MIRA
INFORM REPORT
|
Report Date : |
11.06.2007 |
IDENTIFICATION DETAILS
|
Name : |
RELIANCE
INDUSTRIES LIMITED |
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Registered
Office : |
3rd
Floor, Maker Chambers IV, 222, Nariman Point, Mumbai – 400 021, |
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Country : |
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Financials (as
on) : |
31.03.2006 |
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Date of
Incorporation : |
04.08.1977 |
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Com. Reg. No. |
11-19786 |
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CIN No.: [Company
Identification No.] |
U17110MH1977PLC019786 |
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TAN No.: (Tax
Deduction & Collection Account No.) |
MUMRO9795C/MUMR00462A |
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Legal Form : |
Public Limited
Liability Company. The company’s
shares are listed on the Stock Exchanges. |
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Line of
Business : |
Manufacturers and Marketers of Fabrics,
Polyester Filament Yarn, Polyester Staple Fibres, PTA, LAB, Ethylene Glycol,
PVC, PE, PP, Crude Oil, Gas, Norman Paraffin, Fibre Fill, Ethylene,
Propylene, Benzene, Xylene and Toluene. |
RATING & COMMENTS
|
MIRA’s Rating
: |
A |
RATING |
STATUS |
PROPOSED
CREDIT LINE |
|
|
56-70 |
A |
Financial & operational base are regarded
healthy. General unfavourable factors will not cause fatal effect. Satisfactory
capability for payment of interest and principal sums |
Fairly Large |
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Maximum Credit
Limit : |
USD 1990000000 |
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Status : |
Good |
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Payment
Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is an old
and well-established company. The group’s activities span exploration and
production of oil and gas, refining and marketing, petrochemical (polyester,
polymers and intermediates), textiles, financial review and insurance, power,
telecom etc. In The company can
be considered good for business dealings. |
LOCATIONS
|
Registered
Office : |
3rd Floor,
Maker Chambers IV, 222, Nariman Point, Mumbai – 400 021, |
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Tel. No.: |
91-22-30325000/30327000/22785000 |
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Fax No.: |
91-22-30322268 |
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E-Mail : |
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Website : |
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Corporate
office : |
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Tel No. : |
91-22-30327000 |
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Administrative
Office : |
Chitrakoot, 2nd
Floor, Shree Ram Mills Compound, Ganpatrao Kadam Marg, Worli, Mumbai – 400
013, |
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Tel. No.: |
91-22-24962780/24981163/24981167/24981667-90 |
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Factory : |
v
Patalganga Complex B-4 Industrial Area, Patalganga, Off v
Naroda Complex 103/106
Naroda Industrial Estate, Naroda, Ahmedabad – 382 330, v
Hazira Complex Village
Mora, v
Village Meghpar/Padana, Taluka Lalpur,
Jamnagar-361280, |
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Refinery
Complex : |
Taluka Lalpur, District
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Branches : |
Chitrakoot, Shree
Ram Mills Compound, Ganpatrao Kadam Marg, Worli, Mumbai – 400 018, |
DIRECTORS
|
Name : |
Mr. Mukesh D.
Ambani |
|
Designation : |
Chairman & Managing Director |
|
Date of
Appointment: |
31.07.2002 |
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Qualification: |
Chemical Engineer from |
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Other
Directorship: |
1) Reliance Europe Limited 2) Reliance Infocomm Limited 3) Reliance Communications I
Infrastructure Limited 4) Chairman of Indian Petrochemicals Corporation Limited 5) Member of Shareholder’s/Investors Grievance Committee of the
Board. |
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|
|
|
Name : |
Mr. Nikhil R.
Meswani |
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Designation : |
Executive Director |
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Appointment: |
Since 1990 |
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Qualification: |
Chemical Engineer |
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|
Name : |
Mr. Hital R.
Meswani |
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Designation : |
Executive Director |
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|
Name : |
Mr. H. S. Kohli |
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Designation : |
Executive Director |
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Date of Appointment: |
01.04. 2000 |
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Experience: |
In implementing and operation of petrochemical complexes. |
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|
Name : |
Mr. Yogendra P.
Trivedi |
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Designation : |
Director |
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Date of
Appointment: |
16.04.1992 |
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Experience : |
In finance & taxation |
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|
|
Name : |
Mr. S.
Venkitaramanan |
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Designation : |
ICICI Nominee Director |
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|
Name : |
Mr. U. Mahesh Rao |
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Designation : |
GIC Nominee Director |
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|
Name : |
Mr. Ramiklal H.
Ambani |
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Designation : |
Director |
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Name : |
Mr. Mansingh L.
Bhakta |
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Designation : |
Director |
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|
Name : |
Dr. D. V. Kapur |
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Designation : |
Director |
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Name : |
Mr. M. P. Modi |
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Designation : |
Director |
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Name : |
Mr. Ashok Mishra |
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Designation : |
Independent Director |
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Name : |
Mr. Dipak C Jain |
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Designation : |
Additional Director |
Other Personnel :-
|
|
|
Name : |
Mr. Vinod M.
Ambani |
|
Designation : |
Company Secretary |
SHAREHOLDING PATTERN
|
Names
of Shareholders |
No. of Shares |
Percentage of Holding |
PROMOTERS' HOLDINGS
|
|
|
|
Indian Promoters |
176300346 |
12.63 |
|
Persons Acting in
Concert |
475326789 |
34.04 |
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|
|
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Non Promoter's Holdings
|
|
|
|
Mutual Funds and
UTI |
25793654 |
1.85 |
|
Banks, Financial
Institutions and Insurance Companies |
100010001 |
7.16 |
|
FIIs |
308568588 |
22.10 |
|
|
|
|
Others
|
|
|
|
Private Corporate
Bodies |
16373960 |
1.17 |
|
Indian Public |
196040295 |
14.04 |
|
NRIs / OCBs |
12312742 |
0.88 |
|
The Bank of |
85651161 |
6.13 |
As on 31.03.2007
|
Names
of Shareholders |
No. of Shares |
Percentage of Holding |
|
Individuals /
Hindu Undivided Family |
10586013 |
0.79 |
|
Bodies Corporate |
595124520 |
44.29 |
|
Any Other |
104660154 |
7.79 |
|
Mutual Funds and
UTI |
34520821 |
2.57 |
|
Banks, Financial
Institutions and Insurance Companies |
1473014 |
0.11 |
|
Central
Government / State Governments |
3679623 |
0.27 |
|
Insurance
Companies |
75078919 |
5.59 |
|
Foreign
Institutional Investors |
271623991 |
20.22 |
|
Bodies Corporate |
59562329 |
4.43 |
|
Individual
shareholders holding nominal shares capital up to Rs. 0.100 million |
156549084 |
11.65 |
|
Individual shareholders
holding nominal share capital in excess of Rs. 0.100 million |
19146442 |
1.43 |
|
NRIs / OCBs |
11566390 |
0.86 |
|
Shares held by
custodians and against which depository receipts have been issued |
49936741 |
-- |
BUSINESS DETAILS
|
Line of
Business : |
Manufacturers and Marketers of Fabrics,
Polyester Filament Yarn, Polyester Staple Fibres, PTA, LAB, Ethylene Glycol,
PVC, PE, PP, Crude Oil, Gas, Norman Paraffin, Fibre Fill, Ethylene,
Propylene, Benzene, Xylene and Toluene. |
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|
|
|
Products : |
Item Code No. (ITC Code) 390210.00 Product Description
Polypropylene (PP) Item Code No. (ITC Code) 540242.00 Product Description Polyester
Filament Yarn (PFY) Item Code No. (ITC Code) 290243.00 Product Description
