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Reliance Industries
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« Mar 14
Notes to Accounts Year End : Mar '15
1.1 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.
 
 1.2 17,18,83,624 Shares held by subsidiaries, which were allotted
 pursuant to the Schemes of Amalgamation sanctioned (17,18,83,624) by
 the Hon'ble High Courts in the previous years, do not have voting
 rights and are not eligible for
 
 Bonus Shares
 
 1.3 4,62,46,280 Shares were bought back and extinguished in the last
 five years.
 
 (4,62,46,280)
 
 1.4 The Company has reserved issuance of 12,67,18,207 (Previous year
 13,05,05,114) Equity Shares of Rs. 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 45,419
 options which includes 21,367 options at a price Rs. 936 per option,
 13,052 options at a price of Rs. 961 per option and 11,000 options at a
 price of Rs. 843 per option plus all applicable taxes, as may be levied
 in this regard on the Company (Previous year 71,866 options which
 includes 60,866 options at a price of Rs. 860 per option and 11,000
 options at a price of Rs. 880 per option plus all applicable taxes, as
 may be levied in this regard on the Company) to the Eligible Employees.
 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.
 
 1.5 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. 533 crore are secured by way of first mortgage / charge on all the
 properties situated at Hazira Complex and at Patalganga Complex of the
 Company.
 
 b) Rs. 500 crore are secured by way of first mortgage / charge on the
 immovable properties situated at Jamnagar Complex (SEZ unit) of the
 Company.
 
 c) 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.
 
 d) Rs. 31 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.
 
 2.2 Finance Lease Obligations are secured against Leased Assets.
 
 2.3 Bonds include 5.875% Senior Perpetual Notes (the Notes) of Rs.
 5,000 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. LONG TERM PROVISIONS
 
 During the current financial year, Tapti Joint Venture (JV) achieved
 resolution with Government of India (GoI) that the Tapti JV will assume
 responsibility for abandonment obligation of Tapti Part B facilities.
 Accordingly, the Company has recognized a liability related to
 dismantling and abandonment of facilities based on the estimated future
 expenditure. Further the Company has also recognized similar
 liabilities for D1D3 and MA fields based on the estimates provided in
 the development plan. Aggregate provision recognised is Rs. 1,404 crore
 ($ 224.70 Million)
 
 4.1 Working Capital Loans from Banks referred above to the extent of:
 
 (a) Rs. 672 crore (Previous Year 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. Nil (Previous Year Rs. 3,105 crore) are secured by way of lien on
 Fixed Deposits and Rs. Nil (Previous Year Rs. 978 crore) are secured by
 lien on Government Securities.
 
 4.2 Working Capital Loan from Others of Rs. Nil (Previous Year Rs. 1,199
 crore) are secured by lien on Government Securities.
 
 5.1 Leasehold Land includes Rs. 203 crore (Previous Year Rs. 203 crore) in
 respect of which lease-deeds are pending execution.
 
 5.2 Buildings includes :
 
 i) Cost of shares in Co-operative Housing Societies Rs. 1 crore (Previous
 Year Rs. 1 crore).
 
 ii) Rs. 5 crore (Previous Year Rs. 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.
 
 5.3 Intangible Assets - Others includes :
 
 i) Jetties amounting to Rs. 812 crore (Previous Year Rs. 812 crore), the
 Ownership of which vests with Gujarat Maritime Board.
 
 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.
 
 5.4 Capital Work-in-Progress and Intangible Assets under Development
 includes :
 
 i) Rs. 6,770 crore (Previous Year Rs. 4,204 crore) on account of Project
 Development Expenditure.
 
 ii) Rs. 16,346 crore (Previous Year Rs. 10,951 crore) on account of cost of
 construction materials at site.
 
 5.6 The Gross Block of Fixed Assets includes Rs. 38,122 crore (Previous
 Year Rs. 38,122 crore) on account of revaluation of Fixed Assets carried
 out since inception.
 
 5.7 Additions in Plant and Machinery, Capital Work-in-Progress,
 Intangible Assets - Development Rights and Intangible Assets under
 Development includes Rs. 4,709 crore (net loss) [Previous Year Rs. 8,678
 crore (net loss)] on account of exchange difference during the year.
 
 5.8 i) In respect of Fixed Assets acquired on finance lease on or
 after 1st April, 2001, the minimum lease rentals outstanding as on 31st
 March, 2015 are as follows:
 
 ii) General Description of Lease Terms:
 
 Assets are taken on Lease over a period of 5 to 10 years.
 
 iii) Fixed Assets taken on finance lease prior to 1st April, 2001,
 amount to Rs. 444 crore (Previous Year Rs. 444 crore).  Future obligations
 towards lease rentals under the lease agreements as on 31st March, 2015
 amount to Rs. 1 crore (Previous Year Rs. 2 crore).
 
