Reliance Industries Ltd


BSE: 500325 | NSE: RELIANCE | ISIN: INE002A01018 
Market Cap: [Rs.Cr.] 309,884 | Face Value: [Rs.] 10
Industry: Refineries

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Auditor's Report

Independent Auditors

To the Members of

Reliance Industries Limited

Report on the Financial Statements

We have audited the accompanying financial statements of Reliance Industries Limited("the Company"), which comprise the Balance Sheet as at March 31, 2013, theStatement of Profit and Loss and Cash Flow Statement for the year then ended and a summaryof significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give atrue and fair view of the financial position, financial performance and cash flows of theCompany in accordance with the accounting principles generally accepted in India includingAccounting Standards referred to in Section 211(3C) of the Companies Act, 1956 ("theAct"). This responsibility includes the design, implementation and maintenance ofinternal control relevant to the preparation and presentation of the financial statementsthat give a true and fair view and are free from material misstatement, whether due tofraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on theauditor’s judgment, including the assessment of the risks of material misstatement ofthe financial statements, whether due to fraud or error. In making those risk assessments,the auditor considers internal control relevant to the Company’s preparation and fairpresentation of the financial statements in order to design audit procedures that areappropriate in the circumstances. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of the accounting estimates made bymanagement, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us, the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as atMarch 31, 2013;

(b) In the case of the Statement of Profit and Loss, of the profit for the year endedon that date; and

(c) In the case of the Cash Flow Statement, of the cash flows for the year ended onthat date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2003 ("theOrder") issued by the Central Government of India in terms of Section 227(4A) of theAct, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 ofthe Order.

2. As required by Section 227(3) of the Act, we report that:

a. We have obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purpose of our audit;

b. In our opinion, proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books.

c. The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

d. In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the CashFlow Statement comply with the Accounting Standards referred to in section 211(3C) of theAct;

e. On the basis of the written representations received from the directors as on March31, 2013, taken on record by the Board of Directors, none of the directors is disqualifiedas on March 31, 2013, from being appointed as a director in terms of Section 274(1)(g) ofthe Act.

For Chaturvedi & Shah For Deloitte Haskins & Sells For Rajendra & Co.
Chartered Accountants Chartered Accountants Chartered Accountants
(Registration No. 101720W) (Registration No. 117366W) (Registration No. 108355W)
D. Chaturvedi A. Siddharth A. R. Shah
Partner Partner Partner
Membership No.: 5611 Membership No.: 31467 Membership No.:47166

Mumbai

Date : April 16, 2013

Annexure to Independent Auditors’ Report

Referred to in Paragraph 1 under the heading of "Report on other Legal andRegulatory Requirements" of our report of even date

1. In respect of its fixed assets:

a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets on the basis of available information.

b) As explained to us, all the fixed assets have been physically verified by themanagement in a phased periodical manner, which in our opinion is reasonable, havingregard to the size of the Company and nature of its assets. No material discrepancies werenoticed on such physical verification.

c) In our opinion, the Company has not disposed off a substantial part of its fixedassets during the year and the going concern status of the Company is not affected.

2. In respect of its inventories:

a) The inventories have been physically verified during the year by the management. Inour opinion, the frequency of verification is reasonable.

b) In our opinion and according to the information and explanations given to us, theprocedures of physical verification of inventories followed by the management arereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.

c) The Company has maintained proper records of inventories. As explained to us, therewere no material discrepancies noticed on physical verification of inventories as comparedto the book records.

3. In respect of the loans, secured or unsecured, granted or taken by the Company to /from companies, firms or other parties covered in the register maintained under Section301 of the Companies Act, 1956:

a) The Company has given loans to two subsidiaries. In respect of the said loans, themaximum amount outstanding at any time during the year was Rs 20,316 crore and theyear-end balance is Rs 18,226 crore (including interest free loan of Rs 13,944 crore).

b) In our opinion and according to the information and explanations given to us, therate of interest and other terms and conditions of the loans given by the Company, are notprima facie prejudicial to the interest of the Company.

c) The principal amounts are repayable over a period of three to five years, while theinterest is payable annually at the discretion of the Company.

d) In respect of the said loans and interest thereon, there are no overdue amounts.

e) The Company has not taken any loan during the year from companies, firms or otherparties covered in the Register maintained under Section 301 of the Companies Act, 1956.Consequently, the requirements of Clauses (iii) (f) and (iii) (g) of paragraph 4 of theOrder are not applicable.

