Mar 31, 2023
To The Members of Reliance Industries Limited
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying Standalone Financial Statements of RELIANCE INDUSTRIES LIMITED ("the Companyâ) which includes its joint operations, which comprise the Balance Sheet as at 31st March, 2023, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flow 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 ("the Actâ) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (âInd ASâ) and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2023, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.
We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s Responsibility 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 (ICAI) together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. 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.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Standalone Financial Statements of the current period. 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. We have determined the matters described below to be the key audit matters to be communicated in our report.
Sr. No. |
Key Audit Matter |
Auditorâs Response |
i. |
Estimates of Oil and Gas Reserves |
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Significant judgment and estimates are involved in estimating oil and gas reserves which require consideration of factors such as the availability of geological and engineering data, reservoir performance data, acquisition and divestment activity, drilling of new wells and commodity prices. The quantum of oil and gas reserves have a direct impact on determination of depletion charge for the Company''s oil and gas assets and on the assessment of the recoverability of the carrying values of development rights. Accordingly, the estimation of oil and gas reserves has been considered as a key audit matter in view of the significant judgements and estimates involved. Refer Notes B.2 (d) and Note C (A) to the Standalone Financial Statements. |
Our audit procedures included and were not limited to the following: ⢠Performed walk-through of the estimation process associated with the oil and gas reserves. Tested the design, implementation and operating effectiveness of the controls established by the Company in the process of estimation of oil and gas reserves. ⢠Assessed the objectivity and competence of the Company''s internal specialists involved in estimating oil and gas reserves. ⢠Performed substantive testing of the depletion computation. Involved internal specialists to assess the reasonableness of valuation assumptions and appropriateness of the valuation methodology used in assessing the recoverability of the carrying value of exploration and evaluation assets included in intangible assets under development. ⢠Reviewed the disclosures made by the Company in the Standalone Financial Statements for compliance with the applicable authoritative pronouncements. |
Sr. No. |
Key Audit Matter |
Auditorâs Response |
2. |
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. (b) Claim against the Company in respect of gas said to have migrated from neighbouring blocks (KGD6). (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. (d) Suit for specific performance of a contract for supply of natural gas before the Hon''ble Bombay High Court. Refer Notes 36.3, and 36.4 to the Standalone Financial Statements. 2. Matter relating to trading in shares of Reliance Petroleum Limited (âRPLâ): Securities 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 the Company in the stock exchanges in 2007 in the shares of Reliance Petroleum Limited, then subsidiary of the Company. Refer Note 37.(IV) to the Standalone Financial Statements. 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. |
Our audit procedures included and were not limited to the following: ⢠Tested the design, implementation and operating effectiveness of the controls established by the Company in the process of evaluation of litigation matters. ⢠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 developments in respect of these litigations during the year ended 31st March 2023 till the date of approval of the financial statements. ⢠Rolled out of enquiry letters to the Company''s legal counsel and assessed the responses received. ⢠Assessed the objectivity and competence of the Company''s legal counsel involved in the process. ⢠Reviewed the disclosures made by the Company in the financial statements. ⢠Obtained Management representation letter on the assessment of these matters. |
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3. |
Fair Valuation of Investments |
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As at 31st March, 2023, the Company has investments of C 78,093 crore in Equity and Preference Shares of Jio Digital Fibre Private Limited (''JDFPL'') which are measured at fair value as per Ind AS 109 read with Ind AS 113. These investments are Level 3 investments as per the fair value hierarchy in Ind AS 113 and accordingly determination 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 of JDFPL (fibre assets). Accordingly, it has been considered as a key audit matter. Refer Notes 2 and 39A to the Standalone Financial Statements. |
Our audit procedures included and were not limited to the following: ⢠Tested the design, implementation and operating effectiveness of the controls established by the Company in the process of determination of fair value of the investments. ⢠Reviewed the fair valuation reports provided by the management by involvement of internal valuation specialists. ⢠Assessed the assumptions around the cash flow forecasts including discount rates, expected growth rates and its effect on business and terminal growth rates used and the valuation methodology inter-alia through involvement of the internal specialists. ⢠Discussed potential changes in key drivers as compared 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 specialist and Company''s external experts involved in the process. ⢠Reviewed the disclosures made by the Company in the financial statements. ⢠Obtained Management Representation Letter as regards to fair valuation of these investments |
Sr. No. |
Key Audit Matter |
Auditorâs Response |
4. |
Information Technology (IT) systems and controls over financial reporting |
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We identified IT systems and controls over financial reporting as a key audit matter for the Company because its financial accounting and reporting systems are fundamentally reliant on IT systems and IT controls to process significant transaction volumes, specifically with respect to revenue and raw material consumption. Also, due to such large transaction volumes and the increasing challenge to protect the integrity of the Company''s systems and data, cyber security has become more significant. Automated accounting procedures and IT environment controls, which include IT governance, IT general controls over program development and changes, access to program and data and IT operations, IT application controls and interfaces between IT applications, are required to be designed and to operate effectively to ensure accurate financial reporting. |
Our procedures included and were not limited to the following: ⢠Assessed the complexity of the IT environment by engaging IT specialists and through discussion with the head of IT and internal audit at the Company and identified IT applications that are relevant to our audit. ⢠Tested the design, implementation and operating effectiveness of IT general controls over program development and changes, access to program and data and IT operations by engaging IT specialists. ⢠Performed inquiry procedures with the head of cybersecurity at the Company in respect of the overall security architecture and any key threats addressed by the Company in the current year. ⢠Tested the design, implementation and operating effectiveness of IT application controls in the key processes impacting financial reporting of the Company by engaging IT specialists. ⢠Tested the design, implementation and operating effectiveness of controls relating to data transmission through the different IT systems to the financial reporting systems by engaging IT specialists. |
in accordance with the Ind AS and other accounting principles generally accepted in India. 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 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 the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Company''s Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditorâs Responsibility 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
Information Other than the Financial Statements and Auditorâs 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 Consolidated Financial Statements, 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 the other information is materially inconsistent with the Standalone Financial Statements, or our knowledge obtained during the course of our 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 and Those Charged with Governance 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 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 financial 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 Standalone 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 the 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 Standalone 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.
Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Standalone Financial Statements may be influenced.
We consider quantitative materiality and qualitative factors (i) in planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Standalone Financial Statements.
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 of the current year 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.
The Standalone Financial Statements of the Company for the year ended 31st March, 2022, prepared in accordance with Ind AS have been audited by the predecessor auditors. The report of the predecessor auditors dated 6th May, 2022, expressed an unmodified opinion.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, based on our audit, 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 Other Comprehensive Income, the Statement of Cash Flow and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend proposed is in accordance with section 123 of the Act.
vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable
d) In our opinion, the aforesaid Standalone Financial Statements comply with the Ind AS specified under section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31st March, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2023 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 of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure Aâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls with reference to Standalone Financial Statement.
g) With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of section 197(16) of the Act, as amended, in our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 read with Schedule V of 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 37 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 an amount of
C 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 person(s) or entity(ies), including foreign entities ("Intermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiariesâ) 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 person(s) or entity(ies), including foreign entities ("Funding Partiesâ), 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 Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(c) Based on the audit procedures performed that have been 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 (i) and (ii) of Rule 11(e) of the Companies (Audit and Auditors) Rules, 2014, as provided under (a) and (b) above, contain any material misstatement.
v. The final dividend proposed in the previous year, declared and paid by the Company during the year is in accordance with section 123 of the Act.
As stated in Note 46 to the Standalone Financial Statements, the Board of Directors of the Company have proposed final
to the Company w.e.f. 1st April, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended 31st March, 2023.
2. As required by the Companies (Auditor''s Report) Order, 2020 ("the Orderâ) issued by the Central Government in terms of section 143(11) of the Act, we give in "Annexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
Mar 31, 2022
To the Members of Reliance Industries Limited
Report on the Audit of the Standalone Financial Statements
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.
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.
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 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 |
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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 |
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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. |
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B. |
Litigation matters |
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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. |
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2. |
Matter relating to trading in shares of Reliance Petroleum Limited (''RPL''): |
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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)). |
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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. |
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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 |
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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 |
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in the process. ⢠Reviewed the disclosures made by the Company in the financial statements. |
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D. IT systems and controls over financial reporting |
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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 Auditorâs 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.
Auditorâs 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
Mar 31, 2021
Report on the Audit of the StandaloneFinancial StatementsOpinion
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, 2021, 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, 2021, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
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 Auditors'' 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.
We draw attention to Note 31(b) and 41.1 of the financial statements in respect of the Scheme of Amalgamation of wholly-owned subsidiaries with the Company approved by the Hon''ble National Company Law Tribunal, Mumbai, wherein the financial information has been restated from the appointed date and not from the earliest date presented in accordance with Ind AS 103, as per General Circular No. 09/2019 issued by MCA dated August 21, 2019 and loss due to take over of borrowing and consequential adjustment for reversal thereof in the statement of profit and loss upon the Scheme becoming effective.
Our Opinion is not modified in respect of this matter.
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Standalone Financial Statements for the financial year ended March 31, 2021. 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 Auditors'' 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.
