You are here » Home » Companies » Company Overview » Reliance Industries Ltd

Reliance Industries Ltd.

BSE: 500325 Sector: Oil & Gas
NSE: RELIANCE ISIN Code: INE002A01018
BSE 11:57 | 28 Sep 2220.10 18.40
(0.84%)
OPEN

2229.00

HIGH

2238.70

LOW

2207.25

NSE 11:49 | 28 Sep 2219.40 17.70
(0.80%)
OPEN

2227.00

HIGH

2238.00

LOW

2207.05

OPEN 2229.00
PREVIOUS CLOSE 2201.70
VOLUME 308880
52-Week high 2368.80
52-Week low 867.44
P/E 46.72
Mkt Cap.(Rs cr) 1,407,412
Buy Price 2219.55
Buy Qty 1.00
Sell Price 2220.15
Sell Qty 43.00
OPEN 2229.00
CLOSE 2201.70
VOLUME 308880
52-Week high 2368.80
52-Week low 867.44
P/E 46.72
Mkt Cap.(Rs cr) 1,407,412
Buy Price 2219.55
Buy Qty 1.00
Sell Price 2220.15
Sell Qty 43.00

Reliance Industries Ltd. (RELIANCE) - Auditors Report

Company auditors report

TO THE MEMBERS OF RELIANCE INDUSTRIES LIMITED

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

OPINION

We have audited the accompanying Standalone Financial Statements of Reliance IndustriesLimited ("the Company") which includes joint operations which comprise theBalance sheet as at March 31 2020 the Statement of Profit and Loss including thestatement of Other Comprehensive Income the Cash Flow Statement and the Statement ofChanges in Equity for the year then ended and notes to the Standalone FinancialStatements including a summary of significant accounting policies and other explanatoryinformation.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Financial Statements give the information requiredby the Companies Act 2013 as amended ("the Act") in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of a airs of the Company as at March 31 2020 its profit includingother comprehensive income its cash flows and the changes in equity for the year ended onthat date.

BASIS FOR OPINION

We conducted our audit of the Standalone Financial Statements in accordance with theStandards on Auditing (SAs) as specified under Section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the ‘Auditors'Responsibilities for the Audit of the Standalone Financial Statements' section of ourreport. 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 ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is su cient and appropriate to provide a basisfor our audit opinion on the Standalone Financial Statements.

KEY AUDIT MATTERS

Key audit matters are those matters that in our professional judgement were of mostsignificance in our audit of the Standalone Financial Statements for the financial yearended March 31 2020. These matters were addressed in the context of our audit of theStandalone Financial Statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters. For each matter below our description ofhow our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditors' responsibilities for the audit of the Standalone Financial Statements section ofour report including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the Standalone Financial Statements. The results of our audit proceduresincluding the procedures performed to address the matters below provide the basis for ouraudit opinion on the accompanying Standalone Financial Statements.

