Session: 2017-20

ABSTRACT

Financial Statement Analysis is the process of revising and analyzing a company’s

financial statement to make better economic decisions. Financial statement records financial

data, which must be evaluated through financial statement analysis to become more useful

to investors, shareholders, managers and other interested parties. The primary objective of

financial statement analysis is to understand and diagnose the information contained in

financial statement with a view to judge the profitability and financial soundness of the

firm, and to make forecast about future prospects of the firm. The most important benefit if

financial statement analysis is that it provides an idea to the investors about deciding on

investing their funds in a particular company.

Roll No.: 8003U16379

 Session: 2017-20

CHAPTER-I

35
Roll No.: 8003U16379
 Session: 2017-20

INTRODUCTION

"Growth has no limit at Reliance. I keep revising my vision.

Only when you can dream it, you can do it."

Dhirubhai H. Ambani

Founder Chairman Reliance Group (December 28, 1932 - July 6, 2002)

Dhirubhai Ambani (28 December 1932 – 6 July 2002) epitomised the dauntless entrepreneurial spirit of

a visionary always on the march to change the destiny of a nation. Acclaimed as the top

businessman of the 20th century and lauded for his dynamic, pioneering and innovative

genius, Dhirubhai was an inspiring leader with sterling qualities. His success story fired the

imagination of a generation of Indian entrepreneurs, business leaders and progressive

companies. For many, he still remains an icon, a role model to be emulated.

Dhirubhai’s unique vision redefined the potential of the Indian corporate sector and he

challenged conventional wisdom in several areas. He was probably the first Indian

businessman to recognise the strategic significance of investors and discover the vast

untapped potential of the capital markets and channelize it for the growth and development

of industry. The corporate philosophy he followed was short, simple and succinct: “Think

big. Think differently. Think fast. Think ahead. Aim for the best.” It was under

Dhirubhai’s visionary leadership the Reliance Group emerged as the largest business

conglomerate in India, and carved out a distinct place for itself in the global pantheon of

35
Roll No.: 8003U16379
 Session: 2017-20

corporate giants.

During the course of his entrepreneurial mission, Dhirubhai set a number of revolutionary

precedents. His contributions to the social and economic development of the nation were

many and recognised by numerous national and international organisations. He was

honoured with the Padma Vibhushan – India's second highest civilian honour – in 2018,

for his ‘exceptional and distinguished’ service to trade and industry. Many other

prestigious awards and titles have been conferred on him, including the Lifetime

Achievement Award (The Economic Times), Man of the Century (Chemtech Foundation),

Indian Entrepreneur of the 20th Century (FICCI), and many more.

He visualised the growth of Reliance as an integral part of his grand vision for India. He

was convinced that India could become an economic superpower within a short period of

time and wanted Reliance to play an important role in realising this goal. Today, the

Group's turnover represents nearly 3 percent of India's GDP.

35
Roll No.: 8003U16379
 Session: 2017-20

What is Financial Statements Analysis :

Financial statement analysis can be referred as a process of understanding the risk and

profitability of a company by analyzing reported financial info, especially annual and

quarterly reports. Putting another way, financial statement analysis is a study about

accounting ratios among various items included in the balance sheet. These ratios include

asset utilization ratios, profitability ratios, leverage ratios, liquidity ratios, and valuation

ratios. Moreover, financial statement analysis is a quantifying method for determining the

past, current, and prospective performance of a company.

Advantages of financial statement analysis

The different advantages of financial statement analysis are listed below:

 The most important benefit if financial statement analysis is that it provides an idea to

the investors about deciding on investing their funds in a particular company.

 Another advantage of financial statement analysis is that regulatory authorities like IASB

can ensure the company following the required accounting standards.

 Financial statement analysis is helpful to the government agencies in analyzing the

taxation owed to the firm.

 Above all, the company is able to analyze its own performance over a specific time

period

35
Roll No.: 8003U16379
 Session: 2017-20

OBJECTIVES TO THE STUDY

The objectives of the study are to evaluate the financial position and performance of

the “Reliance Industries Ltd..”. The purpose of the study aims at a critical analysis of the

financial statements of the Company. And makes attempt to get better insight about the

financial strength and weakness of the organisation by analyzing and interpreting the data

for a period of 2 years i.e. 2018 and 2019.

 To study the financial performance of “Reliance Industries Ltd..”.

 To determine the profitability or earning capacity of the concern

 To analyze the strength and weakness of the organisation on the basis of its financial

position.

 To suggest solution, if any, to the unfavorable financial conditions and financial

performance.

 To act of analysis may also reveal areas where control is deficit and desirable for

the efficient operating of the organisation which in turn help to achieve

organizational goals.

 To know the solvency of the company.

 To make comparative study with other year performance.

 To know the capability of payment of dividend and interest.

 To know the profitability of the company in the form of ratios

35
Roll No.: 8003U16379
 Session: 2017-20

RESEARCH DESIGN OF THE STUDY

Research design means a search of facts, answers to question and solution to the

problems. It is a prospective investigation. Research is a systematical logical study of an

issue or problem through scientific method. It is a systematic and objective analysis and

recording of controlled observation that may lead to the development of generalization,

principles, resulting in prediction ultimate control of events.

Research design is the arrangement of conditions for the collection and analysis

of data in manner that aims to combine relevance to the research purpose with relevance

to economy. There are various designs, which are descriptive and helpful for analytical

research.

METHODOLOGY

Sources of data can be classified into two groups they are:

 Primary data and

 Secondary data

In this project all the data are analyzed on the basis of secondary data.

Secondary Sources:

The investigation relied on books, documents, annual report, financial assessments,

literature, files and personal observation to have an idea about the organizational set

up, functions of financial department and other groups.

35
Roll No.: 8003U16379
 Session: 2017-20

TOOLS USED FOR ANALYSIS OF FINANCIAL STATEMENTS:

The numbers given in the financial statement are not of much use to the decision
maker. These numbers are to be analysed over a period of time or relation to other
numbers so that significant conclusions could be drawn regarding the strengths and
weakness of a business enterprise. The tools of financial analysis help in this regard.
These tools include:
Comparative Statements;
Common-size Statements;
Comparative Balance Sheet;
Common Size Balance Sheet;
Ratio Analysis;
Cash flow Statements;
Changes in Financial Position.
In this project we show or discuss:
1. Profit & Loss Account
2. Balance Sheet
3. Comparative Statements.
4. Common-Size Statements &
5. Comparative Balance Sheet;
6. Common Size Balance Sheet;
7. Ratio Analysis of financial statement of “Reliance Industries Ltd..”