How our audit addressed the key audit matter |
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A. Capitalisation and useful life of property, plant and equipment |
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During the year ended March 31, 2021, the Company has incurred |
Our audit procedures included and were not limited to the following: |
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 in the current year. Judgement is involved to determine that the aforesaid capitalisation meet the recognition requirement under Ind AS specifically in relation to determination of whether the criteria for intended use of the management has been met. |
⢠Examined the management assessment of the assumptions considered in estimation of useful life. ⢠Examined the useful economic lives with reference to the Company''s historical experience and technical evaluation by third party specialist appointed by management. ⢠Assessed the objectivity and competence of the Company''s external specialists involved in the process. ⢠Assessed the nature of the additions made to property, plant |
Further, in the current year, the Company has reassessed the |
and equipment, intangible assets, capital work-in-progress and |
useful life of its plant and machinery from 25-35 years to 50 |
intangible asset under development on a test check basis to test |
years. Assessment of useful life of plant and machinery involves |
whether they meet the recognition criteria as set out in para 16 |
management judgement, technical assessment, consideration of |
to 22 of Ind AS 16 - Property, Plant and Equipment, including |
historical experiences, anticipated technological changes, etc. |
intended use of management. |
Accordingly, the above has been determined as a key audit matter. |
⢠Assessed the impact recognised on account of the change in the useful life and disclosure made in the financial statements. |
Key audit matters |
How our audit addressed the key audit matter |
B. Estimation of oil reserves, decommissioning liabilities, depletion charges and impairment evaluation of development rights |
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Refer to Note 34.2 on proved reserves and production on product and geographical basis, Note C(A) on estimation of Oil and Gas reserves, Note B.2(s) on Accounting for Oil and Gas activity, Note C(B) on Decommissioning Liabilities, Note C(C) on Property Plant and Equipment/Intangible Assets and Note B.2(j) on Provisions and Note B.2(i) on impairment of non-financial assets and Note 17 of the financial statements. The determination of the Company''s oil and natural gas reserves requires significant judgements and estimates to be applied. Factors such as the availability of geological and engineering data, reservoir performance data, acquisition and divestment activity, drilling of new wells and commodity prices all impacts the determination of the Company''s estimates of oil and natural gas reserves. Estimates of oil and gas reserves are used to calculate depletion |
Our work included and were not limited to the following procedures: ⢠Performed walk-through of the estimation process associated |
with the oil and gas lesel ves. ⢠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 the process 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. ⢠Tested the assumption used in determining the decommissioning provisions. Also compared these assumptions with the previous year and enquired for reasons for any material variations. ⢠Reviewed the disclosure made by the Company in the financial statements. |
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charges for the Company''s oil and gas assets. The impact of changes in estimated proved reserves is dealt with prospectively by amortising the remaining carrying value of the asset over the expected future production. Oil and natural gas reserves also have |
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a direct impact on the assessment of the recoverability of asset''s |
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carrying values reported in the financial statements. |
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For the purpose of impairment testing, value in use has been determined by the management by considering estimates such as discount rates, reserves and volumes, future oil and gas natural prices etc. along with other macro-economic, business and financing factors. |
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Further, the recognition and measurement of decommissioning provisions involves use of estimates and assumptions relating to timing of abandonment of well and related facilities which would depend upon the ultimate life of the field, expected utilisation of assets by other fields, the scope of abandonment activity and pre-tax rate applied for discounting. |
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Accordingly, the same is considered as a key audit matter. |
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C. Litigation matters |
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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: |
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 |
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1. Matters in relation to Oil and Gas: (a) Disallowance of certain costs under the production sharing |
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 |
contract, relating to Block KG-DWN-98/3 and consequent |
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deposit of differential revenue on gas sales from D1D3 field |
litigations during the year ended March 31, 2021. |
to the gas pool account maintained by Gail (India) Limited (Refer Note 34.3). |
⢠Rolled out of enquiry letters to the Company''s legal counsel and noted the responses received. |
(b) Claim against the Company in respect of gas said |
⢠Assessed the responses received from Company''s legal counsel |
to have migrated from neighbouring blocks (KGD6) |
by engaging our internal legal experts. |
(Refer Note 34.4(a)). |
⢠Assessed the objectivity and competence of the Company''s legal |
counsel involved in the process and legal experts engaged by us. |
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(c) Claims relating to limits of cost recovery, profit sharing |
⢠Reviewed the disclosures made by the Company in the |
and audit and accounting provisions of the public sector |
financial statements. |
corporations etc., arising under two production sharing |
⢠Obtained representation letter from the management on the |
contracts entered into in 1994 (Refer Note 34.4(b)). |
assessment of these matters. |
(d) Suit for specific performance of a contract for supply |
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of natural gas before the Hon''ble Bombay High Court (Refer Note 34.4(c)). |
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2. Matter relating to trading in shares of Reliance Petroleum |
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Limited (RPL): |
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(a) Special Appellate Tribunal judgement dated November 5, |
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2020, dismissing 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 (Refer Note 35(III)). |
Key audit matters |
How our audit addressed the key audit matter |
Due to complexity involved in these litigation matters, management''s judgement regarding recognition and measurement of provisions for these legal proceedings is inherently uncertain and might change over time as the outcomes of the legal cases are determined. |
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Accordingly, it has been considered as a key audit matter. |
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D. Fair Valuation of Investments |
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As at March 31, 2021, the Company has investments of '' 78,234 |
Our audit procedures included and were not limited to the following: |
crore in the Equity and Preference Shares of Jio Digital Fiber Private Limited (''JDFPL'') and Summit Digitel Infrastructure Private Limited ("SDIPL'') (Formerly Reliance Jio Infratel Private Limited) 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 valuation experts. ⢠We assessed the assumptions around the cash flow forecasts including discount rates, expected growth rates and its effect on |
These investments are Level 3 investments as per the fair value |
business and terminal growth rates used through involvement of |
hierarchy in Ind AS 113 and accordingly determination of fair value |
the internal experts. |
is based on a high degree of judgement and input from data that |
⢠We also involved internal experts to assess the Company''s |
is not directly observable in the market. Further, the fair value is |
valuation methodology and assumptions, applied in determining |
significantly influenced by the expected pattern of future benefits of |
the fair value. |
the tangible assets of JDFPL (fiber assets) and SDIPL (tower assets). |
⢠We discussed potential changes in key drivers as compared to |
Refer Note 2 and Note 37A in the financial statements. |
previous year / actual performance with management to evaluate |
Accordingly, the same has been considered as a key audit matter. |
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. |
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⢠Reviewed the disclosures made by the Company in the |
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financial statements. |
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E. Impairment of Investment in shale gas entities and recognition of deferred tax assets |
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(a) Based on the assessment of the internal and external sources |
(a) Our audit procedures to address impairment of investment |
of information, management has identified indicators of impairment in respect of its investments in shale gas entities engaged in the business of exploration and production of oil and gas. In the current year, management has performed an impairment assessment by comparing the carrying value of these investments to their recoverable amount and accordingly recognised an impairment loss of '' 15,686 crore. For the purpose of the above impairment testing, realisable value has been determined by the management by considering estimates such as discount rates, reserves and volumes, future oil and gas natural prices etc, along with consideration |
included and were not limited to the following: ⢠Obtained and assessed the impairment triggers identified by the management. ⢠Read the note in relation to impairment of assets in consolidated financial statement of the shale gas entities. ⢠Discussed the aforesaid matter with the component auditor in accordance with Standard of Auditing 600 - Using the work of Another Auditor. ⢠Read the agreement in reference to divestment of interest in certain upstream assets operated by EQT Corporation to |
of other macro-economic, business and financing factors including divestment agreement entered into for certain upstream assets. |
NoI LI ie! n Oil and Gas, Inc. ⢠Obtained the realisable value assessment made by the management and assessed the methodology and the assumptions applied in determining the realisable value by |
(b) The Company has also recognised Deferred Tax Assets of |
engaging our internal valuation specialists. |
'' 15,570 crore in respect of the difference between the book |
⢠Reviewed the disclosures made by the Company in the |
base and tax base of the investment in shale gas entities |
financial statements. |
engaged in the business of exploration and production of oil and gas, in accordance with Ind AS 12 - Income Taxes. Recognition of the aforesaid deferred tax asset involves |
(b) Our audit procedures to address recognition of deferred tax asset included and were not limited to the following: |
management judgement and estimates to determine whether |
⢠Assessed the basis of recognition of deferred tax assets in |
there is a reasonable certainty to utilise the deferred tax assets |
accordance with Ind AS. |
against future capital gains. |
⢠Obtained and assessed the management assumptions / |
Both the above items have been disclosed as exceptional items in the financial statements (Refer Note 31(c)). |
judgements and mathematical accuracy for calculating the difference between the book base and tax base. ⢠Evaluated the management assessment on future |
Accordingly, the above matters have been considered as a |
transactions including capital gain projections used in |
key audit matter. |
assessing the recoverability. ⢠Evaluated the management assessment of tax credit |
recognition including calculation of tax base as per the Income Tax Act, 1961 by engaging internal tax specialist. In making this assessment, we evaluated the competence and objectivity of our internal experts. |
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⢠Reviewed the disclosures made by the Company in the |
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financial statements. |
Key audit matters |
How our audit addressed the key audit matter |
F. IT systems and controls over financial reporting |
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We identified IT systems and controls over financial reporting as a |
Our procedures included and were not limited to the following: |
key audit matter for the Company because its financial accounting and reporting systems are fundamentally reliant on IT systems and IT controls to process significant transaction volumes, specifically with respect to revenue and raw material consumption. Also, due to such large transaction volumes and the increasing challenge to protect the integrity of the Company''s systems and data, cyber security has become more significant. |
⢠Assessed the complexity of the IT environment by engaging IT specialists and through discussion with the head of IT and internal audit and identified IT applications that are relevant to our audit. ⢠Assessed the design and evaluation of the operating effectiveness of IT general controls over program development and changes, access to program and data and IT operations by engaging IT specialists. |
Automated accounting procedures and IT environment controls, |
⢠Performed inquiry procedures with the head of cybersecurity at |
which include IT governance, IT general controls over program |
the Company in respect of the overall security architecture and |
development and changes, access to program and data and IT |
any key threats addressed by the Company in the current year. |
operations, IT application controls and interfaces between IT |
⢠Assessed the design and evaluation of the operating |
applications are required to be designed and to operate effectively |
effectiveness of IT application controls in the key processes |
to ensure accurate financial reporting. |
impacting financial reporting of the Company by engaging IT specialists. |
⢠Assessed the operating effectiveness of controls relating to data |
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transmission through the different IT systems to the financial reporting systems by engaging IT specialists. |
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 auditors'' 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.
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 judgements 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.
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 auditors'' 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 auditors'' 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 auditors'' 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, 2021 and are therefore the key audit matters. We describe these matters in our auditors'' 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.
1. As required by the Companies (Auditor''s Report) Order, 2016 ("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 Standalone 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, 2021 taken
on record by the Board of Directors, none of the directors is disqualified as on March 31, 2021 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 these 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, 2021 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 Auditors'' 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 35 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 an amount of '' 1.76 crore which are held in abeyance due to pending legal cases.
For D T S & Associates LLP |
For S R B C & CO LLP |
Chartered Accountants |
Chartered Accountants |
ICAI Firm Reg. Number: |
ICAI Firm Reg. Number: |
142412W/W100595 |
324982E/E300003 |
per T P Ostwal |
per Vikas Kumar Pansari |
Partner |
Partner |
Membership No.: 030848 |
Membership No.: 093649 |
UDIN: 21030848AAAAAQ3979 |
UDIN: 21093649AAAAB J4217 |
Mumbai |
Mumbai |
Date: April 30, 2021 |
Date: April 30, 2021 |
Mar 31, 2019
REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
OPINION
We have audited the accompanying Standalone Financial Statements of Reliance Industries Limited (âthe Companyâ), which comprise the Balance sheet as at March 31, 2019, 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 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 (âthe Actâ) 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, 2019, 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 âAuditorâs Responsibilities for the Audit of the Standalone Financial Statementsâ section of our report. We are independent of the Company in accordance with the âCode of Ethicsâ 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.
