Reliance Natural Resources

The Directors have pleasure in presenting the Eighth Annual Report and
 the audited accounts 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 Fifteen months ended
 
             March 31, 2008                 March 31, 2007
 Particulars Rs. in Lakh US $ in million ** Rs. in Lakh US $ in million
  
 
 Total Income    36,730.65       91.55       25,015.89          57.55
 
 Gross Profit 
 before 
 depreciation    9,269.44       231.04        5,691.00          13.09
 
 Less: 
 Depreciation      694.64        17.31        1,136.01           2.61
 
 Profit 
 before tax      8,574.80       213.73        4,554.99          10.48
 Less: 
 Provision for
 Taxation        1,692.56        42.19        1,537.74           3.54
 
 Fringe 
 benefit tax        11.60         0.29           26.31           0.06
 
 Deferred
 tax liability      10.77         0.27            5.16           0.01
 
 Profit 
 after tax      6,859.87        170.98         2,985.78          6.87
 
 Profit
 available for
 appropriation  9,554.27        238.14         2,694.40          6.20
 
 Appropriations        -             -                -             -
 
 Balance carried to 
 balance sheet  9,554.27        238.14         2,694.40          6.20
 
 * The previous financial year of the Company was for a period of
 fifteen months, hence the figures are not comparable
 
 ** Rs. 40.12 = US $ 1 Exchange Rate as on March 31, 2008 (Rs. 43.47 -
 US $ 1 as on March 31, 2007)
 
 Financial Performance
 
 During the year under review, your Company recorded the total income of
 Rs. 367.31 crore, against Rs. 250.16 crore in the previous year, an
 increase of 47%. Net Profit for the financial year ended Mach 31, 2008
 recorded an increase of 137% to Rs. 68.60 crore from Rs. 29.86 crore in
 the previous year.
 
 Dividend
 
 Your Directors have not recommended any dividend on equity shares for
 the year under review.
 
 Equity Share Capital
 
 During the year under review, AAA Power Systems (Global) Private
 Limited, a promoter group company exercised the conversion option in
 respect of 16,00,00,000 warrants, whereupon the Company allotted
 16,00,00,000 equity shares to the warrant holder.  Consequent upon the
 allotment of these shares, the paid-up capital of the Company increased
 to Rs. 816,56,52,110.
 
 Management Discussion and Analysis
 
 Management Discussion and Analysis of Financial Condition including
 results of operations of the Company for the year under review as
 required under clause 49 of the listing agreement with the stock
 exchanges, is given as a separate statement in the Annual Report.
 
 The Company has entered into various contracts in the areas of fuel
 management business. While benefits from such contracts will accrue in
 the future years, their progress is periodically reviewed.
 
 Subsidiary Company
 
 During the year under review, Reliance Fuel Resources Limited became
 subsidiary of the Company. In terms of the approval granted by the
 Central Government under Section 212(8) of the Companies Act, 1956, a
 copy of the Balance Sheet, Profit and Loss Account, Report of the Board
 of Directors and Auditors of the subsisting subsidiary company have not
 been attached with the Balance Sheet of the Company. These documents
 will be made available upon request by any member of the Company
 interested in obtaining the same. However, as directed by the Central
 Government, the financial data of the subsidiary company have been
 furnished in the notes on abridged consolidated financial statements
 which forms part of the Annual Report. The annual accounts of the
 Company including that of subsidiary company will be kept for
 inspection by any member. Further, pursuant to Accounting Standard
 (AS-21) issued by the Institute of Chartered Accountants of India,
 Consolidated Financial Statements presented by the Company include
 financial information of its subsidiary company.
 
 Fixed Deposits
 
 The Company has not accepted any fixed deposits during the year.
 
 Directors
 
 At the ensuing Annual General Meeting, Shri J L Bajaj retires by
 rotation and is eligible for re-appointment. Brief resume of the
 Director, the nature of his expertise in specific areas and the
 companies in which he holds directorships and memberships/
 chairmanships of Board committees, his shareholdings, etc. as
 stipulated under clause 49 of the listing agreements, are provided in
 the Report of Corporate Governance forming part of the Annual Report.
 
 DirectorsResponsibility 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 financial year
 ended March 31, 2008, the applicable accounting standards have been
 followed and that 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, 2008 and of the profit of the Company
 for the said period;
 
 (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.
 
 The above statements have been noted by the audit committee at its
 meeting held on April 28, 2008.
 
 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 subsidiary company as approved by its Board of
 Directors, have been prepared in accordance with the Accounting
 Standard (AS-21) on Consolidated Financial Statements read with
 Accounting Standard (AS-23) on Accounting for Investments in
 Associates.
 
 Auditors
 
 The statutory auditors, M/s Pathak H D & Associates, Chartered
 Accountants, retire at the conclusion of the ensuing Annual General
 Meeting and are eligible for re-appointment. The Company has received a
 letter from them to the effect that their appointment, if made, would
 be within the prescribed limits under Section 224(1B) of the Companies
 Act, 1956. It is accordingly, proposed to appoint M/s Pathak H D &
 Associates as Statutory Auditors of the Company for the year 2008-09.
 
 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 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 is being sent to all the members of the Company, excluding the
 aforesaid information. 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
 
 Information in accordance with the provisions of Section 217(1)(e) of
 the Companies Act, 1956, read with the Companies (Disclosures of
 Particulars in the Report of Board of Directors) Rules, 1988 regarding
 conservation of energy and technology absorption are not given as the
 Company has not undertaken any manufacturing activity. During the year
 under review, the Company earned Rs. 1,292.27 lakh in foreign exchange
 and utilized foreign exchange worth Rs. 7,422.29 lakh.
 
 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. As per clause 49 of the listing agreement, a separate
 section on Corporate Governance forms part of the Annual Report. A
 certificate from the Auditors of the Company on compliance of
 conditions of Corporate Governance under clause 49 of the listing
 agreement is given in the Annexure I to the report.
 
 Acknowledgements
 
 Your Directors wish to place on record their appreciation for the
 continued support and co-operation of the shareholders, banks, various
 regulatory and government authorities and for the valuable
 contributions made by the employees of the Company.
 
                                    On behalf of the Board of Directors
 
 Place : Mumbai                             Anil D Ambani
 Date  : April 28, 2008                     Chairman