
(cid:79) Inside Information
(cid:79) Financial Records and Accounting integrity
(cid:79) External Communication
(cid:79) Work Ethics
(cid:79) Personal Conduct
(cid:79) Health Safety and Environment
(cid:79) Quality
The Ethics Policy sets forth, inter alia:
The Insider Trading Policy
(cid:79) Our Values and Commitments
(cid:79) Our Code of Ethics
(cid:79) Our Business Policies
(cid:79) The Insider Trading Policy
(cid:79) 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
The “Code of Conduct for Prevention of Insider Trading”
contains the policies prohibiting insider trading.
Programme for Ethics Management at Reliance
We have established an elaborate Ethics Management and
Compliance Organisation / Process to underscore our
commitment to ethical conduct throughout our Company. It
is a key part of a vigorous corporate-wide effort to promote
a positive and ethical work environment.
The Company’s shares are listed on three 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 Code of 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, including
shareholders, employees, the government and
lenders. Reliance is committed to achieving the
highest international standards of corporate
Reliance Industries Limited
37
GROWTH IS LIFE
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 12 directors, out of
which 6 are independent directors. The composition
of the Board and category of Directors is as follows:
Category
Name of the Directors
Promoter/
Executive Directors
M.D. Ambani
Chairman & Managing Director
A.D. Ambani
Vice Chairman & Managing Director
N.R. Meswani
Executive Director
Promoter Non-
Executive Director
Non-Promoter
Executive Director
H.R. Meswani
Executive Director
R.H. Ambani
H.S. Kohli
Executive Director
Independent Directors M.L. Bhakta
T.R.U. Pai
Y.P. Trivedi
U. Mahesh Rao*
(Nominee Director of GIC)
Dr. D.V. Kapur
M.P. Modi
S. Venkitaramanan
* Ceased to be a Director with effect from 17th June,
2003 on the withdrawal of nomination by the General
Insurance Corporation of India.
Brief Resume of the Directors being reappointed, nature
of their expertise in specific functional areas and names
of companies in which they hold directorship and the
membership of the committees of the Board are
furnished hereunder:
a) Shri M.L. Bhakta is a Director of the Company since
27th September, 1977. He is a Senior Partner of Messrs
Kanga & Company, a leading firm of Advocates and
Solicitors in Mumbai. He has been in practice for over
40 years and has vast experience in the legal field and
particularly on matters relating to corporate laws,
banking and taxation. He is the legal advisor to leading
foreign and Indian companies and banks. He has also
been associated with a large number of Euro issues
made by Indian companies. He was the Chairman of
the Taxation Law Standing Committee of LAWASIA,
an Association of Lawyers of Asia and Pacific which
has its headquarters in Australia. He is a member of
the International Law Association, Indian Chapter
Regional Branch, Mumbai, Nathdwara Temple Board,
Nathdwara, Rajasthan and President of the Association
of Hospitals, Mumbai. He is also a Director in the
following companies, viz. Gujarat Ambuja Cements
Limited, Micro Inks Limited, The Indian Merchants’
Chamber, Bombay, J.C. Bamford Excavators (India)
Private Limited, JCB India Limited and JCB
Construction Equipment Limited. He is the Chairman
of the Remuneration Committee and the Shareholders’/
Investors’ Grievance Committee of the Company and
Compensation & Remuneration Committee and
Banking Matters Committee of Gujarat Ambuja
Cements Limited. He is a member of the Audit
Committees of Gujarat Ambuja Cements Limited, Micro
Inks Limited and JCB India Limited.
b) Dr. D.V. Kapur is a Director of the Company since 28th
March, 2001. He is a Graduate with Honours in
Electrical Engineering and is having vast experience
in Power Sector, Engineering, Chemicals and
Petrochemicals Industries. He served BHEL, a premier
Indian public sector enterprise, in various positions. He
was responsible for establishment of the Systems
Oriented National Thermal Power Corporation (NTPC),
a public sector enterprise of which he was the founder
Chairman-cum-Managing Director. Under his
leadership NTPC undertook and successfully
implemented a series of 2000 MW power projects which
today form the main stay of the Indian power sector.
For his contribution in building of NTPC, the World Bank
Board of Directors described him as a ‘Model Manager’.
He was Secretary to the Government of India in the
Ministry of Power, Heavy Industry and Chemicals &
Petrochemicals from 1980 to 1986. For the significant
contributions made by him in the fields of Technology
Management and Industrial Development, Jawaharlal
Nehru Technological University conferred the degree
of D.Sc. on him. He has also been associated with a
number of national institutions as Chairman, Board of
Governors, Indian Institute of Technology, Bombay;
Chairman, National Productivity Council; Member,
Atomic Energy Commission etc.
He is a Director on the Boards of a number of
companies, viz. Reliance Power Limited, Jacobs H&G
(P) Limited, GKN Driveline (India) Limited, Larsen &
Toubro Limited, Tata Chemicals Limited, Honda Seil
Power Products Limited, Zenith Limited, DLF Power
Limited, Drivetech Accessories Limited and Reliance
Jamnagar Power Private Limited. He is the Chairman
of the Audit Committee and Shareholders’/Investors’
Relations Committee of Honda Siel Power Products
Limited and the Audit Committee and the Chairman’s
Executive Committee of GKN Driveline (India) Limited
and a Member of the Shareholders’ Grievance
Committee and Audit Committee of Larsen & Toubro
Limited, the Audit Committee of Zenith Limited and
the Remuneration Committee of the Company.
c) Shri M.P. Modi is a Director of the Company since 28th
March, 2001. He has held high positions in Government
of India as Chairman of Telecom Commission, Secretary,
Ministry of Coal and Special Secretary, Insurance. He
has considerable management experience, particularly
in the fields of energy, insurance, petrochemicals and
telecom. At present he is a Director on the Boards of
the following companies: ICICI Prudential Life Insurance
Company Limited, Essar Shipping Limited and Mangalore
Refinery & Petrochemicals Limited. He is the Chairman
of the Audit Committees of Mangalore Refinery &
38
Reliance Industries Limited
GROWTH IS LIFE
Petrochemicals Limited, ICICI Prudential Life Insurance
Co. Limited and a Member of the Audit Committees of
Essar Shipping Limited and the Company.
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, in an
informed and most efficient manner.
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
are 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 held at the Company’s Office at
3rd Floor, “Reliance Centre”, Walchand Hirachand
Marg, Ballard Estate, Mumbai 400 038.
(iii) All divisions/departments in the Company are
encouraged to plan their functions well in advance,
particularly with regard to matters requiring
discussion / approval / decision in the Board /
Committee Meetings. All such matters are
communicated to the Company Secretary in
advance so that the same could be included in the
Agenda for the Board Meetings.
(iv) The Board is given presentations covering Finance,
Sales and Marketing, and the major business
segments and operations of the Company, before
taking on record the results of the Company for the
preceding financial quarter at each of the pre-
scheduled Board Meeting. The Board’s annual
agenda includes recommending dividend keeping
in view the 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.
(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.
C. Board Material Distributed in Advance
a. 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 and focussed discussions
at the meeting. Where it is not 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.
b. In special and 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
Board for their comments. The minutes of proceedings
of a meeting are entered in the Minutes Book within 30
days from the conclusion of the meeting.
E. Post meeting follow up mechanism
The Guidelines for Board and Committee meetings
facilitate an effective post meeting follow-up, review and
reporting process for the decisions taken by the Board
and Committees.
F. Compliance
The Company Secretary while preparing the agenda,
notes on agenda, minutes etc. of the meeting(s), is
responsible for and is required to ensure adherence to
all the applicable provisions of law including the
Companies Act, 1956 and the Secretarial Standards
recommended by the Institute of Company Secretaries
of India, New Delhi.
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
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
U. Mahesh Rao*
Dr. D.V. Kapur
M.P. Modi
S. Venkitaramanan
Attendance
Particulars
Board
Meetings
Last
AGM
5
5
5
5
4
4
5
4
4
2
5
4
5
Present
Present
Present
Present
Present
Present
Present
Present
Present
Present
Present
Present
Present
No. of Directorships and committee
memberships / chairmanships
Other
Committee Committee
Director- Member- Chairman-
ships**
ships**
ships
6
4
1
1
1
8
6
13
5
—
10
3
8
1
1
1
1
—
—
3
3
2
—
4
2
4
—
—
—
—
—
1
3
2
—
—
3
2
—
* Ceased to be a Director with effect from 17th June, 2003 on
the withdrawal of nomination by the General Insurance
Corporation of India.
** In accordance with Clause 49 of the Listing Agreement with
the Stock Exchanges, membership/chairmanship of only the
Audit Committee, Shareholders’/Investors’ Grievance
Committee and the Remuneration Committee of all the Public
Limited Companies has been considered.
Reliance Industries Limited
39
GROWTH IS LIFE
5. Number of Board Meetings held and the dates on
which held
5 (Five) 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, 2003, 16th June, 2003, 31st July, 2003, 16th
October, 2003 and 29th January, 2004. The Company
has held at least one meeting in every three months
and the maximum time gap between any two meetings
was not more than four months. None of the Directors
of the Company was a member of more than ten
Committees nor was the Chairman of more than five
Committees across all Companies in which he was a
Director.
6. Board Committees
A. Standing Committees
The Company has the following standing Committees
of the Board.
(i) Audit Committee
The Board 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, Vice Chairman, Shri T.R.U.
Pai and Shri M.P. Modi. 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 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.
c. Reviewing with management the quarterly, 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 judgement by management, (iii)
qualifications in draft audit report, (iv) significant
adjustments arising out of audit, (v) the going
concern assumption, (vi) compliance with
accounting standards, (vii) compliance with Stock
Exchange and legal requirements concerning
financial statements and (viii) 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.
g. Reviewing the findings of any internal
investigations by the internal auditors into matters
where there is suspected fraud or irregularity or
a failure of internal control systems of a material
nature and reporting the matter to the Board.
h. Discussion with external auditors before the audit
commences nature and scope of audit as well
as have post-audit discussion to ascertain any
area of concern.
i. Reviewing the Company’s financial and risk
management policies.
the payment
j. To look into the reasons for substantial defaults
the depositors,
in
debentureholders, shareholders (in case of non
payment of declared dividends) and creditors.
to
During the year, the Committee has met 5 times, as
against the minimum requirement of 3 meetings. The
head of finance function, head of internal audit and the
representatives of the Statutory Auditors were invited
to be present at the Audit Committee Meetings. The
Cost Auditors appointed by the Company under Section
233B of the Companies Act, 1956 were also invited to
attend the Audit Committee meetings.
Attendance of each Member at the Audit Committee
meetings held during the year
Name of Member of
Audit Committee
Shri Y.P. Trivedi,
Chairman
Shri S. Venkitaramanan,
Vice Chairman*
Shri U. Mahesh Rao**
Shri T.R.U. Pai
Shri M.P. Modi***
Attendance particulars
23rd April, 2003, 28th July, 2003,
16th October, 2003 and
29th January, 2004
23rd April, 2003, 28th July, 2003,
31st July, 2003,
16th October, 2003 and
29th January, 2004
23rd April, 2003
23rd April, 2003, 28th July, 2003,
31st July, 2003 and
29th January, 2004
29th January, 2004
* Elected as Vice Chairman of the Audit Committee
with effect from 28th July, 2003.
** Ceased to be a Director with effect from
17th June, 2003 on the withdrawal of nomination
by the General Insurance Corporation of India.
*** Appointed as a Member of the Audit Committee with
effect from 31st July, 2003.
40
Reliance Industries Limited
(ii) Remuneration Committee
(iii) Shareholders’/Investors’ Grievance Committee
GROWTH IS LIFE
The Board 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 S.
Venkitaramanan and Dr. D.V. Kapur.
The Remuneration Committee has been constituted to
recommend/review the remuneration package of the
Managing/Whole-time Directors, based on performance
and defined criteria.
The remuneration policy is directed towards rewarding
performance, based on review of achievements on a
periodical basis. The remuneration policy is in
consonance with the existing Industry practice.
During the year the Committee met once on
23rd April, 2003, and all the members of the Committee,
who are independent non-executive directors, were
present at the meeting.
Details of remuneration to Directors for the year
The aggregate value of salary and perquisites including
commission paid for the year ended 31st March, 2004
to the Managing Directors/Wholetime Directors is as
follows: Shri M.D. Ambani, Chairman and Managing
Director, Rs.11.62 crore; Shri A.D. Ambani, Vice
Chairman and Managing Director, Rs.11.62 crore;
Shri N.R. Meswani, Executive Director, Rs.3.02 crore;
Shri H.R. Meswani, Executive Director, Rs.3.02 crore.
The aggregate value of salary and perquisites paid to
Shri H.S. Kohli, Executive Director was Rs. 0.18 crore.
Besides this, all the Whole-time Directors were also
entitled to Company’s contribution to Provident Fund,
Superannuation or Annuity Fund, to the extent not
taxable and Gratuity and encashment of leave at the
end of tenure, as per the rules of the Company. The
agreements with the above Directors are for a period
of 5 years from the respective dates of appointments
of the said directors and can be terminated by either
party by giving three months’ notice in writing.
The Company paid sitting fees to all the Non-Executive
Directors at the rate of Rs. 5000/- upto 30th September,
2003 and pays at the rate of Rs.20,000/- from
1st October, 2003, for attending each meeting of the
Board and/or Committee thereof. The sitting fees paid
for the year ended 31st March, 2004 to the Directors
are as follows:- Shri R.H. Ambani - Rs. 50,000/-;
Shri M.L. Bhakta - Rs. 2,20,000/-; Shri Y.P. Trivedi -
Rs. 2,45,000/- Shri T.R.U. Pai - Rs.70,000/-;
Shri S. Venkitaramanan
- Rs. 1,15,000/-;
Shri U. Mahesh Rao - Rs. 20,000/-; Dr. D.V. Kapur -
Rs. 55,000/-; and Shri M.P. Modi - Rs. 55,000/-.
The Company has paid Rs. 30,938/- as professional
fees to Messrs Kanga & Company, a firm in which Shri
M.L. Bhakta, Director of the Company, is a partner.
The Company has not granted any stock option to its
directors.
The Board of the Company has constituted a
Shareholders’ / Investors’ Grievance Committee,
comprising of Shri M. L. Bhakta, (Chairman),
Shri Y.P. Trivedi, Shri M.D. Ambani and Shri A. D.
Ambani. The Committee, inter alia, approves issue
of duplicate certificates and oversees and reviews all
matters connected with the securities transfers. The
Committee also looks into 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 recommend
measures for overall improvement in the quality of
investor services. The Board of Directors have
delegated the power of approving transfer of
securities to the Managing Directors and the
Company Secretary. The Committee also monitors
the implementation and compliance of the Company’s
Code of Conduct for prevention of Insider Trading in
pursuance of SEBI (Prohibition of Insider Trading)
Regulations, 1992.
Shri Vinod M. Ambani, President & Company Secretary,
is the Compliance Officer for complying with the
requirements of the Securities and Exchange Board of
India (Prohition of Insider Trading) Regulations, 1992
and Shri Surendra Pipara, Joint Company Secretary is
the Compliance Officer for complying with the
requirements of the Listing Agreement with the Stock
Exchanges.
The total number of complaints received and replied
to the satisfaction of shareholders during the year under
review, was 20,483. Outstanding complaints as on 31st
March, 2004 were Nil. 609 requests for transfers and
1521 requests for dematerialisation were pending for
approval as on 31st March, 2004, which were approved
and dealt with by 2nd April, 2004 and 3rd April, 2004
respectively.
(iv) Finance Committee
The Finance Committee makes recommendations to the
Board relating to capital structure and the issuance of
securities, reviews banking arrangements and cash
management, and reviews and approves certain short-
term and long-term investment transactions, etc. Finance
Committee meets as and when the need to consider any
matter assigned to it arises.
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) shall be finalized in
consultation with the Committee Members.
Reliance Industries Limited
41
GROWTH IS LIFE
C. Procedures at Committee Meetings
Company’s guidelines relating to Board Meetings are
applicable to Committee Meetings as far may be
practicable. Each Committee has the authority to
engage outside experts, advisers and counsel to the
extent it considers appropriate to assist the Committee
in its work. Minutes of the proceedings of the each
Committee Meeting are placed before the Board for its
perusal and noting.
7. General Body Meetings
Location and time for last 3 Annual General Meetings
were as follows:
Year
AGM Location
Date
Time
2000-01 AGM Birla Matushri
15th June, 2001
11.00 a.m.
Sabhagar,
19 Marine Lines,
Mumbai 400 020
2001-02 AGM Same as above
31st October, 2002 11.00 a.m.
2002-03 AGM Same as above
16th June, 2003
11.00 a.m.
During the year ended 31st March, 2004, there have
been no resolutions passed by the Company’s
shareholders through postal ballot. At the ensuing
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 had imposed a monetary penalty of Rs. 4.75
lakhs on the Company for the alleged non-
disclosure under Regulations 7(1) and (2) of the
Securities and Exchange Board of India (Substantial
Acquisition of Shares and Takeovers) Regulations,
1997 in respect of acquisition of shares of a listed
Company in the year 2002-03. 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.
9. Means of communication
Half-yearly report sent to each household of
shareholders
Half yearly report for the half year ended 30th
September, 2003 was duly sent to shareholders.
Quarterly results
The quarterly results were published in ‘Financial
Express’ and ‘Tarun Bharat’, alongwith the official news
release, and the detailed presentations made to the
media, analysts, institutional investors, etc. were
displayed on the corporate website, www.ril.com
The Management Discussion and Analysis (MD&A) is
a part of the annual report, and each quarterly official
media release.
10.
General Shareholder Information
10.1 Annual General Meeting
Day, Date and Time
Venue
10.2
Financial Calendar (tentative)
: Thursday, the 24th June, 2004 at 11.00 a.m.
: Birla Matushri Sabhagar, 19, Marine Lines, Mumbai 400 020
Results for the quarter ending June 30, 2004
:
Last week of July, 2004
Results for the quarter ending September 30, 2004 :
Last week of October, 2004
Results for the quarter ending December 31, 2004 :
Last week of January, 2005
Results for the year ending March 31, 2005
Annual General Meeting
10.3 Book closure date
:
:
Last week of April, 2005
June, 2005
: Saturday, the 22nd May, 2004 to Saturday, the 29th May, 2004
(both days inclusive), for payment of dividend
10.4 Dividend payment date
: On or after 24th June, 2004.
42
Reliance Industries Limited
10.5
(a) Listing of Equity Shares on Stock
: The Stock Exchange, Mumbai (BSE)
GROWTH IS LIFE
Exchanges at
Phiroze Jeejeebhoy Towers,
Dalal Street,
Mumbai 400 001.
The Calcutta Stock Exchange Association Limited
7, Lyons Range,
Kolkata 700 001.
National Stock Exchange of India Limited (NSE)
“Exchange Plaza”,
Bandra-Kurla Complex, Bandra (E),
Mumbai 400 051.
Note:
(i) Annual listing fees for the year 2004-05, (as
applicable) has been paid to the Stock Exchanges;
(ii) The Company’s equity shares have been delisted
from the Stock Exchanges at Ahmedabad,
Bangalore, Chennai, Cochin, Kanpur, New Delhi
and Pune. The Company’s application to Calcutta
Stock Exchange for delisting is in an advanced
stage of finalisation.
(b) Listing of Global Depository Receipts
:
(GDRs) at
Luxembourg Stock Exchange and traded on PORTAL
System (NASDAQ, USA) and SEAQ System
(London Stock Exchange).
(c) Listing of Debt Securities at
: The Wholesale Debt Market (WDM) Segment of the
National Stock Exchange of India Limited (NSE)
(d) Debenture Trustee
: UTI Bank Limited
Maker Tower F, 13th Floor,
Cuffe Parade, Colaba,
Mumbai 400 005.
10.6
(a) Stock Code
: Bombay Stock Exchange Scrip Code ‘500325’
: National Stock Exchange Trading Symbol ‘RELIANCE EQ’
(b) Demat ISIN Numbers in NSDL & CDSL
:
INE002A01018
for Equity Shares
10.7
Stock Market Data
Month
The Stock Exchange, Mumbai (BSE)
(In Rs. per share)
National Stock Exchange (NSE)
(In Rs. per share)
Month’s High
Price
Month’s Low
Price
Month’s High
Price
Month’s Low
Price
April, 2003
May, 2003
June, 2003
July, 2003
August, 2003
September, 2003
Octobter, 2003
November, 2003
December, 2003
January, 2004
February, 2004
March, 2004
302.00
302.00
337.50
361.70
404.75
445.00
497.45
504.40
582.00
603.25
610.45
598.00
264.00
258.00
291.00
323.20
343.00
391.80
433.10
447.20
477.15
528.60
539.00
505.15
302.00
302.00
337.75
361.85
424.70
510.00
497.90
510.00
582.80
605.90
620.00
600.00
264.75
257.15
291.25
323.25
343.60
392.00
370.00
446.20
435.00
527.25
539.00
505.25
Reliance Industries Limited
43
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, 2004
GROWTH IS LIFE
Period
Percentage Change in
RIL share price
Sensex
RIL relative to Sensex
Financial Year 2003-2004
2 years
5 years
95
79
313
83
61
49
12
18
264
b) RIL share price performance relative to Nifty based on share price on 31st March, 2004
Period
Percentage Change in
Financial Year 2003-2004
2 years
5 years
RIL share price
93
79
313
Nifty
81
57
64
RIL relative to Nifty
12
22
249
10.9 Registrars and Transfer Agents
(Share transfers and communications
regarding share certificates, dividends
and change of address)
Karvy Computershare Private Limited
46, Avenue 4, Street No.1,
Banjara Hills, Hyderabad 500 034, India
E-Mail: rilinvestor@karvy.com
Note : The Registar and Transfer Agent of the Company is supported by countrywide network of Investor Service
Centres. Particulars and contact details of such Centres are given at page no. 125 of this Annual Report.
10.10 Share Transfer System
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 was being 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.
However, in terms of SEBI Circular SEBI/MRD/Cir-10/2004 dated 10th February, 2004, the Company has
discontinued, with effect from 11th February, 2004, the practice of sending option letter for dematerialisation
subsequent to transfer.
10.11 Distribution of Shareholding as on 31st March, 2004
Foreign
Investors
29.62%
Banks / MFs /
FIs
8.77%
Others
14.94%
44
Reliance Industries Limited
Promoters/Persons
acting in concert
46.67%
10.12 Dematerialisation of Shares
GROWTH IS LIFE
Over 92.63% of the Company’s paid-up equity share capital has been dematerialised up to 31st March, 2004.
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 frequently 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. Relevant data for the average daily turnover
for the financial year 2003-04 is given below:
The Stock
Exchange, Mumbai (BSE)
National Stock
Exchange (NSE)
In No. of shares (in million)
In value terms (Rs. million)
($ Million)
2.94
1344.46
30.99
6.06
2703.96
62.32
BSE + NSE
9.00
4048.42
93.31
10.13 Outstanding GDRs/Warrants and Convertible Instruments
Outstanding GDRs as on 31st March, 2004 represent 85,650,461 shares constituting 6.13% of the paid up equity
share capital of the Company. There are no further outstanding instruments, which are convertible into equity shares
of the Company.
10.14 Plant locations
(cid:79) Hazira Complex
Village Mora, Bhatha P.O.Surat-Hazira Road,
Surat - 394 510,
Gujarat State, India.