Key audit matters How our audit addressed the key audit matter
A. Capitalisation of property plant and equipment
During the year ended March 31 2020 the Company has incurred significant capital expenditure. Further out of the total additions to property plant and equipment of Rs. 113300 crore in the current year significant part of the capitalisation pertains to the Gasification project including 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. All units of the gasification complex and related integrated projects have been successfully commissioned and capitalised during the year. Our audit procedures included and were not limited to the following:
• Performed walk-through of the capitalisation process and tested the design and operating e ectiveness of the controls in the process.
• Assessed the nature of the additions made to property plant and equipment and capital work-in-progress on a test check basis to test that they meet the recognition criteria as set out in para 16 to 22 of Ind AS 16 including any such costs incurred specifically for trial run.
Significant level of judgement is involved to ensure that the aforesaid capital expenditure/additions meet the recognition criteria 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. • Assessed that the borrowing cost capitalised (including foreign exchange loss to the extent it is considered as an adjustment to interest cost) is in accordance with the accounting policy of the Company.
• Reviewed the project completion/handover certificate provided by the management to determine whether the asset is in the location and condition necessary for it to be capable of operating in the manner intended by the management.
As a result the aforesaid matter was determined to be a key audit matter.
B. Estimation of oil reserves decommissioning liabilities and impairment evaluation of development rights
Refer to Note 33.2 on proved reserves and production on product and geographical basis Note C(A) on estimation of Oil and Gas reserves and 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. Our work included and were not limited to the following procedures:
• Performed walk-through of the estimation process associated with the oil and gas reserves.
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. • 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 independence and competence of the Company's specialists involved in the process and valuation specialists engaged by us.
Estimates of oil and gas reserves are used to calculate depletion 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 a direct impact on the assessment of the recoverability of asset's carrying values reported in the financial statements. • 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.
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. • Tested the assumption used in determining the decommissioning provisions. Also compared these assumptions with the previous year and enquired for reasons for any variations.
Accordingly the same is considered as a key audit matter.
C. 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 di erential revenue on gas sales from D1D3 field to the gas pool account maintained by Gail (India) Limited (Refer Note 33.3 and Note 33.4 (b)). 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.
b) Claim against the Company in respect of gas said to have migrated from neighbouring blocks (KGD6) (Note 33.4 (a)). • Discussed with the management on the development in these litigations during the year ended March 31 2020.
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 33.4 (c)). • Rolled out of enquiry letters to the Company's legal counsel and noted the responses received.
• Assessed the responses received from Company's legal counsel by engaging legal experts.
d) Suit for specific performance of a contract for supply of natural gas before the Hon'ble Bombay High Court (Note 33.4(d)). • Assessed the objectivity independence and competence of the Company's legal counsel involved in the process and legal experts engaged by us.
e) Arbitration proceedings relating to notice of withdrawal issued to Niko (NECO) Limited (Note 33.4(e)). • Reviewed the disclosures made by the Company in the financial statements in this regard.
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. Accordingly it has been considered as a key audit matter.
D. IT systems and controls over financial reporting
We identified IT systems and controls over financial reporting as a key audit matter for the Company because its financial 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 e ectively 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 and identified IT applications that are relevant to our audit.
• Assessed the design and evaluation of the operating e ectiveness of IT general controls over program development and changes access to programs and data and IT operations by engaging IT specialists.
• Assessed 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.
• Assessed the operating e ectiveness of controls relating to data transmission through the di erent IT systems to the financial reporting systems by engaging IT specialists.
E. Fair value measurement
As at March 31 2020 the Company has investments of Rs. 78107 crore in the equity and Optionally Convertible Preference Shares (‘OCPS') of Jio Digital Fiber Private Limited (‘JDFPL') and Reliance Jio Infratel Private Limited (‘RJIPL') which are measured at fair value as per Ind AS 109 read with Ind AS 113. Our audit procedures included and were not limited to the following:
• Reviewed the fair valuation reports obtained by the management by involvement of external valuation experts.
• Assessed the methodology and the assumptions applied in determining the fair value by engaging valuation specialists.