Paraxylene (PX) Item Code No. (ITC Code) 27.10 Product Description
Bulk Petroleum
Products |
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|
|
|
Brand Names : |
Recron Apparels, Home textiles Industrial sewing
threads, Automotive Upholstery Recron Fibrefill Sleep Product: Pillows, Cushions, Toys, Quits, Mattresses Recron 3S Construction
Industry (concrere/mortar), asbestos cement
(sheet & pipe), paper industry
(conventional & speciality), battery industry Recron Stretch Denims, shirting, suiting, dress material, T- shirt,
sportswear, swimwear Recron Coutluk Shirting, Suiting, furnishing fabric, curtain and
bed sheet Recron Dyefast Knitted cardigan, decorative fabric & home
furnishing Recron Superblack Apparel,
automotive, non-woven & interlling Recron Superdye Woven & knitted apparel, furnishing &
home textile Fiber Intermediates Raw Material Relpet Packing-water,
soft drinks, beverages, confectionery Repol Packaging-Woven
sacks, TQ and BOPP films, Unipol
containers Relene Packaging-woven
sanks, films Reclair Packaging-films,
squeeze bottles Reon Pipes &
fittings, profiles Relpipe Irrigation,
water supply, drainage, industrial effluents,
telecom cable ducts, gas distribution Relab Detergents Vimal Apparels,
fabrics Harmony Furnishing,
home textiles RueRel Apparels,
Fabrics Vimal V2 Apparels,
Fabrics Reance Suits, shirts
& trousers SlumbeRel Sleep products Refining Refinery of
domestic & Industrial Fuel Oil & Gas Refining, power, fertilisers and
petrochemicals |
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|
|
|
Exports to : |
U.S.A., Canada,
U.K., Ireland, France, Germany, Spain, The Netherlands, Italy, Greece,
Belgium, Hungary, Australia, New Zealand, Argentina, Mexico, Chile, Brazil,
Colombia, Hong Kong, Singapore, China, etc. |
The company’s
production capacity is as under:
|
Particulars |
Unit |
Licensed Capacity |
Installed Capacity |
|
Refining of Crude
Oil |
|
NA |
27 |
|
Ethylene |
MT |
750,000 |
750,000 |
|
Propylene |
MT |
365,000 |
365,000 |
|
Benzene |
MT |
291,000 |
345,000 |
|
Butadiene and
Other C4s |
MT |
225,000 |
225,000 |
|
Toluene |
MT |
197,000 |
197,000 |
|
Xylene |
MT |
165,000 |
165,000 |
|
Purified
Terepthalic Acid |
MT |
NA |
1350,000 |
|
Polypropylene |
MT |
NA |
1100,000 |
|
Poly Vinyl
Chloride |
MT |
NA |
300,000 |
|
Polyester Staple
Fibre/Polyester Chips |
MT |
NA |
300,000 |
|
High/Linear Low
Density Polyethylene (Swing Plant) |
MT |
NA |
450,000 |
|
Polyester
Filament Yarn/Polyester Chips |
MT |
NA |
197,300 |
|
Mono Ethylene
Glycol |
MT |
300,000 |
300,000 |
|
Higher Ethylene
Glycol |
MT |
37,500 |
37,500 |
|
Ethylene Oxide |
MT |
50,000 |
50,000 |
|
Linear Alkyl
Benzene |
MT |
NA |
115,000 |
|
Man-made Fibre
spun yarn on worsted system (Spindles) |
Nos. |
NA |
24,094 |
|
Man-made Fibre on
cotton system (Spindles) |
Nos. |
NA |
23,040 |
|
Man-made Fabrics
(Looms) |
Nos. |
NA |
323 |
|
Knitting M/C |
Nos. |
22 |
20 |
|
Paraxylene |
MT |
1,646,000 |
1,646,000 |
|
Orthoxylene |
MT |
150,000 |
150,000 |
|
Poly Ethylene Terephthalate |
MT |
NA |
80,000 |
|
Polyester Staple Fibre Fill |
MT |
NA |
30,000 |
|
High Density Polyethylene Pipes |
MT |
NA |
80,000 |
GENERAL INFORMATION
|
No. of
Employees : |
12864 |
|
|
|
|
Bankers : |
Ø
ABN
AMRO Bank, Mumbai Ø
Allahabad
Bank, Mumbai Ø
Andhra
Bank, Mumbai Ø
Bank
of Ø
Bank
of Ø
Bank
of Ø
Canara
Bank, Mumbai Ø
Central
Bank of Ø
Citibank
N. A., Mumbai Ø
Corporation
Bank, Mumbai Ø
Deutsche
Bank, Mumbai Ø
Dena
Bank, Mumbai Ø
HDFC
Bank Limited, Mumbai Ø
Hongkong
Bank, Mumbai Ø
ICICI
Bank Limited, Mumbai Ø
IDBI
Bank Limited, Mumbai Ø
Indian
Bank, Mumbai Ø
Indian
Overseas Bank, Mumbai Ø
Oriental
Bank of Commerce, Mumbai Ø
Punjab
National Bank, Mumbai Ø
State
Bank of Ø
State
Bank of Saurashtra, Mumbai Ø
Standard
Chartered Grindlays Bank Limited, Mumbai Ø
Syndicate
Bank, Mumbai Ø
Union
Bank of Ø
Vijaya
Bank, Mumbai |
|
Banking Relations : |
Good |
|
|
|
|
Auditors : |
v
Chaturvedi
& Shah Chartered Accountants v
Rajendra
& Company Chartered Accountants INTERNATIONAL ACCOUNTANTS
v
Deloitte
Haskins & Sells Chartered Accountants |
|
|
|
|
Associates : |
Reliance Life Insurance Company Limited (Subsidiary upto Reliance General Insurance Company Limited (Subsidiary upto Reliance Capital Limited BSES Limited Reliance Infocom Limited Reliance Communications Infrastructure Limited Reliance Telecom Limited Reliance Industrial Infrastructure Limited Reliance Europe Limited Reliance Ports & Terminals Limited Reliance Utilities and Power Limited Reliance Salgaoncar Power company Limited Reliance Enterprise Limited Reliance Global Trading Private Limited Unincorporated Oil and Gas Joint Venture Reliance Rubber and chemicals Private Limited Indian Petrochemicals Corporation Limited Reliance Petroinvestments Limited (Subsidiary upto Eklavya Mercantille Private Limited |
|
|
|
|
Subsidiaries : |
v
Vimal
Fabrics Limited (formerly – Devti Fabrics Limited) v
Reliance
Industrial Investments & Holdings Limited v
Reliance
Ventures Limited v
Reliance
Power Ventures Limited v
Reliance
Petroinvestments Limited v
Reliance
Strategic Investments Limited v
Reliance
LNG Private Limited v
Reliance
v
Reliance
Infocom Inc. v
Reliance
Technologies LLC v
Reliance
Communications ( v
Reliance
Communications Inc. v
Gas
Transport & Infrastructure Limited |
CAPITAL STRUCTURE
Authorised
Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
2500000000 |
Equity Shares |
Rs.10/- |
Rs.25000.000 millions |
|
500000000 |
Preference Shares
|
Rs.100/- |
Rs.5000.000 millions |
|
|
GRAND TOTAL |
|
Rs.30000.000 millions |
Issued,
Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
1393170000 |
Equity Shares |
Rs.10/- |
Rs.13931.700 millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE SHEET
|
SOURCES
OF FUNDS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
SHAREHOLDERS FUNDS |
|
|
|
|
1] Share Capital |
13931.700 |
13930.900 |
13959.500 |
|
2] Reserves & Surplus |
484110.900 |
390102.300 |
330565.000 |
NETWORTH
|
498042.600 |
404033.200 |
344524.500 |
|
|
|
|
|
|
LOAN FUNDS |
|
|
|
|
1] Secured Loans |
76649.000 |
79729.000 |
114511.400 |
|
2] Unsecured Loans |
142007.100 |
108116.900 |
94935.200 |
|
TOTAL
BORROWING |
218656.100 |
187845.900 |
209446.600 |
|
DEFERRED TAX LIABILITY |
0.000 |
0.000 |
34748.200 |
|
|
|
|
|
TOTAL
|
716698.700 |
591879.100 |
588719.300 |
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
557167.500 |
302529.900 |
317891.700 |
|
Capital work-in-progress |
69577.900 |
48292.900 |
33568.100 |
|
|
|
|
|
|
INVESTMENTS |
58461.800 |
170514.600 |
139714.000 |
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
Inventories |
101198.200 |
74128.800 |
72312.200 |
|
Sundry Debtors |
41636.200 |
39278.100 |
30463.800 |
|
Cash & Bank Balances |
21461.600 |
36087.900 |
2242.400 |
|
Other Current Assets |
0.000 |
0.000 |
9951.500 |
|
Loans & Advances |
82665.500 |
138696.700 |
105430.600 |
|
Total Current Assets |
246961.500 |
288191.500 |
220400.500 |
|
Less : |
|
|
|
|
Current Liabilities |
176560.200 |
179174.100 |
113123.200 |
Provisions
|
38909.800 |
38475.700 |
9731.800 |
Total Current Liabilities
|
215470.000 |
217649.800 |
122855.000 |
|
Net Current Assets |
31491.500 |
70541.700 |
97545.500 |
|
|
|
|
|
TOTAL
|
716698.700 |
591879.100 |
588719.300 |
PROFIT &
LOSS ACCOUNT
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
Sales Turnover [including other income]
|
919385.700 |
742431.300 |
570403.200 |
|
|
|
|
|
Profit/(Loss) Before Tax
|
107040.600 |
90686.800 |
63011.400 |
Provision for Taxation
|
16347.200 |
14970.000 |
11410.000 |
Profit/(Loss) After Tax
|
90693.400 |
75716.800 |
51601.400 |
|
|
|
|
|
Export Value
|
N.A. |
N.A. |
118235.500 |
|
|
|
|
|
Import Value
|
N.A. |
N.A. |
118235.500 |
|
|
|
|
|
Total Expenditure
|
771117.000 |
651840.500 |
460330.300 |
SUMMARISED RESULTS
|
PARTICULARS |
|
|
31.03.2007 |
|
Type |
|
|
Full
Year |
|
Sales
Turnover |
|
|
1053630.000 |
|
Other
Income |
|
|
1930.000 |
|
Total
Income |
|
|
1055560.000 |
|
Total
Expenditure |
|
|
871530.000 |
|
Operating
Profit |
|
|
184030.000 |
|
Interest |
|
|
11140.000 |
|
Gross
Profit |
|
|
172890.000 |
|
Depreciation |
|
|
40090.000 |
|
Tax |
|
|
15210.000 |
|
Reported
PAT |
|
|
109080.000 |
|
Dividend
(%) |
|
|
1100.000 |
KEY RATIOS
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Debt Equity Ratio |
0.49 |
0.57 |
0.69 |
|
Long Term Debt Equity Ratio |
0.38 |
0.45 |
0.58 |
|
Current Ratio |
1.03 |
1.10 |
1.25 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
1.34 |
1.42 |
1.14 |
|
Inventory |
10.17 |
9.99 |
7.63 |
|
Debtors |
22.03 |
20.56 |
18.18 |
|
Interest Cover Ratio |
13.20 |
7.17 |
5.39 |
|
Operating Profit Margin (%) |
16.81 |
19.49 |
19.53 |
|
Profit Before Interest and Tax Margin (%) |
12.99 |
14.40 |
13.75 |
|
Cash Profit Margin (%) |
13.99 |
15.44 |
14.95 |
|
Adjusted Net Profit Margin(%) |
10.18 |
10.35 |
9.17 |
|
Return On Capital Employed(%) |
18.76 |
19.31 |
15.47 |
|
Return On Net Worth(%) |
