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You can view the entire text of Notes to accounts of the company for the latest year

BSE: 500325ISIN: INE002A01018INDUSTRY: Refineries

BSE   ` 1282.55   Open: 1281.00   Today's Range 1269.30
1287.60
+1.05 (+ 0.08 %) Prev Close: 1281.50 52 Week Range 941.35
1417.00
Year End :2018-03 

1.    Leasehold Land includes :

i)    Leasehold Land includes Rs, 778 crore (Previous Year Rs, 778 crore) in respect of which the letters of allotment are received and supplementary agreements entered, however, lease deeds are pending execution.

ii)    Rs, 6,923 crore (Previous Year Rs, 6,923 crore) towards investment in preference shares representing right to hold and use all the immovable properties of the investee entity.

2.    Buildings includes :

i)    Cost of shares in Co-operative Societies Rs, 2,02,700 (Previous Year Rs, 2,00,200).

ii)    Rs, 135 crore (Previous Year Rs, 135 crore) in shares of Companies / Societies with right to hold and use certain area of Buildings.

3.    Intangible Assets - Others include Jetties amounting to Rs, 812 crore (Previous Year Rs, 812 crore), the Ownership of which vests with Gujarat Maritime Board.

4.    Capital Work-in-Progress and Intangible Assets Under Development includes :

i)    Rs, 16,567 crore (Previous Year Rs, 15,544 crore) on account of Project Development Expenditure.

ii)    Rs, 7,551 crore (Previous Year Rs, 11,526 crore) on account of cost of construction materials at site.

5.    Additions in Property, Plant and Equipment, Capital Work-in-Progress, Intangible Assets and Intangible Assets Under Development includes Rs, 823 crore (net loss) [Previous Year Rs, 2,166 crore (net loss)] on account of exchange difference during the year.

6.    For Assets pledged as security - Refer Note 15.1 .

7. During the year, the Company has not granted any options (Previous year 74,454 options) under ESOS-2006 scheme and the said scheme has been withdrawn. The Members approved a new scheme viz. Rs,Reliance Industries Limited EmployeesRs, Stock Option Scheme 2017' (ESOS-2017) with a limit to grant 6,33,19,568 options. This ceiling will be adjusted for any future bonus issue of shares or stock splits or consolidation of shares and also may further be adjusted at the discretion of the Board of Directors for any corporate action (s). The Company has not granted any options under ESOS-2017.

8. Rights, preferences and restrictions attached to shares:

The Company has only one class of equity shares having par value of Rs, 10 each and the holder of the equity share is entitled to one vote per share. The dividend proposed by Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company in proportion to the number of equity shares held.

9. Secured Non Convertible Debentures referred above to the extent of:

a)    Rs, 370 crore (Previous year Rs, 370 crore) are secured by way of first mortgage / charge on the immovable properties situated at Hazira Complex and at Jamnagar Complex (other than SEZ unit) of the Company.

b)    Rs, 133 crore (Previous year Rs, 266 crore) are secured by way of first mortgage / charge on all the properties situated at Hazira Complex and at Patalganga Complex of the Company.

c)    Rs, 500 crore (Previous year Rs, 500 crore) are secured by way of first mortgage / charge on the immovable properties situated at Jamnagar Complex (SEZ unit) of the Company.

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

The Expected Rate of Return on Plan Assets is determined considering several applicable factors, mainly the composition of Plan Assets held, assessed risks, historical results of return on Plan Assets and the Company's policy for Plan Assets Management.

VII) The expected contributions for Defined Benefit Plan for the next financial year will be in line with FY 2017-18.

These plans typically expose the Company to actuarial risks such as: Investment Risk, Interest Risk,

Longevity Risk and Salary Risk.

Investment The present value of the defined benefit plan liability is calculated using a discount rate which is Risk    determined by reference to market yields at the end of the reporting period on government bonds.

Interest A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset Risk    by an increase in the return on the plan debt investments.

