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Reliance Industries
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Download Annual Report PDF Format 2014 | 2013 | 2012 | 2011
Directors Report Year End : Mar '14    « Mar 13
Dear Members,
 
 The Directors are pleased to present the 40th Annual Report and the
 Companys audited accounts for the financial year ended March 31,2014.
 
 Financial Results
 
 The Companys financial performance, for the year ended March 31,2014
 is summarised below:
 
                         2013-14                2012-13
                         Rs. crore  $ million*  Rs. crore   $ million*
 
 Profit before Tax        27,818       4,643      26,284        4,842
 
 Less: Current Tax         5,812         970       5,244          966
 
 Deferred Tax                 22           4          37            7
 
 Profit for the year      21,984       3,669      21,003        3,869
 
 Add: Balance in 
 Profit and Loss 
 Account                   8,610       1,853       7,609        1,668
 
 Add: On Amalgamation       -           -          1,116          206
 
                          30,594       5,522      29,728        5,743
 
 Less: Appropriation:
 
 Transferred to 
 General Reserve          18,000       3,004      18,000        3,316
 
 Transferred to 
 Capital Redemption 
 Reserve on buy back 
 of Equity Shares           -           -             43            8
 
 Proposed Dividend on 
 Equity Shares             2,793         466       2,628          484
 
 Tax on Dividend             475          79         447           82
 
 Closing Balance           9,326       1,973       8,610        1,853
 
 * 1 $ = Rs. 59.915 Exchange Rate as on March 31,2014(1 $ =Rs. 54.285 as on
 March 31, 2013)
 
 Results of Operations
 
 Operating in a volatile and uncertain environment, the Company
 demonstrated the resilience of its business model. The Companys
 best-in-class refining configuration and integrated petrochemical
 business enabled it to deliver robust profits in the financial year
 2013-14.The highlights of the Companys performance are as under:
 
 - Revenue from operations increased by 8.1% toRs. 401,302 crore ($ 67.0
 billion)
 
 - Exports increased by 15.3% to Rs. 275,825 crore ($ 46.0 billion)
 
 - PBDIT increased by 2.7% at Rs. 39,813 crore ($ 6.6 billion)
 
 - Profit Before Tax increased by 5.8% at Rs. 27,818 crore (.6 billion)
 
 - Cash Profit increased by 1.0% to Rs. 30,795 crore (.1 billion)
 
 - Net Profit increased by 4.7% to Rs. 21,984 crore (.7 billion)
 
 - Gross Refining Margin was $ 8.1 / bbl for the year ended March 31,
 2014
 
 The consolidated revenue from operations of the Company for the year
 ended March 31, 2014 was Rs. 446,339 crore ($ 74.5 billion), an increase
 of 9.3% on a year-on-year basis.
 
 The Company is one of Indias largest contributors to the national
 exchequer primarily by way of payment of taxes and duties to various
 government agencies. During the year, a total ofRs. 31,374 crore ($ 5.2
 billion) was paid in the form of various taxes and duties.
 
 The Company featured in the Fortune Global 500 list of the worlds
 largest corporations for the tenth consecutive year and was ranked
 107th in terms of revenues and 128th in terms of profits.
 
 Dividend
 
 Your Directors have recommended a dividend of Rs. 9.50 per equity share
 (last year Rs. 9.00 per equity share) for the financial year ended March
 31, 2014, amounting to Rs. 3,268 crore (inclusive of tax of Rs. 475 crore),
 one of the highest payout by any private sector domestic company.  The
 dividend payout is subject to approval of members at the ensuing Annual
 General Meeting.
 
 The dividend will be paid to members whose names appear in the Register
 of Members as on May 19, 2014; in respect of shares held in
 dematerialised form, it will be paid to members whose names are
 furnished by National Securities Depository Limited and Central
 Depository Services (India) Limited, as beneficial owners as on that
 date.
 
 The dividend payout for the year under review has been formulated in
 accordance with shareholders aspirations and the Companys policy to
 pay sustainable dividend linked to long term growth objectives of the
 Company to be met by internal cash accruals.
 
 Credit Rating
 
 The Company continues to have the highest domestic credit ratings of
 AAA from CRISIL (S&P subsidiary) and India Ratings & Research (a Fitch
 Group Company). Moodys has reaffirmed investment grade rating for
 international debt, as Baa2 positive outlook (local currency issuer
 rating), which is one notch higher than the countrys sovereign rating.
 During the year, S&P upgraded the Companys international debt rating
 to BBB+ negative outlook, which is now two notches above Indias
 sovereign rating. Strong credit ratings by leading international
 agencies reflect the Companys financial discipline and prudence.
 