21.90 |
21.82 |
17.39 |
STOCK PRICES
|
Face Value |
Rs. 10/- |
|
High |
Rs. 1062.80 |
|
Low |
Rs. 1055.00 |
LOCAL AGENCY FURTHER INFORMATION
History
Subject was
originally incorporated on
A company by name of
Reliance Industries Private Limited was incorporated in
Incorporated as
Reliance Refineries Private Limited in September, 1991, Reliance Petroleum
Limited got its’ name in April, 1993. It was promoted by the company. The
company came out with a Rs. 86160 millions public issue of triple-option
convertible debentures in September, 1993, to part-finance a Rs. 51420 millions
grssroot refinery at
The company has
grown into petrochemical major since its modest beginning with a synthetic
fabric mill at Naroda. The company has set up texturising / twisting facilities
in 1979. Further the company has set up facility at Patalganga,
Subject has setup a
petrochemical facility to produce HDPE and PVC at Hazira,
In 1991-92, the
company commissioned a petrochemicals unit to manufacture HDPE and PVC at
Hazira,
In 1995-96, it
entered the telecom industry through a joint venture with
In December 2002,
it entered into mobile servicing by promoting Reliance Infocomm Limited. The
services are being launched in 3 phases, wherein the first phase it has trigged
mobile revolution and in the second phase an enterprise netway revolution and
in the final phase it will launch a consumer convergence revolution. The total
capex planned by subject for Reliance info has been estimated at Rs. 1,80,000
millions.
It has obtained ISO
9002 certification from BVQI for its Patalganga and Hazira Complexes. It is the
first private sector company in
The company
completed its integrated
It has also
acquired control over the polyster manufacturing facilities of four relatively
large polyster producers over the last two years. This has enhanced the effective
production capacity in polyester by nearly 200000 tonnes per annum to 800000
tonnes per annum. It was ranked the second largest producer of POY and PSF in
the world, and the largest polyster manufacturer in
The company is the
largest producer of polymers in the country with a market share of 52%. The
company’s capacity is nearly a million tonnes per year of polypropylene (PP),
400000 tonnes per year of polyethylene (PE) and 300000 tonnes per year of
polyvinyl chloride (PVC). In April 2001, the company successfully completed the
first phase of comprehensive restructuring plant for its textiles business
located at Naroda, near Ahmedabad in the state of Gujarat which presently
contributes 1% of company’ total revenues.
The company has
acquired management control of BSES. The acquisition was routed through the
company and Reliance Power Ventures Limited, made an open offer to the
shareholders for BSES Limited to acquire 32,281,460 equity shares of BSES
Limited. After completion of open offer, the equity stake of company in BSES
has increased to over 58%, thus making BSES a subsidiary of company.
Subsequently the name of the company has been changed to Reliance Energy
Limited.
In November 2001,
the company sold its just over 10% equity stake in Larsen & Toubro, the
second largest player in the cement industry, to Grasim Industries for Rs. 7665
millions. The divestment of the L & T stake is in consonance with its
declared objectives of unlocking value from its investments, in the interests
of maximizing overall shareholder value.
During the year
2000-01, the company was, in a 90:10 consortium with Niko Resources of Canada,
awarded 12 new exploration blocks by the government through a process of
competitive international bidding. These 12 blocks cover a wide range of
geological settings, spanning shallow and deep waters. Together with the 2
blocks awarded to the company in the earlier rounds of bidding, this has made
the company the country's largest E&P (exploration and production) player
in the private sector, with an exploration acreage of 1,05,765 sq. km. of both,
the east coast and west coast of India.
In March 2002, the
Board approved the proposal for amalgamation of Reliance Petroleum Limited
(RPL) with the Company. The proposed Scheme of Amalgamation was approved by
shareholders of both companies and the effective date for the merger was fixed
on
The disinvestment
process of Government of India has given an opportunity for the company acquire
the second largest petrochemical company
Subject has signed
an MOU with National Organic Chemicals Industries (NOCIL) to take over its
Petrochemicals and Plastics Division in January 2004.
It has also
acquired control over the polyester manufacturing facilities of four relatively
large polyester producers over the last two years. This has enhanced the effective
production capacity in polyester by nearly 200000 tonnes per annum to 800000
tonnes per annum.
It is the world’s
largest polymers in the country with a market share of 52 %. Company has a capacity of nearly a million
tonnes per year of polypropylene (PP)
400000 tonnes per year of polyethylene (PE) and 300000 tonnes per year of
polyvinyl chloride (PVC).
Reliance
Industries, the flagship company of Reliance Group has business interests in
textiles, polyster, petrochemicals, oils and Gas and oil refining.
In an another
strategic move the company has acquired IPCL, a leading public sector
undertaking the, second largest petrochemical company in
The company’s PP
production unit crosses 1 million MT in 2001-02 and EDC manufacturing facility
at Hazira was commissioned. It also
plans to open new offices in
In October 2002,
the Reliance Petroleum Limited amalgamated with Reliance Industries Limited. As
per the Scheme of Amalgamation one equity share of RIL was allotted for every
eleven equity shares of RPL.
It is in trade terms with: -
v
Accurate
Paper Tube
v
Aditya
Forge Limited
v
Agencies
(
v
Aico
Agencies Private Limited
v
Aksh
India Limited
v
Ambica
Textiles
v
Anil
Industrial Components
v
Associated
Chemicals
v
Associated
Products
v
Bhandari
Industries
v
Billimoria
(
v
CEAG
Flameproof Control Gear Private Limited
v
Colloids
v
Elite
Printers
v
Fibro
Chemicals
v
Geecy
Engineering Private Limited
v
Harisidh
Engineering Works
v
IPSA
Chemicals Private Limited
v
Nec
Containers Private Limited
v
PITICO
Chemicals
v
Paper
Converters (Private) Limited
Management's Discussion and Analysis Report
Management's Discussion and Analysis Report for the year under review, as
stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in
The Company has entered into various contracts in the areas of oil & gas,
refining and petrochemicals businesses. While benefits from such contracts will
accrue in the future years, their progress is periodically monitored.
Additionally, some of the landmark events of the year
included the following:
* Reliance demonstrated a new strategic move to unlock enormous value for
its shareholders by reorganizing RIL's business through a process of demerger.
In this process, RIL's investments in power generation and distribution,
financial services and telecommunication services were demerged in to separate
entities and RIL's shareholders received shares in the new entities in the same
proportion of their equity holdings in RIL.
* RIL commenced the setting up of a new refinery through its subsidiary
Reliance Petroleum Limited (RPL). The capital cost of the RPL project is
estimated at Rs. 270000.000 Millions (approximately US$ 6 billion). RPL expects
to commission the project by around December 2008. RPL recently completed its
Initial Public Offering and is now a listed entity on the major stock exchanges
in
* RIL's business performance and strong capital structure were duly
recognized through an upward re-rating of its borrowings by international
credit rating agencies, namely Moodys' and Standard & Poor. RIL is now
rated above
* RIL announced the closure of the buy-back of equity shares with effect
from
* The Board of Directors gave its consent to pursue Retail Business
through a subsidiary of the Company. The Board has approved the initial phase
of setting up of hypermarkets / super markets / convenience stores / specialty
stores etc. in select cities and towns covering the entire geographical region
in the country at an estimated cost of US$ 750 million.
Subsidiaries:
During the year, Reliance Industries (Middle East)
DMCC, Reliance Power Limited, Reliance Patalganga Power Limited, Reliance
Thermal Energy Limited, Jayamkondam Power Limited, Reliance Natural Resources
Limited (formerly Global Fuel Management Services Limited), Reliance Energy
Ventures Limited, Hirma Power Limited, Reliance Communication Ventures Limited,
Reliance Capital Ventures Limited, Relene Petrochemicals Limited, Reliance
Infrastructure Limited (formerly Reliance Project Engineering Associates
Private Limited), Reliance Petroleum Limited, Reliance Retail Limited and
Reliance Netherlands BV (subsidiary of Reliance Ventures Limited) became
subsidiaries of the Company.
