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Reliance Industries

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Directors Report Year End : Mar '19    Mar 18

Dear Members,

The Board of Directors are pleased to present the Company’s Forty-second Annual Report (Post-IPO) and the Company’s audited financial statements (standalone and consolidated) for the financial year ended March 31, 2019.

FINANCIAL RESULTS

The Company’s financial performance for the year ended March 31, 2019 is summarised below:

STANDALONE

CONSOLIDATED

2018-19

2017-18

2018-19

2017-18

Rs.

US$

Rs.

US$

Rs.

US$

Rs.

US$

crore

million*

crore

million*

crore

million*

crore

million*

PROFIT BEFORE TAX

47,367

6,849

45,725

7,016

55,227

7,986

49,426#

7,584

Less: Current Tax

9,440

1,365

8,953

1,374

11,683

1,689

10,098

1,549

Deferred Tax

2,764

399

3160

485

3,707

536

3,248

498

PROFIT FOR THE YEAR

35,163

5,085

33,612

5,157

39,837

5,761

36,080

5,537

Add: Other Comprehensive Income

59,674

8,629

(3,503)

(537)

58,765

8,498

(1,635)

(251)

Total Comprehensive Income for the year

94,837

13,714

30,109

4,620

98,602

14,259

34,445

5,286

Less: Total Comprehensive Income attributable to

-

-

-

-

241

35

9

1

Non-Controlling Interest

Total Comprehensive Income attributable to owners of

94,837

13,714

30,109

4,620

98,361

14,224

34,436

5,285

the Company

Add: Balance in Profit and Loss Account (Adjusted)

31,569

5,550

34,506

5,999

15,533

2,580

14,467

2,413

Add: Transferred from Capital Reserve Account

-

-

-

-

-

-

-

-

Add: Transferred from Revaluation Reserve

-

-

-

-

-

-

327

50

Add: Transferred from Share in Reserve of Associates

-

-

-

-

-

-

10

2

Add: Transferred from Share Based Payments Reserve

-

-

4

1

-

-

4

1

Less: On account ofAmalgamation/DivestmentofStake/Others

-

-

-

-

(639)

(92)

(283)

(43)

Less: Securities Premium on Redemption of

-

-

-

-

(15)

(2)

(144)

(22)

Non-Cumulative Optionally Convertible Preference Shares

Sub-Total

1,26,406

19,264

64,619

10,620

1,13,240

16,710

48,817

7,686

LESS: APPROPRIATION

Transferred to Statutory Reserve

-

-

-

-

15

2

221

34

Transferred to General Reserve

30,000

4,338

25,000

3,836

30,000

4,338

25,000

3,836

Transferred to Capital Redemption Reserve

-

-

-

-

-

-

2

-

Transferred to Debenture Redemption Reserve

4,124

596

4,134

634

4,147

600

4,145

636

Dividend on Equity Shares a

3,554

514

3,255

499

3,554

514

3,255

499

Tax on dividend a

728

105

661

101

728

105

661

101

Closing Balance (Including Other Comprehensive Income)

88,000

13,711

31,569

5,550

74,796

11,151

15,533

2,580

- 1 US$ = Rs. 69.155 Exchange Rate as on March 31, 2019 (1 US$ = Rs. 65.175 as on March 31, 2018)

- Includes exceptional item of Rs. 1,087 crore A Pertaining to previous financial year

RESULTS OF OPERATIONS AND THE STATE OF COMPANY’S AFFAIRS

THE HIGHLIGHTS OF THE COMPANY’S PERFORMANCE (STANDALONE) FOR THE YEAR ENDED MARCH 31, 2019 ARE AS UNDER:

- Value of sales and services increased by 27.2% to Rs. 4,00,986 crore (US$ 58 billion).

- Exports increased by 27.4% to Rs. 2,24,391 crore (US$ 32.4 billion).

- PBDIT increased by 12.9% to Rs. 67,676 crore (US$ 9.8 billion).

- Profit Before Tax increased by 3.6% to Rs. 47,367 crore (US$ 6.8 billion).

