Reliance Capital
BSE: 500111 | NSE: RELCAPITAL | ISIN: INE013A01015 | Finance - Investments
- Directors Report
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| Directors Report | Year End : Mar '08 |
The Directors have pleasure in presenting the 22nd Annual Report,
together with the audited statement of accounts of the Company for the
year ended March 31, 2008.
Financial Results
The performance of the Company for the financial year ended March 31,
2008 is summarised below:
Financial Year ended Financial Year ended
Particulars March 31, 2008 March 31, 2007
(Rs. in crore) (US$ in million*)(Rs. in crore) (US$ in
million**)
Gross Income 2079.79 520.34 883.86 202.77
Gross Profit 1188.54 297.36 740.25 169.83
Less: Depreciation 17.09 4.28 7.07 1.62
Profit before Tax 1171.45 293.08 733.18 168.21
Provision for Taxation 146.00 36.53 87.00 19.96
Net Profit 1025.45 256.56 646.18 148.25
Add: Profit brought
forward from
the previous year 873.36 218.50 499.69 114.63
Excess/(Short)
provision of
Income Tax (3.41) (0.85) - -
Excess provision
of Dividend - - 21.93 5.03
Profit available
for Appropriation 1895.41 474.21 1167.80 267.91
Dividend including
Dividend Tax 158.04 39.54 100.58 23.07
Transfer to General
Reserve 102.55 25.66 64.62 14.82
Transfer to Statutory
Reserve Fund 205.09 51.31 129.24 29.65
Balance carried forward 1429.72 357.70 873.36 200.36
*1 US$ = Rs.39.97
**1 US$ = Rs.43.59
Financial Performance
The Company’s gross income for the financial year ended March 31, 2008
increased to Rs.2,079.79 crore, from Rs.883.86 crore in the previous
year, registering a growth of over 135.30 per cent.
The operating profit (PBDIT) of the Company increased 103.95 per cent
to Rs.1,596.69 crore during the year, up from Rs.782.90 crore in the
previous year.
Interest expenses for the year increased by 857.40 per cent to
Rs.408.15 crore, from Rs.42.63 crore, in the previous year.
Depreciation was at Rs.17.09 crore as against Rs.7.07 crore in the
previous year. Provision for taxation during the year was Rs.146 crore.
Net profit for the year increased by over 58.69 per cent to Rs.1,025.45
crore from Rs.646.18 crore in the previous year.
An amount of Rs.205.09 crore was transferred to Statutory Reserve Fund
pursuant to section 45-IC of the Reserve Bank of India Act, 1934, and
an amount of Rs.102.55 crore was transferred to the General Reserve
during the year under review.
The Company’s Net worth as on March 31, 2008, stood at Rs.5,927.50
crore, as against Rs.5,161.23 crore last year.
Dividend
Your Directors have recommended a dividend of Rs.5.50 (55 per cent) per
equity share on 24,56,32,800 equity shares of Rs.10 each aggregating to
Rs.158.04 crore (inclusive of dividend tax) for the financial year
ended March 31, 2008, which, if approved at the ensuing Annual General
Meeting, will be paid to (i) all those equity shareholders whose names
appear in the Register of Members as on June 20, 2008 and (ii) to those
whose names as beneficial owners, are furnished by the National
Securities Depository Ltd. and Central Depository Services (India) Ltd.
for the purpose.
The dividend payout as proposed is in accordance with the Company’s
policy to pay sustainable dividend linked to long term performance,
keeping in view the capital needs for the Company’s growth plans and
the intent to optimal financing of such plans through internal
accruals.
Management Discussion and Analysis Report
Management Discussion and Analysis Report for the year under review, as
stipulated under clause 49 of the listing agreement with the Stock
Exchanges in India, is presented in a separate section forming part of
the Annual Report.
The Company has entered into various contracts in the areas of
financial services business. While benefits from such contracts will
accrue in the future years, their progress is periodically reviewed.
Resources and Liquidity
The Company has raised Rs.9,326 crore during the financial year 2007-08
by issuance of Commercial Paper, Non- convertible debentures and other
instruments. The funds were mainly deployed in providing consumer
finance.
RCL’s debt equity ratio as on March 31, 2008, stands at a
(conservative) level of 1.5:1. The Company has not accepted any
deposits from the public.
Subsidiaries
During the year, Reliance Capital Markets Pvt. Ltd. and Reliance Asset
Management (UK) Plc became subsidiaries of the Company.