Subsequently, pursuant to the Scheme of Arrangement for demerger, Reliance
Power Limited, Reliance Patalganga Power Limited, Reliance Thermal Energy Limited,
Jayamkondam Power Limited, Reliance Natural Resources Limited (formerly Global
Fuel Management Services Limited), Reliance Energy Ventures Limited, Hirma
Power Limited, Reliance Communication Ventures Limited and Reliance Capital
Ventures Limited ceased to be subsidiaries of the Company. Further during the
year, Reliance Power Ventures Limited, Reliance LNG Limited, Reliance Gas
Pipelines Limited (formerly Gas Transportation & Infrastucture Company
Limited), Reliance Technologies LLC, Reliance do Brasil Industria e Comercio de
Produtos Texteis, Quimicos, Petroquimicos e Derivados Limited (Reliance Brazil
LLC.) and Relene Petrochemicals Private Limited have ceased to be subsidiaries
of the Company.
Reliance Petroleum Limited (RPL), a subsidiary of the Company, made IPO of 1350.000 Millions equity shares of Rs.10/- each at Rs.60/- (including a premium of Rs.50/-) per share, through 100% book building process and the IPO received a overwhelming response from all the categories of investors.
The equity shares of RPL will be listed on Bombay Stock Exchange Limited (BSE)
and The National Stock Exchange of India Limited (NSE).
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, Reports of the Board of Directors and Auditors of the
subsisting subsidiaries have not been attached with the Balance Sheet of the
Company. These documents will be made available upon request by any Member of
the Company interested in obtaining the same. However, as directed by the
Central Government, the financial data of the subsidiaries have been furnished
under Details of Subsidiaries' forming part of the Annual Report. Further,
pursuant to Accounting Standard AS-21 issued by the Institute of Chartered
Accountants of India, Consolidated Financial Statements presented by the
Company includes financial information of its subsidiaries
Structure and Strategy
Reliance Industries Limited (RIL) is the largest private sector business
enterprise in
RIL operates mainly in
RIL is organized into three major business segments which include: Exploration
and Production of oil and gas; Refining and Marketing of petroleum products;
and Petrochemicals, including the manufacturing and marketing of polymers,
polyester, polyester intermediates and chemicals. The Refining & Marketing
and Petrochemicals segment accounted for 98 per cent of RIL's revenues for the
year ended
RIL's strategy is to build and sustain leadership position across its product
categories in the domestic markets, pursue attractive export opportunities,
implement vertical integration, access cutting-edge technologies, achieve
economies of scale, focus on prudent financial management and invest in high
growth opportunities. The primary route for growth adopted by RIL has been
through creating businesses and facilities in an organic manner. RIL has grown
by setting up world scale, world class projects, scaling them up to meet local
and global demand, investing in R&D to develop future prospects and
markets, and developing a large pool of qualified and skilled manpower. RIL has
also grown through selective acquisitions that ensure greater synergy with its
operations.
RIL is
In the Petrochemicals and Refining business, RIL's strategy is to continuously
strive for global leadership and endeavour to be amongst the lowest cost
producers worldwide. Alongside, RIL will continue to invest in research,
quality, safety and environment and thereby set new benchmarks in the industry.
In these businesses RIL will also pursue inorganic growth opportunities, which
are strategic to its intents and have the potential to create greater value for
its shareholders.
In the petroleum retail marketing business, RIL continues to grow its focused
and differentiated offers. RIL operates in petroleum retail markets where it
can create a competitive edge from supply positions, superior customer offers
and efficiency across the value chain. The Indian consumer has already
recognized the value proposition offered by RIL in retailing of petroleum
products.
Going forward RIL will make strategic decisions with regard to the emerging
businesses that it is seeding today.
These include:
* Identifying new businesses with high growth potential.
* Investing in businesses that can scale rapidly and
generate superior returns over an extendable period of time.
* Create a differentiated business model and aspire to
be lowest cost manufacturer/ service provider, which shall ultimately result in
gaining dominant market leadership.
The new businesses will aim to generate superior return on capital employed,
which shall eventually enhance the overall returns.
RIL will continue its business strategy of building and creating value for all
its stakeholders in both its existing and new businesses. RIL will be
Overview - FY 2005-06
Landmark Events
The year 2005-06 was a landmark year in the history of RIL. It
marked a new strategic decision to unlock value for its shareholders by
reorganizing RIL's business through a process of demerger. In this process,
RIL's investments in power generation and distribution, financial services and
telecommunication services were demerged in to separate entities and RIL's
shareholders received shares in the new entities in the same proportion of
their equity holdings in RIL. The successful implementation of the largest
demerger process in Indian corporate history has demonstrated RIL's ability to
seed new businesses, gain leadership in each of these businesses which are
large enough to be independent and thereby create value for RIL's
shareholders.
During the year, RIL commenced the setting up of a new export-oriented refinery
through its subsidiary, Reliance Petroleum Limited (RPL). The refinery will
have a total atmospheric distillation capacity of approximately 580,000 barrels
per stream day with a Nelson Complexity of 14.0 and an integrated polypropylene
plant with a capacity of 0.9 Million TPA. The capital cost of the RPL project
is estimated at Rs 27,0000.000 Millions (approximately US$ 6 billion). RPL
expects to commission the refinery and the polypropylene plant in and around
December 2008. RPL recently completed its US$ 1.2 billion Initial Public
Offering of equity shares which received an overwhelming response across
different classes of investors and are now listed on the Bombay Stock Exchange
and The National Stock Exchange. RIL holds 75 per cent in RPL and has invested
Rs 6,7500.000 Millions as equity contribution in RPL.
RIL's business performance and strong capital structure were duly recognized
through an upward re-rating of its borrowings by international credit rating
agencies, namely Moodys' and Standard & Poor. RIL is now rated above
RIL announced the closure of the buyback of equity shares with effect from
Operational Excellence
RIL put together another outstanding performance in a year that was marked by
several global challenges.
Crude prices remained firm throughout the year and ranged between US$ 55 per
barrel to US$ 70 per barrel. A combination of strong global economic
performance and heightened political uncertainties were the significant contributors
towards the high price of crude. Despite the higher oil prices in the last
couple of years, global oil demand continues to be robust. The forecast from
the International Energy Agency is for a demand growth of 1.25 million barrels
per day for 2006, this is estimated to be higher than 1.05 million barrels per
day for 2005.
The global refining system continues to be stretched, the pace of new capacity
creation continues to be slow, and the light/heavy crude oil price differential
continues to widen. A combination of these three factors augurs well for
globally competitive complex refineries like RIL's existing refinery at
RIL's refining business continued to show a superior performance over the benchmarked
refining margins. Since the commissioning of the refinery, its gross refining
margin has been between US$ 2 to US$ 4 per barrel higher compared to
RIL's refinery undertook a maintenance shutdown in October - November 2005
during which it also implemented a Value Maximisation Programme (VMP), which
will help in enhancing margins and creating further value on a sustainable
basis. The Nelson complexity of the refinery improved from 9.9 to 11.3 as a
result of implementation of the VMP.
RIL continued its rollout of the petroleum retail outlets by adding 867 new
outlets taking the total number of outlets to 1,218 at the end of the financial
year. The response from these outlets continues to be very encouraging in terms
of consumer acceptance and growing market share.
As regards RIL's petrochemicals business, operating rates of ethylene crackers
globally continued to be high on the back of sustained demand and lack of new
capacities getting commissioned. RIL continues to be very well positioned on
the cost curve among the naphtha-based Asian crackers with operating rates at
100 per cent and among the lowest cost crackers in this region. Margins however
were affected by high crude oil and natural gas prices leading to increase in
cost of raw material.
RIL strengthened its global position in this business by adding a new butadiene
facility during the year with a capacity of 140,000 TPA.
The margins for the polyester business improved significantly during the year.
Key contributors towards these were lower intermediate price and rising cotton
prices. Another significant development was the changes in the duty structure
announced in the Union Budget this year which makes polyester more competitive
as compared to cotton. The excise duty on polyester was reduced to 8 per cent
from earlier level of 16 per cent and this is expected to lead to substantial
growth of the polyester industry. RIL is very close to completing one of the
largest expansion in polyester capacity in the world by adding 550,000 TPA of
new polyester capacity.
In the E&P business, RIL was awarded a further five blocks under NELP-V,
which brings up the portfolio to 41 blocks including two in Panna-Mukta &
Tapti and five blocks of coal bed methane. In addition to its domestic
portfolio, RIL has two overseas blocks, one each in
RIL continues its efforts in developing its significant gas discovery at the
RIL is building a strong E&P portfolio, starting with increased production
in its existing Panna-Mukta & Tapti blocks, and commercializing KGD6 and
other blocks in the next 3-5 years.
