The Directors are pleased to present the 40th Annual Report and the
Companys audited accounts for the financial year ended March 31,2014.
The Companys financial performance, for the year ended March 31,2014
is summarised below:
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
General Reserve 18,000 3,004 18,000 3,316
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
- 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 ($4.6 billion)
- Cash Profit increased by 1.0% to Rs. 30,795 crore ($5.1 billion)
- Net Profit increased by 4.7% to Rs. 21,984 crore ($3.7 billion)
- Gross Refining Margin was $ 8.1 / bbl for the year ended March 31,
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.
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
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
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.
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
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
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
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
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.
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
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
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
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.
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
(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
(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
(v) For Petroleum Business - M/s. V.J. Talati & Co., Cost Accountants;
(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,
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
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
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.
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
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.
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