Ril

PRESENTATION ON. RELIANCE INDUSTRIES LTD.

BACKGROUND.  Incorporated

on 8th may 1973 as

Mnylon ltd.  Name changed to Reliance textiles on 11th march 1977  Now the company is known with the name of Reliance industries ltd.

OBJECTIVES.  To

carry on business of manufacturers, dealers, agents, importers and financiers of all kind of man made fibers and petrochemical products.

Business units.  Refining  Chemicals  Textiles  Retail

Highlights.  India’s

first company to earn cash profit of 25000 cr. And net profit of 15000 cr.  Divident payout increased to 130% amounting to 1831 cr Rs.  KGD6-largest deep water project in the world.  RIL took over the operations of GAPCO in 2007-08

Financial highlights.  Turnover-

Rs. 139269 cr.  Market capitalisation-131589 (sensex)  263075(nifty)  Weightage- 17.42% (sensex)  12.88% (nifty)  13.4% of india’s total export.  4.9% of GOI’s indirect tax revenue.

Capital expenditure  Oil

and gas (E & P) -13443 cr.  Refining and marketing – 2661 cr.  Petrochemicals – 506 cr.

Balance sheet analysis. 

69% of long term capital is raised through owner’s capital and 31% through debt . Resulting high cost of capital.

 Out

of total shareholder’s fund 75% of funds are invested in fixed assets

Cont..  The

percentage of fixed assets and current assets comes to be 75% and 25% respectively. Appropriate ratio is of 80% and 20%.

 The

current assets are 3728.24 cr more than the current liability shows that the company is in position to fulfill its current liabilities.

Cont..  Working

capital of the company is only 3% of the long term company’s capital showing the capacities of fixed assets is not beng fully utilised.

Ratio analysis  Cash

position ratio:  absolute cash ratio – 0.20 i.e 20% of current liability.  Short

term solvency ratio:

 Current

ratio – 1:1

Cont..  Working

capital ratio – 0.05 i.e only 5% of net assets employed in business.

 Profitability

ratio  Gross profit ratio – 19% of sales  ROCE – 20.3%

Cont..  Long  Debt

term solvency ratio:

equity ratio – 0.35  Capital gearing ratio – 22.3.

Recent issue in reliance RIL-RPL MERGER  RPL

is a subsidiary of reliance industries which was incorporated on 24th october 2005  It carries on the business of refiners, stores, suppliers and distributors of petroleum and petroleum products.

Benefits of merger  Greater

integration and financial strength.  Efficient cash management .  Diversified human capital.  Amalgamation will strengthen the leadership in industry.

Exchange ratio/swap ratio  Swap

ratio of 1:16 has been recommended by the joint valuers of both the companies.

 Chevron

India holdings ltd having its 4% investment in RPL have agreed to sell its shares which will be then purchased by RIL till the effective date of merger.