MIRA
INFORM REPORT
|
Report Date : |
14.11.2007 |
IDENTIFICATION
DETAILS
|
Name : |
RELIANCE
INDUSTRIES LIMITED |
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|
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Registered
Office : |
3rd Floor,
Maker Chambers IV, 222, Nariman Point, Mumbai – 400 021, Maharashtra |
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Country : |
India |
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Financials (as
on) : |
31.03.2007 |
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Date of
Incorporation : |
04.08.1977 |
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|
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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
: |
Aa |
RATING |
STATUS |
PROPOSED
CREDIT LINE |
|
||
|
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 |
||
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Maximum Credit
Limit : |
USD 2600000000 |
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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 India, Reliance enjoys leading markets share for all its
major businesses. It has a market share of 51 percent in Polyester, 48
percent in Polymers and 78 percent in Fibre intermediates. Reliance has
emerged as India’s Most Admired Business House, for the third successive
year. Directors are well-experienced and respectable industrialists. Trade
relations are fair. The company can
be considered good for business dealings. |
LOCATIONS
|
Registered
Office : |
3rd Floor,
Maker Chambers IV, 222, Nariman Point, Mumbai – 400 021, Maharashtra, India |
|
Tel. No.: |
91-22-30325000/30327000/22785000 |
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Fax No.: |
91-22-30322268/22785111 |
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E-Mail : |
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Website : |
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Head Office : |
Undertaking Polymer Division, Fortune 2000, 5th Floor, C-3,
G Block, Bandra Kurla Complex, Bandra [East], Mumbai – 400051, Maharashtra,
India |
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Corporate
office : |
Reliance Center,
19, Walchand Hirachand Marg, Ballard Estate, Mumbai-400038, Maharashtra,
India |
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Tel No. : |
91-22-30327000 |
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|
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|
Administrative
Office : |
Chitrakoot, 2nd
Floor, Shree Ram Mills Compound, Ganpatrao Kadam Marg, Worli, Mumbai – 400
013, Maharashtra, India |
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Tel. No.: |
91-22-24962780/24981163/24981167/24981667-90 |
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Factory : |
Gandhar Complex P. O. Dahej, Bharuch
- 392 130, Gujarat, India Hazira Complex Village Mora,
Bhatha P.O. Surat-Hazira Road, Surat 394 510, Gujarat, India Jamnagar Complex Village Meghpar
/ Padana, Taluk Lalpur, Dist. Jamnagar 361 280, Gujarat, India Nagothane Complex P. O. Petrochemicals
Township, Nagothane, Raigad - 402 125, Maharashtra, India Naroda Complex 103/106, Naroda
Industrial Estate, Naroda, Ahmedabad 382 320, Gujarat, India Patalganga
Complex B-4, Industrial
Area, Patalganga, Off Bombay-Pune Road, Near Panvel, Dist. Raigad 410 207,
Maharashtra, India Vadodara Complex P. O.
Petrochemicals, Vadodara - 391 346, Gujarat, India |
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Branch Office : |
Module 15/16, Fosbery Road, Offreay Road Station [East], Mumbai –
400033, Maharashtra, India |
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Tel No. : |
91-22-30413483 |
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Fax No. : |
91-22-30411077 |
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Refinery
Complex : |
Taluka Lalpur,
District Jamnagar, Gujarat State |
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Corporate
Communication : |
Maker Chambers
IV, 5th Floor, Nariman Point, Mumbai – 400021, Maharashtra, India |
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Tel No. : |
91-22-22785568 /
22785585 / 22785000 |
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Fax No. : |
91-22-22785185 |
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Email : |
DIRECTORS
|
Name : |
Mr. Mukesh D.
Ambani |
|
Designation : |
Chairman & Managing Director |
|
Date of
Appointment: |
31.07.2002 |
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Qualification: |
Chemical Engineer from Mumbai University & MBA from Stanford
University, U.S.A. |
|
Other
Directorship: |
1) Reliance Europe Limited 2) Reliance Infocomm Limited 3) Reliance Communications 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. Dharam Vir
Kapur |
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Designation : |
Director |
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|
Name : |
Mr. Mahesh P.
Modi |
|
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 |
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|
Name : |
Dr. Raghunath A. Mashelkar |
|
Designation : |
Director |
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Date of
Appointment : |
09.06.2007 |
KEY EXECUTIVES
|
Name : |
Mr. Vinod M. Ambani |
|
Designation : |
Company Secretary |
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Audit Committee
: |
Mr. Yogendra P.
Trivedi (Chairman) |
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|
Mr. S.
Venkitaramanan (Vice Chairman) |
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|
Mr. Mahesh P.
Modi |
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Corporate Governance
and Stakeholders' Interface Committee : |
Mr. Yogendra P.
Trivedi (Chairman) |
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|
Mr. Mahesh P.
Modi |
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|
Dr. Dharam Vir
Kapur |
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Employees Stock Compensation
Committee : |
Mr. Yogendra P.
Trivedi (Chairman) |
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|
Mr. Mukesh D.
Ambani |
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|
Mr. Mahesh P.
Modi |
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|
Prof. Dipak C.
Jain |
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|
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|
Finance
Committee : |
Mr. Mukesh D.
Ambani (Chairman) |
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|
Mr. Nikhil R.
Meswani |
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|
Mr. Hital R.
Meswani |
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Health, Safety
& Environment
Committee : |
Mr. Hital R.
Meswani (Chairman) |
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|
Dr. Dharam Vir
Kapur |
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|
Mr. Hardev Singh
Kohli |
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Remuneration
Committee : |
Mr. Mansingh L.
Bhakta (Chairman) |
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|
Mr. Yogendra P.
Trivedi |
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|
Mr. S.
Venkitaramanan |
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|
Dr. Dharam Vir
Kapur |
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|
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|
Shareholders'/Investors' Grievance
Committee : |
Mr. Mansingh L.
Bhakta (Chairman) |
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|
Mr. Yogendra P.
