The Directors are pleased to present the 37th Annual Report and the
audited accounts for the financial year ended March 31, 2011.
Financial Results
The financial performance of the Company, for the year ended March 31,
2011 is summarised below:
2010-2011 2009-2010
Rs. crore $ Mn* Rs. crore $ Mn*
Profit before Depreciation,
Interest & Tax 41,177.44 9,234 33,041.18 7,359
Less: Interest 2,327.62 522 1,997.21 445
Depreciation 16,241.33 13,477.01
Less: Transfer from
Revaluation
Reserve 2,633.75 13,607.58 3,051 2,980.48 10,496.53 2,338
Profit before Tax 25,242.24 5,661 20,547.44 4,576
Less: Provision
for Current
Taxation 4,320.44 969 3,111.77 693
Provision for
Deferred Tax 635.50 143 1,200.00 267
Profit after Tax 20,286.30 4,549 16,235.67 3,616
Add: Balance in
Profit and
Loss Account 4,999.45 1,114 5,384.19 1,199
Amount Available
for Appropriation 25,285.75 5,663 21,619.86 4,815
Appropriation:
General Reserve 16,000.00 3,588 14,000.00 3,118
Debenture Redemption
Reserve - - 189.50 42
Dividend on Equity Shares 2,384.99 535 2,084.67 464
Tax on Dividend 386.90 87 346.24 77
Balance carried to
Balance Sheet 6,513.86 1,453 4,999.45 1,114
25,285.75 5,663 21,619.86 4,815
* 1 $ = Rs. 44.595 Exchange Rate as on March 31, 2011 (1 $ = Rs. 44.90
as on March 31, 2010)
Results of Operations
The first full year of operations, after commissioning of the Companys
two large scale projects namely KG D6 and SEZ refinery at Jamnagar,
resulted in a record performance during the financial year under
review.
- Turnover increased by 29% to Rs. 2,58,651 crore ($ 58.0 billion)
- Exports increased by 33% to Rs. 1,46,667 crore ($ 32.9 billion)
- PBDIT increased by 25% and achieved a record level of Rs.41,178 crore
($ 9.2 billion)
- Profit Before Tax increased by 23% to Rs. 25,242 crore ($ 5.7
billion)
- Cash Profit increased by 24% to Rs. 34,530 crore ($ 7.7 billion)
- Net Profit increased by 25% to Rs. 20,286 crore ($ 4.5 billion)
- Gross Refining Margin at $ 8.4 /bbl for the year ended March 31, 2011
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 of Rs. 28,719 crore ($
6.4 billion) was paid in the form of various taxes and duties.
Dividend
Your Directors have recommended a dividend of Rs. 8/- per Equity Share
(last year Rs. 7/- per Equity Share) for the financial year ended March
31, 2011, amounting to Rs. 2772 crore (inclusive of tax of Rs. 387
crore) one of the highest ever payout by any private sector domestic
company. The dividend will be paid to members whose names appear in the
Register of Members as on May 9, 2011; 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.
The dividend payout for the year under review has been formulated in
accordance with the Companys policy to pay sustainable dividend linked
to long term growth objectives of the Company to be met by internal
cash accruals and the shareholders aspirations.
Credit Rating
The Company continues to have the highest domestic credit ratings of
AAA from CRISIL and Fitch. Moodys and S&P have reaffirmed investment
grade ratings for international debt of the Company, as Baa2 and BBB,
respectively. Its continued Balance Sheet strengthning in financial
year 2010-11, resulted in Moodys, Fitch and S&P recently upgrading
their outlook for the Company from Stable to Positive. The Companys
international rating from S&P is higher than the countrys sovereign
rating. Strong credit ratings by leading international agencies
reflect the Companys financial discipline and prudence.
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 Company has entered into various joint ventures, partnerships and
contracts in the area of oil and gas, refining and petrochemicals
businesses. While benefits from such contracts will accrue in future
years, their progress is periodically monitored.
In line with its aspirations of ongoing growth, Reliance is investing
its resources in core business across the
integrated energy chain. While doing so, the Company is also taking the
initiative of investing in new technologies and businesses that help
meet changing aspirations of millions of Indian consumers. These
strategies and initiatives are aimed at ensuring that Reliance delivers
long- term sustainable growth and creates unprecedented value for all
its stakeholders.
Some of the major events of the year include the following:
- RIL-BP alliance:
RIL has entered into a strategic partnership with BP and signed the
relationship framework and transactional agreements. The partnership
across the full value chain comprises BP taking a 30% stake in 23 oil
and gas production sharing contracts that Reliance operates in India,
including the producing KG-D6 block. The two companies will also form a
50:50 joint venture for the sourcing and marketing of gas in India and
will endeavour to accelerate the creation of infrastructure for
receiving, transporting and marketing of natural gas in India. BP will
pay an aggregate consideration of $ 7.2 billion for the interests to be
acquired in the 23 production sharing contracts. Future performance
payments of up to $ 1.8 billion could be paid based on exploration
success that results in development of commercial discoveries.
- Shale gas joint ventures:
During the year, the Company, through its subsidiaries, in the United
States of America entered into three distinctive joint venture
agreements with Atlas Energy, Pioneer Natural Resources and Carrizo Oil
& Gas and acquired 40%, 45% and 60% interests, respectively in the
shale gas acreage positions to be explored by these joint ventures. The
net Shale acreage acquisition by Reliance is 3,12,430 acres. It also
entered in to a separate joint venture with Pioneer Natural Resources
aimed at addressing the mid-stream opportunity in gas evacuation and
transportation.
