Reliance Industries Limited Annual Report 2006

FY2006 Annual Report · Reliance Industries Limited

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RELIANCE INDUSTRIES LIMITED

Notice

Notice is hereby given that the Thirty-second Annual General Meeting of the Members of RELIANCE INDUSTRIES LIMITED will
be held on Tuesday, June 27, 2006 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, 2006, 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 & 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. Dipak C. Jain, who was appointed as an Additional
Director pursuant to the provisions of Section 260 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 Section 81 and all other applicable provisions, if any, of the Companies
Act, 1956 (“the Act”) and the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines, 1999 (“the Guidelines”) or any statutory modification(s) or re-enactment of the Act or the
Guidelines, the provisions of any other applicable laws and regulations, the Articles of Association of the Company and Listing
Agreements entered into by the Company with the Stock Exchanges where the securities of the Company are listed and subject to
any applicable approval(s), permission(s) and sanction(s) of any authorities and subject to any condition(s) and modification(s) as
may be prescribed or imposed by such authorities while granting such approval(s), permission(s) and sanction(s) and which may be
agreed to and accepted by the Board of Directors of the Company (hereinafter referred to as “the Board” which term shall include
‘Employees Stock Compensation Committee’ of the Board) and in supersession of the Special Resolution passed by Members in the
Annual General Meeting of the Company held on June 13, 2000, consent of the Company be and is hereby accorded to the Board
to grant, offer and issue, in one or more tranches, to such permanent employees of the Company whether working in India or out of
India and Directors of the Company whether Wholetime Directors or otherwise (hereinafter referred to collectively as the
“Employees”), as may be decided by the Board, Options exercisable by the Employees under a Scheme titled “Employees Stock
Option Scheme - 2006” (hereinafter referred to as “the Scheme”) to subscribe to such number of equity shares and/or equity linked
instruments which could give rise to the issue of equity shares (hereinafter referred to collectively as “the Securities”) of the
Company not exceeding in aggregate 5% of the issued, subscribed and paid-up equity shares of the Company as on March 31, 2006,
i.e. up to 6,96,75,402 equity shares, at such price and on such terms and conditions as may be determined by the Board in
accordance with the Guidelines or any other applicable provisions as may be prevailing at that time.

RESOLVED FURTHER THAT the Board be and is hereby authorised to formulate, evolve, decide upon and bring into effect the
Scheme on such terms and conditions as contained in the Explanatory Statement to this item in the Notice and to make any
modification(s), change(s), variation(s), alteration(s) or revision(s) in the terms and conditions of the Scheme from time to time
including but not limited to, amendment(s) with respect to vesting period and schedule, exercise price, exercise period, eligibility
criteria or to suspend, withdraw, terminate or revise the Scheme.

RESOLVED FURTHER THAT the Securities may be allotted in accordance with the Scheme either directly or through an existing
trust or a trust which may be setup in any permissible manner and that the Scheme may also envisage for providing any financial
assistance to the trust to enable the trust to acquire, purchase or subscribe to the Securities of the Company.

Growth is Life

RESOLVED FURTHER THAT any new equity shares to be issued and allotted as aforesaid shall rank pari passu inter se with the
then existing equity shares of the Company in all respects.

RESOLVED FURTHER THAT the Board be and is hereby authorised to take necessary steps for listing of the Securities allotted
under the Scheme on the Stock Exchanges where the securities of the Company are listed as per the provisions of the Listing
Agreements with the Stock Exchanges concerned, the Guidelines and other applicable laws and regulations.

RESOLVED FURTHER THAT for the purpose of giving effect to this resolution, the Board be and is hereby authorised to do all
such acts, deeds, matters and things as it may, in its absolute discretion, deem necessary, expedient or proper and to settle any
questions, difficulties or doubts that may arise in this regard at any stage including at the time of listing of the Securities without
requiring the Board to secure any further consent or approval of the Members of the Company to the end and intent that they
shall be deemed to have given their approval thereto expressly by the authority of this resolution.”

7. 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 Section 81 and all other applicable provisions, if any, of the Companies
Act, 1956 (“the Act”) and the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines, 1999 (“the Guidelines”) or any statutory modification(s) or re-enactment of the Act or the
Guidelines, the provisions of any other applicable laws and regulations, the Articles of Association of the Company and Listing
Agreements entered into by the Company with the Stock Exchanges where the securities of the Company are listed and subject to
any applicable approval(s), permission(s) and sanction(s) of any authorities and subject to any condition(s) and modification(s) as
may be prescribed or imposed by such authorities while granting such approval(s), permission(s) and sanction(s) and which may be
agreed to and accepted by the Board of Directors of the Company (hereinafter referred to as “the Board” which term shall include
‘Employees Stock Compensation Committee’ of the Board) and in supersession of the Special Resolution passed by Members in the
Annual General Meeting of the Company held on June 13, 2000, consent of the Company be and is hereby accorded to the Board
to extend the benefits of the “Employees Stock Option Scheme – 2006” referred to in the resolution under Item No. 6 in this Notice
and duly passed at this Meeting, also to such permanent employees of the subsidiary companies whether working in India or out of
India and Directors of the subsidiary companies whether Wholetime Directors or otherwise, as may be decided by the Board and /
or such other persons, as may from time to time, be allowed under prevailing laws and regulations on such terms and conditions as
may be decided by the Board.

