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.
The Company's financial performance for the year ended March 31 2019 is summarisedbelow:
| || |
| || |
| ||crore ||US$ million* ||crore ||US$ million* ||crore ||US$ million* ||crore ||US$ million* |
|PROFIT BEFORE TAX ||47367 ||6849 ||45725 ||7016 ||55227 ||7986 ||49426# ||7584 |
|Less: Current Tax ||9440 ||1365 ||8953 ||1374 ||11683 ||1689 ||10098 ||1549 |
|Deferred Tax ||2764 ||399 ||3160 ||485 ||3707 ||536 ||3248 ||498 |
|PROFIT FOR THE YEAR ||35163 ||5085 ||33612 ||5157 ||39837 ||5761 ||36080 ||5537 |
|Add: Other Comprehensive Income ||59674 ||8629 ||(3503) ||(537) ||58765 ||8498 ||(1635) ||(251) |
|Total Comprehensive Income for the year ||94837 ||13714 ||30109 ||4620 ||98602 ||14259 ||34445 ||5286 |
|Less: Total Comprehensive Income attributable to Non-Controlling Interest ||- || |
|241 ||35 ||9 ||1 |
|Total Comprehensive Income attributable to owners of the Company ||94837 ||13714 ||30109 ||4620 ||98361 ||14224 ||34436 ||5285 |
|Add: Balance in Profit and Loss Account (Adjusted) ||31569 ||5550 ||34506 ||5999 ||15533 ||2580 ||14467 ||2413 |
|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 Non-Cumulative Optionally Convertible Preference Shares ||- || |
|(15) ||(2) ||(144) ||(22) |
|Sub-Total ||126406 ||19264 ||64619 ||10620 ||113240 ||16710 ||48817 ||7686 |
|LESS: APPROPRIATION || || || || || || || || |
|Transferred to Statutory Reserve ||- ||- ||- ||- ||15 ||2 ||221 ||34 |
|Transferred to General Reserve ||30000 ||4338 ||25000 ||3836 ||30000 ||4338 ||25000 ||3836 |
|Transferred to Capital Redemption Reserve ||- ||- ||- ||- ||- ||- ||2 ||- |
|Transferred to Debenture Redemption Reserve ||4124 ||596 ||4134 ||634 ||4147 ||600 ||4145 ||636 |
|Dividend on Equity Shares n ||3554 ||514 ||3255 ||499 ||3554 ||514 ||3255 ||499 |
|Tax on dividend n ||728 ||105 ||661 ||101 ||728 ||105 ||661 ||101 |
|Closing Balance (Including Other Comprehensive Income) ||88000 ||13711 ||31569 ||5550 ||74796 ||11151 ||15533 ||2580 |
1 US$ = र 69.155 Exchange Rate as on March 31 2019 (1 US$ = र 65.175 as onMarch 31 2018)
Includes exceptional item of र 1087 crore n Pertaining to previousfinancial year
RESULTS OF OPERATIONS AND THE STATE OF COMPANY'S AFFAIRS
THE HIGHLIGHTS OF THE COMPANY'S PERFORMANCE (STANDALONE) FOR THE YEAR ENDED MARCH 312019 ARE AS UNDER:
Value of sales and services increased by 27.2% to र 400986 crore (US$ 58billion).
Exports increased by 27.4% to र 224391 crore (US$ 32.4 billion).
PBDIT increased by 12.9% to र 67676 crore (US$ 9.8 billion).
Profit Before Tax increased by 3.6% to र 47367 crore (US$ 6.8 billion).
Cash Profit increased by 4.6% to र 48485 crore (US$ 7.0 billion).
Net Profit increased by 4.6% to र 35163 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 र 622809 crore ($ 90.1 billion) anincrease of 44.6% as compared to र 430731 crore in the previous year. Increase inrevenue was primarily on account of higher product price realization led by 22% y-o-yincrease in average Brent crude price and increased petrochemical volumes. Robust growthin Retail and Digital Services business also contributed to higher revenues. OperatingProfit before other income depreciation and exceptional items increased by 30.8% on ay-o-y basis to र 83918 crore ($12.1 billion). Volume growth in Petrochemicals andrapidly increasing contribution from consumer businesses led to significant rise inoperating profit for the year.
The Board of Directors has recommended a dividend of र 6.50 per equity share of र 10/- each (@65%) for the financial year ended March 31 2019 (last year र 6/- per equityshare). The payout is expected to be र 4641 crore (inclusive of dividend distributiontax of र 789 crore). The dividend payment is subject to approval of members at theensuing Annual General Meeting.
