MIRA
INFORM REPORT
|
Report Date : |
29.07.2008 |
IDENTIFICATION
DETAILS
|
Name : |
RELIANCE
INDUSTRIES LIMITED |
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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) : |
31.03.2008 |
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Date of
Incorporation : |
08.05.1973 |
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Com. Reg. No. |
11-19786 |
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CIN No.: [Company
Identification No.] |
L17110MH1973PLC019786 |
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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
: |
Aaa |
RATING |
STATUS |
PROPOSED
CREDIT LINE |
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||
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
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Maximum Credit
Limit : |
USD 3900000000 |
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Status : |
Excellent |
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Payment
Behaviour : |
Regular |
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Litigation : |
Exists |
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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 |
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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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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 and Managing Director |
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Date of
Appointment: |
31.07.2002 |
|
Qualification: |
Chemical Engineer from Mumbai University & MBA from Stanford
University, U.S.A. |
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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 and 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 |
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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 |
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Name : |
Dr. Raghunath A. Mashelkar |
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Designation : |
Director |
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Date of
Appointment : |
09.06.2007 |
KEY EXECUTIVES
|
Name : |
Mr. Vinod M. Ambani |
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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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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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Shareholders'/Investors' Grievance
Committee : |
Mr. Mansingh L.
Bhakta (Chairman) |
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|
Mr. Yogendra P.
Trivedi |
|
|
Mr. Mukesh D.
Ambani |
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|
Mr. Nikhil R.
Meswani |
|
|
Mr. Hital R.
Meswani |
SHAREHOLDING
PATTERN
As on 30.06.2008
|
Names
of Shareholders |
No. of Shares |
Percentage of Holding |
|
Shareholding of
Promoter and Promoter Group |
|
|
|
Indian |
|
|
|
Individuals / Hindu Undivided Family |
10586013 |
0.73 |
|
Bodies Corporate |
631458707 |
43.44 |
|
Any other (specify) |
|
|
|
i. Petroleum Trust (through Trustees for sole
beneficiary-M/s Reliance Industrial Investments and Holdings Ltd.) |
104660154 |
7.20 |
|
Public
Shareholding3 |
|
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|
Institutions |
|
|
|
Mutual Funds / UTI |
41189270 |
2.83 |
|
Financial Institutions / Banks |
1419252 |
0.10 |
|
Central Government / State Government(s) |
3375860 |
0.23 |
|
Insurance Companies |
86316962 |
5.94 |
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Foreign Institutional Investors |
248759750 |
17.11 |
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Non-institutions
|
|
|
|
Bodies Corporate |
77168953 |
5.31 |
|
Individuals |
|
|
|
i. Individual shareholders holding nominal
share capital up to Rs. 1 lakh |
160832579 |
11.06 |
|
ii. Individual shareholders holding
nominal share capital in excess of Rs. 1 lakh |
19184459 |
1.32 |
|
Any other (specify) |
|
|
|
NRIs/ OCBs |
11556299 |
0.79 |
|
Shares held by Custodians and against
which depository 2 receipts have been issued |
57140343 |
3.93 |
|
Total |
1453648601 |
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 and pipe), paper industry
(conventional and 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 and home furnishing Recron Superblack Apparel,
automotive, non-woven and interlling Recron Superdye Woven and 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 and
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
and trousers SlumbeRel Sleep products Refining Refinery of
domestic and Industrial Fuel Oil and Gas Refining, power, ertilizers and
petrochemicals |
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Exports : |
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County : |
·
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 |
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 : |
·
Chaturvedi
and Shah Chartered Accountants ·
Rajendra and
Company Chartered Accountants INTERNATIONAL
ACCOUNTANTS
·
Deloitte
Haskins and 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 |
|
2500000000 |
Equity Shares |
Rs.10/- each |
Rs.25000.000 Millions |
|
50000000 |
Preference Shares
|
Rs.100/-each |
Rs.5000.000 Millions |
|
|
Total |
|
Rs.30000.000
Millions |
Issued, Subscribed
& Paid-up Capital
:
|
No. of Shares |
Type |
Value |
Amount |
|
1453390000 |
Equity Shares |
Rs.10/-each |
Rs.14533.900 Millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE SHEET
|
SOURCES
OF FUNDS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
SHAREHOLDERS FUNDS |
|
|
|
|
1] Share Capital |
14533.900 |
13932.100 |
13931.700 |
|
2] Share Application Money |
0.000 |
601.400 |
0.000 |
|
3] Reserves & Surplus |
783128.100 |
625137.800 |
484110.900 |
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
NETWORTH
|
797662.000 |
639671.300 |
498042.600 |
|
|
|
|
|
|
LOAN FUNDS |
|
|
|
|
1] Secured Loans |
66001.700 |
95691.200 |
76649.000 |
|
2] Unsecured Loans |
298795.100 |
182566.100 |
142007.100 |
|
TOTAL
BORROWING |
364796.800 |
278257.300 |
218656.100 |
|
DEFERRED TAX LIABILITY |
0.000 |
69820.200 |
0.000 |
|
|
|
|
|
TOTAL
|
1162458.800 |
987748.800 |
716698.700 |
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
618836.300 |
636604.600 |
557167.500 |
|
Capital work-in-progress |
230058.400 |
75281.300 |
69577.900 |
|
|
|
|
|
|
INVESTMENTS |
220636.000 |
162513.400 |
58461.800 |
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
Inventories |
142475.400 |
121365.100 |
101198.200 |
|
Sundry Debtors |
62275.800 |
37324.200 |
41636.200 |
|
Cash & Bank Balances |
42800.500 |
18353.500 |
21461.600 |
|
Other Current Assets |
0.000 |
30.700 |
0.000 |
|
Loans & Advances |
184412.000 |
122060.000 |
82665.500 |
|
Total Current Assets |
431963.700 |
299133.500 |
246961.500 |
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
Current