 5.9 Pursuant to the enactment of Companies Act 2013, the company has
 applied the estimated useful lives as specified in Schedule II, except
 in respect of certain assets as disclosed in Accounting Policy on
 Depreciation, Amortisation and Depletion. Accordingly the unamortised
 carrying value is being depreciated / amortised over the revised/
 remaining useful lives. The written down value of Fixed Assets whose
 lives have expired as at 1st April 2014 have been adjusted net of tax,
 in the opening balance of Profit and Loss Account amounting to Rs. 318
 crore.
 
 6.1 Loans and Advances in the nature of Loans given to Subsidiaries
 and Associates:
 
 (i) Loans and Advances shown above, fall under the category of 'Long
 Term Loans & 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.
 
 (ii) All the above Loans and Advances are interest bearing except for
 an amount of Rs. 11,202 crore given to Reliance Industrial Investments
 and Holdings Limited and Rs. 33 crore to Reliance Gas Pipelines Limited.
 
 (iii) Loans to employees as per the Company's policy are not considered.
 
 A) (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 Hon'ble High Court of Judicature at Bombay and Gujarat
 and certain subsequent inter se transfer of shares.
 
 33.2 (a) Net Quantities of Company's Interest (on gross basis) in
 Proved Reserves and Proved Developed Reserves :
 
 (b) In case of producing field and fields where development of drilling
 activities are 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 reserves estimates related to KGD6 and NEC25 have been revised.
 During the year, the Company recognized reserves towards CB10 block
 post review of Declaration of Commerciality (DoC) by Management
 Committee.
 
 (d) The Government of India (GoI), by its letters dated 2nd May 2012,
 14th November 2013 and 10th July 2014 has communicated that it proposes
 to disallow certain costs which the Production Sharing Contract (PSC),
 relating to 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 GoI 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 to
 GoI for the resolution of dispute. Pending decision of the arbitration,
 the demand from the GoI of $ 117 million ( Rs. 731 crores) being the
 Company's share (total demand $ 195 million) towards additional Profit
 Petroleum has been considered as contingent liability.
 
 (e) In supersession of the Ministry's Gazette notification no.
 22011/3/2012-ONG.D.V. dated 10th January, 2014, the GoI notified the
 New Domestic Natural Gas Pricing Guidelines, 2014, on 25th October
 2014. As per new notification, GoI had revised the price of Gas to $
 5.05 per MMBTU on Gross Calorific Value (GCV) basis from the existing
 price of $ 4.205 on Net Calorific Value (NCV) basis per MMBTU with
 effect from 01st November 2014 for the period from November 2014 to
 March 2015. Consequent to the aforesaid dispute referred to under 33.2
 (d) above which has been referred to arbitration, the GoI has directed
 the Company to instruct customers to deposit differential revenue on
 gas sales from D1D3 field on account of the price determined under the
 guidelines converted to NCV basis and the prevailing price prior to 1st
 November 2014 ($ 4.205 per MMBTU) to be credited to the gas pool
 account maintained by GAIL (India) Limited. The amount so deposited by
 customer to Gas Pool Account is Rs. 147 crore as at 31st March 2015 is
 disclosed under Other Long Term Loans and Advances. Revenue has been
 recognized at the GoI notified price of $ 5.05 MMBTU on GCV basis, in
 respect of gas quantities sold from D1D3 field from 1st November 2014.
 
 
 
                                                   (Rs. in crore)
 
                                     As at              As at
                                 31st March, 2015    31st March, 2014
 
 7. CONTINGENT LIABILITIES AND 
 COMMITMENTS
 
 (I) Contingent Liabilities
 
 (A) Claims against the Company / 
 disputed liabilities not 
 acknowledged as debts*
 
 (a) In respect of Joint Ventures       798              414
 
 (b) In respect of Others             1,770            1,433
 
 (B) Guarantees
 
 (i) Guarantees to Banks and Financial Institutions against credit
 facilities extended to third parties and other Guarantees
 
 (a) In respect of Joint Ventures        -                -
 
 (b) In respect of Others             35,418          32,308
 
 (ii) Performance Guarantees
 
 (a) In respect of Joint Ventures        -                -
 
 (b) In respect of Others                274             290
 
 (iii) Outstanding Guarantees furnished to Banks and Financial
 Institutions including in respect of Letters of Credits
 
 (a) In respect of Joint Ventures         20             700
 
 (b) In respect of Others             17,704           4,843
 
 (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              1,121           4,970
 
 (II) Commitments
 
 (A) Estimated amount of contracts remaining to be executed on capital
 account and not provided for:
 
 (a) In respect of Joint Ventures        865           1,168
 
 (b) In respect of Others             20,569          25,349
 
 (B) Other Commitments
 
 (a) Sales Tax deferral liability 
     assigned                            787           1,563
 
 (b) Guarantee against future cash 
 calls **                              1,315           2,917
 
 * The Company has been advised that the demand is likely to be either
 deleted or substantially reduced and accordingly no provision is
 considered necessary.
 
 ** 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 assessed tax liability exceeds the
 provision made, by Rs. 509 crore as on 31st March, 2015. Based on the
 decisions of the Appellate authorities and the interpretations of other
 relevant provisions, the Company has been legally advised that the
 additional demand raised 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 2015 amount to Rs. 82,812 crore (Previous
 Year Rs. 64,918 crore). The unhedged exposures are naturally hedged by
 future foreign currency earnings and earnings linked to foreign
 currency.
 