- Cash Profit increased by 4.6% to Rs. 48,485 crore (US$ 7.0 billion).

- Net Profit increased by 4.6% to Rs. 35,163 crore (US$ 5.1 billion).

- Gross Refining Margin stood at US$ 9.2 / bbl for the year ended March 31, 2019.

FINANCIAL PERFORMANCE REVIEW AND ANALYSIS (CONSOLIDATED)

The Company achieved a consolidated revenue of Rs. 622,809 crore ($ 90.1 billion), an increase of 44.6% as compared to Rs. 430,731 crore in the previous year. Increase in revenue was primarily on account of higher product price realization led by 22% y-o-y increase in average Brent crude price, and increased petrochemical volumes. Robust growth in Retail and Digital Services business also contributed to higher revenues. Operating Profit before other income, depreciation and exceptional items increased by 30.8% on a y-o-y basis to Rs. 83,918 crore (.1 billion). Volume growth in Petrochemicals and rapidly increasing contribution from consumer businesses led to significant rise in operating profit for the year.

DIVIDEND

The Board of Directors has recommended a dividend of Rs. 6.50 per equity share of Rs. 10/each (@65%) for the financial year ended March 31, 2019 (last year Rs. 6/- per equity share). The payout is expected to be Rs. 4,641 crore (inclusive of dividend distribution tax of Rs. 789 crore). The dividend payment is subject to approval of members at the ensuing Annual General Meeting.

The dividend recommended is in accordance with the Company’s Dividend Distribution Policy. The Dividend Distribution Policy of the Company is annexed herewith and marked as Annexure I to this Report and the same is put up on the Company’s website and can be accessed at http://www.ril.com/ DownloadFiles/IRStatutory/Dividend-Distribution-Policy.pdf

MATERIAL CHANGES AFFECTING THE COMPANY

There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year and date of this report. There has been no change in the nature of business of the Company.

MANAGEMENT’S DISCUSSION AND ANALYSIS REPORT

Management’s Discussion and Analysis Report for the year under review, as stipulated under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”), is presented in a separate section, forming part of the Annual Report.

DEVELOPMENTS IN BUSINESS OPERATIONS / PERFORMANCE

The developments in business operations / performance of the Company and its major subsidiaries consolidated with the Company are as below:

REFINING & MARKETING BUSINESS

In FY 2018-19, refining EBIT decreased by 19.8% y-o-y to Rs. 19,868 crore, impacted by volatile crude prices, multiyear low gasoline and naphtha cracks. Weakness in light distillate cracks was partly offset by firm middle distillate cracks. The Company’s refining margins declined to .2/bbl, however, maintained a significant .3/bbl premium over the Singapore complex margins. With a countrywide operational network of 1,372 fuel retail outlets, the Company covers all major highways across the country. Supported by the network presence and the growing fleet customer count, Company’s outlets registered an outstanding pump throughput of more than double the industry average during the year.

PETROCHEMICALS BUSINESS

In FY 2018-19, petrochemicals business delivered its best ever performance with the segment achieving its highest ever production level of 37.7 MMT, up 16% y-o-y. Petrochemicals segment EBIT increased by 51.9% to its highest level of Rs. 32,173 crore. EBIT margin increased to 18.7% from 16.9%, aided by strong integrated polyester chain margins. With the commencement of ethane cracking at Nagothane, all the key components of petrochemical investment cycle are now fully contributing to the earnings.

OIL AND GAS (EXPLORATION & PRODUCTION) BUSINESS

In FY 2018-19, revenues decreased by 3.8% to Rs. 5,005 crore. Volumes from domestic upstream fields and US shale were lower on account of natural decline and slowdown in development activity. Consequently, upstream operations registered EBIT of Rs.(1,379) crore. RIL is undertaking development of three deepwater fields, R-Cluster, Satellite- Cluster and D55 (MJ) fields. These fields are expected to come onstream from mid-2020 onwards. The new development expects to leverage RIL’s partnership with BP, existing infrastructure in the Krishna-Godavari basin and current downturn in the capital equipment and services market. More than 200 wells are on production in Reliance’s domestic CBM block with production averaging 1 mmscmd this year.