Trivedi |
|
|
Mr. Mukesh D.
Ambani |
|
|
Mr. Nikhil R.
Meswani |
|
|
Mr. Hital R.
Meswani |
SHAREHOLDING
PATTERN
As on 30.09.2007
|
Names
of Shareholders |
No. of Shares |
Percentage of Holding |
|
Shareholding of
Promoter and Promoter Group2 |
|
|
|
Indian |
|
|
|
Individuals / Hindu Undivided Family |
10586013 |
0.79 |
|
Bodies Corporate |
595134520 |
44.24 |
|
Any other (specify) |
|
|
|
i. Petroleum Trust (through Trustees for
sole beneficiary-M/s Reliance Industrial Investments and Holdings Ltd.) |
104660154 |
7.78 |
|
Public
Shareholding3 |
|
|
|
Institutions |
|
|
|
Mutual Funds / UTI |
32500755 |
2.42 |
|
Financial Institutions / Banks |
596148 |
0.04 |
|
Central Government / State Government(s) |
3951226 |
0.29 |
|
Insurance Companies |
69242757 |
5.15 |
|
Foreign Institutional Investors |
287667847 |
21.38 |
|
Non-institutions
|
|
|
|
Bodies Corporate |
59431752 |
4.42 |
|
Individuals |
|
|
|
i. Individual shareholders holding nominal
share capital up to Rs. 1 lakh |
152810183 |
11.36 |
|
ii. Individual shareholders holding
nominal share capital in excess of Rs. 1 lakh |
17495807 |
1.30 |
|
Any other (specify) |
|
|
|
i.NRIs/OCBs |
11238522 |
0.84 |
|
Total |
1345315684 |
100.00 |
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 : |
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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. |
PRODUCTION STATUS
|
Particulars |
Unit |
Licensed Capacity |
Installed Capacity |
|
Refining of Crude
Oil |
Mill. MT |
N.A. |
33 |
|
Ethylene |
MT |
N.A. |
1,580,000 |
|
Propylene |
MT |
N.A. |
600,460 |
|
Benzene |
MT |
N.A. |
730,000 |
|
Toluene |
MT |
N.A. |
197,000 |
|
Xylene |
MT |
N.A. |
165,000 |
|
Hydro Cynic Acid ' |
MT |
3600 |
3,600 |
|
Ethane Propane
Mix |
MT |
N.A. |
450,000 |
|
Caustic Soda Lye
/ Flakes |
MT |
N.A. |
165,825 |
|
Chlorine |
MT |
N.A. |
105,000 |
|
Acrylonitrile |
MT |
N.A. |
30,000 |
|
Linear Alkyl
Benzene |
MT |
N.A. |
158,500 |
|
Butadiene &
Other C4s |
MT |
N.A. |
419,000 |
|
Other Chemicals |
MT |
N.A. |
656,150 |
|
Paraxylene |
MT |
N.A. |
1,904,600 |
|
Orthoxylene |
MT |
N.A. |
467,900 |
|
Toluole |
MT |
N.A. |
180,000 |
|
Poly Vinyl
Chloride |
MT |
N.A. |
625,000 |
|
High / Linear
Low Density Poly Ethylene |
MT |
N.A. |
1,055,000 |
|
High Density
Polyethylene Pipes |
MT |
N.A. |
80,000 |
|
Poly Butadiene
Rubber |
MT |
N.A. |
50,000 |
|
Polypropylene |
MT |
N.A. |
1,735,190 |
|
Mono Ethylene
Glycol |
MT |
N.A. |
733,400 |
|
Higher Ethylene
Glycol |
MT |
N.A. |
52,080 |
|
Ethylene Oxide |
MT |
N.A. |
91,000 |
|
Purified
Terephthalic Acid |
MT |
N.A. |
2,050,000 |
|
Polyester
Filament Yam / Polyester Chips |
MT |
N.A. |
807,200+ |
|
Polyester Staple
Fibre / Acrylic Fibre / Chips |
MT |
N.A. |
765,612 |
|
Poly Ethylene
Terephthalate |
MT |
N.A. |
290,000 |
|
Polyester Staple
Fibre Fill |
MT |
N.A. |
42,000 |
|
Man-made Fibre
Spun Yarn on worsted system |
Nos |
N.A. |
24,094 |
|
Man-made fibre
on cotton system (Spindles) |
Nos |
N.A. |
23,040 |
|
Man-made Fabrics
(Looms) |
Nos |
N.A. |
305 |
|
Knitting M/C |
Nos |
22 |
20 |
GENERAL
INFORMATION
|
No. of
Employees : |
12864 |
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Bankers : |
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Facilities : |
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Banking Relations : |
Good |
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|
|
|
Auditors : |
v Chaturvedi & Shah Chartered Accountants v Rajendra & Company Chartered Accountants INTERNATIONAL ACCOUNTANTS
v Deloitte Haskins & Sells Chartered Accountants |
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Associates : |
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Subsidiaries : |
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CAPITAL STRUCTURE
Authorised
Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
2,50,00,00,000 |
Equity Shares |
Rs.10/- each |
Rs.25000.000 millions |
|
50,00,00,000 |
Preference Shares
|
Rs.100/-each |
Rs.5000.000 millions |
|
|
GRAND TOTAL |
|
Rs.30000.000
millions |
Issued,
Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
1,39,35,08,041 |
Equity Shares |
Rs.10/-each |
Rs.13935.100 millions |
|
|
Less : Calls in
arrears – by others |
|
Rs. 3.000 Millions |
|
|
Total |
|
Rs. 13932.100 Millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE SHEET
|
SOURCES
OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
SHAREHOLDERS FUNDS |
|
|
|
|
1] Share Capital |
13932.100 |
13931.700 |
13930.900 |
|
2] Share Application Money |
601.400 |
0.000 |
0.000 |
|
3] Reserves & Surplus |
625137.800 |
484110.900 |
390102.300 |
