ATAL BIHARI VAJPAYEE- INDIAN INSTITUTE OF INFORMATION

TECHNOLOGY AND MANAGEMENT GWALIOR-474015

Comprehensive Understanding of Annual

Reports of Reliance Industries Limited

Submitted To:- Submitted By:-

Dr.Vishal Vyas Abhishek Chaurasia 2017IMG-002
Deepak Paliwal 2017IMG-019
Gaurav Verma 2017IMG-021
Shubham Bhawsar 2017IMG-049
Siddharth Vaish 2017IMG-051
Fiscal Year - 2015-2016
● Turnover Declined:-Reliance has not done great if we talk particularly about its turnover
they have face a decline of 23.8% in their turnover growth and has achieved a
consolidated turnover of ₹2,96,091 crore for the year ended 31st March 2016 as
compared to ₹3,88,494 crore in the previous year. 3

Effects declined turnover are:

● The drop in turnover is due to a dramatic drop in feedstock and commodity prices
over the course of the year, which was partly offset by higher crude throughput
and petrochemicals volumes.
● In FY 2015-16, the Brent crude oil price averaged US$47.4/bbl, down 45 percent
year on year. Exports from India fell 35.8% to 1,46,855 crore (US$22.2 billion)
due to lower oil and commodity prices, compared to 2,28,651 crore the previous
year. And this has led to a decrease in the turnover of Reliance pvt Lmt.

● Increased Operating Profit:-The company's operating profit before other profits and
depreciation rose 18.4% year on year to 44,257 crores (US$6.7 billion) from 37,364
crores the previous year. Higher operating profits were achieved as a result of the
refining and petrochemicals business's strong operating success, indicating that the
company's management has done well in operations.

● The decline in Other Income:-Other income has decreased to 7,612 crore (US$1.15
billion) from 8,495 crore the previous year due to a shift in the investment mix.

● Increased Interest Cost:- Due to higher average debt levels and average exchange
rates during the year, interest costs increased to 3,608 crore (US$545 million) from
3,316 crore the previous year, which has definitely impacted the company but if we see
the company’s Profit after tax they have done a good job. Hence we can say that overall
it hasn't affected much the company.
 ● Increased Depreciation:-Depreciation (which includes depreciation and amortization)
increased by 11.9 percent to 12,916 crores (US$1.9 billion) from 11,547 crores the
previous year, owing to capitalization of petrochemicals ventures and higher depletion in
the shale gas sector.

● Increasing Profit After Tax:-Profit after tax, except exceptional products, increased by
17.2 percent to 27,630 crores (US$4.2 billion), up from 23,566 crores in the previous
year's corresponding era, which clearly indicates that a company runs efficiently,
providing more value in the form of profits to shareholders.

Basic and Diluted earnings per share (EPS) for the year was ₹93.8 as against ₹80.1 in the
previous year.

● Declared Dividend:-The Company has announced a dividend of 10.5 rupees per fully
paid-up equity share of ten rupees each, amounting to Rs. 3,717 crore (US$561 million)
including dividend distribution tax, indicating that the company wanted to attract a few
more investors and wanted their trust in the company to grow.

● Fixed Asset:-As of March 31, 2016, Reliance's fixed assets totaled Rs 4,19,722 crore
(US$63.3 billion). This includes 1,81,433 crore in fixed assets held by its subsidiaries,
primarily in Jio, Reliance Holding USA, and Reliance Retail.

● Capital Expendiure:-Capital expenditure for the year ended March 31, 2016, including
exchange rate gap capitalization, was 1,12,995 crore (US$17.1 billion). Ongoing
expansion projects in the petrochemicals and refining industry at Jamnagar, Dahej, and
Hazira, as well as projects in Jio and US shale gas, accounted for the majority of capital
expenditure.

This clearly indicates that in 2016, the company concentrated on the petrochemical
industry in order to compete and be in the market with global giants such as Saudi
Aramco.

● Gross Debt:- Even though it was a big established company, the company had a
massive capital investment and was constantly looking for funds. Their gross debt was
1,81,079 crore.

