Mar 31, 2023
The Directors present the 19th Annual Report and the audited financial statements for the financial year ended March 31, 2023.
Pursuant to an application filed by Ericsson India Pvt. Ltd before the Hon''ble National Company Law Tribunal, Mumbai Bench ("NCLT" ) in terms of Section 9 of the Insolvency and Bankruptcy Code, 2016 read with the rules and regulations framed thereunder ("Code"), the NCLT had admitted the application and ordered the commencement of Corporate Insolvency Resolution Process ("CIR process" or "CIRP") of Reliance Communications Limited ("Company"/ "RCOM/ "Corporate Debtor") vide its order dated May 15, 2018 ("Admission Order"). The NCLT had, pursuant to the Admission Order, appointed an interim resolution professional ("IRP") of the Company vide its order dated May 18, 2018. In terms of the Admission Order, inter alia, the management of the affairs of the Company was vested with the IRP
Subsequently, the Hon''ble National Company Law Appellate Tribunal ("NCLAT"), while adjudicating upon an appeal preferred against the admission of the insolvency application against the Company, vide its order dated May 30, 2018, inter alia, stayed the Admission Order and allowed the management of the Company to function ("Stay Order"). On April 30, 201 9, the NCLAT, upon allowing the director and shareholder of the Company to withdraw its aforesaid appeal, vacated all interim orders including the Stay Order. The NCLT, vide order May 07, 201 9, directed the IRP to proceed in the CiRP of the Company.
Thereafter, the Committee of Creditors ("CoC") of the Company resolved with the requisite voting share, to replace the IRP with Mr. Anish Niranjan Nanavaty, as the resolution professional of the Company ("RP" or "Resolution Professional"). Subsequently, the Hon''ble NCLT has confirmed Mr. Anish Niranjan Nanavaty as the RP of the Company vide its order dated June 21, 2019, which order was published on June 28, 2019.Accordingly, the management of the Company vests in the RP during the continuance of the CIR process of the Company.
In accordance with the provisions of the Code, various resolution plans in respect of the Company were received by the RP. The CoC of the Company in their meeting held on March 02, 2020, had approved a resolution plan ("Resolution Plan") submitted by UV Asset Reconstruction Company Limited which was subsequently submitted to the NCLT on March 06, 2020 in accordance with Section 30(6) of the Code. The same continues to remain sub-judice with the NCLT.
Financial performance and state of the Company''s affairs
The standalone financial performance of the Company for the year ended March 31, 2023 is summarised below:
Particulars |
Financial Year ended March 31, 2023 |
* Financial Year ended March31,2022 |
||
Rs. in crore |
US$ in million** |
Rs. in crore |
US$ in million** |
|
Total income Gross profit /(Loss) before depreciation, |
340 |
41 |
349 |
46 |
Amortisation and exceptional items Less: |
(64) |
(8) |
(132) |
(18) |
Depreciation and amortization |
116 |
14 |
130 |
17 |
Profit/ (Loss) before Exceptional items and Tax Exceptional items: |
(180) |
(22) |
(262) |
(35) |
(Loss) / Profit on Fair Value of Investments |
- |
- |
- |
- |
Profit/ (Loss) before Tax |
(180) |
(22) |
(262) |
(35) |
Current tax / Excess provision for Tax of earlier years |
- |
- |
- |
- |
Deferred Tax charge/ (credit) |
- |
- |
- |
- |
Profit / (Loss) after tax |
(180) |
(22) |
(262) |
(35) |
Profit / (Loss) after tax from Discontinued Operations Other Comprehensive Income |
(10,381) |
(1,263) |
(5,355) |
(706) |
Re-measurement Gain/ (Loss) of defined benefit plans (Net of tax) |
- |
- |
- |
0 |
Total Comprehensive Income |
(10,561) |
(1,285) |
(5,617) |
(741) |
Add : Balance brought forward from previous year Profit available for appropriation |
(70,021) |
(8,522) |
(64,404) |
(8,497) |
Balance carried to Balance Sheet |
(80,582) |
(9,807) |
(70,021) |
(9,238) |
âFigures of previous year have been regrouped and reclassified, wherever required.
** Exchange Rate '' 82.17 = US$ 1 as on March 31, 2023 ('' 75.793 = US$ 1 as on March 31, 2022).
During the year under review, your Company has earned from Continuing Operations income of '' 340 crore against '' 349 crore in the previous year. The Company has incurred an operational loss of '' 10,561 crore (including loss from discontinuation of wireless business of '' 10,381 crore) and there is a Loss of '' 10,561crore for the year as compared to loss of '' 5,617 crore in the previous year.
The performance and financial position of the subsidiary companies and associate companies are included in the consolidated financial statements of the Company and presented in the Management Discussion and Analysis Report forming part of this Annual Report.
During the year under review, no dividend on the equity shares of the Company has been recommended. The dividend distribution policy of the Company is uploaded on the Company''s website at the link https:/7www.rcom.co.in/our-company/investor-relations/corporate-governance/
Due to losses and ongoing CIR process, the Company has not proposed to carry any amount in reserve.
The Company provides Wireline & Wireless Telecom services to the Business and Government segments. These include a comprehensive portfolio spanning Network Connectivity, Enterprise Voice, Cloud Telephony, Access Number Services, Collaboration Services, Wholesale Voice &Value Added Service (VAS). The Company serves nearly 1,960 businesses of all sizes-from multinational conglomerates to SMEs-belonging to almost every vertical: BFSI, Manufacturing, Logistics, Healthcare, IT & ITeS, OTT and New Media, to name just a few.
Management Discussion and Analysis
Management Discussion and Analysis Report for the year under review as stipulated under Regulation 34(2) of 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 this Annual Report.
Issue and Redemption of Non-Convertible Debentures
The Company has not carried out any fresh issue of NonConvertible Debentures (NCDs) in the current financial year.
NCDs issued during the earlier years matured for final redemption during the financial year 2018-19, but remain unpaid in view of the ongoing CIR Process.
The Company has not accepted any deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 ("Act") and the Companies (Acceptance of Deposits) Rules, 201 4. There are no unclaimed deposits, unclaimed/ unpaid interest, refunds due to the deposit holders or to be deposited with the Investor Education and Protection Fund as on March 31, 2023.
Particulars of Loans, Guarantees or Investments
The Company has complied with provisions of Section 186 of the Act, to the extent applicable with respect to Loans, Guarantees or Investments during the year.
Pursuant to the provisions of Section 186 of the Act, the details of the Investments made by the Company are provided in the standalone financial statements under Notes No. 2.03 and 2.07.
Subsidiary and Associate Companies
During an earlier year, GCX Limited, a step down subsidiary of the Corporate Debtor, along with its subsidiaries/affiliates (collectively, "GCX") had filed for voluntary pre-packaged restructuring under Chapter 11 of the US Bankruptcy Code before Delaware court, USA. Objections were filed on behalf of the Corporate Debtor which were not accepted by the court. The plan filed by GCX had been confirmed by the court on December 04, 2019 ("Plan").
The Plan, as confirmed, provides that the old equity interests in the debtors would be extinguished and the new ownership would pass to the participating Note holders on the "Effective Date" of the Plan. It provided that certain transactions needed to occur and various regulatory approvals needed to be obtained before the debtors would file a Notice of Effective Date (i.e., a notice declaring that, as of the stated date, the Plan had become effective).
Pursuant to the order dated February 25, 2020, the court had granted a motion filed by GCX Limited along with the other debtors aimed at addressing the issues they have been having in completing the steps to make their plan effective inter alia seeking approval for process whereby a bifurcation had been created wherein debtors not requiring regulatory approvals could complete their processes and arrive at effective date, while others could wait for occurrence of their effective date upon fulfillment of regulatory approvals. Accordingly, on April 14, 2020, a notice had been issued intimating occurrence of "Effective Date" of certain "non regulated debtors" while the "Effective Date of the Plan with respect to Debtors GCX Limited, FLAG Telecom Network USA Limited, Reliance Globalcom Limited, and Vanco US, LLC (collectively, the "Regulated Debtors") is expected to occur at a later date". The court confirmed the aforesaid vide order dated April 21, 2020.
A notice of occurrence of Effective Date for the Regulated Debtors dated December 31, 2020 has been issued by counsel to GCX (and served on Corporate Debtor). The said notice inter alia provides that the Effective Date of the Plan for the Regulated Debtors has occurred on December 31, 2020.
In light of the aforesaid development, the Plan having now being effective in respect of the Regulated Debtors and the NonRegulated Debtors, the Corporate Debtor has been divested of its indirect equity interest in GCX and there is no impact on the consolidated financial statements of the Corporate Debtor.
Disclosure as required under Regulation 30 of the SEBI Listing Regulations read with SEBI Circular No. CIR/CFD/CMD/4/2015 dated 09th September 2015 regarding disposal of indirect equity interest in GCX Companies was intimated to the Stock Exchanges.
Pursuant to an application filed by Ericsson India Pvt. Ltd before the Hon''ble NCLT in terms of Section 9 of the Code, the NCLT had admitted the application and ordered the commencement of CIR process of Reliance Telecom Limited, subsidiary company of the Company, vide its order dated May 15, 2018. Mr. Anish Niranjan Nanavaty had been appointed as the resolution professional of Reliance Telecom Limited (RTL).
For RTL, in accordance with the provisions of the Code, various resolution plans were received by the RP The Committee of Creditors (CoC) of RTL, in their meeting held on March 02, 2020, had approved a resolution plan submitted by UV Asset Reconstruction Company Limited, which was subsequently submitted to the NCLT on March 06, 2020 in accordance with Section 30(6) of the Code. The same continues to remain sub-judice with the Hon''ble NCLT.
Pursuant to an application filed by Ericsson India Pvt. Ltd before the Hon''ble NCLT in terms of Section 9 of the Code, the NCLT had admitted the application and ordered the commencement of CIR process of Reliance Infratel Limited, subsidiary company of the Company, vide its order dated May 15, 2018. Mr. Anish Niranjan Nanavaty had been appointed as the resolution professional of Reliance Infratel Limited (RITL).
For RITL, in accordance with the provisions of the Code, various resolution plans were received by the RP. The CoC of RITL, in their meeting held on March 02, 2020, had approved a resolution plan submitted by Reliance Projects & Property Management Services Limited ("RPPMSL") (earlier known as Reliance Digital Platform & Project Services Limited) through its division Infrastructure Projects in respect of RITL which was subsequently submitted to the Hon''ble NCLT in accordance with Section 30(6) of the Code. On December 03, 2020 Hon''ble NCLT pronounced its order approving the resolution plan of RITL ("Plan Approval Order").Upon approval of the resolution plan of RITL, Mr. Anish Niranjan Nanavaty ceased to be the resolution professional of RITL, and RITL was placed under the supervision of a Monitoring Committee constituted under the provisions of the approved resolution plan comprising of two nominees/ representatives of approving financial creditors, two nominees of the Resolution Applicant (RA) and Mr. Anish Niranjan Nanavaty (as the Insolvency Professional).
Considering the pendency of certain inter-creditor disputes in relation to the admission of claims / constitution of the CoC in respect of RITL as well as its impact on the distribution of proceeds under the resolution plan of RITL, RP PMSL being the successful resolution applicant of RITL, had preferred an application before the NCLT bearing I.A No. 3429 of 2022 seeking necessary directions to allow the implementation of the resolution plan approved in respect of RITL, by way of deposit of the plan amount in an escrow account, with the inter se distribution of the resolution plan amounts among financial creditors being subject to the final outcome of the legal proceedings pending before the Supreme Court concerning the status of financial creditors. The financial creditors of RITL did not have any objection to the aforesaid, provided that the distribution of the resolution plan amounts amongst the financial creditors will be subject to the outcome of the legal proceedings pending
before the Supreme Court concerning the status of financial creditors. The Hon''ble NCLT vide order dated November 21,2022 ("Nov 21 Order") permitted the Resolution Applicant to proceed with implementation of the resolution plan and depositing the total value of the resolution plan, in an escrow account to be opened with State Bank of India. The relevant excerpts of the Nov 21 Order are set out below:
"Accordingly, this Bench is of the view that an Escrow Account should be permitted to be opened in the State Bank of India, and the total value of the Resolution Plan should be deposited in that account. Further, the distribution of the amount so deposited in the Escrow account shall be in terms of the order passed by the Hon''ble Apex Court and after obtainingpermission/orders from this Bench."
Further, the Hon''ble Supreme Court has vide order dated November 30, 2022 inter alia directed that the amounts payable in terms of the resolution plan be deposited in an escrow account to be opened with State Bank of India (i.e., the account bank herein) in terms of the Nov 21 Order with no distributions from the said account till the next date of hearing. The relevant excerpts in relation to the order dated November 30, 2022, are set out below:
"In the meanwhile, we direct that the proponent will deposit the amount/money payable in an escrow account to be opened in the State Bank of India in terms of the order dated 21.11.2022 passed by the National Company Law Appellate Tribunal Court-I, Mumbai Bench, Maharashtra"
Accordingly, in pursuance of the above and in compliance with the Nov 21 Order, an escrow agreement dated December 22, 2022 was executed between RITL, representative of financial creditors State Bank of India and China Development Bank, RPPMSL, Mr. Anish Nanavaty (as authorised signatory) and State Bank of India (as account bank) for purposes of recording the terms governing the escrow account set up in accordance with the Nov 21 Order. In pursuance of the same, the Resolution Applicant deposited the relevant resolution plan proceeds into the escrow account, with the understanding, that the same shall be distributed to the relevant creditors and other stakeholders basis further directions from the relevant judicial authorities.
With the completion of the aforesaid actions, the resolution plan for RITL stood implemented on December 22, 2022 in terms of the order of the NCLT order dated December 03, 2020 read together with the order dated November 21, 2022, and the Monitoring Committee of RITL has stood dissolved and RPPMSL has acquired the ownership and control of RITL in terms of the approved resolution plan of RITL, and accordingly, RITL has ceased to be a subsidiary of Reliance Communications Limited with effect from December 22, 2022.
Reliance Communications Infrastructure Limited:
Further, pursuant to an application filed by State Bank of India under Section 7 of the Code, the Hon''ble NCLT vide order dated September 25, 201 9, had ordered the commencement of CIR process in terms of the Code in respect of Reliance Communications Infrastructure Limited (RCIL), a wholly owned subsidiary of the Company and had appointed Mr. Anish Niranjan Nanavaty as the resolution professional of Reliance Communications Infrastructure Limited. RCIL continues to be under the CIRP. A resolution
plan submitted for the RCIL by a resolution applicant, Reliance Projects and Property Management Services Limited, had been approved by the COC pursuant to the meeting dated August 05, 2021 and in this regard, an application had been filed by the RP under Section 30(6) of the Code on August 31, 2021, the same continues to remain sub-judice with the Hon''ble NCLT.
Reliance Tech Services Limited:
During earlier year ended March 31, 2021, Reliance Tech Services Limited (RTSL), a wholly owned subsidiary of the Corporate Debtor, had been admitted by NCLT on August 04, 2020 for corporate insolvency resolution process under the Code and Mr. Anjan Bhattacharya had been appointed as the Interim Resolution Professional (IRP) and subsequently as the Resolution Professional (RP) by the Hon''ble NCLT. During the previous year, the resolution professional of RTSL had filed an application with NCLT on May 04, 2021 for initiation of liquidation proceedings in respect of RTSL. During the year under review, NCLT vide order dated March 03, 2023 has ordered the liquidation of RTSL and appointed Mr. Ashok Mittal as Liquidator. Further, since there are no fixed assets, ongoing operations, or any employees in RTSL, therefore RTSL may not be capable of being liquidated as a going concern in terms of the Code, and accordingly, RTSL has been de-subsidiarised from the Company with effect from March 03, 2023 for the purpose of and as per requirement of IndAS 110 "Consolidated Financial Statement".
During the year, the Company received a notice from Axis Trustee Services Limited ("Axis Trustee" / "Security Trustee") on November 09, 2022 regarding invocation cum sale of pledged shares of Globalcom IDC Limited ("GIDC"). Thereafter, the Company received a notice of invocation of pledge over such shares from Axis Trustee on December 14, 2022. As a matter of background, it may be noted that Reliance Webstore Limited (RWSL) is a wholly owned subsidiary of RCOM, holding 100% of equity shares in GIDC. Accordingly, GIDC was a wholly owned step-down subsidiary of RCOM. Vide facilities agreement dated August 29, 2016, RCOM and RITL had availed a loan facility of '' 565 Crore and '' 635 Crore respectively from State Bank of India ("Lender"). Vide share pledge agreement dated September 23, 201 6, RWSL had pledged 100% of its shareholding in GIDC comprising 20,99,994 equity shares to Axis Trustee (in its capacity as a security trustee for the Lender (State Bank of India)) for above loan facility. Owing to defaults in the repayment of the facilities availed by RCOM and RITL, Axis Trustee first proceeded to issue a notice for the invocation cum sale of pledged shares on November 09, 2022, and thereafter, invoked the pledge on December 1 2, 2022.
On account of said invocation, the Parent Company does not have any control over GIDC. Accordingly, during the previous quarter, GIDC has been de-subsidiarised from RCOM w.e.f. December 12, 2022, during the year ended March 31, 2023.
The summary of the performance and financial position of the each of the subsidiary and associate companies are presented in Form AOC - 1 and in Management Discussion and Analysis Report forming part of the Annual Report. Also, a report on the performance and financial position of each of the subsidiary companies and associate companies as per the Act is provided in the consolidated financial statements.
The Policy for determining material subsidiary companies can be accessed on the Company''s website at the link https:// www.rcom.co.in/our-company/investor-relations/corporate-governance/
Standalone and Consolidated Financial Statements
The audited financial statements of the Company are drawn up, both on standalone and consolidated basis, for the financial year ended March 31, 2023, in accordance with the requirements of the Companies (Indian Accounting Standard) Rules, 2015 (Ind AS) notified under Section 1 33 of the Act, read with relevant rules and other accounting principles. The Consolidated Financial Statements has been prepared in accordance with Ind-AS and relevant provisions of the Act based on the financial statements received from subsidiaries, associates as approved by their respective Board of Directors.
As Reliance Telecom Limited, and Reliance Communications Infrastructure Limited, subsidiaries of the Company are under CIR Process, financial statements of these companies are approved and received from these companies and accordingly the Consolidated Financial Statements are prepared.
During the year under review, there was no change in Directors of the Company.
The members are requested to note that in FY 2019-20, Shri Anil D Ambani, Smt. Chhaya Virani and Smt. Manjari Kacker had resigned with effect from 1 5th November, 201 9; Smt. Ryna Karani has resigned with effect from 14th November, 2019 and Shri Suresh Rangachar had resigned with effect from 13th November, 201 9 as Directors of the Company. Certain directors being Shri Anil D Ambani, Shri Suresh Rangachar and Smt. Manjari Kacker also filed their respective DIR-11 forms with the Registrar of Companies. The aforementioned resignations were put up to the CoC of the Company for their consideration in accordance with Section 28(1)(j) of the Code. However, CoC of the Company at its meeting held on November 20, 2019 considered the resignations tendered by the above directors and expressed a unanimous view that the resignations cannot be accepted and instructed the Resolution Professional to convey to the directors to continue with their duties and responsibilities as directors and provide all cooperation in the Corporate Insolvency Resolution Process, at least until the completion of the Corporate Insolvency Resolution Process of the Company.
In light of the above, it was duly communicated to the aforesaid directors of the Company that their resignations have not been accepted and they are advised to continue to perform their duties and responsibilities as the directors of the Company and provide all cooperation to Resolution Professional in the CIR process.
Further, the RP has filed an application with the Hon''ble National Company Law Tribunal, Mumbai bench ("NCLT"), praying to the NCLT to direct Shri Anil D. Ambani and Shri Suresh Rangachar to continue as directors on the board of the Company and accordingly, declare the resignations tendered by them as null and void. This matter is currently sub-judice before Hon''ble NCLT.
Accordingly, Shri Anil D Ambani, Smt. Chhaya Virani, Smt. Manjari Kacker, Smt. Ryna Karani and Shri Suresh Rangachar continue to be on the composition of the Board of Directors and the respective committees of the Company.
Due to abovementioned events, Company has not received necessary annual disclosures as required under section 164(2) and Section 184(1) of the Companies Act, 2013 from Shri Anil D Ambani, Smt. Chhaya Virani, Smt. Ryna Karani, Smt. Manjari Kacker and Shri Suresh Rangachar, Directors of the Company.