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 (fiber assets) and RJIPL (tower assets). Refer Note 2 and Note 36A in the financial statements. • Assessed the objectivity independence and competence of the Company's external specialists involved in the process and valuation specialists engaged by us
Accordingly the same has been considered as a key audit matter. . • Assessed the adequacy of disclosure in Note 2 and Note 36A in the financial statements.
F. Impact due to significant volatility in crude prices
Due to the ongoing geopolitical and economic situation in the world there has been significant slowdown of economic activities and significant volatility in crude oil prices during March 2020 and subsequent to the year end. Our audit procedures included and were not limited to the following:
• Obtained and reviewed the management impact assessment on account of reduction in oil prices including judgement and estimates applied in determining the areas of impact.
Management has assessed the impact of the aforesaid events on the financial statements specifically in areas of inventory impairment of certain investments development rights etc. including subsequent events up to the reporting date. Pursuant to such evaluation the Company has valued its inventories at net realisable value and recognised a loss of Rs. 4245 crore (net of current tax of Rs. 899 crore) which has been disclosed as exceptional items in the statement of profit and loss (Refer Note C (I) of Critical Accounting Judgements and Key sources of Estimation uncertainty and Note 30.3). Estimates and judgements are involved in determining the net realisable value of inventory including related hedges impairment of investments and development rights stated above. • Assessed the determination of impact on account of inventories valued at net realisable value including related hedges.
• Performed subsequent event procedures upto the date of the audit report.
• Assessed the disclosure made in Note 30.3 in the financial statements.
• Also refer procedures stated in Point B relating to ‘Estimation of oil reserves decommissioning liabilities and impairment evaluation of development rights' and Point G relating to 'Investments in Reliance Energy Generation and Distribution Limited.
Accordingly the same has been considered as a key audit matter.
G. 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 Our audit procedures included and were not limited to the following:
(q).i.E by reference to the requirements under Ind AS 36 "Impairment of Assets"). Accordingly management has identified impairment indicators by considering internal/external sources of information in Reliance Energy Generation and Distribution Limited (REGDL) and RHUSA Inc. (subsidiary of REGDL). As at March 31 2020 the Company has an investment of Rs. 15842 crore in REGDL. Further the Company has also given a guarantee on the borrowings of RHUSA Inc. (subsidiary of REGDL) of Rs. 22700 crore. As a result an impairment assessment has been performed by the Company by comparing the carrying value of these investments (including the guarantee given by the Company on the borrowings of RHUSA Inc.) to their recoverable amount to determine whether an impairment was required to be recognised. • Obtained and read the financial statements of REGDL to identify any disclosure for impairment of assets in these financial statements.
• Performed inquiry procedures with the auditor of RHUSA Inc. in relation to the assumptions used (future oil and gas prices estimated reserves discount rates etc.) for determining the value in use including the testing of IT controls and information provided by the entity (IPE) on the IT application used for reserve and well data management.
• Assessed the objectivity independence and competence of the Company's specialists and external specialists involved in the process.
For the purpose of the above impairment testing value in use has been determined by the management by considering estimates such as future oil and natural gas prices reserves volumes discount rates etc. Management has also involved external specialists for determining of reserve volumes and value in use. • Assessed assumptions used for determining value in use. Further also performed testing of IPE and assessed the recoverable value headroom available.
Accordingly it has been considered as a key audit matter.
H. Transfer of identified liabilities from Reliance Jio Infocomm Limited
During the year Reliance Jio Infocomm Limited (subsidiary of the \Company or ‘RJIL') and certain classes of its creditors have entered into a scheme of arrangement whereby the certain identified liabilities aggregating to Rs.104365 crore together with interest accrued (but not paid thereon) hedges along with receivables or payables and all other balances with respect to the identified liabilities of RJIL have been transferred to the Company with equivalent consideration in accordance with the order dated March 13 2020 issued by National Company Law Tribunal. Refer Note 32 (III) (6) in the financial statements. Our audit procedures included and were not limited to the following:
• Understood the structure of the transaction from the management.
• Obtained and read the order issued by NCLT to assess that the accounting treatment has been applied in accordance with the Scheme.
Being a significant transaction that occurred during the current year it has been considered as a key audit matter. • Assessed the measurement recognition and disclosure of the said transaction in line with the applicable Indian Accounting Standards.
INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITORS' REPORT THEREON RESPONSIBILITIES OF MANAGEMENT FOR THE STANDALONE FINANCIAL STATEMENTS
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. 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 e ectively 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.
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.