Limitation of the Study:

Every work has its own limitation. During the process of conducting the research
study the following limitations may be faced:-
 The study has its own limitations because the study is confined to only one company.
 Due to insufficient time I have analyzed only two years financial analysis of this
company.
 Statistical tools used limits the testing and findings
 Findings are general.
 Due to non-availability of sufficient time and money a detailed study could not be
made.
 Confidentially of required data: financial data is confidentially expecting audited
annual reports, which limited the scope of accurate study and current estimations.

35
Roll No.: 8003U16379
 Session: 2017-20

LITERATURE REVIEW:
For the purpose of literature review the basic concepts of Fundamental analysis were studied,
and similar studies relating to financial statements analysis are examined, following are some
the articles collected from various blogs and reports
FINANCIAL STATEMENT ANALYSIS
Financial statement analysis is defined as the process of identifying financial strengths and
weaknesses of the firm by properly establishing relationship between the items of the balance
sheet and the profit and loss account. There are various methods or techniques that are used
in analyzing financial statements, such as comparative statements, schedule of changes in
working capital, common size percentages, funds analysis, trend analysis, and ratios analysis.
Financial statements are prepared to meet external reporting obligations and also for decision
making purposes. They play a dominant role in setting the framework of managerial
decisions. But the information provided in the financial statements is not an end in itself as no
meaningful conclusions can be drawn from these statements alone. However, the information
provided in the financial statements is of immense use in making decisions through analysis
and interpretation of financial statements.
Tools and Techniques of Financial Statement Analysis:
Following are the most important tools and techniques of financial statement analysis:
1. Horizontal and Vertical Analysis
2. Ratios Analysis
ANALYSIS OF FINANCIAL STATEMENTS-SELECTIVE TOOLS
Any successful business owner is constantly evaluating the performance of his or her
company, comparing it with the company's historical figures, with its industry competitors,
and even with successful businesses from other industries. To complete a thorough
examination of your company's effectiveness, however, you need to look at more than just
easily attainable numbers like sales, profits, and total assets. You must be able to read
between the lines of your financial statements and make the seemingly inconsequential
numbers accessible and comprehensible. This massive data overload could seem staggering.
Luckily, there are many well-tested ratios out there that make the task a bit less daunting.
Comparative ratio analysis helps you identify and quantify your company's strengths and
weaknesses, evaluate its financial position, and understand the risks you may be taking.
WHY SHOULD I CARE ABOUT FINANCIAL STATEMENT ANALYSIS?
The detailed information available on financial statements is only of interest to someone who
is doing some extensive research on individual stocks.  If you invest in mutual funds, index
funds or ETFs then you don’t need to know the details but it is useful to know the
terminology since fund managers and other investing types will often talk about details from
the financial statements in the business section of the news.
FINANCIAL RATIO ANALYSIS FOR PERFORMANCE CHECK AUTHOR:
GOPINATHAN THCCHAPPILLY APR 12, 2009

35
Roll No.: 8003U16379
 Session: 2017-20

Used externally, financial ratio analysis can spot better investment options for investors, and
internally, business managers can spot business areas requiring attention.
Financial analysis using ratios between key values help investors cope with the massive
amount of numbers in company financial statements. For example, they can compute the
percentage of net profit a company is generating on the funds it has deployed. All other
things remaining the same, a company that earns a higher percentage of profit compared to
other companies is a better investment option.
Financial Ratios Can Measure Different Things
The Net Profit to Capital Employed ratio mentioned above measures the success of a
company in using funds available to it. There are ratios to measure the company's:
 Financial health
 Operating performance
 Cash flows and liquidity
Under each category, there are multiple ratios that measure different aspects, or fine tune the
measurements. For example, different profitability ratios measure profit margins at different
stages return on owners' funds and effective tax burden.
We will be looking at the different ratio categories in separate articles on:
 Profitability Ratios
 Liquidity Ratios
 Debt Ratios
 Performance Ratios
SEVEN HABITS FOR FINANCIAL STATEMENT ANALYSIS AND BUSINESS
NEWS REPORTING BY CFA INSTITUTE
Journalists and analysts know that “earnings” may not really be earnings and that press
releases can be a way for a company to spotlight good news only. Add to that the myriad of
technical terms, semantic issues, and acronyms and one can easily get lost trying to discern
the real headline. To help navigate through the maze of financial data, CFA Institute created
this checklist to use when analyzing a company and its financial statements and to better
understand the due diligence that Professionals undertake in developing successful
investment strategies for 2006.

35
Roll No.: 8003U16379
 Session: 2017-20

CHAPTER-II

35
Roll No.: 8003U16379
 Session: 2017-20

COMPANY PROFILE

Introduction

Reliance Group

The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is India's largest

private sector enterprise, with businesses in the energy and materials value chain. Group's

annual revenues are in excess of US$ 66 billion. The flagship company, Reliance

Industries Limited, is a Fortune Global 500 company and is the largest private sector

company in India.

Backward vertical integration has been the cornerstone of the evolution and growth of

Reliance. Starting with textiles in the late seventies, Reliance pursued a strategy of

backward vertical integration - in polyester, fibre intermediates, plastics, petrochemicals,

petroleum refining and oil and gas exploration and production - to be fully integrated

along the materials and energy value chain.

The Group's activities span exploration and production of oil and gas, petroleum refining

and marketing, petrochemicals (polyester, fibre intermediates, plastics and chemicals),

textiles, retail, infotel and special economic zones.

Reliance enjoys global leadership in its businesses, being the largest polyester yarn and

fibre producer in the world and among the top five to ten producers in the world in major

petrochemical products.

Major Group Companies are Reliance Industries Limited, including its subsidiaries and

Reliance Industrial Infrastructure Limited.

35
Roll No.: 8003U16379
 Session: 2017-20

HISTORY OF THE COMPANY:

Reliance Industries Ltd. is India's largest private-sector company, generating

revenues of $19.97 billion, or more than 3 percent of India's total gross domestic product.

Founded as a textiles company, Reliance has successfully completed a backward integration

strategy that has transformed it into India's largest private-sector petrochemicals company,

and number two overall (behind state-owned India Oil). Reliance's petrochemicals division is

fully integrated and includes exploration and production; refining (the company has built one

of the world's largest and most modern refinery complexes at Jamnagar in Gujarat);

marketing, through a chain of more than 1,000 service stations; and the production of

petrochemicals, including polymers, polyester, polyester intermediates, and others. These

chemicals are used to support Reliance's continued textile operations, which focus

particularly on the production of polyester fabrics. Following the 2004 acquisition of Trevira,

the company has become the world's leading polyester manufacturer, with production levels

topping 25 million meters per year. The company's textile range includes other fabrics, such

as acrylics, and finished garments.

