Reliance Industries Limited Annual Report 2005

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FY2005 Annual Report · Reliance Industries Limited

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Growth is life

R E L I A N C E I N D U S T R I E S L I M I T E D

ANNUAL REPORT 2 0 0 4 - 2 0 0 5

G4_125/Jobs1/A205005862_Reliance Annual Report/BW cover1_uni.qxd Prima #133
KSPGREENGOLD

Our theme for this year’s report

is the Golden Mean — an ancient

mathematical concept that brings

greater understanding to the process

of growth. We see it in the incredible

growth patterns of many life forms.

Like the spirals in a sea-shell,

the structure of a sunflower or the

whorls of a pineapple.

Reliance has grown from small

beginnings to become a global leader.

Its roadmap for the future is charted

on strategies for exponential growth.

G4_125/Jobs1/A205005862_Reliance Annual Report/BW cover1_uni.qxd prima #133 CMYK

design by point

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page c

G r o w t h i s L i f e

G ro w t h i s l i f e

From small beginnings, we have come a long way

in a short span of time. We have grown to become world-class

leaders in our businesses as well as in our commitments

to our people and our communities.

Reliance is committed to this spirit of growth.

The base template of our business is constructed on stellar leadership and

individual performance at every level; the supporting pillars and foundations

are a strong balance sheet, world-class levels of operating discipline,

research and innovations in technology and focus on community building.

As we stand at the threshold of the next financial year, we are poised to

test new waters, grow more businesses, increase our returns and create

greater stockholder value, bringing heightened levels of confidence

and satisfaction to every stakeholder.

We believe that while our growth is planned and focused, it is

At Reliance, our vision

also spontaneous and self-energising. We are experiencing

drives our ambitions and

this growth and learning from it. We are now leveraging the

our people define our

strengths of our existing businesses and creating new

business excellence.

growth opportunities through our emerging businesses.

This has made us partners

We are poised to take on new challenges and move

of choice to our people,

on to creating markets for tomorrow.

our country and to the

rest of the world.

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page d

Dhirubhai H. Ambani
Founder Chairman

December 28, 1932 - July 6, 2002

Mukesh D. Ambani
Chairman & Managing Director

Letter to Shareholders

Dear Shareowners,

In 2004-05, Reliance Industries Limited (RIL) delivered a record performance across several
operating and financial indicators. Strategic investments, robust business plans, sound
management practices that adapt rapidly to the changing environment and vitally, the contribution
each and every one of our employees made along the way have collectively resulted in businesses
performing exceedingly well.

Macro-economic trends continued to be driven by high crude oil prices due to strong demand
especially in growing economies like India and China, geo-political events that threatened reliability
of supplies, production disruption at some of the major crude oil centres and low spare production
capacity. The Exploration and Production (E&P) sector also saw very little in terms of additional
capacity enhancement to cater to this growing demand in the Asian region. The downstream sector
was marked by an upcycle across the entire value chain. Reliance’s modern refinery complex at
Jamnagar, India benefited significantly with refining margins remaining robust as demand pushed
refineries, including ours to operate at high capacity rates throughout the year. The petrochemical
markets were also in an early phase of an upside.

Closer home, India’s GDP grew at 7% resulting in increased consumption of petroleum products
which grew by 5% as compared to 3.5% for the previous year. Growth in Polymer demand was at
4% and that of polyester was at 8%, which we maintain was somewhat subdued on account of
higher prices resulting from high feedstock prices.

At Reliance, the operating environment was manifested by greater global competitiveness. One
expression of this was RIL’s record level of exports of manufactured products to 101 countries,
valued at Rs 25,532 crore (US$ 5.8 billion). Exports for the year formed 35% of RIL’s revenues, as
compared to 27% in the previous year, and RIL contributed to 7.7% of India’s total exports.

A high operating rate coupled with a globally competitive cost position also contributed towards
RIL’s remarkable performance. RIL’s world-class refinery processed 31.5 million tonnes of crude at
96% utilisation rate. Nine new crude variants were also processed to take advantage of price
arbitrage between heavy and light crude, demonstrating the ability of our highly complex refinery to
handle wide varieties of crude. This resulted in an all time high gross refining margin (GRM) of US$
8.8 per barrel for the year. The 4th quarter of the year saw an aggregate GRM of US$ 10 per barrel,
the highest ever GRM since the refinery’s inception. Our petrochemical manufacturing assets also
saw high operating rates at 99%, and produced 12.7 million tonnes of products.

As a result, RIL realised a net profit of Rs 7,572 crore (US$ 1.73 billion) on revenues of Rs 73,164
crore (US$ 16.73 billion) for the year 2004-05. These figures reflect an increased income of 47%
and 30% respectively over the previous year. The net profit earned is not only the highest in the
history of RIL, but also continues to place RIL among the top 200 profitable companies from around
the world.

Exemplary operating results, higher exports, debt reduction and prudent financial management
contributed to RIL’s return on net worth (RONW) rising sharply to 22%, as compared with 17% just
a year earlier. Improving RONW continues to be one of the driving forces in RIL’s strategy and
operating plans.

R E L I A N C E I N D U S T R I E S L I M I T E D

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G r o w t h i s L i f e

The Board of Directors of RIL has decided to raise the dividend rate to 75% for the year from 52.5%
in the previous year. The Board also approved what is perhaps India’s largest equity share buy
back programme in December 2004 valued at Rs 2,999 crore (US$ 686 million). Returning cash in
excess of our investment requirements to our shareholders - both through share buy back and our
continued pursuit of a progressive dividend policy - is fundamental to our shareholder value
enhancement strategy. Larger dividends, combined with the equity share buy back programme,
have provided shareholders of RIL with a total cash return of Rs 1,341 crore (US$ 307 million). This
amount represents the highest return among Indian companies in the private sector.

RIL took several strategic initiatives during the year. An important initiative was the acquisition of the
polyester major, Trevira GmbH, headquartered in Frankfurt, Germany. Apart from enhancing RIL’s
global ranking in polyester, the acquisition enables access to valuable intellectual property rights in
this domain.

Another major initiative was the investment in the upstream oil and gas business and its integration
with petroleum retailing, in line with our vision of being a global energy player. RIL’s emphasis on
accretion of its reserves through a mix of own exploration, acquisition of equity stakes in new blocks
in India and overseas and integration with petroleum retailing on a pan-India basis is expected to
pay dividends in the medium to long term.

Looking ahead, many of the factors that characterised the market environment in 2004-05 are likely
to remain in place in 2005-06. Crude oil price volatility is expected to persist on account of
geopolitical events, and could lead to supply uncertainties. Fuel demand is growing worldwide and
is led by developing nations such as China and India. Petroleum refiners anticipate another year of
operating at peak limits of capacity.

RIL is in a strong position to benefit from the upside in the petrochemical cycle. Operating on
a global scale, high level of integration, high operating rates, low cost position, new investments
and an expanded product range underline the potential to create more value in the years ahead.

I have enjoyed steadfast support from the Board of Directors of RIL. I would like to take this
opportunity to express my gratitude to the Board, all well-wishers and RIL’s over two million
shareholders for their understanding and appreciation of the dynamics of the transition, and for their
abiding confidence.

With best wishes,

Sincerely

Mukesh D. Ambani
Chairman & Managing Director
June 28, 2005

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Contents

Highlights 2004-2005

Financial highlights

Company Information

Board of Directors

Mukesh D. Ambani
Chairman & Managing Director

Anil D. Ambani
Vice Chairman & Managing Director
(Up to June 18, 2005)

Nikhil R. Meswani
Executive Director

Hital R. Meswani
Executive Director

H.S. Kohli
Executive Director

Ramniklal H. Ambani

Mansingh L. Bhakta

T. Ramesh U. Pai
(Up to January 26, 2005)

Yogendra P. Trivedi

Dr. D.V. Kapur

M.P. Modi

S. Venkitaramanan

Prof. Ashok Misra
(From April 27, 2005)

Secretary
Vinod M. Ambani

Audit Committee
Yogendra P. Trivedi (Chairman)
S. Venkitaramanan (Vice Chairman)
M.P. Modi

Shareholders’ / Investors’
Grievance Committee
Mansingh L. Bhakta (Chairman)
Yogendra P. Trivedi
Mukesh D. Ambani
Anil D. Ambani (Up to June 18, 2005)

Remuneration Committee
Mansingh L. Bhakta (Chairman)
Yogendra P. Trivedi
S. Venkitaramanan
Dr. D.V. Kapur

Corporate Governance and
Stakeholders’ Interface
Committee
Yogendra P. Trivedi (Chairman)
M.P. Modi
Dr. D.V. Kapur

Health, Safety & Environment
Committee
Hital R. Meswani (Chairman)
Dr. D.V. Kapur
H. S. Kohli

Finance Committee
Mukesh D. Ambani (Chairman)
Anil D. Ambani (Up to June 18, 2005)
Nikhil R. Meswani
Hital R. Meswani

Solicitors & Advocates
Kanga & Co.

Auditors
Chaturvedi & Shah
Rajendra & Co.

International Accountants
Deloitte Haskins & Sells

Bankers
ABN AMRO Bank
Allahabad Bank
Andhra Bank
Bank of America
Bank of Baroda
Bank of India
Bank of Maharashtra
Calyon Bank
Canara Bank
Central Bank of India
Citi Bank
Corporation Bank
Deutsche Bank
HDFC Bank Ltd.
Hong Kong and Shanghai
Banking Corp Ltd.
ICICI Bank Ltd.
IDBI Bank Ltd.
Indian Bank
Indian Overseas Bank
Oriental Bank of Commerce
Punjab National Bank
Standard Chartered Bank
State Bank of Hyderabad
State Bank of India
State Bank of Patiala
State Bank of Saurashtra
Syndicate Bank
UCO Bank
Union Bank of India
Vijaya Bank

G r o w t h i s L i f e

Registered Office
3rd Floor, Maker Chambers IV
222, Nariman Point
Mumbai 400 021. India
Tel +91 22 3032 5000
Fax +91 22 3032 2268
Email investor_relations@ril.com
http://www.ril.com

Manufacturing Facilities
Hazira Complex
Village Mora, Bhatha P.O.
Surat-Hazira Road
Surat 394 510, Gujarat, India

Jamnagar Complex
Village Meghhpar / Padana
Taluka Lalpur
Dist. Jamnagar 361 280
Gujarat, India

Naroda Complex
103 / 106, Naroda Industrial Estate
Naroda, Ahmedabad 382 320
Gujarat, India

Patalganga Complex
B-4, Industrial Area, Patalganga
Off Bombay-Pune Road
Near Panvel, Dist. Raigad 410 207
Maharashtra, India

Registrars & Transfer Agents
Karvy Computershare Private
Limited
46, Avenue 4, Street No.1
Banjara Hills
Hyderabad 500 034, India
Tel +91 40 2332 0666, 2332 0711,
2332 3031, 2332 3037
Fax +91 40 2332 3058
Email rilinvestor@karvy.com
http://www.karvy.com

Tulsiani Chambers
10th Floor, Nariman Point
Mumbai 400 021. India
Tel +91 22 3032 5645 / 3032 5624
Fax +91 22 2285 5731

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Notice

Notice is hereby given that the Thirty-first Annual General Meeting of the Members of
RELIANCE INDUSTRIES LIMITED will be held on Wednesday, August 3, 2005, at 11.00 a.m., at
Birla Matushri Sabhagar, 19, Marine Lines, Mumbai 400 020, to transact the following businesses:

Ordinary Business:

1. To consider and adopt the audited Balance Sheet as at March 31, 2005, Profit and Loss
Account for the year ended on that date and the Reports of the Board of Directors and
Auditors thereon.

2. To declare a dividend on Equity Shares.

3. To appoint Directors in place of those retiring by rotation.

4. To appoint Auditors and to fix their remuneration and in this regard to consider and if
thought fit, to pass, with or without modification(s), the following resolution as an
Ordinary Resolution:

“RESOLVED THAT M/s. Chaturvedi & Shah, Chartered Accountants, M/s. Deloitte Haskins
and Sells, Chartered Accountants, and M/s. Rajendra & Co., Chartered Accountants, be and
are hereby appointed as Auditors of the Company, to hold office from the conclusion of this
Annual General Meeting until the conclusion of the next Annual General Meeting of the
Company on such remuneration as shall be fixed by the Board of Directors.”

Special Business:

5. To consider and if thought fit, to pass, with or without modification(s), the following

resolution as an Ordinary Resolution:

“RESOLVED THAT in accordance with the provisions of Section 257 and all other applicable
provisions, if any, of the Companies Act, 1956 or any statutory modification(s) or
re-enactment thereof, Prof. Ashok Misra, who was appointed as a Director pursuant to the
provisions of Section 262 of the Companies Act, 1956, be and is hereby appointed as a
Director of the Company subject to retirement by rotation under the provisions of the Articles
of Association of the Company.”

6. To consider and if thought fit, to pass, with or without modification(s), the following

resolution as a Special Resolution:

“RESOLVED THAT in accordance with the provisions of Sections 198, 269 and 309 read
with Schedule XIII and all other applicable provisions, if any, of the Companies Act, 1956 or
any statutory modification(s) or re-enactment thereof, approval of the Company be and is
hereby accorded to the re-appointment of Shri Hardev Singh Kohli, as a Wholetime Director,
designated as Executive Director of the Company, for a period of 5 (five) years with effect
from April 1, 2005, on the terms and conditions including remuneration as set out in the
Explanatory Statement annexed to the Notice convening this Meeting, with liberty to the
Board of Directors (hereinafter referred to as “the Board” which term shall be deemed to
include any Committee of the Board constituted to exercise its powers, including the powers
conferred by this Resolution) to alter and vary the terms and conditions and / or
remuneration, subject to the same not exceeding the limits specified under Schedule XIII
to the Companies Act, 1956 or any statutory modification(s) or re-enactment thereof.

RESOLVED FURTHER THAT the Board be and is hereby authorised to take all such steps
as may be necessary, proper or expedient to give effect to this Resolution.”

R E L I A N C E I N D U S T R I E S L I M I T E D

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 9

G r o w t h i s L i f e

7. To consider and if thought fit, to pass, with or without modification(s), the following

resolution as an Ordinary Resolution:

“RESOLVED THAT in accordance with the provisions of Sections 198, 269 and 309 read
with Schedule XIII and all other applicable provisions, if any, of the Companies Act, 1956 or
any statutory modification(s) or re-enactment thereof, approval of the Company be and is
hereby accorded to the re-appointment of Shri Hital R. Meswani, as a Wholetime Director,
designated as Executive Director of the Company, for a period of 5 (five) years with effect
from August 4, 2005, on the terms and conditions including remuneration as set out in the
Explanatory Statement annexed to the Notice convening this Meeting, with liberty to the
Board of Directors (hereinafter referred to as “the Board” which term shall be deemed to
include any Committee of the Board constituted to exercise its powers, including the powers
conferred by this Resolution) to alter and vary the terms and conditions and / or
remuneration, subject to the same not exceeding the limits specified under Schedule XIII
to the Companies Act, 1956 or any statutory modification(s) or re-enactment thereof.

RESOLVED FURTHER THAT the Board be and is hereby authorised to take all such steps
as may be necessary, proper or expedient to give effect to this Resolution."

8. To consider and if thought fit, to pass, with or without modification(s), the following

resolution as a Special Resolution:

“RESOLVED THAT in accordance with the provisions of Sections 198, 309(4) and all other
applicable provisions, if any, of the Companies Act, 1956 or any statutory modification(s)
or re-enactment thereof and the Articles of Association of the Company and subject to
applicable statutory approval(s), the Directors of the Company other than the Managing
Director and Wholetime Directors be paid annually, commission aggregating
Rs 1,00,00,000 (one crore), in such proportion as may be decided by the Board of
Directors, for a period of 5 (five) years from the financial year ended March 31, 2005,
provided that the total commission payable to such Directors shall not exceed one percent
of the net profits of the Company as computed in the manner referred to under Section
198(1) of the Companies Act, 1956 or any statutory modification(s) or re-enactment thereof.”

By Order of the Board of Directors

Vinod M. Ambani
President and Company Secretary

Mumbai,
June 28, 2005.

Registered Office:
3rd Floor, Maker Chambers IV
222, Nariman Point
Mumbai 400 021

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Notes

1. A member entitled to attend

and vote at the Annual General
Meeting (the Meeting) is entitled
to appoint a proxy to attend
and vote on a poll instead of
himself and the proxy need not
be a member of the Company.
The instrument appointing
proxy should, however, be
deposited at the Registered
Office of the Company not less
than forty-eight hours before
commencement of the Meeting.

2. Corporate Members intending to

send their authorised
representatives to attend the
meeting are requested to send a
certified copy of the Board
Resolution authorising their
representative to attend and vote
on their behalf at the Meeting.

In terms of Article 155 of the
Articles of Association of the
Company, Shri Hital R. Meswani,
Shri Ramniklal H. Ambani and
Shri S. Venkitaramanan, Directors,
retire by rotation at the ensuing
Annual General Meeting and
being eligible offer themselves for
re-appointment. Brief resume of
these Directors, nature of their
expertise in specific functional
areas and names of companies in
which they hold directorship and
membership / chairmanship of
Board Committees, as stipulated
under Clause 49 of Listing
Agreement with the Stock
Exchanges in India, are provided
in the Report on Corporate
Governance forming part of the
Annual Report. The Board of
Directors of the Company
commends the respective
re-appointments of the aforesaid
Directors.

R E L I A N C E I N D U S T R I E S L I M I T E D

9. Relevant documents referred to in
the accompanying Notice are
open for inspection at the
Registered Office of the Company
on all working days, except
Saturdays, between 11 a.m.
and 1 p.m. up to the date of
the Meeting.

10. (a) The Company has already
notified closure of Register of
Members and Share Transfer
Books from Saturday, May 14,
2005 to Saturday, May 21, 2005
(both days inclusive) for
determining the names of Members
eligible for dividend on Equity
Shares, if declared at the Meeting.

(b) The dividend on Equity
Shares, if declared at the
Meeting, will be paid on or after
August 3, 2005 to those Members
whose names appeared on the
Company’s Register of Members
on Friday, May 13, 2005. In
respect of shares held in
dematerialised form, the dividend
will be paid on the basis of
particulars of beneficial ownership
furnished by the Depositories as
at the end of business on Friday,
May 13, 2005.

(c) Members may please note
that dividend warrants are payable
at par at the designated branches
of the Bank printed on the
reverse of dividend warrants for
an initial period of 3 months only.
Thereafter, dividend warrants on
revalidation are payable only at
limited centres / branches.
Members are, therefore, advised
to encash dividend warrants
within the initial validity period.

4. The size of the Company has
grown tremendously over the
years. Multiple products being
manufactured at various locations
have substantially increased
the activities and operations of
the Company.

Considering the above, it is
proposed to appoint, subject to
the approval of Members,
M/s. Deloitte Haskins and Sells,
Chartered Accountants, alongwith
the retiring Auditors M/s. Chaturvedi
& Shah, Chartered Accountants
and M/s. Rajendra & Co.,
Chartered Accountants, as
Auditors of the Company, to hold
office from the conclusion of the
ensuing Annual General Meeting
until the conclusion of the next
Annual General Meeting of the
Company. The Board of Directors
of the Company commends
appointment / re-appointment of
the aforesaid Auditors.

5. An Explanatory Statement

pursuant to Section 173(2) of the
Companies Act, 1956, relating to
the Special Business to be
transacted at the Meeting is
annexed hereto.

6. Members are requested to bring
their Attendance Slip along with
their copy of Annual Report to
the Meeting.

7. Members who hold shares in

dematerialised form are requested
to write their Client ID and DP ID
Numbers and those who hold
shares in physical form are
requested to write their Folio
Number in the Attendance Slip for
attending the Meeting.

In case of joint holders attending
the Meeting, only such joint
holder who is higher in the order
of names will be entitled to vote.

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12. The Company has transferred all
unclaimed dividends declared up
to the financial year ended
March 31, 1995 to the General
Revenue Account of the Central
Government as required under
the Companies Unpaid Dividend
(Transfer to the General Revenue
Account of the Central
Government) Rules, 1978 (the
Rules). Members who have so
far not claimed or collected their
dividends declared up to the
aforesaid financial year are
requested to claim such dividends
from the Registrar of Companies,
Maharashtra, CGO Complex,
2nd Floor, ‘A’ Wing, CBD-Belapur,
Navi Mumbai 400 614,
Telephone (091) (022) 2757
6802, by making an application in
Form II of the Rules. A specimen
of the said Claim Form is
provided in the Annual Report.

13. Pursuant to the provisions of

Section 205A(5) and 205C of the
Companies Act, 1956, the
Company has transferred the
unclaimed dividends for the
financial years 1995-96 and
1996-97 to the Investor
Education and Protection Fund
(IEPF) established by the Central
Government. Dividends for the
financial year ended March 31,
1998 and thereafter, which
remain unclaimed for a period of
7 years will be transferred by the
Company to IEPF. Information
in respect of such unclaimed
dividends and the last date
for claiming the same are
provided in Shareholders’
Referencer forming part of
the Annual Report.

11. (a) In order to provide protection
against fraudulent encashment of
dividend warrants, Members who
hold shares in physical form are
requested to intimate the
Company’s Registrar and Transfer
Agents, M/s. Karvy Computershare
Private Limited, under the
signature of the Sole / First joint
holder, the following information
to be printed on dividend
warrants:

(i) Name of the Sole / First joint
holder and the Folio Number.

(ii) Particulars of Bank Account,

viz.:
(a) Name of Bank

(b) Name of Branch

Bank with Pin Code Number

(d) Account type, whether
Savings Bank (SB) or
Current Account (CA)

(e) Bank Account Number

(b) Members who hold shares in
dematerialised form may kindly
note that their Bank Account
details, as furnished by their
Depositories to the Company,
will be printed on their dividend
warrants as per the applicable
regulations of the Depositories
and the Company will not
entertain any direct request from
such Members for deletion of or
change in such Bank Account
details. Further, instructions, if
any, already given by them in
respect of shares held in physical
form will not be automatically
applicable to shares held in
dematerialised form. Members
who wish to change such Bank
Account details are therefore
requested to advise their
Depository Participants about such
change, with complete details of
Bank Account.

G r o w t h i s L i f e

Members who have not so far
encashed dividend warrant(s) for
the aforesaid years are requested
to seek issue of duplicate
warrant(s) by writing to the
Company’s Registrars and
Transfer Agents, M/s. Karvy
Computershare Private Limited,
immediately. Members are
requested to note that no
claims shall lie against the
Company or IEPF in respect of
any amounts which were
unclaimed and unpaid
for a period of seven years
from the dates that they first
became due for payment and
no payment shall be made in
respect of any such claims.

14. Members who hold shares in

physical form in multiple folios in
identical names or joint accounts
in the same order of names are
requested to send the share
certificates to the Company’s
Registrar and Transfer Agents,
M/s. Karvy Computershare
Private Limited, for consolidation
into a single folio.

15. Non-Resident Indian Members
are requested to inform the
Company’s Registrars and
Transfer Agents, M/s. Karvy
Computershare Private Limited,
immediately of:

(a) The change in the residential
status on return to India for
permanent settlement.

(b) The particulars of the Bank
Account maintained in India with
complete name, branch, account
type, account number and
address of Bank with Pin Code
Number, if not furnished earlier.

16. Members are advised to refer

to the Shareholders’
Referencer provided in the
Annual Report.

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 12

Explanatory Statement Pursuant to
Section 173(2) of the Companies Act, 1956

Item No. 5

The Board of Directors of the
Company (the Board), at its meeting
held on April 27, 2005 has appointed,
pursuant to the provisions of Section
262 of the Companies Act, 1956 (the
Act) and Article 136 of the Articles of
Association of the Company, Prof.
Ashok Misra by filling up the casual
vacancy arising on account of death
of Shri T.R.U. Pai, a Director.

In terms of the provisions of Section
262 of the Act, Prof. Ashok Misra
would hold office up to the date of
this Annual General Meeting, as late
Shri T.R.U.Pai, would have held
office only up to the date of this
Annual General Meeting.

The Company has received a notice
in writing from a member alongwith a
deposit of Rs 500 proposing the
candidature of Prof. Ashok Misra for
the office of Director of the Company
under the provisions of Section 257
of the Act.

Prof. Ashok Misra has to his credit
wide experience especially in the
field of Polymer Science & Engineering
and Chemical Engineering. Keeping
in view his enriched expertise and
knowledge, it will be in the interest of
the Company that Prof. Ashok Misra
is appointed as a Director, liable to
retire by rotation in accordance with
the provisions of the Articles of
Association of the Company.

A brief resume of Prof. Ashok Misra,
nature of his expertise in specific
functional areas and names of
companies in which he holds
directorship and membership /
chairmanship of Board Committees,
as stipulated under Clause 49 of
Listing Agreement with the Stock
Exchanges in India, are provided in

the Report on Corporate Governance
forming part of the Annual Report.

Save and except Prof. Ashok Misra,
none of the other Directors of the
Company is, in any way, concerned
or interested in the Resolution set
out at Item No. 5 of the Notice.

The Board commends the Resolution
set out at Item No. 5 of the Notice for
your approval.

Item Nos. 6 and 7

The present term of office of
Shri Hardev Singh Kohli, Wholetime
Director designated as Executive
Director of the Company has expired
on March 31, 2005 and that of
Shri Hital R. Meswani, Wholetime
Director designated as Executive
Director will be expiring on August 3,
2005. The Board of Directors of the
Company (the Board), at its meeting
held on April 27, 2005 has, subject to
the approval of Members,
re-appointed, the said Wholetime
Directors as Executive Directors for
a further period of 5 years from the
expiry dates of their respective
terms, on the remuneration
determined by the Remuneration
Committee of the Board (the
Remuneration Committee) at its
meeting held on April 27, 2005.

The broad particulars of remuneration
payable to and the terms of the
respective re-appointments of
Shri Hardev Singh Kohli and Shri
Hital R. Meswani are as under:

The perquisites and allowances
payable to the aforesaid Directors
shall include accommodation
(furnished or otherwise) or house
rent allowance in lieu thereof; house
maintenance allowance together with
reimbursement of expenses and / or
allowances for utilisation of gas,
electricity, water, furnishing and repairs;
medical reimbursement; leave travel
concession for self and family including
dependents; club fees, medical
insurance and such other perquisites
and / or allowances, up to the
amounts specified above, subject to
an overall ceiling of remuneration
stipulated under Sections 198 and
309 of the Companies Act, 1956 (the
Act) read with Schedule XIII thereto,
or any statutory modification(s) or
re-enactment thereof. The said
perquisites and allowances shall be
evaluated, wherever applicable, as
per the provisions of Income-tax Act,
1961 or any rules thereunder or any
statutory modification(s) or
re-enactment thereof (Income-tax
law). However, the Company’s
contribution to Provident Fund,
Superannuation or Annuity Fund, to
the extent these singly or together
are not taxable under the Income-tax
law, and gratuity payable and
encashment of leave at the end of
the tenure, as per the rules of the
Company and to the extent not
taxable under the Income-tax law,
shall not be included for the purpose
of computation of the overall ceiling
of remuneration. Reimbursement of
expenses incurred for travelling,

Name and Designation

Salary

Rs per month
Perquisites
& Allowances

Shri Hardev Singh Kohli
Executive Director

Shri Hital R. Meswani
Executive Director

3,15,000

5,68,000

1,25,000

2,00,000

R E L I A N C E I N D U S T R I E S L I M I T E D

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 13

G r o w t h i s L i f e

The above may also be treated as
an abstract of the terms of
re-appointment of Shri Hardev Singh
Kohli and Shri Hital R. Meswani
under Section 302 of the Act.

A brief resume of Shri Hardev Singh
Kohli and Shri Hital R. Meswani,
nature of their expertise in specific
functional areas and names of
companies in which they hold
directorship and membership /
chairmanship of Board Committees,
as stipulated under Clause 49 of
Listing Agreement with the Stock
Exchanges in India, are provided in
the Report on Corporate Governance
forming part of the Annual Report.

boarding and lodging in respect of
the Executive Directors and their
spouses and attendant(s) during
business trips, provision of car for
use on the Company’s business and
telephone at residence shall not be
considered as perquisites.

Shri Hardev Singh Kohli shall also be
entitled to an annual increment of
5% of the last drawn salary and
perquisites during his tenure as a
Wholetime Director of the Company.

The Members of the Company have
earlier approved payment of commission
to Shri Mukesh D. Ambani, Shri Anil
D. Ambani, Shri Nikhil R. Meswani
and Shri Hital R. Meswani in addition
to salary, perquisites and allowances
payable to them, such that the overall
remuneration including commission,
which shall be in proportion to their
respective salaries (excluding
perquisites and allowances), for each
financial year shall not exceed 0.67%
of the net profits of the Company as
computed in the manner referred to
under Section 198(1) of the Act or
any statutory modification (s) or
re-enactment thereof.

Members may note that no commission
is proposed to be paid to Shri Hardev
Singh Kohli. However, Shri Hital R.
Meswani shall be entitled to receive
commission in addition to the salary,
perquisites and allowances. Shri
Hital R. Meswani on re-appointment
will be paid commission in proportion
to his salary (excluding perquisites
and allowances).

Shri Hardev Singh Kohli and Shri
Hital R. Meswani shall not, during
their tenure as Wholetime Directors
of the Company, become interested
or otherwise concerned directly or
through their relatives in any Selling
Agency of the Company without
prior approval of the Board and the
Central Government.

The office of Wholetime Director may
be terminated by the Company or the
concerned Wholetime Director(s) by
giving the other 3 (three) months’
prior notice in writing.

The terms and conditions set out for
re-appointment and payment of
remuneration herein may be altered
and varied by the Board as it may,
from time to time, deem fit.

Since Shri Hardev Singh Kohli has
attained the age of 70 years, approval
for his re-appointment is sought from
the Members of the Company by way
of a Special Resolution, as required
under Schedule XIII to the Act.

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 14

Shri Hardev Singh Kohli and Shri
Hital R. Meswani are interested in
the resolutions set out at Item Nos. 6
and 7 of the Notice, respectively,
which pertain to their respective
re-appointments and remuneration
payable to each of them. Further,
Shri Nikhil R. Meswani may also be
deemed to be interested in the
Resolution pertaining to the
re-appointment of and remuneration
payable to Shri Hital R. Meswani, as
they are related to each other. Save
and except the above, none of the
other Directors of the Company is, in
any way, concerned or interested in
these Resolutions.

The Board commends the Resolutions
set out at Item Nos. 6 and 7 of the
Notice for your approval.

Item No. 8

The size of the Company has grown
tremendously over the years. Multiple
products being manufactured at
various locations have substantially
increased the activities and operations
of the Company. Setting new
milestones of growth, Reliance
Industries is India’s first private
sector company to cross US$ 1
billion mark in net profits and it ranks
among the top 150 companies in the
world in terms of net profits.
Management of the Company is
committed to ensure future continued
growth. Consequently, time devoted
and contribution made by the
Directors of the Company including
Non-Executive Directors have
increased.

In order to bring the remuneration of
Non-Executive Directors commensurate
with the increased time and effort put
in by them, the Board of Directors of
the Company (the Board) at its
meeting held on April 27, 2005,
subject to the approval of Members
of the Company and other applicable
statutory approval(s), approved
payment of commission aggregating
Rs 1,00,00,000 (one crore) annually
in such proportion as may be
decided by the Board of Directors to
Non-Executive Directors for a period
of 5 (five) years from the financial
year ended March 31, 2005;
provided that the total commission
payable to such Directors shall not
exceed 1% of the net profits of the
Company as computed in the
manner referred to under Section
198(1) of the Companies Act, 1956.
Payment of such commission will be
in addition to the sitting fee for
attending meetings of the Board /
Committees.

All Directors other than the Managing
Director and Wholetime Directors
may be deemed to be concerned or
interested in the Resolution set out at
Item No. 8 of the Notice.

The Board commends the Resolution
set out at Item No. 8 of the Notice for
your approval.

By Order of the Board of Directors

Vinod M. Ambani
President and Company Secretary

Mumbai,
June 28, 2005.

R E L I A N C E I N D U S T R I E S L I M I T E D

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 15

Management’s Discussion
and Analysis

Forward-Looking Statements

This report contains forward-looking
statements, which may be identified
by their use of words like ‘plans’,
‘expects’, ‘will’, ‘anticipates’,
‘believes’, ‘intends’, ‘projects’,
‘estimates’ or other words of similar
meaning. All statements that address
expectations or projections about the
future, including but not limited to
statements about the company’s
strategy for growth, product
development, market position,
expenditures, and financial results,
are forward-looking statements.

Forward-looking statements are
based on certain assumptions and
expectations of future events. The
company cannot guarantee that
these assumptions and expectations
are accurate or will be realised. The
company’s actual results,
performance or achievements could
thus differ materially from those
projected in any such forward-looking
statements. The company assumes
no responsibility to publicly amend,
modify or revise any forward looking
statements, on the basis of any
subsequent developments,
information or events.

Growth is focus

Reliance on Vision
Reliance on People
Reliance on Excellence
Reliance is Achievement!

At Reliance, our vision drives our
ambitions and our people define our
business excellence.

This has made us partners of choice
to our people, our country and to the
rest of the world.

We harness our creative energies
through strong teamwork, a spirit of
enterprise and financial acumen,
proven qualities that collectively
determine our path of growth.

And growth is life!

During the year, Reliance set new
benchmarks and continued to grow
its businesses at the corporate as
well as the group levels. We also
continue to enjoy our position as the
largest business group in India on all
major financial parameters, including
sales, profits, net worth and assets.

Reliance passed the milestone of
becoming the first Indian private
sector company to record a net profit
of over US$ 1.7 billion. Our net profit
for the year ended March 31, 2005
was Rs 7,572 crore (US$ 1,731
million), an increase of 47 percent
over the previous year.

Reliance Industries emerged as the
first and only private sector company
from India to feature in the 2004
Fortune Global 500 list of the World’s
Largest Corporations.

G r o w t h i s L i f e

From small beginnings, we have
come a long way in a short span of
time. We have grown to become
world-class leaders in our businesses
as well as in our commitments to our
people and the communities in which
we live and thrive.

Reliance is committed to this spirit
of growth.

The base template of our business is
constructed on stellar leadership and
individual performance at every level;
the supporting pillars and foundations
are a strong balance sheet, world-
class levels of operating discipline,
research and innovations in technology
and focus on community building.

As we stand at the threshold of the
next financial year, we are poised
to test new waters, grow more
businesses, increase our returns
and create greater stockholder
value, bringing heightened levels
of confidence and satisfaction to
every stakeholder.

We believe that while our growth
is planned and focused, it is also
spontaneous and self-energising.
We are experiencing this growth
and learning from it. We are now
leveraging the strengths of our
existing businesses and creating
new growth opportunities through
our emerging businesses.

We are poised to take on new
challenges and move on to creating
markets for tomorrow.

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 16

Growth is contribution

Growth is global outreach

Dhirubhai Ambani’s belief: What is
good for India is good for Reliance!
reflects the intrinsic drive and
motivation that has set Reliance on
its broadly charted path of growth.

Reliance integrates its many
products and services to address the
critical needs of the nation in key
areas such as energy, power,
infrastructure and materials.

Reliance enjoys a pre-eminent
position in the Indian economy, with
revenues equivalent to 2.6 percent
of India's GDP.

RIL contributes:

● 7.7 percent to India's total exports

● 7.9 percent towards the

Government of India's indirect
tax revenues

● 4.5 percent of the total
market capitalisation

● weightage of 11 percent in the

BSE Sensex

● weightage of 8 percent in the

Nifty Index

Every fourth investor in India is a
Reliance shareholder.

Reliance enjoys a

pre-eminent position

in the Indian

economy, with

revenues equivalent

to 2.6 percent of

India's GDP

Reliance maintained its position of
pre-eminence by continuing to be
India's largest exporter - an
achievement that reflects its global
competitiveness and the international
quality of its products. We exported
products worth US$ 5,837 million
(Rs 25,532 crore) during the year,
accounting for 35 percent of
our turnover.

Reliance enjoys leadership in all its
major businesses.

● We are India's largest private

sector Exploration and Production
(E&P) company with 300,000
sq kms of exploration acreage in
30 domestic offshore and onshore
blocks. In addition, we also have
two producing blocks (Panna-
Mukta and Tapti) in India, and one
exploration block each in Yemen
and Oman.

● The Reliance refinery at Jamnagar
is the world's largest grassroots
refinery, and the world’s 3rd largest
refinery at any single location. This
alone accounts for 28 percent of
India's refining capacity.

Our global rankings

● Largest producer of polyester fibre

and yarn

● 3rd largest producer of

Paraxylene (PX)

● 5th largest producer of

Mono–Ethylene Glycol (MEG)

● 6th largest producer of Purified

Terepththalic Acid (PTA)

● 7th largest producer of
Polypropylene (PP)

R E L I A N C E I N D U S T R I E S L I M I T E D

Reliance is the

world’s largest

producer of polyester

fibre and yarn

In India, Reliance enjoys leading
market shares for all its major
businesses. In the domestic markets,
we have a market share of 52
percent in polyester, 45 percent in
polymers and 77 percent in fibre
intermediates.

Growth is proof
of performance

The year was characterised by
sustained high crude oil prices,
leading to increased feedstock
prices. Reliance's ability to maintain
cash flows and profits reflects the
global competitiveness of our
business operations, our leadership
in domestic markets and a healthy
presence in export markets.

Reliance’s extensive marketing and
distribution network, investments in
quality, product development efforts,
strong customer bonding and
competitive pricing have ensured that
competing product imports into India
have, at best, been at marginal levels.

A review of the year’s
performance

● Our refinery processed 31.5

million tonnes of crude oil during
the year and achieved a utilisation
rate of 96 percent

● Reliance's major petrochemical
plants operated at 99 percent
capacity utilisation

● Our total production volume of oil
and gas and petrochemicals,
including toll conversion, touched
12.7 million tonnes—an increase
of 3 percent over the previous year

● Oil and Gas Joint Ventures

produced 1.2 million tonnes of
crude oil and 3,452 million cubic
meters of gas

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 17

Financial review

A look at figures for the year
ended March 31, 2005

Reliance's turnover increased to
Rs 73,164 crore (US$ 16,725
million), from Rs 56,247 crore in the
previous year, registering a growth of
30 percent.

Domestic sales accounted for 65
percent of the turnover.

Exports, including deemed exports,
increased to Rs 25,532 crore (US$
5,837 million), from Rs 14,969 crore
in the previous year.

Operating profit (PBDIT) increased
30 percent to Rs 14,261 crore
(US$ 3,260 million) during the year,
up from Rs 10,983 crore in the
previous year.

The company's net operating
margin remained stable during
the year at 19.5 percent despite
volatile raw material prices, offset
by higher selling prices and
increased productivity.

Sales tax expense is lower during
the year as compared to the previous
year mainly on account of higher sales
under exemption instead of deferral.

Other income for the year stood at
Rs 1,450 crore (US$ 331 million),
mainly representing interest income
and income from preference shares.

The company has recognised interest
income of Rs 207 crore during the
year with respect to the investment in
6,40,140 Deep Discount Bonds of
Reliance Communications
Infrastructure Limited.

Premium on investments in
preference shares is recognised as
income over the maturity period of
the investment, accordingly premium
of Rs 911 crore (previous year
Rs 197 crore), receivable on
redemption of 162,00,00,000
10% Cumulative Redeemable /
Optionally Convertible Preference
Shares of Reliance Infocomm
Limited has been recognised during
the year. Increase over previous year
is on account of income accrued for
whole year against proportionate
income from the date of allotment in
the previous year. 40,00,00,000
preference shares are redeemable in
December, 2012 and balance shares
are redeemable in May, 2013 at a
premium of Rs 51 per share to the
issue price.

The income from services decreased
by Rs 1,185 crore to Rs 347 crore in
2004-05 from Rs 1,532 crore in the
previous year. The reduction was
primarily due to the discontinuance of
the marketing of infocomm services
on behalf of Reliance Infocomm Limited
with effect from October 1, 2004.

Interest expenditure increased
2 percent to Rs 1,469 crore
(US$ 336 million) due to the impact
of foreign exchange fluctuations.

Depreciation was at Rs 3,724 crore
(US$ 851 million) as against
Rs 3,247 crore for the previous year.
The higher charge was on account of
normal capital expenditure and
additions for marketing infrastructure.

Reliance’s corporate tax liability for
the year was Rs 705 crore (US$ 161
million). Deferred tax liability was at
Rs 792 crore (US$ 181 million) for
the year.

G r o w t h i s L i f e

Reliance continued

to maintain its

leadership position

as the country’s

largest exporter

Cash profits increased 31 percent
to Rs 12,087 crore (US$ 2,763
million), from Rs 9,197 crore in the
previous year.

Our net profit for the year increased
by 47 percent to Rs 7,572 crore
(US$ 1,731 million), compared to
Rs 5,160 crore in the previous year.

The total paid up equity share capital
as on March 31, 2005 stood at
Rs 1,394 crore (US$ 319 million) as
against Rs 1,396 crore on account
of buyback and extinguishment
of shares.

Earnings per share (EPS) were
Rs 54.2 (US$ 1.24) and cash
earnings per share (CEPS) were
Rs 86.6 (US$ 1.98).

Subject to the approval of our valued
shareholders, we are pleased to
propose a dividend of 75 percent.
This would result in a dividend payout
of Rs 1,192 crore (US$ 272 million),
including dividend tax, for the year.
Reliance has consistently increased
dividends for the past 13 years.

The Company has made investments
in equity / warrants of Reliance
Energy Limited of Rs 1,156 crore
through its 100% subsidiary Reliance
Power Ventures Limited. During April
2005 further investment of Rs 62 crore
has been made in warrants of
Reliance Energy Limited and the
warrants have been converted into
equity shares on May 2, 2005.

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 18

Capital expenditure during the year
was Rs 5,093 crore (US$ 1,164
million), primarily on account of E&P,
investment in our retail marketing
network, and expansion of our
petrochemical business.

The deductions to fixed assets were
Rs. 2,240 crore and comprised of
the following:

● Certain assets which were

acquired by RIL for marketing of
Infocomm services and as part of
retail infrastructure but which are
integral to infocomm business
have been transferred to
respective infocomm companies
pursuant to these activities now
being carried out by infocomm
companies themselves. The
Company discontinued marketing
of infocomm services with effect
from October 1, 2004.

● Catalysts in MEG, PTA and PX
plants were replaced during the
year which is capitalised as part
of the plant.

● An aircraft which was purchased
by RIL has been sold and has
since been acquired on operating
lease.

● Old MEG reactor at Hazira

complex has been retired during
the year.

The contingent liabilities are
disclosed in the accounts section
forming part of this Annual Report.
The Company has disclosed
contingent liability of Rs 5,334 crore
towards sales tax deferral liability
assigned by paying off the present
value. No cash out flow other than
the present value already paid off is
expected towards this sales tax
deferral liability. Increase in
guarantees to banks in respect of
others is on account of increase in
letter of credit for crude purchase /
ongoing projects and issuance of
guarantee to banks / financial
institutions on behalf of Reliance
Netherlands BV for investment in
Trevira GmbH amounting to
Rs 453 crore. Decrease in
contingent liabilities with respect to
bills discounted with banks is on
account of reduction in discounting
of export bills on hand.

● Certain vehicles, buildings and

other miscellaneous assets have
also been sold during the year.

The loss on sale of assets amounting
to Rs 26.74 crore is mainly on
account of replacement of catalysts,
while the profit on disposal of other
assets was Rs 17.82 crore. The
aforesaid disposals did not have any
adverse impact on the profit / going
concern status of the Company.

Total assets increased during the
year to Rs 80,586 crore
(US$ 18,422 million).

The current liabilities have increased
by 29% to Rs 13,284 crore as at
March 31, 2005 as compared to
Rs 10,284 crore as on March 31,
2004. The increase in current
liabilities is generally consistent with
the increase in the manufacturing
and other expenses which also
increased by 29% to Rs 50,359 crore
in 2004-05 as compared to
Rs 39,133 crore during the previous
year. Further the financing of crude
purchases through Buyer’s credit
has been discontinued this year as
the Company was getting better
credit terms directly from the suppliers.

R E L I A N C E I N D U S T R I E S L I M I T E D

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 19

G r o w t h i s L i f e

Foreign exchange

savings,

taxes paid and

exports

Foreign exchange savings

Reliance produces import substitutes
and hence contributes towards
crucial savings of foreign exchange
for the country. This year, we have
saved foreign exchange to the tune
of Rs 40,248 crore (US$ 9,201
million), an increase of 54 percent
over the previous year’s figure of
Rs 26,134 crore.

Taxes paid

Reliance is one of India’s largest
contributors to the national
exchequer, primarily by way of
payment of taxes and duties to
various government agencies.

● During the year, Reliance paid a
total of Rs 13,972 crore (US$
3,194 million) in the form of
various taxes and duties.

● Continued growth in production

and sales volumes has increased
Reliance’s payment of duties
and taxes over the years, despite
the decline in customs and
excise duties.

Exports

During the year, Reliance’s exports,
including deemed exports, increased
to Rs 25,532 crore (US$ 5,837
million), from Rs 14,969 crore in the
previous year, recording an annual
growth of 71 percent.

Reliance continued to maintain its
leadership position as the country’s
largest exporter.

● Reliance exports its products to

101 countries, including the most
quality conscious customers in the
US and Europe. This
demonstrates Reliance’s global
competitiveness, the world-class
quality of its products and superior
logistical capabilities.

● This significant growth in exports

has been achieved while retaining
uninterrupted leadership in the
domestic markets.

● Reliance now exports 35 percent
of its turnover, with refining and
petrochemicals contributing
69 percent and 31 percent
respectively.

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 20

Resources and

liquidity

Prudent financial management helps
us maintain a conservative financial
profile. This is well reflected in our
domestic and international ratings.

● Reliance’s long-term debt is rated
AAA by CRISIL, the highest rating
awarded by the agency. FITCH
Ratings India has also awarded
Ind AAA debt rating for the
company, indicating the highest
credit quality.

● Reliance’s international debt

carries ratings of BB+ from S&P,
and Ba2 from Moody’s, which is in
line with sovereign ratings.

● Reliance’s short-term debt
programme is rated P1+ by
CRISIL, the highest credit rating
that may be assigned to this
category of instruments.

Reliance’s gross debt-equity ratio,
including long-term and short-term
debt as on March 31, 2005, is a
conservative 0.46, despite the
increase in total assets to Rs 80,586
crore (US$ 18,422 million).

The company’s long-term debt as on
March 31, 2005 stood at Rs 15,344
crore (US$ 3,508 million). Of this
debt, 54 percent represented foreign
currency denominated debt.

Reduction in secured debentures is
due to redemption of debentures
amounting to Rs 2,834 crore.

R E L I A N C E I N D U S T R I E S L I M I T E D

Increase in Long term Unsecured
loans from banks is on account of
new foreign currency loans for
Project financing. Unsecured Short
Term loans from banks decreased on
account of reduction in availment of
buyer’s credit facilities. Unsecured
Short Term loan from ‘Others’ includes
loan from Reliance Communications
Infrastructure Ltd of Rs 1,600 crore.

Reliance’s exports, and foreign
exchange-denominated oil and gas
revenues provide a cover of more
than 75 times its annual interest
obligations on foreign currency
denominated debt.

The average final maturity of the
company’s total long-term debt is
6.2 years. The average final maturity
of the company’s long-term foreign
exchange debt is 7.7 years.

Reliance availed a US$ 350 million
loan (Rs 1,527 crore) and signed a
EUR 116.2 million Export Credit
Agency (ECA) backed Buyer’s credit
facility (availed during the year US$
13 million equivalent to Rs 58 crore)
for project financing.

Reliance met its working capital
requirements through commercial
rupee credit lines provided by a
consortium of Indian and foreign
banks. The credit lines are fixed
annually and renewed on a quarterly
basis. In addition, Reliance issues
short term debt in the form of fixed
and floating rate bonds / loans in
Indian Rupees and foreign currency.

We also undertake liability
management transactions and enter
into structured derivatives
arrangements such as interest rate
and currency swaps. This is
practised on an ongoing basis in
order to reduce our overall cost of
debt and diversify our liability mix.

Reliance also actively manages its
short-term liquidity to generate
reasonable returns by investing
surplus funds while preserving the
safety of capital and maintaining
liquidity.

RIL’s current cash flow levels, for
less than two years, are adequate to
extinguish its entire net debt,
reflecting its inherent financial
strength and conservatism.

In our ongoing endeavour to enhance
value for our shareholders, Reliance
introduced India’s largest share
buy-back programme in December
2004 with an allocated amount of
Rs 2,999 crore (US$ 686 million).
Rs 149.61 crore has since been
invested towards buying back
2.86 million shares, which have
been extinguished.

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 21

Growth is Expansion

G r o w t h i s L i f e

Business review

Reliance’s interests span major
growth sectors of the Indian
economy, with activities ranging from
energy to infocomm businesses. Its
existing and emerging businesses in
the areas of exploration and
production, refining and marketing,
petrochemicals, textiles, power,
information technology and
telecommunications have given
Reliance a unique leadership
position in India and the world.

Exploration and
Production

Currently, India imports about two
thirds of its crude oil requirement.
Exploration and production of oil and
gas is therefore vital for India’s
energy security and future growth.
Reliance’s interests in E&P are
inexorably linked with this national
imperative. E&P, the initial link in the
energy value chain, will be a major
growth area for Reliance over the
next several years.

Exploration

This year, India consumed 124
million tonnes of crude oil as against
a domestic production capacity of
just 34 million tonnes, signifying
a pressing need for increased
E&P activity.

Domestic gas production remained
stagnant at 32 billion cubic metres
(bcm) resulting in availability of 75
million standard cubic meters per day
(MMSCMD) of natural gas for sale to
consumers. This is against the
projected demand of 117-151
MMSCMD in 2001-02 and 166 -231
MMSCMD in 2006-07 as indicated in
the Government of India’s policy
paper Hydrocarbon Vision 2025.

As a result, there is a need for
significant step-up in the production
of gas in the country. As a prominent
private sector E&P player, Reliance
is poised to play a major role in
increasing domestic oil and natural
gas production.

● Reliance is the largest exploration

acreage holder in the private
sector in India with 30 domestic
exploration blocks covering an
area of about 300,000 sq kms.
As part of our exploration strategy,
we acquired 3000 line kms of 2D
seismic data and 9,000 sq kms of
3D seismic data during the year.

● Building on the giant Dhirubhai

gas discovery, we continued our
exploratory drilling campaign in the
KG-DWN-98/3 discovery block.
Five more wells were drilled,
confirming upside potential of the
block and also helping reduce the
reservoir risk.

The Development Plan of Dhirubhai
1 and 3 discoveries was approved by
the Government of India.

● Mining lease for 20 years effective

from March 2, 2005 was also
obtained.

● The Development Plan envisages
initial plateau production of 40
MMSCMD from these fields with
the provision of modular
expansion to address future
discoveries and markets.

Reliance emerged as the lowest
bidder to NTPC, India for the
supply of around 12 MMSCMD of
natural gas.

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 22

E&P, the initial link

in the energy value

chain, will be a major

growth area for

Reliance over the

next several years

● To transport the gas, Reliance is
planning to build the Kakinada-
Ahmedabad East-West pipeline, to
enable access to markets in the
states of Andhra Pradesh,
Maharashtra and Gujarat as also
in other states along the Hazira-
Vijaipur-Jagdishpur (HVJ) pipeline.

Reliance also has a stake in two
overseas blocks in Oman and Yemen.

● An Exploration and Production
Sharing Agreement has been
signed with the Government
of Oman.

● In the Yemen off shore block

where Reliance has 25 percent
interest, 2 exploratory wells and 4
appraisal wells were drilled and
test results are encouraging.

● In association with our JV

partners, Reliance is proceeding
towards a rapid development of
the block targeting commercial
production in 2005-06.

Production

Reliance has a 30 percent
participating interest in an
unincorporated Joint Venture (JV)
with British Gas and ONGC, for
the Panna-Mukta and Tapti oil and
gas fields.

● The Panna-Mukta fields currently
produce 30,000 bbl of crude oil
per day, and about 4 MMSCMD
of natural gas, while the Tapti field
produces about 7 MMSCMD of
natural gas.

● Reliance’s share of crude

production increased 8 percent
to 383,018 tonnes and gas
production increased 15 percent
to 34.5 trillion BTU (966 MMSCM)
of natural gas in these 2 fields.
Increased production and prices
resulted in EBITDA growth of 36
percent over the previous year.

● In an effort to realise a price
better than that offered by the
Government nominee, it was
resolved that the Panna-Mukta
and Tapti Joint Venture (JV) would
market the gas from these fields
directly to the consumers from
April 1, 2005 which has since
commenced.

● As part of the Panna Expanded

Plan of Development, the JV has
awarded an EPIC contract for two
platforms and associated pipelines
with completion scheduled in April
2006 in order to achieve an
incremental recovery of 2.4 million
tonnes of oil and 74 trillion BTU
(2,095 MMSCM) of natural gas.

● Pursuant to approvals, the JV is
also in the process of awarding
another EPIC contract for its Mid
Tapti Plan of Development. This
plan when implemented is
expected to augment the JV’s
natural gas production at Tapti
from the present 7 MMSCMD to
12.74 MMSCMD in 2007.

R E L I A N C E I N D U S T R I E S L I M I T E D

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 23

G r o w t h i s L i f e

Reliance operates

the third largest

refinery in the world

at any single location

● Strength derived from product

prices helped refineries
across regions achieve high
gross margins.

● Domestic demand for petroleum
products for the year rose to 113
million tonnes, against 107.8
million tonnes, registering a growth
of 4.8 percent compared to 3.5
percent in the previous year.

● HSD, which accounts for 40

percent of the total petroleum
product demand, showed a strong
growth of 7.4 percent compared to
1.2 percent the previous year.

● LPG continued to maintain its near

double-digit growth rate at 9.4
percent, with consumption of 9.9
million tonnes.

● Growth in MS increased to 4.9

percent compared to 4.3 percent
the previous year.

● Reliance exported 10.2 million
tonnes of refined products to
30 countries.

● Demand for aviation fuel increased
by 14.5 percent compared to 9.4
percent the previous year.

● Naphtha and Kerosene

consumption declined 4.9 percent
and 0.6 percent respectively.

The Reliance refinery achieved
96 percent capacity utilisation during
the year. This compares favourably
with other refineries in India and
overseas which are at 91 percent for
North America, 89 percent for
Europe, and 93 percent for Asia-
Pacific.

● We sold 44.7 percent of our

production to domestic markets,
of which 61 percent went to
public sector companies.

● Captive consumption accounted

for 22.6 percent.

High and volatile oil and petroleum
product prices led to the Government
of India announcing three duty
changes during the year in June and
August 2004 and in March 2005.

The year also witnessed a major
step towards the greening of
petroleum products.

● Bharat Stage III compliant Petrol
and Diesel were introduced in 11
major cities and Bharat Stage II
Petrol has been introduced
throughout the rest of country from
April 1, 2005.

Refining and Marketing

Petroleum refining and retailing is the
second link in Reliance’s drive for
growth and global leadership in the
core energy value chain. Reliance
already operates the third largest
refinery in the world at any single
location.

In January 2005, we achieved a
landmark when the 1,000 millionth
barrel of crude oil was processed.

● Reliance’s refinery, India’s first and
the only private sector refinery,
has now completed 5 years of
successful operations. It has
significantly improved domestic
product availability, and India has
become a net exporter of
petroleum products from being a
large importer previously.

World over, crude oil prices remained
high and volatile on account of geo-
political uncertainties, production
disruptions at some of the major
crude oil centres, strong product
demand and low spare production
capacity. The global crude oil
demand increased to 82.5 million
barrels per day in 2004 as compared
to 79.8 million barrels per day in
2003, registering a growth rate of
3.4 percent, the highest since 1978.

● The Dubai crude price averaged at

US$ 36.5 per barrel ranging
between US$ 29.1 and US$ 47.9.
WTI and Brent crude prices
recorded a maximum of US$ 56.9
and US$ 55.7 respectively.
Average prices were US$ 44.8 per
barrel and US$ 42.1 respectively.

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 24

● While Bharat Stage II Diesel

implementation has been deferred
across seven states by six months
till October 1, 2005, it was
introduced in the rest on schedule.

● It was also proposed that Euro IV
compliant fuel will be introduced
in these eleven cities from
April 1, 2010.

Having entered Retail Marketing of
petroleum products, in a short period
of one year, Reliance created a
strong brand name and several new
benchmarks with its outlets selling
significantly higher volumes than the
industry average.

Leveraging state-of-the-art
technology deployed at Retail
Outlets, Reliance also achieved
remarkable success in the card
based fleet services programme,
aimed at enabling vehicle owners to
significantly improve their operational
efficiency.

Reliance is well on the way to create
a Pan-India network of world class
truck stops, where apart from fuel,
facilities like secured parking, rest
areas and catering facilities are
available in a One-Stop Outlet.

The future outlook for this business
continues to be bright and Reliance
is poised to achieve a significant
market share in the Retail Petroleum
Segment in the near future.

Reliance has the

distinction of being among

the top ten producers

in the world in all of its

major petrochemical

product lines

Petrochemicals

The Petrochemicals business is the
next link in the core energy value
chain. Reliance has the distinction of
being among the top ten producers
in the world in all of its major
petrochemical product lines. This
sector continues to power Reliance’s
sustained performance and progress,
and provide attractive growth
opportunities.

India continues to witness high
growth in petrochemicals, with
consumption envisaged to treble
every decade. Reliance is pursuing a
three-pronged strategy of enhancing:

● Margins through an emphasis on

premium grades

● Market shares through new

capacity additions and
acquisitions, and

● Market leadership through new

technology development initiatives

Polymers (PP, PE and PVC)

Global demand for polymers grew at
5 percent while capacity growth was
less than 3 percent, leading to
tightening of supply and consequent
spurt in prices. The current up-cycle
is expected to be longer in duration
leading to a strong and sustained
earning period for integrated
producers like Reliance.

Domestic polymer consumption
showed growth of 3 percent.
Reliance, along with its associate
company IPCL, maintained its
leadership position with a market
share of 67 percent. While global per

capita consumption of polymers was
22 kg, Indian consumption has just
reached 4 kg, indicating substantial
untapped potential that is likely to be
realised in the future.