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
NETWORTH
|
639671.300 |
498042.600 |
404033.200 |
|
|
|
|
|
|
LOAN FUNDS |
|
|
|
|
1] Secured Loans |
95691.200 |
76649.000 |
79729.000 |
|
2] Unsecured Loans |
182566.100 |
142007.100 |
108116.900 |
|
TOTAL
BORROWING |
278257.300 |
218656.100 |
187845.900 |
|
DEFERRED TAX LIABILITY |
69820.200 |
0.000 |
0.000 |
|
|
|
|
|
TOTAL
|
987748.800 |
716698.700 |
591879.100 |
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
636604.600 |
557167.500 |
302529.900 |
|
Capital work-in-progress |
75281.300 |
69577.900 |
48292.900 |
|
|
|
|
|
|
INVESTMENTS |
162513.400 |
58461.800 |
170514.600 |
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
Inventories |
121365.100 |
101198.200 |
74128.800 |
|
Sundry Debtors |
37324.200 |
41636.200 |
39278.100 |
|
Cash & Bank Balances |
18353.500 |
21461.600 |
36087.900 |
|
Other Current Assets |
30.700 |
0.000 |
0.000 |
|
Loans & Advances |
122060.000 |
82665.500 |
138696.700 |
|
Total Current Assets |
299133.500 |
246961.500 |
288191.500 |
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
Current
Liabilities |
168655.300 |
176560.200 |
179174.100 |
|
Provisions |
17128.700 |
38909.800 |
38475.700 |
Total Current Liabilities
|
185784.000 |
215470.000 |
217649.800 |
|
Net Current Assets |
113349.500 |
31491.500 |
70541.700 |
|
|
|
|
|
TOTAL
|
987748.800 |
716698.700 |
591879.100 |
PROFIT &
LOSS ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
|
|
|
|
|
|
Sales Turnover |
1116927.200 |
812113.300 |
742431.300 |
|
|
Other Income |
4782.800 |
6829.200 |
0.000 |
|
|
Total Income |
1121710.000 |
818942.5 |
742431.300 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
145204.700 |
107040.600 |
90686.800 |
|
|
Provision for Taxation |
25770.700 |
16347.200 |
14970.000 |
|
|
Profit/(Loss) After Tax |
119434.000 |
90693.400 |
75716.800 |
|
|
|
|
|
|
|
|
Earnings in Foreign Currency : |
|
|
|
|
|
|
Export Earnings |
585313.200 |
308196.000 |
NA |
|
|
Interest Earnings |
6.600 |
10.200 |
NA |
|
|
Other Earnings |
4.400 |
0.300 |
NA |
|
Total Earnings |
585324.200 |
308206.500 |
NA |
|
|
|
|
|
|
|
|
Imports : |
|
|
|
|
|
|
Raw Materials |
737113.500 |
529451.900 |
NA |
|
|
Stores & Spares |
15402.600 |
9279.600 |
NA |
|
|
Capital Goods |
10999.800 |
26811.500 |
NA |
|
Total Imports |
763515.900 |
565543.000 |
NA |
|
|
|
|
|
|
|
|
Expenditures : |
|
|
|
|
|
|
Purchases |
18212.800 |
|
|
|
|
Manufacturing
and Other Expenses |
904798.100 |
665273.000 |
651840.500 |
|
|
Interest and
Finance Charges |
11888.900 |
8770.400 |
|
|
|
Depreciation |
48151.500 |
34009.100 |
|
|
Total Expenditure |
983051.300 |
733213.800 |
651840.500 |
|
QUARTERLY RESULTS
|
PARTICULARS |
|
30.06.2007 |
30.09.2007 |
|
Type |
|
1st
Quarter |
2nd
Quarter |
|
Sales
Turnover |
|
280560.000 |
320430.000
|
|
Other
Income |
|
1050.000 |
1680.000
|
|
Total
Income |
|
281610.000 |
322110.000
|
|
Total
Expenditure |
|
228790.000 |
262620.000
|
|
Operating
Profit |
|
52820.000 |
59490.000
|
|
Interest |
|
2880.000 |
2570.000
|
|
Gross
Profit |
|
49940.000 |
56920.000
|
|
Depreciation |
|
9580.000 |
11290.000
|
|
Tax |
|
4670.000 |
5270.000
|
|
Reported
PAT |
|
32640.000 |
38370.000
|
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt Equity Ratio |
0.47 |
0.49 |
0.57 |
|
Long Term Debt Equity Ratio |
0.34 |
0.38 |
0.45 |
|
Current Ratio |
0.90 |
1.03 |
1.10 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
1.34 |
1.34 |
1.42 |
|
Inventory |
10.64 |
10.17 |
9.99 |
|
Debtors |
29.98 |
22.03 |
20.56 |
|
Interest Cover Ratio |
13.21 |
13.20 |
7.17 |
|
Operating Profit Margin (%) |
17.34 |
16.81 |
19.49 |
|
Profit Before Interest and Tax Margin (%) |
13.27 |
12.99 |
14.40 |
|
Cash Profit Margin (%) |
14.16 |
13.99 |
15.44 |
|
Adjusted Net Profit Margin(%) |
10.09 |
10.18 |
10.35 |
|
Return On Capital Employed(%) |
20.12 |
18.76 |
19.31 |
|
Return On Net Worth(%) |
22.45 |
21.90 |
21.82 |
LOCAL AGENCY
FURTHER INFORMATION
History
Subject was
originally incorporated on 8th May 1973 in Karnataka State as a
Public Limited Company under the name and style of “Mynylon Limited”.
A company by name
of Reliance Industries Private Limited was incorporated in Maharashtra on 11th
February 1967 and was converted into a Public Limited Company on 28th
June 1985 and with effect from 1st July 1975 Reliance Textile
Industries Limited was amalgamated with Mynylon Limited. The name of Mynylon was then changed to Reliance
Textile Industries Limited with effect from 11th March 1977. Due to diversification, name of the company
subsequently changed to the present. Its Company Registration Number is 19786.
