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Reliance Industries
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« Mar 13
Notes to Accounts Year End : Mar '14
1.1 162,67,93,078 Shares were allotted as Bonus Shares in the last five
 years by capitalisation of Securities Premium (162,67,93,078) and
 Reserves.
 
 1.2 6,92,52,623 Shares were allotted in the last five years pursuant to
 the Scheme of amalgamation with Reliance (6,92,52,623) Petroleum
 Limited without payments being received in cash.
 
 1.3 45,04,27,345 Shares were allotted on conversion / surrender of
 Debentures and Bonds, conversion of Term (45,04,27,345) Loans, exercise
 of warrants, against Global Depository Shares (GDS) and re-issue of
 forfeited equity shares, since inception.
 
 1.4 17,18,83,624 Shares held by Subsidiaries do not have Voting Rights
 and are not eligible for Bonus Shares (17,18,83,624)
 
 1.5 4,62,46,280 Shares were bought back and extinguished in the last
 five years.  (4,62,46,280)
 
 1.6 The Company has reserved issuance of 13,05,05,114 (Previous year
 13,37,43,590) Equity Shares ofRs. 10 each for offering to eligible
 employees of the Company and its subsidiaries under Employees Stock
 Option Scheme (ESOS). During the year, the Company has granted 60,866
 (Previous Year NIL) options to the eligible employees at a price ofRs.
 860 per option plus all applicable taxes, as may be levied in this
 regard on the Company. The options would vest over a maximum period of
 7 years or such other period as may be decided by the Human Resources,
 Nomination and Remuneration Committee from the date of grant based on
 specified criteria.
 
 1.7 Share application money pending allotment represents application
 money received on account of Employees Stock Option Scheme.
 
 2.1 Non Convertible Debentures referred above to the extent of:
 
 a) Rs. 370 crore are secured by way of first mortgage /charge on the
 immovable properties situated at Hazira Complex and at Jamnagar Complex
 (other than SEZ units) of the Company.
 
 b) Rs. 917 crore are secured by way of first mortgage/charge on all the
 properties situated at Hazira Complex and at Patalganga Complex of the
 Company.
 
 c) Rs. 30 crore are secured by way of first mortgage / charge on certain
 properties situated at Surat in the State of Gujarat and on fixed
 assets situated at Allahabad Complex of the Company.
 
 d) Rs.51 crore are secured by way of first mortgage /charge on movable and
 immovable properties situated at Thane in the State of Maharashtra and
 on movable properties situated at Baulpur Complex of the Company.
 
 e) Rs. 500 crore are secured by way of first mortgage / charge on the
 immovable properties situated at Jamnagar Complex (SEZ unit) of the
 Company.
 
 2.2 Finance Lease Obligations are secured against leased assets.
 
 2.3 Bonds include, 5.875% Senior Perpetual Notes (the Notes) of Rs.
 4,793 crore. The Notes have no fixed maturity date and the Company will
 have an option, from time to time, to redeem the Notes, in whole or in
 part, on any semi-annual interest payment date on or after February
 5,2018 at 100% of the principal amount plus accrued interest.
 
 3.1 Working Capital Loans from Banks referred above to the extent of:
 
 (a) Rs. 3,906 crore are secured by hypothecation of present and future
 stock of raw materials, stock-in-process, finished goods, stores and
 spares (not relating to plant and machinery), book debts, outstanding
 monies, receivables, claims, bills, materials in transit, etc. save and
 except receivables of Oil and Gas Division.
 
 (b) Rs. 3,105 crore are secured by way of lien on fixed deposits and Rs.
 978 crore are secured by lien on Government Securities.
 
 3.2 Working Capital Loan from Others ofRs. 1,199 crore are secured by
 lien on Government Securities.
 
 4.1 Leasehold Land includesRs. 203 crore (Previous YearRs. 203 crore) in
 respect of which lease-deeds are pending execution.
 
 4.2 Buildings include:
 
 i) Cost of shares in Co-operative Housing SocietiesRs. 1 crore (Previous
 YearRs. 1 crore).  ii) Rs.5 crore (Previous YearRs. 5 crore) in respect of
 which conveyance is pending.
 
 iii) Rs. 93 crore (Previous Year Rs. 93 crore) in shares of Companies /
 Societies with right to hold and use certain area of Buildings.
 