Polypropylene (PP)

The global demand for PP grew at
6 percent, which was the highest
amongst all commodity polymers.
China and the Middle East (ME)
continued to have a major influence
with ME being major exporting region
and China the largest importer.
The average capacity utilisation was
90 percent.

Global prices increased to an 8 year
high during the middle of the year.
The average increase in domestic
prices over the last year was 22
percent. The converting industry has
realigned itself to these price levels
and consumption registered a very
healthy growth.

Reliance’s plants at Hazira and
Jamnagar operated above rated
capacities with a utilisation rate of
101 percent. During the year,
production increased by 6 percent.
The combined market share for
Reliance and IPCL was 85 percent.

The domestic industry is poised to
grow at a healthy rate backed by a
buoyant economy. The automotive,
appliances, geo-textiles, and
packaging sectors are key growth
drivers for PP demand. Prices are
expected to remain healthy during
2005-06 and integrated producers
like Reliance are expected to enjoy
robust margins.

R E L I A N C E I N D U S T R I E S L I M I T E D

(production in ‘000 tonnes)

2002-03

2003-04

2004-05

Polymers

1,769

1,859

1,921

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 25

Reliance is scheduled to commission
its 280 KTA of additional capacity
at Jamnagar during financial year
2005-06. This will enhance our
domestic market share and enable
us to consolidate our global
leadership position.

Polyethylene (PE)

Global demand registered a growth
of 5 percent and capacity utilisation
improved to 87 percent. As in the
case of PP, China and the Middle
East dominated the PE trade.

After a buoyant domestic demand
growth of nearly 14 percent in PE
during 2003-04, consumption of
HDPE grew marginally during the
year while the growth in LLDPE
was 12 percent. International prices
reached an 8 year peak for HDPE,
a 12 year peak for LLDPE and a
10 year peak for LDPE. As a result,
there had been substantial
de-stocking by the converting industry.

● The PE plant at Hazira operated at
96 percent capacity and Reliance
maintained its leadership position
in the domestic market.

● The marketing arrangement with
Relene Petrochemicals Private
Limited (RPCL) has provided an
edge to Reliance over other
domestic producers with the
production of a range of specialty
polymers including Ethylene Vinyl
Acetate (EVA) and Ultra High
Molecular Weight PE (UHMWPE).
These products find applications in
niche markets and are expected to
substantially strengthen Reliance’s
competitive position.

● The domestic industry has

realigned itself to current price
levels and has seen healthy
movement of products during the
last quarter of 2004-05.

● With the growth of the packaging
sector and the Government’s
emphasis in upgrading agriculture
and infrastructure sectors, the
demand for PE is expected to grow
at a healthy rate during 2005-06.

Reliance will focus on consolidating
its presence in specialty grades and
leverage its strength as a single
window supplier for all PE products.

Poly Vinyl Chloride (PVC)

Global PVC consumption grew at 4
percent and capacity utilisation was
maintained at 82 percent. After a
16 percent growth in domestic
consumption last year, growth was
marginal during 2004-05. Prices too
witnessed a strong upswing touching
an 8 year high during the year.

While monthly average consumption
was low during the first nine months,
it reached to 90 KT per month in the
fourth quarter indicating demand
recovery and restocking by the
downstream sector.

Low growth during the year was
mainly due to a weaker demand in
the pipe sector, which accounts for
more than 65 percent of
consumption. Other significant
growing markets are films, sheets
and calendared products.

Production at our Hazira plant
increased by 4 percent and capacity
utilisation was 101 percent. The
combined market share of Reliance
and IPCL increased to 68 percent.

Emphasis on infrastructure, housing,
water supply, sanitation and
micro-irrigation in India will generate
a sizeable demand for PVC products.
Consumption is likely to grow at a
double-digit rate during 2005-06.

Driven by an increase in global
prices, the industry is likely to
achieve better margins. With greater
feedstock integration and an

G r o w t h i s L i f e

Reliance invested

in Trevira,

a leading producer

of branded

polyester fibres in

Europe

optimized grade-mix across Reliance
and IPCL, this business would
witness substantial gains.
Forthcoming expansions at the IPCL
plant in Gandhar will enhance overall
capacity and increase our share in
the domestic market.

Polyester (PFY, PSF
and PET)
The much-awaited abolition of the
textile quota by the US, the EU and
Canada was applied from January
2005. India is expected to be a key
beneficiary. India’s low cost structure
and skilled manpower will provide
textiles and apparel at competitive
prices to the world markets.

The Government of India has
reduced the excise duty on polyester
filament yarn (PFY) by 8 percent to
16 percent and customs duty on
polyester and its raw materials by 5
percent to 15 percent.

The Government has also provided
capital subsidy to the processing
sector, a sector that is considered
to be the weakest link in the entire
textile chain. It has also reduced
customs duty on selected textile
machinery from 20 percent to
10 percent.

Thirty hosiery products, which were
earlier reserved under the Small
Scale Industry (SSI) category, have
now been de-reserved. These
measures are expected to bring in
large-scale investments to increase
capacities in the downstream textile
industry and strengthen the entire
textile value chain in India.

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 26

Anticipating a rise in demand,
Reliance is increasing its PFY
capacity by 320 KTA and polyester
staple fibre (PSF) capacity by 230
KTA. With the commissioning of
these expansions, the group’s total
polyester capacity will rise to
2 million tonnes.

The domestic demand for total
polyester increased from 1.64 million
tonnes to 1.72 million tonnes this
year, a growth of 5 percent. Reliance
continues to be the market leader
with a 52 percent market share.

The Indian PET bottle resin market
grew by 21 percent to 101 KTA, at
more than double the last year’s
growth rate. Reliance has a majority
market share at 57 percent of the
PET market. Changing lifestyles
and increasing consumer spending
is expected to further accelerate
growth of PET consumption in the
years to come.

During the year, Reliance’s total
polyester production volume
increased by 12 percent to 1.04
million tonnes.

During the year, Reliance invested
in Trevira, a leading producer of
branded polyester fibres in Europe.
Trevira has a manufacturing capacity
of 130,000 tonnes per annum of
polyester staple fibres, polyester

Polyester
Intermediates (PX,
PTA, and MEG)
Reliance is the world’s 3rd largest
producer of Paraxylene (PX), 6th
largest producer of PTA and 5th
largest producer of MEG. In India,
Reliance is the largest manufacturer
of polyester intermediates with a
market share of 100 percent in some
categories. Reliance is the only
producer of PX, while there are two
PTA and four MEG producers in India.

With the acquisition of SM Dyechem’s
MEG plant in December 2004,
Reliance has enhanced its market
share by 11 percent. Reliance also
enhanced its Hazira plant capacity
to cater to domestic market needs
during the year.

Demand for PTA and MEG grew by
8 percent. PX demand grew by
8 percent. The combined production
of fibre intermediates was 3.15
million tonnes; over 50 percent of
this was utilised captively.

Globally, there were no major PTA
and MEG capacity additions. It is
expected that in line with polyester
capacity additions, more PTA and
MEG capacities will be added
beyond 2005. The increase in PTA
capacity is likely to lead to a
shortage of PX and affect PTA
operating rates.

Reliance has opened an office in
China to give it a leveraging position
in this large and growing market.

filament yarns and polyester chips
spread over four locations–Bobingen
and Guben (Germany), Silkeborg
(Denmark) and Quevaucamps
(Belgium). In addition, it has a state-
of-the-art R&D facility at Bobingen.
This is Reliance’s first international
investment in polyesters.

● Trevira is a highly specialized and
branded manufacturer of polyester
products. The company has
several valuable patents and
technologies and is the market
leader in Europe in high value
applications of polyester, especially
in automotive and flame retardant
textiles.

● Trevira will provide Reliance a
strong presence in Europe and
place us in a position to cater to all
market segments of polyester
fibres and filament yarns. This will
enable Reliance to provide
innovative solutions for apparel
and non-apparel applications of
polyester to customers worldwide.

(production in ‘000 tonnes)

2002-03

2003-04

2004-05

Polyester

Polyester Intermediates

851

3,075

925

3,026

1,036

3,147

R E L I A N C E I N D U S T R I E S L I M I T E D

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 27

Cracker Products

Ethylene and Propylene

Reliance operates one of the world's
largest grassroots, multifeed cracker
at its Hazira petrochemicals complex.
During the year, Reliance produced
816 KT of Ethylene and 395 KT of
Propylene, an increase of 0.75
percent and 2.7 percent respectively
over the previous year.

Reliance plans to increase cracker
capacity by 33 percent, through de-
bottle necking enhancement to reach
the million tonne mark in Ethylene
production. This would be partially
realised during 2005-06.

Construction of new Butadiene
extraction facilities is progressing
well and it is expected that
commercial production will
commence during 2005-06.
Butadiene is a high value commodity
intermediate mainly used in the
manufacture of synthetic rubbers,
a key input for the tyre industry.

With the startup of RPCL, new
opportunities were created to
enhance inter-site synergy. The
Hazira complex provided a natural
destination for low present value -
high potential value co-product
streams. Such low value streams
from the RPCL cracker were
upgraded to their full commercial
potential at Hazira.

G r o w t h i s L i f e

Reliance operates one

of the world’s largest

grassroots multifeed

cracker at its Hazira

petrochemicals complex

Aromatics

LPG

Retail Business
A well-trained distribution network of
114 distributors and 4,782 outlets
services a million customers in the
states of Gujarat, Maharashtra,
Madhya Pradesh and Rajasthan. Our
retail sales were 73,723 tonnes.

Bulk Business
Reliance sold 122,274 tonnes from
its Hazira Cracker during the year of
which 29,971 tonnes were sold to the
manufacturing industry and 92,303
tonnes to the bottler segment. We
also sold 24,270 tonnes of LPG from
the Patalganga unit to industries
(12,063 tonnes) and to bottlers
(12,207 tonnes).

Process improvements enabled to
grow Benzene production by 5
percent, which now stands at 377
KT. Reliance maintained its
leadership in the domestic market
with a share of 55 percent. Naphtha
feedstock from the Reliance refinery
at Jamnagar was optimized to
enhance overall cracker productivity.

Exports of benzene to markets in
South East Asia, the Middle East,
Europe and US increased by 33
percent to 100 KT, reflecting a high
acceptability of our product.

Reliance retained its leadership
position in the domestic Toluene
market with a share of 60 percent.
At the Hazira complex, Toluene
production increased by 10 percent
to 116 KTA and was achieved
through inter-site integration.

Reliance is a dominant player of
Aromatics in South East Asia. This
enabled the company to place the
entire surplus volume on contract
with leading corporations like BASF,
Shell and Idemitsu, thereby
optimizing netback. The strategy of
term contracts in different geographic
regions also ensured a hedge
against price volatility.

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 28

Chemicals

Reliance is India’s largest
manufacturer of Linear Alkyl
Benzene (RELAB).

● During the year, LAB and Normal

Paraffin (NP) production increased
by 2 percent to 2,51,809 tonnes.

● The industry faced input cost

pressure in the second and third
quarters; however this challenge
was effectively addressed through
increase in price realisation.

● The attractive consumer

propositions currently on offer are
expected to boost the detergent
consumption in the country.
This augurs well for an
increased demand for LAB in
the coming years.

Reliance exported 40 percent of LAB
production during the year to
countries in South East Asia, Middle
East and Europe, retaining and
expanding the customer base in
these logistically convenient markets.

Our NP plant fully meets the
feedstock requirement of the LAB
plant. Reliance also offers three
grades of NP to the market to meet
the specific needs of different
segments in the Chlorinated Paraffin
Wax industry.

Textiles

Reliance’s Naroda Textile Complex,
one of India’s largest and modern
textile complexes, produces about 25
million metres of fabric both for
domestic and international markets.

● It is the only textile complex in
India to offer the maximum
marketed range in the greatest
number of product categories.

● Our textile products are sold under
the brand names of Only Vimal,
Harmony, Reance, RueRel and V2
(pre-cut, pre-packed products).

● The flagship brand ONLY VIMAL
is India’s largest selling brand of
premium textiles. In a survey
conducted by The Economic
Times, it was voted as ‘India’s
most trusted Fabric Brand’.

Our R&D has developed many new
products / processes such as
fluorescent shades on polyester
fabrics, extended laundering colour-
fast fabrics in dope-dyed fibres,
water and oil repellent finishes on
Poly Wool and Lycra stretch fabrics,
wash-fast, flame-retardant fabrics
and others.

In the future, our R&D efforts will
focus on the development of water-
proof, weather colour-fast fabrics for
outdoor applications, chintz finishes,
built-in stain repellent and stain
release properties, tri-blends fabrics
and others.

(production in ‘000 tonnes)

2002-03

2003-04

2004-05

LAB & NP

233

247

252

The Harmony Show

Over the years, the Harmony Show
has been acclaimed as the largest
private show of contemporary
Indian art. Today, it is a corporate
platform for the advancement of
Indian art and social commitment
ventures. Every year, renowned
and aspiring artists share this well-
attended forum.

In celebration of a glorious decade of
committed work, this year’s event
showcased the work of over 200
artists and displayed more than 500
works of art.

In the true Reliance tradition, the
show also included the works of
children from two voluntary agencies:
ASEEMA and PRATHAM. ASEEMA
is committed to educating street
children and PRATHAM wishes to
make sure that every Indian child is
in school and learning well!

This event is a celebration of child
art. For us in Reliance, this is a
window of opportunity for our social
commitment endeavours.

R E L I A N C E I N D U S T R I E S L I M I T E D

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 29

Our opportunities

The per capita consumption for most
products and services in India still
remains among the lowest in the
world. With a GDP growth forecast of
6-7 percent in the coming years, the
Indian economy provides several
attractive growth opportunities.

● The upstream energy sector,
where Reliance is one of the
leading players, would continue to
provide tremendous growth
opportunities to an already
growing economy. Reliance aims
at leveraging its market leadership
position, financial strength and
project execution capabilities to
effectively participate in utilising
and creating these opportunities.

● Reliance will continue to allocate
significant proportions of its cash
flows to the core energy value
chain businesses and invest in
affiliate opportunity domains based
on prospects. Reliance will invest
in projects that deliver superior
returns, and maximise the
profitability of existing
E&P operations.

● In the downstream petroleum
sector, retail marketing of
petroleum products presents a
significant growth opportunity.

● In petrochemicals, Reliance will

continue to maintain its leadership
position and participate in new
opportunities. Reliance is pursuing
a strategy of enhancing margins
through an emphasis on premium
grades, market shares through
new capacity additions and
acquisitions, and market
leadership through new
technology development initiatives.

Reliance is

establishing a

state-of-the-art

retail network

across the country

Reliance’s leadership position in
India, coupled with its competitiveness,
product quality, logistical capabilities
and financial strengths will provide us
new opportunities in domestic as well
as international markets. We will
continue to explore and pursue these
new opportunities.

Our challenges

Reliance is equipped to face normal
market competition in all its existing
businesses from Indian as well as
international companies –

● The company remains fully
committed to achieving and
maintaining world-class levels of
operating and capital discipline.
Reliance is strongly positioned to
address this environment with its
cost competitiveness and robust
and appropriate strategies.

● The petrochemicals business

witnessed two rounds of import
duty cuts during the last financial
year. This had a marginal impact
on Reliance’s operations. This
business also faces the challenge
from new capacity creation by
regional players. However, we
expect that our ongoing business
strategies and cost positions will
enable us to maintain our operating
margins and competitiveness.

G r o w t h i s L i f e

● The public sector oil marketing
companies currently enjoy the
advantage of their large existing
distribution network for petroleum
retailing. Reliance has the
necessary approvals for the
setting up of 5,849 retail outlets,
and is establishing a state-of-the-
art retail network across
the country.

● In E&P, the major challenge will
be to bring the discovered gas in
the KG basin to energy-deficient
consumers in the country.
Reliance has deployed world-class
technology in partnership with
leading service providers for
development of the block and
for distribution of the gas to
end consumers.

Our future

The outlook for margins and
profitability depends greatly upon the
overall global economic outlook, the
global demand-supply scenario, and
trends in feedstock and product prices.

● The company’s long term

competitive position, particularly
given the capital-intensive and
commodity-based nature of the
industry, is closely associated with
the company’s ability to invest in
projects that provide adequate
financial returns and to manage
operating expenses effectively.

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 30

● We derive a major portion of

our revenues from the
petrochemicals and refining
businesses. The variable that
affects our performance most
in petrochemicals and refining
is the price of crude oil.

● However, Reliance’s operations

have historically shown significant
resilience to fluctuations in
business cycles and crude prices.
This is mainly attributed to our
high levels of integration, globally
competitive operations and
leadership position in domestic
markets. The company also
follows an efficient inventory
management system and a well-
crafted strategy of procuring crude
through a mix of spot and long
term contracts.

● The recent unfavourable trends in
import tariffs on key raw materials
and products may impact the cost
structure and/or selling prices of
products in the domestic markets,
potentially affecting margins.
However, Reliance’s profitability
has consistently increased despite
a sharp reduction in import duties
since the economic reforms in
India in the early 1990s.

● The instability in the foreign

currency exchange rates may
impact the company due to its
large portfolio of foreign currency
debt. To help mitigate this position,
Reliance has adopted a
conservative foreign exchange risk
management policy. It undertakes
liability management transactions
and other structured derivatives
such as interest rate swaps and
currency swaps on an ongoing
basis to manage these risks. The
company’s rapidly growing exports
and foreign exchange
denominated oil and gas revenues
cover our foreign currency debt
service requirement.

Our internal

controls

The company’s well defined
organisation structure, predefined
authority levels, documented policy
guidelines and an extensive system
of internal controls ensure optimal
utilisation and protection of
resources, IT security, accurate
reporting of financial transactions
and compliance with applicable laws
and regulations.

● Reliance has adequate systems of
internal control in place. This is to
ensure that assets are
safeguarded against loss from
unauthorised use or disposition,
and that transactions are
authorised, recorded, and reported
correctly. The company has an
exhaustive budgetary control
system. Actual performance is
reviewed with reference to the
budget by the management on an
ongoing basis.

● The internal audit function is
empowered to examine the
adequacy, relevance and
effectiveness of control systems,
compliance with policies, plans
and statutory requirements. The
top management and the Audit
Committee of the Board review the
findings and recommendations of
the internal audit panel.

● Reliance is in the process of

making significant investments in
its E&P business. The E&P
business has the potential to
provide a significantly higher
contribution to Reliance’s overall
business profile, in the medium to
long term projections.

● Refining and marketing earnings

are closely tied to regional
demand for refined products and
the associated effects on industry
refining and marketing margins.

● Earnings in the petrochemicals
segment are closely linked to
global chemical demand, inventory
levels and plant capacities.
Additionally, feedstock and fuel
costs, which tend to follow crude
oil and natural gas price
movements, influence earnings in
this segment.

Our risks and

concerns

Reliance continuously monitors
business and operations risk through
business process re-engineering and
reviewing. All key functions and
divisions are independently
responsible to monitor risk
associated within their respective
areas of operations such as
production, treasury, insurance, legal
and other issues like health, safety
and environment.

R E L I A N C E I N D U S T R I E S L I M I T E D

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 31

G r o w t h i s L i f e

IPCL’s operating margin (excluding
other income) for the year was at
21.02% compared to 20.60% in the
previous year as increase in product
prices during the year was offset by
increase in raw material prices on
account of high crude oil prices
globally, resulting in high Naphtha
and Propane prices.

Other income for the year was
Rs 132 crore (US$ 30 million),
compared to Rs 101 crore for the
previous year.

Interest expense for the year stands
reduced by 61% to Rs 87 crore
(US$ 20 million), primarily due to
reduction in outstanding debt.

Depreciation for the year was higher
by 7% at Rs 506 crore (US$ 116
million), compared to Rs 472 crore
for the previous year, due to
depreciation on assets capitalised
during the year.

Profit before non-recurring item
(Voluntary Retirement Scheme) and
tax increased 127% to Rs 1,088
crore (US$ 249 million) from Rs 480
crore in the previous year.

Indian Petrochemicals

Corporation Limited

(IPCL)

Financial year 2004-05 was the third
year of IPCL’s operations under the
Reliance management. The initiatives
introduced to increase capacity
utilization, reduce operating costs,
improve financial management and
enhance overall productivity and
efficiency have resulted in continuous
improvement in financial and
operating performance year on year.

● In 2004-05, economic conditions

improved and demand for
petroleum and petrochemical
products strengthened despite
global crude oil prices remaining at
all time highs during the year.

● Increase in global demand for

petrochemical products outpaced
increase in supplies and polymer
prices entered into a new upcycle.

● Domestic demand for

petrochemicals too strengthened,
resulting in increased operating
rates and earnings.

● We believe we are now entering
into what could be a long and
strong earning period for our
industry.

IPCL is positioned to leverage
maximum benefit from the cyclical
upswing to deliver substantially more
long-term value to its shareholders.

IPCL’s turnover for the year ended
March 31, 2005 increased to
Rs 9,386 crore (US$ 2,146 million),
against Rs 9,019 crore in the previous
year, registering a growth of 4%.

Turnover includes sale of traded
products of Rs 68 crore (US$ 16
million), compared to Rs 2,224 crore
in the previous year.

Net turnover for the year, excluding
excise duty recovered on sales and
sale of traded products increased
38% to Rs 8,131 crore. The increase
reflects the impact of an increase of
28% in product selling prices and
10% in sales volume.

Domestic sales of products
manufactured by IPCL increased
24% to Rs 6,493 crore (US$ 1,484
million) and accounted for 80% of
turnover excluding trading sales.

Export of products manufactured by
IPCL was Rs 1,638 crore (US$ 374
million) compared to Rs 644 crore in
the previous year, an increase of 154%.

IPCL’s operating profit (PBDIT) for
the year was Rs. 1,756 crore (US$
401 million) compared to Rs 1,251
crore in the previous year, an
increase of 40%.

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 32

During the year, there was an
extraordinary, non-recurring expense
of Rs 62 crore (US$ 14 million) on
account of the settlement relating to
the Voluntary Retirement Scheme
implemented during the year as a
result of which 680 employees opted
for early retirement.

Cash profits increased to Rs 1,426
crore (US$ 326 million), compared to
Rs 801 crore for the previous year,
registering a growth of 78%.

Net profit increased to Rs 786 crore
(US$180 million) which is 188%
higher over last year. The Net Profit
has increased from Rs 107 crore in
FY 01-02 to Rs 786 crore in
FY 04-05, reflecting an increase of
7.34 times, after Reliance acquired
management control in June 2002.

IPCL’s paid up equity share capital
stood at Rs 249 crore (US$ 57 million).

Earnings Per Share (EPS) is Rs 31.65
(US$ 0.72) and Cash Earnings Per
Share (CEPS) is Rs 57.45 (US$
1.31).

A dividend of 45% has been
declared. The corresponding
dividend payout will be Rs 112 crore
(US$ 26 million). In addition, tax
(inclusive of surcharge and education
cess) of Rs 16 crore is payable by
the Company on distribution of
dividend.

Capital expenditure during the year
was Rs 147 crore (US$ 34 million),
primarily on account of minor
expansions and renewal of assets.

IPCL contributed a total of Rs 1,897
crore (US$ 434 million) to the
national exchequer in the form of
various taxes.

IPCL’s long term debt is rated “AA”
and short-term debt is rated P1+
by CRISIL.

IPCL’s gross debt was Rs 760 crore
(US$ 174 million) on March 31, 2005
compared to Rs 2,166 crore on
March 31, 2004, registering a decline
of 65%. IPCL's gross debt equity
ratio including long term and
short-term debt as on March 31,
2005 stood at 0.43 as against 1.19
on March 31, 2004.

The Company’s long-term debt as on
March 31, 2005 stood at Rs 687
crore (US$ 157 million). Of this debt,
70% represented foreign currency
denominated debt.

IPCL is positioned

to take maximum

benefit from

cyclical upswing

R E L I A N C E I N D U S T R I E S L I M I T E D

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 33

G r o w t h i s L i f e

Reliance Telecom

will soon be

expanding their

services to another

500 towns

Reliance Infocomm

(RIC)

RIC commenced operations with the
launch of its wireless business in
May 2003 followed by frantic growth
in operations. The fiscal year ended
March 2005 was a period of
consolidation. During the year, RIC
focused on improving its business
processes and systems, credit
monitoring and customer satisfaction.

RIC currently offers services in 20
circles across the country through its
next generation fibre optic backbone
spanning more than 70,000 route
kms. It has also acquired a license
for the J&K circle.

● As on March 31, 2005, RIC

has 10.64 million mobile, fixed
wireless and fixed line customers.

● RIC was awarded the CDMA

Development Group's 3G CDMA
Industry Achievement Award for
International Leadership in 2004.

Reliance Telecom

Reliance Telecom Limited (RTL),
which began operations in 1997-98,
provides GSM services in 7 telecom
circles covering 206 towns in 11
Indian states.

RIL and its subsidiaries hold 35.6%
of RTL after the 10 percent holding
of Nynex International (Asia) Limited
was acquired in April 2004.

● Despite stiff competition, RTL’s
subscriber base grew by 3.25
lakhs to reach 1.12 million,
reflecting 41 percent growth. RTL
is increasing its radio capacity to
cater to increased traffic as a
result of increase in usage and
subscriber base.

● Due to competition, we had to
reduce our tariffs considerably
and are therefore witnessing a
decline in the ARPU in the Eastern
Region circles which limited the
revenue jump to 25 percent.

● The Department of Telecom

(DOT), India had earlier directed
that prepaid services should be
discontinued in the states of
Assam and the North East. In
compliance, we had completed our
subscribers’ plan migration to
postpaid services. However, in
November 2004, DOT allowed the
re-launch of prepaid services in
the region for a trial period of 3
months. Subsequently, this service
has been reintroduced.

● With the recent launch of our

Kolkata GSM operation, we have
been able to fill up the gap in the
eastern corridor. Our GSM
services are now available in all
the Eastern Region Circles.

● RTL has drawn up ambitious plans
to expand services in another 500
towns in the coming months.

● The summary of total assets of
RTL as on March 31, 2005 and
the performance for 2004-05 is
as under:

Total Assets

Total Income

Net Profit

Rs crore

513

453

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 34

RIC’s performance is being
continuously benchmarked against
the best in the industry. This has
enabled it to improve margins and
register a healthy performance both
in operational and financial terms.
RIC turned in a net profit in the last
quarter of 2004-05, a major
achievement for a telecom company
in just its second year of operations.

Summary of the total assets, as on
March 31, 2005 and the performance
of Reliance Communications
Infrastructure Limited and its
subsidiaries including Reliance
Infocomm Limited on a consolidated
basis is as under:

Total Assets

Total Income

Net Profit after tax
and minority interest

Rs crore

29,007

8,058

Reliance Infocomm

is expanding its

coverage area to

5,700 towns

Wireless business

RIC has emerged as one of the
leading wireless service providers in
the mobile and fixed-wireless
categories in the country.

● Our subscriber base stands at

10.57 million at the end of March
2005 – 9.34 million digital mobile
and 1.23 million fixed wireless
connections.

● This registers a 51 percent growth

over the previous year. The
reported wireless subscriber base
is after a one-time company
initiated churn of 0.98 million
subscribers in March 2005.

● RIC is currently implementing its
Phase-II expansion project to
increase its coverage area. At the
end of March 2005, the coverage
stood at 2,787 towns.

● By the end of Phase II, wireless
services would be available in
5,700 towns and would also cover
about 4 lakh villages, providing a
much superior reach and coverage.

The focus of our wireless business
during the year was on strengthening
internal and external processes and
systems. Some notable
achievements are:

● Complete end-to-end

computerisation of the customer
acquisition process

● Integration of the customer care
system with the billing system

● Achievement of zero error

rate billing.

● RIC has obtained ISO 9001-2000

certification for its billing processes.

● The customer care center

completed the COPC (Customer
Operations Performance Centre),
the USA certification process, in
December 2004, reinforcing
commitment to better customer
experience.

● Moving towards a customer-centric
organization, a new concept of
CIOU (Customer Integrated
Operations Unit) has been
adopted. This assigns customer
ownership at the smallest unit in
the organisation. Each customer is
mapped to a CIOU which
becomes responsible for all
customer related processes—
pre and post acquisition.

● RIC has also expanded its

customer interface points across
the country by increasing the
number of company owned stores
–Webworlds and Webworld
Expresses–to 1,312 at the end of
March 2005.

Since the launch of prepaid services
in the last quarter of the previous
year, concerted efforts were made
during the year to drive prepaid
acquisitions.

R E L I A N C E I N D U S T R I E S L I M I T E D

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 35

G r o w t h i s L i f e

Broadband business

Enterprise broadband services
commenced operations during the
year and are available in 29
important cities in India. More than
14 products and services have been
launched successfully till date across
voice telephony, internet and data
networking solutions and the
collaborative applications and
solutions space.

● RIC has taken the initiative to

expand network coverage beyond
the existing 29 cities/towns.
Simultaneously, we strive to
overcome challenges posed by
faster roll out of last mile
connectivity.

● Enterprise broadband services

have created a niche by offering
unique, innovative and technically
superior products like Reliance
Single Number, Digital Electronic
News Gathering, IPLC pay per use
and others.

Within a short time, the services
have made inroads into some of the
leading companies, mainly in the
BFSI, Media, FMCG, IT and ITES
services sector.

● The enterprise business has

successfully implemented a well-
integrated OSS-BSS architecture
capable of handling multi product
multi location orders and service.

● RIC has successfully migrated
marginal and low credit worthy
subscribers from the postpaid to
the prepaid platform. This has
resulted in a more manageable
base of high end postpaid
customers for delivering superior
quality services.

● Prepaid subscribers now account
for more than two thirds of the
total subscriber base.

A wide variety of handsets are now
available at the low as well as high
end at attractive prices, offering more
choice to customers.

● We offer flexibility to the customer
to buy any RIC certified handset
from the open market. A GSK
(Get Started Kit) pack enables
them to activate an unprovisioned
handset using a PIN.

● In addition, the novel concept of
an HCC (Handset Change Card)
was launched to facilitate the
subscriber to change handsets
while retaining his original mobile
number. The card acts like a
virtual SIM. This move is expected
to fuel a secondhand market for
handsets and further bring down
the entry cost for new customers.

● As in the past, RIC introduced

customer friendly tariffs, both for
prepaid and postpaid segments,
to enhance customer delight.

● RIC pioneered the concept of
“Unlimited Calling” offering
unlimited on-net calls to other
Reliance numbers. These products
have been well received in the
market and have created a unique
value proposition which is difficult
to match by competition that is
constrained by network capacity.

● E-recharge facility was also

launched on prepaid services,
offering customers the flexibility
to opt for any denomination.

R-World, the wireless data
applications platform, offers more
than 150 applications. Some unique
applications include railway
reservation, mobile banking, e-mail
access and others. The R-world
services, which were hitherto free,
have been made chargeable with
effect from April 1, 2005.

R-Connect, our wireless Internet
access service, has received a good
response as it offers better speed
than dial ups. The new unlimited
data plans and attractive tariffs have
given a boost to R-Connect usage.

Data cards which enable laptop
users to access the Internet
anywhere on the RIC network have
also evoked a good response.

The PCO business was launched in
May 2004. In the very first year, it
gained a significant share of the STD
PCO market establishing over 3 lakh
PCOs by the end of March 2005 –
a result of focused marketing efforts
and innovative delivery mechanisms.

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 36

Reliance Energy

Reliance Energy Limited (REL) is
India's leading private sector utility
group, with aggregate group
revenues of around Rs 9,500 crore
(US$ 2.2 billion), and gross fixed
assets of
Rs 10,700 crore (US$ 2.4 billion). It
is also India’s most valuable private
sector power company, with market
capitalisation of over Rs 9,500 crore
(US$ 2.2 billion).

REL has made significant strides in
its operational as well as financial
performance during 2004-05. The
highlights of REL’s performance for
the year 2004-05 are:

● Total income of Rs 4,593 crore
(US$ 1.05 billion), against Rs
3,583 crore in the corresponding
previous financial year, an
increase of 28 percent.

● Cash profit of Rs 970 crore (US$
222 million), against Rs 686 crore
in the corresponding previous
financial year, an increase of
41 percent.

● Net profit of Rs 520 crore

(US$ 119 million), against Rs 367
crore in the corresponding
previous financial year, an
increase of 42 percent.

The ISO 9001-2000 certification
was received for all business
operations functions of the enterprise
broadband business. This underlines
the focus on our smooth and efficient
business processes.

● Consumer broadband services,
offering Triple Play–Voice, Video
and Data–are currently undergoing
trials in a few thousand homes.
Various technology options are
being evaluated before the
commercial rollout of services on
a large scale.

● The consumer broadband project

will be an extension of the
enterprise broadband project
sharing the same fibre network,
extending it further to connect
households.

Reliance IndiaCall,

our high quality

calling card service

in the USA and

Canada, enables

customers to call

any number in India

at a highly

competitive rate

R E L I A N C E I N D U S T R I E S L I M I T E D

International business

In May 2004, RIC launched
“Reliance IndiaCall” – a calling card
service in the USA and Canada
through its 100 percent subsidiary,
Reliance Communications
International Inc., USA.

● This high quality service enables
customers to call any number in
India at a highly competitive rate.
It has gained immense popularity
in the market enabling RIC to gain
leadership of incoming ILD
minutes. The product is offered
exclusively over the internet
through credit card payments.

The integration of Flag Telecom, a
100 percent subsidiary of RIC, has
been successfully completed. This
provides a seamless flow of
information for pre and post sales
delivery functions.

● Flag has recently started work on
its new terabit submarine cable
network FALCON. This will
connect Egypt to India with
multiple landings in the Arabian
Gulf. This cable will connect to
Flag’s global network and provide
end-to-end reliable connectivity
from the Middle East and India to
most of the major cities around the
globe. FALCON will start providing
connectivity to the Gulf countries
by the end of 2005.

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 37

REL is India’s

leading private sector

utility group, with

aggregate group

revenues of around

Rs 9,500 crore

REL’s two distribution companies in
Delhi also achieved a notable
improvement in both operational
and financial performance during
the year.

● The aggregate total income of the
two Delhi distribution companies
during the year under review was
Rs 3,248 crore (US$ 742 million),
as against Rs 2,587 crore in the
previous year, an increase of
26 percent. The aggregate Profit
before Tax (PBT) was Rs 179 crore
(US$ 41 million), as against Rs
149 crore in the previous year, an
increase of 20 percent.

● The aggregate technical and

commercial (AT&C) losses have
reduced from the actual opening
loss levels of 51.5 percent and
63.2 percent in BSES Rajdhani
and BSES Yamuna respectively,
to 40.9 percent and 50.2 percent
respectively at the end of the
financial year ended March 31, 2005.

● The year 2004-05 witnessed

various steps and initiatives to
meet Reliance Energy’s
commitment to international
standards of customer service.
The stress was on consumer
interface initiatives with the aim of
achieving world-class standards.

The 42 percent growth in net profit
was achieved, after taking into
consideration higher provisions/
expenses aggregating Rs 180 crore
(US$ 41 million) for the year ended
March 31, 2005. Excluding the
above, the net profit would have
been higher at Rs 700 crore
(US$ 160 million), an increase of
91 percent.

Reliance Energy ranks third among
Indian private sector companies in
terms of net worth. As on March31,
2005, the net worth of the Company
stood at Rs 6,339 crore
(US$ 1,449 million).

REL remains debt free at the net
level, and enjoys the top-end ratings
of 'AAA' and 'Ind AAA' by CRISIL and
FITCH, respectively, clearly
indicating financial conservatism.
A conservative capital structure, as
reflected by a zero net debt position
as on March 31, 2005, coupled with
strong cash reserves provide a
robust platform for our future growth.

The turnover of our EPC and
Contracts Division was Rs 1,235
crore (US$ 282 million) during the
year under review. This division had
a record order book position of about
Rs 3,500 crore (US$ 800 million) as
on March 31, 2005, as against
Rs 1,200 crore in the previous year,
an increase of 192 percent.

REL’s Dahanu Power Station received
international recognition during the
year. It was named as one of the
world's top 12 plants of 2004 by
Platts POWER magazine, in its July/
August 2004 issue, based on several
selection criteria such as operational
efficiency, minimal environmental
impact, technology use, financing
structure, etc.

G r o w t h i s L i f e

In a move to further consolidate its
position as one of the most
consumer friendly utilities in the
world, Reliance Energy has launched
the first of its kind ‘Multilingual Power
Bill' in Mumbai. With this move, the
Company has become the only utility
company in the world to offer
multilingual billing choice in as many
as 19 Indian languages.

Taking forward the philosophy of
offering the customer the bill in his /
her language, REL introduced
another pathbreaking initiative by
launching bills in braille for the
visually impaired.

REL is committed to expanding its
customer base in its distribution
business through new licenses,
through open access on existing
networks, and /or through
participation in the privatisation
process of state owned distribution
assets. The Company plans to set up
gas, wind, hydro and coal based
power generation projects, to match
its distribution capability. The
Company is also exploring growth
opportunities in the power
transmission sector.

Reliance Energy, through a special
purpose vehicle viz. Reliance Energy
Generation Limited is setting up a
3,740 MW gas based mega power
project at Dhirubhai Ambani Energy
City, near Dadri in the state of Uttar
Pradesh. With an initial investment
outlay of about Rs 11,000 crore (US$
2.5 billion), the power project, to be
developed in phases, will also be the
world's largest gas based power
generating plant at a single location.

Reliance Energy aims at a leadership
role in creating world-class power
infrastructure in the country in pace
with regulatory changes and reforms
in the domestic power sector.

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 38

Major products and brands

R E L I A N C E I N D U S T R I E S L I M I T E D

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 39

G r o w t h i s L i f e

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 40

Growth is Strength

Growth is

conservation

At Reliance, energy conservation
efforts seek to reduce the unit cost of
fuels and to improve efficiencies in
energy intensive processes. While
production volumes have been
increasing, our specific energy
consumption is reducing consistently
as shown in the table below:

Site

Patalganga

Hazira

Jamnagar

Unit

2003-04

2004-05

MMKcal/MT

Fuel & loss,
% on crude

3.21

2.02

9.95

3.12

2.01

9.76

At Patalganga
● A team from the Confederation of
Indian Industry visited our site in
Patalganga in order to experience
our energy management systems
and related initiatives.

● In October 2004, our complex at
Patalganga organised a two-day
seminar cum workshop on a
Ministry of Power-promoted Clean
Development Mechanism (CDM),
to identify schemes for carbon
trading with developed countries
under the Kyoto protocol.

● The company has also taken a

leadership position by organizing
an ‘All Sites Energy Meet 2004’ to
share best practices in energy
conservation. One hundred
engineers from all group
complexes and sites participated
and generated ideas for
implementation.

At Naroda
● High cost liquid fuel was replaced

with low cost natural gas. In
addition, captive power generation
has gone up with the export of
power to the Gujarat Electricity
Board (GEB). Besides bringing
additional revenue, this has also
helped increase the heat rate of
the generating systems. Maintaining
the power factor close to unity
resulted in a reduction in the GEB
bill and losses across reactors.

At Jamnagar
● An innovative low-pressure flare

gas recovery project was
commissioned in October 2004.
This resulted in a dual benefit: it
eliminated environmental emissions
and utilised waste gas as fuel gas.

● Reliance has adopted a disciplined
approach to energy conservation
by way of pinch analysis, reducing
heat losses through insulation,
use of low-pressure steam in place
of high-pressure steam and
increasing waste heat recovery
from the stacks. This has paid
rich dividends at all our
manufacturing sites.

R E L I A N C E I N D U S T R I E S L I M I T E D

Our conservation

efforts seek to

make our

processes more

cost effective and

energy efficient

Growth is

innovation

Our R&D efforts in Polyesters and
Polymers help us in developing new
and improved products.

Our research
and development
programmes

The Reliance Technology Centre
(RTC) was the hub of all polyester
R&D activities. Some of the
highlights are:

● Process troubleshooting and

development of NG-3 technology
to support commercial
demonstration of technology
at Hazira

● Development of differentiated

grades of PET for novel
applications

● Development and commercial

demonstration of Recron `Stretch'
for comfort stretch applications,
and of Recron `Mircelle' with ultra
micro denier yarn

● Demonstration of `Dyefast'

polyester fibres.

● Process development and plant
demonstration of super high
tenacity fibres.

R&D efforts in the polymer sector
continued towards new and improved
product development, catalyst-
chemical-additive development
and process improvement in
addition to IPR.

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 41

G r o w t h i s L i f e

● By March 2006 we plan to train

about 40 percent of our
supervisory staff in Six Sigma
methodology. This will motivate
them to work towards achieving
world-class performance. In turn,
this is expected to bring about
increased satisfaction for the
customer and the shareholder.

Quality management

During the year, several new
initiatives were taken to improve and
strengthen quality management
systems at our sites.

● At the newly acquired RPCL

facility, QA/QC systems were put
in place at the time of plant start
up – resulting in reliable results
from the start.

● Total Quality Management was

introduced in all the laboratories at
Jamnagar.

● The 5 S programme was

introduced at laboratories for
inventory and document
management.

● Inter laboratory testing across the
Reliance group has been made a
regular feature to monitor the
reliability of analytical services.

● Suggestion schemes have been
introduced to encourage the
involvement of all employees in
quality related activities - eighteen
employees received awards.

Reliance’s efforts on the quality front
continued to receive recognitions:

● The Jamnagar laboratory received
recognition on the analytical front
from CEMILAC (Centre for Military
Airworthiness and Certification) for
its high level of Quality Confidence
and Control Measures.

During the year, a US Patent on a
polypropylene catalyst system was
granted to Reliance. This was a
notable milestone for the Hazira
R&D centre.

Two more international patents are
being filed as PCT application in the
research area of polyolefin catalyst
and high performance stereo
regulating donors for polypropylene.

A breakthrough was achieved in the
development of next generation
RELCAT 100 X and RELDONOR
Technology for Polypropylene.

● RELCAT 100 X technology

involves the development of a
high generation morphologically-
controlled catalyst and improved
products.

● RELDONOR Technology has
provided the opportunity to
improve catalyst performance as
well as product characteristics
without bringing change into the
solid catalyst technology.

● Reliance continued to sponsor and
participate in various research
programmes at premier institutes
in India and abroad including
Polymer Institute, Brno, Czech
Republic and IIT Bombay.

● Reliance’s partnership with the

Council of Scientific and Industrial
Research (CSIR) under the New
Millennium Indian Technology
Leadership Initiative (NMITLI)
continued and progressed towards
developing technology in various
areas of polymers and chemicals.

The Six Sigma

initiative has been

implemented to

achieve Zero Defect

work culture

Growth is

quality

Reliance’s commitment to excellence
and our efforts to continually
enhance the quality of all products,
processes and services contribute
largely to our leadership in major
businesses

Six Sigma

With a mission to achieve Zero
Defect work culture, Reliance
launched the Six Sigma initiative in
February 2004.

Six Sigma was deployed across all
aspects of businesses, manufacturing
and service functions to help us
improve processes, boost
productivity, reduce inventory and
improve quality.

● A team of 25 full-time Black Belts
is spearheading cross-functional
high impact projects throughout
the company.

● Benefits from ongoing projects

have been assessed at
Rs 140 crore.

● Three of our Six Sigma projects
were rated as the top three
projects at the 50th year
celebrations of the Indian
Statistical Institute, Bangalore in
March 2005.

● One Six Sigma project at Hazira

has won an award at the American
Society for Quality conference
held at Seattle in 2005.

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 42

● For each month during the year,

Reliance received Golden
certificates from Shell Global
Services for Excellence in
Reliability of Testing and Results.

● Reliance’s laboratory was

accredited for conforming to QMS
as per ISO/IEC 17025 by NABL.

Growth is care

for good health

Reliance’s occupational health
centers carry out pre-employment
and periodic medical checkups as
well as other routine preventive
services. Specialised tests like
biological monitoring, health risk
assessment studies and audits for
exposure to various materials are
also performed.

Health education and awareness
form an integral part of the health
care programme at Reliance.

● Medical teams regularly conduct
health awareness programs to
address life style diseases such as
hypertension, diabetes, heart
disease and stress.

● They are also at the forefront in
organizing health promotion
activities for continuous
improvement in the workplace
environment.

One such initiative in occupational
health and safety, Project CASH,
Change Agents for Safety and
Health, has been introduced at all
our manufacturing sites.

R E L I A N C E I N D U S T R I E S L I M I T E D

● The objective is to bring about a
positive change and continual
improvement in occupational
health practices at the workplace
as also attitudinal and behavioural
changes amongst our people.

● The project has led to the
prevention of work related
diseases, injuries, reduction in
absenteeism and ultimately to
improvement in productivity levels.

As a founder member of the India
Business Alliance of the World
Economic Forum, Reliance has
resolved to share the responsibility of
eradicating and containing the
spread of conditions such as
Tuberculosis (TB) and HIV/AIDS.

● To achieve this, the company has
entered into collaboration with a
large number of agencies working
on these issues to create unique
Public-Private Partnerships (PPP).

● The well-equipped DOTS Therapy
& Microscopy centres established
at the Community Medical Centers
at Hazira and Jamnagar cater to a
total population of approximately
150,000 each.

● The centres adopt a two-fold
approach for detection and
control of TB - one focused on
the workplace and the other at
the village level, involving the
local population and families of
our workers.

Growth is care

for safety

Issues of safety are given high
priority at Reliance.

● A committee of Directors has been
constituted for monitoring Health,
Safety and Environment standards
and practices. This is to ensure
that our safety management
systems are world class and that
we are striving to achieve zero
incidences at the work place.

We realise that as a world leader in
manufacturing, we need to put safety
management systems in place.

● We partnered with DuPont to
evaluate safety management
systems at all our sites. The
exercise was spread over three
months and the evaluation study
has opened up new avenues
for improvement.

● The centres also provide

● Our aim is to graduate from the

comprehensive health care to all
those affected by Tuberculosis and
HIV/AIDS. This is implemented
through interventions like
counseling, education, training,
social and nutritional support.

present Dependent Safety culture
to the Interdependent Safety
culture where the safety of the
employee at the site is taken care
of not just by the individual himself
but also by all other employees in
the vicinity.

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 43

G r o w t h i s L i f e

At Hazira, a pure

oxygen aeration system

for effluent treatment

has tangibly brought

down levels of pollution

● A high-powered Environment

● To keep employees updated on

Health and Safety (EH&S) group
at each complex monitors and
audits performance.

At Jamnagar

Various environmental and process
measures have been implemented
for conservation of natural resources:

● A reverse osmosis (RO) plant is
being set up to treat wastewater
streams to recover water for
special purposes like medicinal
plantation and others from the
effluent treatment plant and
cooling towers. The treated
wastewater will replace
desalinated water for horticulture
purposes, and will lead to savings
in desalinated water.

● A flare recovery unit for the Coker,
designed and implemented with
in-house expertise, was
commissioned to recover the
gases that were lost during drum
changeover. This is the first such
instance in the world, resulting in
the recovery of over 40 tonnes of
gas per day.

● Our ISO 14001 certified Jamnagar
refinery has set up key objectives
to ensure ongoing efforts at
environment protection. These
include total recycling of treated
effluents, and the development
and implementation of leak detection
and leak repair programmes.

environmental and safety measures,
various training programs on
Environment Management
Systems, in-house mock drills for
marine oil spill response and
environmental monitoring are
conducted regularly.

Reliance is conducting studies that
will help in designing safe and
environmentally sound operations to
support sustainable development.

● For the first time in India, a defined
scientific study has been initiated
off the East coast to understand
the behavioural pattern of marine
fauna.

● Similarly, a scientific study has
also been initiated off the West
Coast to capture the existing
status of the flora and fauna.

At Hazira

We have developed an Integrated
Management System encompassing
the requirements of ISO 9000, ISO
14001 and OHSAS 18001.

● Conservation of water has been

maximised by reuse and recycling
of wastewater.

● A pure oxygen aeration system
was introduced in the central
effluent treatment plant to enable
maximum reuse and recycling and
to achieve treated wastewater
quality 60 percent lower than the
prescribed standards.

● Besides employees, the transport
drivers and cleaners who come to
the sites to load products are
given training in safety awareness
measures prior to their entry to
the site.

● An inter-site benchmarking is done
regularly to encourage healthy
competition between sites.

● Our Jamnagar site participated in
the benchmarking done by Shell
Global International. The Total
Recordable Cases Frequency
Rate (TRCFR) for Jamnagar this
year is 0.89 as against 2.94 during
the previous year.

● Our Hazira site received the

Occupational Health and Safety
Assessment Series (OHSAS
18001) certification in May 2004 -
the first site in the Reliance group
to achieve this certification.

Growth is care for

the environment

Reliance believes that a clean
environment in and around the
workplace fosters health and
prosperity for the individual, the
group and the larger community to
which they belong.

Environmental protection is
an integral part of the planning,
design, construction, operation and
maintenance of all our projects.

● Structured environmental

monitoring, management systems
and regular audits ensure
compliance to all environmental
protection laws.

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 44

Water Consumption at the Hazira Petrochemical Complex

00-01

01-02

02-03

03-04

04-05

Water consumption

5.6

5.4

5.2

4.9

4.6

(M3/MT)

Wastewater generation at the Hazira Petrochemical Complex

00-01

01-02

02-03

03-04

04-05

Effluent generation

2.27

2.03

1.73

1.61

1.47

(M3/MT)

● As a unit that is committed to

global environment conservation,
the consumption of ozone
depleting substances has been
reduced by 53 percent by use of
the Freon Recovery Unit.

● Nearly 20,000 trees were planted
this year, taking the total tree
count to 200,000. Approximately
84 acres of land have been
landscaped in the complex.

At Patalganga

We have voluntarily adopted the
codes of practice of the Responsible
Care (RC) initiative and have also
implemented the ISO 14000–
Environmental Management System,
demonstrating our commitment to
continually improving environmental
performance.

● Various steps were undertaken to
improve the effluent treatment
plant performance. 95 percent of
the cooling water make-up is
treated recycled water. Biogas
generated from the anaerobic
treatment processes is utilised as
fuel in the heaters, and heat from
the steam generator flue gases is
utilised in a spin flash dryer
system for drying of bio-sludge.
Processes are also being
developed for vermi-composting
of bio-sludge from the effluent
treatment plant.

● The Patalganga Complex has
collaborated with industry
associations and regulatory bodies
to develop a common effluent
treatment plant. This plant is
based on an upflow anaerobic
sludge blanket (UASB) technology,
with post aerobic facility and a
state-of-the-art sludge handling
system.

Gas Transportation and Infrastructure
Company Limited (GTIL), a subsidiary
of Reliance, is in the pre-project
development phase of setting up of
gas / hydrocarbon pipelines.

R E L I A N C E I N D U S T R I E S L I M I T E D

● The design, construction,

operation and maintenance of the
pipelines will be driven by a
concern for utmost safety for the
facilities and the local community
as also for a minimal impact on
the environment.

● GTIL has now obtained

environment clearance from the
Ministry of Environment & Forests,
Government of India for four of its
pipeline projects, with a length of
approximately 3,200 kms covering
six states.

The Patalganga

complex has adopted

the codes of practice

of the Responsible

Care Initiative to

improve environmental

performance

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 45

G r o w t h i s L i f e

Corporate

citizenship

At Reliance, we think beyond
business. As corporate citizens, we
invest in social infrastructure,
believing strongly that our business
strength fuels our social
contributions. To this end, Reliance
encourages, funds and develops
numerous education, health, human
capital and infrastructure initiatives.
These initiatives are undertaken
through partnerships with non-
governmental organisations,
corporates and trusts.

Educational initiatives

Aligned with the goals and vision of
the management, several
educational initiatives have been
proposed / established as leaps into
the future. These ventures aim at
building confidence, capacity, global
mindsets and communication skills in
young people—how they grow will
shape and give direction to the
growth of our country.

Dhirubhai Ambani Institute of
Information and Communication
Technology (DA-IICT),
Gandhinagar, India

2004-05 was a landmark year for
DA-IICT, Gandhinagar. It held its
first Convocation in December 2004,

Growth is care for

our people

At Reliance, we stress on quality of
life. We are building with care, a
workplace that proactively fosters
professional as well as personal
growth. There is freedom to explore
and learn; and there are opportunities
that inspire initiative and intrinsic
motivation. We believe that people
must dream to achieve, that these
dreams will drive the company’s
excellence in all its businesses.

Reliance thinks, behaves, lives
and thrives with a global mindset,
encouraging every employee to
reach his / her full potential by
availing opportunities that arise
across the group.

● With presence in 36 countries,

Reliance offers global opportunities.

● With steady organic growth and
consolidation of businesses,
Reliance offers possibilities
for cross-organisation, cross-
discipline and cross-country
career opportunities.

We now have 12,113 employees
with an average age of 37 years.

Programmes for training and
capacity building are given prime
importance. This endeavour targets
the technical and professional growth
of our people.

● Reliance is associated with the
Indian Institute of Management
(IIM), Bangalore and the Indian
Institute of Technology (IIT),
Bombay. We have sponsored the
participation of over 250 engineers
in a customised Management
course – MPRE (Management
Program for Reliance Engineers)
at IIM-Bangalore.

● We sponsored 91 science

graduates and diploma holders
to complete a Reliance Certified
Engineering course with
IIT-Bombay.

● Reliance conducted over 160,000
man-hours of training and 1,448
training programmes, covering
7919 employees. The Company
also supported development of all
other employees with a highly
scientific Key Result Area
(KRA) based Performance
Management System and Career
Mapping exercises.

● Reliance has embarked on

developing a performance linked
incentive scheme for all its
employees with the assistance of
reputed international consultants.

● The company also started a
‘Manufacturing Leadership
Programme’ for its Senior
Executives from Manufacturing, in
association with Hewitt Associates.

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 46

where 95 graduates of its three
postgraduate programs – M.Tech
(ICT), MS(IT) and MS(IT Agri) - were
awarded degrees.

DA-IICT, Gandhinagar, is a statutory
university as per an enactment of the
Government of Gujarat in the year
2003. Its status has been further
acknowledged in November 2004
when the University Grants
Commission (UGC) notified its
inclusion in the list of universities
maintained by it under Section 2(f)
of the UGC Act.

● All eligible students of the first

batches of the Institute’s
postgraduate and undergraduate
programmes have been placed in
leading companies.

● With the rapid growth in

information technology and
communications, there is a
concurrent rising demand for ICT
professionals. To meet this
demand Reliance, through the DA-
IICT Society, Gandhinagar
proposes to expand DA-IICT’s
initiatives to other states. To begin
with, two new DA-IICTs are
proposed to be established at
Kolkata and Srinagar. These will
also be developed as world-class
centres for higher education and
knowledge management.

At Reliance, we think

beyond business

Dhirubhai Ambani International
School, Mumbai

The Dhirubhai Ambani International
School commenced academic
sessions in March 2003. The school
provides international educational
opportunities in the context of the
emerging educational needs
of students.

● The school prepares students for

the Indian Certificate of Secondary
Education (ICSE), Cambridge
University’s International General
Certificate of Secondary Education
(IGCSE) and the International
Baccalaureate Diploma (IB)
examinations. The school has 940
students. 90 faculty members with
a rich experience in national and
international curricula educate,
mentor and guide the children
through these developmentally
critical years of growth.

● The very first batch of IB students
has created an impressive record
by securing admissions into
prestigious universities in the US
and UK. Out of 57 IB students,
47 applied to universities in the
US and UK. All 47 have gained
admission to schools of
their choice.

● The school seeks to develop the
creative potential in children,
shaping them to be critical thinkers
who appreciate cultural diversity
and a global outlook. It hopes to
achieve this through a blend of
national and international curricular
content and method as well as a
synthesis of internationally
acclaimed educational practices
with India’s rich educational and
cultural heritage.

● As a step towards creating the

idea of a human community, the
school has recently opened the
"Dhirubhai Ambani International
School Akanksha Centre", in
association with the Akanksha
Foundation, an NGO working to
educate slum children.

● The school served as a centre for
collecting relief materials for those
affected by the recent tsunamis.
The response was warm
and overwhelming.

Rewards and scholarships

The Dhirubhai Ambani Foundation
(DAF) has instituted several rewards
and scholar schemes over the years.

The Dhirubhai Ambani SSC Merit
Reward Scheme and Dhirubhai
Ambani Undergraduate Scholarship
Scheme encourage and assist
district level meritorious students to
pursue professionally oriented higher
education. Both the schemes,
instituted in June 1996, are currently
applicable in the states of Gujarat,
Maharashtra, Goa and the Union
Territory of Diu, Daman, Dadra and
Nagar Haveli.

● These schemes are also suitably
designed to encourage education
of the girl-child and to mainstream
the physically challenged.

● This year 575 meritorious

students received Rewards and
Scholarships under the schemes.
Over the past 9 years, DAF has
covered 4,234 students under
these two schemes. Of these 314
are physically challenged.

R E L I A N C E I N D U S T R I E S L I M I T E D

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 47

G r o w t h i s L i f e

We want to educate the

girl child and we want

to mainstream the

physically challenged

● Studies on Tuberculosis in HIV

positive cases and on the role of
pseudomonas in nosocomial
infections are nearing completion.

● A community based study on the

prevalence of Type 2 diabetes was
undertaken in a rural population in
Malwan in Sindhudurg District.

● Microbiological studies on

transfusion transmitted viruses
received two prizes in two
consecutive years at the All
India Conference of
Medical Microbiologists.

Dhirubhai Ambani Hospital,
Lodhivali, Raigad

This state-of-the-art hospital was
established seven years ago. It has
served the population in the industrial
and rural areas of Raigad District,
Maharashtra.

● Besides taking care of

hospitalisation requirements,
the hospital provides poor
patients and senior citizens free
outpatient and subsidised in-
patient treatment.

● It has provided critical intervention
in the case of numerous highway
accidents and saved lives by
providing prompt, specialised and
free life saving treatment. A total of
375 highway accident cases were
treated last year.

HNH&RC offers tertiary level
healthcare facilities that include
cardiology, cardio-thoracic surgery,
neurology and neuro-surgery,
oncology, urology, nephrology,
paediatric and neonatal surgery,
gastroenterology, micro-ear surgery,
retinal surgery and other services.
Over 258 consultants in various
areas of specialization drive and
manage the activities. They are
assisted by a staff of 1,000, including
paramedical and other support.
The centre also provides free and
subsidised out-patient and in-patient
treatment to the needy.

HNH&RC offers postgraduate
qualifications in various
specialisations awarded by the
College of Physicians and Surgeons
(CPS) and Diploma of the National
Board (DNB).

