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Reliance Industries Ltd.

BSE: 500325 | NSE: RELIANCE |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE002A01018 | SECTOR: Oil Exploration and Production

BSE Live

Feb 03, 16:01
2329.05 2.25 (0.10%)
Volume
AVERAGE VOLUME
5-Day
463,829
10-Day
361,286
30-Day
233,787
148,804
  • Prev. Close

    2326.80

  • Open Price

    2345.00

  • Bid Price (Qty.)

    2329.05 (241)

  • Offer Price (Qty.)

    2329.05 (9)

NSE Live

Feb 03, 15:59
2329.00 2.05 (0.09%)
Volume
AVERAGE VOLUME
5-Day
9,430,633
10-Day
8,434,505
30-Day
5,953,805
11,398,850
  • Prev. Close

    2326.95

  • Open Price

    2349.00

  • Bid Price (Qty.)

    2329.00 (933)

  • Offer Price (Qty.)

    0.00 (0)

Annual Report

For Year :
2022 2021 2019 2018 2017 2016 2015 2014 2013

Auditor's Report

To the Members of Reliance Industries Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying Standalone Financial Statements of Reliance Industries Limited (the Company) which includes joint operations, which comprise the Balance sheet as at March 31, 2022, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the Standalone Financial Statements, including a summary of significant accounting policies and other explanatory information.

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 Companies Act, 2013, as amended (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, 2022, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ''Auditor''s Responsibilities for the Audit of the Standalone Financial Statements'' section of our report. We are independent of the Company in accordance with the ''Code of Ethics'' issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of

Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Financial Statements.

Emphasis of Matter

We draw attention to Note 32(a) of the Standalone Financial Statements, wherein, the Company has withdrawn from General Reserves, an amount of '' 36,143 crore equal to the loss recognised in the Statement of Profit and Loss on measurement of the gasification undertaking as held for sale and credited the same to the Statement of Profit and Loss. This is in accordance with Scheme approved by National Company Law Tribunal, Mumbai, overriding the Indian Accounting Standards (Ind AS).

Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements for the financial year ended March 31, 2022. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report.

We have fulfilled the responsibilities described in the Auditor''s responsibilities for the audit of the Standalone Financial Statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the Standalone Financial Statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying Standalone Financial Statements.

Key audit matters

How our audit addressed the key audit matter

A. Capitalisation and useful life of tangible and intangible assets

Significant judgment and estimates are involved with respect to the following matters of tangible and intangibles assets:-

Our audit procedures included and were not limited to the following:-

a) During the year ended March 31, 2022, the Company has incurred capital expenditure on various projects included in capital work in progress and intangible assets under development. Further, items of property, plant and equipment that are ready for its intended use as determined by the management have been capitalised. Judgement is involved to determine that the aforesaid capitalisation meet the recognition requirement under Ind AS including determination of whether the criteria for intended use of the management has been met. Refer Note B.2(b) and B.2(d) of the financial statements.

• Assessed the design and operating effectiveness of the controls with respect to capital expenditure incurred on various projects included in capital work in progress, intangible assets under development.

• Assessed the nature of the additions made to property, plant and equipment, intangible assets, capital work-in-progress and intangible asset under development on a test check basis to test whether they meet the recognition criteria as set out Ind AS 16 - Property, Plant and Equipment and Ind AS 38 -Intangible Assets, including intended use of management.

Key audit matters

How our audit addressed the key audit matter

b) Re-assessment of estimated useful lives used for determination of depreciation of tangible assets, amortisation of intangible assets and recoverability of their carrying values involves assumptions used for such technical assessment, consideration of historical experience and anticipated future risks. Refer Note B.2(b) and B.2(d) of financial statements.

c) Estimates of oil and gas reserves are used to calculate depletion charges for the Company''s oil and gas assets and also have a direct impact on the assessment of the recoverability of their carrying values. Factors such as the availability of geological and engineering data, reservoir performance data, acquisition and divestment activity, drilling of new wells and commodity prices impacts the determination of the Company''s estimates of oil and natural gas reserves. Refer Note C(a) of the financial statements.

