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CHAPTER I

INTRODUCTION

Reliance Industries Limited (RIL) (BSE: 500325, NSE: RELIANCE, LSE: RIGD) is an Indian
conglomerate company headquartered in Mumbai, Maharashtra, India. The company operates
through three business segments: petrochemicals, refining, and oil and gas, other divisions of the
company include textiles, retail business, special economic zone (SEZ) development and
telecom/broadband business. RIL is one of the largest publicly traded company in India by
market capitalization and is the second largest company in India by revenue after Indian Oil
Corporation. It is also India's largest private sector company by revenue and profit. The company
is ranked 99th on Fortune Global 500 list of the world's biggest corporations for the year 2012.

Reliance Industries

Type

Public

Traded as

BSE: 500325,NSE: RELIANCE,LSE: RIGD


BSE SENSEX Constituent
CNX Nifty Constituent

Industry

Conglomerate

Predecessors

Reliance Commercial Corporation

Founded

1966

Founders

Dhirubhai Ambani

Headquarters

Mumbai, Maharashtra, India

Area served

Worldwide

Key people

Mukesh Ambani
(Chairman and MD)

Products

Crude oil, natural


gas,petrochemicals, petroleum,polyester, textiles, retail,telecom, media

Revenue

US$ 75 billion (2014)

Operating

US$ 7.14 billion (2013)

income
Profit

US$ 3.86 billion (2013)

Total assets

US$ 58.67 billion (2013)

Total equity

US$ 31.66 billion (2013)

Employees

23,519 (2013)

Website

www.ril.com

Stock
According to the company website "1 out of every 4 investors in India is Reliance
shareholder."Reliance has more than 3 million shareholder, making it one of the world's most
widely held stock. Reliance Industries ltd. Subsequent to its split in Jan. 2006 has continued to
grow. Reliance Company has been among the best company performing in the Indian Stock
Market.

Products
Though the company's petrochemicals, refining, and oil and gas-related operations form the
incore of its business, other dividors of the company include cloth, retail business and special
economic zone (SEZ) development. Reliance Retail has entered into the fresh foods market as
Reliance Fresh.
RIL is to invest $10 billion over the next few years in its new aerospace division which will
design, develop, manufacture, equipment and components, including airframe, engine, radarsavionics and accessories for military and civilian aircraft. helicopters, unmanned airborne
vehicles and aerostats. It had applied for industrial license in early July 2012. This decision
comes after the creation of Reliance Aerospace Technologies 11rt Ltd and Reliance Security
Solutions Ltd.
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It has a wide range of products from petroleum products, petrochemicals, to garments, reliance
retail has entered into the fresh food market as Reliance Fresh and launched a new chain called
Delight Reliance Retail and NOVA chemicals have signed a letter of intent to make energy
efficient structures. The primary business of the company is petroleum refining and
petrochemicals. It operates a33 million tone refinery at Jamnagar in the Indian state of Gujarat.
Reliance has also completed a second refinery of 29 million tones at the same site which started
operation in December 2008.The Company is also involved in oil and gas exploration and
production. In 2002, it stuck a major find on Indias eastern coast in the Krishna Godavari basin.
Gas production from this find was started on April 22009. As of the end of third quarter of 20A910, gas production from the KG D6 ramped up to 60 MMSCMD.

CHAPTER II

Product Flow Chart

RILs Growth Story


Fiscal 2AA4 will go down as a record year in the history of Reliance Industries. The company's
net profits crossed the $1 billion mark. Over the last 25 years, RIL has seen its sales growth from
Rs.120 crore (Rs 1.2 billion) to Rs 74,418 crore (Rs 744.18 billion). Net profits during the period
grew at a compounded annual growth rate of 26 per cent to Rs 5,160 crore (Rs 51.6 billion). This
remarkable performance was reflected in the stock markets too shares of Reliance gave a return
of 39 per cent on an annualized basis.
Figuring among the top 150 companies globally in terms of net profit and among the top 450 in
terms of sales, Reliance's past performance has been admirable. But what is even more surprising
is that even now the company is not showing any signs of sluggishness. While announcing the
annual results for fiscal 2004, vice-chairman and managing director Anil Ambani said the
company would continue to grow at the rate of 20 per cent over the next five years -- that is
almost double the country's expected economic growth rate. Since RIL accounts for 12 percent of
the Sensex's market-cap and one out of four investors in Indian equities is a Reliance
shareholder, RIL's future performance is significant for the overall market performance. And
today in 2ilt,?its turnover is Rs.339,792 Cr. lt RIL contributes 14%of India's total Export .7.8%
weightage in the NSE Nifty, 5.5% of the government of India's indirect tax revenues ,9.3%
weightage in the BSE Sensex ,4% of total capitalization in India.