The dividend recommended is in accordance with the Company's Dividend DistributionPolicy. The Dividend Distribution Policy of the Company is annexed herewith and marked as AnnexureI to this Report and the same is put up on the Company's website and can be accessedat 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 ofthe Company between the end of the financial year and date of this report. There has beenno 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 stipulatedunder the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 ("Listing Regulations") is presented in aseparate section forming part of the Annual Report.
DEVELOPMENTS IN BUSINESS OPERATIONS/PERFORMANCE
The developments in business operations/performance of the Company and its majorsubsidiaries consolidated with the Company are as below:
REFINING & MARKETING BUSINESS
In FY 2018-19 refining EBIT decreased by 19.8% y-o-y to र 19868 crore impacted byvolatile crude prices multiyear low gasoline and naphtha cracks. Weakness in lightdistillate cracks was partly offset by firm middle distillate cracks. The Company'srefining margins declined to $9.2/bbl however maintained a significant $4.3/bbl premiumover the Singapore complex margins. With a countrywide operational network of 1372 fuelretail outlets the Company covers all major highways across the country. Supported by thenetwork presence and the growing fleet customer count Company's outlets registered anoutstanding pump throughput of more than double the industry average during the year.
In FY 2018-19 petrochemicals business delivered its best ever performance with thesegment 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 र 32173 crore.EBIT margin increased to 18.7% from 16.9% aided by strong integrated polyester chainmargins. With the commencement of ethane cracking at Nagothane all the key components ofpetrochemical 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 र 5005 crore. Volumes from domesticupstream fields and US shale were lower on account of natural decline and slowdown indevelopment activity. Consequently upstream operations registered EBIT of र (1379)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-2020onwards. The new development expects to leverage RIL's partnership with BP existinginfrastructure in the Krishna-Godavari basin and current downturn in the capital equipmentand services market. More than 200 wells are on production in Reliance's domestic CBMblock with production averaging 1 mmscmd this year.
Reliance Retail achieved a turnover of र 130566 crore in FY 2018-19 an increase of88.7% y-o-y. The business delivered an EBIT of र 5546 crore for FY 2018-19 more thandoubling over previous year. EBIT margin increased by 120 bps to 4.2% for the year. Duringthe year Reliance Retail added over 2800 stores and now operates 10415 retail stores inover 6600 towns and cities covering an area of 22 million sq. ft. Reliance Retailoperated 516 owned petro retail outlets as on March 31 2019.
Digital service business achieved revenue of र 46506 crore an increase of 94.5%y-o-y. Segment EBIT increased by 176.7% to र 8784 crore with EBIT margin of 18.9%. Thecompany added 120.1 million subscribers during the year with year-end subscribers' baseat 306.7 million. This was driven by strong adoption of Jio services across the countryreflected by healthy customer engagement metrics on data and voice. The Board of Jioapproved the demerger of its passive infrastructure tower and fiber assets into twoseparate Special Purpose Vehicles (SPVs). The scheme of demerger was effective 31st March2019 post all requisite internal shareholder debt holder and regulatory approvals. Theassets would be held by a separate Securities and Exchange Board of India registeredInfrastructure Investment Trusts (InvIT). This demerger deleverages the balance sheet andestablishes Jio franchise as an asset-light digital services company.
MEDIA AND ENTERTAINMENT
Reliance's flagship media company Network18 Media & Investments Limited continuedon its growth trajectory and invested in key areas to fill whitespaces or fortify itscompetitive position. Focus during the year was on regional content while ad-monetisationwitnessed accelerated growth across broadcasting and digital platforms and genres-newsentertainment and film. Network18 reported revenues of र 5116 crore (growth of 178%y-o-y) and EBIT of र (52) crore on a consolidated basis.
ACQUISITION OF SHARES AND CONTROL OF DEN NETWORKS LIMITED (DEN) AND HATHWAY CABLE ANDDATACOM LIMITED (HATHWAY)
During the year Digital Media Distribution Trust (DMDT) of which Reliance ContentDistribution Limited a wholly-owned subsidiary of the Company is the sole beneficiarythrough six Special Purpose Vehicles (SPVs) owned and controlled by DMDT acquired sharesof and sole control over Den Networks Limited and Hathway Cable and Datacom Limited andalso acquired indirect control over GTPL Hathway Limited and Hathway Bhawani Cabletel andDatacom Limited.