Liabilities |
309109.400 |
168655.300 |
176560.200 |
|
Provisions |
29926.200 |
17128.700 |
38909.800 |
Total Current Liabilities
|
339035.600 |
185784.000 |
215470.000 |
|
Net Current Assets |
90928.100 |
113349.500 |
31491.500 |
|
|
|
|
|
TOTAL
|
1162458.800 |
987748.800 |
716698.700 |
PROFIT &
LOSS ACCOUNT
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
|
|
|
|
|
|
|
Sales Turnover |
1392694.600 |
1116927.200 |
812113.300 |
|
|
Other Income |
66156.200 |
4782.800 |
6829.200 |
|
|
Total Income |
1458850.800 |
1121710.000 |
818942.500 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
230101.400 |
145204.700 |
107040.600 |
|
|
Provision for Taxation |
35518.500 |
25770.700 |
16347.200 |
|
|
Profit/(Loss) After Tax |
194582.900 |
119434.000 |
90693.400 |
|
|
|
|
|
|
|
|
Earnings in Foreign Currency : |
|
|
|
|
|
|
Export Earnings |
NA |
585313.200 |
308196.000 |
|
|
Interest Earnings |
NA |
6.600 |
10.200 |
|
|
Other Earnings |
NA |
4.400 |
0.300 |
|
Total Earnings |
NA |
585324.200 |
308206.500 |
|
|
|
|
|
|
|
|
Imports : |
|
|
|
|
|
|
Raw Materials |
NA |
737113.500 |
529451.900 |
|
|
Stores & Spares |
NA |
15402.600 |
9279.600 |
|
|
Capital Goods |
NA |
10999.800 |
26811.500 |
|
Total Imports |
NA |
763515.900 |
565543.000 |
|
|
|
|
|
|
|
|
Expenditures : |
|
|
|
|
|
|
|
|
|
|
|
|
Purchases |
0.0000 |
18212.800 |
25161.300 |
|
|
Raw Material Consumed |
963115.600 |
0.000 |
0.000 |
|
|
Power & Fuel |
20528.400 |
|
|
|
|
Manufacturing and
Other Expenses |
35020.100 |
898252.100 |
643961.100 |
|
|
Interest and
Finance Charges |
20499.500 |
11888.900 |
8770.400 |
|
|
Depreciation |
48471.400 |
48151.500 |
34009.100 |
|
|
Other Expenditure |
141114.400 |
|
|
|
Total Expenditure |
1228749.400 |
976505.300 |
711901.900 |
|
QUARTERLY RESULTS
|
PARTICULARS |
|
|
30.06.2008 (1ST Quarter) |
|
Sales
Turnover |
|
|
415790.000 |
|
Other
Income |
|
|
2260.000 |
|
Total
Income |
|
|
418050.000 |
|
Total
Expenditure |
|
|
354580.000 |
|
Operating
Profit |
|
|
63470.000 |
|
Interest |
|
|
2940.000 |
|
Gross
Profit |
|
|
60530.000 |
|
Depreciation |
|
|
11510.000 |
|
Tax |
|
|
5670.000 |
|
Reported
PAT |
|
|
41100.000 |
KEY RATIOS
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
Debt Equity Ratio |
0.46 |
0.47 |
0.49 |
|
Long Term Debt Equity Ratio |
0.34 |
0.34 |
0.38 |
|
Current Ratio |
0.96 |
0.90 |
1.03 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
1.39 |
1.34 |
1.34 |
|
Inventory |
10.56 |
10.64 |
10.17 |
|
Debtors |
27.97 |
29.98 |
22.03 |
|
Interest Cover Ratio |
17.86 |
13.21 |
13.20 |
|
Operating Profit Margin (%) |
17.29 |
17.34 |
16.81 |
|
Profit Before Interest and Tax Margin (%) |
13.81 |
13.27 |
12.99 |
|
Cash Profit Margin (%) |
14.50 |
14.16 |
13.99 |
|
Adjusted Net Profit Margin(%) |
11.02 |
10.09 |
10.18 |
|
Return On Capital Employed(%) |
18.81 |
20.12 |
18.76 |
|
Return On Net Worth(%) |
21.90 |
22.45 |
21.90 |
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 and Toubro, the
second largest player in the cement industry, to Grasim Industries for Rs.7665
millions. The divestment of the L and 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: -
·
Accurate Paper
Tube
·
Aditya Forge
Limited
·
Agencies
(India) Corporation
·
Aico Agencies
Private Limited
·
Aksh India
Limited
·
Ambica
Textiles
·
Anil
Industrial Components
·
Associated
Chemicals
·
Associated Products
·
Bhandari
Industries
·
Billimoria
(India)
·
CEAG
Flameproof Control Gear Private Limited
·
Colloids India
·
Elite Printers
·
Fibro
Chemicals
·
Geecy
Engineering Private Limited
·
Harisidh
Engineering Works
·
IPSA Chemicals
Private Limited
·
Nec Containers
Private Limited
·
PITICO
Chemicals
·
Paper
Converters (Private) Limited
Operations
During the year, the
Company has scaled new heights and set several new benchmarks in terms of
sales, profits, networth and assets. This was a landmark year for the Company
as it delivered record financial and operating performance amidst challenging
and volatile market conditions.
Turnover for the
year was Rs. 1392690.000 Millions ($ 34.7 billion) against Rs.1183540.000 Millions
($ 27.2 billion) in the previous year, reflecting a growth of 18%. During the
year, exports were higher by 25% at Rs.834920.000 Millions
Profit after tax, including exceptional item, for the year was
Rs.194580.000 Millions ($ 4.9 billion) as against Rs.119430.000 Millions ($ 2.7
billion) for the previous year, registering an increase of 63%. Profit after
tax, excluding exceptional item was Rs. 152610.000 Millions ($ 3.8 billion),
representing an increase of 28% and the Compounded Annual Growth Rate (CAGR) of
30% over the past five years.
Exceptional item of Rs. 47330.000 Millions ($ 1.2 billion) represents
gains primarily arising out of transactions concerning shares of Reliance
Petroleum Limited, a subsidiary of the Company.
The Company is one of India's largest contributors to the national
exchequer primarily by way of payment of taxes and duties to various government
agencies. During the year, a total of Rs.136960.000 Millions ($ 3.4 billion)
was paid in the form of various taxes and duties.
Additionally, some of the major events of
the year include the following:
During the year the Company's Oil and Gas Exploration & Production
business made significant offshore discoveries in the east and west coast of
India. RIL surpassed its previous record and had 9 discoveries. Three gas
discoveries were made in the Krishna basin in deep water (KG-D6-R1, KG-V-D3-A1
& B1). Two more gas discoveries were made in the Krishna basin in shallow
water (KG-III-05-P1 & J1). A deep water discovery was made in the Cauvery
basin (CY-D5-A1) yielding both oil and gas. An oil discovery was made in the
deep waters of the prolific Krishna basin (KG-D4-MD1). One gas discovery each
was made in the shallow waters of the Gujarat-Saurashtra basin (GS-01-B1) and
Mahanadi basin (NEC-25-J1). In order to assess their commerciality, appraisal
process is underway. The development plan for MA field (Dhirubhai-26) has been
approved by the Management Committee. The development plan for Sohagpur Coal
Bed Methane blocks (East and West) approved by the DGH.
During the year, the Company signed an agreement to acquire certain polyester
(capacity) assets of Hualon, Malaysia. It is a leading polyester producer in
Malaysia with a capacity of half a million tonnes per annum along with
downstream textile manufacturing capabilities spread over two locations in
Malaysia, namely Nilai and Malacca. This acquisition was the second
international acquisition in the polyester sector after the Company acquired
Trevira in Europe. This acquisition will help the Company consolidate its
position as the world's largest polyester manufacturer with an annual capacity
of 2.5 million tonnes, which represents an increase of 25% over its existing
capacity. With this acquisition, Reliance's global market share in polyester
fibre and yarn will exceed 7%.