Mission & Vision


Continuously innovate to remain Farmers in human progress by Hamessing science &
technology in the petrochemicals domain.

Our mission
Be a Globally preferred Business associate with response to concern for ecology, society, &
Shareholders value.

Values and quality policy your values


Integrity respect to peoples, unity of purpose, outside-in Focus, Agility and innovation

Quality policy
"Bare committee to meet customers' requirements through continual improvement of our quality
image system. We shall sustain organizational excellence through visionary leadership and
innovative efforts.

MITESTONES
Staring of as a small textile company, Reliance has in its journey crossed several milestones to
become a fortune 500 companies in less than 30 decades. Reliance continues to cross newer and
bigger miles in its quest for what is known as Growth of Life.

AWARDS
RIL believe in GROWTH THROUGH RECOGNITION
Leadership
Shri Mukesh Ambani, Chairman & Managing Director, RIL has been nominated to a 'key
advocacy group of Millennium Development Goals', whose mandate includes finding ways to
fight socio-economic evils such as poverty, by the United Nations in 2010. Shri Ambani is the
only Indian to be a part of the MDG Advocacy Group that comprises eminent international
personalities.
Shri Mukesh Ambani has been re-elected as Vice Chairman of the Business Council for
Sustainable Developments (WBCSD) Executive Committee or a second consecutive term in
2010.
The Foundation Board of World Economic Forum (WEF) elected Shri Mukesh Ambani on its
Board. WEF's mission is to improve the stats of &e world and the elected board members make
valuable contributions to this mission through their involvement.
Shri Mukesh Ambani received prestigious Dwight D Eisenhower Global Leadership Award' at
the Business Council for International Understanding's Annual Global Awards Gala in 2010.

Corporate Ranking & Ratings:


RIL continues to be featured, for the sixth consecutive year, in the Fortune Global 500 list of the
Worlds Largest Corporations, ranking for 2010 is as follows:

Ranked 175 based on Revenues


Ranked 100 based on Profits

RIL has been ranked at 20th position, on the basis of sales, in the ICIS Top 100 Chemicals
Companies list. RIL is the only Indian company in the world's Top 20 chemical companies in the
global ranking. RIL had also been named as 8th biggest gainer in the list in terms of operating
profits. RIL is the only Indian company to get a perfect score from CLSA Asia-Pacific Markets
(CLSA) in a list of Asia's best companies in terms of CSR and termed the Company as the
region's 'Corporate Good Guy'. In its Ethical Asia' 2010 report, CLSA has named RIL among its
top picks for providing very- good data and going well beyond required disclosure. RIL is rated
as the 33rd most innovative Company in the World in a survey conducted by the US financial
publication- Business Week in collaboration with the Boston Consulting Group (BCG). Further,
in 2010, BCG has ranked RIL second amongst the world's 10 biggest 'Sustainable Value
Creators', companies for creating the most shareholder value for the period 2000 to 2009.

Project Management
E&P Division received the Petrotech-2010 Special Technical Award in the Project Management'
category for completion of their Krishna Godavari Gas project ahead of schedule.

Health, Safety and Environment

Allahabad Manufacturing Division received a rating of 90% for its environmental

initiatives from British Safety Council in 2010.


Barabanki Manufacturing Division received '5 Star Rating on BSC Environment' from

British Safety Council in 2010.


Dahej Manufacturing Division received 'Greentech Environment Excellence Award 2010
Dahej Manufacturing Division received the National Award for the Prevention of
Pollution in Petrochemicals Sector' for its excellence in environment practices from the

Ministry of Environment & Forests, Government of India " in 2010.


Dahej Manufacturing Division received Our Cup of Joy Indies Best Practices on Water
Confederation of Indian Industry (CII) October 2010.
RIL have got many such awards in different categories such as Technology, patents, R&D
and Innovation, Retail.

Commitments of Reliance Industries


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Reliance believes that any business conduct can be ethical only when it rests on the nine Core
values of Honesty, Integrity, Respect, Fairness, Purposefulness, Trust, Responsibility, Citizenship
and Caring.
The essence of these commitments is that each employee conducts the companys business with
integrity, in compliance with applicable laws, and in a manner that excludes considerations of
personal advantage.
We do not lose sight of these values under any circumstances, regardless of the goals we have to
achieve. To us, the means are as important as the ends.