The Company's financial discipline and prudence is reflected in the strong creditratings 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") andInd AS 110-Consolidated Financial Statements read with Ind AS 28 Investments in Associatesand Joint Venture and Ind AS 31-Interests in Joint Ventures the audited consolidatedfinancial 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 Reporthave become or ceased to be Company's subsidiaries joint ventures or associate companies.
A statement providing details of performance and salient features of the financialstatement of Subsidiary/ Associate/ Joint Venture companies as per Section 129(3) of theAct is provided as Annexure A to the consolidated financial statement and therefore notrepeated to avoid duplication.
The audited financial statement including the consolidated financial statement of theCompany and all other documents required to be attached thereto is put up on the Company'swebsite and can be accessed at http://www.ril.com/InvestorRelations/FinancialReporting.aspx. The financial statements of the subsidiaries as required areput 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 duringbusiness hours at the Registered Office of the Company.
The Company has formulated a Policy for determining Material Subsidiaries. The Policyis put up on the Company's website and can be accessed at https://www.ril.com/DownloadFiles/IRStatutory/Material- Subsidiaries.pdf
The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2 relatingto र Meetings of the Board of Directors' and र General Meetings' respectively havebeen 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 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;
b) the Directors have selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2019 and of the profit ofthe Company for the year ended on that date;
c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets 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 theCompany and that such internal financial controls are adequate and are operatingeffectively; and
f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
The Company is committed to maintain the highest standards of Corporate Governance andadhere to the Corporate Governance requirements set out by the Securities and ExchangeBoard of India ("SEBI"). The Company has also implemented several bestgovernance practices. The report on Corporate Governance as stipulated under the ListingRegulations forms part of the Annual Report. The requisite certificate from the Auditorsof the Company confirming compliance with the conditions of Corporate Governance isattached to the report on Corporate Governance.
BUSINESS RESPONSIBILITY REPORT
As stipulated under the Listing Regulations the Business Responsibility Reportdescribing the initiatives taken by the Company from an environmental social andgovernance perspective is attached as a part of the Annual Report.
CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contracts/arrangements/transactions entered by the Company during the financialyear with related parties were in its ordinary course of business and on an arm's lengthbasis. During the year the Company had not entered into anycontract/arrangement/transaction with related parties which could be considered materialin 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 RelatedParty Transactions as approved by the Board is put up on the Company's website and can beaccessed at http://www.ril. com/DownloadFiles/IRStatutory/Policy-on-Materiality-of-RPT.pdf
There were no materially significant related party transactions which could havepotential conflict with interest of the Company at large.
Members may refer Note 31 to the Standalone Financial Statement which sets out relatedparty disclosures pursuant to Ind AS.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
During the year under review the Company has won the Golden Peacock Global Award 2018for the success of its Corporate Social Responsibility initiatives. This is the third timethe Company won the award highlighting its commendable work under CSR ambit. The award isto recognise the transformative work done by Reliance Foundation (RF) the CSR arm of theCompany. The Award instituted by the Institute of Directors (IOD) India in 1991 isregarded as a benchmark of Corporate Excellence worldwide. Under the able leadership ofits Founder and Chairperson Smt. Nita M. Ambani RF has touched the lives of around 26million people across India covering more than 18000 villages and 200 urban locations.
The Corporate Social Responsibility and Governance ("CSR&G") Committeehas formulated and recommended to the Board a Corporate Social Responsibility Policy("CSR Policy") indicating the activities to be undertaken by the Company whichhas been approved by the Board. There has not been any change in the policy during thecurrent 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 corecommitments of Scale Impact and Sustainability.
The Company has identified following focus areas for CSR engagement:
Rural Transformation: Creating sustainable livelihood solutions addressingpoverty hunger and malnutrition including sustainable development of water and landresources diversification of livelihoods and access to knowledge resources throughdigital platforms.
Health: Promoting healthcare across all levels including preventive healthcare and sanitation through improved access awareness and health seeking behaviour.
Education: Setting up of an Institution of Eminence for higher education inthe country access to quality education training and skill enhancement includingemployability enhancing vocational skills among youth.
Sports for Development: Long-term commitment towards development ofgrassroots sports in the country through training mentoring and other developmentprogrammes for the youth.
Disaster Response: Managing and responding to disaster situations throughappropriate relief measures.
Arts Culture and Heritage: Protection and promotion of India's art cultureand heritage.
Environment: Environmental sustainability ecological balance conservationof natural resources and promoting biodiversity.
The Company also undertakes other need-based initiatives in compliance with ScheduleVII to the Act.
During the year the Company spent र 849 crore (around 2.09 % of the average netprofits of last three financial years) on CSR activities.