HNH&RC offers M.Sc. and Ph.D.
programs and also runs a
Nursing School.

Sir Hurkisondas Nurrotumdas
Medical Research Society
(HNMRS), Mumbai

At HNMRS researchers are
encouraged to move out of the four
walls of the hospitals to carry out
community-based studies.

● Recent projects include studies
focusing on children. These
include a study of acute and
chronic adrenal insufficiency in
severely ill children, and a study of
calcium and Vitamin D status in
children under 5 years of age.

The Reliance Kargil Scholarship
Scheme was launched with the
generous contribution of Reliance
employees. It continued to support
383 children from 103 families of
martyrs of the Kargil war as well as
disabled soldiers.

The Dhirubhai Ambani Scholars
Scheme was announced in 2003 to
commemorate the silver jubilee of
the company’s listing on the Bombay
Stock Exchange.

● Under the scheme, 900 meritorious
children of Reliance shareholders
were selected for the scholarships.

● More than 50 percent have joined
Engineering Colleges while 13
percent are pursuing degree
courses in Medicine. The rest are
pursuing degree or diploma
courses in various disciplines.

Healthcare initiatives

As with education, Reliance stresses
one more key contributor to the
country’s human index factor –
programmes and projects in areas of
health awareness and management.
Along with other pre-occupations,
social infrastructure is foremost in
our minds. Greater importance will
be assigned to these efforts in the
coming years.

Sir Hurkisondas Nurrotumdas
Hospital and Research Centre
(HNH&RC), Mumbai

The Dhirubhai Ambani Foundation
joined the management of
Sir Hurkisondas Nurrotumdas Hospital
and Research Centre in December
1997 with the commitment to restore
the hospital to its erstwhile glory by
re-structuring the hospital services
and setting up state-of-the-art
technology in the field of healthcare
that will conform to international
standards.

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 48

Community development

At all manufacturing locations, care
is taken to improve the quality of life
in the surrounding communities.
These community development
programmes focus on key areas of
healthcare, education, child welfare,
and infrastructure development.

Reliance offers medical services at
all its locations. This includes free
outdoor medical services for nearby
communities, outreach mobile
medical services, family planning
camps, blood donation drives,
antenatal check-ups, vaccination
centers, pulse polio camps, school
health check-ups, diagnostic multi-
disciplinary camps, eye camps and
other outreach programmes.

At Jamnagar

● These included: cattle feed supply

to cowsheds; organisation of
community meals programmes
benefiting 19,000 villagers in
surrounding villages; safety
awareness programmes to
educate villagers in community
safety; mobile medical van service
to surrounding villages, multi-
diagnostic medical camps and
a village medical center.

● We carried out repairing of village
roads, supply of drinking water
through water tankers on need
basis during the year.

● Reliance continued to support the
Jamnagar Municipal Corporation
and citizens in various community
celebrations and activities.

● Support to the development of
Dwarka continued; a project to
construct a bypass road from the
state highway to Gomati ghat was
taken up for implementation.

At Hazira

● In fulfillment of the Millennium

Development Goals and Agenda
21 guidelines, Reliance initiated a
major outreach programme towards
HIV/AIDS and TB intervention, by
the creation of a DOTS (Directly
Observed Therapy Short-term)
centre. This unique and first of its
kind Public-Private Partnership
project, with 4,154 registered
patients, has been recognized by
UNDP and has been widely
acclaimed. A campaign has been
launched to replicate sustainable
models countrywide.

● Eye camps, blood donation
camps, a mobile dispensary
catering to nearly 15,000 patients
and a physiotherapy centre for
mentally challenged children
constituted some of the other
healthcare initiatives at Hazira.

● As part of its education outreach,
Reliance felicitated students
and teachers, provided
infrastructure, and initiated a
‘Train the Teacher’ programme
to benefit community schools.

At Patalganga

● The complex hosted the 66th

Senior National and Inter-State
Table Tennis Championship in
January 2005. Reliance organised
the entire tournament and took
care of the accommodation, food
and transport for 654 participants.

● The Patalganga complex

undertook several community
health initiatives. These included
organising an HIV awareness
drive benefiting 500 tanker drivers,
and a blood donation camp.

● The Patalganga team played an
active role to protect the lives,
environment and property of the
neighbouring community by
providing active support for
various accidents and incidents
related to fires and leaks.

Our DOTS Centre,

a Public-Private

Partnership, has been

recognised by UNDP for

its HIV / AIDS and TB

intervention programmes

R E L I A N C E I N D U S T R I E S L I M I T E D

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 49

Reliance has undertaken several
initiatives near the E&P project site
in Andhra Pradesh. These include
financial as well as administrative
support for supplying drinking water,
establishment of a primary health
centre and distribution of books
to children.

The scope of the Gokul Gram
Yojana, being carried out under the
Reliance Rural Development Trust
(RRDT) with the support of the
Government of Gujarat, was
extended to 23 districts.

● Construction of 44 village roads,

151 community halls, 63
panchayat houses and 16
anganwadis was completed.

● Construction work on 447 new
projects commenced in the
villages - these include 14 village
roads, 111 community halls,
67 panchayat houses and
255 anganwadis.

The Harmony Initiative

Harmony, an initiative of the
Dhirubhai Ambani Memorial Trust, is
dedicated to the cause of a growing
population of Senior Citizens. The
initiative, at present, has focus on
three main areas.

● The Harmony Interactive Centre,
in South Mumbai, provides a
unique opportunity for senior
citizens to interact and connect
with their peers in a space of their
own. The Centre also aims to
sensitise people on issues
pertaining to the elderly. Over the
next few years, several such
Centres will be established to
further the Harmony vision.

● The magazine Harmony-Celebrate
Age symbolises the inspiring and
motivational voice of every Silver
Citizen. The magazine is aimed at
the 55 plus middle and upper
middle class, English-speaking
urban reader.

G r o w t h i s L i f e

At the Harmony

Centre, Older

people rediscover

themselves!

The paperless medium–
www.harmonyindia.org—is positioned
as the future voice of Harmony. The
portal aims to create networking and
awareness about the needs of the
elderly and highlights the resources
and opportunities available for
seniors in India and their NRI friends
and counterparts overseas. It reflects
the overall image of Harmony as a
single window information centre, a
virtual platform meant to reach out to
people from all strata of society
globally and to create an opportunity
for self-expression.

● Over 1000 enthusiastic Senior
Citizens came together to
Celebrate Age in the Harmony
initiated 5 kms Senior Citizen
Special Run, held in association
with the Standard Chartered
Mumbai Marathon 2005 on
January 16, 2005. The event
placed the image of senior
citizens in the forefront, helping
increase awareness and sensitivity
towards them.

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 50

RIL emerged as the Petrochemicals
Company of the Year at the sixth
annual Platts Global Energy Awards
in New York, USA, December 2004

RIL was awarded International
Refiner of the Year 2005 at the
World Refining and Fuels Conference
in San Francisco, March 2005, USA,
by Hart Energy Publishing LP. RIL
was the first Asian company to be so
honoured in the 20-year history of
this award.

Health, Safety and
Environment (HSE)

● The Naroda Textile Division was
awarded the Certification of
OHSAS 18001 – 1999, for
Occupational Health & Safety
Management Systems, May 2004.

● RIL emerged as India’s Greenest
Company amongst the private
sector with an overall rank of
No. 2 in a BT – ACNielsen ORG-
MARG survey of shareholder
perception published in Business
Today, October 2004

● Greentech’s Platinum Award in the

petroleum refinery sector was
awarded to the Jamnagar refinery
for Outstanding Achievement in
Environment Management,
November 2004.

RIL received the following ranks in
the survey by IMRB International
based on a peer-perception survey
published in Businessworld,
November 2004

● No.2 among India’s Most
Respected Companies

● Emerged as India’s Most
Dynamic Organisation

● No.2 among India’s Most Globally

Competitive Organisations

RIL emerged as Asia’s Best
Chemical Company in the seventh
annual survey of the World’s Best
Companies in 2004 conducted by
the Global Finance magazine,
November 2004.

RIL received the following ranks in
the seventh annual global survey of
corporate reputation conducted
jointly by PricewaterhouseCoopers
and the Financial Times,
November 2004:

● Ranked 9th in the Top 10 list of
the World’s Most Respected
Energy / Chemicals Companies

● Ranked 3rd in India list of country-
wise ranking of the World’s Most
Respected Companies

● Ranked 45th in the world list of

CEOs—Companies that create
the Most Value for their
Shareholders

● Ranked 55th in CEOs—

Companies that demonstrate
the Most Innovation

Growth is

achievement

Reliance’s commitment to excellence
and the management’s outstanding
performance brought in several
national and international awards,
rankings and recognition for
the company.

Corporate rankings

RIL emerged as the first and only
private sector company from India
to feature in the 2004 Fortune
Global 500 list of World’s Largest
Corporations, July 2004.

RIL was the only Indian private
sector company to be listed in the
Top-500 companies in the world in
terms of market value in
BusinessWeek’s The Global 1000
List, July 2004.

Reliance emerged in top positions in
the following in Business Barons –
TNS Mode Opinion Poll for 2004,
August 2004.

● The Reliance Group emerged
as India’s Most Admired
Business House for the fourth
consecutive year

● RIL emerged as India’s Most

Admired Company and was rated
first in the poll on financial
performance, returns to
shareholders, growth prospects
and ethics, and at second place
on Management Quality

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FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 51

The Jamnagar complex

received CII’s

‘Excellence in Energy

Management Award’

for the second

successive year,

October 2004

Energy Management

Quality

The Jamnagar refinery received the
award for Excellence in Energy
Conservation from the Federation of
Gujarat Industries, April 2004.

Reliance refinery was ranked in the
top position in Shell Benchmarking
‘Energy & Loss’ performance for
the fourth consecutive year from
around 50 refineries the world over,
August 2004.

The Jamnagar complex received
CII’s Excellence in Energy
Management Award for the second
successive year, October 2004.

RIL won the following National
Energy Conservation Awards 2004,
December 2004.

The Hazira complex received top
honours and bagged the
International Asia-Pacific Quality
Award in the category of Big Industry
Organisation of more than 250
employees, September 2004.

RIL was awarded the IT Excellence
Award for 2004 by NASSCOM,
September 2004.

The Jamnagar complex received a
total of 9 Gold Certificates from
Shell Global Solutions, Netherlands
under SMPCS (Shell Main Products
Correlation Scheme) Quality
Pacesetting for its excellence in
testing of fuel products, December
2004.

● The Hazira and Jamnagar

Exports

complexes claimed the first
position in the Petrochemicals
Sector and Refinery
Sector respectively.

● The Patalganga complex

received the special award in
the Petrochemicals Sector.

The Jamnagar complex received the
FICCI Award Certificate and Shield in
recognition of its high degree of
energy efficiency, excellent water and
energy conservation practices,
commendable waste management
practices and excellent pollution
control facilities with innovative
features, December 2004.

RIL won the following Synthetic
and Rayon Textiles Export
Promotion Council (SRTEPC)
awards for exports, March 2005:

● Three Gold Trophies, for the sixth
year in a row, for exports in the
year 2003-04

● The Gold for Best Overall Export
Performance in the category of
SRTEPC Special Award

● Best Export Performance in the
categories of Polyester Staple
Fibre and Polyester Filament Yarn

G r o w t h i s L i f e

Management Awards

Mukesh D. Ambani was conferred
the Asia Society Leadership Award
by the Asia Society, Washington,
USA, May 2004.

Mukesh D. Ambani ranked 13th in
Asia’s Power 25 list of The Most
Powerful People in Business
published by Fortune magazine,
August 2004.

Mukesh D. Ambani was chosen
Telecom Man of the Year 2004 by
Voice and Data magazine,
September 2004.

The Ambani brothers were the
only two CEOs from one business
group to feature amongst India’s
top five Most Admired CEOs.
Anil D. Ambani ranked at number
one and Mukesh D. Ambani at
number five in Business Barons—
TNS Mode Opinion Poll of India's
Most Admired CEOs, published in
Business Barons, September 2004.

Mukesh D. Ambani was conferred
the World Communication Award
for the Most Influential Person in
Telecommunications in 2004 by
Total Telecom, October 2004.

Mukesh D. Ambani ranked 42nd
among the World’s Most
Respected Business Leaders and
second among the four Indian CEOs
featured in a survey conducted by
PricewaterhouseCoopers and
published in the Financial Times,
London, November 2004.

Mukesh D. Ambani and Anil D.
Ambani ranked No.2 by IMRB
International in The Power 100 list
of India Inc.’s Most Powerful CEOs,
published in The Economic Times
Corporate Dossier, December 2004.

Anil D. Ambani was adjudged CEO
of the Year at The Platts 2004 Global
Energy Awards, December 2004.

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 52

Report on Corporate Governance

Reliance Industries Limited is in the
forefront of implementation of
Corporate Governance best practices.
Keeping in view the Company’s size,
complexity, global operations and
corporate traditions, the Reliance
Governance framework is based on
the following main principles:

● Constitution of a Board of Directors
of appropriate composition, size
and commitment to discharge their
responsibilities and duties.

● Ensuring timely flow of information
to the Board and its Committees
to enable them discharge their
functions effectively.

● Independent verification and
safeguarding integrity of the
Company’s financial reporting.

● A sound system of risk

management and internal control.

● Timely and balanced disclosure of
all material information concerning
the Company to all stakeholders.

● Transparency and accountability.

● Compliance with all the rules and

regulations.

● Fair and equitable treatment of
all its stakeholders including
employees, customers,
shareholders and investors.

For implementing the Corporate
Governance practices, Reliance has
a well defined policy framework
consisting of the following:

● Reliance’s Values and
Commitments policy

● Reliance’s Code of Ethics

● Reliance’s Business Policies

● Reliance’s Policy for Prohibition of

Insider Trading

● A detailed programme of ethics

management.

These policies and their effective
implementation underpin the
commitment of the Company
to uphold highest principles of
Corporate Governance consistent
with the Company’s goal to
enhance shareholder value.

Corporate Governance issues have,
of late, received serious attention
from all over the world. Several
international Committees set up by
Stock Exchanges, other statutory
authorities and Chambers of
Commerce have come out with
reports suggesting measures to
strengthen Corporate Governance
practices all over the world. New
Acts, notable among them being
Sarbanes-Oxley Act, Voluntary
Codes from several industry
associations have all led to a lively
debate on the principles and
practices of Corporate Governance.
In India too, several reports on
Corporate Governance issues have
been submitted by independent
committees, which culminated inter
alia in the issue of revised Clause 49
of the Listing Agreement by the
Securities and Exchange Board of
India (SEBI). The last date for
implementation of the revised Clause
49 has now been extended to
December 31, 2005.

Reliance being a global company
and committed to follow the best
international practices in every
respect of its corporate endeavour
had also decided to revisit its
Corporate Governance policies and
practices in line with international
trends. With expert assistance from
Indian and international firms,
Reliance has launched a programme
to fully review its policies and
practices of Corporate Governance
with a clear goal to not only comply
with statutory requirements in letter
and spirit ahead of time limit but also
implement the best international
practices of Corporate Governance.

As a first step, a Board Committee,
namely Corporate Governance and
Stakeholders’ Interface Committee,
consisting of Independent Directors
was set up to examine all Corporate
Governance issues in detail and
recommend appropriate policies to
the Board. Under the guidance of the
Corporate Governance and
Stakeholders’ Interface Committee the
Company with the help of experts
undertook a series of exercises in
the following areas:

1) Preparation of Code of Business
Conduct and Ethics for the Board
of Directors and the Senior
Management.

2) Improving the quality and

frequency of information flow to
the Board and the Audit Committee
to enable them to discharge their
functions effectively.

3) Thorough review of compliance

requirements with reference to the
revised Clause 49 of the Listing
Agreement and establishment of
monitoring mechanism.

4) Improve the system of disclosures
to the Board and the shareholders
in the interest of transparency and
accountability.

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In accordance with Clause 49 of
the Listing Agreement with the
Stock Exchanges in India
(Clause 49) and the best practices
followed internationally on
Corporate Governance, the details
of governance systems and
processes including compliance by
the Company with the provisions
of Clause 49 are as under:

1. Company’s philosophy on

Code of Governance

Reliance's philosophy on
Corporate Governance envisages
attainment of the highest levels
of transparency, accountability and
equity in all facets of its operations,
and in all its interactions with its
stakeholders, including
shareholders, employees, lenders
and the Government. Reliance
is committed to achieve and
maintain the highest international
standards of Corporate
Governance. Reliance believes
that all its actions must serve the
underlying goal of enhancing
overall shareholder value over
a sustained period of time.

2. Board of Directors

The Company’s policy is to
maintain optimum combination of
Executive and Non-Executive
Directors. The Board of Directors
of the Company (the Board)
consists of 11 Directors, out of
which 6 are Independent
Directors. Composition of the
Board and category of Directors
are as follows:

5) Review of the system of internal

controls and risk mitigation
strategies to assist Audit
Committee and the Board.

6) A programme to improve

effectiveness of the Board by
sharing best international
corporate practices.

Based on these inputs and
discussions the Corporate
Governance and Stakeholders’
Interface Committee recommended
to the Board to adopt the following:

(a)Code of Business Conduct and
Ethics for Directors and Senior
Management incorporating best
practices in Corporate
Governance.

(b)Series of templates to ensure

adequate and timely information
flow to the Audit Committee and
the Board on the functioning of
the Company.

(c) A programme to adopt all the
requirements of the revised
Clause 49 though there is no
mandatory requirement at present.

(d)Adoption of some of the best

Governance practices prevalent in
companies of similar stature in
India and abroad.

The Board of Directors agreed with
the recommendations of the
Corporate Governance and
Stakeholders’ Interface Committee
and decided to implement all the
above suggestions in the larger
interests of transparency, accountability
and shareholder values. Reliance
recognises that good Corporate
Governance is a continuing exercise
and reiterates its commitment to
pursue higher standards of
Corporate Governance in the overall
interest of all the stakeholders.

G r o w t h i s L i f e

Category

Name of Directors

Promoter
Executive
Directors

Promoter
Non-Executive
Director

Non-Promoter
Executive
Director

Independent
Directors

M.D. Ambani
Chairman &
Managing Director

A.D. Ambani*
Vice Chairman &
Managing Director

N.R. Meswani
Executive Director

H.R. Meswani
Executive Director

R.H. Ambani

H.S. Kohli
Executive Director

M.L. Bhakta
Y.P. Trivedi
T.R.U. Pai**
Dr. D.V. Kapur
M.P. Modi
S. Venkitaramanan
Prof. Ashok Misra***

* Shri A. D. Ambani resigned as the
Vice Chairman and Managing
Director and also as a Director of
the Company on June 18, 2005
and ceased to be a Director with
effect from that date.

** Shri T.R.U. Pai passed away on

January 26, 2005 and ceased to be a
Director with effect from that date.

*** The Board has appointed

Prof. Ashok Misra with effect from
April 27, 2005, in the casual
vacancy on account of death of
Shri T. R. U. Pai.

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Brief resume of the Directors who
are being appointed or re-appointed
at the ensuing Annual General
Meeting, nature of their expertise
in specific functional areas and
names of companies in which they
hold directorship and membership /
chairmanship of the Board
Committees are provided below:

a) Shri Hital R. Meswani

Shri Hital R. Meswani, age 36
years, graduated with honours in
the Management & Technology
programme from University of
Pennsylvania. He received a B.S.
degree in Chemical Engineering
and a B.S.Econ. (equivalent to
B.B.A.) from the Wharton
Business School, both from
University of Pennsylvania, USA.
He joined Reliance Industries
Limited in 1990. He is on the
Board of the Company as an
Executive Director since August 4,
1995, with overall responsibility of
Petroleum Division, all
manufacturing and project
activities of the group including
Jamnagar, Patalganga and Hazira
complexes. He is the brother of
Shri Nikhil R. Meswani, one of the
Directors of the Company.

Shri H. R. Meswani is also on
the Board of Reliance Industrial
Investments and Holdings Limited
and is also the Chairman of its
Audit Committee.

Board of the Company with effect
from August 2, 2002, he was
appointed as Director of the
Company with effect from August
14, 2002. He is also a member
of the Audit Committee and the
Remuneration Committee of
the Board.

Shri S. Venkitaramanan is also on
the Boards of Ashok Leyland
Finance Limited, Housing
Development Finance Corporation
Limited, Southern Petrochemical
Industries Corporation Limited,
New Tirupur Area Development
Corporation Limited, Tamil Nadu
Water Investment Company
Limited and BPL Telecom
Private Limited.

He is also a member of the Audit
Committee of Ashok Leyland
Finance Limited.

d) Shri H. S. Kohli

Shri H. S. Kohli, age 71, is a M.S.
(Chem). He has wide experience
in implementation and operation
of petrochemicals complex. Since
1991, he has been working at the
Company’s Hazira Complex.
Keeping in view his expertise in
the field of petrochemicals, he
was appointed as a Wholetime
Director of the Company
designated as Executive Director
with effect from April 1, 2000. He
is also a member of the Health,
Safety and Environment
Committee of the Board.

Shri H. S. Kohli is also on the
Board of Reliance Assam
Petrochemicals Limited.

b) Shri Ramniklal H. Ambani

Shri Ramniklal H. Ambani, age
80 years, has been one of the
seniormost Directors of the
Company since January 11, 1977.
He is the elder brother of Late
Shri Dhirubhai H. Ambani and has
been instrumental in chartering the
growth of the Company during its
initial years of operations from its
factory at Naroda, Ahmedabad. He
along with the Founder Chairman
Late Shri Dhirubhai H. Ambani set
up and operated the textile plant of
the Company at Naroda,
Ahmedabad and was responsible
for establishing the Reliance
Brand name “VIMAL” in the textile
market of the country.

Shri R. H. Ambani is also on the
Boards of Gujarat Industrial
Investments Corporation Limited,
Sintex Industries Limited, Yashraj
Investment & Leasing Company
Private Limited, Anjali Threads
Private Limited, Anjali Fiscal
Private Limited, Action Export
Private Limited, Ras Organisers
Private Limited and Anjali Estate
Private Limited.

He is also the Chairman of the
Audit Committee of Gujarat
Industrial Investments Corporation
Limited.

c) Shri S. Venkitaramanan

Shri S. Venkitaramanan, age
74 years, belongs to the Indian
Administrative Service and was
the Finance Secretary of the
Government of India and former
Governor of Reserve Bank of
India. He has a wide range of
experience to his credit in the
Banking and Financial Management
and also in the corporate world.
On ceasing to be a nominee
Director of ICICI Limited on the

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G r o w t h i s L i f e

Company Secretary in advance
so that the same could be
included in the Agenda for the
Board / Committee meetings.

(iv) The Board is given presentations

covering Finance, Sales,
Marketing and the major
business segments and
operations of the Company,
before taking on record the
results of the Company for the
preceding financial quarter at
each of the pre-scheduled Board
meetings.

The information placed before the
Board includes:

● Annual operating plans of

businesses, capital budgets and
any updates.

● Quarterly results for the Company

and its operating divisions or
business segments.

● Minutes of meetings of Audit

Committee and other Committees
of the Board, as also abstracts of
resolutions passed by circulation.

● Materially important show cause,
demand, prosecution and penalty
notices.

● Fatal or serious accidents,

dangerous occurrences, any
material effluent or pollution
problems.

● Any material default in financial

obligations to and by the Company,
or substantial non-payment for
goods sold by the Company.

e) Prof. Ashok Misra

Prof. Ashok Misra, age 57 years,
is Ph. D. and M.S. in Polymer
Science & Engineering from the
University of Massachusetts, USA,
M.S. in Chemical Engineering from
Tufts University and B. Tech in
Chemical Engineering from IIT,
Kanpur. He has also completed
the Executive Development Program
in 1999 at the Kellogg School of
Management, Northwestern
University, Evanston, Illinois, USA.
He authored two books on Polymers
and published several articles in
international journals and has
been awarded six patents.
He is also on the Board of Indian
Institute of Technology, Powai,
Mumbai, since May, 2000. He is
a member of several scientific
associations and societies.

Keeping in view his enriched
knowledge and vast experience
especially in the field of Polymer
Science & Engineering and
Chemical Engineering, Prof. Ashok
Misra was appointed on the Board
of the Company on April 27, 2005,
to fill up casual vacancy in the office
of Directors arising on account of
the death of Shri T.R.U.Pai.

Prof. Ashok Misra is also on the
Boards of Rashtriya Chemicals
& Fertilizers Limited, Mewar
Polytex Limited and Anjani
Technoplast Limited.

He is also the Chairman of
Management Committee of
Rashtriya Chemicals &
Fertilizers Limited.

3. Board Meetings, its

Committee Meetings and
Procedures

A. Institutionalised Decision

Making Process

With a view to institutionalise all
corporate affairs and set up
systems and procedures for
advance planning for matters
requiring discussion / decisions by
the Board, the Company has
defined guidelines for the meetings
of the Board and Committees
thereof. These Guidelines seek to
systematise the decision making
process at the meetings of the
Board / Committees in an informed
and efficient manner.

B. Scheduling and Selection of
Agenda Items for Board
Meetings

(i) Minimum four Board meetings are
held in each year, which are pre-
scheduled after the end of each
financial quarter. Apart from the
four pre-scheduled Board meetings,
additional Board meetings are
convened by giving appropriate
notice to address the specific
needs of the Company. In case
of business exigencies or urgency
of matters, resolutions are passed
by circulation.

(ii) The meetings are held at the

Company’s Registered Office at
Maker Chambers IV, 222,
Nariman Point, Mumbai 400 021.

(iii) All divisions / departments of the
Company are encouraged to plan
their functions well in advance,
particularly with regard to matters
requiring discussion / approval /
decision at the Board /
Committee meetings. All such
matters are communicated to the

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● Any issue, which involves possible
public or product liability claims of
substantial nature, including any
judgment or order which may have
passed strictures on the conduct
of the Company or taken an
adverse view regarding another
enterprise that can have negative
implications on the Company.

● Details of any joint venture,

acquisitions of companies or
collaboration agreement.

● Transactions that may involve
substantial payment towards
goodwill, brand equity or
intellectual property.

● Significant labour problems and
their proposed solutions. Any
significant development in Human
Resources / Industrial Relations
front like implementation of
Voluntary Retirement Scheme etc.

● Sale of material nature, of

investments, subsidiaries, assets,
which is not in normal course of
business.

● Quarterly details of foreign

exchange exposures and the
steps taken by management to
limit the risks of adverse exchange
rate movement, if material.

● Non-compliance of any regulatory,

statutory nature or listing
requirements and shareholders
service such as non-payment of
dividend, delay in share transfer etc.

● Quarterly summary of all long-term

borrowings made, bank
guarantees issued, loans and
investments made.

● Internal Audit findings and External

Audit Management Reports
(through the Audit Committee).

● Status of business risk exposures,

its management and related
action plans.

● Making loans and investment of

surplus funds.

● Proposals for investment, mergers

and acquisitions.

● Recommending / Declaring

dividend.

● General notices of interest of

Directors.

● Terms of reference of Board

Committees.

(v) The Chairman of the Board and
the Company Secretary in
consultation with other concerned
persons of the senior
management, finalise the agenda
papers for the Board meetings.

C. Board Material Distributed

in Advance

a) Agenda and Notes on Agenda are

circulated to the Directors, in
advance, in the defined Agenda
format. All material information is
incorporated in the Notes on
Agenda for facilitating meaningful
and focussed discussions at the
meeting. Where it is not practicable
to attach supporting or relevant
documents to the Agenda, the
same is tabled before the meeting
with specific reference to this
effect in the Agenda.

b) In the event that approval for
specific item(s) arise after
circulation of the Agenda, such
item(s) are circulated as additional
or supplemetary item(s) to the
Agenda.

D. Recording Minutes of

Proceedings at Board and
Committee Meetings

The Company Secretary records
the minutes of the proceedings of
each Board and Committee
meeting. Draft minutes are
circulated to all the members of
the Board / Committee for their
comments. The finalised minutes
of proceedings of a meeting are
entered in the Minutes Book within
30 days from the conclusion of
that meeting.

E. Post Meeting Follow-up

Mechanism

The Guidelines for Board and
Committee meetings facilitate an
effective post meeting follow-up,
review and reporting process for
the decisions taken by the Board
and Committees thereof. Action
taken report on the decisions /
minutes of the previous meeting(s)
is placed at the immediately
succeeding meeting of the Board /
Committee for noting by the Board
/ Committee.

F. Compliance

The Company Secretary while
preparing the Agenda, Notes on
Agenda, Minutes etc. of the
meeting(s), is responsible for and
is required to ensure adherence
to all the applicable laws and
regulations including the
Companies Act, 1956 read with the
Rules issued thereunder and to
the extent feasible, the Secretarial
Standards recommended by the
Institute of Company Secretaries
of India, New Delhi.

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G r o w t h i s L i f e

5. Number of Board Meetings

held and the dates on
which held

Five Board meetings were held
during the year, as against the
minimum requirement of four
meetings. The dates on which the
meetings were held are: April 29,
2004, July 27, 2004, October 25,
2004, December 27, 2004 and
January 21, 2005. The Company
has held at least one Board
meeting in every three months and
the maximum time gap between
any two meetings was not more
than four months.

6. Board Committees

A. Standing Committees

Details of the Standing
Committees of the Board and
other related information are
provided hereunder:

(i) Audit Committee

The Board has constituted Audit
Committee, comprising four
Independent Non-Executive
Directors, namely Shri Y.P. Trivedi,
Chairman, Shri S. Venkitaramanan,
Vice Chairman, Shri M.P. Modi
and Shri T.R.U. Pai (Ceased to be
a member w.e.f. January 26, 2005).
All the members of the Audit
Committee possess financial /
accounting expertise. The
constitution of the Audit Committee
meets the requirements of Section
292A of the Companies Act, 1956
and Clause 49.

4. Attendance of Directors at

Board Meetings, last Annual
General Meeting and Number
of other Directorships and
Membership / Chairmanship
of Committees of each
Director in various
companies:

Name of the

Director

Attendance

Particulars

No. of Directorships and

Committee Memberships /

Chairmanships

Board

Last

Other

Committee Commiittee

Meetings AGM

Director- Member-

Chairman-

ships

ships***

M.D. Ambani

A.D. Ambani*

N.R. Meswani

H.R. Meswani

H.S. Kohli

R.H. Ambani

M.L. Bhakta

Y.P. Trivedi

T.R.U. Pai**

S. Venkitaramanan

Dr. D.V. Kapur

M.P. Modi

Present

Not Present

Present

Prof. A. Misra**

The Directorships held by Directors as mentioned above, do not include Alternate
Directorships and Directorships of Foreign Companies, Section 25 Companies
and Private Limited Companies.

* Shri A. D. Ambani resigned from
the Company on June 18, 2005
and ceased to be a Director with
effect from that date.

** Shri T.R.U. Pai passed away on
January 26, 2005 and ceased to
be a Director with effect from that
date. Prof. A. Misra was appointed
as Director in the casual vacancy

in the office of Directors on account
of death of Shri T. R. U. Pai.

***In accordance with Clause 49,

membership / chairmanship of only
the Audit Committee, Shareholders’ /
Investors’ Grievance Committee
and Remuneration Committee
of all Public Limited Companies
has been considered.

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Shri Vinod M. Ambani, President &
Company Secretary, is the
Secretary to the Audit Committee.

The primary objective of the Audit
Committee is to monitor and
effectively supervise the
Company’s financial reporting
process with a view to provide
accurate, timely and proper
disclosures and the integrity and
quality of the financial reporting.

During the year, the Audit
Committee has met seven times.
The dates on which the meetings
were held are: April 29, 2004, July
27, 2004, September 28, 2004,
October 25, 2004, January 20,
2005, February 17, 2005 and
March 9, 2005. Executives of
Finance Department, Head of
Internal Audit and representatives
of the Statutory Auditors were
invited to attend the Audit
Committee meetings. The Cost
Auditors appointed by the
Company under Section 233B of
the Companies Act, 1956 were
also invited to attend the Audit
Committee meetings.
The terms of reference stipulated
by the Board to the Audit
Committee are as contained in
Section 292A of the Companies
Act, 1956 and Clause 49.

In terms of the revised Clause 49
of the Listing Agreement, the terms
of reference / powers of the Audit
Committee has been specified by
the Board of Directors as under:

A. The Audit Committee shall have

the following powers:

1) To investigate any activity within

its terms of reference.

2) To seek information from any

● Significant adjustments made in

employee.

3) To obtain outside legal or other

professional advice.

4) To secure attendance of outsiders

with relevant expertise, if it
considers necessary.

B. The role of the Audit Committee

the financial statement arising out
of audit findings.

● Compliance with listing and other
legal requirements relating to
financial statements.

● Disclosure of related party

transactions.

shall include the following:

● Qualifications in draft audit report.

1) Oversight of the Company's

financial reporting process and the
disclosure of its financial
information to ensure that the
financial statement is correct,
sufficient and credible.

2) Recommending to the Board, the
appointment, re-appointment and,
if required, the replacement or
removal of Statutory Auditor and
fixation of audit fees.

3) Approval of payment to Statutory
Auditors for any other services
rendered by the Statutory Auditors.

4) Reviewing with the management,
the annual financial statements
before submission to the Board
for approval, with particular
reference to:

● Matters required to be included in

the Directors’ responsibility
statement to be included in the
Board’s report in terms of clause
(2AA) of Section 217 of the
Companies Act, 1956.

● Changes, if any, in accounting

policies and practices and reasons
for the same.

● Major accounting entries involving
estimates based on the exercise of
judgement by management

5) Reviewing, with the management,
the quarterly financial statements
before submission to the Board
for approval.

6) Reviewing, with the management
the performance of statutory and
internal auditors, adequacy of
internal control systems.

7) Reviewing the adequacy of

internal audit function, if any,
including the structure of the
internal audit department, staffing
and seniority of the official
heading the department, reporting
structure, coverage and
frequency of internal audit.

8) Discussion with internal auditors

any significant findings and follow
up there on.

9) Reviewing the findings of any
internal investigations by the
internal auditors into matters
where there is suspected fraud
or irregularity or a failure of
internal control systems of a
material nature and reporting the
matter to the Board.

10)Discussion with Statutory auditors
before the audit commences,
about the nature and scope of
audit as well as post-audit
discussion to ascertain any area
of concern.

R E L I A N C E I N D U S T R I E S L I M I T E D

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G r o w t h i s L i f e

Attendance of each Member at
the Audit Committee meetings
held during the year

Details of remuneration and
other terms of appointment
of Directors:

11) To look into the reasons for
substantial defaults in the
payment to the depositors,
debenture holders, shareholders
(in case of non payment of
declared dividends) and creditors.

12)To review the functioning of the

Whistle Blower Mechanism, if and
when introduced.

13)Carrying out such other function
as may be specifically referred to
the Committee by the Board of
Directors and / or other Committees
of Directors of the Company.

Name of Member

No. of

of Audit

Committee

meetings

attended

Shri Y.P. Trivedi,

Chairman

Shri S.

Venkitaramanan,

Vice Chairman

Shri T.R.U. Pai*

14)To review the following information:

Shri M.P. Modi

● The Management discussion and
analysis of financial condition and
results of operations;

● Statement of significant related

party transactions (as defined by
the Audit Committee), submitted
by management;

● Management letters / letters of

internal control weaknesses issued
by statutory auditors;

● Internal audit reports relating to

internal control weaknesses; and

● The appointment, removal and

terms of remuneration of the Chief
Internal Auditor.

15)Reviewing the financial

statements and in particular the
investments made by the Unlisted
Subsidiaries of the Company.

* Shri T.R.U. Pai passed away on
January 26, 2005 and ceased
to be a Director with effect from
that date.

(ii)Remuneration Committee

The Board has constituted
Remuneration Committee,
comprising four Independent Non-
Executive Directors namely, Shri
M.L. Bhakta, Chairman, Shri Y.P.
Trivedi, Shri S. Venkitaramanan
and Dr. D.V. Kapur.

The Remuneration Committee
has been constituted to
recommend / review remuneration
of the Managing Directors and
Wholetime Directors, based on
their performance and defined
assessment criteria.

The remuneration policy of the
Company is directed towards
rewarding performance, based on
review of achievements on a
periodic basis. The remuneration
policy is in consonance with the
existing Industry practice.

The aggregate value of salary and
perquisites including commission
paid for the year ended March 31,
2005 to the Managing Directors
and Wholetime Directors is as
follows: Shri M.D. Ambani,
Chairman and Managing Director,
Rs 21.72 crore (Salary Rs 0.60
crore, Perquisites Rs 0.48 crore
and Commission Rs 20.64 crore);
Shri A.D. Ambani, Vice Chairman
and Managing Director, Rs 21.72
crore (Salary Rs 0.60 crore,
Perquisites Rs 0.48 crore and
Commission Rs 20.64 crore);
Shri N.R. Meswani, Executive
Director, Rs 5.55 crore (Salary
Rs 0.15 crore, Perquisites
Rs 0.24 crore and Commission
Rs 5.16 crore); Shri H.R. Meswani,
Rs 5.55 crore (Salary Rs 0.15
crore, Perquisites Rs 0.24 crore
and Commission Rs 5.16 crore);
Shri H.S. Kohli, Rs 0.17 crore.
(Salary Rs 0.15 crore and
Perquisites Rs 0.02 crore).
Commission payable is variable
and is based on the net profits of
the Company.

Besides this, the Managing
Directors and the Wholetime
Directors are also entitled to
Company's contribution to Provident
Fund, Superannuation or Annuity
Fund, to the extent not taxable
and Gratuity and encashment of
leave at the end of tenure, as per
the rules of the Company and
to the extent not taxable. The
appointment of the said Directors
is for a period of 5 (five) years and
can be terminated by either party
by giving three months’ notice
in writing.

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 60

The Company paid sitting fee to all
the Non-Executive Directors at the
rate of Rs 20,000 for attending
each meeting of the Board and/or
Committee thereof. The sitting fee
paid for the year ended March 31,
2005 to such Directors is as
follows:
Shri R.H. Ambani - Rs 1,00,000;
Shri M.L. Bhakta - Rs 2,80,000;
Shri Y.P. Trivedi - Rs 5,80,000;
Shri T.R.U. Pai - Rs 1,60,000;
Shri S. Venkitaramanan -
Rs 2,80,000;
Dr. D.V. Kapur - Rs 3,40,000; and
Shri M.P. Modi - Rs 4,40,000.

The Company paid Rs 1,88,385
as professional fee to
M/s. Kanga & Co., a firm in which
Shri M.L. Bhakta, Director of the
Company, is a Partner.

It is also proposed to pay, subject
to Members’ approval and other
applicable statutory approval(s),
commission aggregating
Rs 1,00,00,000 annually to Non-
Executive Directors in such
proportion as may be decided by
the Board of Directors.

There were no other pecuniary
relationships or transactions of the
Non-Executive Directors vis-à-vis
the Company. The Company has
not granted any stock option to
any of its Directors.

(iii)Shareholders’ / Investors’

Grievance Committee

The Board has constituted
Shareholders’ / Investors’
Grievance Committee (the
Committee), comprising
Shri M.L. Bhakta, Chairman,
Shri Y.P. Trivedi, Shri M.D. Ambani
and Shri A. D. Ambani (up to June
18, 2005).

The Committee, inter alia, approves
issue of duplicate certificates and
oversees and reviews all matters
connected with the transfer of
securities of the Company.
The Committee also looks into
redressal of shareholders’
complaints related to transfer of
shares, non-receipt of balance
sheet, non-receipt of declared
dividends, etc. The Committee
oversees performance of the
Registrars and Transfer Agents of
the Company and recommends
measures for overall improvement
in the quality of investor services.
The Committee also monitors the
implementation and compliance of
the Company’s Code of Conduct
for Prohibition of Insider Trading in
pursuance of SEBI (Prohibition of
Insider Trading) Regulations, 1992.
The Board has delegated the power
of approving transfer of securities
to the Managing Directors and the
Company Secretary.

Compliance Officer

During the financial year 2004-05,
Shri Vinod M. Ambani, President &
Company Secretary, and Shri
Surendra Pipara, Joint Company
Secretary, were the Compliance
Officers for complying with the
requirements of the SEBI
(Prohibition of Insider Trading)
Regulations, 1992 and the Listing
Agreement with the Stock
Exchanges in India, respectively.
From the financial year 2005-06,
Shri Vinod M. Ambani, shall be the
Compliance Officer for complying
with the requirements of SEBI
(Prohibition of Insider Trading)
Regulations, 1992 and the Listing
Agreement with the Stock
Exchanges in India.

Investor Grievance Redressal

The total number of complaints
received and resolved to the
satisfaction of investors during the
year under review and their break-
up are provided as under:

Types of

Complaints

Non-receipt of

Annual Report

No. of

Complaints

238

Non-receipt of

6,591

dividend warrants

Non-receipt

of Interest /

Redemption

Warrants

Non-receipt of

Certificates

Total

5,829

1,292

13,950

There were no outstanding
complaints as on March 31, 2005.
126 requests for transfers and
1629 requests for dematerialisation
were pending for approval as on
March 31, 2005, which were
approved and dealt with by April 1
and 2, 2005 respectively.

(iv) Finance Committee

The Board has constituted
Finance Committee comprising
Shri Mukesh D. Ambani,
Chairman, Shri Anil D. Ambani
(up to June 18, 2005),
Shri Nikhil R. Meswani and
Shri Hital R. Meswani.

The Finance Committee makes
recommendations to the Board
relating to capital structure and
issuance of securities, reviews
banking arrangements and cash

R E L I A N C E I N D U S T R I E S L I M I T E D

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G r o w t h i s L i f e

management, reviews and
approves certain short-term and
long-term loans, investment
transactions, etc. Finance
Committee meets as and when
the need to consider any matter
assigned to it arises.

(v) Health, Safety and Environment

Committee

The Board has constituted
Health, Safety and Environment
Committee comprising Shri Hital
R. Meswani, Chairman, Shri H.S.
Kohli and Dr. D.V. Kapur.

The Health, Safety and
Environment Committee has
been constituted inter alia to
monitor and ensure maintaining
highest standards of
environmental, health and safety
norms and compliance with
applicable pollution and
environmental laws at all works /
factories / locations of the
Company and to recommend
measures, if any, for improvement
in this regard.

The Committee met twice during
the year and reviewed, inter alia,
the HSE Policy of the Company,
performance on health, safety
and environment matters and the
procedures and controls being
followed at the various Plants of
the Company and compliance
with the relevant statutory
provisions.

(vi) Corporate Governance and
Stakeholders’ Interface
Committee

The Board has constituted
Corporate Governance and
Stakeholders’ Interface
Committee comprising Shri Y. P.
Trivedi, Chairman, Dr. D. V. Kapur
and Shri M. P. Modi.

The terms of reference of the
Corporate Governance and
Stakeholders’ Interface Committee,
inter alia, includes the following:

and found that the Company had
fully complied with all applicable
norms of Corporate Governance
and listing requirements.

● Observance of practices of

Corporate Governance at all levels
and to suggest remedial measures
wherever necessary.

● Provision of correct inputs to the
media so as to preserve and
protect the Company’s image and
standing.

● Dissemination of factually correct

information to the investors,
institutions and public at large.

● Interaction with the existing and

prospective FIIs and rating
agencies, etc.

The Committee has conducted a
detailed review of the requirements
under the existing Clause 49 and
the proposed amendments and
also reviewed global best practices.
The Company is in compliance
with all the current requirements
of Clause 49. The Committee has
engaged reputed consultants to
help develop processes to meet
the additional requirements under
the revised Clause 49 (including
the non-mandatory requirements)
and other best practices. These
are under implementation.

● Recommendation of nomination of

B. Functional Committees

Directors on the Board.

During the year, the Corporate
Governance and Stakeholders’
Interface Committee has met
seven times. The dates on which
the meetings were held are:
January 5, 2005, January 19, 2005,
January 29, 2005, February 4, 2005,
February 17, 2005, March 9, 2005
and March 25, 2005. All the
Committee members attended all
seven meetings.

During the year, certain issues
relating to Corporate Governance
were raised by the then Vice
Chairman & Managing Director.
These were considered and dealt
with by the Audit Committee and
by the Corporate Governance and
Stakeholders’ Interface Committee
at their respective meetings and
their respective reports were
submitted to the Board, which
were considered by the Board at
its meeting held on April 27, 2005.
The Board has accepted the
reports of both the Committees

The Board may, from time to time,
constitute one or more Functional
Committees delegating thereto
powers and duties with respect to
specific purposes. Meetings of
such Committees will be held as
and when the need for discussing
the matter concerning the
purposes arises. Time schedule
for holding the meetings of such
functional committee(s) are
finalised in consultation with the
Committee Members.

During the year, the Board has
constituted the following two
Committees:

(i) Buy Back Committee, comprising

Shri Y.P. Trivedi, Chairman,
Dr. D.V. Kapur and Shri M.P. Modi,
to oversee all matters pertaining to
the Buy Back of Equity Shares
announced by the Company.

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 62

(ii) Committee of Independent

Directors, comprising Shri M.L.
Bhakta, Chairman, Shri Y.P. Trivedi,
Shri S. Venkitaramanan,
Dr. D.V. Kapur and Shri M.P. Modi,
to consider all matters pertaining
to exercise of the Company’s
options to convert 162 crore
Cumulative Convertible /
Redeemable Preference Shares
aggregating Rs 8,100 crore and to
engage independent valuer to
determine the ‘Fair Value’ of the
Equity Shares of Reliance
Infocomm Limited.

Procedure at Committee
Meetings

Company’s guidelines relating to
Board meetings are applicable to
Committee meetings as far as may
be practicable. Each Committee
has the authority to engage outside
experts, advisers and counsel to
the extent it considers appropriate
to assist it in its work. Minutes of
the proceedings of the Committee
meetings are placed before the
Board for perusal and noting.

7. General Body Meetings

Location, date and time of the
Annual General Meetings held
during the preceding 3 years are
as follows:

No Special Resolutions were passed
by the Company at the last 3 Annual
General Meetings. During the year
ended March 31, 2005, no
resolution has been passed by the
Company’s Members through
postal ballot. At the ensuing
Annual General Meeting also,
there is no resolution proposed to
be passed through postal ballot.

8. a.Disclosures on materially
significant related party
transactions i.e. transactions
of the Company of material
nature, with its promoters,
the directors or the
management, their
relatives, or subsidiaries,
etc. that may have potential
conflict with the interests
of the Company at large.

None of the transactions with any
of the related parties were in
conflict with the interest of the
Company. Attention of Members is
drawn to the disclosures of
transactions with the related
parties set out in Notes on
Accounts – Schedule ‘ O’, forming
part of the Annual Report.

The Company’s related party
transactions are generally with its
Subsidiaries and Associates.
The related party transactions are
entered into based on considerations
of various business exigencies such
as synergy in operations, sectoral
specialisation and the Company’s
long term strategy for sectoral
investments, optimisation of market
share and profitability, legal
requirements, liquidity and capital
resources of Associates and
Subsidiaries.

All related party transactions are
negotiated on arms length basis and
are only intended to further the
interests of the Company.

The Company’s transactions with its
Subsidiaries relate to investments
made and loans and advances given
for strategic investments in
Associates. The Company owns
100% interest in all its major
Subsidiaries. Accordingly, the inter-
company transactions between the
Company and its Subsidiaries are
eliminated in preparation of
consolidated financial statements.

Year

AGM / Location

Date

Time

EGM

2001-02

AGM

Birla Matushri Sabhagar October 31, 2002 11a.m.

19, Marine Lines

Mumbai 400 020

2002-03

AGM

Same as above

June 16, 2003

11a.m.

2003-04

AGM

Same as above

June 24, 2004

11a.m.

R E L I A N C E I N D U S T R I E S L I M I T E D

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 63

The more significant transactions
during 2004-05 with Associates on
consolidated financial statements
basis are as follows:

● Loan taken during the year from

Reliance Communications
Infrastructure Limited Rs 2,735
crore and repaid Rs 2,282 crore
and Rs 1,560 crore taken and
repaid Rs 1,560 crore to Reliance
Capital Limited. In addition, Loan
& Advances of Rs 4,152 crore
given to and repaid by Reliance
Capital Limited.

● Fixed Assets sold during the year
to Reliance Infocomm Limited
Rs 219 crore and to Reliance
Communications Infrastructure
Limited Rs 1,187 crore.

● Sale of Investment to Reliance
Capital Limited Rs 117 crore;
Reliance General Insurance Co.
Limited Rs 128 crore and to
Reliance Energy Limited
Rs 1,489 crore.

● Investments in Equity / Warrants

of Reliance Energy Limited
Rs 1,156 crore through 100%
subsidiary Reliance Power
Ventures Limited. During April
2005, further investment of
Rs 62 crore has been made in
warrants of Reliance Energy
Limited and the warrants have
been converted into Equity Shares.

● Interest on DDBs received from

Reliance Communications
Infrastructure Limited Rs 207 crore.
Premium from investment in
Preference Shares of Reliance
Infocomm Limited Rs 911 crore.

● Sales to Reliance Communications
Infrastructure Limited Rs 1,109
crore comprising primarily
communication devices and HDPE
resins and to Indian Petrochemicals
Corporation Limited Rs 2,634
crore mainly Naptha.

● Purchases from Reliance Capital
Limited Rs 281 crore comprising
communication devices and from
Indian Petrochemicals Corporation
Limited Rs 547 crore mainly
polymers.

● Interest Paid to Reliance

Communications Infrastructure
Limited Rs 95 crore. Electric,
Power and Fuel expense paid
to Reliance Utilities and Power
Limited Rs 349 crore. Rent,
Warehousing, Distribution and
Product handling charges paid
to Reliance Ports and Terminals
Limited Rs 868 crore. Wholesale
Traffic charges paid by 100%
Subsidiary Reliance
Communications Inc. to Reliance
Infocomm Limited Rs 435 crore.

G r o w t h i s L i f e

b.Details of non-compliance
by the Company, penalties,
strictures imposed on the
Company by Stock
Exchanges or SEBI, or any
other statutory authority,
on any matter related to
capital markets, during the
last three years.

There has been no instance of
non-compliance by the Company
on any matter related to capital
markets during the last three years
and hence no penalties or
strictures have been imposed on
the Company by the Stock
Exchanges or SEBI or any other
statutory authority.

9. Means of communication

● Half Yearly Reports: Half Yearly
Reports covering financial results
are sent to Members at their
registered addresses.

● Quarterly Results: Quarterly

Results are published in 'Financial
Express' and 'Tarun Bharat'

● News Releases, Presentations,

etc.: Official news releases,
detailed presentations made to
media, analysts, institutional
investors, etc. are displayed on the
Company’s website www.ril.com.

● Website: The Company’s website
www.ril.com contains a separate
dedicated section ‘Investor
Relations’ where shareholders
information is available. Full
Annual Report is also available on
the website in a user-friendly and
downloadable form.

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 64

● Annual Report: Annual Report

10.3. Book Closure Period

(b)

Listing & Trading of Global
Depository Receipts (GDRs)
at
Luxembourg Stock Exchange
and traded on PORTAL
System (NASDAQ, USA) and
SEAQ System
(London Stock Exchange).

Annual maintenance and
listing agency fee for the year
2005 has been paid by the
Company to the Luxembourg
Stock Exchange.

Listing of Debt
Securities at
The Wholesale Debt Market
(WDM) Segment of the
National Stock Exchange of
India Limited (NSE).

Annual listing fee for the year
2005-06 has been paid by
the Company.

(c)

(d) Debenture Trustees

10.6

UTI Bank Limited
Maker Tower F, 13th Floor
Cuffe Parade, Colaba
Mumbai 400 005

(a) Stock Code
Scrip Code -
Bombay Stock Exchange
‘500325’

Trading Symbol -National
Stock Exchange
‘RELIANCE EQ’

(b)

Demat ISIN in NSDL & CDSL
for Equity Shares
ISIN INE002A01018

Saturday, May 14, 2005 to
Saturday, May 21, 2005 (both
days inclusive), for payment
of dividend.

10.4. Dividend Payment Date(s)
On or after August 3, 2005

10.5.

(a) Listing of Equity Shares
on Stock Exchanges and
Payment of Listing Fee
The Stock Exchange,
Mumbai (BSE)
Phrioze Jeejeebhoy Towers,
Dalal Street, Mumbai 400 001.

National Stock Exchange of
India Limited (NSE),
“Exchange Plaza”
Bandra-Kurla Complex
Bandra (E), Mumbai 400 051

The Calcutta Stock Exchange
Association Limited
7, Lyons Range
Kolkata 700 001

Annual listing fee for the year
2005-06, (as applicable) has
been paid by the Company to
BSE and NSE; the Company’s
application to Calcutta Stock
Exchange for delisting is
awaiting confirmation.

containing inter alia Audited Annual
Accounts, Consolidated Financial
Statements, Directors’ Report,
Auditors’ Report, International
Accountants’ Report and other
important information is circulated to
Members and others entitled thereto.
The Management’s Discussion
and Analysis (MD&A) Report
forms part of the Annual Report.

● SEBI EDIFAR: Annual Report,

Quarterly Results, Shareholding
Pattern etc. of the Company are
also posted on the SEBI EDIFAR
website www.sebiedifar.nic.in.

10. General Shareholder

Information

10.1. Annual General Meeting:

Date and Time, Venue
Wednesday, August 3, 2005
at 11.00 a.m.
Birla Matushri Sabhagar,
19, Marine Lines,
Mumbai 400 020.

10.2. Financial Calendar (tentative)

Results for the quarter
ending June 30, 2005
Last week of July, 2005

Results for quarter
ending September 30, 2005
Last week of October, 2005

Results for quarter
ending December 31, 2005
Last week of January, 2006

Results for year ending
March 31, 2006
Last week of April, 2006

Annual General Meeting
June, 2006

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G r o w t h i s L i f e

10.7 Stock Market Data

April, 2004

May, 2004

June, 2004

July, 2004

August, 2004

September, 2004

October, 2004

November, 2004

December, 2004

January, 2005

February, 2005

March, 2005

Bombay Stock Exchange (BSE)

National Stock Exchange (NSE)

(In Rs per share)

Month’s High

Month’s Low

Month’s High

Month’s Low

Price

580.85

543.50

458.50

490.25

504.90

519.95

567.00

552.40

548.00

553.80

559.90

600.90

Price

521.65

382.00

409.00

412.00

448.45

454.00

512.70

487.00

472.30

498.20

521.00

539.25

Price

650.00

633.05

458.25

490.50

555.00

519.75

600.00

587.00

547.90

550.00

597.80

600.80

Price

522.20

381.70

409.15

400.00

448.50

468.50

512.25

487.00

472.10

490.00

528.65

539.10

RIL share price on BSE

700

600

500

400

300

580.85

543.50

521.65

490.25

458.50

504.90

519.95

448.45 454.00

409.00 412.00

382.00

Low

High

600.90

567.00

552.40 548.00 553.80 559.90

512.70

487.00

472.30

498.20

539.25

521.00

4
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RIL share price on NSE

700

600

500

400

300

650.00

633.05

High

522.20

490.50

458.25

600.00 587.00

547.90 550.00

597.80 600.80

512.25

487.00

472.10

490.00

528.65

539.10

555.00

519.75

468.60

448.50

409.15

400.00

381.70

Low

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5
0
-
n
a
J

5
0
-
b
e
F

5
0
-
r
a
M

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 66

10.8 Share price performance in
comparison to broad based
indices – BSE Sensex and
NSE Nifty

RIL share price performance
relative to BSE Sensex
based on share price on
March 31, 2005

Period

Percentage Change in

RIL share price

Sensex

RIL relative to Sensex

1.47

97.49

81.56

73.59

16.14

-12.63

112.97

87.15

29.82

-7.27

-2.99

33.71

RIL Share Price on BSE

Financial Year
2004-2005

2 years

3 years

5 years

E
S
B
n
o

e
c
i
r
P
e
r
a
h
S
L
R

600

550

500

450

400

Sensex

8000

7000

6000

5000

4000

x
e
s
n
e
S

4
0
-
r
p
A

4
0
-
y
a
M

4
0
-
n
u
J

4
0
-
l
u
J

4
0
-
g
u
A

4
0
-
t
p
e
S

4
0
-
t
c
O

4
0
-
v
o
N

4
0
-
c
e
D

5
0
-
n
a
J

5
0
-
b
e
F

5
0
-
r
a
M

Month Ended

RIL share price performance
relative to Nifty based on
share price on March 31, 2005

Period

Percentage Change in

RIL share price

Financial Year
2004-2005

2 years

3 years

5 years

1.49

96.35

81.83

72.55

Nifty

14.89

108.10

80.22

33.18

RIL relative to Nifty

-11.66

-5.65

0.90

29.56

R E L I A N C E I N D U S T R I E S L I M I T E D

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 67

G r o w t h i s L i f e

The Company obtains from a
Company Secretary in practice
half-yearly certificate of
compliance with the share
transfer formalities as required
under Clause 47(c) of the
Listing Agreement with Stock
Exchanges and files a copy of
the certificate with the Stock
Exchanges.

10.11 Shareholding Pattern as on

March 31, 2005

Foreign
Investors
30.93%

Banks / Mfs / FIs
8.04%

Others
14.27%

Promoters (including
persons acting in concert)
46.76%

10.9 Registrars and Transfer

Agents
Karvy Computershare
Private Limited
46, Avenue 4, Street No.1
Banjara Hills
Hyderabad 500 034
Email rilinvestor@karvy.com
Tel +91 40 2332 0666 /
2332 0711 / 2332 3037

List of Investor Service Centres
of Karvy Computershare
Private Limited forms part of
the Annual Report.

10.10 Share Transfer System

Presently, the share transfers
which are received in physical
form are processed and the
share certificates returned
within a period of 7 days from
the date of receipt, subject to
the documents being valid and
complete in all respects.

The Board has delegated the
authority for approving transfer,
transmission, etc. of the
company’s securities to the
Managing Director and / or
Company Secretary.
A summary of transfer /
transmission of securities of the
Company so approved by the
Managing Director / Company
Secretary, is placed at every
Board Meeting.