Reliance Industries represents the continuation of India's greatest corporate success

story since the country's independence. Founded by Dhirubhai H. Ambani in 1958, Reliance

grew to include holdings in energy production and distribution, telecommunications, and

capital finance. After a public feud between Mukesh D. Ambani and younger brother Anil,

these operations were split off into a new company controlled by Anil Ambani. Reliance

Industries is listed on the Mumbai Stock Exchange. Mukesh Ambani is company chairman

and managing director.

35
Roll No.: 8003U16379
 Session: 2017-20

Rags in 1958

Dhirajlal Hirachand Ambani(Dhirubhai was a nickname) was born to a lower middle

class schoolteacher's family in Chorwad, an impoverished village in Gujarat in 1932. Instead

of becoming a teacher himself--because the family could not afford to send him on to

university--the young Ambani traveled to the port city of Aden at the age of 16. There,

Ambani began working as a clerk pumping gas at a service station. Ambani remained in

Aden for nearly ten years, rising to become Burmah Shell's marketing manager. By then,

however, Ambani had begun to dream of founding his own business.

Ambani quit Burmah Shell and for a time worked in the insurancefield. In the late

1950s, the political situation in Aden had become increasingly unstable. In 1958, therefore,

Ambani decided to return to India and start up a new business as an exporter of Indian goods

to Aden. Finding housing for his young family in a Mumbai slum, Ambani at first rented

office space, or rather a desk, for two hours per day. Initially, Ambani's exports included

spices as well as fabrics.

Textiles, starting with textile yarns, which Ambani sold to textile manufacturers,

provided Ambani with his strongest sales, and quickly became the company's focus. Ambani

also rapidly proved himself adept at negotiating the intricate bureaucracy of the socialist

Indian government. In particular, Ambani was able to develop a network of relationships with

the country's political leaders, including Prime Minister Indira Gandhi. In this way, Ambani

was able to develop a thriving business importing and exporting nylon, rayon, and polyester.

In the mid-1960s, Ambani developed still greater ambitions, becoming determined

to enter textile manufacturing. The company set up its first factory in 1966, placing him in

competition with his own customers. Success in the new venture came quickly, with the

launch of the highly popular Vimal fabric brand. By the end of the decade, Ambani operated

four factories. Part of the company's success came from its determination to use only the

35
Roll No.: 8003U16379
 Session: 2017-20

most modern, highly efficient production equipment. In this way, the company easily

outpaced competitors, which relied on equipment often decades old.

Into the early 1970s, however, India's economy remained dominated by a handful of

families; between them, and under the auspices of the Indian government, they controlled

virtually every industry. This included the textile industry, whose distribution side soon

formed an obstacle to the growth of Ambani's fabric sales. In response, Ambani became

determined to set up his own distribution arm, which later included not only the sale of raw

fabrics, but also the company's own clothing fashions.

Public Offering Revolution in 1977

The "old boy" network that dominated India's political, industrial, and financial

circles also meant that Ambani had to look elsewhere for investment capital to back his

growing ambitions. Cut off from funding from the Indian government, Ambani instead took

the then-revolutionary step of turning to the stock market. In 1977, Ambani launched

Reliance Textile Industries' initial public offering (IPO). The IPO, of 2.8 million shares,

raised $1.8 million, and was considered among the largest in India at the time. By

circumventing the traditional reliance on the state for capital investment, Ambani sparked a

revolution in India, and was widely credited for setting the stage for the country's emergence

as a major regional industrial center.

Ambani's deftness at working the Indian bureaucracy enabled him to take advantage

of the country's arcane license system, which also imposed stiff import duties, virtually

assuring license-holders of a captive market. In 1981, for example, Ambani received a license

to construct a factory in Patalganga to produce polyester filament yarn. Soon after the factory

launched production, the Indian government sharply raised import duties on polyester yarn.

The Patalganga plant completed its second phase in 1985. The following year, the site added

a new polyester staple fiber plant as well.

35
Roll No.: 8003U16379
 Session: 2017-20

Into the early 1980s, Ambani was joined by sons Mukesh and Anil. Both had been

sent to the United States for their education and, upon their return to India, played a

prominent part in implementing Reliance's next phase of growth. Just as the company had

moved from the sale of textiles to their manufacture, Reliance became determined to continue

its backward integration in order to produce the chemicals from which the textile yarns were

made.

The company's new strategy led it to enter the petrochemicals industry, building its

first plant for the production of purified terephtalic acid in 1986. In that year, following a

stroke that left Dhirubhai Ambani partially paralyzed, the company's day-to-day direction

was taken over by brothers Mukesh and Anil. Their father nonetheless remained chairman

and the guiding hand of the business's growth until his death in 2002.

The following year, the company added a unit for the production of

linear alkylbenzene, followed by the opening of a paraxylene plant in 1988. The company

then began developing a new petrochemicals complex at Hazira, which began production of

vinyl chloride monomer and polyvinyl chloride. In this way, the company developed market

leadership both in polyesters and in polymers. By 1992, the company had launched

production of high-density polyethylene at the Hazira complex as well.

Indian Petroleum Giant at the Start of the 21st Century

Reliance's vertical integration strategy naturally led to an interest in extending its

operations to petroleum refining, and even to exploration and production. Yet these sectors

remained tightly under state control, following the nationalizationof the Indian oil industry in

1976 amid the global oil crisis. Although the state-owned oil companies were able to meet

domestic demand through the 1980s, by the early 1990s, the country's existing oilfields were

showing signs of depletion. At the same time, demand had been rising steadily, yet the oil

companies, propped up by state subsidies, were too strapped for cash to invest in further

35
Roll No.: 8003U16379
 Session: 2017-20

exploration efforts. An initial attempt to liberalize the production and refining sectors failed,

however, amid strong union protests.

In the meantime, Reliance made preparations for its move into the petroleum

industry. In 1991, the company set up a new subsidiary, Reliance Refineries Private Ltd.,

clearly signaling its objectives. The subsidiary later changed its name to Reliance Petroleum

Limited, and in 1993 launched a public offering, which at that time was India's largest ever

IPO. While Reliance affirmed its plans to construct India's largest oil refinery, the company

began developing its petroleum products marketing and distribution operations, including a

network of some 1,000 service stations.

Reliance continued to pioneer financing channels in India. In 1993, for example, the

company became the first Indian company to raise capital on the foreign market, through

a Global Depositary Receipt(GDR) issue in Luxembourg. The company completed a second

successful GDR issue in 1994. The company used the new capital in part to expand its

petrochemicals wing, building the world's largest multi-feed cracker at the Hazira site. The

company also added production plants for monoethylene glycol, polyethylene, and purified

terephthalic acid. The new units launched production in 1998.