● Reliance Holding USA (36,951 crores),

● Jio (33,187 crore), Recron Malaysia (1,295 crore),
● Independent Media Trust Group (1,000 crores),
● Reliance Gas Pipelines Limited (700 crores),
● and Reliance Retail (734) raised the majority of the debt.
 ● Standalone Revenue from Operation:-RIL's standalone revenue from operations in FY
2015-16 was 2,51,241 crore (US$37.9 billion), down 26.3 percent year over year.
Standalone profit after tax was 27,417 crore (US$4.1 billion), up 20.7 percent from the
previous year's figure of 22,719 crores. On a stand-alone basis, EPS for the year was
84.7, up from 70.2 the previous year.

● Consolidated Revenue from Operation:-Reliance's consolidated revenue from

operations includes a total of Rs 21,612 crore from Reliance Retail Ventures Limited, Rs
11,723 crore from GAPCO, and Rs 3,256 crore from Reliance Holding USA Inc. (Shale).
In addition to the standalone profit after tax, Reliance Retail Ventures Limited contributed
a total of 212 crores to the consolidated profit after tax.

So finally if we conclude on the basis of the above information then we can clearly see the
following conclusions:-:

● The Revenue from operations decreased by 26.3% to ₹ 2,51,241 crore (US$37.9 billion).
● Exports decreased by 35.8% to ₹ 1,46,855 crore (US$22.2 billion).
● PBDIT increased by 18.3% to ₹ 47, 721 crore (US$7.2 billion).
● Profit before Tax increased by 21.2% to ₹ 35,701 crore (US$5.4 billion).
● Cash Profit increased by 17.7% to ₹ 37,465 crore (US$5.7 billion).
● Net Profit increased by 20.7% to ₹ 27,417 crore (US$4.1 billion).
● Gross Refining Margin stood at US$10.8 / bbl for the year ended March 31, 2016.
Fiscal Year - 2016-2017
 ANALYSIS

● Turnover Increased: Reliance accomplished a consolidated turnover of '3,30,180 crore

(US$50.9 billion), an expansion of 12.6% when contrasted with '2,93,298 crore in the
earlier year. Expansion in revenue is basically by virtue of expansion in prices of
refining and petrochemical products part of the way balanced by lower volumes from
E&P business.

Turnover was likewise supported by robust growth in retail business which recorded
a 60.2% flood in turnover to '33,765 crores. Brent crude oil cost found the middle value
of US$48.6/bbl in FY 2016-17 when contrasted with US$47.5/bbl in the earlier year.
Exports (counting considered fare) from India were marginally higher at '1,47,755 crore
(US$22.8 billion) as against '1,46,855 crore in the earlier year.

● High other Incomes: Other income was higher at '9,443 crores (US$1.5 billion) as
against '7,479 crores in the earlier year basically because of profit on the sale of
investments.

● Finance Cost Increased: Finance Cost was at '3,849 crores (US$594 million) as
against '3,691 crores in the earlier year. The increment was basically on account of a
higher normal exchange rate for the year.

● Depreciation (counting depletion and amortization) was higher: by 0.7% to '11,646

crores (US$1.8 billion) when contrasted with '11,565 crores in the earlier year principally
by virtue of capitalization of new undertakings in the petrochemicals business.

● Profit after tax was higher by 18.8% at '29,901 crores (US$4.6 billion) as against
'25,171 crores in the earlier year.

● Basic earnings per share (EPS) Increased: for the year finished 31st March 2017 was
at '101.3 as against '85.4 in the earlier year.
● Dividend: The Board of Directors of the Company has suggested a dividend of '11.0 per
completely settled up equity share of '10/ - each, accumulating '3,916 crores (US$604
million), including dividend distribution tax.

● Reliance's fixed assets remained at '5,18,471crore (US$80.0 billion) as of 31st March

2017. This incorporates fixed assets of '2,31,152 crore of its auxiliaries principally in
Reliance Jio, Reliance Holding USA, and Reliance Retail.

● Capital consumption for the year finished 31st March 2017 was '114,742 crore
(US$17.7 billion) including conversion scale contrast capitalization. Capital consumption
was primarily because of progressing projects in the petrochemicals and refining
business (at Jamnagar, Dahej, Hazira) US Shale gas and Digital administrations
business.