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, 2019. 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 Auditorâs 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. Carrying value of Investments in Reliance Energy Generation and Distribution Limited |
|
Management regularly reviews whether there are any indicators of impairment on the investments made by the Company (Refer Note B.2 (p).i.E by reference to the requirements under Ind AS 36 âImpairment of Assetsâ). Accordingly, management has identified impairment indicators (operating losses, negative net-worth) in Reliance Energy Generation and Distribution Limited (REGDL), a wholly owned subsidiary of the Company with an investment of Rs. 10,501 crore. As a result, an impairment assessment has been performed by the Company by comparing the carrying value of these investments to their recoverable amount to determine whether an impairment was required to be recognised. For the purpose of the above impairment testing, value in use has been determined by forecasting and discounting future cash flows. Furthermore, the value in use is highly sensitive to changes in some of the inputs used for forecasting the future cash flows e.g. future oil and natural gas prices and reserves volumes. The determination of the recoverable amount of the investments in REGDL involved judgment due to inherent uncertainty in the assumptions supporting the recoverable amount of these investments. Accordingly, the evaluation of impairment of investments in REGDL was determined to be a key audit matter. |
Our audit procedures included and were not limited to the following: - Obtained and read the financial statements of REGDL and its subsidiaries to identify any disclosure for impairment of assets in their standalone financial statements. - Assessing the appropriateness of the Companyâs valuation methodology applied in determining the recoverable amount. In making this assessment, we also evaluated the objectivity, independence and competency of specialists involved in the process. - Assessing the assumptions around the key drivers of the cash flow forecasts including future oil and natural gas prices and reserves volumes, discount rates, etc. - Assessing the appropriateness of the weighted average cost of capital used in the determining recoverable amount by engaging valuation experts. - Discussing/Evaluating potential changes in key drivers as compared to previous year / actual performance with management in order to evaluate whether the inputs and assumptions used in the cash flow forecasts were suitable. |
Key audit matters |
How our audit addressed the key audit matter |
- Assessing the recoverable value headroom by performing sensitivity analysis of key assumptions used. |
|
- Performed inquiry procedures with the auditor of the step down subsidiary of REGDL on their significant findings in relation to the key data and assumptions used by the management for estimating the oil and gas reserve; calculation of the depletion charge and future net income and reasonableness of the discount rate used by the subsidiary for calculating the future net income for impairment calculation. |
|
B. Investment in Reliance Jio Infocomm Limited (RJIL) |
|
A) As at March 31, 2019, the Company has a total investments of Rs. 44,200 crore in Reliance Jio Infocomm Limited (subsidiary of the Company) which constitutes 13 % of the total investment portfolio of the Company (Refer Note 2 of the financial statements). These investments are classified as financial assets in the financial statements. As per Ind AS 36 - âImpairment of assetsâ, the standard is applicable to financial assets classified as subsidiaries. Accordingly, in assessing whether there is any indication that an asset may be impaired, an entity shall consider as a minimum, the external and internal sources of information, any other indications or evidences from internal reporting that indicates that the assets may be impaired. In case of RJIL, the existence of an impairment indicator is significantly influenced by whether there is an impairment to the underlying property, plant and equipment and intangible assets including âSpectrum / License feeâ in its financial statements. This assessment involves significant judgment especially in relation to determination of the expected pattern of consumption of the expected future economic benefits. |
A) In respect of the impairment indicator assessment for the investments in RJIL, our audit procedures included and were not limited to the following:- - Obtained and read the financial statements of RJIL to identify if any disclosure is made for impairment of assets in its standalone financial statements. - Obtained the impairment indicator assessment performed by the management considering internal / external sources of information specifically relating to RJIL tangible and intangible assets including âSpectrum / License feeâ and related expected pattern of consumption of expected future benefits. - Performed inquiry procedures with the subsidiary auditor on their significant findings in relation to amortization and impairment of property, plant and equipment and intangible assets, especially in relation to âSpectrum / License feeâ.â |
B) Further, in the current year, as part of Composite Scheme of Arrangement between RJIL, Jio Digital Fibre Private Limited (JDFPL) and Reliance Jio Infratel Private Limited (RJIPL) (âthe schemeâ) for demerger of optic fiber cable undertaking of RJIL, upon the scheme becoming effective on 31 March 2019, the Company, being shareholder of RJIL, has received Equity Shares and Optionally Convertible Preference Shares with surplus rights (âOCPSâ) of JDFPL. Pursuant to receipt of these Equity Shares and OCPS, the Company has allocated its cost of investments in RJIL into RJIL and JDFPL and elected to value its investment in OCPS at Fair value through Other Comprehensive Income (FVOCI). Subsequently, Company sold its controlling equity stake in JDFPL to Digital FIbre Infrastructure Trust resulting into a gain of Rs. 494 crore recognised in the statement of profit & loss. The remaining Equity investment in JDFPL has been measured at FVTPL and OCPS continued to be measured at FVTOCI. The Company has no control or significant influence over JDFPL post the sale of controlling stake. Refer Note 2.3 of the financial statements. The same has been reported as a significant transaction that occurred during the current year which involves exercise of judgment and interpretation of the relevant Indian Accounting Standards and applicable statutes / regulations. Accordingly, assessment of impairment indicator for the investments in RJIL and accounting treatment in the financial statements pursuant to demerger of optic fiber cable undertaking of RJIL has been considered as a key audit matter. |
B) In respect of the accounting treatment applied in the financial statements pursuant to demerger of optic fiber cable undertaking of RJIL, our audit procedures included and were not limited to the following:- - Obtained and read the composite scheme of arrangement for demerger of the optic fiber cable undertaking. - Obtained the memo prepared by the Company in consultation with external experts (including related assumptions and accounting policy choice) on the accounting treatment to be applied in the financial statements. - Evaluating whether the measurement, recognition and disclosure of the said transaction is in line with the applicable Indian Accounting Standards. - Performing substantive testing procedures including involvement of valuation specialists for testing of the valuation reports provided by the management for appropriateness of assumptions involved and testing of the computation. - Assessing whether the accounting entries recorded in the books is in line with the accounting treatment assessed above, including the arithmetical accuracy of the same. - Performed inquiry procedures with the auditors of RJIL on the accounting treatment applied in its standalone financial statements in respect of the demerger. - Review of the disclosure made by the Company in the financial statements in this regard. |
Key audit matters |
How our audit addressed the key audit matter |
C. Capitalisation of property, plant and equipment |
|
As part of Gasification project, the Company has incurred additional capital expenditure, for modification of power plant equipments i.e. Gas Turbines, Auxiliary Boilers, HRSGs, Process Furnaces, etc. to make them compatible to multiple feedstock, including those received from petcoke gasifier. Currently all units of the gasification complex, its associated utilities and offsites have been started and the complex is under stabilization. The testing phase of the project is under progress as at March 31, 2019 as it has not achieved the quality and efficiency parameters. Accordingly, significant level of judgement is involved to ensure that capitalisation of Property, Plant and Equipment meet the recognition criterias of Ind AS 16 - Property, Plant and Equipment, specifically in relation to determination of trial run period and costs associated with trial runs for it to be ready for intended use. As a result, the aforesaid matter was determined to be a key audit matter. |
Our audit procedures included and were not limited to the following - Assessing the nature of the costs incurred to substantially modify the existing power plants to test whether such costs are incurred specifically for trial run and meet the recognition criteria as set out in para 16 to 22 of Ind AS 16. - Evaluating the assessment provided by third party vendors involved in the construction and testing process to determine whether capitalisation ceased when the asset is in the location and condition necessary for it to be capable of operating in the manner intended by the management. |
D. Changes in useful life and residual value of plant and machinery |
|
As at March 31, 2019, the Company had a gross block of Rs. 228,340 crore in plant and machinery which constitutes 72.32% of the property, plant and equipment (Refer Note 1 of the financial statements). In the current year, the Company has revised the useful life and residual value of the plant and machinery. Assessment of useful life and residual values of plant and machinery in an integrated and complex plants involves management judgment, consideration of historical experiences, anticipated technological changes, etc. Refer Note 1.7 of the financial statements. Accordingly, it has been determined as a key audit matter. |
Our audit procedures included and were not limited to the following: - Evaluating the reasonableness of the assumptions considered by the management in estimation of useful life and residual values. - Examining the useful economic lives and residual value assigned with reference to the Companyâs historical experience, technical evaluation by third party and our understanding of the future utilisation of assets by the Company. - Assessing whether the impact on account of the change has been appropriately recognised in the financial statements. - Review of the disclosure made by the Company in the financial statements in this regard. |
E. Estimation of oil reserves and decommissioning liabilities |
|
Refer to Note 32.2 on proved reserves and production both on product |
Our procedures have focused on managementâs estimation process |
and geographical basis and Note C(A) on estimation of Oil and Gas |
in the determination of oil and gas reserves and decommissioning |
reserves, Note C(C) on depreciation and amortisation and Note 16 of the |
liabilities. Our work included and were not limited to the following |
financial statements. |
procedures: |
The determination of the Companyâs oil and natural gas reserves |
- Understand the Companyâs process associated with the oil and gas |
requires significant judgments and estimates to be applied. Factors such as the availability of geological and engineering data, reservoir |
reserves estimation process. |
performance data, acquisition and divestment activity, drilling of |
- Evaluating the objectivity, independence and competence of the |
new wells and commodity prices all impacts the determination of the |
Internal specialists involved in the oil and gas reserves estimation |
Companyâs estimates of oil and natural gas reserves. The Company bases |
process. |
its proved reserves estimates considering reasonable certainty with |
- Assessing whether the updated oil and gas reserve estimates were |
rigorous technical and commercial assessments based on conventional |
included appropriately in the Companyâs consideration of impairment, |
industry practice and regulatory requirements. |
accounting for amortization/depletion and disclosures of proved |
Estimates of oil and gas reserves are used to calculate depletion charges for the Companyâs oil and gas assets. The impact of changes in estimated |
reserves and proved developed reserves in the financial statements. |
proved reserves is dealt with prospectively by amortising the remaining |
- Testing of assumption used in the determining the decommissioning |
carrying value of the asset over the expected future production. Oil |
provisions. Also compared these assumptions with past year and |
and natural gas reserves also have a direct impact on the assessment of the recoverability of assetâs carrying values reported in the financial statements. Further, the recognition and measurement of decommissioning provisions involves use of estimates and assumptions relating to timing of abandonment of well and related facilities which would depend upon the ultimate life of the field, expected utilization of assets by other fields, the scope of abandonment activityand pre-tax rate applied for discounting. Accordingly, the same is considered as a key audit matter. |
enquired for reasons for any variations. |
Key audit matters |
How our audit addressed the key audit matter |
F. Litigation matters (Oil and Gas) |
|
The Company has certain significant open legal proceedings under arbitration for various complex matters with the Government of India and other parties, continuing from earlier years, which are as under: 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 32.3 and Note 32.4 (b)). b) Claim against the Company in respect of gas said to have migrated from neighboring blocks (KGD6) (Note 32.4 (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 (Note |
Our audit procedures included and were not limited to the following: - Assessing managementâs 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. - Discussion with the management on the development in these litigations during the year ended March 31, 2019. - Roll out of enquiry letters to the Companyâs legal counsel (internal/ external) and study the responses received from them. Also verified that accounting/disclosure made by the Company are in accordance with the assessment of legal counsel. |
32.4(c) ). d) Suit for specific performance of a contract for supply of natural gas before the Honâble Bombay High Court (Note 32.4 (d)). Due to complexity involved in these litigation matters, managementâs judgement regarding recognition and measurement 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. |
- Review of the disclosures made by the Company in the financial statements in this regard. - Obtained representation letter from the management on the assessment of these matters. |
G. 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 accounting and reporting systems are fundamentally reliant on IT systems and IT controls to process significant transaction volumes, specifically with respect to revenue and raw material consumption. Automated accounting procedures and IT environment controls, which include IT governance, IT general controls over program development and changes, access to programs and data and IT operations, IT application controls and interfaces between IT applications are required to be designed and to operate effectively to ensure accurate financial reporting. |
Our procedures included and were not limited to the following: - Assessing the complexity of the IT environment by engaging IT specialists and through discussion with the head of IT. - Assessing the design and evaluation of the operating effectiveness of IT general controls over program development and changes, access to programs and data and IT operations by engaging IT specialists. - Assessing the design and evaluation of the operating effectiveness of IT application controls in the key processes impacting financial reporting of the Company by engaging IT specialists. - Assessing 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 AUDITORâS REPORT THEREON
The Companyâs 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 auditorsâ 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 Companyâs 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 Companyâs 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 Companyâs financial reporting process.