We care about:
Quality
Research & Development
Health- Safety & Environment
Human Resource Development
Energy Conservation
Corporate citizenship

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CHAPTER III
Reliance lndustries Limited
Comparative Balance Sheet as at 31st March 2012 and
31stMarch 2011

Sources Of Funds
Total Share Capital
Equity Share Capital
Share Application
Money
Preference Share Capital
Reserves
Revaluation Reserves
Net worth
Secured Loans
Unsecured Loans
Total Debt
Total Liabilities

Application Of Funds
Gross Block
Less: Accum.
Depreciation
Net Block
Capital Work in Progress
Investments
Inventories
Sundry Debtors
Cash and Bank Balance
Total Current Assets
Loans and Advances
Fixed Deposits
Total CA, Loans &
Advances
Deferred Credit
Current Liabilities
Provisions

Mar '12 (Amt in Cr.)

Mar '11 (Amt in Cr.)

3,271.00
3,271.00

3,273.37
3,273.37

0
1,59,698.00
3,127.00
1,66,096.00
6,969.00
51,658.00
58,627.00
2,24,723.00

0
1,42,799.95
5,467.00
1,51,540.32
10,571.21
56,825.47
67,396.68
2,18,937.00

2,09,552.00

2,21,251.97

91,770.00

78,545.50

1,17,782.00
4,885.00
54,008.00
35,955.00
18,424.00
889
55,268.00
24,573.00
38,709.00

1,42,706.47
12,819.56
37,651.54
29,825.38
17,441.94
604.57
47,871.89
17,320.60
26,530.29

1,18,550.00

91,722.78

0
66,244.00
4,258.00

0
61,399.87
4,563.48

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Total CL & Provisions


Net Current Assets
Miscellaneous Expenses
Total Assets
Contingent Liabilities
Book Value (Rs)

70,502.00
48,048.00
0

65,963.35
25,759.43
0

2,24,723.00

2,18,937.00

45,831.00
498.21

41,825.13
446.25

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Reliance Industries Limited


Cash Flow Statement for the year ended 31st March, 2012 and 31st March, 2011

Net Profit Before Tax


Net Cash From Operating Activities
Net Cash (used in)/from
Investing Activities
Net Cash (used in)/from Financing Activities
Net (decrease)/increase In Cash and Cash
Equivalents
Opening Cash & Cash Equivalents
Closing Cash & Cash Equivalents

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Mar '12 (Amt

Mar '11 (Amt

in Cr.)

in Cr.)

25750
26974
-3046

25242.24
33280.52
-20332.88

-11465

724.57

12463

13672.21

27135
39598

13462.65
27134.86

Reliance Industries Limited


Statement of Profit and Loss for the year ended 31st March, 2012 and 31st March, 2011

Income
Sales Turnover
Excise Duty
Net Sales
Other Income
Stock Adjustments
Total Income
Expenditure
Raw Materials
Power & Fuel Cost
Employee Cost
Other Manufacturing Expenses
Selling and Admin Expenses
Miscellaneous Expenses
Preoperative Exp Capitalised
Total Expenses

Operating Profit
PBDIT
Interest
PBDT
Depreciation
Other Written Off
Profit Before Tax
Extra-ordinary items
PBT (Post Extra-ord Items)
Tax
Reported Net Profit
Total Value Addition
Preference Dividend
Equity Dividend
Corporate Dividend Tax

Mar '12

Mar '11

(Amt in Cr.)

(Amt in Cr.)

3,39,792.00
9,860.00
3,29,932.00
5,981.00
872
3,36,785.00

2,58,651.15
10,515.09
2,48,136.06
3,358.61
3,243.05
2,54,737.72

2,79,737.00
4,094.00
2,857.00
2,557.00
7,510.00
255
-37
2,96,973.00

1,98,076.21
2,255.07
2,621.59
2,915.44
7,207.83
500.52
-30.26
2,13,546.40

33,831.00
39,812.00
2,668.00
37,144.00
11,394.00
0
25,750.00
0
25,750.00
5,710.00
20,040.00
17,236.00
0
2,531.00
410

37,832.71
41,191.32
2,328.30
38,863.02
13,607.58
0
25,255.44
0
25,255.44
4,969.14
20,286.30
15,470.19
0
2,384.99
386.9