 4.3 Intangible Assets - Others include:
 
 i) Jetties amounting to Rs. 812 crore (Previous Year Rs. 812 crore), the
 Ownership of which vests with Gujarat Maritime Board. However, under an
 agreement with Gujarat Maritime Board, the Company has been permitted
 to use the same at a concessional rate.
 
 ii) Rs. 8,367 crore (Previous Year Rs. 8,367 crore) in preference shares of
 subsidiaries and lease premium paid with right to hold and use Land and
 Buildings.
 
 4.4 Capital Work-in-Progress and Intangible Assets under development
 include:
 
 i) Rs. 4,204 crore (Previous YearRs. 2,795 crore) on account of project
 development expenditure, ii) Rs. 10,951 crore (Previous YearRs. 4,685
 crore) on account of cost of construction materials at site.
 
 4.5 Gross Block includesRs. 12,901 crore added on revaluation of
 Building, Plant & Machinery and Equipments as at 01.01.2009 based on
 reports issued by international values.
 
 4.6 The Gross Block of Fixed Assets includesRs. 38,122 crore (Previous
 YearRs. 38,122 crore) on account of revaluation of Fixed Assets carried
 out since inception. Consequent to the said revaluation there is an
 additional charge of depreciation of Rs. 1,845 crore (Previous YearRs.
 2,072 crore) and an equivalent amount has been withdrawn from
 Revaluation Reserve/ General Reserve.
 
 4.7 Additions in Plant and Machinery, Capital Work-in-Progress,
 Intangible Assets - Development Rights and Intangible Assets under
 development includesRs. 8,678 crore (net loss) [Previous YearRs. 5,070
 crore (net loss)] on account of exchange difference during the year.
 
 4.8 Additions for the previous year includes freehold land Rs. 56 crore,
 buildings Rs.674 crore, plant and machineryRs. 1,189 crore, furniture and
 fixturesRs. 12 crore, vehiclesRs. 10 crore and softwareRs. 1 crore on
 amalgamation of Reliance Jamnagar Infrastructure Limited with the
 Company. Accumulated depreciation of Rs. 603 crore on the above assets
 has been included in depreciation for the previous year.
 
 (a) Loans and Advances shown above, fall under the category of Long
 Term Loans and Advances in nature of Loans and are re-payable within 3
 to 5 years except Short Term Loans and Advances to Reliance Ventures
 Limited and Reliance Strategic Investments Limited.
 
 (b) All the above loans and advances are interest bearing except for an
 amount ofRs. 13,454 crore given to Reliance Industrial Investments and
 Holdings Limited and Rs. 33 crore paid to Reliance Gas Pipelines Limited.
 
 (c) Loans to employees as per Companys policy are not considered.
 
 B) (i) Investment by the loanee in the shares of the Company
 
 *None of the loanees and loanees of subsidiary companies have, per se,
 made investments in shares of the Company. These investments represent
 shares of the Company allotted as a result of amalgamation of erstwhile
 Reliance Petroleum Limited (amalgamated in 2001-02) and Indian
 Petrochemicals Corporation Limited with the Company under the Schemes
 approved by the Honble High Court of Judicature at Bombay and Gujarat
 and certain subsequent inter se transfer of shares.
 
 (b) In case of producing field and fields where development of drilling
 activities is in progress, the geological and reservoir simulation are
 updated as and when new well information is available. In all cases.
 Reserve evaluation is carried out at least once in a year.
 
 (c) The Government of India, by its letters dated 2nd May 2012 and 14th
 November 2013 has communicated that it proposes to disallow certain
 costs which the Production Sharing Contract (PSC), relating to Block
 KG-DWN-98/3 entitles the Company to recover. Based on legal advice
 received, the Company continues to maintain that a Contractor is
 entitled to recover all of its costs under the terms of the PSC and
 there are no provisions that entitle the Government to disallow the
 recovery of any Contract Cost as defined in the PSC. The Company has
 already referred the issue to arbitration and already communicated the
 same toGol for the resolution of dispute.
 
 5. The figures for the previous year include figures of Reliance
 Jamnagar Infrastructure Limited, the wholly owned subsidiary company
 engaged in infrastructure development and maintenance developer of the
 operating Special Economic Zone, which was amalgamated with the Company
 with effect from 1st April, 2011 as per the Scheme of Amalgamation (the
 Scheme) sanctioned by the Honble High Court of Gujarat at Ahmedabad.
 