In the Refining & Marketing business, the Company took over majority
control of Gulf Africa Petroleum Corporation (GAPCO) and started shipping
products to the East African markets. GAPCO owns and operates large storage
terminal facilities and a retail distribution network in countries like
Tanzania, Uganda and Kenya. It owns and operates large coastal storage
terminals in Dar es Salaam (Tanzania), Mombassa (Kenya), and Kampala (Uganda).
It has other wellspread depots in East and Central Africa and operates nearly
250 retail outlets.
The Company also signed MoU with GAIL (India) Limited to explore
opportunities of setting up petrochemical plants in feedstock rich countries
outside India.
Subsidiaries:
Ministry of Corporate Affairs, Government of India, vide order No.
47/108/2008-CL-III
dated April 16, 2008 has granted approval that the requirement to attach
various documents in respect of subsidiary companies, as set out in sub-section
(1) of Section 212 of the Companies Act, 1956, shall not apply to the Company.
Accordingly, the Balance Sheet, Profit and Loss Account and other documents of
the subsidiary companies are not being attached with the Balance Sheet of the
Company. Financial information of the subsidiary companies, as required by the
said order, is disclosed in the Annual Report. The Company will make available
the Annual Accounts of the subsidiary companies and the related detailed
information to any member of the Company who may be interested in obtaining the
same. The annual accounts of the subsidiary companies will also be kept open
for inspection by any investor at the Registered Office of the Company and that
of the respective subsidiary companies. The Consolidated Financial Statements
presented by the Company include financial results of its subsidiary
companies.
Reliance Petroleum Limited (RPL), a listed subsidiary of the Company, has
set a rapid pace on all fronts in the implementation of a world-class, complex
greenfield refinery at Jamnagar in Gujarat. The project has made rapid strides
during the year and achieved overall progress of 90%. Based on the progress
made so far, RPL expects to complete the refinery project ahead of its initial
schedule of December, 2008. During the year, the Company sold 208.000 Millions
equity shares, representing 4.62% of the equity share capital of RPL out of its
holding of 75%. After this sale, the shareholding of the Company in RPL stands
at 70.38%. The sale of shares monetized only a small portion of the Company's
holding in RPL and helped to broadbase the shareholding of RPL, besides
unlocking value for the Company's shareholders.
Reliance Retail Limited (RRL), another subsidiary of the Company,
launched its first store in November 2006 through its convenience store format
Reliance Fresh'. Since then RRL has rapidly grown to operate 590 stores across
13 states at the end of Financial Year 2007-08. RRL launched its first Reliance
Digital' store in April 2007 and its first and India's largest hypermarket
Reliance Mart' in Ahmedabad in August 2007. This year, RRL has also launched
its first few specialty stores for apparel (Reliance Trends), footwear
(Reliance Footprints), jewellery (Reliance Jewels), books, music and other
lifestyle products (Reliance Timeout), auto accessoriesand service format
(Reliance Autozone) and also an initiative in the health and wellness business
through Reliance Wellness'. In each of these store formats, RRL is offering a
unique set of products and services at a value price point that has not been
available so far to the Indian consumer. Overall, RRL is well positioned to
rapidly expand its existing network of 590 stores which operate in 57
cities.
Reliance Ventures Limited, a subsidiary of the Company in a joint venture
with Haryana State Industrial Investment Development Corporation (HSIIDC), is
promoting Reliance Haryana SEZ Limited (RHSEZ) to develop the two SEZs in
Haryana State. The proposed SEZs will function as an integrated package with
all the required infrastructure facilities to ensure sustainable development of
medium and large scale industries and service activities with sufficient
provision for future growth and expansion.
Group
Pursuant to an intimation from the Promoters, the names of the Promoters
and entities comprising group' as defined under the Monopolies and Restrictive
Trade Practices ('MRTP') Act, 1969 are disclosed in the Annual Report for the
purpose of the SEBI (Substantial Acquisition of Shares and Takeovers)
Regulations, 1997.Directors' Responsibility Statement Pursuant to the
requirement under Section 217(2AA) of the Companies Act, 1956, with respect to
Directors' Responsibility Statement, it is hereby confirmed that:
(i) in the preparation of the annual accounts, the applicable accounting
standards read with requirements set out under Schedule VI to the Companies
Act, 1956, have been followed and there are no material departures from the
same;
(ii) the Directors have selected such accounting policies and applied
them consistently and made judgements and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of the
Company as at March 31, 2008 and of the profit of the Company for the year
ended on that date;
(iii) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
(iv) The Directors have prepared the annual accounts of the Company on a
going concern' basis.
CONSERVATION OF ENERGY
(a) Energy conservation measures taken: Some major energy conservation
measures carriedout during the year are listed below:
1) At Hazira Manufacturing Division's Captive Power Plant, energy saving
has been achieved by usage of HP fuel gas make-up substituting C4 at the rate
of 1.2 Ton Per Hour (TPH).
2) At Jamnagar Manufacturing Division's Sulphur Complex, energy saving has
been achieved by adding Plate & Frame exchanger in place of existing rich /
lean amine shell & tube exchanger in ATU.
3) At Hazira Manufacturing Division, energy saving has been achieved by
reduction of C3 at the rate of 1.6 TPH dumping in fuel gas header and export
Cracker gas as per Naphtha quality.
4) At Hazira Manufacturing Division's Mono Ethylene Glycol - 2 Plant,
reduction in ethylene burning has been achieved by substituting steam due to
high selectivity catalyst.
5) Improvement in biogas recovery was done at Hazira Manufacturing
Division. Further, as a part of Clean Development Mechanism (CDM), a project on
energy efficiency through steam optimization (Cracker and Aromatics Plant steam
optimization measures) has been completed.
6) Methyl Acetate recovery; optimization of quench air conditions in all
products; stopping of pack preheaters in spinning by improving pack life &
optimizing pack inventory; and process changes in exchanger EA-402 were carried
out at Patalganga Manufacturing Division which resulted in significant energy
savings and revenues.
7) At Patalganga Manufacturing Division, reduction in specific heating
oil consumption in CP7 by trap design modification & process optimization
was achieved. Also, parallel reboiler to R/R column E- 1035N, activation of
economizer mode in inverters for spinning & CP equipments and stopping of
brine chillers resulted in savings of energy.
8) Under Energy Saving Scheme-II, installation of E-1221 and D-1221 were
carried out at Kurkumbh Manufacturing Division.
9) Air Conditioning system optimization was completed at Silvassa
Manufacturing Division.
10) Energy saving by replacing HP steam with MP steam in stripper reboiler
in VGO Hydrotreater contributed to energy saving was achieved at Jamnagar
Manufacturing Division.
12) Reduction in power of compressed air system was achieved at Allahabad
Manufacturing Division.
13) Air washer system in AHU was completed at Silvassa Manufacturing
Division.