In terms of the provisions of the Companies Act, 2013, Shri Vishwanath Devaraja Rao Executive - Non Independent Director of the Company retires by rotation and being eligible, offers himself for re-appointment at the ensuing AGM.
A brief profile of Shri Vishwanath Devaraja Rao along with requisite details as stipulated under Regulation 36(3) of the Listing Regulations are provided in this Annual Report.
The details of programme for familiarization of Independent Directors with the Company, nature of the industry in which the Company operates and related matters are placed on the website of the Company at the link https://www.rcom.co.in/our-company/investor-relations/corporate-governance/
During the year under review, there was no change in the Key Managerial Personnel of the Company.
Evaluation of Directors, Board and Committee:
The Company is under corporate insolvency resolution process pursuant to the provisions of the Insolvency and Bankruptcy Code, 2016. With effect from June 28, 201 9, its affairs, business and assets are being managed by, and the powers of the board of directors are vested in the Resolution Professional, Mr. Anish Niranjan Nanavaty, appointed by Hon''ble National Company Law Tribunal, Mumbai Bench.
Hence, no formal annual evaluation has been done for the Directors performance and that of the Committees and individual directors as required under the provisions of Section 134 read with Rule 8 (4) of the Companies (Accounts) Rules, 2014.
Policy on appointment and remuneration for Directors, Key Managerial Personnel and Senior Management Employees
The Nomination and Remuneration Committee of the Board has devised a policy for selection, appointment and remuneration of Directors, Key Managerial Personnel and Senior Management Employees. The Committee has also formulated the criteria for determining qualifications, positive attributes and independence of a Director, which has been put up on the Company''s website at https://www.rcom.co.in/our-company/investor-relations/corporate-governance/
Currently, as the Company is under CIR Process, the approval of CoC is necessary for the appointment and remuneration of Directors and Key Managerial personnel of the Company.
Directors'' Responsibility Statement
Pursuant to the requirements under Section 134(5) of the Act with respect to Directors'' Responsibility Statement, it is hereby confirmed that:
i In preparation of the annual accounts for the financial year ended March 31, 2023, the applicable Accounting Standards had been followed along with proper explanation relating to material departures, if any;
ii The Directors had 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 on March 31, 2023 and of the profit/loss of the Company for the year ended on that date;
iii The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv The Directors had prepared the annual financial statements for the financial year ended March 31, 2023 on a ''going concern basis'';
v The Directors had laid down internal financial controls to be followed by the Company and such financial controls are adequate and are operating effectively, and
vi The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
Note: Since the Company is under CIR Process, the management of the affairs of the Company is vested with Resolution Professional and the Directors of the Company are required to continue performing their duties and roles and extend necessary cooperation and support to the RP. Accordingly, the above mentioned duties and responsibility of Directors have been performed by directors under the overall supervision/direction of RP of the Company.
Contracts and Arrangements with Related Parties
All contracts / arrangements / transactions entered into by the Company during the financial year under review with related parties were on an arm''s length basis and in the ordinary course of business. There were no materially significant related party transactions made by the Company with its Promoters, Directors, Key Managerial Personnel or other designated persons, which may have a potential conflict with the interest of the Company at large.
During the year under review, the Company has not entered in to any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of Company on materiality of related party transactions.
During the year under review, as the Company is under CIR Process, in terms of Section 28(1)(f) of the Code, approval of the CoC was taken for all new related party transactions in CoC meeting(s).
The new transactions entered into were reviewed and statements giving details of all new related party transactions were placed before the Audit Committee on a quarterly basis.
The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website at the link https://www.rcom.co.in/our-company/investor-relations/ corporate-governance/. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company.
During the year under review, there are no transactions entered by the Company with persons / entities as mentioned in Regulation 34 (3), 53 (f) and in Part A, Part 2A of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Material Changes and Commitments, if any, affecting the financial position of the Company
Except as disclosed in this report, there were no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year and the date of this report.
A calendar of Meetings is prepared and circulated in advance to the Directors. During the financial year ended March 31, 2023, the Directors held 4 meetings on May 28 , 2022, August 12, 2022, November 12, 2022, and February 14, 2023. The maximum gap between two meetings of Directors was 93 days and minimum gap between two meetings of Directors was 75 days.
The additional details about aforesaid meetings are given in the Corporate Governance Report forming part of this report.
Audit Committee
During the year under review, there was no change in the composition of the Audit Committee of the Company.
The Audit Committee of the Directors consists of Independent Directors namely Smt. Manjari Kacker, Chairperson, Smt. Ryna Karani, Smt. Chhaya Virani and Non Independent Directors, Shri Punit Garg, Shri Vishwanath Devaraja Rao, as members.
During the year, all the recommendations made by the Audit Committee were accepted by the Directors and noted and taken on record by the RP of the Company.
Auditors and Auditors'' Report
At the 17th Annual General Meeting (AGM) of the Company held on September 25, 2021, M/s. Pathak H.D. & Associates LLP, Chartered Accountants were appointed as the statutory auditors of the Company to hold office for a term of 5 consecutive years until the conclusion of the 22nd AGM of the Company. Pursuant to the provisions of Section 139 of the Act and the Companies (Audit and Auditors) Rules, 2014, M/s. Pathak H.D. & Associates LLP, Chartered Accountants, the Statutory Auditors of the Company have been appointed as Auditors for a term of 5 consecutive years.
The Auditors in their report to the members have given a qualified opinion and the response of the Company with respect to it is as follows:
Qualifications in present audit report (if any)
The observations and comments given by the Auditors in their report read together with notes on financial statements are self explanatory particularly Note No. 2.14, 2.31, 2.47, 2.48 & 2.53 (standalone financials) and Note No. 2.1 6, 2.36, 2.40, 2.51, 2.52 &, 2.59 (consolidated financials) and hence the same to be treated as explanation provided under Section 134 of the Act.
The audited financial statements are drawn up both on standalone and consolidated basis for the financial year ended March 31, 2023, in accordance with the requirements of the Ind-AS Rules.
As per the provisions of Clause (ca) of Sub-section (3) of Section 134 of the Act, the auditors of the Company have not reported any fraud under sub-section (12) of Section 143 of the Act.
Pursuant to the provisions of the Act and the Companies (Cost Records and Audit) Rules, 2014, the Resolution Professional on the recommendation of directors, have appointed M/s N. Ritesh and Associates, Cost Accountants, as the Cost Auditors to conduct cost audit for the telecommunications businesses of the Company for the financial year ending March 31, 2024 and their remuneration is subject to ratification by the Members at the ensuing Annual General Meeting of the Company.
The Provisions of Section 148(1) of the Act are applicable to the Company and accordingly the Company has maintained cost accounts and records in respect of the applicable products for the year ended March 31, 2023.
Secretarial Standards
During the year under review, the Company has complied with the applicable Secretarial Standards issued by The Institute of Company Secretaries of India.
Secretarial Audit & Secretarial Compliance Report
Pursuant to the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Resolution Professional on the recommendation of Directors in the meeting held on May 28, 2022 had appointed M/s. Ashita Kaul & Associates, Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is attached herewith as Annexure A.
Pursuant to Regulation 24A of the Listing Regulations, the Company has obtained Annual Secretarial Compliance Report from M/s. Ashita Kaul & Associates, Company Secretaries in Practice (PCS) on compliance of all applicable SEBI Regulations and circulars/ guidelines issued there under and the copy of the same shall be submitted with the Stock Exchanges within the prescribed due date.
The observations and comments given by the Secretarial Auditor in their Report are self-explanatory and hence do not call for any further comments under Section 134 of the Act.
As required under Section 1 34(3)(a) of the Act, the Annual Return for the financial year 2022-23 is put up on the Company''s website and can be accessed at https://www.rcom.co.in/our-company/investor-relations/annual-return/
Particulars of Employees and related disclosures
Pursuant to the provisions of second proviso to Section 136(1) of the Act, the Annual Report, excluding the information required under Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (the Rules), as amended, is being sent
to all the members of the Company and others entitled thereto. Any member interested in obtaining the same may write to the Company Secretary and the same will be furnished on request.
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
As the Company does not carry on any manufacturing activity, being a telecommunications service provider, most of the information of the Company as required under Section 134(3) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 are not applicable. However, the information as applicable has been given in the Annexure B forming part of this Report.
Corporate Governance
The Company has adopted the "Reliance Group-Corporate Governance Policies and Code of Conduct" which sets out the systems, process and policies confirming to the international standards. The report on Corporate Governance as stipulated under Regulation 34(3) read with Para C of Schedule V of the Listing Regulations is presented in separate section forming part of this Annual Report.
A Certificate from, M/s. Ashita Kaul & Associates, Practicing Company Secretaries, confirming compliance to the conditions of Corporate Governance as stipulated under Para E of Schedule V of the Listing Regulations, is enclosed to this Report.
Whistle Blower Policy (Vigil Mechanism)
In accordance with Section 177 of the Act and the Listing Regulations, The Company has formulated an Vigil Mechanism to address the genuine concern, if any, of the directors and employees. The details of the same have been stated in the Report on Corporate Governance and the policy can also be accessed on the Company''s website at https://www.rcom.co.in/ our-company/investor-relations/corporate-governance/
Risk Management
The Board of the Company had constituted a Risk Management Committee in their meeting held on 14th November, 2014 consisting of majority of directors and senior managerial personnel of the Company; however, due to ongoing corporate insolvency resolution process ("CIR process"), provisions of Regulation 21 of Listing Regulations are not applicable to the Company. The Board of Directors of the Company has previously dissolved the Risk Management Committee in its meeting held on November 03, 2018. The Audit Committee of Directors looks after the functions of the Risk Management Committee.
The Company is currently under CIR process pursuant to the provisions of the Insolvency and Bankruptcy Code, 2016 and considering these developments including, in particular, the respective Resolution Professionals having taken over the management and control of the Company and its subsidiaries (Group) which are under CIR process inter alia with the objective of running them as going concerns. The Company continues to incur loss, current liabilities exceed current assets and the Group has defaulted in repayment of borrowings, payment of regulatory and statutory dues. The Auditors have drawn qualification in their Audit Report for the year ended March 31, 2023 that these events indicate material uncertainty on the Group''s ability to continue as a going concern.
Further, the Company has a robust Business Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhances Company''s competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting.
The risk framework has different risk models which helps in identifying risks trend, exposure and potential impact analysis at a Company level as also separately for business segments.
Compliance with provisions of Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company is committed to uphold and maintain the dignity of women employees and it has in place a policy which provides for protection against sexual harassment of women at work place and for prevention and redressal of such complaints. During the year no such complaint was received. The Company has also constituted an Internal Compliance Committee under the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013.
Corporate Social Responsibility
The Company has constituted Corporate Social Responsibility Committee in compliance with the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules 2014. The Corporate Social Responsibility Committee has formulated a Corporate Social Responsibility Policy (CSR policy) indicating the activities to be undertaken by the Company. However, Section 135 of the Companies Act, 2013 and rules made there under are not applicable to the Company for the financial year 2023.
The CSR policy may be accessed on the Company''s website at the link; https://www.rcom.co.in/our-company/investor-relations/corporate-governance/
The CSR Committee as on March 31, 2023, comprised Smt. Manjari Kacker as Chairperson and Shri Punit Garg, Shri Vishwanath Devaraja Rao, Smt. Ryna Karani and Smt. Chhaya Virani as members.
Orders, if any, passed by Regulators or Courts or Tribunals
Except as disclosed in this report, no orders have been passed by the Regulators or Courts or Tribunals impacting the going concern status and the Company''s operation.
Internal Financial Controls and their adequacy
The Company has in place adequate internal financial controls across the organization. The same is subject to review periodically by the Internal Audit Cell and by the Audit Committee for its effectiveness. Except as disclosed in auditors report, during the year under review, such controls were tested and no further reportable material weaknesses in the design or operation were observed.
Business Responsibility and Sustainability Report
Business Responsibility and Sustainability Report is not applicable to the Company pursuant to the regulation 34(2)(f) of SEBI''s (Listing Obligations and Disclosure Requirements) Regulations, 2015
Proceedings under the Insolvency and Bankruptcy Code, 2016
The Company is under Corporate Insolvency Resolution Process pursuant to the provisions of the Insolvency and Bankruptcy Code, 2016. Various resolution plans in respect of the Company were received by the Resolution Professional of the Company. The Committee of Creditors ("COC") of the Company in their meeting held on March 02, 2020, had approved a resolution plan submitted by UV Asset Reconstruction Company Limited which was subsequently submitted to the NCLT on March 06, 2020 in accordance with Section 30(6) of the Code. The same continues to remain sub-judice with the NCLT. The detailed background of the proceeding is provided at the beginning of this report.
General
Except as disclosed in this report, during the year under review, there were no reportable event in relation to issue of equity shares with differential right as to dividend, voting or otherwise, issue of sweat equity shares to Director or Employee and one time settlement with any bank or financial institution.
Your Directors express their sincere appreciation for the co-operation and assistance received from Shareholders, Debenture Holders, Bankers, Financial Institutions, Regulatory Bodies, government Authorities, debenture trustee, customers and other business constituents during the year under review. The Directors express their sincere thanks to the Resolution Professional and Committee of Creditors of the Company for continuous support during the year. Your Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers and staff and look forward to their continued support in future.
Mar 31, 2018
Dear Shareowners,
The Directors present the 14th Annual Report and the audited financial statement for the financial year ended March 31, 2018.
Financial results
The financial results of the Company for the year ended March 31, 2018 is summarised below:
Particulars |
Financial Year ended March 31, 2018 |
* Financial Year ended March 31, 2017 |
||
Rs. in crore |
US$ in million** |
Rs. in crore |
US$ in million** |
|
Total income |
2,231 |
342 |
3,537 |
545 |
Gross profit /(Loss) before depreciation, amortisation and |
264 |
41 |
347 |
54 |
exceptional items |
||||
Less: |
||||
Depreciation and amortization |
200 |
31 |
216 |
33 |
Profit/ (Loss) before Tax |
64 |
10 |
131 |
21 |
Less: Provision for: |
||||
Current tax / Excess provision for Tax of earlier years |
1 |
0.15 |
- |
- |
Deferred Tax charge/ (credit) |
- |
- |
(94) |
(14) |
Profit / (Loss) after tax |
63 |
10 |
225 |
35 |
Profit / (Loss) after tax from Discontinued Operations |
(9,933) |
(1,524) |
(2,021) |
(312) |
Other Comprehensive Income |
||||
Re-measurement Gain/ (Loss) of defined benefit plans (Net of tax) |
3 |
0.46 |
(1) |
(0.15) |
Total Comprehensive Income |
(9,867) |
(1,514) |
(1,797) |
(277) |
Add : Balance brought forward from previous year |
(7,163) |
(1,099) |
(5,366) |
(827) |
Profit available for appropriation |
- |
- |
- |
- |
Balance carried to Balance Sheet |
(17,030) |
(2,613) |
(7,163) |
(1,104) |
âFigures of previous year have been regrouped and reclassified, wherever required.
** Exchange Rate Rs.65.1 75 = US$ 1 as on March 31, 2018 (Rs.64.85 = US$ 1 as on March 31, 2017).
Financial Performance
During the year under review, your Company has earned income of Rs.2,231 crore against Rs.3,537 crore in the previous year. The Company has incurred a loss of Rs.9,867 crore (including loss from discontinuation of wireless business of Rs.9933 crore) for the year as compared to loss of Rs.1,797 crore in the previous year. The performance and financial position of the subsidiary companies and associate companies are included in the consolidated financial statement of the Company and presented in the Management Discussion and Analysis Report forming part of this Annual Report.
Dividend
During the year under review, the Board of Directors has not recommended dividend on the equity shares of the Company. The Dividend Distribution Policy of the Company is annexed herewith as Annexure A to this Report.
Business Operations
The Company together with its subsidiary Global Cloud Xchange Limited (GCX), is a leading global communications services provider with businesses including a vast global subsea network; a global on-net Cloud ecosystem; extensive India and global enterprise business; India Data Center Business (IDC) and India National Long Distance Business (NLD).
The Company specializes in Enterprise telecommunications service provider and is at the forefront of enabling digital revolution across India and globally, with focus on the Emerging Markets of Asia Pacific and the Middle East. The Company continues to build on its global platform designed to power the future digital ecosystem. Based on one of the most extensive subsea and terrestrial fiber optic networks in the world and a global services platform, the Company is putting together the very fabric that will deliver the next generation of applications and services to Enterprises, Carriers, OTTs and government entities.
Scheme of Arrangements
1. Sistema Shyam Teleservices Limited
The Board of Directors of the Company at its meeting held on October 31 , 201 7 took on record the Orders of Honâble High Courts for demerger of Indian Telecom business of Sistema Shyam Teleservices Ltd (SSTL) into the Company and allotted 10% equity of the Company to SSTL, as per Scheme. Under the terms of the agreement entered into between the Company and SSTL, the Company acquired the telecommunications business of SSTL including its licenses. In addition, the Company acquired 30 MHz of the most valuable and superior 800 / 850 MHz band spectrum, ideally suited for 4G LTE services and other evolving technologies. This resulted in extension of the validity of Companyâs spectrum portfolio in the 800 / 850 MHz band in eight important Circles (Delhi, Gujarat, Tamil Nadu, Karnataka, Kerala, Kolkata, UP-West and West Bengal) by a period of 12 years, i.e. from 2021 to 2033.
2. Reliance Telecom Limited
The Board had approved the Scheme of Arrangement for demerger of Wireless Undertaking of Reliance Telecom Limited, a wholly owned subsidiary company, into the Company on June 24, 201 6. The Honâble High Court of Judicature at Bombay had sanctioned the said Scheme on October 27, 2016. The Company has applied to the Department of Telecommunications (DoT) for its approval to the Scheme, which is condition precedent before giving effect to the Scheme. The Scheme would be made effective upon receiving the approval of the DoT.
3. Demerger of Wireless undertaking to Aircel Group
The Board had approved the demerger and transfer of Wireless Business including the investments held by the Company in its subsidiary companies to Aircel Limited and Dishnet Wireless Limited by way of Scheme of Arrangement (Scheme) on September 14, 2016. In view of legal and regulatory uncertainties which caused inordinate delay in receipt of relevant approvals for the Scheme, the parties to the merger agreement agreed to lapse Scheme and accordingly withdrawn the Scheme from National Company Law Tribunal in October, 2017.
Debt Restructuring Plan and Asset Monetisation
As reported in previous year, the lenders of the Company and its subsidiaries namely Reliance Telecom Limited and Reliance Infratel Limited (RCom Group) at their meeting held on June 2, 2017 constituted a Joint Lenders Forum (âJLFâ) with State Bank of India as the Convener, and invoked the SDR Scheme for RCom Group, in accordance with the then guidelines issued by RBI.
RCom Group has taken several significant and constructive steps to reduce debt and liabilities and improve the long-term sustainability. RCom Group has worked closely with all the Lenders and their advisors to run a competitive process in a transparent manner, to monetize the wireless spectrum, towers, fiber, media convergence nodes (MCNs), real estate assets and other asset(s)/undertaking(s) including development of prime real estate asset situated at Navi Mumbai.
The Company expects the transactions to close in a phased manner by last quarter of 2018. The proceeds comprise primarily of cash payment and include transfer of deferred spectrum installments payable to the Department of Telecommunication (DoT). The Company will utilise the proceeds of the monetisation of this cash deal solely for pre-payment of debt to its lenders.
Post success of proposed asset monetization, your Companyâs continuing operations will comprise of stable and profitable B2B focused businesses, including Indian and Global Enterprise, Internet Data Centres and the largest private subsea cable network in the world.
During the year under review, Honâble National Company Law Tribunal (NCLT), Mumbai had, overruled the objections of the Company and lenders represented by State Bank of India as lead member, vide its order dated May 15, 2018 and admitted applications filed by an operational creditor for its claims against the Company and its subsidiaries - Reliance Telecom Limited (RTL) and Reliance Infratel Limited (RITL), thereby admitting the Company, RTL and RITL to debt resolution process under the Insolvency and Bankruptcy Code, 2016 (IBC). As a consequence, Interim Resolution Professionals (IRPs) were appointed in the Company, RTL and RITL vide NCLTâs orders dated May 18, 2018. The Company along with the lenders filed an appeal before Honâble National Company Law Appellate Tribunal (NCLAT) challenging the orders of NCLT admitting the Company to IBC proceedings. The Honâble NCLAT, vide its order dated May 30, 2018, stayed the order passed by NCLT and consequently, the Board stands reinstated.
Management Discussion and Analysis
Management Discussion and Analysis Report for the year under review as stipulated under Regulation 34(2)(e) of 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 this Annual Report.
