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Reliance Industries

BSE: 500325|NSE: RELIANCE|ISIN: INE002A01018|SECTOR: Refineries
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Auditor's Report (Reliance Industries) Year End : Mar '16
We have audited the accompanying standalone financial statements of
 RELIANCE INDUSTRIES LIMITED (the Company), which comprise the Balance
 Sheet as at March 31, 2016, the Profit and Loss Statement and the Cash
 Flow Statement for the year then ended and a summary of the significant
 accounting policies and other explanatory information.
 
 MANAGEMENT''S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS
 
 The Company''s Board of Directors is responsible for the matters stated
 in Section 134(5) of the Companies Act, 2013 (the Act) with respect
 to the preparation of these standalone financial statements that give a
 true and fair view of the financial position, financial performance and
 cash flows of the Company in accordance with the accounting principles
 generally accepted in India, including Accounting Standards prescribed
 under Section 133 of the Act.
 
 This responsibility also includes maintenance of adequate accounting
 records in accordance with the provisions of the Act for safeguarding
 the assets of the Company and for preventing and detecting frauds and
 other irregularities; selection and application of appropriate
 accounting policies; making judgments and estimates that are reasonable
 and prudent; and the design, implementation and maintenance of adequate
 internal financial controls, that were operating effectively for
 ensuring the accuracy and completeness of the accounting records,
 relevant to the preparation and presentation of the financial
 statements that give a true and fair view and are free from material
 misstatement, whether due to fraud or error.
 
 AUDITORS'' RESPONSIBILITY
 
 Our responsibility is to express an opinion on these standalone
 financial statements based on our audit.
 
 We have taken into account the provisions of the Act, the accounting
 and auditing standards and matters which are required to be included in
 the audit report under the provisions of the Act and the Rules made
 thereunder and the Order under section 143 (11) of the Act.
 
 We conducted our audit of the standalone financial statements in
 accordance with the Standards on Auditing specified under Section
 143(10) of the Act. Those Standards require that we comply with ethical
 requirements and plan and perform the audit to obtain reasonable
 assurance about whether the standalone financial statements are free
 from material misstatement.
 
 An audit involves performing procedures to obtain audit evidence about
 the amounts and the disclosures in the financial statements.  The
 procedures selected depend on the auditor''s judgment, including the
 assessment of the risks of material misstatement of the financial
 statements, whether due to fraud or error. In making those risk
 assessments, the auditor considers internal financial control relevant
 to the Company''s preparation of the standalone financial statements
 that give a true and fair view in order to design audit procedures that
 are appropriate in the circumstances. An audit also includes evaluating
 the appropriateness of the accounting policies used and the
 reasonableness of the accounting estimates made by the Company''s Board
 of Directors, as well as evaluating the overall presentation of the
 standalone financial statements.
 
 We believe that the audit evidence obtained by us is sufficient and
 appropriate to provide a basis for our audit opinion on the standalone
 financial statements.
 
 OPINION
 
 In our opinion and to the best of our information and according to the
 explanations given to us, the aforesaid standalone financial statements
 give the information required by the Act in the manner so required and
 give a true and fair view in conformity with the accounting principles
 generally accepted in India, of the state of affairs of the Company as
 at March 31, 2016, and its profit and its cash flows for the year ended
 on that date.
 
 OTHER MATTERS
 
 The standalone financial statements and other financial information
 include the Company''s proportionate share in jointly controlled assets
 of Rs, 1,055 crore, liabilities of Rs, 95 crore, expenditure of Rs, 462
 crore and the elements making up the Cash Flow Statement and related
 disclosures in respect of an unincorporated joint venture which is
 based on statements from the operator and certified by the management.
 
 Our opinion is not qualified / modified in respect of this matter.
 
 REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
 
 1.  As required by Section 143 (3) of the Act, we report that:
 
 a) We have sought and obtained all the information and explanations
 which to the best of our knowledge and belief were necessary for the
 purposes of our audit.
 
 b) In our opinion, proper books of account as required by law have been
 kept by the Company so far as it appears from our examination of those
 books.
 
 c) The Balance Sheet, the Profit and Loss Statement, and the Cash Flow
 Statement dealt with by this Report are in agreement with the books of
 account.
 
 d) In our opinion, the aforesaid standalone financial statements comply
 with the Accounting Standards prescribed under section 133 of the Act.
 
 e) On the basis of the written representations received from the
 directors as on 31st March, 2016 taken on record by the Board of
 Directors, none of the directors is disqualified as on 31st March, 2016
 from being appointed as a director in terms of Section 164 (2) of the
 Act.
 
 f) With respect to the adequacy of the internal financial controls over
 financial reporting of the Company and the operating effectiveness of
 such controls, refer to our separate Report in Annexure A.
 
 g) With respect to the other matters to be included in the Auditor''s
 Report in accordance with Rule 11 of the Companies (Audit and Auditors)
 Rules, 2014, in our opinion and to the best of our information and
 according to the explanations given to us:
 
 i. The Company has disclosed the impact of pending litigations on its
 financial position in its financial statements as referred to in Note
 32.2 (d) (e) and Note 33 to the standalone financial statements.
 
 ii. The Company has made provision, as required under the applicable
 law or accounting standards, for material foreseeable losses, if any,
 on long-term contracts including derivative contracts;
 
 iii. There has been no delay in transferring amounts, required to be
 transferred, to the Investor Education and Protection Fund by the
 Company except for a sum of Rs, 17 crore, which are held in abeyance
 due to pending legal cases.
 
 2. As required by the Companies (Auditor''s Report) Order, 2016 (the
 Order) issued by the Central Government in terms of Section 143(11) of
 the Act, we give in Annexure B a statement on the matters specified
 in paragraphs 3 and 4 of the Order.
 
 (Referred to in paragraph 2, under ''Report on Other Legal and
 Regulatory Requirements'' section of our Report of even date)
 
 i.  In respect of its fixed assets:
 
 a) The Company has maintained proper records showing full particulars
 including quantitative 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 the management in a phased periodical manner, which in our
 opinion is reasonable having regard to the size of the Company and
 nature of its assets. No material discrepancies were noticed on such
 physical verification.
 
 c) As per the information and explanations provided to us, title deeds
 of immovable properties are generally in the name of the Company except
 in case of properties acquired by entities that have since been
 amalgamated with the Company and except in fourteen cases of leasehold
 land, aggregating Rs. 317 crore (refer note 10.1 to the financial
 statements) in respect of which lease deeds are pending execution. We
 verified the title deeds for immovable properties acquired during the
 course of the year and in respect of other properties, the same is
 under compilation.
 
 ii. In our opinion, the inventories have been physically verified
 during the year by the Management at reasonable intervals and as
 explained to us no material discrepancies were noticed on physical
 verification.
 
 iii. In respect of the loans, secured or unsecured, granted by the
 Company to companies, firms, Limited Liability Partnerships or other
 parties covered in the register maintained under Section 189 of the
 Companies Act, 2013:
 
 a) In our opinion and according to the information given to us, the
 terms and conditions of the loans given by the Company are prima facie,
 not prejudicial to the interest of the Company.
 
 b) The schedule of repayment of principal and payment of interest has
 been stipulated and repayments of principal amounts and /or receipts of
 interest have been regular as per stipulations.
 
 c) There are no overdue amounts as at the year-end in respect of both
 principal and interest.
 
 iv. In our opinion and according to the information and explanations
 given to us, the Company has complied with the provisions of Sections
 185 and 186 of the Companies Act, 2013 in respect of grant of loans,
 making investments and providing guarantees and securities.
 
 v. According to the information and explanations given to us, the
 Company has not accepted any deposit from the public.  Therefore, the
 provisions of Clause (v) of paragraph 3 of the Order is not applicable
 to the Company.
 
 vi. We have broadly reviewed the cost records maintained by the Company
 pursuant to the Companies (Cost Records and Audit) Rules, 2014
 prescribed by the Central Government under Section 148(1) of the
 Companies Act, 2013 and are of the opinion that, prima facie, the
 prescribed accounts and cost records have been maintained. We have,
 however, not made a detailed examination of the cost records with a
 view to determine whether they are accurate or complete.
 
 vii.  In respect of statutory dues:
 
 a) According to the records of the Company, undisputed statutory dues
 including Provident Fund, Employees'' State Insurance, Income Tax, Sales
 Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and
 other material statutory dues have been generally regularly deposited
 with the appropriate authorities.  According to the information and
 explanations given to us, no undisputed amounts payable in respect of
 the aforesaid dues were outstanding as at March 31, 2016 for a period
 of more than six months from the date of becoming payable.
 