 Employees Stock Option Scheme
 
 The Human Resources, Nomination and Remuneration Committee of the Board
 of Directors of the Company, inter alia, administers and monitors the
 Employees Stock Option Scheme of the Company in accordance with the
 Securities and Exchange Board of India (Employee Stock Option Scheme
 and Employee Stock Purchase Scheme) Guidelines, 1999 (the SEBI
 Guidelines).
 
 The applicable disclosures as stipulated under the SEBI Guidelines as
 on March 31,2014 (cumulative position) with regard to the
 Employees Stock Option Scheme are provided in Annexure I to this
 Report.
 
 The issuance of equity shares pursuant to exercise of options does not
 affect the Statement of Profit and Loss of the Company, as the exercise
 is made at the market price prevailing as on the date of the grant plus
 taxes as applicable.
 
 The Company has received a certificate from the Auditors of the Company
 that the Scheme has been implemented in accordance with the SEBI
 Guidelines and the resolution passed by the shareholders. The
 certificate would be placed at the Annual General Meeting for
 inspection by members.
 
 Managements Discussion and Analysis Report
 
 Managements Discussion and Analysis Report for the year under review,
 as stipulated under Clause 49 of the Listing Agreement with the Stock
 Exchanges in India, is presented in a separate section forming part of
 the Annual Report.
 
 The developments at our major subsidiaries are as below:
 
 Shale Gas Business
 
 The US shale gas business is now a material contributor to RILs
 consolidated profits. The shale business delivered revenues of $ 819
 million and EBITDA of $ 616 million in 2013 on the back of a 52% growth
 in volumes to 154BCFe. Proved reserves of shale gas increased 43% to
 2.66 TCFe.
 
 Retail Business
 
 Reliance Retail has become Indias largest retailer by revenues.
 Financial Year (FY) 2013-14 Revenues grew 34% to Rs. 14,496 crore, while
 EBITDA was at Rs. 363 crore. The retail business also achieved two major
 milestones in FY 2013-14. It crossed 10 million square feet of retail
 space and broke even on a net profit basis during the year. The Company
 enhanced its presence across various format sectors. Reliance Retail
 now operates 1,691 stores across 146 cities.
 
 Reliance Jio Infocomm
 
 Reliance Jio Infocomm Limited (RJIL) successfully acquired the right to
 use spectrum in 14 key circles across India in the 1,800 MHz band in
 the spectrum auction conducted by Department of Telecommunications
 (DoT), Government of India (Gol). RJIL will use this spectrum in
 conjunction with its pan India 2,300 MHz spectrum acquired earlier to
 provide seamless 4G services using FDD-LTE on 1,800 MHz and TDD-LTE on
 2,300 MHz through an integrated ecosystem.  Following the acquisition,
 RJIL holds the largest quantum of liberalised spectrum, with the
 longest residual spectrum life.
 
 Corporate Social Responsibility and Governance Committee
 
 During the year, your directors have constituted the Corporate Social
 Responsibility and Governance Committee (CSR&G Committee) comprising
 Shri Yogendra P. Trivedi as the Chairman and Shri Nikhil R. Meswani,
 Dr. Dharam Vir Kapur and Dr. Raghunath A. Mashelkar as other members.
 
 The said Committee has been entrusted with the responsibility of
 formulating and recommending to the Board, a Corporate Social
 Responsibility Policy (CSR Policy) indicating the activities to be
 undertaken by the Company, monitoring the implementation of the
 framework of the CSR Policy and recommending the amount to be spent on
 CSR activities.
 
 Consolidated Financial Statement
 
 In accordance with the Accounting Standard (AS) - 21 on Consolidated
 Financial Statements read with AS - 23 on Accounting for Investments in
 Associates and AS - 27 on Financial Reporting of Interests in Joint
 Ventures, the audited consolidated financial statement is provided in
 the Annual Report.
 
 Subsidiaries
 
 Details of major subsidiaries of the Company and their business
 operations during the year under review are covered in the Managements
 Discussion and Analysis Report.
 