14) Hydrocarbon recovery from CG Sour oil trap vent from atmosphere to
first stage suction drum was achieved at Dahej Manufacturing Division.
15) HRSG Burner modification No. 5 was carried out at Hazira Manufacturing
Division.
16) Optimized Loading of Spinneret in Pack Pre Heaters was done at
Allahabad Manufacturing Division.
17) Stopping of 6 nos. aerators in monsoon period was completed at
Nagothane Manufacturing Division.
18) At Dahej Manufacturing Division, saving in demineralized water was
achieved as a result of ethylene oxide recatalyzation, cleaning of Ethylene
Oxide Reactor by gas cooler and replacement of ion exchange resulted in
increase of cycle time.
MANAGEMENT DISCUSSION AND ANALYSIS
Forward-looking Statements
This report contains forward-looking statements, which may be identified
by their use of words like plans', expects', will', anticipates', believes',
intends', projects', estimates' or other words of similar meaning. All statements
that address expectations or projections about the future, including, but not
limited to statements about the company's strategy for growth, product
development, market position, expenditures, and financial results, are
forward-looking statements. Forward-looking statements are based on certain
assumptions and expectations of future events. The company cannot guarantee
that these assumptions and expectations are accurate or will be realised. The
company's actual results, performance or achievements could thus differ
materially from those projected in any such forward-looking statements. The
company assumes no responsibility to publicly amend, modify or revise any
forward looking statements, on the basis of any subsequent developments,
information or events.
During the year,
Reliance signed an agreement to acquire certain polyester (capacity) assets of
Hualon, Malaysia. It is a leading polyester producer in Malaysia with a
capacity of half a million tonnes per annum along with downstream textile
manufacturing capabilities spread over two locations in Malaysia, namely Nilai
and Malacca. This acquisition was the second international acquisition in the
polyester sector after Reliance acquired Trevira. This will help Reliance
consolidate its position as the world's largest polyester manufacturer with an
annual capacity of 2.5 million tonnes, which represents an increase of 25% over
its existing capacity.
With this acquisition, Reliance's global market share in polyester fibre
and yarn will exceed 7%.
In the Refining & Marketing business, Reliance took over majority
control of Gulf Africa Petroleum Corporation (GAPCO) and started shipping
products to the East African markets. GAPCO owns and operates large storage
terminal facilities and a retail distribution network in countries like
Tanzania, Uganda and Kenya. It owns and operates large coastal storage
terminals in Dar es Salaam (Tanzania), Mombassa (Kenya), and Kampala (Uganda).
It has other well-spread depots in East and Central Africa. It also markets through
250 outlets covering retail and industrial segments.
Reliance also signed MoU with GAIL (India) Limited to explore
opportunities of setting up petrochemical plants in feedstock rich countries
outside India. Earlier, Reliance and GAIL had signed a MoU for co-operation in
identified areas in natural gas - pipeline transmission and marketing, coal bed
methane gas opportunities, city and local gas distribution, operations and
maintenance services, exploration & production and technology and knowledge
sharing.
Reliance Petroleum Limited (RPL) continued the second year of
implementation of its refinery project with an overall project progress of 90%.
Based on the progress made so far, RPL expects to complete the refinery project
ahead of schedule.
During the year, Reliance Retail Limited (RRL) continued its rollout of
stores across various verticals and formats. Reliance Retail today operates
over 590 stores in 57 cities, spanning 13 states, with over 3.5 million square
feet of trading space.
During FY 2007-08, two international investment rating agencies, Moody's
and S&P, reaffirmed investment grade rating for the international debt of
Reliance.
Reliance's Hazira manufacturing division was awarded the 'Deming Quality
Control Award' for the Operations Business Unit (2007), making it the world's
first petrochemical company to win this award.
Reliance's Jamnagar refinery was adjudged the winner of 'Golden Peacock
National Training Award 2007'.
Reliance's Hazira manufacturing division was adjudged the winner of
'Golden Peacock Innovation Award 2007'.
Reliance is amongst the 'World's 25 Most Innovative Companies'. The
Company was ranked 19th in the list compiled by Business Week in collaboration
with Boston Consulting Group.
Financial Review:
Reliance delivered superior financial performance during the year with
improvement across all major parameters.
Turnover achieved for the year ended 31st March 2008 was Rs. 1392690.000
Millions ($ 34.7 billion), reflecting a growth of 18% over the previous year.
Increase in revenue
was due to 12% increase in prices and a 6% growth in volumes. During the year,
exports were higher by 25% at Rs. 834920.000 Millions ($ 20.8 billion).
Consumption of raw materials increased by 17% from Rs. 768720.000 Millions to
Rs. 903040.000 Millions ($ 22.5 billion). This was mainly on account of higher
crude and naphtha prices. Traded goods purchase increased from Rs. 18210.000
Millions to Rs. 60080.000 Millions ($ 1.5 billion) primarily comprising petroleum
products for retail sales.
Employee cost was Rs. 21190.000 Millions ($ 528 million) for the year as
against Rs. 20940.000 Millions. The previous year's figure includes Rs.
3760.000 Millions towards expenditure incurred on Voluntary Retirement Scheme /
Special Separation Scheme announced for the employees of erstwhile IPCL
Vadodara unit.
Operating Profit before other income increased by 16% from Rs. 200460.000
Millions to Rs. 233060.000 Millions ($ 5.8 billion). Net operating margin for
the period was 17.5% as compared to 17.9% in the previous year.
Other income was higher at Rs. 8950.000 Millions ($ 223 million) against
Rs.4780.000 Millions primarily on account of increase in interest income.
Interest costs were lower by 9% at Rs. 10770.000 Millions ($ 269 million)
primarily on account of appreciation of the rupee vis-a-vis the US dollar.
During the year,
the rupee appreciated by 7.7% against the US dollar.
Moreover, 85% of Reliance's
debt is foreign currency denominated. During the year, Rs. 8850.000 Millions of
interest was capitalized, as against Rs 5350.000 Millions in the previous year.
Gross interest cover was 12.3 compared to 11.9 for the previous year.
Depreciation was marginally higher at Rs. 48470.000 Millions ($ 1.2
billion) against Rs. 48150.000 Millions in the previous year. Exceptional item
of Rs. 47330.000 Millions ($ 1.2 billion) represents gains primarily arising
out of transactions concerning RPL shares. The transactions were conducted
through stock exchanges and have helped to further broad base the shareholding
pattern of RPL. The sale of shares monetises only a fraction of Reliance's
holding in RPL at the same time increasing free float in the market. This has
unlocked value for Reliance shareholders. Reliance now holds 70.38% of RPL's
equity.
Profit after tax, including exceptional item, was Rs. 194580.000 Millions
($ 4.9 billion) as against Rs. 119430.000 Millions for the previous year, an
increase of 63%. Profit after tax, excluding exceptional item was Rs.