RETAIL BUSINESS

Reliance Retail achieved a turnover of Rs. 1,30,566 crore in FY 2018-19, an increase of 88.7% y-o-y. The business delivered an EBIT of Rs. 5,546 crore for FY 2018-19, more than doubling over previous year. EBIT margin increased by 120 bps to 4.2% for the year. During the year, Reliance Retail added over 2,800 stores and now operates 10,415 retail stores in over 6,600 towns and cities covering an area of 22 million sq. ft. Reliance Retail operated 516 owned petro retail outlets as on March 31, 2019.

DIGITAL SERVICES

Digital service business achieved revenue of Rs. 46,506 crore, an increase of 94.5% y-o-y. Segment EBIT increased by 176.7% to Rs. 8,784 crore with EBIT margin of 18.9%. The company added 120.1 million subscribers during the year, with year-end subscribers’ base at 306.7 million. This was driven by strong adoption of Jio services across the country reflected by healthy customer engagement metrics on data and voice. The Board of Jio approved the demerger of its passive infrastructure, tower and fiber assets into two separate Special Purpose Vehicles (SPVs). The scheme of demerger was effective 31st March 2019 post all requisite internal, shareholder, debt holder and regulatory approvals. The assets would be held by a separate Securities and Exchange Board of India registered Infrastructure Investment Trusts (InvIT). This demerger deleverages the balance sheet and establishes Jio franchise as an asset-light, digital services company.

MEDIA AND ENTERTAINMENT

Reliance’s flagship media company Network18 Media & Investments Limited continued on its growth trajectory, and invested in key areas to fill whitespaces or fortify its competitive position. Focus during the year was on regional content, while ad-monetisation witnessed accelerated growth across broadcasting and digital platforms and genres-news, entertainment and film. Network18 reported revenues of Rs. 5,116 crore (growth of 178% y-o-y), and EBIT of ‘ (52) crore on a consolidated basis.

ACQUISITION OF SHARES AND CONTROL OF DEN NETWORKS LIMITED (DEN) AND HATHWAY CABLE AND DATACOM LIMITED (HATHWAY)

During the year, Digital Media Distribution Trust (DMDT), of which Reliance Content Distribution Limited, a wholly-owned subsidiary of the Company is the sole beneficiary, through six Special Purpose Vehicles (SPVs), owned and controlled by DMDT, acquired shares of and sole control over Den Networks Limited and Hathway Cable and Datacom Limited and also acquired indirect control over GTPL Hathway Limited and Hathway Bhawani Cabletel and Datacom Limited.

CREDIT RATING

The Company’s financial discipline and prudence is reflected in the strong credit ratings ascribed by rating agencies as given below:

Instrument

Rating

Agency

Rating

Outlook

Remarks

International Debt

S&P

BBB

Stable

Two notches above India’s sovereign rating

International Debt

Moody’s

Baa2

Stable

At par with India’s sovereign rating

Long-Term Debt

CRISIL

CRISIL AAA

Stable

Highest rating awarded by CRISIL

Long-Term Debt

India Ratings

IND AAA

Stable

Highest rating awarded by India Ratings

CONSOLIDATED FINANCIAL STATEMENT

In accordance with the provisions of the Companies Act, 2013 (“the Act”) and Ind AS 110 - Consolidated Financial Statements read with Ind AS 28 Investments in Associates and Joint Venture and Ind AS 31 - Interests in Joint Ventures, the audited consolidated financial statement is provided in the Annual Report.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

During the year under review, companies listed in Annexure II to this Report have become or ceased to be Company’s subsidiaries, joint ventures or associate companies.

A statement providing details of performance and salient features of the financial statement of Subsidiary/ Associate/ Joint Venture companies, as per Section 129(3) of the Act, is provided as Annexure A to the consolidated financial statement and therefore not repeated, to avoid duplication.