Non Convertible Debentures
During the year under review, the Company has not issued any Non-Convertible Debentures.
Deposits
The Company has never accepted any deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 (âthe Actâ) and the Companies (Acceptance of Deposits) Rules, 2014.
Particulars of Investments
Pursuant to the provisions of Section 186 of the Act, the details of the Investments made by the Company are provided in the unabridged standalone financial statement under Notes No. 2.03 and 2.08.
Subsidiary and Associate Companies
The performance and financial position of the major subsidiary companies are presented in Management Discussion and Analysis Report forming part of this Annual Report. Also, a report on the performance and financial position of each of the subsidiary companies and associate companies as per the Act is provided in the consolidated financial statement. The Policy for determining material subsidiary companies can be accessed on the Companyâs website at the link http://www.rcom.co.in/Rcom/about-us/ investor-relations/corporate-governance.html.
Consolidated Financial Statement
The Audited Consolidated Financial Statement for the financial year ended March 31, 2018, incorporating the results of the operations of all subsidiary companies and associate companies, have been prepared in accordance with Indian Accounting Standard (Ind AS) - 110 on âConsolidated Financial Statementâ read with Ind AS-28 on âInvestments in Associates and Joint Venturesâ, notified under the Act, read with the Accounting Standards Rules as applicable and same is in compliance with the Companies Act, 2013.
Directors
During the year under review, the Board of Directors have appointed Smt. Chhaya Virani and Smt. Ryna Karani as Independent Directors w.e.f. November 11, 2017. The Company has also appointed Shri Manikantan V., Chief Financial Officer (CFO) and Shri Suresh Rangachar as Directors of the Company w.e.f October 2, 2017 and November 11, 2017 respectively, liable to retire by rotation. Shri Punit Garg, President, Telecom Business has been appointed as an Executive Director of the Company w.e.f October 2, 201 7. The Board of Directors at their meeting held on July 18, 2018 has proposed Smt. Manjari Kacker, Non Independent Director for appointment as an Independent Director of the Company based on her fulfilling criteria of independence as provided under Section 149(6) of the Act.
In terms of the provisions of the Companies Act, 2013, no director of the Company retires by rotation at the ensuing AGM.
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the Act and Listing Regulations.
The details of programme for familiarization of Independent Directors with the Company, nature of the industry in which the Company operates and related matters are placed on the website of the Company at the link http://www.rcom.co.in/Rcom/ about-us/investor-relations/corporate-governance.html.
Key Managerial Personnel
During the year under review, Shri Punit Garg, President Telecom Business was appointed as the Executive Director and Shri Manikantan V, CFO was elevated and appointed as Director and CFO of the Company. Shri Prakash Shenoy, Company Secretary ceased as Manager of the Company w.e.f. October 18, 2017.
Evaluation of Directors, Board and Committees
The Company has devised a policy for performance evaluation of the individual directors, Board and its Committees, which includes criteria for performance evaluation. Pursuant to the provisions of the Act and Regulation 17(10) of Listing Regulations, the Board has carried out an annual performance evaluation of its own performance, the individual directors as well as the evaluation of working of the Committees of the Board. The Board performance was evaluated based on inputs received from all the Directors after considering criteria such as Board composition and structure, effectiveness of processes and information provided to the Board etc. A separate meeting of the Independent Directors was also held during the year for evaluation of the performance of non-independent Directors, performance of the Board as a whole and that of the Chairman.
The Nomination and Remuneration Committee has also reviewed the performance of the individual directors based on their knowledge, level of preparation and effective participation in Meetings, understanding of their roles as directors etc.
Policy on appointment and remuneration for Directors, Key Managerial Personnel and Senior Management Employees
The Nomination and Remuneration Committee of the Board has devised a policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management Employees and their Remuneration. The Committee has formulated the criteria for determining qualifications, positive attributes and independence of a Director, which has been placed on the Companyâs website. The policy on the above is attached as Annexure B.
Directorsâ Responsibility Statement
Pursuant to the requirements under Section 134(5) of the Act with respect to Directorsâ Responsibility Statement, it is hereby confirmed that:
i. In preparation of the annual accounts for the financial year ended March 31, 2018, the applicable Accounting Standards had been followed along with proper explanation relating to material departures, if any;
ii The Directors had 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, 2018 and of the loss of the Company for the year ended on that date;
iii The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv The Directors had prepared the annual accounts for the financial year ended March 31, 2018 on a âgoing concernâ basis;
v The Directors had laid down internal financial controls to be followed by the Company and such financial controls are adequate and are operating effectively, and
vi The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
Contracts and Arrangements with Related Parties
All contracts/ arrangements/ transactions entered into by the Company during the financial year under review with related parties were on an armâs length basis and in the ordinary course of business. There were no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons, which may have a potential conflict with the interest of the Company at large.
All Related Party Transactions were placed before the Audit Committee for approval. Omnibus approval of the Audit Committee was obtained for the transactions which were of a repetitive nature. The transactions entered into pursuant to the omnibus approval so granted were reviewed and statements giving details of all related party transactions were placed before the Audit Committee on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Companyâs website at the link http://www. rcom.co.in/Rcom/about-us/investor-relations/corporate-governance.html. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company.
Material Changes and Commitments, if any, affecting the financial position of the Company
Except as disclosed in this report, there were no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year and the date of this report.
Meetings of the Board
A calendar of Meetings is prepared and circulated in advance to the Directors. During the year, Nine Board Meetings were held, details of which are given in the Corporate Governance Report forming part of this report.
Audit Committee
The Audit Committee of the Board consists of Independent Directors namely Shri R. N. Bhardwaj, Chairman, Shri A. K. Purwar, Prof. J. Ramachandran, Shri Deepak Shourie, Smt. Ryna Karani, Smt. Chhaya Virani and Non Independent Directors Smt. Manjari Kacker, Shri Punit Garg, Shri Manikantan V, as members. During the year, all the recommendations made by the Audit Committee were accepted by the Board.
Auditors and Auditorsâ Report
At the 12th Annual General Meeting (AGM) held on September 27, 2016, M/s. Pathak H.D. & Associates, Chartered Accountants were appointed as the statutory auditors of the Company to hold office till the conclusion of the 17th AGM. Pursuant to the provisions of Section 139 of the Act and the Companies (Audit and Auditors) Rules, 2014, M/s. Pathak H.D. & Associates, Chartered Accountants, the Statutory Auditors of the Company have been appointed as Auditors for a term of 5 years. The Company has received a confirmation from the said Auditors that they are not disqualified to act as the Auditors and are eligible to hold the office as Auditors of the Company.
The Auditors in their report to the members have given a qualified opinion and the response of Board with respect to it is as follows:
Considering all factors including admitting the companies to debt resolution process under the IBC, the Company, with a view to reflecting fairly the position for the purpose of presentation in respect of the Companyâs obligation for interest and without implying in any way that the terms of lending by the banks and other lenders are altered, has not provided interest of Rs.3,055 crore (Rs.3,609 crore in case of consolidated) during the year. Had the Company provided interest, the loss would have been higher by Rs.3,055 crore (Rs.3,609 crore in case of consolidated) for the year ended March 31, 2018.
The observations and comments given by the Auditors in their report read together with notes on financial statements are self explanatory particularly Note No. 2.50 ( standalone financials) and Note No. 2.54 (consolidated financials) and hence the same to be treated as explanation provided under Section 134 of the Act.
The audited financial statement drawn up both on standalone and consolidated basis for the financial year ended March 31, 2018, in accordance with the requirements of the Ind-AS Rules.
Cost Auditors
Pursuant to the provisions of the Act and the Companies (Cost Records and Audit) Rules, 2014, the Board of Directors have appointed M/s. V. J. Talati & Co., Cost Accountants, as the Cost Auditors to conduct cost audit for the telecommunications businesses of the Company for the financial year ending March 31, 2019, subject to the remuneration being ratified by the shareholders at the ensuing AGM of the Company.
Secretarial Standards
During the year under review, the Company has complied with the applicable Secretarial Standards issued by The Institute of Company Secretaries of India.
Secretarial Audit
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed M/s. Ashita Kaul & Associates, Company Secretaries in Practice to undertake the Secretarial Audit of the Company. There is no qualification, reservation or adverse remark made in their Secretarial Audit Report submitted to the Company. The Secretarial Audit Report is attached herewith as Annexure C.
Extract of Annual Return
Extract of the Annual Return as on March 31, 2018 of the Company in Form - MGT-9 is attached herewith as Annexure D.
Particulars of Employees and related disclosures
(a) Employees Stock Option Scheme
During the year under review, the Company has not granted any Options to the employees of the Company. Employees Stock Option Scheme (ESOS) was approved and implemented by the Company and Options were granted to the employees under âESOS Plan 2008â and âESOS Plan 2009â in accordance with earlier guidelines applicable to ESOS.
During the year under review, ESOS Plan 2008 has completed ten years tenure and all its outstanding Options were lapsed.
The ESOS Compensation Committee of the Board monitors the Employees Stock Option Scheme. The existing ESOS Scheme and Plan are in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (SEBI ESOS Regulations).
The Company has received a certificate from the auditors of the Company that the ESOS Plan 2009 has been implemented in accordance with the SEBI ESOS Regulations and as per the resolution passed by the members of the Company authorising issuance of the said Options. The other details as required under SEBI ESOS Regulations are disclosed on Companyâs website at www. rcom.co.in/investorrelations/corporategovernance.
(b) Other Particulars
In terms of the provisions of Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (the Rules), as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are provided in the Annexure to the Directorsâ Report. Disclosures relating to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Rules, are also provided in the Annual Report, which forms part of this Report.
However, having regard to the provisions of Section 136 of the Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. The said information is available for inspection at the registered office of the Company on all working days, except Saturdays between 11.00 A.M. and 1.00 P.M. upto the date of the Annual General Meeting. Any member interested in obtaining the same may write to the Company Secretary. Upon receipt of such request the information shall be furnished.
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
As the Company does not carry on any manufacturing activity, being a telecommunications service provider, most of the information of the Company as required under Section 134(3) (m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 are not applicable. However, the information as applicable has been given in the Annexure E forming part of this Report.
Corporate Governance
The Company has adopted the âReliance Group-Corporate Governance Policies and Code of Conductâ which sets out the systems, process and policies conforming to the international standards. The report on Corporate Governance as stipulated under Regulation 34(3) read with Para C of Schedule V of the Listing Regulations is presented in separate section forming part of this Annual Report
A Certificate from the auditors of the Company M/s. Pathak H.D. & Associates, Chartered Accountants conforming compliance to the conditions of Corporate Governance as stipulated under Para E of Schedule V of the Listing Regulations, is enclosed to this Report.
a) The disclosures required under Schedule V of the Act as applicable to Shri Punit Garg as an Executive Director are given below:
(i) Remuneration comprises of salary, allowances and other perquisites - Rs.233 Lakhs per annum.
(ii) Details of fixed component and performance linked incentives along with the performance criteria -Annual increment / performance linked incentive, as may be decided by the Board of Directors pursuant to recommendation of the Nomination and Remuneration Committee based on his performance and the performance of the Company and as per the Company Policy.
(iii) Service, contracts, notice period, severance fees -He has a binding service contract with functions and duties of an Executive Director.
(iv) Stock option details, if any, and whether the same has been issued at a discount as well as the period over which accrued and over which exercisable -Not Applicable.
b) The disclosures required under Schedule V of the Act as applicable to Shri Manikantan V. as a Director and Chief
Financial Officer are given below:
(i) Remuneration comprises of salary, allowances and other perquisites - Rs.178 Lakhs per annum.
(ii) Details of fixed component and performance linked incentives along with the performance criteria -Annual increment / performance linked incentive, as may be decided by the Board of Directors pursuant to recommendation of the Nomination and Remuneration Committee based on his performance and the performance of the Company and as per the Company Policy.
(iii) Service, contracts, notice period, severance fees -He has a binding service contract with functions and duties of a Director and Chief Financial Officer.
(iv) Stock option details, if any, and whether the same has been issued at a discount as well as the period over which accrued and over which exercisable -Not Applicable
Whistle Blower (Vigil Mechanism)
In accordance with Section 177 of the Act and the Listing Regulations, the Company has formulated a Vigil Mechanism to address the genuine concern, if any of the directors and employees. The details of the same have been stated in the Report on Corporate Governance and the policy can also be accessed on the Companyâs website.
Risk Management
The Company has constituted a Risk Management Committee consisting of majority of directors and senior managerial personnel of the Company; however this mandatory provisions of Listing Regulations are not applicable to the Company. The details of the Committee and its terms of reference etc. are set out in the Corporate Governance Report forming part of this Report.
The Company has a robust Business Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance Companyâs competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level as also separately for business segments.
Compliance with provisions of Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company is committed to uphold and maintain the dignity of women employees and it has in place a policy which provides for protection against sexual harassment of women at work place and for prevention and redressal of such complaints. During the year no such complaints were received.
The Company has also constituted an Internal Compliance Committee under the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013
Corporate Social Responsibility
The Company has constituted Corporate Social Responsibility Committee in compliance with the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules 2014. The Corporate Social Responsibility Committee has formulated a Corporate Social Responsibility Policy (CSR policy) indicating the activities to be undertaken by the Company. The CSR policy may be accessed on the Companyâs website at the link; http://www.rcom.co.in/Rcom/ about-us/investor-relations/corporate-governance.html.
The CSR Committee consists of Smt. Manjari Kacker as Chairperson, Shri R. N. Bhardwaj, Prof. J. Ramachandran, Shri Deepak Shourie, Shri A. K. Purwar, Shri Punit Garg, Shri Manikantan V., Smt. Ryna Karani, Smt. Chhaya Virani, Directors as members of the Committee.
The annual report on CSR activities is annexed as Annexure F.
Orders, if any, passed by Regulators or Courts or Tribunals
Except as disclosed in this report, no orders have been passed by the Regulators or Courts or Tribunals impacting the going concern status and the Companyâs operation.
Internal Financial Controls and their adequacy
The Company has in place adequate internal financial controls across the organisation. The same is subject to review periodically by the internal audit cell and by the audit committee for its effectiveness.
During the year, such controls were tested and no reportable material weakness in the design or operation were observed.
Business Responsibility Statement
Business Responsibility Report for the year under review as stipulated under the Listing Regulations is presented in separate section forming part of this Annual Report.
Acknowledgement
Your Directors express their sincere appreciation for the cooperation and assistance received from shareholders, debenture holders, bankers, financial institutions, regulatory bodies, debenture trustee and other business constituents during the year under review. The Directors express their sincere thanks to the lenders of the Company for continuous support during the year. Your Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers and staff and look forward to their continued support in future.
For and on behalf of the Board of Directors
Anil Dhirubhai Ambani
Chairman
Mumbai
July 18, 2018
Mar 31, 2017
Dear Shareowners,
Your Directors present the 13th Annual Report and the audited financial statement for the financial year ended March 31, 2017. Financial results
The financial results of the Company for the year ended March 31, 2017 is summarised below:
Particulars |
Financial Year ended |
* Financial Year ended |
||
March 31, 2017 |
March 31, 2016 |
|||
Rs, in crore US$ in million** |
Rs, in crore |
US$ in million** |
||
Total income |
9,154 |
1412 |
10,314 |
1557 |
Gross profit /(Loss) before depreciation, amortization and |
(1,883) |
(290) |
387 |
58 |
exceptional items |
||||
Less: |
||||
Depreciation and amortization |
1,972 |
304 |
2,014 |
304 |
Profit/ (Loss) before Tax |
(3,855) |
(594) |
(1,627) |
(246) |
Less: Provision for: |
||||
Current tax / Excess provision for Tax of earlier years |
- |
- |
||
Deferred Tax charge/ (credit) |
(2,059) |
(318) |
(1,248) |
(188) |
Profit / (Loss) after tax |
(1,796) |
(276) |
(379) |
(56) |
Other Comprehensive Income |
||||
Re-measurement Gain/ (Loss) of defined benefit plans (Net of tax) |
(1) |
(0.15) |
(1) |
(0.15) |
Total Comprehensive Income |
(1,797) |
(276) |
(380) |
(56) |
Add : Balance brought forward from previous year |
(5,366) |
(827) |
(4,986) |
(753) |
Profit available for appropriation |
- |
- |
||
Balance carried to Balance Sheet |
(7,163) |
(1103) |
(5,366) |
(811) |
âFigures of previous year have been regrouped and reclassified, wherever required.
** Exchange Rate '' 64.85 = US$ 1 as on March 31, 2017 (Rs, 66.255 = US$ 1 as on March 31, 2016).
Financial Performance
During the year under review, your Company has earned income of Rs, 9,154 crore against Rs, 10,314 crore in the previous year. The Company has incurred a loss of Rs, 1,796 crore for the year as compared to loss of Rs, 379 crore in the previous year. The performance and financial position of the subsidiary companies and associate companies are included in the consolidated financial statement of the Company and presented in the Management Discussion and Analysis Report forming part of this Annual Report.
Dividend
During the year under review, the Board of Directors has not recommended dividend on the equity shares of the Company. The Dividend Distribution Policy of the Company is annexed herewith as Annexure A to this Report.
Business Operations
The Company together with its subsidiary companies operates on a pan India basis offers full value chain of wireless (GSM including 3G/4G services), wireline, national and international long distance, voice, data, video, Direct-To-Home (DTH) and internet based communications services under various business units organised into strategic geographical business units: India
Operations and Global Operations. These strategic business units are supported by passive infrastructure connected to nationwide backbone of Optic Fibre Network as well as fully integrated network operation system and by the largest retail distribution and customer services. The Company also owns through its subsidiary company, a global submarine cable network infrastructure and offers managed services, managed Ethernet and application delivery services.
Scheme of Arrangements with:
1. Sistema Shyam Teleservices Limited
A Scheme of Arrangement for transfer and vesting of Wireless Telecom Business Undertaking of Sistema Shyam Teleservices Limited (SSTL) into the Company (''Scheme'') was approved by the Hon''ble High Court of Judicature at Bombay on October 7, 2016 and by Hon''ble Rajasthan High Court on September 30, 2016. The Appointed date is the Effective date. The Scheme is also approved by the Department of Telecommunications, subject to fulfillment of certain conditions. Upon fulfillment of said conditions, the Scheme will be made effective and the Company will be required to allot 27.65 crore equity shares of '' 5/each of the Company to SSTL, which is 10% of the diluted equity share capital of the Company.
2. Reliance Telecom Limited
The Board had approved the Scheme of Arrangement for demerger of Wireless Undertaking of Reliance Telecom Limited, a wholly owned subsidiary company, into the Company on June 24, 2016. The Hon''ble High Court of Judicature at Bombay has sanctioned the said Scheme on October 27, 2016. The Company has applied to the Department of Telecommunications (DoT) for its approval to the Scheme, which is condition precedent before giving effect to the Scheme. The Scheme would be made effective only upon receiving the approval of the DoT.
3. Aircel Group
The Board had approved the demerger and transfer of Wireless Business, including (i) the investments held by the Company in its indirect wholly owned subsidiary companies, Reliance Communications (Hong Kong) Limited, Reliance Communications (UK) Limited, Reliance Communications Inc. USA, Reliance Communications International, Inc. and Reliance Communications Canada, Inc., (ii) the wireless telecom business undertaking of the Company and Reliance Telecom Limited ("RTL")(a wholly owned subsidiary of the Company) to Aircel Limited ("AL") and Dishnet Wireless Limited (a wholly owned subsidiary of AL) ("DWL"), by way of Scheme of arrangement of demerger among the Company, RTL, AL, DWL, South Asia Communications Private Limited, Deccan Digital Networks Private Limited and their respective shareholders and creditors("Scheme") on September 14, 2016.
Under the terms of the Scheme, upon completion of the Scheme, the Company will be issued and allotted such number of equity shares of AL which will constitute 50% of the fully diluted paid up equity share capital of AL.
The Company has received approval from the Shareholders and have filed petition to the National Company Law Tribunal (NCLT). The Company has also received approval of the Competition Commission of India.
Debt Restructuring Plan
The lenders have invoked the Strategic Debt Restructuring (SDR) plan with Reference Date as June 2, 2017 in accordance with the guidelines issued by Reserve Bank of India and have constituted a Joint Lenders'' Forum (ILF). For expeditious closure of the strategic transactions (Schemes of Arrangement) as mentioned above, your Company had submitted an overall debt resolution plan to the lenders.
At the JLF meeting, Lenders have taken note of advanced stage of implementation of Company''s strategic transformation plan, and have agreed for a standstill on Company''s debt servicing obligations for next 7 months till end December, 2017. The successful implementation of SDR plan is considered to be in the interest of all the stakeholders of the Company and will enable the Company to meet its debt servicing obligations towards the Lenders.