AUDITORâS 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 auditorâs 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 professiona 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 system 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 managementâs 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 Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs 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 auditorâs 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, 2019 and are therefore the key audit matters. We describe these matters in our auditorâs 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.
OTHER MATTER
The accompanying standalone financial statements and other financial information includes the Companyâs proportionate share in unincorporated joint operation in respect of total assets of Rs. 55 crore, total expenditure of Rs. 494 crore and the elements making up the cash flow statement and related disclosures in respect of an unincorporated joint operation which is based on statements from the operator and certified by the management. Our opinion is not modified in respect of above matter.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure 1â 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 Standalone 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, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2019 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 with reference to these Standalone Financial Statements and the operating effectiveness of such controls, refer to our separate Report in âAnnexure 2â to this report;
(g) In our opinion, the managerial remuneration for the year ended March 31, 2019 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 Auditorâs 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 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 an amount of Rs. 1.51 crore which are held in abeyance due to pending legal cases.
Annexure 1
To the Independent Auditorâs Report of even date on the Standalone Financial Statements of Reliance Industries Limited
(Referred to in paragraph 1, under âReport on Other Legal and Regulatory Requirementsâ section of our Report of even date)
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Company has a regular programme for physical verification in a phased periodic manner, which, in our opinion, is reasonable having regards to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.
(c) According to information and explanations given by the management, the title deeds/lease deeds of immovable properties included in property, plant and equipment are held in the name of the Company except for the immovable properties which were acquired by entities that have since been amalgamated with the Company, property acquired during the previous year of Rs. 178 crore for which the registration of title deeds is in progress and in cases of leasehold land of Rs. 89 crore in respect of which the allotment letters are received and supplementary agreements entered; however, lease deeds are pending execution. (Refer note 1.1 of the Financial Statements).
(ii) The management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies were noticed on such physical verification.
(iii) (a) The Company has granted loans to parties covered in the register maintained under section 189 of the Companies Act, 2013. In our opinion and according to the information and explanations provided to us, the terms and conditions of the grant of such loans are prima facie not prejudicial to the Companyâs interest.
(b) The schedule of repayment of principal and payment of interest has been stipulated for the loans granted and the repayment/receipts are regular.
(c) The Principal and interest are not overdue in respect of loans granted to companies, firms or other parties listed in the register maintained under section 189 of the Companies Act, 2013 which are overdue for more than ninety days.
(iv) In our opinion and according to the information and explanations provided to us, the Company has not granted any loans or provided any guarantees or security to the parties covered under Section 185 of the Act. The Company has complied with the provisions of Section 186 of the Act in respect of investments made or loans or guarantee or security provided to the parties covered under Section 186.
(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable to the Company.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, related to the manufacturing activities, and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.
(vii) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident fund, Employeesâ State Insurance, Income-tax, Sales-tax, Goods and Services tax, Service tax, Duty of Custom, Duty of Excise, Value Added Tax, Cess and Other Statutory Dues applicable to it.
(b) According to the information and explanations provided to us, no undisputed amounts payable in respect of Provident fund, Employeesâ State Insurance, Income-tax, Sales Tax, Goods and Service tax, Service tax, Duty of custom, Duty of excise, Value added tax, Cess and Other Statutory Dues were outstanding, at the year end, for a period of more than six months from the date they became payable.
(c) According to the records of the Company, the dues of Income-tax, Sales-tax, Service tax, Duty of Custom, Duty of Excise, Value added tax and Cess which have not been deposited on March 31, 2019 on account of any dispute, are as follows:
Name of the Statute |
Nature of Dues |
Amount (Rs. in crore) |
Period to which the amount relates |
Forum where dispute is pending |
Income Tax Act,1961 |
Income Tax |
28 |
Various Years from 1997-98 to 2016-17 |
Commissioner of Income-Tax (Appeals) |
Central Excise Act, 1944 |
Excise Duty |
-* |
Various Years from 1990-91 to 2017-18 |
Commissioner of Central Excise (Appeals) |
and Service Tax |
210 |
Various Years from 1991-92 to 2016-17 |
Central Excise and Service Tax Appellate Tribunal |
|
4 |
Various Years from 2006-07 to 2009-10 |
High Court |
||
Central Sales Tax Act, |
Sales Tax/ VAT |
496 |
Various Years from 1983-88 to 2011-12 |
Sales Tax Appellate Tribunal |
1956 and Sales Tax Act |
and Entry Tax |
55 |
Various Years from 2000-01 to 2011-12 |
High Court |
of various States |
23 |
2001-02 and 2005-06 |
Supreme Court |
|
Customs Act, 1962 |
Customs Duty |
20 |
2007-08 |
Central Excise and Service Tax Appellate Tribunal |
* Rs. 0.12 crore
(viii) In our opinion and according to the information and explanations provided by the management, the Company has not defaulted in repayment of loans or borrowing to a financial institution, bank or government or dues to debenture holders.
(ix) In our opinion and according to the information and explanations provided by the management, the Company has utilized the monies raised by way of debt instruments and term loans for the purposes for which they were raised.
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the Financial Statements and according to the information and explanations provided by the management, we report that no fraud by the Company or no material fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanations provided by the management, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
(xii) In our opinion, the Company is not a nidhi company.
Therefore, the provisions of clause 3(xii) of the Order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations provided by the management, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the financial statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations provided to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) of the Order are not applicable to the Company and, not commented upon.
(xv) According to the information and explanations provided by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of Companies Act, 2013.
(xvi) According to the information and explanations provided to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (i) OF SUB-SECTION 3 OF SECTION 143 OF THE COMPANIES ACT, 2013 (âTHE ACTâ)
We have audited the internal financial controls over financial reporting of Reliance Industries Limited (âthe Companyâ) as of March 31, 2019 in conjunction with our audit of the Standalone Financial Statements of the Company for the year ended on that date.
MANAGEMENTâS RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
The Companyâs Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
AUDITORâS RESPONSIBILITY
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting with reference to these standalone financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting with reference to these standalone financial statements was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting with reference to these standalone financial statements and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting with reference to these standalone financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting with reference to these standalone financial statements.
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING WITH REFERENCE TO THESE FINANCIAL STATEMENTS
A companyâs internal financial control over financial reporting with reference to these standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting with reference to these standalone financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING WITH REFERENCE TO THESE STANDALONE FINANCIAL STATEMENTS
Because of the inherent limitations of internal financial controls over financial reporting with reference to these standalone financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting with reference to these standalone financial statements to future periods are subject to the risk that the internal financial control over financial reporting with reference to these standalone financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
OPINION
In our opinion, the Company has, in all material respects, adequate internal financial controls over financial reporting with reference to these standalone financial statements and such internal financial controls system over financial reporting with reference to these standalone financial statements were operating effectively as at March 31, 2019, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For D T S & Associates For S R B C & CO LLP
Chartered Accountants Chartered Accountants
(Registration No.142412W) (Registration No.324982E/E300003)
T P Ostwal Vikas Kumar Pansari
Partner Partner
Membership No. 030848 Membership No. 093649
Mumbai
Date: April 18, 2019
Mar 31, 2018
Independent Auditors' Report
To the Members of Reliance Industries Limited
Report on the Standalone Financial Statements
We have audited the accompanying Standalone Financial Statements of Reliance Industries Limited ("the Companyâ), which comprise the Balance Sheet as at March 31, 2018, 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 a summary of significant accounting policies and other explanatory information (hereinafter referred to as "Standalone Financial Statementsâ).
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 Actâ) 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 the Statement of Changes in Equity of the Company in accordance with 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 control 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.
Auditor's 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 there under. We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as 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 disclosures in the Standalone Financial Statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the Standalone 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 accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the Financial Statements. 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.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the 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, 2018, its Profit including Other Comprehensive Income, its Cash Flows and the Statement of Changes in Equity for the year ended on that date.
Other Matters
1. Â Â Â The accompanying Standalone Financial Statements and other financial information includes the Company's proportionate share in unincorporated joint operation in respect of total assets of ' 319 crore, total expenditure of ' 446 crore and the elements making up the Cash Flow Statement and related disclosures in respect of an unincorporated joint operation which is based on statements from the operator and certified by the management. Our opinion is not modified in respect of above matter.
2. Â Â Â The comparative financial information of the Company for the year ended March 31, 2017 prepared in accordance with Indian Accounting Standards, included in these Standalone Financial Statements, have been audited by the predecessor auditors. The report of the predecessor auditors on the comparative financial information dated April 24, 2017 expressed an unmodified opinion.
Report on Other Legal and Regulatory Requirements
1. Â Â Â As required by the Companies (Auditor's report) Order, 2016 ("the Orderâ) 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. Â Â Â As required by section 143(3) of the Act, we report that:
(a) Â Â Â We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
(b) Â Â Â 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) Â Â Â The Balance Sheet, Statement of Profit and Loss including 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) Â Â Â In our opinion, the aforesaid Standalone 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) Â Â Â On the basis of written representations received from the directors as on March 31, 2018, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018, from
being appointed as a director in terms of section 164 (2) of the Act;
(f) Â Â Â 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 2â to this report;
(g) Â Â Â 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. Â Â Â The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements - Refer Note 33 to the Standalone Financial Statements;
ii. Â Â Â 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. Â Â Â 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 ' 19.02 crore which are held in abeyance due to pending legal cases.
(Referred to in paragraph 1, under 'Report on Other Legal and
Regulatory Requirements' section of our Report)
(i) Â Â Â (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) Â Â Â The Company has a regular programme for physical verification in a phased periodic manner, which, in our opinion, is reasonable having regards to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.
(c) Â Â Â According to information and explanations given by the management, the title deeds/lease deeds of immovable properties included in Property,
Plant and Equipment are held in the name of the Company except for the immovable properties which were acquired by entities that have since been amalgamated with the Company; property acquired during the year of '178 crore for which the registration of title deeds is in progress and in cases of leasehold land of ' 89 crore in respect of which the letters of allotment are received and supplementary agreements entered; however, lease deeds are pending execution (Refer note 1.1 of the
Financial Statements).
(ii) Â Â Â The management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies were noticed on such physical verification.
(iii) Â Â Â (a) The Company has granted loans to parties covered
in the register maintained under section 189 of the Companies Act, 2013. In our opinion and according to the information and explanations provided to us, the terms and conditions of the grant of such loans are prima facie not prejudicial to the Company's interest.
(b) Â Â Â The schedule of repayment of principal and payment of interest has been stipulated for the loans granted and the repayment/receipts are regular.
(c) Â Â Â The Principal and interest are not overdue in respect of loans granted to companies, firms or other parties listed in the register maintained under section 189 of the Companies Act, 2013 which are overdue for more than ninety days.
(iv) Â Â Â In our opinion and according to the information and explanations provided to us, provisions of section 185 and 186 of the Companies Act 2013 and in respect of loans to directors including entities in which they are interested and in respect of loans and advances given, investments made and, guarantees, and securities given have been complied with by the Company.
(v) Â Â Â The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable to the Company.
(vi) Â Â Â We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, related to the manufacturing activities, and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.
(vii) Â Â Â (a) The Company is generally regular in depositing
with appropriate authorities undisputed statutory dues including Provident Fund, Employees' State Insurance, Income-Tax, Sales-Tax, Goods and Services Tax, Service Tax, Duty of Custom, Duty of Excise, Value Added Tax, Cess and Other Statutory Dues applicable to it.