 b) Details of dues of Income Tax, Sales Tax, Service Tax, Customs Duty,
 Excise Duty and Value Added Tax which have not been deposited as on
 March 31, 2016 on account of disputes are given below:
 
 Sr.   Name of the           Nature of        Amount 
 No    Statute               Dues            (Rs. in crore)
  
 1.    Central               Excise
       Excise                Duty                 15
       Act,1944              and Service
                             Tax
 
                                                 105
 
                                                   4
 
 2.    Central               Sales
       Sales Tax             Tax/              1,207 
       Act,1956              VAT and
       and                   Entry
       Sales Tax             Tax
       Act of                                    647
       various
       States                                     92
 
                                                  24
 
 3.    Customs               Custom               20
       Act, 1962             Duty
 
       Total                                   2,114
 
 
 Name of the Statute     Period to which the     Forum where
                         amount relates          dispute is pending
 
 Central Excise
 Act, 1944                                       Commissioner 
                         Various Years from      of Central Excise 
                         1990-91 to 2006-07     (Appeals)
 
                                                 Customs, Excise
                         Various Years from      and Service
                         1991-92 to 2012-13      Tax Appellate Tribunal
 
                         Various Years from      High Court 
                         2006-07 to 2009-10
 
 Central Sales Tax                               Joint/Deputy
 Act, 1956               Various Years           from Commissioner/
                         1992-93 to 2009-10      Commissioner
                                                (Appeals)
 
                                                 Sales Tax 
                         Various Years from      Appellate 
                         1983-84 to 2008-09      Tribunal
 
                         Various Years from      High Court 
                         1994-95 to 2008-09
 
                         Various Years from      Supreme Court 
                         2000-01 to 2008-09
 
 Customs Act, 1962       2007-08                 Customs, Excise and
                                                 Service Tax Appellate
                                                 Tribunal
 
 viii. In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in the repayment of loans or
 borrowings to financial institutions, banks and Government and dues to
 debenture holders.
 
 ix. In our opinion and according to the information and explanations
 given to us, monies raised by way of debt instruments and the term
 loans during the year have been applied by the Company for the purposes
 for which they were raised.
 
 x. In our opinion and according to the information and explanations
 given to us, no material fraud by the Company or on the Company by its
 officers or employees has been noticed or reported during the year.
 
 xi. In our opinion and according to the information and explanations
 given to us, the Company has paid / provided managerial remuneration in
 accordance with the requisite approvals mandated by the provisions of
 section 197 read with Schedule V to the Companies Act, 2013.
 
 xii. The Company is not a Nidhi Company and hence reporting under
 clause (xii) of Paragraph 3 of the Order is not applicable.
 
 xiii. In our opinion and according to the information and explanations
 given to us the Company''s transactions with its related party are in
 compliance with Sections 177 and 188 of the Companies Act, 2013, where
 applicable, and details of related party transactions have been
 disclosed in the financial statements etc. as required by the
 applicable accounting standards.
 
 xiv. During the year the Company has not made any preferential
 allotment or private placement of shares or fully or partly convertible
 debentures and hence reporting under clause (xiv) of Paragraph 3 of the
 Order is not applicable to the Company.
 
 xv. In our opinion and according to the information and explanations
 given to us, during the year, the Company has not entered into any
 non-cash transactions with its directors or persons connected with him
 and hence reporting under clause (xv) of Paragraph 3 of the Order is
 not applicable to the Company
 
 xvi. In our opinion and according to information and explanations
 provided to us, the Company is not required to be registered under
 section 45-IA of the Reserve Bank of India Act, 1934.
 
 For Chaturvedi 
 & Shah                  For Deloitte Haskins
                         & Sells LLP             For Rajendra & Co.
 
 Chartered Accountants   Chartered Accountants   Chartered Accountants
 
 (Registration 
 No. 101720W)           (Registration 
                         No. 117366W/ W-100018) (Registration 
                                                 No. 108355W)
 
 Rajesh D. Chaturvedi    A. B. Jani              A. R. Shah
 
 Partner                 Partner                 Partner
 
 Membership No.: 45882   Membership No.: 46488   Membership No.:47166
 
 Mumbai
 
 Date : April 22, 2016
Source :
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