Management Discussion and Analysis
Management Discussion and Analysis Report for the year under review as stipulated under Regulation 34(2)(e) of 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 this Annual Report.
Non Convertible Debentures
During the year under review, the Company has not issued any Non-Convertible Debentures.
Deposits
The Company has not accepted deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 ("the Act") and the Companies (Acceptance of Deposits) Rules, 2014.
Particulars of Investments
Pursuant to the provisions of Section 186 of the Act, the details of the Investments made by the Company are provided in the unabridged standalone financial statement under Notes No. 2.03 and 2.09.
Subsidiary and Associate Companies
During the year under review, Aircom Holdco B.V., The Netherlands and Tower com Infrastructure Private Limited became the subsidiaries of the Company. The performance and financial position of the major subsidiary companies are presented in Management Discussion and Analysis Report forming part of this Annual Report. Also, a report on the performance and financial position of each of the subsidiary companies and associate companies as per the Act is provided in the consolidated financial statement. The Policy for determining material subsidiary companies may be accessed on the Company''s website at the link http://www.rcom.co.in/ Rcom/aboutus/ir/pdf/Policy-for-determining-Material-Subsidiary.pdf.
Your Company has signed the Definitive Agreements with Brookfield, a leading global infrastructure asset manager with over $250 billion of assets under management, in December 2016 in relation to the proposed transfer of Reliance Infratel Limited''s (RITL) nationwide tower assets and related infrastructure. The Transaction has received the shareholders and Competition Commission of India''s (CCI) approval. The scheme petition has been filed with the National Company Law Tribunal (NCLT).
The Lenders of Reliance Telecom Limited, a wholly owned subsidiary and Reliance Infratel Limited, a subsidiary company, have also invoked the Strategic Debt Restructuring (SDR) plan with Reference Date as June 2, 2017 in accordance with the guidelines issued by Reserve Bank of India and have constituted a Joint Lenders'' Forum (JLF).
Consolidated Financial Statement
The Audited Consolidated Financial Statement for the financial year ended March 31, 2017, incorporating the results of the operations of all subsidiary companies and associate companies, have been prepared in accordance with Indian Accounting Standard (Ind AS) - 110 on ''Consolidated Financial Statement'' read with Ind AS-28 on ''Investments in Associates and Joint Ventures'', notified under the Act, read with the Accounting Standards Rules as applicable and same is in compliance with the Companies Act, 2013.
Directors
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the Act and Listing Regulations. The details of programme for familiarization of Independent Directors with the Company, nature of the industry in which the Company operates and related matters are put up on the website of the Company at the link http://www.rcom. co.in/Rcom/aboutus/ir/pdf/Directors_familiarisation.pdf.
In terms of the provisions of the Act, Smt. Manjari Kacker, Director of the Company, retires by rotation and being eligible, offers herself for re-appointment at the ensuing Annual General Meeting (AGM). A brief resume of Smt. Manjari Kacker, along with requisite details as stipulated under Regulation 36(3) of the Listing Regulations, is given in the section on Corporate Governance Report forming part of this Annual Report.
Key Managerial Personnel
During the year under review, Shri Vinod Sawhny, the then CEO resigned and Shri Bill Barney, CEO Enterprise and GCX and Shri Gurdeep Singh, CEO Wireless Business were designated as Co-CEO of the Company w.e.f. September 30, 201 6. Shri Prakash Shenoy, Company Secretary was re-appointed as a Manager of the Company w.e.f. June 1, 2016 for five years i.e. up to May 31, 2021.
Evaluation of Directors, Board and Committees
The Company has devised a policy for performance evaluation of the individual directors, Board and its Committees, which includes criteria for performance evaluation. Pursuant to the provisions of the Act and Regulation 17(10) of Listing Regulations, the Board has carried out an annual performance evaluation of its own performance, the individual directors as well as the evaluation of working of the Committees of the Board. The Board performance was evaluated based on inputs received from all the Directors after considering criteria such as Board composition and structure, effectiveness of processes and information provided to the Board etc. A separate meeting of the Independent Directors was also held during the year for evaluation of the performance of non-independent Directors, performance of the Board as a whole and that of the Chairman.
The Nomination and Remuneration Committee has also reviewed the performance of the individual directors based on their knowledge, level of preparation and effective participation in Meetings, understanding of their roles as directors etc.
Policy on appointment and remuneration for Directors, key managerial personnel and senior management employees
The Nomination and Remuneration Committee of the Board has devised a policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management Employees and their Remuneration. The Committee has formulated the criteria for determining qualifications, positive attributes and independence of a Director, which has been placed on the Company''s website. The policy on the above is attached as Annexure B.
Directors'' Responsibility Statement
Pursuant to the requirements under Section 134(5) of the Act with respect to Directors'' Responsibility Statement, it is hereby confirmed that:
i I n preparation of the annual financial statement for the financial year ended March 31, 2017, the applicable Accounting Standards had been followed along with proper explanation relating to material departures, if any;
ii The Directors had 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, 2017 and of the loss of the Company for the year ended on that date;
iii The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv The Directors had prepared the annual financial statement for the financial year ended March 31, 2017 on a ''going concern'' basis;
v The Directors had laid down internal financial controls to be followed by the Company and such financial controls are adequate and are operating effectively, and
vi The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
Contracts and Arrangements with Related Parties
All contracts/ arrangements/ transactions entered into by the Company during the financial year under review with related parties were on an arm''s length basis and in the ordinary course of business. There were no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons, which may have a potential conflict with the interest of the Company at large.
All Related Party Transactions were placed before the Audit Committee for approval. Omnibus approval of the Audit Committee was obtained for the transactions which were of a repetitive nature. The transactions entered into pursuant to the omnibus approval so granted were reviewed and statements giving details of all related party transactions were placed before the Audit Committee for their approval on a quarterly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website at the link http://www. rcom.co.in/Rcom/aboutus/ir/pdf/Related-Party-Transactions-Policy.pdf. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company.
Material Changes and Commitments, if any, affecting the financial position of the Company
There were no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year and the date of their report.
Meetings of the Board
A calendar of Meetings is prepared and circulated in advance to the Directors. During the year, eight Board Meetings were held, details of which are given in the Corporate Governance Report.
Audit Committee
The Audit Committee of the Board consists of Independent Directors namely Shri R. N. Bhardwaj, Chairman, Shri A. K. Purwar, Prof. J. Ramachandran, Shri Deepak Shourie and Non Independent Director Smt. Manjari Kacker as members. During the year, all the recommendations made by the Audit Committee were accepted by the Board.
Auditors and Auditors'' Report
At the last Annual General Meeting (AGM) held on September 27, 201 6, M/s. BSR & Co. LLP, Chartered Accountants and M/s. Pathak H.D. & Associates, Chartered Accountants were appointed as statutory auditors of the Company to hold office till the conclusion of the 13th AGM and 17th AGM respectively. M/s BSR & Co. LLP, Chartered Accountants would be completing 10 years at the ensuing AGM and their term will come to an end.
Pursuant to the provisions of Section 139 of the Act and the Companies (Audit and Auditors) Rules, 2014, M/s. Pathak H.D. & Associates, Chartered Accountants, the Statutory Auditors of the Company have been appointed as Auditors for a term of 5 years. However, their appointment as Statutory Auditors of the Company shall be required to be ratified by the Members at the ensuing Annual General Meeting. The Company has received a confirmation from the said Auditors that they are not disqualified to act as the Auditors and are eligible to hold the office as Auditors of the Company. Necessary resolution for ratification of appointment of the said Auditors is included in the Notice of AGM for seeking approval of the members.
The observations and comments given by the Auditors in their report read together with notes on financial statements are self explanatory and hence do not call for any further comments under Section 134 of the Act. Financial Statements - Application of Indian Accounting Standards (Ind AS) Rules, 2015 Ministry of Corporate Affairs (MCA) vide its Notification No.G.S.R. 111(E) dated February 16, 2015, has made the application of the Companies (Indian Accounting Standards) Rules, 2015 (Ind-AS Rules) effective from April 1, 2015.
The audited financial statement drawn up both on standalone and consolidated basis for the financial year ended March 31, 2017, in accordance with the requirements of the above said Rules.
The ESOS Compensation Committee of the Board monitors the Employees Stock Option Scheme. The existing ESOS Scheme and Plans are in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (SEBI ESOS Regulations). The applicable disclosures as stipulated under the Companies (Share Capital and Debentures) Rules, 2014 as on March 31, 2017 are given below:
Particulars |
ESOS Plan 2008 |
ESOS Plan 2009 |
|
a) |
Total Options granted |
1,49,91,185 Options |
1,32,17,975 Options |
b) |
No of Options surrendered |
1,32,1 7,975 Options |
- |
c) |
Options vested |
Nil |
Nil |
d) |
Options exercised |
Nil |
Nil |
e) |
Total number of equity shares arising as a result of exercise of Options |
Nil |
Nil |
f) |
Options lapsed / forfeited during the year |
4,674 Options |
96,188 Options |
g) |
Exercise Price |
Market Price or such other price as Board / Committee may determine. Different Exercise price may apply to different Plan(s). |
Average of the weekly high and low of the closing price of the equity share of the Company at National Stock Exchange of India Limited during two weeks preceding the date of Grant i.e. January 1 6, 2009. |
h) |
Variation of terms of Options |
None |
None |
i) |
Money realised by exercise of Options during the year |
Nil |
Nil |
Cost Auditors
Pursuant to the provisions of the Act and the Companies (Cost Records and Audit) Rules, 2014, the Board of Directors have appointed M/s. V. J. Talati & Co., Cost Accountants, as the Cost Auditors to conduct cost audit for the telecommunications businesses of the Company for the financial year ending March 31, 2018, subject to the remuneration being ratified by the shareholders at the ensuing AGM of the Company.
Secretarial Audit
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed M/s. Ashita Kaul & Associates, Company Secretaries in Practice to undertake the Secretarial Audit of the Company. There is no qualification, reservation or adverse remark made in their Secretarial Audit Report submitted to the Company. The Secretarial Audit Report is attached herewith as Annexure C.
Extract of Annual Return
Extract of the Annual Return as on March 31, 2017 of the Company in Form - MGT-9 is attached herewith as Annexure D.
Employees Stock Option Scheme
During the year under review, the Company has not granted any Options to the employees of the Company. Employees Stock Option Scheme (ESOS) was approved and implemented by the Company and Options were granted to the employees under "ESOS Plan 2008" and "ESOS Plan 2009" in accordance with earlier guidelines applicable to ESOS.
The Company has received a certificate from the auditors of the Company that the ESOS Plan 2008 and 2009 have been implemented in accordance with the SEBI ESOS Regulations and as per the resolution passed by the members of the Company authorizing issuance of the said Options. The other details as required under SEBI Regulations are disclosed on Company''s website at www.rcom.co.in/investorrelations/ corporate governance.
Directors'' Report |
||
Particulars |
ESOS Plan 2008 |
ESOS Plan 2009 |
j) Total number of Options in force at the end of the year |
48,124 Options |
5,53,454 Options |
k) Employee wise details of Options granted to: |
||
i. Key managerial personnel Shri Manikantan V. - Chief Financial Officer |
Nil |
29400 |
ii. Employee who receives grant in any one year of Option amounting to 5 per cent or more of Option granted during the year |
Nil |
Nil |
iii. Identified employees who were granted options, during any one year equal to or exceeding 1 per cent of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant |
Nil |
Nil |
Particulars of Employees and related disclosures
In terms of the provisions of Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing highest top 10 remuneration and remuneration in excess of the limits set out in the said rules are provided in the Annexure to the Directors'' Report. However, having regard to the provisions of Section 136 of the Act, the Annual Report excluding the aforesaid information is being sent to all the shareholders of the Company and others entitled thereto. The said information is available for inspection at the registered office of the Company on all working days, except Saturdays between 11:00 A.M. and 1:00 P.M. up to the date of the Meeting and any member interested in obtaining the same may write to the Company Secretary. Upon such request the information shall be furnished. Disclosures relating to the 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 are provided in Annexure E.
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
As the Company does not carry on any manufacturing activity, being a telecommunications service provider, most of the information of the Company as required under Section 134(3) (m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 are not applicable. However, the information as applicable has been given in the Annexure F forming part of this Report.
Corporate Governance
The Company has adopted the "Reliance Group-Corporate Governance Policies and Code of Conduct" which sets out the systems, process and policies conforming to the international standards. The report on Corporate Governance as stipulated under Regulation 34(3) read with Para C of Schedule V of the Listing Regulations is presented in separate section forming part of this Annual Report
A Certificate from the auditors of the Company M/s. Pathak H.D. & Associates, Chartered Accountants and M/s. BSR & Co. LLP, Chartered Accountants conforming compliance to the conditions of Corporate Governance as stipulated under Para E of Schedule V of the Listing Regulations, is enclosed to this Report.
Vigil Mechanism
In accordance with Section 1 77 of the Act and the Listing Regulations, the Company has formulated a Vigil Mechanism to address the genuine concern, if any of the directors and employees. The details of the same have been stated in the Report on Corporate Governance and the policy can also be accessed on the Company''s website.
Risk Management
The Company has constituted a Risk Management Committee consisting of majority of directors and senior managerial personnel; however the mandatory provisions of Listing Regulations are not applicable to the Company. The details of the Committee and its terms of reference etc. are set out in the Corporate Governance Report forming part of this Report.
The Company has a robust Business Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance Company''s competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level as also separately for business segments.
Compliance with provisions of Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company is committed to uphold and maintain the dignity of woman employees and it has in place a policy which provides for protection against sexual harassment of women at work place and for prevention and redressal of such complaints. During the year no such complaints were received.
Corporate Social Responsibility
The Company has constituted Corporate Social Responsibility Committee in compliance with the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules 2014. The Corporate Social Responsibility Committee has formulated a Corporate Social Responsibility Policy (CSR policy) indicating the activities to be undertaken by the Company. The CSR policy may be accessed on the Company''s website at the link; http://www.rcom.co.in/Rcom/ aboutus/ir/pdf/CSR-Policy.pdf.
The CSR Committee consists of Smt. Manjari Kacker as Chairperson, Shri Anil D. Ambani, Prof J. Ramachandran, Shri Deepak Shourie, Shri A. K. Purwar and Shri R. N. Bhardwaj, Directors as members.
The annual report on CSR activities is annexed as Annexure G.
Orders, if any, passed by Regulators or Courts or Tribunals
No orders have been passed by the Regulators or Courts or Tribunals impacting the going concern status and the Company''s operation.
Internal Financial Controls and their adequacy
The Company has in place adequate internal financial controls across the organization. The same is subject to review periodically by the internal audit cell and by the audit committee for its effectiveness.
During the year, such controls were tested and no reportable material weakness in the design or operation were observed.
Business Responsibility Statement
Business Responsibility Report as stipulated under the listing regulations is presented in separate section forming a part of this Annual Report.
Acknowledgement
Your Directors express their sincere appreciation for the cooperation and assistance received from shareholders, debenture holders, debenture trustee, bankers, financial institutions, regulatory bodies and other business constituents during the year under review. The Directors express their sincere thanks to the lenders of the Company for continuous support during the year. Your Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers and staff, resulting in the successful performance of the Company during the year.
For and on behalf of the Board of Directors
Mumbai Anil Dhirubhai Ambani
August 12, 2017 Chairman
Mar 31, 2015
Dear Shareowners,
The Directors present the 11th Annual Report and the audited financial
statement for the financial year ended March 31, 2015.
Financial Results
The financial performance of the Company for the year ended March 31,
2015 is summarised below:
Particulars Financial Year ended Financial Year ended
March 31, 2015 March 31, 2014
Rs.in crore US$ in
million** Rs.in crore US$ in
million
Total income 11,136 1782 12,445 2,079
Gross profit before
depreciation,
amortisation and
exceptional 311 50 1,290 215
items
Less:
Depreciation and
amortisation 1,940 310 2,048 342
Profit/ (Loss) before
Exceptional items,
Tax and (1,629) (260) (758) (127)
Adjustments
Exceptional Items
Lease Rent Equalisa
tion written back 4,328 692 - -
Yield on Redeemable
Preference Share rece
ivables reversed (1,359) (217) - -
Profit/ (Loss)
before Tax 1,340 215 (758) (127)
Less: Provision for:
Current tax / Excess
provision for Tax
of earlier years 1,494 239 (1,488) (248)
Profit/(Loss)
after tax (154) (24) 730 121
Add : Balance brought
forward from
previous year 881 141 322 54
Profit available for
appropriation 727 117 1,052 175
Appropriations:
Transfer to Debenture
Redemption Reserve - - 171 28
Balance carried to
Balance Sheet 727 117 881 147
* Figures of previous year have been regrouped and reclassified,
wherever required. ** Exchange Rate Rs. 62.500 = US$ 1 as on March 31,
2015 (Rs.59.915 = US$1 as on March 31, 2014).
Financial Performance
During the year under review, your Company has earned income of Rs.
11,136 crore against Rs. 12,445 crore in the previous year. The Company
has incurred a loss of Rs. 154 crore for the year as compared to profit of
Rs. 730 crore in the previous year.
The performance and financial position of the subsidiary companies and
associate companies are included in the consolidated financial statement
of the Company and presented in the Management Discussion and Analysis
forming part of this Annual Report.
Dividend
During the year under review, the Board of Directors has not
recommended any dividend on the equity shares of the Company.
Business Operations
The Company together with its subsidiary companies operates on a
pan-India basis offers full value chain of wireless (CDMA and GSM
including 3G services), wireline, national long distance,
international, voice, data, video, Direct-To-Home (DTH) and internet
based communications services under various business units organised
into strategic geographical business units: India Operations and Global
Operations.
These strategic business units are supported by passive infrastructure
connected to nationwide backbone of Optic Fibre Network as well as
fully integrated network operation system and by the largest retail
distribution and customer services facilities. The Company also owns
through its subsidiary company, a global submarine cable network
infrastructure and offers managed services, managed Ethernet and
application delivery services.
Spectrum Auction
The Department of Telecommunications (DoT) conducted auction for the
800, 900, 1800 and 2100 MHz spectrum in March 2015. The Company
successfully bid for its requirements in the 10 service areas and won
additional/top up spectrum in 1800 MHz in Haryana, Karnataka and Punjab
and in 800 MHz in Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir,
Kolkata, Odisha, Punjab, Uttat Pradesh (West) and West Bengal service
areas. The validity of the above spectrum will be for a fresh 20 year
period starting from the effective date as mentioned in the Letter of
Intent (LOI), which in case of spectrum blocks currently held by the
existing licensees, is the date of expiry of existing licenses. The
LOIs have been issued on 27/28 May, 2015. As per the payment options
available, the Company has chosen the deferred payment option.
Management Discussion and Analysis
Management 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
this Annual Report.
Share Capital / Fund Raising Programme
During the year under review, the Company allotted 33,82,86,197 equity
shares of Rs. 5/- each at a offer price of Rs. 142.14 per equity share
(including a Share premium of Rs. 137.14 per equity share) under Qualified
Institutional Placement (QIP) to Qualified Institutional Buyers on July
2, 2014 and received an amount aggregating to Rs. 4,808.40 crore. The
Company had also allotted 8,66,66,667 Warrants entitling the
subscribers to subscribe to equivalent number of Equity Shares of Rs. 5/-
each at a price of Rs. 150/- per Warrant (including Share premium of Rs.
145/- per Equity Share) aggregating to Rs. 1,300 crore under preferential
allotment to the Promoter Group entity and allotted 8,66,66,667 equity
shares to the Promoter Group entity, against said Warrants on January
20, 2015. The fund raised were utilised as per the object/purpose for
which it was raised. The Paid up share capital of the Company was
increased from Rs. 1032.01 crore to Rs. 1244.49 crore. This was the maiden
QIP and Preferential Issue of the Company.
During the current financial year 2015-16, the Company issued and
allotted foreign currency Senior Secured Notes on May 6, 2015 amounting
to US$ 300 mn (Rs. 1,909 crore). The Notes have a tenor of 5 ½ years due
in November, 2020 and carry a coupon rate of 6.5 per cent per annum,
payable semi annually. The Notes are listed on the Singapore Stock
Exchange.
Non Convertible Debentures
During the year under review, the Company has not issued or redeemed
any Non-Convertible Debentures.
Deposits
The Company has not accepted deposit from the public falling within the
ambit of Section 73 of the Companies Act, 2013 ("the Act") and the
Companies (Acceptance of Deposits) Rules, 2014.