The annual report on CSR activities is annexed herewith and marked as Annexure III tothis Report.
The Company has an elaborate Group Risk Management Framework which is designed toenable risks to be identified assessed and mitigated appropriately.
The Risk Management Committee of the Company has been entrusted with the responsibilityto 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 andCommercial Safety and Operations Compliance and Control and Financial risks have beenidentified and assessed and there is an adequate risk management infrastructure in placecapable of addressing those risks.
More details on Risk Management indicating development and implementation of RiskManagement policy including identification of elements of risk and their mitigation arecovered in Management's Discussion and Analysis section which forms part of the AnnualReport.
INTERNAL FINANCIAL CONTROLS
Internal Financial Controls are an integrated part of the risk management processaddressing financial and financial reporting risks. The internal financial controls havebeen documented digitised and embedded in the business processes.
Assurance on the effectiveness of internal financial controls is obtained throughmanagement reviews control selfassessment continuous monitoring by functional experts aswell as testing of the internal financial control systems by the internal auditors andstatutory auditors during the course of their audits. The Company believes that thesesystems provide reasonable assurance that Company's internal financial controls aredesigned 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 theCompany Shri P.K. Kapil and Smt. Nita M. Ambani Directors of the Company retire byrotation at the ensuing Annual General Meeting. The Board of Directors on therecommendation 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 valuablecontribution 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 June11 2020. The Board of Directors based on the performance evaluation and as per therecommendation of the HRNR Committee has recommended re-appointment of Shri R.S. Gujralas an Independent Director of the Company for a second term of 5 (five) consecutive yearson the expiry of his current term of office. The Board considers that given hisbackground experience and contributions made by him during his tenure the continuedassociation 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 anIndependent Director effective October 17 2018;
(b) Re-appointed Shri P.M.S. Prasad as Executive Director for a period of five yearseffective August 21 2019; and
(c) Appointed Smt. Savithri Parekh as Joint Company Secretary and Compliance Officereffective March 29 2019.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence prescribed under the Act and theListing 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 athttp://www.ril.com/DownloadFiles/ IRStatutory/Policy-for-Selection-of- Directors.pdf andhttp://www.ril.com/ DownloadFiles/IRStatutory/Remuneration- Policy-for-Directors.pdf
The Policy for selection of Directors and determining Directors' independence sets outthe guiding principles for the HRNR Committee for identifying persons who are qualified tobecome Directors and to determine the independence of Directors in case of theirappointment as Independent Directors of the Company.
The Policy also provides for the factors in evaluating the suitability of individualBoard members with diverse background and experience that are relevant for the Company'soperations.
There has been no major change in the aforesaid policy during the year. The criteria ofindependence number of directorships and committee memberships prescribed in the policyhas been changed to align the policy with the amendment made in this regard in the Act andthe Listing Regulations.
The Remuneration Policy for Directors Key Managerial Personnel and other employeessets out the guiding principles for the HRNR Committee for recommending to the Board theremuneration of the Directors Key Managerial Personnel and other employees of theCompany. There has been no change in the policy during the current year.
The Company has a policy for performance evaluation of the Board Committees and otherindividual Directors (including Independent Directors) which include criteria forperformance evaluation of Nonexecutive Directors and Executive Directors.
In accordance with the manner specified by the HRNR Committee the Board carried outannual performance evaluation of the Board its Committees and Individual Directors. TheIndependent Directors carried out annual performance evaluation of the Chairperson. TheChairman of the respective Committees shared the report on evaluation with the respectiveCommittee members. The performance of each Committee was evaluated by the Board based onreport on evaluation received from respective Committees. A consolidated report was sharedwith 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 OptionSchemes of the Company. No grants have so far been made under Employee Stock OptionScheme-2017. Employee Stock Option Scheme-2006 ("ESOS-2006") has been withdrawnduring the financial year 2017-18. However options granted under ESOS-2006 which are inforce 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 Auditorsof the Company that the schemes are implemented in accordance with the SBEB Regulationsand the resolutions passed by the members. The certificate would be available at theAnnual General Meeting for inspection by members. The details as required to be disclosedunder the SBEB Regulations are put up on the Company's website and can be accessed athttp://www.ril.com/DownloadFiles/ IRStatutory/SEBI-Regulations-2006.pdf andhttp://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 CharteredAccountants were appointed as Auditors of the Company for a term of 5 (five) consecutiveyears at the Annual General Meeting held on July 21 2017. The Auditors have confirmedthat they are not disqualified from continuing as Auditors of the Company.