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 Jamnagar, Gujarat. Reliance Petroleum Limited enjoys the
support of 2 millions international, domestic, institutional and retail
shareholders. This is the second largest investor base in the Indian corporate
sector next only to the company.
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, Maharashtra to
produce PFY in 1982, PSF in 1986, a linear alkyl benzene (LAB) and a PTA in
1988. The company has technical collaboration for PFY and PSF with DuPont, USA
and for PTA with UOP processors, US and ICI, UK.
Subject has setup a
petrochemical facility to produce HDPE and PVC at Hazira, Gujarat in technical
collaboration with Dupont and BF Goodrich respectively. The Hazira
petrochemical plant was commissioned in 1991-92. Its operations capture value
addition at every stage from producing crude oil and gas to polyester and
polymer products and are vertically integrated to the production of textiles.
It operates world’s largest grassroot, multi-fed crackers at its Hazira
petrochemical complex.
In 1991-92, the
company commissioned a petrochemicals unit to manufacture HDPE and PVC at
Hazira, Gujarat, in technical collaboration with Dupont and BF Goodrich
respectively. In 1995-96, it entered the telecom industry through a joint
venture with Nynex, USA.
In 1995-96, it
entered the telecom industry through a joint venture with Nynex, US. Subject
entered this industry by promoting Reliance Telecom Limited. It provides
cellular services using GSM Standard.
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 India to be rated by the international credit
rating agencies.
The company
completed its integrated Jamnagar complex during 1999-2000, the company
completed its integrated Jamnagar Complex, in a record period of less then 3
years. The Jamnagar Complex Houses the world's largest Grassroot Refinery
(under Subsidiary company Reliance Petroleum), paraxylene and polypropylene
project with the capacity of 27 million tonnes, 1.4 million tonnes and 6,00,000
tonnes per annum respectively together with country's largest all weather port,
power plants and all related infrastructure.
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 India, with a market
share of 51%.
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 September 19, 2002. The exchange
ratio will be of 1 share of the company for every 11 shares of Reliance
Petroleum Limited held. The merger of
RPL with the company represents the largest ever merger in India, creating the
country’s largest private sector company on all financial parameters.
The disinvestment
process of Government of India has given an opportunity for the company acquire
the second largest petrochemical company India i.e. IPCL. The company has
picked 26% stake from Government of India and acquired another 20% from public
through an open offer.
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 India. The company has acquired 26% stake in IPCL
held by Government of India through an open offer and transparent process of
global competitive bidding.
Subsequently under the regulations, the company acquired further 20%
equity stake in IPCL through an open offer to the public, thereby increasing
its stake in the company to 46%. The
total consideration for the successful bid was Rs. 14910 millions (US$ 303
millions) at Rs. 231 per share for acquiring the 25% stake. The total investment made by the company for
acquiring the IPCL stake, including the open offer to the public was Rs. 26380
millions.
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 Indonesia and Turkey and it has established
overseas offices in China, UAE and Vietnam.
The company was planning to increase the capacity of PET from 80000
tonnes per year to 300000 tonnes per year through the building of the world’s
first plant based on Dupont’s revolunationary NG-3 technology. The new plant will be located alongside at
Hazira. The expansion project was expected to be completed in the financial
year 2003-04.
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 (India) Corporation
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 (India)
v CEAG Flameproof Control Gear Private Limited
v Colloids India
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
Amalgamation
of Indian Petrochemicals Corporation Limited (IPCL) with the Company:
Indian Petrochemicals Corporation Limited ('IPCL') has been amalgamated with
the Company. The Scheme of Amalgamation was sanctioned by the Hon'ble High
Court of Judicature at Bombay vide Order dated June 12, 2007 as modified vide
Order dated July 11, 2007, and by the Hon'ble High Court of Gujarat at
Ahmedabad vide Order dated August 16, 2007. The Scheme became effective on
September 5, 2007, the Appointed Date of the Scheme being April 1, 2006.
The amalgamation of IPCL with the Company is in line with global trends in the
energy and chemicals sector, to achieve size, scale, integration and greater
financial strength and flexibility, in the interests of maximizing the overall
shareholder value. The amalgamation would also augment the Company's status of
being India's only world scale, fully integrated, globally competitive energy
company with operations in oil and gas exploration and production (E&P),
refining and marketing (R&M), petrochemicals and textiles.
Results of Operations:
Turnover for
the year was Rs. 1183540 Millions (US$ 27,227 million) against Rs. 891240
Millions in the previous year. During the year, the Company has scaled new heights
and set several new benchmarks in terms of sales, profits, net worth and
assets.
The net profit
for the year was Rs. 119430 Millions (US$2,747 million), registering a
Compounded Annual Growth Rate (CAGR) of 30% over the past five years.
Investment Rating:
The Company has
the highest credit rating of AAA from CRISIL, and investment grade rating of
Baa2 and BBB from Moody's and S&P respectively.
The Company's
international rating from S&P is higher than the country's sovereign
rating.
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 India, is
presented in a separate section forming part of the Annual Report.
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 include the
following:
* During the
year, the Company commissioned the world's largest polyester expansion project
with a capacity of 550 KTA at globally competitive cost in a record time of
eighteen months. With this expansion, the Company's polyester capacity has been
augmented to 2 million tonnes per year. To keep pace with polyester capacity
expansion, the Company also commissioned a 730 KTA of PTA plant at Hazira. In
FY 2006-07, the Company expanded its polypropylene capacity by 280 KTA at
Jamnagar that increased the overall PP capacity to 1,710 KTA. These expansions
are expected to provide the Company significant growth opportunities and
sustain leadership position in petrochemicals business.
* The
Company plans to further sharpen its focus on the exports of petroleum products
of the refinery. Towards this end, the Company has secured the necessary
approvals for the conversion of its Jamnagar Complex as an Export Oriented Unit
(EOU) with effect from April 16, 2007.