Business Review
Exploration and Production
Globally, the E&P industry registered a record growth during
the year, primarily due to spiraling crude oil and gas prices. With growing
competition and ever growing demand for energy, especially from developing
countries, the focus is on energy security.
During the year, the domestic crude oil and gas production in
RIL is the largest exploration acreage holder among the Private sector
companies in
RIL's portfolio of E&P assets, gives it the potential to create value across
entire value chain from wellhead to burner tip. Accretion of new reserves
through exploration, development of existing oil and gas reserves and
development of related downstream infrastructure facilities would result in
significant value creation for RIL in future. RIL has achieved a high success
rate of 74 per cent in terms of discoveries made from the wells drilled thus
far, excluding wells under evaluation
The company’s fixed
assets of important value include
AS PER WEBSITE
The company is
The originally
envisaged capacity was substantially enhanced while implementing the project
and it commissioned its 27 mmtpa refinery (540000 ballers per day) within a
very short period of less then 36 months at a project cost of Rs. 142500
millions (US $ 3.4 bn). The company is the world's largest grassroots refinery
and the seventh largest refinery in the world at any single site. The refinery
has been set up at 30%-50% lower per tone capital cost as competed to other
refineries recently set up in Asia, by leading international oil companies,
establishing new benchmark for capital productivity. It also has a remarkable
ability to use almost any kind of crude oil. The company's products have been
exported to a large number of destinations in the Far East, Europe and the
The setting up of
the Central India pipeline project, which envisages setting up a 1615-km
pipeline to serve the landlocked markets in central
The
company has passed a resolution to sponsor a depository receipt Programme
enabling shareholders of the company (Reliance Industries) to partially
disinvest their equity shareholding in the company at an appropriate time in
the course of an international offering in one or more trances to strategic
investors, financial investors and any other investor in the form of depository
receipts and any other financial instruments subject to necessary approvals.
The company will
focus on its high value-added product ranges of men's wear, under the Vimal
brand, and home textiles, under the Harmony brand. Other textile products,
including women's wear products, will be phased out, and the polyester filament
yarn processing business will be re-located.
The first phase of
restructuring will lead to a reduction of over 4,600 people from the company's
total workforce, at an estimated one-time outlay of Rs. 900.00 millions, in an
amicable manner within a span of two weeks
It has increased
its stake in equity share capital of BSES, an electric utility company, through
open offer to 27%. Further it has announced the largest share buy back of Rs.
1,1000 millions at a maximum price of Rs. 303/- per share. The company proposes
to invest Rs. 2,50,000 millions over the next 3 to 5 years in the telecom
sector covering basic, cellular, long distance, international, voice, data
services by setting up a broadband network throughout
Press Clippings
“Reliance Group
emerges as India
April 13, 2004:
Reliance Group has emerged as
Tata Group and the
Bharti Group are the second and third amongst the ‘Largest Wealth Creators’ in
the private sector. The Tata Group’s market capitalisation increased by Rs.
369640.000 millions while telecom major Bharati Group rose by Rs. 234630.000
millions. The ‘Top 10’ Largest Wealth Creators’ – Groups for the Year 2003-04
added market capitalisation worth Rs. 1803910.000 millions.
Amongst the ‘Individual
Companies Category’, Reliance Industries Limited (RIL) emerged as the ‘Largest
Wealth Creator’ amongst the private sector companies. During the 12 month
period ended March 31st 2004, RIL – the flagship company of the
Reliance Group, has witnessed its market capitalisation surge by Rs. 365290.000
millions. Its market capitalisation has increased from Rs. 386030.000 millions
as on March 31st 2003 to Rs. 751320.000 millions on March 31st
2004. At the second position, Bharti Tele-Ventures Limited has added wealth in
terms of market capitalisation to the tune of Rs. 234170.000 millions followed
by Tata Motors at the third slot at Rs. 118660.000 millions. The ‘Top 10’
Largest Wealth Creators’ – Individual Companies Category added market
capitalisation worth Rs. 1359150.000 millions.
In the ‘Top 10’
individual Companies Category, two Reliance Group companies (Reliance
Industries Limited ranked first and Reliance Energy Limited ranked fourth) and
two Tata Group companies (Tata Motors ranked third and Tata Iron and Steel
Company Limited ranked eighth) emerged in the ‘Largest Wealth Creators List’.
In the Group
Category, the Reliance Group’s market capitalisation increased from Rs.
443620.000 millions last year (March 31st 2003) to Rs. 949680.000
for the year ended March 31st 2004, while Tata Group’s market
capitalisation has increased from Rs. 206990.000 millions to Rs. 576640.000
millions.”
Press reports
regarding M/s. Reliance Industries Limited
The press had reports on June 04, 2005 that Mr. Mukesh Ambani, Chairman and Mr.
Anil Ambani, Vice Chairman are close to an amicable solution on the ownership
issue in the Reliance Industries Limited.
The Exchange, in order to verify the accuracy or otherwise of the information
reported in the press and to inform the market place so that the interest of
the investors is safeguarded, had written to the officials of the company.
Reliance Industries Limited has vide its letter inter-alia stated, "The
company is unware of the veracity of the matters referred in the news item and
hence we are unable to offer any comment. It is also not the policy of the
company to comment on media reports".
Vacon Plc, Press
Release, April 28, 2005.
Reliance Industries
chooses Vacon AC drives for polymerization lines. In close cooperation with its
Indian partner Hi-Rel Electronics Private Limited, Vacon will deliver 270 AC
drives to Reliance Industries Limited (RIL), the largest polyester yarn and
polyester staple fibre manufacturer in
To further increase
the manufacturing capacity of polyester yarn (also known as Partially Oriented
Yarn, POY) and Polyester Staple Fibre (PSF), RIL is expanding their
polymerization line processes at the Hazira and Patalganga plants. The 270
Vacon AC drives will control a connected load in excess of 20 MW of the
continuous polymerization processes and utilities. At the Hazira plant, the
Vacon AC drives will control the continuous polymerization lines for polyester
yarn and polyester staple fibre, both lines with the production capacity of 600
tons a day. At their Patalganga plant, the Vacon AC drives will control the
continuous polymerization line for polyester yarn producing 250 tons a day.
Over the next two
years, RIL will be building an additional half a million tonnes per year of
polyester capacity by investing in a 240,000 tonnes per year polyester staple
fibre plant at Hazira, 216,000 tonnes per year polyester filament yarn plant at
Hazira, and 94,000 tonnes per year polyester filament yarn plant at Patalganga.
With the commissioning of these plants, Reliance Industries Limited will almost
double its current capacity and become the world’s largest producer of
polyester.
Speed control brings energy savings and improves reliability
In controlling the
speed of the motors according to need, Vacon AC drives bring several benefits.
In addition to energy savings, speed control improves process control and
decreased electromechanical stress for the electrical system. The extended
lifetime of the mechanics also means lower maintenance and repair costs.
In cooperation with
Hi-Rel Electronics, Vacon has developed redundant control systems for the most
critical drives. Redundancy is vital to the quality of the product as any trip
would result in substantial loss of first grade material and production volumes
resulting from time lost in restarting the whole process.
Vacon Group was
founded in 1993 for one purpose only: to create, develop and pro-vide AC drives
worldwide. Ambitious to meet the most demanding needs of clients seeking top
performance, easiness and reliability, Vacon offers AC drives in the power
range of 0.25 kW...3 MW. In 2004, the Group revenues totalled EUR 128.6
million.
Reliance Industries
Limited (RIL) is India’s largest private sector company on all major financial
parameters with turnover of Rs 56,2470.000 Millions (US$ 12.8 billion), net
profit of Rs 5,1600.000 Millions (US$
1.2 billion), net worth of Rs 34,4520.000 Millions (US$ 7.9 billion) and total
assets of Rs 71,1570.000 Millions (US$ 16.3 billion).
RIL is the first
and only private sector company from India to feature in the 2004 Fortune
Global 500 list of ‘World’s Largest Corporations’ and ranks amongst the world’s
Top 200 companies in terms of profits.
RIL emerged in the world’s
10 most respected energy/chemicals companies and amongst the top 50 companies
that create the most value for their shareholders in a global survey and
research conducted by PricewaterhouseCoopers and Financial Times in 2004. RIL
also features in the Forbes Global list of world’s 400 best big companies and
in FT Global 500 list of world’s largest companies.
RIL emerged as the
‘Best Managed Company’ in
Incorporated in
1983, Hi-Rel Electronics Limited, is a leading solution provider in the fields
of Industrial Automation Solutions, Rotating Machine Controls, Soft Starters,
Power Controllers, Uninterruptible Power Supply and Power Conditioning
products. Hi-Rel endeavours to offer products and create solutions with clear
and compelling advantages and to help you achieve the full potential of the
machinery and processes. Hi-Rel Electronics has been a trusted partner of Vacon
for the last five years.
Financial
Subject’s gross
turnover for the year ended 31st March, 2004 increased to Rs. 744180
millions (USD 17.022 million) compared to Rs. 650610 millions in the previous
year, registering growth of 14 per cent.
Gross turnover
includes inter-divisional transfers of Rs. 181710 millions (USD 4,156 million),
compared to Rs. 149650 millions.
