RIL nets Rs 921 crore profit

Attributing the difference in the accounts with US GAAP and international accounting standards (IAS) mainly to deferred taxation and investments of subsidiaries, which are marked to market under US GAAP, Ambani, said “it may, however, be noted that as about 96 per centof the revenue of the company is earned in India, the true and fair picture is indicated as per Indian GAAP.”

Ambani said capital expenditure during the half year under review was over Rs 1,350 crore primarily on the Jamnagar Petrochemical complex. With all the plants commissioned at the Hazira petrochemical complex, interest expenses had increased by 46 per cent to Rs 347 crore, a 32 per cent increase in depreciation.

The operating margin improved from 19.1 to 19.6 per cent despite the extremely challenging environment faced by the global petrochemicals industry. “The factors contributing to improved margins were substantially lower feedstock costs, strong volume growth, depreciation of Indian rupee and gains from productivity and cost control, he said.

Ambani said the company’s foreign exchange borrowings remained fully hedged during the half year. As a result, there was no adverse impact arising from depreciation of the Indian rupee from Rs 39.5 per dollar as on April 1998 to Rs 42.5 per dollar ason September 30. During this period, the company bought back $ 37.45 million of 2005 maturity bonds which were financed by syndicated loan of similar maturity, resulting in savings in interest cost.