Subsidiaries:
During the year, Ranger Farms Limited, Retail Concepts & Services (India)
Limited, Reliance Retail Insurance Broking Limited, Reliance Dairy Foods
Limited, Reliance Retail Finance Limited, RESQ Limited (subsidiaries of
Reliance Retail Limited), Reliance Haryana SEZ Limited (subsidiary of Reliance
Ventures Limited), Reliance Exploration & Production - DMCC and Reliance
Global Management Services Private Limited became subsidiaries of the Company.
The name of Reliance Infrastructure Limited (a subsidiary of the Company) has
been changed to Reliance Jamnagar Infrastructure Limited. 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 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 Subsidiary Companies' forming part of the
Annual Report.
Further,
pursuant to Accounting Standard AS-21, Consolidated Financial Statements
presented by the Company include financial results of its subsidiaries.
Reliance
Petroleum Limited (RPL), a listed subsidiary of the Company, is making rapid
strides on setting up a greenfield petroleum refinery having a total capacity
of approximately 5,80,000 barrels per stream day and polypropylene plant having
a capacity to produce 0.9 million tonnes per annum. The project, being set up
in a Special Economic Zone (SEZ) at Jamnagar in Gujarat at an estimated cost of
Rs. 270000 Millions, witnessed significant progress during the year and has
achieved several key milestones within a short period of 16 months since
kick-off.
Reliance Retail
Limited (RRL), a subsidiary of the Company, has launched the new project for
carrying on the organised retail business with plans for a pan-India footprint
of multi-format retail outlets supported by a state-of-the-art supply chain
infrastructure.
The store
network continues to expand at a rapid pace. Currently there are over 300
Reliance Fresh stores covering more than 30 towns and cities in 12
States.
RRL's focus
this year will be on the rapid roll-out of Reliance Fresh and Hypermarkets in
various parts of the country.
Group: Pursuant to an intimation from the Promoters, the
names of the Promoters and entities comprising the 'group' as defined under the
Monopolies and Restrictive Trade Practices ("MRTP") Act, 1969 are
disclosed in the Annual Report.
Management's 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.
Overview - FY 2006-07:
Value creation through integration:
A landmark
merger of Indian Petrochemicals Corporation Limited (IPCL) with Reliance
Industries Ltd. (RIL) has been completed.
As per the approval from the Hon. High Courts, all assets and liabilities of
IPCL have been transferred to RIL with effect from 1st April 2006. As per the
scheme of merger, shareholders of IPCL will receive 1 share of RIL in lieu of
every 5 shares of IPCL held by them. Accordingly, 60,140,560 equity shares of
the Company are being issued to the shareholders of IPCL.
Following the
merger, RIL with its headquarters at Mumbai, India, has manufacturing
facilities located at Patalganga, Nagothane, Nagpur and Kurkumbh in the state
of Maharashtra, Naroda, Hazira, Jamnagar, Vadodara and Gandhar in the state of
Gujarat, Silvassa near Gujarat, Allahabad and Barabanki in the state of U.P.,
Dhenkanal in the state of Orissa, Hoshiarpur in the state of Punjab.
Key milestones:
It was a year
of several achievements.
Reliance
Petroleum Limited (RPL), a subsidiary established a key milestone by completing
its Rs. 81000 Millions (US$ 1,860 million) Initial Public Offering of equity
shares. The issue received an overwhelming response and the shares are listed
in India on the Bombay Stock Exchange and the National Stock Exchanges. The
world's largest polyester expansion project was also commissioned by them
during the year. They brought a Polyester capacity of 550 KTA on stream at
globally competitive costs in a record time of eighteen months. With this
expansion, their polyester capacity has been augmented to 2 million tonnes per
year. Subsequently, Reliance now have 4% of global polyester capacity and 6% of
global production. Following this expansion, they have commissioned a PTA plant
of 730 KTA capacity at Hazira. They continue to invest aggressively in their
fiber intermediates business that will help them keep pace with expansion of
fibre capacity.
During the
year, they expanded their polypropylene (PP) capacity by 280 KTA at Jamnagar
that increased the combined capacity to 1,710 KTA. With this expansion, they
now have 3.5% of global PP capacity and 3.6% of global PP production.
Reliance Retail
Limited is in the process of building a business that will aim at offering
competitive products and services to Indian consumers across several verticals
in diverse geographies through multiple formats.
This will be
built on an integrated platform with a world-class supply chain, logistics and
information technology infrastructure across the country. Reliance Retail
entered the organised retail market in India with the launch of its convenience
store format under the brand name of 'Reliance Fresh'. Since the launch of the
first Reliance Fresh store in November 2006 in Hyderabad, the network had
expanded to 96 stores at the end of FY 2006-07 covering locations like Jaipur,
Chennai, NCR, Guntur, Vijayawada and Visakhapatnam.
Record
financial performance: During the year, they set several benchmarks in terms of
sales, profits, net worth and assets. They achieved the unique status of
becoming the India's first company in the private sector to achieve a Net
Profit exceeding Rs 100000 Millions. Their Net Profit for the year was at Rs.
119430 Millions (US$2,747 million) with a Compounded Annual Growth Rate (CAGR)
of 30% over the past five years.
They made a
dividend payout of Rs. 11 per share - the highest ever - amounting to Rs. 15340
Millions (US$ 353 million), including dividend distribution tax. This is the
highest ever payout by any private sector company in India. The erstwhile IPCL
also distributed dividend of Rs. 6 per share aggregating to Rs. 1090 Millions
(US$ 25 million), including dividend distribution tax to its
shareholders.
Return on
Equity is at 23.5% and Return on Capital Employed is at 20.5%.
Both are
significantly higher than the weighted average cost of capital.
Their net
gearing was at 25% and the gross debt/equity ratio was 0.44 as at March 31,
2007.