The Notes on financial statement referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification reservation adverse remark or disclaimer.
(II) COST AUDITORS
The Board has appointed following Cost Accountants as Cost Auditors for conducting theaudit of cost records of products and services of the Company for various segments for thefinancial year 2019-20 under section 148 of the Act read with the Companies (Cost Recordsand 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 CostAuditors.
(III) SECRETARIAL AUDITOR
The Board had appointed Dr. K.R. Chandratre Practising Company Secretary to conductSecretarial Audit for the financial year 2018-19. The Secretarial Audit Report for thefinancial year ended March 31 2019 is annexed herewith and marked as Annexure IV tothis Report. The Secretarial Audit Report does not contain any qualification reservationor adverse remark.
(I) MEETINGS OF THE BOARD
Seven Meetings of the Board of Directors were held during the year. The particulars ofmeetings held and attended by each Director are detailed in the Corporate GovernanceReport.
(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 SinghGujral. During the year all the recommendations made by the Audit Committee were acceptedby the Board.
(III) CORPORATE SOCIAL RESPONSIBILITY AND GOVERNANCE COMMITTEE
The Corporate Social Responsibility and Governance ("CSR&G") Committeecomprises 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 AdilZainulbhai (Chairman) Shri Yogendra P. Trivedi Dr. Raghunath A. Mashelkar Shri RaminderSingh Gujaral and Dr. Shumeet Banerji
(V) VIGIL MECHANISM
The Company has established a robust Vigil Mechanism and a Whistle-blower policy inaccordance with provisions of the Act and Listing Regulations. The Vigil Mechanism issupervised by an र Ethics & Compliance Task Force' comprising a member of the Boardas the Chairperson and senior executives as members.
Protected disclosures can be made by a whistle-blower through an e-mail or dedicatedtelephone line or a letter to the Ethics & Compliance Task Force or to the Chairman ofthe Audit Committee.
The Vigil Mechanism and Whistle-blower policy is put up on the Company's website andcan 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 (PreventionProhibition & Redressal) Act 2013 ("POSH Act") and Rules made thereunderthe Company has formed Internal Complaints Committee for various work places to addresscomplaints pertaining to sexual harassment in accordance with the POSH Act. The Companyhas a policy for prevention of Sexual Harassment which ensures a free and fair enquiryprocess with clear timelines for resolution. To build awareness in this area the Companyhas been conducting online programme on a continuous basis.
(VII) PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEES GIVEN AND SECURITIESPROVIDED
Particulars of loans given investments made guarantees given and securities providedalong with the purpose for which the loan or guarantee or security is proposed to beutilised by the recipient are provided in the Standalone Financial Statement (Please referNote 2 3 6 9 31 and 37 to the Standalone Financial Statement).
The Company has issued on private placement basis and allotted Unsecured RedeemableNon-convertible Debentures (NCDs) aggregating र 19000 crore (paid up to the extent ofर 17000 crore) during the financial year 2018-19. The funds raised through issuance ofNCDs have been utilised for refinancing of existing borrowings and other purpose in theordinary course of business.
(IX) CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed under the Act are provided in AnnexureV to this Report.
(X) ANNUAL RETURN
As required under Section 134(3)(a)of the Act the Annual Return is put up on theCompany's website and can be accessed athttp://www.ril.com/DownloadFiles/IRStatutory/Annual Return 2018-19.pdf andhttp://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 astatement showing the names of top ten employees in terms of remuneration drawn and namesand other particulars of the employees drawing remuneration in excess of the limits setout in the said rules forms part of this Report.
Disclosures relating to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 forms part of this Report.
Having regard to the provisions of the second proviso to Section 136(1) of the Act andas advised the Annual Report excluding the aforesaid information is being sent to themembers of the Company. The said information is available for inspection on all workingdays during business hours at the Registered Office of the Company.
Any member interested in obtaining such information may write to the Company Secretaryand the same will be furnished on request.
Your Directors state that no disclosure or reporting is required in respect of thefollowing matters as there were no transactions on these items during the year underreview:
Details relating to deposits covered under Chapter V of the Act.
Issue of equity shares with differential rights as to dividend voting orotherwise.
Issue of shares (including sweat equity shares) to employees of the Companyunder any scheme save and except Employees' Stock Options Schemes referred to in thisReport.
The Company does not have any scheme of provision of money for the purchase ofits own shares by employees or by trustees for the benefit of employees.
Neither the Managing Director nor the Whole-time Directors of the Companyreceive any remuneration or commission from any of its subsidiaries.