(cid:79) Naroda Complex
103/106, Naroda Industrial Estate Naroda,
Ahmedabad - 382 320
Gujarat State, India.
(cid:79) Jamnagar Complex
(cid:79) Patalganga Complex
Village Meghpar/Padana, Taluka Lalpur,
District Jamnagar - 361 280
Gujarat State, India.
10.15 Address for Correspondence
B-4, Industrial Area, Patalganga
Off Bombay-Pune Road, Near Panvel,
District Raigad - 410 207,
Maharashtra State, India.
(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.
(cid:79)
For Securities held in Demat form
To the Depository Participant
(cid:79) For Securities held in Physical form
Karvy Computershare Private Limited
46, Avenue 4, Street No. 1 Banjara Hills,
Hyderabad - 500 034.
E-Mail: rilinvestor@karvy.com
(ii) Any query on Annual Report
Secretarial Department
Reliance Industries Limited
Fosbery Road,
Off. Reay Road Station (East),
Mumbai - 400 033.
10.16 Transfer of unclaimed amounts to Investor Education and Protection Fund
The investors are advised to claim the unencashed dividends lying in the unpaid dividend accounts of the Company
before the due dates (as indicated in the Notes to the Notice) for crediting the same to the Investor Education and
Protection Fund.
During the year under review the Company has credited a sum of Rs. 7.36 crore to the Investor Education and
Protection Fund pursuant to Section 205C of the Companies Act, 1956 and the Investor Education and Protection
Fund (awareness and protection of investors) Rules, 2001.
Reliance Industries Limited
45
GROWTH IS LIFE
Directors’ Report
Your Directors are pleased to present the 30th Annual Report and the audited accounts for the year ended 31st March, 2004.
Financial Results
The performance of the Company for the financial year ended 31st March, 2004 is summarised below :
2003-04
2002-03
Rs. Cr.
US$ Mn*
Rs. Cr. US$ Mn
3,452.79
615.70
Gross profit before interest, depreciation
Less: Interest
Depreciation
Less: Transfer from General Reserve
Profit before Tax
Less: Provision for Current Taxation
Provision for Deferred Tax
3,331.39
84.37
Profit after Tax
Add: Balance in Profit and Loss Account
Taxation Reserve Written Back
Taxation for Earlier Years
Debenture Redemption Reserve Written Back
Investment Allowance (Utilised) Reserve Written Back
Amount Available for Appropriation
Appropriations :
Capital Redemption Reserve
Debenture Redemption Reserve
General Reserve
Interim dividend on Preference Shares
Proposed dividend on Equity Shares
Tax on dividend
Balance carried to Balance Sheet
10,982.88
1,434.72
3,247.02
6,301.14
351.00
790.00
5,160.14
3,343.06
10.00
(23.03)
850.00
76.63
9,416.80
-
-
3,000.00
-
733.10
91.64
5,592.06
9,416.80
2,512
328
43
1441
80
181
1180
765
2
(5)
194
18
2,154
-
-
686
-
168
21
1279
2,154
9,366.46
1,555.16
2,837.09
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
1,973
328
597
1,048
52
132
864
574
-
-
-
-
1,438
84
59
421
4
147
19
704
1,438
* 1 US $ = Rs. 43.7175 Exchange rate as on 31st March, 2004 (Previous year as on 31st March, 2003 1 US $ = Rs. 47.485)
Dividends
The Directors have recommended a dividend of Rs 5.25
per Equity Share on 139,63,77,536 Equity Shares of Rs 10
each for the financial year ended 31st March, 2004, 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 29th May, 2004
and (ii) to those whose names as beneficial owners are
furnished by National Securities Depository Limited and
Central Depository Services (India) Limited.
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.
The Company has entered into various contracts in the areas
of oil & gas, refining, petrochemicals and telecommunication
businesses. While benefits from such contracts will accrue
in the future years, the Board of Directors shall periodically
review their progress.
Subsidiary Companies
During the year, Reliance Communications International Inc.
(Subsidiary of Reliance Communications Inc.) has become
a Subsidiary of the Company.
In terms of approval granted by the Central Government
under Section 212(8) of the Companies Act, 1956, 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 Company interested in obtaining the same.
However, pursuant to Accounting Standard AS-21 issued
by the Institute of Chartered Accountants of India,
Consolidated Financial Statements presented by the
Company includes the financial information of its
subsidiaries.
Fixed Deposits
The Company has not accepted any fixed deposit during
the year.
Directors
Shri U. Mahesh Rao ceased to be the Director of the Company
with effect from 17th June, 2003, on the withdrawal of his
nomination by General Insurance Corporation of India (GIC).
Your Board placed on record its deep appreciation for the
valuable advice and guidance given by him to the Company
during his tenure as Nominee Director of GIC.
Shri M.L. Bhakta, Dr. D.V. Kapur and Shri M.P.Modi, retire
by rotation and being eligible, offer themselves for
reappointment at the ensuing Annual General Meeting.
46
Reliance Industries Limited
GROWTH IS LIFE
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)
(ii)
in the preparation of the annual accounts the applicable
accounting standards have been followed;
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, 2004 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 records in
accordance with the provisions of the Companies Act,
1956 for safeguarding the assets of the Company and
for preventing and detecting fraud and other
irregularities; and
(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 and Auditors' Report
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
and also that they are not otherwise disqualified within the
meaning of sub section (3) of Section 226 of the Companies
Act, 1956, for such appointment.
The notes to the accounts referred to in the Auditors' Report
are self-explanatory and therefore do not call for any further
comments.
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 appointments of Shri S.N.
Bavadekar, Cost Accountant, for conducting the cost audit
for the Textiles, Polyester and a part of Chemicals
businesses and Messrs V.J. Talati & Co., Cost Accountants,
for conducting the cost audit of a part of the Chemicals
business for the financial year ended on 31st March, 2004.
International Accountants
The report submitted by Messrs Deloitte Haskins & Sells,
member firm of Deloitte Touche Tohmatsu (DTT), appointed
as International Accountants of the Company, for the year
under review to the Board of Directors, is circulated with
this report for the information of members.
Personnel
As required by the provisions of Section 217(2A) of the
Companies Act, 1956, read with 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 the aforesaid information. Any
shareholder interested in obtaining such particulars may
write to the Company Secretary at the Registered Office of
the Company.
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
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.
Delisting
In accordance with the approval granted by the shareholders,
the Company has got its equity shares delisted from the
Stock Exchanges at Ahmedabad, Bangalore, Chennai,
Cochin, Kanpur, New Delhi and Pune. The delisting from
the Stock Exchange at Kolkata is in an advanced stage and
the approval is expected to be received soon.
The Company's equity shares shall continue to be listed on
the Stock Exchange, Mumbai (BSE) and the National Stock
Exchange of India (NSE), which have nation-wide trading
terminals.
Acknowledgment
Your Directors would like to express their grateful
appreciation for the assistance and co-operation received
from 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.
For and on behalf of the Board of Directors
Mukesh D. Ambani
Chairman & Managing Director
Mumbai
Dated: 29th April, 2004.
Reliance Industries Limited
47
GROWTH IS LIFE
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
The Company provides high priority to energy
conservation schemes to conserve natural resources
and remain globally competitive. Energy audits and
benchmarking studies are done regularly to identify
areas for energy savings. Energy benchmarking of the
Refinery for the year 2003 conducted by Shell indicated
lowest corrected Energy Index and Energy & Loss
Index. Some of the major energy conservation
measures carried out during the year by the Company
are listed below:
1.
2.
3.
Substitution of higher pressure steam by lower
pressure steam in process heating applications
in various plants like purification crystalliser in PTA
plant, dryer in PVC plant, draw chest and steam
box in PSF plant and stripping column and quench
AHUs in POY plant.
Elimination of double pumping of fluids in various
services like raw water and DM water service in
CPP plant and acetic acid service in PTA plant.
Substitution of costlier fuel with cheaper fuel like
use of FCC gas in GTs and HRSGs instead of
Naphtha.
4. Operational improvements like replacement of
solid metallic fan blades with hollow FRP fan
blades, double sealing arrangement in GT bypass
stack damper, process optimization by addition
of catalyst in slurry mix tank, online water wash of
GT air compressor, installation of additional
depropaniser column in Cracker plant and
modification of CGC discharge line in Cracker
plant.
5.
6.
Improvement in efficiency of pumps in PE and
MEG plants and reduction in excess flow from
eductor circulation pump in VCM plant.
in electrical systems
like
Improvement
replacement of filament type indication lamps in
MCC panel by LED type in MEG plant and
replacement of conventional chokes by new
generation electric chokes in MEG plant.
(b) Additional
Investment
/ proposals being
implemented for reduction of consumption of
Energy
1.
Usage of lower pressure steam in place of high
pressure steam like use of flash steam in stripper
of PE-I &II and import of LP steam in place of MP
steam letdown in MEG plant.
2. Operational improvements like installation of
condensate pot for MEG column reboiler,
optimization of feed tray location in Hiboil column
in VCM plant, use of hot recycle solvent to preheat
reactor feed in PE-II plant, installation of second
effluent desalter wash water exchanger and
detailed pinch study in Crude oil exchanger
network to improve pre-heat.
Pump efficiency improvements like cooling water
pumps internal coating, and optimization of BFW
pumping system.
Steam system improvements like recovery of
phase-1 boiler blow down and reduction of dilution
steam generator blow-down by using exchanger
in Cracker plant.
3.
4.
(c) Impact of measures at (a) & (b) above for reduction
in consumption of energy and on the cost of
production of goods
1.
2.
As a result of various energy conservation
measures taken, the Company saved energy
equivalent to Rs.115 crores per annum.
The additional investment / proposals being
implemented for reduction in energy consumption
have potential to reduce energy consumption
equivalent to Rs.123 crore per annum.
(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 the research and
development (R & D) carried out by the Company
(i)
Improved Chemical formulation for caustic tower
anti-polymerant trials in Cracker plant.
(ii) Development of process for manufacturing P-
diethyl Benzene from mixed Xylenes using in-
house available equipments.
(iii) Development of analytical method for determining
Sulphur impurities in feed ethylene to EO reactor
at ppb level in MEG plant.
(iv) Completion of Organic Stripping Column (OSC)
modification for burning volatile organic
components from Esterification process in
Dowtherm vaporizers.
(v) New Generation bottle grade PET manufacturing
technology. Full scale commercial unit installation
and research initiatives based on the initial
production trials – both at commercial plant at
Hazira and pilot plant at Reliance Technology
Center (RTC), Patalganga.
48
Reliance Industries Limited
GROWTH IS LIFE
(vi) Modification of catalyst properties to suit the
requirements of PP plants at Hazira and
Jamnagar.
(vii) Addition of new section in catalyst plant to treat
the waste gases.
(viii) Additional facility of Bulk Polymerization for Relcat
10X.
(ix) Developed fluorescent shades on polyester
fabrics for use as safety outerwear fabrics.
(x) Developed extended laundering colourfast fabrics
for institutional/up-market requirement using
dope-dyed fibres.
(xi) Standardization flame-retardant, Water & Oil
repellent finishes on PW blends.
(xii) Development of oil & water repellent finish on
Lycra-stretch fabrics for International Market.
(xiii) Development & manufacturing of very high
colour-fast Polyester-viscose blends for uniform
fabrics.
(xiv) Development of Moisture-management finish on
synthetic blended suiting fabrics.
b. Benefits derived as a result of above efforts
(i) Chemical formulation for caustic tower anti-
polymerant trials in cracker plant, potential benefit
of Rs. 60 lacs/year.
(ii) Production of p- diethyl benzene will give value
addition in aromatics plant to the tune of Rs. 1.5
crore/annum
(iii) Development of analytical method for determining
Sulphur impurities in feed ethylene to EO reactor
at ppb level in MEG plant resulted in optimization
of the run length of Sulphur guard bed.
(iv) Organic Stripper Column Modification resulted in
the safe disposal hazardous and toxic organic
components.
(v) Treatment of waste gases in Catalyst plant
resulted in improved environment and working
atmosphere.
(vi) Bulk polymerization will be used for evaluation of
each batch of catalyst at the identical condition,
which will be helpful in outside RIL sale of catalyst.
(vii) Providing invertor driven back-up Chilled Water
Pump resulting in benefit of Rs. 16.98 lakhs per
year.
(viii) Integration of Old & New Chilled Water systems
resulting in benefit of Rs. 54.43 lakhs per year.
(ix) Providing invertor on Service Water pump B motor
resulting in benefit of Rs. 9.4 lakhs per year.
(x) Reduction of pressure drop in instrument air
system by replacement of chiller resulting in
benefit of Rs. 20 lakhs per year.
(xi) Produced V.high colourfast Polyester-Rayon
blends for Institutional/Defence uniform fabrics.
(xii) Standardized high performance flame-retardant,
water & oil repellent fabrics finishes.
(xiii) Produced stain-repellent Lycra-stretch fabrics for
active & leisurewear end use.
(xiv) Produced comfort Polyester blends by moisture
management finishing technique.
c. Future plan of action
(i) Development of Water-proof, weather colour-fast
fabrics for outdoor application.
(ii) Standardization of Lycra-plied yarn through
assembly winding & TFO twisting route.
(iii) Development of Chintz finishes by standardisation
of wet & dry finishing processes.
(iv) Development of advance finishes having stain-
repellent & stain-release properties together.
(v) Standardization and development of tri-blends
fabrics using Polyester-Wool & Rayon for
International market.
(vi) Study and dyeing process improvisation of wool-
dyeing cycle to minimize wool-felting and
reduction in waste.
d. Expenditure on R & D
Rs. in crore
a) Capital
b) Recurring
Total
c)
Total R & D as a percentage
of total turnover
14.50
19.09
33.59
0.06
2. Technology absorption, adaptation and innovation
a. Efforts made towards technology absorption,
adaptation and innovation:
Imported technologies have been successfully
absorbed resulting in high production level in
operations. New product developments were also done
to meet the customer demand and to increase the
customer base of the Company. Technologies
innovations have been successfully implemented to
increase production and reduce consumptions of raw
materials, catalysts, chemicals and utilities. Some such
innovations are as under :
(i) New Depropaniser column was installed to reduce
propylene loss from propylene tower.
(ii)
Increasing Oxy load and carrying out minor
modifications increased VCM plant capacity from
900 MTPD to 933 MTPD.
(iii) Volumetric loading increased in PVC reactor from
94% to 96% for K 57 & K 60 grade.
(iv) Advanced process control has been successfully
implemented in LLDPE plant distillation sections
to optimize operations.
Reliance Industries Limited
49
GROWTH IS LIFE
(v) Operating conditions modified and additive
changed in PP random grade application to reduce
odor in the product and volatiles.
(vi) Rate of PP production increased by change in
controlling catalyst particle size at catalyst plant
and rotary feeder modified to improve reliability
of operation.
(vii) Antimicrobial fibrefill product developed for high
performance applications.
(viii) In CPP plant EMS upgraded with
the
implementation of Active and Reactive power
control system.
(ix) Retrol firing established in all GT’s and HRSG’s
to substitute costlier naphtha firing.
b. Benefits derived as a result of the above efforts
(i) Capacity enhancement /New grade development
/ Improvement and Cost reduction has resulted in
benefits of approximately Rs. 90 crore per annum.
(ii)
Import substitution
• Reduced import of EDC by sustained
production in HTDC reactor resulted in benefits
of Rs. 19 crore per annum.
•
Indigenous C8-C10 in PE plant has resulted in
Rs. 1.3 crore per annum.
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
Paraxylene
UOP Inter America
Inc.-U.S.A.
1998
1999
Polypropylene
Union Carbide U.K.
1999
Full
Full
Full
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
1. Activities relating to export, initiatives taken to
increase exports, Development of New export
markets for Products and Services and Export
Plan.
The Company has continued to maintain focus and
avail of export opportunities based on economic
considerations. During the year the Company has
exports (FOB value) worth Rs. 11,817.54 crore
(US $ 2703.16 million).
2.
Total Foreign exchange used and earned
Rs. in crore
a.
b.
Total Foreign Exchange earned
11,823.55
Total savings in foreign exchange
39,654.26
through products manufactured by
the Company and deemed exports
(US$ 9,071 million)
Subtotal (a+b)
c.
Total Foreign Exchange used
51,477.81
34,979.70
Form ‘A’
Form for disclosure of particulars with respect to
conservation of energy
A. Power & Fuel Consumption
2003-04
2002-03
1
Electricity
a) Purchased Units (lacs)
59.73
45.71
Total Cost (Rs. in crore)
Rate/Unit (Rs.)
2.83 #
4.73
2.03
4.44
b) Generation by/through
captive power facilities
through Steam Turbine/Generator
Units (lacs)
KWH per unit of fuel
Total Cost (Rs. in crore)
Cost/Unit (Rs.)
c) Own Generation
23,303.06
4.68
693.32
2.98
22,540.20
5.45
614.58
2.73
1) Through Diesel Generator
Units (lacs)
KWH per unit of fuel
Fuel Cost/Unit (Rs.)
22.46
3.71
4.97
62.18
6.04
2.13
2) Through Steam
Turbine/Generator
Units (lacs)
KWH per unit of fuel
Fuel Cost/Unit (Rs.)
2
3
Coal
Quantity (tonnes)
Total Cost (Rs. in crore)
Average rate per Unit (Rs.)
Furnace Oil
Quantity (K. Ltrs)
Total Cost (Rs. in crore)
Average rate per Ltr. (Rs.)
4
Diesel Oil / GT Fuel
23,467.93
5.11
2.17
24,333.34
4.15
1.91
NIL
NIL
NIL
NIL
NIL
NIL
160,443.13 146,391.24
133.65
9.13
155.23
9.68
Quantity (K.Ltrs)
Total Cost (Rs. in crore)
Average rate per Ltr. (Rs.)
1,057,418.951,208,203.28
1,019.65
8.44
892.96
8.44
5 Others
Gas
Quantity (1000 M3)
Total Cost (Rs. in crore)
Average rate per 1000M3 (Rs.)
# Excluding Demand Charges
1,168,581.661,128,823.35
1,043.35
9,242.83
1,084.05
9,276.61
50
Reliance Industries Limited
B. Consumption per unit of Production
GROWTH IS LIFE
Product
Electricity (KWH)
HSD/ HFHSD (Ltrs)
Furnace Oil/
LSHS (kgs)
Gas (SM3)
Current
Year
Previous Current
Previous Current
Previous Current
Year
Year
Year
Year
Year
Year
Previous
Year
Fabrics ( Per 1000 mtrs)
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)
3,979
733
476
388
623
583
531
325
327
721
138
287
269
59
4,282
840
480
389
627
584
540
327
329
855
144
301
270
61
3
65
49
8
84
-
-
-
-
-
-
-
17
-
2
65
47
8
307
-
-
-
-
-
-
-
17
-
-
1
1
-
348
-
-
-
-
-
-
-
-
-
-
12
10
-
207
-
-
-
-
-
-
-
-
-
580
45
24
-
-
-
-
-
0
53
-
73
0
0
641
-
-
-
-
-
-
-
0
352
-
-
0
0
Mumbai
Dated: 29th April, 2004.
For and on behalf of the Board of Directors
Mukesh D. Ambani
Chairman & Managing Director
Auditors’ Certificate on Corporate Governance
To the Members of
RELIANCE INDUSTRIES LIMITED
We have examined the compliance of conditions of
Corporate Governance by Reliance Industries Limited, for
the year ended on 31st March, 2004, as stipulated in Clause
49 of the Listing Agreement of the said Company with stock
exchanges.
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 to the explanations given to us, and based on
For Chaturvedi & Shah
Chartered Accountants
D.Chaturvedi
Partner
Membership No.: 5611
Mumbai
Dated: 29th April 2004
the 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
Membership No.: 7586
Reliance Industries Limited
51
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, 2004 and the Profit
and Loss Account for the year ended on that date annexed
thereto and Cash Flow Statement for the year 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 Auditing
Standards generally accepted in India. Those standards
require that we plan and perform the audit to obtain
reasonable assurance about whether the 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.
2. As required by the Companies (Auditor’s Report) Order
2003 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;
For Chaturvedi & Shah
Chartered Accountants
D. Chaturvedi
Partner
Membership No.: 5611
Mumbai
Dated: 29th April, 2004
c)
d)
e)
f)
The Balance Sheet, Profit Loss Account and Cash
Flow Statement dealt with by this report are in
agreement with the books of account;
In our opinion the Balance Sheet, Profit and Loss
Account and Cash Flow Statement dealt with by
this report comply with the mandatory Accounting
Standards referred in sub-section (3C) of section
211 of the Companies Act, 1956;
In our opinion, and based on information and
explanations given to us, none of the directors are
disqualified as on 31st March, 2004 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 accounts 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)
In so far as it relates to Balance Sheet, of the
state of affairs of the Company as at 31st
March, 2004;
(ii) In so far as it relates to the Profit and Loss
Account, of the Profit of the Company for the
year ended on that date; 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 Rajendra & Co.
Chartered Accountants
R. J. Shah
Partner
Membership No.: 7586
52
Reliance Industries Limited
GROWTH IS LIFE
Annexure to Auditors’ Report
Referred to in Paragraph 2 of our report of even date
1.
In respect of its fixed assets:
a. The Company has maintained proper records
showing full particulars including quantitative details
and situation of fixed assets on the basis of available
information.
b. As explained 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 its assets. No material
discrepancies were noticed on such physical
verification.
c.
In our opinion, the Company has not disposed of
substantial part of fixed assets during the year and
the going concern status of the Company is not
affected.
2.
In respect of its inventories:
a. As explained to us, inventories have been physically
verified by the management at regular intervals
during the year.
b.
In our opinion and according to the information and
explanations given to us, the procedures of physical
verification of inventories followed by the
management are reasonable and adequate in
relation to the size of the Company and the nature
of its business.
c. The Company has maintained proper records of
inventories. As explained to us, there were no
material discrepancies noticed on physical
verification of inventory as compared to the book
records.
3.
In respect of loans, secured or unsecured, granted or
taken by the Company to/from companies, firms or other
parties covered in the register maintained under Section
301 of the Companies Act, 1956:
a. The Company has granted loans to two parties
aggregating to Rs. 1,112.05 crore and taken loans
from one party aggregating to Rs. 1,175.00 crore
during the year.
b.
c.
In our opinion and according to the information
and explanations given to us, the rate of interest,
wherever applicable and other terms and
conditions are not prima facie prejudicial to the
interest of the Company.
In respect of loans granted by the Company to
one party, the amount has been repaid during the
year. In respect of the other party, a wholly owned
subsidiary of the Company, the loan is interest-
free and is repayable on demand. In respect of
loans taken by the Company, the interest
payments are regular and the principal amount is
repayable on demand.
d. There is no overdue amount in respect of loans
taken by the Company. In respect of loans given
by the Company, these are repayable on demand
and therefore the question of overdue amounts
does not arise.
4.
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 inventory, fixed assets and also for the
sale of goods. During the course of our audit, we have
not observed any major weaknesses in internal controls.
5.
In respect of transactions covered under Section 301
of the Companies Act, 1956:
a.
b.
In our opinion and according to the information and
explanations given to us, the transactions made in
pursuance of contracts or arrangements, that
needed to be entered into in the register maintained
under Section 301 of the Companies Act, 1956 have
been so entered.