152610.000 Millions ($ 3.8 billion), representing an increase of 28%.
Basic earning per share (EPS), including exceptional item, for the year
was Rs. 133.9 ($ 3.3). Basic earning per share (EPS) excluding exceptional
item, for the year was Rs. 105.0 ($ 2.6) against Rs. 82.2 for the previous
year.
The outstanding debt as on 31st March 2008 was Rs 364800.000 Millions ($
9.1 billion) compared to Rs 278260.000 Millions as on 31st March 2007. Net
gearing as on 31st March 2008 was 22.3% as compared to 25.2% on 31st March
2007.
Reliance has domestic credit ratings of AAA from CRISIL and FITCH.
Moody's and S&P have reaffirmed investment grade ratings for international
debt of Reliance, as Baa2 and BBB respectively.
Business Review
Oil and Gas Exploration & Production (E&P)
Sector overview:
High commodity prices and robust demand for oil and gas resulted in the
E&P industry experiencing a record year. IPE Brent prices averaged at $ 82.8
/bbl during FY 2007-08 as against an average of $ 64.2 /bbl in FY 2006-07.
Henry Hub natural
gas price averaged at $ 7.4 /MMBTU for FY 2007- 08. One of the major events in
the industry was crude oil prices crossing an all time high of $ 100 /bbl. The
energy demand was driven by secular global growth. Supply chain pressures also
led to price escalations. In another significant development, spot Liquefied
Natural Gas (LNG) prices breached its oil price parity in the Asian LNG
markets.
The International Energy Agency forecasts the global demand for oil to
grow by 1.5% to 87.2 million BPD in 2008. The previous year 2007 saw an
increase in global oil demand to 86.0 million BPD, resulting in an increase of
1.3% over 2006.
High commodity prices and robust growth have ensured strong profitability
and cash flows for E&P companies. They have encouraged significant
investments across the global energy value chain, resulting in severe pressure
in the supply chain. The cost of exploration and development has increased
sharply with the cost of drilling rigs, seismic services, engineering,
fabrication and installation costs contributing to the increase. This trend is
likely to continue in the medium term.
Rising challenges in the E&P sector
The capital expenditure in the E&P industry is estimated to be
upwards of $ 300 billion per annum. Operators are increasingly looking at
opportunities in the deep waters of the Gulf of Mexico, West Africa, Latin
America and in the Asia Pacific Region.
Deep water exploration is a fast emerging frontier for oil and gas as the
era of easy' oil seems to have come to an end. The overall cost inflation in
upstream projects in deepwater areas has increased by more than 100% since
2002. Cost of steel has increased by 100% since 2002 while in sub-sea and EPC
contracts price inflation is also around 100%. PIRA estimates that since 2002,
finding & development costs have increased from $ 8/ bbl to $ 15/ bbl in
2006, an increase of 90%. CERA estimates that capex inflation has risen from a
base of 100 to touch 198 in the third quarter of 2007.
Shortage of rigs is hampering exploration efforts worldwide. The high day
rates of operating the rigs are driven by demand/supply fundamentals and rise
in the cost of manpower, services and raw materials. Demand for 6th generation
drill-ships capable of drilling in harsher environments far exceeds the
availability. Consequently, contracting rigs is a big challenge for operators
and due to this shortage, rig utilisation rates are expected to remain high.
Shipyards constructing deepwater rigs are fully booked and the lead time for a
new build is between 3-4 years.
Recent oil and gas discoveries are in deep waters, oil sands, shales,
arctic and unconventional geographies. These discoveries are in much harsher
terrains and in new frontiers. In addition, availability of manpower, services
and equipment is limited. Evacuation and transportation logistics of resources
are also becoming more challenging. All these factors are resulting in project
cost escalation and delays.
About 88% of world's proven oil reserves of 1,148 billion barrels are
under the control of national oil companies (NOCs) with no equity participation
by international oil companies (IOCs) in them. IOCs in the western part of the
world now control less than 10% of the world's oil and gas resource base.
In spite of these challenges, profitability of E&P companies has been
strong in recent times, driven largely by record oil prices. During the past
five years, oil prices have increased from an average of $ 25 /bbl in 2002 to $
72 / bbl in 2007, an increase of 188%. More recently, oil prices have moved to
as high as $ 120 /bbl.
Henry Hub gas prices have also increased from $ 3.34 /MMBTU in 2002 to
the average price of $ 7.4 /MMBTU in 2007.
Development of a global natural
gas market continues:
Gas accounts for 34%
of the energy basket in the Former Soviet Union region and in Europe, 24% in
USA, 15% in Japan and 14% in Korea. The world average is 24%. In India, gas accounts
for just 8% of the energy basket constrained by limited availability of gas and
nascent transmission and distribution infrastructure.
The share of gas in the global energy mix is set to increase primarily
driven by the power sector, industrial sector, city gas distribution and
gas-to-liquid opportunities. Gas is preferred because of its cost
competitiveness and environmental advantages over other fossil fuels. Gas is
also more convenient to use vis-a-vis other fossil fuels.
Accelerating global demand, increasing import dependency, and the
build-out of LNG infrastructure are supporting price discovery. Industry
expectations suggest continued strength in global GDP over the long-term driven
by developing economies of Asia and the Middle East and a 40% increase in LNG
liquefaction capacity over the coming 3 years addressing 11% of global demand
by 2010.
Powerful trends are supporting demand growth and prices in both the
developed and developing nations. In 2007-08, Henry Hub Prices averaged $ 7.4 /
MMBTU. In Europe, the NBP prices averaged 40 pence per therm which is the
equivalent of around $ 8 /MMBTU. The Asian LNG prices were $ 9.5 /MMBTU based
on average for prices in Japan and Korea. Long term contracts signed by China
for LNG are at around $ 10 /MMBTU (FOB). These contracts are for 2-3 MMTPA and
the first sale is expected to commence in the year 2013-14.
In the developed world, natural gas is the only near-term generation
option to bridge the energy gap. A similar trend is clear in Asia and
Australia.
In the developing
world, rapid economic growth is fueling energy demand in all its forms. Natural
gas has been a niche fuel, not easily available due to infrastructure constraints
and domestic productive capacity. However, the price of alternative fuels
(particularly crude products) is supporting a re-evaluation of energy source,
which in many cases favors natural gas.
While nuclear and renewable remain the long term 'green' solutions of
choice, natural gas will remain the primary near-term alternative to meet the
demand for growth in generation in developed and developing economies.
Natural Gas in India:
The landscape of the
Indian natural gas market is set to witness significant change. Natural gas
currently accounts for around 8% of the total energy mix in India as against
the global average of 24%. However, with increased availability and spurt in
transmission and distribution infrastructure, the share of natural gas in the
energy mix is set to rise.
For 2007-08, gas production is expected to be 88 MMSCMD and LNG
consumption is estimated at 33 MMSCMD.