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Per share data (annualised)


Shares in issue (lakhs)
Earning Per Share (Rs)
Equity Dividend (%)
Book Value (Rs)

32,710.59
61.26
85
498.21

32,733.74
61.97
80
446.25

CHAPTER IV

Comparative accounting policies


A. Basis of Preparation of Financial Statements
The financial statements are prepared under the historical cost convention, except for certain
fixed assets which are revalue, in accordance with the generally accepted accounting principles
in India and the provisions of the Companies Act, 1956.
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B. Use of Estimates
The preparation of financial statements requires estimates and assumptions to be made that affect
the reported amount of assets and liabilities on the date of the financial statements and the
reported amount of revenues and expenses during the reporting period. Difference between the
actual results and estimates are recognised in the period in which the results are know/
materialised.

C. Own Fixed Assets


Fixed Assets are stated at cost net of recoverable taxes and includes amounts added on
revaluation, less accumulated depreciation and impairment loss, if any. All costs, including
financing costs till commencement of commercial production, net charges on foreign exchange
contracts and adjustments arising from exchange rate variations attributable to the fixed assets
are capitalised.

D. Leased Assets
a) Operating Leases: Rentals are expensed with reference to lease terms and other considerations'
b) (I) finance leases prior to 1st April, 200l: Rentals are expensed with reference to lease terms
and other considerations. (II) Finance leases on or after 1st April, 2001the lower of the fair value
of the assets and present value of the minimum lease rentals is capitalised as fixed assets with
corresponding amount shown as lease liability. The principal component is charged to profit and
loss accent.
(c) However, rentals referred to in (a) or (b)
(l) Above and the interest component referred to in (b) (a) above pertaining to the period up to
the date of commissioning of the assets are capitalised. d) All assets given on finance lease are
shown as receivables at an amount equal to net investment in the lease, initial direct costs in
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respect of lease are expensed in the year in which such costs are incurred. Income from lease
assets is accounted by applying interest rate implicit in the lease to the net investment.

E. Intangible Asset
Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated
amortisation / depletion. AII costs, including financing costs till commencement of commercial
production, net charges on foreign exchange contracts and adjustments arising from exchange
rate variations attributable to the intangible assets are capitalised.

F. Depreciation and Amortization


Depreciation on fixed assets is provided to the extent of depreciable amount on written down
value method (WDV) at the rates and in the manner prescribed in Schedule XIV to the
Companies Act, 1956 over their useful life except: on fixed assets pertaining to refining Segment
and SEZ units, deprecation is provided on Straight Line Method (SLM) over their l useful life;
on fixed bed catalyst with a life of 2 years or more, depreciation is provided over its useful life
,on fixed bed catalyst having life of less than 2 years,100% deprecation is provided in the year of
addition; on additions or extensions forming an integral part of existing plants ,including
incremental cost arising on account of translation of foreign currency liabilities for acquisition of
fixed assets and insurance spares, depreciation is provided as aforesaid over the residual life of
the respective plants; premium on leasehold land is amortized over the period of lease; technical
knowhow is amortized over the useful life of the underlying assets and computer software is
amortized over a period of 5 years ;on intangible assets - development rights, depletion is
provided in proportion of oil and gas production achieved via-a-via the proved reserves (net of
reserves to be retained to cover abandonment costs as per the production sharing conflict and the
Government of Indias share in the reserves considering the estimated future expenditure on
developing the reserves as per technical evaluation; intangible assets - others are amortized over
the period of agreement of right to use ,provided in case of jelly the aggregate amount amortized
to date is not less that the aggregate rebate availed by the Company; on amounts added on
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revaluation, deprecation is provided as aforesaid over the residual life of the asset as certified by
the valuers on assets acquired under finance lease from 1st April 20A1 depreciation is provided
over the lease term.

G. Impairment of Assets
An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An
impairment loss is charged & loss a/c in the year in which asset is identified as impaired. The
impairment loss recognized in prior accounting period is reversed if there has been a change in
the estimate of recoverable amount.