No significant or material orders were passed by the Regulators or Courts orTribunals 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 theInsolvency and Bankruptcy Code 2016.
The Board of Directors wish to place on record its deep sense of appreciation for thecommitted services by all the employees of the Company. The Board of Directors would alsolike to express their sincere appreciation for the assistance and co-operation receivedfrom the financial institutions banks Government authorities customers vendors andmembers 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
DIVIDEND DISTRIBUTION POLICY
The Board of Directors (the "Board") of Reliance Industries Limited (the"Company") at its meeting held on April 24 2017 had adopted this DividendDistribution Policy (the "Policy") as required by Regulation 43A of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 (the "ListingRegulations").
The objective of this Policy is to establish the parameters to be considered by theBoard of Directors of the Company before declaring or recommending dividend.
The Company has had an uninterrupted dividend payout since listing. In future theCompany would endeavour to pay sustainable dividend keeping in view the Company's policyof meeting the longterm growth objectives from internal cash accruals.
CIRCUMSTANCES UNDER WHICH THE SHAREHOLDERS MAY OR MAY NOT EXPECT DIVIDEND
The Board of Directors of the Company while declaring or recommending dividend shallensure compliance with statutory requirements under applicable laws including theprovisions of the Companies Act 2013 and Listing Regulations. The Board of Directorswhile determining the dividend to be declared or recommended shall take into considerationthe advice of the executive management of the Company and the planned and furtherinvestments for growth apart from other parameters set out in this Policy.
The Board of Directors of the Company may not declare or recommend dividend for aparticular period if it is of the view that it would be prudent to conserve capital forthe then ongoing or planned business expansion or other factors which may be considered bythe Board.
PARAMETERS TO BE CONSIDERED BEFORE RECOMMENDING DIVIDEND
The Board of Directors of the Company shall consider the following financial/internalparameters while declaring or recommending dividend to shareholders:
Profits earned during the financial year
Earnings outlook for next three to five years
Expected future capital/liquidity requirements
Any other relevant factors and material events.
The Board of Directors of the Company shall consider the following external parameterswhile declaring or recommending dividend to shareholders:
Macro-economic environment-Significant changes in macro-economic environmentmaterially affecting the businesses in which the Company is engaged in the geographies inwhich the Company operates
Regulatory changes-Introduction of new regulatory requirements or materialchanges in existing taxation or regulatory requirements which significantly affect thebusinesses in which the Company is engaged
Technological changes which necessitate significant new investments in any ofthe businesses in which the Company is engaged.
UTILISATION OF RETAINED EARNINGS
The Company shall endeavor to utilise the retained earnings in a manner which shall bebeneficial to the interests of the Company and also its shareholders.
The Company may utilise the retained earnings for making investments for future growthand expansion plans for the purpose of generating higher returns for the shareholders orfor any other specific purpose as approved by the Board of Directors of the Company.
PARAMETERS THAT SHALL BE ADOPTED WITH REGARD TO VARIOUS CLASSES OF SHARES
The Company has issued only one class of shares viz. equity shares. Parameters fordividend payments in respect of any other class of shares will be as per the respectiveterms of issue and in accordance with the applicable regulations and will be determinedif and when the Company decides to issue other classes of shares.
CONFLICT IN POLICY
In the event of any conflict between this Policy and the provisions contained in theListing Regulations the Regulations shall prevail.
The Board may from time to time make amendments to this Policy to the extent requireddue to change in applicable laws and Listing Regulations or as deemed fit on a review.