 8. As per Accounting Standard (AS) 17 on Segment Reporting, segment
 information has been provided under the Notes to Consolidated Financial
 Statements.
 
 9. DETAILS OF LOANS GIVEN, INVESTMENTS MADE AND GUARANTEE GIVEN
 COVERED U/S 186 (4) OF THE COMPANIES ACT, 2013 Loans given and
 Investments made are given under the respective heads.
 
 10.1 The Company had announced Voluntary Separation Scheme (VSS) for
 the employees of Silvassa Manufacturing Division during the previous
 year. A sum of Rs. 32,00,000 (Previous Year Rs. 31 crore) has been paid
 during the year and debited to the Profit and Loss Statement under the
 head Employee Benefits Expense.
 
 (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 evalua- tion is carried out at least once in a year.
 
 (c) The reserves estimates related to KGD6 and NEC25 have been revised.
 During the year, the Company recognized reserves towards CB10 block
 post review of Declaration of Commerciality (DoC) by Management
 Committee.
 
 (III) The Income-Tax Assessments of the Company have been completed up
 to Assessment Year 2010-11. The assessed tax liability exceeds the
 provision made by Rs. 726 crore as on 31st March, 2015. Based on the
 decisions of the Appellate authorities and the interpretations of other
 relevant provisions, the Company has been legally advised that the
 additional demand raised is likely to be either deleted or
 substantially reduced and accordingly no provision is considered
 necessary.
 
 11. FINANCIAL AND DERIVATIVE INSTRUMENTS
 
 a) Derivative contracts entered into by the Company and outstanding as
 on 31st March, 2015
 
 (i) For hedging Currency and Interest Rate Related Risks:
 
 Nominal amounts of derivative contracts entered into by the Company and
 outstanding as on 31st March, 2015 amount to Rs. 1,74,754 crore (Previous
 Year Rs. 1,15,654 crore).
 
 b) Foreign Currency Exposures that are not hedged by derivative
 instruments as on 31st March, 2015 amount to Rs. 85,791 crore (Previous
 Year Rs. 65,612 crore). The unhedged exposures are naturally hedged by
 future foreign currency earnings and earnings linked to foreign
 currency.
 
 c) Other Option Contracts of Rs. 16 crore and Future Contracts of Rs. 306
 crore are outstanding as on 31st March, 2015.
 
 12. The audited/unaudited financial statements of foreign subsidiaries
 / associates have been prepared in accordance with the Generally
 Accepted Accounting Principle of its Country of Incorporation or
 International Financial Reporting Standards. The differences in
 accounting policies of the Company and its subsidiaries / associates
 are not material and there are no material transactions from 1st
 January, 2015 to 31st March, 2015 in respect of subsidiaries /
 associates having financial year ended 31st December, 2014.
 
 Names of Subsidiaries which are yet to commence operations - Sr.
 
 Name of the Companies No.
 
 1 Reliance Jio Global Resources LLC
 
 2 Reliance Marcellus Holdings LLC
 
 3 Reliance Textiles Limited
 
 Names of Subsidiaries which have been liquidated or sold during the
 year - Sr.
 
 Name of the Companies No.
 
 1 Achman Commercial Private Limited
 
 2 Delight Proteins Limited
 
 3 Gapco Rwanda Limited
 
 4 GenNext Innovation Ventures Limited
 
 5 Infotel Telecom Limited
 
 6 Kaizen Capital LLP
 
 7 LPG Infrastructure (India) Limited
 
 8 Mark Project Services Private Limited
 
 9 Rancore Technologies Private Limited
 
 10 Reliance Agri Ventures Private Limited
 
 11 Reliance Convention and Exhibition Centre Limited
 
 12 Reliance Corporate Centre Limited
 
 13 Reliance Corporate Services Limited
 
 14 Reliance Dairy Foods Limited
 
 15 Reliance F&B Services Limited
 
 16 Reliance Financial Distribution and Advisory Services Limited
 
 17 Reliance Food Processing Solutions Limited
 
 18 Reliance Gas Corporation Limited
 
 19 Reliance Industries Investment and Holding Limited
 
 20 Reliance Infrastructure Management Services Limited
 
 21 Reliance Nutritious Food Products Limited
 
 22 Reliance People Serve Limited
 
 23 Reliance Review Cinema Limited
 
 24 Reliance Security Solutions Limited
 
 25 Reliance Strategic (Mauritius) Limited
 
 26 Reliance Style Fashion India Private Limited
 
 27 Reliance Styles India Limited
 
 All the above Companies have been amalgamated pursuant to the Scheme of
 Amalgamation except:
 
 1. Gapco Rwanda Limited which has been sold during the year.
 
 2. Reliance Strategic (Mauritius) Limited and Kaizen Capital LLP which
 have been liquidated during the year.
Source : Dion Global Solutions Limited
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