In preparing the Standalone Financial Statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

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

AUDITORS' RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the StandaloneFinancial Statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditors' report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these Standalone Financial Statements.

As part of an audit in accordance with SAs we exercise professional judgement andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the StandaloneFinancial Statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is su cient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign 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 hasadequate internal financial controls with reference to financial statements in place andthe operating e ectiveness of such controls.

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

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditors' report to the related disclosures inthe 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 asa going concern.

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

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

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

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the Standalone Financial Statementsfor the financial year ended March 31 2020 and are therefore the key audit matters. Wedescribe these matters in our auditors' report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

OTHER MATTER

The accompanying Standalone Financial Statements and other financial informationincludes the Company's proportionate share in unincorporated joint operation in respect oftotal assets of Rs. Nil as at March 31 2020 total expenditure of Rs. 177 crore and theelements making up the Cash Flow Statement for the year ended March 31 2020 and relateddisclosures in respect of an unincorporated joint operation which is based on statementsfrom the operator and certified by the management. Our opinion is not modified in respectof above matter.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

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 ofthe Act we give in the "Annexure 1" a statement on the matters specified inparagraphs 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 bestof 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 theCompany so far as it appears from our examination of those books;

(c) The Balance Sheet the Statement of Profit and Loss including the Statement ofOther Comprehensive Income the Cash Flow Statement and Statement of Changes in Equitydealt with by this Report are in agreement with the books of account;

(d) In our opinion the aforesaid Standalone Financial Statements comply with theAccounting Standards specified under Section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended;

(e) On the basis of the written representations received from the directors as on March31 2020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 from being appointed as a director in terms of Section 164 (2) of theAct;

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these Standalone Financial Statements and theoperating effectiveness of such controls refer to our separate Report in "Annexure2" to this report;

(g) In our opinion the managerial remuneration for the year ended March 31 2020 hasbeen paid/provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to the Act;

(h) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its Standalone Financial Statements – Refer Note 34 to the StandaloneFinancial Statements;

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company except for an amount of Rs. 1.63crore 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: 20030848AAAAAR2144 UDIN: 20093649AAAAAN1906
Mumbai Mumbai
Date: April 30 2020 Date: April 30 2020

ANNEXURE 1

TO THE INDEPENDENT AUDITORS' REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTSOF RELIANCE INDUSTRIES LIMITED

(Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' section of our Report of even date) (

i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The Company has a regular programme for physical verification in a phased periodicmanner which in our opinion is reasonable having regards to the size of the Company andthe nature of its assets. No material discrepancies were noticed on such verification.

(c) According to information and explanations given by the management the titledeeds/lease deeds of immovable properties included in property plant and equipment areheld in the name of the Company except for leasehold land of Rs. 83 crore in respect ofwhich the allotment letters are received and supplementary agreements entered; howeverlease deeds are pending execution. (Refer Note 1.1 of the Standalone FinancialStatements).

(ii) The management has conducted physical verification of inventory at reasonableintervals during the year and no material discrepancies were noticed on such physicalverification.

(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under Section 189 of theAct. Accordingly the provisions of clause 3(iii) (a) (b) and (c) of the Order are notapplicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations provided to usthe Company has not granted any loans or provided any guarantees or security to theparties covered under Section 185 of the Act. The Company has complied with the provisionsof Section 186 of the Act in respect of investments made or loans or guarantee or securityprovided to the parties covered under Section 186 of the Act.

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76of 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 pursuantto the rules made by the Central Government for the maintenance of cost records underSection 148(1) of the Act related to the manufacturing activities and are of the opinionthat prima facie the specified accounts and records have been made and maintained. Wehave not however made a detailed examination of the same.

(vii) (a) The Company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including Provident fund Employees' State InsuranceIncome-tax Sales-tax Goods and Services tax Duty of Custom Duty of Excise Value AddedTax Cess and Other Statutory Dues applicable to it.

(b) According to the information and explanations provided to us no undisputed amountspayable in respect of Provident fund Employees' State Insurance Income-tax Sales TaxGoods and Service tax Duty of custom Duty of excise Value added tax Cess and OtherStatutory Dues were outstanding at the year end for a period of more than six monthsfrom the date they became payable.

(c) According to the records of the Company the dues of Income-tax Sales-tax Servicetax Duty of Custom Duty of Excise Value added tax and Cess which have not beendeposited on March 31 2020 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 the dispute is pending
Income Tax Act 1961 Income Tax 48 2011-12 and 2012-13 Commissioner of Income-Tax (Appeals)
Central Excise Act 1944 Excise Duty and Service Tax 0.13 Various Years from 1990-91 to 2017-18 Commissioner of Central Excise (Appeals)
713 Various Years from 1991-92 to 2016-17 Central Excise and Service Tax Appellate Tribunal
5 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 of various States and Entry Tax 83 Various Years from 2000-01 to 2011-12 High Court
Customs Act 1962 Customs Duty 20 2007-08 Central Excise and Service Tax Appellate Tribunal

(viii) In our opinion and according to the information and explanations provided by themanagement the Company has not defaulted in repayment of loans or borrowing to afinancial institution bank or government or dues to debenture holders.

(ix) In our opinion and according to the information and explanations provided by themanagement the Company has utilised the monies raised by way of debt instruments and termloans for the purposes for which they were raised.