● Reliance's gross debt was at 196,601 crore (US$30.3 billion). This incorporates
standalone gross debt of '1,07,447 crore and balance in key auxiliaries including
Reliance Jio ('47,463 crore), Reliance Holding USA ('32,816 crore), Recron Malaysia
('1,586 crore), Reliance Gas Pipelines Limited ('1,450 crore) and Independent Media
Trust Group ('1,307 crore).

● Cash and marketable securities were at '77,226 crore (US$11.9 billion) bringing about
net debt at '1,19,375 (US$18.4 billion).

● RIL's standalone revenue from operations: for FY 2016-17 was '2,65,041 crore
(US$40.9 billion) , an increment of 5.5% on a y-o-y premise. Standalone profit after tax
was at '31,425 crore (US$4.9 billion) an increment of 14.8 % against '27,384 crore in the
earlier year. Fundamental EPS on a standalone reason for the year was '96.9 as against
'84.6 in the earlier year.

● D/E Ratio decreased: It was decreased from 0.42 to 0.37 which means that the
company's shareholder's equity is in excess and it does not need to tap its debts to
finance its operations and business. The company has more of owned capital than
borrowed capital and this speaks highly of the company.

● EPS increased: It has increased by 14.5% which means stocks are increasing
profitabily and more investors will get attracted to the company.

● RONW has also increased: This means that company is using the shareholder’s equity
more efficiently than previous years.

● ROCE has increased: Selling the outdated machinery would lower the company's total
asset base and thus improve the company's ROCE since removing unused or
unnecessary assets allows for less capital to be employed to facilitate the same amount
of production. Paying off debt, thereby reducing liabilities.
So finally if we conclude on the basis of the above information then we can clearly see the
following conclusions:

● Revenue from operations increased by 5.5 % to ₹ 2,65,041 crore (US$ 40.9 billion).
● Exports increased 0.6% to ₹ 1,47,755 crore (US$ 22.8 billion).
● PBDIT increased by 10.2% to ₹ 51,965 crores (US$ 8.0 billion).
● Profit before Tax increased by 13.2 % to ₹ 40,777 crore (US$ 6.3 billion).
● Cash Profit increased by 11.2% to ₹ 40,909 crore (US$ 6.3 billion).
● Net Profit increased by 14.8 % to ₹ 31,425 crore (US$ 4.8 billion).
● Gross Refining Margin stood at US$ 11.0 / bbl for the year ended March 31, 2017.
Fiscal Year - 2017-2018
Reliance achieved consolidated revenue of Rs.4,30,731 crore, an increase of 30.5% as compared to Rs.
3,30,10 crore in the previous year. The increase in the revenue was primarily on account of higher
volumes with the start-up of petrochemicals projects and the uptrend in prices of products in the refining
and petrochemical businesses.

Reliance Retail recorded a 104.9% increase in revenue to Rs. 69,198 crore. Digital Services business
recorded revenue of Rs. 23,916 crores in its first years of commercial operations.

● Other income was lower at Rs. 8,862 crore as against Rs. 9,443 crore in the previous year,
primarily on account of adverse yield movement.

● The finance cost was at Rs. 8052 crore as against rs. 3849 crore in the previous year. The
increase was primarily due to the commencement of the Digital Services business.Petrochemical
projects at Jamnagar and higher loan balances

● Depreciation (including depletion and amortization) was higher by 43.4% to®16,706 crore
(US$2.6 billion) as compared to $11,646 crore in the previous year, primarily on account of the
commencement of wireless service business in Reliance Jio. Higher depreciation also reflected
the capitalization of new projects in the petrochemicals business and reduction in reserve
estimates in the domestic Exploration & Production business.

● Profit after tax was higher by 20.6% at $36,075 crore (US$5.5 billion) as against $29,901 crore
in the previous year.

● Basic earnings per share (EPS) for the year ended 31st March 2018 was at Rs 60.9 as against Rs
101.3 in the previous year.

● Reliance’s fixed assets (excluding goodwill) stood at %5,85,094 crore (US$89.8 billion) as on
31% March, 2018. This includes fixed assets of Rs 2,84,647 crore of its subsidiaries mainly in
Reliance Jio, Reliance Holding USA, and Reliance Retail.
● Capital expenditure for the year ended 31st March 2018 was %79,253 crores (US$12.2 billion),
including exchange rate difference. Capital expenditure was principally on account of the Digital
Services business, projects in the petrochemicals and refining business, and in the Organised
Retail business.