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 68

10.12 Build up of Equity Share Capital

Particulars

Allotment Date

No. of Shares

Subscribers to Memorandum - Mynylon Limited

Shareholders of Reliance Textile Industries Limited
(Merged with Mynylon Limited)

Conversion of Loan

Rights Issue - I

Bonus Issue - I

Debenture - Series - I Conversion

Consolidation of Fractional Coupon Shares

Conversion of Loan

Rights Issue - II

Debenture - Series - II Conversion

Debenture - Series - I Conversion - Phase II

Shareholders of Sidhpur Mills Co Ltd
(Merged with the Company)

Rights Issue – II NRI

Debenture - Series - III Conversion

Rights Issue - II

Shareholders of Sidhpur Mills Co Ltd
(Merged with the Company) – II

Bonus Issue- II

Shareholders of Sidhpur Mills Co Ltd
(Merged with the Company) – III

Oct 19, 1975

May 9, 1977

Sep 28, 1979

Dec 31, 1979

Sep 19, 1980

Dec 31, 1980

May 15, 1981

Jun 23, 1981

Sep 22, 1981

Oct 6, 1981

Dec 31, 1981

Apr 12, 1982

Jun 15, 1982

Aug 31, 1982

Sep 9, 1982

Dec 29, 1982

1 100

59 50 000

9 40 000

6 47 832

45 23 359

8 40 575

24 673

2 43 200

1 40 800

23 80 518

8 42 529

27 168

81 059

774

19 20 000

1 942

Sep 30, 1983

1 11 39 564

Sep 30, 1983

371

Debenture - Series - IV Conversion

Sep 30, 1983

64 00 000

Shareholders of Sidhpur Mills Co Ltd
(Merged with the Company) – IV

Shareholders of Sidhpur Mills Co Ltd
(Merged with the Company) – V

Debenture Series - I Conversion

Debenture Series – II Conversion

Shareholders of Sidhpur Mills Co Ltd
(Merged with the Company) – VI

Consolidation of Fractional Coupon Shares.

Debenture.Series - E Conversion

Debenture Series - III Conversion

Debenture Series – IV Conversion

Shareholders of Sidhpur Mills Co Ltd
(Merged with the Company) – VII

Consolidation of Fractional Coupon

Shareholders of Sidhpur Mills Co Ltd
(Merged with the Company) – VIII

Shareholders of Sidhpur Mills Co Ltd
(Merged with the Company) – IX

Apr 5, 1984

Jun 20, 1984

Oct 1, 1984

Dec 31, 1984

Jan 31, 1985

Apr 30, 1985

Jul 5, 1985

Dec 17, 1985

Dec 31, 1985

Nov 15, 1986

Apr 1, 1987

617

97 66 783

2 16 571

45 005

53 33 333

52 835

42 871

106

610

40 284

169

R E L I A N C E I N D U S T R I E S L I M I T E D

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 69

Particulars

Debenture Series - G Conversion

Right Issue - III

Debenture Series – G Conversion

Shareholders of Sidhpur Mills Co Ltd
(Merged with the Company) – X

Shareholders of Sidhpur Mills Co Ltd
(Merged with the Company) – XI

Shareholders of Sidhpur Mills Co Ltd
(Merged with the Company) – XII

Shareholders of Sidhpur Mills Co Ltd
(Merged with the Company) – XIII

Shareholders of Sidhpur Mills Co Ltd
(Merged with the Company) – XIV

G r o w t h i s L i f e

Allotment Date

No. of Shares

Aug 1, 1987

6 60 30 100

Feb 4, 1988

3 15 71 695

Feb 4, 1988

Jun 2, 1988

Oct 31, 1988

Nov 29, 1990

May 22, 1991

Oct 10, 1991

29 35 380

322

Euro Issue- GDR - I

Jun 3, 1992

1 84 00 000

Shareholders of Sidhpur Mills Co Ltd
(Merged with the Company)

4 060

Shareholders of Reliance Petrochemicals Limited (RPL)
(Merged with the Company)

Dec 4, 1992

7 49 42 763

Loan Conversion

Jul 7, 1993

3 16 667

Debenture - Series H - Conversion

Aug 26, 1993

3 64 60 000

Warrant Conversion (Debenture - Series F)

Aug 26, 1993

1 03 16 092

Euro Issue GDR – II

Loan Conversion

Warrant Conversion (Debenture - Series J)

Private Placement of Shares

Conversion of RPL Debentures

Shareholders of Reliance Polypropylene Limited and
Reliance Polyethylene Limited (Merged with the Company)

Feb 23, 1994

2 55 32 000

Mar 1, 1994

Aug 3, 1994

18 38 950

87 40 000

Oct 21, 1994

2 45 45 450

Dec 22, 1994

75 472

Mar 16, 1995

9 95 75 915

Warrants Conversion

Mar 10, 1995

74 80 000

Conversion of 3.5% ECB Due 1999 - I

Conversion of 3.5% ECB Due 1999 - II

Conversion of 3.5% ECB Due 1999 - III

Conversion of 3.5% ECB Due 1999 - IV

Conversion of 3.5% ECB Due 1999 - V

Conversion of 3.5% ECB Due 1999 - VI

May 24, 1997

Jul 11, 1997

Jul 22, 1997

Sep 13, 1997

Oct 22, 1997

Nov 4, 1997

544

13 31 042

6 05 068

18 64 766

18 15 755

1 03 475

Bonus Issue – III

Dec 20, 1997

46 60 90 452

Conversion of 3.5% ECB Due 1999 - VII

Dec 4, 1997

15 68 499

Conversion of 3.5% ECB Due 1999 - VIII

Sep 27, 1999

7 624

Conversion of Warrants

Shareholders of Reliance Petroleum Limited
(Merged with the Company)

Total

Less: Shares Bought Back and extinguished

Total Equity as on March 31, 2005

Jan 12, 2000

12 00 00 000

Oct 23, 2002

34 26 20 509

139 63 77 536

28 69 495

139 35 08 041

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 70

10.13 Dematerialisation of Shares
93.66% of the Company’s Paid
up Equity Share Capital has
been dematerialised up
to March 31, 2005. Trading
in Equity Shares of the
Company is permitted only
in dematerialised form as per
notification issued by SEBI.

CDSL
6.84%

Physical
6.34%

NSDL
86.82%

Liquidity:
The Company’s Equity Shares
are among the most liquid and
actively traded shares on the
Indian Stock Exchanges. RIL
shares consistently rank
among the top few frequently
traded shares, both in terms of
the number of shares traded,
as well as value. The highest
trading activity is witnessed on
the BSE and NSE. Relevant
data for the average daily
turnover for the financial year
2004-2005 is given below:

10.14 Outstanding GDRs /

Warrants and Convertible
Bonds, Conversion
Outstanding GDRs as on
March 31, 2005 represent
11,91,58,619 shares
constituting 8.55% of the Paid
up Equity Share Capital of the
Company. There are no other
outstanding instruments, which
are convertible into Equity
Shares of the Company.

10.15 Buy Back of Equity Shares

of the Company
The Board at its meeting held
on December 27, 2004,
approved Buy Back of its fully
Paid up Equity Shares of
Rs 10 each, at a price not
exceeding Rs 570 per share,
payable in cash, up to an
aggregate amount of Rs 2,999
crore, representing the limit of
10% of the total Paid up
Equity Share Capital and Free
Reserves of the Company as
on March 31, 2004. The Buy
Back would be made out of
the free reserves and / or the
securities premium account of
the Company by open market
purchases through Stock
Exchange(s) in India, as per
provisions contained in the
SEBI (Buy Back of Securities)
Regulations, 1998. The Buy
Back Offer is open from
January 10, 2005 to
December 26, 2005.

No. of shares (in million)

Value (Rs million)

(US$ Million)

BSE

3.03

NSE

6.40

1522.30

3220.10

34.80

73.60

BSE + NSE

9.43

4742.40

108.40

(Source: This information is compiled from the data available from the

websites of BSE and NSE)

R E L I A N C E I N D U S T R I E S L I M I T E D

The cumulative number of
Equity Shares bought back
from January 10, 2005 till
March 31, 2005 is 28,69,495
Equity Shares against a total
consideration of Rs 149.61
crore, at an average price of
Rs 521.38 per share.

10.16 Locations of Manufacturing

Facilities

Jamnagar Complex
Village Motikhavdi
P.O. Digvijay Gram,
Dist. Jamnagar – 361 140
Gujrat State, India.

Hazira Complex
Village Mora, Bhatha P.O.
Surat-Hazira Road
Surat – 394 510,
Gujarat State, India.

Patalganga Complex
B-4, Industrial Estate Area,
Patalganga
Off Bombay-Pune Road
Near Panvel,
Dist. Raigad – 410 207
Maharashtra State, India.

Naroda Complex
103/106,
Naroda Industrial Estate
Naroda, Ahmedabad – 382 320
Gujarat State, India.

10.17 Address for

Correspondence
(i) Investor Correspondence
For transfer / dematerilisation
of shares, payment of dividend
on shares, interest and
redemption of debentures,
and any other query relating
to the shares and debentures
of the Company:

For Shares / Debentures
held in Physical form
Karvy Computershare
Private Limited
46, Avenue 4, Street No. 1
Banjara Hills
Hyderabad – 500 034
Email rilinvestor@karvy.com

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 71

G r o w t h i s L i f e

Secretarial Audit
The Secretarial Audit Report
confirming that the total issued
capital of the Company is in
agreement with the total
number of shares in physical
form and the total number of
dematerialised shares held
with NSDL and CDSL, is
placed before the Board on a
quarterly basis. A copy of the
Audit Report is submitted to
the Stock Exchanges in India
where the securities of the
Company are listed.

14.

Fee to Statutory Auditors
The fee paid to the Statutory
Auditors for the year was
Rs 4.50 crore (previous year
Rs 4.64 crore), including
Rs 2.30 crore (previous year
Rs 2.48 crore) as fees paid
for Certification in Finance &
Tax matters.

11. Compliance Certificate of

13.

the Auditors
Certificate from the Auditors
of the Company,
M/s. Chaturvedi & Shah and
M/s. Rajendra & Co., confirming
compliance with the conditions
of Corporate Governance as
stipulated under Clause 49,
is annexed to the Directors’
Report forming part of the
Annual Report.

This Certificate has also been
forwarded to the Stock
Exchanges in India where the
securities of the Company
are listed.

12. Adoption of Non-Mandatory
Requirements of Clause 49
The Company complies with all
the applicable Non-mandatory
requirements stipulated
under Clause 49, such as
requirements with regard to:

(i)

despatch of half-yearly
financial performance to
Members, and

(ii)

Remuneration Committee.

None of the specified matters which
are recommended to be decided by
Postal Ballot are to be considered at
the ensuing Annual General Meeting.

For Shares / Debentures held
in Demat form
To the investors’ Depository
Participant(s) and/or Karvy
Computershare Private Limited

(ii) Any query on
Annual Report
Secretarial Department
Reliance Industries Limited
3rd Floor, Maker Chambers IV
222, Nariman Point
Mumbai 400 021
Email investor_relations@ril.com

10.18 Transfer of unclaimed

amounts to Investor
Education and Protection
Fund
During the year under review
the Company has credited
Rs 7.72 crore to the Investor
Education and Protection Fund
pursuant to Section 205C of
the Companies Act, 1956 read
with the Investor Education
and Protection Fund
(Awareness and Protection of
Investors) Rules, 2001. Details
of the aforesaid transfer are
as under:

Amount

Transferred

(Rs in crore)

2.42

4.95

0.35

Type of

Transfer

Dividend

Interest on

Debentures

Debenture

Redemption

Money

Total Amount

7.72

Transferred

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 72

173

174

175

177

Shareholders’ Referencer*

Contents

At a Glance

Investor Service and Grievance Handling Mechanism

Matters Relating to Shareholders

I. Dividend

(A) Course of Action in case of Non-receipt of Dividend, Revalidation of

Dividend Warrants etc.

(B) Payment of Dividend through ECS Facility
(C) Unclaimed Dividend

II. Dematerialisation / Rematerialisation of Shares

III. Nomination Facility

IV. Transfer / Transmission / Transposition / Duplicate Certificates etc.

V. Miscellaneous

(A) Change of address
(B) Change of name
(C) Authority to another person to deal with shares

VI. Shareholders’ General Rights

VII. Duties / Responsibilities of Investors

VIII. General Safeguards

Initiatives Taken by the Company

Information Regarding Tax on Dividend and Sale of Shares

Contact Details

Annexures

1. List of Investor Service Centres

2. ECS Mandate Form

3. Nomination Form (Form 2B)

4. Claim Form for receiving unpaid dividend from General Revenue Account

of the Central Government

* This referencer has been prepared to facilitate shareholders to understand the
procedures involved in completing various investor-related transactions
expeditiously and properly. It is also endeavoured to provide the related forms
and other information that may be required by shareholders.

R E L I A N C E I N D U S T R I E S L I M I T E D

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 73

At a Glance

● Presently, the Company has

about 2 million folios of
shareholders holding Equity
Shares in the Company.

● 1 out of every 4 investors in

India is a Reliance shareholder.

● Face value of the Company’s

Equity Shares is Rs 10.

● The Company’s Equity Shares

are under compulsory trading in
demat form only.

● Over 93% of the Company’s
Equity Shares are held in
demat form.

● The Company’s Equity Shares

are freely transferable except as
may be required statutorily.

● Karvy Computershare Private

Limited, Hyderabad, an ISO 9002
Registrar, is the Registrar and
Transfer Agents of the Company.

● The Company’s Equity Shares

are listed on the National Stock
Exchange of India Limited (NSE)
and the Stock Exchange, Mumbai
(BSE). Global Depository
Receipts (GDRs) issued by the
Company are listed on
Luxembourg Stock Exchange.

Investor Service and
Grievance Handling
Mechanism

All share related matters viz.,
transfer, transmission, transposition,
nomination, dividend, change of
name / address / signature,
registration of mandate / Power of
Attorney, replacement / split /
consolidation / demat / remat of
shares, issue of duplicate certificates
etc. are being handled by the
Company’s Registrars and Transfer
Agents (R&TA) M/s. Karvy
Computershare Private Limited
(Karvy). Karvy, the largest Registrar
in the country having a vast number
of Investor Service Centres across
the country, discharges investor
service functions effectively and
expeditiously.

Investors are requested to correspond
directly with Karvy, on all share
related matters. List of Investor
Service Centres of Karvy is enclosed
(Annexure – 1).

The Company has an established
mechanism for investor service and
grievance handling, with Karvy and
the Compliance Officer appointed by
the Company for this purpose being
the important functional nodes.
The Company has appointed a firm
of Chartered Accountants as Internal
Security Auditors to concurrently audit
the transactions and communication
with investors, regulatory and other
concerned authorities.

The Company has prescribed service
standards for various investor related
activities being handled by Karvy,
which are covered in the section on
‘Initiatives Taken by the Company’.
Any deviation therefrom is examined
by the Internal Security Auditors who

G r o w t h i s L i f e

also advise the corrective actions
thereon and inform the Company on
the matters on a monthly basis.

The Board of Directors of the Company
has constituted a Shareholders’ /
Investors’ Grievance Committee (the
Committee) which, inter alia, approves
issue of duplicate certificates and
oversees and reviews all matters
connected with securities transfers
and other processes. The Committee
also looks into redressal of
shareholders’ complaints related to
transfer of shares, non-receipt of
balance sheet, non-receipt of
declared dividend etc. The
Committee oversees performance of
the R&TA and recommends
measures for overall improvement in
the quality of investor services. The
summary statement of investor-
related transactions and details are
also considered by the Board of
Directors of the Company.

Matters Relating to
Shareholders

I. Dividend

(A) Course of Action in case of
Non-receipt of Dividend,
Revalidation of Dividend
Warrant etc.

What should a shareholder do in
case of non-receipt of dividend?

Shareholders may write to the
Company’s R&TA furnishing the
particulars of the dividend not received
and quoting the folio number/client ID
particulars (in case of dematerialised
shares). The R&TA shall check the
records and issue duplicate dividend
warrant if the dividend remains
unpaid in the records of the
Company after expiry of the validity
period of the warrant. The Company
would request the concerned
shareholders to execute an indemnity
before issuing the duplicate warrant.

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 74

bank account is directly credited and
an advice thereof is issued by the
Company after the transaction is
effected. The concerned bank branch
credits investor’s account and
indicate the credit entry as “ECS” in
his / her pass book / statement of
account. If any investor maintains
more than one bank account,
payment can be received at any one
of his / her accounts as per the
preference of the investor. The
investor does not have to open a
new bank account for the purpose.

If the validity period of the lost
dividend warrant has not expired,
shareholders will have to wait till the
expiry date since duplicate warrant
cannot be issued during the validity
of the original warrant. On expiry of
the validity period, if the dividend
warrant is still shown as unpaid in
records of the Company, duplicate
warrant will be issued.

However, duplicate warrants will not
be issued against those shares
wherein a ‘stop transfer indicator’ has
been instituted either by virtue of a
complaint or by law, unless the
procedure for releasing the same has
been completed.

No duplicate warrant will be issued in
respect of dividends which have
remained unpaid / unclaimed for a
period of seven years in the unpaid
dividend account of the Company as
they are required to be transferred to
the Investor Education and
Protection Fund (IEPF) constituted
by the Central Government.

Why do the shareholders have to
wait till the expiry of the validity
period of the original warrant?

Since the dividend warrants are
payable at par at several centres
across the country, banks do not
accept ‘stop payment’ instructions.
Hence, shareholders have to wait
till the expiry of the validity of the
original warrant.

What is the procedure for
revalidation of dividend warrants?

Shareholders who have not
encashed their dividend warrants
within the validity period may send
their request of revalidation to the
Company’s R&TA enclosing the said
dividend warrants. The Company’s
R&TA will after due verification of the
records, issue a revalidated dividend
warrant. The revalidated warrant will
be valid for a period of 3 months
from the date of such warrant.

How can a bank or any other
person be authorised to receive
dividends on behalf of
shareholders?

Shareholders may write to the
Company’s R&TA furnishing the
name and address of the authorised
person/bank alongwith folio number
and current communication address.
The Company’s R&TA will despatch
the respective shareholders’ dividend
warrants to the concerned person /
bank. This facility is applicable only
for the shareholders holding shares
in physical form.

(B) Payment of dividend through

Electronic Clearing Service
(ECS)

What is payment of dividend
through ECS Facility and how does
it operate?

Reserve Bank of India's Electronic
Clearance Service (ECS) Facility
provides investors an option to
collect dividend / interest directly
through their bank accounts rather
than receiving the same through
post. Under this option, investor’s

R E L I A N C E I N D U S T R I E S L I M I T E D

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 75

G r o w t h i s L i f e

What are the benefits of ECS
Facility?

Some of the major benefits of ECS
Facility are:

a. Prompt credit to the bank account
of the investor through electronic
clearing at no extra cost.

b. Exposure to delays / loss in postal

service avoided.

c. As there can be no loss in transit
of warrants, issue of duplicate
warrants is avoided.

d. Fraudulent encashment of

warrants is avoided.

Where all the ECS Facility is
available?

ECS Facility is presently made
available to the investors residing at
18 centres, viz., Ahmedabad,
Bangalore, Bhubhaneshwar,
Chandigarh, Chennai, Coimbatore,
Guwahati, Hyderabad, Jaipur,
Kanpur, Kolkata, Mumbai, Nagpur,
New Delhi, Patna, Pune,
Thiruvananthapuram and Vadodara.
As per Reserve Bank of India, this
service will be extended to some
more centers.

How to avail of ECS Facility?

What are the statutory provisions
governing unclaimed dividend?

Prior to amendment of Section 205A
and enactment of Section 205C by
the Companies (Amendment) Act,
1999 effective October 31, 1998,
companies were required to transfer
to the general revenue account of
the Central Government any moneys
transferred to the ‘unpaid dividend
account’ which remained unpaid or
unclaimed for a period of 3 years
from the date of transfer to the
unpaid dividend account.

With effect from October 31, 1998, any
moneys transferred to the ‘unpaid
dividend account’ of the Company
and remaining unpaid or unclaimed
for a period of 7 years from the date
of such transfer shall have to be
transferred to the Investor Education
and Protection Fund (IEPF).
Investors are requested to note that
no claims shall lie against the
Company or IEPF for any moneys
transferred to IEPF in accordance
with the provisions of Section 205C
of the Companies Act, 1956.

Investors holding shares in physical
form may send their ECS Mandate
Form, duly filled in, to the Company’s
R&TA. ECS Mandate Form is
enclosed (Annexure – 2) for
immediate use of investors. The Form
may also be downloaded from the
Company's website www.ril.com
under the section "Investor
Relations". However, if shares are
held in dematerialised form, ECS
mandate has to be sent to the
concerned Depository Participant
(DP) directly, in the format prescribed
by the DP.

Why cannot the Company take on
record bank details in case of
dematerialised shares?

As per the Depository Regulations,
the Company is obliged to pay
dividend on dematerialised shares as
per the details furnished by the
concerned DP. The Company cannot
make any change in such records
received from the Depository.

Can ECS Facility be opted out by
investors?

ECS would be an additional mode of
payment. Investors would have the
right to opt out from this mode of
payment by giving an advance notice
of four weeks either to the
Company’s R&TA or to the
concerned DP, as the case may be.

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 76

What is the status of unclaimed
and unpaid dividend for different
years?

In view of the statutory provisions, as
aforesaid, the status of unclaimed
and unpaid dividend of the Company
is captured in the following Chart 1:

Chart 1

Status of unclaimed and unpaid dividend for different years

Dividend for
1994- 95 or before

Dividend for
1995- 96 and 1996- 97

Dividend for
1997- 98 and thereafter

Transfer of
unpaid dividend

Transferred to
General Revenue Account
of the Central Government

Transferred to Central
Government’s Investor
Education and Protection
Fund (IEPF)

Will be transferred to
IEPF on due date(s)

Claims for
unpaid dividend

Can be claimed from ROC,
Maharashtra*

Cannot be claimed

Can be claimed from the
Company’s R&TA within
the time limits provided in Chart 2.

Chart 2

Information in respect of unclaimed and unpaid dividends declared for
1997-98 and thereafter

Financial year
ended

Date of declaration
of Dividend

Last date for claiming
unpaid Dividend

31.03.1998

26.06.1998

31.03.1999

24.06.1999

31.03.2000

30.03.2000

31.03.2001

15.06.2001

31.03.2002

31.10.2002

31.03.2003

16.06.2003

31.03.2004

24.06.2004

25.06.2005

23.06.2006

29.03.2007

14.06.2008

30.10.2009

15.06.2010

23.06.2011

* Shareholders who have not
encashed their dividend warrant(s)
relating to one or more of the
financial year(s) up to and including
1994-95 are requested to claim such
dividend from the Registrar of
Companies, Maharashtra, CGO
Complex, 2nd Floor, “A” Wing,
CBD-Belapur, Navi Mumbai – 400
614, Telephone (091) (022) 2757
6802, in Form II of the Companies
Unpaid Dividend (Transfer to General
Revenue Account of the Central
Government) Rules, 1978. A specimen
of the said Claim Form is enclosed
(Annexure -- 4).

R E L I A N C E I N D U S T R I E S L I M I T E D

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G r o w t h i s L i f e

II. Dematerialisation /

Rematerialisation of Shares

What is dematerialisation of
shares?

Dematerialisation (Demat) is the
process by which securities held in
physical form evidencing the holding
of securities by any person are
cancelled and destroyed and the
ownership thereof is entered into
and retained in a fungible form on
a depository by way of electronic
balances.

Demat facilitates paperless trading
whereby securities transactions are
executed electronically reducing /
mitigating possibility of loss of
related documents and / or
fraudulent transactions.

Trading in demat form is regulated by
the Depositories Act, 1996 and is
monitored by the Securities and
Exchange Board of India (SEBI). The
two depositories presently functioning
in India are National Securities
Depository Limited (NSDL) and
Central Depository Services (India)
Limited (CDSL).

Why dematerialise shares?

1. Trading in Compulsory Demat

SEBI has notified various
companies whose shares shall
be traded in demat form only.
By virtue of such notification,
the shares of the Company are
also subject to compulsory
trading in demat form on the
Stock Exchanges.

2. Benefits of Demat

●

Immediate transfer of shares.

● No formal registration required.

● No stamp duty applicable.

● No additional holding/transaction
cost to Shareholders pursuant to
SEBI directions of January 28,2005.

● Obtain acknowledgment from the
DP on handing over the share
certificate(s).

● Demat transfers are required to
be completed in 21 days as
against 30 days (excluding time
for despatch) for physical transfer.
Service standard prescribed by
the Company for completing
demat is three days from the date
of the receipt of requisite
documents for the purpose.

● Receive a confirmation statement
of holdings from the DP. Statement
of holdings is sent by the DPs
from time to time. Presently,
confirmation is given by DPs on
an immediate basis through email
or SMS facilities, thus enabling
shareholders to further trade in
the securities immediately.

Shareholders should not send share
certificate(s) / documents to the
Company / Company’s R&TA directly.

Additional information on the matter
may be received from–

Shri Praveen Chaturvedi
Assistant General Manager
Demat Advisory Cell
Karvy Computershare Private Limited
46, Avenue 4, Street No.1
Banjara Hills
Hyderabad 500 034, India

Telephone Nos: +91 40 2332 0666 /
2332 0711 / 2332 3031 / 2332 3037

e-mail: praveenc@karvy.com

Karvy has been advised by the
Company to facilitate shareholders in
dematerialising shares.

● No requirement for approval of

Board of Directors of the
Company for transfers.

● Quick settlements.

● Shareholders need not worry
about the space required for
preserving certificates in case of
large holdings.

● Avoidance of loss through loss in
transit, theft, mutilation, forging of
share certificates.

● Widely accepted for pledging
against borrowings with lower
interest rates.

● SEBI Guidelines prescribe further
issues in electronic mode only.

● Facilitates the Company to

determine entitlements easily
and faster.

● Details of investors are obtained
from the Beneficiary Position
(Benpos) and hence cannot be
manipulated by companies..

● Dematerialised shares can be
rematerialised or changed into
physical form whenever the
shareholder so wish.

How to dematerialise shares?

The procedure for dematerialising
shares is as under:

● Open Beneficiary Account with a

DP registered with SEBI.

● Submit Demat Request Form

(DRF) as given by the DP, duly
signed by all the holders with the
names and signature in the same
order as appearing in the
concerned certificate(s) and the
Company records, alongwith
requisite documentary proof.

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How to get dividend on
dematerialised shares? Will such
shareholders be eligible for
receiving Annual Report every
year and also to attend General
Meetings?

Dividend of shareholders holding
shares in dematerialised form will
be credited through ECS to the bank
accounts as opted by them while
opening the Beneficiary Accounts
with the DP. In other cases, dividend
warrants will be despatched to them
with the bank account details, as
furnished by the Depositories,
printed thereon.

Holding shares in dematerialised form
will not affect the rights of the
Shareholders. They, as members
of the Company, will be entitled to
receive Annual Report, attend
General Meetings and participate
and vote thereat to the extent of
their entitlement.

Is pledge of dematerialised
shares possible?

Dematerialised shares can be
pledged for the purpose of availing
of any funding / loan arrangement
with a bank.

What is rematerialisation of shares?

It is the process through which shares
held in demat form are converted into
physical form in the form of share
certificate(s).

What is the procedure for
rematerialisation of shares ?

● Shareholder should submit duly

filled in Rematerialisation Request
Form (RRF) to the concerned DP.

● DP intimates the relevant

Depository of the request through
the system.

● DP submits RRF to the Company’s

R&TA.

● Depository confirms

rematerialisation request to the
Company’s R&TA.

● The Company’s R&TA updates

accounts and prints certificate(s)
and informs the Depository.

● Depository updates the Beneficiary
Account of the shareholder by
deleting the shares so
rematerialised.

● Share certificate(s) is despatched

to the shareholder.

III. Nomination Facility

What is nomination facility and to
whom it is more useful? What is
the procedure of appointing a
nominee?

Section 109A of the Companies Act,
1956 provides the facility of
nomination to share / debenture
holders. This facility will be very
useful for individuals holding shares /
debentures in sole name. In the case
of joint holding of shares / debentures
by individuals, nomination will be
effective only in the event of the
death of all joint holders.

Investors especially those who are
holding shares / debentures in single
name, are advised to avail of the
nomination facility by submitting the
prescribed Form 2B to the Company’s
R&TA. Form 2B is enclosed
(Annexure – 3) for immediate use of
investors. Form 2B may also be
downloaded from the Company’s
website, www.ril.com under the
section “Investor Relations”.

However, if shares / debentures are
held in dematerialised form,
nomination has to be registered with
the concerned DP directly, as per the
format prescribed by the DP.

R E L I A N C E I N D U S T R I E S L I M I T E D

Who can appoint a nominee and
who can be appointed as a
nominee?

Individual shareholders holding the
shares / debentures in single name or
joint names can appoint a nominee.
While an individual can be appointed
as a nominee, a trust, society, body
corporate, partnership firm, karta of
HUF or a power of attorney holder
will not be nominee(s). Minors can,
however, be appointed as a nominee.

How to avail of nomination facility
for more than one folio?

There can be only one nomination
for one folio. Folios having different
order or combination of names of
shareholders will require separate
nominations.

Can a nomination once made be
revoked / varied?

It is possible to revoke / vary a
nomination once made. If nomination
is made by joint holders, and one of
the joint holders dies, the remaining
joint holder(s) can make a fresh
nomination by revoking the existing
nomination.

Are the joint holders deemed to be
nominees to the shares?

Joint holders are not nominees; they
are joint holders of the relevant
shares having joint rights on the
same. In the event of death of any
one of the joint holders, the surviving
joint holder(s) of the shares is / are
the only person(s) recognised under
law as holder(s) of the shares.

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G r o w t h i s L i f e

If a shareholder who holds shares
in his sole name dies without
leaving a Will, how can his legal
heir(s) claim the shares?

The legal heir(s) should obtain a
Succession Certificate or Letter of
Administration with respect to the
shares and send a true copy of the
same, duly attested, alongwith a
request letter, transmission form, and
the share certificate(s) in Original, to
the Company’s R&TA for transmission
of the shares in his / their name(s).

In case of a deceased shareholder
who held shares in his / her own
name (single) and had left a Will,
how do the legal heir(s) get the
shares transmitted in their name(s)?

The legal heir(s) will have to get the
Will probated by the Court of
competent jurisdiction and then send
to the Company’s R&TA a copy of
the probated copy of the Will,
alongwith relevant details of the
shares, the relevant share
certificate(s) in Original and
transmission form for transmission of
the shares in his / their name(s).

How can the change in order of
names (i.e. transposition) be
effected?

Share certificates alongwith a
request letter duly signed by all the
joint holders may be sent to the
Company’s R&TA for change in order
of names, known as ‘transposition’.
Transposition can be done only for
the entire holdings under a folio and
therefore, requests for transposition
of part holding cannot be accepted
by the Company / R&TA.

What rights are conferred on the
nominee and how can he exercise
the same?

The nominee is entitled to all the
rights of the deceased shareholder to
the exclusion of all other persons. In
the event of death of the shareholder,
all the rights of the shareholder shall
vest in the nominee. The nominee is
required to apply to the Company by
reporting the death of the nominator
along with the death certificate.

The nominee has an option to decide
to register himself as a shareholder
or he could send an application to
have the shares transferred to any
other person to whom the nominator
could have otherwise transferred the
shares. If the nominee opts to
transfer the shares to a third party,
he should submit to the Company’s
R&TA the transfer deed(s) duly
stamped and executed accompanied
by the relevant certificate(s) and
other documentary proof(s).

If shares are held in dematerialised
form, nomination has to be registered
with the concerned DP directly, as
per the format prescribed by the DP.

IV.Transfer / Transmission /
Duplicate Certificates etc.

How to get shares registered in
favour of transferee(s)?

Transferee(s) need to send share
certificate(s) alongwith share transfer
deed, duly filled in, executed and
affixed with share transfer stamps, to
the Company’s R&TA. It takes about
7 days for the Company’s R&TA to
process the transfer although the
statutory time limit fixed for
completing a transfer is one month.

The Government of India, Ministry of
Finance, Department of Revenue
has fixed the Stamp Duty on Transfer
(whether with or without consideration)

of shares at the rate of twenty five
paise (25 paise) for every hundred
rupees or part thereof of the market
value of the shares on the date of
execution of the transfer deed. The
transfer deed is valid for a period of
one year from the date of registration
or till the book closure date,
whichever is later.

In case of dematerialised shares, the
shares are credited to the purchaser’s
account by the respective Depository
Participant under the directions of the
concerned Depository. Presently,
transfer of dematerialised shares
does not attract stamp duty.

How to get shares registered
which are received by way of gift?
Does it attract stamp duty?

The procedure for registration
of shares gifted is same as the
procedure for a normal transfer. The
stamp duty payable for registration of
gifted shares would be @ 25 paise
for every Rs 100 or part thereof, of
the face value or the market value of
the shares prevailing as on the date
of the document, if any, conveying
the gift or the date of execution of
the transfer deed, whichever is higher.

What is the procedure for getting
shares in the name of surviving
shareholder(s), in the event of
death of one shareholder?

The surviving shareholder(s) will have
to submit a request letter supported
by an attested copy of the Death
Certificate of the deceased
shareholder and accompanied by the
relevant share certificate(s). The
Company’s R&TA on receipt of the
said documents and after due scrutiny
will delete the name of deceased
shareholder from its records and
return the share certificate(s) to the
surviving shareholder(s) with
necessary endorsement.

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What is the procedure for
obtaining duplicate share
certificate(s) in case of loss /
misplacement of original share
certificate(s)?

the original share certificate(s),
directly or indirectly, with or without
the knowledge of the original
shareholder, as it tantamounts to
passing of adverse title.

Shareholders who have lost /
misplaced share certificate(s) should
inform the Company’s R&TA,
immediately about loss of share
certificate(s) quoting their folio
number and details of share
certificate(s), if available. The R&TA
shall immediately mark a ‘stop
transfer’ on the folio to prevent any
further transfer of shares covered by
the lost share certificate(s).

It is recommended that the
shareholders should lodge a FIR with
the police regarding loss of share
certificate(s). They should send their
request for duplicate shares to the
Company’s R&TA. Documents
required to be submitted alongwith
the application include Indemnity
Bond, Surety Form, copy of FIR,
Memorandum of Association and
Certified Copy of Board Resolution
(in case of companies).

What should a shareholder do in
case he finds the original share
certificate(s) after receipt of
duplicate share certificate(s)?

Such a shareholder is requested
to surrender the original share
certificate(s), after cancellation, to
the Company’s R&TA immediately
if the duplicate share certificate(s)
have been issued to him. Further, as
the shareholder has been issued
duplicate share certificate(s), he
would be liable to indemnify any
innocent third party(ies) purchasing

What is the procedure for
splitting of a share certificate
into smaller lots?

Shareholders may write to the
Company’s R&TA enclosing the
relevant share certificate for splitting
into smaller lots. The share
certificates, after splitting, will be sent
by the Company’s R&TA to the
shareholders at their registered
address.

V. Miscellaneous

(A) Change of address

What is the procedure to get
changes in address registered
in the Company’s records?

Shareholders holding shares in
physical form, may send a request
letter duly signed by all the holders
giving the new address alongwith Pin
Code. Shareholders are also
requested to quote their folio number
and furnish proof such as attested
copies of Ration Card / PAN Card /
Passport / Latest Electricity or
Telephone Bill / Lease Agreement
etc. If shares are held in
dematerialised form, information
about change in address needs to be
sent to the DP concerned.

Can there be multiple addresses
for a single folio?

There can only be one registered
address for one folio.

(B) Change of name

What is the procedure for
registering change of name of
shareholders ?

Shareholders may request the
Company’s R&TA for effecting
change of name in the share
certificate(s) and records of the
Company. Original share
certificate(s) alongwith the supporting
documents like marriage certificate,
court order etc. should be enclosed.
The Company’s R&TA, after
verification, will effect the change of
name and send the share
certificate(s) in the new name of the
shareholders. Shareholders holding
shares in demat form, may request
the concerned DP in the format
prescribed by DP.

to deal with shares

What is the procedure for
authorising any other person to
deal with the shares of the
Company?

Shareholders need to execute a
Power of Attorney in favour of the
concerned person and submit a
notarised copy of the same to the
Company’s R&TA. After scrutiny of
the documents, the R&TA shall register
the Power of Attorney and inform the
shareholders concerned about the
registration number of the same.

R E L I A N C E I N D U S T R I E S L I M I T E D

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G r o w t h i s L i f e

VI. Shareholders’ General Rights

VII.Duties / Responsibilities

VIII. General Safeguards

of Investors

● To remain abreast of corporate

developments, company specific
information and take informed
investment decision(s).

● To be aware of relevant statutory
provisions and ensure effective
compliance therewith.

● Not to indulge in fraudulent and
unfair trading in securities nor to
act upon any unpublished
sensitive information.

● To participate effectively in the
proceedings of shareholders’ /
debentureholders’ meetings.

● To respond to communications
seeking shareholders’ approval
through Postal Ballot.

● To respond to communications of
SEBI / Depository / Depository
Participant / Brokers / Sub-brokers
/ Other Intermediaries / Company,
seeking investor feedback /
comments.

● To receive not less than 21
clear days’ notice of general
meetings unless consented for
a shorter notice.

● To receive notice and forms for
Postal Ballots in terms of the
provisions of the Companies Act,
1956 and the concerned Rules
issued thereunder.

● To receive copies of Balance
Sheet and Profit and Loss
Account alongwith all annexures /
attachments (Generally known as
Annual Report).

● To participate and vote at general
meetings either personally or
through proxy (proxy can vote
only in case of a poll).

● To receive dividends and other
corporate benefits like bonus,
rights etc. duly approved.

● To demand poll on any resolution

at a general meeting in
accordance with the provisions of
the Companies Act, 1956.

● To inspect statutory registers
and documents as permitted
under law.

In pursuit of the Company’s objective
to mitigate / avoid risks while dealing
with securities and related matters,
the following are certain general
safeguards suggested for investors
to follow :

● Folio number (DP ID number
in respect of dematerialised
securities) should not be
disclosed to unknown persons.
Signed blank transfer deeds
(delivery instruction slips in
respect of dematerialised
shares) should not be given to
unknown persons.

● Off-market deals and dealings
with / through unregistered
intermediaries should be avoided.
It exposes investor to the
counter-party risk.

● Demat account should not be
kept dormant for long; periodic
statement of holdings should be
obtained from the concerned DP
and holdings verified.

● Correspondence containing

certificates of securities and high
value dividend / interest warrants /
cheques / demand drafts should
not be sent by ordinary post.

● A valid Contract Note / Confirmation
Memo should be obtained from
the broker / sub-broker, within
24 hours of execution of the trade
and it should be ensured that the
Contract Note / Confirmation
Memo contains Order no.,
trade no., trade time, quantity,
price, brokerage.

●

Investors should restrain
themselves from indulging into
insider trading and fraudulent
trading practices.

Investors should convert their
physical holdings of securities into
demat holdings.

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Initiatives Taken by the
Company

Setting New Benchmarks in
Investor Service

The service standards that have
been set by the Company for various
investor related transactions /
activities are as follows:

(A) Registrations

Sr. Particulars
No.

Service Standards
(No. of working days)

Folio Consolidation

Transfers
1
Transmission
2
3
Transposition
4 Deletion of Name
5
6 Change of Name
7 Demat
8 Remat
9
10 Replacement
11 Certificate Consolidation
12 Certificate Split

Issue of Duplicate shares

7
4
4
3
3
3
3
3
35
3
3
3

(B) Correspondence

Sr. Particulars
No.

Queries / Complaints

1 Non-receipt of Annual Reports
2 Non-receipt of Dividend Warrants
3 Non-receipt of Interest/Redemption Warrants
4 Non-receipt of Certificate

Event Related
TDS certificate related
Allotment / call money

1
2
3 Others

Requests

1 Change of Address
2 Revalidation of Dividend Warrants
3 Revalidation of Redemption Warrants
4
5 Nomination
6
7 Multiple Queries

Bank Mandate / Details

Power of Attorney

R E L I A N C E I N D U S T R I E S L I M I T E D

Increasing Electronic
(Dematerialised) Shareholding

The Company’s R&TA, has
introduced 2 new schemes for
opening of DP Account for Reliance
shareholders at concessional rate
based on the total number of shares
held in physical form. Details of
these schemes may be received
from the Company’s R&TA.

Undelivered Share
Certificates & Warrants

The Company with the help of its
R&TA has been engaged in a
continuous exercise of tracking
investors who could not be reached
at their existing address.

Intimation Letters to
Investors

The Company gives an opportunity
by sending intimation letters, twice a
year, to investors for claiming their
outstanding dividend / interest
amount which is due for transfer to
Investor Education & Protection
Fund.

Consolidation of Folios

The Company has initiated a unique
investor servicing measure for
consolidation of small holdings within
the same household. In terms of this,
those shareholders holding less
than 10 shares (under a single
folio) in the Company, within the
same household, can send such
shares for transfer alongwith
transfer forms duly filled in and
signed, free of cost; the stamp
duty involved in such cases will be
borne by the Company.

Service Standards
(No. of working days)

2
4
4
2

2
4
2

2
3
3
2
2
2
4

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G r o w t h i s L i f e

● Securities Transaction Tax (STT),
effective from October 1, 2004, is
payable as under –

– @ 0.075% on both the
purchaser and the seller in
respect of delivery based
transactions.

– @ 0.01% on the seller in
respect of derivatives.

– @ 0.015% on the seller in
respect of transactions in
securities not being settled by
actual delivery.

Scheme for disposal of ‘Odd
Lot’ Equity Shares

At the Annual General Meeting
of the Company held on June 26,
1998, our Founder Chairman
Shri Dhirubhai H. Ambani,
announced for the benefit of small
shareholders a scheme for disposal
of ‘Odd Lot’ shares (the Scheme) to
facilitate such shareholders to realise
the full market value without having
to suffer a discount for odd lots.

In order to assist small shareholders
in disposal of such odd lot shares, the
Company has formed a Trust known
as ‘Reliance Odd Lot Shares Trust’
which will dispose of the odd lot
shares on behalf of the shareholders.

The salient features of the Scheme
effective July 1, 1998, are as under:

1. This Scheme is available to
Indian national residents in
respect of any master folio having
holdings up to 49 shares. The
entire holding which is in odd lot
under a master folio has to be
offered under the Scheme.

2. The Scheme is purely to facilitate
the disposal of odd lot Equity
Shares and is absolutely optional.
Shareholders are free to avail of
any other offer that may be
available.

3. The holders of Equity Shares in
odd lot may avail of the Scheme
by lodging duly filled in application
form and a duly executed transfer
deed alongwith the relevant share
certificate(s).

4. The odd lot shares offered under
the Scheme are sold on a first-
cum-first served basis in the open
market, through designated
brokers in the Mumbai / National
Stock Exchange.

5. All costs of implementing the
Scheme will be borne by the
Company and shareholders will
receive the full sale proceeds of
their holdings without any
deduction for service charges
and brokerage.

Information Regarding
Tax on Dividend and
Sale of Shares

The provisions relating to tax on
dividend and sale of shares are
provided for ready reference of
Shareholders:

● No tax is payable by shareholders

on dividend. However, the
Company is required to pay
dividend tax @12.5% and
surcharge @10%, together with
education cess @ 2%.

● Short Term Capital Gains (STCG)

tax is payable @ 10% and
surcharge (@ 10% above income
level of Rs 10 Lakh) together with
education cess @ 2%, by the
shareholders in case shares are
sold within 12 months from the
date of purchase.

● No Long Term Capital Gains

(LTCG) tax is payable on sale of
shares through a recognized
stock exchange.

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 84

General Shareholder Information
covering inter alia listing details,
stock market data, the Company’s
share price performance etc. is
provided in the Report on
Corporate Governance forming
part of the Annual Report.

NOTE
The terms ‘shareholders’ and
‘investors’ have been used
interchangeably.

The contents of this Referencer
are for the purpose of general
information of readers; for full
particulars / provisions, readers are
advised to refer to the relevant Acts /
Rules / Regulations / Guidelines /
Clarifications.

Contact Details

Depositories

National Securities Depository
Limited
Trade World, 4th floor
Kamala Mills Compound
Senapati Bapat Marg, Lower Parel
Mumbai 400 013
Tel +91 22 2499 4200
Fax +91 22 2497 2993 / 2497 6351
info@nsdl.co.in
www.nsdl.co.in

Central Depository Services
(India) Limited
Phiroze Jeejeebhoy Towers
16th floor, Dalal Street
Mumbai 400 001
Tel +91 22 2272 3333
Fax +91 22 2272 3199 / 2272 2072
investors@cdslindia.com
www.cdslindia.com

Registrars and Transfer Agents

Karvy Computershare Private
Limited
46, Avenue 4, Street No. 1
Banjara Hills
Hyderabad 500 034
Tel +91 40 2332 0666 / 2332 0711 /
2332 3037
Fax +91 40 2332 3058
rilinvestor@karvy.com

Securities and Exchange
Board of India
Mittal Court ‘B’ Wing, 1st Floor
224, Nariman Point
Mumbai 400 021
Tel +91 22 2285 0451 - 56
Fax +91 22 2204 5633 / 2202 1073
iggc@sebi.gov.in

Securities and Exchange
Board of India
Office of Investor Assistance and
Education
Exchange Plaza, Wing II, 4th Floor
Bandra-Kurla Complex, Bandra (E)
Mumbai 400 051
Tel +91 22 2659 8509
Fax +91 22 2659 8514 / 18
iggc@sebi.gov.in

Registrar of Companies
2nd Floor, Hakoba Mills Compound
Dattaram Lad Marg
Kalachowki
Mumbai 400 033
Tel +91 22 2378 2497
rocbom.sb@sb.nic.in

Company Law Board
(Western Region Bench)
NTC House
N.M. Marg Ballard Estate
Mumbai 400 023
Tel +91 22 2266 0757 / 2261 1456

Regional Director (Western Region)
Everest, 5th Floor
100, Marine Drive
Mumbai 400 002
Tel +91 22 2281 7259
Fax +91 22 2281 2389
rdwest@sb.nic.in

The Stock Exchange
Mumbai (BSE)
Phrioze Jeejeebhoy Towers,
Dalal Street, Mumbai 400 001
Tel +91 22 2272 1233 / 4
Fax +91 22 2272 1919
isc@bseindia.com

National Stock Exchange of India
Limited (NSE)
“Exchange Plaza”
Bandra-Kurla Complex
Bandra (E), Mumbai 400 051
Tel +91 22 2659 8100 / 8114
Fax +91 22 2659 8120
cc_nse@nse.co.in

R E L I A N C E I N D U S T R I E S L I M I T E D

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G r o w t h i s L i f e

Directors’ Report

Dear Shareholders,

Financial Results

Your Directors are pleased to present
the 31st Annual Report and the
audited accounts for the year ended
March 31, 2005.

The performance of the Company
for the financial year ended
March 31, 2005 is summarised below:

Gross profit before interest,
depreciation

Less: Interest

2004-2005

2003-2004

Rs Crs.

US$ Mn*

Rs Crs.

US$ Mn*

14,260.84

3,260

10,982.88

2,512

1,468.66

336

1,434.72

328

Depreciation

3,784.57

3,331.39

Less: Transfer from General Reserve

61.07

3,723.50

851

84.37

3,247.02

743

Profit before Tax

9,068.68

2,073

6,301.14

1,441

Less: Provision for Current Taxation

Provision for Deferred Tax

Profit after Tax

Add: Balance in Profit and
Loss Account

Taxation Reserve Written Back

Taxation for Earlier Years

Debenture Redemption Reserve
written back

Investment Allowance (Utilised)
Reserve Written Back

705.00

792.00

7,571.68

5,592.06

161

181

1,731

1,278

351.00

790.00

5,160.14

3,343.06

10.00

(23.03)

850.00

76.63

181

1,180

765

(5)

194

Amount Available for Appropriation

13,163.74

3,009

9,416.80

2,154

Appropriations:

General Reserve

Proposed dividend on Equity Shares

Tax on dividend

Tax on Dividend for earlier years

Balance carried to Balance Sheet

3,000.00

1,045.13

146.58

4.17

8,967.86

13,163.74

686

239

2,050

3,009

3,000.00

733.10

91.64

5,592.06

9,416.80

686

168

1,279

2,154

* 1 US $ = Rs 43.745 Exchange Rate as on March 31, 2005 (1 US $ = Rs 43.7175 as on March 31, 2004)

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Buy Back

Pursuant to the Buy Back Offer made
in accordance with the provisions of
the Companies Act, 1956 and the
Securities and Exchange Board of
India (Buy Back of Securities)
Regulations, 1998, the Company has
bought back 28,69,495 Equity
Shares of Rs 10 each of an
aggregate face value of Rs
2,86,94,950 as of March 31, 2005.
Consequent to the Buy Back, the
Paid up Equity Share Capital of the
Company as on March 31, 2005
stood reduced to Rs 1393,50,80,410.

Dividend

Your Directors have recommended a
dividend of Rs 7.50 per Equity
Share (last year Rs 5.25 per Equity
Share) on 139,35,08,041 Equity
Shares of Rs 10 each for the
financial year ended March 31, 2005,
which, if approved at the ensuing
Annual General Meeting, will be paid
to (i) all those Members whose
names appear in the Register of
Members as on May 13, 2005 and
(ii) all those whose names appear on
that date as beneficial owners as
furnished by National Securities
Depository Limited and Central
Depository Services (India) Limited.

The dividend pay out for the year
under review has been formulated in
accordance with the Company’s policy
of striving to pay stable dividend
linked to long term performance,
keeping in view the Company’s need
for capital, its growth plans and the
intent to finance such plans through
internal accruals to the maximum.
Your Directors believe that this would
increase shareholder value and
eventually lead to a higher return
threshold.

Management’s Discussion and
Analysis Report

Management’s Discussion and
Analysis Report for the year under
review, as stipulated under Clause
49 of the Listing Agreement with the
Stock Exchanges in India, is
presented in a separate section
forming part of the Annual Report.

The Company has entered into
various contracts in the areas of oil &
gas, refining, petrochemicals and
telecommunication businesses.
While benefits from such contracts
will accrue in the future years, their
progress is periodically monitored.

The Board of Directors, at its
meeting held on June 18, 2005,
decided to consider a scheme of
reorganisation of the businesses of
the Company and has authorised the
Corporate Governance and
Stakeholders’ Interface Committee to
examine the matter and suggest a
proposal to the Board of Directors for
its consideration.

The Board of Directors at its meeting
held on June 28, 2005, decided to
execise the option to convert, 162
Crore 10% Cumulative Convetible /
Redeemable Preference Shares of
Reliance Infocomm Limited,
subscribed at an aggregate value of
Rs.8,100 Crore alongwith the
accrued premium of Rs. 1,108.27
Crore, into fully paid up equity shares
of the face value of Re.1 each of
Reliance Infocomm Limited at a price
of Rs.32 per equity share.

Subsidiaries

During the year, Reliance
Communications (Canada) Inc.
and Reliance Netway Inc. became
subsidiaries of Reliance
Communications Inc., a subsidiary
of Reliance Infocom Inc., Reliance
Infocom BV as also of the Company.

Further, Reliance Communications
(Hongkong) Limited became a
subsidiary of Reliance Infocom BV
as also of the Company.
Subsequently, Reliance Infocom BV
ceased to be subsidiary of the
Company and consequently all the
subsidiaries of Reliance Infocom BV,
namely Reliance Infocom Inc.,
Reliance Communications (UK)
Limited, Reliance Communications
(Hongkong) Limited, Reliance
Communications Inc., Reliance
Communication International Inc.,
Reliance Communications (Canada)
Inc. and Reliance Netway Inc.,
have ceased to be subsidiaries
of the Company.

During the year, Reliance do Brasil
Indústria e Comércio de Produtos
Têxteis, Químicos, Petroquímicos e
Derivados Ltda (Reliance Brazil LLC)
became a subsidiary of the Company.

After the close of the financial year
2004-2005, Reliance Industries
(Middle East) DMCC became a
subsidiary of the Company.

In terms of approval granted by the
Central Government under Section
212(8) of the Companies Act, 1956,
copy of the Balance Sheet, Profit and
Loss Account, Report of the Board of
Directors and Auditors of the
subsidiaries have not been attached
with the Balance Sheet of the
Company. These documents will be
made available upon request by any
Member of the Company interested
in obtaining the same. However as
directed by the Central Government,
the financial data of the subsidiaries
have been furnished under ‘Details
of Subsidiaries’ forming part of the
Annual Report. Further, pursuant to
Accounting Standard AS-21 issued
by the Institute of Chartered
Accountants of India, Consolidated
Financial Statements presented by
the Company includes financial
information of its subsidiaries.

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Fixed Deposits

The Company has not accepted any
fixed deposits during the year.

Directors

Your Directors express their profound
grief on the sad demise of Shri
T.R.U. Pai on January 26, 2005.
Shri Pai was a member of the Board
since July 6, 1979 and contributed
immensely to the Company’s growth.
Your Directors place on record their
deep appreciation for the valuable
advice and guidance rendered by
him to the Company during his
tenure as Director of the Company.

Pursuant to the provisions of Section
262 of the Companies Act, 1956
Prof. Ashok Misra was appointed as
Director in the casual vacancy in the
office of Directors on account of the
death of Shri T. R. U. Pai.
Prof. Ashok Misra would hold office
up to the date of the ensuing Annual
General Meeting. The Company has
received a notice in writing from a
member proposing the candidature
of Prof. Ashok Misra for the office
of Director.

Your Directors have reappointed,
subject to the approval of members
at the ensuing Annual General
Meeting, Shri Hardev Singh Kohli
and Shri Hital R. Meswani, both
Wholetime Directors designated as
Executive Directors of the Company,
for a further period of 5 years from
April 1, 2005 and August 4, 2005,
respectively.

Shri Anil D. Ambani, Vice Chairman
and Managing Director, has resigned
from the Board with effect from
June 18, 2005. Your Directors place
on record their deep appreciation for
the invaluable contribution made by
Shri Anil D. Ambani during his tenure
as Director of the Company. Shri
Anil D. Ambani has been associated

with the Company since 1982 and
has played a key role in building
Reliance to its present pre-eminent
position in the corporate world. Your
Directors convey their best wishes to
Shri Anil D. Ambani.

In terms of Article 155 of the Articles
of Association of the Company, Shri
H.R. Meswani, Shri R.H. Ambani and
Shri S. Venkitaramanan, retire by
rotation and being eligible, offer
themselves for re-appointment at the
ensuing Annual General Meeting.

Brief resume of the Directors
proposed to be appointed /
re-appointed, nature of their expertise
in specific functional areas and
names of companies in which they
hold directorship and membership /
chairmanship of Board committees,
as stipulated under Clause 49 of
Listing Agreement with the Stock
Exchanges in India, are provided in
the Report on Corporate Governance
forming part of the Annual Report.

Directors’ Responsibility
Statement

Pursuant to the requirement under
Section 217(2AA) of the Companies
Act, 1956, with respect to Directors’
Responsibility Statement, it is hereby
confirmed that:

(i)in the preparation of the annual
accounts, the applicable accounting
standards have been followed;

(ii) the Directors have selected such
accounting policies and applied them
consistently and made judgements
and estimates that are reasonable
and prudent so as to give a true and
fair view of the state of affairs of the
Company as at March 31, 2005 and
of the profit of the Company for the
year ended on that date;

(iii) the Directors have taken proper
and sufficient care for the
maintenance of adequate accounting

records in accordance with the
provisions of the Companies Act,
1956 for safeguarding the assets of
the Company and for preventing and
detecting fraud and other
irregularities; and

(iv) the Directors have prepared the
annual accounts of the Company on
a ‘going concern’ basis.

Consolidated Financial Statements

In accordance with the Accounting
Standard AS-21 on Consolidated
Financial Statements read with
Accounting Standard AS-23 on
Accounting for Investments in
Associates, your Directors provide
the audited Consolidated Financial
Statements in the Annual Report.

Auditors and Auditors’ Report

M/s. Chaturvedi & Shah, Chartered
Accountants, and M/s. Rajendra & Co.,
Chartered Accountants, Statutory
Auditors of the Company, hold office
until the conclusion of the ensuing
Annual General Meeting and are
eligible for re-appointment. Your
Directors have also proposed to
appoint M/s. Deloitte Haskins and
Sells, Chartered Accountants, as
Auditors of the Company, subject to
the approval of Members at the
ensuing Annual General Meeting.

The Company has received letters
from all of them to the effect that
their appointment / re-appointment, if
made, would be within the prescribed
limits under Section 224(1B) of the
Companies Act, 1956 and that they
are not disqualified for such
appointment / re-appointment within
the meaning of Section 226 of the
said Act.

The notes on accounts referred to
in the Auditors’ Report are self-
explanatory and therefore do not
call for any further comments.

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Cost Auditors

The Central Government had directed
an audit of the cost accounts
maintained by the Company in
respect of its Textiles, Polyester and
Chemicals businesses. The Central
Government has approved the
appointments of Shri S.N. Bavadekar,
Cost Accountant, for conducting the
cost audit for the Textiles, Polyester
and a part of Chemicals businesses
and M/s. V.J. Talati & Co., Cost
Accountants, for conducting the cost
audit of a part of the Chemicals
business for the financial year ended
on March 31, 2005.

International Accountants

The report submitted to the Board of
Directors by M/s. Deloitte Haskins
and Sells, member firm of Deloitte
Touche Tohmatsu (DTT), appointed
as International Accountants of the
Company, for the year under review,
is provided in the Annual Report for
information of Members.

Secretarial Audit

Your Company voluntarily appointed
Dr. K.R. Chandratre, Practicing
Company Secretary, to conduct
Secretarial Audit of the Company
for the financial year 2004-2005.
The Secretarial Audit Report
confirms that the Company has
complied with all the applicable
provisions of the Companies Act,
1956, Listing Agreement with the
Stock Exchanges, Securities
Contracts (Regulation) Act, 1956,
and all the Regulations of Securities
and Exchange Board of India (SEBI)
as applicable to the Company,
including the SEBI (Substantial
Acquisition of Shares and Takeovers)
Regulations, 1997 and the SEBI
(Prohibition of Insider Trading)
Regulations, 1992.

Particulars of Employees

In terms of the provisions of Section
217(2A) of the Companies Act, 1956,
read with the Companies (Particulars

of Employees) Rules, 1975 as
amended, the names and other
particulars of the employees are
required to be set out in the
Annexure to the Directors’ Report.
However, as per the provisions of
Section 219(1)(b)(iv) of the said Act,
the Annual Report excluding the
aforesaid information is being sent to
all the Members of the Company and
others entitled thereto. Member who
is interested in obtaining such
particulars may write to the Company
Secretary at the Registered Office of
the Company.