Domestic sales
accounted for 80 per cent of gross turnover. Manufactured exports, including
deemed exports, increased to Rs. 149690 millions (USD 3,424 millions) from Rs.
115100 millions previous year.
Operating profit
(PBDIT) increased 17 per cent to Rs. 109830 millions (USD 2,512 millions)
during the year, up from Rs. 93660 millions in the previous year.
Outlook
Company’s overall
operating earnings presently depend largely on the profitability of its
refining and petrochemicals business. The outlook for margins and profitability
depends upon overall global economic outlook, global demand –supply scenario
and trends in feedstock and product prices.
Company proposed entry into retail marketing of transportation fuels
through development of its own distribution and marketing infrastructure and
acquisition of marketing 7 distribution assets. This process will also add a
new revenue stream to company’s existing business portfolio and enhance
long-term shareholder value in the coming years.
Oil & Gas
Company is the
country’s largest private sector exploration and production (E&P) player,
with aggregate exploration and production acreage of nearly 279340 Sq. Km in 31
exploration blocks in
2 exploration
blocks were awarded prior to NELP, where company partners include ONGC Limited
and Oil India Limited. Company has also
acquired peratorship in 3 exploration blocks from Tullow of U.K. and is in advanced
stages of acquiring operatorship of 2 more blocks from Tullow.
Refining & Marketing
Indian Petroleum
Refining and Marketing Industry has been dominated by the public sector
companies.
Company’s refinery
in
Petrochemicals
Polymer consumption
in
Company, an
integrated polyster manufacturer with global economies of scale, further
consolidated its position in the global polyster industry during the year.
Company remains the world’s second largest polyster fibre and yarn
manufacturer.
Company is the
world’s 3rd largest producer of paraxylene and is thelargest
producer of purified terepthalic acid in
BSES
BSES Limited became
part of the Reliance Group. This is a
beginning of new relationship and signalled another step that company as
In January, 2003
the company and Reliance Power Ventures Limited a wholly owned subsidiary of
the company along with persons acting in concert, made an open offer to the
shareholders of BSES Limited, inter alia, to acquire up to 32281460 equity
shares of BSES representing 20 % of the its fully diluted equity share capital,
at a price of Rs. 230.10 pershare, in terms of the Securities and Exchange
Board of India Regulations, 1997. The
offer opened on January 17, 2003 and closed on February15, 2003.
Chemicals
Company is the
largest producer of linear alkyl benzene (LAB) in the country. The acquisition of IPCL, which has a LAB
capacity of 43500 tonnes during the year, strengthened the leadership position
of company in
Achievements
Of Mr. Mukesh
Ambani-
·
Rated No.
1. Among the top 50 Power People in the 2002 Power List published by
·
Ranked
33rd among the Top 50 most Respected Business Leaders of the World,
tops among the three Indian CEO’s featured in a survey conducted by
Pricewaterhouse Coopers and published in financial Times,
·
Conferred
'Memebership Award’ by The Textile Association (
·
Conferred
'The Entrepreneur of the Decade Award’ by the
·
Rated
as one of 'India’s Most Admired CEO’s for the fourth consecutive year in the
Business Barons Taylor Nelson Sofres-Mode Survey, July, 2002 and also emerged
as one of the Super Six world-class Indian CEO’s
·
Recipient
of Ernst and Young Entrepreneur of the Year Award –2000
·
Honoured
by University Department of Chemical Technology (UDCT),
·
Conferred
the 'Business of the Year 1997’ Award by Business
·
Recognised
as 'Global Leader for Tomorrow’ in 1994 by the World Economic
·
Named
in 'Time Roster of Young Leaders for the New Millenium’ by Time
magazine-December, 1994.
Of Mr. Anil Ambani-
·
Rated
No. 1. Among the top 50 Power People in the 2002 Power List published by
·
Conferred
'The Entrepreneur of the Decade Award’ by the
·
Rated
as one of 'India’s Most Admired CEO’s for the fourthj consequtive year in the
Business Barons Taylor Nelson Sofres-Mode Survey, July, 2002 and also emerged
as one of the Super Six world-class Indian CEO’s
·
Awarded
the first Wharton Indian Alumni Award by the Wharton India Economic Forum
(WIFE) in recognition of his contribution to the establishment of Reliance as a
global leader in many of its business areas, December, 2001.
·
Named
amongst 'The Power 50-
·
Selected
by Asiaweek magazine for tits list of 'Leaders of the Millennium in Business
and Finance and was introduced as the only 'new hero’ in Business and Finance
from
·
Leading
business magazine Business Barons included him in its list of '
·
Conferred
the 'Businessman of the year 1997’ award by
Awards and Accolades
Company was the
only Indian Company to feature among
Reliance Group
emerged as
Company was ranked number
one for 'Financial Soundness’ and 'Long Term Vision’, and number two in
'Overall Leadership’, in a Far Eastern Economic Review survey, Review200:
An Asiamoney Survey
in December 2002 – January 2003 ranked the company among the top five companies
in the 'Overall Best Managed Company’ category.
Company feature in
the 'World’s Most Respected Companies list published by Financial Times based
on a global survey and research done by Pricewaterhouse Coopers. In the same survey the company was ranked
among the world’s 10 most respected energy and chemical companies, and also
topped the list of 'Most respected Indians companies’
Company was ranked
at number three in '
The 2001-02 annual
report of company was judged the Best Annual Report among Indian Companies and
among the best 25 in
In a Finance Poll
in March 2003, Company was ranked number one in
Company received
the inaugural best export performance award for Financial Year 2000-01 from the
Government of Maharashtra in March, 2003.
Mukesh Ambani was
conferred the “Membership Award” by The Textile Association of India in
December 2002.
KOKILABEN AMBANI
ANNOUNCES AMICABLE
FAMILY SETTLEMENT
Mumbai, 1 8th June 2005: The Board of
Directors of Reliance Industries placed their deep appreciation of the sincere
and painstaking efforts taken by Smt. Kokilaben Ambani in working towards the
settlement that will further enhance the value of the Reliance group. The Board further expressed their gratitude
to Smt. Kokilaben Ambani for finding an amicable resolution in the overall
interests of the company and its shareholders which will pave the way for
preserving and taking forward the historic legacy of Shri Dhirubhai Ambani,
founder Chairman of the Company.
The press release
of Smt. Kokilaben Ambani is enclosed.
Reliance
Successfully Closes US$ 350 Million Multi Currency Term Loan
Facility Upsized From Mandated US$ 250 Million Following Overwhelming Response
The Mandated Lead Arrangers for the facility were: ABN AMRO Bank N.V.,
Bank of America N.A., The Bank of Tokyo-Mitsubishi, Limited, Calyon, DBS Bank
Limited, The Hongkong and Shanghai Banking Corporation Limited, HVB Corporates
& Markets and Mizuho Corporate Asia (HK) Limited.
The Facility was fully underwritten by the Mandated Lead Arrangers and
was extremely well received during the syndication stage with 26 financial
institutions joining the facility. In total, the facility consists of 34 banks
from 13 countries globally. The strong response to this facility clearly
demonstrates the confidence of the international banking community in RIL
paper. The success of the facility is all the more creditable considering the
fact that the pricing achieved was the finest so far for an offshore medium
term loan raised by RIL.
Reacting to the continued success of RIL's offering in the international
market, Alok Agarwal, President (Finance) of the Reliance group said, "The
interest and commitment shown by the international financing community is a
clear reflection of RIL's business strengths and the confidence it generates in
their global investor base. Their relationship banks have once again proved
themselves by bringing this transaction to such a commercially successful
close."
The success of this facility follows close on the heels of Reliance's
recently concluded multi-currency term loan facility in March of this year. It
may be remembered that the earlier US$350m transaction had also closed
successfully with a tremendous response from participating banks with a total
of 34 banks joining the transaction.
Reliance Industries wins Silver at the International Exposition of
Innovation and Quality Circles
Improvement of reliability in Spin Finish Application System for its polyester
staple fibre product
'Magdiwang' the team from Intel Technology
This year eight teams from companies of
The criteria
The competing teams were graded on a one thousand-point IQC judging criteria.
The broad headings under which they were marked are - project selection and
definition, analytical techniques, innovative actions and implementation, value
creation and results achieved, standardisation, review and continuous
improvement, and presentation.
The team members
Mr. Sanjay Agrawal, Mr. Nilesh Sheth, Mr. Vinay Ray, Mr. Piyush Desai and Mr.
Vipul Chotalia all from the polyester staple fibre plant of Reliance's Hazira
complex comprised the Reliance contingent 'Pragati' for the competition.
International Exposition of Innovation and Quality Circles
The first International Exposition of Quality Circles was organised in 1984 and
in 2001, the event was renamed International Exposition of Innovation and
Quality Circles with the aim to exchange ideas on the latest IQC concepts and
developments. The theme for 2005 was 'Innovation and Teaming for Enterprise
Competitiveness'.