The major demand centers, excepting the north-eastern market which is not
connected to the transmission network of the rest of India, have been
considered for making demand projections. The un-met demand for natural gas is
estimated to increase from about 113 MMSCMD (FY 2007-08) to 396 MMSCMD by the
year 2022. The following factors are expected to drive the increased
consumption of natural gas in India:
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 and
Production DMCC, a wholly owned subsidiary of RIL, will serve as the operator.
Mr. Atul Chandra, President of International Operations,
RIL, said, “They are pleased to reach agreement with the KRG on these two PSCs.
They 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
and 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.
Mumbai, 17th January 2008
RECORD QUARTERLY
PROFIT, UP 26% Y-O-Y
TURNOVER EXCEEDS RS.
1000000.000 MILLIONS IN NINE MONTHS FOR THE FIRST TIME
EXPANDING GLOBAL
FOOTPRINT ACROSS ALL BUSINESSES
REFINERY AND OIL
AND GAS DEVELOPMENT PROJECTS IN ADVANCED STAGES OF IMPLEMENTATION
|
3Q FY08 |
2Q FY08 |
3Q FY07 |
% Change wrt 3QFY07 |
(In Rs. Millions) |
9M FY08 |
9M FY07 |
% Change |
|
|
|
|
|
|
|
|
|
|
358800.000 |
334020.000 |
297530.000 |
21% |
Turnover |
1005720.000 |
890780.000 |
13% |
|
60740.000 |
59490.000 |
53000.000 |
15% |
PBDIT |
178930.000 |
152310.000 |
17% |
|
80790.000 |
38370.000 |
30810.000 |
162% |
Net Profit |
155460.000 |
87870.000 |
77% |
|
38820.000 |
38370.000 |
30810.000 |
26% |
Net Profit |
113490.000 |
87870.000 |
29% |
|
267.000 |
264.000 |
212.000 |
- |
EPS |
781.000 |
605.000 |
- |
|
|
|
|
|
|
|
|
|
Reliance Industries Limited (RIL) today reported its financial performance for the nine months period ended 31st December, 2007. Highlights of the un-audited financial results as compared to the previous period are:
·
Turnover increases by 13% to Rs.1005720.000 Millions (US$ 25.5 billion).
·
Cash Profit increases by 51% to Rs.197140.000 Millions (US$ 5.0 billion)
·
Net Profit (including exceptional item) increases by 77% to
Rs.155460.000 Millions (US$ 4.0 billion)
·
Exceptional income of Rs.47330.000 Millions (US$ 1.2 billion)
·
Net Profit (excluding exceptional item) increases by 29% to
Rs.113490.000 Millions (US$ 2.9 billion)
·
Gross Refining Margin for 3Q FY 07-08 was at US$ 15.4 / bbl and for 9M
FY 07-08 was
US$ 14.9 / bbl
Other Highlights
Reliance was awarded the “Deming Quality Control Award” for Operations
Business Unit (2007) making it the World’s first petrochemical company to win
this award
Reliance’s Jamnagar refinery adjudged winner of “Golden Peacock National
Training Award 2007”
Reliance’s Hazira Manufacturing division adjudged winner of “Golden
Peacock Innovation Award 2007”
Reliance expanded its International footprint in Exploration and
Production -
·
Executed two Production Sharing Contracts (PSC) in Kurdistan
·
Signed Production Sharing Agreement (PSA) for an offshore block in Oman
·
Signed two Production Sharing Agreements in Yemen
·
Signed Hydrocarbon Production and Exploitation Contracts for two
offshore blocks in
·
Columbia
RIL and GAIL signed an MoU to explore opportunities to set up
petrochemical plants outside of India. Earlier, RIL and GAIL had signed an MoU
for cooperation in identified areas in natural gas sector including gas
pipelines and city gas distribution.
Reliance has acquired a majority stake and management control of Gulf
Africa Petroleum Corporation (GAPCO), a petroleum downstream company in East
Africa.
Reliance has signed an agreement to acquire the assets of Hualon, a
leading polyester producer in Malaysia and commenced operations with the use of
the assets pending the transfer.
The textile brand VIMAL re-launched with new look and offerings
International investment rating agencies Moodys and S and P have
reaffirmed investment grade rating for international debt of RIL
Commenting on the results, Mukesh D. Ambani, CMD, Reliance Industries
Limited said:
“I am happy to report that Reliance continues
to surpass previous records in financial performance. The quality of their
manufacturing assets and their people is being recognized through the various
awards and recognition that they have been receiving in the recent past. The
new growth platforms around Oil and Gas, Organized Retailing and Agro-Retail
initiatives are gathering momentum and the initial response to these
initiatives have been very encouraging.
Each of these initiatives inherently
addresses India’s economic and social imperatives.”
RELIANCE PETROLEUM
LIMITED (RPL)
RPL successfully completed the second year of implementation of its
refinery project with an overall project progress of 82%. Based on the progress
made so far, RPL expects to complete the refinery project ahead of its initial
schedule of December 2008.
During the quarter, project implementation gained further momentum and
led to the achievement of several significant milestones, including the
following:
·
Engineering activities are nearing completion.
·
Overall procurement progress exceeded 97%.
·
More than 75% of equipments and tagged items already received at site.
·
Deliveries of over dimensional cargos (ODC) and super ODCs are nearing
completion.
·
Over 40% of equipments have been erected; Project skyline changed
dramatically.
·
Overall construction progress crossed the 60% mark for the complex.
·
Structural and pipe fabrication activities progressing at an accelerated
pace.
·
Sufficient site infrastructure mobilised to sustain equipment
installation and fabrication activities on the fast track.
Over 2,400 equipments, including several super heavy equipments, have
already been installed at site. The underground piping works are mostly
complete. Nearly 80% of structural steel fabrication, 95% of tankage
fabrication and over 73% of pipe fabrication is completed. The construction
activities are at peak and sufficient site infrastructure is mobilised to
sustain construction on fast track in the coming quarters.
RELIANCE RETAIL
LIMITED (RRL)
The third quarter of FY 2007-08 was an eventful quarter for Reliance Retail.
This quarter saw the launch of 6 new formats.
Additionally, RRL entered into an alliance with Apple for setting up a
chain of Apple Specialty Stores branded as Store. This is RRL’s first alliance
with an international brand. Ths first iStore was launched during the quarter
in Bangalore.
Reliance Fresh started the quarter with 329 stores and opened an
additional 112 stores to end the quarter with 441 stores in over 45 towns and
cities.
As on date there are 453 Reliance Fresh stores operational across India.
Reliance Digital launched 2 additional stores in Bangalore and Navi
Mumbai respectively bringing the total Reliance Digital stores to 3.
The new formats launched by RRL this quarter are Reliance Trends,
Reliance Footprint, Reliance Wellness, Reliance Time Out, Reliance Jewels and
Reliance Super.