Energy Conservation, Technology
Absorption and Foreign Exchange
earnings and outgo

The particulars relating to energy
conservation, technology absorption,
foreign exchange earnings and
outgo, as required to be disclosed
under Section 217(1)(e) of the
Companies Act, 1956 read with the
Companies (Disclosure of Particulars
in the Report of Board of Directors)
Rules, 1988 are provided in the
Annexure to this Report.

Transfer of Unclaimed Dividend
to IEPF

Pursuant to the provisions of Section
205A(5) of the Companies Act, 1956,
the declared dividend which remained
unclaimed for a period of 7 years
have been transferred by the Company
to the Investor Education and
Protection Fund (IEPF) established
by the Central Government pursuant
to Section 205C of the said Act.

Corporate Governance

During the year, your Board has
constituted an independent Board
Committee, named “Corporate
Governance and Stakeholders’
Interface Committee”, to inter alia
review the governance systems and
processes followed by the Company,
to suggest improvements, if any
required in this area, and to
recommend nomination of Directors
on the Board.

Your Company is committed to
maintain the highest standards of
Corporate Governance. Your
Directors adhere to the requirements
set out by the Securities and
Exchange Board of India’s (SEBI)
Corporate Governance practices and
have implemented all the major
stipulations prescribed. Your
Company has also decided to
implement several best practices,
though not mandatory at present, as
part of good Corporate Governance.

Report on Corporate Governance as
stipulated under Clause 49 of the
Listing Agreement with the Stock
Exchanges in India forms part of the
Annual Report.

Certificate from the Auditors of the
Company, M/s. Chaturvedi & Shah,
Chartered Accountants and
M/s. Rajendra & Co., Chartered
Accountants, confirming compliance
of conditions of Corporate
Governance as stipulated under
the aforesaid Clause 49, is annexed
to this Report.

Acknowledgment

Your Directors would like to express
their grateful appreciation for the
assistance and co-operation received
from the Financial Institutions, Banks,
Government Authorities, Customers,
Vendors and Members during the
year under review. Your Directors
also wish to place on record their
deep sense of appreciation for the
committed services of the Executives,
Staff and Workers of the Company.

For and on behalf of the
Board of Directors

Mukesh D. Ambani
Chairman & Managing Director

Mumbai,
June 28, 2005.

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pressure in GT 1, installation of
make up water heaters in all 4
other BHEL HRSGs and
preheating CPP Deaerator make-
up by Condensate return from
Sulphur & Crude Units.

2. Measures being implemented in
the Cracker Plant are—C3R
compressor steam reduction by
cold recovery from de-methaniser
pre stripper column, dilution
steam generator blowdown
reduction by using an exchanger,
and Fuel Gas Compressor suction
pressure drop reduction.

3. Measures being implemented in
the PP Plant are—generation of
LP Steam from HP condensate
and stopping of one VGR
compressor during HOMO grade
run in both the lines .

4. Measures being implemented in
the PSF Plant are—optimization
of air cooled condenser fans,
stoppage of three blowers by
stoppage of creel 1 AHU,
optimization of MP steam
consumption during draw
machine interruptions in steam
draw chest in DM 1 – 4 and
automatic changeover from Delta
to Star for 75 KW motor in baler.

5. Measures being implemented in
the Refinery are—increase in
Crude Preheat temperature by
heat recovery from VGO product
stream as a result of detailed
Pinch Study.

Annexure to Directors’ Report

Particulars required under the
Companies (Disclosure of
Particulars in the Report of Board
of Directors) Rules, 1988.

A. CONSERVATION OF ENERGY

(a) Energy Conservation measures

taken

Improvement in energy efficiency is a
continuous process at Reliance and
conservation of energy is given a
very high priority in all our plants and
offices. Energy audits and
benchmarking are done regularly to
identify areas of improvement and
steps are taken to implement the
measures required for such
improvement. According to the
Energy Benchmarking Study for the
year 2004, conducted by energy
major Shell, our Refinery has the
lowest corrected energy index and
energy & loss index, indicating
highest energy efficiency. Some of
the major energy conservation
measures carried out during the year
are listed below:

1. Improvement in Power Plant

energy efficiency by measures
such as reduction in specific fuel
consumption, replacement of
copper ballast with electronic
ballast and maintaining power
factor close to unity.

2. Substitution of high-pressure

steam with low-pressure steam in
MEG Plant.

3. Transfer of excess residual heat
from one fluid streams to other
fluid streams for heating
purposes, like transfer of heat
from high boil product stream in
VCM Plant, flash steam in PE
Plant, hot recycle solvent in PE
Plant, boiler blowdown in CPP,
process steam in MEG Plant and
process condensate in PTA Plant,
to other streams.

4. Operational improvements like

optimization of slurry mole ratios
in all esterification areas in PSF
Plant to reduce heat loads STG-1,
baler motor optimization in PSF
Draw line, APH modification from
co-current to counter—current in
PE plant, installation of P-Q
control in GT power system, inlet
air fogging in all gas turbines in
CPP, optimization of feed tray
location in Hiboil column in VCM,
replacement of fin fan blades by
hollow FRP blades in Crude,
Coker Aromatics and PRU/SHP-
TAME Plants, installation of new
parallel fractionator overhead
condensor in Coker Plant,
installation of condensate pot for
MEG column reboiler and
installation of make up water
heater in BHEL HRSGs in CPP.

(b) Additional Investment /

proposals being implemented
for reduction of consumption
of Energy

1. In CPP Plant, proposals being

implemented for energy
conservation are—reduction in
back pressure in Gas turbines 1
and 2, stoppage of SHP letdown
to 22 K for HRSG 5/6/7, reduction
in Plant & Instrument Air header

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above for reduction in
consumption of energy and
on the cost of production
of goods.

1. As a result of various energy

conservation measures taken, the
Company saved energy equivalent
to Rs 30 crore per annum.

2. The additional investment

proposals being implemented for
reduction in energy consumption
have potential to reduce energy
consumption equivalent to
approximately Rs 100 crore
per annum.

(d) Total Energy Consumption and
Energy Consumption per unit of
production as per Form ‘A’
attached hereto.

B. TECHNOLOGY ABSORPTION

Efforts made in technology
absorption—as per Form B given
below:

Form B

Form for disclosure of particulars
with respect to absorption

1. Research and Development

(R&D)

a. Specific areas in which the
research and development
(R&D) is being carried out

1. Morphologically controlled

RELCAT100X developed at lab
scale and pilot plant trial.

2. Magnesium alkoxide process

developed and pilot plant trial for
scale up.

3. Advance donor developed for PP

catalyst to be used in homo
grades for improvement in
catalyst activity and product
properties.

4. Bulk polymerization facility

established for regular screening
of catalyst.

5. Development of water-proof, all

weather colour-fast fabrics for out
door / tentage, all terrain,
application.

6. Standardisation of Lycra-plied
yarn manufacturing through
assembly winding & two-for-one
twisting process.

7. Development of Polyester-Wool-
Rayon tri-blends fabrics through
standardization of spinning,
weaving & finishing processes.

8. Development & Standardization of
bi-functional stain-release as well
as stain-repellent eco-friendly
finishes for Childrenwear fabrics
for International Market.

customer segment.

3. Standardisation of Lycra-plied
yarn has resulted in improved
finishing leading to better
appearance of cloth.

4. Developed tropical and tri-blend

Polyester-wool-Rayon fabrics as a
new product to create fresh
demand and increased business.

5. Produced Power Teflon double
defence mechanism blended
fabrics against stains for
childrenwear application.

6. Optimized wool dyeing techniques
to minimize felting, reduce waste
and improved yields besides
better finishing.

7. Developed high abrasion-

resistance blended jacquard
fabrics for apparel end use.

c. Future plan of action

1. Development of high performance

catalyst for PP production.

9. Optimization of wool dyeing

2. Development of process for

process by re-engineering sliver
loading device to minimize wool-
felting & waste.

10.Development of high abrasive-
resistance woven jacquards
specialty fabrics for uniform
application.

b. Benefits derived as a result of

R&D efforts

1. In-house development of PP

catalyst system for performance &
product characteristic improvement.

2. All weather tentage fabric shall
create major opportunities as it
intends to replace cotton cloth,
which is not meeting with the
finish requirement of the indented

catalyst support.

3. Development of advanced donor

and nucleating agents for
polyolefin.

4. Technology development and
commercialization of Titanium
Dioxide product.

5. Development of tri-blend fabrics
with Spandex Polyurethane
filament yarn along with stain-
repellent finishes.

6. Standardization of processing and
finishing process of Polyester-
Rayon blend fabrics using special
scouring techniques.

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9. New polyelectrolyte was developed

for improved settleability of
effluent water in ETP.

10.Recycling of PET flakes

commissioned in PSF CP 8 unit
for reduction of oligomer
consumption.

b. Benefits Derived as a result of

the above efforts

I. Product development /

improvement and cost reduction

Capacity enhancement / new
grade development / improvement
and cost reduction has resulted in
benefits of approximately
Rs 75 crores per annum.

II. Import substitution

● Scheme for recovery of

Cyclohexane was developed
in-house and implemented to
recover the cyclohexane from
RB column bottom grease.
Resulted in cyclohexane recovery
of 1093 MT / annum & in turn
reduction in import of cyclohexane
by 1000 MTA yielding saving of
Rs 3.4 crore per annum.

● Commercial production of PDEB
started using in-house developed
catalyst & process technology (by
IPCL R&D and RIL Hz team)
resulted in reduction in import by
700 MTA. Bottom line increase:
Rs 4.5 crore per annum.

7. Development of anti-felting and

dimensionally stable wool & wool-
blended fabrics by re-engineering
yarn manufacturing & special
finish application.

successfully implemented to increase
production and reduce consumption
of raw materials, catalysts, chemicals
and utilities. Some such innovations
are as under:

8. Development of specialty shirting
fabrics using power stretch yarns
for leisure & comfort.

9. Development of elastic fabrics
along with water repellent
properties using various stretches
yarns for medical application.

10.Development & optimization of
Polyester-Wool-Rayon-Silk
blended fabrics for up-market.

d. Expenditure on R & D

a) Capital

b) Recurring

Total

Rs crore

21.06

40.26

61.32

c) Total R & D expenditure as a

percentage of total turnover 0.08

2. Technology Absorption,
Adoption and Innovation

a. Efforts made towards

technology absorption,
adoption and innovation:

Imported technologies have been
successfully absorbed resulting in
high production level in operations.
New product developments were
also done to meet customer demand.
Technology innovations have been

1. Cracked Gas Compressor stand
alone cooling water system
commissioned to reduce cooling
water supply temperature by 2
deg C to CGC intercoolers
thereby increasing ethylene
production.

2. Expander-compressor unloading
scheme commissioned in cracker
plant to increase ethylene
production.

3. Azeo-drying time reduced in

Hiboil Column and VCM column
in VCM plant.

4. EDC Cracking Furnace run-length

improved in VCM plant by
improving furnace feed EDC
quality.

5. VCM Plant debottlenecking done
for increase in plant capacity.

6. Use of high Selectivity EO

catalyst and new design of EO
reactor in MEG-1 plant instead of
high activity catalyst for reduction
of raw material consumption and
CO2 generation.

7. Catacarb Technology in CO2
removal system introduced to
increase the CO2 absorption
efficiency and reduce CO2
concentration at the inlet of EO
reactor to improve catalyst
selectivity & run length.

8. Glycol section debottlenecking
was done in-house. Capacity
increased from 315 TPD to 350
TPD EOE.

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c. Information regarding
Imported Technology

Product

Technology from

Year of Import

Status of implementation /
absorption

Polyester Staple Dupont (U.S.A) /
Chemtex U.S.A.
Fibre Fill

1998

Paraxylene

UOP Inter America Inc. 1999
U.S.A.

Polypropylene

Union Carbide U.K.

1999

Full

C. FOREIGN EXCHANGE

EARNINGS AND OUTGO

1. Activities relating to export,

initiatives to increase exports,
Developments of New export
markets for Products and
Services and Export Plan.

The Company has continued to
maintain focus and avail of export
opportunities based on economic
considerations. During the year
the Company has exports (FOB
value) worth Rs 23,741.33 crore
(US$ 5427.21 million).

2. Total Foreign Exchange used and

earned

a. Total Foreign Exchange earned

Rs crore

23,745.46

b. Total savings in Foreign Exchange

41,520.25

through products manufactured by the
Company and deemed exports
(US$ 9,491 million)

Sub total (a+b)

65,265.71

c. Total Foreign Exchange used

43,703.55

R E L I A N C E I N D U S T R I E S L I M I T E D

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G r o w t h i s L i f e

Form 'A'

Form for disclosure of particulars with respect to conservation of energy

A. Power & Fuel Consumption

2004-05

2003-04

1 Electricity

a) Purchased Units (lacs)
Total Cost (Rs in crore)
Rate / Unit (Rs)

b) Generation through captive

power facilities

187.28
6.37
3.40

59.73
2.83
4.73

Through Steam Turbine / Generator
Units (lacs)
KWH per unit of fuel
Total Cost (Rs in crore)
Cost / Unit (Rs)

23,945.63
4.79
976.90
4.08

23,303.06
4.68
693.32
2.98

c) Own Generation

1) Through Diesel Generator

Units (lacs)
KWH per unit of fuel
Fuel Cost/Unit (Rs)

2) Through Steam Turbine / Generator

Units (lacs)
KWH per unit of fuel
Fuel Cost / Unit (Rs)

Purchased Fuel consumed

2 Furnace Oil

Quantity (K.Ltrs)
Total Cost (Rs in crore)
Average rate per Ltr.(Rs)

3 Diesel Oil

Quantity (K.Ltrs)
Total Cost (Rs in crore)
Average rate per Ltr.(Rs)

4 Others
Gas
Quantity (1000 m3)
Total Cost (Rs in crore)
Average rate per 1000m3 (Rs)

Internal Fuel consumed

5 Gas

Quantity (1000 m3)
Total Cost (Rs in crore)

6 GT fuels

Quantity (K.Ltrs)
Total Cost (Rs in crore)

# Excluding Demand Charges

19.20
3.58
6.13

22.46
3.71
4.97

25,131.76
5.84
1.85

23,467.93
5.11
2.17

161,335.01
178.37
11.06

1,657.68
3.06
18.48

160,443.13
155.23
9.68

10,047.18
15.71
15.64

150,258.78
56.71
3,774.01

148,560.33
51.76
3,484.11

1,424,732.42
1,425.60

1,020,021.34
1,032.29

1,001,884.24
1,094.64

1,047,371.77
877.25

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 94

B. Consumption per unit of Production

Product

Electricity (KWH)

Furnace Oil/
HSD/ HFHSD (Ltrs)

LSHS (Kgs)

Gas (SM3)

Current Previous Current Previous Current Previous Current Previous
Year

Year

720

580

317

348

236

For and on behalf of the Board of Directors

Mukesh D. Ambani
Chairman & Managing Director

Fabrics ( Per 1000 mtrs)

4,058

3,979

PFY (per MT)

PSF (per MT)

PTA (per MT)

LAB (per MT)

MEG (per MT)

PVC (per MT)

HDPE (per MT)

PP (per MT)

FF (per MT)

Cracker (per MT)

PET (per MT)

PX (per MT)

Petro-products (per MT)

700

416

374

627

562

545

337

320

706

143

298

255

733

476

388

623

583

531

325

327

721

138

287

269

Mumbai,
June 28, 2005.

R E L I A N C E I N D U S T R I E S L I M I T E D

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G r o w t h i s L i f e

Swarna Traders Private Limited;
Rajkiran Synthetics Private Limited;
Avshesh Mercantile Private Limited;
Vatayan Synthetics Private Limited;
Rajniketan Traders Private Limited;
Avada Trading Company Private
Limited; Kalpavriksha Trading Private
Limited; Vanraj Merchandise Private
Limited; Deep Mercantile Private
Limited; Cube Investments Private
Limited; Platinum Commercials Private
Limited; Ornamental Trading
Enterprises Private Limited;
Chandragupta Traders Private Limited;
Kaveri Commercials Private Limited;
Esteem Textiles Trading Private
Limited; Srenik Traders Private Limited;
Orator Trading Enterprises Private
Limited; Ascent Tradecom Private
Limited; Arundhati Traders Private
Limited; Suprabhat Tradecom Private
Limited; Shrusti Trading Private
Limited; Khodiyar Trading &
Investments Private Limited; Vasishtha
Tradecom Private Limited; Kunjvan
Texfab Private Limited; Unicom Trading
Enterprises Private Limited; Revlon
Trading Company Private Limited;
Bloom Trading Private Limited; Lazor
Syntex Private Limited; Dadhichi Texfab
Private Limited; Hansdhwani Trading
Company Private Limited; Vijeta
Commercials Private Limited;

Persons constituting group coming
within the definition of “group” as
defined in the Monopolies and
Restrictive Trade Practices Act, 1969
include the following:

Petroleum Trust (through Trustees for
sole beneficiary - M/s Reliance
Industrial Investments and Holdings
Limited); Fiery Investments and
Leasing Private Limited; Sanatan
Textrade Private Limited; Clarion
Investments and Trading Company
Private Limited; Orson Trading Private
Limited; Nikhil Investments Company
Private Limited; Real Fibres Private
Limited; Pams Investments and Trading
Company Private Limited; Hercules
Investments Private Limited; Reliance
Consolidated Enterprises Private
Limited; Jagdishvar Investments and
Trading Company Private Limited;
Jagdanand Investments and Trading
Company Private Limited; Kedareshwar
Investments and Trading Company
Private Limited; Kankhal Investments
and Trading Company Private Limited;
Eklavya Mercantile Private Limited;
Anadha Enterprise Private Limited;
Ekansha Enterprise Private Limited;
Bhumika Trading Private Limited; Bahar
Trading Private Limited; Bhavan
Mercantile Private Limited; Anumati
Mercantile Private Limited; Sanchayita
Mercantile Private Limited; Reliance
Enterprises Limited; Florentine Trading
Private Limited; Velocity Trading Private
Limited; Madhuban Merchandise
Private Limited; Ornate Traders Private
Limited; Reliance Polyolefins Private
Limited; Tresta Trading Private Limited;
Amur Trading Private Limited; Reliance
Capital Limited; Yangste Trading
Private Limited; Reliance Aromatics
and Pertochemicals Private Limited;
Reliance Energy and Project
Development Private Limited;

Reliance Chemicals Private Limited;
Dainty Investment & Leasings Private
Limited; Rashi Trading Company
Private Limited; Saumya Finance &
Leasing Company Private Limited;
Fidelity Shares & Securities Private
Limited; Riyaz Trading Private Limited;
Kudrat Investment & Leasing (India)
Private Limited; Rishiraj Merchandise
Private Limited; Aavaran Textiles
Private Limited; Silvassa Hydrocarbons
and Investments Private Limited;
Pururava Traders Private Limited;
Silkina Trading Private Limited;
Jogiya Traders Private Limited;
Shangrila Investments & Trading
Company Private Limited; Innova
Tradecom Private Limited; Nirupama
Traders Private Limited; Sundale
Merchandise Private Limited;
Chaitanya Commercials Private
Limited; Gaylord Investments & Trading
Company Private Limited; Gaiety
Mercantile Private Limited; Elite
Mercantile Private Limited; Sumiran
Investments Private Limited; Swarag
Traders Private Limited; Spellbound
Trading Private Limited; Pratiksha
Finance & Leasing Company Private
Limited; Niharika Synthetics Trading
Private Limited; Bhagirath Traders
Private Limited; Parasakthi Trading
Company Private Limited; Radharaman
Textiles Trading Private Limited;
Sridivya Trading Private Limited;
Hexagon Trading & Investments Private
Limited; Devpriya Mercantile Private
Limited; Smruti Mercantile Private
Limited;

FINAL july _final2 July.qxd 7/4/05 5:29 PM Page 96

Chikki Fertilizers Trading & Agencies
Private Limited; Avron Trading Private
Limited; Navketan Commercials Private
Limited; Akshya Textiles Trading &
Agencies Private Limited; Bindi
Chemicals Agencies & Trading Private
Limited; Prolab Synthetics &
Detergents Private Limited; Vita
Investment & Trading Company Private
Limited; Classic Merchant Bankers
Private Limited; Lordwest Investments
& Trading Company Private Limited;
Maxwell Dyes & Chemicals Private
Limited; Tejasvi Trading Company
Private Limited; Auspicious Investments
Private Limited; Proline Investments
Private Limited; Sameep Trading
Private Limited; Lazor Detergents
Private Limited; Yashasvi Holdings
Private Limited; Reliance Industrial
Infrastructure Limited; Pratik Holdings &
Trading Private Limited; Rajtilak
Holdings & Trading Private Limited;
Creditable Investments Private Limited;
Darshan Securities Private Limited;
Sihasan Holdings & Trading Private
Limited

Nirantar Merchandise Private Limited;
Anusudha Tradecom Private Limited;
Spark Tradecom Private Limited;
Advitiya Fabrics Private Limited; Cyril
Traders Private Limited; Rhino Bags
Private Limited; Guruvas Textiles
Private Limited; Reliance Welfare
Association; Ranjana Traders Private
Limited; Eminent Commercials Private
Limited; Indra-dham Traders Private
Limited; Antariksh Commercials Private
Limited; Kinnari Merchandise Private
Limited; Capable Commercials Private
Limited; Shiny Leasing & Holdings
Private Limited; Reliance Exports
Private Limited; Kanakdhara Traders
Private Limited; Vicraze Investments &
Trading Company Private Limited;
Aakrosh Investments & Leasing Private
Limited; Prasiddhi Trading Private
Limited; Antarang Traders Private
Limited; Neelam Mercantile Private
Limited; Anuchit Traders Private
Limited; Lavanya Holdings & Trading
Private Limited; Akshar Traders Private
Limited; Shital Texturising Private
Limited; Panchtirth Trading Private
Limited; Charishma Investments
Private Limited; Adbhut Trading
Company Private Limited; Biraaj
Textiles Trading Private Limited; Sugam
Texturising Private Limited; Shruti
Traders Private Limited;

R E L I A N C E I N D U S T R I E S L I M I T E D

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G r o w t h i s L i f e

Auditors’ Certificate on
Corporate Governance

To the Members of
RELIANCE INDUSTRIES LIMITED

We have examined the compliance of conditions of Corporate Governance
by Reliance Industries Limited, for the year ended on March 31, 2005, as
stipulated in Clause 49 of the Listing Agreement of the said Company with
stock exchanges.

The compliance of conditions of Corporate Governance is the responsibility
of the Management. Our examination has been limited to a review of the
procedures and implementations thereof adopted by the Company for ensuring
compliance with the conditions of the Corporate Governance as stipulated in
the said Clause. It is neither an audit nor an expression of opinion on the
financial statements of the Company.

In our opinion and to the best of our information and according to the
explanations given to us, we certify that the Company has complied
with the conditions of Corporate Governance as stipulated in Clause 49 of
the above mentioned Listing Agreement.

We state that no investor grievances were pending for a period of one month
against the Company as certified by the Registrars & Share Transfer Agents
of the Company, based on the records maintained by them.

We further state that such compliance is neither an assurance as to the future
viability of the Company nor of the efficiency or effectiveness with which the
management has conducted the affairs of the Company.

For Chaturvedi & Shah
Chartered Accountants

D. Chaturvedi
Partner
Membership No.: 5611

Mumbai,
June 28, 2005.

For Rajendra & Co.
Chartered Accountants

R. J. Shah
Partner
Membership No.: 7586

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Auditors’ Report

To the Members of
RELIANCE INDUSTRIES LIMITED

We have audited the attached Balance Sheet of RELIANCE INDUSTRIES
LIMITED as at March 31, 2005 and the Profit and Loss Account for the year
ended on that date annexed thereto and Cash Flow Statement for the year
ended on that date. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

1. We conducted our audit in accordance with Auditing Standards generally
accepted in India. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatements. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by the management, as well as evaluating
the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.

2. As required by the Companies (Auditor’s Report) Order 2003 issued by the
Central Government of India in terms of sub-section (4A) of section 227 of
the Companies Act, 1956, we enclose in the Annexure hereto a statement on
the matters specified in paragraphs 4 and 5 of the said Order.

3. Further to our comments in the Annexure referred to in paragraph 2 above,

we report that:

a) We have obtained all the information and explanations which to the best of
our knowledge and belief were necessary for the purposes of our audit;

b) In our opinion, proper books of account, as required by law, have been kept
by the Company, so far as appears from our examination of those books;

c) The Balance Sheet, the Profit and Loss Account and Cash Flow statement

dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, the Profit and Loss Account and Cash

Flow Statement dealt with by this report comply with the mandatory
Accounting Standards referred in sub-section (3C) of section 211 of the
Companies Act, 1956;

e) In our opinion, and based on information and explanations given to us, none
of the directors are disqualified as on March 31, 2005 from being appointed
as directors in terms of clause (g) of sub-section (1) of section 274 of the
Companies Act 1956;

R E L I A N C E I N D U S T R I E S L I M I T E D

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f) In our opinion and to the best of our information and according to the

explanations given to us, the said accounts read together with the Significant
Accounting Policies and other notes thereon give the information required
by the Companies Act, 1956, in the manner so required, and present a true
and fair view in conformity with the accounting principles generally accepted
in India:

(i)

In so far as it relates to Balance Sheet, of the state of affairs of the
Company as at March 31, 2005;

(ii) In so far as it relates to the Profit and Loss Account, of the Profit of the

Company for the year ended on that date; and

(iii) In so far as it relates to the Cash Flow Statement, of the cash flows of

the Company for the year ended on that date.

For Chaturvedi & Shah
Chartered Accountants

D. Chaturvedi
Partner
Membership No.: 5611

Mumbai,
April 27, 2005.

For Rajendra & Co.
Chartered Accountants

R. J. Shah
Partner
Membership No.: 7586

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Annexure to Auditors’ Report
Referred to in Paragraph 2 of our report of even date

1. In respect of its fixed assets:

a. The Company has maintained
proper records showing full
particulars including quantitative
details and situation of fixed
assets on the basis of available
information.

b. As explained to us, all the fixed
assets have been physically
verified by the management
during the year in a phased
periodical manner, which in our
opinion is reasonable, having
regard to the size of the Company
and nature of its assets. No
material discrepancies were
noticed on such physical
verification.

c. In our opinion, the Company has

not disposed of substantial part of
fixed assets during the year and
the going concern status of the
Company is not affected.

2. In respect of its inventories:

a. As explained to us, inventories

have been physically verified by
the management at regular
intervals during the year.

b. In our opinion and according to

the information and explanations
given to us, the procedures of
physical verification of inventories
followed by the management are
reasonable and adequate in
relation to the size of the
Company and the nature of its
business.

c. The Company has maintained

proper records of inventories. As
explained to us, there were no
material discrepancies noticed on
physical verification of inventory
as compared to the book records.

3. In respect of the loans, secured or
unsecured, granted or taken by
the company to/ from companies,
firm or other parties covered in
the register maintained under
section 301 of the Companies
Act, 1956:

a. The Company has not granted
any new loans during the year.
However, the Company has
granted loans in the past to one
party and maximum amount
outstanding at any time during the
year is Rs 794.22 crore and year
end balance is Rs 753.78 crore.

b. In our opinion and according to

the information and explanations
given to us, the aforesaid loan is
interest-free and other terms and
conditions are not prima facie
prejudicial to the interest of
the company.

c. The loan has been given to a

wholly owned subsidiary of the
Company. The said loan is
interest free and is repayable
on demand.

d. In respect of the loans given by

the company, these are repayable
on demand and therefore the
question of overdue amount does
not arise.

e. The Company has taken loans
from one party aggregating to
Rs 2,735 crore during the year
and the balance outstanding at
the year-end is Rs 1,600 crore.

In our opinion and according to
the information and explanations
given to us, the rate of interest,
wherever applicable and other
terms and conditions are not
prima facie prejudicial to the
interest of the Company.

g. The interest payments are regular

and the principal amount is
repayable on demand.

100

R E L I A N C E I N D U S T R I E S L I M I T E D

4. In our opinion and according to

the information and explanations
given to us, there is an adequate
internal control system
commensurate with the size of
the Company and the nature of its
business for the purchase of
inventory, fixed assets and also
for the sale of goods and
services. During the course of our
audit, we have not observed any
continuing failure to correct major
weaknesses in internal controls.

5. In respect of the contracts or
arrangements referred to in
Section 301 of the Companies
Act, 1956:

a. In our opinion and according to the

information and explanations
given to us, the transactions
made in pursuance of contracts
or arrangements, that needed
to be entered in the register
maintained under section 301
of the Companies Act, 1956 have
been so entered.

b. In our opinion and according to the

information and explanations
given to us, these contracts or
arrangements represent fees for
professional services rendered
aggregating to Rs 0.02 crore
which appears reasonable.

6. The Company has not accepted
any deposits from the public.

7. In our opinion, the Company has

an internal audit system
commensurate with the size and
nature of its business.

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101

8. The Central Government has

b. The disputed statutory dues

prescribed maintenance of cost
records under Section 209 (1) (d)
of the Companies Act, 1956 in
respect of certain manufacturing
activities of the Company. We
have broadly reviewed the accounts
and records of the Company in
this connection and are of the
opinion, that prima facie, the
prescribed accounts and records
have been made and maintained.
We have not, however, made a
detailed examination of the same.

9. In respect of statutory dues:

a. According to the records of the
Company, undisputed statutory
dues including Provident Fund,
Investor Education and Protection
Fund, Employees’ State Insurance,
Income Tax, Sales tax, Wealth
Tax, Service Tax, Customs Duty,
Excise Duty, Cess and other
statutory dues have been
generally regularly deposited with
the appropriate authorities.
According to the information and
explanations given to us, no
undisputed amounts payable in
respect of the aforesaid dues
were outstanding as at March 31,
2005 for a period of more than six
months from the date of becoming
payable except a sum of Rs 1.17
crore in respect of Investor
Education and Protection Fund.

aggregating to Rs 610.45 crore,
that have not been deposited on
account of disputed matters
pending before appropriate
authorities are as under:

Sr. Name of the
No. statute

Nature of
the dues

Income Tax Act, 1961

Income Tax

Forum where
dispute is
pending

Commissioner of
Income Tax
(Appeals)

Amount
(Rs in crore)

190.16

2. Central Excise Act, 1944 Excise Duty Commissioner of

16.07

and Service Central Excise (Appeals)
Tax

3. Central Sales Tax Act
And Sales Tax Act
of various states

Sales Tax

CESTAT
High Court
Supreme Court

Commissioner
(Appeals)

Appellate Tribunal
High Court

4. Customs Act

Custom Duty Commissioner of

Customs (Appeals)

CESTAT

TOTAL:

214.38
0.06
30.41

14.00

0.01
125.54

13.99

5.83

610.45

10. The Company has no

12. In our opinion and according to

the explanations given to us and
based on the information
available, no loans and advances
have been granted by the
Company on the basis of security
by way of pledge of shares,
debentures and other securities.

accumulated losses and has not
incurred any cash losses during
the financial year covered by our
audit or in the immediately
preceding financial year.

11. Based on our audit procedures

and according to the information
and explanation given to us, we
are of the opinion that the
Company has not defaulted in
repayment of dues to financial
institutions, banks or debenture
holders.

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18. The Company has not made any
preferential allotment of shares to
parties and companies covered
in the Register maintained under
Section 301 of the Companies
Act, 1956.

19. The Company has created
securities and/or charges in
respect of secured debentures
issued.

20. The Company has not raised any
monies by way of public issue
during the year.

21. In our opinion and according to

the information and explanations
given to us, no fraud on or by the
company has been noticed or
reported during the year that
causes the financial statements
to be materially misstated.

For Chaturvedi & Shah
Chartered Accountants

D. Chaturvedi
Partner
Membership No.: 5611

For Rajendra & Co.
Chartered Accountants

R. J. Shah
Partner
Membership No.: 7586

Mumbai,
April 27, 2005.

13. In our opinion, the Company is
not a chit fund or a nidhi/mutual
benefit fund/ society. Therefore,
the provisions of clause 4(xiii) of
the Companies (Auditor’s Report)
Order 2003, are not applicable to
the Company.

14. The Company has maintained
proper records of transactions
and contracts in respect of
dealing and trading in shares,
securities, debentures and other
investments and timely entries
have been made therein. All
shares, debentures and other
investments have been held by
the Company in its own name.

15. The Company has given

guarantees for loans taken by
others from banks or financial
institutions. According to the
information and explanations
given to us, we are of the opinion
that the terms and conditions
thereof are not prima facie
prejudicial to the interests of
the Company.

16. The Company has raised new
term loans towards the end of
the year. Pending utilisation of
the same, the funds have been
temporarily invested in government
securities. The term loans
outstanding at the beginning
of the year were applied for
the purposes for which they
were raised.

17. According to the information and
explanation given to us and on
an overall examination of the
Balance Sheet of the Company,
we are of the opinion that there
are no funds raised on short-term
basis that have been used for
long-term investment.

102

R E L I A N C E I N D U S T R I E S L I M I T E D

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103

International Accountants’ Report

To the Board of Directors

RELIANCE INDUSTRIES LIMITED

We have audited the Balance Sheet of Reliance Industries Limited as at 31st
March, 2005, the Profit and Loss Account and the Cash Flow Statement of the
Company for the year ended on that date (the financial statements) attached
hereto, which have been prepared in accordance with the Generally Accepted
Accounting Principles in India and Accounting Standards referred to in Section
211(3C) of the Companies Act, 1956.

Respective Responsibilities of the Management and Auditors

The management of the Company is responsible for the preparation of these
financial Statements. The financial statements have also been audited by firms
of Chartered Accountants appointed as Auditors under the statute (The Companies
Act, 1956) who submit separately their report in accordance with the provisions
of the Companies Act. It is our responsibility to form an independent opinion,
based on our audit of the statements and to report our opinion to you as a
concurrent special assignment.

Basis of Opinion

We conducted our audit in accordance with the auditing standards issued by
the Institute of Chartered Accountants of India. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. It also includes an assessment of the significant estimates
and judgements made by the management in the preparation of the financial
statements and whether the accounting policies are appropriate to the
circumstances of the Company, consistently applied and adequately disclosed.
We planned and performed audit so as to obtain all information and explanation,
which to the best of our knowledge and belief were necessary for the purposes
of our audit.

The financial statements dealt with by this report are in agreement with books of
account of the Company.

Opinion

In our opinion and to the best of our information and according to the
explanations given to us, the financial statements read with the significant
accounting policies and notes thereon give a true and fair view:

(i) In the case of the Balance Sheet, of the state of affairs of the Company

as at 31st March, 2005;

(ii) In the case of the Profit and Loss Account, of the profit for the year ended on

that date; and

(iii) In the case of Cash Flow Statement, of the cash flows for the year ended on

that date.

For Deloitte Haskins & Sells
Chartered Accuntants

P.R. Barpande
Partner
Membership No. 15291

Mumbai,
April 27, 2005.

Balance Sheet as at 31st March, 2005

Schedule

As at
31st March, 2005

(Rs. in crore)
As at
31st March, 2004

SOURCES OF FUNDS

Shareholders’ Funds
Share Capital
Reserves and Surplus

Loan Funds
Secured Loans
Unsecured Loans

Deferred Tax Liability

TOTAL

APPLICATION OF FUNDS

Fixed Assets
Gross Block
Less: Depreciation
Net Block
Capital Work -in -Progress

Investments
Current Assets, Loans and Advances
Current Assets
Inventories
Sundry Debtors
Cash and Bank Balances
Other Current Assets

Loans and Advances

Less: Current Liabilities and Provisions
Current Liabilities
Provisions

Net Current Assets

TOTAL

Significant Accounting Policies
Notes on Accounts

1,393.09
39,010.23

7,972.90
10,811.69

1,395.95
33,056.50

40,403.32

34,452.45

11,451.14
9,493.52

18,784.59
4,266.82

63,454.73

20,944.66
3,474.82

58,871.93

55,125.82
24,872.83
30,252.99
4,829.29

7,412.88
3,927.81
3,608.79
2,087.66
17,037.14
11,415.37
28,452.51

13,283.95
3,847.57
17,131.52

53,502.91
21,713.74
31,789.17
3,356.81

35,082.28
17,051.46

35,145.98
13,971.40

7,231.22
3,189.93
224.24
995.15
11,640.54
11,069.23
22,709.77

10,284.47
2,670.75
12,955.22

11,320.99

63,454.73

9,754.55

58,871.93

‘A’
‘B’

‘C’
‘D’

‘E’

‘F’

‘G’

‘H’

‘I’

‘N’
‘O’

As per our Report of even date

For and on behalf of the Board

For Chaturvedi & Shah
Chartered Accountants

For Rajendra & Co.
Chartered Accountants

D. Chaturvedi
Partner

Mumbai
April 27, 2005

R. J. Shah
Partner

104 RELIANCE INDUSTRIES LIMITED

M. D. Ambani

N. R. Meswani
H.R. Meswani
H. S. Kohli

R. H. Ambani
M. L. Bhakta
Y. P. Trivedi
Dr. D. V. Kapur
M. P. Modi
S. Venkitaramanan

V. M. Ambani

}

Chairman & Managing Director

Executive Directors

Directors

Company Secretary

Profit and Loss Account for the year ended 31st March, 2005

Growth is Life 105

INCOME

Turnover
Less: Excise Duty Recovered on Sales
Net Turnover
Other Income
Variation in Stocks

EXPENDITURE
Purchases
Manufacturing and Other Expenses
Interest and Finance Charges
Depreciation
Less : Transferred from General Reserve
[Refer Note 3, Schedule ‘O’]

Schedule

2004-05

(Rs. in crore)

2003-04

73,164.10
7,112.80

56,247.03
4,445.50

‘J’
‘K’

‘L’
‘M’

66,051.30
1,449.81
(524.35)
66,976.76

2,356.55
50,359.37
1,468.66

3,784.57
61.07

3,331.39
84.37

51,801.53
1,138.05
(605.41)
52,334.17

2,218.28
39,133.01
1,434.72

3,247.02
46,033.03

6,301.14
351.00
790.00

5,160.14
3,343.06
10.00
(23.03)
850.00
76.63
9,416.80

3,723.50
57,908.08

9,068.68
705.00
792.00

7,571.68
5,592.06
-
-
-
-
13,163.74

3,000.00
1,045.13
146.58
4.17

3,000.00
733.10
91.64
-

4,195.88
8,967.86

3,824.74
5,592.06

54.24

36.79

Profit Before Tax

Provision for Current Tax
Provision for Deferred Tax

Profit after Tax

Add: Balance brought forward from Previous year
Taxation Reserve Written Back
Taxation for Earlier Years
Debenture Redemption Reserve Written Back
Investment Allowance (utilised) Reserve Written Back

Amount Available for Appropriations

APPROPRIATIONS
General Reserve
Proposed Dividend on Equity Shares
Tax on Dividend
Tax on Dividend for earlier years

Balance Carried to Balance Sheet

Basic and Diluted Earning per Share of
Rs 10 each (in Rupees)
[Ref. Note 11, Schedule ‘O’]

Significant Accounting Policies

Notes on Accounts

‘N’

‘O’

As per our Report of even date

For and on behalf of the Board

For Chaturvedi & Shah
Chartered Accountants

For Rajendra & Co.
Chartered Accountants

D. Chaturvedi
Partner

Mumbai
April 27, 2005

R. J. Shah
Partner

M. D. Ambani

N. R. Meswani
H.R. Meswani
H. S. Kohli

R. H. Ambani
M. L. Bhakta
Y. P. Trivedi
Dr. D. V. Kapur
M. P. Modi
S. Venkitaramanan

V. M. Ambani

}

Chairman & Managing Director

Executive Directors

Directors

Company Secretary

Schedules forming part of the Balance Sheet

SCHEDULE ‘A’

SHARE CAPITAL

Authorised:

250 00 00 000 Equity Shares of Rs. 10 each

(250 00 00 000)

50 00 00 000 Preference Shares of Rs. 10 each

(50 00 00 000)

As at
31st March, 2005

(Rs. in crore)

As at
31st March, 2004

2,500.00

500.00

3,000.00

2,500.00

500.00

3,000.00

Issued, Subscribed and Paid up:

139 35 08 041 Equity Shares of Rs. 10 each fully

1,393.51

(139 63 77 536) paid up

Less: Calls in arrears - by others

0.42

1,396.38

0.43

TOTAL

1,393.09

1,395.95

1. Of the above Equity Shares:

(a)

48 17 70 552 Shares out of the issued and subscribed share capital before the buyback of shares were allotted as

(48 17 70 552) Bonus Shares by capitalisation of Share Premium and Reserves.

(b)

(52 31 98 799)

52 31 98 799 Shares out of the issued and subscribed share capital before the buyback of shares were allotted pursuant
to Schemes of Amalgamation without payments being received in cash and includes 10,46,60,154 shares
allotted to Petroleum Trust, the sole beneficiary of which is Reliance Industrial and Investments Holdings
Limited, a wholly owned subsidiary of the Company.

(c)

33 04 27 345 Shares out of the issued and subscribed share capital before the buyback of shares were allotted on

(33 04 27 345)

conversion/surrender of Debentures and Bonds, conversion of Term Loans, exercise of warrants against
Global Depository Shares (GDS) and reissue of forfeited equity shares.

2. During the financial year, the Company bought back and extinguished 28,69,495 equity shares.

The Company has reserved issuance of 5,26,87,851 Equity Shares of Rs 10 each for offering to employees under Employees
Stock Option Scheme (ESOP).

106 RELIANCE INDUSTRIES LIMITED

Schedules forming part of the Balance Sheet

Growth is Life 107

SCHEDULE ‘B’

RESERVES AND SURPLUS

Revaluation Reserve

As per last Balance Sheet
Less: Deduction on retirement of Revalued Assets

Capital Reserve

As per last Balance Sheet

Capital Redemption Reserve
As per last Balance Sheet
Add: Transferred from General Reserve on buyback of Equity Shares

Securities Premium Account
As per last Balance Sheet
Less: Premium on Buyback of Equity Shares
Less: Premium on Redemption of Debentures/Bonds

Less: Calls in arrears - by others

Debentures Redemption Reserve

As per last Balance Sheet
Less: Transferred to Profit and Loss Account

Investment Allowance (Utilised) Reserve

As per last Balance Sheet
Less: Transferred to Profit and Loss Account

Taxation Reserve

As per last Balance Sheet
Less: Transferred to Profit and Loss Account

General Reserve

As per last Balance Sheet
Less: Transferred to Capital Redemption Reserve on Buyback of
Equity Shares
Less: Transferred to Profit and Loss Account*
[Refer Note 3, Schedule ‘O’]

Add: Transferred from Profit and Loss Account

Profit and Loss Account

TOTAL

As at
31st March, 2005

(Rs. in crore)

As at
31st March, 2004

2,733.53
3.65

2,735.81
2.28

2,729.88

2,733.53

291.28

885.07
2.87

15,825.07
146.74
210.67
15,467.66
2.25

550.02
-

-
-

7,181.78
2.87

61.07

7,117.84
3,000.00

885.07
-

887.94

885.07

15,973.02
-
147.95
15,825.07
2.31

15,465.41

15,822.76

1,400.02
850.00

550.02

76.63
76.63

10.00
10.00

4,266.15
-

84.37

4,181.78
3,000.00

10,117.84

7,181.78

8,967.86

5,592.06

39,010.23

33,056.50

* Cumulative amount transferred on account of Depreciation on Revaluation Rs. 2,563.43 crore (Previous Year Rs. 2,502.36 crore).

Schedules forming part of the Balance Sheet

SCHEDULE ‘C’

SECURED LOANS

A. DEBENTURES

1. Non Convertible Debentures

2. Deep Discount Debentures

Less: Unamortised Discounts

B. WORKING CAPITAL LOANS

From Banks
Rupee Loans

TOTAL

As at
31st March, 2005

(Rs. in crore)
As at
31st March, 2004

7,074.75

-
-
-

9,308.58

600.00
11.79
588.21

7,074.75

9,896.79

898.15

7,972.90

1,554.35

11,451.14

(a) Debentures referred to in A above to the extent of Rs. 3,595.00 crore are secured by way of first mortgage / charge in favour
of the Trustees on all the properties situated at Hazira, District Surat in the State of Gujarat and at Patalganga, District
Raigad in the State of Maharashtra.

(b) Debentures referred to in A above to the extent of Rs. 566.25 crore are secured by way of first mortgage / charge in favour
of the Trustees on all the properties situated at Patalganga, District Raigad in the State of Maharashtra and on the properties
of petrochemicals complex situated at Jamnagar, in the State of Gujarat and on the movable properties situated at Hazira,
District Surat, in the State of Gujarat.

(c) Debentures referred to in A above to the extent of Rs. 2,913.50 crore are secured by way of first mortgage / charge in favour
of the Trustees on all the properties, both present and future, excluding book debts, office premises and certain other
properties specifically excluded of the Refinery Division of the Company.

(d) Debentures referred to in A above are redeemable at par, in one or more instalments, on various dates with the earliest
redemption being on 15th June, 2005 and the last being on 24th November, 2018. The debentures are redeemable as follows:
Rs.896.40 crore in financial year 2005-06, Rs.1,021.40 crore in financial year 2006-07, Rs.1,143.65 crore in financial year
2007-08, Rs.976 crore in financial year 2008-09, Rs.742.30 crore in financial year 2009-10, Rs.175 crore in financial year
2010-11, Rs.250 crore in financial year 2011-12, Rs.570 crore in financial year 2012-13, Rs.383.33 crore in financial year
2013-14, Rs.383.34 crore in financial year 2014-15, Rs.133.33 crore in financial year 2015-16, Rs.133.33 crore in financial
year 2016-17, Rs.133.33 crore in financial year 2017-18 and Rs.133.34 crore in financial year 2018-19.

Working Capital Loans from Banks referred to in B above are secured by hypothecation of present and future stock of raw
materials, stock-in-process, finished goods, stores and spares, book debts, outstanding monies, receivable claims, etc.
save and except receivable of Oil and Gas Division.

SCHEDULE ‘D’

UNSECURED LOANS

A. Long Term

i)
ii)

From Banks
From Others

B. Short Term

i)
ii)

From Banks
From Others

TOTAL

108 RELIANCE INDUSTRIES LIMITED

As at
31st March, 2005

(Rs. in crore)
As at
31st March, 2004

6,459.40
1,809.73

886.06
1,656.50

4,064.12
1,796.83

8,269.13

5,860.95

3,632.57
-

2,542.56

10,811.69

3,632.57

9,493.52

Growth is Life 109

(Rs. in crore)

Schedules forming part of the Balance Sheet

SCHEDULE ‘E’

FIXED ASSETS

Description

OWN ASSETS:

Leasehold Land
Freehold Land
Buildings
Plant & Machinery
Electrical Installations
Equipments
Furniture & Fixtures
Vehicles
Ships
Aircrafts & Helicopters
Jetties

Sub-Total
LEASED ASSETS :

Plant & Machinery
Ships
Sub-Total
I N T A N G I B L E A S S E T S :
Technical Know how fees**
Software**
Sub-Total
Total
Previous Year
Capital Work-in-Progress

Gross Block

Depreciation

Net Block

As at
01-04-2004

Additions

Deductions/
Adjustments

As at
31-03-2005

For the
Year

Upto
31-03-2005

As at
31-03-2005

As at
31-03-2004

58.42
266.17
2,844.34
45,159.74
950.53
851.36
230.21
143.23
260.84
229.75
646.97

15.82
100.88
354.65
3,020.63
40.08
49.95
77.21
31.03
0.04
40.39
-

-
0.02
18.41
1,992.76
0.20
1.43
2.66
24.56
1.50
182.83
-

74.24
367.03
3,180.58
46,187.61
990.41
899.88
304.76
149.70
259.38
87.31
646.97

0.71
-
124.54
3,257.12
56.91
53.98
23.34
22.42
8.86
20.21
41.34

5.95
-
847.58
21,506.41
518.36
312.82
137.90
80.05
184.72
48.71
271.01

68.29
367.03
2,333.00
24,681.20
472.05
587.06
166.86
69.65
74.66
38.60
375.96

53.17
266.17
2,118.45
26,347.96
489.01
591.81
113.63
74.25
84.98
170.77
417.30

51,641.56

3,730.68

2,224.37

53,147.87

3,609.43* 23,913.51

29,234.36

30,727.50

15.49
9.98
25.47

1,741.88
94.00
1,835.88
53,502.91
50,552.99

-
-
-

15.49
-
15.49

-
9.98
9.98

3.88
2.00
5.88

-
7.65
7.65

-
2.33
2.33

3.88
4.33
8.21

8.23
123.86
132.09
3,862.77
3,050.16

-
-
-
2,239.86
100.24

1,750.11
217.86
1,967.97
55,125.82
53,502.91

106.90
62.36
169.26
3,784.57
3,331.39

839.93
111.74
951.67
24,872.83
21,713.74

910.18
106.12
1,016.30
30,252.99
31,789.17
4,829.29

1,008.85
44.61
1,053.46
31,789.17

3,356.81

Leasehold Land includes Rs. 0.11 crore (Previous Year Rs 0.21 crore) in respect of which lease-deeds are pending execution.

b) Buildings include :

Cost of shares in Co-operative Societies Rs. 0.01 crore ( Previous Year Rs. 0.01 crore).

ii) Rs. 93.20 crore (Previous Year Rs. 93.20 crore) incurred towards purchase/ acquisition of 1,94,819 Equity shares of Re.1
each of M/s. Mature Trading and Investments Private Limited with a right of occupancy of certain area of a commercial
premises.

c) Capital work-in-progress includes :

Rs.225.64 crore on account of pre-operative expenses (Previous Year Rs. 112.62 crore).

ii) Rs.426.40 crore on account of cost of construction materials at site (Previous Year Rs. 271.82 crore).

iii) Rs.851.44 crore on account of advance against capital expenditure (Previous Year Rs. 1,170.91 crore).

d) Additions/ Deletions and Capital work-in-progress is net of Rs. 54.37 crore on account of exchange difference during the year.

(Previous Year Rs. 12.98 crore).

e) The Ownership of Jetties vests with Gujarat Maritime Board. However, under an agreement with Gujarat Maritime Board, the

Company has been permitted to use the same at a concessional rate.

f) Gross Block includes amount added on revaluation of Plant & Machinery as at 01-04-1997.

Refer to Note 3, Schedule ‘O’

** Other than internally generated

Schedules forming part of the Balance Sheet
SCHEDULE ‘F’

INVESTMENTS

A. LONG TERM INVESTMENTS

Government and other Securities-Quoted

8,660 6.75% UTI US64 Tax Free Bonds of Rs. 100 each

(8,660)

Government and other Securities-Unquoted

Kisan Vikas Patra (Deposited with
Sales Tax Department)
(Rs. 20,000; Previous Year Rs. 20,000)

7 Years National Savings Certificate (Deposited with
Sales Tax Department)
(Rs. 12,000; Previous Year Rs. 12,000)

6 Years National Savings Certificate (Deposited with
Sales Tax Department)

Trade Investments
In Equity Shares-Unquoted, fully paid up

5 Bombay Gujarat Art Silk Vepari Mahajan Co-operative
(5) Shops & Warehouse Society Limited of Rs. 200 each

(Rs. 1,000; Previous Year Rs. 1,000)

60 New Piece Goods Bazar Co. Limited of Rs. 100 each

(60)

(Rs. 17,000; Previous Year Rs. 17,000)

15 Pandesara Industrial Co-operative Society Limited of

(15) Rs. 100 each (Rs. 1,500; Previous Year Rs. 1,500)

165 The Art Silk Co-operative Society Limited of Rs. 100 each

(165)

(Rs. 16,500; Previous Year Rs. 16,500)

20 The Bombay Market Art Silk Co-operative

(20)

(Shops & Warehouses) Society Limited of Rs. 200 each
(Rs. 4,000; Previous Year Rs. 4,000)

1,00,00,000 Petronet India Limited of Rs. 10 each

(1,00,00,000)

1,30,00,000 Petronet V.K. Limited of Rs. 10 each

(1,30,00,000)

10,66,000 Petronet C.I. Limited of Rs. 10 each

(10,66,000)

[Refer Note 1]

Petronet C.I. Limited - Share Application Money
[Refer Note 1]

11,08,500 Reliance Europe Limited of Sterling Pound 1 each

(11,08,500)

10,000 Reliance Netherlands B.V. of Euro 1 each

(-)

118 Reliance Petroproducts Private Limited of Rs. 10 each

(118)

(Rs. 1,180; Previous year Rs. 1,180)

145 Reliance Global Trading Private Limited of Rs. 10 each

(145)

(Rs. 1,450; Previous Year Rs. 1,450)

110 RELIANCE INDUSTRIES LIMITED

As at
31st March, 2005

(Rs. in crore)
As at
31st March, 2004

0.08

0.01

10.00

13.00

3.93

0.06

0.09

0.08

10.00

13.00

1.07

1.87

3.93

26.99

29.87

Schedules forming part of the Balance Sheet
SCHEDULE ‘F’ (contd.)

Growth is Life 111

As at
31st March, 2005

As at
31st March, 2004

(Rs. in crore)

In Equity Shares-Unquoted, partly paid up

225 Crimpers Industrial Co-operative Society Limited of

(225) Rs. 100 each, Rs. 25 paid up

(Rs. 5,625; Previous Year Rs. 5,625)

226 Reliance Global Trading Private Limited of Rs. 10 each,

(226) Rs. 2.50 paid up (Rs. 565; Previous Year Rs. 565)

182 Reliance Petroproducts Private Limited of Rs. 10 each,

(182) Rs. 2.50 paid up (Rs. 455; Previous Year Rs. 455)

Other Investments

In Equity Shares-Quoted, fully paid up

26.99

29.87

15,51,549 Reliance Energy Limited of Rs. 10 each

(15,51,549)

(Company under the same management)

33.73

6,00,89,966 Reliance Capital Limited of Rs. 10 each

485.80

(6,00,89,966)

69,80,000 Reliance Industrial Infrastructure Limited of Rs. 10 each

16.58

(69,80,000)

In Equity Shares-Unquoted, fully paid up

51,02,080 Reliance Telecom Limited of Rs. 10 each

(51,02,080)

(Refer Note 5)

31,50,00,000 Reliance Infocomm Limited of Re. 1 each
(Company under the same management)

(31,50,00,000)

536.11

4.46

31.50

2,55,00,175 Reliance General Insurance Company Limited of Rs. 10 each 25.50

(2,55,00,175)

5,00,175 Reliance Life Insurance Company Limited of Rs. 10 each

0.50

(5,00,175)

485.80

16.58

536.11

5.10

31.50

25.50

0.50

90,00,00,000 Reliance Communications Infrastructure Limited of
(90,00,00,000) Re. 1 each (Company under the same management)

2,331.00

1000 Air Control & Chemical Engineering Co. Ltd. of

0.01

(1000) Rs. 100 each

2,392.97

2,393.61

Schedules forming part of the Balance Sheet
SCHEDULE ‘F’ (contd.)

As at
31st March, 2005

As at
31st March, 2004

(Rs. in crore)

In Preference Shares-Unquoted, fully paid up

- 6% Cumulative Redeemable Preference Shares of
(86,00,000) Reliance Enterprises Limited of Rs. 100 each [Refer Note 4]

86.00

162,00,00,000 10% Cumulative Redeemable / Optionally Convertible

8,100.00

(162,00,00,000) Preference Shares of Reliance Infocomm Limited of
Re. 1 each (Company under the same management)

- 8% Cumulative Non-Convertible Redeemable

(64,18, 576) Preference Shares of Reliance Infocomm Limited of
Re. 1 each (Company under the same management)

8,100.00

8,186.00

In Debentures-Unquoted, fully paid up

6,40,140 Deep Discount Bonds of Reliance Communications

1,600.02

(6,40,140)

Infrastructure Limited of Maturity Value Rs. 68,550 each
(Company under the same management)

- Deep Discount Bonds of Reliable Internet Services

(13,752) Limited of Maturity Value Rs. 1,00,000 each

1,600.02

70.00

1,670.02

In Equity Shares of Subsidiary Companies-Unquoted, fully paid up

14,75,04,400 Reliance Industrial Investments and

(14,75,04,400) Holdings Limited of Rs. 10 each

147.50

12,629.10 12,785.74

20,20,000 Reliance Power Venture Limited of Rs. 10 each

(20,20,000)

20,20,000 Reliance Ventures Limited of Rs. 10 each

(20,20,000)

- Reliance Infocom B.V. of 100 Euro Each

(11,120)

2.02

20,20,200 Reliance Strategic Investments Limited of Rs. 10 each

2.02

(20,20,200)

45,000 Reliance LNG Ltd of Rs. 10 each

(45,000)

50,000 Gas Transportation & Infrastructure

(50,000) Company Limited of Rs.10 each

- Reliance Technologies LLC. (90% interest)

(-)

0.05

5,56,400 Reliance Do Brasil Industria E Comercio De Produtos

0.88

(-) Texteis, Quimicos, Petroquimicos E Derivados Ltda

(Reliance Brazil LLC.) of 1 Reais each

2.02

4.48

2.02

0.05

154.54

158.14

112 RELIANCE INDUSTRIES LIMITED

Schedules forming part of the Balance Sheet
SCHEDULE ‘F’ (contd.)