Particulars of Investments
Pursuant to the provisions of Section 186 of the Act, the details of
the Investments made are provided in the unabridged standalone financial
statement under Notes No.2.11 and 2.15.
Subsidiary and Associate companies
During the year under review, Reliance Infra Realty Limited and
Reliance Infra Projects Limited became the subsidiaries of the Company.
The performance and financial position of the major subsidiary companies
are presented in Management Discussion and Analysis Report forming part
of this Annual Report. Also, a report on the performance and financial
position of each of the subsidiary companies and associate companies as
per the Act is provided in the consolidated financial statement. The
Policy for determining material subsidiary companies may be accessed on
the Company's website at the link
http://www.rcom.co.in/Rcom/aboutus/ir/
pdf/Policy-for-determining-Material-Subsidiary.pdf.
Consolidated Financial Statement
The Audited Consolidated Financial Statement for the financial year
ended March 31, 2015, based on the financial statement received from
subsidiary companies, joint ventures and associate companies, as
approved by their respective Board of Directors have been prepared in
accordance with Accounting Standard (AS) - 21 on 'Consolidated
Financial Statement' read with AS-23 on 'Accounting for Investments in
Associates' and AS-27 on 'Financial Reporting of Interests in Joint
Ventures', notified under the Act, read with the Accounting Standards
Rules as applicable.
Directors
During the year under review, in terms of the provisions of Act, the
Company appointed Prof. J. Ramachandran, Shri Deepak Shourie, Shri A.
K. Purwar and Shri R. N. Bhardwaj as Independent Directors of the
Company for a period of 5 years and Smt. Manjari Kacker as a Woman
Director, liable to retire by rotation w.e.f. September 16, 2014.
The Company has received declarations from all the Independent
Directors of the Company confrming that they meet the criteria of
independence as prescribed under the Act and Clause 49 of the Listing
Agreement with the Stock Exchanges.
The details of programme for familiarization of Independent Directors
with the Company, nature of the industry in which the Company operates
and related matters are put up on the website of the Company at the
link http://www.rcom.co.in/
Rcom/aboutus/ir/pdf/Directors_familiarisation.pdf.
In terms of the provisions of the Companies Act, 2013, Smt. Manjari
Kacker, Woman Director of the Company, retires by rotation and being
eligible, offers herself for re-appointment at the ensuing Annual
General Meeting (AGM). A brief resume of Smt. Manjari Kacker, Woman
Director, nature of expertise in specific functional areas and names of
the companies in which she holds directorship and / or membership /
chairmanship of Committees of the respective Boards, shareholding and
relationship between directors inter se as stipulated under Clause 49
of the Listing Agreement with the Stock Exchanges in India, is given in
the section on Corporate Governance Report forming part of this Annual
Report.
Key Managerial Personnel
During the year, Shri Vinod Sawhny, Chief Executive Officer, Shri
Manikantan V., Chief Financial Officer and Shri Prakash Shenoy, Company
Secretary and Manager were designated as the Key Managerial Personnel
(KMP) of the Company as per requirements of the Act.
Evaluation of Directors, Board and Committees
The Company has devised a policy for performance evaluation of the
individual directors, Board and its Committees, which includes criteria
for performance evaluation.
Pursuant to the provisions of the Act and Clause 49 of the Listing
Agreement, the Board has carried out an annual performance evaluation
of its own performance, the directors individually as well as the
evaluation of the working of the Committees of the Board. The Board
performance was evaluated based on inputs received from all the
Directors after considering criteria such as Board composition and
structure, effectiveness of processes and information provided to the
Board etc. A separate meeting of the Independent Directors was also
held during the year for the evaluation of the performance of
non-independent Directors, performance of the Board as a whole and that
of the Chairman.
The Nomination and Remuneration Committee has also reviewed the
performance of the individual directors based on their knowledge, level
of preparation and effective participation in Meetings, understanding
of their roles as directors etc.
Policy on appointment and remuneration for Directors, key managerial
personnel and senior management employees
The Nomination and Remuneration Committee of the Board has devised a
policy for selection and appointment of Directors, Key Managerial
Personnel and Senior Management Employees and their Remuneration. The
Committee has formulated the criteria for determining qualifications,
positive attributes and independence of a Director, which has been put
up on the Company's website. Further, the Committee has also devised a
policy relating to remuneration for Key Managerial Personnel and senior
management employees, as the Company does not have any Whole-time
Director/ Managing Director on its Board. The policy on the above is
attached as Annexure - A.
Directors' Responsibility Statement
Pursuant to the requirements under Section 134(5) of the Act with
respect to Directors' Responsibility Statement, it is hereby confirmed
that:
i. In the preparation of the annual financial statement for the financial
year ended March 31, 2015, the applicable Accounting Standards had been
followed along with proper explanation relating to material departures,
if any;
ii. The Directors had 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, 2015 and of the loss of the Company for
the year ended on that date;
iii. The Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 2013 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
iv. The Directors had prepared the annual financial statement for the
financial year ended March 31, 2015 on a 'going concern' basis;
v. The Directors had laid down internal financial controls to be
followed by the Company and such financial controls are adequate and are
operating effectively, and
vi. The Directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems are
adequate and operating effectively.
Contracts and Arrangements with Related Parties
All contracts/ arrangements/ transactions entered into by the Company
during the financial year under review with related parties were on an
arm's length basis and in the ordinary course of business. There were
no materially significant related party transactions made by the Company
with Promoters, Directors, Key Managerial Personnel or other designated
persons, which may have a potential conflict with the interest of the
Company at large.
All Related Party Transactions were placed before the Audit Committee
for approval. Omnibus approval of the Audit Committee was obtained for
the transactions which were of a repetitive nature. The transactions
entered into pursuant to the omnibus approval so granted were reviewed
and statements giving details of all related party transactions were
placed before the Audit Committee for their approval on a quarterly
basis. The policy on Related Party Transactions as approved by the
Board is uploaded on the Company's website at the link http://www.
rcom.co.in/Rcom/aboutus/ir/pdf/Related-Party-Transactions- Policy.pdf.
None of the Directors has any pecuniary relationships or transactions
vis-Ã -vis the Company.
Material Changes and Commitments if any, affecting the financial
position of the Company
There was no material change and commitment which materially affect the
financial position of the Company occurred between the financial year
ended on March 31, 2015 and the date of this report.
Meetings of the Board
A calendar of Meetings is prepared and circulated in advance to the
Directors. During the year, six Board Meetings were held, details of
which are given in the Corporate Governance Report.
Audit Committee
The Audit Committee of the Board consists of Independent Directors
namely Prof. J. Ramachandran, Chairman, Shri A. K. Purwar, Shri R. N.
Bhardwaj, Shri Deepak Shourie and Non Independent Director Smt. Manjari
Kacker as members. During the year, all the recommendations made by
the Audit Committee were accepted by the Board.
Auditors and Auditors' Report
M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co.LLP,
Chartered Accountants, the Statutory Auditors of the Company hold office
until the conclusion of the ensuing Annual General Meeting (AGM) and
are eligible for re-appointment. The Company has received letters from
M/s. Chaturvedi & Shah, Chartered Accountants and M/s. BSR & Co. LLP,
Chartered Accountants; to the effect that their appointment, if made,
would be within the prescribed limits under Section 141(3) of the Act
and that they are not disqualified from appointment as statutory
auditors of the Company.
The observations and comments given by the Statutory Auditors in their
report read together with notes on financial statement are self
explanatory and hence do not call for any further comments under
Section 134 of the Act.
Cost Auditors
Pursuant to the provisions of the Act and Companies (Cost Records and
Audit) Rules, 2014, the Board of Directors have appointed M/s. V. J.
Talati & Co., Cost Accountants, as the Cost Auditors for conducting
cost audit for the telecommunications businesses of the Company for the
financial year ending March 31, 2016, subject to the remuneration being
ratifed by the members at the ensuing AGM of the Company.
Secretarial Audit
Pursuant to the provisions of Section 204 of the Act and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the
Board of Directors had appointed M/s. Kaushik M. Jhaveri & Co., Company
Secretaries in Practice to undertake the Secretarial Audit of the
Company. There is no qualification, reservation or adverse remark made
in their Secretarial Audit Report. The Audit Report of the Secretarial
Auditor is attached herewith as Annexure  B.
Extract of Annual Return
Extract of the Annual Return of the Company in form MGT-9 is attached
herewith as Annexure - C.
Employees Stock Option Scheme
During the year under review, the Company has not granted any Options
to the employees of the Company. Employees Stock Option Scheme (ESOS)
was approved and implemented by the Company and Options were granted to
the employees under ESOS Plan 2008 and Plan 2009 in accordance with
earlier guidelines applicable to ESOS.
The ESOS Compensation Committee of the Board monitors the Scheme. The
existing ESOS Scheme and Plans are in compliance with the Securities
and Exchange Board of India (Share based employee benefits) Regulations,
2014 (SEBI Regulations).
The applicable disclosures as stipulated under the Companies (Share
Capital and Debentures) Rules, 2014 as on March 31, 2015 are given
below:
Particulars ESOS Plan 2008 ESOS Plan 2009
a) Total Options
granted : 1,49,91,185 Options 1,32,17,975 Options
b) No of Options
surrendered : 1,32,17,975 Options -
c) Options vested : Nil Nil
d) Options
exercised : Nil Nil
e) Total number of
equity shares arising
as a result of
exercise : Nil Nil
of Options
f) Options lapsed/
forfeited during
the year : 2,76,141 Options 5,37,632 Options
g) Exercise Price : Market Price or
such other Average of the
weekly high
price as Board/Committee and low of the closi
-ng price
may determine. Different of the equity share
of the
Exercise price may
apply to Company at
National Stock
different Plan(s). Exchange of India
Limited during two
weeks preceding
the date of Grant
i.e. January
16, 2009.
h) Variation of terms
of Options : None None
i) Money realised by
exercise of
Options during
the year : Nil Nil
j) Total number of
Options in force at
the end of the year : 62,274 Options 12,75,358 Options
k) Employee wise
details of Options
granted to:
i. Key managerial
personnel : Nil 29400
Shri Manikantan V.
Chief Financial
Officer
ii. Employee who rece
ives grant in any one
year of : Nil Nil
Option amounting to 5
per cent or more of
Option granted during
the year
iii.Identifed employ
ees who were granted
options, : Nil Nil
during any one year
equal to or exceeding
1 per cent
of the issued capital
(excluding outstanding
warrants
and conversions) of the
Company at the time
of grant
The Company has received a certificate from the auditors of the Company
that the ESOS Plan 2008 and 2009 have been implemented in accordance
with the SEBI Regulation and as per the resolution passed by the
members of the Company authorising issuance of the said Options.
Particulars of Employees and related disclosures
In terms of the provisions of Section 197 of the Act read with Rule 5
of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, a statement showing the names and other particulars of the
employees drawing remuneration in excess of the limits set out in the
said rules are provided in the Annexure to the Directors' Report.
However, having regard to the provisions of Section 136 of the Act, the
Annual Report excluding the aforesaid information is being sent to all
the members of the Company and others entitled thereto. The said
information is available for inspection at the registered office of the
Company on all working days, except Saturdays between 11:00 A.M. and
1:00 P.M. up to the date of the AGM and any member interested in
obtaining the same may write to the Company Secretary. Upon such
request the information shall be furnished.
Disclosures relating to the 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 Personal) Rules, 2014 are
provided in Annexure - D.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
As the Company does not carry on any manufacturing activity, being a
telecommunications service provider, most of the information of the
Company as required under Section 134(3)
(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014
are not applicable. However, the information as applicable has been
given in the Annexure  E forming part of this Report.
Corporate Governance
The Company has adopted "Reliance Group-Corporate Governance Policies
and Code of Conduct" which sets out the systems, process and policies
conforming to the international standards. The report on Corporate
Governance as stipulated under Clause 49 of the Listing Agreement with
the Stock Exchanges is presented in separate section forming part of
this Annual Report.
A Certifcate from the auditors of the Company M/s. Chaturvedi & Shah,
Chartered Accountants and M/s. BSR & Co. LLP, Chartered Accountants
conforming compliance to the conditions of Corporate Governance as
stipulated under Clause 49 of the Listing Agreement, is enclosed to
this Report.
Vigil Mechanism
In accordance with Section 177 of the Act and the Listing Agreement,
the Company has formulated a Vigil Mechanism to address the genuine
concern, if any of the directors and employees. The details of the same
have been stated in the Report on Corporate Governance and the policy
can also be accessed on the Company's website.
Risk Management
Pursuant to the requirement of Clause 49 of the Listing Agreement,
during the year, the Company has constituted a Risk Management
Committee consisting of majority of directors and senior managerial
personnel. The details of the Committee and its terms of reference etc.
are set out in the Corporate Governance Report forming part of this
Report.
The Company has a robust Business Risk Management framework to
identify, evaluate business risks and opportunities. This framework
seeks to create transparency, minimize adverse impact on the business
objectives and enhance Company's competitive advantage. The business
risk framework defines the risk management approach across the
enterprise at various levels including documentation and reporting. The
framework has different risk models which help in identifying risks
trend, exposure and potential impact analysis at a Company level as
also separately for business segments.
Compliance with provisions of Sexual Harassment of Women at workplace
(Prevention, Prohibition and Redressal) Act, 2013
The Company is committed to uphold and maintain the dignity of woman
employees and it has in place a policy which provides for protection
against sexual harassment of women at work place and for prevention and
redressal of such complaints. During the year no such complaints were
received.
Corporate Social Responsibility
The Company has constituted Corporate Social Responsibility Committee
in compliance with the provisions of Section 135 of the Act read with
the Companies (Corporate Social Responsibility Policy) Rules 2014. The
Corporate Social Responsibility Committee has formulated a Corporate
Social Responsibility Policy (CSR policy) indicating the activities to
be undertaken by the Company. The CSR policy may be accessed on the
Company's website at the link; http://www.rcom.co.in/Rcom/
aboutus/ir/pdf/CSR-Policy.pdf.
The CSR Committee consists of Smt. Manjari Kacker as Chairperson, Shri
Anil D. Ambani, Prof J. Ramachandran, Shri Deepak Shourie, Shri A. K.
Purwar and Shri R. N. Bhardwaj, Directors as members.
The disclosures with respect to CSR activities is given in Annexure -
F.
Orders, if any, passed by Regulators or Courts or Tribunals
No orders have been passed by the Regulators or Courts or Tribunals
impacting the going concern status and the Company's operation.
Internal Financial Controls and their adequacy
The Company has in place adequate internal financial controls across the
organisation. The same is subject to review periodically by the
internal audit cell for its effectiveness. During the year, such
controls were tested and no reportable material weakness in the design
or operation were observed.
Business Responsibility Statement
SEBI vide its Circular CIR/CFD/DIL/8/2012 dated August 13, 2012, has
mandated top 100 listed entities, based on market capitalisation on BSE
Limited and National Stock Exchange of India Limited at March 31, 2012,
to include Business Responsibility Report ("BRR") as part of the Annual
Report. In view of FAQ's issued by SEBI, the BRR has been uploaded on
the website of the Company at www.rcom.co.ininvestor relationsFinancial Results. Any shareholder interested in obtaining physical
copy of BRR may write to the Company Secretary at the Registered Office
of the Company.
Acknowledgement
Your Directors would like to express their sincere appreciation for the
co-operation and assistance received from shareholders, debenture
holders, debenture trustee, bankers, financial institutions, regulatory
bodies and other business constituents during the year under review.
Your Directors also wish to place on record their deep sense of
appreciation for the commitment displayed by all executives, officers
and staff, resulting in the successful performance of the Company
during the year.
For and on behalf of the Board of Directors
Mumbai Anil Dhirubhai Ambani
May 29, 2015 Chairman
Mar 31, 2014
Dear Shareowners,
The Directors have pleasure in presenting the 10th Annual Report and
the audited accounts for the financial year ended March 31, 2014.
Financial Results
The standalone performance of the Company for the financial year ended
March 31, 2014 is summarised below:
Particulars Financial Year ended *Financial Year ended
March 31, 2014 March 31, 2013
Rs. in crore US$ in
million** Rs.in crore US$ in
million**
Total income 12,445 2,079 12,820 2,362
Gross profit before
depreciation, amortisation
and exceptional 1,290 215 2,305 425
items Less:
Depreciation and
amortisation 2,048 342 1,681 310
Profit / (Loss)before tax (758) (127) 624 115
Less: Provision for:
Current tax / Excess
provision for Tax of
earlier years 1,488 248 - -
Profit / (Loss) after tax 730 121 624 115
Add : Balance brought
forward from previous year - - - -
Profit available for
appropriation 730 121 624 115
Appropriations:
Proposed Dividend on
equity shares - - 52 10
Dividend Tax - - 9 2
Transfer (from) / to
General Reserve - - - -
Transfer to Debenture
Redemption Reserve 171 29 246 45
Balance carried to Balance
Sheet 559 92 317 58
* Figures of previous year have been regrouped and reclassified,
wherever required.
** Exchange Rate Rs. 59.915 = US$ 1 as on March 31, 2014 (Rs. 54.285 = US$1
as on March 31, 2013).
Financial Performance
During the year under review, your Company has earned income of Rs.
12,445 crore against Rs. 12,820 crore for the previous year. The Company
has earned profit of Rs. 730 crore for the year as compared to profit of Rs.
624 crore in the previous year.
Dividend
During the year under review, the Board of Directors has not
recommended any dividend on the equity shares of the Company.
Business Operations
The Company together with its subsidiaries operates on a pan- India
basis and offers the full value chain of wireless (CDMA and GSM
including 3G services), wireline, national long distance,
international, voice, data, video, Direct-To-Home (DTH) and internet
based communications services under various business units organised
into strategic geographical business units: India and Global
Operations. From the second quarter of the financial year under review,
the functions of business operations of the Company have been
re-organised with intent to provide financial reporting system for
better performance evaluation and decision making. The change in
segment reporting will improve visibility and disclosures of the
financial performance of business operations and assist in better
understanding of the performance of the telecom operations of the
Company in the domestic i.e. Indian telecom market and the global
business operations ranging from carrier business to voice calling
cards in the international markets.
These strategic business units are supported by passive infrastructure
connected to nationwide backbone of Optic Fibre Network as well as
fully integrated network operation system and by the largest retail
distribution and customer services facilities. The Company also owns
through its subsidiaries, a global submarine cable network
infrastructure and offers managed services, managed Ethernet and
application delivery services.
Management Discussion and Analysis
Management 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
this Annual Report.
Fund Raising Programme
During the current financial year 2014-15, the Company has allotted
33,82,86,197 equity shares of Rs. 5 each at a offer price of Rs. 142.14 per
equity share of Rs. 5 each (including a share premium of Rs. 137.14 per
equity share) under Qualified Institutional Placement (QIP) and received
an amount aggregating to Rs. 4808.40 crore.
The Company on August 7, 2014 has also allotted 8,66,66,667 Warrants
entitling for subscription of equivalent number of Equity Shares of Rs.
5/- each at a price of Rs. 150/- per Warrant (including share premium of
Rs 145 per Equity Share) aggregating Rs. 1,300 crore under preferential
allotment, to the Promoter Group entity. 50 per cent of the issue
price has been received on the date of allotment of the said Warrants
and the balance 50 per cent will be receivable on or before March 31,
2015. GCX Limited, a subsidiary of the Company has, on August 1, 2014
issued Senior Secured Bonds of USD 350 million bearing 7 per cent p.a.
interest, with a maturity of 5 years.
Subsidiaries
During the year under review, Reliance Communications Tamil Nadu
Private Limited, Global Cloud Xchange Limited and GCX Limited became
the subsidiary of the Company and Kerala Communication Network Private
Limited, M. P. Network Private Limited and Vanco EpE ceased to be
subsidiaries of the Company. In accordance with the general circular
issued by the Ministry of Corporate Affairs (MCA), Government of India
(GOI), Balance Sheet, Statement of profit and Loss and other documents
of the subsidiary companies are not attached with the Balance Sheet of
the Company. The Company shall make available the copies of annual
accounts of the subsidiary companies and related detailed information
to the shareholders of the Company seeking the same. The annual
accounts of the subsidiary companies will also be kept for inspection
by any shareholder at the Registered Office of the Company and that of
respective subsidiary companies.
Further, pursuant to Accounting Standard (AS)-21 prescribed under the
Companies (Accounting Standards) Rules, 2006 (Accounting Standards
Rules) and the Listing Agreement, Consolidated Financial Statements
presented herein by the Company include financial information of
subsidiary companies, which forms part of this Annual Report.