In our opinion and according to the information and
explanations given to us, there are no transactions
in pursuance of contracts or arrangements entered
in the register maintained under Section 301 of the
Companies Act, 1956 aggregating during the year
to Rs. 5,00,000/- (Rupees Five Lacs only) or more
in respect of any party.
6. The Company has not accepted any deposits from the
public.
7.
In our opinion, the internal audit system of the Company
is commensurate with its size and nature of its business.
8. 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.
9.
In respect of statutory dues:
a. According to the records of the Company,
undisputed statutory dues including Provident Fund,
Investor Education and Protection Fund,
Employees’ State Insurance, Income-Tax, Sales-
tax, Wealth Tax, Customs Duty, Excise Duty, Cess
and other statutory dues have been generally
regularly deposited with the appropriate authorities.
According to the information and explanations given
to us, no undisputed amounts payable in respect
of the aforesaid dues were outstanding as at 31st
March, 2004 for a period of more than six months
from the date of becoming payable.
Reliance Industries Limited
53
GROWTH IS LIFE
b. The disputed statutory dues aggregating to Rs.
530.93 crore, that have not been deposited on
account of matters pending before appropriate
authorities are as under:
13.
In our opinion, the Company is not a chit fund or a
nidhi /mutual benefit fund/ society. Therefore, clause
4(xiii) of the Companies (Auditor’s Report) Order 2003
is not applicable to the Company.
Sr. Name of the
No. statute
Nature of the
Dues
1.
Income Tax Act,
1961
Income-Tax
2. Central Excise Act,
1944
Excise Duty
and Service
Tax
Forum where
dispute is
pending
Commissioner of
Income-Tax
(Appeals)
Commissioner of
Central Excise
CEGAT
High Court
Supreme Court
3. Central Sales Tax
Act and Sales Tax
Act of various states
Sales Tax
Commissioner
(Appeals)
Appellate Tribunal
High Court
4. Customs Duty Act
Customs Duty
CEGAT
Amount
(Rs. in crore)
220.61
28.98
62.37
16.21
14.66
116.35
6.55
22.15
43.05
TOTAL:
530.93
10. The Company has no accumulated losses and has
not incurred any cash losses during the financial year
covered by our audit or in the immediately preceding
financial year.
11. Based on our audit procedures and according to the
information and explanation given to us, we are of the
opinion that the Company has not defaulted in
repayment of dues to financial institutions, banks or
debenture holders.
12.
In our opinion and according to the information and
explanation given to us, no loans and advances have
been granted by the Company on the basis of security
by way of pledge of shares, debentures and other
securities.
14. The Company has maintained proper records of
transactions and contracts in respect of trading in
securities, debentures and other investments and
timely entries have been made therein. All shares,
debentures and other investments have been held by
the Company in its own name.
15. The Company has given guarantees for loans taken
by others from banks or financial institutions. According
to the information and explanations given to us, we
are of the opinion that the terms and conditions thereof
are not prima-facie prejudicial to the interests of the
Company.
16. The Company has not raised any new term loans
during the year. The term loans outstanding at the
beginning of the year were applied for the purposes
for which they were raised.
17. According to the information and explanations given
to us and on an overall examination of the Balance
Sheet of the Company, we are of the opinion that the
Company has utilised Rs 5,032.46 crore from short
term sources towards repayment of long-term
borrowings and acquisition of fixed assets.
18. During the year, the Company has not made any
preferential allotment of shares to parties and
companies covered in the Register maintained under
Section 301 of the Companies Act, 1956.
19. The Company has created securities in respect of
debentures issued.
20. The Company has not raised any money by way of
public issue during the year.
21.
In our opinion and according to the information and
explanations given to us, no fraud on or by the
Company has been noticed or reported during the year,
that causes the financial statements to be materially
misstated.
For Chaturvedi & Shah
Chartered Accountants
D. Chaturvedi
Partner
Membership No.: 5611
Mumbai
Dated: 29th April, 2004
For Rajendra & Co.
Chartered Accountants
R. J. Shah
Partner
Membership No.: 7586
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 at 31st March, 2004, 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
The management of the Company is responsible for the
preparation of these financial statements. The 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 judgements made by the
management in the preparation of the financial statements
and whether the accounting policies are appropriate to the
circumstances to the Company, consistently applied and
adequately disclosed. We planned and performed audit so
as to obtain all information and explanation, 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 accounts 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, 2004;
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
Membership No. 15291
Mumbai
Dated: 29th April, 2004
Reliance Industries Limited
55
GROWTH IS LIFE
Balance Sheet as at 31st March, 2004
Schedule
As at
31st March, 2004
(Rs. in crore)
As at
31st March, 2003
SOURCES OF FUNDS
Shareholders’ Funds
Share Capital
Reserves and Surplus
Loan Funds
Secured Loans
Unsecured Loans
Deferred Tax Liability
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
Miscellaneous Expenditure
(to the extent not written off or adjusted)
TOTAL
Significant Accounting Policies
Notes on Accounts
1,395.95
33,056.50
11,451.14
9,493.52
53,502.91
21,713.74
31,789.17
3,356.81
7,231.22
3,046.38
224.24
995.15
11,496.99
10,543.06
22,040.05
11,312.32
973.18
12,285.50
‘A’
‘B’
‘C’
‘D’
‘E’
‘F’
‘G’
‘H’
‘I’
‘N’
‘O’
1,395.92
28,978.49
34,452.45
30,374.41
11,776.86
7,981.45
20,944.66
3,474.82
58,871.93
19,758.31
2,684.82
52,817.54
50,552.99
18,461.16
32,091.83
1,994.44
35,145.98
13,971.40
34,086.27
6,722.72
7,510.41
2,998.11
147.21
562.06
11,217.79
11,139.33
22,357.12
9,490.89
904.83
10,395.72
9,754.55
11,961.40
_
47.15
58,871.93
52,817.54
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: 29th April, 2004
M. D. Ambani
A. D. Ambani
N. R. Meswani
H. S. Kohli
R. H. Ambani
M. L. Bhakta
T. R. U. Pai
Y. P. Trivedi
Dr. D. V. Kapur
M. P. Modi
S. Venkitaramanan
V. M. Ambani
-
-
Chairman & Managing Director
Vice-Chairman & Managing Director
} Executive Directors
}
Directors
-
Company Secretary
56
Reliance Industries Limited
Profit and Loss Account for the year ended 31st March, 2004
GROWTH IS LIFE
Schedule
2003-04
(Rs. in crore)
2002-03
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
245.90
624.00
4,104.31
2,726.23
_
_
_
_
6,830.54
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’
74,417.90
18,170.87
56,247.03
4,445.50
65,061.44
14,965.63
50,095.81
4,198.02
51,801.53
1,138.05
(605.41)
52,334.17
2,218.28
39,133.01
1,434.72
3,331.39
84.37
3,452.79
615.70
3,247.02
46,033.03
6,301.14
351.00
790.00
5,160.14
3,343.06
10.00
(23.03)
850.00
76.63
9,416.80
Profit Before Tax
Provision for Current Tax
Provision for Deferred Tax
Profit after Tax
Add: Balance brought forward from Previous year
Taxation Reserve Written Back
Taxation for Earlier Years
Debenture Redemption Reserve Written Back
Investment Allowance (utilised) Reserve Written Back
Amount Available for Appropriations
APPROPRIATIONS
Capital Redemption Reserve
Debenture Redemption Reserve
General Reserve
Interim Dividend on Preference Shares (paid)
Proposed Dividend on Equity Shares
Tax on Dividend
_
_
3,000.00
_
733.10
91.64
Balance Carried to Balance Sheet
Basic and Diluted Earning per Share of
Rs 10 each (in Rupees)
[Ref. Note 11, Schedule ‘O’]
400.00
279.75
2,000.00
20.08
698.19
89.46
3,824.74
5,592.06
3,487.48
3,343.06
36.79
29.25
Significant Accounting Policies
Notes on Accounts
As per our Report of even date
‘N’
‘O’
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: 29th April, 2004
M. D. Ambani
A. D. Ambani
N. R. Meswani
H. S. Kohli
R. H. Ambani
M. L. Bhakta
T. R. U. Pai
Y. P. Trivedi
Dr. D. V. Kapur
M. P. Modi
S. Venkitaramanan
V. M. Ambani
-
-
Chairman & Managing Director
Vice-Chairman & Managing Director
} Executive Directors
}
Directors
-
Company Secretary
Reliance Industries Limited
57
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
SCHEDULE ‘A
SHARE CAPITAL
Authorised:
As at
31st March, 2004
(Rs. in crore)
As at
31st March, 2003
250 00 00 000 Equity Shares of Rs. 10 each
(250 00 00 000)
50 00 00 000 Preference Shares of Rs. 10 each
(50 00 00 000)
Issued, Subscribed and Paid up:
139 63 77 536 Equity Shares of Rs. 10 each fully 1,396.38
(139 63 77 536) paid up
Less: Calls in arrears - by others 0.43
TOTAL
Notes:
1 Of the above Equity Shares:
2,500.00
500.00
3,000.00
1,395.95
1,395.95
2,500.00
500.00
3,000.00
1,396.38
0.46
1,395.92
1,395.92
(a)
48 17 70 552 Shares were allotted as Bonus Shares by capitalisation of Share Premium and Reserves.
(48 17 70 552)
(b)
52 31 98 799 Shares were allotted pursuant to Schemes of Amalgamation without payments
(52 31 98 799) 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 Shares were allotted on conversion / surrender of Debentures and Bonds, conversion of Term
(33 04 27 345) 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).
58
Reliance Industries Limited
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
SCHEDULE ‘B’
RESERVES AND SURPLUS
As at
31st March, 2004
(Rs. in crore)
As at
31st March, 2003
Revaluation Reserve
As per last Balance Sheet
Less: Deduction on retirement of Revalued Assets
2,735.81
2.28
2,738.50
2.69
Capital Reserve
As per last Balance Sheet
Capital Redemption Reserve
2,733.53
2,735.81
291.28
291.28
As per last Balance Sheet
Add: Transferred from Profit and Loss Account
885.07
_
485.07
400.00
Securities Premium Account
As per last Balance Sheet
Less: Premium on Redemption of Debentures/Bonds
Less: Calls in arrears - by others
Debentures Redemption Reserve
885.07
885.07
15,973.02
147.95
15,825.07
2.31
16,153.81
180.79
15,973.02
2.55
15,822.76
15,970.47
As per last Balance Sheet
Add: Transferred from/ (to) Profit and Loss Account
1,400.02
(850.00)
1,120.27
279.75
550.02
1,400.02
Investment Allowance (Utilised) Reserve
As per last Balance Sheet
Less: Transferred to Profit and Loss Account
76.63
76.63
Taxation Reserve
As per last Balance Sheet
Less: Transferred to Profit and Loss Account
10.00
10.00
General Reserve
As per last Balance Sheet
Less: Transferred to Profit and Loss Account*
[Refer Note 3, Schedule ‘O’]
Add: Transferred from Profit and Loss Account
4,266.15
84.37
4,181.78
3,000.00
Profit and Loss Account
76.63
10.00
_
_
76.63
_
10.00
_
2,881.85
615.70
2,266.15
2,000.00
7,181.78
5,592.06
4,266.15
3,343.06
TOTAL
33,056.50
28,978.49
* Cumulative amount transferred on account of Depreciation on Revaluation
Rs. 2,502.36 crore (Previous Year Rs. 2,417.99 crore)
Reliance Industries Limited
59
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
SCHEDULE ‘C’
SECURED LOANS
A.
DEBENTURES
1.
Non Convertible Debentures
2.
Deep Discount Debentures
Less: Unamortised Discounts
B.
TERM LOANS
From Financial Institution
Rupee Loans
C. WORKING CAPITAL LOANS
From Banks
Rupee Loans
TOTAL
As at
31st March, 2004
(Rs. in crore)
As at
31st March, 2003
9,308.58
600.00
11.79
588.21
10,037.08
607.50
83.63
523.87
9,896.79
10,560.95
_
23.64
1,554.35
1,192.27
11,451.14
11,776.86
1.
(a) Debentures referred to in A above to the extent of Rs. 5,330.54 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. 881.25 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. 30.00 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. 3,655.00 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 are redeemable at par, in one or more instalments, on various dates with the earliest
redemption being on 31st May, 2004 and the last being on 24th November, 2018. The debentures are redeemable as
follows: Rs.1,204.04 crore in financial year 2004-05, Rs.942.40 crore in financial year 2005-06, Rs.1,287.40 crore in
financial year 2006-07, Rs.1,774.15 crore in financial year 2007-08, Rs.1,377.00 crore in financial year 2008-09, Rs.861.80
crore in financial year 2009-10, Rs.175.00 crore in financial year 2010-11, Rs. 250.00 crore in financial year 2011-12,
Rs. 725.00 crore in financial year 2012-13, Rs. 383.33 crore in financial year 2013-14, Rs. 383.34 crore in financial year
2014-15, Rs. 133.33 crore in financial year 2015-16, Rs.133.33 crore in financial year 2016-17, Rs.133.33 crore in financial
year 2017-18 and Rs.133.34 crore in financial year 2018-19.
2. 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 receivables of Oil and Gas Division.
SCHEDULE ‘D’
UNSECURED LOANS
A.
Long Term
i)
ii)
From Banks
From Others
B.
Short Term
From Banks
TOTAL
As at
31st March, 2004
(Rs. in crore)
As at
31st March, 2003
4,064.12
1,796.83
5,851.50
1,979.95
5,860.95
7,831.45
3,632.57
9,493.52
150.00
7,981.45
60
Reliance Industries Limited
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
SCHEDULE ‘E’
FIXED ASSETS
Description
As at
01-04-2003
Additions
Deductions /
Adjustments
As at
31-03-2004
As at
01-04-2003
For the
Year
Deductions /
Adjustments
Upto
As at
31-03-2004 31-03-2004
As at
31-03-2003
Gross Block
Depreciation
(Rs. in crore)
Net Block
OWN ASSETS :
Leasehold Land
Freehold Land
Development Rights /
Producing properties
Buildings
Plant and Machinery
Electrical Installations
Equipments
Furniture and Fixtures
Vehicles
Ships
Aircrafts and Helicopters
Jetties
56.79
230.50
1.63
35.69
1,056.46
2,724.36
41,953.48
776.74
655.08
199.50
138.22
214.78
46.92
646.97
1,191.45
121.44
1,040.52
173.92
196.86
31.36
20.24
46.06
182.83
_
_
0.02
_
1.46
82.17
0.13
0.58
0.65
15.23
_
_
_
58.42
266.17
2,247.91
2,844.34
42,911.83
950.53
851.36
230.21
143.23
260.84
229.75
646.97
4.72
_
0.53
_
_
_
5.25
_
53.17
266.17
52.07
230.50
434.03
628.11
15,623.17
414.26
212.22
96.37
61.21
168.31
32.68
133.44
109.22
98.14
2,711.13
47.30
47.61
20.62
19.73
7.55
26.30
96.23
_
0.36
65.77
0.04
0.28
0.40
11.96
_
_
_
543.25
725.89
1,704.66
2,118.45
18,268.53 24,643.30
489.01
591.81
113.63
74.25
84.98
170.77
417.30
461.52
259.55
116.59
68.98
175.86
58.98
229.67
622.43
2,096.25
26,330.31
362.48
442.86
103.13
77.01
46.47
14.24
513.53
Sub-Total
48,699.80
3,042.00
100.24
51,641.56
17,808.52 3,184.36*
78.81
20,914.07 30,727.50
30,891.28
LEASED ASSETS :
Plant and Machinery
Ships
Sub-Total
INTANGIBLE ASSETS **
Technical Knowhow fees #
Software #
Sub-Total
Total
15.49
9.98
25.47
1,741.88
85.84
1,827.72
_
_
_
_
8.16
8.16
_
_
_
_
_
_
15.49
9.98
25.47
8.74
3.65
12.39
2.87
2.00
4.87
1,741.88
94.00
610.84
29.41
122.19
19.97
1,835.88
640.25
142.16
_
_
_
_
_
_
11.61
5.65
17.26
3.88
4.33
8.21
6.75
6.33
13.08
733.03
49.38
1,008. 85
44.61
1,131.04
56.43
782.41
1,053.46
1,187.47
50,552.99
3,050.16
100.24
53,502.91
18,461.16
3,331.39
78.81
21,713.74 31,789.17
32,091.83
Previous Year
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
Capital Work-in-Progress
3,356.81
1,994.44
NOTES :
a) Leasehold Land includes Rs. 0.21 crore (Previous Year Rs. 0.21 crore) in respect of which lease-deeds are pending
execution.
b) Buildings include :
i) Cost of shares in Co-operative Societies Rs. 0.01 crore (Previous Year Rs. 0.01 crore).
ii) Rs. 93.20 crore (Previous Year Rs. 93.20 crore) incurred towards purchase/ acquisition of 1,94,819 Equity Shares of
Re. 1 each of M/s Mature Trading and Investments Private Limited with a right of occupancy of certain area of a
commercial premises.
c) Capital-work-in progress includes :
i) Rs.112.62 crore on account of pre-operative expenses (Previous Year Rs.76.47 crore)
ii) Rs. 271.82 crore on account of cost of construction materials at site. (Previous Year Rs.133.97 crore)
iii) Rs.1170.91 crore on account of advance against capital expenditure. (Previous Year Rs. 279.18 crore)
d) Additions and Capital work in Progress is net of Rs.12.98 crore on account of exchange difference during the year. (Previ-
ous Year Rs.13.91 crore)
e) 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. 2,733.53 crore (Previous year Rs. 2,735.81 crore) being the amount added on revaluation of
Plant and Machinery as at 01-04-1997.
* Refer to Note 3 , Schedule ‘O’
** Intangible assets are re-grouped from Plant and Machinery and Equipments
# Other than internally generated
Reliance Industries Limited
61
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
SCHEDULE ‘F’
INVESTMENTS
As at
31st March, 2004
(Rs. in crore)
As at
31st March, 2003
A. LONG TERM INVESTMENTS
Government and other Securities
Unquoted
Indira Vikas Patra
_
8,660 6.75% Tax free US64 Bonds of face 0.08
_
(-) value of Rs 100 each (Refer Note 1)
Kisan Vikas Patra
(Deposited with Sales Tax Department)
(Rs 20,000; Previous Year Rs 20,000)
7 Years National Savings Certificate
(Deposited with Sales Tax Dept.)
(Rs 12,000; Previous year Rs. 12,000)
Trade Investments
In Equity Shares Unquoted, fully paid up
5 Bombay Gujarat Art Silk Vepari Mahajan
(5) Co-operative Shops & Warehouse Society
Limited of Rs 200 each (Rs. 1,000;
Previous year Rs. 1,000)
60 New Piece Goods Bazar Co. Limited of
(60) Rs 100 each (Rs. 17,000;
Previous year Rs. 17,000)
15 Pandesara Industrial Co-operative
(15) Society Limited of Rs 100 each
(Rs. 1,500; Previous Year Rs. 1,500)
165 The Art Silk Co-operative Society Limited
(165) of Rs. 100 each (Rs. 16,500;
Previous year Rs. 16,500)
0.08
_
_
_
_
_
_
20 The Bombay Market Art Silk Co-operative
(20) (Shops & Warehouses)Society Limited of
1,00,00,000 Petronet India Limited of Rs. 10 each
Rs. 200 each (Rs. 4000; Previous year Rs. 4000) _
10.00
(1,00,00,000)
1,30,00,000 Petronet V.K. Limited of Rs. 10 each 13.00
(1,30,00,000)
10,66,000 Petronet C.I. Limited of Rs. 10 each 1.07
(10,66,000)
Petronet C.I. Limited -
Share Application Money
In Equity Shares Unquoted, Partly Paid up
225 Crimpers Industrial Co-operative
(225) Society Limited of Rs.100 each,
Rs. 25 Paid up (Rs. 5,625;
Previous Year Rs. 5,625)
1.87
25.94
_
_
Other Investments
In Equity Shares - Quoted, fully paid up
15,51,549 Reliance Energy Limited (Formerly 33.73
(15,51,549) BSES Limited) of Rs.10 each
(Company under the same management)
6,00,89,966 Reliance Capital Limited of Rs. 10 each
485.80
(6,00,89,966)
69,80,000 Reliance Industrial Infrastructure Limited
16.58
(69,80,000) of Rs. 10 each
536.11
62
Reliance Industries Limited
0.51
0.51
_
_
_
_
_
_
_
_
_
10.00
13.00
1.07
1.87
25.94
_
_
25.94
25.94
33.73
485.80
16.58
536.11
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
SCHEDULE ‘F’ (contd.)
INVESTMENTS
As at
31st March, 2004
(Rs. in crore)
As at
31st March, 2003
In Equity Shares - Unquoted, fully paid up
51,02,080 Reliance Telecom Limited of Rs 10 each
5.10
(51,02,080)
(31,50,00,000)
31,50,00,000 Reliance Infocomm Limited of Re 1 each
(Company under the same management)
(Refer Note 2)
2,55,00,175 Reliance General Insurance
(2,55,00,175) Company Limited of Rs 10 each
31.50
25.50
5,00,175 Reliance Life Insurance Company Limited
0.50
(5,00,175) of Rs. 10 each
5.10
31.50
25.50
0.50
90,00,00,000 Reliance Communications
2,331.00
2,331.00
2,397.54
2,397.54
(90,00,00,000)
Infrastructure Limited of Re 1 each
(Company under the same management)
1000 Air Control & Chemical Engineering Co.
(1000) Limited of Rs. 100 each
118 Reliance Petroproducts Private Limited
(118) of Rs. 10 each
(Rs. 1,180; Previous year Rs. 1,180)
0.01
_
11,08, 500 Reliance Europe Limited of
(11,08,500) Sterling Pound 1 each
145 Reliance Global Trading Private Limited
(145) of Rs. 10 each
(Rs. 1,450; Previous year Rs. 1,450)
3.93
_
In Equity Shares Unquoted, Partly Paid up
226 Reliance Global Trading Private Limited
(226) of Rs.10 each, Rs.2.50 paid up
(Rs.565; Previous Year Rs. 565)
182 Reliance Petroproducts Private Limited
_
_
(182) of Rs. 10 each, Rs.2.50 paid up
(Rs. 455; Previous Year Rs. 455)
In Preference Shares Unquoted, fully paid up
86,00,000 6% Cumulative Redeemable
(86,00,000) Preference Shares of
of Reliance Enterprise Limited of
Rs. 100 each (Refer Note 3)
- 14% Cumulative Redeemable
(2,18,90,000) Preference Shares of
_
86.00
_
Reliance Salgoacar Power Limited of
Rs. 10 each
- 9% Cumulative Redeemable
(12,69,000) Preference Shares of Goa Trading
Private Limited of Rs. 100 each
_
162,00,00,000 10% Cumulative Redeemble /Optionally
8,100.00
(-) convertible Preference Shares of Reliance
Infocomm Limited of Re. 1 each
(Company under the same management)
64,18,576 8% Cumulative Non-Convertible Redeemble
_
(-) Preference Shares of Reliance
Infocomm Limited of Re. 1 each
(Company under the same management)
(Refer Note 4)
0.01
_
3.93
_
_
_
_
86.00
21.89
12.69
_
_
8,186.00
120.58
Reliance Industries Limited
63
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
SCHEDULE ‘F’ (contd.)
