RIL revaluation buoys reserves

Reserves have increased to Rs 58,777 crore.

Reliance Industries (RIL) has revalued its three facilities by Rs 22,497 crore. Unidentified international valuers have done the revaluation which was reflected on the books of the company on August 1.

In a media statement released today, the Mukesh Ambani-controlled company said that it had revalued plant, equipment and buildings of its facilities at Patalganga, Hazira and Jamnagar by Rs 22,497 crore.

The exercise has increased the company's reserves including revaluation reserves to Rs 58,777 crore from Rs 36,280 crore on March 31, 2005.

The company said in the statement that consequent to the revaluation, there is an additional charge of depreciation of Rs 353 crore for the half year ended September 30. " An equivalent amount has been withdrawn from revalution reserve. This has no impact on profit for the period," it added.

Analysts said the revaluation was aimed at shoring up reserves and maintaining the size of the balance sheet which would have otherwise reduced substantially owing to the demerger of group firms from Reliance Industries.

The company proposed to demerge Reliance Capital, Reliance Energy and Reliance Infocomm. The demerger proposal has been passed by the shareholders. RIL had hinted at the recent EGM that it might go in for a revaluation.

A shareholder said the company had assured them that a revalution would adequately compensate for a fall in net worth which might occur owing to the proposed demerger.

Shareholders, who attended the meeting last week, had raised queries on clarity on the tax treatment for shares which they would receive in the resulting companies and transparency in the valuation of these companies.