Demerger of Real Estate
During the year under review, the Board of Directors had in- principle
decided on a demerger of the real estate held by the Company into a
separate unit to unlock substantial value for the benefit of
stakeholders of the Company. The proposed separation of real estate
into a separate unit is part of Company''s strategic plan to divest
non-core assets, and focus on its core wireless and enterprise
business.
Directors
In terms of the provisions of the Companies Act, 2013, Shri Anil D.
Ambani, Chairman of the Company, retires by rotation and being
eligible, offers himself for re-appointment at the ensuing Annual
General Meeting (AGM). A brief resume of Shri Anil D. Ambani, Chairman
being appointed at the ensuing AGM, nature of expertise in Specific
functional areas and names of the companies in which he holds
directorship and / or membership / chairmanships of Committees of the
respective Boards, shareholding and relationship between directors
inter se as stipulated under Clause 49 of the Listing Agreement with
the Stock Exchanges in India, is given in the section on Corporate
Governance Report forming part of this Annual Report.
In terms of provisions of the Companies Act, 2013, the Board has
proposed appointment of Prof. J. Ramachandran, Shri Deepak Shourie and
Shri A. K. Purwar, who have been Independent Directors of the Company
as per the requirements of the Listing Agreement with the Stock
Exchanges, as Independent Directors, not liable to retire by rotation
for a term of five consecutive years effective from the date of passing
of the resolution by the members through Postal Ballot for which
separate notice has been sent to the Members of the Company.
Shri R. N. Bhardwaj was appointed as an Additional Director on August
29, 2013 under Section 260 of the Companies Act, 1956. Pursuant to the
provisions of Section 161 of the Companies Act, 2013, which corresponds
to Section 260 in the Companies Act, 1956, Shri R. N. Bhardwaj holds
Office till the date of the ensuing Annual General Meeting of the
members of the Company. It has been proposed to appoint him as an
Independent Director not liable to retire by rotation for a consecutive
term of five years effective from the date of passing of resolution by
the members through Postal Ballot which has been sent to the Members of
the Company.
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. As per the provisions of Section 149 of the
Companies Act, 2013, the Company should have at least one woman
director.
In view of above, the Board of Directors has proposed the appointment
of Smt. Manjari Kacker as a Director, liable to retire by rotation to
the members through Postal Ballot.
Shri S. P. Talwar, Director passed away on August 9, 2013. The Board
placed on record the deep sense of appreciation of the services
rendered by Shri S. P. Talwar as a director of the Company.
Directors'' Responsibility Statement
Pursuant to the requirements 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 financial year ended
March 31, 2014, the applicable Accounting Standards had been followed
along with proper explanation relating to material departures, if any;
ii. the Directors had 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 had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
iv. the Directors had prepared the annual accounts for the financial
year ended March 31, 2014 on a ''going concern'' basis.
Consolidated Financial Statements
The Audited Consolidated Financial Statements, based on the financial
statements received from subsidiaries, joint ventures and associates,
as approved by their respective Board of Directors have been prepared
in accordance with 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 Venture'', notified under
Section 211(3C) of the Companies Act, 1956 read with the Accounting
Standards Rules as applicable.
Auditors and Auditors'' Report
M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co.LLP,
Chartered Accountants, the Auditors of the Company hold Office until the
conclusion of the ensuing AGM and are eligible for re-appointment.
The Company has received letters from M/s. Chaturvedi & Shah, Chartered
Accountants and M/s. BSR & Co. LLP, Chartered Accountants; to the
effect that their appointment, if made, would be within the prescribed
limits under Section 143(3) of the Companies Act, 2013 and that they
are not disQualified for appointment.
The observations and comments given by the Auditors in their report
read together with notes to Accounts are self explanatory and hence do
not call for any further comments under Section 217 of the Companies
Act, 1956.
Cost Auditors
Pursuant to the direction of the Central Government that the cost
accounts maintained by the Company be audited by a Cost Auditor, the
Company has appointed M/s. V. J. Talati & Co., Cost Accountants, as
Cost Auditors for conducting the cost audit for the telecommunications
businesses of the Company for the financial year ending March 31, 2015.
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 employees are set out in
the Annexure to the Directors'' Report. However, having regard to the
provisions of Section 219(1)(b) (iv) of the Companies Act, 1956, the
Annual Report excluding the aforesaid information is being sent to all
the members of the Company and others entitled thereto. Any member
interested in obtaining such particulars may write to the Company
Secretary at the Registered Office of the Company.
Employees Stock Option Scheme
During the year under review, the Company has not granted any Options
to the employees of the Company. Employees Stock Option Scheme (ESOS)
was approved and implemented by the Company and Options were granted to
employees under ESOS Plan 2008 and Plan 2009 in accordance with the
Securities and Exchange Board of India (Employee Stock Option Scheme
and Employee Stock Purchase Scheme) Guidelines, 1999 (''the SEBI
Guidelines''). The ESOS Compensation Committee, constituted in
accordance with the SEBI Guidelines administrate and monitors the
Scheme.
The Company has received a certificate from the auditors of the Company
that the ESOS Plan 2008 and 2009 have been implemented in accordance
with the SEBI Guidelines and as per the resolution passed by the
members of the Company authorising issuance of the said ESOS.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
As the Company is being a telecommunications service provider, most of
the information of the Company as required under Section 217(1)(e) of
the Companies Act, 1956, read with the Companies (Disclosures of
Particulars in the Report of Board of Directors) Rules, 1988 is not
applicable. However, the information as applicable has been given in
the Annexure  A forming part of this Report.
Corporate Governance
The Company has adopted "Reliance Group-Corporate Governance Policies
and Code of Conduct" which has set out the systems, process and
policies conforming to the international standards. The report on
Corporate Governance as stipulated under Clause 49 of the Listing
Agreement with the Stock Exchanges, forms part of this Annual Report.
A certificate from the auditors of the Company M/s. Chaturvedi & Shah,
Chartered Accountants and M/s. BSR & Co. LLP, Chartered Accountants
conforming compliance with conditions of Corporate Governance as
stipulated under Clause 49 of the Listing Agreement, is enclosed to
this Report.
Business Responsibility Statement
SEBI vide its Circular CIR/CFD/DIL/8/2012 dated August 13, 2012, has
mandated the top 100 listed entities, based on market capitalisation on
BSE Limited and National Stock
Exchange of India Limited at March 31, 2012, to include Business
Responsibility Report ("BRR") as part of the Annual Report. In view of
FAQ''s dated May 10, 2013 issued by SEBI, the BRR has been uploaded on
the website of the Company www.rcom.co.ininvestor relationsshareholders. Any shareholder nterested in obtaining physical copy of
BRR may write to the Company Secretary at the registered Office of
the Company
Acknowledgements
Your Directors would like to express their sincere appreciation for the
co-operation and assistance received from shareholders,
debentureholders, debenture trustee, bankers, financial nstitutions,
regulatory bodies and other business constituents during the year under
review. Your Directors also wish to place on record their deep sense of
appreciation for the commitment displayed by all executives, Officers
and staff, resulting in the successful performance of the Company
during the year.
For and on behalf of the Board of Directors
Mumbai Anil Dhirubhai Ambani
August 14, 2014 Chairman
Mar 31, 2013
Dear Shareowners,
The Directors have pleasure in presenting the 9th Annual Report and the
audited accounts for the financial year ended March 31, 2013,
Financial Results
The standalone performance of the Company for the financial year ended
March 31, 2013 is summarised below:
Particulars Financial Year ended Financial Year ended
March 31. 2013 March 31, 2012
Rs. in
crore USS in
million** Rs. in
crore USS in
million**
Total income 12,820 2,362 11,863 2,332
Gross profit before
depreciation,
amortisation and 2,305 425 1,896 373
exceptional items
Less:
Depreciation and
amortisation 1,681 310 1,741 342
Profit/(Loss)before tax 624 115 155 31
Less: Provision for:
Current tax/Excess
provision for Tax of
earlier years - - (1) -
Profit/f Loss) after tax 624 115 156 31
Add : Balance brought
forward from previous year - - - -
Profit available for
appropriation 624 115 156 31
Appropriations:
Proposed Dividend
on equity shares 52 10 52 10
Dividend Tax 9 2 8 2
Transfer (from) /to
General Reserve - - - -
Transfer to Debenture
Redemption Reserve 246 45 91 18
Balance carried to
Balance Sheet 317 58 5 1
* Figures of previous year have been regrouped and reclassified,
wherever required.
** Exchange Rate Rs. 54.285 = USS 1 as on March 31, 2013 [Rs. 50.875 =
US$1 as on March 31, 2012).
Financial Performance
During the year under review, your Company has earned income of Rs. 1
2,820 crore against Rs. 11,863 crore for the previous year. The
Company has earned Profit of Rs. 624 crore for the year as compared to
profit of Rs. 1 56 crore in the previous year.
Dividend
Your Directors have recommended a dividend of Rs. 0.25 (5 per cent) per
equity share each of t 5 for the financial year ended March 31, 201 3,
which, if approved at the ensuing 9"1 Annual General Meeting (AGM),
will be paid to (i) all those equity shareholders whose names appear in
the Register of Members as on close of the day on August 16, 2013, and
(ii) those equity shareholders whose names appear as beneficial owners
as on close of the day on August 1 6, 201 3, as furnished by the
National Securities Depository Limited and Centra! Depository Services
(India) Limited for the purpose.
Business Operations
The Company together with its subsidiaries operates on a pan- India
basis and offers the full value chain of wireless (CDMA and GSM
including 3G services), wireline, national long distance,
international, voice, data, video, Direct-To-Home (DTH) and internet
based communications services under various business units organised
into strategic customer facing business segments:
Wireless, Global and Broadband. These strategic business uni are
supported by passive infrastructure connected to nationwic backbone of
Optic Fibre Network as well as fully integral network operation system
and by the largest retail distribute and customer services facilities.
The Company also owns throw its subsidiaries, a global submarine cable
network infrastructi and offers managed services, managed Ethernet and
applicati delivery services.
Schemes of Arrangements
Re-organisation of subsidiary companies.
1. Scheme of Arrangement between Reliance BPO Priv Limited and
Reliance Communications Infrastruct Limited:
During the year under review, the Flon''ble High Cc of Judicature at
Bombay sanctioned the Scheme Arrangement by way of demerging BPO
Division Retiance BPO Private Limited into Reliance Communicat
Infrastructure Limited, a wholly owned subsidiary of Company vide order
dated December 20, 201 2 effec from February 18, 2013, The appointed
date of Sch was April 1, 201 2.
2, Scheme of Amalgamation between Netizen Rajas Limited and Reliance
Infratel Limited:
As reported in the annual report of the previous year, Netizen
Rajasthan Limited, a wholly owned subsidiary of Reliance Infratel
Limited (RITL), a subsidiary of the Company, amalgamated with RITL in
terms of the Scheme of Amalgamation sanctioned by the Hon''ble High
Court of Judicature at Bombay vide order dated April 20, 2012 effective
from May 1 5, 201 2. The appointed date was March 1, 2012.
Management Discussion and Analysis
Management 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
this Annual Report.
Subsidiary Companies
During the year under review, Reliance BPO Private Limited, MP Network
Private Limited, Kerala Communication Network Private Limited and
Reliance Globalcom Limited became the subsidiaries of the Company.
During the year under review, Reliance Wimax World Limited and its 1 8
subsidiaries ceased to be subsidiaries of the Company.
In accordance with the general circular issued by the Ministry of
Corporate Affairs (MCA), Government of India (GOI), Balance Sheet,
Statement of Profit and Loss and other documents of the subsidiary
companies are not attached with the Balance Sheet of the Company. The
Company shall make available the copies of annual accounts of the
subsidiary companies and related detailed information to the
shareholders of the Company seeking the same, The annual accounts of
the subsidiary companies will also be kept for inspection by any
shareholder at the Registered Office of the Company and that of
respective subsidiary companies.
Further, pursuant to Accounting Standard (AS)-21 prescribed under the
Companies (Accounting Standards) Rules, 2006 and the Listing Agreement,
Consolidated Financial Statements presented herein by the Company
include financial information of subsidiary companies, which forms part
of this Annual Report.
Directors
In terms of the provisions of the Companies Act, 1956, Shri S. P.
Talwar, Director of the Company retires by rotation and being eligible,
offers himself for re-appointment at the ensuing Annual General Meeting
(AGM).
A brief resume of the Director retiring by rotation at the ensuing AGM,
nature of expertise in specific functional areas and names of the
companies in which he holds directorship and/ or membership/
chairmanships of Committees of the respective Boards, shareholding and
relationship between directors inter se as stipulated under Clause 49
of the Listing Agreement with the Stock Exchanges in India, is given in
the section on Corporate Governance Report forming part of this Annual
Report.
Directors'' Responsibility Statement
Pursuant to the requirements under Section 217(2AA) of the Companies
Act, 1 956 with respect to Directors'' Responsibility Statement, it is
hereby confirmed that:
i. in the preparation of the annual accounts for financial year ended
March 31, 2013, the applicable Accounting Standards had been followed
along with proper explanation relating to material departures;
ii. the Directors had 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, 201 3 and of the Profit of the Company
for the year under review;
iii. the Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
iv. the Directors had prepared the annual accounts for financial year
ended March 31, 201 3 on a ''going concern'' basis.
Auditors and Auditors'' Report
M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co.,
Chartered Accountants, the Auditors of the Company hold office until
the conclusion of the ensuing AGM and are eligible for re-appointment.
The Company has received letters from M/s. Chaturvedi & Shah, Chartered
Accountants and M/s. B S R & Co., Chartered Accountants, to the effect
that their appointment, if made, would be within the prescribed limits
under Section 224(1 B) of the Companies Act, 1 956, and that they are
not disqualified for such appointment within the meaning of Section 226
of the Companies Act, 1 956.
The observations and comments given by the Auditors in their report
read together with notes to Accounts are self explanatory and hence do
not call for any further comments under Section 21 7 of the Companies
Act, 1 956.
Consolidated Financial Statements
The Audited Consolidated Financial Statements, based on the financial
statements received from subsidiaries, joint ventures and associates,
as approved by their respective Board of Directors have been prepared
in accordance with 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 Venture'', notified under
Section 211 (3C) of the Companies Act, 1 956 read with the Accounting
Standards Rules as applicable.
Cost Auditors
Pursuant to the direction of the Central Government that the cost
accounts maintained by the Company be audited by a cost auditor, the
Company has appointed M/s. V J Talati & Company, Cost Accountants, as
Cost Auditors for conducting the cost audit for the telecommunications
businesses of the Company for the financial year ending March 31, 2014.
Particulars of Employees
In terms of the provisions of Section 21 7(2A) of the Companies Act,
1956 read with the Companies (Particulars of Employees) Rules, 1975 as
amended, the names and other particulars of employees are set out in
the Annexure to the Directors'' Report, However, having regard to the
provisions of Section 21 9(1 )(b) (iv) of the Companies Act, 1956, the
Annual Report excluding the aforesaid information is being sent to all
the members of the Company and others entitled thereto. Any member
interested in obtaining such particulars may write to the Company
Secretary at the Registered Office of the Company.
Employees Stock Option Scheme
During the year under review, the Company has not granted any Options
to the employees of the Company, Employees Stock Option Scheme (ESOS)
was approved and implemented by the Company and Options were granted to
employees under ESOS Plan 2008 and Plan 2009 in accordance with the
Securities and Exchange Board of India (Employee Stock Option Scheme
and Employee Stock Purchase Scheme) Guidelines, 1 999 (''the SEBI
Guidelines''),
Conservation of Energy. Technology Absorption and Foreign Exchange
Earnings and Outgo
The particulars as required to be disclosed pursuant to Section 21 7(1
He) of the Companies Act, 1 956, read with the Companies (Disclosures
of Particulars in the Report of Board of Directors) Rules, 1 988, are
given in the Annexure - A forming part of this Report.
Corporate Governance
The Company has adopted "Reliance Group-Corporate Governance Policies
and Code of Conduct" which has set out the systems, process and
policies conforming to the international standards. The report on
Corporate Governance as stipulated under Clause 49 of the Listing
Agreement with the Stock Exchanges, forms part of this Annual Report.
A Certificate from the auditors of the Company M/s. Chaturvedi & Shah,
Chartered Accountants and M/s. BSR & Co., Chartered Accountants
conforming compliance with conditions of Corporate Governance as
stipulated under Clause 49 of the Listing Agreement, is enclosed to
this Report.
Business Responsibility Reporting
SEBI vide its Circular CIR/CFD/DIL/8/2012 dated August 13, 2012, has
mandated the top 100 listed entities, based on market capitalisation on
Bombay Stock Exchange and National Stock Exchange at March 31, 2012, to
include Business Responsibility Report ("BRR") as part of the Annual
Report. In view of FAQ''s dated May 1 0, 201 3 issued by SEBI, the BRR
has been uploaded on the website of the Company www.rcom.co.ininvestor
relationsshareholders. Any shareholder interested in obtaining
physical copy of BRR may write to the Company Secretary at the
registered office of the Company. ''
Acknowledgements
Your Directors would like to express their sincere appreciation for the
co-operation and assistance received from shareholders,
debentureholders, debenture trustee, bankers, financial institutions,
regulatory bodies and other business constituents during the year under
review. Your Directors also wish to place on record their deep sense of
appreciation for the commitment displayed by all executives, officers
and staff, resulting in the successful performance of the Company
during the year.
For and on behalf of the Board of Directors
Mumbai Anil Dhirubhai Ambani
May 10, 2013 Chairman
Mar 31, 2012
The Directors have pleasure in presenting the 8th Annual Report and
the audited accounts for the financial year ended March 31, 2012.
Financial Results
The standalone performance of the Company for the financial year ended
March 31, 2012 is summarised below:
Particulars Financial
Year ended * Financial
Year ended
March 31, 2012 March 31, 2011
Rs.in crore US$ in
million** Rs.in crore US$ in
million**
Total income 11,863 2,332 13,282 2,978
Gross profit before
depreciation, 1,896 373 735 165
amortisation and
exceptional items
Less:
a. Depreciation
and amortisation 1,741 342 1,595 358
b. Exceptional
items and other
adjustments - - - -
Profit/(Loss)
before tax 155 31 (860) (193)
Less: Provision for:
Current tax/ Excess
provision for Tax
of earlier years (1) - (102) (23)
Profit/(Loss) after tax 156 31 (758) (170)
Add : Balance brought
forward from previous
year - - 662 149
Profit available for
appropriation 156 31 (96) (21)
Appropriations:
Proposed Dividend
on equity shares 52 10 103 23
Dividend Tax 8 2 17 4
Transfer (from)
/to General Reserve - - (216) (48)
Transfer to Debenture
Redemption Reserve 91 18 - -
Balance carried to
Balance Sheet 5 1 - -
* Figures of previous year have been regrouped and reclassified,
wherever required.
** Exchange Rate Rs. 50.875 = US$ 1 as on March 31, 2012 (Rs.44.595 = US$1
as on March 31, 2011).
Financial Performance
During the year under review, your Company has earned income of Rs. 1
1,863 Crore against Rs. 13,282 crore for the pervious year. The Company
has earned Profit of Rs. 156 crore for the year as compared to loss of Rs.
758 crore in the previous year.
Dividend
Your Directors have recommended a dividend of Rs. 0.25, (5 per cent) per
equity share each of Rs. 5 for the financial year ended March 31, 2012,
which, if approved at the ensuing 8th Annual General Meeting (AGM),
will be paid to (i) those equity shareholders whose names appear in the
Register of Members as on close of the day on August 24, 201 2, and
(ii) to those equity shareholders whose names appear as beneficial
owners as on close of the day on August 24, 2012, as furnished by the
National Securities Depository Limited and Central Depository Services
(India) Limited for the purpose.
Business Operations
The Company together with its subsidiaries operates on a pan-India
basis and offers the full value chain of wireless (CDMA and GSM
including 3G services), wireline, national long distance,
international, voice, data, video, Direct-To-Home (DTH) and internet
based communications services under various business units organised
into strategic customer facing business segments; Wireless, Global and
Broadband. These strategic business units are supported by passive
infrastructure connected to nationwide backbone of Optic Fibre Network
as well as fully integrated network operation system and by the largest
retail distribution and customer services facilities. The Company also
owns through its subsidiaries, a global submarine cable network
infrastructure and offers managed services, managed Ethernet and
application delivery services.
During the year under review, the Company had crossed 153 million
wireless customers as on March 31, 2012. The Company ranks among the
top two wireless operators in the country.