INVESTMENTS
As at
31st March, 2004
(Rs. in crore)
As at
31st March, 2003
In Debentures Unquoted, fully paid up
6,40,140 Deep Discount Bonds of Reliance
1,600.02
1,600.02
(6,40,140) Communications Infrastructure Limited
of Maturity Value Rs. 68,550 each
(Previous Year Maturity value Rs. 1,00,000 each)
(Company under the same management)
13,752 Deep Discount Bonds of Reliable
(13,752) Internet Services Limited of Maturity
Value Rs. 1,00,000 each
70.00
70.00
1,670.02
1,670.02
12,789.67
4,724.25
In Equity Shares of Subsidiary Companies - Unquoted,
fully paid up
14,75,04,400 Reliance Industrial Investments and 147.50
147.50
(14,75,04,400) Holdings Limited of Rs.10 each
20,20,000 Reliance Power Venture Limited
2.02
(20,20,000) of Rs. 10 each
20,20,000 Reliance Ventures Limited of Rs. 10 each
2.02
(20,20,000)
11,120 Reliance Infocom BV of 100 Euro Each
(11,120)
20,20,200 Reliance Strategic Investments Limited
(20,20,200) of Rs. 10 each
- Reliance Technologies LLC (90% interest)
(-)
45,000 Reliance LNG Limited of Rs 10 each
(45,000)
50,000 Gas Transportation & Infrastructure
(-) Company Limited of Rs.10 each
4.48
2.02
_
0.05
0.05
2.02
2.02
4.48
2.02
_
0.05
_
158.14
158.09
In Preference Shares of Subsidiary Companies - Unquoted,
fully paid up
10,00,000 5% Cumulative Redeemable Non Convertible 10.00
(-) Preference Shares of Reliance
Ventures Limited of Re. 1 each
10.00
_
_
In Debentures of Subsidiary Companies- Unquoted,
fully paid up
2,79,90 000 8.25% Unsecured Convertible
279.90
279.90
(2,79,90,000) Debentures of Reliance
Industrial Investments and Holdings
Limited of Rs. 100 each
8,83,143 0% Unsecured Optionally Convertible
441.58
(8,83,143) Debentures of Reliance Industrial Investments
and Holdings Limited of Rs. 5000 each
(Refer Note 5)
721.48
441.58
721.48
Total (A)
889.62
13,705.31
879.57
5,630.27
64
Reliance Industries Limited
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
SCHEDULE ‘F’ (contd.)
INVESTMENTS
As at
31st March, 2004
(Rs. in crore)
As at
31st March, 2003
B. CURRENT INVESTMENTS
Other Investments in Units Quoted
- Units of Unit Scheme 1964, Unit Trust of India
(85,600) of Rs 10 each (Deposited with Mumbai
_
Port Trust) (Refer Note 1)
_
Other Investments in Units Unquoted
- Reliance Liquid Fund
(3,04,81,268) Cash Plan of Rs 10 each
- Reliance Liquid Fund - Treasury Plan of
(33,33,449) Rs 10 each
- Reliance Income Fund - Growth Plan of
(3,75,15,484) Rs. 10 each
_
_
_
77 696 Reliance Liquid Fund - Super Cash Plan of
0.09
(60,31,02,631) Rs 10 each
- Reliance Monthly Income Plan - Units of
(10,61,04,097) Rs 10 each
- Reliance Short Term Fund-Growth Plan of
(22,01,15,723) Rs 10 each
17,24,67,452 Reliance Liquid Fund Institutional
(-) Plan- Growth Plan of Rs. 10 each
_
_
266.00
0.08
0.08
32.70
4.88
70.01
622.07
139.84
222.87
_
266.09
1,092.37
Total ( B)
Total (A+B)
266.09
13,971.40
1,092.45
6,722.72
Notes:
1. Units of US 64 has been converted into 6.75% Tax Free US 64 Bonds of Face Value of Rs. 100 each
2. The Company has extended negative lien on 16,06,50,000 shares of Reliance Infocomm Limited to banks for
extending loans to an associate.
3. Maturity date of 6% Cumulative Redeemable Preference Shares of Reliance Enterprises Limited, due for
redemption on 1st October 2003, has been extended by ten years.
4. 8% Cumulative Redeemable Preference Shares of Reliance Infocomm Limited has been allotted pursuant to
the High Court order on demerger of the basic services division of Reliance Telecom Limited.
5.
Interest on Unsecured Optionally convertible Debentures of Reliance Industrial Investments and Holdings
Limited has been changed from 6.5% to 0% with effect from 1st April, 2003.
INVESTMENTS
AGGREGATE VALUE OF
Quoted Investments
Unquoted Investments
As at
31st March, 2004
Book Value Market Value
As at
31st March, 2003
Book Value Market Value
(Rs. in crore)
536.11
13,435.29
948.40
536.19
6,186.53
349.89
Reliance Industries Limited
65
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
SCHEDULE ‘F’ (contd.)
Movements during the year
Purchased and Sold
Assets Backed Notes
MBLRS TR9 ICICI SR-A
MBLRS TR9 ICICI SR-B
MBLRS TR9 ICICI SR-C
MBLRS TR10 ICICI SR-A
MBLRS TR10 ICICI SR-B
MBLRS TR11 ICICI
MBLRS TR12 ICICI SR-B
Government Securities
7.40% GOI 2012
7.46% GOI 2017
7.49% GOI 2017
9.81% GOI 2013
7.27% GOI 2013
8.07% GOI 2017
7.38% GOI 2015
6.85% GOI 2012
11.99% GOI 2009
6.05% GOI 2019
12.00% GOI 2008
6.25% GOI 2018
9.39% GOI 2011
5.64% GOI 2019
6.20% UTI 2010
11.83% GOI 2014
10.71% GOI 2016
7.37% GOI 2014
Treasury Bills
Face value
Rs.
Nos.
Cost
(Rs. in crore)
25 00 00 000
25 00 50 849
46 27 00 993
60 00 00 000
36 38 08 434
5 00 39 839
5 00 31 671
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
10
10
10
10
10
100
50
2 05 00 000
1 70 00 000
1 65 00 000
50 00 000
90 00 000
3 05 00 000
5 00 000
40 00 000
60 00 000
1 10 00 000
5 00 000
85 00 000
20 00 000
75 00 000
55 00 000
25 00 000
45 00 000
5 00 000
50 00 000
250.00
250.05
462.70
600.00
363.81
500.40
250.16
234.26
200.33
193.95
66.32
103.91
375.17
5.94
44.44
78.97
113.56
6.33
90.18
25.06
74.79
57.76
37.58
64.69
5.85
49.51
Face value
Rs.
Nos.
(In crore)
Cost
(Rs. in crore)
Mutual Fund Units
Reliance Liquid Fund - Treasury Plan Growth Option
Reliance Liquid Fund - Cash 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
Reliance Short Term Fund-Gilt Fund Units
Reliance Long Term Gilt Fund Units
RLF-Treasury Plan-Institutional-Growth Plan
RIF-Institutional Plan -Growth Plan
Reliance Medium Term Fund -Institutional Plan - Growth Plan
Reliance Long Term Gilt Fund -Institutional Plan Growth Option
Reliance Short Term Gilt Fund -Institutional Plan Growth Option
10
10
10
10
10
10
10
10
10
10
10
10
10
66
Reliance Industries Limited
46.88
201.20
46.64
1,468.84
5.15
24.23
13.32
160.85
92.47
36.85
6.17
61.94
2.12
709.00
2,198.10
926.00
15,484.92
70.00
258.03
135.00
1,680.50
1,411.80
741.98
86.25
650.07
21.89
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
SCHEDULE ‘G’
CURRENT ASSETS
INVENTORIES
Stores, Chemicals and Packing Material
Raw Materials
Stock-in-Process
Finished Goods / Traded Goods
SUNDRY DEBTORS (Unsecured) #
Over six months
Considered good
Considered doubtful
Less : Provision for doubtful debts
Others, considered good
CASH AND BANK BALANCES
Cash on hand
Balance with Banks
In Current Accounts :
with Scheduled Banks
With Others *
In Fixed Deposit Accounts :
With Scheduled Banks
OTHER CURRENT ASSETS:
Interest Accrued on Investments @
Premium Accrued on Investments in Preference Shares $
TOTAL
As at
31st March, 2004
(Rs. in crore)
As at
31st March, 2003
839.97
2,881.83
752.38
2,757.04
10.59
_
10.59
_
10.59
3,035.79
1,004.06
2,391.52
939.55
3,175.28
7,231.22
7,510.41
15.50
113.23
128.73
113.23
15.50
2,982.61
3,046.38
2,998.11
2.19
2.32
205.96
0.62
15.47
797.57
197.58
134.21
_
10.68
224.24
147.21
562.06
_
995.15
11,496.99
562.06
11,217.79
# Sundry Debtors include Rs. NIL (Previous year Rs.10.26 crore) from Reliance Communications Infrastructure Limited,Rs.NIL
(Previous year Rs. 3.14 crore) from Reliance Infocomm Limited and Rs. 3.43 crore (Previous Year Rs. NIL) from Reliance
Energy Limited, companies under the same management
* Includes balance with non scheduled banks as follows:
Municipal Co-operative Bank
ABN Amro Bank, Shanghai
ABN Amro Bank, Jakarta
ABN Amro Bank, Jebel Ali
Hongkong and Shanghai Banking Corporation, Turkey
Hongkong and Shanghai Banking Corporation, Vietnam
31st March
2004
0.24
0.13
0.03
0.06
0.12
0.04
31st March Maximum Balance at any
(Rs. in crore)
2003
-
-
-
-
-
-
time during the year
0.24
0.29
0.18
1.59
0.17
0.12
@ Interest Accrued on Investments includes Rs 732.02 crore (Previous Year Rs. 490.58 crore) accrued on Deep Discount Bonds
issued by Reliance Communications Infrastructure Limited, a company under the same management and Rs. 18.36 crore accrued
on 8.25% Debentures Issued by Reliance Industrial Investments and Holdings Limited, a wholly owned Subsidiary of the Company
$ Premium accrued on Investments in Preference Shares represents receivables on investments in Reliance Infocomm Limited, a
company under the same management.
SCHEDULE ‘H’
LOANS AND ADVANCES
UNSECURED - (Considered Good)
Loans to subsidiary companies
Advances recoverable in cash or in kind or for
value to be received
Advance Tax (net of Provisions)
Deposits
Balance with Customs, Central Excise Authorities, etc.
TOTAL
As at
31st March, 2004
(Rs. in crore)
As at
31st March, 2003
7,121.94
1,133.55
81.89
2,003.37
202.31
10,543.06
6,716.12
2,022.71
151.06
2,058.88
190.56
11,139.33
Reliance Industries Limited
67
GROWTH IS LIFE
Schedules forming part of the Balance Sheet
SCHEDULE ‘H’ (contd.)
Advances include:
(i) Rs.Nil (Previous Year Rs. 0.35 crore) to the Officers of the Company (Maximum amount outstanding at any time during
the year Rs. 0.35 crore).
(ii) Rs. Nil (Previous Year Rs. 888.00 crore) paid to Reliance Infocomm Limited, a company under the same management,
towards Debenture Application money/Call Money Advance pending allotment (Maximum amount outstanding at any
time during the year Rs. 888.00 crore).
(iii) Rs. Nil (Previous Year Rs. 2.83 crore) paid to others towards Shares Application money pending allotment.
(iv) Rs. 37.60 crore (Previous Year Rs. 40.10 crore) receivable from Reliance Communication Infrastructure Limited (Maximum
amount outstanding at any time during the year Rs. 40.10 crore) and Rs. 14.57 crore (Previous Year Rs.15.53 crore)
receivable from Reliance Infocomm Limited (Maximum amount outstanding at any time during the year Rs.15.53 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 @
Sundry Creditors - 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, 2004
(Rs. in crore)
As at
31st March, 2003
3.10
10,846.34
6.81
49.73
39.53
0.03
1.02
365.76
2.69
9,002.89
13.99
45.93
45.23
0.01
1.83
378.32
11,312.32
9,490.89
PROVISIONS
Provision for Wealth Tax
Provision for Leave encashment/ Superannuation / Gratuity
Proposed Dividend
Tax on Dividend
37.16
111.28
733.10
91.64
30.16
87.02
698.19
89.46
TOTAL
973.18
904.83
12,285.50
10,395.72
@Small scale indutrial undertakings to whom amounts are due have been determined based on the information available
with the Company and are as follows :
A Square Pallet Systems, Addya Automotive Components, Alok Fabrications, Ambika Industries, Ankita Tex Chem Ind Pvt. Ltd., Atisha
Engineers, Auto Strap India, Beacon Industrial Elec. Pvt. Ltd, BI Limited, Dabir Industries, Darshan Enterprises, Deeaar Laboratories,
Detection Instruments (India) Pvt. Ltd., Devhari Polymers, Dhwani Polyprints Private Limted, Diamond Graphics, Dinsons Self Stick Pvt.
Ltd., Efficient Data Processing Pvt. Ltd, Excelsior Electronic Automation, Expack Sales & Services, Fit-Tech Industries, Gamma Manganese
Chemicals, Girnar Packaging, Heatray Engineering, Heetu Chemicals & Alkalies Ltd., Hem Industries, Hercules Speciality Chemicals,
Instrument India, Johnson Controls(India) Pvt. Ltd., K M Enterprises, Kooverji Devshi & Co. Pvt. Ltd., M K System & Plant (India) Pvt. Ltd.,
Maharastra Plastic & Mehta Trading Company, Mitesh Enterprise, National Engineers & Steel, New Marine Engineering Works, Nice Pack
Industries Pvt. Ltd., Paramount Transmission Co., Pipe Fit Engineers, Polyl Plastic Industries, Real Hardware Mart, Riddhi Forms Pvt.
Ltd., Ronak Industries, S K H Engineers, S S Engineering Works, Sarigam Containers Private Limited, Schurtek Engineers, Scientific
Device(Bombay) Pvt. Ltd., Shah Marketing Company, Shree Krishna Packaging, Shree Tools, Shreeji Industries, Shrink Packaging Systems
Pvt. Ltd., South Gujarat Paper Tubes, Sparchem, Starvox Electronics Limited, Sumip Composites Pvt. Ltd., Texparts Industries, Tex-
Tube Manufacturing Co Pvt. Ltd., Tohem Enterprises, Vajrachem, Venus International, Vishal Industrial Gases, Wesmec Engineering Pvt.
Ltd.,
* Includes for capital expenditure Rs.676.45 crore (Previous year Rs.717.48 crore).
# These figures do not include any amounts, due and outstanding, to be credited to Investor Education and Protection Fund.
68
Reliance Industries Limited
Schedules forming part of the Profit and Loss Account
GROWTH IS LIFE
SCHEDULE ‘J’
OTHER INCOME
Dividend :
From Current Investments
From Long Term Investments
[Tax Deducted at Source Rs NIL
(Previous Year Rs. 11.79 crore)]
Interest Received :
From Current Investments
From Long Term Investments
From Others
[Tax Deducted at Source Rs. 36.75 crore
(Previous Year Rs. 78.18 crore)]
Premium on Investments in Preference Shares
2003-04
(Rs. in crore)
2002-03
_
25.84
0.11
112.33
25.84
112.44
144.79
276.92
262.12
147.14
322.66
235.80
683.83
197.58
101.67
1.49
127.64
1,138.05
(10.15)
36.31
705.60
_
26.16
2.52
154.49
1,001.21
Profit/(Loss) on Sale of Long Term Investments (net)
Profit on Sale of Current Investments (net)
8.27
93.40
Profit on Sale of Fixed Assets
Miscellaneous Income
TOTAL
SCHEDULE ‘K’
VARIATION IN STOCKS
2003-04
(Rs. in crore)
2002-03
STOCK-IN-TRADE (at close)
Finished/Traded Goods
Stock-in-process
STOCK-IN-TRADE (at commencement)
Finished Goods
Stock-in-process
TOTAL
2,757.04
752.38
3,175.28
939.55
3,175.28
939.55
3,509.42
4,114.83
1,159.51
519.83
4,114.83
(605.41)
1,679.34
2,435.49
Reliance Industries Limited
69
GROWTH IS LIFE
Schedules forming part of the Profit and Loss Account
SCHEDULE ‘L’
MANUFACTURING AND OTHER EXPENSES
2003-04
(Rs. in crore)
2002-03
RAW MATERIAL CONSUMED
MANUFACTURING EXPENSES
Stores, Chemicals and Packing Materials
Electric Power, Fuel and Water
Machinery Repairs
Building Repairs
Labour, Processing and Machinery Hire Charges
Excise Duty
Lease Rent
Exchange Differences (Net)
1,263.37
725.15
155.82
68.25
167.58
(48.10)
8.68
(260.65)
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 Welfare and other amenities
637.20
70.53
97.02
SALES AND DISTRIBUTION EXPENSES
Samples, Sales Promotion and Advertisement Expenses
Brokerage, Discount and Commission
Warehousing and Distribution Expenses
Sales Tax including defeased / Service Tax
Bad debts written off
Less: Provision for Doubtful Debts Written Back
Provision for Doubtful Debts (net)
220.64
316.04
922.74
802.80
113.23
(113.23)
_
32,503.11
30,856.93
1,135.34
719.40
106.01
30.60
146.35
193.60
15.80
(176.24)
2,080.10
2,170.86
466.45
99.11
86.17
804.75
651.73
159.98
141.97
944.87
476.19
_
_
4.76
2,262.22
1,727.77
ESTABLISHMENT EXPENSES
Insurance
Rent
Rates & Taxes
Other Repairs
Travelling Expenses
Payment to Auditors
Professional Fees
Loss on Sale/ Discarding of Assets
General Expenses*
Wealth Tax
Charity and Donations
234.18
205.68
181.81
83.16
103.72
4.70
207.51
14.09
430.97
7.00
36.44
223.09
124.03
122.96
71.99
57.53
4.56
188.79
23.54
279.17
6.00
42.33
Less: Preoperative Expenses of Projects
Under Commissioning (net)
TOTAL
* Includes investments written off Rs. NIL (Previous Year Rs. 18.15 crore)
SCHEDULE ‘M’
INTEREST
Debentures
Fixed Loans
Others
TOTAL
1,509.26
39,159.44
26.43
1,143.99
36,551.28
4.00
39,133.01
36,547.28
2003-04
1,122.93
118.91
192.88
1,434.72
(Rs. in crore)
2002-03
1,272.72
196.60
85.84
1,555.16
70
Reliance Industries Limited
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 results 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.
Intangible Assets
Intangible Assets are stated at cost of acquisition less accumulated amortisation. Technical know how is amortised over
the useful life of the underlying plant. Computer Software is amortised over a period of 5 years. Amortisation is done on
written down value basis except in respect of Crude Oil refinery where it is so amortised on straight line basis.
F. 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 over its residual life 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 as per technical evaluation; 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.
G. 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.
Reliance Industries Limited
71
GROWTH IS LIFE
Significant Accounting Policies
SCHEDULE ‘N’ (contd.)
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.
H.
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.
I.
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 are 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.
J. Turnover
Turnover includes sale of goods, services, sales tax, service 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.
K. 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.
L. 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 as at year
end.
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 Activity
The Company has adopted Full Cost Method of accounting for its Oil and Gas activity and all costs incurred in prospecting,
acquisition, exploration and development are accumulated considering the country as a cost centre.
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.
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.
72
Reliance Industries Limited
GROWTH IS LIFE
Significant Accounting Policies
SCHEDULE ‘N’ (contd.)
Q. Employee Separation Costs
Compensation to employees who have opted for retirement under the voluntary retirement scheme of the Company has
been debited to the profit and loss account in the year of payment.
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. Premium on Investments in Preference Shares
Premium on Investments in Preference Shares is recognised as income over the maturity period of investment.
U. 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.
SCHEDULE ‘O’
Notes on Accounts
1. The previous year’s figures have been reworked, regrouped, rearranged and reclassified wherever necessary.
2. Turnover includes Income from Services of Rs. 1,531.87 crore (Previous Year Rs. 352.27 crore).
3. The Gross Block of Fixed Assets include Rs. 2,733.53 crore (Previous Year Rs. 2,735.81 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. 84.37 crore (Previous Year Rs. 116.61 crore) and an equivalent amount has been withdrawn from General
Reserve and credited to the Profit and Loss Account.
4. On account of prudence and as originally recommended by Accounting Standard 26 on “Intangible Assets”, issued by
the Institute of Chartered Accountants of India, expenditure on employee separation scheme has been charged to the
Profit and Loss Account, instead of being amortized over 60 months.
Accordingly, expenditure aggregating to Rs.107.42 crore incurred on employee separation schemes announced during
the year and Rs.47.15 crore being the unamortised Miscellaneous Expenditure on employee separation as at 1.4.2003
has been charged under the head Payments to and Provisions for employees in the Profit and Loss Account.
Consequent to the above, the profit for the year is lower by Rs 117.37 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:
i) Salaries
ii) Perquisites
iii) Commission
iv) Leave salary / Encashment
v) Contribution to Provident Fund and Superannuation Fund
vi) Provision for Gratuity
2003-04
(Rs. in crore)
2002-03
1.94
0.54
1.94
0.22
4.64
0.06
2003-04
1.65
1.47
36.59
0.56
0.40
0.29
40.96
1.73
0.54
2.01
0.22
4.50
0.06
(Rs. in crore)
2002-03
1.81
1.62
29.86
1.55
0.46
0.07
35.37
Reliance Industries Limited
73
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:
Profit before Taxation
Add Depreciation as per accounts
Provision for Doubtful Debts (net)
Loss on Sale of Assets
Investment Written off
Managerial Remuneration
Less Depreciation as per Section 350 of Companies Act, 1956
Premium on Investment in Preference Shares
Profit on sale of Fixed Assets
Profit on Sale of Investments
Net Profit for the year
Salaries, Perquisites and Commission @ 0.67% p.a.
(Previous Year @ 1.00% p.a. upto 6th July,2002 and @0.67% p.a. thereafter)
Less: Salaries & Perquisites of the Directors eligible for commission
Balance Commission
2003-04
6,301.14
3,247.02
_
14.09
_
40.00
9,602.25
3,331.39
197.58
1.49
101.67
5970.12
40.00
3.41
36.59
(Rs. in crore)
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
7. A sum of Rs. 2.18 crore (net debit) [Previous Year Rs. 3.73 crore (net credit)] 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. 250.72
crore). Future obligations towards lease rentals under the lease agreements as on 31st March, 2004 amount to
Rs. 12.25 crore (Previous Year Rs. 21.50 crore).
Within one year
Later than one year and not later than five years
Later than five years
Total
2003-04
7.42
3.28
1.55
12.25
(Rs. in crore)
2002-03
9.27
10.54
1.69
21.50
(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. 25.47 crore). The minimum lease rentals outstanding as of
31st March 2004 in respect of these assets are as follows:
Due
Within one year
Later than one year and not later than five years
*(Rs. 17,472)
Later than five years
Total Minimum
Lease Payments
Outstandings
as on 31.03.2004
Future Interest
on outstanding
(Rs. in crore)
Present Value
of Minimum
Lease Payments
2003-04
2002-03
2003-04
2002-03
2003-04
2002-03
4.15
2.74
_
7.71
6.89
_
0.07
_
*
0.36
0.25
_
4.07
2.74
_
7.35
6.64
_
Total
6.89
14.60
0.07
0.61
6.81
13.99
(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.