Growth is Life 113

In Preference Shares of Subsidiary Companies-Unquoted, fully paid up

10,00,000 5% Cumulative Redeemable Non Convertible
(10,00,000) Preference Shares of Reliance Ventures Limited

of Re. 1 each

In Debentures of Subsidiary Companies-Unquoted, fully paid up

2,79,90,000 0% Unsecured Convertible Debentures of

(2,79,90,000) Reliance Industrial Investments and

Holdings Limited of Rs. 100 each (Refer Note 2)

8,83,143 0% Unsecured Optionally Convertible Debentures of
(8,83,143) Reliance Industrial Investments and Holdings Limited

of Rs. 5,000 each

Total (A)

B. CURRENT INVESTMENTS

Other Investments

In Government Securities-Quoted
11.99% GOI 2009
6.18% GOI 2005
10.20% GOI 2005
9.90% GOI 2005

In Treasury Bills-Quoted
91 Days Treasury Bills
364 Days Treasury Bills

In Units-Unquoted

441.58

721.48

92.15
670.20
25.69
30.16

818.20

415.32
1,699.32

2,114.64

- Reliance Liquid Fund - Super Cash Plan of

(77,696) Rs. 10 each

14,54,06,713 Reliance Liquid Fund-Treasury Plan-Institutional Plan-

235.00

(17,24,67,452) Growth Option-Growth Plan of Rs. 10 each

1,65,81,915 Reliance Liquid Fund-Cash Plan of Rs. 10 each

19.42

(-)

9,71,36,418 Reliance Floating Rate Fund-Growth

(-) Plan-Growth Option of Rs. 10 each

9,93,31,499 Reliance Floating Rate Fund-Monthly
(-) Dividend Plan of Rs. 10 each

10,68,39,963 Reliance Long Term Gilt Plan-Retail
(-) Plan-Growth Option of Rs. 10 each

Total (B)

Total (A+B)

100.00

122.00

576.42

As at
31st March, 2005

As at
31st March, 2004

(Rs. in crore)

10.00

279.90

441.58

721.48

886.02
13,542.20

889.62
13,705.31

-
-
-
-

-
-

0.09

266.00

266.09

3,509.26

17,051.46

266.09

13,971.40

Schedules forming part of the Balance Sheet
SCHEDULE ‘F’ (contd.)
(1) The investments and share application money in Petronet C. I. Limited of Rs. 1.07 crore and Rs. 1.87 crore respectively have

(2)

been written off during the year, as the said company is being wound up.
Interest on Unsecured Optionally Convertible Debentures of Reliance Industrial Investments and Holdings Limited has been
changed from 8.25% to 0% with effect from 1st April 2004.

(3) The Company has extended negative lien on 16,06,50,000 equity shares of Reliance Infocomm Limited to banks for extending

loans to Reliance Infocomm Limited.

(4) 6% Cumulative Redeemable Preference Shares of Reliance Enterprises Limited have been redeemed during the year.
(5) 8% Cumulative Non-Convertible Preference Shares issued by Reliance Infocomm Limited pursuant to the High Court order on
demerger of basic services division of Reliance Telecom Limited in 2003-04, have been redeemed at par during the year. The
value of Rs. 0.64 crore received on the above redemption has been reduced from the cost of investments in equity shares of
Reliance Telecom Limited.

As at 31st March, 2005

As at 31st March, 2004

(Rs in crore)

INVESTMENTS
AGGREGATE VALUE OF
Quoted Investments
Unquoted Investments

Movements during the year
Purchased and sold
Certificate of Deposits
ICICI Bank
Kotak Mahindra Bank Limited
Development Credit Bank

Government Securities
364 Days Treasury Bills
91 Days Treasury Bill
7.38% GOI 2015
8.07% GOI 2017
6.18% GOI 2005
7.55% GOI 2010
12.32% GOI 2011
7.37% GOI 2014
Floating Rate Bonds 2013
5.59% GOI 2016
8.35% GOI 2022
6.25% GOI 2018
6.05% GOI 2019
6.35% GOI 2020
9.39% GOI 2011
11.99% GOI 2009
6.85% GOI 2012
10.71% GOI 2016
Floating Rate Bonds 2016
12.29% GOI 2010
7.49% GOI 2017
7.46% GOI 2017
4.49% GOI 2016
Floating Rate Bonds 2015
6.30% GOI 2023
6.17% GOI 2023
7.40% GOI 2012
11.83% GOI 2014
5.64% GOI 2019
8.00% GOI 2012

Mutual Fund Units
Reliance Liquid Fund-Treasury Plan-Institutional-Growth Plan
Reliance Liquid Fund - Cash Plan - Growth Option
Reliance Liquid Fund - Super Cash Plan - Growth Option
Reliance Floating Rate Fund-Growth Plan-Growth Option
Reliance Fixed Term Scheme-Monthly Plan Series 10
Reliance Fixed Term Scheme-Monthly Plan Series 14
Reliance Short Term Fund-Institutional Plan-Growth Plan
Reliance Fixed Term Scheme-Monthly Plan Series 9
Reliance Fixed term Scheme-Series 12
Reliance Fixed Term Scheme-Quaterly Plan 5 Growth Option

114 RELIANCE INDUSTRIES LIMITED

Book Value
3,469.03
13,582.43

Market Value
4,156.40

Book Value
536.19
13,435.21

Face Value
Rs.

1 00 000
1 00 000
1 00 000

Nos.

1000
5000
4000

Market Value
948.49

Cost
(Rs. in crore)

9.97
49.58
39.43

2,815.09
2,754.98
1,487.49
811.31
795.37
597.36
259.16
200.77
174.95
171.07
167.84
145.79
142.04
141.16
139.77
129.93
100.29
86.89
84.98
74.84
71.49
70.89
50.00
49.94
42.71
26.58
26.19
22.66
5.09
1.01

Cost
(Rs. in crore)
11,169.70
10,642.09
2,255.00
605.08
225.59
175.00
150.00
150.00
150.00
70.00

100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100

29 13 49 000
27 82 09 000
13 80 00 000
6 80 00 000
7 05 35 000
5 70 00 000
2 00 00 000
1 80 00 000
1 75 00 000
1 70 00 000
1 40 00 000
1 35 00 000
1 35 00 000
1 30 00 000
1 20 00 000
1 05 00 000
90 00 000
60 00 000
85 00 000
55 00 000
60 00 000
60 00 000
50 00 000
50 00 000
40 00 000
25 00 000
25 00 000
15 00 000
5 00 000
1 00 000

Face Value
Rs.
10
10
10
10
10
10
10
10
10
10

Nos.
(in crore)
713.69
920.72
204.17
59.86
22.56
17.50
13.55
15.00
15.00
7.00

Schedules forming part of the Balance Sheet

Growth is Life 115

SCHEDULE ‘G’

CURRENT ASSETS

INVENTORIES
Stores, Chemicals and Packing Materials
Raw Materials
Stock-in-Process
Finished Goods / Traded Goods

SUNDRY DEBTORS (Unsecured and Considered Good) #
Over six months
Others

CASH AND BANK BALANCES
Cash on hand
Balance with Banks
In Current Accounts :
with Scheduled Banks
with Others *
In Fixed Deposit Accounts :
with Scheduled Banks **

OTHER CURRENT ASSETS
Interest Accrued on Investments @
Premium Accrued on Investments in Preference Shares $

TOTAL

As at
31st March, 2005

(Rs. in crore)

As at
31st March, 2004

679.45
3,748.36
971.45
2,013.62

42.18
3,885.63

2.07

382.08
0.36

3,224.28

979.32
1,108.34

839.97
2,881.83
752.38
2,757.04

7,412.88

7,231.22

10.59
3,179.34

3,927.81

3,189.93

2.19

205.96
0.62

15.47

3,608.79

224.24

797.57
197.58

2,087.66
17,037.14

995.15
11,640.54

Sundry Debtors include Rs. 5.28 crore (Previous Year Rs. 3.43 crore) from Reliance Energy Limited, company under the same
management.
Includes balances with non scheduled banks as follows:

As at
31st March, 2005

As at
31st March, 2004

Municipal Co-operative Bank
ABN Amro Bank, Shanghai
ABN Amro Bank, Jakarta
ABN Amro Bank, Jebel Ali
Hongkong and Shanghai Banking Corporation, Turkey
Hongkong and Shanghai Banking Corporation, Vietnam
Stadtsparkasse Koln, Frankfurt (Rs. 2,036) (Previous
Year Rs. NIL)

-
0.07
0.07
0.08
0.11
0.03

0.24
0.13
0.03
0.06
0.12
0.04

(Rs. in crore)
Maximum Balance at
any time during the year
2004-05
0.24
1.77
0.15
1.58
0.22
0.13

2003-04
0.24
0.29
0.18
1.59
0.17
0.12

0.14

The Company has placed Fixed Deposits amounting to Rs. 35.00 crore (Previous Year Rs. NIL) under lien as security for buy
back of shares.

@ Interest Accrued on Investments includes Rs. 939.38 crore (Previous Year Rs. 732.02 crore) accrued on Deep Discount Bonds
issued by Reliance Communications Infrastructure Limited, a company under the same management and Rs. NIL (Previous Year
Rs. 18.36 crore) accrued on Debentures issued by Reliance Industrial and Investments and Holdings Limited, a wholly owned
Subsidiary of the Company.
Premium accrued on Investments in Preference Shares represents Rs. 1,108.27 crore (Previous Year Rs. 197.58 crore) receivable
on investments in Preference Shares of Reliance Infocomm Limited, a company under the same management and Rs. 0.07 crore
(Previous Year Rs. NIL) receivable on investments in Preference Shares of Reliance Ventures Limited, a wholly owned Subsidiary
of the Company.

Schedules forming part of the Balance Sheet
SCHEDULE ‘H’

LOANS AND ADVANCES
UNSECURED - (Considered Good Unless Otherwise Stated)
Loans to subsidiary companies
Advances recoverable in cash or in kind or for
value to be received
Less: Considered Doubtful

Deposits
Balance with Customs, Central Excise Authorities, etc.

TOTAL

As at
31st March, 2005

(Rs. in crore)
As at
31st March, 2004

7,703.73

7,121.94

1,418.72
69.88

1,566.44
-

1,348.84
1,846.17
516.63

11,415.37

1,566.44
2,003.37
377.48

11,069.23

Advances include Rs. 34.70 crore (Previous Year Rs. 37.60 crore) receivable from Reliance Communications Infrastructure Limited
(Maximum amount outstanding at any time during the year Rs. 37.60 crore) and Rs. 13.46 crore (Previous Year Rs. 14.57 crore)
receivable from Reliance Infocomm Limited (Maximum amount outstanding at any time during the year Rs. 14.57 crore), companies
under the same management, towards net investment in finance leases given.

SCHEDULE ‘I’

CURRENT LIABILITIES AND PROVISIONS

CURRENT LIABILITIES
Sundry Creditors - Small Scale Industries @
Sundry Creditors - Others *
Liability for Leased Assets
Unpaid Dividend #
Unpaid Matured debentures #
Unpaid Call Money #
Interest accrued on above #
Interest accrued but not due on Loans

PROVISIONS
Provision for Income Tax
Provision for Wealth Tax
Provision for Leave encashment / Superannuation / Gratuity
Other Provisions
Proposed Dividend
Tax on Dividend

TOTAL

As at
31st March, 2005

As at
31st March, 2004

(Rs. in crore)

4.48
12,829.51
2.74
51.84
28.40
0.03
0.54
366.41

705.00
12.65
174.57
1,763.64
1,045.13
146.58

3.10
9,818.49
6.81
49.73
39.53
0.03
1.02
365.76

13,283.95

10,284.47

351.00
37.16
111.28
1,346.57
733.10
91.64

3,847.57
17,131.52

2,670.75
12,955.22

The company has recognized liability based on substantial degree of estimation for excise duty payable on clearance of
goods lying in stock as on 31st March 2004 of Rs. 175.17 crore as per the estimated pattern of despatches. During the year
Rs. 156.89 crore was utilized for clearance of goods and unused balance of Rs. 18.28 crore was reversed. Liability recog-
nized under this class for the year is Rs. 254.12 crore which is outstanding as on 31st March 2005. Actual outflow is
expected in the next financial year. Other class of liabilities where recognition is based on substantial degree of estimation
relate to disputed customer / supplier / third party claims, rebates or demands against the company. Any additional informa-
tion in this regard can be expected to prejudice seriously the position of the company.
@Small scale industrial undertakings to whom amounts are due have been determined based on the information available

with the company and are as follows:
A Square Pallet Sys., Aadi Energy Sys.P Ltd., Accurate Paper Tube P Ltd, Ace Ind., Aditya Ind., Ajanta Timber Mart, Aksh
India Ltd, Alliance Fittings & Forgings Ltd., Anil Industrial Components, Ankleshwar Ammonia Supply Co., Anthia Machine
Tools, Arham Steels P Ltd, Ashar Industrial Corporation, Ashvin Corporation, Ashvin Ind., Asian Engng., Atisha Engineers,
Auto Strap India, B H Enterprise, B. K. Engng Co.,Balaji Pkg. Ind., Baliga Lighting Equipment, Bhagwati Electricals,
Biltube India Ltd, Bliss Anand P Ltd, Brajesh Pkg P Ltd, Ceag Flameproof Control Gears P Ltd, Colius Paper Convertors
P Ltd, Comet Brass Products, Comet Engineers, Compack Ind.,Cosmo Enterprises, Dabir Industries, Devhari Polymers,

116 RELIANCE INDUSTRIES LIMITED

Growth is Life 117

Schedules forming part of the Balance Sheet

SCHEDULE ‘I’ (contd.)

Dinsons Self Sticks P Ltd, Dot Graphics, EBY Fasteners, Efficient Data Processing P Ltd., Elektro Engineers, Fabrico
Packers P Ltd., Gamma Manganese Chemicals, Girnar Pkg., Gujarat Timbers, Indo Gujarat Rubber Ind., Indusons Intnl,
Interlables Ind. P Ltd, J.B.Ind., J.B.Packaging, K M Enterprises, Kagaz Pkg., Kanpur Plastipack Limited, Kantilal Chunilal
& Sons Appliances P. Ltd., Lotus Fibre, Mahavir Enterprises, Metasal Speciality Chemicals, Met-Pro Chemicals, Micro
Engineering P Ltd, Mitesh Enterprise, MS Fittings Mfg Co, MTL Instruments P Ltd, Narlabs, Nec Containers P Ltd, Nechmo
Sales, Neha Agencies, Nice Pack Industries P Ltd, Pack Print Ind.,Pioneer Fabrics & Packaging P Ltd., Pipefit Engineers,PLA
Chem Ind., Pooja Paper Craft, Prabhat Tdg. Co., Pratik Enterprises, Precise Tools, Programmed Engg Products P Ltd,
Quality Tubes & Cones Co., Radha Madhav Indu., Rajkamal Plastic Ind., Reeshab Teelak Chemicals P Ltd, Reliable
Packaging, Riddhi Forms P Ltd, S K H Engineers, S S Eng. Works, S.Kumar Ind.Ltd, Sanghvi Packaging Ind., Sanghvi
Pallet Corporation, Sarigam Containers P Ltd, Shivai Barrel Mfg. Co. P Ltd.,Shree Laxmi Krupa Engng. Works, Shri
Krishna Packaging, Simron Products, Sip Tools, Sri Saibaba Cotton Waste Spg. Mills, Sucheta Enterprises, Sunrise
Paper & Boards Mills, Text-Tube Mfg. Co. P Ltd, Tirth Pkg. Ind., Utkarsh Packers P Ltd., V M Corporation, Vajrachem,
Woodrums.

* Includes for capital expenditure Rs. 525.37 crore (Previous year Rs. 676.45 crore).
# These figures do not include any amounts, due and outstanding, to be credited to Investor Education and Protection Fund

except Rs. 1.17 crore which is held in abeyance due to legal cases pending.

Schedules forming part of the Profit and Loss Account

SCHEDULE ‘J’

OTHER INCOME

Dividend :
From Long Term Investments

[Tax Deducted at Source Rs. NIL (Previous Year Rs. NIL)]

Interest Received :
From Current Investments
From Long Term Investments
From Others

[Tax Deducted at Source Rs. 12.05 crore (Previous Year
Rs. 36.75 crore)]

Premium on Investments in Preference Shares

Profit on Sale of Long Term Investments (net)
Profit on Sale of Current Investments (net)

Profit on Sale of Fixed Assets
Miscellaneous Income

TOTAL

SCHEDULE ‘K’

VARIATION IN STOCKS

STOCK-IN-TRADE (at close)
Finished Goods/Traded Goods
Stock-in-process

STOCK-IN-TRADE (at commencement)
Finished Goods/Traded Goods
Stock-in-process

TOTAL

2004-05

(Rs. in crore)

2003-04

20.40

25.84

144.79
276.92
262.12

8.27
93.40

58.10
207.36
103.15

15.99
31.18

368.61

910.76

47.17
17.82
85.05
1,449.81

683.83

197.58

101.67
1.49
127.64
1,138.05

2004-05

(Rs. in crore)

2003-04

2,013.62
971.45

2,757.04
752.38

2,985.07

3,509.42

3,175.28
939.55

3,509.42
(524.35)

4,114.83
(605.41)

Schedules forming part of the Profit and Loss Account

SCHEDULE ‘L’

MANUFACTURING AND OTHER EXPENSES

2004-05

(Rs. in crore)

2003-04

RAW MATERIAL CONSUMED
MANUFACTURING EXPENSES

Stores, Chemicals and Packing Materials
Electric Power, Fuel and Water
Machinery Repairs
Building Repairs
Labour, Processing and Machinery Hire Charges
Excise Duty
Lease Rent
Exchange Differences (Net)

PAYMENTS TO AND PROVISIONS
FOR EMPLOYEES (including Managerial Remuneration)

Salaries, Wages and Bonus
Contribution to Provident Fund, Gratuity Fund,
Superannuation Fund, Employee’s State Insurance
Scheme, Pension Scheme, Labour Welfare Fund etc.
Employee’s Welfare and other amenities

SALES AND DISTRIBUTION EXPENSES

Samples, Sales Promotion and Advertisement Expenses
Brokerage, Discount and Commission
Warehousing and Distribution Expenses
Sales Tax including defeased / Service Tax
Bad debts written off
Less: Provision for Doubtful Debts Written back (net)

ESTABLISHMENT EXPENSES

Insurance
Rent
Rates & Taxes
Other Repairs
Travelling Expenses
Payment to Auditors
Professional Fees
Loss on Sale of Discarded Assets
General Expenses *
Wealth Tax
Charity and Donations

43,575.32

32,503.11

1,263.37
725.15
155.82
68.25
167.58
(48.10)
8.68
(260.65)

2,760.09

2,080.10

637.20

70.53
97.02

846.40

804.75

220.64
316.04
922.74
802.80
113.23
(113.23)

1,824.95

2,262.22

234.18
205.68
181.81
83.16
103.72
4.70
207.51
14.09
430.97
7.00
36.44

1,486.17
907.94
177.14
65.23
126.83
132.47
17.88
(153.57)

615.10

121.70
109.60

114.56
245.89
1,009.78
454.72
-
-

217.04
179.46
212.71
81.76
72.94
4.56
193.17
26.74
327.52
8.00
38.31

Less : Preoperative Expenses of Projects Under Commissioning (Net)

TOTAL

1,362.21
50,368.97
9.60
50,359.37

1,509.26
39,159.44
26.43
39,133.01

* Includes investments written off Rs. 2.94 crore (Previous Year Rs. NIL) and Provision for Doubtful Claims of Rs. 69.88 crore
(Previous Year Rs. NIL).

SCHEDULE ‘M’

INTEREST AND FINANCE CHARGES

Debentures
Fixed Loans
Others

TOTAL

118 RELIANCE INDUSTRIES LIMITED

2004-05

816.39
210.74
441.53

1,468.66

(Rs. in crore)

2003-04

1,122.93
118.91
192.88

1,434.72

Growth is Life 119

Significant Accounting Policies

SCHEDULE ‘N’

SIGNIFICANT ACCOUNTING POLICIES

A. Basis of Preparation of Financial Statements

The financial statements have been prepared under the historical cost convention in accordance with the generally accepted
accounting principles in India and the provisions of the Companies Act, 1956, except for certain fixed assets which have been
revalued.

B. Use of Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets
and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting
period. Difference between the actual results and estimates are recognised in the period in which the results are known/ materialised.

C. Own Fixed Assets

Fixed Assets are stated at cost net of modvat / cenvat and includes amounts added on revaluation, less accumulated depreciation
and impairment loss, if any. All costs, including financing costs till commencement of commercial production, net charges on
foreign exchange contracts and adjustments arising from exchange rate variations attributable to the fixed assets are capitalised.

D. Leased Assets

a) Operating Leases: Rentals are expensed with reference to lease terms and other considerations.
b)

(i) Finance leases prior to 1st April 2001: Rentals are expensed with reference to lease terms and other considerations.
(ii) Finance leases on or after 1st April, 2001: The lower of the fair value of the assets and present value of the minimum
lease rentals is capitalised as fixed assets with corresponding amount shown as lease liability. The principal component
in the lease rental is adjusted against the lease liability and the interest component is charged to profit and loss account.
c) However, rentals referred to in (a) or (b) (i) above and the interest component referred to in (b) (ii) above pertaining to the

period upto the date of commissioning of the assets are capitalised.

d) All assets given on finance lease are shown as receivables at an amount equal to net investment in the lease. Initial direct
costs in respect of lease are expensed in the year in which such costs are incurred. Income from lease assets is accounted
by applying the interest rate implicit in the lease to the net investment.

Intangible Assets
Intangible Assets are stated at cost of acquisition less accumulated amortisation. Technical know how is amortised over the
useful life of the underlying plant. Computer Software is amortised over a period of 5 years. Amortisation is done on written down
value basis except in respect of Crude Oil refinery where it is so amortised on straight-line basis.

F. Depreciation

Depreciation on fixed assets has been provided on written down value method at the rate and in the manner prescribed in
Schedule XIV to the Companies Act, 1956 except on fixed assets pertaining to crude oil refining and marketing infrastructure for
petroleum products, depreciation has been charged over its residual life on straight line method (SLM); on fixed bed catalyst
depreciation has been provided over its useful life ranging from 2 to 9 years; on additions or extensions forming an integral part
of existing plants, including incremental cost arising on account of translation of foreign currency liabilities for acquisition of fixed
assets and insurance spares, depreciation has been provided as aforesaid over the residual life of the respective plants; on
development rights and producing properties depreciation has been provided in proportion of oil and gas production achieved vis
a vis the proved reserves (net of reserves to be retained to cover abandonment costs as per the production sharing contract and
the Government of India’s share in the reserves) considering the estimated future expenditure on developing the reserves as per
technical evaluation; premium on leasehold land is amortised over the period of lease; cost of jetty has been amortised over the
period of agreement of right to use, provided however that the aggregate amount amortised to date is not less than the aggregate
rebate availed by the company; on revalued assets depreciation has been charged over the residual life of the assets; on assets
acquired under finance lease from 1st April 2001 depreciation is spread over the lease term.

SCHEDULE ‘N’ (contd.)

Impairment of Assets
An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to
the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognised in prior
accounting periods is reversed if there has been a change in the estimate of recoverable amount.

H. Foreign Currency Transactions

(a) Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the

transaction.

(b) Monetary items denominated in foreign currencies at the year end are restated at year end rates. In case of monetary items
which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of the
contract is recognised as exchange difference and the premium paid on forward contracts has been recognised over the life
of the contract.

In respect of branches, which are integral foreign operations, all transactions are translated at rates prevailing at the time of
transaction or that approximates the actual rate as at the date of transaction. Branch monetary assets and liabilities are
restated at the year-end rates.

(e) Any income or expense on account of exchange difference either on settlement or on translation is recognised in the profit
and loss account except in cases where they relate to acquisition of fixed assets in which case they are adjusted to the
carrying cost of such assets.

Investments
Current investments are carried at the lower of cost and quoted/fair value, computed category wise. Long Term Investments are
stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary
in the opinion of the management.

Inventories
Items of inventories are measured at lower of cost or net realisable value. Cost of inventories comprise of all cost of purchase,
cost of conversion and other costs incurred in bringing them to their respective present location and condition. Cost of raw
materials, process chemicals, stores and spares, packing materials, trading and other products are determined on weighted
average basis. By-products are valued at net realisable value. Cost of work-in-progress and finished stock is determined on
absorption costing method.

K. Turnover

Turnover includes sale of goods, services, sales tax, service tax and excise duty and sales during trial run period, adjusted for
discounts (net) and gain / loss on corresponding hedge contracts. Income from services includes fees accrued on rendering of
services, the cost of which is charged to revenue in the year of delivery.

L. Excise Duty and Sales Tax

Excise duty has been accounted on the basis of, both, payments made in respect of goods cleared as also provision made for
goods lying in bonded warehouses. Sales tax charged to Profit and Loss Account includes payments made for assignment of
deferred sales tax liabilities.

M. Employee Retirement Benefits

Company’s contributions to Provident Fund and Superannuation Fund are charged to Profit and Loss Account. Gratuity and
Leave Encashment Benefit are charged to Profit and Loss Account on the basis of actuarial valuation as at year end.

N. Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of
such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other
borrowing costs are charged to revenue.

120 RELIANCE INDUSTRIES LIMITED

Growth is Life 121

SCHEDULE ‘N’ (contd.)

O. Commodity Hedging Transactions

The commodity hedging contracts are accounted on the date of their settlement and realised gain/ loss in respect of settled
contracts are recognised in the profit and loss account, along with the underlying transactions.

P. Accounting for Oil and Gas Activity

The Company has adopted Full Cost Method of accounting for its Oil and Gas activity and all costs incurred in prospecting,
acquisition, exploration and development are accumulated considering the country as a cost centre.
Oil and Gas Joint Ventures are in the nature of Jointly Controlled Assets. Accordingly assets and liabilities as well as income and
expenditure are accounted on the basis of available information on line by line basis with similar items in the company’s financial
statements, according to the participating interest of the company.

Q. Provision for Current and Deferred Tax

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act,
1961. Deferred tax resulting from “timing difference” between book and taxable profit is accounted for using the tax rates and
laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognised and
carried forward only to the extent that there is a reasonable certainty that the assets will be realised in future.

R. Employee Separation Costs

Compensation to employees who have opted for retirement under the voluntary retirement scheme of the Company has been
debited to the profit and loss account in the year of payment.

Issue Expenses
Issue expenses pertaining to the projects are capitalised.

T. Premium on Redemption of Bonds / Debentures

Premium on redemption on Bonds / Debentures are adjusted against the Securities Premium Account.

U. Premium on Investments in Preference Shares

Premium on Investments in Preference Shares is recognised as income over the maturity period of investment.

V. Provision, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a
result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are
disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.

Notes on Accounts

SCHEDULE ‘O’

The previous year’s figures have been reworked, regrouped, rearranged and reclassified wherever necessary. Accordingly,
amounts and other disclosures for the preceding year are included as an integral part of the current year financial statements and
are to be read in relation to the amounts and other disclosures relating to the current year.

Turnover includes Income from Services of Rs. 346.88 crore (Previous Year Rs. 1,531.87 crore). In view of clarification issued by
the Institute of Chartered Accountants of India on 2nd April, 2005, Inter-Divisional Transfers which hitherto was considered as part
of “Turnover and Inter divisional Transfers” is now not considered (Previous Year Rs. 18,170.87 crore).

The Gross Block of Fixed Assets include Rs. 2,729.88 crore (Previous Year Rs. 2,733.53 crore) on account of revaluation of
Fixed Assets carried out in the past. Consequent to the said revaluation there is an additional charge of depreciation of Rs. 61.07
crore (Previous Year Rs. 84.37 crore) and an equivalent amount has been withdrawn from General Reserve and credited to the
Profit and Loss Account.

SCHEDULE ‘O’ (contd.)

(a) Payment to Auditors:

(i) Audit Fees
(ii) Tax Audit Fees
(iii) Certification & Consultation in finance and tax matters
(iv) Expenses Reimbursed

(b) Cost Audit Fees

*excluding service tax

5. Managerial Remuneration :

(a) Executive Directors
(i) Salaries
(ii) Perquisites
(iii) Commission
(iv) Leave salary / Encashment
(v) Contribution to Provident fund and Superannuation fund
(vi) Provision for Gratuity

2004-05*
2.00
0.50
1.80
0.20
4.50

0.06

2004-05
1.65
1.46
51.59
-
0.40
0.09
55.19

Computation of net profit in accordance with Section 198 read with Section 309(5) of the Companies Act, 1956:

Profit before Taxation
Add Depreciation as per accounts
Loss on Sale of Assets
Investment Written off
Provision for Doubtful claims
Managerial Remuneration

Less Depreciation as per Section 350 of Companies Act, 1956

Premium on Investment in Preference Shares
Profit on buyback of Bonds/ Redemption of Debentures
Profit on sale of Fixed Assets
Profit on Sale of Investments
Net Profit for the year

Salaries, Perquisites and Commission @ 0.67% p.a.
Less: Salaries & Perquisites of the Directors eligible for commission

Balance Commission

2004-05
9,068.68
3,723.50
26.74
2.94
69.88
54.80
12,946.54
3,784.57
910.76
6.62
17.82
47.17
8,179.60
54.80
3.21
51.59

(Rs. in crore)
2003-04
1.94
0.54
1.94
0.22
4.64

0.06

(Rs. in crore)
2003-04
1.65
1.47
36.59
0.56
0.40
0.29
40.96

(Rs. in crore)
2003-04
6,301.14
3,247.02
14.09
-
-
40.00
9,602.25
3,331.39
197.58
-
1.49
101.67
5,970.12
40.00
3.41
36.59

(b) General expenses includes Rs. 0.22 crore (Previous year Rs. 0.08 crore) towards sitting fees paid to non-executive directors

6. A sum of Rs. 2.86 crore (net debit) [Previous Year Rs. 2.18 crore (net debit)] is included under Establishment Expenses representing

Net Prior Period Items.

122 RELIANCE INDUSTRIES LIMITED

SCHEDULE ‘O’ (contd.)

Growth is Life 123

7. Premium on forward exchange contracts to be recognised in the Profit and Loss Account of subsequent accounting period

aggregate to Rs. 5.16 crore (Previous Year Rs. NIL).

(a) Fixed assets taken on finance lease prior to April 1, 2001, amount to Rs.218.68 crore (Previous year Rs. 250.72 crore).
Future obligations towards lease rentals under the lease agreements as on 31st March, 2005 amount to Rs. 5.33 crore
(Previous year Rs. 12.25 crore).

Within one year

Later than one year and not later than five years

Later than five years

Total

(Rs. in crore)

2004-05

2003-04

2.41

1.52

1.40

5.33

7.42

3.28

1.55

12.25

(b) The Company has acquired certain items of Plant and Machinery and Ships on finance lease on or after April 1, 2001,
amounting to Rs.9.98 crore (Previous Year Rs. 25.47 crore). The minimum lease rentals outstanding as of 31st March,2005
in respect of these assets are as follows:

Due

Total Minimum Lease
Payments outstanding

Future Interest on
Outstandings

(Rs. in crore)

Present Value of
Minimum Lease
Payments

As at
31st March, 2005

As at
31st March, 2004

2004-05

2003-04

As at
31st March, 2005

As at
31st March, 2004

Within one year

Later than one year and
not later than five years
(* Rs. 17,472)

Later than five years

Total

1.93

0.81

2.74

4.15

2.74

6.89

0.07

1.93

0.07

0.81

2.74

4.07

2.74

6.81

(i)
Lease rentals are charged on the basis of agreed terms.
(ii) Assets are taken on lease over a period of 3 to 15 years

(d) The Company has taken an Aircraft on operating lease and lease rent amounting to Rs. 10.34 crore (Previous Year Rs. NIL)

has been debited to Profit and Loss Account. The future minimum lease payment is as under:

Not later than one year

Later than one year and not later than five years

Later than five years

Total

(Rs. in crore)

2004-05

2003-04

13.14

52.54

84.25

149.93

SCHEDULE ‘O’ (contd.)

(a)

(i) Assets given on finance lease on or after 1st April, 2001

Particulars

Total

Not later than one
year

Later than one
and not later than
five years

(Rs. in crore)

Later than
five years

2004-05

2003-04

2004-05

2003-04

2004-05

2003-04

2004-05

2003-04

Gross Investment

Less: Unearned Finance Income

Present Value of Minimum Lease Rental

78.78

30.62

48.16

90.15

38.02

52.13

11.37

6.83

4.54

11.37

7.40

3.97

45.47

19.91

25.56

45.47

23.09

22.38

21.94

3.88

18.06

33.31

7.53

25.78

(ii) General Description of Lease terms:

(cid:127) Lease rentals are charged on the basis of agreed rate of interest.
(cid:127) Assets are given on lease for a period of 10 years.

(b)

(i) Plant and Machinery given on operating lease amounts to Rs. Nil (Previous Year Rs. 26.16 crore).
(ii) Depreciation on Assets given on operating lease Rs. 2.28 crore (Previous Year Rs. 2.76 crore).
(iii) Future lease rentals receivable within a period of one year for such assets are Rs.Nil (Previous Year Rs. 9.55 crore)

(c) Miscellaneous income includes income from finance lease of Rs. 7.40 crore (Previous Year Rs. 7.89 crore) and income from

operating lease of Rs. 9.97 crore (Previous Year Rs. 9.69 crore).

10. The deferred tax liability comprise of the following:

a. Deferred Tax Liability

Related to fixed assets

b. Deferred Tax Assets

Disallowance under the Income Tax Act, 1961

c. Provision for deferred tax (Net)

11.

(a) EARNINGS PER SHARE (EPS)

ii)

Net Profit as per Profit and Loss Account (Rs. in crore)

Less : Provision for taxation for earlier years (Rs. in crore)

iii) Net profit available for equity shareholder

(Numerator used for calculation) (Rs. in crore)

iv) Weighted Average number of equity shares used as

denominator for calculating EPS

As at
31st March, 2005

(Rs. in crore)

As at
31st March, 2004

4,633.46

3,811.41

366.64

4,266.82

2004-05

7,571.68

336.59

3,474.82

2003-04

5,160.14

23.03

7,571.68

5,137.11

139,59,09,459

139,63,77,536

v) Basic and Diluted Earnings per share of Rs. 10 each (Rs.)

54.24

36.79

(b) Pursuant to the buyback announcement made on 27th December 2004, the Company has bought back 28,69,495 Equity
Shares for a total consideration of Rs. 149.61 crore at an average price of Rs. 521.38 per share. Consequently a sum of
Rs. 146.74 crore being the Premium on buyback has been charged to Securities Premium Account and a sum of Rs. 2.87
crore has been transferred to Capital Redemption Reserve from the General Reserve.

124 RELIANCE INDUSTRIES LIMITED

SCHEDULE ‘O’ (contd.)

12. As per Accounting Standard 18, issued by the Institute of Chartered Accountants of India, the disclosures of transactions with the

Growth is Life 125

related parties as defined in the Accounting Standard are given below:

(i) List of related parties with whom transactions have taken place and relationships:

Sr. No.

Name of the Related Party

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35

36
37
38
39
40

41
42
43
44
45
46

Reliance Industrial Investments and Holdings Limited
Reliance Power Ventures Limited
Reliance Ventures Limited
Reliance Strategic Investments Limited
Reliance Infocom B.V., Subsidiary till 20th October, 2004
Reliance Infocomm Inc., Subsidiary till 20th October, 2004
Reliance Communication Inc., Subsidiary till 20th October, 2004
Reliance Communications (UK) Limited, Subsidiary till 20th October, 2004
Reliance Communications International Inc., Subsidiary till 20th October, 2004
Reliance Communications (Canada) Inc., Subsidiary till 20th October, 2004
Reliance Netway Inc., Subsidiary till 20th October, 2004
Reliance Communications (Hongkong) Limited, Subsidiary till 20th October, 2004
Reliance Technologies LLC.
Reliance LNG Limited
Reliance Do Brasil Industria E Comercio De Produtos Texteis, Quimicos,
Petroquimicos E Derivados Ltda (Reliance Brazil LLC.)
Gas Transportation & Infrastructure Company Limited

Reliance Life Insurance Company Limited
Reliance General Insurance Company Limited
Reliance Capital Limited
Reliance Energy Limited
Reliance Infocomm Limited
Reliance Communications Infrastructure Limited
Reliance Telecom Limited
Reliance Industrial Infrastructure Limited
Reliance Europe Limited
Reliance Petroinvestments Limited
Reliance Rubber and Chemicals Private Limited
Indian Petrochemicals Corporation Limited
Reliance Enterprises Limited (upto 11th January, 2005)
Reliance Nutraceuticals Private Limited
Reliance Pharmaceuticals (India) Private Limited
Reliance Utilities and Power Limited
Reliance Ports and Terminals Limited
Rosche Trading Private Limited
Unincorporated Oil and Gas Joint Ventures

Shri Mukesh D. Ambani
Shri Anil D. Ambani
Shri Nikhil R. Meswani
Shri Hital R. Meswani
Shri H. S. Kohli

Dhirubhai Ambani Foundation
Jamnaben Hirachand Ambani Foundation
Dhirubhai Ambani Memorial Trust
Hirachand Govardhandas Ambani Public Charitable Trust
Dhirubhai Ambani Institute of Information and Communication Technology Trust
Dhirubhai Ambani Institute of Information and Communication Technology,
Gandhinagar

Relationship

Subsidiary Companies

Associate Companies
and Joint Ventures

Key Managerial
Personnel

Others

Subsidiaries Associates

Key
Managerial
Personnel

(Rs. in crore)

Others

Total

SCHEDULE ‘O’ (contd.)

(ii)

Transactions during the year with related parties :

Sr.
No.

Nature of Transactions
(Excluding reimbursements)

Debentures Issued
Balance as at 1st April, 2004

Issued during the year

Repaid during the year

Balance as at 31st March, 2005

Loans Taken
Balance as at 1st April, 2004

Taken during the year

Repaid during the year

Balance as at 31st March, 2005

Fixed Assets/Capital Work in Progress
Balance of Assets taken on Lease as at 1st April,2004

Balance of Assets taken on Lease as at 31st March,2005

Assets Purchased during the year

Assets sold during the year

Investments
Balance as at 1st April,2004

Purchased/adjusted during the year

Sold / redemption during the year

Balance as at 31st March, 2005

Premium Accrued on Investment in Preference Shares

Interest Accrued on Investments

Sundry Debtors as at 31st March,2005

-
(68.03)
-
(1,020.00)
-
(187.03)
-
(-)

1,147.00
(150.00)
4,290.02
(5,040.89)
3,837.02
(4,043.89)
1,600.00
(1,147.00)

6.81
(13.98)
2.74
(6.81)
23.56
(8.15)
1406.02
(-)

12,719.66
(4,641.55)
87.76
(8,100.00)
1,821.41
(82.99)
12,633.02
(12,719.66)
1,108.27
(197.58)
939.38
(732.02)
29.77
(135.70)

889.62
(879.57)
0.88
(10.05)
4.48
(-)
886.02
(889.62)
0.07
(-)
-
(18.36)

Loans and Advances

i) Loans Given
Balance as at 1st April,2004

Given during the year

Returned during the year

Balance as at 31st March, 2005

7,121.94
(6,716.12)
1,612.59
(561.23)
1,030.80
(155.41)
7,703.73
(7,121.94)

60.47
(83.41)
4,151.63
(6,872.06)
4,212.10
(6,895.00)
-
(60.47)

126 RELIANCE INDUSTRIES LIMITED

-
(68.03)
-
(1,020.00)
-
(187.03)
-
(-)

1,147.00
(150.00)
4,290.02
(5,040.89)
3,837.02
(4,043.89)
1,600.00
(1,147.00)

6.81
(13.98)
2.74
(6.81)
23.56
(8.15)
1,406.02
(-)

13,609.28
(5,521.12)
88.64
(8,110.05)
1,825.89
(82.99)
13,519.04
(13,609.28)
1,108.34
(197.58)
939.38
(750.38)
29.77
(135.70)

7,182.41
(6,799.53)
5,764.22
(7,433.29)
5,242.90
(7,050.41)
7,703.73
(7,182.41)

SCHEDULE ‘O’ (contd.)

Sr.
No.

Nature of Transactions
(Excluding reimbursements)

ii) Advances recoverable in cash or in kind
Balance as at 1st April,2004

Given during the year

Returned/Adjusted during the year

Balance as at 31st March,2005

iii) Deposit
Balance as at 1st April, 2004

Returned during the year

Balance as at 31st March, 2005

Sundry Creditors
Balance as at 31st March, 2005

Turnover

Other Income
Dividend

Interest Received

Premium Accrued on Investments in Preference Shares

Lease Rental Income

Service Income

Rent received

Miscellaneous Income

Purchases

Expenditure
Interest Paid

Payments to and provisions for Directors

Electric Power, Fuel and Water

Rent

Lease Rentals

Professional Fees

Charter Hire Charges

Insurance Premium

Subsidiaries Associates

Key
Managerial
Personnel

Growth is Life 127

(Rs. in crore)

Others

Total

-
(72.24)

-
(23.09)
0.07
(-)

124.42
(1,034.84)
15.23
(77.69)
69.56
(988.11)
70.09
(124.42)

1,153.09
(1,163.25)
14.08
(10.16)
1,139.01
(1,153.09)

261.31
(486.96)
3,798.04
(4,406.10)

20.40
(20.81)
228.69
(399.85)
910.69
(197.58)
7.40
(7.89)
158.30
(-)
35.81
(-)
31.86
(25.10)
828.02
(623.75)

102.81
(108.41)

349.39
(372.09)
89.73
(91.17)
5.14
(9.02)
16.82
(16.95)
30.15
(12.57)
56.74
(63.32)

55.19
(40.96)

124.42
(1,107.08)
15.23
(77.69)
69.56
(1,060.35)
70.09
(124.42)

1,153.09
(1,163.25)
14.08
(10.16)
1,139.01
(1,153.09)

261.31
(486.96)
3,798.04
(4,406.10)

20.40
(20.81)
228.69
(422.94)
910.76
(197.58)
7.40
(7.89)
158.30
(-)
35.81
(-)
31.86
(25.10)
828.02
(623.75)

102.81
(108.41)
55.19
(40.96)
349.39
(372.09)
89.73
(91.17)
5.14
(9.02)
16.82
(16.95)
30.15
(12.57)
56.74
(63.32)

SCHEDULE ‘O’ (contd.)

Sr.
No.

Nature of Transactions
(Excluding reimbursements)

Assignment of Liability

Hire Charges

Donations

Warehousing and Distribution Charges

Product Handling charges

General expenses

Guarantees Issued
Financial Guarantees

Performance Guarantees

Figure in bracket represents previous year’s amounts

Subsidiaries Associates

Key
Managerial
Personnel

(Rs. in crore)

Others

Total

-
(147.03)
55.90
(35.42)

646.15
(657.10)
87.46
(78.94)
63.14
(43.03)

196.20
(243.33)
201.94
(1,236.82)

0.39
(1.13)

8.49
(16.51)

0.13
(-)

-
(147.03)
55.90
(35.42)
8.49
(16.51)
646.15
(657.10)
87.46
(78.94)
63.66
(44.16)

196.20
(243.33)
201.94
(1,236.82)

Significant Related Party Transactions:
i.

ii.

Loan taken during the year includes from Reliance Communication Infrastructure Limited Rs. 2,735 crore and repaid Rs. 2,282
crore and Rs. 1,555.02 crore taken from and repaid to Reliance Capital Limited.
Fixed Assets purchased during the year includes from Reliance Industrial Infrastructure Limited Rs. 23.05 crore. Fixed Assets
sold during the year includes to Reliance Infocomm Limited Rs. 218.59 crore and to Reliance Communication Infrastructure
Limited Rs. 1187.44 crore.

iii. Sale of Investment includes to Reliance Capital Limited Rs. 117.37 crore; Reliance General Insurance Company Limited
Rs. 127.85 crore and to Reliance Energy Limited Rs. 1,488.92 crore. Purchase of Investments includes from Reliance General
Insurance Company Limited Rs. 19.91 crore; Reliance Energy Limited Rs. 14.99 crore and from Reliance Capital Limited
Rs. 52.86 crore. (Also refer to Schedule F to the Balance Sheet )

iv. Premium Receivable on Preference shares includes from Reliance Infocomm Limited Rs. 1108.27 crore.
v.
vi. Loans and Advances includes Rs. 1,106.55 crore given to Reliance Power Ventures Limited; repayment by Reliance Ventures

Interest Accrued on Investments includes from Reliance Communication Infrastructure Limited Rs. 939.38 crore.

Limited Rs. 494.05 crore and Rs. 4,151.63 crore given to and repaid by Reliance Capital Limited

vii. Turnover includes transactions with Reliance Communication Infrastructure Limited Rs. 1,109.40 crore and Indian Petrochemicals

Corporation Limited Rs. 2,633.53 crore.

viii. Other Income: Dividend Received includes from Reliance Capital Limited Rs. 17.43 crore. Interest received includes from Reliance
Communication Infrastructure Limited Rs. 207.34 crore; Reliance Capital Limited Rs. 19.16 crore. Premium on Redemption of
Preference Shares includes from Reliance Infocomm Limited Rs. 910.69 crore. Lease rental Income includes from Reliance
Communication Infrastructure Limited Rs. 5.36 crore; Reliance Infocomm Limited Rs. 2.04 crore. Service Income includes from
Indian Petrochemicals Corporation Limited Rs. 98.94 crore; Reliance Infocomm Limited Rs. 59.36 crore. Rent received includes
from Reliance Infocomm Limited Rs. 25.70 crore; Reliance Communication Infrastructure Limited Rs. 10.11 crore. Miscellaneous
Income includes from Reliance General Insurance Company Limited Rs. 8.27 crore; Reliance Telecom Limited Rs. 3.34 crore;
Reliance Port and Terminals Limited Rs. 8.23 crore; Indian Petrochemicals Corporation Limited Rs. 7.32 crore and Reliance
Energy Limited Rs. 3.85 crore.

ix. Expenditure: Purchases include from Reliance Capital Limited Rs. 281.04 crore, Indian Petrochemicals Corporation Limited
Rs. 546.98 crore. Interest Paid includes to Reliance Communication Infrastructure Limited Rs.95.23 crore. Payment to and
provisions for Directors include to Shri Mukesh D. Ambani Rs. 21.90 crore; Shri Anil D. Ambani Rs. 21.90 crore; Shri Nikhil R.
Meswani Rs. 5.59 crore and Shri Hital R. Meswani Rs. 5.59 crore. Electric, Power and Fuel includes to Reliance Utilities and
Power Limited Rs. 349.39 crore. Lease Rent includes to Reliance Capital Limited Rs. 5.14 crore. Rent includes to Reliance Port
and Terminals Limited Rs. 84.00 crore. Professional Fees includes to Reliance Europe Limited Rs. 16.82 crore. Charter Hire
charges include to Reliance Europe Limited Rs. 26.66 crore. Insurance Premium includes to Reliance General Insurance Company
Limited Rs. 56.74 crore. Hire charges includes to Reliance Ports and Terminals Limited Rs. 50.00 crore. Donation includes to
Dhirubhai Ambani Foundation Rs. 7.56 crore. Warehousing and Distribution Charges includes to Reliance Port and Terminals
Limited Rs. 646.15 crore. Product handling charges includes to Reliance Ports and Terminals Limited Rs. 87.46 crore. General
Expenses includes to Reliance Communication Infrastructure Limited Rs. 40.33 crore; Reliance Infocomm Limited Rs. 16.68
crore and to Reliance Industrial Infrastructure Limited Rs. 6 crore.
Financial Guarantees include for Reliance Europe Limited Rs. 87.49 crore; Reliance Telecom Limited Rs. 108.71 crore. Performance
Guarantee include for Reliance Infocomm Limited Rs. 180.55 crore and Reliance Telecom Limited Rs. 16.37 crore.

128 RELIANCE INDUSTRIES LIMITED

SCHEDULE ‘O’ (contd.)

13. Loans and advances in the nature of Loans given to Subsidiaries and Associates etc:

A) Loans and Advances in the nature of Loans

Sr. No. Name of the Company

As at
31st March, 2005

As at
31st March, 2004

Growth is Life 129

(Rs. in crore)
Maximum
Balance during
the year
794.22

Reliance Industrial Investments & `

Subsidiary

753.78

794.22

Holdings Limited

Reliance Ventures Limited

Reliance Power Ventures Limited

Gas Transportation & Infrastructure
Company Limited

Subsidiary

Reliance Industrial Infrastructure Limited

Associate

Recron Synthetics Limited

Other

4,406.87

2,503.05

40.03

132.20

4,900.92

1,396.50

30.30

60.47

132.20

4,921.39

2,553.03

40.03

60.47

132.20

Loans and Advances shown above, to Subsidiaries fall under the category of ‘Loans & Advances in nature of Loans
where there is no repayment schedule’.
Loans and Advances to Recron Synthetics Limited is at zero percent repayable in 2013 and not before repayment by
loanee of all its secured loans.
Inter Corporate Deposits are not considered as they are repayable on demand and interest is charged at market rates.
Loans to employees as per Company’s policy are not considered.

Investment by the loanee in the shares of the company
*None of the loanees have, per se, made investments in shares of the Company. However the following companies have
been allotted shares of the company as a result of amalgamation of Reliance Petroleum Limited with the company under the
scheme approved by the Hon’ble High Courts of Bombay and Gujarat.

c
d

Notes :
a

Sr. No.

Name of the Company

*Reliance Industrial Investments & Holdings Limited,
* sole beneficiary of Petroleum Trust

*Reliance Chemicals Private Limited

*Reliance Aromatics & Petrochemicals Private Limited

*Reliance Energy & Project Development Private Limited

*Reliance Polyolefins Private Limited

*Reliance Industrial Infrastructure Limited

14.

(a) Disclosure of the Company’s Interest in Oil and Gas Joint Ventures as at 31st March, 2005 :

Sr. No.

Name of the Fields
In the Joint Ventures

% Interest

Sr. No.

Name of the Fields
In the Joint Ventures

Panna Mukta

Tapti

NEC-OSN-97/2

KG-DWN-98/3

GS-OSN-2000/1

GK-OSJ-3

GK-OS-5

30%(30%)

90%(90%)

60%(60%)

40%(40%)

GK-ON-90/2

CB-ON/1

AS-ONN-2000/1

KG-DWN-2001/1

Yemen (Block 9)

NEC-DWN-2002/1

Figures in bracket represents previous year’s % interest.

No. of Shares

Amount

(Rs. in crore)

104,660,155

1,654.96

14,568,373

16,029,091

19,090,909

86,000

320.50

339.42

420.00

1.12

% Interest

40%(40%)

90%(90%)

25%(25%)

90%(90%)

SCHEDULE ‘O’ (contd.)

(b) Net Quantities of an enterprise’s interest in proved reserves and proved developed reserves within India:

Oil:
Beginning of the year
Additions
Deletion
Production
Closing balance for the year

Gas:
Beginning of the year
Additions
Deletion
Production
Closing balance for the year

Proved Reserves
(Million MT)

Proved Developed
Reserves (Million MT)

2004-05

2003-04

2004-05

2003-04

5.18
0.95
Nil
0.43
5.70

4.97
0.61
Nil
0.40
5.18

Proved Reserves
(Million M3)*

2004-05

136,437
37,225
Nil
1,036
172,626

2003-04

82,724
54,616
Nil
903
136,437

3.62
0.93
Nil
0.43
4.12

4.02
Nil
Nil
0.40
3.62

Proved Developed
Reserves (Million M3)*
2004-05

2003-04

13,380
2,132
Nil
1,036
14,476

13,133
1,150
Nil
903
13,380

* 1 cubic meter = 35.315 cubic feet and 1 cubic feet = 1000 BTU

Proved Reserves
(Million MT)

Proved Developed
Reserves (Million MT)

Oil:
Beginning of the year 2004-05
Additions
Deletion
Production
Closing balance for the year 2004-05

Nil
1.28
Nil
Nil
1.28

Nil
Nil
Nil
Nil
Nil

15. As per Accounting Standards 21 on “Consolidated Financial Statements” and Accounting Standard 23 on “Accounting for
Investments in Associates in Consolidated Financial Statements” issued by the Institute of Chartered Accountants of India, the
Company has presented consolidated financial statements separately including subsidiaries and associates, in this annual report.

16. PROJECT DEVELOPMENT EXPENDITURE

(in respect of Projects upto 31st March, 2005, included under Capital work-in-progress)

Opening Balance

Add: Project Development Expenditure transferred from

2004-05

112.62

(Rs. in crore)

2003-04

76.47

Profit and Loss Account

Interest Capitalised

9.60

296.69

26.43

143.75

Less: Project Development Expenses Capitalised during the year

Closing Balance

130 RELIANCE INDUSTRIES LIMITED

306.29

418.91

193.27

225.64

170.18

246.65

134.03

112.62

SCHEDULE ‘O’ (contd.)

17. ADDITIONAL INFORMATION

(A) Estimated amount of contracts remaining to be executed on

Capital accounts and not provided for:

(i)

In respect of joint ventures

(ii) In respect of others

(B) Uncalled liability on partly paid Shares

(Rs.19,935, Previous Year Rs. 19,935)

(i) Outstanding guarantees furnished to Banks

and Financial Institutions including in respect of Letters of credit

(a)

In respect of joint ventures

(b)

In respect of others

(ii) Guarantees to Banks and Financial

Institutions against credit facilities extended to third parties

(a) In respect of joint ventures

(b) In respect of others

(iii) Liability in respect of bills discounted with Banks

(a)

In respect of joint ventures

(b)

In respect of others

(iv) Claims against the Company / disputed liabilities

not acknowledged as debts

(a)

In respect of joint ventures

(b)

In respect of others

(v) Performance Guarantees

(a)

In respect of joint ventures

(b)

In respect of others

(vi) Sales tax deferral liability assigned

Growth is Life 131

(Rs. in crore)

As at
31st March, 2005

As at
31st March, 2004

633.20

3,313.97

39.99

1,740.60

2,003.52

496.79

651.81

52.55

195.05

517.61

208.82

5,333.82

243.33

588.87

158.95

400.77

35.79

1,277.94

5,036.31

(D) The Income-Tax assessments of the Company have been completed up to Assessment Year 2002-2003. The disputed
demand outstanding up to the said Assessment Year is Rs. 190.71 crore. Based on the decisions of the Appellate authorities
and the interpretations of other relevant provisions, the Company has been legally advised that the demand is likely to be
either deleted or substantially reduced and accordingly no provision has been made.

SCHEDULE ‘O’ (contd.)

18. LICENSED AND INSTALLED CAPACITY

(As certified by the Management)

Refining of Crude Oil

UNIT

Mill. MT

Ethylene

Propylene

iii Benzene

Toluene

Xylene

vi Butadine & Other C4s

C i

Paraxylene

ii Orthoxylene

iii

Toluole

D i

Mono Ethylene Glycol

Higher Ethylene Glycol

iii Ethylene Oxide

Poly Vinyl Chloride

High/Linear Low Density Poly Ethylene

High Density Polyethylene Pipes

Polypropylene

Purified Terephthalic Acid

Polyester Filament Yarn/Polyester Chips

Polyester Staple Fibre/ Polyester Chips

Poly Ethylene Terephthalate

Polyester Staple Fibre Fill

Man-made Fibre Spun Yarn on worsted system Nos

Man-made fibre on cotton system (Spindles)

Man-made Fabrics (Looms)

Knitting M/C

Linear Alkyl Benzene

Nos

Licensed Capacity

Installed Capacity

2004-05

2003-04

2004-05

2003-04

N.A.

750,000*

750,000

365,000*

365,000

291,000*

345,000

197,000*

197,000

165,000*

165,000

225,000*

225,000

1,646,000*

1,646,000

150,000*

175,000

N.A.

180,000

300,000*

475,000

300,000

37,500*

50,000*

37,500

50,000

37,500

50,000

N.A.

325,000

300,000

450,000

80,000

N.A.

1,150,000

1,100,000

N.A.

1,350,000

N.A.

197,300 +

N.A.

300,000

290,000

30,000

24,094

23,040

305

80,000

30,000

24,094

23,040

323

115,000

NA - Delicensed vide notification No 477(E) dated 27th July 1991 and press note No 1 (1998 series) dated 8th June, 1998
+ Includes 32,300 MT based on average denier of 40
* Licensed Capacity is reduced for delicensed products, for which Letter of Intents are held, vide notification No. 431 dated 28th June, 2001.

19.

(a) The Ministry of Company Affairs, Government of India vide its Order No. 46/38/2005-CL-III dated 21st March, 2005 issued
under Section 211(4) of the Companies Act, 1956 has exempted the Company from disclosure of quantitative details in the
Profit and Loss Account under paras 3(i)(a), 3(ii)(a) (1) & (2), 3(ii)(b) of Part II, Schedule VI to the Companies Act,1956.

(b) The Ministry of Company Affairs, Government of India vide its Order No.47/25/2005-CL-III dated 21st March 2005 issued
under section 212 (8) of the Companies Act, 1956 has exempted the Company from attaching the Balance Sheet and Profit
and Loss Account of Subsidiaries under Section 212 (1) of the Companies Act, 1956. As per the order, key details of each
subsidiary is attached along with the statement under section 212 of the Companies Act, 1956.

132 RELIANCE INDUSTRIES LIMITED

SCHEDULE ‘O’ (contd.)

20. PRODUCTION MEANT FOR SALE:

Products

Crude Oil

Gas

Petroleum Products

Ethylene

Propylene

Benzene

Toluene

Xylene

Orthoxylene

Paraxylene

Ethylene Glycol

PVC

PTA

Polyester Filament Yarn

Polyester Staple Fibre

PSF Spun Yarn

ASF Spun Yarn

PET

Fibre Fill

Fabrics

Normal Paraffin

LAB

Unit

BBTU

‘000 MT

Mtrs. in Lacs

Production meant for Sale includes production through Toll Conversion, wherever applicable.

21. VALUE OF IMPORTS ON CIF BASIS IN RESPECT OF

Raw Materials

Stores & spares, Chemicals and Packing Materials

Capital goods

22. EXPENDITURE IN FOREIGN CURRENCY

Interest on foreign currency loans

Premium on Redemption of Debentures/ Bonds

Technical know-how and engineering fees

Oil and gas activity

Professional fees

Freight and forwarding

Other matters

Growth is Life 133

2004-05

2003-04

383,018

34,502

24,819

5,687

350,890

114,901

56,203

145,565

571,510

223,984

327,269

414,956

353,173

29,457

23,662

3,138

343,810

106,014

52,932

205,932

564,364

222,615

314,515

449,305

1,165,769

1,092,581

558,047

347,566

340,144

1,286

172

146,060

29,791

195.50

21,423

603,949

314,531

327,012

78,001

27,854

166.96

24,250

120,184

116,815

(Rs. in crore)

2004-05

2003-04

39,578.32

29,639.77

714.34

642.29

706.25

2,731.13

(Rs. in crore)

2004-05

2003-04

414.76

242.04

1,311.05

153.49

286.79

194.16

295.75

8.26

151.44

739.28

195.86

255.77

145.44

SCHEDULE ‘O’ (contd.)