Longevity The present value of the defined benefit plan liability is calculated by reference to the best estimate Risk    of the mortality of plan participants both during and after their employment. An increase in the life

expectancy of the plan participants will increase the plan's liability.

Salary    The present value of the defined plan liability is calculated by reference to the future salaries of plan

Risk    participants. As such, an increase in the salary of the plan participants will increase the plan's liability.

10. The Company had announced Voluntary Separation Scheme (VSS) for the employees of Patalganga Manufacturing Division. A sum of ' 1 crore (Previous Year ' Nil) has been paid during the year and debited to the Statement of Profit and Loss under the head "Employee Benefits Expense”.

*    Stock options post bonus issue, range of exercise price and range of fair value at grant date have been proportionately adjusted to give the impact of bonus issue in the ratio of 1:1 made by the Company during FY 2017-18.

#    Includes options exercised, expired / lapsed upto 31st March, 2018 i.e. 7,78,232. Accordingly balance of outstanding options granted as on 31st March, 2018 is 7,86,812.

Exercise period will expire not later than five years from the date of vesting of options or such other period as may be decided by the Human Resources, Nomination and Remuneration Committee, of the Board.

c) Fair Value on the grant date

The fair value on the grant date is determined using "Black Scholes Model", which takes into account exercise price, term of the option, share price at grant date and expected price volatility of the underlying shares, expected dividend yield and risk free interest rate for the term of the option.

The model inputs for options granted during the previous year ended 31st March, 2017 included as mentioned below. Further, no new stock options were granted during FY 2017-18;

a)    Weighted average exercise price '1,096

b)    Grant date: 05.10.2016 & 10.10.2016

c)    Vesting year: 2017-18 to 2020-21

d)    Share Price at grant date: ' 1,089 at 05.10.2016 & ' 1,096 at 10.10.2016

e)    Expected price volatility of Company's share: 25.1% to 26.5%

f)    Expected dividend yield: 1.07%

g)    Risk free interest rate: 7 %

The expected price volatility is based on the historic volatility (based on remaining life of the options). Certification and consultation fees primarily includes certification fees paid to auditors. Statute and regulation permit auditors to certify export / import documentation, quarterly filings, XBRL filings, transfer pricing and bond issuances among others.

11. Corporate Social Responsibility (CSR)

(a)    CSR amount required to be spent as per Section 135 of the Companies Act, 2013 read with Schedule VII thereof by the Company during the year is Rs, 703 crore (Previous Year Rs, 620 crore)

(b)    Expenditure related to Corporate Social Responsibility is Rs, 745 crore (Previous Year Rs, 659 crore).

(c)    Out of note (b) above, Rs, 672 crore (Previous Year Rs, 557 crore) is spent through Reliance Foundation, Rs, 38 crore (Previous Year Rs, 22 crore) is spent through Reliance Foundation Youth Sports and Rs, 1 crore spent through Reliance Foundation Institution of Education and Research which are related parties.

(d)    Out of note (b) above, Rs, Nil (Previous Year Rs, 5 crore) is towards construction / acquisition of an asset that will be owned by the Company.

12. RELATED PARTIES DISCLOSURES

As per Ind AS 24, the disclosures of transactions with the Related Parties are given below: (i)    List of Related Parties where control exists and also other Related Parties with whom transactions have taken place and relationships:

Sr.

Name of the Related Party    Relationship

No.