The audited financial statement including the consolidated financial statement of the Company and all other documents required to be attached thereto is put up on the Company’s website and can be accessed at http://www.ril.com/InvestorRelations/ FinancialReporting.aspx. The financial statements of the subsidiaries, as required, are put up on the Company’s website and can be accessed at http://www.ril. com/InvestorRelations/Downloads.aspx

These documents will also be available for inspection on all working days, during business hours, at the Registered Office of the Company.

The Company has formulated a Policy for determining Material Subsidiaries. The Policy is put up on the Company’s website and can be accessed at https://www.ril. com/DownloadFiles/IRStatutory/Material-Subsidiaries.pdf

SECRETARIAL STANDARDS

The Directors state that applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ‘Meetings of the Board of Directors’ and ‘General Meetings’, respectively, have been duly followed by the Company.

DIRECTORS’ RESPONSIBILITY STATEMENT

Your Directors state that:

a) in the preparation of the annual accounts for the year ended March 31, 2019, the applicable accounting standards read with requirements set out under Schedule III to the Act have been followed and there are no material departures from the same;

b) 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, 2019 and of the profit of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a going concern basis;

e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by the Securities and Exchange Board of India (“SEBI”). The Company has also implemented several best governance practices. The report on Corporate Governance as stipulated under the Listing Regulations forms part of the Annual Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance.

BUSINESS RESPONSIBILITY REPORT

As stipulated under the Listing Regulations, the Business Responsibility Report describing the initiatives taken by the Company from an environmental, social and governance perspective is attached as a part of the Annual Report.

CONTRACTS ORARRANGEMENTS WITH RELATED PARTIES

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in its ordinary course of business and on an arm’s length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.

The Policy on Materiality of Related Party Transactions and on dealing with Related Party Transactions as approved by the Board is put up on the Company’s website and can be accessed at http://www.ril. com/DownloadFiles/IRStatutory/Policy-on-Materiality-of-RPT.pdf

There were no materially significant related party transactions which could have potential conflict with interest of the Company at large.

Members may refer Note 31 to the Standalone Financial Statement which sets out related party disclosures pursuant to Ind AS.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

During the year under review, the Company has won the Golden Peacock Global Award 2018 for the success of its Corporate Social Responsibility initiatives. This is the third time the Company won the award highlighting its commendable work under CSR ambit. The award is to recognise the transformative work done by Reliance Foundation (RF), the CSR arm of the Company. The Award instituted by the Institute of Directors (IOD), India in 1991, is regarded as a benchmark of Corporate Excellence worldwide. Under the able leadership of its Founder and Chairperson, Smt. Nita M. Ambani, RF has touched the lives of around 26 million people across India covering more than 18,000 villages and 200 urban locations.

The Corporate Social Responsibility and Governance (“CSR&G”) Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy (“CSR Policy”) indicating the activities to be undertaken by the Company, which has been approved by the Board. There has not been any change in the policy during the current year.

The CSR Policy is put up on the Company’s website and can be accessed at http:// www.ril.com/DownloadFiles/IRStatutory/ CSR-Policy.pdf

The key philosophy of CSR initiatives of the Company is guided by three core commitments of Scale, Impact and Sustainability.

The Company has identified following focus areas for CSR engagement:

- Rural Transformation: Creating sustainable livelihood solutions, addressing poverty, hunger and malnutrition including sustainable development of water and land resources, diversification of livelihoods and access to knowledge resources through digital platforms.

- Health: Promoting healthcare across all levels, including preventive health care and sanitation through improved access, awareness and health seeking behaviour.

- Education: Setting up of an Institution of Eminence for higher education in the country, access to quality education, training and skill enhancement including employability enhancing vocational skills among youth.

- Sports for Development: Long-term commitment towards development of grassroots sports in the country through training, mentoring and other development programmes for the youth.

- Disaster Response: Managing and responding to disaster situations through appropriate relief measures.

- Arts, Culture and Heritage: Protection and promotion of India’s art, culture and heritage.

- Environment: Environmental sustainability, ecological balance, conservation of natural resources and promoting biodiversity.

The Company also undertakes other need-based initiatives in compliance with Schedule VII to the Act.

During the year, the Company spent Rs. 849 crore (around 2.09 % of the average net profits of last three financial years) on CSR activities.