Reliance
Industries awarded the 'Golden Jubilee Memorial Trust Excellence Award'
June 2, 2005: Reliance Industries Limited's
manufacturing division in Hazira,
The award was presented by Shri Shankarsinh
Vaghela, Minister of Textiles, Government of India at the 65th Installation
function of the office bearers of Southern Gujarat Chamber of Commerce &
Industry in
American Society
for Quality
Reliance Industries wins the International Team Excellence Silver Award
This year 25 teams from companies around the world participated in the
International Team Excellence Competition.
The team from Reliance presented a project aimed at controlling an industry
problem of high b-colour in polyester fiber. Variation in b-colour leads to
uneven dye-ability resulting in market complaints and huge monetary loss. A
cross functional and multi-stakeholder team resolved this chronic problem using
six sigma methodology utilizing the ASQ International Team Excellence Process.
The criteria
The 36 parameters of the criteria rates team success based on the project's
impact on organizational goals, project selection and purpose-to action
planning, project buy-in, implementation, progress, and results.
The team members
Mr. Sandesh Kadam, Dr. S.Aravindanath, Mr. Neeraj Dhingra, Mr. Rohit Agrawal
all from the polyester staple fibre plant from Reliance's Hazira complex and
Mr. J.S.Sekhon from its general management comprised the Reliance contingent for
the competition.
Previous winners
Some of the previous winners have been Merrill Lynch, Johnson & Johnson,
Bayer Corporation, Honda of America Mfg., Boeing, DynMcdermtt Petroleum
Company, Fidelity Investments, Liebert Corporation, DST Output, DENSO
Manufacturing, Emerson Hermetic Motor Division,
International Team Excellence Award
The International Team Excellence Award is a process that promotes business
effectiveness through team-based management and encourages individuals, teams,
and organizations to excel in quality through participation practices. Since
its institution in 1985, 749 teams have participated in the competition.
The competition process combines the application of continuous improvement
tools, problem-solving processes, team dynamics, project management, and
communication skills to generate significant performance improvements within an
organization.
Reliance Industries
emerges as the 'Best Overall Company' at the Stevie Awards
Other Indian winners are:
- Wipro Technologies,
- J. Walter Thompson, Mumbai, was honored
for 'Best TV Advertising Spot', for their work for Philips.
Members of the Awards' Board of Distinguished Judges & Advisors and
their staffs selected International Stevie winners from among the Finalists,
which were culled from more than 600 nominations by judges around the world
during two months of preliminary judging. The awards will be presented to
winners on
Seventy-six International Stevie Award winners were announced in
categories ranging from Best Multinational Company and Best New Product to Best
Corporate Social Responsibility Program and Best Executive. The 21 countries
represented in the winners' circle include Argentina, Australia, Brazil,
Canada, China, Croatia, the Czech Republic, France, Germany, India, Indonesia,
Italy, South Korea, Nigeria, Pakistan, Spain, Sweden, Thailand, the United Arab
Emirates, the United Kingdom, and the United States.
The StevieTM Awards
The Stevie Awards are conferred in three programs: The American Business
Awards, The International Business Awards, and The Stevie Awards for Women
Entrepreneurs. Honoring companies of all types and sizes and the people behind
them, the Stevies recognize outstanding performances in the workplace
worldwide. Learn more about The Stevie Awards at www.stevieawards.com.
Reliance Industries Limited
Reliance Industries Limited (RIL) is India's largest private sector
company on all major financial parameters with turnover of Rs 731640.000
Millions (US$ 16.7 billion), cash profit of Rs 120870.000 Millions (US$ 2.8
billion), net profit of Rs 75720.000 Millions (US$ 1.7 billion) and net worth
of Rs 404830.000 Millions (US$ 9.3 billion).
RIL is the first and only private sector company from India to feature
in the 2004 Fortune Global 500 list of 'World's Largest Corporations'
and ranks amongst the world's Top 200 companies in terms of profits. RIL
emerged in the world's 10 most respected energy/chemicals companies and amongst
the top 50 companies that create the most value for their shareholders in a
global survey and research conducted by PricewaterhouseCoopers and Financial Times in 2004. RIL also
features in the Forbes Global
list of world's 400 best big companies and in FT Global 500 list of world's largest companies.
RIL emerged as the 'Best Managed Company' in
Reliance sets up a state-of-the-art Fibre Application Centre in
At this Centre, Reliance - the world's
largest polyester fibre and yarn producer, has joined hands with Rieter Machine
Works of Switzerland - the world's leading manufacturer of textile spinning
machinery, to work together towards providing compelling value to the
downstream textile industry.
It's a unique partnership, where both the
parties are committed to offer the customers the best raw material and best
machine running performance that will ensure innovative end products.
This facility is established with an
approximate investment of US$ 3 million. It is unique as Reliance is the only
polyester manufacturer in
The 'Reliance Fibre Application Centre' has
installed chute feed cards, auto leveler drawframe, ringframe, open-end
spinning machines and flyerframe. The Centre also has a provision to simulate
mill climatic conditions.
Benefits of the partnership
Customers will greatly benefit from this facility,
as new specialty manmade fibres from Reliance R&D will be perfectly adapted
to the needs of the various spinning processes.
This facility takes Reliance one-step nearer
to the customer and reduces the development cycle time by providing quality yarn
samples that are tested at the application centre. This will further improve
the operational efficiency of downstream textile industry for developing value
added products at the shortest possible time.
Reliance Fibre Application Centre together
with the Reliance Technology Centre at Patalganga and the Reliance Testing
Centre at
At the occasion Mr. Nikhil R. Meswani said,
"In a quota free regime, the troika of
The Rieter Group
Rieter Machine Works Limited is a part of The
Rieter Group,
Reliance Industries Limited
Reliance Industries Limited (RIL) is India's
largest private sector company on all major financial parameters with turnover
of Rs 731640.000 Millions (US$ 16.7 billion), cash profit of Rs 120870.000
Millions (US$ 2.8 billion), net profit of Rs 75720.000 Millions (US$ 1.7
billion) and net worth of Rs 404830.000 Millions (US$ 9.3 billion).
RIL is the first and only private sector
company from
RIL emerged as the 'Best Managed Company' in
Backgrounder
Reliance takes research a step forward - towards downstream application of
fibre
Reliance Industries Limited is a global
player in polyester, fibre intermediates and polymers and has been engaged in
polyester R&D for over a decade. The Reliance Technology Centre (RTC) is a
world-class research facility at Patalganga, located near Mumbai. The RTC,
which was inaugurated in 2003, was set-up to conduct advanced research in
polyester and related polymers to develop advanced polyester process and
product technologies in
RTC is equipped with state-of-the-art
research facilities, laboratories and, is manned by the most competent and
skilled scientists and engineers at par with the best in the world. The RTC is
designed to serve as a catalyst for development of new technologies, processes
and value added products and provides new application solutions for textile,
construction, paper, furnishing and, packaging industries.
The Reliance Fibre Application Centre at
Patalganga takes the research a step forward. After the R&D is undertaken
at the RTC, the Fibre Application Centre provides an opportunity to further
test the application of the fibre, simulate yarn spinning and accordingly make
changes to provide the best product to the customer.
The Reliance Testing Centre at
The Reliance Fibre Application Centre will
work in coordination with RTC and the Reliance Testing Centre.
Products which have resulted from the research effort include RecronTM Dyefast,
RecronTM Superdye, RecronTM Stretch, RecronTM Fibrefill, RecronTM Cotluk,
RecronTM Superblack and RecronTM 3S.
Financial Review
Operating profit, before other income, was
Rs. 7,2780.000 Millions (US$ 1,653
million), against Rs. 5,9750.000 Millions for the corresponding previous
period, an increase of 22%
The company's net operating margin was lower
during the period at 18.9% mainly due to significant increase in price of crude
oil during the half-year, which was not fully absorbed in domestic price of
petroleum products.
Other income decreased to Rs. 4160.000
Millions (US$ 94 million), from Rs. 6430.000 Millions on account of the company
exercising its option to convert the Preference shares of Reliance Infocomm
Limited with effect from 1st April 2005. This was partially offset by higher
interest income from current investments and fixed deposits.
Interest expenditure decreased 49% to Rs.
4580.000 Millions (US$ 104 million) due to appreciation of the rupee and
reduction in debt.
Depreciation was at Rs. 1,5950.000 Millions
(US$ 362 million) as against Rs. 1,8300.000 Millions for the corresponding
previous period. The decrease is on account of assets sold during 2004-05 and
impact of WDV depreciation on petrochemical assets
The outflow on account of capital
expenditure was over Rs. 4,2000.000 Millions (US$ 954 million), primarily on
account of oil and gas, petrochemical capacity expansions and normal capital
expenditure.
Business Review
Oil & Gas
(E&P)
RIL's oil and
gas strategy is aimed at further enhancing the level of vertical integration in
its energy business, and capturing value across the entire energy chain, while
fulfilling important national priorities.
RIL is the largest exploration acreage
holder among the Private sector companies in
12 exploration blocks were awarded under the
1st round of the New Exploration Licensing Policy (NELP-I) of Government of
India, 4 blocks in NELP II, 9 blocks in NELP III and 1 block in NELP IV.