For and on behalf of the Board of Directors
Mukesh D. Ambani
Chairman and Managing Director
Mumbai April 18 2019
|Sr. No. ||Name of the Company |
|1. ||C-Square Info Solutions Private Limited |
|2. ||Dronagiri Bokadvira East Infra Limited |
|3. ||Dronagiri Bokadvira North Infra Limited |
|4. ||Dronagiri Bokadvira South Infra Limited |
|5. ||Dronagiri Bokadvira West Infra Limited |
|6. ||Dronagiri Dongri East Infra Limited |
|7. ||Dronagiri Dongri North Infra Limited |
|8. ||Dronagiri Dongri South Infra Limited |
|9. ||Dronagiri Dongri West Infra Limited |
|10. ||Dronagiri Funde East Infra Limited |
|11. ||Dronagiri Funde North Infra Limited |
|12. ||Dronagiri Funde South Infra Limited |
|13. ||Dronagiri Funde West Infra Limited |
|14. ||Dronagiri Navghar East Infra Limited |
|15. ||Dronagiri Navghar North First Infra Limited |
|16. ||Dronagiri Navghar North Infra Limited |
|17. ||Dronagiri Navghar North Second Infra Limited |
|18. ||Dronagiri Navghar South First Infra Limited |
|19. ||Dronagiri Navghar South Infra Limited |
|20. ||Dronagiri Navghar South Second Infra Limited |
|21. ||Dronagiri Navghar West Infra Limited |
|22. ||Dronagiri Pagote East Infra Limited |
|23. ||Dronagiri Pagote North First Infra Limited |
|24. ||Dronagiri Pagote North Infra Limited |
|25. ||Dronagiri Pagote North Second Infra Limited |
|26. ||Dronagiri Pagote South First Infra Limited |
|27. ||Dronagiri Pagote South Infra Limited |
|28. ||Dronagiri Pagote West Infra Limited |
|29. ||Dronagiri Panje East Infra Limited |
|30. ||Dronagiri Panje North Infra Limited |
|31. ||Dronagiri Panje South Infra Limited |
|32. ||Dronagiri Panje West Infra Limited |
|33. ||Genesis Colors Limited |
|34. ||Genesis La Mode Private Limited |
|35. ||Genesis Luxury Fashion Private Limited |
|36. ||GLB Body Care Private Limited |
|37. ||GLF Lifestyle Brands Private Limited |
|38. ||GML India Fashion Private Limited |
|39. ||Grab A Grub Services Private Limited |
|40. ||Indiavidual Learning Private Limited |
|41. ||Jio Estonia OU |
|42. ||Jio Digital Fibre Private Limited |
|43. ||Kalamboli East Infra Limited |
|44. ||Kalamboli North First Infra Limited |
|45. ||Kalamboli North Infra Limited |
|46. ||Kalamboli North Second Infra Limited |
|47. ||Kalamboli North Third Infra Limited |
|48. ||Kalamboli South First Infra Limited |
|49. ||Kalamboli South Infra Limited |
|50. ||Kalamboli West Infra Limited |
|51. ||M Entertainments Private Limited |
|52. ||Mindex 1 Limited |
|53. ||New Emerging World of Journalism Private Limited |
|54. ||Radisys B.V. |
|55. ||Radisys Cayman Limited |
|56. ||Radisys Canada Inc |
|57. ||Radisys Convedia (Ireland) Limited |
|58. ||Radisys Corporation |
|59. ||Radisys GmbH |
|60. ||Radisys India Private Limited |
|61. ||Radisys International LLC |
|62. ||Radisys International Singapore Pte. Ltd |
|63. ||Radisys Poland sp. z.o.o |
|64. ||Radisys Spain S.L.U. |
|65. ||Radisys Systems Equipment Trading (Shanghai) Co. Ltd. |
|66. ||Radisys Technologies (Shenzhen) Co. Ltd. |
|67. ||Radisys UK Limited |
|68. ||Reliance Navi Mumbai Infra Limited |
|69. ||Reverie Language Technologies Private Limited |
|70. ||Rhea Retail Private Limited |
|71. ||Rutvi Project Managers Private Limited |
|72. ||Saavn Inc |
|73. ||Saavn LLC |
|74. ||Saavn Media Private Limited |
|75. ||SankhyaSutra Labs Private Limited |
|76. ||The Indian Film Combine Private Limited |
|77. ||Ulwe East Infra Limited |
|78. ||Ulwe North Infra Limited |
|79. ||Ulwe South Infra Limited |
|80. ||Ulwe Waterfront East Infra Limited |
|81. ||Ulwe Waterfront North Infra Limited |
|82. ||Ulwe Waterfront South Infra Limited |
|83. ||Ulwe Waterfront West Infra Limited |
|84. ||Ulwe West Infra Limited |
2. Companies/Bodies Corporate which ceased to be Subsidiaries during the financial year2018-19:
|Sr. No. ||Name of the Company |
|1. ||Jio Digital Fibre Private Limited |
|2. ||Resolute Land Consortium Projects Limited |
|3. ||RIL Exploration and Production (Myanmar) Limited |
|4. ||Reliance LNG Limited |
|5. ||Reliance Jio Infratel Private Limited |
|6 ||Rutvi Project Managers Private Limited |
|7. ||Santol Commercials Private Limited |
|8. ||Tangerine Agro Private Limited |
3. Companies/Bodies Corporate which have become Joint Ventures or Associates during thefinancial year 2018-19:
|Sr. No. ||Name of the Company |
|1. ||East West Pipeline Limited |
|2. ||Jamnagar Utilities & Power Private |
| ||Limited |
|3. ||Jio Digital Fibre Private Limited |
|4. ||Rutvi Project Managers Private Limited |
4. Companies/Bodies Corporate which ceased to be a Joint Venture or Associate duringthe financial year 2018-19:
|Sr. No. ||Name of the Company |
|1. ||East West Pipeline Limited |
For and on behalf of the Board of Directors
Mukesh D. Ambani
Chairman and Managing Director
Mumbai April 18 2019
Note 1: Andhra Pradesh-East Godavari; Gujarat-Bharuch Jamnagar NavsariSurat; Haryana-Jhajjar; Madhya Pradesh
- Anuppur Shahdol; Maharashtra-Mumbai Palghar Thane.