The annual report on CSR activities is annexed herewith and marked as Annexure III to this Report.

RISK MANAGEMENT

The Company has an elaborate Group Risk Management Framework, which is designed to enable risks to be identified, assessed and mitigated appropriately.

The Risk Management Committee of the Company has been entrusted with the responsibility to assist the Board in

(a) overseeing and approving the Company’s enterprise wide risk management framework; and

(b) overseeing that all the risks that the organisation faces such as Strategic and Commercial, Safety and Operations, Compliance and Control and Financial risks have been identified and assessed and there is an adequate risk management infrastructure in place, capable of addressing those risks.

More details on Risk Management indicating development and implementation of Risk Management policy including identification of elements of risk and their mitigation are covered in Management’s Discussion and Analysis section, which forms part of the Annual Report.

INTERNAL FINANCIAL CONTROLS

Internal Financial Controls are an integrated part of the risk management process, addressing financial and financial reporting risks. The internal financial controls have been documented, digitised and embedded in the business processes.

Assurance on the effectiveness of internal financial controls is obtained through management reviews, control selfassessment, continuous monitoring by functional experts as well as testing of the internal financial control systems by the internal auditors and statutory auditors during the course of their audits. The Company believes that these systems provide reasonable assurance that Company’s internal financial controls are designed effectively and are operating as intended.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the Act and the Articles of Association of the Company, Shri P.K. Kapil and Smt. Nita M. Ambani, Directors of the Company, retire by rotation at the ensuing Annual General Meeting. The Board of Directors on the recommendation of the Human Resources, Nomination and Remuneration (“HRNR”) Committee has recommended their re-appointment.

Prof. Ashok Misra demitted office as an Independent Director of the Company w.e.f. October 17, 2018. The Board places on record its appreciation towards valuable contribution made by Prof. Ashok Misra during his tenure as a Director of the Company.

The term of office of Shri R.S. Gujral as an Independent Director, will expire on June 11, 2020. The Board of Directors, based on the performance evaluation and as per the recommendation of the HRNR Committee has recommended re-appointment of Shri R.S. Gujral, as an Independent Director of the Company for a second term of 5 (five) consecutive years on the expiry of his current term of office. The Board considers that, given his background, experience and contributions made by him during his tenure, the continued association of Shri R.S. Gujral would be beneficial to the Company.

The Board of Directors, on recommendation of the HRNR Committee, has:

(a) Appointed Smt. Arundhati Bhattacharya as an Additional Director, to be an Independent Director, effective October 17, 2018;

(b) Re-appointed Shri P.M.S. Prasad as Executive Director for a period of five years effective August 21, 2019; and

(c) Appointed Smt. Savithri Parekh as Joint Company Secretary and Compliance Officer effective March 29, 2019.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence prescribed under the Act and the Listing Regulations.

The Company has devised the following Policies viz:

a) Policy for selection of Directors and determining Directors’ independence; and

b) Remuneration Policy for Directors, Key Managerial Personnel and other employees.

The aforesaid policies are put up on the Company’s website and can be accessed at http://www.ril.com/DownloadFiles/ IRStatutory/Policy-for-Selection-of-Directors.pdf and http://www.ril.com/ DownloadFiles/IRStatutory/Remuneration-Policy-for-Directors.pdf

The Policy for selection of Directors and determining Directors’ independence sets out the guiding principles for the HRNR Committee for identifying persons who are qualified to become Directors and to determine the independence of Directors, in case of their appointment as Independent Directors of the Company.

The Policy also provides for the factors in evaluating the suitability of individual Board members with diverse background and experience that are relevant for the Company’s operations.

There has been no major change in the aforesaid policy during the year. The criteria of independence, number of directorships and committee memberships prescribed in the policy has been changed to align the policy with the amendment made in this regard in the Act and the Listing Regulations.

The Remuneration Policy for Directors, Key Managerial Personnel and other employees sets out the guiding principles for the HRNR Committee for recommending to the Board the remuneration of the Directors, Key Managerial Personnel and other employees of the Company. There has been no change in the policy during the current year.