Reliance has been awarded 5 more exploration blocks under the just concluded
NELP V. The Production Sharing Contract has been signed and application for
exploration license has been submitted.
The Company and various partners, including
ONGC Limited and Oil India Limited, were awarded two exploration blocks prior
to NELP. The Company has also acquired the operating rights of four exploration
blocks from Tullow Oil plc, a UK Company.
Three blocks out of the above-awarded blocks
have been relinquished as the expected deposits were found to be sub-economic.
In the
In the
During the quarter, processing and
interpretation of acquired data have been taken up in an accelerated manner.
Building on the giant Dhirubhai gas
discovery, Reliance continued with the exploratory drilling campaign in the
discovery block KG-DWN-98/3 in the
The contract for development is slated to be
awarded in calendar Q1-06.
The exploration in the CBM block of RIL is
also progressing as per plan.
Reliance has deployed state-of-the-art
technology, and is working with leading international technology and service
providers for the E&P project, covering all activities, such as seismic
studies, processing and interpretation of data and drilling.
RIL also holds a 30% interest in an unincorporated
Joint Venture with British Gas and ONGC, to develop the proven Panna-Mukta and
Tapti oil & gas fields. British Gas has a 30% share and ONGC the balance
40% share.
The Panna-Mukta fields produced 725,340
tonnes of crude oil and 22.32 billion cubic feet (632 MMSCM) of gas during the
half year under report.
The Tapti field produced 40.46 billion cubic
feet of gas (1,145 MMSCM) during the half year under report.
Refining & Marketing (R&M)
During the period under report, the domestic
demand for petroleum products reduced by 0.6% compared to first half of last
year. This is against 5.5% growth last year compared to the corresponding
previous period.
The consumption of HSD, which accounts for
more than a third of the total consumption of petroleum products, registered a
negative growth of 0.6%, against a growth of 8.8% during the corresponding
previous period. LPG demand showed significantly lower growth of 0.8% against
13.8% growth during the corresponding previous period. Demand for MS grew by
4.3%. The demand of Aviation turbine fuel grew by 14.7% during the half year.
Naphtha sales fell by 11.2% and Kerosene sales increased slightly by 0.8%.
The average prices of WTI, Brent and
The global refining industry in general and
the US refining industry in particular was dramatically influenced by the two
hurricanes, Katrina and Rita that hit US Gulf coast on 29th August & 24th
September respectively. US Gulf coast is the major hub for US refining with
total capacity of about 4.7 mn b/d or 27.5% of US capacity. Almost all of this
closed during 2 hurricanes. Reportedly as of end Sep '05 3.1 mn b/d capacity
still remains closed.
International Energy Agency revised down its
global oil demand growth forecast for 2005 to 1.26 million b/d, due to regional
economic and logistical disruptions as well as retail price spikes in US due to
Katrina and Rita and weaker outlook for
The refinery margins were robust in all the
regions as product price increases were higher than the concomitant rise in
crude oil prices.
During the period under report, Reliance
recorded 96% capacity utilisation at its Jamnagar Refinery. The refinery
processed 15.87 million tons of crude during the half year.
This capacity utilisation compares
favourably with the utilisation rates for other refineries, both in
Exports of refining products during the
period under review were 5.2 million tons, compared to 4.8 million tons in the
corresponding period last year.
The implementation of setting up of Retail
Outlets at various locations is in full swing. Reliance already has the
necessary approvals for setting up 5,849 retail outlets in
As on date, over 850 outlets are operational.
The response from these retail outlets is encouraging as the throughput per
outlet is higher than the industry norms. By the end of March 2006, Reliance
will have significant presence in the retailing of transportation fuels.
Reliance will continue to set new standards for services and product quality
through its retail outlets. This will help improve margins, overall return on
capital and consequently, shareholder value.
Petrochemicals
Polyester: Reliance is the country's largest manufacturer of PFY, PSF
and PET, with a market share of 50%.
RIL's production volumes of PFY, PSF and PET
increased by 7% to 549,000 tonnes.
Reliance has maintained its focus on
speciality products. 56% of PSF production and 36% of PFY production
represented niche products, contributing a premium of up to 50% over commodity
prices.
Demand for PFY, PSF and PET, for the period
under review, was 7% higher at 896,000 tonnes.
Reliance also continues to be the largest
manufacturer of polyester intermediates, PX, PTA and MEG, in the country, with
a market share of 77%.
Production of PX, PTA and MEG increased by
5% to 16,08,000 tonnes
Polymers: Reliance is the largest manufacturer of PP, PE and PVC, in the country,
with a market share of 46%.
Production volumes of PP, PE and PVC
decreased 3% to 939,000 tonnes.
There was an increased focus on high value
premium products, with speciality grades contributing 19% of production, and
generating a premium of up to 14% over commodity prices.
Domestic demand for PP, PE and PVC, for the
period under review, was 12% higher at 1,892,000 tonnes.
RIL operates the world's largest grassroots,
multi-feed cracker at its Hazira petrochemicals complex. During the period
under review, Reliance produced 421,000 tonnes of ethylene and 200,000 tonnes
of Propylene.
Chemicals: During the half-year under review, Linear Alkyl Benzene (LAB)
production was 56,000 tonnes. Reliance has a market share of 24% in LAB.
During the
half-year, Reliance has successfully commissioned the 140,000 tonnes per annum capacity
Butadiene plant at Hazira. Butadiene production during the half-year was 33,000
tonnes.
NET
PROFIT NEARLY DOUBLES IN 24 MONTHS TO US$ 2 BILLION
DIVIDEND
OF 100%
PAYOUT OF RS
1,3940.000 Millions, HIGHEST IN PRIVATE SECTOR
Mumbai,
The performance
highlights of Reliance Industries Limited for the year ended 31st March 2006 are:
Turnover of Rs.
89,1240.000 Millions (US$ 19,976 million) against Rs. 73,1640.000 Millions for
the previous year, an increase of 22%
Operating Profit (PBDIT)
of Rs. 14,9820.000 Millions (US$ 3,358 million) against Rs. 14,2610.000
Millions for the previous year, an
increase of 5%.
Cash Profit of Rs.
13,1740.000 Millions (US$ 2,953 million)
against Rs. 12,0870.000 Millions for the
previous year, an increase of 9%.
Net Profit of Rs.
9,0690.000 Millions (US$ 2,033 million) against Rs. 7,5720.000 Millions for the
previous year, an increase of 20%.
Dividend of 100%,
payout of Rs. 1,3940.000 Millions (US$ 312 million)
Earnings Per Share
(EPS) for the year is Rs. 65.1 (US$ 1.46)
Contribution to
the national exchequer in the form of various taxes is Rs. 15,9500.000 Millions
(US$ 3,575
million) against Rs. 13,9720.000 Millions for the previous year
The Company’s
production of oil & gas and petrochemicals, including toll conversion, is
13.5 million tonnes during the year, against 12.7 million tonnes for the
previous year, an increase of 6%.
Exports of
manufactured products were Rs. 32,6910.000 Millions (US$ 7,327 million),
against Rs. 25,5320.000 Millions for the previous year, an increase of 28%.
The Company’s
Scheme of Arrangement (Scheme), to demerge certain undertakings to four
resulting companies was approved by the Hon High Court of Mumbai on 9th December 2005,
effective from 21st December 2005.
The
consolidated Net profit of the Company after consolidating its subsidiaries and
associates is Rs. 9,3980.000 Millions (US$ 2,106 million).
The
Company has also reconciled its profits with US GAAP. Reconciliation of Net
Profit as per Indian GAAP and US GAAP is as under:
|
|
Indian GAAP |
|
|
Consolidated Net
Profit |
Rs. MM 93980.000 2106 |
Rs. MM 97350.000 2182 |
|
Difference |
|
3370.000 76 |
The
difference is mainly on account of deferred tax. The carrying value of the net assets demerged
under the Scheme of demerger is Rs. 19,0060.000 Millions as per US GAAP.
Commenting
on the results, Chairman & Managing Director Mukesh Ambani said, “It has
been a very good year in an extremely challenging environment. They took
several strategic steps to enhance and distribute wealth to their shareholders.
What is even more gratifying is the growth in their profits from a little over
US$ 1 billion to over US$ 2 billion in a span of just 24 months. They are now
investing in each of their businesses to achieve substantial earnings growth in
the future and create further value for millions of their shareholders”.
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No exist designating subject or any of its beneficial owners, controlling
shareholders or senior officers as terrorist or terrorist organization or whom
notice had been received that all financial transactions involving their assets
have been blocked or convicted, found guilty or against whom a judgement or
order had been entered in a proceedings for violating money-laundering,
anti-corruption or bribery or international economic or anti-terrorism sanction
laws or whose assets were seized, blocked, frozen or ordered forfeited for
violation of money laundering or international anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.40.91 |
|
|
1 |
Rs.80.46 |
|
Euro |
1 |
Rs.54.60 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
9 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
8 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
NO |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
72 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit consideration.
Capability to overcome financial difficulties seems comparatively below
average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|