74
Reliance Industries Limited
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
(Rs. in crore)
Later than five
years
Later than one
year and not
later than five
years
2003-04
90.15
Gross Investment
Less: Unearned Finance Income
38.02
Present Value of Minimum Lease Rental 52.13
2002-03
101.56
45.93
55.63
2003-04
11.37
7.40
3.97
2002-03
11.37
7.89
3.48
2003-04
45.47
23.09
22.38
2002-03
45.49
25.88
19.61
2003-04
33.31
7.53
25.78
2002-03
44.70
12.16
32.54
(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 amounts to Rs.26.16 crore (Previous Year Rs. 25.47 crore).
(ii) Depreciation on Assets given on operating lease amouts to Rs.2.76 crore (Previous Year Rs. 3.53 crore).
(iii) Future lease rentals receivable within a period of one year for such assets are Rs.9.55 crore (Previous Year
Rs.7.94 crore)
(c) Miscellaneous income includes income from finance lease of Rs. 7.89 crore (Previous Year Rs. 8.33 crore) and
income from operating lease of Rs. 9.69 crore (Previous Year Rs. 9.73 crore).
10. The deferred tax liability comprise of the following:
(a) Deferred Tax Liability
Related to fixed assets
(b) Deferred Tax Assets
As at
31st March, 2004
As at
31st March, 2003
(Rs. in crore)
3,811.41
2,955.94
(i) Disallowance under the Income Tax Act 1961
(ii) Provision for doubtful debts
336.59
_
229.43
41.69
(c)
Provision for deferred tax liability (Net)
11. EARNINGS PER SHARE (EPS)
(a)
(b)
(c)
(d)
Net Profit as per Profit and Loss Account (Rs. in crore)
Less : Interim dividend on Preference Shares (Rs. in crore)
Less : Provision for taxation for earlier years (Rs. in crore)
Net profit available for equity shareholder
(Numerator used for calculation) (Rs. in crore)
(e) Weighted Average number of equity shares used as
336.59
3,474.82
2003-04
5,160.14
_
23.03
5,137.11
271.12
2,684.82
2002-03
4,104.31
20.08
_
4,084.23
denominator for calculating EPS
Basic and Diluted Earnings per share of Rs. 10 each (Rs.) :
139,63,77,536
36.79
(f)
139,63,77,536
29.25
Reliance Industries Limited
75
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
10
11
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
Reliance Industrial Investments and Holdings Limited
Subsidiary Companies
Reliance Power Ventures Limited
Reliance Ventures Limited
Reliance Strategic Investments Limited
Reliance Infocom Inc.
Reliance Communications Inc.
Reliance Communications (UK) Limited
Reliance Technologies LLC.
Reliance Infocom BV
Reliance LNG Private Limited
Reliance Communications International Inc.
Gas Transportation & Infrastructure Company Limited
Reliance Life Insurance Company Limited
Reliance General Insurance Company Limited
Associate Companies
and Joint Ventures
Reliance Capital Limited
Reliance Energy Limited ( formerly BSES Limited )
Reliance Infocomm Limited
Reliance Communications Infrastructure Limited
Reliance Telecom Limited
Reliance Industrial Infrastructure Limited
Reliance Europe Limited
Reliance Petroinvestments Limited
Reliance Rubbers and Chemicals Limited
Indian Petrochemicals Corporation Limited
Reliance Enterprises Limited
Reliance Global Trading Private Limited.
Reliance Utilities and Power Limited
Reliance Ports and Terminals Limited
Rosche Trading Private Limited
Unincorporated Oil and Gas Joint Ventures
Shri Mukesh D Ambani
Shri Anil D Ambani
Shri Nikhil R Meswani
Shri Hital R Meswani
Shri H S Kohli
Key Managerial Personnel
Dhirubhai Ambani Foundation
Jamnaben Hirachand Ambani Foundation
Dhirubhai Ambani Memorial Trust
Hirachand Govardhandas Ambani Public Charitable Trust
Others
76
Reliance Industries Limited
GROWTH IS LIFE
Notes on Accounts
SCHEDULE ‘O’ (contd.)
(ii) Transactions during the year with related parties :
Subsidiaries Associates
Key
Managerial
Personnel
(Rs. in crore)
Others
Total
68.03
1,020.00
(1,211.03)
187.03
(218.50)
_
(68.03)
150.00
5,040.89
(495.40)
4,043.89
(345.40)
1,147.00
(150.00)
13.98
_
(0.78)
6.81
(13.98)
_
(58.88)
8.15
(11.87)
Sr.
No.
Nature of Transactions
(Excluding reimbursements)
A)
Debentures Issued
Balance as at 1st April,2003
Issued during the year
Repaid during the year
Balance as at 31st March, 2004
B)
Loans Taken
Balance as at 1st April,2003
Taken during the year
Repaid during the year
Balance as at 31st March, 2004
C)
Fixed Assets/Capital Work in Progress
Balance of Assets taken on Lease as on 1st April,2003
Assets taken on Lease during the year
Balance of Assets taken on Lease as at 31st March, 2004
Assets given on Lease during the year
Assets Purchased during the year
D)
Investments
Balance as at 1st April,2003
Purchased/adjusted during the year
Sold during the year
Balance as at 31st March, 2004
E)
Premium Accrued on Investment in
Preference Shares
F)
Interest Accrued on Investments
18.36
(51.79)
G)
Sundry Debtors as at 31st March, 2004
879.57
4,641.55
10.05
(11.83)
_
8,100.00
(2,250.00)
_
(12.01)
(145.71)
889.62
(879.57)
12,719.66
(4,641.55)
197.58
732.02
(490.58)
135.70
(149.20)
68.03
1,020.00
(1,211.03)
187.03
(218.50)
_
(68.03)
150.00
5,040.89
(495.40)
4,043.89
(345.40)
1,147.00
(150.00)
13.98
_
(0.78)
6.81
(13.98)
_
(58.88)
8.15
(11.87)
5,521.12
8,110.05
(2,261.83)
_
(157.72)
13,609.28
(5,521.12)
197.58
750.38
(542.37)
135.70
(149.20)
Reliance Industries Limited
77
GROWTH IS LIFE
Notes on Accounts
Subsidiaries Associates
Key
Managerial
Personnel
(Rs. in crore)
Others
Total
SCHEDULE ‘O’ (contd.)
Sr.
No.
Nature of Transactions
(Excluding reimbursements)
H)
Loans & Advances
i) Loans Given
Balance as at 1st April,2003
Given during the year
Returned during the year
Balance as at 31st March, 2004
6,716.12
83.41
561.23
(5,559.62)
155.41
(1,832.48)
7,121.94
(6,716.12)
6,872.06
(3,964.87)
6,895.00
(5,213.88)
60.47
(83.41)
ii) Advances recoverable in cash or in kind
Balance as at 1st April,2003
72.24
1,034.84
Given during the year
Returned/Adjusted during the year
Balance as at 31st March, 2004
_
(72.24)
72.24
(_)
_
(72.24)
77.69
(1,396.93)
988.11
(2,684.23)
124.42
(1,034.84)
iii) Deposit
Balance as at 1st April,2003
Given during the year
Returned during the year
Balance as at 31st March,2004
I)
Sundry Creditors
Balance as at 31st March, 2004
J)
Turnover
K)
Sale of Investments
L)
Other Income
Dividend
Interest Received
Premium Accrued on Investments in
Preference Shares
Lease Rental Income
Miscellaneous Income
1,163.25
_
(736.46)
10.16
(210.05)
1,153.09
(1,163.25)
486.96
(1,755.17)
4,406.10
(1,369.38)
82.99
20.81
(112.33)
399.85
(412.66)
197.58
7.89
(8.32)
25.10
(49.03)
_
(4.44)
23.09
(124.03)
78
Reliance Industries Limited
6,799.53
7,433.29
(9,524.49)
7,050.41
(7,046.36)
7,182.41
(6,799.53)
1,107.08
77.69
(1,469.17)
1,060.35
(2,684.23)
124.42
(1,107.08)
1,163.25
_
(736.46)
10.16
(210.05)
1,153.09
(1,163.25)
486.96
(1,755.17)
4,406.10
(1,369.38)
82.99
(4.44)
20.81
(112.33)
422.94
(536.69)
197.58
7.89
(8.32)
25.10
(49.03)
GROWTH IS LIFE
Notes on Accounts
SCHEDULE ‘O’ (contd.)
Sr.
No.
Nature of Transactions
(Excluding reimbursements)
Subsidiaries Associates
Key
Managerial
Personnel
(Rs. in crore)
Others
Total
M)
Purchases
N)
Expenditure
Interest Paid
Payments to and provisions for Directors
Directors’Sitting Fees (Rs. NIL, Previous Year Rs.30,000)
Electric Power,Fuel and Water
Rent
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
Product Handling charges
Investments written off
Others
O)
Guarantees Issued
Financial Guarantees
Performance Guarantees
_
(17.54)
1.13
(0.38)
Note: Figures in brackets represents previous year’s amounts.
40.96
(35.37)
623.75
(171.24)
108.41
(4.00)
372.09
(409.86)
91.17
(2.16)
9.02
(15.42)
16.95
(22.60)
12.57
(22.53)
63.32
(38.65)
_
(0.02)
147.03
(404.53)
5.55
(6.30)
29.87
(22.54)
657.10
(753.43)
78.94
_
(0.45)
43.03
(18.09)
243.33
(455.26)
1,236.82
(5,102.77)
623.75
(171.24)
108.41
(4.00)
40.96
(35.37)
372.09
(409.86)
91.17
(2.16)
9.02
(15.42)
16.95
(22.60)
12.57
(22.53)
63.32
(38.65)
_
(0.02)
147.03
(404.53)
5.55
(6.30)
29.87
(22.54)
16.51
(31.55)
657.10
(753.43)
78.94
_
(17.99)
44.16
(18.47)
243.33
(455.26)
1,236.82
(5,102.77)
16.51
(31.55)
Reliance Industries Limited
79
GROWTH IS LIFE
Notes on Accounts
13. 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
As at 31st
March,2004
As at 31st
March,2003
(Rs. in crore)
Maximum
Balance
during the
year
Reliance Industrial Investments &
Holdings Limited
Reliance Ventures Limited
Reliance Power Ventures Limited
Gas Transportation & Infrastructure
Company Limited
Recron Synthetics Limited
Subsidiary
794.22
830.19
841.06
Subsidiary
Subsidiary
Subsidiary
Other
4,900.92
1,396.50
4,684.16
1,185.64
4,900.92
1,396.50
30.30
132.20
60.47
_
132.20
118.41
30.30
132.20
118.41
Reliance Industrial Infrastructure Limited
Associate
1.
2.
3.
4.
5.
6.
Notes:
1. Loans and Advances shown above, to Subsidiaries fall under the category of ‘Loans & Advances in nature of Loans
where there is no repayment schedule’.
2. Loans and Advances to Recron Synthetics Limited is at zero percent repayable in 2013 and not before repayment by
loanee of all its secured loans.
3.
ICDs are not considered as they are repayable on demand and interest is charged at market rates.
4. 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.
(Rs. in crore)
Sr No. Name of the Company
No. of Shares
Amount
1.
2.
3.
4.
5.
6.
*Reliance Industrial Investments & Holdings Limited,
sole beneficiary of Petroleum Trust
*Reliance Chemicals Private Limited
*Reliance Aromatics & Petrochemicals Private Limited
*Reliance Energy & Project Development Private Limited
*Reliance Polyolefins Private Limited
Reliance Industrial Infrastructure Limited
104,660,155
1654.96
14,568,373
16,029,091
16,029,091
19,090,909
86,000
320.50
339.42
339.42
420.00
1.12
80
Reliance Industries Limited
GROWTH IS LIFE
Notes on Accounts
SCHEDULE ‘O’ (contd.)
14. (a) Disclosure of the Company’s Interest in Oil and Gas Joint Ventures:
Sr No
1
2
3
4
5
6
7
8
9
10
11
Name of the Fields
In the Joint Ventures
Panna Mukta
Tapti
NEC-OSN-97/2
KG-DWN-98/3
GS-OSN-2000/1
GK-OSJ-3
GK-OS-5
GK-ON-90/2
CB-ON/1
AS-ONN-2000/1
KG-DWN-2001/1
% Interest
Sr No
30%
30%
90%
90%
90%
60%
40%
40%
40%
90%
90%
12
13
14
15
16
17
18
19
20
21
Name of the Fields
in the Joint Ventures
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-2001/1
KG-OSN-2001/2
Yemen (Block 9)
NEC-DWN-2002/1
% Interest
90%
90%
90%
90%
90%
90%
90%
90%
25%
90%
During the year, the Company has relinquished it’s interest in:
GK-OSJ-1
(i)
KG-ON-1
(ii)
(iii) MB-OSN-97/2
(b) Net Quantities of an enterprise’s interest in proved reserves and proved developed reserves:
Oil:
Proved Developed Reserves Proved Developed Reserves
Beginning of the year 2003-04
Additions
Deletion
Production
Closing balance for the year 2003-04
Gas:
Beginning of the year 2003-04
Additions
Deletion
Production
Closing balance for the year 2003-04
(Million MT)
4.97
0.61
Nil
0.40
5.18
(Million MT)
4.02
Nil
Nil
0.40
3.62
Proved Developed Reserves Proved Developed Reserves
(Million M3)
82,724
54,616
Nil
903
136,437
(Million M3)
13,133
1,150
Nil
903
13,380
All the above quantities of Oil and Gas reserves are within India.
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.
16.
PROJECT DEVELOPMENT EXPENDITURE
(in respect of Projects included under Capital work-in-progress)
Opening Balance
Add: Project Development Expenditure transferred
2003-04
2002-03
76.47
64.86
(Rs. in crore)
from Profit and Loss Account
Interest Capitalised
26.43
143.75
4.00
84.85
Less: Project Development Expenses Capitalised during the year
Closing Balance
170.18
246.65
134.03
112.62
88.85
153.71
77.24
76.47
Reliance Industries Limited
81
GROWTH IS LIFE
Notes on Accounts
SCHEDULE ‘O’ (contd.)
17. ADDITIONAL INFORMATION
As at 31st
March, 2004
(Rs. in crore)
As at 31st
March, 2003
(A)
(B)
(C)
In respect of joint ventures
In respect of others
Estimated amount of contracts remaining to be
executed on Capital accounts and not provided for:
(i)
(ii)
Uncalled liability on partly paid Shares (Rs.19,935, Previous Year Rs. 19,935)
Contingent Liabilities
(i) Outstanding guarantees furnished to Banks and
39.99
1,740.60
_
399.20
1,941.46
_
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
(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
_
496.79
_
243.33
_
588.87
158.95
400.77
35.79
1277.94
5,036.31
_
207.62
_
455.26
_
502.03
133.10
261.03
166.21
4,936.56
3,700.71
(D)
The Income-Tax assessments of the Company have been completed up to Assessment Year 2001-2002. The
disputed demand outstanding up to the said Assessment Year is Rs. 350.95 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.
18. LICENSED AND INSTALLED CAPACITY
(As certified by the Management)
Licensed Capacity
UNIT
2003-04
2002-03
Installed Capacity
2002-03
2003-04
Refining of Crude Oil
A
B (i) Ethylene
C (i) Paraxylene
(ii) Orthoxylene
(ii) Propylene
(iii) Benzene
(iv) Toluene
(v) Xylene
(vi) Butadine & Other C4s
Mill. MT
MT
MT
MT
MT
MT
MT
MT
MT
MT
D (i) Mono Ethylene Glycol
MT
(ii) Higher Ethylene Glycol
MT
(iii)Ethylene Oxide
MT
E Poly Vinyl Chloride
MT
F High/Linear Low Density Poly Ethylene
MT
G High Density Polyethylene Pipes
MT
H Polypropylene
MT
I
MT
J Polyester Filament Yarn/Polyester Chips
MT
K Polyester Staple Fibre/ Polyester Chips
MT
L Poly Ethylene Terephthalate
MT
M Polyester Staple Fibre Fill
N Man-made Fibre Spun Yarn on worsted system Nos
Nos
O Man-made fibre on cotton system (Spindles)
Nos
P (i) Man-made Fabrics (Looms)
Nos
MT
Purified Terephthalic Acid
(ii) Knitting M/C
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.
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.
27
750,000
365,000
345,000
197,000
165,000
225,000
1,646,000
175,000
300,000
37,500
50,000
300,000
450,000
80,000
1,100,000
1,350,000
197,300 +
300,000
80,000
30,000
24,094
23,040
323
20
115,000
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
1,050,000
1,280,000
197,300 +
300,000
80,000
30,000
24,094
23,040
323
20
115,000
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. 46/5/2004-CL-III dated April 16, 2004
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.47/1/2004-CL-III dated 6th April, 2004
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. As per the order,
Key details of each subsidiary is attached along with the statement under Section 212 of the Companies Act, 1956.
20. PRODUCTION MEANT FOR SALE
Products
Crude Oil
Gas
Petroleum Products
Ethylene
Propylene
Benzene
Toluene
Xylene
Paraxylene
Orthoxylene
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
2003-04
353,173
29,457
23,662
_
3,138
343,810
106,014
52,932
564,364
205,932
222,615
314,515
449,305
1,092,581
603,949
314,531
327,012
78,001
27,854
166.96
24,250
116,815
2002-03
356,101
29,113
22,773
2,142
_
306,410
94,420
50,354
531,803
191,722
222,881
286,008
434,273
1,041,251
699,207
278,090
297,770
77,094
23,949
176.73
9,962
115,492
Production meant for Sale includes production through toll conversion, wherever applicable.
21. VALUE OF IMPORTS ON CIF BASIS IN RESPECT OF
Raw Materials
Stores & spares, dyes and chemicals
Capital goods
22. EXPENDITURE IN FOREIGN CURRENCY
Interest on foreign currency loans
Premium on Redemption of Debentures/ Bonds
Technical know-how and engineering fees
Oil and gas activity
Professional fees
Freight and forwarding
Other matters
(Rs. in crore)
2003-04
2002-03
29,639.77
706.25
3,451.09
27,942.14
583.81
2218.35
(Rs. in crore)
2003-04
2002-03
295.75
8.26
151.44
19.32
195.86
255.77
145.44
474.17
134.78
96.23
30.34
95.46
130.06
121.76
Reliance Industries Limited
83
GROWTH IS LIFE
Notes on Accounts
SCHEDULE ‘O’ (contd.)
23. VALUE OF RAW MATERIALS CONSUMED
Imported
Indigenous
Rs. in
crore
31,006.23
1,496.88
2003-04
2002-03
% of
Consumption
Rs. in
crore
% of
Consumption
95.39
4.61
30,129.79
727.14
97.64
2.36
32,503.11
100.00
30,856.93
100.00
24. VALUE OF STORES, CHEMICALS AND PACKING MATERIALS CONSUMED
Imported
Indigenous
Rs. in
crore
702.57
560.80
2003-04
% of
Consumption
55.61
44.39
2002-03
Rs. in
crore
591.31
544.03
% of
Consumption
52.08
47.92
1,263.37
100.00
1,135.34
100.00
25. EARNINGS IN FOREIGN EXCHANGE
FOB value of exports
Interest (Rs.3,969.14)
Others
26. EXPENDITURE ON RESEARCH AND DEVELOPMENT
Revenue expenditure including amortisation of deferred cost and
unamortised deferred research & development Expenditure
Capital expenditure on research & 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
2003-04
11,817.54
_
6.01
(Rs. in crore)
2002-03
10,626.29
3.04
_
(Rs. in crore)
2003-04
2002-03
19.09
14.50
33.59
9.32
31.74
41.06
2003-04
2002-03
18,333
18,747
b) Number of Equity Shares held by them
22,14,94,589
22,61,08,487
c)
(i) Amount of Dividend Paid (Gross) (Rs. in crore)
Tax Deducted at Source Rs. Nil (Previous Year Rs. 20.24 crore)
110.75
107.40
(ii) Year to which dividend relates
2002-2003
2001-2002
84
Reliance Industries Limited
28 BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE
GROWTH IS LIFE
I. Registration Details
Registration No.
Balance Sheet Date:
1
3
1
1
.
.
1
0
9
3
7
.
8
0
II. Capital Raised during the year (Amount Rs. crore)
N I
Public Issue:
Bonus Issue:
Conversion of Bonds:
N I
N I
6
4
L
L
L
Rights Issue:
Private Placement:
State Code:
1
1
N I
N I
.
.
.
.
.
-
.
.
9
5
5
4
0
0
1
2
L
L
3
0
2
0
0
3
4
5
1
6
3
1
0
3
0
5
III. Position of Mobilisation and Deployment of Funds (Amount Rs. crore)
9
3
Total Assets:
Total Liabilities :
Sources of Funds
Paid-up Capital:
Secured Loans:
Deferred Tax Liability
Application of Funds
Net Fixed Assets
Net Current Assets
5
8
8
7
1
1
3
1
1
3
5
9
3
4
4
1
7
9
5
7
4
5
5
1
4
5
4
.
.
.
.
.
.
IV. Performance of Company (Amount Rs. crore)
Turnover and Inter divisional
transfers :
Net Turnover:
Profit Before Tax:
Earnings per share in Rs.
7
5
4
1
6
4
8
3
1
0
0
3
7
1
1
6
.
.
.
.
9
1
8
9
5
9
5
1
7
5
4
2
8
5
0
3
4
9
Reserves & Surplus:
Unsecured Loans:
5
3
8
3
9
8
0
4
7
5
9
Investments:
1
3
9
7
Miscellaneuos Expenditure
Total Expenditure :
Profit After Tax:
Dividend : Rs. per share
6
5
0
1
3
6
4
.