RESOLVED FURTHER THAT for the purpose of giving effect to the above resolution, the Board be and is hereby authorised to do
all such acts, deeds, matters and things as it may, in its absolute discretion, deem necessary, expedient or proper and to settle any
questions, difficulties or doubts that may arise in this regard at any stage including at the time of listing of the Securities without
requiring the Board to secure any further consent or approval of the Members of the Company to the end and intent that they
shall be deemed to have given their approval thereto expressly by the authority of this resolution.”

By Order of the Board of Directors

Vinod M. Ambani
President and Company Secretary

Mumbai,
April 27, 2006.

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

RELIANCE INDUSTRIES LIMITED

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 Nikhil R. Meswani, Shri H. S. Kohli and
Shri Y.P. Trivedi, 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 directorships and memberships/chairmanships 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 their respective re-appointments.

4. 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.

5. Members are requested to bring their Attendance Slip alongwith their copy of Annual Report to the Meeting.

6. 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.

8. 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 11.00 a.m. and 1.00 p.m. up to the date of the Meeting.

9. (a) The Company has already notified closure of Register of Members and Transfer Books from Saturday, June 3, 2006 to Saturday,
June 10, 2006 (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 June 27, 2006 to those Members whose names
shall appear on the Company’s Register of Members on Friday, June 2, 2006. 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, June 2, 2006.

10.(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 Registrars and Transfer Agents, M/s. Karvy Computershare Private Limited, under the
signature of the Sole/First joint holder, the following information to be incorporated 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

(d) Account type, whether Savings Account (SA) 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 electronic 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.

Growth is Life

11. The Company has transferred all unpaid/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 not so far 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.

12. Pursuant to the provisions of Section 205A(5) and 205C of the Companies Act, 1956, the Company has transferred the unpaid/

unclaimed dividends for the financial years 1995-96, 1996-97 and 1997-98 to the Investor Education and Protection Fund (IEPF)
established by the Central Government. Dividends for the financial year ended March 31, 1999 and thereafter, which remain
unpaid/unclaimed for a period of 7 years will be transferred by the Company to IEPF. Information in respect of such unpaid/
unclaimed dividends and the last date for claiming the same are provided in Shareholders’ Referencer forming part of the
Annual Report.

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.

13. 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 Registrars and Transfer Agents, M/s. Karvy Computershare Private
Limited, for consolidation into a single folio.

14. 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.

15.Members are advised to refer to the Shareholders’ Referencer provided in the Annual Report.

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

Item No. 5

The Board of Directors of the Company (the Board), has appointed, pursuant to the provisions of Section 260 of the Companies Act,
1956 (the Act) and Article 135 of the Articles of Association of the Company, Prof. Dipak C. Jain as an Additional Director of the
Company with effect from August 4, 2005.

In terms of the provisions of Section 260 of the Act, Prof. Dipak C. Jain would hold office upto 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. Dipak C. Jain for the office of Director of the Company, under the provisions of Section 257 of the Act.

Prof. Dipak C. Jain has, to his credit, more than 20 years experience in management, education and corporate governance. Keeping in
view his enriched expertise and knowledge, it will be in the interest of the Company that Prof. Dipak C. Jain is appointed as a
Director, who if appointed, shall be liable to retire by rotation, in accordance with the provisions of the Articles of Association of the
Company.

A brief resume of Prof. Dipak C. Jain, nature of his expertise in specific functional areas and names of companies in which he holds
directorships and memberships/chairmanships of Board Committees, as stipulated under Clause 49 of Listing Agreement with the
Stock Exchanges in India, are provided in Report on Corporate Governance forming part of the Annual Report.

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

Save and except Prof. Dipak C. Jain, none of the other Directors of the Company is, in any way, concerned or interested in the
resolution.

RELIANCE INDUSTRIES LIMITED

Item Nos. 6 and 7

Stock Options have long been recognised as an effective instrument to attract talent and align the interest of employees with those of
the company and its shareholders, providing an opportunity to employees to share the growth of the company and to create long-term
wealth in the hands of employees. Stock Option Schemes also create a common sense of ownership between the company and its
employees, paving the way for a unified approach to the common objective of enhancing overall shareholder value. The main objective
of such Schemes is to give employees who are performing well, a certain minimum opportunity to gain from the company’s performance,
thereby acting as a retention tool and to attract best talent available in the market.