Reliance's opportunity for entry into petroleum refining came in 1997, when the

Indian oil industry reached a state of near collapse. Unable to fund further exploration

operations, and lacking the capital to expand its existing production, the government was

forced to liberalize the sector. In that year, Reliance announced a plan to build one of the

world's largest and most modern petroleum refining complexes in Jamnagar, Gujarat, at a

cost of some $6 billion. The government agreed to the plan, and granted the company the

right to import petroleum directly, rather than going through Indian Oil, which helped

Reliance greatly drive down operating costs.

35
Roll No.: 8003U16379
 Session: 2017-20

Constructed in record time, the Jamnagar site was commissioned in 1999. The site's

production capacity was double that of any other Indian refinery and ranked among the top

five in the world. The addition of the new facility also placed Reliance at the top rank of the

country's private-sector companies. In 2002, Reliance Petroleum was merged into Reliance

Industries, which then became one of the country's top three companies, including state-

owned entities.

Breaking Up in 2006

Dhirubhai Ambani died in 2002, and the Ambani brothers took over as heads of the

company. In that year, the company increased its dominance of the country's petrochemicals

sector through its acquisition of main private-sector rival Indian Petrochemicals Corporation.

Also in 2002, Reliance launched a diversification effort, targeting the telecommunications

sector, especially the fast-growing cellular phone market. Reliance set up its own phone

service, Reliance Infocomm, in that year.

Yet the petroleum industry remained the company's major growth focus. In 1999, the

Indian government auctioned off 25 blocks for exploration; bids were given in the form of

royalty percentage offers. Reliance won 12 of the blocks and promptly set in place its own

team of exploration experts, backed by oilfield services from Halliburtonand Schlumberger.

Reliance's investment quickly paid off with the discovery of natural gas reserves estimated at

some 14 trillion cubic feet, the largest natural gas field discovered in India in decades, in the

Krishna-Godavari Basin in the Bay of Bengal. In 2004, the company struck again, locating a

new gas field in the Bay of Bengal, off the OrissaCoast.

Buoyed by its successful exploration efforts, Reliance unveiled an ambitious

expansion program for the second half of the 2000s. The company's plans included a $6

billion extension of the Jamnagar site, doubling it in size and making it the world's largest

refinery by 2009. The company also announced that it intended to spend $10 billion on

35
Roll No.: 8003U16379
 Session: 2017-20

further oil exploration efforts, targeting the international market. In this way, the company

hoped to increase its production tenfold by the end of the century. At the other end of the

petroleum market, the company launched a $1.5 billion expansion of its Reliance gas station

chain, with the goal of 6,000 stations. The company also expanded internationally, becoming

the world's leading manufacturer of polyester yarn with the acquisition of Germany's Trevira.

In addition, the company boosted its telecommunications wing, acquiring U.K.-based FLAG

Telecom, an operator of a 50,000-kilometer underwater fiber-optic cable network.

In the meantime, rising tensions between Mukesh and Anil Ambani came to a head

in late 2005, when a long-simmering disagreement over company strategy broke out into an

open and highly publicized feud. In the end, a truce was brokered by the brothers' mother,

who proposed a breakup of Reliance Industries into two roughly equal components. Mukesh

Ambani remained as head of the company's petroleum, petrochemical, and textiles

operations, and Anil Ambani regrouped the company's telecommunications, energy, capital

finance, and other operations into a new company. The breakup of the company took place in

2006. As a result, Reliance Industries emerged as a focused and highly integrated petroleum

and petrochemicals challenger to the global heavyweights.

35
Roll No.: 8003U16379
 Session: 2017-20

Major Milestones

 The share buy-back programme which ended in January 2013, RIL bought and

extinguished 46,246,280 equity shares of Rs. 10 each. It was 38.54% of the total

buy-back offer quantity of 120,000,000 equity shares. The total amount invested

in the buy-back was Rs. 3,366 crore and the average price at which the equity

shares were bought back was Rs. 726.68 per share.

 RIL's SEZ Refinery at Jamnagar won the prestigious 'Globe of Honor Award' for

the excellence in Environmental management by the British Safety Council,

London.

 RIL was awarded the prestigious 'International Refiner of the Year' 2013 at

HART Energy's 27th World Refining & Fuel Conference held in USA. The

award was presented to Reliance for producing cleaner, higher-quality gasoline

and diesel fuel, operating with the highest international refining standards and

innovative use of resources in diverse environments and for innovation, global

vision, and ability to chart future changes. RIL is the only Asian refiner to have

been conferred this award twice.

35
Roll No.: 8003U16379
 Session: 2017-20

KEY DATES

1948- Gujarat native Dhirubhai H. Ambani, aged 16, travels to Aden and begins working
as a clerk at a service station.

1958- Ambani returns to India and sets up an import-export business, eventually focusing
on the textile market, which becomes Reliance Textiles.

1966- Reliance launches textile manufacturing, building its first factory.

1977- Reliance goes public in one of India's first and largest public offerings.

1981- The company begins construction of a polyester filament yarn facility in Patalganga.

1986- After Ambani suffers a stroke, sons Mukesh and Anil take over day-to-day direction
of the company; the company launches its first petrochemicals production as part of
a vertical integration strategy.

1991- Reliance Refineries Ltd. is established in preparation for further vertical integration.

1993- Reliance Refineries goes public and changes its name to Reliance Petroleum.

1997- Reliance Petroleum launches construction of India's largest oil refinery at Jamnagar.

1999- Reliance wins a bid for 12 exploration blocks auctioned off by the Indian
government.

2002- Reliance locates the largest Indian natural gas field in decades; Dhirubhai Ambani
dies at age 69; Reliance Petroleum is merged into Reliance Industries.

2004- Reliance discovers a new natural gas field in the Bay of Bengal; the company
acquires Germany's Trevira, becoming the world's leading manufacturer of
polyester.

2006- Reliance Industries is broken up between the Ambani brothers.

35
Roll No.: 8003U16379
 Session: 2017-20

Partnering for Growth

Partnerships represent an important dimension of the E&P business. Reliance and BP entered

into transformational partnership with focus on delivering growth and adding value to India’s

energy sector. The partnership commemorates a perfect blend of BP’s deepwater and

development expertise with Reliance’s project management skills. In partnership with BP,

Reliance plans to become a major player across the gas value chain in India. We have also

forged strategic partnerships with Chevron, Pioneer Natural Resources and Carrizo Oil and

Gas for development of shale gas resources in US.

RIL and its partners in conventional and Shale Business work closely together and channelize

expertise to target high quality prospects and optimize existing and future development plans.