They endeavour to play a pivotal role in India's economy and strive towards
contributing to its progress and development. Their revenues are equivalent to
about 2.9% of India's GDP. They account for:
·
Nearly 12% of India's total exports
·
About 6.5% of the Government of India's indirect tax
revenues
·
About 5.7% of the total market capitalisation in India
·
Weightage of 13.4% in the BSE Sensex
·
Weightage of 11.7% in the Nifty Index
Financial Review:
They delivered
superior financial performance during the year with improvement in all major
parameters. Turnover for the year was Rs.1183540 Millions (US$ 27,227 million)
as against Rs. 891240 Millions in the previous year.
Net Turnover
for the year was Rs. 1116930 Millions (US$ 25,694 million) as against Rs.
812110 Millions in the previous year.
Other Income
was Rs. 4780 Millions (US$ 110 million) as against Rs. 6830 Millions in the
previous year. This decrease was on account of decrease in interest income due
to utilisation of surplus funds for investment in Reliance Petroleum
Limited.
Consumption of
raw materials was Rs. 786930 Millions (US$ 18,103 million) as against Rs.
583430 Millions in the previous year. Employee cost was Rs. 20940 Millions (US$
482 million) as against Rs. 9780 Millions in the previous year.
During the year
erstwhile IPCL offered Voluntary Separation Scheme for the employees of
Vadodara unit at a cost of Rs. 3760 Millions.
Operating
profit before other income was Rs. 200460 Millions (US$4,611 million) as
against Rs. 142990 Millions in the previous year. Interest expenditure was Rs.
11890 Millions (US$ 274 million) as against Rs. 8770 Millions in the previous
year. Interest capitalised during the year was Rs. 5350 Millions as compared to
Rs. 6370 Millions in the previous year. The outstanding debt as on March 31,
2007 was Rs. 278260 Millions (US$ 6,401 million) compared to Rs. 218660
Millions as on March 31, 2006.
Depreciation
charge for the year was Rs. 48150 Millions (US$ 1,108 million) as against Rs.
34010 Millions in the previous year. Resultant from this, the profit before tax
was Rs. 145200 Millions (US$ 3,340 million) as against Rs.107040 Millions in
the previous year.
Provision for taxation
was Rs. 16570 Millions (US$ 381 million) as against Rs.9310 Millions in the
previous year, which includes Fringe Benefit Tax of Rs. 400 Millions (US$ 9
million). Provision for deferred tax was Rs. 9200 Millions (US$212 million) as
against Rs. 7040 Millions in the previous year. Profit after taxation was Rs.
119430 Millions (US$ 2,747 million) as against Rs. 90690 Millions in the
previous year.
Capital expenditure during the year was Rs. 89800 Millions
(US$2,066 million) primarily on account of exploration and production,
implementation of value maximisation projects, expansion of petrochemical
capacities and setting up of petroleum retail marketing outlets.
The company’s fixed assets of important value include Leasehold Land,
Freehold Land, Development Rights/Producing Properties, Building, Plant &
Machinery, Electrical Installation, Factory Equipments, Furniture &
Fixtures, Vehicles, Ships, Aircrafts, Helicopters and Jetties.
Business Review:
Oil & Gas:
Growing demand for oil and gas globally:
The Exploration
and Production (E&P) industry witnessed yet another great year, driven
largely by high commodity prices and robust oil and gas demand. Global demand
for oil grew by 0.8% from 83.1 million barrels per day in 2005 to 83.8 million
barrels per day in 2006.
IPE Brent
prices averaged 10% higher at US$ 65 per barrel during FY 2006-07 as against an
average price of US$ 59 per barrel in FY 2005-06. Natural gas prices in Asia
and Europe which are predominantly linked to crude remained volatile and Henry
hub natural gas prices averaged US$ 8 / MMBTU for 2006.
Experts
forecast gas prices to stay above historical levels in the near future.
Fossil fuels
are expected to remain the predominant energy source with about 80% share of
energy demand globally. Oil and gas alone is expected to account for 54% of the
projected demand. Alternative fuels are expected to grow rapidly but account
for less than 2% of the energy demand in the foreseeable future. Global demand for
oil is expected to grow at 1.3% annually while natural gas is expected to grow
at about 2% per annum.
However, there are concerns regarding a concurrent growth in supply. This is
primarily due to low levels of spare production capacity, declining number of
large discoveries and geopolitical uncertainties.
The
International Energy Agency (IEA), in its world energy outlook, has estimated
investment requirements of over US$ 8.2 trillion over the next two decades in
order to bridge the demand-supply gap. This is substantially higher than its
earlier forecast of US$ 5.3 trillion which underlines a positive demand outlook
for energy.
Oil and gas prices are expected to remain firm in the future reflecting a tight
market situation.
Impact on oil and gas companies:
Strong
profitability and cash flows for E&P companies have spurred investments
across the energy value chain globally resulting in severe supply chain
pressures. However, the biggest global challenge for the E&P sector is the
sharp increase in the cost of equipment and services (which have doubled in
recent years) resulting in a steep increase in the cost of exploration and
development. The major factors that have contributed to cost escalation are
increase in costs of seismic services, drilling rigs and related services,
engineering, fabrication and installation costs. Over the past five years, the
E&P industry has witnessed a significant growth in capital expenditure and
the same trend is expected to continue in the medium term.
Sector outlook
- India: During the year under review, India's net import of crude oil and
petroleum products grew by over 17% to an estimated US$ 39 billion, accounting
for 20% of the total imports. Despite growing fears over the impact of rising
inflation, experts forecast annual GDP growth of 8-9% over the next five years,
thus boosting the energy demand even further.
Domestic crude
oil production in India was slightly higher at 34 million tonnes and gas
production stood at 1,120 BCF. India's E&P industry has received a great
impetus with the growing demand for crude oil and gas in the country and policy
initiatives of the Government of India to prompt investment in E&P sector.
Under the New
Exploration Licensing Policy (NELP) of the Government of India, 162 exploratory
blocks have been acquired by participating companies. It is heartening to note
that since the onset of NELP, there have been world-class discoveries that have
considerably changed the prospectivity of India's sedimentary basins.