23. VALUE OF RAW MATERIALS CONSUMED

Imported
Indigenous

Rs. in
crore

39,972.02
3,603.30

43,575.32

2004-05

2003-04

% of
Consumption

Rs. in
crore

% of
Consumption

91.73
8.27

100.00

31,006.23
1,496.88

32,503.11

95.39
4.61

100.00

24. VALUE OF STORES, CHEMICALS AND PACKING MATERIALS CONSUMED

2004-05

2003-04

Rs. in
crore

667.97

818.20

1,486.17

% of
Consumption

44.94

55.06

100.00

Rs. in
crore

702.57

560.80

1,263.37

% of
Consumption

55.61

44.39

100.00

Imported

Indigenous

25. EARNINGS IN FOREIGN EXCHANGE

FOB value of exports

Interest (Previous year Rs. 3,969)

Others

26. EXPENDITURE ON RESEARCH AND DEVELOPMENT

Revenue expenditure including amortisation of deferred cost and

unamortised deferred research & development Expenditure

Capital expenditure on research & development

TOTAL

(Rs. in crore)

2004-05

2003-04

23,741.33

11,817.54

0.01

4.12

6.01

(Rs. in crore)

2004-05

2003-04

40.26

21.06

61.32

19.09

14.50

33.59

27. REMITTANCE IN FOREIGN CURRENCY ON ACCOUNT OF DIVIDEND

2004-05

2003-04

The Company has paid dividend in respect of shares held by Non – residents on

repatriation basis. This inter-alia includes portfolio investment and direct

investment, where the amount is also credited to Non- Resident External Account

(NRE A/c). The exact amount of dividend remitted in foreign currency cannot be

ascertained. The total amount remittable in this respect is given herein below:

a) Number of Non Resident Shareholders

b) Number of Equity Shares held by them

16,985

18,333

31,67,81,817

22,14,94,589

(i) Amount of Dividend Paid (Gross) (Rs. in crore)

166.31

110.75

Tax Deducted at Source Rs. Nil (Previous year Rs.Nil)

(ii) Year to which dividend relates

2003-2004

2002-2003

134 RELIANCE INDUSTRIES LIMITED

SCHEDULE ‘O’ (contd.)

28 BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE

I. Registration Details

Registration No.

Balance Sheet Date:

II. Capital Raised during the year (Amount Rs. crore)
N I

Public Issue:

Bonus Issue:

Conversion of Bonds:

N I

State Code:

Rights Issue:

Private Placement:

III. Position of Mobilisation and Deployment of Funds (Amount Rs. crore)

Total Assets:

Total Liabilities :

Sources of Funds

Paid-up Capital:

Secured Loans:

Deferred Tax Liability :

Application of Funds

Net Fixed Assets :

Net Current Assets :

IV. Performance of Company (Amount Rs. crore)

Turnover :

Net Turnover:

Profit Before Tax:

Earnings per share in Rs.

Reserves & Surplus:

Unsecured Loans:

Investments:

Miscellaneuos Expenditure

Total Expenditure :

Profit After Tax:

Dividend : Rs. per share

Growth is Life 135

N I

V. Generic Names of Three Principal Products of Company (as per monetary terms)

Item Code No. (ITC Code):

Product Description:

B U L K

P E T R O L E U M

P R O D U C T S

Item Code No. (ITC Code):

0
Product Description:

2 1

P O L Y P R O P Y L E N E

( P P

)

Item Code No. (ITC Code):

0
Product Description:

2 .

P O L Y E S T E R

F I

L A M E N T

Y A R N

( P F Y )

As per our Report of even date

For and on behalf of the Board

For Chaturvedi & Shah
Chartered Accountants

For Rajendra & Co.
Chartered Accountants

D. Chaturvedi
Partner

Mumbai
April 27, 2005

R. J. Shah
Partner

M. D. Ambani

N. R. Meswani
H.R. Meswani
H. S. Kohli

R. H. Ambani
M. L. Bhakta
Y. P. Trivedi
Dr. D. V. Kapur
M. P. Modi
S. Venkitaramanan

V. M. Ambani

}

Chairman & Managing Director

Executive Directors

Directors

Company Secretary

Cash Flow Statement for the year 2004-05

A: CASH FLOW FROM OPERATING ACTIVITIES :

Net Profit before tax as per Profit and Loss Account

9,068.68

6,301.14

Notes

2004-05

2003-04

(Rs. in crore)

Adjusted for:

Miscellaneous Expenditure written off

Net Prior Year Adjustments

Investment written off / Provided

Provision for doubtful claims

(Profit) / Loss on Sale / Discarding of Assets

Depreciation

Transferred from General Reserve

Effect of Exchange Rate Change

Profit on Sale of Investments

Dividend Income

Interest / Other Income

Interest Expenses

2.86

2.94

69.88

8.92

3,784.57

(61.07)

116.42

(47.17)

(20.40)

(1,279.37)

1,468.66

47.15

2.18

12.60

3,331.39

(84.37)

22.34

(101.67)

(25.84)

(881.41)

1,434.72

Operating Profit before Working Capital Changes

4,046.24

13,114.92

3,757.09

10,058.23

Adjusted for:

Trade and Other Receivables

Inventories

Trade Payables

Cash Generated from Operations

Net Prior Year Adjustments

Taxes Paid

Net Cash from Operating Activities

B: CASH FLOW FROM INVESTING ACTIVITIES:

Purchase of Fixed Assets

Sale of Fixed Assets

Purchase of Investments

Sale of Investments

Movement in Loans

Interest Income

Dividend Income

1,739.76

(181.66)

3,129.42

(257.88)

279.19

2,005.20

4,687.52

17,802.44

(2.86)

(511.00)

17,288.58

(5,244.01)

1,597.73

(40,849.25)

37,813.43

(1,783.41)

282.77

20.40

2,026.51

12,084.74

(2.18)

(305.00)

11,777.56

(4,319.08)

8.84

(37,255.52)

30,108.51

303.99

564.35

25.84

Net Cash Used in Investing Activities

(8,162.34)

(10,563.07)

136 RELIANCE INDUSTRIES LIMITED

Cash Flow Statement for the year 2004-05 (Contd.)

Growth is Life 137

Notes

2004-05

(Rs. in crore)

2003-04

C: CASH FLOW FROM FINANCING ACTIVITIES:

Proceeds from Issue of Share Capital (Net)

Buyback of Equity Shares

Proceeds from Long Term Borrowings

Repayment of Long Term Borrowings

Short Term Loans

Dividends Paid

Interest Paid

Net Cash Used in Financing Activities

Net Increase / (Decrease) in Cash and Cash Equivalents

Opening Balance of Cash and Cash Equivalents

Closing Balance of Cash and Cash Equivalents

0.07

(149.61)

7,149.70

(7,731.66)

(2,282.52)

(826.79)

(1,900.88)

(5,741.69)

3,384.55

224.24

3,608.79

0.27

1,835.00

(4,713.11)

3,945.21

(783.84)

(1,420.99)

(1,137.46)

77.03

147.21

224.24

As per our Report of even date

For and on behalf of the Board

For Chaturvedi & Shah
Chartered Accountants

For Rajendra & Co.
Chartered Accountants

D. Chaturvedi
Partner

Mumbai
April 27, 2005

R. J. Shah
Partner

M. D. Ambani

N. R. Meswani
H.R. Meswani
H. S. Kohli

R. H. Ambani
M. L. Bhakta
Y. P. Trivedi
Dr. D. V. Kapur
M. P. Modi
S. Venkitaramanan

V. M. Ambani

}

Chairman & Managing Director

Executive Directors

Directors

Company Secretary

Notes On Cash Flow Statement for the year 2004-05

Sr. No.

Particulars

Effect of Exchange Rate Change

Unrealised Foreign exchange Loss on revaluation of Creditors

Unrealised Foreign exchange gain on revaluation of Debtors

Unrealised Foreign exchange Loss on revaluation of Loans

Total

Purchase of Fixed Assets

Additions as per Schedule ‘E’

Movement in CWIP

Adjusted for Interest Capitalised

Reduction in Creditors for Capital Expenditure

Exchange gain de-capitalised

Total

Sale of Fixed Assets

Deductions from Gross Block

Cummulative Depreciation on Deductions

Net Loss on Sale / Discarding of Assets

Reduction in Liability for Leased assets

Withdrawal from Revaluation Reserve

Total

Purchase of Investments

Increase in Long Term Investments

Increase in Current Investments

Movement in Investments (Purchased & sold during the year)

Total

Sale of Investments

Decrease in Long Term Investments

Decrease in Current Investments

Movement in Investments (Purchased & sold during the year)

Profit on Sale of Investments

Total

138 RELIANCE INDUSTRIES LIMITED

(Rs. in crore)

Amount

95.75

(31.63)

52.30

116.42

(3,862.77)

(1,472.48)

296.69

(151.08)

(54.37)

(5,244.01)

2,239.86

(625.48)

(8.92)

(4.08)

(3.65)

1,597.73

(0.93)

(3,509.26)

(37,339.06)

(40,849.25)

161.12

266.08

37,339.06

47.17

37,813.43

Notes On Cash Flow Statement for the year 2004-05 (Contd.)

Growth is Life 139

Sr. No.

Particulars

Movement in Loans

Increase in Loans to Subsidiary Companies

Movement in Advances to Associates / Affiliates

Total

Proceeds from Long Term Borrowings

Movement in Long Term loans

Adjustment for Exchange Difference

Total

Repayment of Long Term Borrowings

Debentures

Deep Discount Debentures

Foreign Currency Loan from Banks

Premium on Redemption of Debentures/Bonds

Total

Movement in Short Term Loans

Reduction in Short term Secured Loans

Reduction in Short term Unsecured Loans

Reduction in Liability for Bills Discounted

Total

10)

Dividends Paid

Proposed Dividend (incl. Tax) - Equity Shares

Increase in Unclaimed Dividend On Equity Shares

Tax on Dividend for earlier years

Total

11)

Interest Paid

Interest as per Profit & Loss account

Interest capitalised

Movement in interest payable

Total

(Rs. in crore)

Amount

(581.79)

(1,201.62)

(1,783.41)

7,045.23

104.47

7,149.70

(2,233.83)

(600.00)

(4,687.16)

(210.67)

(7,731.66)

(656.20)

(1,090.01)

(536.31)

(2,282.52)

(824.74)

2.11

(4.16)

(826.79)

(1,468.66)

(296.69)

(135.53)

(1,900.88)

Statement Pursuant to Section 212 of the Companies Act,1956,
relating to Company’s Interest in Subsidiary Companies for the financial year 2004-05

Name of Subsidiary
Company

Reliance
Industrial
Investments &
Holdings
Limited

Reliance
Ventures
Limited

Reliance
Power
Ventures
Limited

Reliance
Strategic
Investments
Limited

Reliance
LNG
Limited

Gas
Transportation
and Infrastructure
Company Limited

Reliance
Technologies
LLC.

Reliance Do
Brasil Industria E
Commercio De
Portudos Texteis,
Quimicos,
Petroquimicos E
Derivados Ltda
(Reliance Brazil LLC.)

The Financial Year of
the Subsidiary Companies
ended on

Date from which they
became Subsidiary
Companies

31-3-2005

30-12-1988

7-10-1999

13-5-2000

28-12-2001

2-1-2002

19-3-2003

2-5-2000

14-12-2004

a. Number of shares held by

Reliance Industries Ltd. with its
nominees in the subsidiaries at
the end of the financial year of
the Subsidiary Companies

14,75,04,400
Equity Shares of
the face value of
Rs.10 each
fully paid-up

20,20,000
Equity Shares of
the face value of
Rs.10 each
fully paid-up

20,20,200
Equity Shares of
the face value of
Rs.10 each
fully paid-up

45,000
Equity Shares of
the face value of
Rs.10 each
fully paid-up

50,000
Equity Shares of
the face value of
Rs.10 each
fully paid-up

NIL

2,00,000
Equity Shares of
the face value of
Reais 1 each
fully paid-up

100%

90%

100%

90%

100%

Rs. 5702.29 Lakhs Rs. 2.24 Lakhs

Rs. 3170.90 Lakhs (Rs. 0.40 Lakhs)

Rs. 0.04 Lakhs

Not Applicable

(US $ 2284)
(Rs. 1 Lakh)

Reais 16498
Rs. 2.69 Lakhs

Rs. 16157.33 Lakhs (Rs. 243.11 Lakhs) Rs. 4785.46 Lakhs (Rs. 0.34 Lakhs)

(Rs. 0.08 Lakhs)

Not Applicable

(US $ 3552287)
(Rs. 1553.95 Lakhs)

Not Applicable

NIL

Not Applicable

NIL

Not Applicable

NIL

Not Applicable

For and on behalf of the Board

M. D. Ambani

N. R. Meswani
H.R. Meswani
H. S. Kohli

R. H. Ambani
M. L. Bhakta
Y. P. Trivedi
Dr. D. V. Kapur
M. P. Modi
S. Venkitaramanan

V. M. Ambani

}

Chairman & Managing Director

Executive Directors

Directors

Company Secretary

b. Extent of Interest of holding
Company at the end of
the financial year of
the Subsidiary Companies

The net aggregate amount of
the Subsidiary Companies
Profit / (Loss) so far as it
concerns the members of
the Holding Company

a. Not dealt with in the Holding
Company’s accounts:
i)

For the financial year
ended 31st March, 2005

ii)

For the previous
Financial years of
the Subsidiary
Companies
since they became
the Holding Company’s
subsidiaries

b. Dealt with in Holding
Company’s accounts:
i)

For the financial year
ended 31st March, 2005

NIL

ii)

For the previous
Financial years of
the Subsidiary Companies Rs. 2673.89 Lakhs NIL
since they became
the Holding Company’s
subsidiaries

Figures in bracket represent losses.

Mumbai
April 27, 2005

140 RELIANCE INDUSTRIES LIMITED

Details of Subsidiary Companies

Growth is Life 141

Name of Subsidiary
Company

Reliance
Industrial
Investments &
Holdings
Limited

Reliance
Ventures
Limited

Reliance
Power
Ventures
Limited

Reliance
Strategic
Investments
Limited

Reliance
LNG
Limited

Gas
Transportation
and Infrastructure
Company Limited

Reliance
Technologies
LLC.

(Rs. in crore)

Reliance Do
Brasil Industria E
Commercio De
Portudos Texteis,
Quimicos,
Petroquimicos E
Derivados Ltda
(Reliance Brazil LLC.)

Capital

147.50

2.12

2.02

0.05

17.74

0.91

Reserves

220.10

7.49

79.57

(0.02)

(17.28)

0.03

Total Assets

1,875.36

4,416.48 2,600.90

6.47

0.05

40.08

0.47

0.94

$ (3,949,524)

Reais 17,867

$ 4,055,555

Reais 556,400

Total Liabilities

1,875.36

4,416.48 2,600.90

6.47

0.05

40.08

0.47

0.94

$ 107,106

Reais 574,267

Investments

1,874.03

1,414.63 2,600.94

2.02

Turnover / Total Income

61.68

0.04

31.79

Profit before taxation

57.02

0.02

31.77

Provision for Taxation

0.07

Profit after Taxation

57.02

0.02

31.70

10 Proposed Dividend

$ 107,106

Reais 574,267

$ 1

0.04

$ 1,063

(0.01)

Reais 22,654

0.04

$ (2,538)

Reais 21,708

(0.01)

0.01

Reais 5,210

0.03

$ (2,538)

Reais 16,498

Exchange Rate as on 31.03.2005 : 1 US$ = Rs. 43.745, 1 Reais = Rs. 16.3288

Notes:

1.
2.

The Company owns 100% interest in all its major Subsidiaries.
The Company’s significant transactions with its Subsidiaries relate to investments made and loans and advances given for strategic
investments in associates.

3. During the year the rate of interest has been reduced to zero percent in case of Optionally convertible debentures of Rs. 279.90 crore

in 100% Subsidiary Reliance Industrial Investments and Holdings Limited.

4. Company’s investments, loans and advances to Subsidiaries as on 31st March 2005 aggregate to Rs. 8,589.75 crore.
5.

The Company's investments, loans and advances to Subsidiaries and the internal accruals of Subsidiaries are deployed directly /
indirectly by the Subsidiaries as follows:

Investments in Reliance Energy Limited
Loans to Reliance Petroinvestments Limited for investment in Indian Petrochemicals Corporation Limited
Interest in Petroleum Trust (Holding equity shares of Reliance Industries Limited issued to it pursuant to
amalgamation of erstwhile Reliance Petroleum Limited into Reliance Industries Limited in 2001-02)
Zero Coupon Optionally Convertible Debentures of Reliance Polyolefins Private Limited
Zero Coupon Optionally Convertible Debentures of Reliance Chemicals Private Limited
Zero Coupon Optionally Convertible Debentures of Reliance Aromatics and Petrochemicals Private Limited
Zero Coupon Optionally Convertible Debentures of Reliance Energy and Project Development Private Limited
Investment in Reliance Telecom Limited
Other investments
Other assets
Total Assets

Please also refer Note 13 of Schedule ‘O’ of the notes to accounts.

Rs in crore
2,815.83
2,579.09
1,654.96

401.39
305.80
323.97
323.96
52.59
13.12
470.04
8,940.75

Consolidated Financial
Statements and Notes

Auditors' Report on
Consolidated Financial Statements

TO THE BOARD OF DIRECTORS

RELIANCE INDUSTRIES LIMITED

We have examined the attached Consolidated Balance Sheet of Reliance

Industries Limited (“the Company”) and its subsidiaries as at 31st March, 2005,

and the Consolidated Profit and Loss Account for the year then ended annexed

thereto and the Consolidated Cash Flow Statement for the year ended on that

date. These financial statements are the responsibility of the Company’s

Management. Our responsibility is to express an opinion on these financial

statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards

in India. These Standards require that we plan and perform the audit to obtain

reasonable assurance whether the financial statements are prepared, in all

material respects, in accordance with an identified financial reporting framework

and are free of material misstatements. An audit includes, examining on a test

basis, evidence supporting the amounts and disclosures in the financial

statements. An audit also includes assessing the accounting principles used and

significant estimates made by management, as well as evaluating the overall

financial statements. We believe that our audit provides a reasonable basis for our

opinion.

We did not audit the financial statements of certain subsidiaries, whose financial

statements reflect total assets (net) of Rs. 1.42 crore as at 31st March, 2005 and

total revenues of Rs. 546.62 crore for the year then ended. We also did not audit

the financial statements of certain associates, in which the share of profit of the

142 RELIANCE INDUSTRIES LIMITED

Growth is Life 143

Company is Rs. 1.35 crore. These financial statements have been audited by other

auditors whose reports have been furnished to us, and our opinion, in so far as it

relates to the amounts included in respect of these subsidiaries/associates, is

based solely on the report of the other auditors.

We report that the consolidated financial statements have been prepared by the

Company in accordance with the requirements of Accounting Standard (AS) 21,

Consolidated Financial Statements, issued by the Institute of Chartered

Accountants of India and on the basis of the separate audited financial statements

of the Company and its subsidiaries included in the consolidated financial

statements.

On the basis of the information and explanations given to us and on the

consideration of the separate audit reports on individual audited financial

statements of the Company and its subsidiaries, we are of the opinion that the said

consolidated financial statements give a true and fair view in conformity with the

accounting principles generally accepted in India:

(a)

in the case of the Consolidated Balance Sheet, of the consolidated state

of affairs of the Company and its subsidiaries as at 31st March, 2005;

(b)

in the case of the Consolidated Profit and Loss Account, of the

consolidated results of operations of the Company and its subsidiaries for

the year then ended and

(c)

in the case of the Consolidated Cash Flow Statement, of the consolidated

cash flows of the Company and its subsidiaries for the year then ended.

For Chaturvedi & Shah
Chartered Accountants

D. Chaturvedi
Partner
Membership No. : 5611

Mumbai
April 27, 2005

For Rajendra & Co.
Chartered Accountants

R. J. Shah
Partner
Membership No. : 7586

Consolidated Balance Sheet as at 31st March, 2005

Schedule

As at
31st March, 2005

SOURCES OF FUNDS

Shareholders’ Funds
Share Capital
Reserves and Surplus

Minority Interest
Loan Funds
Secured Loans
Unsecured Loans

Deferred Tax Liability

TOTAL

APPLICATION OF FUNDS

Fixed Assets
Gross Block
Less: Depreciation
Net Block
Capital Work -in -Progress

Investments
In Associates
In Others

Current Assets, Loans and Advances
Current Assets
Inventories
Sundry Debtors
Cash and Bank Balances
Other Current Assets

Loans and Advances

Less: Current Liabilities and Provisions

Current Liabilities
Provisions

Net Current Assets

Miscellaneous Expenditure
[to the extent not written off or adjusted]

TOTAL

Significant Accounting Policies
Notes on Accounts

1,393.09
39,700.58

8,005.40
10,811.69

55,127.49
24,873.37
30,254.12
4,870.57

16,533.77
6,550.20

7,412.88
3,927.81
3,610.72
1,453.31
16,404.72
6,697.21
23,101.93

13,286.46
3,846.52
17,132.98

‘A’
‘B’

‘C’
‘D’

‘E’

‘F’

‘G’

‘H’

‘M’
‘N’

41,093.67
0.05

18,817.09
4,266.82
64,177.63

(Rs. in crore)
As at
31st March, 2004

35,017.55
0.16

21,016.77
3,474.84
59,509.32

1,395.95
33,621.60

11,479.18
9,537.59

53,573.85
21,717.95
31,855.90
3,388.19

35,124.69

35,244.09

15,047.39
3,381.36

23,083.97

18,428.75

7,231.22
3,271.56
270.88
728.22
11,501.88
7,449.02
18,950.90

10,444.72
2,671.09
13,115.81

5,968.95

0.02

5,835.09

1.39

64,177.63

59,509.32

As per our Report of even date

For and on behalf of the Board

For Chaturvedi & Shah
Chartered Accountants

For Rajendra & Co.
Chartered Accountants

D. Chaturvedi
Partner

Mumbai
April 27, 2005

R. J. Shah
Partner

144 RELIANCE INDUSTRIES LIMITED

M. D. Ambani

N. R. Meswani
H.R. Meswani
H. S. Kohli

R. H. Ambani
M. L. Bhakta
Y. P. Trivedi
Dr. D. V. Kapur
M. P. Modi
S. Venkitaramanan

V. M. Ambani

}

Chairman & Managing Director

Executive Directors

Directors

Company Secretary

Consolidated Profit and Loss Account for the year ended 31st March, 2005
(Rs. in crore)

Schedule

2004-05

2003-04

Growth is Life 145

INCOME

Turnover
Less: Excise Duty Recovered on Sales
Net Turnover
Other Income (including Share in Associates)
Variation in Stocks

EXPENDITURE

Purchases
Manufacturing and Other Expenses
Interest
Depreciation
Less : Transferred from General Reserve
[Refer Note 7, Schedule ‘N’]

‘I’
‘J’

‘K’
‘L’

Profit Before Tax and Extra Ordinary Expenditure

Add:Profit on sale of subsidiaries on Consolidation

Profit Before Tax

Provision for Current Tax
Provision for Deferred Tax

Profit after Tax (before adjustment for Minority Interest)

Add: Share of Loss transferred to Minority

Profit after Tax (after adjustment for Minority Interest)
Add:Balance brought forward from Previous year

Exchange Difference on account of opening Reserves
Dividend adjustment on consolidation
Reserve Adjustment on sale of subsidiaries
Taxation Reserve Written Back
Taxation for Earlier Years
Debenture Redemption Reserve Written Back
Investment Allowance (utilised) Reserve Written Back

Amount Available for Appropriations

APPROPRIATIONS

Debenture Redemption Reserve
Statutory Resereve
General Reserve
Proposed Dividend on Equity Shares
Tax on Dividend
Tax on Dividend for earlier years

Balance Carried to Balance Sheet

Basic and Diluted Earning per Share of Rs 10 each (in Rupees)
[Ref. Note 12, Schedule ‘N’]
Significant Accounting Policies
Notes on Accounts

‘M’
‘N’

73,710.46
7,112.80

56,470.84
4,445.50

66,597.66
1,499.70
(524.35)
67,573.01

2,356.55
50,920.21
1,474.07

3,788.43
61.07

3,335.18
84.37

3,727.36
58,478.19
9,094.82
30.63
9,125.45
705.22
792.00
7,628.23
-
7,628.23
5,773.64
-
54.95
(6.52)
-
0.32
-
-
13,450.62

52,025.34
1,156.80
(605.41)
52,576.73

2,419.81
39,156.37
1,439.67

3,250.81
46,266.66
6,310.07
-
6,310.07
351.06
790.02
5,168.99
-
5,168.99
3,470.41
3.95
52.33
-
10.00
(23.03)
850.00
76.63
9,609.28

1.33
6.34
3,000.00
1,045.13
146.58
4.17

1.33
9.57
3,000.00
733.10
91.64
-

4,203.55

9,247.07

54.65

3,835.64

5,773.64

36.85

As per our Report of even date

For and on behalf of the Board

For Chaturvedi & Shah
Chartered Accountants

For Rajendra & Co.
Chartered Accountants

D. Chaturvedi
Partner

Mumbai
April 27, 2005

R. J. Shah
Partner

M. D. Ambani

N. R. Meswani
H.R. Meswani
H. S. Kohli

R. H. Ambani
M. L. Bhakta
Y. P. Trivedi
Dr. D. V. Kapur
M. P. Modi
S. Venkitaramanan

V. M. Ambani

}

Chairman & Managing Director

Executive Directors

Directors

Company Secretary

Schedules forming part of the Consolidated Balance Sheet

SCHEDULE ‘A’

SHARE CAPITAL

Authorised:

250 00 00 000
(250 00 00 000)

50 00 00 000
(50 00 00 000)

As at
31st March, 2005

(Rs. in crore)

As at
31st March, 2004

Equity Shares of Rs. 10 each

2,500.00

Preference Shares of Rs. 10 each

500.00

3,000.00

Issued, Subscribed and Paid up:

139 35 08 041
(139 63 77 536)

Equity Shares of Rs. 10 each fully paid up
Less: Calls in arrears - by others

1,393.51
0.42

1,396.38
0.43

TOTAL

1. Of the above Equity Shares:

1,393.09
1,393.09

500.00

3,000.00

1,395.95
1,395.95

(a)

48 17 70 552 Shares out of the issued and subscribed share capital before the buyback of shares were allotted as Bonus

(48 17 70 552) Shares by capitalisation of Share Premium and Reserves.

(b)

(52 31 98 799)

(c)

33 04 27 345 Shares out of the issued and subscribed share capital before the buyback of shares were allotted on
(33 04 27 345) conversion / surrender of Debentures and Bonds, conversion of Term Loans, exercise of warrants against

Global Depository Shares (GDS) and reissue of forfeited equity shares.

2. During the financial year, the Company bought back and extinguished 28,69,495 equity shares.

3. The Company has reserved issuance of 526,87,851 Equity Shares of Rs. 10 each for offering to employees under Employees

Stock Option Scheme (ESOP).

146 RELIANCE INDUSTRIES LIMITED

Schedules forming part of the Consolidated Balance Sheet

Growth is Life 147

SCHEDULE ‘B’
RESERVES AND SURPLUS

Revaluation Reserve

As per last Balance Sheet
Less: Deduction on retirement of Revalued Assets

Capital Reserve

As per last Balance Sheet

Capital Redemption Reserve
As per last Balance Sheet
Add: Transferred from Profit and Loss Account

Securities Premium Account
As per last Balance Sheet
Less: Premium on Buyback of Equity Shares
Less: Premium on Redemption of Debentures/Bonds

Less: Calls in arrears - by others

Debentures Redemption Reserve

As per last Balance Sheet
Add: Transferred from / (to) Profit and Loss Account

Investment Allowance (Utilised) Reserve

As per last Balance Sheet
Less: Transferred to Profit and Loss Account

Taxation Reserve

As per last Balance Sheet
Less: Transferred to Profit and Loss Account

Statutory Reserve

As per last Balance Sheet
Add: Transferred from Profit and Loss Account

General Reserve

As per last Balance Sheet
Less: Transferred to Capital Redemption Reserve on

Buyback of Equity Shares
Less: Transferred to Profit and Loss Account*
[Refer Note 7, Schedule ‘N’]

Add: Transferred from Profit and Loss Account

Share in Reserves of Associates

Revaluation Reserves :
As per last Balance Sheet
Additions during the year

Capital Reserves :
As per last Balance Sheet
Additions during the year

Profit and Loss Account
TOTAL

As at
31st March, 2005

(Rs. in crore)
As at
31st March, 2004

2,733.53
3.65

2,735.81
2.28

2,729.88

291.28

2,733.53

291.28

885.07
2.87

15,825.07
146.74
210.67
15,467.66
2.25

557.99
1.33

-
-

9.57
6.34

7,185.73
2.87

61.07

7,121.79
3,000.00

318.33
19.95
338.28

43.70
-
43.70

885.07
-

887.94

885.07

15,973.02
-
147.95
15,825.07
2.31

15,465.41

15,822.76

1,406.66
(848.67)

559.32

557.99

76.63
76.63

10.00
10.00

-
9.57

15.91

9.57

4,270.10
-

84.37

4,185.73
3,000.00

10,121.79

7,185.73

9.71
308.62
318.33

13.65
30.05
43.70

381.98
9,247.07
39,700.58

362.03
5,773.64
33,621.60

* Cumulative amount transferred on account of Depreciation on Revaluation Rs. 2563.43 crore (Previous Year Rs. 2,502.36 crore).

Schedules forming part of the Consolidated Balance Sheet

SCHEDULE ‘C’

SECURED LOANS

A. DEBENTURES

1. Non Convertible Debentures

2. Deep Discount Debentures

Less: Unamortised Discounts

B. WORKING CAPITAL LOANS

From Banks
Rupee Loans

TOTAL

As at
31st March, 2005

As at
31st March, 2004

(Rs. in crore)

7,074.75

37.20
4.70
32.50

9,308.58

637.20
20.95
616.25

7,107.25

9,924.83

898.15

8,005.40

1,554.35

11,479.18

(a) Debentures referred to in A(1) above to the extent of Rs. 3595.00 crore are secured by way of first mortgage / charge in
favour of the Trustees on all the properties situated at Hazira, District Surat in the State of Gujarat and at Patalganga, District
Raigad in the State of Maharashtra.

(b) Debentures referred to in A(1) above to the extent of Rs. 566.25 crore are secured by way of first mortgage / charge in
favour of the Trustees on all the properties situated at Patalganga, District Raigad in the State of Maharashtra and on the
properties of petrochemicals complex situated at Jamnagar, in the State of Gujarat and on the movable properties situated
at Hazira, District Surat, in the State of Gujarat.

(c) Debentures referred to in A(1) above to the extent of Rs. 2913.50 crore are secured by way of first mortgage / charge in
favour of the Trustees on all the properties, both present and future, excluding book debts, office premises and certain other
properties specifically excluded of the Refinery Division of the Company.

(d) Debentures referred to in A(2) above to the extent of Rs.37.20 crore are secured by way of a second and subservient charge

of companies immovable property situated in Mumbai and by way of pledge of securities.

(e) Debentures referred to in A above are redeemable at par, in one or more instalments, on various dates with the earliest
redemption being on 15th June, 2005 and the last being on 24th November, 2018. The debentures are redeemable as follows:
Rs. 933.60 crore in financial year 2005-06, Rs.1021.40 crore in financial year 2006-07, Rs.1143.65 crore in financial year
2007-08, Rs. 976 crore in financial year 2008-09, Rs.742.30 crore in financial year 2009-10, Rs.175 crore in financial year
2010-11, Rs.250 crore in financial year 2011-12, Rs.570 crore in financial year 2012-13, Rs.383.33 crore in financial year
2013-14, Rs.383.34 crore in financial year 2014-15, Rs.133.33 crore in financial year 2015-16, Rs.133.33 crore in financial
year 2016-17, Rs.133.33 crore in financial year 2017-18 and Rs.133.34 crore in financial year 2018-19.

SCHEDULE ‘D’

UNSECURED LOANS

A. Long Term

i)
From Banks
ii) From Others

B. Short Term

i)
From Banks
ii) From Others

TOTAL

148 RELIANCE INDUSTRIES LIMITED

(Rs. in crore)

As at
31st March, 2005

As at
31st March, 2004

6,459.40
1,809.73

886.06
1,656.50

4,064.12
1,796.83

8,269.13

5,860.95

3,676.49
0.15

2,542.56

10,811.69

3,676.64

9,537.59

Schedules forming part of the Consolidated Balance Sheet

Growth is Life 149

SCHEDULE ‘E’

FIXED ASSETS

Gross Block

Depreciation

Net Block

(Rs. in crore)

Description

As at
01-04-2004

Additions Deductions /

As at

Adjustments 31-03-2005

For the
Year

Upto

As at

31-03-2005 31-03-2005

As at
31-03-2004

OWN ASSETS :
Leasehold Land
Freehold Land
Buildings
Plant & Machinery
Electrical Installations
Equipments
Furniture & Fixtures
Vehicles
Ships
Aircrafts & Helicopters
Jetties

58.42
266.17
2,844.39
45,229.57
950.53
852.18
230.45
143.23
260.84
229.75
646.97

15.82
100.88
354.65
3,054.24
40.08
50.18
77.23
31.03
0.04
40.39
-

-
0.02
18.41
2,095.13
0.20
2.19
2.66
24.56
1.50
182.83
-

74.24
367.03
3,180.63
46,188.68
990.41
900.17
305.02
149.70
259.38
87.31
646.97

0.71
-
124.54
3,260.95
56.91
54.00
23.35
22.42
8.86
20.21
41.34

5.95
-
847.58
21,506.62
518.36
313.01
138.04
80.05
184.72
48.71
271.01

68.29
367.03
2,333.05
24,682.06
472.05
587.16
166.98
69.65
74.66
38.60
375.96

53.17
266.17
2,118.50
26,414.10
488.99
592.26
113.74
74.25
84.98
170.77
417.30

Sub-Total

51,712.50

3,764.54

2,327.50

53,149.54

3,613.29*

23,914.05

29,235.49

30,794.23

LEASED ASSETS :
Plant & Machinery
Ships

Sub-Total

INTANGIBLE ASSETS :
Technical Know how fees**
Software**
Sub-Total
Total
Previous Year
Capital Work-in-Progress

15.49
9.98

25.47

-
-

15.49
-

15.49

-
9.98

9.98

3.88
2.00

5.88

-
7.65

7.65

-
2.33

2.33

3.88
4.33

8.21

1,741.88
94.00
1,835.88
53,573.85
50,597.87

8.23
123.86
132.09
3,896.63
3,076.22

-
-
-
2,342.99
100.24

1,750.11
217.86
1,967.97
55,127.49
53,573.85

106.90
62.36
169.26
3,788.43
3,335.18

839.93
111.74
951.67
24,873.37
21,717.95

910.18
106.12
1,016.30
30,254.12
31,855.90
4,870.57

1,008.85
44.61
1,053.46
31,855.90

3,388.19

Leasehold Land includes Rs. 0.11 crore (Previous Year Rs. 0.21 crore) in respect of which lease-deeds are pending execution.

a)
b) Buildings include :

Cost of shares in Co-operative Societies Rs. 0.01 crore ( Previous Year Rs. 0.01 crore).

ii) Rs. 93.20 crore (Previous Year Rs. 93.20 crore) incurred towards purchase / acquisition of 1,94,819 Equity shares of
Re. 1 each of M/s. Mature Trading and Investments Private Limited with a right of occupancy of certain area of a commercial
premises.

c) Capital work-in-progress includes :

Rs. 226.17 crore on account of pre-operative expenses (Previous Year Rs. 113.00 crore).

i)
ii) Rs. 426.40 crore on account of cost of construction materials at site (Previous Year Rs. 271.82 crore).
iii) Rs. 851.44 crore on account of advance against capital expenditure (Previous Year Rs.1,170.91 crore).

d) Additions / Deletions and Capital work-in-progress is net of Rs. 54.37 crore on account of exchange difference during the year

(Previous Year Rs. 12.98 crore).

e) The Ownership of Jetties vests with Gujarat Maritime Board. However, under an agreement with Gujarat Maritime Board, the

Company has been permitted to use the same at a concessional rate.

f) Gross Block includes amount added on revaluation of plant & machinery as at 01.04.1997.

Refer to Note 7, Schedule ‘N’

*
** Other than internally generated

Schedules forming part of the Consolidated Balance Sheet

SCHEDULE ‘F’

CURRENT ASSETS

INVENTORIES
Stores, Chemicals and Packing Materials
Raw Materials
Stock-in-Process
Finished Goods / Traded Goods

SUNDRY DEBTORS (Unsecured and Considered Good) #
Over six months
Others

CASH AND BANK BALANCES
Cash on hand

Balance with Banks
In Current Accounts :

with Scheduled Banks
with Others

In Fixed Deposit Accounts :
with Scheduled Banks*
with Others

OTHER CURRENT ASSETS
Interest Accrued On Investments @
Premium Accrued on Investments in Preference Shares $

TOTAL

(0.07)

As at
31st March, 2005

(Rs. in crore)
As at
31st March, 2004

679.45
3,748.36
971.45
2,013.62

839.97
2,881.83
752.38
2,757.04

7,412.88

7,231.22

42.18
3,885.63

10.59
3,260.97

3,927.81

3,271.56

2.54

2.44

382.55
0.36

3,224.32
0.95

793.30
660.01

206.20
0.75

15.51
45.98

3,610.72

270.88

593.19
135.03

1,453.31

16,404.72

728.22

11,501.88

Sundry Debtors include Rs. 5.28 crore (Previous Year Rs. 3.43 crore) from Reliance Energy Limited, a company under the same
management

The Company has placed Fixed Deposits amounting to Rs. 35.00 crore (Previous Year Rs NIL) under lien as security for buy
back of shares.

@ Interest Accrued on Investments includes Rs. 753.36 crore (Previous Year Rs. 546.00 crore) after elimination of inter company
profit of Rs 186.02 crore (Previous Year Rs 186.02 crore) accrued on Deep Discount Bonds issued by Reliance Communications
Infrastructure Limited, a company under the same management.

Premium accrued on Investments in Preference Shares after elimination of inter company profit of Rs 448.26 crore (Previous
Year Rs 62.55 crore) represents receivables on investments in Preference Shares of Reliance Infocomm Limited, a company
under the same management

150 RELIANCE INDUSTRIES LIMITED

Schedules forming part of the Consolidated Balance Sheet

Growth is Life 151

SCHEDULE ‘G’

LOANS AND ADVANCES

UNSECURED - (Considered Good Unless Otherwise Stated)
Advances recoverable in cash or in kind or for
value to be received
Less: Considered Doubtful

Deposits
Balance with Customs, Central Excise Authorities, etc.

TOTAL

As at
31st March, 2005

(Rs. in crore)
As at
31st March, 2004

4,404.17
69.88

5,067.83
-

4,334.29
1,846.17
516.75

6,697.21

5,067.83
2,003.59
377.60

7,449.02

Advances include Rs. 34.70 crore (Previous Year Rs. 37.60 crore) receivable from Reliance Communications Infrastructure Limited
(Maximum Amount outstanding at any time during the year Rs. 37.60 crore) and Rs. 13.46 crore (Previous Year Rs. 14.57 crore)
receivable from Reliance Infocomm Limited (Maximum amount outstanding at any time during the year Rs. 14.57 crore), companies
under the same management, towards net investment in finance leases given.

SCHEDULE ‘H’

CURRENT LIABILITIES AND PROVISIONS

CURRENT LIABILITIES
Sundry Creditors - Small Scale Industries
- Others *
Liability for Leased Assets
Unpaid Dividend #
Unpaid Matured debentures #
Unpaid Call Money #
Interest accrued on above #
Interest accrued but not due on Loans

PROVISIONS
Provision for Wealth Tax
Provision for Income Tax
Provision for Leave encashment/ Superannuation/ Gratuity
Other Provisions
Proposed Dividend
Tax on Dividend

TOTAL

As at
31st March, 2005

(Rs. in crore)
As at
31st March, 2004

4.48
12,832.02
2.74
51.84
28.40
0.03
0.54
366.41

12.65
703.92
174.60
1,763.64
1,045.13
146.58

3.10
9,978.74
6.81
49.73
39.53
0.03
1.02
365.76

13,286.46

10,444.72

37.16
351.32
111.30
1,346.57
733.10
91.64

3,846.52

17,132.98

2,671.09

13,115.81

Includes for capital expenditure Rs. 274.79 crore (Previous year Rs. 676.45 crore).

# These figures do not include any amounts, due and outstanding, to be credited to Investor Education and Protection Fund

except Rs. 1.17 crore which is held in abeyance due to legal cases pending.

Schedules forming part of the Consolidated Profit and Loss Account

SCHEDULE ‘I’

OTHER INCOME

Dividend :

From Long Term Investments

Interest Received :

From Current Investments
From Long Term Investments
From Others
[Tax Deducted at Source Rs. 12.05 crore
(Previous Year Rs. 36.75 crore)]

Premium on Investments in Preference Shares

Profit on Sale of Long Term Investments
Profit on Sale of Current Investments

Profit on Sale of Fixed Assets

Miscellaneous Income

Share in Associates
Less: Elimination of Inter company Profits*

2004-05

(Rs. in crore)

2003-04

4.54

58.10
207.54
103.60

15.99
31.18

455.34
385.71

144.79
253.84
262.34

8.27
98.95

189.63
131.55

369.24

910.76

47.17

17.82

85.08

69.63

660.97

197.58

107.22

1.49

126.92

58.08

TOTAL

1,499.70

1,156.80

* Includes elimination on account of Premium on Investments in Preference Shares of Reliance Infocomm Limited of Rs. 385.71 crore
(Previous Year Rs. 62.55 crore) and interest on Deep Discount Bonds of Reliance Communications Infrastructure Limited of Rs. NIL
(Previous Year Rs. 69.00 crore)

SCHEDULE ‘J’

VARIATION IN STOCKS

STOCK-IN-TRADE (at close)
Finished Goods/Traded Goods
Stock-in-process

STOCK-IN-TRADE (at commencement)
Finished Goods/ Traded Goods
Stock-in-process

TOTAL

152 RELIANCE INDUSTRIES LIMITED

2004-05

(Rs. in crore)

2003-04

2,013.62
971.45

2,757.04
752.38

2,985.07

3,509.42

3,175.28
939.55

3,509.42

(524.35)

4,114.83

(605.41)

Schedules forming part of the Consolidated Profit and Loss Account

Growth is Life 153

SCHEDULE ‘K’

(Rs. in crore)

MANUFACTURING AND OTHER EXPENSES

2004-05

2003-04

RAW MATERIAL CONSUMED

MANUFACTURING EXPENSES

PAYMENTS TO AND PROVISIONS
FOR EMPLOYEES (including Managerial Remuneration)

SALES AND DISTRIBUTION EXPENSES

ESTABLISHMENT EXPENSES

Insurance
Rent
Rates & Taxes
Other Repairs
Travelling Expenses
Payment to Auditors
Professional Fees
Loss on Sale of Discarded Assets
General Expenses*
Wealth Tax
Charity and Donations

43,575.32

32,503.11

1,263.37
725.54
155.82
68.26
167.58
(48.10)
8.68
(265.96)

3,287.38

2,075.19

638.67

70.54
97.16

857.59

806.37

220.64
315.67
922.74
802.80
113.23
(113.23)

1,827.14

2,261.85

234.37
207.38
181.82
83.18
104.09
4.75
210.27
14.09
452.98
7.00
36.44

1,486.17
907.94
177.14
65.23
651.84
132.47
17.88
(151.29)

626.29

121.70
109.60

116.75
245.89
1,009.78
454.72
-
-

217.48
181.26
212.71
81.77
74.05
4.60
197.96
26.74
339.65
8.00
38.31

Less : Preoperative Expenses of Projects Under Commissioning (Net)

TOTAL

1,382.53
50,929.96

9.75

50,920.21

1,536.37
39,182.89

26.52

39,156.37

Includes investments written off Rs. 2.94 crore (Previous Year Rs. NIL) and Provision for Doubtful Claims of Rs. 69.88 crore
(Previous Year Rs. NIL).

Schedules forming part of the Consolidated Profit and Loss Account

SCHEDULE ‘L’

INTEREST

Debentures
Fixed Loans
Others

TOTAL

SCHEDULE ‘M’

2004-05

820.86
210.74
442.47

(Rs. in crore)

2003-04

1,126.79
118.90
193.98

1,474.07

1,439.67

SIGNIFICANT ACCOUNTING POLICIES TO THE CONSOLIDATED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT

1. Principles of consolidation

The consolidated financial statements relate to Reliance Industries Limited (‘the Company’) and its subsidiary companies. The
consolidated financial statements have been prepared on the following basis:

a) The financial statements of the Company and its subsidiary companies are combined on a line-by-line basis by adding
together the book values of like items of assets, liabilities, income and expenses, after fully eliminating intra-group balances
and intra-group transactions resulting in unrealised profits or losses in accordance with Accounting Standard (AS) 21 -
“Consolidated Financial Statements” issued by the Institute of Chartered Accountants of India.

In case of foreign subsidiaries, revenue items are consolidated at the average rate prevailing during the year. All assets and
liabilities are converted at rates prevailing at the end of the year. Any exchange difference arising on consolidation is
recognised in the profit and loss account except in cases where they relate to acquisition of fixed assets in which case they
are adjusted to the carrying cost of such assets.

The difference between the cost of investment in the subsidiaries, over the net assets at the time of acquisition of shares in
the subsidiaries is recognised in the financial statements as Goodwill or Capital Reserve as the case may be.

d) The difference between the proceeds from disposal of investment in a subsidiary and the carrying amount of its assets less
liabilities as of the date of disposal is recognised in the consolidated statement of Profit and Loss account as the profit or loss
on disposal of investment in subsidiary.

e) Minority Interest’s share of net profit of consolidated subsidiaries for the year is identified and adjusted against the income of

the group in order to arrive at the net income attributable to shareholders of the company.

f) Minority Interest’s share of net assets of consolidated subsidiaries is identified and presented in the consolidated balance

sheet separate from liabilities and the equity of the company’s shareholders.

In case of associates where the company directly or indirectly through subsidiaries holds more than 20% of equity, Investments
in associates are accounted for using equity method in accordance with Accounting Standard (AS) 23 -”Accounting for
investments in associates in consolidated financial statements” issued by the Institute of Chartered Accountants of India.

h) The Company accounts for its share in the change in the net assets of the associates, post acquisition, after eliminating
unrealised profits and losses resulting from transactions between the Company and its associates to the extent of its share,
through its profit and loss account to the extent such change is attributable to the associates’ profit and loss account and
through its reserves for the balance, based on available information.

The difference between the cost of investment in the associates and the share of net assets at the time of acquisition of
shares in the associates is identified in the financial statements as Goodwill or Capital Reserve as the case may be.

As far as possible, the consolidated financial statements are prepared using uniform accounting policies for like transactions
and other events in similar circumstances and are presented in the same manner as the Company’s separate financial
statements.

Investments other than in subsidiaries and associates have been accounted as per Accounting Standard 13 (AS) 13 on “Accounting
for Investments”.

3. Other significant accounting policies

These are set out under “Significant Accounting Policies” as given in the Unconsolidated Financial Statements of Reliance
Industries Limited and its subsidiaries.

154 RELIANCE INDUSTRIES LIMITED

Growth is Life 155

Notes on Consolidated Accounts

SCHEDULE ‘N’

NOTES ON ACCOUNTS TO CONSOLIDATED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT

The subsidiary companies considered in the consolidated financial statements are:

Name of the Subsidiaries

Country of
incorporation

Proportion of
ownership interest

Reliance Industrial Investments and Holdings Limited
Reliance Power Ventures Limited
Reliance Ventures Limited
Reliance Strategic Investments Limited
Reliance Technologies LLC.
Reliance LNG Limited
Gas Transportation & Infrastructure Company Limited
Reliance Do Brasil Industria E Comercio De Produtos Texteis,
Quimicos, Petroquimicos E Derivados Ltda (Reliance Brazil LLC.)

India
India
India
India
U.S.A.
India
India
Brazil

100%
100%
100%
100%
90%
90%
100%
100%

The following subsidiaries were desubsidiarised during the year. The results of operations of these entities are included in the
consolidated financial statements till the date of cessation of the subsidiary relationship.

Reliance Infocom B.V. and hence, its following subsidiaries:
Reliance Infocom Inc.
Reliance Communications Inc.
Reliance Communication International Inc.
Reliance Communication (Canada) Inc.
Reliance Netway Inc.
Reliance Communication (Hongkong) Limited
Reliance Communication (U.K.) Limited

The significant associate companies considered in the consolidated financial statements are

Name of the associate companies

Country of
incorporation

Proportion of
ownership interest

Reliance Capital Limited
Reliance Industrial Infrastructure Limited
Reliance Energy Limited *
Reliance Communication Infrastructure Limited
(and its subsidiaries including Reliance Infocomm Limited)
Reliance Infocomm Limited
Reliance Telecom Limited
Reliance Life Insurance Company Limited
Reliance General Insurance Company Limited
Reliance Petroinvestments Limited (and its associates
including Indian Petrochemical Corporation Limited)
Rosche Trading Private Limited
Reliance Europe Limited

India
India
India
India

India
India
India
India
India

India
U.K.

47.20%
46.23%
43.68%
45.00%

7.57%
35.60%
25.00%
25.00%
50.00%

50.00%
50.00%

* Accounting as per equity method is based on the information submitted by Reliance Energy Limited to the stock exchanges as
per listing agreement.

The carrying amount of investments includes goodwill (net of Capital Reserve) arising on acquisition of Reliance Energy Limited
of Rs. 384.28 crore (Previous Year Rs. Nil); Reliance Capital Limited of Rs. 118.51 crore (Previous Year Rs. 118.51 crore) and
Reliance Communications Infrastructure Limited of Rs. 223.74 crore (Previous Year Rs. 223.74 crore).

4. As required by Accounting Standard (AS-23) on “Accounting for Investments in Associates in Consolidated Financial Statements”
issued by the Institute of Chartered Accountants of India, the carrying amount of investments in Associates at the beginning of
the year have been restated by applying “Equity Method” of accounting from the date of acquisition of the associates and
corresponding adjustment has been made to the retained earnings at the beginning of the year after eliminating unrealised
profits, if any.

Notes on Consolidated Accounts

SCHEDULE ‘N’ (contd.)

The financial statement of Reliance Technologies LLC. have been prepared under US GAAP, Reliance Do Brasil Industria E
Commercio De Portudos Texteis Quimicos, Petroquimicos E Derivados Ltda has been prepared under Brazilian accounting laws.
The difference in accounting policies between the Company and its subsidiary is not material. Synergy Entrepreneur Solutions
Private Limited, an associate of Reliance Communication Infrastructure Limited, is in process of evaluating extent of recoverability
of the customer receivables amounting to Rs. 1,420.80 crore. On completion of evaluation, suitable accounting effect will be made.

Turnover includes Income from Services of Rs. 893.24 crore (Previous Year Rs. 1,421.84 crore). In view of clarification issued by
the Institute of Chartered Accountants of India on 2nd April, 2005, Inter-Divisional Transfers which hitherto was considered as part
of “Turnover and Inter divisional Transfers” is now not considered (Previous Year Rs 18,170.87 crore).

The Gross Block of Fixed Assets include Rs. 2,729.88 crore (Previous Year Rs. 2,733.53 crore) on account of revaluation of
Fixed Assets carried out in the past. Consequent to the said revaluation there is an additional charge of depreciation of Rs.61.07
crore (Previous Year Rs. 84.37 crore) and an equivalent amount has been withdrawn from General Reserve and credited to the
Profit and Loss Account.

8. Managerial Remuneration:

i)
Salaries
ii) Perquisites
Iii) Commission
iv) Leave salary / Encashment
v) Contribution to provident fund and Superannuation fund
vi) Provision for gratuity

2004-05
1.65
1.46
51.59
-
0.40
0.09
55.19

(Rs in crore)
2003-04
1.65
1.47
36.59
0.56
0.40
0.29
40.96

9. A sum of Rs. 2.86 crore (net debit) [Previous Year Rs. 2.18 crore (net debit)] is included under Establishment Expenses representing

Net Prior Period Items.

10. Premium on forward exchange contracts to be recognised in the Profit and Loss Account of subsequent accounting period

aggregate to Rs. 5.16 crore (Previous Year Rs. NIL)

11. The deferred tax liability as at 31st March, 2005 comprise of the following:

a. Deferred Tax Liability

Related to fixed assets

b. Deferred Tax Assets

Disallowance under the Income Tax Act, 1961

c. Provision for deferred tax (Net)

12. EARNINGS PER SHARE (EPS)

a) Net Profit as per Profit and Loss Account (Rs. in crore)
b)
c) Net profit available for equity shareholder

Less : Provision for taxation for earlier years (Rs. in crore)

(Numerator used for calculation) (Rs. in crore)

d) Weighted Average number of equity shares used as denominator for

As at 31st
March, 2005

(Rs. in crore)
As at 31st
March, 2004

4,633.80

3,811.43

366.98

4,266.82

2004-05
7,628.23
-

7,628.23

336.59

3,474.84

2003-04
5,168.99
23.03

5,145.96

calculating EPS

e) Basic and Diluted Earnings per share of Rs.10 each (Rs.) :

139,59,09,459
54.65

139,63,77,536
36.85

156 RELIANCE INDUSTRIES LIMITED

Growth is Life 157

Notes on Consolidated Accounts

SCHEDULE ‘N’ (contd.)

13. Segment Information:

The Company has identified three reportable segments viz. Petrochemicals, Refining and Others. Segments have been identified
and reported taking into account nature of products and services, the differing risks and returns and the internal business reporting
systems. The accounting policies adopted for segment reporting are in line with the accounting policy of the company with
following additional policies for segment reporting.

(a) Revenue and expenses have been identified to a segment on the basis of relationship to operating activities of the segment.
Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have
been disclosed as “Unallocable”.

(b) Segment assets and segment liabilities represent assets and liabilities in respective segments. Investments, tax related
assets and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as
“Unallocable”.

(i) Primary Segment Information :

(Rs. in crore)

Particulars

Petrochemicals

Refining

Others

Unallocable

Sub-Total

Eliminations

Total

2004-2005

2003-2004

2004-2005

2003-2004

2004-2005

2003-2004

2004-2005

2003-2004

2004-2005

2003-2004

2004-2005

2003-2004

2004-2005

2003-2004

Segment Revenue
External Turnover
Inter Segment Turnover

29,744.75
-

23,423.86
-

41,342.12
10,357.90

30,520.16
11,086.13

Gross Turnover
Less: Excise duty recovered

29,744.75
3,587.59

23,423.86
2,089.18

51,700.02
3,516.92

41,606.29
2,347.42

2,623.59
-

2,623.59
8.29

2,526.82
-

2,526.82
8.90

Net Turnover

26,157.16

21,334.68

48,183.10

39,258.87

2,615.30

2,517.92

-
-

73,710.46
10,357.90

56,470.84
11,086.13

-
(10,357.90)

-
(11,086.13)

73,710.46
-

56,470.84
-

84,068.36
7,112.80

67,556.97
4,445.50

(10,357.90)
-

(11,086.13)
-

73,710.46
7,112.80

56,470.84
4,445.50

76,955.56

63,111.47

(10,357.90)

(11,086.13)

66,597.66

52,025.34

Segment Result before Interest
Extra ordinary items and Taxes
Less: Interest Expense
Add: Interest Income
Profit before Extra ordinary
Items and Taxes

Extraordinary Income
Profit Before Tax
Current Tax
Deferred Tax
Net Profit after Tax

Other Information
Segment Assets
Segment Liabilities
Capital Expenditure
Depreciation
Non Cash Expenses
other than depreciation

3,762.46
-
-

3,368.44
-
-

5,520.66
-
-

3,499.67
-
-

1,191.77
-
-

588.96
-
-

(244.61)
1,474.07
369.24

(368.30)
1,439.67
660.97

10,230.28
1,474.07
369.24

7,088.77
1,439.67
660.97

3,762.46

3,368.44

5,520.66

3,499.67

1,191.77

588.96

(1,349.44)

(1,147.00)

9,125.45

6,310.07

3,762.46
-
-
3,762.46

3,368.44
-
-
3,368.44

5,520.66
-
-
5,520.66

3,499.67
-
-
3,499.67

1,191.77
-
-
1,191.77

588.96
-
-
588.96

(1,349.44)
705.22
792.00
(2,846.66)

(1,147.00)
351.06
790.02
(2,288.08)

9,125.45
705.22
792.00
7,628.23

6,310.07
351.06
790.02
5,168.99

14,536.94
4,961.13
1,241.83
1,447.66

14,256.03
3,009.58
438.74
1,490.41

30,533.74
7,897.58
2,332.26
1,574.89

29,911.06
5,919.14
1,548.86
1,501.80

19,053.55
2,771.55
1,703.00
607.38

15,843.90
333.70
2,205.85
173.15

17,186.38
1,502.72
101.92
97.43

11,944.42
3,183.67
125.48
85.45

81,310.61
17,132.98
5,379.01
3,727.36

71,955.41
12,446.09
4,318.93
3,250.81

69.88

47.15

69.88

47.15

-
-
-

-
-
-
-

-
-
-

-
-
-
-

10,230.28
1,474.07
369.24

7,088.77
1,439.67
660.97

9,125.45

6,310.07

9,125.45
705.22
792.00
7,628.23

6,310.07
351.06
790.02
5,168.99

81,310.61
17,132.98
5,379.01
3,727.36

71,955.41
12,446.09
4,318.93
3,250.81

69.88

47.15

a) As per Accounting Standard on Segment Reporting (AS-17), issued by the Institute of Chartered Accountant of India, the Company

has reported segments information on consolidated basis including businesses conducted through its subsidiaries.

b) The reportable Segments are further described below:

— The petrochemicals segment includes production and marketing operations of petrochemical products namely, High and
Low density Polyethylene, Polypropylene, Polyvinyl Chloride, Polyester Yarn, Polyester Fibres, Purified Terephthalic Acid,
Paraxylene, Ethylene Glycol, Olefins, Aromatics, Linear Alkyl Benzene and Polyethylene Terephthalate.

— The refining segment includes production and marketing operations of the Petroleum refinery.

— The businesses, which were not reportable segments during the year, have been grouped under the “Others” segment. This

mainly comprises of :

Oil and Gas

Textile

Communication business conducted through subsidiaries and associate viz. Reliance Infocomm Inc., Reliance Infocomm
B.V., RelianceTechnologies LLC., Reliance Communications Inc., Reliance Communications (U.K.) Limited, Reliance
Communications International Inc., Reliance Communications (Canada) Inc., Reliance Netway Inc., Reliance
Communications (Hongkong) Limited, Reliance Infocomm Limited and Reliance Communcations Infrastructure Limited.