 In accordance with the General Circular issued by the Ministry of
 Corporate Affairs, Government of India, the Balance Sheet, Statement of
 Profit and Loss and other documents of the subsidiary companies are not
 being attached with the Balance Sheet of the Company. However, the
 financial information of the subsidiary companies is disclosed in the
 Annual Report in compliance with the said circular. The Company will
 provide a copy of separate annual accounts in respect of each of its
 subsidiary to any shareholder of the Company who asks for it and the
 said annual accounts will also be kept open for inspection at the
 Registered Office of the Company and that of the respective subsidiary
 companies.
 
 Directors
 
 Pursuant to the provisions of Section 161(1) of the Companies Act, 2013
 and the Articles of Association of the Company, Shri Adil Zainulbhai
 was appointed as an Additional Director designated as an Independent
 Director w.e.f. December 20, 2013 and he shall hold office up to the
 date of the ensuing Annual General Meeting. The Company has received
 requisite notice in writing from a member proposing Shri Adil
 Zainulbhai for appointment as an Independent Director.
 
 In terms of the Articles of Association of the Company, Shri Ramniklal
 H. Ambani, Shri Nikhil R. Meswani, Shri Yogendra P. Trivedi and Prof.
 Ashok Misra, Directors retire at the ensuing Annual General Meeting.
 The Company has received requisite notices in writing from members
 proposing Shri Yogendra P. Trivedi and Prof. Ashok Misra for
 appointment as Independent Directors.
 
 The Company has received declarations from all the Independent
 Directors of the Company confirming that they meet with the criteria of
 independence as prescribed both under sub-section (6) of Section 149 of
 the Companies Act, 2013 and under Clause 49 of the Listing Agreement
 with the Stock Exchanges.
 
 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 for the year ended March
 31, 2014, 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 judgments 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, 2014 and of the profit of the Company
 for the year ended on that date;
 
 iii) the Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1956 for safeguarding the assets of
 the Company and for preventing and detecting fraud and other
 irregularities; and
 
 iv) the Directors have prepared the annual accounts of the Company on
 a going concern basis.
 
 Auditors and Auditors Report
 
 M/s. Chaturvedi & Shah, Chartered Accountants, Deloitte Haskins & Sells
 LLP, Chartered Accountants and M/s. Rajendra & Co., Chartered
 Accountants, Statutory Auditors of the Company, hold office till the
 conclusion of the ensuing Annual General Meeting and are eligible for
 re-appointment.
 
 The Company has received letters from all of them to the effect that
 their re-appointment, if made, would be within the prescribed limits
 under Section 141 (3)(g) of the Companies Act, 2013 and that they are
 not disqualified for re-appointment.
 
 The Notes on Financial Statements referred to in the Auditors Report
 are self-explanatory and do not call for any further comments.
 
 Cost Auditors
 
 The Company has appointed the following cost auditors for conducting
 the audit of cost records of the Company for the financialyear2013-14:
 
 (i) For the Textiles Business - M/s. Kiran J. Mehta & Co., Cost
 Accountants;
 
 (ii) For the Chemicals Business - M/s. Diwanji & Associates, Cost
 Accountants, M/s. K.G. Goyal & Associates, Cost Accountants, M/s. V.J.
 Talati & Co., Cost Accountants, M/s. Kiran J. Mehta & Co., Cost
 Accountants, M/s. Bandyopadhyaya Bhaumik&Co., Cost Accountants, M/s.
 Shome & Banerjee, Cost Accountants and M/s. Dilip M. Malkar & Co., Cost
 Accountants;
 
 (iii) For the Polyester Business - Shri Suresh D. Shenoy, Cost
 Accountant and M/s. V. Kumar & Associates, Cost Accountants;
 
 (iv) For Electricity Generation - M/s. Dilip M. Malkar & Co., Cost
 Accountants;
 
 (v) For Petroleum Business - M/s. V.J. Talati & Co., Cost Accountants;
 and
 
 (vi) For Oil & Gas Business - M/s. Kiran J. Mehta & Co., Cost
 Accountants, Shri Suresh D. Shenoy, Cost Accountant, M/s.
 Bandyopadhyaya Bhaumik&Co., Cost Accountants and M/s. Shome & Banerjee,
 Cost Accountants.
 
 M/s. Shome & Banerjee, Cost Accountants, were nominated as the
 Companys Lead Cost Auditor.
 
 Secretarial Audit Report
 
 As a measure of good corporate governance practice, the Board of
 Directors of the Company appointed Dr. K.R. Chandratre, Practicing
 Company Secretary, to conduct the Secretarial Audit. The Secretarial
 Audit Report for the financial year ended March 31, 2014, is provided
 in the Annual Report.
 