In terms of the approval granted by the Central Government under
section 212(8) of the Companies Act, 1956, copies of the Balance Sheet,
Profit and Loss Account and Report of the Board of Directors and
Auditors of the subsisting subsidiaries have not been attached with the
Balance Sheet of the Company. However, these documents will be made
available upon request to any member of the Company interested in
obtaining the same. As directed by the Central Government, the
financial data of the subsidiaries has been furnished under ‘Details of
Subsidiaries’, which forms part of the Annual Report. The annual
accounts of the Company including that of subsidiaries will be kept for
inspection by any member. Further, pursuant to Accounting Standard-21
(AS-21) issued by the Institute of Chartered Accountants of India,
Consolidated Financial Statements presented by the Company include
financial information of its subsidiaries.
Fixed Deposits
The Company has neither accepted nor renewed any fixed deposits during
the year.
Twenty-nine deposit accounts, aggregating to Rs.0.02 crore, remained
unclaimed on the due dates as on March 31, 2008.
RCL has intimated the deposit holders individually of their unclaimed
amount with a request to return the Fixed Deposit Receipts duly
discharged to enable the Company to repay the amount.
Directors
In terms of Article 154 of the Articles of Association of the Company,
Shri Amitabh Jhunjhunwala, Director of the Company, retires by rotation
and being eligible offers himself for re-appointment at the ensuing
Annual General Meeting.
A brief resume of the Director retiring by rotation at the ensuing
Annual General Meeting, nature of his expertise in specific functional
areas, and names of Companies in which he holds directorship and/or
membership/chairmanship of Committees of the Board, as stipulated under
clause 49 of the listing agreement with the Stock Exchanges, are given
in the section on Corporate Governance elsewhere in the Annual Report.
Directors’ Responsibility Statement
Pursuant to the requirement under section 217(2AA) of the Companies
Act, 1956, with respect to Directors’ Responsibility Statement, it is
hereby confirmed that:
(i) in the preparation of the accounts for the financial year ended
March 31, 2008, the applicable accounting standards have been followed
alongwith proper explanation relating to material departures;
(ii) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that were 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 under review;
(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 accounts for the financial year
ended March 31, 2008 on a ‘going concern’ basis.
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.
Consolidated Financial Statements
The Audited Consolidated Financial Statements, based on the Financial
Statements received from subsidiaries, associates and partnership
firms, as approved by their respective Board of Directors and Managing
Committee, have been prepared in accordance with Accounting Standard-21
(AS-21)on
Consolidated Financial Statements read with Accounting Standard-23
(AS-23) on the Accounting for Investments in Associates.
Auditors
M/s. Chaturvedi & Shah, Chartered Accountants and M/s. BSR & Co.,
Chartered Accountants, as Statutory Auditors of the Company, hold
office until the conclusion of the ensuing Annual General Meeting and
are eligible for re-appointment.
The Company has received letters from M/s. Chaturvedi & Shah, Chartered
Accountants and M/s. BSR & Co., Chartered Accountants, to the effect
that their appointment, if made, would be within the prescribed limits
under section 224(1B) of the Companies Act, 1956, and that they are not
disqualified for such appointment within the meaning of section 226 of
the Companies Act, 1956.
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,
the names and other particulars of the employees are set out in the
Annexure to the Directors’ Report. However, 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 all the Members of
the Company and others entitled thereto. Any member interested in
obtaining such particulars may write to the Company Secretary at the
Registered Office of the Company.
Energy Conservation, Technology Absorption and Foreign Exchange
Earnings and Outgo
Particulars required to be furnished under the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988, are as
under:
(1) Part A and B pertaining to conservation of energy and technology
absorption are not applicable to the Company.
(2) Foreign Exchange earnings and outgo: Earnings - Nil
Outgo - Rs.13.23 crore
Transfer of Unclaimed dividend to IEPF
Pursuant to the provisions of section 205(A) of the Companies Act,
1956, the declared dividend which remained unclaimed for a period of 7
years has been transferred by the Company to the Investor Education and
Protection Fund (IEPF) established by the Central Government pursuant
to section 205C of the said Act.
Corporate Governance
The Company has adopted the “Reliance Anil Dhirubhai Ambani Group -
Corporate Governance Policies and Code of Conduct” which has set out
the systems, processes and policies conforming to International
Standards. The report on Corporate Governance as stipulated under
clause 49 of the listing agreement with the Stock Exchanges, forms part
of the Annual Report.
A Certificate from the Auditors of the Company M/s. Chaturvedi & Shah,
Chartered Accountants and M/s. BSR & Co., Chartered Accountants,
confirming compliance with conditions of Corporate Governance as
stipulated under the aforesaid clause 49, is annexed to this Report.
Acknowledgements
Your Directors would like to express their sincere appreciation of the
co-operation and assistance received from shareholders, bankers,
regulatory bodies and other business constituents during the year under
review. Your Directors also wish to place on record their deep sense of
appreciation for the commitment displayed by all executives, officers
and staff, resulting in the successful performance of the Company
during the year.
For and on behalf of the Board of Directors
Anil D. Ambani
Chairman
Mumbai
April 29, 2008
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