PERFORMANCE EVALUATION

The Company has a policy for performance evaluation of the Board, Committees and other individual Directors (including Independent Directors) which include criteria for performance evaluation of Nonexecutive Directors and Executive Directors.

In accordance with the manner specified by the HRNR Committee, the Board carried out annual performance evaluation of the Board, its Committees and Individual Directors. The Independent Directors carried out annual performance evaluation of the Chairperson. The Chairman of the respective Committees shared the report on evaluation with the respective Committee members. The performance of each Committee was evaluated by the Board, based on report on evaluation received from respective Committees. A consolidated report was shared with the Chairman of the Board for his review and giving feedback to each Director.

EMPLOYEES’ STOCK OPTION SCHEMES

The HRNR Committee inter alia administers and monitors Employees’ Stock Option Schemes of the Company. No grants have so far been made under Employee Stock Option Scheme - 2017. Employee Stock Option Scheme - 2006 (“ESOS - 2006”) has been withdrawn during the financial year 2017-18. However options granted under ESOS - 2006, which are in force continue to be governed by ESOS - 2006.

The Schemes are in line with the SEBI (Share Based Employee Benefits) Regulations, 2014 (“SBEB Regulations”). The Company has received a certificate from the Auditors of the Company that the schemes are implemented in accordance with the SBEB Regulations and the resolutions passed by the members. The certificate would be available at the Annual General Meeting for inspection by members. The details as required to be disclosed under the SBEB Regulations are put up on the Company’s website and can be accessed at http://www.ril.com/DownloadFiles/ IRStatutory/SEBI-Regulations-2006.pdf and http://www.ril.com/DownloadFiles/ IRStatutory/SEBI-Regulations-2017.pdf

AUDITORS AND AUDITORS’ REPORT

(I) STATUTORY AUDITORS

S R B C & CO LLP, Chartered Accountants and D T S & Associates, Chartered Accountants were appointed as Auditors of the Company for a term of 5 (five) consecutive years, at the Annual General Meeting held on July 21, 2017. The Auditors have confirmed that they are not disqualified from continuing as Auditors of the Company.

The Notes on financial statement referred to in the Auditors’ Report are self-explanatory and do not call for any further comments. The Auditors’ Report does not contain any qualification, reservation, adverse remark or disclaimer.

(II) COST AUDITORS

The Board has appointed following Cost Accountants as Cost Auditors for conducting the audit of cost records of products and services of the Company for various segments for the financial year 2019-20 under section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014:

(i) Textiles Business - Kiran J. Mehta & Co;

(ii) Chemicals Business - Diwanji & Co., K.G. Goyal & Associates, V.J. Talati & Co., Suresh D. Shenoy, Shome & Banerjee and Dilip M. Malkar & Co.;

(iii) Polyester Business - VJ. Talati & Co., Suresh

D. Shenoy and V. Kumar & Associates;

(iv) Electricity Generation - Diwanji & Co. and Kiran J. Mehta & Co.;

(v) Petroleum Business - Suresh D. Shenoy;

(vi) Oil & Gas Business - V.J. Talati & Co. and Shome & Banerjee;

(vii) Gasification-Suresh D. Shenoy; and

(viii) Composite Solution - Diwanji & Co.

Shome & Banerjee, Cost Accountants, were nominated as the Company’s Lead Cost Auditors.

(III) SECRETARIAL AUDITOR

The Board had appointed Dr. K.R. Chandratre, Practising Company Secretary, to conduct Secretarial Audit for the financial year 2018-19. The Secretarial Audit Report for the financial year ended March 31, 2019 is annexed herewith and marked as Annexure IV to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

DISCLOSURES

(I) MEETINGS OF THE BOARD

Seven Meetings of the Board of Directors were held during the year. The particulars of meetings held and attended by each Director are detailed in the Corporate Governance Report.

(II) AUDIT COMMITTEE

The Audit Committee comprises Independent Directors namely Shri Yogendra P. Trivedi (Chairman), Dr. Raghunath

A. Mashelkar, Shri Adil Zainulbhai and Shri Raminder Singh Gujral. During the year all the recommendations made by the Audit Committee were accepted by the Board.