The natural gas market in India - towards market driven pricing: The natural
gas market is on a high growth trajectory. Natural gas accounts for 9% of total
energy mix in India as against a global average of 21%. Its growth so far was
constrained by limited availability and nascent transmission and distribution
infrastructure. Following the large scale discoveries in the recent past and
growing imports of LNG, supplies are expected to increase considerably. Pricing
regime towards integration of domestic prices with global markets will be key
to investments in this sector. Currently, deregulated gas accounts for 44% of
India's gas consumption but is expected to touch 70% by the end of the
decade.
The regulatory
framework too is evolving and is expected to be conducive for promoting investments
in this sector of national importance. In pursuance to the PNGRB (Petroleum and
Natural Gas Regulatory Board) Act, a regulatory body is proposed in order to
provide the investment framework to market participants and investors.
Significantly large projects are being planned by various players in creating a
pan India gas grid which would improve connectivity and spur demand for natural
gas. Growing availability will result to the contribution of natural gas in
energy sector in India growing substantially.
Reliance performance - Continuing growth and
productivity:
They are
India's largest exploration acreage holder in the private sector and their
current portfolio comprises of (i) 30% interest in Panna Mukta, Tapti (PMT)
fields; (ii) 33 exploration blocks awarded by Government of India under NELP
and Pre-NELP licensing rounds; (iii) exploration and production rights to 5
coal bed methane (CBM) blocks; and (iv) exploration interests in Yemen, Oman,
East Timor, Colombia and Australia.
International
operations:
During FY 2006-07, they further expanded their footprint in
the global E&P arena. They were awarded two onshore blocks in Yemen and a
deepwater block in Oman adding up to a combined acreage of 38,078 sq. kms. More
recently, in FY 2007-08, they were awarded the block W06-5 covering an area of
approximately 5,760 sq. kms. in the Bonaparte basin in Australia. They are
working on the finalisation of production sharing contracts for the newly
awarded blocks and are making satisfactory progress.
Their consortium is implementing an initial programme of
drilling in Yemen's Block-9 which is scheduled for completion by the end of
2007. The production in Yemen averaged at 5,500 barrels per day.
They have consolidated their operations by transferring the international
exploration portfolio into a wholly owned subsidiary, Reliance Exploration and
Production (REP) DMCC, incorporated in Dubai.
Improved productivity from PMT: Impressive progress was made on implementation
of growth initiatives at the PMT fields. The expanded plan of development
(EPOD) for Panna - Mukta fields comprising of the installation of 2 wellhead
platforms and drilling of 6 wells is nearing completion.
Enterprises over which Key Managerial Personnel are able to exercise
significant influence
Dhirubhai Ambani Foundation
Jamnaben Hirachand Ambani Foundation
Hirachand Govardhandas Ambani Public Charitable Trust
HNH Trust and HNH Research Society
Jamnaben Hirachand Ambani Education Trust
AS PER WEBSITE
The company is India's largest private sector enterprise and is a major
player in the Indian petrochemicals sector. Its operations capture value
addition at every stage from producing crude oil and gas to polyester and
polymer products and are vertically integrated to the production of textiles.
Reliance has one of the largest marketing networks in Indian industry. All its
brands are market leaders
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 USA, including to Japan, Singapore, Indonesia, Malaysia,
Thailand, China, Greece and Italy. This reflects the fact that the company's
products meet the most stringent international environment and quality
specifications. In line with the governments oil sector policies, the company
is currently selling the five controlled products, namely, LPG, Gasoline,
Aviation Fuel, Kerosene and Diesel, to the public sector oil companies, IOC,
HPCL and BPCL to the extent required by the Government. The Oil Coordination
Committee determines the price realization for the company's controlled
products, based on the principle of import parity the company has already
applied for marketing rights for the controlled products, as it meets all the
criteria specified in this regard by the Government, as per the Gazette
Notification of November 1997. As soon as the marketing of controlled products
is decontrolled, the company will make appropriate arrangements for the same.
The company is also making investments in pipeline projects, to facilitate
distribution of petroleum products across the country, in a seamless and cost-efficient
manner. The company holds a 13% stake in Petronet V.K. Limited, which owns the
113-km, long Vadinar-Kandla pipeline. This pipeline links the company’s
refinery to the Kandla-Bhatinda pipeline, providing access to the high growth
north and north-west markets.
The setting up of the Central India pipeline project, which envisages
setting up a 1615-km pipeline to serve the landlocked markets in central India,
has been approved by the government. The company will hold a 26% stake in the
joint venture implementing this project. The company will also hold a 10% stake
in Petronet India Limited, the holding company set up for the creation of
pipeline infrastructure for evacuations of petroleum products all over India.
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 India.
Press Clippings
Reliance Industries Limited Signs Production Sharing
Agreement for Deep Water Offshore Block
in Oman
Muscat, Oman November 12 2007: Reliance Industries Limited
(RIL) is pleased to announce that it’s wholly owned subsidiary Reliance
Exploration and Production DMCC today signed a Production Sharing Agreement
(PSA) with the government of Oman for a offshore Block No 41 in Oman deep
water.
The Block measures over 20,000 sq km and water depth could
increase up to 3,000 meters. The new Block is adjacent to the earlier Block
allocated to RIL in 2005. RIL will integrate operations of both the adjoining blocks
to increase value for both the government of Oman and Reliance Industries
Limited.
Within a week, this is Reliance's third Block for which PSA
has been signed. The previous two were in the Kurdistan Region of Northern
Iraq.
RIL has been actively pursuing petroleum exploration
activities in the Middle East, particularly in Oman and Yemen, besides India,
Asia Pacific Region and South America.
Reliance Industries Limited
Reliance Industries Limited (RIL) is India’s largest private
sector company on all major financial parameters with turnover of Rs. 1183540
Millions (US$ 27.23 billion), cash profit of Rs. 176780 Millions (US$ 4.07
billion), net profit of Rs. 119430 Millions (US$ 2.75 billion) and net worth of
Rs. 639670 Millions (US$ 14.72 billion) as of March 31, 2007.