● Reliance’s gross debt was at %2,18,763 crore (US$33.6 billion). This includes standalone gross
debt of [1,16,881 crore and balance in key subsidiaries, including Reliance Jio (58,392 crore),
Reliance Holding USA (%30,927 crore), Reliance Retail Group (%3,448 crore), Recron Malaysia
(%1,023 crore), Reliance Gas Pipelines Limited (1,309 crore) and Independent Media Trust
Group (%2,203 crore).

● Cash and marketable securities were at €78,063 crore (US$12.0 billion) resulting in net debt at
€1,40,700 crore (US$21.6 billion).

● RIL's standalone revenue from operations for FY 2017-18 was %3,15,357 crore (US$48. 4
billion), an increase of 19.0% on a y-o-y basis. Standalone profit after tax was at 733,612 crores
(US$5.2 billion) an increase of 7.0 % against $31,425 crore in the previous year. Basic EPS on a
standalone basis for the year was %53.1* as against $96.9 in the previous year.
So finally if we conclude on the basis of the above information then we can clearly see the
following conclusions:

● Value of sales and services increased by 19.0 % to = 3,15,357 crore (US$ 48.4 billion).
● Exports increased by 19.2 % to = 1,76,117 crore (US$ 27.0 billion).
● PBDIT increased by 15.4 % to = 59,961 crore (US$ 9.2 billion).
● Profit Before Tax increased by 12.1 % to % 45,725 crore (US$ 7.0 billion).
● Cash Profit increased by 13.3 % to = 46,352 crore (US$ 7.1 billion).
● Net Profit increased by 7.0 % to 2 33,612 crore (US$ 5.2 billion).
● Gross Refining Margin stood at US$ 11.6 / bbl for the year ended March 31, 2018.
Fiscal Year - 2018-2019
Analysis (2018-2019)

• We have comprehensively understood the annual report and based on that we have done the annual
analysis of Reliance for the financial year 2018-2019. First of all we will start the analysis with the key
performance indicators of the Reliance Ind. We can clearly depict that the turnover of the company
increased in a tremendous way on around 44 percent year on year basis, indicating then the company is
working in an efficient way during this financial year.

• We also understood that earning per share of the company in the financial year 2018-19 got increased by
around 9.7% year on year basis, indicating that Reliance is earning a decent profit in order to distribute to
its shareholders.

• We can also depict that the dividend per share of the company increased by approx. eight percent
,indicating companies have decent cash flows during the financial year 2018-19.

• Revenue increased - Reliance achieved consolidated revenue of `6,22,809 cr. , a rise of approx. 44% ,
as compared to `4,30,731 cr. within the previous year. Increase in revenue was totally on account of
volume increase with stabilisation of organic compounds and oil worth connected increase in realisations
within the refinement and petrochemical product. The upper volumes in organic compounds business are
on account of the primary full year of operations of recent petrochemical facilities. Reliance’s
consolidated revenue was conjointly boosted by sturdy growth in retail and digital services business, that
recorded a rise of approx. 87% and approx. 94% in revenue, severally as compared to the previous year.

• Profit - Volume growth in petrochemicals and quickly increasing contribution from client businesses led
to vital rise in in operation profit for the year. In operation Profit before different financial gain and
depreciation increased by approx. 30% on a y-o-y basis to `83,918 large integer as compared to `64,176
cr. within the previous year. Profit when tax before exceptional things was higher by approx.13% at
`39,588 cr. as against `34,988 cr. within the previous year. comparatively lower growth in profit after tax
is especially because of higher interest charges and depreciation because of stabilisation of projects.

• Lower other financial gain - The exceptional item was lower at `8,635 cr. as against `8,862 cr. within
the previous year, totally on account of adverse yield movement.

• Increased Finance price - It absolutely was at `16,495 cr. as against `8,052 cr. within the previous year.
The rise was totally on account of commencement of digital services business, organic compound comes
at Jamnagar and better loan balances.