Note 2: Andhra Pradesh-East Godavari; Gujarat-Bharuch Jamnagar NavsariSurat Vadodara Ahmedabad; Madhya Pradesh-Shahdol; Maharashtra-NagpurRaigad; Uttar Pradesh-Allahabad Barabanki; Punjab-Hoshiarpur
Note 3: Maharashtra-Mumbai Gangakhed Yavatmal; Gujarat-Jasdan Netrang; Telangana-Warangal;Uttarakhand-Dehradun; Madhya Pradesh-Jamai Seoni; Rajasthan
- Banswara Sawai Madhopur; Union Territory-Delhi.
Note 4: Andhra Pradesh-Anantapur Kurnool Vishakhapatnam; Bihar-Patna; Gujarat-Ahmedabad;Jharkhand-Ranchi; Madhya Pradesh-Bhopal; Maharashtra
- Mumbai Nagpur Pune Thane Nashik; Odisha-Bhubneshwar Rajasthan-BhilwaraJaipur; Tamil Nadu-Chennai; Telangana-Karim Nagar Khammam Nizamabad; UttarPradesh-Ghaziabad Lucknow; Uttarakhand-Rudraprayag; West Bengal-Kolkata;Union Territory
- Delhi Chandigarh.
Note 5: Goa-North Goa; Gujarat-Aravalli Banaskantha Bharuch BhavnagarBotad Chhota Udepur Dahod Dang Devbhoomi Dwarka Gandhinagar Gir Somnath JamnagarJunagadh Kheda Kutch Mahisagar Mehsana Morbi Narmada Navsari Panchmahal PatanPorbandar Rajkot Sabarkantha Surat Surendranagar Tapi Vadodara; Haryana-Faridabad;
Karnataka-Bengaluru; Kerela-Kollam; Maharashtra-Mumbai Thane PuneRaigad; Punjab-Amritsar; Rajasthan
- Jaipur; Tamilnadu-Chennai; Union Territory-Delhi Dadra and NagarHaveli Diu and Daman.
Note 6: Andhra Pradesh-Chittoor
East Godavari Guntur Kadapa Krishna Kurnool Prakasam Srikakulam VishakhapatnamVizianagaram West Godavari; Madhya Pradesh-Shahdol; Uttar Pradesh-Anantapur.
Note 7: Gujarat-Gandhinagar; Maharashtra-Mumbai Nagpur; Uttarakhand-Chamoli;Union Territory - Delhi.
Note 8: Maharashtra-Mumbai; Union Territory-Delhi.
Note 9: Kerala-Wayanad Kannur Kozhikode Malappuram Palakad ThirusurErnakulam Allappuzha
IA (1)-Reliance Foundation (RF) a company within the meaning of Section 8 of theCompanies Act 2013 and has a comprehensive approach towards development with an overallaim to create and support meaningful and innovative activities that address some ofIndia's most pressing developmental challenges with the aim of enabling lives living andlivelihood for a stronger and inclusive India.
IA (2)-Reliance Foundation Institution of Education and Research (RFIER) is acompany within meaning of Section 8 of the Companies Act 2013 to promote encouragesupport and assist educational research and medical activities.
IA (3)-Reliance Foundation Youth Sports (RFYS) a company within meaning of Section8 of the Companies Act 2013 has a comprehensive approach towards development of grassrootsports.
"Includes र 475 crore towards contribution to RFIER as Corpus for the proposedUniversity project.
The implementation and monitoring of Corporate Social Responsibility (CSR) Policy isin compliance with CSR objectives and policy of the Company.
|Yogendra P. Trivedi ||Nikhil R. Meswani |
CSR & G Committee
|Executive Director |
|Mumbai April 18 2019 || |