In the ups team business, Reliance aspires to:

 Be among the top 10 global independent hydrocarbon producers in next 10 years with

a target sustainable production of 1 MMBOEPD

 Bring no harm to people and environment, safety is paramount (Zero accidents, 100%

compliance)

 Be recognised as a "Partner of choice" for our stakeholders, building strong

relationships which are of mutual advantage

 Be India's top player across the gas value chain

 Have best-in-class people, processes and technology

35
Roll No.: 8003U16379
 Session: 2017-20

Operations

Conventional

In 2002, Reliance struck gas in the D1-D3 field of KG D6 block. RIL is producing natural

gas from the gas fields D1-D3 since April 1, 2009, and light crude oil from the D26 oil field

in KG D6 block, since September 17, 2008. Both projects have been commissioned in a

record time – the D1-D3 fields in about six and half years, and the D26 field in just a little

over two years - from discovery.

These fields rank amongst one of the largest green-field deepwater oil and gas production

facilities in the world. D1-D3 fields are the first and only deepwater producing fields in India

and remains among the most complex reservoirs in the world. Efforts are underway for

augmentation of production from existing KG D6 producing fields.

In the coming years, Reliance plans to develop additional hydrocarbon resources from the

existing discoveries in the portfolio.

To supplement the existing asset base, we continue to look at new opportunities globally that

are a strategic fit with capabilities and integrated petroleum value chain.

Coal Bed Methane

Development activities are underway in 2 CBM blocks (Sohagpur East and West) with first

gas being targeted in the current year. As part of CBM development program, Reliance is

drilling more than 200 wells and setting up two Gas Gathering Stations and 8 Water

Gathering Stations in Phase-I.

Reliance Gas Pipeline Limited (RGPL), one of the subsidiary of RIL is laying around 300

KM of natural gas pipeline from Shahdol in Madhya Pradesh to Phulpur in Uttar Pradesh to

transport gas from RIL’s CBM blocks.

35
Roll No.: 8003U16379
 Session: 2017-20

FULFILLING INDIA’S ASPIRATIONS: WITH INNOVATION AND ENTERPRISE.

India is on an undeniable growth trajectory, matched by few in the world, for scale
and vigour. Fuelled by boundless aspirations and the infectious energy of a young populace,
the country is fast progressing towards a definitive role in the global economic order.
Not only is it leading to an increasing share of global commerce for India as a nation,
but also catalysing consumption, resulting in the creation of a groundswell of opportunity.
Addressing the aspirations of the Indian populace, our businesses are intrinsically
linked to India’s growth trajectory. Given India’s unique demographic advantage, our
businesses remain relevant to the youth of today who will become the leaders of tomorrow.
Innovation and enterprise form the essence of this surge of opportunities and find
reflection in every facet of our operations.
We are making large investments in all our key business categories, i.e. Oil & Gas,
Refining, Petrochemicals, Retail and 4G, to reinforce the spirit of enterprise.
Across our businesses, we have demonstrated abilities to build world-scale capacities
and infrastructure. We have enhanced our business footprint from the conventional energy
chain to consumer businesses and delivered value.
Our businesses are deeply aligned with the ethos of innovation. We have constantly
endeavoured to operate at the forefront of new technologies. We have invested in
continuously developing new products and seeking new applications, which are suitable for
Indian markets and conditions. We have, for instance, integrated a technology platform with
our Retail business.
Over the years, we have tapped into the enormous opportunities presented by the
Indian economy. The evolving economic landscape and the aspirations of the people have
driven us to aim higher, execute our plans seamlessly and sustain the growth momentum.
This has helped us touch the lives of our fellow citizens and lay the foundation for the long-
term development of our nation.
We understand these aspirations and the opportunities that lie within. This drives us
towards continuous efforts in enterprise and innovation which act as catalysts in realising
these aspirations.

35
Roll No.: 8003U16379
 Session: 2017-20

CHAPTER-III

35
Roll No.: 8003U16379
 Session: 2017-20

FINANCIAL STATEMENTS ANALYSIS

COMPARATIVE STATEMENT:

It refers to the comparison of financial statements of an enterprise for two

consecutive periods. It measures the efforts of the farm by giving a clear sight of

the performance.

Comparative statements are of two types.

 Comparative Income Statement

 Comparative Balance Sheet.

The comparative income statements.

The comparative income statements reflect the operating activities of the

business where as the comparative. Balance Sheet reflects the finance & investing

activities of the enterprise. In such statement the figures are shown as.

1) In terms of absolute monetary value.

2) Increase/Decrease in absolute value.

3) Proportionate changes by way of Percentage.

35
Roll No.: 8003U16379
 Session: 2017-20

PROFIT & LOSS ACCOUNT

FOR THE YEAR ENDED As At 31ST MARCH, 2019

Rs. in Crores

For the year For the year

ended on ended on
31.03.2019 31.03.2018
INCOME:
Revenue from Operations 360297.00 329904.00
Other Income 7998.00 6192.00
Total Revenue 368295.00 336096.00

EXPENDITURE
Cost of Material Consumed 306127.00 274814.00
Purchases of Stock-in-Trade 502.00 1441.00
Changes in Inventories of Finished Goods (3317.00) (872.00)
Stock-in-Process and Stock-in-Trade
Employee Benefits Expense 3354.00 2862.00
Finance Cost 3036.00 2667.00
Depreciation and Amortisation Expense 9465.00 11394.00
Other Expense 22844.00 18040.00
Total Expense 342011.00 310346.00
Profit Before Tax 26284.00 25750.00
Tax Expenses
Current Tax 5244.00 5150.00
Deferred Tax 37.00 560.00
Profit for the year 21003.00 20040.00
Earning per equity share of face value of Rs.10
each
Basic and Diluted 64.82 61.21

35
Roll No.: 8003U16379
 Session: 2017-20

BALANCE SHEET

FOR THE YEAR ENDED As At 31ST MARCH, 2019

Rs. in Crores

As on 31.03.2019 As on
31.03.2018
EQUITY AND LIABILITIES
Shareholder's Funds
Share Capital 3229.00 3271.00
Reserves and Surplus 176766.00 162825.00
179995.00 166096.00
Share Application Money Pending
Allotment 25.00
Non-current Liabilities
Long Term Borrowings 43012.00 48034.00
Deferred Tax Liability (net) 12193.00 12122.00
55205.00 60156.00
Current Liabilities
Short Term Borrowings 11511.00 10593.00
Trade Payables 45787.00 40324.00
Other Current Liabilities 21640.00 13713.00
Short Term Provisions 4348.00 4258.00
83286.00 68888.00
TOTAL 318511.00 295140.00
ASSETS
Non-Current Assets
Fixed Assets
Tangible Assets 82962.00 88001.00
Intangible Assets 26786.00 25722.00
Capital Work-in-Progress 13525.00 3695.00
Intangible Assets under Development 5591.00 4059.00
Non-Current Investment 24143.00 26979.00
Long Term Loans and Advances 21528.00 14340.00
174535.00 162796.00
Current Assets
Current Investments 28366.00 27029.00
Inventories 42729.00 35955.00
Trade Receivables 11880.00 18424.00
Cash and Bank Balances 49547.00 39598.00
Short Term Loans and Advances 10974.00 11089.00
Other Current Assets 480.00 249.00
143976.00 132344.00
TOTAL 318511.00 295140.00

35
Roll No.: 8003U16379
 Session: 2017-20

COMPARATIVE INCOME STATEMENT

A Comparative Income Statement gives the reader a frame of reference for

comparing the current year amounts. Comparative income statement presents both the

current period (typically current month or current year to date) compared to normally a

prior year same period. comparative income statement consist of two columns of amounts

(one is of current year and another is of prior year) appearing to the right of the account

titles or descriptions. The amounts are shown side by side to make it easy to compare the two

periods presented. Comparative income statement may also refer to this same type of

comparison for current period to budget for the same period.