Redemption of Zero Coupon Foreign Currency Convertible Bonds (FCCBs) of
US$ 500 Million and US$ 1000 Million
On May 10, 2011, being the due date, the Company redeemed outstanding
FCCBs as per terms and conditions of US$ 500 million. In view of this
redemption, the Company would not be required to allot 2,74,1 3,085
equity shares of Rs. 5 each arising out of conversion of the said FCCBs.
On March 1, 201 2, being the due date, the Company also redeemed
outstanding FCCBs as per terms and conditions of US$ 1,000 million. In
view of this redemption, the Company would not be required to allot
6,17,25,849 equity shares of Rs. 5 each arising out of conversion of the
said FCCBs.
Facility Agreement with Banks
During the year under review, the Company has availed drawdown of
second and third tranches of disbursements of the loan sanctioned;
aggregating to Rs. 2,980 crore (US$ 666 Million) for refinancing 3G
spectrum fee paid by the Company and Rs. 715 crore (US$ 141 Million) for
equipment imports by the Company and Reliance Telecom Limited (RTL), a
wholly owned subsidiary
During the year under review, Company has also successfully completed
refinancing of redemption value of its outstanding FCCBs of Rs. 6,000
crore (US$ 1,182 million) on maturity thereof by availing funds from
consortium consist of Industrial and Commercial Bank of China Ltd
(ICBC), China Development Bank Corporation (CDB) and Export Import Bank
of China (EXIM).
Schemes of Arrangements
(a) Scheme of Arrangement with Global Innovative Solutions Private
Limited (GISPL).
As reported in the annual report of the previous year, GISPL, a wholly
owned subsidiary of the Company, amalgamated with the Company in terms
of the Scheme of Amalgamation sanctioned by the Hon'ble High Court of
Judicature at Bombay vide order dated April 29, 2011 and effective
from May 25, 2011.
(b) Re-organisation of subsidiary companies.
1. As reported in the annual report of the previous year, the Hon'ble
High Court of Judicature at Bombay sanctioned the following Schemes of
Arrangement vide orders dated May 6, 2011.
i. Reliance Communications Maharashtra Private Limited, a wholly owned
subsidiary of Reliance Telecom Limited (RTL) merged into RTL.
ii. Matrix Innovations Limited, a wholly owned subsidiary of Reliance
Communications Infrastructure Limited (RCIL) merged into RCIL.
iii. Reliance Global IDC Limited, a wholly owned subsidiary of Reliance
Infratel Limited (RITL) merged into RITL.
The above mentioned Schemes were effective from May 25, 2011.
2. Scheme of Arrangement between Netizen Rajasthan Limited and
Reliance Infratel Limited.
During the year under review, Netizen Rajasthan Limited, a wholly owned
subsidiary of RITL, a subsidiary of the Company, amalgamated with RITL
in terms of the Scheme of Amalgamation sanctioned by the Hon'ble High
Court of Judicature at Bombay vide order dated April 20, 2012 effective
from May 15, 2012. The appointed date was March 1, 2012.
Management Discussion and Analysis
Management 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
this Annual Report.
The Company has during the year, entered into various contracts in the
areas of telecom and value added service businesses. While benefits
from such contracts will accrue in the future years, their progress is
periodically reviewed.
Subsidiary Companies
During the year under review, Vanco Euronet Sro, Vanco Net Direct
Limited, WANcom Gmbh ceased to be subsidiaries of the Company. In
accordance with the general circular issued by the Ministry of
Corporate Affairs (MCA), Government of India (GOI), Balance Sheet,
Statement of Profit and Loss and other documents of the subsidiary
companies are not attached with the Balance Sheet of the Company. The
Company shall make available the copies of annual accounts of the
subsidiary companies and related detailed information to the
shareholders of the Company seeking the same. The annual accounts of
the subsidiary companies will also be kept for inspection by any
shareholder at the Registered Office of the Company and that of
respective subsidiary companies.
Further, pursuant to Accounting Standard (AS)-21 prescribed under the
Companies (Accounting Standards) Rules, 2006 and the Listing Agreement,
Consolidated Financial Statements presented herein by the Company
include financial information of subsidiary companies, which forms part
of this Annual Report.
Directors
In terms of the provisions of the Companies Act, 1956, Shri A. K.
Purwar, Director of the Company retires by rotation and being eligible,
offers himself for re-appointment at the ensuing Annual General Meeting
(AGM).
A brief resume of the Director retiring by rotation at the ensuing AGM,
nature of expertise in specific functional areas and names of the
companies in which he holds directorship and/ or membership/
chairmanships of Committees of the respective Boards, shareholding and
relationship between directors inter se as stipulated under Clause 49
of the Listing Agreement with the Stock Exchanges in India, is given in
the section on Corporate Governance Report forming part of this Annual
Report.
Directors' Responsibility Statement
Pursuant to the requirements 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 financial year ended
March 31, 2012, the applicable Accounting Standards had been followed
along with proper explanation relating to material departures;
ii. the Directors had 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, 2012 and of the Profit of the Company
for the year under review;
iii. the Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
iv. the Directors had prepared the annual accounts for financial year
ended March 31, 2012 on a 'going concern' basis.
Consolidated Financial Statements
The Audited Consolidated Financial Statements, based on the financial
statements received from subsidiaries, joint ventures and associates,
as approved by their respective Board of Directors have been prepared
in accordance with 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 Venture', notified under
Section 211(3C) of the Companies Act, 1956 read with the Accounting
Standards Rules as applicable.
Auditors and Auditors' Report
M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co.,
Chartered Accountants, the Auditors of the Company hold office until
the conclusion of the ensuing AGM and are eligible for re-appointment.
The Company has received letters from M/s. Chaturvedi & Shah, Chartered
Accountants and M/s. B S R & Co., Chartered Accountants, to the effect
that their appointment, if made, would be within the prescribed limits
under Section 224(1 B) of the Companies Act, 1 956, and that they are
not disqualified for such appointment within the meaning of Section 226
of the Companies Act, 1956.
The observations and comments given by the Auditors in their report
read together with notes to Accounts are self explanatory and hence do
not call for any further comments under Section 217 of the Companies
Act, 1956.
Cost Auditors
Pursuant to the direction of the Central Government that the cost
accounts maintained by the Company be audited by a cost auditor, the
Company has appointed M/s. V J Talati & Company, Cost Accountants, as
Cost Auditors for conducting the cost audit for the telecommunications
businesses of the Company for the financial year ending March 31, 2013.
Initial Public Offering of Subsea telecommunication infrastructure
network business
The Company is evaluating potential initial public offering and listing
in Singapore of Reliance Globalcom Limited, a subsidiary company which
has subsea telecommunications infrastructure network business, through
a business trust in Singapore, subject to all necessary permissions,
sanctions and approvals. The cornerstone of the Company's strategy for
consistent growth in future will always be sustainable value creation
for all stakeholders of the Company,
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 and
the Companies (Particular of Employees) Amendment Rules, 2011, the
names and other particulars of employees are set out in the Annexure to
the Directors' Report. However, having regard to the provisions of
Section 219(1)(b) (iv) of the Companies Act, 1956, the Annual Report
excluding the aforesaid information is being sent to all the members of
the Company and others entitled thereto. Any member interested in
obtaining such particulars may write to the Company Secretary at the
Registered Office of the Company.
Employees Stock Option Scheme
During the year under review, the Company has not granted any Options
to the employees of the Company. Employees Stock Option Scheme (ESOS)
was approved and implemented by the Company and Options were granted to
employees under ESOS Plan 2008 and Plan 2009 in accordance with the
Securities and Exchange Board of India (Employee Stock Option Scheme
and Employee Stock Purchase Scheme) Guidelines, 1999 ('the SEBI
Guidelines').
The particulars as required under Clause 12 of the SEBI Guidelines are
as follows:
Particulars ESOS Plan 2008 ESOS Plan 2009
a) Total Options granted 1,49,91,185 Options 1,32,1 7,975 Options
b) No of Options
surrendered 1,32,17,975 Options 2,44,000 Options
c) Pricing formula
decided by ESOS
Compensation Market Price or such
other price Average of the weekly
high and low of the
Committee as Board / Committee
may closing price of the
equity share of the
determine. Different
Exercise Company at National
Stock Exchange of
price may apply to
different India Limited during
two weeks preceding
Plan(s). the date of Grant i.e.
January 16, 2009.
d) Options vested 8,75,253 Options 63,34,253 Options
e) Options exercised Nil Nil
f) Total number of
equity shares arising
as a result Subject to Option(s)
exercised by Subject to Option(s)
exercised by the
of exercise of Options the employees, not
exceeding employees, not
exceeding 63,34,253
8,75,253 Equity
Shares. Equity Shares.
g) Options lapsed/
forfeited during the year 3,06,059 Options 24,22,039 Options
h) Variation of terms
of Options None None
i) Money realised by
exercise of Options
during Nil Nil
the year
j) Total number of
Options in force at
the end of 5,69,194 Options 39,12,214 Options
the year
k) Employee wise details
of Options granted to:
i. Senior managerial
personnel (i.e. Managing Nil Nil
Director/Whole-time
Director/Manager)
ii. Employee who
receives grant in any one Nil Nil
year of Option amounting
to 5 per cent or more
of Option granted during
the year
iii. Identified
employees who were
granted Nil Nil
options, during any
one year equal to or
exceeding 1 per cent
of the issued capital
(excluding outstanding
warrants and
conversions) of the
Company at the time
of grant
l) Diluted Earnings
Per Share (EPS)
pursuant to N.A. N.A.
issue of shares on
exercise of Options
calculated There would not be
any fresh There would not be any
fresh issue of
in accordance with
Accounting Standard (AS) issue of equity
shares of the equity shares of the
Company upon
20 Company upon
exercise of exercise of Options by
employees.
Options by employees.
m) The difference between
employee compensation
cost using intrinsic
value method and fair
value of the Options
and impact of this
difference on
Profits Rs. 5 crore Rs. 12 crore
EPS of the Company Rs. 0.65 Rs. 0.65
n) Weighted- average
exercise prices of
Options Nil Nil
granted during the year
where exercise price
is less than market
price.
o) Weighted- average
fair values of Options Nil Nil
granted during the year
where exercise price is
less than market price.
p) Significant
assumptions made in
computation base: Black Scholes
model
of fair value
(i) risk-free interest
rate, 8.05 per cent p.a. 8.05 per cent p.a.
(ii) expected life, 6 years 7 years
(iii) expected
volatility, 52.04 per cent 52.04 per cent
(iv) expected dividends
(yield), and 0.02 per cent 0.07 per cent
(v) the price of the
underlying share in
market Rs. 541.15 per shareRs. 174.00 per share
at the time of option
grant.
The Company has received a certificate from the auditors of the Company
that the ESOS Plan 2008 and 2009 have been implemented in accordance
with the SEBI Guidelines and as per the resolution passed by the
members of the Company authorising issuance of the said ESOS.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
The particulars as required to be disclosed pursuant to Section
217(1)(e) of the Companies Act, 1956, read with the Companies
(Disclosures of Particulars in the Report of Board of Directors) Rules,
1988, are given in the Annexure - A forming part of this Report.
Corporate Governance
The Company has adopted "Reliance Group-Corporate Governance Policies
and Code of Conduct" which has set out the systems, process and
policies conforming to the international standards. The report on
Corporate Governance as stipulated under Clause 49 of the Listing
Agreement with the Stock Exchanges, forms part of this Annual Report.
A Certificate from the auditors of the Company M/s. Chaturvedi & Shah,
Chartered Accountants and M/s. B S R & Co., Chartered Accountants
conforming compliance with conditions of Corporate Governance as
stipulated under Clause 49 of the Listing Agreement, is enclosed to
this Report.
Acknowledgements
Your Directors would like to express their sincere appreciation for the
co-operation and assistance received from shareholders,
debentureholders, debenture trustee, bankers, financial institutions,
regulatory bodies and other business constituents during the year under
review. Your Directors also wish to place on record their deep sense of
appreciation for the commitment displayed by all executives, officers
and staff, resulting in the successful performance of the Company
during the year,
For and on behalf of the Board of Directors
Mumbai Anil Dhirubhai Ambani
June 2, 2012 Chairman
Mar 31, 2011
Dear Shareowners,
The Directors present the 7th Annual Report and the audited accounts
for the financial year ended March 31, 2011.
Financial Results
The standalone performance of the Company for the financial year ended
March 31, 2011 is summarised below:
Particulars Financial Year ended * Financial Year ended
March 31, 2011 March 31, 2010
Rs. in crore US$ in
million** Rs. in crore US$ in
million**
Total income 12,614.02 2,828.57 12,511.72 2,771.76
Gross profit before
depreciation, 728.03 163.25 2,149.06 476.09
amortisation and
exceptional items
Less:
a. Depreciation
and amortisation 1,594.27 357.50 1,511.24 334.79
b. Exceptional items
and other adjustments (6.73) (1.51) 18.35 4.07
profit/ (Loss)
before tax (859.51) (192.74) 619.47 137.23
Less:
Provision for:
Current tax (101.52) (22.76) 140.54 31.13
profit/ (Loss)
after tax (757.99) (169.98) 478.93 106.10
Add : Balance brought
forward from
previous year 662.14 148.48 502.75 111.37
profit available for
appropriation (95.85) (21.50) 981.68 217.47
Appropriations:
Proposed Dividend on
equity shares 103.20 23.14 175.44 38.87
Dividend Tax 17.14 3.84 29.14 6.46
Transfer (from) /to
General Reserve (216.19) (48.48) 40.00 8.86
Transfer to Debenture
Redemption Reserve - - 74.96 16.61
Balance carried to
Balance Sheet - - 662.14 146.67
* Figures of previous year have been regrouped and reclassified,
wherever required.
** Exchange Rate Rs. 44.595 = US$ 1 as on March 31, 2011 (Rs. 45.14= US$1
as on March 31, 2010).
Financial Performance
During the year under review, your Company has earned income of Rs.
12,614.02 crore against k 12,511.72 crore in the previous year. The
Company has incurred loss ofRs. 757.99 crore compared to profit after tax
of Rs. 478.93 crore in the previous year.
Dividend
Your Directors have recommended a dividend of Re. 0.50, (10 per cent)
per equity share each of Rs. 5 for the financial year ended March 31, 2011
out of the accumulated profits of the Company, which, if approved at the
ensuing 7th Annual General Meeting, will be paid to (i) all those
equity shareholders whose names appear in the Register of Members as on
September 18, 2011, and (ii) to those whose names appear as beneficial
owners as on September 18, 2011 as furnished by the National Securities
Depository Limited and Central Depository Services (India) Limited for
the purpose. Such declaration of dividend is made in compliance with
the Companies (Declaration of Dividend out of Reserves) Rules, 1975.
Due to absence of profits during the year under review, your Directors
are not proposing to transfer any amount to General Reserves.
Business Operations
The Company operates on a pan-India basis and offers the full value
chain of wireless (CDMA and GSM including 3G services), wireline,
national long distance, international, voice, data, video,
Direct-To-Home (DTH) and internet based communications services under
various business units organised into three strategic customer-facing
business segments; Wireless, Global and Broadband. These strategic
business units are supported by passive infrastructure connected to
nationwide backbone of Optic Fibre Network fully integrated network
operation system and by the largest retail distribution and customer
services facilities. The Company also owns through its subsidiaries, a
global submarine cable network infrastructure and offers managed
services, managed Ethernet and application delivery services. During
the year under review, the Company along with its wholly owned
subsidiary i.e; Reliance Telecom Limited (RTL) have been awarded 3G
spectrum in 13 out of 22 telecom circles, at a price of Rs. 85,850
million. The Company is one among the only 3 operators who won in 13
circles, the highest circle coverage for any existing player. The
Company won in all the 3 metros namely Mumbai, Delhi and Kolkata and
also in all those circles in which the Company has GSM incumbents.
On December 13, 2010, the Company became the first operator to offer 3G
services to customers in top 3 metro circles namely Mumbai, Delhi and
Kolkata. The Company rolled-out 3G services, on trial basis, in a
record time of 100 days of receiving 3G spectrum in the above said
metros, once again demonstrating all round execution and innovation
capabilities. The Company is in discussion with like-minded operators
to offer nation-wide 3G services to the subscribers.
During the year under review, the Company had crossed the landmark of
136 million wireless customers as on March 31, 2011. The Company ranks
among top two wireless operators in the country.
Redemption of US$ 500 Million Zero Coupon Foreign Currency Convertible
Bonds (FCCBs)
On May 10, 2011, the Company had redeemed all outstanding FCCBs as per
terms and conditions of US$ 500 million Zero Coupon Convertible Bonds
on due date. In view of redemption of said Bonds, the Company would not
be required to allot 2,74,13,085 equity shares of Rs. 5 each arising out
of conversion of the said FCCB's.
Facility Agreement with China Development Bank
During the year under review, the Company has signed facility agreement
with China Development Bank (CDB) on March 9, 2011 which includes Rs.
6,000 crore (US$ 1.33 Billion) for refinancing 3G spectrum fee payment
by the Company and Rs. 2,700 crore (US$ 600 Million) for equipment
imports from Chinese Vendors by the Company and Reliance Telecom
Limited. Till March 31, 2011, Company drawn down first tranche of Rs.
3,000 crore (US$ 665 Million) and remaining amount was drawdown during
the financial year 2011-12.
Schemes of Arrangement
(a) Scheme of Arrangement with Global Innovative Solutions Private
Limited
Global Innovative Solutions Private Limited, a wholly owned subsidiary
of the Company amalgamated with the Company w.e.f. May 25, 2011 in
terms of the Scheme of Amalgamation sanctioned by the Hon'ble High
Court of Judicature at Bombay vide order dated April 29, 2011. The
appointed date was April 1, 2010.
(b) Re-organization of Subsidiaries
The Hon'ble High Court of Judicature at Bombay sanctioned the following
Schemes of Arrangement vide order dated May 6, 2011.
i. Reliance Communications Maharashtra Private Limited, a wholly owned
subsidiary of Reliance Telecom Limited (RTL) merged with RTL. The
appointed date was April 1, 2010.
ii. Matrix Innovations Limited, a wholly owned subsidiary of Reliance
Communications Infrastructure Limited (RCIL) merged with RCIL. The
appointed date was April 1, 2010.
iii. Reliance Global IDC Limited, a wholly owned subsidiary of
Reliance Infratel Limited (RITL) merged with RITL.
The appointed date was January 1, 2011. The above Schemes were made
effective on May 25, 2011.
(c) On June 20, 2010, the Board of Directors of the Company approved a
proposal to acquire Digicable, India's largest Cable TV service
provider to be renamed as "Reliance Digicom". Subject to necessary
regulatory approvals. Integration of the Company's DTH, IPTV, retail
broadband businesses along with Digicable acquisition will make the
Company India's / Asia's largest and the world's 5th largest digital TV
and ultra high-speed broadband service provider. The Company is
awaiting regulatory approvals for completing this transaction.
Management Discussion and Analysis
Management Discussion and Analysis Report for the year under review as
stipulated under Clause 49 of the listing agreement with the Stock
Exchanges in India is presented in a separate section forming part of
the Annual Report. The Company has entered into various contracts in
the areas of telecom and value added service businesses. While benefits
from such contracts will accrue in the future years, their progress is
periodically reviewed.
Subsidiary Companies
During the year, Reliance Mobile Commerce Limited became the wholly
owned subsidiary of the Company. Reliance Communications Maharashtra
Private Limited became the wholly owned subsidiary of the Company
through Reliance Telecom Limited (RTL) during the year and merged into
RTL, w.e.f. May 25, 2011.
During the year under review, Flag Pacific Limited, Flagweb Limited,
Flag Telecom Belgium Network SA, Vanco ApS, Vanco Hongkong Solutions
Limited, Vanco Net Direct Limited UK, RCOM Malaysia SDN. BHD, Yipes
Systems Inc and Flag Access India Private Limited ceased to be
subsidiaries of the Company. As per approval granted by the Ministry
of Corporate Affairs vide Circular No.02/2011 dated February 8, 2011,
copies of the Balance Sheet, profit and Loss Account, Report of the
Board of Directors and Auditors of the subsidiary companies are not
being attached to the Balance Sheet of the Company. The financial
information of the subsidiary companies as required by the above
circular is disclosed under 'Financial Information of Subsidiary
Companies', which forms part of the Annual Report.
The Company will make available hard copies of Annual Accounts of the
subsidiary companies and related detailed information to the
shareholders of the Company seeking the same.
The annual accounts of the subsidiary companies will also be kept for
inspection by any shareholders at the Registered office of the Company
and that of respective subsidiary companies.