The employee reward through this mechanism has been well tested over a period of time.

The Company, immediately after the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines, 1999 (“the Guidelines”) were introduced by SEBI, had approved, in principle, grant of Options to the
Employees of the Company and its subsidiary companies, vide Special Resolutions passed at the Annual General Meeting held on June
13, 2000.

The Board of Directors of the Company (hereinafter referred to as “the Board” which term shall include ‘Employee Stock
Compensation Committee’ of the Board) is now considering to reward such permanent employees of the Company whether working in
India or out of India and Directors of the Company whether Wholetime Directors or otherwise (hereinafter referred collectively as the
“Employees”), as it may decide from time to time, through this mechanism and has made certain modifications to the earlier proposal.
As a measure of good corporate governance practice, the Board thought it fit to again place the matter for approval of the Members of
the Company.

The salient features of the Employees Stock Option Scheme – 2006 (hereinafter referred to as the “the Scheme”) are as under –

(A) Total number of Options to be granted

The Options to be granted under the Scheme shall not result in issue of equity shares exceeding 5% of the issued, subscribed and
paid-up equity shares of the Company as on March 31, 2006, i.e. up to 6,96,75,402 shares.

(B)Identification of classes of employees entitled to participate in the Scheme

Such permanent employees, including Directors, of the Company and its subsidiary companies as may be decided by the Board, from
time to time, will be entitled to participate in the Scheme.

Under the prevailing Guidelines, an employee who is a promoter or belongs to the promoter group will not be eligible to participate in
the Scheme. A Director, who either by himself or through his relative or through any body corporate, directly or indirectly holds more
than 10% of the outstanding equity shares of the Company, will also not be eligible to participate in the Scheme.

The Options granted under the Scheme shall not be renounced, transferred, pledged, hypothecated, mortgaged or otherwise alienated
in any other manner.

There shall be a minimum period of one year between the grant of Options and vesting of Options. The maximum vesting period may
extend up to four years from the date of grant of Options, unless otherwise decided by the Board. The vesting shall happen in one or
more tranches as may be decided by the Board.

(D) Exercise price or pricing formula

The exercise price for the purposes of the grant of Options shall be the ‘market price’ within the meaning set out in the Guidelines,
i.e., the latest available closing price, prior to the date when Options are granted / shares are issued, on that Stock Exchange where
there is highest trading volume on the said date.

(E) Exercise period and the process of exercise

Exercise period will commence from the vesting date and will expire not later than seven years from the date of grant of Options or
such other period as may be decided by the Board.

The Options will be exercisable by the Employees by a written application to the designated officer of the Company, in such manner,
and on execution of such documents, as may be prescribed by the Board.

The Options shall lapse if not exercised any time within the exercise period.

Growth is Life

(F) Appraisal process for determining the eligibility of employees to participate in the Scheme

The Company has a formal performance appraisal system established whereby performance of the employees is assessed each year on the
basis of various functional and managerial parameters. The appraisal process is revised at regular intervals in line with the emerging
global standards.

The Employees would be granted Options based on performance linked parameters such as work performance, technical knowledge,
period of service, designation and such other parameters as may be decided by the Board from time to time.

The Board may at its discretion extend the benefits of the Scheme to a new entrant.

(G) Maximum number of Options to be issued per employee and in aggregate

The number of Options that would be granted to an employee under the Scheme shall be decided by the Board. However, Options to
be granted to a single employee shall not result into equity shares exceeding 0.10% of the issued, subscribed and paid-up equity shares
of the Company as on March 31, 2006. The aggregate of all such grants shall not result into equity shares exceeding 5% of the issued,
subscribed and paid-up equity shares of the Company as on March 31, 2006.

The maximum number of shares that can be issued under the Scheme to Non-Executive Directors of the Company in a financial year
and in aggregate shall not exceed 3,00,000 shares and 9,00,000 shares respectively.

(H) Accounting methods/policies

The Company and its subsidiary companies shall conform to the accounting policies specified in Clause 13.1 of the Guidelines, and/or
such other guidelines as may be applicable, from time to time.

(I) Method of valuation of Options

The Company shall use the intrinsic value method for valuation of the Options. The difference between the employee compensation
cost so computed and the employee compensation cost that shall have been recognised, had the fair value of the Options been
recognised, shall be disclosed in the Directors’ Report and the impact of such difference on profits and on EPS of the Company shall
also be disclosed in the Directors’ Report.