• Depreciation (including depletion and amortisation) - It absolutely was higher by around 25% to
20,934 cr. as compared to `16,706 cr. within the previous year, totally on account of commencement of
wireless service business in Reliance Jio. Higher depreciation conjointly reflected the capitalisation of
recent projects within the petrochemicals business.

• Increased Earnings Per Share -For the year terminated March 31, 2019 was at `66.8 as against `60.9
within the previous year.

• Dividend - The Board of administrators of the corporate has suggested a dividend of `6.5 per absolutely
paid up equity share of `10/ every, aggregating `4,641 cr. , as well as dividend distribution tax.

• Reliance’s fixed assets - It stood at `5,65,840 cr. as on March thirty one, 2019. This includes RIL
Standalone's mounted assets of `3,14,745 cr. and balance of `2,51,095 cr. in its subsidiaries chiefly
Reliance Jio, Reliance Holding USA and Reliance Retail.

• Capital expenditure - For the year terminated March thirty one, 2019 was `1,32,445 cr., together with
rate of exchange distinction. cost was in the main on account of the digital services business, comes
within the petrochemicals and refinement business and within the organized retail business.

• Reliance’s Gross Debt - It absolutely was at `2,87,505 cr. .This includes standalone gross debt of
`1,61,720 large integer and balance in key subsidiaries, together with Reliance Jio (`67,018 cr.), Reliance
Holding USA (`34,848 cr.), Reliance Retail cluster (`12,832 cr.), independent Media Trust cluster (`3,045
cr.), Hathway Cable and Datacom restricted (`1,973 cr.), Reliance Gas Pipelines restricted (`1,379 cr.) and
Recron Malaysia (`1,170 cr.). money and Marketable Securities were at `1,33,027 cr. (US$19.2 billion)
leading to net debt at `1,54,478 cr..
• Increased RIL’s standalone Revenue - From Operations for FY 2018-19 was `4,00,986 cr., a rise of
27.2% on a y-o-y basis. Profit when tax was at `35,163 cr. a rise of around 4.5% against `33,612 cr. within
the previous year. Basic EPS on a standalone basis for the year was `55.5 as against `53.1 within the
previous year.

So finally if we conclude on the basis of above information then we can clearly see the following
conclusions:

• Price of sales and services exaggerated by 27.2% to ` 4,00,986 cr.

• Exports redoubled by approx.27% to ` 2,24,391 cr.
• PBDIT exaggerated by approx. 13% to 67,676 cr.
• Profit Before Tax exaggerated by 3.6% to ` 47,367 cr.
• Money Profit enhanced by 4.6% to ` 48,485 cr.
• Net profit enhanced by 4.6% to ` 35,163 cr.
• Gross refining Margin stood at US$ 9.2 / bbl for the year complete March thirty-one,
Fiscal Year - 2019-2020
 Analysis (2019-2020)

• We have comprehensively understood the annual report and based on that we have done the annual
analysis of Reliance for the financial year 2019-2020. First of all we will start the analysis with the key
performance indicators of the Reliance Ind. We can clearly depict that the turnover of the company
increased a little by around 5 percent year on year basis, indicating then the company is working in an
efficient way during this financial year.

• We also understood that earning per share of the company in the financial year 2018-19 got increased by
around 5.7% year on year basis, indicating that Reliance is earning a decent profit in order to distribute to
its shareholders.

• We can also depict that the dividend per share of the company remained the same as for the financial
year of 2018-19.
• We can also depict that the profit after tax of the company increased by approx 11 % for the financial
year 2019-20 indicating lower tax rate of the company.

• Revenue increased - The revenue for the FY 2019-20 has increased in a decent manner. Reliance
achieved consolidated revenue of `6,59,205 cr. , a rise of approx. 5%, as compared to `6,25,212 cr. within
the previous year. Increase in revenue was totally on account of upper revenue from client Business.
Reliance’s consolidated revenue was boosted by sturdy growth in retail and digital services business, that
recorded a rise of approx.25% and 40% in revenue, severally as compared to the previous year. Revenues
for the processing and organic compound business declined in line with fall in average oil and products
costs for the year.