- Joint venture for Butyl Rubber production in India:
During the year, RIL and Russias SIBUR announced a joint venture for
the setting up of a facility for producing 100,000 MT butyl rubber in
India. This is a significant step towards Reliances commitment to
service Indias growing automotive sector by bringing in complex
technologies, available with only a very few companies globally. The
setting up of domestic manufacturing of butyl rubber which is expected
to be commissioned by 2013, will fulfill a longstanding demand of the
Indian tyre and rubber industry.
- Spearheading the knowledge revolution:
During the year, RIL acquired a substantial stake in
Infotel Broadband Services Limited (Infotel Broadband), which emerged
as a successful bidder in all the 22 circles of the auction for
Broadband Wireless Access (BWA) Spectrum conducted by the Department of
Telecommunications (DoT). RIL owns 95% of the equity share capital of
Infotel Broadband.
RIL sees the broadband opportunity as a new frontier of knowledge
economy in which it is confident of taking leadership position and
providing India with an opportunity to be in the forefront among the
countries providing world-class 4G network and services.
Others:
The Honorable Supreme Court of India delivered its judgment in the
Reliance Natural Resources Limited (RNRL) - RIL dispute. The judgment
recognized the dominant role of the provisions of the Production
Sharing Contract and upheld the policies formulated by the Government
under which it has the authority to regulate the production and
distribution of natural gas. RIL and RNRL signed a Gas Supply Master
Agreement in compliance with the Gas Utilization Policy and EGoM
decisions. RIL and Reliance ADA Group companies approved and signed an
agreement canceling all existing non-compete arrangements entered into
between the two groups pursuant to the scheme of reorganization of the
Reliance Group and entered into a new simpler, non-compete agreement
with respect to gas based power generation.
Consolidated Financial Statements
In accordance with the Accounting Standard AS-21 on Consolidated
Financial Statements read with Accounting Standard AS-23 on Accounting
for Investments in Associates and AS-27 on Financial Reporting of
Interest in Joint Ventures, the audited Consolidated Financial
Statements are provided in the Annual Report.
Subsidiaries
In accordance with the general circular issued by the Ministry of
Corporate Affairs, Government of India, 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. 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 at the Registered
Office of the Company and that of the respective subsidiary companies.
The Consolidated Financial Statements presented by the Company include
the financial results of its subsidiary companies.
Details of major subsidiaries of the Company are covered in
Managements Discussion and Analysis Report forming part of the Annual
Report.
Directors
Shri Ramaniklal H. Ambani, Shri Nikhil R. Meswani, Prof. Ashok Misra
and Shri Yogendra P. Trivedi, Directors, retire by rotation and being
eligible, offer themselves for reappointment at the ensuing Annual
General Meeting.
Group
Pursuant to intimation from the Promoters, the names of the Promoters
and entities comprising the group 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 for the year ended March
31, 2011, 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, 2011 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, M/s. Deloitte Haskins &
Sells, Chartered Accountants and M/s. Rajendra & Co., Chartered
Accountants, Statutory Auditors of the Company, hold office until the
conclusion of the ensuing Annual General Meeting and are eligible for
reappointment.
The Company has received letters from all of them to the effect that
their reappointment, if made, would be within the prescribed limits
under Section 224(1B) of the
Companies Act, 1956 and that they are not disqualified for
reappointment within the meaning of Section 226 of the said Act.
The Notes on Accounts referred to in the Auditors Report are
self-explanatory and do not call for any further comments.
Cost Auditors
The Central Government has approved the appointment of the following
cost auditors for conducting Cost Audit for the financial year 2010-11
–
(i) For the textiles business - M/s. Kiran J. Mehta & Co, Cost
Accountant;
(ii) For the chemicals business – Shri S. N. Bavadekar,
Cost Accountant, M/s. V. J. Talati & Co., Cost
Accountants, M/s. Diwanji & Associates, Cost
Accountants, M/s. K. G. Goyal & Associates, Cost Accountants; and
(iii) For the polyester business – Shri Suresh D. Shenoy,
Cost Accountant, M/s. V. Kumar & Associates, Cost Accountants.
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 Secretarial Audit of records and
documents of the Company. The Secretarial Audit Report for the
financial year ended March 31, 2011, 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,
Depositories Act, 1996, Listing Agreements with the Stock Exchanges,
Securities Contracts (Regulation) Act, 1956 and 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, 1997, the Securities and Exchange
Board of India (Prohibition of Insider Trading) Regulations, 1992 and
the Securities and Exchange Board of India (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999.
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 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
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 the Annexure-I to this Report.
Transfer of amounts to Investor Education and Protection Fund
Pursuant to the provisions of Section 205A(5) of the Companies Act,
1956, dividends, interest on debentures and matured debentures which
remained unpaid or unclaimed for a period of 7 years have been
transferred by the Company to the Investor Education and Protection
Fund.
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 this 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
executives, staff and workers of the Company.
For and on behalf of the Board of Directors
Mukesh D. Ambani
Chairman and Managing Director
April 21, 2011
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