Accounting change added over Rs 1k crore to RIL's profit
The country's most valued corporate entity Reliance Industries said that its net profit would have been lower by Rs 1,177 crore in the first nine months of the current fiscal if it had followed a separate accounting method.business Updated: Jan 22, 2009 19:06 IST
The country's most valued corporate entity Reliance Industries on Wednesday said that its net profit would have been lower by Rs 1,177 crore in the first nine months of the current fiscal if it had followed a separate accounting method.
The company today reported a net profit after tax of Rs 11,733 crore for the nine-month period ended December 31, 2008, down from Rs 15,546 crore in the year-ago period.
While announcing its results, the company said it "has continued to adjust the foreign currency exchange differences on amounts borrowed for acquisition of fixed assets, to the carrying cost of fixed assets in compliance with Schedule VI of the Companies Act, 1956 as per legal advice received, which is at variance to the treatment prescribed in Accounting Standard (AS1) on 'Effects of Change in Foreign Exchange Rates' notified in the Companies (Accounting Standards) Rules 2006".
"Had the treatment as per the AS1 been followed, the net profit after tax for the nine months period ended December 31, 2008 would have been lower by Rs 1,177 crore (242 million dollars)," the company added.
It further said that the net profit after tax for the seven quarters from April 1, 2007 to December 31, 2008 would have also been lower by Rs 1,146 crore (235 million dollars) on account of cumulative effect of the above-said treatment.
RIL also revealed that it had revalued plants, equipment and buildings situated at Patalganga, Hazira, Naroda and Jamnagar in earlier years, consequent to which there had emerged an additional charge for depreciation of Rs 1,199 crore for the nine months period ended December 31, 2008, which had been withdrawn from the reserves.