4. In our opinion and according to the information and explanations given to us, thereis an adequate internal control system commensurate with the size of the Company and thenature of its business for the purchases of inventory and fixed assets and for the sale ofgoods and services. During the course of our audit, we have not observed any continuingfailure to correct major weaknesses in internal control system.

5. In respect of the contracts or arrangements referred to in Section 301 of theCompanies Act, 1956:

(a) In our opinion and according to the information and explanations given to us, thetransactions made in pursuance of contracts or arrangements that need to be entered in theregister maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, thetransactions made in pursuance of contracts / arrangements entered in the Registermaintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs5,00,000 in respect of each party during the year have been made at prices which appearreasonable as per information available with the Company.

6. According to the information and explanations given to us, the Company has notaccepted any deposit from the public. Therefore, the provisions of Clause (vi) ofparagraph 4 of the Order are not applicable to the Company.

7. In our opinion, the Company has an internal audit system commensurate with the sizeand nature of its business.

8. We have broadly reviewed the cost records maintained by the Company pursuant to theCompanies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government underSection 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie theprescribed cost records have been maintained. We have, however, not made a detailedexamination of the cost records with a view to determine whether they are accurate orcomplete.

9. In respect of statutory dues:

a) According to the records of the Company, undisputed statutory dues includingProvident Fund, Investor Education and Protection Fund, Employees’ State Insurance,Income-Tax, Sales

Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess, and other statutory dueshave been generally regularly deposited with the appropriate authorities. According to theinformation and explanations given to us, no undisputed amounts payable in respect of theaforesaid dues were outstanding as at March 31, 2013 for a period of more than six monthsfrom the date of becoming payable. Amounts due and outstanding for a period exceeding 6months as at March 31, 2013 to be credited to Investor Education and Protection Fund of Rs10 crore, which are held in abeyance due to pending legal cases, have not been considered.

b) The disputed statutory dues aggregating Rs 1,035 crore that have not been depositedon account of disputed matters pending before appropriate authorities are as under:

Sr. Name of No the Statute Nature of the Dues Amount Rs ( in crore) Period to which the amount relates Forum where dispute is pending
1. Central Excise Act, 1944 Excise Duty and Service Tax 17 Various years from 1995-96 to 2010-11 Commissioner of Central Excise (Appeals)
111 Various years from 1991-92 to 2010-11 Central Excise & Service Tax Appellate Tribunal
1 Various years from 1982-83 to 1985-86 High Court
2. Central Sales Tax Act, 1956 and Sales Tax Acts of various states Sales Tax/ VAT and Entry Tax 60 Various years from 1991-92 to 2009-10 Joint/Deputy Commissioner/ Commissioner (Appeals)
450 Various years from 1993-94 to 2008-09 Sales Tax Appellate Tribunal
125 Various years from 1994-95 to 2009-10 High Court
1 2007-08 to 2008-09 Supreme Court
3. Customs Act, 1962 Custom Duty 15 2007-08 Joint/Deputy Commissioner/ Commissioner (Appeals)
255 2007-08 Central Excise & Service Tax Appellate Tribunal
TOTAL 1,035

10. The Company does not have accumulated losses at the end of the financial year. TheCompany has not incurred cash losses during the financialyear covered by the audit and inthe immediately preceding financial year.

11. Based on our audit procedures and according to the information and explanationsgiven to us, we are of the opinion that the Company has not defaulted in repayment of duesto financial institutions, banks and debenture holders.

12. In our opinion and according to the explanations given to us and based on theinformation available, no loans and advances have been granted by the Company on the basisof security by way of pledge of shares, debentures and other securities.