(III) CORPORATE SOCIAL RESPONSIBILITY AND GOVERNANCE COMMITTEE

The Corporate Social Responsibility and Governance (“CSR&G”) Committee comprises Shri Yogendra P. Trivedi (Chairman), Shri Nikhil R. Meswani, Dr. Raghunath A. Mashelkar and Dr. Shumeet Banerji.

(IV) HUMAN RESOURCES, NOMINATION AND REMUNERATION COMMITTEE

The Human Resources, Nomination and Remuneration Committee comprises Shri Adil Zainulbhai (Chairman), Shri Yogendra P. Trivedi, Dr. Raghunath A. Mashelkar, Shri Raminder Singh Gujaral and Dr. Shumeet Banerji

(V) VIGIL MECHANISM

The Company has established a robust Vigil Mechanism and a Whistle-blower policy in accordance with provisions of the Act and Listing Regulations. The Vigil Mechanism is supervised by an ‘Ethics & Compliance Task Force’ comprising a member of the Board as the Chairperson and senior executives as members.

Protected disclosures can be made by a whistle-blower through an e-mail, or dedicated telephone line or a letter to the Ethics & Compliance Task Force or to the Chairman of the Audit Committee.

The Vigil Mechanism and Whistle-blower policy is put up on the Company’s website and can be accessed at: http://www.ril. com/DownloadFiles/IRStatutory/Vigil-Mechanism-and-Whistle-Blower-Policy.pdf

(VI) PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

As per the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (“POSH Act”) and Rules made thereunder, the Company has formed Internal Complaints Committee for various work places to address complaints pertaining to sexual harassment in accordance with the POSH Act. The Company has a policy for prevention of Sexual Harassment, which ensures a free and fair enquiry process with clear timelines for resolution. To build awareness in this area, the Company has been conducting online programme on a continuous basis.

(VII) PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient are provided in the Standalone Financial Statement (Please refer Note 2, 3, 6, 9, 31 and 37 to the Standalone Financial Statement).

(VIII) DEBENTURES

The Company has issued on private placement basis and allotted, Unsecured, Redeemable Non-convertible Debentures (NCDs) aggregating Rs.19,000 crore (paid up to the extent of Rs. 17,000 crore) during the financial year 2018-19. The funds raised through issuance of NCDs have been utilised for refinancing of existing borrowings and other purpose in the ordinary course of business.

(IX) CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided in Annexure V to this Report.

(X) ANNUAL RETURN

As required under Section 134(3)(a)of the Act, the Annual Return is put up on the Company’s website and can be accessed at http://www.ril.com/DownloadFiles/ IRStatutory/Annual Return 2018-19.pdf and http://www.ril.com/DownloadFiles/ IRStatutory/Annual Return 2017-18.pdf

(XI) PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names of top ten employees in terms of remuneration drawn and names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules forms part of this Report.

Disclosures relating to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report.

Having regard to the provisions of the second proviso to Section 136(1) of the Act and as advised, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection on all working days, during business hours, at the Registered Office of the Company.

Any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following matters as there were no transactions on these items during the year under review:

- Details relating to deposits covered under Chapter V of the Act.

- Issue of equity shares with differential rights as to dividend, voting or otherwise.

- Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except Employees’ Stock Options Schemes referred to in this Report.

- The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.

- Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

- No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company’s operations in future.

- No fraud has been reported by the Auditors to the Audit Committee or the Board.

- There is no Corporate Insolvency Resolution Process initiated under the Insolvency and Bankruptcy Code, 2016.

ACKNOWLEDGEMENT

The Board of Directors wish to place on record its deep sense of appreciation for the committed services by all the employees of the Company. The Board of Directors would also like to express their sincere appreciation for the assistance and co-operation received from the financial institutions, banks, Government authorities, customers, vendors and members during the year under review.

For and on behalf of the Board of Directors

Mukesh D. Ambani

Chairman and Managing Director

Mumbai, April 18, 2019

Source : Dion Global Solutions Limited
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