In the months of October and November, Reliance Trends, a specialty
apparel store selling men’s women’s’ and children’s garments was launched at
Gurgaon and Delhi. The store carries the best of national and international
brands apart from in-house brands.
RRL also opened its chain of specialty wellness stores offering
pre-emptive, curative and beauty solutions under the brand name of Reliance
Wellness in the cities of Hyderabad and Bangalore.
RRL ended the quarter with 3 Reliance Wellness stores in Hyderabad and 1
in Bangalore.
The last quarter also saw the launch of 2 Reliance Footprints stores.
Reliance Footprints, a specialty footwear store offering over 25,000 pairs of
formal and sports wear in men, women and children’s footwear, was launched in
Hyderabad and Bangalore. The launch of another Footprint store in New Delhi in
January 2008 brings the total count of the footwear specialty stores to 3.
In December 2007, RRL launched another specialty format in Bangalore
offering its customers an extensive range of merchandise in Books, Music,
Stationery, Toys and Gifts under the brand name Reliance Time Out.
This quarter also saw Reliance’s foray into fine and branded jewellery
under the brand name of Reliance Jewels in Bangalore. Reliance Jewels is a
stand-alone fine jewellery format which has thousands of designs of exquisitely
crafted jewellery, a one stop shopping destination for fine jewellery.
RRL closed this quarter by opening its ninth format, Reliance Super, in
Amrtisar. Reliance Super is a smaller version of the hypermarket format,
offering over 10,000 products in various categories like Grocery, Home Care,
Apparel and Accessories, FMCG, Consumer Durables and IT, Automotive Accessories
and Lifestyle Products.
With the launch of the new formats, RRL now operates 9 different formats
across India. Including the Reliance Fresh stores the company now operates over
465 retail stores across India.
The Reliance One loyalty membership base continues to grow and has
crossed over 2 million loyal customers.
MEDIA RELEASE
Reliance Strikes Eighth Gas Discovery in Block NEC – 25
in the Mahanadi Basin
Mumbai, February
26, 2008: Reliance Industries Limited (RIL) is pleased to announce yet another
gas discovery in NEC-OSN 97/2 (NEC-25) block located in the NEC-Mahanadi
offshore basin, off the Orissa coast in Bay of Bengal. This shallow water block
covering an area of 10,755 sq km in water depths ranging between 20-600 m was
awarded under the bidding round of NELP I. RIL holds 90% participating interest
(PI) and NIKO (NELPIO) Ltd. holds 10% of PI in the block.
This is the eighth
discovery in the block. RIL had earlier struck six consecutive commercial
discoveries in this block, for which the development plan has been submitted to
the Directorate General of Hydrocarbons (DGH) for approval.
The well NEC 25-J1
was drilled with the objective of exploring upper Miocene slope sands in the
deeper part of the block. This well was drilled at a water depth of 478 m to
the target depth of 2926 m. For the first time in this basin, the well
encountered high quality multi-darcy gas bearing reservoir sands in the
interval 2484 – 2495.5 m based on the interpretation of the wire-line logs.
Subsequently, the presence of gas in the above interval was confirmed by
carrying out Modular Dynamic Testing (MDT).
This discovery,
named ‘Dhirubhai–40’ has been notified to Government of India and DGH.
RIL is
currently
evaluating the potential commercial interest of the discovery through
additional data collection and analysis.
This discovery
establishes the hydrocarbon potential towards the deeper part of NEC-Mahanadi
Basin and opens up more acreage for further hydrocarbon exploration efforts.
Reliance
Industries Limited
Reliance
Industries Limited (RIL) is India’s largest private sector company on all major
financial parameters with turnover of Rs1,18,3540 Millions (US$ 27.23 billion),
cash profit of Rs 17,6780 Millions (US$ 4.07 billion), net profit of Rs11,9430
Millions (US$ 2.75 billion) and net worth of Rs63, 9670 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.
MEDIA RELEASE
Second Gas
Discovery in Deepwater Exploration Block in Krishna Basin
Two discoveries
enhances Krishna Basin Prospectively
Mumbai April 1,
2008: Reliance Industries Limited (RIL) is pleased to announce yet another
discovery in exploratory block KG-DWN-2003/1of Krishna Basin. The deepwater
block awarded in NELP-V is situated 45 kms away from the coast and covers an
area of 3288 Sq. Km. This is the second gas discovery in this block. RIL holds
90% participating interest (PI) and Hardy Exploration and Production India Inc
holds 10% of PI in the block.
The well KGVD3-B1
was drilled at a water depth of 711 m, to a total depth of 2730 m, with the
objective of exploring high amplitude geobodies of Pliestocene deep water fan
complex and unconformity related structural traps at Miocene level. Excellent
qualities of reservoirs were encountered with gross hydrocarbon columns of
around 111 meters. The potential of the zones was evaluated through wire-line
based technology called Modular Dynamic Testing (MDT). This discovery namely ‘Dhirubhai–41’
has been notified to Government of India and Directorate General of
Hydrocarbons. The potential commercial interest of the discovery is being
ascertained
through more data
gathering and analysis.
In February 2008,
RIL made first gas discovery in the same block and the discovery was named as ‘Dhirubhai–
39’ and the notification of potential commercial discovery was submitted to
Government of India and Directorate General of Hydrocarbons few days back.
About 70 per cent
of this block is covered by 3D Seismic survey and further prospect analysis is
underway. This discovery has established a petroleum system in the block, the
extent of which is being analyzed. In the last quarter of this financial year
(2007-08), RIL has made four discoveries, two in Krishna Basin Deep Waters, one
in shallow waters of Krishna Basin and one in Mahanadi Basin.
Reliance
Industries Limited
Reliance
Industries Limited (RIL) is India’s largest private sector company on all major
financial parameters with turnover of Rs1,183540 Millions (US$ 27.23 billion),
cash profit of Rs17,6780 Millions (US$ 4.07 billion), net profit of Rs119430
Millions (US$ 2.75 billion) and net worth of Rs 63 967 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.
MEDIA RELEASE
NET PROFIT OF US$ 955 MILLION, INCREASE OF 13%
PETROCHEMICALS PRODUCTION INCREASED BY 4%
CRUDE PROCESSED 8.13 MILLION TONNES, INCREASE OF 1.5%
OIL & GAS DEVELOPMENT PROJECTS IN ADVANCED STAGES OF IMPLEMENTATION
Reliance Industries Limited (RIL) today reported
its financial performance for the quarter ended 30th June, 2008. Highlights of
the un-audited financial results as compared to the previous period are:
• Turnover increased by 38% to Rs. 430500.000 Millions ($ 10.0 billion)
• Exports increased by 112% to Rs. 283570.000 Millions ($ 6.6 billion)
• PBDIT increased by 8% to Rs. 63470.000 Millions ($ 1.5 billion)
• Cash Profit increased by 8% to Rs. 54860.000 Millions ($ 1.3 billion)
• Net Profit increased by 13% to Rs. 41100.000 Millions ($ 955 million)
KEY BUSINESS DRIVERS
• 36% growth in revenue was due to increase in prices and a 2% growth
was in volumes. Exports were higher by 112% at Rs. 283570.000 Millions ($ 6.6
billion).