Clause 6(1) of the Guidelines requires that any employee stock option scheme must be approved by way of a special resolution.
Further, as the Scheme will entail further shares to be offered to persons other than existing Members of the Company, consent of
Members is required by way of a special resolution pursuant to the provisions of Section 81 of the Companies Act, 1956 (the Act)
Accordingly the resolution set out at Item No. 6 is being placed for approval of Members pursuant to the provisions of Section 81 of the
Act and Clause 6 of the Guidelines and all other applicable provisions of laws.

As per Clause 6(3) of the Guidelines, a separate special resolution is required to be passed if the benefits of the scheme are to be
extended to employees of the holding or subsidiary companies. Further, as the Scheme will entail further shares to be offered to
persons other than existing Members of the Company, consent of Members is required by way of a special resolution pursuant to the
provisions of Section 81 of the Act. Accordingly, the resolution set out at Item No. 7 is being placed for approval of Members pursuant
to the provisions of Section 81 of the Act and Clause 6 of the Guidelines and all other applicable provisions of laws.

The Options to be granted under the Scheme shall not be treated as an offer or invitation made to public for subscription in the
securities of the Company.

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

None of the Directors of the Company is, in any way, concerned or interested in the resolutions, except to the extent of the Options
that may be offered to them under the Scheme.

By Order of the Board of Directors

Vinod M. Ambani
President and Company Secretary

Mumbai,
April 27, 2006.

RELIANCE INDUSTRIES LIMITED

Members’
Feedback Form
2005-2006

Name : .................................................................................. e-mail id : .............................................................................................

Address : .............................................................................................................................................................................................

DP ID No. : .........................................................................................................................................................................................

Client ID No. : ...................................................................................................................................................................................

Folio No. : ............................................................................................................................................................................................
(in case of physical holding)

No. of equity shares held : .................................................................
(the period for which held)

Please rate on a 5 point scale of 1 to 5

Signature of member

1. Excellent

2. Very Good

3. Good

4. Satisfactory

5. Unsatisfactory

Centre-fold

Directors' Report and Management's

Contents

Discussion and Analysis

Presentation

Report on Corporate Governance

Contents

Shareholders' Referencer

Centre-fold

Presentation

Contents

Presentation

Quality of Financial and non- financial

Contents

information in the Annual Report

Presentation

Information on Company's Website

Contents

Presentation

INVESTOR SERVICES

Turnaround time for response to shareholder query

Quality of response

Timely receipt of Annual Report

Conduct of Annual General Meeting

Timely receipt of dividend warrants / payment through ECS

Promptness in confirming demat / remat requests

Overall rating

Views/Suggestions for improvement, if any ...............................................................................................................................

.......................................................................................................................................................................................................

Members are requested to send this feedback form to the address given overleaf.

e
r
e
h
t
u
C

Growth is Life

BUSINESS REPLY INLAND LETTER

Postage
will be
paid by the
Addressee

Business Reply Permit No.
MBI-S-1324
Nariman Point - P. O.
Mumbai 400 021

No postage
stamp
necessary if
posted in
INDIA

To,
Shri S. Sudhakar
Asst. Vice President-Corporate Secretarial
Reliance Industries Limited
Registered Office: 3rd Floor, Maker Chambers IV
222, Nariman Point
Mumbai 400 021

Fold

RELIANCE INDUSTRIES LIMITED

Contents

Company Information

Board of Directors

Mukesh D. Ambani
Chairman & Managing Director

Nikhil R. Meswani
Executive Director

Hital R. Meswani
Executive Director

Hardev Singh Kohli
Executive Director

Ramniklal H. Ambani

Mansingh L. Bhakta

Yogendra P. Trivedi

Dr. Dharamvir Kapur

Mahesh P. Modi

S. Venkitaramanan

Prof. Ashok Misra

Prof. Dipak C. Jain
(from August 4, 2005)

Secretary
Vinod M. Ambani

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

Shareholders’/Investors’
Grievance Committee
Mansingh L. Bhakta (Chairman)
Yogendra P. Trivedi
Mukesh D. Ambani
Nikhil R. Meswani
Hital R. Meswani

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

Corporate Governance and
Stakeholders’ Interface Committee
Yogendra P. Trivedi (Chairman)
Mahesh P. Modi
Dr. Dharamvir Kapur

Growth is Life

Consistent growth over ten years

Turnover (Rs crore)

Net Profit (Rs crore)

Net Worth (Rs crore)

Market Capitalisation (Rs crore)

Earnings per Share (Rs)

Book Value per Share (Rs)

RELIANCE INDUSTRIES LIMITED

Financial Highlights

2005-06
US$ Mn

04-05

03-04

02-03

01-02

00-01

99-00

98-99

97-98

96-97

Rs. in crore

Turnover

Total Income

Earnings Before
Depreciation, Interest
and Tax (EBDIT)