(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the Financial Statements and according to the information and explanationsprovided by the management we report that no fraud by the Company or no material fraud onthe Company by the Officers and employees of the Company has been noticed or reportedduring the year.

(xi) According to the information and explanations provided by the management themanagerial remuneration has been paid/provided in accordance with the requisite approvalsmandated by the provisions of Section 197 read with Schedule V to the Act.

(xii) In our opinion the Company is not a nidhi company. Therefore the provisions ofclause 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 managementtransactions with the related parties are in compliance with Section 177 and 188 of theAct where applicable and the details have been disclosed in the financial statements asrequired by the applicable accounting standards.

(xiv) According to the information and explanations provided to us and on an overallexamination of the balance sheet the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) of the Order are notapplicable to the Company and not commented upon.

(xv) According to the information and explanations provided by the management theCompany has not entered into any non-cash transactions with directors or persons connectedwith him as referred to in Section 192 of the Act.

(xvi) According to the information and explanations provided to us the provisions ofSection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.

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: 20030848AAAAAR2144 UDIN: 20093649AAAAAN1906
Mumbai Mumbai
Date: April 30 2020 Date: April 30 2020

ANNEXURE 2

TO THE INDEPENDENT AUDITORS' REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTSOF RELIANCE INDUSTRIES LIMITED

REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE i OF SUB SECTION 3 OF SECTION143 OF THE COMPANIES ACT 2013 "THE ACT"

We have audited the internal financial controls over financial reporting of RelianceIndustries Limited ("the Company") which includes joint operations as of March31 2020 in conjunction with our audit of the Standalone Financial Statements of theCompany for the year ended on that date.

MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company's Management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin 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 adequateinternal financial controls that were operating e ectively for ensuring the orderly and ecient conduct of its business including adherence to the Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.

AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting with reference to these Standalone Financial Statementsbased on our audit. We conducted our audit in accordance with the Guidance Note and theStandards on Auditing as specified under Section 143(10) of the Act to the extentapplicable to an audit of internal financial controls and both issued by the Institute ofChartered Accountants of India. Those Standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting withreference to these Standalone Financial Statements was established and maintained and ifsuch controls operated e ectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls over financial reporting with reference to theseStandalone Financial Statements and their operating e ectiveness. Our audit of internalfinancial controls over financial reporting included obtaining an understanding ofinternal financial controls over financial reporting with reference to these StandaloneFinancial Statements assessing the risk that a material weakness exists and testing andevaluating the design and operating e ectiveness of internal control based on the assessedrisk. The procedures selected depend on the auditors' judgement including the assessmentof the risks of material misstatement of the financial statements whether due to fraud orerror. We believe that the audit evidence we have obtained is su cient and appropriate toprovide a basis for our audit opinion on the internal financial controls over financialreporting with reference to these Standalone Financial Statements.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING WITH REFERENCE TO THESESTANDALONE FINANCIAL STATEMENTS

A company's internal financial control over financial reporting with reference to theseStandalone Financial Statements is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financialstatements for external purposes in accordance with generally accepted accountingprinciples. A company's internal financial control over financial reporting with referenceto these Standalone Financial Statements includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the Company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the Company are being made only in accordance withauthorisations of management and directors of the Company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the Company's assets that could have a material e ect on the financialstatements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING WITHREFERENCE TO THESE STANDALONE FINANCIAL STATEMENTS

Because of the inherent limitations of internal financial controls over financialreporting with reference to these Standalone Financial Statements including thepossibility of collusion or improper management override of controls materialmisstatements due tOfferror or fraud may occur and not be detected. Also projections ofany evaluation of the internal financial controls over financial reporting with referenceto these Standalone Financial Statements to future periods are subject to the risk thatthe internal financial control over financial reporting with reference to these StandaloneFinancial Statements may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.

OPINION

In our opinion the Company has in all material respects adequate internal financialcontrols over financial reporting with reference to these Standalone Financial Statementsand such internal financial controls over financial reporting with reference to theseStandalone Financial Statements were operating e ectively as at March 31 2020 based onthe internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

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: 20030848AAAAAR2144 UDIN: 20093649AAAAAN1906
Mumbai Mumbai
Date: April 30 2020 Date: April 30 2020