• Profit - Consolidated Earnings Before Interest Taxes Depreciation and Amortization for the year
increased by approx. 10% on a y-o-y basis to `102,280 cr. as compared to `92,656 cr. within the previous
year. Consolidated Earnings Before Interest Taxes Depreciation and Amortization nearly doubled within
the last 5 years. Profit after Tax (excluding exceptional items) was higher by approx.11% at `44,324 cr.As
against `39,837 cr. within the previous year.

•Decreased alternative financial gain - It absolutely was at `13,956 cr. as against ` 8,386 cr. within the
previous year, totally on account of interest financial gain.

• Increased Finance price - it absolutely was at ` 22,027 cr. as against ` 16,495 cr. within the previous
year. The rise was totally on account of upper loan balances, currency depreciation and lower interest
capitalization on account of empowerment of digital projects.

•Depreciation (including depletion and amortisation) - It absolutely was higher by 6.1% to ` 22,203 cr.
(US$2.9 billion) as compared to ` 20,934 cr. within the previous year. Increase in depreciation was totally
on account of capitalisation of gasification and digital services projects. Basic Earnings Per Share (EPS)
for the year all over March thirty one, 2020 (before exceptional items) was at ` 70.6 as against ` 66.8
within the previous year.

•Decreased Earning Per Share - For the year all over March thirty one, 2020 was at ` 63.4 as against `
66.8 within the previous year.

• Dividend - The Board of administrators of the corporate has counseled a dividend of ` 6.5/ per totally
paid up equity share of ` 10/ every.

• Reliance’s fixed assets - It stood at ` 6,31,505 cr. as on March thirty one, 2020. This includes RIL
Standalone’s mounted assets of ` 3,34,436 cr. and balance of ` 2,97,069 cr. in its subsidiaries chiefly
Reliance Jio, Reliance Holding USA and Reliance Retail.

•Capital Expenditure - For the year all over March thirty one, 2020 was ` 77,444 cr. , together with
exchange rate distinction. cost was primarily on account of the digital services business, project within the
petrochemicals and processing business and within the organized retail business.
•Reliance’s Gross Debt - it absolutely was at ` 3,36,294 cr. . This includes standalone gross debt of `
2,62,345 cr. and balance in key subsidiaries, together with Reliance Holding USA (` 36,254 cr.), Reliance
Jio (`23,242 cr.), Reliance Retail cluster (` 4,618 cr.), freelance Media Trust cluster (` 3,265 cr.), Reliance
Sibur Elastomers Pvt Ltd (` 2,478 cr.) and Hathway Cable and Datacom ltd. (`1,975 cr.).

•Cash and Marketable Securities -It was at `1,75,259 cr. leading to net debt at ` 1,61,035 cr. .

•Decreased RIL’s standalone Revenue - For FY 2019-20 was ` 3,65,202 cr.), a decrease of 9.06% on a
y-o-y basis. Profit once tax was at `30,903 cr. , a decrease of approx. 13% against 35,163 cr. within the
previous year. Basic EPS on a standalone basis (before exceptional items) for the year was `55.45 as
against ` 55.48 within the previous year. Basic EPS on a standalone basis for the year was ` 48.75 as
against ` 55.48 within the previous year.
So finally if we conclude on the basis of above information then we can clearly see the following
conclusions:

• Worth of sales and services reduced by approx. 9% to`3,65,202 cr.

• Exports reduced by 9.6% to `2,02,830 cr.
• Earnings before interest taxes depreciation and Amortization reduced by approx. 2 % to ` 66,394 cr.
• Profit Before Tax (before exceptional Item) reduced by 5.9% to ` 44,561 cr.
• Money Profit reduced by 2.9% to ` 47,089 cr. (US$ 6.2 billion).
• Net profit (before exceptional Item) was stable at thirty five,148 cr.
• Gross refinement Margin stood at US$ eight.9/bbl.
References
1. https://www.moneycontrol.com/download-annual-report/relianceindustries/RI/2016

2. https://www.moneycontrol.com/download-annual-report/relianceindustries/RI/2017

3. https://www.ril.com/ar2017-18/pdf/ril-annual-report-2018.pdf

4. https://www.ril.com/ar2018-19/pdf/ril-annual-report-2019.pdf

5. https://www.ril.com/getattachment/299caec5-2e8a-43b7-8f70-d633a150d07e/AnnualRep
ort_2019-20.aspx