1    Aanant Commercial Private Limited A

2    Adventure Marketing Private Limited#

3    AETN18 Media Private Limited#

4    Affinity Names Inc.

5    Aurora Algae Pty Limited A

6    Aurora Algae RGV LLC A

7    Aurora Algae Inc.

8    Capital18 Fincap Private Limited#

9    Central Park Enterprises DMCCA

10    Cluster Commercials Private Limited A

11    Colorful Media Private Limited#

12    Colosceum Media Private Limited#

13    Delta Corp East Africa Limited a

14    Devashree Commercials Private Limited a

15    Digital18 Media Limited#

16    Dignity Mercantile Private Limited a

17    Dreketi S.A. a

18    E-18 Limited#

19    e-Eighteen.com Limited#

20    Equator Trading Enterprises Private Limited#

21    Ethane Crystal LLC

22    Ethane Emerald LLC    _ , ...

Subsidiary

23    Ethane Opal LLC

24    Ethane Pearl LLC

25    Ethane Sapphire LLC

26    Ethane Topaz LLC

27    Girisha Commercials Private Limited a

28    Greycells18 Media Limited#

29    Ibn18 (Mauritius) Limited#

30    IndiaCast Media Distribution Private Limited # A

31    IndiaCast UK Limited# a

32    IndiaCast US Limited# a

33    Indiawin Sports Private Limited

34    Infomedia Press Limited#

35    Jalaja Commericals Private Limited a

36    Jio Information Solutions Limited (Formerly Reliance Textiles Limited)

37    Kanhatech Solutions Limited

38    Model Economic Township Limited

39    Moneycontrol Dot Com India Limited#

40    Naroda Power Private Limited a

41    Network18 Holdings Limited#

42    Network18 Media & Investments Limited#

43    NW18 HSN Holding PLC# a

44    Panorama Television Private Limited#

# Control by Independent Media Trust ofwhich RIL is the sole beneficiary

a The above entities includes related parties where the relationship existed for the part of the year

45    RB Holdings Private Limited#

46    RB Media Holdings Private Limited#

47    RB Mediasoft Private Limited#

48    Recron (Malaysia) Sdn. Bhd.

49    Reed Infomedia India Private Limited#

50    Reliance Aerospace Technologies Limited A

51    Reliance Ambit Trade Private Limited

52    Reliance Aromatics and Petrochemicals Limited

53    Reliance Brands Limited

54    Reliance Chemicals Limited

55    Reliance Clothing India Private Limited

56    Reliance Commercial Dealers Limited

57    Reliance Commercial Land & Infrastructure Limited A

58    Reliance Commercial Trading Private Limited A

59    Reliance Comtrade Private Limited

60    Reliance Content Distribution Limited A

61    Reliance Corporate IT Park Limited

62    Reliance Digital Media Distribution Limited A

63    Reliance Eagleford Midstream LLC a

64    Reliance Eagleford Upstream GP LLC

65    Reliance Eagleford Upstream Holding LP

66    Reliance Eagleford Upstream LLC

67    Reliance Eminent Trading & Commercial Private Limited

68    Reliance Energy and Project Development Limited

69    Reliance Energy Generation and Distribution Limited

70    Reliance Ethane Holding Pte Limited

71    Reliance Exploration & Production DMCC

72    Reliance GAS Lifestyle India Private Limited (Formerly Reliance Brands Luxury Private Limited)

73    Reliance Gas Pipelines Limited

74    Reliance Global Business B.V. a

75    Reliance Global Commercial Limited a

76    Reliance Global Energy Services (Singapore) Pte Ltd.

77    Reliance Global Energy Services Limited

78    Reliance Holding USA, Inc.

79    Reliance Industrial Investments and Holdings Limited

80    Reliance Industries (Middle East) DMCC

81    Reliance Innovative Building Solutions Private Limited

82    Reliance Jio AsiaInfo Innovation Centre Limited a

83    Reliance Jio Digital Services Limited

84    Reliance Jio Global Resources LLC

85    Reliance Jio Infocomm Limited

86    Reliance Jio Infocomm Pte Limited

87    Reliance Jio Infocomm UK Limited

88    Reliance Jio Infocomm USA, Inc.

89    Reliance Jio Infratel Private Limited

90    Reliance Jio Media Limited

91    Reliance Jio Messaging Services Limited

92    Reliance Lifestyle Holdings Limited

93    Reliance LNG Limited

# Control by Independent Media Trust of which RIL is the sole beneficiary

A The above entities includes related parties where the relationship existed for the part of the year