• Tapti block produced higher gas volumes of 1,133 MMSCM and 77,400 tonnes
of condensate, registering a growth of 97% and 133% respectively over the
corresponding period of the previous year.
• Panna-Mukta fields produced 321,600 tonnes of crude oil and 353 MMSCM
of natural gas, a decrease of 30% and 27% respectively as compared to the
corresponding period of the previous year. The decrease in production at
Panna-Mukta was due to a shutdown in June’08 in the PPA process platform.
• The Jamnagar refinery processed 8.13 million tonnes of crude, a
utilization rate of 98.5% as compared to 8.01 million tonnes of crude oil
processed during the corresponding period of the previous year. Average
refinery utilization was at 85.6% in North America, 83.7% in Europe and 83.5%
in the Asia-Pacific region.
• Revenue for the refining & marketing segment increased by 46% from
Rs 223280.000 Millions to Rs 325870.000 Millions (US$ 7.6 billion) mainly due
to high product prices driven by high crude oil prices. Increase in prices
accounted for 41% of growth in revenue while higher volumes accounted for 5%.
Exports of refined products were at $ 5.7 billion. This accounted for 5.3
million tonnes of product volume as compared to 5.0 million tonnes for the
corresponding period of the previous year.
• Production of petrochemical products increased from 4.8 million tonnes
to 5.0 million tonnes, an increase of 4%.
• Consumption of raw materials increased by 75% from Rs 191740.000
Millions to Rs 335270.000 Millions ($ 7.8 billion) mainly on account of higher
crude and naphtha prices. Traded goods purchased decreased from Rs. 8360.000
Millions to Rs. 5900.000 Millions ($ 137 million) following the reduction in
retail marketing of transportation fuels.
• The capital expenditure for the period was Rs. 72150.000 Millions (US$
1.7 billion) primarily in oil and gas business.
COMMENTING ON THE RESULTS, MUKESH D. AMBANI, CMD, RELIANCE INDUSTRIES
LIMITED SAID:
“At Reliance they continued to scale new peaks in financial performance
despite challenging business environment including domestic inflation and weakening
of the leading economies of the world. The sterling performance was made
possible by their quality manufacturing assets and experienced, highly skilled
people. They will play major role in India’s energy security as they are
focusing to be among the top leaders in the world in the oil and gas sphere.
They are confident that the new growth drivers Oil and Gas, Organized retailing
and Agro-Retail will take Reliance to a higher growth trajectory in the medium
term.”
KEY BUSINESS UPDATE
CORPORATE
• RIL continues to be amongst the 30 fastest climbers in the 2008 list
of Global Fortune 500 Companies. RIL’s new rankings across various parameters
were as follows:
o Rank 206 based on Sales
o Rank 103 based on Profits
• RIL has domestic credit ratings of AAA from CRISIL and FITCH. Moody’s
has reaffirmed Baa2 investment grade rating for RIL’s international debt while
S&P maintained its rating at BBB.
OIL AND GAS (EXPLORATION & PRODUCTION) BUSINESS
• There were 2 gas discoveries as follows:
o Discovery B1 in Block KG – VD3
o One more discovery (Discovery 42) in the KG - D6 Block
• The development plan for the MA oil field in KG – D6 was approved by
the Government
• A well drilled in the block KG-D6 has resulted in a discovery (Dhirubhai
42) for the first time in the Pleistocene submarine channel complex play which
has a significant area extent in the block particularly in the northern and
eastern parts of the block. The discovery was notified to the Government in
July’08. RIL has filed an appraisal program for the discovery to evaluate size
of the discovery.
• The progress has been made in the development of D1 & D3 and MA
fields, in the KG-D6 block, as per management expectations. The progress was
made despite adverse weather conditions, complex logistics, tight supply chain
market and global shortage of manpower.
• RIL operates with 6 rigs deployed for both development and exploration
activities. Further RIL plans to mobilize 6 additional rigs of which 2 are
expected to be in Indian waters by the year end.
INTERNATIONAL OIL AND GAS (EXPLORATION & PRODUCTION) BUSINESS
• Reliance expanded its International footprint in Exploration and
Production:
o Executed two Production Sharing Contracts in Kurdistan (Iraq)
o Acquired acreage in Peru by farming in three on-land blocks, including
a block in which Reliance is the operator.
o Reliance farmed out 25% participating interest in block K located in
East Timor to Oil India Limited and Indian Oil Corporation.
• The International business comprises of 11 blocks with acreage of
about 80,000 square kilometers – 3 in Yemen (1 producing and 2 exploratory), 2
each in Oman, Kurdistan and Colombia, 1 each in East Timor and Australia. The
average production at the Yemen Block 9 was 5,000 BOPD.
REFINING & MARKETING BUSINESS
As an international refiner, RIL’s refining margins were influenced by
the divergent margin scenario witnessed by the industry globally. RIL managed
to sustain its margins primarily on the back of efficient sourcing of crude
oil, ability to produce globally accepted products and flexibility in its crude
bucket, product slate and evacuation infrastructure.
PETROCHEMICALS BUSINESS
The polymer business witnessed sustained production growth with volumes
of PP, PE and PVC remained stable at 831 KT. RIL produced 458 KT of ethylene,
an increase of 2% and production of 181 KT of propylene which remained flat
over the corresponding period of the previous year. Polyester production volume
(PFY, PSF and PET) increased by 5% to 410 KT. RIL has maintained its focus on
specialty products which account for 53% and 42% of PSF and PFY production
respectively. RIL’s polyester intermediates (PX, PTA and MEG) production grew
by 3% to 1,184 KT during the period under review.
RELIANCE PETROLEUM LIMITED (RPL)
Reliance Petroleum Limited (“RPL”) achieved 94% overall progress in
implementation of its complex refinery. RPL has mobilised sufficient resources
and expects to complete the refinery ahead of its initial schedule of December
2008.
RELIANCE RETAIL LIMITED (RRL)
Reliance Retail today operates over 735 stores in 70 cities, spanning 13
states, with over 3.5 million square feet of trading space through 12 distinct
store formats. During the quarter, Reliance Retail has entered into joint
venture with Office Depot for office solution products.
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 records 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. 42.30 |
|
UK Pound |
1 |
Rs. 84.03 |
|
Euro |
1 |
Rs. 66.42 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
9 |
|
PAID-UP CAPITAL |
1~10 |
10 |
|
OPERATING SCALE |
1~10 |
9 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
10 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
10 |
|
--LEVERAGE |
1~10 |
10 |
|
--RESERVES |
1~10 |
10 |
|
--CREDIT LINES |
1~10 |
10 |
|
--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 |
|
86 |
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 |
|