Further, pursuant to Accounting Standard (AS) -21 prescribed under the
Companies (Accounting Standards) Rules, 2006 and Listing Agreement as
prescribed by the Securities and Exchange Board of India, Consolidated
Financial Statements presented by the Company include financial
information of subsidiary companies, which forms part of the Annual
Report.
Directors
In terms of the provisions of the Companies Act, 1956, Prof. J.
Ramachandran, Director of the Company retires by rotation and being
eligible, offers himself for re-appointment at the ensuing Annual
General Meeting.
A brief resume of the Director retiring by rotation at the ensuing
Annual General Meeting, nature of expertise in specific functional areas
and names of companies in which he holds directorship and/or
membership/chairmanships of Committees of the Board, shareholding and
relationship between directors inter se as stipulated under Clause 49
of the listing agreement with the Stock Exchanges in India, is given in
the section on Corporate Governance forming part of the Annual Report.
Directors' Responsibility Statement
Pursuant to the requirements 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
financial year ended March 31, 2011, the applicable Accounting Standards
have been followed along with proper explanation relating to material
departures; ii. the Directors had selected such accounting policies
and applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company as at March 31, 2011 and of the loss of the
Company for the year under review; iii. the Directors had taken proper
and sufficient care for the maintenance of adequate accounting records
in accordance with the provisions of the Companies Act, 1956 for
safeguarding the assets of the Company and for preventing and detecting
fraud and other irregularities; and iv. the Directors had prepared the
annual accounts for financial year ended March 31, 2011 on a 'going
concern' basis.
Group
Pursuant to an intimation received from the Promoters, the names of the
Promoters and entities comprising 'Group' as defined under the
Monopolies and Restrictive Trade Practices Act, 1969 are disclosed in
the Annual Report for the purpose of the SEBI (Substantial Acquisition
of Shares and Takeovers) Regulations, 1997.
Consolidated Financial Statements
The Audited Consolidated Financial Statements, based on the financial
statements received from subsidiaries, joint venture and associates, as
approved by their respective Board of Directors have been prepared in
accordance with Accounting Standard (AS) - 21 on 'Consolidated
Financial Statements' read with Accounting Standard (AS) - 23 on
'Accounting for Investments in Associates' and Accounting Standard (AS)
à 27 on 'Financial Reporting of Interests in Joint Venture', notified
under Section 211(3C) of the Companies Act, 1956 read with the
Companies (Accounting Standards) Rules, 2006, as applicable.
Auditors and Auditors' Report
M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co.,
Chartered Accountants, the Auditors of the Company hold office until the
conclusion of the ensuing Annual General Meeting and are eligible for
re-appointment. The Company has received letters from M/s. Chaturvedi
& Shah, Chartered Accountants and M/s. B S R & Co., Chartered
Accountants, to the effect that their appointment, if made, would be
within the prescribed limits under Section 224(1B) of the Companies
Act, 1956, and that they are not disQualified for such appointment
within the meaning of Section 226 of the Companies Act, 1956.
The observations and comments given by Auditors in their report read
together with notes to Accounts are self explanatory and hence do not
call for any further comments under Section 217 of the Companies Act,
1956.
Cost Auditors
Ministry of Corporate Affairs vide its circular dated May 02, 2011 has
made it mandatory to audit Cost records of telecommunications companies
from financial year commencing from April 1, 2011 by Cost Auditor.
Accordingly, the Board of Directors at their meeting held on May 30,
2011, had appointed M/s. V. J. Talati & Co., Cost Accountants as the
Cost Auditor of the Company for the financial year 2011-12. The Company
has received a letter from M/s. V. J. Talati & Co., Cost Accountants,
to the effect that their appointment is within the prescribed limits
under Section 224(1B) of the Companies Act, 1956.
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 and
the Companies (Particular of Employees) Amendment Rules, 2011, the
names and other particulars of employees are set out in the Annexure to
the Directors' Report. However, having regard to the provisions of
Section 219(1)(b) (iv) of the Companies Act, 1956, the Annual Report
excluding the aforesaid information is being sent to all the members of
the Company and others entitled thereto. Any member interested in
obtaining such particulars may write to the Company Secretary at the
Registered office of the Company.
Employee Stock Option Scheme
During the year under review, the Company has not granted any Options
to the employees of the Company. Employees Stock Option Scheme (ESOS)
was approved and implemented by the Company and Options were granted to
employees under ESOS Plan 2008 and Plan 2009 in accordance with the
Securities and Exchange Board of India (Employee Stock Option Scheme
and Employee Stock Purchase Scheme) Guidelines, 1999 ('the SEBI
Guidelines').
The particulars as required under Clause 12 of SEBI (Employee Stock
Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are
as follows:
Particulars ESOS Plan 2008 ESOS Plan 2009
a) Total
Options granted 1,49,91,185 Options 1,32,17,975 Options
b) No of
Options
surrendered 1,32,17,975 Option Nil
c) Pricing
formula decided
by ESOS
Compensation Market Price or such
other price Average of the weekly high
and low of the
Committee as Board / Committee may closing price of the equity
share of the
determine. Different
Exercise price Company at National Stock
Exchange of
may apply to different
Plan(s). India Limited during two weeks
preceding
the date of Grant i.e. January
16, 2009.
d) Options
vested 11,22,211 Options 93,23,215 Options
e) Options
exercised Nil Nil
f) Total number
of equity shares
arising as a
result Subject to Option(s)
exercised by Subject to Option(s) exercised
by the
of exercise of
Options the employees, not
exceeding employees, not exceeding
11,22,211 Equity Shares. 93,23,215 Equity Shares.
g) Options
lapsed/forfeited
during the year 2,46,958 Options 29,88,962 Options
h) Variation of
terms of Options None None
i) Money
realised by
exercise of
Options during
the year Nil Nil
j) Total number
of Options in
force at the
end of 8,75,253 Options 63,34,253 Options
the year
k) Employee wise
details of
Options granted
to:
i. Senior
managerial
personnel (i.e.
Managing Nil Shri Hasit Shukla,President,
Director/Whole-
time Director/
Manager) Company Secretary and Manager
ii. Employee who
receives grant
in any one year 1,00,000 Options.
of option
amounting to 5
per cent
or more Nil Nil
of option
granted during
the year
iii. Identifed
employees who
were granted Nil Nil
options, during
any one year
equal to or
exceeding 1
per cent of the
issued capital
(excluding
outstanding
warrants and
conversions) of
the company at
the time of
grant
l) Diluted
Earnings Per
Share (EPS)
pursuant to N.A. N.A.
issue of shares
on exercise of
Options
calculated
There would not be
any fresh There would not be any fresh
issue of
in accordance
with Accounting
Standard (AS) 20 issue of equity shares
of the equity shares of the Company
upon
Company upon
exercise of exercise of Options by
employees
Options by employees
m) The difference
between employee
compensation
cost using
intrinsic value
method and fair
value of the
Options and
impact of this
difference on
profits Rs. 5.86 crore Rs. 15.91 crore
EPS of the
Company Rs. (3.67) Rs. (3.67)
n) Weighted-
average exercise
prices of Options
granted during
the year where
exercise price
is less than
market price. Nil Nil
o) Weighted-
average fair
values of Options
granted during
the year where
exercise price
is less than
market price. Nil Nil
p) significant
assumptions made
in computation of
fair value base: Black Scholes model
(i) risk-free
interest rate, 8.01 % p.a. 8.01 % p.a.
(ii) expected life, 7 years 8 years
(iii) expected
volatility, 45.60 % 45.60 %
(iv) expected
dividends (yield),
and 0.09 % 0.29 %
(v) the price of
the underlying
share in market
at the time of
option grant. Rs. 541.15 per share Rs. 174 per share
The Company has received a certificate from the auditors of the Company
that the ESOS Plan 2008 and 2009 has been implemented in accordance
with the Guidelines and as per the resolution passed by the members of
the Company authorising issuance of ESOS.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
The particulars as required to be disclosed pursuant to Section
217(1)(e) of the Companies Act, 1956, read with the Companies
(Disclosures of Particulars in the Report of Board of Directors) Rules,
1988, are given in the Annexure à A forming part of this Report.
Corporate Governance
The Company has adopted "Reliance Group-Corporate Governance Policies
and Code of Conduct" which has set out the systems, process and
policies conforming to international standards. The report on Corporate
Governance as stipulated under Clause 49 of the listing agreement with
the Stock Exchanges, forms part of the Annual Report.
A certificate from the Auditors of the Company M/s. Chaturvedi & Shah,
Chartered Accountants and M/s. BSR & Co., Chartered Accountants,
conforming compliance with conditions of Corporate Governance as
stipulated under the Clause 49, is attached to this Report.
Acknowledgements
Your Directors would like to express their sincere appreciation of the
co-operation and assistance received from shareholders,
debentureholders, bankers, regulatory bodies and other business
constituents during the year under review. Your Directors also wish to
place on record their deep sense of appreciation for the commitment
displayed by all executives, officers and staff, resulting in the
successful performance of the Company during the year.
For and on behalf of the Board of Directors
Mumbai Anil Dhirubhai Ambani
May 30, 2011 Chairman
Mar 31, 2010
The Directors have pleasure in presenting the sixth Annual Report and
the audited accounts for the financial year ended 31st March, 2010.
Financial Results
The standalone performance of the Company for the financial year ended
31st March, 2010 is summarised below:
Particulars Financial Year ended * Financial Year ended
31st March, 2010 31st March, 2009
(Rs. in crore) US$ in million** (Rs. in
crore) US$ in
million**
Total income 12,511.72 2,771.76 13,694.66 2,700.05
Gross profit before
depreciation, 2,149.06 476.09 3,288.75 648.41
amortisation and
exceptional items
Less:
a. Depreciation and
amortisation 1,511.24 334.79 1,933.51 381.21
b. Exceptional items
and other adjustments 18.35 4.07 (3,459.83) (682.14)
profit before tax 619.47 137.23 4,815.07 949.34
Less: Provision
for:
Current tax 140.54 31.13 -- --
Fringe beneft tax -- -- 12.40 2.44
profit after tax 478.93 106.10 4,802.67 946.90
Add : Balance brought
forward from previous
year 502.75 111.37 4,300.24 847.84
profit available for
appropriation 981.68 217.47 9,102.91 1,794.74
Appropriations:
Proposed Dividend on
equity shares 175.44 38.87 -- --
Interim Dividend paid
on equity shares -- -- 165.12 32.56
Dividend Tax 29.14 6.46 28.06 5.53
Transfer to General
Reserve 40.00 8.86 8,400.00 1,656.15
Transfer to Debenture
Redemption Reserve 74.96 16.61 6.98 1.38
Balance carried to
Balance Sheet 662.14 146.67 502.75 99.12
* Figures of previous year have been regrouped and reclassifed,
wherever required.
** Exchange Rate Rs. 45.14 = US$ 1 as on 31st March, 2010 (Rs.50.72=
US$1 as on 31st March, 2009).
Financial Performance
During the year under review, your Company has earned income of
Rs.12,511.72 crore against Rs.13,694.66 crore in the previous year. The
Company earned profit after tax of Rs. 478.93 crore compared to Rs.
4,802.67 crore in the previous year.
Dividend
Your Directors have recommended a dividend of Re. 0.85, (17%) per
equity share each of Rs. 5 for the financial year ended 31st March,
2010, which, if approved at the ensuing Annual General Meeting, will be
paid to (i) all those equity shareholders whose names appear in the
Register of Members as on 14th September, 2010, and (ii) to those whose
names appear as benefcial owners, as at the end of the business hours
on 14th September, 2010 as furnished by the National Securities
Depository Limited and Central Depository Services (India) Limited for
the purpose.
The proposed dividend is in accordance with the Companys policy to pay
sustainable dividend linked to long term performance, keeping in view
the capital needs for the Companys growth plans and the intent to
optimal fnancing of such plans through internal accruals.
Management Discussion and Analysis
Management Discussion and Analysis Report for the year under review as
stipulated under Clause 49 of the listing agreement with the Stock
Exchanges in India is presented in a separate section forming part of
the Annual Report.
The Company has entered into various contracts in the areas of telecom
and value added service businesses. While benefts from such contracts
will accrue in the future years, their progress is periodically
reviewed.
Business Operations
The Company operates on a pan-India basis and offers the full value
chain of wireless (CDMA and GSM), wireline, national long distance,
international, voice, data, video, Direct-To-Home (DTH) and internet
based communications services under various business units organised
into three strategic customer-facing business segments; Wireless,
Global and Broadband. These strategic business units are supported by
passive infrastructure connected to nationwide backbone of Optic Fibre
Network fully integrated network operation system and by the largest
retail distribution and customer services facilities. The Company also
owns through its subsidiaries, a global submarine cable network
infrastructure and offers managed services, managed Ethernet and
application delivery services.
During the year under review, the Company had crossed the landmark of
100 million wireless customers. The Company ranks among top two
wireless operators in the country. The momentous achievement has been
attained within seven years of the Companys first launching its
pan-India mobile services in 2003, fastest ramp up of mobile customers
in the world. With this landmark achievement, the Company becomes the
4th operator in the world to serve over 100 Million customers in a
single country.
Schemes of Arrangement
(a) Scheme of Arrangement with Reliance Infratel Limited
In terms of the Scheme of Arrangement between the Company and Reliance
Infratel Limited (RITL), a subsidiary of the Company and their
respective shareholders and creditors, as sanctioned by the Honble
High Court of Judicature at Bombay vide order dated 18th July, 2009,
the Optic Fiber Undertaking of the Company was demerged and vested into
RITL with effect from 15th September 2009. The appointed date was 1st
April 2008.
(b) Scheme of Amalgamation with Reliance Gateway Net Limited
Reliance Gateway Net Limited (RGNL), a wholly owned subsidiary of the
Company amalgamated with the Company w.e.f. 13th July 2009 in terms of
the Scheme of Amalgamation sanctioned by the Honble High Court of
Judicature at Bombay vide order dated 3rd July, 2009. The appointed
date was 31st March, 2009.
Repurchase of Foreign Currency Convertible Bonds (FCCBs)
During the year under review, the Company had repurchased and cancelled
297 Zero Coupon FCCBs each of US $ 1,00,000 at a discount.
The outstanding FCCBs issued by the Company, if converted into the
Equity Shares of the Company, would result in increase to the paid up
Equity Share Capital of the Company by 8.91 crore Equity Shares each of
Rs.5/-.
Subsidiary Companies
During the year under review, Global Innovative Solutions Private
Limited, Reliance WiMax D.R.C. B.V, Reliance WiMax Gambia B.V.
Reliance WiMax Mauritius B.V., Reliance WiMax Mozambique B.V, Reliance
WiMax Niger B.V., Reliance WiMax Zambia B.V., Access Bissau LDA became
the subsidiaries of the Company.
During the year under review, Reliance Mobile Limited and Vanco (India)
Private Limited ceased to be subsidiaries of the Company.
In terms of the approval granted by the Central Government under
Section 212(8) of the Companies Act, 1956, copies of the Balance Sheet,
profit and Loss Account, Report of the Board of Directors and Auditors
of the subsidiaries have not been attached with the Balance Sheet of
the Company. However, these documents will be made available upon
request by any member of the Company. As directed by the Central
Government, the financial data of the subsidiaries have been furnished
under ÃFinancial Information of Subsidiary Companies, which forms part
of the Annual Report. The annual accounts of the Company including that
of subsidiaries will be kept for inspection by any member. Further,
pursuant to Accounting Standard (AS) -21 prescribed under the Companies
(Accounting Standards) Rules, 2006, Consolidated Financial Statements
presented by the Company include financial information of subsidiary
Companies.
Employee Stock Option Scheme
During the year under review, the Company has not granted any Options
to the employees of the Company. Employees Stock Option Scheme (ESOS)
was approved and implemented by the Company and Options were granted to
employees under ESOS Plan 2008 and Plan 2009 in accordance with the
Securities and Exchange Board of India (Employee Stock Option Scheme
and Employee Stock Purchase Scheme) Guidelines, 1999 (Ãthe SEBI
Guidelines).
Fixed Deposits
The Company has not accepted any fxed deposit during the year under
review.
Directors
In terms of the provisions of the Companies Act, 1956, Shri Deepak
Shourie, Director of the Company retires by rotation and being
eligible, offers himself for re-appointment at the ensuing Annual
General Meeting.
A brief resume of the Director retiring by rotation at the ensuing
Annual General Meeting, nature of expertise in specifc functional areas
and names of companies in which he holds directorship and/or
membership/chairmanships of Committees of the Board, as stipulated
under Clause 49 of the listing agreement with the Stock Exchanges in
India, is given in the section on Corporate Governance forming part of
the Annual Report.
Directors Responsibility Statement
Pursuant to the requirements under Section 217(2AA) of the Companies
Act, 1956 with respect to Directors
Responsibility Statement, it is hereby confrmed that:
i. in the preparation of the annual accounts for financial year ended
31st March, 2010, the applicable Accounting Standards have been
followed along with proper explanation relating to material departures;
ii. the Directors had 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 31st March, 2010 and of the profit of the Company
for the year under review;
iii. the Directors had taken proper and suffcient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
iv. the Directors had prepared the annual accounts for financial year
ended 31st March, 2010 on a Ãgoing concern basis.
Group
Pursuant to intimation received from the Promoters, the names of the
Promoters and entities comprising ÃGroup as defined under the
Monopolies and Restrictive Trade Practices Act, 1969 are disclosed in
the Annual Report for the purpose of the SEBI (Substantial Acquisition
of Shares and Takeovers) Regulations, 1997.
Consolidated Financial Statements
The Audited Consolidated Financial Statements, based on the financial
statements received from subsidiaries and associates, as approved by
their respective Board of Directors have been prepared in accordance
with Accounting Standard (AS) -21 on ÃConsolidated Financial
Statements read with Accounting Standard (AS) -23 on ÃAccounting for
Investments in Associates, notifed under Section 211(3C) of the
Companies Act, 1956 read with the Companies (Accounting Standards)
Rules, 2006, as applicable.
Auditors and Auditors Report
M/s. Chaturvedi & Shah, Chartered Accountants and M/s. B S R & Co.,
Chartered Accountants, as Statutory Auditors of the Company, hold offce
until the conclusion of the ensuing Annual General Meeting and are
eligible for re-appointment.
The Company has received letters from M/s. Chaturvedi & Shah, Chartered
Accountants and M/s. B S R & Co., Chartered Accountants, to the effect
that their appointment, if made, would be within the prescribed limits
under Section 224(1B) of the Companies Act, 1956, and that they are not
disqualifed for such appointment within the meaning of Section 226 of
the Companies Act, 1956.
The observations and comments given by Auditors in this report read
together with notes to Accounts are self explanatory and hence do not
call for any further comments under Section 217 of the Companies Act,
1956.
Particulars of Employees
In terms of the provisions of Section 217(2A) of the Companies Act,
1956 read with the Companies (Particulars of Employees) Rules, 1975,
the names and other particulars of employees are set out in the
Annexure to the Directors Report. However, having regard to the
provisions of Section 219(1)(b)(iv) of the
Companies Act, 1956, the Annual Report excluding the aforesaid
nformation is being sent to all the members of the Company and others
entitled thereto. Any member interested in obtaining such particulars
may write to the Company Secretary at the Registered Offce of the
Company.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
The particulars as required to be disclosed pursuant to Section
217(1)(e) of the Companies Act, 1956, read with the Companies
(Disclosures of Particulars in the Report of Board of Directors) Rules,
1988, are given in the Annexure - A forming part of this Report.
Corporate Governance
The Company has adopted "Reliance Anil Dhirubhai Amban Group-Corporate
Governance Policies and Code of Conduct" which has set out the systems,
process and policies conforming to international standards. The report
on Corporate Governance as stipulated under Clause 49 of the listing
agreement with the Stock Exchanges, forms part of the Annual Report.
A Certifcate from the Auditors of the Company M/s. Chaturved & Shah,
Chartered Accountants and M/s. B S R & Co., Chartered Accountants,
conforming compliance with conditions of Corporate Governance as
stipulated under the aforesaid Clause 49, is annexed to this Report.
Acknowledgements
Your Directors would like to express their sincere appreciation of the
co-operation and assistance received from shareholders,
debentureholder, bankers, regulatory bodies and other business
constituents during the year under review. Your Directors also wish to
place on record their deep sense of appreciation for the commitment
displayed by all executives, offcers and staff resulting in the
successful performance of the Company during the year.
For and on behalf of the Board of Directors
Mumbai Anil Dhirubhai Ambani
15th May, 2010 Chairman