Accordingly, the above matters relating to tangible and intangible assets have been considered as a key audit matter.

• Reviewed the management re-assessment of estimated useful lives of tangible assets, intangible assets and recoverability of their carrying values with respect to anticipated future risks.

• Performed walk-through of the estimation process associated with the oil and gas reserves. Further, assessed the valuation methodology, including assumptions around the key drivers of the cash flow forecasts including future oil and gas prices, estimated reserves, discount rates used, etc. by engaging valuation experts.

• Assessed the objectivity and competence of the Company''s specialists involved in estimating oil & gas reserves and valuation specialists engaged by us.

• Assessed whether the updated oil and gas reserve estimates were included in the Company''s, accounting for amortisation / depletion and disclosures of proved reserves and proved developed reserves in the financial statements.

• Reviewed the disclosures made by the Company in the financial statements.

B.

Litigation matters

The Company has certain significant ongoing legal proceedings for various complex matters with the Government of India and other parties, continuing from earlier years, which are as under:

1. Matters in relation to Oil and Gas:

(a) Disallowance of certain costs under the production sharing contract, relating to Block KG-DWN-98/3 and consequent deposit of differential revenue on gas sales from D1D3 field to the gas pool account maintained by Gail (India) Limited (Refer Note 35.3).

(b) Claim against the Company in respect of gas said to have migrated from neighbouring blocks (KGD6) (Refer Note 35.4(a)).

(c) Claims relating to limits of cost recovery, profit sharing and audit and accounting provisions of the public sector corporations etc., arising under two production sharing contracts entered into in 1994 (Refer Note 35.4(b)).

(d) Suit for specific performance of a contract for supply of natural gas before the Hon''ble Bombay High Court (Refer Note 35.4(c)).

Our audit procedures included and were not limited

to the following:

• Assessed the management''s position through discussions with the in-house legal expert and external legal opinions obtained by the Company (where considered necessary) on both, the probability of success in the aforesaid cases, and the /magnitude of any potential loss.

• Discussed with the management on the development in these litigations during the year ended March 31, 2022.

• Rolled out of enquiry letters to the Company''s legal counsel and assessed the responses received by engaging our internal legal experts.

• Assessed the objectivity and competence of the Company''s legal counsel involved in the process and legal experts engaged by us.

• Reviewed the disclosures made by the Company in the financial statements.

• Obtained representation letter from the management on the assessment of these matters.

2.

Matter relating to trading in shares of Reliance Petroleum Limited (''RPL''):

Special Appellate Tribunal judgement dated November 5, 2020, dismissing the Company''s appeal made in relation to order passed by the Securities and Exchange Board of India (''SEBI'') under Section 11B of the SEBI Act, 1992 in connection with trades by Company in the stock exchanges in 2007 in the shares of Reliance Petroleum Limited, then subsidiary of the Company (Refer Note 36(iv)).

Due to complexity involved in these litigation matters, management''s judgement regarding recognition, measurement and disclosure of provisions for these legal proceedings is inherently uncertain and might change over time as the outcomes of the legal cases are determined.

Accordingly, it has been considered as a key audit matter.

We have determined that there are no other key audit matters to communicate in our report.

Key audit matters

How our audit addressed the key audit matter

C. Fair Valuation of Investments

As at March 31, 2022, the Company has investments of

Our audit procedures included and were not limited

'' 78,144 crore in the Equity and Preference Shares of Jio Digital

to the following:

Fiber Private Limited (JDFPL) which are measured at fair value as per Ind AS 109 read with Ind AS 113.

• Reviewed the fair valuation reports provided by the

management by involvement of internal specialist / external

These investments are Level 3 investments as per the fair

valuation experts.

value hierarchy in Ind AS 113 and accordingly determination

• We assessed the assumptions around the cash flow forecasts

of fair value is based on a high degree of judgement and input from data that is not directly observable in the market. Further, the fair value is significantly influenced by the expected pattern of future benefits of the tangible assets

including discount rates, expected growth rates and its effect on business and terminal growth rates used through involvement of the internal experts.

of JDFPL (fiber assets). Refer Note 2 and Note 38A in the

• We also involved internal experts to assess the Company''s

financial statements.

valuation methodology and assumptions, applied in determining the fair value.