Risk and Finance business conducted through Reliance Petroinvestments Limited, Reliance Capital Limited and Reliance
General Inurance Company Limited.

Power business conducted through Reliance Energy Limited.

(cid:127)
(cid:127)
(cid:127)
(cid:127)
(cid:127)
Notes on Consolidated Accounts

SCHEDULE ‘N’ (contd.)

(ii) Secondary Segment Information:

1. Segment Revenue – External Turnover

- Within India

- Outside India

Total Revenue

2. Segment Assets

- Within India

- Outside India

Total Assets

3. Segment Liability

- Within India

- Outside India

Total Liability

4. Capital Expenditure

- Within India

- Outside India

Total Expenditure

2004-05

48,904.40

24,806.06

73,710.46

78,383.61

2,927.00

81,310.61

17,126.45

6.53

17,132.98

5,356.87

22.14

5,379.01

(Rs. in crore)
2003-04

44,182.88

12,287.96

56,470.84

70,724.48

1,230.93

71,955.41

12,265.39

180.70

12,446.09

4,318.33

0.60

4,318.93

14. PROJECT DEVELOPMENT EXPENDITURE

(in respect of Projects upto 31st March, 2005, included under Capital work-in-progress)

Opening Balance

2004-2005

(Rs. in crore)

2003-2004

113.00

76.76

Add: Project Development Expenditure transferred from

Profit and Loss Account
Interest Capitalised

9.75
296.69

Less:Project Development Expenses Capitalised during the year

Closing Balance

306.44
419.44

193.27

226.17

26.52
143.75

170.27
247.03

134.03

113.00

158 RELIANCE INDUSTRIES LIMITED

Notes on Consolidated Accounts

SCHEDULE ‘N’ (contd.)

15. ADDITIONAL INFORMATION

(A) Estimated amount of contracts remaining to be

executed on Capital accounts and not provided for:
(i)
(ii)

In respect of joint ventures
In respect of others

(B) Uncalled liability on partly paid Shares

(i) Outstanding guarantees furnished to Banks

and Financial Institutions including in respect of
Letters of credit
(a)
(b)

In respect of joint ventures
In respect of others

(ii) Guarantees to Banks and Financial Institutions against

credit facilities extended to third parties
(a)
(b)

In respect of joint ventures
In respect of others

(iii) Liability in respect of bills discounted with Banks

(a)
(b)

In respect of joint ventures
In respect of others (including third party bills discounting)

(iv) Claims against the Company / disputed liabilities

not acknowledged as debts
(a)
(b)

In respect of joint ventures
In respect of others

(v) Performance Guarantees

(a)
(b)

In respect of joint ventures
In respect of others
(vi) Sales tax deferral liability assigned

As at 31st
March, 2005

633.20
3,318.27

0.41

-
2,003.57

-
651.81

-
52.55

195.05
517.61

-
208.82
5333.82

Growth is Life 159

(Rs. in crore)

As at 31st
March, 2004

39.99
1,748.70

0.41

-
496.79

-
243.33

-
588.87

158.95
400.77

35.79
1,277.94
5,036.31

(D) The Income-Tax assessments of the Company have been completed up to Assessment Year 2002-2003. The disputed
demand outstanding up to the said Assessment Year is Rs. 193.58 crore. Based on the decisions of the Appellate authorities
and the interpretations of other relevant provisions, the Company has been legally advised that the demand is likely to be
either deleted or substantially reduced and accordingly no provision has been made.

SCHEDULE ‘N’ (contd.)

16. Related Party Disclosures :

(i) List of related parties with whom transactions have taken place and relationships:

Sr. No.

Name of the Related Party

Relationship

Reliance Life Insurance Company Limited

Associate Companies and Joint Ventures

Reliance General Insurance Company Limited

Reliance Capital Limited

Reliance Energy Limited

Reliance Infocomm Limited

Reliance Communications Infrastructure Limited

Reliance Telecom Limited

Reliance Industrial Infrastructure Limited

Reliance Europe Limited

Reliance Petroinvestments Limited

Reliance Rubber and Chemicals Private Limited

Indian Petrochemicals Corporation Limited

Reliance Enterprises Limited
(upto 11th January, 2005)

Reliance Pharmaceuticals (India) Private Limited

Reliance Nutraceuticals Private Limited

Reliance Utilities and Power Limited

Reliance Ports and Terminals Limited

Unincorporated Oil and Gas Joint Ventures

Rosche Trading Private Limited

Shri Mukesh D. Ambani

Shri Anil D. Ambani

Shri Nikhil R. Meswani

Shri Hital R. Meswani

Shri H. S. Kohli

Dhirubhai Ambani Foundation

Jamnaben Hirachand Ambani Foundation

Dhirubai Ambani Memorial Trust

Hirachand Govardhandas Ambani Public
Charitable Trust

Dhirubhai Ambani Institute of Information and
Communication Technology Trust

Dhirubhai Ambani Institute of Information and
Communication Technology, Gandhinagar

Key Managerial Personnel

Others

160 RELIANCE INDUSTRIES LIMITED

Growth is Life 161

Associates

Key
Managerial
Personnel

Others

(Rs. in crore)
Total

Notes on Consolidated Accounts

SCHEDULE ‘N’ (contd.)

(ii) Transactions during the year with related parties :

Sr.
No.

Nature of Transactions
(Excluding reimbursements)

Debentures Issued
Balance as at 1st April, 2004

Issued during the year

Repaid during the year

Balance as at 31st March,2005

Loans Taken
Balance as at 1st April,2004

Taken during the year

Repaid during the year

Balance as at 31st March,2005

Fixed Assets/Capital Work in Progress
Balance of Assets taken on Lease as at 1st April,2004

Balance of Assets taken on Lease as at 31st March,2005

Premium Accrued on Investments in Preference Shares

Assets Purchased during the year

Assets sold during the year

Investments (Excluding share in Associates)
Balance as at 1st April, 2004

Purchased/adjusted during the year

Sold / redemption during the year

Balance as at 31st March, 2005

Interest Accrued on Investments

Sundry Debtors as at 31st March, 2005

Loans and Advances

i) Loans Given
Balance as at 1st April, 2004

Given during the year

Returned during the year

Balance as at 31st March, 2005

-
(68.03)
-
(1,020.00)
-
(187.03)
-
(-)

1,147.15
(154.09)
4,294.76
(5,041.04)
3,841.91
(4,047.98)
1,600.00
(1,147.15)

6.81
(13.98)
2.74
(6.81)
23.56
(8.15)
1,406.02
(-)

14,436.80
(6,090.67)
1,244.29
(8,388.95)
1,821.91
(107.54)
15,506.45
(14,436.80)
1,108.27
(197.58)
939.38
(732.02)
29.77
(164.31)

2,668.50
(2,721.18)
4,156.09
(6,872.15)
4,241.07
(6,924.84)
2,583.52
(2,668.50)

-
(68.03)
-
(1,020.00)
-
(187.03)
-
(-)

1,147.15
(154.09)
4,294.76
(5,041.04)
3,841.91
(4,047.98)
1,600.00
(1,147.15)

6.81
(13.98)
2.74
(6.81)
23.56
(8.15)
1,406.02
(-)

14,436.80
(6,090.67)
1,244.29
(8,388.95)
1,821.91
(107.54)
15,506.45
(14,436.80)
1,108.27
(197.58)
939.38
(732.02)
29.77
(164.31)

2,668.50
(2,721.18)
4,156.09
(6,872.15)
4,241.07
(6,924.84)
2,583.52
(2,668.50)

(Rs. in crore)

Others

Total

Associates

Key
Managerial
Personnel

Notes on Consolidated Accounts

SCHEDULE ‘N’ (contd.)

Sr.
No.

Nature of Transactions
(Excluding reimbursements)

ii) Advances recoverable in cash or in kind
Balance as at 1st April,2004

Given during the year

Returned/Adjusted during the year

Balance as at 31st March, 2005

iii) Deposit
Balance as at 1st April,2004

Returned during the year

Balance as at 31st March,2005

Sundry Creditors
Balance as at 31st March, 2005

Turnover

Other Income
Dividend

Interest Received

Premium Accrued on Investments in Preference Shares

Lease Rental Income

Service Income

Rent received

Miscellaneous Income

Purchases

Expenditure
Interest Paid

Payments to and provisions for Directors

Electric Power, Fuel and Water

Rent

Lease Rentals

Professional Fees

Charter Hire Charges

162 RELIANCE INDUSTRIES LIMITED

124.42
(1,034.84)
15.23
(77.69)
69.56
(988.11)
70.09
(124.42)

1,153.09
(1,163.25)
14.08
(10.16)
1,139.01
(1,153.09)

261.33
(583.28)
3,798.04
(4,439.86)

58.57
(70.79)
228.69
(399.85)
910.69
(197.58)
7.40
(7.89)
158.30
(-)
35.81
(-)
49.05
(25.11)
828.02
(623.75)

55.19
(40.96)

102.83
(108.41)

349.39
(372.09)
89.73
(91.17)
5.14
(9.02)
16.82
(16.95)
30.15
(12.57)

124.42
(1,034.84)
15.23
(77.69)
69.56
(988.11)
70.09
(124.42)

1,153.09
(1,163.25)
14.08
(10.16)
1,139.01
(1,153.09)

261.33
(583.28)
3,798.04
(4,439.86)

58.57
(70.79)
228.69
(399.85)
910.69
(197.58)
7.40
(7.89)
158.30
(-)
35.81
(-)
49.05
(25.11)
828.02
(623.75)

102.83
(108.41)
55.19
(40.96)
349.39
(372.09)
89.73
(91.17)
5.14
(9.02)
16.82
(16.95)
30.15
(12.57)

Notes on Consolidated Accounts

SCHEDULE ‘N’ (contd.)

Sr.
No.

Nature of Transactions
(Excluding reimbursements)

Growth is Life 163

(Rs. in crore)

Others

Total

Associates

Key
Managerial
Personnel

Insurance Premium

Assignment of Liability

Hire Charges

Donations

Warehousing and Distribution Charges

Product Handling charges

Wholesale Traffic charges

General expenses

Guarantees Issued
Financial Guarantees

Performance Guarantees

Figure in bracket represents previous year’s amounts.

56.74
(63.32)
-
(147.03)
55.90
(35.42)

646.15
(657.10)
87.46
(78.94)
435.24
(173.70)
63.14
(43.03)

196.20
(243.33)
201.94
(1,236.82)

56.74
(63.32)
-
(147.03)
55.90
(35.42)
8.49
(16.51)
646.15
(657.10)
87.46
(78.94)
435.24
(173.70)
63.27
(43.03)

196.20
(243.33)
201.94
(1,236.82)

8.49
(16.51)

0.13
(-)

Significant Related Party Transactions:
i.

Loan taken during the year includes from Reliance Communication Infrastructure Limited Rs. 2,735 crore and repaid Rs. 2,282 crore and
Rs. 1,559.76 crore taken and repaid Rs.1,559.91 crore to Reliance Capital Limited.
Fixed Assets purchased during the year includes from Reliance Industrial Infrastructure Limited Rs. 23.05 crore. Fixed Assets sold during the
year includes to Reliance Infocomm Limited Rs. 218.59 crore and to Reliance Communication Infrastructure Limited Rs.1187.44 crore
Sale of Investment includes to Reliance Capital Limited Rs. 117.37 crore; Reliance General Insurance Company Limited Rs. 127.85 crore and
to Reliance Energy Limited Rs. 1,488.92 crore. Purchase of Investments includes from Reliance General Insurance Company Limited Rs. 19.91
crore; Reliance Energy Limited Rs. 14.99 crore and from Reliance Capital Limited Rs. 52.86 crore and Rs. 1156.53 crore invested in equity
shares / warrants of Reliance Energy Limited.
Premium Receivable on Preference shares includes from Reliance Infocomm Limited Rs.1108.27 crore.
Interest Accrued on Investments includes from Reliance Communication Infrastructure Limited Rs. 939.38 crore.
Loans and Advances includes Rs. 4,151.63 crore given to and repaid by Reliance Capital Limited and given to Reliance Pharmaceuticals (India)
Private Limited Rs. 2.22 crore and to Reliance Nutraceuticals Private Limited Rs. 2.22 crore.

ii.

iii.

iv.
v.
vi.

vii. Turnover includes transactions with Reliance Communication Infrastructure Limited Rs. 1,109.40 crore and Indian Petrochemicals Corporation

Limited Rs. 2,633.53 crore.

ix.

viii. Other Income: Dividend Received includes from Reliance Capital Limited Rs. 17.43 crore and Reliance Energy Limited Rs. 38.91 crore (Share
in Associates is after considering these dividends). Interest received includes from Reliance Communication Infrastructure Limited Rs. 207.34
crore; Reliance Capital Limited Rs.19.16 crore. Premium on Redemption of Preference Shares includes from Reliance Infocomm Limited Rs.
910.69 crore. Lease rental Income includes from Reliance Communication Infrastructure Limited Rs. 5.36 crore and Reliance Infocomm Limited
Rs. 2.04 crore. Service Income includes from Indian Petrochemicals Corporation Limited Rs. 98.94 crore and Reliance Infocomm Limited Rs.
59.36 crore. Rent received includes from Reliance Infocomm Limited Rs. 25.70 crore; Reliance Communication Infrastructure Limited Rs. 10.11
crore. Miscellaneous Income includes from Reliance General Insurance Company Limited Rs. 8.27 crore; Reliance Telecom Limited Rs. 3.34
crore; Reliance Port and Terminals Limited Rs. 8.23 crore; Indian Petrochemicals Corporation Limited Rs. 7.32 crore and Reliance Energy
Limited Rs. 3.85 crore.
Expenditure: Purchases include from Reliance Capital Limited Rs. 281.04 crore; Indian Petrochemicals Corporation Limited Rs. 546.98 crore.
Interest Paid includes to Reliance Communication Infrastructure Limited Rs. 95.23 crore. Payment to and provisions for Directors include to Shri
Mukesh D. Ambani Rs. 21.90 crore; Shri Anil D. Ambani Rs. 21.90 crore; Shri Nikhil R. Meswani Rs. 5.59 crore and Shri Hital R. Meswani Rs.
5.59 crore. Electric, Power and Fuel includes to Reliance Utilities and Power Limited Rs. 349.39 crore. Lease Rent includes to Reliance Capital
Limited Rs. 5.14 crore. Rent includes to Reliance Port and Terminals Limited Rs. 84.00 crore. Professional Fees includes to Reliance Europe
Limited Rs. 16.82 crore. Charter Hire charges include to Reliance Europe Limited Rs. 26.66 crore. Insurance Premium includes to Reliance
General Insurance Company Limited Rs. 56.74 crore. Hire charges includes to Reliance Ports and Terminals Limited Rs. 50.00 crore. Donation
includes to Dhirubhai Ambani Foundation Rs. 7.56 crore. Warehousing and Distribution Charges includes to Reliance Port and Terminals
Limited Rs. 646.15 crore. Product handling charges includes to Reliance Ports and Terminals Limited Rs. 87.46 crore. Wholesale Traffic
charges includes to Reliance Infocomm Limited Rs. 435.24 crore. General Expenses includes to Reliance Communication Infrastructure Limited
Rs. 40.33 crore; Reliance Infocomm Limited Rs. 16.68 crore and to Reliance Industrial Infrastructure Limited Rs. 6 crore.
Financial Guarantees include for Reliance Europe Limited Rs. 87.49 crore; Reliance Telecom Limited Rs. 108.71 crore. Performance Guarantee
include for Reliance Infocomm Limited Rs. 180.55 crore and Reliance Telecom Limited Rs. 16.37 crore.

Notes on Consolidated Accounts

17. Details of Investments :

A. INVESTMENTS IN ASSOCIATES

LONG TERM INVESTMENTS

Other Investments
In Equity Shares-Quoted, fully paid up

As at
31st March, 2005

As at
31st March, 2004

(Rs. in crore)

8,10,63,496 Reliance Energy Limited of Rs.10 each (Company under the

2,912.26

(7,18,67,874)

same management)

6,00,89,966 Reliance Capital Limited of Rs.10 each

641.91

(6,00,89,966)

69,80,000 Reliance Industrial Infrastructure Limited of Rs.10 each

67.43

(69,80,000)

3,621.60

2,115.42

642.38

61.58

2,819.38

In Equity Shares-Unquoted, fully paid up

70,95,130 Reliance Telecom Limited of Rs.10 each

59.46

56.03

(70,95,130)

(Refer Note 4)

31,50,00,000 Reliance Infocomm Limited of Re. 1 each (Company under

22.83

31.50

(31,50,00,000)

the same management)

2,55,00,175 Reliance General Insurance Company Limited

34.60

(2,55,00,175)

of Rs.10 each

5,00,175 Reliance Life Insurance Company Limited of Rs.10 each

0.50

(5,00,175)

90,00,00,000 Reliance Communications Infrastructure Limited of Re. 1 each 2,220.53
(90,00,00,000)

(Company under the same management)

11,08,500 Reliance Europe Limited of Sterling Pound 1 each

17.43

(11,08,500)

44,38,777 Reliance Petroinvestments Limited of Rs.10 each

288.24

(44,38,777)

50,000 Rosche Trading Private Limited of Rs.10 each

0.05

(50,000)

33.14

0.50

2,196.94

15.62

107.46

0.05

2,643.64

2,441.24

In Warrants-Unquoted, Partly Paid Up

98,61,228 Reliance Energy Limited of Rs.640 each, Rs. 576 paid up

568.01

(-)

568.01

In Preference Shares-Unquoted, Fully paid up

- 6% Cumulative Redeemable Preference Shares of
(86,00,000) Reliance Enterprises Limited of Rs. 100 each (Refer Note 3)

162,00,00,000

10% Cumulative Redeemable /Optionally Convertible

8,100.00

(162,00,00,000) Preference Shares of Reliance Infocomm Limited of
Re. 1 each (Company under the same management)
- 8% Cumulative Non-Convertible Redeemable Preference

(89,25,894) Shares of Reliance Infocomm Limited of Re. 1 each

(Company under the same management)

8,100.00

164 RELIANCE INDUSTRIES LIMITED

86.00

8,100.00

0.25

8,186.25

Notes on Consolidated Accounts

SCHEDULE ‘N’ (contd.)

In Preference Shares-Unquoted, Partly paid up

90,000 Rosche Trading Private Limited of Rs.100 each,

(90,000) Rs.55 paid up

In Debentures-Unquoted, fully paid up

(6,40,140)

6,40,140 Deep Discount Bonds of Reliance Communications
Infrastructure Ltd of Maturity Value Rs. 68,550 each
(Company under the same management)

Growth is Life 165

As at
31st March, 2005

As at
31st March, 2004

(Rs. in crore)

0.50

1,600.02

Total Investment in Associates (A)

16,533.77

15,047.39

B. INVESTMENTS IN OTHERS

LONG TERM INVESTMENTS

Government and other Securities-Quoted

8,660
(8,660)

6.75% UTI US64 Tax Free Bonds of Rs. 100 each

0.08

Government and other Securities-Unquoted

Kisan Vikas Patra ( Deposited with Sales Tax Department)
(Rs. 20,000;Previous Year Rs. 20,000)
7 Years National Savings Certificate (Deposited with Sales Tax
Department) (Rs. 12,000;Previous Year Rs. 12,000)
6 Years National Savings Certificate (Deposited with
Sales Tax Department)

Trade Investments
In Equity Shares-Unquoted, fully paid up

5 Bombay Gujarat Art Silk Vepari Mahajan Co-operative
(5) Shops & Warehouse Society Limited of Rs. 200 each

(Rs. 1,000; Previous Year Rs.1,000)

60 New Piece Goods Bazar Co. Ltd of Rs. 100 each (Rs. 17,000;

(60) Previous Year Rs. 17,000)

15 Pandesara Industrial Co-operative Society Limited of Rs. 100 each

(Rs. 1,500; Previous Year Rs. 1,500)

(15)
165 The Art Silk Co-operative Society Limited of Rs. 100 each

(165)

(Rs. 16,500; Previous Year Rs. 16,500)

20 The Bombay Market Art Silk Co-operative (Shops & Warehouses)
(20) Society Limited of Rs. 200 each (Rs. 4000;Previous Year Rs. 4000)

0.09

0.08

-
0.01

0.01

1,00,00,000 Petronet India Limited of Rs. 10 each
(1,00,00,000)

1,30,00,000 Petronet V.K. Limited of Rs. 10 each

(1,30,00,000)

10,66,000 Petronet C.I. Limited of Rs. 10 each (Refer Note 1)

( 10,66,000)

Petronet C.I. Limited - Share Application Money (Refer Note 1)

10,000 Reliance Netherlands B.V. of Euro 1 each

(-)

118 Reliance Petroproducts Private Limited of Rs.10 each

(118)

(Rs.1,180; Previous year Rs.1,180)

145 Reliance Global Trading Private Limited of Rs.10 each

(145)

(Rs. 1,450; Previous Year Rs. 1,450)

10.00

13.00

0.06

23.06

0.08

-
-

10.00

13.00

1.07

1.87

25.94

Notes on Consolidated Accounts

SCHEDULE ‘N’ (contd.)

In Equity Shares-Unquoted, Partly Paid Up

225 Crimpers Industrial Co-operative Society Limited of Rs.100 each,

(225) Rs. 25 paid up (Rs. 5,625;Previous Year Rs. 5,625)

226 Reliance Global Trading Private Limited of Rs.10 each,

(226) Rs.2.50 paid up (Rs. 565; Previous Year Rs. 565)

182 Reliance Petroproducts Private Limited of Rs. 10 each,

(182) Rs.2.50 paid up (Rs. 455; Previous Year Rs. 455)

Other Investments
In Equity Shares-Quoted, fully paid up

40,37,000 India Polyfibres Limited of Rs.10 each

(40,37,000)

2,500 MH Mills & Industries Limited of Rs.10 each

(2,500)

In Equity Shares-Unquoted, fully paid up

1,000 Air Control & Chemical Engineering Company Limited

(1,000)

of Rs. 100 each

1,700 Farvision Securities Private Limited of Rs. 100 each

(1,700)
22,900 Observer (India) Limited of Rs.10 each

(22,900)

150 Reliance Aromatics & Petrochemicals Private Limited of

(150) Rs.10 each (Rs. 1,500; Previous Year Rs. 1,500)

185 Reliance Energy & Project Development Private Limited of

(185) Rs. 10 each (Rs. 1,850; Previous Year Rs. 1,850)

900 Glory Bullion Trading Private Limited of Rs.10 each

(-)

(Rs. 9,000; Previous Year Nil)

4.05

0.01

4.06

0.01

0.09

0.04

900 Kunj Bihari Agrotech Private Limited of Rs.10 each

(-)

(Rs. 9,000; Previous Year Nil)

900 New Empire Millinium Investments and Trading Private

(-)

Limited of Rs.10 each (Rs. 9,000; Previous Year Nil)

69,524 WorldTel Holding Limited, Bermuda of US$ 0.05 each

(69,524)

3,000 Reliance Nutraceuticals Private Limited of Rs. 10 each

(-)

(Rs. 30,000; Previous Year Nil)

4,000 Reliance Pharmaceuticals (India) Private Limited of Rs. 10 each

(-)

(Rs. 40,000; Previous Year Nil)

1.93

2.07

166 RELIANCE INDUSTRIES LIMITED

As at
31st March, 2005

As at
31st March, 2004

(Rs. in crore)

23.06

25.94

4.05

0.01

4.06

0.01

0.09

0.04

1.93

2.07

Notes on Consolidated Accounts

SCHEDULE ‘N’ (contd.)

Growth is Life 167

As at
31st March, 2005

As at
31st March, 2004

(Rs. in crore)

In Debentures-Quoted, fully paid up

1,250
(1,250)

14% Non Convertible Debentures of MH Mills & Industries
Limited of Rs.45 each

0.01

In Debentures-Unquoted, fully paid up

- Deep Discount Bonds of Reliable Internet Services Limited of

(13,752) Maturity Value Rs. 1,00,000 each

40,13,900 Reliance Polyolefins Private Limited (Zero coupon Optionally

401.39

(40,13,900) Fully Convertible Debentures of Rs.1,000 each)

1,74,000 Reliance Chemicals Private Limited (Series I) (Zero coupon

17.40

(1,74,000) Optionally Fully Convertible Debentures of Rs.1,000 each)
28,84,042 Reliance Chemicals Private Limited (Series II) (Zero coupon

288.40

(28,84,042) Optionally Fully Convertible Debentures of Rs.1,000 each)

32,39,660 Reliance Aromatics and Petrochemicals Private Limited (Zero

323.97

(32,39,660)

coupon Optionally Fully Convertible Debentures of Rs.1,000 each)

(32,39,560)

32,39,560 Reliance Energy & Project Development Private Limited
(Zero coupon Optionally Fully Convertible
Debentures of Rs.1,000 each)

323.96

0.01

70.00

401.39

17.40

288.40

323.97

323.96

1,355.12

1,361.26

1,425.12

1,431.26

Interest in a Beneficiary Trust

1,654.96

Adjustment for exchange difference on consolidation of subsidiaries

Provision for dimunition in the value of investments

(0.42)

(0.02)

1.03

(0.02)

Total Long Term Investments

3,038.93

3,113.25

CURRENT INVESTMENTS

Other Investments

In Goverment Securities Quoted
11.99% GOI 2009
6.18% GOI 2005
10.20% GOI 2005
9.90% GOI 2005

In Treasury Bills Quoted
91 Days Treasury Bills
364 Days Treasury Bills

92.15
670.20
25.69
30.16
818.20

415.32
1,699.32
2,114.64

-
-
-
-
-

-
-
-

Notes on Consolidated Accounts

SCHEDULE ‘N’ (contd.)

As at
31st March, 2005

As at
31st March, 2004

(Rs. in crore)

Other Investments In Units-Unquoted

(-) Reliance Liquid Fund - Super Cash Plan of Rs. 10 each

(77,696)

14,54,06,713 Reliance Liquid Fund-Treasury Plan-Institutional Plan-Growth 235.00

(17,24,67,452) Option-Growth Plan of Rs. 10 each

1,65,81,915 Reliance Liquid Fund - Cash Plan of Rs. 10 each

19.42

(-)

9,71,36,418 Reliance Floating Rate Fund-Growth Plan-Growth Option of

100.00

(-) Rs.10 each

9,93,31,499 Reliance Floating Rate Fund-Monthly Dividend Plan of

100.00

(-) Rs.10 each

10,68,39,963 Reliance Long Term Gilt Plan-Retail Plan-Growth Option of

122.00

(-) Rs.10 each

12,34,611 Reliance Income Fund (Growth plan) units of Rs. 10 each

2.01

(12,37,055)

578.43

0.09

266.00

2.02

268.11

Total Current Investments

Investment in Others (B)

3,511.27

6,550.20

268.11

3,381.36

Total (A) + (B)

23,083.97

18,428.75

(1)

(2)

The investments and share application money in Petronet C. I. Limited of Rs. 1.07 crore and Rs. 1.87 crore respectively have been written
off during the year, as the said company is being wound up.

The company has extended negative lien on 16,06,50,000 equity shares of Reliance Infocomm Limited to banks for extending loans to
Reliance Infocomm Limited.

(3)

6% Cumulative Redeemable Preference Shares of Reliance Enterprises Limited have been redeemed during the year.

(4)

8% Cumulative Non-Convertible Preference Shares issued by Reliance Infocomm Limited pursuant to the High Court Order on demerger of
basic services division of Reliance Telecom Limited in 2003-04, have been redeemed at par during the year. The value of Rs. 0.64 crore
received on the above redemption has been reduced from the cost of investments in equity shares of Reliance Telecom Limited.

INVESTMENTS

(Rs. in crore)

As at
31st March, 2005

As at
31st March, 2004

AGGREGATE VALUE OF

Book Value

Market Value

Book Value

Market Value

Quoted Investments

Unquoted Investments

6,558.57

8,373.09

2,823.51

6,342.62

16,525.82

15,604.21

168 RELIANCE INDUSTRIES LIMITED

Consolidated Cash Flow Statement for the year 2004-05

Growth is Life 169

A: CASH FLOW FROM OPERATING ACTIVITIES:

Net Profit before tax as per Profit and Loss Account

9,125.45

6,310.07

2004-05

(Rs. in crore)

2003-04

Adjusted for:

Share in Income of Associates

Net Prior Year Adjustments

Miscellaneous Expenditure written off

Investments written off / provided

Provision for doubtful claims

(Profit) / Loss on Sale / Discarding of Assets

Depreciation

Transferred from General Reserve

Effect of Exchange Rate Change

Profit on Sale of Investments

Dividend Income

Interest / Other Income

Interest Expenses

Operating Profit before Working Capital Changes

Adjusted for:

Trade and Other Receivables

Inventories

Trade Payables

Cash Generated from Operations

Net Prior Year Adjustments

Taxes Paid

Net Cash from Operating Activities

B: CASH FLOW FROM INVESTING ACTIVITIES:

Purchase of Fixed Assets

Sale of Fixed Assets

Purchase of Investments

Sale of Investments

Movement in Loans

Interest Income

Dividend Income

Net Cash Used in Investing Activities

(69.63)

2.86

2.94

69.88

8.92

3,788.43

(61.07)

116.43

(47.17)

(1,280.00)

1,474.07

1,739.79

(181.66)

3,124.97

(58.08)

2.18

47.15

12.60

3,335.18

(84.37)

14.96

(107.22)

(4.54)

(858.52)

1,439.67

4,005.66

13,131.11

3,739.01

10,049.08

(418.41)

279.19

2,065.67

4,683.10

17,814.21

(2.86)

(506.28)

17,305.07

(5,353.68)

1,693.35

(41,946.34)

37,801.80

(691.82)

283.40

(8,213.29)

1,926.45

11,975.53

(2.18)

(305.06)

11,668.29

(4,360.38)

8.84

(37,462.84)

30,133.33

615.72

559.83

4.54

(10,500.96)

Consolidated Cash Flow Statement for the year 2004-05 (Contd.)

C: CASH FLOW FROM FINANCING ACTIVITIES:

Proceeds from Issue of Share Capital (Net)

Buyback of Equity Shares

Proceeds from Long Term Borrowings

Repayment of Long Term Borrowings

Short Term Loans

Dividends Paid

Interest Paid

Net Cash Used in Financing Activities

2004-05

0.07

(149.61)

7,149.70

(7,731.66)

(2,282.67)

(771.84)

(1,920.17)

(5,706.18)

(Rs. in crore)

2003-04

0.26

1,910.49

(4,749.08)

3,945.36

(731.51)

(1,422.09)

(1,046.57)

Net Increase / (Decrease) in Cash and Cash Equivalents

3,385.60

120.76

Opening Balance of Cash and Cash Equivalents

Less : Upon desubsidiarisation of Reliance Infocomm BV

270.88

45.76

150.12

225.12

150.12

Closing Balance of Cash and Cash Equivalents

3,610.72

270.88

As per our Report of even date

For and on behalf of the Board

For Chaturvedi & Shah
Chartered Accountants

For Rajendra & Co.
Chartered Accountants

D. Chaturvedi
Partner

Mumbai
April 27, 2005

R. J. Shah
Partner

M. D. Ambani

N. R. Meswani
H.R. Meswani
H. S. Kohli

R. H. Ambani
M. L. Bhakta
Y. P. Trivedi
Dr. D. V. Kapur
M. P. Modi
S. Venkitaramanan

V. M. Ambani

}

Chairman & Managing Director

Executive Directors

Directors

Company Secretary

170 RELIANCE INDUSTRIES LIMITED

Reconciliation of Net Profit determined under Indian GAAP to
Consolidated Net Income in accordance with US GAAP

Growth is Life 171

The following reconciliation between Net Profit determined under generally accepted accounting principles in India (“Indian GAAP”) to
Consolidated Net Income in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) has
been provided as additional disclosure on a voluntary basis to assist readers who may be unfamiliar with Indian GAAP which is the primary
reporting basis.

Reconciliation of Profit determined under Indian GAAP with Net Income according to US GAAP.

Year ended 31st March, 2005

Notes

Net Profit determined under Indian GAAP

Adjustments for Consolidation

Consolidated Net Profit determined as per Indian GAAP

Adjustments to conform with US GAAP

Affiliates and Subsidiaries

Indirect Preoperative Expenses

Foreign Currency and Hedging

Depreciation

Deferred Income Tax

Employee Benefits

Loss on early extinguishment of debt

Other

Consolidated net income in accordance with US GAAP

1 US $ = Rs 43.745 (Exchange rate as on 31.03.2005)

Rs.
(crore)

7,572

7,628

(214)

(10)

236

(419)

(45)

(211)

(21)

6,987

US $
(Millions)

1,731

1,744

(49)

(2)

(96)

(10)

(49)

(5)

1,597

Notes to Reconciliation of Net profit determined under Indian GAAP with Consolidated Net Income according to US GAAP.

The following notes show the difference between Indian and US GAAP and necessary adjustments to arrive at consolidated net income
under the US GAAP:

Share in income of Affiliates and Subsidiaries

Under Indian GAAP , the Company’s consolidated financial statements include its share of earnings of affiliates and subsidiaries which
is consistent with US GAAP. However, the net income under US GAAP includes the earnings of subsidiaries and affiliates determined
in accordance with US GAAP. Consolidation of subsidiaries and affiliates is based on financial statements/ results received from them.

Indirect Preoperative Expenses

Under Indian GAAP, certain indirect expenses incurred during construction are capitalized. Under US GAAP, such indirect costs are
expensed as incurred.

Foreign Currency and Hedging

Under Indian GAAP, foreign exchange difference relating to acquisition of fixed assets is adjusted to the carrying cost of such assets.
Other foreign exchange differences are recognized in the profit and loss account. Under US GAAP, all gains or losses arising out of
foreign exchange differences are required to be included in the determination of net income.

The Company also enters into derivative contracts to manage its exposures to fluctuations in interest rates, foreign currencies and
commodity prices. Substantially all such contracts are regulated by agencies of the Government and may be entered into only for the
purposes of hedging. In order to comply with regulations, the Company maintains documentation to demonstrate that each such contract
qualifies for, and is effective as, a hedge of cash flows or fair value of a fixed rate asset or liability. Derivatives that do not meet the
criteria for designation as a hedge under Statement of Financial Accounting Standard No. 133 “ Accounting for Derivative Instruments
and Hedging Activities” (SFAS 133, as amended) at inception, or fail to meet the criteria thereafter, are marked to market and recognized
in the statement of net income immediately.

Under Indian GAAP, the gain or loss on such derivative contracts are generally recognised when the underlying hedge transaction
settles, or upon earlier termination of the hedge.

Under US GAAP, the accounting for hedge contracts depends upon the nature of the hedge. For a derivative designated as hedging an
exposure to variable cash flow of a forecasted transaction, the effective portion of the derivative’s gain or loss is recognised in income
when the forecasted transaction affects earnings, or upon earlier termination of the hedge. Changes in fair value of a derivative that is
designated as a fair value hedge along with the gain or loss on the hedged asset or liability are recognised in the statement of net
income.

4. Depreciation

Under Indian GAAP, indirect preoperative expenses incurred during construction are capitalized. Under US GAAP, such indirect costs
must be expensed as incurred. Depreciation has been adjusted to take account of the US GAAP adjustments to fixed assets for indirect
preoperative expenses and foreign currencies.

5. Deferred Income Tax

The provision for taxation under Indian GAAP consists of the estimated tax currently payable and deferred income taxes for timing
differences between accounting income and taxable income at the substantively enacted income tax rates.

US GAAP requires that a provision for such deferred income taxes be made for the future tax effects of temporary differences between
book and tax basis of assets at the enacted tax rates.

Accordingly, the reconciliation provides for an adjustment to reflect the differences due to tax rates and the tax effect of US GAAP
adjustments.

Employee benefits

Under Indian GAAP, provision for leave encashment is accounted for on actuarial valuation basis.

Under US GAAP, provision for leave encashment is accounted on actual basis.

Loss on extinguishment of debt

Under Indian GAAP, debt extinguishment premiums are adjusted against Securities Premium Account.

Under US GAAP, premiums for early extinguishment of debt are expensed as incurred.

As per our report of even date

For Deloitte Haskins & Sells

Chartered Accountants

P. R. Barpande

Partner

Mumbai

April 27, 2005

For and on behalf of the Board

N.R. Meswani

Executive Director

International Accountants’ Report

To the Board of Directors of

RELIANCE INDUSTRIES LIMITED

We have audited the Balance Sheet of Reliance Industries Limited ('RIL') as of 31st March, 2005 and the Profit and Loss account and
the Cash Flow statement for the year then ended and have issued our report thereon dated April 27, 2005. Our audit also included the
accompanying Reconciliation of Net Profit under Indian GAAP to Consolidated Net Income in accordance with US GAAP (“the
Reconciliation”).

The Reconciliation is the responsibility of the Company’s management. Our responsibility is to express an opinion based on our audit.

The audited financial statements of an affiliate, which reflect RIL’s share in net profit for the year of Rs. 227 crore for the year ended
March 31, 2005 are not available and the said share has been considered on the basis of net profit of the affiliate as published, for the
year.

Subject to our remark in the foregoing para, in our opinion, such Reconciliation, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects, the information set forth therein.

Mumbai
April 27, 2005

172 RELIANCE INDUSTRIES LIMITED

For Deloitte Haskins & Sells
Chartered Accountants

P. R. Barpande
Partner
(Membership No. 15291)

Growth is Life 173

Annexure 1 to Shareholders' Referencer

List of Investor Service Centres of Karvy Computershare Private Limited
City name

STD Code Phone-Office

Fax Nos.

E-mail

AGRA
AHMEDABAD
ALIGARH
ALLAHABAD
ANANTAPUR
ANKLESHWAR
AURANGABAD
BANGALORE
BAREILLY
BELGAUM
BELLARY
BHARUCH
BHAVNAGAR
BHIMAVARAM
BHOPAL
BHUBANESHWAR
CALICUT
CHANDIGARH
CHENNAI
CHILAKALURIPET
COIMBATORE
CUTTACK
DEHRADUN
DINDIGUL
DURGAPUR
ELURU
ERODE
GHAZIABAD
GOBICHETTIPALAYAM
GORAKHPUR
GUNTUR
HALDIA
HUBLI
HYDERABAD
INDORE
JAIPUR
JAMNAGAR
JAMSHEDPUR
JUNAGADH
KAKINADA
KANPUR
KARAIKUDI
KARUR
KOCHI
KOLKATA
LUCKNOW
MADURAI
MANGALORE
MATTANCHERRY
MUMBAI
MUMBAI
MYSORE
NADIAD
NASIK
NELLORE
NEW DELHI
PALGHAT
PANJIM
PATNA
PONDICHERRY
PRODDATUR
PUNE
RAJAHMUNDRY
RAJKOT
RANCHI
RENUKOOT
ROURKELA
SALEM
SHIMOGA
SURAT
TANJORE
THENI
TIRUPATI
TIRUPUR
TRICHUR
TRICHY
TRIVANDRUM
TUMKUR
UDUPI
VADODARA
VALLABH-VIDHYANAGAR
VARANASI
VIJAYAWADA
VISHAKAPATNAM
VISHAKAPATNAM GAJUWAKA

0562
079
0571
0532
08554
02646
0240
080
0581
0831
08392
02642
0278
08816
0755
0674
0495
0172
044
08647
0422
0671
0135
0451
0343
08812
0424
0120
04285
0551
0863
03224
0836
040
0731
0141
0288
0657
0285
0884
0512
04565
04324
0484
033
0522
0452
0824
0484
022
022
0821
0268
0253
0861
011
0491
0832
0612
0413
08564
020
0883
0281
0651
05446
0661
0427
08182
0261
04362
04546
0877
0421
0487
0431
0471
0816
0820
0265
02692
0542
0866
0891
0891

2526660 to 63
26420422 / 26400527 / 28
2509106 to 08
2561073 to 74
249601 / 249607 / 249608
243291 / 243292 / 243392 / 243955
2363517 / 23 / 24 / 30
26621192 / 26621193
~
2402544 / 2402722 / 2402880
254531, 254532
242082 / 242394 / 241546
2525005. 2525006
231766 / 67 / 68 / 69
2559332, 2559337, 2574569, 2574589, 2574731
2547531 to 34, 2547382
2760882, 2760884
5071726, 5071727, 5071728, 5079702
28153445, 28151034, 28153658
257501
2237501 TO -506, 2231387, 2237990
2335187, 3110827, 3109972
2713351, 2714046, 2714047
2436077, 2436177
2586375 to 77
227851 / 52 / 54
2225603, 225615, 2225616, 2225617, 2225624
2701886, 2701891
226275, 226276
2333825, 2333814
2326684 / 2326686
276755 to 57
2353962, 2353974, 2353975
23312454 / 23320251
5069891, 5069892, 5069893
2375099, 2363321, 2375039
2557862 TO 65
2487020, 2487045, 2487048
2624154 / 2624140 / 2624125
2387382 / 2387383
2330127, 2331445, 3092333, 3096000
237192, 237193
241892, 241893, 241894
2310884, 2322152
24634787 to 89, 24647231, 24647232, 24644891
2236820 to 26
2350855, 2350852 to 854
2492302, 2496332, 2492901
2223243
26730799 / 843 / 311 / 867 / 153 / 292
30325600, 30325624, 30325645
2524292, 2524294
2563210 / 2563245 / 2563248
2577811, 5602542, 5602543, 5602544
2349935 / 2349936 / 2349937
23324401 / 23353835 / 981
2547143
2426870, 2426871, 2426872
2321355 / 56
2220636, 2220640
250822 / 250823 / 250824
4048790
2434468 / 2434469
2239403 / 2239404 / 2239338 / 2294316
2330386, 2330394, 2330320
254201
2510771, 2510772
2335700 TO 704
228795, 228796, 227485
8357356 / 8351976 / 8369928
279407, 279408
261285, 261108
2252756
2205865, 5330158
2322483, 2322484
2798200, 2791000
2725987, 2725989 to 991
2261891, 2261892, 2261893
2530962, 2530963, 2530964
2225325 / 2225389
248980, 248873
2225365, 2223814
2495200 / 400 / 500 / 600 / 700 / 800
2752915 to 18
2511685, 2511686

2526663
26565551
2429272
2561073
~
~
~
26621169
2476797
2402933
254533
~
~
~
2760890
2511012
~
~
28153181
257502
~
~
2714047
~
~
~
~
~
~
2346519
2326687
~
2353961
23312946
5069894
2364660
~
~
~
2387381
2558334
~
241891
2323104
24644866, 24634787
2236826
2350856
2496352

26730152
2285731
2524293
~
~
2349939
23324621
~
2426873
~
2220659
~
25456842
2434471
~
~
~
~
2335705
2226747
8368693
~
~
~
~
~
2794132
2725987
~
~
2363207
~
2223814
2495300
2752915 - 18
~

sandeepagar@karvy.com, ksblagra@karvy.com
ahmedabad@karvy.com
aligarh@karvy.com; ksblaligarh@karvy.com
pradeept@karvy.com, ksblallahabad@karvy.com
lrajesh@karvy.com, ksblanantpur@karvy.com
hiren.soni@karvy.com, ksblankleshwar@karvy.com
shaileshn@karvy.com, ksblabad@karvy.com
ramapriyanpb@karvy.com
avitabh@karvy.com, ksblbareilly@karvy.com
ksblbelgaum@karvy.com
vijayendra@karvy.com, ksblbellary@karvy.com
hiren.soni@karvy.com, ksblbharuch@karvy.com
manish.jain@karvy.com, bhavnagar@karvy.com
ppvarma@karvy.com, ksblbvaram@karvy.com
ashutosh.dwivedi@karvy.com, ksblbhopal@karvy.com
ksblbbsr@karvy.com
bijesh@karvy.com, ksblcalicut@karvy.com
sanjay@karvy.com, chandigarh@karvy.com
sraja@karvy.com, ksblmadras@karvy.com
ksblchpet@karvy.com
srn@karvy.com, coimbatore@karvy.com
debasis@karvy.com, ksblcuttack@karvy.com
abhishek@karvy.com, ksbldehradun@karvy.com
dindigul@karvy.com
jagdish@karyv.com, ksbldurgapur@karvy.com
ksbleluru@karvy.com
erode@karvy.com
shailendra@karvy.com, ksblghaziabad@karvy.com
gobi@karvy.com
abhinav@karvy.com, ksblgorakhpur@karvy.com
ssrikanth@karvy.com, ksblguntur@karvy.com
joshiss@karvy.com, ksblhaldia@karvy.com
basavarajhirur@karvy.com, hubli@karvy.com
anitha@karvy.com
pmungre@karvy.com
mbmaheshwari@karvy.com, ksbljaipur@karvy.com
jamnagar@karvy.com
jamshedpur@karvy.com, ksbljamshedpur@karvy.com
junagadh@karvy.com
vvrao@karvy.com, ksblkakinada@karvy.com
prashant@karvy.com, ksblkanpur@karvy.com
karaikudi@karvy.com
karur@karvy.com
rganesan@karvy.com, ksblcochin@karvy.com
alokc@karvy.com, ksblcalcutta@karvy.com
nitinsaxena@karvy.com, adminlucknow@karvy.com
madurai@karvy.com, ksblmadurai@karvy.com
cshetty@karvy.com, mangalore@karvy.com
kparthasarathy@karvy.com, ksblmattancherry@karvy.com
pbamlani@karvy.com, mumbaiandheri@karvy.com
~
vasanthank@karvy.com, mysore@karvy.com
nadiad@karvy.com
nabriyad@karvy.com
chandramohan@karvy.com, ksblnellore@karvy.com
sakulpuri@karvy.com, ksbldelhi@karvy.com
palghat@karvy.com
rajeshpatki@karvy.com ksblpanajim@karvy.com
sanjayn@karvy.com, ksblpatna@karvy.com
vipul@karvy.com, ksblpondicherry@karvy.com
viswam@karvy.com, ksblproddatur@karvy.com
anandjaju@karvy.com, pune@karvy.com
gv@karvy.com; ksblrjm@karvy.com
manish.jain@karvy.com, rajkot@karvy.com
ranchi@karvy.com, ksblranchi@karvy.com
renukoot@karvy.com
nmohanty@karvy.com, rourkela@karvy.com
salem@karvy.com
shimoga@karvy.com, ksblshimoga@karvy.com
surat@karvy.com, ksblsurat@karvy.com
tanjore@karvy.com
jaya@karvy.com, theni@karvy.com
venkatreddy@karvy.com, ksbltirupati@karvy.com
tirupur@karvy.com
josephka@karvy.com
trichy@karvy.com
csjoy@karvy.com, ksbltvm@karvy.com
somnath@karvy.com, tumkur@karvy.com
ksbludupi@karvy.com, udupi@karvy.com
shoban@karvy.com, ksblbaroda@karvy.com
mukesh.patel@karvy.com, vvnagar@karvy.com
ashutosh@karvy.com, ksblvaranasi@karvy.com
cchrao@karvy.com, vijayawada@karvy.com
ysrinivas@karvy.com, ksblvizag@karvy.com
prasad@karvy.com, ksblgajuwaka@karvy.com

ELECTRONIC CLEARING SERVICES (ECS) MANDATE FORM

Annexure 2 to Shareholders' Referencer

To
Reliance Industries Limited
C/o. Karvy Computershare Private Limited
46, Avenue 4, Street No. 1, Banjara Hills
Hyderabad 500 034

Dear Sirs,

Please fill-in the information in CAPITAL LETTERS in ENGLISH ONLY. Please TICK ✓

FORM FOR ELECTRONIC CLEARING SERVICES FOR PAYMENT OF DIVIDEND/INTEREST.
wherever is applicable.

For shares held in physical form

Master
Folio No.

For shares held in electronic form

FOR OFFICE USE ONLY

ECS
Ref.No.

DP. Id

Client Id

Name of
First holder

Bank name

Branch name

Branch code

(9 Digits Code Number appearing on the MICR Band of the cheque supplied by the
Bank). Please attach a xerox copy of a cheque or a blank cheque of your bank duly
cancelled for ensuring accuracy of the banks name, branch name and code number.

Savings

Current

Cash Credit

Account type

A/c. No. (as appearing
in the cheque book)

Effective date of this
mandate

(cid:1)

I, hereby, declare that the particulars given above are correct and complete. If any transaction is delayed or not
effected at all for reasons of incompleteness or incorrectness of information supplied as above, Karvy
Computershare Private Limited, will not be held responsible. I agree to avail the ECS facility provided by RBI, as
and when implemented by RBI/Reliance Industries Limited.

I further undertake to inform the Company any change in my Bank/branch and account number.

Dated : _________________
Note : On dematerialisation of existing physical shares, for which you have availed ECS facility, the above form

(Signature of First holder)

174 RELIANCE INDUSTRIES LIMITED

needs to be re-submitted.

Annexure 3 to Shareholders' Referencer

Growth is Life 175

Nomination Form
[ To be filled in by individual(s) ]

To,

From

Name of shareholder and address

Reliance Industries Limited
C/o. Karvy Computershare Private Ltd.
46, Avenue 4, Street No.1
Banjara Hills
Hyderabad 500 034

Folio No.

No. of Shares

I am/we are holder(s) of Shares of the Company as mentioned above. I/We nominate the following person in whom all
rights of transfer and/or amount payable in respect of Equity Shares shall vest in the event of my/our death.

Nominee’s name

Age

To be furnished in case the nominee is a minor

Date of Birth

Guardian’s Name & Address*

Occupation of
Nominee Tick ( )

Service

Professional

Business

3 Student

Household

Farmer

7 Others

Nominee’s

Address

Telephone No.

Email Address

Specimen signature of
Nominee / Guardian
(in case nominee
is minor)

Pin Code

Fax No.

STD Code

* To be filled in case nominee is a minor
Kindly take the aforesaid details on record.
Thanking you,

Yours faithfully,

Date..................................

Name and address of equity shareholder {as appearing on the Certificate(s)}

Signature (as per specimen with Company)

Sole/1st holder

(address)
2nd holder
3rd holder
4th holder

Witness (two)

Name and Address of Witness

Signature & Date

INSTRUCTIONS :

Please read the instructions given below very carefully and follow the same to the letter. If the form is not

filled as per instructions, the same will be rejected.

The nomination can be made by individuals only. Non individuals including society, trust, body corporate,

partnership firm, Karta of Hindu Undivided Family, holder of power of attorney cannot nominate. If the
Shares are held jointly all joint holders shall sign (as per the specimen registered with the Company) the

nomination form.

A minor can be nominated by a holder of Shares and in that event the name and address of the Guardian

shall be given by the holder.

The nominee shall not be a trust, society, body corporate, partnership firm, Karta of Hindu Undivided
Family, or a power of attorney holder. A non-resident Indian can be a nominee on re-patriable basis.

Transfer of Shares in favour of a nominee shall be a valid discharge by a Company against the legal
heir(s).

Only one person can be nominated for a given folio.

Details of all holders in a folio need to be filled; else the request will be rejected.

The nomination will be registered only when it is complete in all respects including the signature of (a) all

registered holders (as per specimen lodged with the Company) and (b) the nominee.

Whenever the Shares in the given folio are entirely transferred or dematerialised, then this nomination

will stand rescinded.

10.

Upon receipt of a duly executed nomination form, the Registrars & Transfer Agent of the Company will
register the form and allot a registration number. The registration number and folio no. should be quoted

by the nominee in all future correspondence.

11.

The nomination can be varied or cancelled by executing fresh nomination form.

12.

The Company will not entertain any claims other than those of a registered nominee, unless so directed by
a Court.

13.

The intimation regarding nomination / nomination form shall be filed in duplicate with the Registrars &

Transfer Agents of the Company who will return one copy thereof to the Shareholders.

14.

For shares held in dematerialised mode nomination is required to be filed with the Depository Participant

in their prescribed form.

FOR OFFICE USE ONLY

Nomination Registration Number

Date of Registration

Checked by (Name and Signature)

176 RELIANCE INDUSTRIES LIMITED

Growth is Life 177

Annexure 4 to Shareholders' Referencer

FORM II

[See Rule 6(i)]

PART ‘A’

Application to the Central Government for an order for payment of the dividend amount out of the General Revenue Account of
the Central Government pursuant to section 205B of the Companies Act, 1956.

Reliance Industries Limited

Regn. No. 11-19786

Maker Chamber IV, 222, Nariman Point, Mumbai 400 021.

(i)

(ii)

(i)

Name of the applicant

Postal address of the applicant

Name, registration number and registered

address of the company from which the

amount is due.

Number of shares held

Preference shares (with distinctive numbers)

Equity shares (with distinctive numbers)

Financial year to which the dividend relates.

Amount due

On Preference Shares

(ii) On Equity Shares

(iii)

Interest, if any, payable to him pursuant to

sub-section (4) of Section 205A of the Act, and

(iv)

Total of (i), (ii) and (iii) above :

Reasons for non-receipt of the amount from the Company.

Place :

Date :

(Signature of the applicant or a person holding a
power of attorney from the applicant)

Received from the Registrar of Companies, Maharashtra, Mumbai the sum of Rs. _____________ (Rupees (in words)
____________________________________ ) being the amount payable to me/us from the General Revenue Account of the Central
Government as unclaimed or unpaid dividend (which was originally) due from M/s. Reliance Industries Limited .

1. Signature of witness with name, date, address and

occupation

Signature of the claimant with name, date, address and
occupation (on revenue stamp of Re. 1/- if the claim is

for Rs. 500/- or more)

2. Signature of witness, with name, date, address and occupation

Notes:

1. Indemnity Bond should be furnished on non-judicial stamp paper of the requisite value, in case the claim exceeds Rs.2500/-.

2. In the case of deceased shareholder, the legal representative(s) of the deceased shareholder, who is (are) preferring the claim, is(are) required to furnish
succession certificate/probate/letters of administration. In case the shares have been transmitted in the name of the claimant, a certificate in this behalf from the

company be furnished.

3. Dividend warrant or a photocopy of the share certificate should be furnished.

4. Separate applications should be made for claims in respect of each company.

Payment Order by the Registrar of Companies, Maharashtra, Mumbai

PART 'B'

Classification "075-Miscellaneous General Services-
Unpaid dividends of Companies - Deduct Refunds."

Certified that the amount claimed, namely Rs. _____________
has actually been deposited by the company to the General
Revenue Account of the Central Government under Major Head
"075 Miscellaneous General Services - Unpaid Dividends of
Companies" on _________ (date). Necessary note for refund has
been kept in the accounts maintained by me.

_________________
(Asst. Registrar of Companies, Maharashtra, Mumbai)

Passed for payment for Rs. ____________________ in favour
of Shri/Smt. _________________________________________

The cheque/demand draft may please be issued in favour of
Shri/Smt. ___________________________________________

_________________
(Asst. Registrar of Companies, Maharashtra, Mumbai)

FORM III
[See Rule 6(3)]

Form of Indemnity Bond

Registrar of Companies, Maharashtra

CGO Complex, 2nd Floor,
'A' Wing, CBD Belapur,
Navi Mumbai 400 614.

In Consideration of your agreeing to pay me/us the sum of Rs.___________(Rupees _______________________________________)
only, being the amount due to me/us on dividend for the year(s)___________________) from Reliance Industries Limited, Mumbai
out of the General Revenue Account of the Central Government. I, _____________________________son/daughter/wife of Mr /
Mrs______________________ do hereby agree to indemnify you to the extent of any claim not exceeding the amount herein before
mentioned which may be preferred against you, and which you may have to lawfully discharge.

(Signature)

Place :

Date :

Witnesses:-

(Signature) :

Address :

(Signature) :

Address :

178 RELIANCE INDUSTRIES LIMITED

Growth is Life 179

ATTENDANCE SLIP

Reliance Industries Limited

Registered Office: 3rd floor, Maker Chambers IV, 222, Nariman Point, Mumbai 400 021.

PLEASE FILL ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE OF THE MEETING HALL.
Joint shareholders may obtain additional Slip at the venue of the meeting.

DP. Id*

Client Id*

NAME AND ADDRESS OF THE SHAREHOLDER

Master Folio No.

No. of Shares.

No. of Share(s) held:

I hereby record my presence at the 31st ANNUAL GENERAL MEETING of the Company held on Wednesday, August 3, 2005

at 11.00 a.m. at Birla Matushri Sabhagar, 19, New Marine Lines, Mumbai 400 020.

Signature of the shareholder or proxy

*Applicable for investors holding shares in dematerialised form.

Reliance Industries Limited

Registered Office: 3rd floor, Maker Chambers IV, 222, Nariman Point, Mumbai 400 021.

PROXY FORM

DP. Id*

Client Id*

Master Folio No.

No. of Shares.

I/We ................................................................................................................................................................................................. o f

........................................................................................................................ being a member/members of Reliance Industries

Limited hereby appoint .....................................................................................................................................................................

of ................................................................................................................................................................................. or failing him

............................................................................................... of ........................................................................................................

as my/our proxy to vote for me/us and on my/our behalf at the 31st ANNUAL GENERAL MEETING to be held on

Wednesday, August 3, 2005 at 11.00 a.m. or at any adjournment thereof.

Signed this ......................................... day of .............................................. 2005.

* Applicable for investors holding shares in dematerialised form.

Affix a 15

paise

revenue

stamp

NOTE:

(1)

The proxy in order to be effective should be duly stamped, completed and signed and must be deposited at
the Registered Office of the Company not less than 48 hours before the time for holding the aforesaid
meeting. The Proxy need not be a member of the Company.

(2) Members holding shares under more than one folio may use photocopy of this Proxy Form for other folios.

The Company shall provide additional forms on request.

Our theme for this year’s report

is the Golden Mean — an ancient

mathematical concept that brings

greater understanding to the process

of growth. We see it in the incredible

growth patterns of many life forms.

Like the spirals in a sea-shell,

the structure of a sunflower or the

whorls of a pineapple.

Reliance has grown from small

beginnings to become a global leader.

Its roadmap for the future is charted

on strategies for exponential growth.

G4_125/Jobs1/A205005862_Reliance Annual Report/BW cover1_uni.qxd prima #133 CMYK

design by point

Growth is life

R E L I A N C E I N D U S T R I E S L I M I T E D

ANNUAL REPORT 2 0 0 4 - 2 0 0 5

G4_125/Jobs1/A205005862_Reliance Annual Report/BW cover1_uni.qxd Prima #133
KSPGREENGOLD