13. In our opinion, the Company is not a chit fund / nidhi / mutual benefit fund /society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Order are notapplicable to the Company.

14. The Company has maintained proper records of the transactions and contracts inrespect of dealing or trading in shares, securities, debentures and other investments andtimely entries have been made therein. All shares, securities, debentures and otherinvestments have been held by the Company in its own name.

15. The Company has given guarantees for loans taken by Others from banks and financialinstitutions. According to the information and explanations given to us, we are of theopinion that the terms and conditions thereof are not prima facie prejudicial to theinterest of the Company.

16. The Company has raised new term loans during the year. The term loans outstandingat the beginning of the year and those raised during the year have been applied for thepurposes for which they were raised.

17. According to the information and explanations given to us and on an overallexamination of the Balance Sheet of the Company, we are of the opinion that there are nofunds raised on short-term basis that have been used for long-term investment.

18. The Company has not made any preferential allotment of shares to parties andcompanies covered in the Register maintained under Section 301 of the Companies Act, 1956.

19. The Company has created securities / charges in respect of secured debenturesissued.

20. The Company has not raised any monies by way of public issues during the year.

21. In our opinion and according to the information and explanations given to us, nomaterial fraud on or by the Company has been noticed or reported during the year.

For Chaturvedi & Shah For Deloitte Haskins & Sells For Rajendra & Co.
Chartered Accountants Chartered Accountants Chartered Accountants
(Registration No. 101720W) (Registration No. 117366W) (Registration No. 108355W)
D. Chaturvedi A. Siddharth A. R. Shah
Partner Partner Partner
Membership No.: 5611 Membership No.: 31467 Membership No.:47166

Mumbai

Date : April 16, 2013

   

Peer Comparison

Company Market Cap
(Rs. in Cr.)
P/E (TTM)
(x)
P/BV (TTM)
(x)
EV/EBIDTA
(x)
ROE
(%)
ROCE
(%)
D/E
(x)
Reliance Inds. 309,884.04 14.12 1.73 7.03 12.3 12.2 0.41
I O C L 64,061.46 4.10 1.05 8.59 8.4 8.2 1.31
B P C L 32,404.83 6.77 1.95 6.27 16.8 14.8 1.48
H P C L 10,553.40 2.20 0.77 7.90 6.7 6.8 2.37
Essar Oil 9,280.24 0.00 3.90 9.43 0.0 0.0 12.92
M R P L 9,166.10 0.00 1.42 32.11 -11.1 -1.1 1.00
Omnitech Pet. 2,253.11 0.00 87.46 0.00 0.0 0.0 0.00
C P C L 1,018.42 0.00 0.50 0.00 0.0 0.0 1.65
Nagar.Oil Refin. 163.14 0.00 0.21 0.00 0.0 0.0 0.00

Futures & Options Quote

 
Expiry Date
963.15 18.00  (1.9%)
Instrument: FUTSTK
Expiry Date: 24 Apr 2014
Open Price: 946.40
Average Price: 958.16
No. of Contracts Traded: 5,378,250
Open Interest: 9,590,500
Underlying: RELIANCE
Market Lot: 250
Previous Close: 963.15
Day’s High | Low: 965.45 | 946.40
Turnover (Cr.): 515.32
Open Int. Change: -1,104,000.00 ( [10.3]% )
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Key Information

Key Executives:

Mukesh D Ambani , Chairman & Managing Director  

Nikhil Rasiklal Meswani , Executive Director  

Hital R Meswani , Executive Director  

Ramniklal H Ambani , Director  


Company Head Office / Quarters:
3rd Floor Maker Chambers IV,
222 Nariman Point,
Mumbai,
Maharashtra-400021
Phone : 91-22-22785000
Fax : 91-22-22785111
E-mail : investor_relations@ril.com
Web : http://www.ril.com
Registrars:
Karvy Computershare Pvt Ltd
Plot No 17-24
Vittal Rao Nagar
Madhapur
Hyderabad-500081

Fund Holding


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