94    Reliance Marcellus II LLC

95    Reliance Marcellus LLC

96    Reliance Payment Solutions Limited

97    Reliance Petro Marketing Limited

98    Reliance Petroinvestments Limited a

99    Reliance Polyolefins Limited

100    Reliance Progressive Traders Private Limited

101    Reliance Prolific Commercial Private Limited

102    Reliance Prolific Traders Private Limited

103    Reliance Retail Finance Limited

104    Reliance Retail Insurance Broking Limited

105    Reliance Retail Limited

106    Reliance Retail Ventures Limited

107    Reliance Sibur Elastomers Private Limited

108    Reliance SMSL Limited

109    Reliance Strategic Investments Limited

110    Reliance Supply Solutions Private Limited a

111    Reliance Trading Limited a

112    Reliance Universal Commercial Limited a

113    Reliance Universal Enterprises Limited

114    Reliance Universal Traders Private Limited

115    Reliance Vantage Retail Limited

116    Reliance Ventures Limited

117    Reliance World Trade Private Limited @

118    Reliance-GrandOptical Private Limited

119    Resolute Land Consortium Projects Limited a

120    RIL (Australia) Pty Limited a

121    RIL Exploration and Production (Myanmar) Company Limited

122    RIL USA, Inc.

123    Roptonal Limited# a

124    RP Chemicals (Malaysia) Sdn. Bhd.

125    RRB Investments Private Limited#

126    RRB Mediasoft Private Limited#

127    RRK Finhold Private Limited#

128    RVT Finhold Private Limited#

129    RVT Media Private Limited#

130    Santol Commercials Private Limited a

131    Setpro18 Distribution Limited#

132    Surela Investment and Trading Private Limited

133    Tangerine Agro Private Limited a

134    Television Eighteen Mauritius Limited#

135    Television Eighteen Media and Investment Limited#

136    TV18 Broadcast Limited#

137    TV18 Home Shopping Network Limited #a

138    Viacom18 Media (UK) Limited # a

139    Viacom18 Media Private Limited # a

140    Viacom18 US Inc.# a

141    Watermark Infratech Private Limited#

142    Wave Land Developers Limited a

143    Web18 Holdings Limited#

144    Web18 Software Services Limited#

145    Independent Media Trust

146    Network18 Media Trust

147    Petroleum Trust

148    Jio Payments Bank Limited

149    East West Pipeline Limited ( Formerly Reliance Gas Transportation Infrastructure Limited)

150    Gujarat Chemical Port Terminal Company Limited

151    Indian Vaccines Corporation Limited

152    Reliance Europe Limited

153    Reliance Industrial Infrastructure Limited

154    Reliance Utilities and Power Private Limited

155    Sikka Ports and Terminals Limited ( Formerly Reliance Ports And Terminals Limited)

156    Shri Mukesh D. Ambani

157    Shri Nikhil R. Meswani

158    Shri Hital R. Meswani

159    Shri P. M. S. Prasad

160    Shri P. K. Kapil

161    Shri Alok Agarwal

162    Shri Srikanth Venkatachari

163    Shri K. Sethuraman

164    Smt. Nita M. Ambani

165    Dhirubhai Ambani Foundation

166    Hirachand Govardhandas Ambani Public Charitable Trust

167    HNH Trust and HNH Research Society

168    Jamnaben Hirachand Ambani Foundation

169    Reliance Foundation

170    Reliance Foundation Institution of Education and Research^

171    Reliance Foundation Youth Sports

172    IPCL Employees Gratuity Fund - Baulpur Unit

173    IPCL Employees Provident Fund Trust

174    Reliance Industries Limited Vadodara Units Employees Superannuation Fund

175    RIL Vadodara Unit Employees Gratuity Fund

176    Reliance Employees Provident Fund Bombay

177    Reliance Industries Limited Staff Superannuation Scheme

178    Reliance Industries Limited Employees Gratuity Fund

A The above entities includes related parties where the relationship existed for the part of the year

The reserve estimates for producing fields are revised based on the performance of producing fields and with respect to discovered fields, the revision are based on the revised geological and reservoir simulation studies.

