Two Reliance Commn firms write off Rs 4500 cr

Post write-off, RCVL net worth stands at Rs 11,000cr.

Reliance-Anil Dhirubhai Ambani Group (R-ADAG) today announced that the two companies operating under its telecom holding arm, Reliance Communications Ventures Ltd (RCVL), approved write-offs and provisions of Rs 4,500 crore.

Post-write-offs, the consolidated networth of RCVL stood at nearly Rs 11,000 crore.

The two firms "" Reliance Infocomm and Reliance Communications Infrastructure "" wrote off Rs 4,500 crore in the period up to March 31, 2005, when they were under the unified Reliance group. The announcement of the write-offs came before the listing of RCVL.

RCVL, which, besides Reliance Infocomm and Reliance Communications Infrastructure, also holds Reliance Telecom, is expected to be listed in the week beginning March 6.

R-ADAG, in a statement, said the write-offs and provisions were based on an independent report by a leading international accounting firm.

"It is also based on liabilities related to regulatory and taxation matters, bad debts, slow-moving inventories and impairment of assets among others," it added.

"This disclosure is being made in the interests of transparency and fairness, for the benefit of over 22 lakh Reliance shareholders who have become shareholders of RCVL.

The disclosure is also based on the demerger scheme approved by the Bombay High Court in December 2005," it said.

Necessary disclosures will also be made in the 'information memorandum' proposed to be filed by RCVL.

Reliance Infocomm and Reliance Communications Infrastructure propose to recast their accounts for the year ended March 2005, subject to necessary approvals, the release said, adding that it reflects "a true and fair view of the state of affairs in that period".