Depreciation

Profit After Tax

Equity Dividend %

Dividend Payout

Equity Share Capital

Equity Share Suspense

Reserves and Surplus

Net Worth

Gross Fixed Assets

Net Fixed Assets

Total Assets

19,976

20,129

89,124

89,807

73,164

56,247

50,096

45,404 23,024 15,847

10,624

9,719

6,442

74,614

57,385

51,097

46,186 23,407 16,534

11,232 10,055

6,731

3,358

14,982

14,261

10,983

9,366

8,658

5,562

4,746

3,318

2,887

1,948

762

2,033

312

10,851

11,163

20,605

14,048

20,866

3,401

9,069

100

1,393

48,411

49,804

91,928

62,675

93,095

3,724

3,247

2,837

2,816

1,565

1,278

855

667

410

7,572

5,160

4,104

3,243

2,646

2,403

1,704

1,653

1,323

1,045

52.5

733

698

47.5

663

42.5

448

385

1,393

1,396

1,054

1,053

342

37.5

350

933

327

932

299

458

39,010

33,057

28,931

26,416 13,712 12,636

11,183 10,863

8,013

40,403

34,453

30,327

27,812 14,765 13,983

12,369 11,983

8,471

59,955

56,860

52,547

48,261 25,868 24,662

22,088 19,918 14,665

35,082

35,146

34,086

33,184 14,027 15,448

15,396 14,973 11,173

80,586

71,157

63,737

56,485 29,875 29,369

28,156 24,388 19,536

Market Capitalisation

24,870

110,958

76,079

75,132

38,603

41,989 41,191 33,346

12,176 16,518 14,395

Number of Employees

12,540

12,113

11,358

12,915

12,864 15,083 15,912

16,640 17,375 16,778

Contribution to
National Exchequer

Key Indicators

3,575

15,950

13,972

12,903

13,210

10,470

4,277

3,719

2,893

3,021

2,490

Earnings Per Share - Rs.

US$

1.46

2005-06

04-05

03-04

02-03

01-02

00-01

99-00

98-99

97-98

96-97

65.1

54.2

36.8

29.3

23.4

25.1

22.4

18.0

17.6

14.4

Turnover
Per Share - Rs.

Book Value
Per Share - Rs.

Debt : Equity Ratio

EBDIT /
Gross Turnover %

Net Profit Margin %

RONW % *

ROCE % *

14.34

639.6

525.0

402.8

358.8

325.2

218.5

150.4

113.8

104.1

70.0

8.01

0.44:1

357.4

0.44:1

16.8

10.2

22.7

20.5

16.8

10.2

22.7

20.5

289.9

246.7

217.2

199.2

140.1

129.9

129.8

128.3

92.0

0.46:1

0.56:1

0.60:1

0.64:1

0.72:1

0.82:1

0.86:1 0.68:1

0.83:1

19.5

10.3

21.9

21.3

19.5

9.2

17.0

14.0

18.7

8.2

14.8

13.2

19.1

7.1

16.1

15.3

26.8

12.8

20.0

20.4

30.6

15.5

21.8

20.0

31.2

16.0

19.0

18.3

29.7

17.0

21.6

18.7

30.2

20.5

22.3

19.7

1US$ = Rs. 44.615 (Exchange rate as on 31.03.2006)
Per share figures upto 1996-97 have been recast to adjust for 1 : 1 bonus issue in 1997-98
Turnover excludes Merchant exports
* Adjusted for Capital work-in-progress and revaluation

Growth is Life

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 realized.
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.

Structure and Strategy

Reliance Industries Limited (RIL) is the
largest private sector business enterprise
in India, on all major financial
parameters, including sales, profits, net
worth and assets. RIL’s operations capture
value addition at every stage, from the
production of crude oil and gas to
polyester, polymer and chemical products,
and finally to the production of textiles.
RIL is the only company globally to
achieve this degree of vertical integration
and value addition.

RIL operates mainly in India but has
business activities and customers in more
than 100 countries around the world. RIL
has production facilities at three major
locations in India and a further four
locations in Europe. RIL also has
exploration and production interests in
India, Yemen and Oman.

RIL is organized into three major business
segments which include: Exploration and
Production of oil and gas; Refining and
Marketing of petroleum products; and
Petrochemicals, including the
manufacturing and marketing of
polymers, polyester, polyester
intermediates and chemicals. The
Refining & Marketing and

Petrochemicals segment accounted for 98
per cent of RIL’s revenues for the year
ended March 31, 2006. The E&P
business is expected to become a
significant contributor in terms of
revenues and profits starting from the
next couple of years.