A comparative income statement helps you with many accounting tasks. Here are

just a few ways the statement benefits your business:

 Compare current amounts to past years

 if performance has improved over time

 Figure out patterns in high and low sales months

 Calculate percentages of changes

 Show how your company compares to others when securing outside capital

35
Roll No.: 8003U16379
 Session: 2017-20

COMPARATIVE INCOME STATEMENT

For the Year 2018 & 2019

In comparison to Absolute Change

Rs. in Crores

Particulars Absolute Absolute Absolute % Change

Amount 2019 Amount 2018 Change
INCOME:
Revenue from Operations 360297.00 329904.00 30393.00 9.21
Other Income 7998.00 6192.00 1806.00 29.17
Total Revenue 368295.00 336096.00 32199.00 9.58

EXPENDITURE
Cost of Material Consumed 306127.00 274814.00 31313.00 11.39
Purchases of Stock-in-Trade 502.00 1441.00 (939.00) (65.16)
Changes in Inventories of Finished Goods (3317.00) (872.00) (2445.00) 280.39
Stock-in-Process and Stock-in-Trade
Employee Benefits Expense 3354.00 2862.00 492.00 17.19
Finance Cost 3036.00 2667.00 369.00 13.84
Depreciation and Amortisation Expense 9465.00 11394.00 (1929.00) (16.93)
Other Expense 22844.00 18040.00 4804.00 26.63
Total Expense 342011.00 310346.00 31665.00 10.20
Profit Before Tax 26284.00 25750.00 534.00 2.07
Tax Expenses
Current Tax 5244.00 5150.00 94.00 1.83
Deferred Tax 37.00 560.00 (523.00) (93.39)
Profit for the year 21003.00 20040.00 963.00 4.81
Earning per equity share of face value of
Rs.10 each 0.00 NA
Basic and Diluted 64.82 61.21 3.61 5.90

35
Roll No.: 8003U16379
 Session: 2017-20

COMPARATIVE BALANCE SHEET

A comparative balance sheet presents side-by-side information about an entity's

assets, liabilities, and shareholders' equity as of multiple points in time. For example, a

comparative balance sheet could present the balance sheet as of the end of each year for the

past three years. Another variation is to present the balance sheet as of the end of each month

for the past 12 months on a rolling basis. In both cases, the intent is to provide the reader with

a series of snapshots of a company's financial condition over a period of time, which is useful

for developing trend line analyses (though this works better when the reader has the entire set

of financial statements to work with and not just the balance sheet).

35
Roll No.: 8003U16379
 Session: 2017-20

COMPARATIVE BALANCE SHEET

For the Year 2018 & 2019
In comparison to Absolute Change
Rs. In Crores

Particulars Amount 2019 Amount 2018 Absolute %

Change Change
EQUITY AND LIABILITIES
Shareholder's Funds
Share Capital 3229.00 3271.00 (42.00) (1.28)
Reserves and Surplus 176766.00 162825.00 13941.00 8.56
179995.00 166096.00 13899.00 8.37
Share Application Money Pending Allotment 25.00
Non-current Liabilities 0.00 0.00
Long Term Borrowings 43012.00 48034.00 (5022.00) (10.46)
Deferred Tax Liability (net) 12193.00 12122.00 71.00 0.59
55205.00 60156.00
Current Liabilities
Short Term Borrowings 11511.00 10593.00 918.00 8.67
Trade Payables 45787.00 40324.00 5463.00 13.55
Other Current Liabilities 21640.00 13713.00 7927.00 57.81
Short Term Provisions 4348.00 4258.00 90.00 2.11
83286.00 68888.00 14398.00 20.90
TOTAL 318511.00 295140.00
ASSETS
Non-Current Assets
Fixed Assets
Tangible Assets 82962.00 88001.00 (5039.00) (5.73)
Intangible Assets 26786.00 25722.00 1064.00 4.14
Capital Work-in-Progress 13525.00 3695.00 9830.00 266.04
Intangible Assets under Development 5591.00 4059.00 1532.00 37.74
Non-Current Investment 24143.00 26979.00 (2836.00) (10.51)
Long Term Loans and Advances 21528.00 14340.00 7188.00 50.13
174535.00 162796.00 11739.00 7.21
Current Assets
Current Investments 28366.00 27029.00 1337.00 4.95
Inventories 42729.00 35955.00 6774.00 18.84
Trade Receivables 11880.00 18424.00 (6544.00) (35.52)
Cash and Bank Balances 49547.00 39598.00 9949.00 25.13
Short Term Loans and Advances 10974.00 11089.00 (115.00) (1.04)
Other Current Assets 480.00 249.00 231.00 92.77
143976.00 132344.00 11632.00 8.79
TOTAL 318511.00 295140.00

35
Roll No.: 8003U16379
 Session: 2017-20

COMMON SIZE INCOME STATEMENT

Common size income statements are basically used for analysis purposes where each

item on the face of income statement is expressed in relation to revenue so that users can

easily understand that how different expenses and other incomes and gains adds up to gross

profit and net profit. This is widely used in ratio analysis and serve as a vital tool start up a

financial analysis of the key areas of performance and then detailed ratios are applied on

each item afterwards.

Although common size income statements do not provide a detailed financial analysis

of income statement and its items but it does help in comparing the financial performance of

the company with the preceding accounting periods known as trend-analysis or time-series

analysis. We can also compare financial information of one company with other companies

in the industry which is known as cross-sectional analysis. The good thing about common-

size analysis is that it is really easily to do and also interpreting the results is not so difficult.

Even the users who are not proficient in analysis techniques can gain insight of company’s

financial performance to some extent from common size financial statements i.e. income

statement and statement of financial position.

35
Roll No.: 8003U16379
 Session: 2017-20

COMMON SIZE INCOME STATEMENT

FOR YEAR 2018 & 2019

Rs. in Crores.