(b) Â Â Â According to the information and explanations provided to us, no undisputed amounts payable in respect of Provident Fund, Employees' State Insurance, Income-Tax, Service Tax, Sales-Tax, Goods and Services Tax, Duty of Custom, Duty of Excise, Value Added Tax, Cess and Other Statutory Dues were outstanding, at the year end, for a period of more than six months from the date they became payable.
(c) Â Â Â According to the records of the Company, the dues of Income-Tax, Sales-Tax, Service Tax, Duty of Custom, Duty of Excise, Value Added Tax and Cess which have not been deposited on March 31, 2018 on account of any dispute, are as follows:
(viii) Â Â Â In our opinion and according to the information and explanations provided by the management, the Company has not defaulted in repayment of loans or borrowing
Name of the Statute |
Nature of Dues |
Amount (' in crore) |
Period to which the amount relates |
Forum where dispute is pending |
Income Tax Act,1961 |
Income Tax |
11 |
2009-10 |
Commissioner of Income-Tax (Appeals) |
Central Excise Act, 1944 |
Excise Duty and Service Tax |
1 |
Various Years from 1990-91 to 2017-18 |
Commissioner of Central Excise (Appeals) |
102 |
Various Years from 1991-92 to 2010-11 |
Central Excise and Service Tax Appellate Tribunal |
||
4 |
Various Years from 2006-07 to 2009-10 |
High Court |
||
Central Sales Tax Act, 1956 and Sales Tax Act of various States |
Sales Tax/ VAT and Entry Tax |
282 |
Various Years from 1983-88 to 2012-13 |
Sales Tax Appellate Tribunal |
54 |
Various Years from 1999-00 to 2011-12 |
High Court |
||
24 |
2001-02 and 2008-09 |
Supreme Court |
||
Customs Act, 1962 |
Customs Duty |
20 |
2007-08 |
Central Excise and Service Tax Appellate Tribunal |
Total |
 |
498 |
 |  |
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to a financial institution, bank or government or dues to debenture holders.
(ix) Â Â Â In our opinion and according to the information and explanations provided by the management, the Company has utilized the monies raised by way of debt instruments and term loans for the purposes for which they were raised.
(x) Â Â Â Based upon the audit procedures performed for the purpose of reporting the true and fair view of the Financial Statements and according to the information and explanations provided by the management, we report that no fraud by the Company or no fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
(xi) Â Â Â According to the information and explanations provided by the management, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
(xii) Â Â Â In our opinion, the Company is not a nidhi Company. Therefore, the provisions of clause 3(xii) of the Order are not applicable to the Company and hence not commented upon.
(xiii) Â Â Â According to the information and explanations provided by the management, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the Financial Statements, as required by the applicable accounting standards.
(xiv) Â Â Â According to the information and explanations provided to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) of the Order are not applicable to the Company and, not commented upon.
(xv) Â Â Â According to the information and explanations provided by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of Companies Act, 2013.
(xvi) Â Â Â According to the information and explanations provided to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Reliance Industries Limited ("the Companyâ) as of March31,2018 in conjunction with our audit of the Standalone Financial Statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditor's Responsibility
Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Noteâ) and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls and both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the Financial Statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A Company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Financial Statements for external purposes in accordance with generally accepted accounting principles. A Company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Financial Statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the Financial Statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March31,2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For D T S & Associates                                                                              For S R B C & CO LLP
Chartered Accountants                                                                              Chartered Accountants
(Registration No.142412W) Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â (Registration No.324982E/E300003)
T P Ostwal    Vikas                                                                                       Kumar Pansari
Partner                                                                                                           Partner
Membership No. 030848 Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Membership No. 093649
Â
Mumbai
Date: April 27, 2018
Â
Mar 31, 2017
We have audited the accompanying Standalone financial statements of RELIANCE INDUSTRIES LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2017, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "standalone Ind AS financial statements")
MANAGEMENT''S RESPONSIBILITY FOR THE STANDALONE IND AS 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 Ind AS 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) prescribed under section 133 of the Act read with relevant rules issued there under.
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 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 Ind AS 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 Ind AS 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 there under.
We conducted our audit of the standalone Ind AS 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 Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind
AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS 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 Ind AS 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 Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
OPINION
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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, 2017, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.
OTHER MATTERS
The standalone Ind AS financial statements and other financial information include the Company''s proportionate share in jointly controlled operations in respect of assets of Rs. 767 crore, liabilities of Rs.73 crore, expenditure of Rs. 591 crore and the elements making up the Cash Flow Statement and related disclosures in respect of an unincorporated joint ventures which is based on statements from the operator and certified by the management.
Our opinion is not modified in respect of above said matters.
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 Statement of Profit and Loss including Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account.
d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act read with relevant rules issued there under.
e) On the basis of the written representations received from the directors as on March 31, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 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, 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 Ind AS financial statements. Refer note 32 to the standalone Ind AS 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.19.85 crore, which are held in abeyance due to pending legal cases; and
iv. The Company has provided requisite disclosures in the standalone Ind AS financial statements as regards its holding and dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated the November 8, 2016 of the Ministry of Finance, during the period from November 8, 2016 to December 30, 2016.
Based on audit procedures performed and the representations provided to us by the management, we report that the disclosures are in accordance with the books of account maintained by the Company and as produced to us by the Management.
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.
REPORT ON THE INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING UNDER CLAUSE (I) OF SUBSECTION 3 OF SECTION 143 OF THE COMPANIES ACT, 2013 (âTHE ACT")
We have audited the internal financial controls over financial reporting of RELIANCE INDUSTRIES LIMITED ("the Company") as of 31st March, 2017 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
MANAGEMENT''S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
AUDITORS'' RESPONSIBILITY
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company''s assets that could have a material effect on the financial statements.
INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
OPINION
In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note.
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 cases of leasehold land, aggregating Rs. 778 crore (refer note
1.1 to the standalone Ind AS financial statements) in respect of which lease deeds are pending execution. We verified the title deeds for immovable properties acquired from April 1, 2015 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) (d) 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, 2017 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, 2017 on account of disputes are given below:
1 Income Tax |
Income |
2,257 |
2011-12 and |
Commissioner |
|
Act,1961 |
Tax |
2012-13 |
of Income-Tax (Appeals) |
||
2 Central |
Excise |
0 # |
Various Years from |
Commissioner |
|
Excise Act, |
Duty |
1990-91 to 2006-07 |
of Central Excise |
||
1944 |
and |
(Appeals) |
|||
Service |
136 |
Various Years from |
Central Excise |
||
Tax |
1991-92 to 2012-13 |
and Service Tax Appellate Tribunal |
|||
4 |
Various Years from 2006-07 to 2009-10 |
High Court |
|||
Sr. |
Name of the |
Nature of |
Amount |
Period to which the |
Forum where |
No |
Statute |
Dues |
(Rs, in crore) |
amount relates |
dispute is pending |
3 |
Central |
Sales |
1,337 |
Various Years from |
Joint/ Deputy |
Sales Tax |
Tax/ |
1999-00 to 2009-10 |
Commissioner/ |
||
Act, 1956 |
VAT and |
Commissioner |
|||
and Sales |
Entry |
(Appeals) |
|||
Tax Act of |
Tax |
366 |
Various Years from |
Sales Tax |
|
various |
1983-88 to 2012-13 |
Apellate |
|||
States |
Tribunal |
||||
238 |
Various Years from 2000-01 to 2007-08 |
High Court |
|||
0@ |
2004-05 and 2011-12 |
Supreme Court |
|||
4 |
Customs Act, 1962 |
Customs Duty |
20 |
2007-08 |
Central Excise and Service Tax Appellate Tribunal |
Total |
4,359 |
# Rs.35 lakh.
@ Rs.39 lakh.
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 standalone Ind AS 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 24, 2017
Mar 31, 2016
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
Mar 31, 2015
We have audited the accompanying standalone financial statements of
Reliance Industries Limited ("the Company"), which comprise the Balance
Sheet as at March 31, 2015, the Profit and Loss Statement, the Cash
Flow Statement for the year then ended and a summary of 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 the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. 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 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.
We conducted our audit 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 financial statements
are free from material misstatements.
An audit involves performing procedures to obtain audit evidence about
the amounts and 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 financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of
the accounting estimates made by the Company's directors, as well as
evaluating the overall presentation of the financial statements.
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.
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, 2015, and its profit and its cash flows for the year ended
on that date.
OTHER MATTERS
The financial statements and other financial information include the
Company's proportionate share in jointly controlled assets of Rs. 967
crore, liabilities of Rs. 190 crore, expenditure of Rs. 440 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 respective Operators and certified by the management.
Our opinion is not qualified / modified in respect of this matter.
REPORT ON OTHER LEGAL AND REGULATORY
REQUIREMENTS
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 specified under Section 133 of the Act,
read with Rule 7 of the Companies (Accounts) Rules, 2014;
e) On the basis of the written representations received from the
directors as on March 31, 2015, taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2015,
from being appointed as a director in terms of Section 164 (2) of the
Act.
f ) 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
33.2 (d), (e) and Note 34 to the financial statements.
(ii) The Company has made provision, as required under the applicable
law or accounting standards, for material foreseeable losses, if any,
and as required 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 a sum of Rs. 15 crore, which are held in abeyance due to
pending legal cases.
For Chaturvedi & Shah
Chartered Accountants
(Registration No. 101720W)
D. Chaturvedi
Partner
Membership No.: 5611
For Deloitte Haskins & Sells LLP
Chartered Accountants
(Registration No. 117366W/ W-100018)
A. B. Jani
Partner
Membership No.: 46488
For Rajendra & Co.
Chartered Accountants
(Registration No. 108355W)
A. R. Shah
Partner
Membership No.:47166
Mumbai
Date : April 17, 2015
Mar 31, 2014
We have audited the accompanying financial statements of Reliance
Industries Limited (the Company), which comprise the Balance Sheet as
at March 31,2014, the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
MANAGEMENTS RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
The Companys Management is responsible for the preparation of these
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 Standards notified under the Companies
Act, 1956 (the Act) read with the General Circular 15/2013 dated 13th
September, 2013 of the Ministry of Corporate Affairs in respect of
Section 133 of the Companies Act, 2013 and in accordance with the
accounting principles generally accepted in India. This responsibility
includes the design, implementation and maintenance of internal control
relevanttothe 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.
AUDITORSRESPONSIBILITY
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditors 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 control relevant to the Companys preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Companys
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
OPINION
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid
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:
(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31,2014;
(b) In the case of the Statement of Profit and Loss, of the profit of
the Company for the year ended on that date; and
(c) In the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
REPORTONOTHERLEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditors Report) Order, 2003 (the
Order) issued by the Central Government of India in terms of Section
227(4A) of the Act, we give in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, we report that:
a. We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b. In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books.
c. The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
d. In our opinion, the Balance Sheet, the Statement of Profit and
Loss, and the Cash Flow Statement comply with Accounting Standards
notified under the Act read with the General Circular 15/2013 dated
13th September, 2013 of the Ministry of Corporate Affairs in respect of
Section 133 of the Companies Act, 2013
e. On the basis of the written representations received from the
directors as on March 31,2014, taken on record by the Board of
Directors, none of the directors is disqualified as on March 31,2014,
from being appointed as a director in terms of Section 274(1 )(g) of
the Act.