RIL’s strategy is to build and sustain
leadership position across its product
categories in the domestic markets,
pursue attractive export opportunities,
implement vertical integration, access
cutting-edge technologies, achieve
economies of scale, focus on prudent
financial management and invest in high
growth opportunities. The primary route
for growth adopted by RIL has been
through creating businesses and facilities
in an organic manner. RIL has grown by
setting up world scale, world class
projects, scaling them up to meet local
and global demand, investing in R&D to
develop future prospects and markets,
and developing a large pool of qualified
and skilled manpower. RIL has also
grown through selective acquisitions that
ensure greater synergy with its
operations.

RIL is India’s first private sector company
in the Exploration and Production (E&P)
sector to have discovered large gas
reserves. The E&P strategy of RIL is
aimed at further enhancing the level of
vertical integration in its energy business,
and realising value across the entire
energy chain, while fulfilling important
national priorities. In the years to come,
RIL is well positioned to be amongst the
largest value creators in the upstream oil
and gas sector.

In the Petrochemicals and Refining
business, RIL’s strategy is to continuously
strive for global leadership and endeavour
to be amongst the lowest cost producers
worldwide. Alongside, RIL will continue
to invest in research, quality, safety and
environment and thereby set new
benchmarks in the industry. In these
businesses RIL will also pursue inorganic
growth opportunities, which are strategic
to its intents and have the potential to
create greater value for its shareholders.
In the petroleum retail marketing
business, RIL continues to grow its
focused and differentiated offers. RIL
operates in petroleum retail markets

where it can create a competitive edge
from supply positions, superior customer
offers and efficiency across the value
chain. The Indian consumer has already
recognized the value proposition offered
by RIL in retailing of petroleum products.

Going forward RIL will make strategic
decisions with regard to the emerging
businesses that it is seeding today. These
include:

• Identifying new businesses with high

growth potential.

• Investing in businesses that can scale
rapidly and generate superior returns
over an extendable period of time.

• Create a differentiated business model

and aspire to be lowest cost
manufacturer/ service provider, which
shall ultimately result in gaining
dominant market leadership.

The new businesses will aim to generate
superior return on capital employed,
which shall eventually enhance the
overall returns.

RIL will continue its business strategy of
building and creating value for all its
stakeholders in both its existing and new
businesses. RIL will be India’s
pre-eminent global corporation in terms
of size, scale, portfolio diversification and
value creation.

Overview – FY 2005-06

Landmark Events

The year 2005-06 was a landmark year in
the history of RIL. It marked a new
strategic decision to unlock value for its
shareholders by reorganizing RIL’s
business through a process of demerger.
In this process, RIL’s investments in
power generation and distribution,
financial services and telecommunication
services were demerged in to separate
entities and RIL’s shareholders received
shares in the new entities in the same
proportion of their equity holdings in
RIL. The successful implementation of
the largest demerger process in Indian
corporate history has demonstrated RIL’s
ability to seed new businesses, gain

leadership in each of these businesses
which are large enough to be
independent and thereby create value for
RIL’s shareholders.

During the year, RIL commenced the
setting up of a new export-oriented
refinery through its subsidiary, Reliance
Petroleum Limited (RPL). The refinery
will have a total atmospheric distillation
capacity of approximately 580,000
barrels per stream day with a Nelson
Complexity of 14.0 and an integrated
polypropylene plant with a capacity of
0.9 Million TPA. The capital cost of the
RPL project is estimated at Rs 27,000
crore (approximately US$ 6 billion). RPL
expects to commission the refinery and
the polypropylene plant in and around
December 2008. RPL recently completed
its US$ 1.2 billion Initial Public Offering
of equity shares which received an
overwhelming response across different
classes of investors and are now listed on
the Bombay Stock Exchange and The
National Stock Exchange. RIL holds
75 per cent in RPL and has invested
Rs 6,750 crore as equity contribution in
RPL.

RIL’s business performance and strong
capital structure were duly recognized
through an upward re-rating of its
borrowings by international credit rating
agencies, namely Moodys’ and Standard
& Poor. RIL is now rated above India’s
sovereign rating and is at Baa2 (Moodys’)
and BBB (S&P).

RIL announced the closure of the buy-
back of equity shares with effect from
August 2, 2005. This was pursuant to the
programme achieving its key objective of
ensuring a positive impact on the stock
price thereby contributing towards
maximization of overall shareholder
value. Under the scheme, RIL purchased
2.86 million shares from the open market
valued at Rs 149.61 crore (US$ 34 million)
which have since been extinguished prior
to April, 2005.