 The Secretarial Audit Report confirms that the Company has complied
 with all the applicable provisions of the Companies Act, 1956, the 98
 sections of the Companies Act, 2013 notified vide Ministry of Corporate
 Affairs Gazette Notification No. S.O. 2754(E) dated September 12, 2013,
 the Securities Contracts (Regulation) Act, 1956, Depositories Act,
 1996, the Foreign Exchange Management Act, 1999 to the extent
 applicable to Overseas Direct Investment (ODI), Foreign Direct
 Investment (FDI) and External Commercial Borrowings (ECB), all the
 Regulations and Guidelines of SEBI as applicable to the Company,
 including the Securities and Exchange Board of India (Substantial
 Acquisition of Shares and Takeovers) Regulations, 2011, the Securities
 and Exchange Board of India (Prohibition of Insider Trading)
 Regulations, 1992, the Securities and Exchange Board of India (Employee
 Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,
 1999, the Securities and Exchange Board of India (Issue and Listing of
 Debt Securities) Regulations, 2008, Listing Agreements with the Stock
 Exchanges and the Memorandum and Articles of Association of the
 Company.
 
 Particulars of Employees
 
 In terms of the provisions of Section 217(2A) of the Companies Act,
 1956, read with the Companies (Particulars of Employees) Rules, 1975,
 as amended, the names and other particulars of the employees are set
 out in the annexure to the Directors Report. Having regard to the
 provisions of Section 219(1)(b)(iv)of the said Act, the Annual Report
 excluding the aforesaid information is being sent to the members of the
 Company. Any member interested in obtaining such particulars may write
 to the Company Secretary of the Company.
 
 Energy Conservation, Technology Absorption and Foreign Exchange
 Earnings and Outgo
 
 The particulars relating to energy conservation, technology absorption,
 foreign exchange earnings and outgo, as required to be disclosed under
 Section 217(1)(e) of the Companies Act, 1956 read with the Companies
 (Disclosure of Particulars in the Report of Board of Directors) Rules,
 1988, are provided in Annexure II to this Report.
 
 Transfer of Amounts to Investor Education and Protection Fund
 
 Pursuant to the provisions of Section 205A(5) and 205C of the Companies
 Act, 1956, relevant amounts which remained unpaid or unclaimed for a
 period of seven years have been transferred by the Company, from to
 time to time on due dates, to the Investor Education and Protection
 Fund.
 
 Pursuant to the provisions of Investor Education and Protection Fund
 (Uploading of information regarding unpaid and unclaimed amounts lying
 with companies) Rules, 2012, the Company has uploaded the details of
 unpaid and unclaimed amounts lying with the Company as on June 06, 2013
 (date of last Annual General Meeting) on the Companys website
 (www.ril.com), as also on the Ministry of Corporate Affairs website.
 
 Corporate Governance
 
 The Company is committed to maintain the highest standards of corporate
 governance and adhere to the corporate governance requirements set out
 by SEBI. The Company has also implemented several best corporate
 governance practices as prevalent globally.
 
 The Report on corporate governance as stipulated under Clause 49 of the
 Listing Agreement forms part of the Annual Report.
 
 The requisite certificate from the Auditors of the Company confirming
 compliance with the conditions of corporate governance as stipulated
 under the aforesaid Clause 49, is attached to the Report on corporate
 governance.
 
 Business Responsibility Report
 
 SEBI, vide its Circular CIR/CFD/DIL/8/2012 dated August 13, 2012,
 mandated the top 100 listed entities, based on market capitalisation at
 BSE and NSE, to include Business Responsibility Report (BRR) as part of
 the Annual Report describing the initiatives taken by the companies
 from Environmental, Social and Governance perspective.  Pursuant to the
 above, the Stock Exchanges included in the Listing Agreement a
 suggested framework of a BRR.  Accordingly, the BRR is attached which
 forms part of the Annual Report.
 
 Acknowledgement
 
 Your Directors would like to express their appreciation for the
 assistance and co-operation received from the financial institutions,
 banks. Government authorities, customers, vendors and members during
 the year under review. Your Directors also wish to place on record
 their deep sense of appreciation for the committed services by the
 Companys executives, staff and workers.
 
 For and on behalf of the Board of Directors
 
 Mukesh D. Ambani
 
 Chairman and Managing Director
 
 April 18, 2014
Source : Dion Global Solutions Limited
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