1. 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) In our opinion, the Company has not disposed off a substantial part
of its fixed assets during the year and the going concern status of the
Company is not affected.
2. In respect of its inventories:
a) The inventories have been physically verified during the year by the
management. In our opinion, the frequency of verification is reasonable.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c) The Company has maintained proper records of inventories. As
explained to us, there were no material discrepancies noticed on
physical verification of inventories as compared to the book records.
3. In respect of the loans, secured or unsecured, granted or taken by
the Company to/from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956:
a) The Company has given loans to two subsidiaries. In respect of the
said loans, the maximum amount outstanding at any time during the year
was Rs. 20,955 crore and the year-end balance is Rs. 18,941 crore
(including interest free loan of Rs. 13,454 crore).
b) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions of the
loans given by the Company, are not prima facie prejudicial to the
interest of the Company.
c) The principal amounts are repayable over a period of three to five
years, while the interest is payable annually, both at the discretion
of the Company.
d) In respect of the said loans and interest thereon, there are no
overdue amounts.
e) The Company has not taken any loan during the year from companies,
firms or other parties covered in the Register maintained under Section
301 of the Companies Act, 1956. Consequently, the requirements of
Clauses (iii) (f) and (iii) (g) of paragraph 4 of the Order are not
applicable.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchases of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in such internal control
system.
5. In respect of the contracts or arrangements referred to in Section
301 of the Companies Act, 1956:
(a) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements that need to be entered in the register maintained under
Section 301 of the Companies Act, 1956 have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts /
arrangements entered in the Register maintained under section 301 of
the Companies Act, 1956 and exceeding the value ofRs. 5,00,000 in respect
of each party during the year have been made at prices which appear
reasonable as per information available with the Company.
6. According to the information and explanations given to us, the
Company has not accepted any deposit from the public. Therefore, the
provisions of Clause (vi) of paragraph 4 of the Order are not
applicable to the Company.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. We have broadly reviewed the cost records maintained by the Company
pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209(1 )(d) of the
Companies Act, 1956 and are of the opinion that prima fade the
prescribed 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.
9. In respect of statutory dues:
a) According to the records of the Company, undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employees State Insurance, Income-Tax, Sales Tax, Wealth Tax, Service
Tax, Customs Duty, Excise Duty, 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, 2014 for a period of more than six months
from the date of becoming payable. Amounts due and outstanding for a
period exceeding 6 months as at March 31, 2014 to be credited to
Investor Education and Protection Fund of Rs. 12 crore, which are held in
abeyance due to pending legal cases, have not been considered.
b) Details of dues of Sale Tax, Custom Duty and Excise Duty which have
not been deposited as on March 31,2014 on account of disputes are given
below:
Sr. Name of the Nature
of the Amount Period to
which the Forum where
dispute is
No Statute Dues (Rs. in
amount
relates pending
crore)
1. Central
Excise Excise
Duty and 17 Various
Years from Commissioner of
Act, 1944 Service
Tax 1990-91 to
2012-13 Central Excise
(Appeals)
132 Various
years from Central Excise
& Service
1991-92 to
2012-13 Tax Appellate
Tribunal
1 1982-83 to
1985-86 Supreme Court
2. Central
Sales Tax Sales Tax
/VAT 60 Various
years from Joint/Deputy
Act,1956
and and Entry
Tax 1991-92 to
2009-10 Commissioner/
Sales Tax
Acts Commissioner
(Appeals)
of various
states
488 Various
years from Sales Tax
Appellate
1993-94 to
2008-09 Tribunal
125 Various
years High Court
from 1994-95
to 2009-10
1 2007-08 to
2008-09 Supreme Court
3. Customs Custom
Duty 20 2007-08 Central Excise
& Service
Act, 1962 Tax Appellate
Tribunal
TOTAL 844
10. The Company does not have accumulated losses at the end of the
financial year. The Company has not incurred cash losses during the
financial year covered by the audit and in the immediately preceding
financial year.
11. Based on our audit procedures and according to the information and
explanations given to us, we are of the opinion that the Company has
not defaulted in repayment of dues to financial institutions, banks and
debenture holders.
12. In our opinion and according to the explanations given to us and
based on the information available, no loans and advances have been
granted by the Company on the basis of security by way of pledge of
shares, debentures and other securities.
13. In our opinion, the Company is not a chit fund/nidhi/ mutual
benefit fund/ society. Therefore, the provisions of clause (xiii) of
paragraph 4 of the Order are not applicable to the Company.
14. The Company has maintained proper records of the transactions and
contracts in respect of dealing or trading in shares, securities,
debentures and other investments and timely entries have been made
therein. All shares, securities, debentures and other investments have
been held by the Company in its own name.
15. The Company has given guarantees for loans taken by Others from
banks and financial institutions. According to the information and
explanations given to us, we are of the opinion that the terms and
conditions thereof are not prima facie prejudicial to the interest of
the Company.
16. The Company has raised new term loans during the year. The term
loans outstanding at the beginning of the year and those raised during
the year have been applied for the purposes for which they were raised.
17. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we are of
the opinion that there are no funds raised on short-term basis that
have been used for long-term investment.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under Section
301 of the Companies Act, 1956.
19. The Company has created securities /charges in respect of secured
debentures issued.
20. The Company has not raised any monies by way of public issues
during the year.
21. In our opinion and according to the information and explanations
given to us, no material fraud on or by the Company has been noticed or
reported during the year.
For Chaturvedi & Shah For Deloitte Haskms
& Sells LLP For Rajendra & Co.
Chartered Accountants Chartered Accountants Chartered Accountants
(Registration No.
101720W) (Registration No.
117366W/W-100018) (Registration No.
108355W)
D. Chaturvedi A. B.Jani A. R. Shah
Partner Partner Partner
Membership No.: 5611 Membership No.: 46488 MembershipNo.:47166
Mumbai
Date: April 18,2014
Mar 31, 2013
We have audited the accompanying financial statements of Reliance
Industries Limited ("the Company"), which comprise the Balance Sheet as
at March 31, 2013, the Statement of Profit and Loss and Cash Flow
Statement for the year then ended and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these 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 referred to in Section 211(3C) of the Companies
Act, 1956 ("the Act"). This responsibility includes the design,
implementation and maintenance of internal control 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 financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatements.
An audit involves performing procedures to obtain audit evidence about
the amounts and 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 control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid 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:
(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
(b) In the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of Section
227(4A) of the Act, we give in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, we report that:
a. We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b. In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books.
c. The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
d. In our opinion, the Balance Sheet, the Statement of Profit and
Loss, and the Cash Flow Statement comply with the Accounting Standards
referred to in section 211(3C) of the Act;
e. On the basis of the written representations received from the
directors as on March 31, 2013, taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2013,
from being appointed as a director in terms of Section 274(1)(g) of the
Act.
1. 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) In our opinion, the Company has not disposed off a substantial part
of its fixed assets during the year and the going concern status of the
Company is not affected.
2. In respect of its inventories:
a) The inventories have been physically verified during the year by the
management. In our opinion, the frequency of verification is
reasonable.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c) The Company has maintained proper records of inventories. As
explained to us, there were no material discrepancies noticed on
physical verification of inventories as compared to the book records.
3. In respect of the loans, secured or unsecured, granted or taken by
the Company to / from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956:
a) The Company has given loans to two subsidiaries. In respect of the
said loans, the maximum amount outstanding at any time during the year
was Rs. 20,316 crore and the year-end balance is Rs. 18,226 crore
(including interest free loan of Rs. 13,944 crore).
b) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions of the
loans given by the Company, are not prima facie prejudicial to the
interest of the Company.
c) The principal amounts are repayable over a period of three to five
years, while the interest is payable annually at the discretion of the
Company.
d) In respect of the said loans and interest thereon, there are no
overdue amounts.
e) The Company has not taken any loan during the year from companies,
firms or other parties covered in the Register maintained under Section
301 of the Companies Act, 1956. Consequently, the requirements of
Clauses (iii)
(f) and (iii) (g) of paragraph 4 of the Order are not applicable.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchases of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal control
system.
5. In respect of the contracts or arrangements referred to in Section
301 of the Companies Act, 1956:
(a) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements that need to be entered in the register maintained under
Section 301 of the Companies Act, 1956 have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts /
arrangements entered in the Register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of Rs. 5,00,000 in
respect of each party during the year have been made at prices which
appear reasonable as per information available with the Company.
6. According to the information and explanations given to us, the
Company has not accepted any deposit from the public. Therefore, the
provisions of Clause (vi) of paragraph 4 of the Order are not
applicable to the Company.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. We have broadly reviewed the cost records maintained by the Company
pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209(1)(d) of the
Companies Act, 1956 and are of the opinion that prima facie the
prescribed 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.
9. In respect of statutory dues:
a) According to the records of the Company, undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employees'' State Insurance, Income-Tax, Sales Tax, Wealth Tax, Service
Tax, Customs Duty, Excise Duty, Cess, and other 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, 2013 for a period of more than six months
from the date of becoming payable. Amounts due and outstanding for a
period exceeding
6 months as at March 31, 2013 to be credited to Investor Education and
Protection Fund of Rs. 10 crore, which are held in abeyance due to
pending legal cases, have not been considered.
b) The disputed statutory dues aggregating Rs. 1,035 crore that have
not been deposited on account of disputed matters pending before
appropriate authorities are as under:
Sr. Name of Nature Amount Period to which Forum
No the Statute of the Dues (Rs. in the amount
relates where dispute
crore) is pending
1. Central Excise Excise Duty
and 17 Various years
from Commissioner
of
Act, 1944 Service Tax 1995-96 to
2010-11 Central Excise
(Appeals)
111 Various years
from Central Excise
1991-92 to
2010-11 & Service Tax
Appellate
Tribunal
1 Various years
from High Court
1982-83 to
1985-86
2. Central Sales
Tax Sales Tax/
VAT 60 Various years
from Joint/Deputy
Act, 1956 and and Entry
Tax 1991-92 to
2009-10 Commissioner/
Sales Tax Acts Commissioner
of various
states (Appeals)
450 Various years
from Sales Tax
Appellate
1993-94 to
2008-09 Tribunal
125 Various years High Court
from 1994-95 to
2009-10
1 2007-08 to
2008-09 Supreme Court
3. Customs Custom Duty 15 2007-08 Joint/Deputy
Act, 1962 Commissioner/
Commissioner
(Appeals)
255 2007-08 Central Excise
& Service Tax
Appellate
Tribunal
TOTAL 1,035
10. The Company does not have accumulated losses at the end of the
financial year. The Company has not incurred cash losses during the
financial year covered by the audit and in the immediately preceding
financial year.
11. Based on our audit procedures and according to the information and
explanations given to us, we are of the opinion that the Company has
not defaulted in repayment of dues to financial institutions, banks and
debenture holders.
12. In our opinion and according to the explanations given to us and
based on the information available, no loans and advances have been
granted by the Company on the basis of security by way of pledge of
shares, debentures and other securities.
13. In our opinion, the Company is not a chit fund / nidhi / mutual
benefit fund / society. Therefore, the provisions of clause (xiii) of
paragraph 4 of the Order are not applicable to the Company.