Record Financial Performance

During the year, RIL scaled new heights
and set several new benchmarks in its
financial performance in terms of sales,
profits, net worth and assets. RIL scaled
the unique milestone of becoming the

first Indian private sector company to
record a net profit of over US$ 2 billion
thereby nearly doubling its profit in a
span of just 24 months. RIL’s net profit
for the year was Rs 9,069 crore (US$
2,033 million), registering a Compounded
Annual Growth Rate (CAGR) of 28 per
cent over the past five years.

RIL also took several additional strategic
steps to enhance and distribute wealth to
its shareholders. The Board of Directors
have recommended a dividend payout of
Rs 10 per share, the highest ever
dividend by RIL. The dividend pay out, if
approved, will be Rs 1,394 crore (US$
312 million), highest ever by any private
sector company in India.

RIL generated a return on equity of 22.7
per cent and a return on capital
employed of 20.5 per cent, which were
significantly higher than its weighted
average cost of capital of around 12.5 per
cent. RIL has a net gearing of 25 per cent
and a gross debt/equity ratio of 0.44.

RIL enjoys a preeminent position in
India’s economy, with revenues
equivalent to about 2.8 per cent of
India’s GDP. RIL’s leadership position in
India is also reflected in its all round
contribution to the national economy.

RIL accounts for:

• Over 8 per cent of India’s total

exports

• Nearly 8 per cent of the Government

of India’s indirect tax revenues

• About 4 per cent of the total market

capitalization in India

• Weightage of 10.6 per cent in the BSE

Sensex

• Weightage of 8.6 per cent in the Nifty

Index

RIL maintained its position as India’s
largest exporter, reflecting its global
competitiveness and the international
quality of its products. RIL’s products
worth US$ 7,327 million (Rs 32,691
crore) were exported during the year,
accounting for 37 per cent of its turnover.

RELIANCE INDUSTRIES LIMITED

Operational Excellence

RIL put together another outstanding
performance in a year that was marked by
several global challenges.

Crude prices remained firm throughout
the year and ranged between US$ 55 per
barrel to US$ 70 per barrel. A
combination of strong global economic
performance and heightened political
uncertainties were the significant
contributors towards the high price of
crude. Despite the higher oil prices in
the last couple of years, global oil demand
continues to be robust. The forecast from
the International Energy Agency is for a
demand growth of 1.25 million barrels
per day for 2006, this is estimated to be
higher than 1.05 million barrels per day
for 2005.

The global refining system continues to
be stretched, the pace of new capacity
creation continues to be slow, and the
light/heavy crude oil price differential
continues to widen. A combination of
these three factors augurs well for
globally competitive complex refineries
like RIL’s existing refinery at Jamnagar
and the new refinery being set up by RPL.

RIL’s refining business continued to show
a superior performance over the
benchmarked refining margins. Since the
commissioning of the refinery, its gross
refining margin has been between US$ 2
to US$ 4 per barrel higher compared to
Singapore complex refining margins. For
FY 2005-06, RIL had the highest ever
gross refining margin at US$ 10.3 per
barrel and more importantly a spread of
US$ 5.8 per barrel over the Singapore
complex margin for the last quarter of the
year. Apart from operating efficiencies
and optimal capacity utilization, the
principal differentiator between RIL’s
refinery and other global refineries has
been its ability to take advantage of the
light/heavy crude price differential.

RIL’s refinery undertook a maintenance
shutdown in October – November 2005
during which it also implemented a Value
Maximisation Programme (VMP), which
will help in enhancing margins and
creating further value on a sustainable
basis. The Nelson complexity of the
refinery improved from 9.9 to 11.3 as a
result of implementation of the VMP.

Growth is Life

RIL continued its rollout of the
petroleum retail outlets by adding 867
new outlets taking the total number of
outlets to 1,218 at the end of the
financial year. The response from these
outlets continues to be very encouraging
in terms of consumer acceptance and
growing market share.

As regards RIL’s petrochemicals business,
operating rates of ethylene crackers
globally continued to be high on the back
of sustained demand and lack of new
capacities getting commissioned. RIL
continues to be very well positioned on
the cost curve among the naphtha-based
Asian crackers with operating rates at
100 per cent and among the lowest cost
crackers in this region. Margins however
were affected by high crude oil and
natural gas prices leading to increase in
cost of raw material.

RIL strengthened its global position in
this business by adding a new butadiene
facility during the year with a capacity of
140,000 TPA.

The margins for the polyester business
improved significantly during the year.
Key contributors towards these were
lower intermediate price and rising
cotton prices. Another significant
development was the changes in the duty
structure announced in the Union
Budget this year which makes polyester
more competitive as compared to cotton.
The excise duty on polyester was reduced
to 8 per cent from earlier level of 16 per
cent and this is expected to lead to
substantial growth of the polyester
industry. RIL is very close to completing
one of the largest expansion in polyester
capacity in the world by adding 550,000
TPA of new polyester capacity.