 The Scheme became effective on 22nd October, 2012, the appointed date
 of the Scheme being 1st April, 2011.
 
 In accordance with the scheme and as preapproval of the High Court:
 
 a) The assets, liabilities, reserves, rights and obligations of
 erstwhile Reliance Jamnagar Infrastructure Limited have been
 transferred to and vested with the Company with effect from 1st April,
 2011 and have been recorded at their respective book values, under the
 pooling of interest method of accounting for amalgamation as prescribed
 in Accounting Standard 14 on Accounting for Amalgamations.
 
 b) Being a wholly owned subsidiary company, 10,00,00,000 equity shares
 & 18,50,000,10% non-cumulative optionally convertible preference shares
 of erstwhile Reliance Jamnagar Infrastructure Limited held by the
 Company have been cancelled against Share Capital of the amalgamating
 company and no shares have been issued in pursuance to the scheme of
 amalgamation.
 
 c) Amount added on amalgamation to profit and loss account of previous
 year is inclusive of profit for the period 1st April 2011 till 31 st
 March 2012 and is net of stamp duty paid on amalgamation.
 
 6.  CONTINGENT LIABILITIES AND COMMITMENTS (Rs. In crore)
 
                                             As at         As at
                                             31st March,
                                             2014          31st March,
                                                           2013
 
 (I) Contingent Liabilities
 
 (A) Claims against the company/disputed 
 liabilities not acknowledged as debts
 
 (a) In respect of Joint Ventures                 414          -
 
 (b) In respect of others                       1,433         1,663
 
 (B) Guarantees
 
 (i) Guarantees to Banks and Financial 
 Institutions against credit facilities 
 extended to third parties
 
 (a) In respect of Joint Ventures
 
 (b) In respect of others                      32,308        31,080
 
 (ii) Performance Guarantees
 
 (a) In respect of Joint Ventures
 
 (b) In respect of others                         290           258
 
 (iii) Outstanding guarantees furnished 
 to Banks and Financial Institutions 
 including in respect of Letters of
 Credit
 
 (a) In respect of Joint Ventures                 700           160
 
 (b) In respect of others                       4,843         5,099
 
 (C) Other Money for which the company 
 is contingently liable 
 
 (i) Liability in respect of bills 
 discounted with Banks (Including
 third party bills discounting)
 
 (a) In respect of Joint Ventures
 
 (b) In respect of others                      4,970          3,961
 
 (II) Commitments
 
 (A) Estimated amount of contracts 
 remaining to be executed on capital
 account and not provided for:
 
 (a) In respect of Joint Ventures              1,168            441
 
 (b) In respect of others                     25,349          7,948
 
 (B) Other commitments
 
 (a) Sales tax deferral liability 
 assigned                                      1,563          2,345
 
 (b) Guarantee against future cash
 calls*                                        2,917          1,645
 
 * The Company has issued guarantees against future cash calls to be
 made by JV Partners of its wholly owned subsidiary Reliance Marcellus
 LLC.
 
 (III) The Income-Tax assessments of the Company have been completed up
 to Assessment Year 2010-11. The disputed demand outstanding up to the
 said Assessment Year is Rs. 1,207 crore. Based on the decisions of the
 Appellate authorities and the interpretations of other relevant
 provisions, the Company has been legally advised that the demand is
 likely to be either deleted or substantially reduced and accordingly no
 provision is considered necessary.
 
 b) Foreign Currency exposures that are not hedged by derivative
 instruments as on 31st March 2014 amounting to Rs. 64,918 crore (Previous
 Year Rs. 71,627 crore). The unheeded exposures are naturally hedged by
 future foreign currency earnings and earnings linked to foreign
 currency.
 
 7.  As per Accounting Standard (AS) 17 on Segment Reporting, segment
 information has been provided under the Notes to Consolidated Financial
 Statements.
 
 8.  The Ministry of Corporate Affairs, Government of India, vide
 General Circular No. 2 and 3 dated 8th February 2011 and 21st February
 2011 respectively read with General Circular No. 08/2014 dated 4th
 April 2014 has granted a general exemption from compliance with section
 212 of the Companies Act, 1956, subject to fulfillment of conditions
 stipulated in the circular. The Company has satisfied the conditions
 stipulated in the circular and hence is entitled to the exemption.
 Necessary information relating to the subsidiaries has been included in
 the Consolidated Financial Statements.
Source : Dion Global Solutions Limited
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