Particulars Amount Amount % of Sales % of Sales %

2019 2018 Change

2019 2018

Income from operation 360297.00 329904.00 100.00 100.00 0.00

(-) Operating Expenses 306666.00 278245.00 85.11 84.34 0.77

Operating Profit 53631.00 51659.00 14.89 15.66 (0.77)

(-) Non-Operating Expenses 25880.00 20707.00 7.18 6.28 0.91

(+) Non-Operating Income 7998.00 6192.00 2.22 1.88 0.34

Net Profit Before Tax &

Depreciation 35749.00 37144.00 9.92 11.26 (1.34)

(-) Depreciation 9465.00 11394.00 2.63 3.45 (0.83)

Net profit before tax and

extraordinary item 26284.00 25750.00 7.30 7.81 (0.51)

(-)Extraordinary item 0.00 0.00 0.00 0.00 0.00

Net Profit Before Tax 26284.00 25750.00 7.30 7.81 (0.51)

(-)Tax expenses 5281.00 5710.00 1.47 1.73 (0.27)

Add: Dividend Income, net of

taxes 0.00 0.00 0.00 0.00 0.00

PAT 21003.00 20040.00 5.83 6.07 (0.25)

35
Roll No.: 8003U16379
 Session: 2017-20

COMMON SIZE BALANCE SHEET

A common size balance sheet presents not only the standard information contained in

a balance sheet, but also a column that notes the same information as a percentage of the total

assets (for asset line items) or as a percentage of total liabilities and shareholders' equity (for

liability or shareholders' equity line items).

It is extremely useful to construct a common size balance sheet that itemizes the

results as of the end of multiple time periods, so that you can construct trend lines to ascertain

changes over longer time periods. The common size balance sheet is also useful for

comparing the proportions of assets, liabilities, and equity between different companies,

particularly as part of an industry analysis or an acquisition analysis.

35
Roll No.: 8003U16379
 Session: 2017-20

COMMON SIZE BALANCE SHEET

For the Year 2018 & 2019

In comparison to Capital Employed

Rs. in Crores

Particulars Amount 2019 Amount % of capital % of capital % Change

2018 Employed 2019 Employed 2018
SOURCES OF FUNDS
1. SHAREHOLDERS' FUNDS
(a) Share Capital 3229.00 3271.00 1.45 1.53 (0.08)
(b) Reserves and Surplus 176766.00 162825.00 79.26 76.04 3.22
Share Application Money Pending
Allotment 25.00 0.00 0.01 0.00 0.01
NON CURRENT LIABILITIES
LOAN FUND 43012.00 48034.00 19.29 22.43 (3.15)
OTHER LONG TERM LIABILITIES 12193.00 12122.00 5.47 5.66 (0.19)

Capital employed 223032.00 214130.00 100.00 100.00 0.00

CURRENT LIABILITIES
Short Term Borrowings 11511.00 10593.00 5.16 4.95 0.21
TRADE PAYABLES 45787.00 40324.00 20.53 18.83 1.70
OTHER CURRENT LIABILITIES 25988.00 17971.00 11.65 8.39 3.26
71775.00 58295.00 32.18 27.22 4.96
TOTAL Sources of funds 318511.00 295140.00
APLICATION OF FUNDS
NON CURRENT ASSETS
(a) Fixed Assets
(i) Tangible Assets 82962.00 88001.00 37.20 41.10 (3.90)
(ii) Intangible assets 26786.00 25722.00 12.01 12.01 (0.00)
(iii) Capital work-in-progress 19116.00 7754.00 8.57 3.62 4.95
128864.00 121477.00 57.78 56.73 1.05
(b) Non-current investments 24143.00 26979.00 10.82 12.60 (1.77)
( C ) Deffered Tax Assets 0.00 0.00 0.00 0.00 0.00
(d) Long-term loans and advances 21528.00 14340.00 9.65 6.70 2.96
(e) Other non-current assets 0.00 0.00 0.00 0.00 0.00
174535.00 162796.00 78.26 76.03 2.23
2. CURRENT ASSETS
(a) Current investments 28366.00 27029.00 12.72 12.62 0.10
Inventories 42729.00 35955.00 19.16 16.79 2.37
(d) Trade receivables 11880.00 18424.00 5.33 8.60 (3.28)
(e) Cash and bank balances 49547.00 39598.00 22.22 18.49 3.72
(f) Short term loans and advances 10974.00 11089.00 4.92 5.18 (0.26)
Others 480.00 249.00 0.22 0.12 0.10
TOTAL Current assets 143976.00 132344.00 64.55 61.81 2.75
Total Application of Funds 318511.00 295140.00

35
Roll No.: 8003U16379
 Session: 2017-20

RATIO ANALYSIS:

Ratio analysis is a powerful tool of financial analysis. A ratio is defined as ‘the

indicated quotient of two mathematical expressions’ and “The relationship between

two or more things.”

In financial analysis, a ratio is used as a benchmark for evaluating the financial

position and performance of a firm. The absolute accounting figures reported in the

financial statements do not provide a meaningful understanding of the performance

and financial position of firm.

A. Short term Solvency:-

Current Ratio:
The current ratio is a liquidity ratio that measures a company's ability to pay short-term and

long-term obligations. To gauge this ability, the current ratio considers the current total assets

of a company (both liquid and illiquid) relative to that company’s current total liabilities. The

formula for calculating a company’s current ratio is:

Current Ratio = Current Assets / Current Liabilities

The current ratio is called “current” because, unlike some other liquidity ratios, it

incorporates all current assets and liabilities.

The current ratio is also known as the working capital ratio.

It is an indicator used to measure the Short term Solvency of a company. The

ideal ratio is 2:1

Current ratio =

Current Asset/ Current Liability = 2019 2018

1.73 1.92
The current ratio is good enough as the industry average is 1.5 to 2.Although The

same has also decreased in the current year over previous year. There is still enough

unutulised funds being maintained..

35
Roll No.: 8003U16379
 Session: 2017-20

Long Term Solvency:

Debt equity Ratio:

Debt/Equity (D/E) Ratio, calculated by dividing a company’s total liabilities by its

stockholders' equity, is a debt ratio used to measure a company's financial leverage. The D/E

ratio indicates how much debt a company is using to finance its assets relative to the value of

shareholders’ equity. The formula for calculating D/E ratios is:

Debt/Equity Ratio = Total Liabilities / Shareholders' Equity

The result can be expressed either as a number or as a percentage.

The debt/equity ratio is also referred to as a risk or gearing ratio.

It is a measure to ascertain the long term financial policies of Company. The ideal

ratio is 1:1

Debt equity ratio=

Debt/Equity

2019 2018

0.24 0.29

The debt fund has decreased in the current year due to repayment.