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: 29th April, 2004
M. D. Ambani
A. D. Ambani
N. R. Meswani
H. S. Kohli
R. H. Ambani
M. L. Bhakta
T. R. U. Pai
Y. P. Trivedi
Dr. D. V. Kapur
M. P. Modi
S. Venkitaramanan
V. M. Ambani
-
-
Chairman & Managing Director
Vice-Chairman & Managing Director
} Executive Directors
}
Directors
-
Company Secretary
Reliance Industries Limited
85
GROWTH IS LIFE
Cash Flow Statement Annexed to the Balance Sheet
for the period April 2003-March 2004
A: CASH FLOW FROM OPERATING ACTIVITIES:
Net Profit before tax as per Profit and Loss Account
6,301.14
4,974.21
2003-04
2002-03
(Rs. in crore)
Adjusted for:
Miscellaneous Expenditure written off
Net Prior Year Adjustments
Provision for Doubtful Debts
Investments written off / provided
(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
Operating Profit before Working Capital Changes
Adjusted for:
Trade and Other Receivables
Inventories
Trade Payables
Cash Generated from Operations
Net Prior Year Adjustments
Taxes Paid
47.15
2.18
_
_
12.60
3,331.39
(84.37)
22.34
(101.67)
(25.84)
(881.41)
1,434.72
(257.88)
279.19
2,005.20
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
3,757.09
10,058.23
3,570.28
8,544.49
(2,226.76)
(2,536.34)
3,001.75
2,026.51
12,084.74
(2.18)
(305.00)
(1,761.35)
6,783.14
3.73
(144.56)
Net Cash from Operating Activities
11,777.56
6642.31
B:
CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of Fixed Assets
Sale of Fixed Assets
Puchase of Investments
Sale of Investments
Movement in Loans
Interest Income
Dividend Income
Net Cash Used in Investing Activities
(4,319.08)
8.84
(37,255.52)
30,108.51
303.99
564.35
25.84
(10,563.07)
(3,704.25)
27.20
(29,186.07)
26,321.53
(555.87)
409.49
112.44
(6,575.53)
86
Reliance Industries Limited
GROWTH IS LIFE
Cash Flow Statement Annexed to the Balance Sheet
for the period April 2003-March 2004
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
2003-04
2002-03
(Rs. in crore)
0.27
_
1,835.00
(4,713.11)
3,945.21
(783.84)
(1,420.99)
(1,137.46)
401.74
(400.00)
7,733.08
(7,625.55)
579.31
(672.43)
(1,696.43)
(1,680.28)
Net Increase / (Decrease) in Cash and Cash Equivalents
77.03
(1,613.50)
Opening Balance of Cash and Cash Equivalents
147.21
1,760.71
Closing Balance of Cash and Cash Equivalents
224.24
147.21
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: 29th April, 2004
M. D. Ambani
A. D. Ambani
N. R. Meswani
H. S. Kohli
R. H. Ambani
M. L. Bhakta
T. R. U. Pai
Y. P. Trivedi
Dr. D. V. Kapur
M. P. Modi
S. Venkitaramanan
V. M. Ambani
-
-
Chairman & Managing Director
Vice-Chairman & Managing Director
} Executive Directors
}
Directors
-
Company Secretary
Reliance Industries Limited
87
GROWTH IS LIFE
Statement Pursuant to Section 212 of the Companies Act,1956,
relating to Company’s Interest in Subsidiary Companies for the financial year 2003-04
Name of Subsidiary
Company
Reliance Industrial
Investments and
Holdings Limited
Reliance Ventures
Limited
Reliance Power
Ventures Limited
Reliance Strategic
Investments
Limited
1
2
3
4
The Financial Year of the Subsidiary
Companies ended on
Date from which they became
Subsidiary Companies
a. Number of shares held by
Reliance Industries Ltd.
with its nominees in the subsidiaries
at the end of the financial year of the
Subsidiary Companies
b. Extent of Interest of holding
Company at the end of the
financial year of the
Subsidiary Companies
The net aggregate amount of the
Subsidiary Companies Profit / (Loss)
so far as it concerns the members of the
Holding Company
a. Not dealt with in the Holding
Company’s accounts:
For the financial year
ended 31st March, 2004
i)
31st March, 2004
31st March, 2004
31st March, 2004
31st March, 2004
30th December, 1988
7th October, 1999
13th May, 2000
28th December, 2001
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
20,20,200 Equity
Shares of the face
value of Rs.10 each
fully paid-up
100%
100%
100%
100%
Rs.4140.91 Lakhs
(Rs.1.15 Lakhs)
Rs.3925.14 Lakhs
(Rs.0.56 Lakhs)
ii) For the previous Financial years
Rs.12016.42 Lakhs
(Rs.241.96 Lakhs)
Rs.860.32 Lakhs
Rs.0.20 Lakhs
of the Subsidiary Companies since
they became the Holding
Company’s subsidiaries
b. Dealt with in Holding
Company’s accounts:
For the financial year
ended 31st March, 2004
i)
NIL
NIL
ii) For the previous Financial years
Rs. 2,673.89 Lakhs
NIL
of the Subsidiary Companies since
they became the Holding
Company’s subsidiaries
Note :
1.
2.
3.
100% Subsidiary of Reliance Infocom BV.
100% Subsidiary of Reliance Infocom Inc.
100% Subsidiary of Reliance Communications Inc.
4. Figures in bracket represent losses.
NIL
NIL
NIL
NIL
88
Reliance Industries Limited
Statement Pursuant to Section 212 of the Companies Act,1956,
relating to Company’s Interest in Subsidiary Companies for the financial year 2003-04
GROWTH IS LIFE
Reliance LNG Gas
Limited
Transportation
and Infrastructure
Company Limited
Reliance
Infocom B.V.
Reliance Infocom Reliance
Inc.
Reliance
Reliance
Reliance
Technologies, Communications Communications Communications
International Inc.
Inc.
LLC
(U.K.) Limited
(See Foot Note 1)
(See Foot Note 1)
(See Foot Note 2) (See Foot Note 3)
31st March,
2004
31st March,
2004
31st March,
2004
31st March,
2004
31st March,
2004
31st March,
2004
31st March,
2004
31st March,
2004
2nd January,
2002
19th March,
2003
31st December, 31st December
2000
2000
2nd May,
2000
13th December,
2002
21st October,
2002
29th September,
2003
45,000 Equity 50,000 Equity
Shares of the Shares of the
face value of
face value of
Rs.10 each
Rs.10 each
fully paid-up
fully paid-up
NIL
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 by Reliance
Infocom Inc.
B.V.
100 shares of
face value of
US$ 100 fully
paid-up, held
100 shares of
face value of
US$ 100 fully
paid-up, held
by Reliance
Communications
Inc.
90%
100%
100%
100%
90%
100%
100%
100%
Rs.0.05
Lakhs
(Rs.0.14
Lakhs)
NIL
NIL
Not Applicable
Euro 24,999
(Rs. 0.13
crore)
(US $ 32,950)
(Rs. 0.14
crore)
(US $ 5,918)
(Rs.0.03
crore)
Not Applicable
(US $ 2,516,527) Not Applicable
(Rs.11.00
crore)
Not Applicable
Euro 11965
(Rs. 0.06
crore)
US $ 49,113
Rs.0.22
crore
(US $ 3,794,592) Not Applicable
(Rs.18.02
crore)
(US $ 9,861)
(Rs.0.04 crore)
Not Applicable
Not Applicable
NIL
NIL
Not Applicable
NIL
US $ 12,500
(Rs.0.06 crore)
NIL
NIL
Not Applicable
NIL
Not Applicable
Not Applicable
NIL
Not Applicable
For and on behalf of the Board
M. D. Ambani
A. D. Ambani
N. R. Meswani
H. S. Kohli
R. H. Ambani
M. L. Bhakta
T. R. U. Pai
Y. P. Trivedi
Dr. D.V. Kapur
M. P. Modi
S. Venkitaramanan
V. M. Ambani
-
-
Chairman & Managing Director
Vice-Chairman & Managing Director
} Executive Directors
}
Directors
-
Company Secretary
Reliance Industries Limited
89
Mumbai
Dated: 29th April, 2004
GROWTH IS LIFE
Details of Subsidiary Companies
Name of Subsidiary
Company
Reliance
Industrial
Investments
and Holdings
Limited
Reliance
Ventures
Limited
Reliance
Power
Ventures
Limited
Reliance
Strategic
Investments
Limited
Reliance
LNG
Limited
(Rs. in crore)
Gas
Transportation
and
Infrastructure
Company
Limited
1 Capital
147.50
2.12
2.02
2.02
0.05
0.05
2 Reserves
162.76
7.47
47.85
0.00
0.00
(0.02)
3
Total Assets
1 877.42
4 910.50
1 446.58
2.02
0.05
32.44
4
Total Liabilities
1 877.42
4 910.50
1 446.58
2.02
0.05
32.44
5 Details of Investments
1 874.03
1 414.88
1 444.42
2.02
6
Total Income
68.61
0.00
39.26
0.00
7 Profit before Taxation
41.41
(0.01)
39.25
(0.01)
8 Provision for Taxation
_
_
_
_
9 Profit after Taxation
41.41
(0.01)
39.25
(0.01)
10 Proposed Dividend
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
_
Exchange Rate as on 31.03.2004
1 US$ = Rs. 43.7175
1 Euro = Rs. 53.45
90
Reliance Industries Limited
GROWTH IS LIFE
Details of Subsidiary Companies
Reliance
Infocom
B.V.
Reliance
Infocom
Inc.
Reliance
Technologies,
LLC
Reliance
Communications
(U.K.)
Limited
Reliance
Communications
Inc.
Reliance
Communications
International
Inc.
(Rs. in crore)
5.94
Euro 1,112,000
3.94
$ 900,000
17.73
$ 4,055,555
0.19
Euro 36,964
6.25
Euro 1,169,618
6.25
Euro 1,169,618
5.67
Euro 1,061,673
0.40
Euro 75,452
0.19
Euro 36,261
0.06
Euro 11,262
0.13
Euro 24,999
0.07
$ 16,163
(17.26)
$ (3,946,986)
27.17
$ 6,214,125
27.17
$ 6,214,125
21.86
$ 5,000,000
11.24
$ 2,570,630
(0.16)
(36,610)
(0.02)
$ (3,660)
(0.14)
(32,950)
0.47
$108,644
0.47
$108,644
_
$ 1
0.01
$ 1,155
(0.03)
$ (6,576)
_
(0.03)
$ (6,576)
0.00
$ 1,000
_
0.00
$ 1,000
0.00
$ 1,000
_
_
_
_
_
21.86
$ 5,000,000
(11.05)
$ (2,526,388)
183.50
$ 41,974,152
183.50
$ 41,974,152
0.04
$ 10,000
203.36
$ 46,516,154
(11.00)
$ (2,516,527)
_
(11.00)
$ (2,516,527)
_
_
_
_
_
0.04
$ 10,000
_
1.59
$ 364,575
1.59
$ 364,575
_
_
_
_
_
_
Reliance Industries Limited
91
GROWTH IS LIFE
92
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,
2004, and the Consolidated Profit and Loss Account
for the year then ended annexed thereto and the
Consolidated Cash Flow Statement for the year
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.
We conducted our audit in accordance with generally
accepted auditing standards in India. Those Standards
require that we plan and perform the audit to obtain
reasonable assurance whether the financial statements
are prepared, in all material respects, in accordance
with an identified financial reporting framework and are
free of material misstatements. An audit includes,
examining on a test basis, evidence supporting the
amounts and disclosures in the financial statements.
the accounting
includes assessing
An audit also
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.
We did not audit the financial statements of certain
subsidiaries, whose financial statements reflect total
assets (net) of Rs. 218.98 crore as at 31st March, 2004
and total revenues of Rs. 215.01 crore for the year then
ended. These financial statements have been audited
by other auditors 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,
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.
issued by
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, 2004;
(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 Chaturvedi & Shah
Chartered Accountants
D. Chaturvedi
Partner
Membership No.: 5611
Mumbai
Dated: 29th April, 2004
For Rajendra & Co.
Chartered Accountants
R.J. Shah
Partner
Membership No.: 7586
Reliance Industries Limited
93
Consolidated Balance Sheet as at 31st March, 2004
GROWTH IS LIFE
Schedule
As at
31st March, 2004
(Rs. in crore)
As at
31st March, 2003
SOURCES OF FUNDS
Shareholders’ Funds
Share Capital
Reserves and Surplus
Minority Interest
Loan Funds
Secured Loans
Unsecured Loans
Deferred Tax Liability
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
Miscellaneous Expenditure
[to the extent not written off or adjusted]
TOTAL
Significant Accounting Policies
Notes on Accounts
1,395.95
33,621.60
11,479.18
9,537.59
53,573.85
21,717.95
31,855.90
3,388.19
14,722.33
3,457.85
7,231.22
3,128.01
270.88
976.79
11,606.90
6,922.85
18,529.75
11,472.57
973.52
12,446.09
‘A’
‘B’
‘C’
‘D’
‘E’
‘F’
‘G’
‘H’
‘M’
‘N’
1,395.92
29,139.79
35,017.55
0.16
30,535.71
0.06
11,801.04
7,981.45
21,016.77
3,474.84
59,509.32
19,782.49
2,684.88
53,003.14
50,597.87
18,461.57
32,136.30
2,010.63
35,244.09
34,146.93
6,009.79
4,332.09
18,180.18
10,341.88
7,510.41
3,000.73
150.12
464.08
11,125.34
7,805.41
18,930.75
9,558.59
905.02
10,463.61
6,083.66
1.39
8,467.14
47.19
59,509.32
53,003.14
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: 29th April, 2004
M. D. Ambani
A. D. Ambani
N. R. Meswani
H. S. Kohli
R. H. Ambani
M. L. Bhakta
T. R. U. Pai
Y. P. Trivedi
Dr. D. V. Kapur
M. P. Modi
S. Venkitaramanan
V. M. Ambani
-
-
Chairman & Managing Director
Vice-Chairman & Managing Director
} Executive Directors
}
Directors
-
Company Secretary
94
Reliance Industries Limited
GROWTH IS LIFE
Consolidated Profit and Loss Account for the year ended 31st March, 2004
Schedule
2003-2004
(Rs. in crore)
2002-2003
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 7, Schedule ‘N’]
‘I’
‘J’
‘K’
‘L’
Profit Before Tax
Provision for Current Tax
Provision for Deferred Tax
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 Previous year
Exchange Difference on account of opening Reserves
Dividend adjustment on Consolidation
Taxation Reserve Written Back
Taxation for Earlier Years
Debenture Redemption Reserve Written Back
Investment Allowance (Utilised) Reserve Written Back
Shares in Associates
Amount Available for Appropriations
APPROPRIATIONS
Capital Redemption Reserve
Debenture Redemption Reserve
Statutory Reserve
General Reserve
Interim Dividend on Preference Shares (paid)
Proposed Dividend on Equity Shares
Tax on Dividend
Balance Carried to Balance Sheet
74,641.71
18,170.87
56,470.84
4,445.50
65,073.72
14,965.63
50,108.09
4,198.02
52,025.34
1,098.72
58.08
(605.41)
52,576.73
2,419.81
39,156.37
1,439.67
3,335.18
84.37
3,453.17
615.70
3,250.81
46,266.66
6,310.07
351.06
790.02
5,168.99
_
5,168.99
3,470.41
3.95
52.33
10.00
(23.03)
850.00
76.63
_
9,609.28
_
1.33
9.57
3,000.00
_
733.10
91.64
400.00
281.08
_
2,000.00
20.08
698.19
89.46
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
246.07
624.00
4,003.31
_
4,003.31
2,818.47
_
49.71
_
_
_
_
87.73
6,959.22
3,835.64
5,773.64
36.85
3,488.81
3,470.41
28.53
Basic and Diluted Earning per Share of Rs 10 each (in Rupees)
[Ref. Note 12, Schedule ‘N’]
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: 29th April, 2004
M. D. Ambani
A. D. Ambani
N. R. Meswani
H. S. Kohli
R. H. Ambani
M. L. Bhakta
T. R. U. Pai
Y. P. Trivedi
Dr. D. V. Kapur
M. P. Modi
S. Venkitaramanan
V. M. Ambani
-
-
Chairman & Managing Director
Vice-Chairman & Managing Director
} Executive Directors
}
Directors
-
Company Secretary
Reliance Industries Limited
95
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
(250 00 00 000)
50 00 00 000 Preference Shares of Rs. 10 each
(50 00 00 000)
Issued, Subscribed and Paid up:
As at
31st March, 2004
(Rs. in crore)
As at
31st March, 2003
2,500.00
500.00
3,000.00
2,500.00
500.00
3,000.00
139 63 77 536 Equity Shares of Rs. 10 each fully
1,396.38
(139 63 77 536) paid up
Less: Calls in arrears - by others
0.43
1,396.38
0.46
TOTAL
Notes:
1. Of the above Equity Shares:
1,395.95
1,395.95
1,395.92
1,395.92
(a)
48 17 70 552 Shares were allotted as Bonus Shares by capitalisation of Share Premium and Reserves.
(48 17 70 552)
(b)
52 31 98 799 Shares were allotted pursuant to Schemes of Amalgamation without payments being received in
(52 31 98 799) 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 Shares were allotted on conversion / surrender of Debentures and Bonds, conversion of Term
(33 04 27 345) Loans, exercise of warrants against Global Depository Shares and re-issue of forfeited
equity shares
2. The Company has reserved isssuance of 5,26,87,851 Equity Shares of Rs. 10 each for offering to employees under
Employees Stock Option Scheme (ESOP).
96
Reliance Industries Limited
Schedules forming part of the Consolidated Balance Sheet
GROWTH IS LIFE
SCHEDULE ‘B’
Revaluation Reserve
As at
31st March, 2004
(Rs. in crore)
As at
31st March, 2003
As per last Balance Sheet
Less: Deduction on retirement of Revalued Assets
2,735.81
2.28
2,738.50
2.69
Capital Reserve
As per last Balance Sheet
Capital Redemption Reserve
2,733.53
291.28
2,735.81
291.28
As per last Balance Sheet
Add: Transferred from Profit and Loss Account
885.07
_
485.07
400.00
Securities Premium Account
As per last Balance Sheet
Less: Premium on Redemption of Debentures/Bonds
Less: Calls in arrears - by others
Debentures Redemption Reserve
885.07
885.07
15,973.02
147.95
15,825.07
2.31
16,153.81
180.79
15,973.02
2.55
15,822.76
15,970.47
As per last Balance Sheet
Add: Transferred from/ (to) Profit and Loss Account
1,406.66
(848.67)
1,125.58
281.08
Investment Allowance (Utilised) Reserve
As per last Balance Sheet
Less: Transferred to Profit and Loss Account
76.63
76.63
Taxation Reserve
As per last Balance Sheet
Less: Transferred to Profit and Loss Account
10.00
10.00
Statutory Reserve
As per last Balance Sheet
Add : Transferred from Profit and Loss Account
General Reserve
As per last Balance Sheet
Less: Transferred to Profit and Loss Account*
[Refer Note 7, Schedule ‘N’]
Add : Transferred from Profit and Loss Account
Shares in Reserves of Associates
Revaluation Reserves :
As per last Balance Sheet
Additions during the year
Capital Reserves :
As per last Balance Sheet
Additions during the year
Profit and Loss Account
TOTAL
_
9.57
4,270.10
84.37
4,185.73
3,000.00
9.71
308.62
318.33
13.65
30.05
43.70
* Cumulative amount transferred on account of Depreciation on Revaluation
Rs. 2,502.36 crore (Previous Year Rs. 2,417.99 crore)
557.99
1,406.66
_
_
76.63
_
10.00
_
_
_
76.63
10.00
9.57
_
2,885.80
615.70
2,270.10
2,000.00
7,185.73
4,270.10
_
9.71
9.71
_
13.65
13.65
362.03
5,773.64
33,621.60
23.36
3,470.41
29,139.79
Reliance Industries Limited
97
Schedules forming part of the Consolidated Balance Sheet
GROWTH IS LIFE
SCHEDULE ‘C’
SECURED LOANS
A.
DEBENTURES
1.
Non Convertible Debentures
2.
Deep Discount Debentures
Less: Unamortised Discounts
B.
TERM LOANS
From Financial Institutions
Rupee Loans
C. WORKING CAPITAL LOANS
From Banks
Rupee Loans
TOTAL
As at
31st March, 2004
As at
31st March, 2003
(Rs. in crore)
9,308.58
637.20
20.95
616.25
10,037.08
644.70
96.64
548.06
9,924.83
10,585.14
_
23.64
1,554.35
11,479.18
1,192.26
11,801.04
1.
(a) Debentures referred to in A above to the extent of Rs. 5330.54 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. 881.25 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. 30.00 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. 3655 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 28.04 crore are secured by way of second and subservient
charge on Company’s immovable property situated at Mumbai and by way of pledge of securities.
(f) Debentures referred to in A above are redeemable at par, on various dates starting from 31st May, 2004 and
ending on 24th November, 2018, the earliest being 31st May, 2004. The debentures are redeemable in the following
financial years viz: Rs.1204.04 crore in financial year 2004-05, Rs.942.40 crore in financial year 2005-06, Rs.1287.40
crore in financial year 2006-07, Rs.1,802.19 crore in financial year 2007-08, Rs.1377 crore in financial year 2008-
09, Rs.861.80 crore in financial year 2009-10, Rs.175 crore in financial year 2010-11, Rs.250 crore in financial year
2011-12, Rs.725 crore in financial year 2012-13, Rs.383.33 crore in financial year 2013-14, Rs.383.33 crore in
financial year 2014-15, Rs.133.33 crore in financial year 2015-16, Rs.133.33 crore in financial year 2016-17,
Rs.133.33 crore in financial year 2017-18 and Rs.133.33 crore in financial year 2018-19.
2. 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.
SCHEDULE ‘D’
UNSECURED LOANS
Long Term
i) From Banks
ii) From Others
Short Term
i) From Banks
ii) From Others
TOTAL
A.
B.
98
(Rs. in crore)
As at
31st March, 2004
As at
31st March, 2003
4,064.12
1,796.83
5,851.50
1,979.95
5,860.95
7,831.45
3,676.49
0.15
150.00
_
3676.64
9,537.59
150.00
7,981.45
Reliance Industries Limited
Schedules forming part of the Consolidated Balance Sheet
GROWTH IS LIFE
SCHEDULE ‘E’
FIXED ASSETS
Gross Block
Depreciation
Description
As at
01-04-2003
Additions
Deductions /
Adjustments
As at
31-03-2004
As at
01-04-2003
For the Deductions /
Upto
Adjustments 31-03-2004
Year
(Rs in crore)
Net Block
As at
As at
31-03-2004 31-03-2003
OWN ASSETS :
Leasehold Land
Freehold Land
Development Rights /
Producing Properties
Buildings
Plant & Machinery
Electrical Installations
Equipments
Furniture & Fixtures
Vehicles
Ships
Aircrafts & Helicopters
Jetties
56.79
230.50
1.63
35.69
_
0.02
58.42
266.17
4.72
_
0.53
_
5.25
52.07
_
_ _ 266.17 230.50
53.17
1,056.46
2,724.41
41,997.39
776.74
655.78
199.72
138.22
214.78
46.92
646.97
1,191.45
121.44
1,066.44
173.92
196.98
31.38
20.24
46.06
182.83
_
_
1.46
82.17
0.13
0.58
0.65
15.23
_
_
_
2,247.91
2,844.39
42,981.66
950.53
852.18
230.45
143.23
260.84
229.75
646.97
434.03 109.22
628.11 98.14
15,623.20 2,714.78
414.28 47.30
212.47 47.73
96.47 20.64
61.21 19.73
168.31 7.55
32.68 26.30
133.44 96.23
_ 543.25 1,704.66 622.43
0.36 725.89 2,118.50 2,096.30
65.76 18,272.22 24,709.44 26,374.19
0.04 461.54 488.99 362.46
0.28 259.92 592.26 443.31
0.40 116.71 113.74 103.25
11.96 68.98 74.25 77.01
_ 175.86 84.98 46.47
_ 58.98 170.77 14.24
_ 229.67 417.30 513.53
Sub-Total
48,744.68
3,068.06
100.24
51,712.50
17,808.92 3,188.15*
78.80 20,918.27 30,794.23 30,935.76
LEASED ASSETS :
Plant & Machinery
Ships
Sub-Total
INTANGIBLE ASSETS **
Technical Knowhow fees #
Software #
Sub-Total
Total
Previous Year
Capital Workin-Progress
NOTES :
15.49
9.98
25.47
_
_
_
_
15.49
9.98
8.74 2.87
3.65 2.00
_ 11.61 3.88 6.75
_ 5.65 4.33 6.33
_
_
25.47
12.39 4.87
_ 17.26 8.21 13.08
1,741.88
85.84
1,827.72
_
8.16
8.16
_
_
_
1,741.88
94.00
1,835.88
610.84 122.19
29.42 19.97
640.26 142.16
_ 733.03 1,008.85 1,131.04
_ 49.39 44.61 56.42
_ 782.42 1,053.46 1,187.46
50,597.87
46,727.47
3,076.22
3,991.41
100.24
121.01
53,573.85
50,597.87
18,461.57 3,335.18
15,076.94 3,453.17
78.80 21,717.95 31,855.90 32,136.30
68.54 18,461.57 32,136.30
3,388.19 2,010.63
a) Leasehold Land includes Rs. 0.21 crore (Previous Year Rs. 0.21 crore) in respect of which lease-deeds are pending
execution.
b) Buildings include :
i) Cost of shares in Co-operative Societies Rs. 0.01 crore ( Previous Year Rs. 0.01 crore).
ii) Rs. 93.20 crore (Previous Year Rs. 93.20 crore) incurred towards purchase/ acquisition of 1,94,819 Equity shares of
Re.1 each of M/s. Mature Trading and Investments Pvt. Limited with a right of occupancy of certain area of a commercial
premises.
c) Capital-work-in progress includes :
i) Rs.113.00 crore on account of pre-operative expenses (Previous Year Rs.76.76 crore)
ii) Rs.271.82 crore on account of cost of construction materials at site. (Previous Year Rs.133.97 crore)
iii) Rs.1170.91 crore on account of advance against capital expenditure. (Previous Year Rs.279.18 crore)
d) Additions/ Deletions and Capital work in Progress is net of Rs.12.98 crore on account of exchange difference during the
year. (Previous Year Rs.13.91 crore)
e) 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. 2,733.53 crore (Previous Year Rs. 2,735.81 crore) being the amount added on revaluation of
Plant and Machinery as at 01-04-1997.