RIL is the first and only private sector company from India
to feature in the Fortune Global 500 list of ‘World’s Largest
Corporations’ and ranks amongst the world’s Top 200 companies in terms of
profits. RIL is amongst the 25 fastest climbers ranked by Fortune. 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.
RELIANCE INDUSTRIES LIMITED AWARDED OIL AND GAS
CONTRACT IN KURDISTAN REGION OF IRAQ
Mumbai, November 8 2007: Reliance Industries Limited (RIL)
is pleased to announce that it has executed two Production Sharing Contracts
with the Kurdistan Regional Government (KRG) covering petroleum exploration
activities in the Rovi and Sarta Blocks in the Kurdistan Region of Iraq.
Under the terms of the contract, Reliance Exploration &
Production DMCC, a wholly owned subsidiary of RIL, will serve as the operator.
Mr. Atul Chandra, President of International Operations,
RIL, said, “We are pleased to reach agreement with the KRG on these two PSCs.
We hope and believe this will be an investment that will provide long-term
benefits to all the stakeholders.”
RIL established a local office in Erbil in 2006 and has
undertaken extensive geological work over the past year in the Kurdistan
region.
RIL has been actively pursuing petroleum exploration
activities in the Middle East, particularly in Oman and Yemen, besides India,
Asia Pacific Region and South America.
Another Gas Discovery in Krishna Basin
RIL Strikes Gas in KG-OSN-2001/1 Reinforcing Miocene
Potential
Mumbai, November 06, 2007: Reliance Industries Limited (RIL)
has met with yet another success in KG-OSN-2001/1 (KG-III-5) located in the Krishna
offshore basin in the east coast of India. The well (KGIII5-P1) is the second
gas discovery in the Miocene clastics reservoir in the Krishna basin. This
shallow water block, with an area of 1100 sq. kms, was awarded to RIL under
biding round of NELP-III. RIL holds 100% participating interest in this block.
This well KGIII5-P1 was targeted with the objective of
consolidating the Miocene play fairways in the block as well as in Krishna
basin. The well was drilled at water depth of 151 m and was drilled to the
target depth of 3500 meters. The well encountered clastic reservoir with gross
hydrocarbon column of around 32 meters in Miocene section and 4 meters in
Pliocene section. The two pay zones were established through wire-line based
technology called Reservoir Characterisation Imager (RCI). This discovery
namely ‘Dhirubhai – 37’ has been notified to Government of India and
Directorate General of Hydrocarbons.
RIL is currently evaluating the commerciality of this
discovery.
IPCL Amalgamates with RIL
Mumbai, September 6, 2007: The certified copies of the
Orders of the Hon’ble High Court of Gujarat at Ahmedabad and the Hon’ble High
Court of Judicature at Bombay, sanctioning the Scheme of Amalgamation of Indian
Petrochemicals Corporation Limited (“IPCL”) with Reliance Industries Limited
(the “Company” / “RIL”) from
1st April, 2006 (“Appointed Date”), have been
filed with the respective Registrars of Companies yesterday.
With this, the Scheme became effective yesterday, i.e., 5th
September, 2007 and accordingly IPCL has been amalgamated with RIL.
The amalgamation of IPCL with the Company is in
line with global trends in the energy and chemicals sector, to achieve size,
scale, integration and greater financial strength and flexibility, in the interests
of maximizing the overall shareholder value.
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 India with a dominant market position.
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 India in a study by Business Today and A.T. Kearney
in 2003. In 2004, the company emerged as ‘India’s biggest wealth creator’ in
the private sector over a 5-year period in a study by Business Today – Stern
Stewart and as India’s ‘Most Admired Company’ in a Business Barons – TNS Mode
Opinion Poll.
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.
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
June 10, 2005: Reliance Industries Limited's (RIL) US$350 Million Multi Currency
Term Loan Facility has closed successfully. Due to an overwhelming response
from the market, the final facility size was increased from the initial size of
US$250 million. The Facility comprises a USD, Euro and JPY Tranche to cater to
the diversified international investor base for RIL paper. The proceeds of this
transaction are intended for RIL's ongoing capital expenditure programme.
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
June 7, 2005: Reliance Industries Limited's Hazira complex was awarded
the 'silver' at the International Exposition of Innovation and Quality Circles
(IEIQC) competition 2005 held in Singapore. The subject of 'Pragati', the team
from Reliance, was 'Reliability Improvement in Spin Finish Application System'.
'Magdiwang' the team from Intel Technology Philippines won the gold while the
bronze was claimed by 'Syconrof' from PT. Semen Gresik (Persero) Tbk Indonesia.
Mr. Cedric Foo, Chairman of SPRING (Singapore Productivity and Innovation Group)
Singapore, the organisers of the competition, presented the awards.
This year eight teams from companies of South-East Asia participated in the
International Exposition of Innovation and Quality Circles competition. Out of
these three were from India; besides Reliance, there was Lucas-TVS Pondicherry
Division and PT Indofood Sukses Makmur Tbk bogasari flour mills.
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, Surat has won the 'Golden Jubilee Memorial
Trust Excellence Award' from The Southern Gujarat Chamber of Commerce &
Industry for 'Corporate Excellence' in energy conservation, productivity and
exports in textiles and chemicals in the category of large industry.
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 Surat. Reliance Hazira has won the award consecutively since the
last three years.
CMT REPORT
(Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
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.39.29 |
|
UK Pound |
1 |
Rs.80.72 |
|
Euro |
1 |
Rs.57.67 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
9 |
|
PAID-UP CAPITAL |
1~10 |
9 |
|
OPERATING SCALE |
1~10 |
9 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
9 |
|
--LIQUIDITY |
1~10 |
9 |
|
--LEVERAGE |
1~10 |
9 |
|
--RESERVES |
1~10 |
9 |
|
--CREDIT LINES |
1~10 |
9 |
|
--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 |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
81 |
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 |
|