13.    Government of India (GOI), by its letters dated 2nd May, 2012, 14th November, 2013, 10th July, 2014 and 3rd June 2016 has communicated that it proposes to disallow certain costs which the Production Sharing Contract (PSC), relating to Block KG-DWN-98/3 entitles the Company to recover. Based on legal advice received, the Company continues to maintain that a Contractor is entitled to recover all of its costs under the terms of the PSC and there are no provisions that entitle the Government to disallow the recovery of any Contract Cost as defined in the PSC. The Company has already referred the issue to arbitration and the arbitration is currently underway. Pending decision of the arbitration, the demand from the GOI of $ 148 million being the Company's Share (total demand $ 247 million) towards additional Profit Petroleum has been considered as contingent liability.

14.    (a) The Government has made a claim of about $ 1.55 billion against the KGD6 Contractor parties in respect of gas said to have migrated from neighboring blocks. In carrying out petroleum operations, the Contractor has worked within the boundaries of the block awarded to it and has complied with all applicable regulations and provisions of the PSC. The Company has already invoked the dispute resolution mechanism in the PSC and issued a Notice of Arbitration to the Government on 11th November, 2016. The Company remains convinced of being able to fully justify and vindicate its position that the Government's claim is not sustainable. The arbitration hearings are over and the arbitral award is awaited.

(b) In supersession of the Ministry's Gazette notification no. 22011/3/2012-ONG.D.V. dated 10th January, 2014, the GOI notified the New Domestic Natural Gas Pricing Guidelines, 2014, on 26th October, 2014. Consequent to the aforesaid dispute referred to under 32.3 above which has been referred to arbitration, the GOI has directed the Company to instruct customers to deposit differential revenue on gas sales from D1D3 field on account of the prices determined under the above guidelines converted to NCV basis and the prevailing price prior to 1st November, 2014 ($ 4.205 per MMBTU) to be credited to the gas pool account maintained by GAIL (India) Limited. The amount so deposited by customer to Gas Pool Account is Rs, 295 crore (net) as at 31st March, 2018 is disclosed under Other Non -Current Assets (refer note 4). Revenue has been recognized at the GOI notified prices in respect of gas quantities sold from D1D3 field from 1st November, 2014.

(c)    The Company and BG Exploration and Production India Limited (together, the 'Claimants') referred a number of disputes, differences and claims arising under two Production Sharing Contract entered into in 1994 among the Claimants, Oil and Natural Gas Corporation Limited (ONCG) and the Government (the PSCs') to arbitration. The disputes relate to, among other things, the limits of cost recovery, profit sharing and audit and accounting provisions of the PSCs. The Arbitration Tribunal by majority issued a final partial award ("FPA”), and separately, two dissenting opinions in the matter on 12 October 2016. The FPA does not conclude these proceedings as: (1) the Claimants have challenged certain parts of the FPA before the English Commercial Court and the Court has delivered its judgment on 16 April 2018 wherein it decided one of the issues in Claimants favour and this issue will be now remitted back to the Tribunal for determination; and (2) after this determination there are two further phases of the arbitration to be determined by the Tribunal viz. CRL Increase and Quantification of Final Award yet to take place. The Company has been notified by Government of its computation of the purported share of Government's Profit Petroleum and Royalty alleged to be payable by the Contractor pursuant to the Government's interpretation of the FPA. In Company's view Government's demand notice is premature since

the quantification of liabilities (if any) of the parties arising out of FPA have to be determined by the Arbitration Tribunal after the Parties have made their respective submissions on CRL increase and quantification. The Company has already responded to the Government's demand notice appropriately. The Company is in the process of reviewing the English court judgment and will take appropriate next steps.