14. The Company has maintained proper records of the transactions and
contracts in respect of dealing or trading in shares, securities,
debentures and other investments and timely entries have been made
therein. All shares, securities, debentures and other investments have
been held by the Company in its own name.
15. The Company has given guarantees for loans taken by Others from
banks and financial institutions. According to the information and
explanations given to us, we are of the opinion that the terms and
conditions thereof are not prima facie prejudicial to the interest of
the Company.
16. The Company has raised new term loans during the year. The term
loans outstanding at the beginning of the year and those raised during
the year have been applied for the purposes for which they were raised.
17. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we are of
the opinion that there are no funds raised on short-term basis that
have been used for long-term investment.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under Section
301 of the Companies Act, 1956.
19. The Company has created securities / charges in respect of secured
debentures issued.
20. The Company has not raised any monies by way of public issues
during the year.
21. In our opinion and according to the information and explanations
given to us, no material fraud on or by the Company has been noticed or
reported during the year.
For Chaturvedi &
Shah For Deloitte Haskins
& Sells For Rajendra & Co.
Chartered Accountants Chartered Accountants Chartered Accountants
(Registration No.
101720W) (Registration No.
117366W) (Registration No.
108355W)
D. Chaturvedi A. Siddharth A. R. Shah
Partner Partner Partner
Membership No.: 5611 Membership No.: 31467 Membership No.:47166
Mumbai
Date : April 16, 2013
Mar 31, 2012
1. We have audited the attached Balance Sheet of RELIANCE INDUSTRIES
LIMITED as at March 31, 2012, the Statement of Profit and Loss and the
Cash Flow Statement for the year ended on that date annexed thereto.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with the Auditing Standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 issued
by the Central Government of India in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
a) We have 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 appears from our examination of
those books;
c) The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
d) In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement dealt with by this report are in compliance with
the Accounting Standards referred to in sub-section (3C) of Section 211
of the Companies Act, 1956.
e) On the basis of written representations received from the Directors
as on March 31, 2012 and taken on record by the Board of Directors, we
report that none of the Directors is disqualified as on March 31, 2012
from being appointed as a director in terms of clause (g) of sub -
section (1) of Section 274 of the Companies Act, 1956;
f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with the
Significant Accounting Policies and notes thereon give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2012;
(ii) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Annexure to Auditors-Report
Referred to in Paragraph 3 of our report of even date
1. 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) In our opinion, the Company has not disposed off a substantial part
of its fixed assets during the year and the going concern status of the
Company is not affected.
2. In respect of its inventories:
a) The inventories have been physically verified during the year by the
management. In our opinion, the frequency of verification is
reasonable.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c) The Company has maintained proper records of inventories. As
explained to us, there were no material discrepancies noticed on
physical verification of inventories as compared to the book records.
3. In respect of the loans, secured or unsecured, granted or taken by
the Company to / from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956:
a) The Company has given loans to two subsidiaries. In respect of the
said loans, the maximum amount outstanding at any time during the year
was Rs 10,254 crore and the year-end balance is Rs 10,239 crore
(including interest free loan of Rs 6,615 crore).
b) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions of the
loans given by the Company, are not prima facie prejudicial to the
interest of the Company.
c) The principal amounts are repayable over a period of three to five
years, while the interest is payable annually at the discretion of the
Company.
d) In respect of the said loans and interest thereon, there are no
overdue amounts.
e) The Company has not taken any loan during the year from companies,
firms or other parties covered in the Register maintained under Section
301 of the Companies Act, 1956. Consequently, the requirements of
Clauses (iii) (f) and (iii) (g) of paragraph 4 of the Order are not
applicable.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchases of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal control
system.
5. In respect of the contracts or arrangements referred to in Section
301 of the Companies Act, 1956:
(a) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements that need to be entered in the register maintained under
Section 301 of the Companies Act, 1956 have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts /
arrangements entered in the Register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of Rs 5,00,000 in
respect of each party during the year have been made at prices which
appear reasonable as per information available with the Company.
6. According to the information and explanations given to us, the
Company has not accepted any deposit from the public. Therefore, the
provisions of Clause (vi) of paragraph 4 of the Order are not
applicable to the Company.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. We have broadly reviewed the cost records maintained by the Company
pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209(1)(d) of the
Companies Act, 1956 and are of the opinion that prima facie the
prescribed 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.
9. In respect of statutory dues:
a) According to the records of the Company, undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employees' State Insurance, Income-Tax, Sales Tax, Wealth Tax, Service
Tax, Customs Duty, Excise Duty, Cess, and other 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, 2012 for a period of more than six months
from the date of becoming payable. Amounts due and outstanding for a
period exceeding 6 months as at March 31, 2012 to be credited to
Investor Education and Protection Fund of Rs 9 crore, which are held in
abeyance due to pending legal cases, have not been considered.
b) The disputed statutory dues aggregating Rs 828 crore that have not
been deposited on account of disputed matters pending before
appropriate authorities are as under:
Sr. Name of Nature of Amount Period to Forum where
No the Statute the Dues (Rs. in which the dispute is
crore) amount pending
relates
1. Central
Excise Excise Duty 19 Various
years Commissioner of
Act, 1944 and Service from
1995-96 Central Excise
Tax to 2010-11 (Appeals)
104 Various
years Central Excise
from
1991-92 & Service Tax
to 2010-11 Appellate
Tribunal
2. Central
Sales Tax Sales Tax/ 40 Various
years Joint/Deputy
Act,
1956 and VAT and from
1991-92 Commissioner/
Sales
Tax Acts Entry Tax to 2009-10 Commissioner
of various
states (Appeals)
26 Various
years Sales Tax
from
1993-94 Appellate
to 2009-10 Tribunal
398 Various
years High Court
from
1997-98
to 2009-10
1 2007-08 Supreme Court
3. Customs
Act, Custom Duty 240 2005-06 Central Excise
1962 and 2007-08 & Service Tax
Appellate
Tribunal
TOTAL 828
10. The Company does not have accumulated losses at the end of the
financial year. The Company has not incurred cash losses during the
financial year covered by the audit and in the immediately preceding
financial year.
11. Based on our audit procedures and according to the information and
explanations given to us, we are of the opinion that the Company has
not defaulted in repayment of dues to financial institutions, banks and
debenture holders.
12. In our opinion and according to the explanations given to us and
based on the information available, no loans and advances have been
granted by the Company on the basis of security by way of pledge of
shares, debentures and other securities.
13. In our opinion, the Company is not a chit fund / nidhi / mutual
benefit fund / society. Therefore, the provisions of clause (xiii) of
paragraph 4 of the Order are not applicable to the Company.
14. The Company has maintained proper records of the transactions and
contracts in respect of dealing or trading in shares, securities,
debentures and other investments and timely entries have been made
therein. All shares, securities, debentures and other investments have
been held by the Company in its own name.
15. The Company has given guarantees for loans taken by Others from
banks and financial institutions. According to the information and
explanations given to us, we are of the opinion that the terms and
conditions thereof are not prima facie prejudicial to the interest of
the Company.
16. The Company has raised new term loans during the year. The term
loans outstanding at the beginning of the year and those raised during
the year have been applied for the purposes for which they were raised.
17. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we are of
the opinion that there are no funds raised on short-term basis that
have been used for long- term investment.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under Section
301 of the Companies Act, 1956.
19. The Company has created securities / charges in respect of secured
debentures issued.
20. The Company has not raised any monies by way of public issues
during the year.
21. In our opinion and according to the information and explanations
given to us, no material fraud on or by the Company has been noticed or
reported during the year.
For Chaturvedi & Shah For Deloitte Haskins & Sells For Rajendra & Co.
Chartered Accountants Chartered Accountants Chartered Accountants
(Registration
No. 101720W) (Registration No. 117366W) (Registration No.
108355W)
D. Chaturvedi A. Siddharth A. R. Shah
Partner Partner Partner
Membership No.: 5611 Membership No.: 31467 Membership No.:47166
Mumbai
Date : April 20, 2012
Mar 31, 2011
1. We have audited the attached Balance Sheet of RELIANCE INDUSTRIES
LIMITED as at March 31, 2011, the Profit and Loss Account and the Cash
Flow Statement for the year ended on that date annexed thereto. These
financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with the Auditing Standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 issued
by the Central Government of India in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
a) We have 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 appears from our examination of
those books;
c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report are in compliance with the
Accounting Standards referred to in subÃsection (3C) of Section 211 of
the Companies Act, 1956.
e) On the basis of written representations received from the Directors
as on March 31, 2011 and taken on record by the Board of Directors, we
report that none of the Directors is disqualified as on March 31, 2011
from being appointed as a director in terms of clause (g) of sub Ã
section (1) of Section 274 of the Companies Act, 1956;
f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with the
Significant Accounting Policies and notes thereon give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2011;
(ii) in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Annexure to Auditors Report Referred to in Paragraph 3 of our report
of even date
1. 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) In our opinion, the Company has not disposed off a substantial part
of its fixed assets during the year and the going concern status of the
Company is not affected.
2. In respect of its inventories:
a) The inventories have been physically verified during the year by the
management. In our opinion, the frequency of verification is
reasonable.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c) The Company has maintained proper records of inventories. As
explained to us, there were no material discrepancies noticed on
physical verification of inventories as compared to the book records.
3. In respect of the loans, secured or unsecured, granted or taken by
the Company to / from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956:
a) The Company has given loans to two subsidiaries. In respect of the
said loans, the maximum amount outstanding at any time during the year
was Rs. 7,196.72 crore and the year-end balance is Rs. 6,997.07 crore.
b) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions of the
loans given by the Company, are not prima facie prejudicial to the
interest of the Company.
c) The principal amounts are repayable on demand and there is no
repayment schedule. The interests is payable on demand.
d) In respect of the said loans, the same are repayable on demand and
therefore the question of overdue amounts does not arise. In respect of
interest, there are no overdue amounts.
e) The Company has not taken any loan during the year from companies,
firms or other parties covered in the Register maintained under Section
301 of the Companies Act, 1956. Consequently, the requirements of
Clauses (iii) (f) and (iii) (g) of paragraph 4 of the Order are not
applicable.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchases of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal control
system.
5. In respect of the contracts or arrangements referred to in Section
301 of the Companies Act, 1956:
(a) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements that need to be entered in the register maintained under
Section 301 of the Companies Act, 1956 have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts /
arrangements entered in the Register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of Rs. 5,00,000 in
respect of each party during the year have been made at prices which
appear reasonable as per information available with the Company.
6. According to the information and explanations given to us, the
Company has not accepted any deposit from the public. Therefore, the
provisions of Clause (vi) of paragraph 4 of the Order are not
applicable to the Company.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. The Central Government has prescribed maintenance of cost records
under Section 209 (1) (d) of the Companies Act, 1956 in respect of
certain manufacturing activities of the Company. We have broadly
reviewed the accounts and records of the Company in this connection and
are of the opinion, that prima facie, the prescribed accounts and
records have been made and maintained. We have not, however, carried
out a detailed examination of the same.