* Refer to Note 7, Schedule ‘N’
** Intangible assets are re-grouped from Plant & Machinery and Equipments
# Other than internally generated
Reliance Industries Limited
99
Schedules forming part of the Consolidated Balance Sheet
GROWTH IS LIFE
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
With Others
In Fixed Deposit Accounts :
With Scheduled Banks
With Others
As at
31st March, 2004
(Rs. in crore)
As at
31st March, 2003
839.97
2,881.83
752.38
2,757.04
10.59
_
10.59
_
10.59
3,117.42
1,004.06
2,391.52
939.55
3,175.28
7,231.22
7,510.41
15.50
113.23
128.73
113.23
15.50
2,985.23
3,128.01
3,000.73
2.44
3.04
206.20
0.75
15.51
45.98
134.28
_
12.80
_
OTHER CURRENT ASSETS
Interest Accrued On Investments @
Premium Accrued on Investments in Preference Shares $
779.21
197.58
TOTAL
270.88
150.12
464.08
_
976.79
11,606.90
464.08
11,125.34
# Sundry Debtors include Rs. NIL (Previous Year Rs.10.26 crore) from Reliance Communications Infrastructure Limited,
Rs.NIL (Previous Year Rs. 3.14 crore) from Reliance Infocomm Limited and Rs 3.43 crore (Previous Year Rs NIL) from
Reliance Energy Limited, companies under the same management .
@ Interest Accrued on Investments includes Rs. 732.02 crore (Previous Year Rs. 490.58 crore) accrued on Deep Discount
Bonds issued by Reliance Communications Infrastructure Limited, a company under the same management.
$ Premium accrued on Investments in Preference Shares represents premium accrued on Preference Shares issued by
Reliance Infocomm Limited, a company under the same management.
100
Reliance Industries Limited
Schedules forming part of the Consolidated Balance Sheet
GROWTH IS LIFE
SCHEDULE ‘G’
LOANS AND ADVANCES
UNSECURED - (Considered Good)
Advances recoverable in cash or in kind or for
value to be received
Advance Tax (net of Provisions)
Deposits
Balance with Customs, Central Excise Authorities, etc.
TOTAL
Advances include:
As at
31st March, 2004
(Rs. in crore)
As at
31st March, 2003
4,634.94
81.89
2,003.59
202.43
6,922.85
5,404.76
151.06
2,058.92
190.67
7,805.41
(i)
(ii)
Rs.Nil (Previous Year Rs.0.35 crore) to the Officers of the Company (Maximum amount outstanding at any time during
the year Rs.0.35 crore).
Rs. Nil (Previous Year Rs. 888.00 crore) paid to Reliance Infocomm Limited, a company under the same management,
towards Debenture Application money/Call Money Advance pending allotment (Maximum amount outstanding at any
time during the year Rs. 888.00 crore).
(iii) Rs. Nil (Previous Year Rs. 2.83 crore) paid to others towards Shares Application money pending allotment.
(iv) Rs. 37.60 crore (Previous Year Rs. 40.10 crore) receivable from Reliance Communication Infrastructure Limited
(Maximum amount outstanding at any time during the year Rs. 40.10 crore) and Rs. 14.57 crore (Previous Year
Rs.15.53 crore) receivable from Reliance Infocomm Limited (Maximum amount outstanding at any time during the
year Rs.15.53 crore), companies under the same management, towards net investment in finance leases given.
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, 2004
(Rs. in crore)
As at
31st March, 2003
3.10
11,006.59
6.81
49.73
39.53
0.03
1.02
365.76
2.69
9,070.59
13.99
45.93
45.23
0.01
1.83
378.32
11,472.57
9,558.59
PROVISIONS
Provision for Wealth Tax
Provision for Income Tax
Provision for Leave encashment/ Superannuation / Gratuity
Proposed Dividend
Tax on Dividend
37.16
0.32
111.30
733.10
91.64
30.16
0.17
87.04
698.19
89.46
TOTAL
973.52
905.02
12,446.09
10,463.61
*
Includes for capital expenditure Rs.676.45 crore (Previous Year Rs.717.48 crore).
# These figures do not include any amounts, due and outstanding, to be credited to Investor Education and Protection
Fund.
Reliance Industries Limited
101
Schedules forming part of the Consolidated Profit and Loss Account
GROWTH IS LIFE
SCHEDULE ‘I’
OTHER INCOME
Dividend :
From Current Investments
From Long Term Investments
[Tax Deducted at Source Rs NIL (Previous Year
Rs. 14.37 crore.)]
2003-04
(Rs. in crore)
2002-03
_
4.54
0.11
92.69
Interest Received :
From Current Investments
From Long Term Investments
From Others
[Tax Deducted at Source Rs. 36.75 crore (Previous Year
Rs. 79.16 crore.)]
144.79
253.84
262.34
Premium on Investments in Preference Shares
4.54
92.80
147.14
209.22
163.58
660.97
519.94
197.58
_
Profit/(Loss) on Sale of Long Term Investments (net)
Profit on Sale of Current Investments (net)
8.27
98.95
0.66
36.31
Profit on Sale of Fixed Assets
Miscellaneous Income
TOTAL
SCHEDULE ‘J’
107.22
1.49
126.92
36.97
2.52
154.25
1,098.72
806.48
VARIATION IN STOCKS
2003-04
(Rs. in crore)
2002-03
STOCK-IN-TRADE (at close)
Finished/Traded Goods
Stock-in-process
STOCK-IN-TRADE (at commencement)
Finished Goods
Stock-in-process
2,757.04
752.38
3,175.28
939.55
3,175.28
939.55
3,509.42
4,114.83
1,159.51
519.83
4,114.83
1,679.34
TOTAL
(605.41)
2,435.49
102
Reliance Industries Limited
GROWTH IS LIFE
Schedules forming part of the Consolidated Profit and Loss Account
SCHEDULE ‘K’
MANUFACTURING AND OTHER EXPENSES
2003-04
(Rs. in crore)
2002-03
RAW MATERIAL CONSUMED
MANUFACTURING EXPENSES
32,503.11
30,856.93
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)
1,263.37
725.54
155.82
68.26
167.58
(48.10)
8.68
(265.96)
1,135.34
719.40
106.01
30.60
146.35
193.60
15.80
(176.56)
2,075.19
2,170.54
PAYMENTS TO AND PROVISIONS
FOR EMPLOYEES (including Managerial Remuneration)
Salaries, Wages and Bonus
Contribution to Provident Fund, Gratuity Fund,
638.67
475.55
Superannuation Fund, Employee’s State Insurance
Scheme, Pension Scheme, Labour Welfare Fund etc. 70.54
97.16
Employee’s Welfare and other amenities
99.11
86.17
806.37
660.83
SALES AND DISTRIBUTION EXPENSES
Samples, Sales Promotion and
Advertisement Expenses
Brokerage, Discount and Commission
Warehousing and Distribution Expenses
Sales Tax including defeased / Service Tax
Bad debts written off
Less: Provision for Doubtful Debts Written back
Provision for Doubtful Debts (net)
ESTABLISHMENT EXPENSES
Insurance
Rent
Rates & Taxes
Other Repairs
Travelling Expenses
Payment to Auditors
Professional Fees
Loss on Sale of Discarded Assets
General Expenses*
Wealth Tax
Charity and Donations
220.64
315.67
922.74
802.80
113.23
(113.23)
_
234.37
207.38
181.82
83.18
104.09
4.75
210.27
14.09
452.98
7.00
36.44
159.98
141.97
944.87
476.19
_
_
4.76
2,261.85
1,727.77
223.34
124.70
123.17
71.99
58.14
4.70
189.48
23.67
262.47
6.00
42.33
Less : Preoperative Expenses of Projects Under
Commissioning (Net)
TOTAL
1,536.37
39,182.89
26.52
39,156.37
1,129.99
36,546.06
4.29
36,541.77
* Includes investments written off Rs. NIL (Previous Year Rs. 18.15 crore)
Reliance Industries Limited
103
Schedules forming part of the Consolidated Profit and Loss Account
GROWTH IS LIFE
SCHEDULE ‘L’
INTEREST
Debentures
Fixed Loans
Others
TOTAL
SCHEDULE ‘M’
2003-04
1,126.79
118.90
193.98
1,439.67
(Rs. in crore)
2002-03
1,276.04
196.60
85.84
1,558.48
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:
a) 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.
b)
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.
c) 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.
d) 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.
e) 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.
f) 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.
g)
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.
h) 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.
i)
j)
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.
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 (AS) 13 -
“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
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 (U.K.) Limited
Reliance Technologies LLC
Reliance Infocom B.V.
Reliance Communications International Inc.
Reliance LNG Limited
Gas Transportation & Infrastructure Company Limited
Country of
incorporation
Proportion of
ownership interest
India
India
India
India
U.S.A.
U.S.A.
U.K.
U.S.A.
Netherlands
U.S.A.
India
India
100%
100%
100%
100%
100%
100%
100%
90%
100%
100%
90%
100%
2. The significant associate companies considered in the consolidated financial statements are:
Name of the associate companies
Reliance Capital Limited
Reliance Industrial Infrastructure Limited*
Reliance Energy Limited (Formerly BSES Limited)
Reliance Communication Infrastructure Limited
Reliance Telecom Limited
Reliance Life Insurance Company Limited
Reliance General Insurance Company Limited
Reliance Petroinvestments Limited
Reliance Europe Limited
* Accounted for based on unaudited financial results.
Country of
Incorporation
Proportion of
ownership interest
India
India
India
India
India
India
India
India
U.K.
46.71%
46.23%
41.03%
45.00%
25.60%
25.00%
25.00%
50.00%
50.00%
3. The carrying amount of investments includes goodwill (net of Capital Reserve) arising on acquisition of the associates
of Rs. 342.25 crore (Previous Year Rs. 456.53 crore)
4. The financial statements of Reliance Infocom Inc., Reliance Technologies LLC, Reliance Communications Inc. and
Reliance Communications International 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.
5. 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.
6. Turnover includes Income from Services of Rs. 1421.84 crore (Previous Year Rs. 364.56 crore).
7. The Gross Block of Fixed Assets include Rs. 2733.53 crore (Previous Year Rs 2735.81 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.84.37 crore (Previous Year Rs. 116.61 crore) and an equivalent amount has been withdrawn from General Reserve
and credited to the Profit and Loss Account.
8. On account of prudence and as originally recommended by Accounting Standard 26 on “Intangible Assets”, issued by
the Institute of Chartered Accountants of India, expenditure on employee separation scheme has been charged to the
Profit and Loss Account, instead of being amortised over 60 months.
Accordingly, Rs.107.42 crore expenditure incurred on employee separation schemes announced during the year and
Rs.47.15 crore being the unamortised Miscellaneous Expenditure on employee separation as at 1.4.2003 has been
charged under the head Payments to and Provisions for employees in the Profit & Loss Account.
Consequent to the above, the profit for the year is lower by Rs 117.37 crore.
Reliance Industries Limited
105
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Notes on Consolidated Accounts
SCHEDULE ‘N’ (contd.)
9. Managerial Remuneration:
i)
ii)
Salaries
Perquisites
iii) Commission
iv) Leave salary / Encashment
v) Contribution to provident fund and Superannuation fund
vi) Provision for gratuity
2003-04
(Rs in crore)
2002-03
1.65
1.47
36.59
0.56
0.40
0.29
40.96
1.81
1.62
29.86
1.55
0.46
0.07
35.37
10. A sum of Rs. 2.18 crore (net debit) [Previous Year Rs. 3.73 crore (net credit)] is adjusted to general expenses
representing Net Prior Period Items.
11. The deferred tax liability as at 31st March, 2004 comprise of the following:
a. Deferred Tax Liability
Related to fixed assets
b. Deferred Tax Assets
As at 31st
March, 2004
(Rs. in crore)
As at 31st
March, 2003
3,811.43
2,955.94
(i) Disallowance u/s 43B of the Income Tax Act 1961
(ii) Provision for doubtful debts
336.59
_
229.43
41.69
c. Provision for deferred tax (Net)
12. EARNINGS PER SHARE (EPS)
a) Net Profit as per Profit and Loss Account (Rs.in crore)
b) Less : Interim dividend on Preference Shares (Rs.in crore)
c)
Less : Provision for taxation for earlier years (Rs.in crore)
d) Net profit available for equity shareholder
(Numerator used for calculation) (Rs.in crore)
e) Weighted Average number of equity shares used as
336.59
3,474.84
2003-04
5,168.99
_
23.03
5,145.96
271.12
2,684.82
2002-03
4,003.31
20.08
_
3,983.31
denominator for calculating EPS
139,63,77,536
139,63,77,536
f)
Basic and Diluted Earnings per share (Rs.) :
(Face value Rs.10 each)
36.85
28.53
106
Reliance Industries Limited
GROWTH IS LIFE
Notes on Consolidated Accounts
13. 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)
Particulars
Petrochemicals
Refining
Others
Unallocable
Sub-Total
Eliminations
Total
2003-2004
2002-2003
2003-2004
2002-2003
2003-2004
2002-2003
2003-2004
2002-2003
2003-2004
2002-2003
2003-2004
2002-2003
2003-2004
2002-2003
1 Segment Revenue
External Turnover
Intra Segment Turnover
Inter Segment Turnover
Gross Turnover
Less: Excise duty recovered
23,423.86
7,050.05
-
30,473.91
2,089.18
21,791.01
7,399.38
-
29,190.39
1,834.63
30,520.16
-
11,086.13
26,884.20
-
7,524.92
2,526.82
34.69
-
41,606.29
2,347.42
34,409.12
2,243.80
2,561.51
8.90
1,432.88
41.33
-
1,474.21
119.59
Net Turnover
28,384.73
27,355.76
39,258.87
32,165.32
2,552.61
1,354.62
-
-
-
-
-
-
-
-
-
-
-
-
56,470.84
7,084.74
11,086.13
74,641.71
4,445.50
50,108.09
7,440.71
7,524.92
65,073.72
4,198.02
-
(7,084.74)
(11,086.13)
-
(7,440.71)
(7,524.92)
56,470.84
-
-
(18,170.87)
-
(14,965.63)
-
56,470.84
4,445.50
50,108.09
-
-
50,108.09
4,198.02
70,196.21
60,875.70
(18,170.87)
(14,965.63)
52,025.34
45,910.07
2 Segment Result before Interest
Extra ordinary items and Taxes
Less: Interest Expense
Add: Interest Income
Profit before Extra ordinary
Items and Taxes
Profit Before Tax
Current Tax
Deferred Tax
Net Profit after Tax
3 Other Information
Segment Assets
Segment Liabilities
Capital Expenditure
Depreciation
Non Cash Expenses
other than depreciation
3,368.44
2,928.80
3,499.67
2,344.01
588.96
598.30 (368.30)
1,439.67
660.97
40.81
1,558.48
519.94
7,088.77
1,439.67
660.97
5,911.92
1,558.48
519.94
-
-
-
-
7,088.77
1,439.67
660.97
3,368.44
3,368.44
2,928.80
2,928.80
3,499.67
3,499.67
2,344.01
2,344.01
588.96
588.96
3,368.44
2,928.80
3,499.67
2,344.01
588.96
598.30 (1,147.00)
598.30 (1,147.00)
351.06
790.02
598.30 (2,288.08)
(997.73)
(997.73)
246.07
624.00
(1,867.80)
6,310.07
6,310.07
351.06
790.02
5,168.99
14,256.03
3,009.58
438.74
1,490.41
14,975.72
2,530.83
1,181.68
1,581.08
29,911.06
5,919.14
1,548.86
1,501.80
27,694.80
4,029.04
2,416.52
1,046.46
15,843.90
333.70
2,205.85
173.15
4,130.62 11,944.42
685.68 3,183.67
870.52 125.48
125.46 85.45
16,618.42
3,218.06
-
84.47
71,955.41
12,446.09
4,318.93
3,250.81
4,873.38
4,873.38
246.07
624.00
4,003.31
63,419.56
10,463.61
4,468.72
2,837.47
47.15
92.96
47.15
92.96
-
-
-
-
-
-
-
-
-
-
6,310.07
6,310.07
351.06
790.02
5,168.99
71,955.41
12,446.09
4,318.93
3,250.81
-
-
-
-
-
-
-
-
-
-
47.15
92.96
5,911.92
1,558.48
519.94
4,873.38
4,873.38
246.07
624.00
4,003.31
63,419.56
10,463.61
4,468.72
2,837.47
(a) As per Accounting Standard on Segment Reporting (AS-17), issued by the Institute of Chartered Accountant of India, the
Company has reported the above on consolidated basis including businesses conducted through its subsidiaries and
associates.
(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
* Communication business conducted through subsidiaries and associates viz. Reliance Infocom Inc., Reliance Infocom
B.V. ,Reliance Technologies LLC.,Reliance Communications Inc.,Reliance Communications (U.K.) Ltd., Reliance
Communications International Inc., Reliance Infocomm Limited and Reliance Communications Infrastucture Limited.
* Risk and Finance business conducted through Reliance Petroinvest Limited, Reliance Capital Limited and Reliance
General Insurance Company Limited.
* Power business conducted through Reliance Energy Limited.
Reliance Industries Limited
107
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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
14. PROJECT DEVELOPMENT EXPENDITURE
(in respect of Projects included under Capital work-in-progress)
2003-04
(Rs. in crore)
2002-03
44,182.88
12,287.96
56,470.84
70,724.48
1,230.93
71,955.41
12,265.39
180.70
12,446.09
4,318.33
0.60
4,318.93
39,256.15
10,851.94
50,108.09
62,098.84
1,320.72
63,419.56
10,461.07
2.54
10,463.61
4,468.73
-
4,468.73
Opening Balance
Add: Project Development Expenditure transferred
from Profit and Loss Account
Interest Capitalised
Less:Project Development Expenses Capitalised
during the year
Closing Balance
15. ADDITIONAL INFORMATION
2003-04
26.52
143.75
76.76
170.27
247.03
134.03
113.00
(Rs. in crore)
2002-03
64.86
4.29
84.85
89.14
154.00
77.24
76.76
As at 31st
March, 2004
As at 31st
March, 2003
(Rs. in crore)
(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
(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
39.99
1748.70
0.41
_
496.79
_
243.33
399.20
1,958.82
0.41
_
207.62
_
455.26
108
Reliance Industries Limited
GROWTH IS LIFE
Notes on Consolidated Accounts
SCHEDULE ‘N’ (contd.)
(iii) Liability in respect of bills discounted with Banks
(a) In respect of joint ventures
(b) In respect of others
(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, 2004
As at 31st
March, 2003
(Rs. in crore)
_
588.87
158.95
400.77
35.79
1,277.94
5,036.31
_
502.03
133.10
261.03
166.21
4,936.56
3,700.71
(D) The Income-Tax assessments of the Company have been completed up to Assessment Year 2001-2002. The
disputed demand outstanding up to the said Assessment Year is Rs. 352.88 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
16. 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
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
Reliance Life Insurance Company Limited
Associate Companies and Joint Ventures
Reliance General Insurance Company Limited
Reliance Capital Limited
Reliance Energy Limited (formerly BSES Limited )
Reliance Infocomm Limited
Reliance Communications Infrastructure Limited
Reliance Telecom Limited
Reliance Industrial Infrastructure Limited
Reliance Europe Limited
Reliance Petroinvestments Limited
Reliance Rubbers and Chemicals Limited
Indian Petrochemicals Corporation 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
Rosche Trading Private Limited
Shri Mukesh D Ambani
Shri Anil D Ambani
Shri Nikhil R Meswani
Shri Hital R Meswani
Shri H S Kohli
Key Managerial Personnel
Dhirubhai Ambani Foundation
Others
Jamnaben Hirachand Ambani Foundation
Dhirubai Ambani Memorial Trust
Hirachand Govardhandas Ambani Public Charitable Trust
Reliance Industries Limited
109
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Notes on Consolidated Accounts
SCHEDULE ‘N’ (contd.)
(ii) Transactions during the year with related parties :
A s s o c i a t e s
K e y
M a n a g e r i a l
P e r s o n n e l
(Rs. in crore)
O t h e r s
T o t a l
Sr. Nature of Transactions
N o . (Excluding reimbursements)
A) Debentures Issued
Balance as at 1st April,2003
Issued during the year
Repaid during the year
Balance as at 31st March, 2004
B) Loans Taken
Balance as at 1st April,2003
Taken during the year
Repaid during the year
Balance as at 31st March, 2004
C) Fixed Assets/Capital Work in Progress
Balance of Assets taken on Lease as on 1st April,2003
Assets taken on Lease during the year
Balance of Assets taken on Lease as at 31st March, 2004
Assets given on Lease during the year
Assets Purchased during the year
D) Investments
Balance as at 1st April,2003
Purchased/adjusted during the year
Sold during the year
Balance as at 31st March, 2004
68.03
1,020.00
(1,211.03)
187.03
(218.50)
_
(68.03)
154.09
5,041.04
(499.49)
4,047.98
(345.40)
1,147.15
(154.09)
13.98
_
(0.78)
6.81
(13.98)
_
(58.88)
8.15
(11.87)
6,090.67
8,387.02
(4,389.96)
_
(1,645.53)
14,436.80
(6,090.67)
E) Premium Accrued on Investments in Preference Shares 197.58
F)
Interest Accrued on Investments
G) Sundry Debtors as at 31st March, 2004
732.02
(490.58)
164.31
(149.20)
110
Reliance Industries Limited
68.03
1,020.00
(1,211.03)
187.03
(218.50)
_
(68.03)
154.09
5,041.04
(499.49)
4,047.98
(345.40)
1,147.15
(154.09)
13.98
_
(0.78)
6.81
(13.98)
_
(58.88)
8.15
(11.87)
6,090.67
8,387.02
(4,389.96)
_
(1,645.53)
14,436.80
(6,090.67)
197.58
732.02
(490.58)
164.31
(149.20)
GROWTH IS LIFE
Notes on Consolidated Accounts
SCHEDULE ‘N’ (contd.)