(d)    NTPC had filed a suit for specific performance of a contract for supply of natural gas by the Company before the Hon'ble Bombay High Court. The main issue in dispute is whether a valid, concluded and binding contract exists between the parties for supply of Natural Gas of 132 Trillion BTU annually for a period of 17 years. The matter is presently sub judice and the Company is of the view that NTPC's claim lacks merit and no binding contract for supply of gas was executed between NTPC and the Company.

(e)    Considering the complexity of above issues, the Company is of the view that any attempt for quantification of possible exposure to the Company will have an effect of prejudicing Company's legal position in the ongoing arbitration/litigations.

15. Exploration for and Evaluation of Oil and Gas Resources

The following financial information represents the amounts included in Intangible Assets Under Development relating to activity associated with the exploration for and evaluation of oil and gas resources.

(III)    The Income -Tax Assessments of the Company have been completed up to Assessment Year 2015-16. The total outstanding demand up to AY 2015-16 amounts to Rs, 11 crore as on date (i.e. 27th April, 2018). Based on the decisions of the Appellate authorities and the interpretations of other relevant provisions of the Income tax Act, the Company has been legally advised that the additional demand raised is likely to be either deleted or substantially reduced and accordingly no provision is considered necessary.

(IV)    The Securities and Exchange Board of India had passed an Order under section 11B of the Securities and Exchange Board of India Act, 1992 on 24th March, 2017 on a Show Cause Notice dated 16th December, 2010 issued to the Company in the matter concerning trading in the shares of Reliance Petroleum Limited by the Company in the year 2007, directing (i) disgorgement of Rs, 447 crore along with interest calculated at 12% per annum from 29th November, 2007 till date of payment and (ii) prohibiting the Company from dealing in equity derivatives in the Futures and Options segment of the stock exchanges, directly or indirectly for a period of one year from 24th March, 2017. The Company has filed an appeal against the said Order before the Hon'ble Securities Appellate Tribunal ('SAT'). SAT has stayed the direction on disgorgement till the next date of hearing and the prohibition from dealing in equity derivatives in the Futures and Options segment expired on 23rd March, 2018.

16.. CAPITAL MANAGEMENT

The Company adheres to a disciplined Capital Management framework, the pillars of which are as follows:

a)    Maintain diversity of sources of financing and spreading the maturity across tenure buckets in order to minimize liquidity risk.

b)    Maintain AAA rating domestically and investment grade rating internationally by ensuring that the financial strength of the Balance Sheet is preserved.

c)    Manage financial market risks arising from foreign exchange, interest rates and commodity prices, and minimize the impact of market volatility on earnings.

d)    Leverage optimally in order to maximize shareholder returns while maintaining strength and flexibility of Balance Sheet.

This framework is adjusted based on underlying macro-economic factors affecting business environment, financial market conditions and interest rates environment.

The financial instruments are categorized into three levels based on the inputs used to arrive at fair value measurements as described below:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: Inputs other than the quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and

Level 3: Inputs based on unobservable market data.

Valuation Methodology

All financial instruments are initially recognized and subsequently re-measured at fair value as described below:

a)    The fair value of investment in quoted Equity Shares, Bonds, Government Securities, Treasury Bills and Mutual Funds is measured at quoted price or NAV.

b)    The fair value of Interest Rate Swaps is calculated as the present value of the estimated future cash flows based on observable yield curves.

c)    The fair value of Forward Foreign Exchange contracts and Currency Swaps is determined using observable forward exchange rates and yield curves at the balance sheet date.

d)    The fair value of over-the-counter Foreign Currency Option contracts is determined using the Black Scholes valuation model.

e)    Commodity derivative contracts are valued using available information in markets and quotations from exchange, brokers and price index developers

f)    The fair value of the remaining financial instruments is determined using discounted cash flow analysis.

g)    All foreign currency denominated assets and liabilities are translated using exchange rate at reporting date.