9. In respect of statutory dues:
a) According to the records of the Company, undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employees State Insurance, Income-Tax, Sales Tax, Wealth Tax, Service
Tax, Customs Duty, Excise Duty, Cess, and other 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, 2011 for a period of more than six months
from the date of becoming payable. Amounts due and outstanding for
a period exceeding 6 months as at March 31, 2011 to be credited to
Investor Education and Protection Fund of Rs. 7.81 crore, which are
held in abeyance due to pending legal cases, have not been considered.
b) The disputed statutory dues aggregating Rs. 1,201.74 crore that have
not been deposited on account of disputed matters pending before
appropriate authorities are as under:
Sr. Name of Nature of Amount
No the Statute the Dues (Rs in
crore)
1. Income Tax Income-Tax 605.41
Act, 1961 (TDS) / Penalties
2. Central Excise Excise Duty 16.91
Act, 1944 and Service
Tax
85.50
3. Central Sales Tax Sales Tax/ 34.41
Act, 1956 and VAT and
Sales Tax Acts Entry Tax
of various states
29.61
394.11
0.90
4. Customs Act, Custom Duty 34.89
1962
TOTAL 1201.74
Name of the Statue Period to Forum where
which the dispute is
amount pending
relates
Income Tax
Act, 1961 Various years Commissioner of
from 2007-08 Income-Tax
to 2009-10 (Appeals)
Central Excise
Act, 1944 Various years Commissioner of
from 1995-96 Central Excise
to 2010-11 (Appeals)
Various years Central Excise
from 1991-92 & Service Tax
to 2009-10 Appellate
Tribunal
Central Sales Tax
Act, 1956 and
Sales Tax Acts
of various states Various years Joint/Deputy
from 1991-92 Commissioner/
to 2009-10 Commissioner
(Appeals)
Various years Sales Tax
from 1993-94 Appellate
to 2009-10 Tribunal
Various years High Court
from 1997-98
to 2009-10
Customs Act,
1962 2007-08 Supreme Court
2005-06 Central Excise
and 2007-08 & Service Tax
Appellate
Tribunal
10. The Company does not have accumulated losses at the end of the
financial year. The Company has not incurred cash losses during the
financial year covered by the audit and in the immediately preceding
financial year.
11. Based on our audit procedures and according to the information and
explanations given to us, we are of the opinion that the Company has
not defaulted in repayment of dues to financial institutions, banks and
debenture holders.
12. In our opinion and according to the explanations given to us and
based on the information available, no loans and advances have been
granted by the Company on the basis of security by way of pledge of
shares, debentures and other securities.
13. In our opinion, the Company is not a chit fund / nidhi / mutual
benefit fund / society. Therefore, the provisions of clause (xiii) of
paragraph 4 of the Order are not applicable to the Company.
14. The Company has maintained proper records of the transactions and
contracts in respect of dealing or trading in shares, securities,
debentures and other investments and timely entries have been made
therein. All shares, securities, debentures and other investments have
been held by the Company in its own name.
15. The Company has given guarantees for loans taken by Others from
banks and financial institutions. According to the information and
explanations given to us, we are of the opinion that the terms and
conditions thereof are not prima facie prejudicial to the interest of
the Company.
16. The Company has raised new terms loans during the year. The term
loans outstanding at the beginning of the year and those raised during
the year have been applied for the purposes for which they were raised.
17. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we are of
the opinion that there are no funds raised on short-term basis that
have been used for long- term investment.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under Section
301 of the Companies Act, 1956.
19. The Company has created securities / charges in respect of secured
debentures issued.
20. The Company has not raised any monies by way of public issues
during the year.
21. In our opinion and according to the information and explanations
given to us, no material fraud on or by the Company has been noticed or
reported during the year.
For Chaturvedi & Shah For Deloitte Haskins & Sells For Rajendra & Co.
Chartered Accountants Chartered Accountants Chartered
Accountants
(Registration
No. 101720W) (Registration No. 117366W) (Registration
No. 108355W)
D. Chaturvedi A. Siddharth A. R. Shah
Partner Partner Partner
Membership No.: 5611 Membership No.: 31467 Membership No.:47166
Mumbai
April 21, 2011
Mar 31, 2010
1. We have audited the attached Balance Sheet of RELIANCE INDUSTRIES
LIMITED as at March 31, 2010, the Profit and Loss Account and the Cash
Flow Statement for the year ended on that date annexed thereto. These
financial statements are the responsibility of the CompanyÃs
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with the Auditing Standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (AuditorÃs Report) Order, 2003 issued
by the Central Government of India in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
a) We have 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 appears from our examination of
those books;
c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report are in compliance with the
Accounting Standards referred to in subÃsection (3C) of Section 211 of
the Companies Act, 1956.
e) On the basis of written representations received from the Directors
as on March 31, 2010 and taken on record by the Board of Directors, we
report that none of the Directors is disqualified as on March 31, 2010
from being appointed as a director in terms of clause (g) of sub Ã
section (1) of Section 274 of the Companies Act, 1956;
f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with the
Significant Accounting Policies and notes thereon give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2010;
(ii) in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Annexure to Auditorsà Report Referred to in Paragraph 3 of our report
of even date
1. 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) In our opinion, the Company has not disposed off a substantial part
of its fixed assets during the year and the going concern status of the
Company is not affected.
2. In respect of its inventories:
a) The inventories have been physically verified during the year by the
management. In our opinion, the frequency of verification is
reasonable.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c) The Company has maintained proper records of inventories. As
explained to us, there were no material discrepancies noticed on
physical verification of inventories as compared to the book records.
3. In respect of the loans, secured or unsecured, granted or taken by
the Company to / from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956:
a) The Company has given loans to a wholly owned subsidiary of the
Company. In respect of the said loans, the maximum amount outstanding
at any time during the year is Rs. 5,541.44 crore and the year- end
balance is Rs. 2,649.54 crore.
b) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions of the
loans given by the Company, are not prima facie prejudicial to the
interest of the Company.
c) The principal amounts are repayable on demand and there is no
repayment schedule. The interests is payable on demand.
d) In respect of the said loans, the same are repayable on demand and
therefore the question of overdue amounts does not arise. In respect of
interest, there are no overdue amounts.
e) The Company has not taken any loan during the year from companies,
firms or other parties covered in the Register maintained under Section
301 of the Companies Act, 1956. Consequently, the requirements of
Clauses (iii) (f) and (iii) (g) of paragraph 4 of the Order are not
applicable.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchases of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal control
system.
5. In respect of the contracts or arrangements referred to in Section
301 of the Companies Act, 1956:
(a) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements, that need to be entered in the register maintained under
Section 301 of the Companies Act, 1956 have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts /
arrangements entered in the Register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of Rs. 5,00,000 in
respect of each party during the year have been made at prices which
appear reasonable as per information available with the Company.
6. According to the information and explanations given to us, the
Company has not accepted any deposits from the public. Therefore, the
provisions of Clause (vi) of paragraph 4 of the Order are not
applicable to the Company.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. The Central Government has prescribed maintenance of cost records
under Section 209 (1) (d) of the Companies Act, 1956 in respect of
certain manufacturing activities of the Company. We have broadly
reviewed the accounts and records of the Company in this connection and
are of the opinion, that prima facie, the prescribed accounts and
records have been made and maintained. We have not, however, carried
out a detailed examination of the same.
9. In respect of statutory dues:
a) According to the records of the Company, undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employeesà State Insurance, Income-Tax, Sales Tax, Wealth Tax, Service
Tax, Customs Duty, Excise Duty, Cess, and other 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, 2010 for a period of more than six months
from the date of becoming payable. Amounts due and outstanding for a
period exceeding 6 months as at March 31, 2010 to be credited to
Investor Education and Protection Fund of Rs. 7.02 crore, which are
held in abeyance due to pending legal cases, have not been considered.
b) The disputed statutory dues aggregating Rs. 311.76 crore, that have
not been deposited on account of disputed matters pending before
appropriate authorities are as under:
Sr. Name of Nature of Amount
No the Statute the Dues (Rs in
crore)
1. Income Tax Income-Tax / 5.43
Act, 1961 Penalties
0.58
2. Central Excise Excise Duty 17.02
Act, 1944 and Service
Tax
69.38
3. Central Sales Tax Sales Tax/ 48.84
Act, 1956 and VAT and
Sales Tax Acts Entry Tax
of various states
17.52
115.15
0.90
4. Customs Act, Custom Duty 16.68
1962
20.26
TOTAL 311.76
Name of the Period to Forum where
Statue which the dispute is
amount pending
relates
Income Tax
Act, 1961 2006-07 Commissioner of
Income-Tax
(Appeals)
Various years Income- Tax
from 2002-03 Appellate
to 2005-06 Tribunal
Central Excise Various years Commissioner of
Act, 1944 from 1991-92 Central Excise
to 2007-08 (Appeals)
Various years Central Excise
from 1986-87 and Service Tax
to 2007-08 Appellate
Tribunal
Central Sales Tax
Act, 1956 and
Sales Tax Acts
of various states Various years Joint/Deputy
from 1991-92 Commissioner/
to 2008-09 Commissioner
(Appeals)
Various years Sales Tax
from 1992-93 Appellate
to 2006-07 Tribunal
Various years High Court
from 1997-98
to 2004-05
2007-08 Supreme Court
Customs Act,
1962 Various years Commissioner
from 2002-03 of Customs
to 2007-08 (Appeals)
2004-05 Central Excise
and 2005-06 and Service Tax
Appellate
Tribunal
10. The Company does not have accumulated losses at the end of the
financial year. The Company has not incurred cash losses during the
financial year covered by the audit and in the immediately preceding
financial year.
11. Based on our audit procedures and according to the information and
explanations given to us, we are of the opinion that the Company has
not defaulted in repayment of dues to financial institutions, banks and
debenture holders.
12. In our opinion and according to the explanations given to us and
based on the information available, no loans and advances have been
granted by the Company on the basis of security by way of pledge of
shares, debentures and other securities.
13. In our opinion, the Company is not a chit fund / nidhi / mutual
benefit fund / society. Therefore, the provisions of clause (xiii) of
paragraph 4 of the Order are not applicable to the Company.
14. The Company has maintained proper records of the transactions and
contracts in respect of dealing or trading in shares, securities,
debentures and other investments and timely entries have been made
therein. All shares, securities, debentures and other investments have
been held by the Company in its own name.
15. The Company has given guarantees for loans taken by Others from
banks and financial institutions. According to the information and
explanations given to us, we are of the opinion that the terms and
conditions thereof are not prima facie prejudicial to the interest of
the Company.
16. The Company has raised new terms loans during the year. The term
loans outstanding at the beginning of the year and those raised during
the year have been applied for the purposes for which they were raised.
17. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we are of
the opinion that there are no funds raised on short-term basis that
have been used for long-term investment.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under Section
301 of the Companies Act, 1956.
19. The Company has created securities / charges in respect of secured
debentures issued.
20. The Company has not raised any monies by way of public issues
during the year.
21. In our opinion and according to the information and explanations
given to us, no material fraud on or by the Company has been noticed or
reported during the year.
For Chaturvedi & Shah For Deloitte Haskins & Sells For Rajendra & Co.
Chartered Accountants Chartered Accountants Chartered Accountants
(Registration No. 101720W) (Registration No. 117366W) (Registration No.
108355W)
D. Chaturvedi A. Siddharth A. R. Shah
Partner Partner Partner
Membership No.: 5611 Membership No.: 31467 Membership No.:47166
Mumbai
April 23, 2010
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