Sr. Nature of Transactions
N o . (Excluding reimbursements)
H) Loans & Advances
i) Loans Given
Balance as at 1st April,2003
Given during the year
Returned during the year
Balance as at 31st March, 2004
ii) Advances recoverable in cash or in kind
Balance as at 1st April,2003
Given during the year
Returned/Adjusted during the year
Balance as at 31st March, 2004
iii) Deposit
Balance as at 1st April,2003
Given during the year
Returned during the year
Balance as at 31st March, 2004
I) Sundry Creditors
Balance as at 31st March, 2004
J) Turnover
K) Sale of Investments
L) Other Income
Dividend
Interest Received
Premium Accrued on Investments in Preference Shares
Lease Rental Income
Miscellaneous Income
M) Purchases
(Rs. in crore)
O t h e r s
T o t a l
A s s o c i a t e s
K e y
M a n a g e r i a l
P e r s o n n e l
2721.18
6,872.15
(6,634.75)
6,924.84
(5,245.99)
2,668.49
(2,721.18)
1,034.84
77.69
(1,396.93)
988.11
(2,684.23)
124.42
(1,034.84)
1,163.25
_
(736.46)
10.16
(210.05)
1,153.09
(1,163.25)
583.28
(1,755.17)
4,439.86
(1,369.38)
107.54
(179.40)
70.79
(132.82)
399.85
(434.93)
197.58
7.89
(8.32)
25.11
(55.06)
623.75
(171.24)
2,721.18
6,872.15
(6,634.75)
6,924.84
(5,245.99)
2,668.49
(2,721.18)
1,034.84
77.69
(1,396.93)
988.11
(2,684.23)
124.42
(1,034.84)
1,163.25
_
(736.46)
10.16
(210.05)
1,153.09
(1,163.25)
583.28
(1,755.17)
4,439.86
(1,369.38)
107.54
(179.40)
70.79
(132.82)
399.85
(434.93)
197.58
7.89
(8.32)
25.11
(55.06)
623.75
(171.24)
Reliance Industries Limited
111
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Notes on Consolidated Accounts
SCHEDULE ‘N’ (contd.)
Sr. Nature of Transactions
N o . (Excluding reimbursements)
N) Purchases of Investments
O) Expenditure
Interest Paid
Payments to and provisions for Directors
Directors’Sitting Fees (Rs.NIL,Previous Year Rs.30000)
Electric Power,Fuel and Water
Rent
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
Product Handling charges
Wholesale Traffic Charges
Investments written off
Others
P) Guarantees Issued
Financial Guarantees
Performance Guarantees
(Rs. in crore)
O t h e r s
T o t a l
A s s o c i a t e s
K e y
M a n a g e r i a l
P e r s o n n e l
1.93
108.41
(4.00)
372.09
(409.86)
91.17
(2.16)
9.02
(15.42)
16.95
(22.60)
12.57
(22.53)
63.32
(38.65)
_
(0.02)
147.03
(404.53)
5.55
(6.30)
29.87
(22.54)
657.10
(753.43)
78.94
173.70
_
(0.45)
43.03
(18.09)
243.33
(455.26)
1,236.82
(5,102.77)
40.96
(35.37)
1.93
108.41
(4.00)
40.96
(35.37)
372.09
(409.86)
91.17
(2.16)
9.02
(15.42)
16.95
(22.60)
12.57
(22.53)
63.32
(38.65)
_
(0.02)
147.03
(404.53)
5.55
(6.30)
29.87
(22.54)
16.51
(31.55)
657.10
(753.43)
78.94
173.70
_
(0.45)
43.03
(18.09)
243.33
(455.26)
1,236.82
(5,102.77)
16.51
(31.55)
Note: Figures in brackets represents previous year’s amounts.
112
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GROWTH IS LIFE
Consolidated Cash Flow Statement Annexed to the Balance Sheet
for the period April 2003-March 2004
2003-04
(Rs. in crore)
2002-03
A: CASH FLOW FROM OPERATING ACTIVITIES:
Net Profit before tax as per Profit and Loss Account
6,310.07
4,873.38
Adjusted for:
Share in Income of Associates
Net Prior Year Adjustments
Miscellaneous Expenditure written off
Provision for Doubtful Debts
Provision for Diminution in value of Investments
(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
Operating Profit before Working Capital Changes
Adjusted for:
Trade and Other Receivables
Inventories
Trade Payables
Cash Generated from Operations
Net Prior Year Adjustments
Taxes Paid
Net Cash from Operating Activities
(58.08)
2.18
47.15
_
_
12.60
3,335.18
(84.37)
14.96
(107.22)
(4.54)
(858.52)
1,439.67
(418.41)
279.19
2,065.67
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
(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
3,739.01
10,049.08
3,631.66
8,505.04
(2,221.41)
(2,536.34)
2,996.14
1,926.45
11,975.53
(2.18)
(305.06)
11,668.29
(4,360.38)
8.84
(37,462.84)
30,133.33
615.72
559.83
4.54
(10,500.96)
(1,761.61)
6,743.43
3.73
(149.15)
6,598.01
(3,757.06)
27.20
(29,607.12)
26,349.95
(524.74)
389.67
132.95
(6,989.15)
Reliance Industries Limited
113
GROWTH IS LIFE
Consolidated Cash Flow Statement Annexed to the Balance Sheet
for the period April 2003-March 2004
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
2003-04
(Rs. in crore)
2002-03
0.26
_
1,910.49
(4,749.08)
3,945.36
(731.51)
(1,422.09)
401.74
(400.00)
8,172.56
(7,656.76)
579.31
(622.72)
(1,696.43)
Net Cash Used in Financing Activities
(1,046.57)
(1,222.30)
Net Increase / (Decrease) in Cash and Cash Equivalents
Opening Balance of Cash and Cash Equivalents
Closing Balance of Cash and Cash Equivalents
120.76
150.12
270.88
(1,613.44)
1,763.56
150.12
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: 29th April, 2004
M. D. Ambani
A. D. Ambani
N. R. Meswani
H. S. Kohli
R. H. Ambani
M. L. Bhakta
T. R. U. Pai
Y. P. Trivedi
Dr. D. V. Kapur
M. P. Modi
S. Venkitaramanan
V. M. Ambani
-
-
Chairman & Managing Director
Vice-Chairman & Managing Director
} Executive Directors
}
Directors
-
Company Secretary
114
Reliance Industries Limited
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 which is the primary reporting basis.
Reconciliation of Profit determined under Indian GAAP with Net Income according to US GAAP.
Year ended 31st March, 2004
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
Indirect Preoperative Expenses
Foreign Currency and Hedging
Depreciation
Deferred Income Tax
Employee Benefits
Loss on early extinguishment of debt
Other
Notes
Rs.
(crore)
US $
(Millions)
5,160
9
5,169
(163)
(26)
13
160
(60)
67
(148)
(6)
1
2
3
4
5
6
7
1,180
2
1,182
(37)
(6)
3
37
(14)
15
(34)
(1)
Consolidated net income in accordance with US GAAP
5,006
1,145
43.718 Rs. = 1 US $ (Exchange rate as on 31.03.2004)
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
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.
2.
Indirect Preoperative Expenses
Under Indian GAAP, certain indirect expenses incurred during construction are capitalized. Under US GAAP, such
indirect costs are expensed as incurred.
3. 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 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.
Reliance Industries Limited
115
4. Depreciation
GROWTH IS LIFE
Under Indian GAAP, indirect preoperative expenses incurred during construction are capitalized. 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.
5. 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.
6. 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 was being amortized over 60 months. On
account of prudence, with effect from 1 April, 2003, as originally recommended by Accounting Standard 26 on “Intangible
Assets” issued by the Institute of Chartered Accountants of India, expenditure on employee separation scheme and any
unamortized amounts have been charged to the Profit and Loss Account.
Under US GAAP, provision for leave encashment is accounted on actual basis. Compensation towards voluntary retirement
scheme is charged in the year in which the employees accept the offer.
7. Loss on extinguishment of debt
Under Indian GAAP, debt extinguishment premiums are adjusted against Securities Premium Account.
Under US GAAP, premiums for early extinguishment of debt are expensed as incurred.
As per our report of even date
For Deloitte Haskins & Sells
Chartered Accountants
P. R. Barpande
Partner
Mumbai
Dated: 29th April, 2004
For and on behalf of the Board
A.D. Ambani
Vice-Chairman & Managing Director
N.R. Meswani
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, 2004 and the Profit and Loss account
for the year then ended and have issued our report thereon dated 29th April, 2004. Our audit also included the accompanying
Reconciliation of Net Profit under Indian GAAP to Consolidated Net Income in accordance with US GAAP (“the Reconciliation”).
The 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: 29th April, 2004
For Deloitte Haskins & Sells
Chartered Accountants
P. R. Barpande
Partner
(Membership No. 15291)
116
Reliance Industries Limited
GROWTH IS LIFE
CIRCULAR TO SHAREHOLDERS
Reliance Industries Limited
117
GROWTH IS LIFE
118
Reliance Industries Limited
GROWTH IS LIFE
Dear Shareholders,
Dematerialisation of Securities
We are happy to inform you that over 92% 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 dematerialized 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 dematerialized 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 dematerializing your shares:
• Open a Demat Account with any of the Depository Participants (DPs)
• Submit Demat request Form (DRF) duly signed by all the holders along with the share certificates
only to the DPs.
• Obtain acknowledgment 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 COMPUTERSHARE PRIVATE LIMITED
In case you need any additional information on this matter please feel free to contact our special advisory cell.
Demat Advisory Cell
Karvy Computershare Private Limited
46, Avenue 4, Street No.1, Banjara Hills,
Hyderabad 500034, India
Telephone Nos: +91-40-23320666 / 23320711 / 23323031 / 23323037
e-mail: rilinvestor@karvy.com
In case you have already dematerialised your holdings kindly ignore this communication.
Reliance Industries Limited
119
GROWTH IS LIFE
Nomination facility
Section 109A of the Companies Act, 1956 provides inter alia, the facility of nomination to share/debenture holders. This
facility is mainly useful for all holders holding the shares/ debentures in single name. In case where the securities are held in
joint names, the nomination will be effective only in the event of the death of all the holders.
Investors are advised to avail of this facility, especially investors holding securities in single name, to avoid the process of
transmission by law.
Investors holding shares in physical form may send nomination form provided in this Annual Report or which may also be
downloaded from the Company’s website (www.ril.com under the section “Investor Relations”) to the Registrar and Transfer
Agent of the Company at Hyderabad. However, if the share are held in dematerialized form, the nomination has to be
conveyed to your Depository Participant directly, as per the format prescribed by them.
Payment of dividend through Electronic Clearing Service
The Reserve Bank of India’s Electronic Clearance Service (ECS)provides you an option to collect your dividend/interest
directly through your bank accounts rather than receiving them through post. Under this option, your bank account would be
directly credited and an advice thereof would be issued by us after the transaction is effected. Your bank branch will credit
your account and indicate the credit entry as “ECS” in your pass book/statement of account. Presently, only individual
transactions upto Rs.1,00,000 are covered under the scheme. If you maintain more than one bank account, payment can be
received at any one of your accounts. You do not have to open a new bank account for the purpose. The highlights of this
service are:
a.
Instant credit to the bank account of the investor through electronic clearing at no extra cost.
b. Exposure to delays in postal service avoided.
c. As there can be no loss in transit of the instruments, issue of duplicate instrument is avoided;
d. Prompt credit of dividend/interest is assured.
e. No chance of fraudulent encashment of instrument.
The new method will enable you to receive the dividend/interest quickly and safely and will minimize the loss of warrants
sent through post or fraudulent encashment of the same.
If you would like to avail of this method of payment, you are requested to fill up the Mandate Form provided in this Annual
Report and mail to the Company’s registrar and transfer agents - M/s Karvy Computershare Private Limited, Unit: U-31, 46,
Avenue 4, Street No.1, Banjara Hills, Hyderabad 500034. The information provided by you will be kept confidential and
would be utilized only for the purpose of effecting the payments meant for you.
This would be additional mode of payment. You would have the right to withdraw from this mode of payment by giving an
advance notice of six weeks. If you have furnished the bank account number and name of the bank and its branch for printing
those details on the dividend/interest warrant in response to our previous circular, you may still avail this method of payment
in substitution of your earlier instructions.
It may be noted that this facility is presently made available to the investors residing at fifteen centers, viz., Mumbai,
New Delhi, Kolkata, Chennai, Ahmedabad, Bangalore, Hyderabad, Pune, Kanpur, Nagpur, Jaipur, Chandigarh,
Bhubaneswar, Guwahati and Thiruvananthapuram. As per Reserve Bank of India (RBI), this service will shortly be
extended to some more centers. Information from the investors residing in other areas will be used as and when RBI
issues necessary directions to this effect.
Investors holding shares in physical form may send there ECS Mandate Form provided in this Annual Report or which may
also be downloaded from the Company’s website (www.ril.com under the section “Investor Relations”) to the Registrar and
Transfer Agent of the Company at Hyderabad. However, if the share are held in dematerialized form, the ECS mandate has
to be conveyed to your Depository Participant directly, as per the format prescribed by them.
120
Reliance Industries Limited
GROWTH IS LIFE
Nomination Form
[ To be filled in by individual(s) ]
To,
From
Name of shareholder and address
Reliance Industries Limited
C/o. Karvy Computershare Private 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 ( )
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
Witness (two)
1.
2.
Name and Address of Witness
Signature & Date
Reliance Industries Limited
121
INSTRUCTIONS :
GROWTH IS LIFE
1.
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.
2.
The nomination can be made by individuals only. Non individuals including society, trust, body corporate,
partnership firm, Karta of Hindu Undivided Family, holder of power of attorney cannot nominate. If the Shares
are held jointly all joint holders shall sign (as per the specimen registered with the Company) the nomination
form.
3.
A minor can be nominated by a holder of Shares and in that event the name and address of the Guardian shall
be given by the holder.
4.
The nominee shall not be a trust, society, body corporate, partnership firm, Karta of Hindu Undivided Family,
or a power of attorney holder. A non-resident Indian can be a nominee on re-patriable basis.
5.
6.
7.
8.
9.
Transfer of Shares in favour of a nominee shall be a valid discharge by a 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; 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.
Whenever the Shares in the given folio are entirely transferred or dematerialised, then this nomination will
stand rescinded.
10.
Upon receipt of a duly executed nomination form, the Registrars & 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.
The Company will not entertain any claims other than those of a registered nominee, unless so directed by a
Court.
13.
The intimation regarding nomination / nomination form shall be filed in duplicate with the Registrars & Transfer
Agents of the Company who will return one copy thereof to the Shareholders.
14.
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)
122
Reliance Industries Limited
GROWTH IS LIFE
ELECTRONIC CLEARING SERVICES (ECS) MANDATE FORMAT
To
Reliance Industries Limited
C/o. Karvy Computershare Private Limited
46, Avenue 4, Street No. 1, Banjara Hills
Hyderabad 500 034
Dear Sirs,
Please fill-in the information in CAPITAL LETTERS in ENGLISH ONLY. Please
FORM FOR ELECTRONIC CLEARING SERVICES FOR PAYMENT OF DIVIDEND/INTEREST.
wherever is applicable.
(cid:1)
For shares held in physical form
Master
Folio No.
For shares held in electronic form
FOR OFFICE USE ONLY
ECS
Ref.No.
DP. Id
Client Id
Name of
First holder
Bank name
Branch name
Branch code
(9 Digits Code Number appearing on the MICR Band of the cheque supplied by the Bank).
Please attach a xerox copy of a cheque or a blank cheque of your bank duly cancelled for
ensuring accuracy of the banks name, branch name and code number.
Savings
Current
Cash Credit
Account type
A/c. No. (as appearing
in the cheque book)
Effective date of this
mandate
(cid:1)
(cid:1)
(cid:1)
I, hereby, declare that the particulars given above are correct and complete. If any transaction is delayed or not effected
at all for reasons of incompleteness or incorrectness of information supplied as above, Karvy Computershare Private
Limited, will not be held responsible. I agree to avail the ECS facility provided by RBI, as and when implemented by RBI/
Reliance Industries Limited.
I further undertake to inform the Company any change in my Bank/branch and account number.
Dated : _________________
Note : On dematerialisation of existing physical shares, for which you have availed ECS facility, the above form
(Signature of First holder)
needs to be re-submitted.
Reliance Industries Limited
123
GROWTH IS LIFE
124
Reliance Industries Limited
List of Investor Service Centres of Karvy Computershare Private Limited
City name
STD Code
Phone-Office
Fax Nos.
City name
STD Code
Phone-Office
Fax Nos.
GROWTH IS LIFE
Bhubaneshwar
0674
2539287,2539387,2532103,
Agra
Ahmedabad
Aligarh
Allahabad
Anantapur
Ankleswar
Aurangabad
Bangalore
Bareilly
Belgaum
Bellary
Bharuch
Bhavnagar
Bhimavaram
Bhopal
0562
079
0571
0532
08554
02646
0240
080
0581
0831
0839
02642
0278
08816
0755
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
Kochi
Kolkata
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
0484
033
2526660 to 63
2526663
26420422/26400527/28
26565551
2509106 to 08
2561073 to 74
2429272
2561073
249601/249607/249608
243291/243292/243392/
243955
2363517/23/24/30
26621184/26621192
2476797, 2476809
2402544/722/880
254531/32/33/34/35
242082/242394/241546
2525005/06/08/09
231766/67/68/69
2559332/2559337/
2574731/569/589/2729762
2532804
2760882,2760884
5071726,5071727,
5071728,5079702
28153445
28153658/28153181
—
—
—
6621169
2476797
2402933
—
—
—
—
—
—
—
—
28153181
257501
257502
2237501-502/2237503-505/
2237506/2237507
2335187/88
—
—
2713351, 2714046, 2714047
2714047
2436077/177
2586375 to 77
227851/52/54
2225601/03/15/16/17/24
2701886,2701891,2700594
2226275,2226276
2333825,2333814
2326684/2326686
312381/276755 to 57
2353961/62/63/73
—
—
—
—
—
—
2346519
2326687
—
—
23320666 / 23323037
23323058
2431250/42/54,2269891 to 93
2375099,2363321,2375039
2557862 TO 65
2487020,2487045,2487048
2624154/2624140/2624125
2387382/2387383
2330127,2331445,3092333
437192 to 93
2269894
2364660
2553106
—
—
2387381
2558334
—
241892/241893/241894
241891
2310884,2322152
2323104
24644891/7231/24634788/89/
24644866,
5432,24652175 to 78
24634787
Lucknow
Madurai
Mangalore
Mattancherry
Mumbai
(Nariman Point)
Mumbai (Andheri)
0522
0452
0824
0484
022
022
2236820 to 26
2350855,2350852 to 854
2492302/2496332/2496352
2223243
2236826
2350856
—
—
30325645, 624
22855731
26730799/843/311/867/
153/292
26730152
Mysore
0821
2524292/2524293/2441520/
Nadiad
Nasik
Nellore
New Delhi
Palghat
Panjim
Patna
Pondicherry
Proddatur
Pune
Rajahmundry
Rajkot
Ranchi
Renukoot
Rourkela
Salem
0268
0253
0861
011
0491
0832
0612
0413
08564
020
0883
0281
0651
05446
0661
0427
2441524/2438003 - 06
2524294
2563210/2563245/2563248
2577811,5602542,5602543,
5602544
—
—
2349935/2349936/2349937
2349939
23324401/23353835/981
23324621
2547143
2426870 TO 74
2321354/55/56/57
—
—
—
2220636, 2220640, 2220633,
2220644
2220659
250822/250823/250824
—
4048790/91/92
25456842
2434468/2434469
2434471
2239403/2239404/2239338/
2294316
2330386, 2330394, 2330320
—
—
253179
253179
2510771, 2510772
—
2335700/2335705/
2335701 - 704
2335705
Shimoga
0818
2228795/96/97/2227485/
Surat
Thanjavur
Theni
Tirupati
Tirupur
Trichur
Trichy
Trivandrum
Tumkur
Udupi
Vadodara
2226747
2357356/2351976/2369928
2226747
2368693
279407, 279408
261285, 261108
2252756
2205865, 5330158
2322483, 2322484
—
—
—
—
—
2791322, 2798200, 2793799,
2793800, 2791000
2725987, 2725989 to 991
2261891/2/3/4
2530962/63/64/65
2794132
2725987
—
—
2225325/2225389
2363207
0261
04362
04546
0877
0421
0487
0431
0471
0816
0825
0265
Vallabh Vidhyanagar 02692
239407/239420/239450
—
Varanasi
Vijayawada
0542
0866
2225365, 2223814
2223814
2495200/400/500/600/
Vishakapatnam
0891
Vishakapatnam -
700/800
2495300
2752915-18
2752915-18
Gajuwaka
0891
2511685, 2511686
—
Reliance Industries Limited
125
GROWTH IS LIFE
126
Reliance Industries Limited
GROWTH IS LIFE
ATTENDANCE SLIP
Reliance Industries Limited
Registered Office: 3rd floor, Maker Chambers IV, 222, Nariman Point, Mumbai 400 021.
PLEASE FILL ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE OF THE MEETING HALL.
Joint shareholders may obtain additional Slip at the venue of the meeting.
DP. Id*
Client Id*
NAME AND ADDRESS OF THE SHAREHOLDER
Master Folio No.
No. of Share(s) held:
I hereby record my presence at the 30TH ANNUAL GENERAL MEETING of the Company held on Thursday, the 24th June,
2004 at 11.00 a.m. at Birla Matushri Sabhagar, 19, New Marine Lines, Mumbai 400 020.
Signature of the shareholder or proxy
*Applicable for investors holding shares in electronic form.
....................................................................................... TEAR HERE .................................................................................................
Reliance Industries Limited
PROXY FORM
Registered Office: 3rd floor, Maker Chambers IV, 222, Nariman Point, Mumbai 400 021.
DP. Id*
Client Id*
Master Folio No.
I/We ..................................................................................................................................................................................................... of
............................................................................................................................. being a member/members of Reliance Industries
Limited hereby appoint ...........................................................................................................................................................................
of ........................................................................................................................................................................................ or failing him
............................................................................................................ of .................................................................................................
as my/our proxy to vote for me/us and on my/our behalf at the 30TH ANNUAL GENERAL MEETING to be held on Thursday,
the 24th June, 2004 at 11.00 a.m. or at any adjournment thereof.
Signed this ......................................... day of ................................................ 2004.
* Applicable for investors holding shares in electronic form.
Affix a 15
paise
revenue
stamp
NOTE:
(1)
The proxy in order to be effective should be duly stamped, completed and signed and must be deposited at the
Registered Office of the Company not less than 48 hours before the time for holding the aforesaid meeting. The
Proxy need not be a member of the Company.
(2) Members holding shares under more than one folio may use photocopy of this Proxy Form for other folios. The
Company shall provide additional forms on request.
Reliance Industries Limited
127
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Tel. Nos.: +91-40-23320666/23320711/23323037
Fax No.: +91-40-23323058
E-mail: rilinvestor@karvy.com
128
Reliance Industries Limited
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