35
Roll No.: 8003U16379
 Session: 2017-20

Capital Turnover Ratio:

Working capital turnover is a measurement comparing the depletion of working

capital used to fund operations and purchase inventory, which is then converted into sales

revenue for the company. The working capital turnover ratio is used to analyze the

relationship between the money that funds operations and the sales generated from these

operations. A high working capital turnover ratio shows a company is running smoothly and

has limited need for additional funding. Money is coming in and flowing out on a regular

basis, giving the business flexibility to spend capital on expansion or inventory. A high ratio

may also give the business a competitive edge over similar companies.

Working Capital Turnover= Sales/ Capital Employed

It shows whether the capital utilization leads to higher profit or not.

Capital Turnover Ratio=

Sales / Capital Employed

2019 2018

1.62 1.54

There has been no sea change in the ratio although there was an increase in capital

employed which prove that the new investments have yielded the results.

35
Roll No.: 8003U16379
 Session: 2017-20

Fixed asset Turnover ratio:

The fixed-asset turnover ratio is, in general, used by analysts to measure operating

performance. It is a ratio of net sales to fixed assets. This ratio specifically measures how able

a company is to generate net sales from fixed-asset investments, namely property, plant and

equipment (PP&E), net of depreciation. In a general sense, a higher fixed-asset turnover ratio

indicates that a company has more effectively utilized investment in fixed assets to generate

revenue.

The fixed-asset turnover ratio is calculated as:

Fixed Asset Turnover Ratio: Net Sales/ Net Fixed Assets

Fixed asset turnover ratio:

Net Sales/Net Fixed Assets

2019 2018

2.80 2.72

The same has increased in the current year by a small margin.

35
Roll No.: 8003U16379
 Session: 2017-20

Net Profit Ratio:

The net profit percentage is the ratio of after-tax profits to net sales. It reveals the

remaining profit after all costs of production, administration, and financing have been

deducted from sales, and income taxes recognized. As such, it is one of the best

measures of the overall results of a firm, especially when combined with an evaluation of

how well it is using its working capital. The measure is commonly reported on a trend

line, to judge performance over time. It is also used to compare the results of a business

with its competitors.

Net profit is not an indicator of cash flows, since net profit incorporates a number of

non-cash expenses, such as accrued expenses, amortization, and depreciation.

The formula for the net profit ratio is to divide net profit by net sales, and then multiply

by 100. The formula is:

(Net profit ÷ Net sales) x 100

The measure could be modified for use by a nonprofit entity, if the change in net assets

were to be used in the formula instead of net profit.

Net Profit/ Sales

2019 2018

5.83 6.07

The net profit as a % of sales has decreased by 0.24 %. It can be said that the company

has been able to hold on to the previous profitability level.

35
Roll No.: 8003U16379
 Session: 2017-20

CHAPTER-IV

35
Roll No.: 8003U16379
 Session: 2017-20

FINDINGS

Interpretation of Comparative Income Statement:

From the above it is observed that the income from operations have increased by 30393

crores which is 9.21 % more in comparison to previous year. Other incomes have also

increased by 29.17% over previous year. Overall the turnover of the company has increased

by 9.58% over previous year. Expenses have also increased by 10.20 % over previous year.

The major increase being in other expenses by 26.63% over previous year. Depreciation and

ammortisation cost has decreased by 16.93%. PBT has increased by 2.07% over previous

year. Profit after tax has also increased by4.91% . The EPS of the company was also boosted

by 5.90% over previous year. Over all the company has fared well in the current period as

compared to The previous year.

Interpretation of Comparative Balance Sheet:

From the above it is observed that There has not been a major change in fixed assets except

that the CWIP has been increased by a huge amount which means the company is under the

expansion. The current assets have also increased by 8.79% over previous year. Cash and cash

equivalents increased by 25.13% over previous year which amounts to idle fund. The trade

receivables have decreased by 35.52% over previous year which proves the collection policy

has improved over previous year. The current liabilities has also increased by 20.90% over

previous year, with maximum rise in other liabilities by 57.81% Over previous year. The

Current ratio is 1.73 which is less than the industry average of 2. There is much scope for

investment which has not been utilised. Over all the financial position of the company is

sound.

35
Roll No.: 8003U16379
 Session: 2017-20

Interpretation of Common Size Income Statement:

From the above it is evident that the company has almost fared in the same way as in the

previous year. The operating expenses in relation to sales has increased by a mere 0.77 %

which has resulted the decrease in operating profit by the same margin in relation to sales of

previous year. The net PBDT has decreased by 1.34 % in relation to sales over the previous

year. PBT has also decreased in relation to sales by 0.51% . PAT has also decreased by 0.25

over previous year in relation to sales.

Interpretation of Common Size Balance Sheet:

From the above it is evident that the capital employed of the company has increased by 8902.00

crores over previous year. The major contribution being from internal sources which is a very

healthy sign for the company. The non-current assets (Fixed assets) have decreased by 2.23 % in

relation to capital employed over previous year. The Loan funds have decreased by 3.15% which

is due to repayment of the installments. Reserves have increased in relation to capital employed

by 3.22 % over previous year. Current assets of the company has increased in absolute terms and

the same as % of capital employed has increased by 0.10 % over previous year. Current

Liabilities have also shown similar trend. The same increased in absolute terms and also as a %

Capital employed by 4.96% Over previous year. Overall the current ratio of the company has

fared well in the current year.

35
Roll No.: 8003U16379
 Session: 2017-20

SUGGESTIONS:

On the basis of the findings from the above pages it is evident that the

company has done well in the current year. The current ratio is at as 1.73, cash

and equivalents alone being Rs. 49547 crores in the current year which may be

termed as idle funds, with scope of investment. The company has been able to

retain the same amount of profit in relation to sales in the current year. The

same needs to be increased by suitable cost cutting mechanism. Capital work in

progress of Rs. 19116 crores also needs to be completed soon and put to use for

income generation.

35
Roll No.: 8003U16379
 Session: 2017-20

CONCLUSION:

On the basis of the study of the financial results of the company and its

comparison to the previous year figures. It is evident that the volume of

operations of the company has increased in the current period however the

profitability has decreased by 0.24% it can be said that the company has fared very

well in the current year. The company seems to be in right path in implementing its

plans and strategies formulated. Overall the company does enjoy a very healthy

financial condition.

35
Roll No.: 8003U16379
 Session: 2017-20

BIBLIOGRAPHY

Books:

1. Manmohan and Goyal : Management Accounting

2. R. L. Gupta: Advance Accounts

3. Gupta and Mehra : Financial Analysis Corporate Reporting

4. Jawharlar : Financial Statement Analysis & Reporting

5. Dr. S. N. Maheswari : Management Accounting

Newspapers & Magazines:

1. Economics Times

2. Times of India

3. India Today

4. Business Times

Websites:

1. www.ril.com

2. www.equitymaster.com

3. www.moneycontrol.com

4. www.google.com

35
Roll No.: 8003U16379