H. Foreign Currency Transactions


(a) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing
on the date of the transactions or that approximates the actual rate at the date of the transactions.
(b) Monetary items denominated in foreign currencies at the yearend are restated at year end
rates .In case of items which are covered by forward exchange contracts, the difference between
the yearend rate and rate on the date of the contract is recognized as exchange difference and the
premium paid on forward contracts is recognised over the life of the contract.
(c) Non monetary foreign currency items are carried at cost.
(d) In respect of branches, which are integral foreign operations, all transactions are translated at
rates prevailing on the date of transaction or that approximates the actual rate at the date of
transactions. Branch monetary assets and liabilities are restated at the yearend rates.
(e)Any income or expense on account of exchange difference either on settlement or on
translation is recognised in the Profit & loss account except in case of long term liabilities, where
the relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of
such assets.

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I. Investments
Current investments are carried at lower of cost and quoted/fair value; computed category
wise .Long term Investments are stated at cost .Provision for demotion in the value of long-term
investments is made only if such a decline is other than temporary.

J. Inventories
Items of inventories are measured at lower of cost and net realizable value after providing for
obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and
other costs including manufacturing overheads incurred in bringing them to their respective
present location and condition. cost of raw materials, process chemicals, stores and spares,
packing materials, trading and other products are determined on weighted average basis. By
products are valued at net realizable value.

K. Revenue Recognition
Revenue is recognized only when it can be reliably measured and it is reasonable to expect
ultimate collection. Revenue from operations include sale of goods ,services ,sales tax , service
tax, excise duty and sales during trial run period adjusted for discounts (net), Value Added Tax
(VAT) and gain /loss on corresponding hedge contracts .Dividend Income is recognized when
right to receive is established. Interest income is recognized on time proportion basis taking into
account the amount outstanding and rate applicable.

L. Excise Duty / Service Tax and Sales Tax / value Added tax
Excise duty / Service tax is accounted on the basis of both, payments made in respect of goods
cleared / services provided as also provision made tor goods lying in bonded warehouses. Sales
tax / Value added tax paid is charged to Profit and Loss account.

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M. Employee Benefits
(i) Short-term employee benefits are recognized as an expense at the undiscounted amount in the
profit and loss account of the year in which the related service is rendered.
(ii) Post employment and other long term employee benefits are recognized as an expense in the
Profit and Loss account for the year in which the employee has rendered services. The expense is
recognized at the present value of the amounts payable determined using actuarial valuation
techniques. Actuarial gains and losses in respect of post employment and other long term
benefits are charged to the Profit and Loss account.
(iii) In respect of employees stock option, the excess of fair price on the date of grant over the
exercise price is recognized as deferred compensation cost amortized over the vesting period"

N. Employee Separation Costs


Compensation to employees who have opted for retirement under the voluntary retirement
scheme of the Company is charged to the Profit and Loss account in the year of exercise of
option.

O. Borrowing Costs
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are
capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for its intended use. All other borrowing costs are charged
to Profit and Loss account.
P. Financial Derivatives and commodity Hedging Transactions

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In respect of derivative contracts, premium paid, gains / losses on settlement and losses on
restatement are recognized in the Profit and Loss account except in case where they relate to the
acquisition or construction of fixed assets, in which case, they are adjusted to the carrying cost of
such assets.
Q. Accounting for Oil and Gas Activity
The Company has adopted Full Cost Method of accounting for its Oil and Gas activity and all
costs incurred in acquisition, exploration and development are accumulated considering the
county as a cost centre. Oil and Gas Joint Ventures are in the nature of Jointly Controlled Assets.
accordingly, assets and liabilities as well as income and expenditure are accounted on the basis of
available information on line by line basis with similar items in the Companys financial
Statements, according to the participating interest of the company.

R. Provision for Current and Deferred Tax


Provision for current tax is made after taking into consideration benefits admissible under the
provisions of the Income-tax Act, 1961 . Deferred tax resulting from "timing difference" between
taxable and accounting income is accounted for using the tax rates and laws that are enacted or
substantively enacted as on the balance sheet date. Deferred tax asset is recognized and carried
forward only to the extent that there is a virtual certainty that the asset will be realized in future.
S. Premium on Redemption of bonds / debentures
Premium on redemption of bonds / debentures, net of tax impact, are adjusted against the
Securities Premium Account.

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CHAPTER V
Conclusion
The company's overall position is at a very good position. The company achieves sufficient T
years. The long term solvency position of the company is very good. The company achieves
sufficient profit in past four years. The long term solvency position of the company is very good.
The company maintains low liquidity to achieve the high profitability. The company distributes
dividends every year to its share holders. The profit of the company decreased in the last year
due to maintaining the comparatively high liquidity. The net working capital of the company is
maximum in last to last year.

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