B. Financial Risk Management

The different types of risks the company is exposed to are market risk, commodity risk, credit risk and liquidity risk. The Company uses derivative financial instruments such as forwards, options and swap contracts to minimize any adverse effect on its financial performance. All such activities are undertaken within an approved Risk Management Policy framework.

i) Market Risk a) Foreign Currency Risk

Foreign Currency Risk is the risk that the Fair Value or Future Cash Flows of an exposure will fluctuate because of changes in foreign currency rates. Exposures can arise on account of the various assets and liabilities which are denominated in currencies other than Indian Rupee.

The following table shows foreign currency exposures in US Dollar, Euro and Japanese Yen on financial instruments at the end of the reporting period. The exposure to all other foreign currencies are not material.

b. Interest Rate Risk

The company's exposure to the risk of changes in market interest rate relates to the floating rate debt obligations and derivative products taken to mitigate interest rate risk.

ii. Commodity Price Risk

Commodity price risk arises due to fluctuation in prices of crude oil, other feed stock and products. The company has a risk management framework aimed at prudently managing the risk arising from the volatility in commodity prices and freight costs.

The company's commodity risk is managed centrally through well-established trading operations and control processes. In accordance with the risk management policy, the Company enters into various transactions using derivatives and uses over-the-counter as well as Exchange Traded Futures, Options and Swap contracts to hedge its commodity and freight exposure.

iii) Credit Risk

Credit risk is the risk that a customer or counterparty to a financial instrument fails to perform or pay the amounts due causing financial loss to the company. Credit risk arises from company's activities in investments, dealing in derivatives and receivables from customers.

The company has a prudent and conservative process for managing its credit risk arising in the course of its business activities. Credit risk is actively managed through Letters of Credit, Bank Guarantees, Parent Company Guarantees, advance payments and factoring & forfeiting without recourse to the Company. The company restricts its fixed income investments in liquid securities carrying high credit rating.

iv) Liquidity Risk

Liquidity risk arises from the Company's inability to meet its cash flow commitments on the due date. The company maintains sufficient stock of cash, marketable securities and committed credit facilities. The company accesses global and local financial markets to meet its liquidity requirements. It uses a range of products and a mix of currencies to ensure efficient funding from across well-diversified markets and investor pools. Treasury monitors rolling forecasts of the company's cash flow position and ensures that the company is able to meet its financial obligation at all times including contingencies.

The company's liquidity is managed centrally with operating units forecasting their cash and liquidity requirements. Treasury pools the cash surpluses from across the different operating units and then arranges to either fund the net deficit or invest the net surplus in the market.

C. Hedge Accounting

The company's business objective includes safe-guarding its earnings against adverse price movements of crude oil and other feedstock, refined products, freight costs as well as foreign exchange and interest rates. Reliance has adopted a structured risk management policy to hedge all these risks within an acceptable risk limit and an approved hedge accounting framework which allows for Fair Value and Cash Flow hedges. Hedging instruments include exchange traded futures and options, over-the-counter swaps, forwards and options as well as non-derivative instruments to achieve this objective. The table below shows the position of hedging instruments and hedged items as on the balance sheet date.

17..    EVENTS AFTER THE REPORTING PERIOD

The Board of Directors have recommended dividend of ' 6.00 per fully paid up equity share of ' 10/- each, aggregating ' 4,281 crore, including ' 728 crore dividend distribution tax for the financial year 2017-18, which is based on relevant share capital as on 31st March, 2018. The actual dividend amount will be dependent on the relevant share capital outstanding as on the record date / book closure.

18.    The figures for the corresponding previous year have been regrouped / reclassified wherever necessary, to make them comparable.

19.    APPROVAL OF FINANCIAL STATEMENTS

The Financial Statements were approved for issue by the Board of Directors on April 27, 2018.