Accordingly, the same has been considered as a

• We discussed potential changes in key drivers as compared

key audit matter.

to previous year / actual performance with management to evaluate the inputs and assumptions used in the cash flow forecasts.

• Assessed the objectivity and competence of our internal expert and Company''s internal/external specialists involved

in the process.

• Reviewed the disclosures made by the Company in the financial statements.

D. IT systems and controls over financial reporting

We identified IT systems and controls over financial reporting as a key audit matter for the Company because its financial

Our procedures included and were not limited to the following:

accounting and reporting systems are fundamentally

• Assessed the complexity of the IT environment by engaging

reliant on IT systems and IT controls to process significant

IT specialists and through discussion with the head of IT

transaction volumes, specifically with respect to revenue

and internal audit and identified IT applications that are

and raw material consumption. Also, due to such large

relevant to our audit.

transaction volumes and the increasing challenge to protect

• Assessed the design and evaluation of the operating

the integrity of the Company''s systems and data, cyber

effectiveness of IT general controls over program development

security has become more significant.

and changes, access to program and data and IT operations

Automated accounting procedures and IT environment

by engaging IT specialists.

controls, which include IT governance, IT general controls

• Performed inquiry procedures with the head of cybersecurity at

over program development and changes, access to

the Company in respect of the overall security architecture and

program and data and IT operations, IT application controls

any key threats addressed by the Company in the current year.

and interfaces between IT applications are required to be

• Assessed the design and evaluation of the operating

designed and to operate effectively to ensure accurate

effectiveness of IT application controls in the key processes

financial reporting.

impacting financial reporting of the Company by engaging IT specialists.

• Assessed the operating effectiveness of controls relating to data transmission through the different IT systems to the financial reporting systems by engaging IT specialists.


Information Other than the Financial Statements and Auditor’s Report Thereon

The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the Standalone Financial Statements and our auditor''s report thereon.

Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in section 134(5) of 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 including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Standalone Financial Statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.

Auditor’s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast

significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements for the financial year ended March 31, 2022 and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2020 (the Order), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure 1 a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. 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 Statement of Profit and Loss including the Statement of Other Comprehensive

Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;

(e) On the basis of the written representations received from the directors as on March 31, 2022 taken

on record by the Board of Directors, none of the directors is disqualified as on March 31, 2022 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 with reference to Standalone Financial Statements and the operating effectiveness of such controls, refer to our separate Report in Annexure 2 to this report;

(g) In our opinion, the managerial remuneration for the year ended March 31, 2022 has been paid

/ provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;

(h) 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, as amended 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 Standalone Financial Statements - Refer Note 36 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; and

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 an amount of '' 2 crore which are held in abeyance due to pending legal cases.

iv. a) The management has represented that,

to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other persons or entities, including foreign entities (Intermediaries), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the company from any persons or entities, including foreign entities (Funding Parties), with the understanding, whether recorded in writing or otherwise, that the company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

c) Based on the audit procedures that were considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement.

v. The final dividend paid by the Company during the year in respect of the same declared

for the previous year is in accordance with section 123 of the Act to the extent it applies to payment of dividend.

For D T S & Associates LLP For S R B C & CO LLP

Chartered Accountants Chartered Accountants

ICAI Firm Registration Number: ICAI Firm Registration Number:

142412W/W100595 324982E/E300003

per T P Ostwal per Vikas Kumar Pansari

Partner Partner

Membership Number: 030848 Membership Number: 093649

UDIN: 22030848AIMPYR9342 UDIN: 22093649AIMNPC6387

Place of Signature: Mumbai Place of Signature: Mumbai

Date: May 06, 2022 Date: May 06, 2022