In the E&P business, RIL was awarded a
further five blocks under NELP-V, which
brings up the portfolio to 41 blocks
including two in Panna-Mukta & Tapti
and five blocks of coal bed methane. In
addition to its domestic portfolio, RIL has
two overseas blocks, one each in Yemen
and Oman. RIL signed a Technical
Evaluation Agreement with ANH
(Columbia’s hydrocarbon regulator) and
also entered into a cooperation

agreement with Ecopetrol (National Oil
Company of Columbia) for farm-in
opportunities in that country.

RIL continues its efforts in developing its
significant gas discovery at the Krishna
Godavari Basin. Key contractors and
suppliers for the KGD6 block have been
appointed and front-end engineering for
the offshore facility has been completed.
Detailed engineering and placement of
orders for all long-lead items are expected
to be completed shortly. RIL continues
to be well on track for its phase-I of
commercial production in FY 2008-09.

RIL is building a strong E&P portfolio,
starting with increased production in its
existing Panna-Mukta & Tapti blocks,
and commercializing KGD6 and other
blocks in the next 3-5 years.

Financial Review

During the year, RIL continued to post
path-breaking financial numbers.

Turnover for the year increased by 22 per
cent from Rs 73,164 crore to Rs 89,124
crore (US$ 19,976 million).

Net Turnover for the year increased by 23
per cent from Rs 66,051 crore to Rs
81,211 crore (US$ 18,203 million). This
increase in net turnover is on account of
a 1 per cent increase in sales volume and
a 22 per cent increase in selling prices of
our products.

Other Income decreased from Rs 1,450
crore to Rs 683 crore (US$ 153 million).
This decrease was primarily on account
of conversion of Preference shares of
Reliance Infocomm Ltd to equity shares
with effect from April 1, 2005. These
shares were subsequently de-merged as a
part of the demerger scheme. This
decrease was partially offset by higher
income from other investments.

Consumption of raw materials increased
by 27 per cent from Rs 45,932 crore to Rs
58,343 crore (US$ 13,077 million)
primarily on account of higher crude
prices.

Employee cost increased by 16 per cent
from Rs 846 crore to Rs 978 crore (US$
219 million). This increase was mainly on
account of higher salaries.

Other expenditure, which also includes
conversion costs, selling expenses, sales
tax, repairs and maintenance, excise duty
on stock, and establishment expenses
increased by 64 per cent from Rs 5,937
crore to Rs 9,722 crore (US$ 2,179
million). This increase was primarily on
account of higher sales tax, freight
expenses on retailing of petroleum
products, payment of royalty on
production of Paraxylene, excise duty
provision on stocks and higher repairs
and maintenance expense due to the
planned shutdown of our refinery.

Operating profit before other income
increased by 12 per cent from Rs 12,811
crore to Rs 14,299 crore (US$ 3,205
million). Despite higher selling prices our
operating profits were impacted due to
higher raw material cost and a planned
shutdown of our refinery.

Interest expenditure decreased sharply by
40 per cent from Rs 1,469 crore to Rs 877
crore (US$ 197 million) on account of
lower interest rates and higher interest
capitalization. Interest capitalized during
the year was Rs 637 crore as compared to
Rs 297 crore in the previous year. The
outstanding debt as on March 31, 2006
was Rs 21,866 crore (US$ 4,901 million)
compared to Rs 18,785 crore as on
March 31, 2005.

Depreciation charge for the year was Rs
3,401 crore (US$ 762 million) as against
Rs 3,724 crore in the previous year. This
decrease is primarily on account of the
written down value (WDV) method of
depreciation on the petrochemical assets.

Resultant from the above, profit before
tax increased by 18 per cent from Rs
9,069 crore to Rs 10,704 crore (US$
2,399 million).

Provision for taxation increased by 32 per
cent from Rs 705 crore to Rs 931 crore
(US$ 209 million), which included Fringe
Benefit Tax of Rs 31 crore (US$ 7
million). Provision for deferred tax
decreased by 11 per cent from Rs 792
crore to Rs 704 crore (US$ 158 million)
mainly on account of lower Income tax
depreciation.

Profit after taxation increased 20 per cent
to Rs 9,069 crore (US$ 2,033 million)
from Rs 7,572 crore.

RELIANCE INDUSTRIES LIMITED

RIL exports its products to around 100
countries, including the most quality and
value driven markets in the USA and
Europe. This demonstrates RIL’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.

RIL now exports 37 per cent of its
turnover, with refining and
petrochemicals contributing 75 per cent
and 25 per cent respectively.

Resources and Liquidity

RIL has a financial framework, which
enables it to pursue aggressive business
growth strategies while retaining a
prudent capital structure.

RIL continues to maintain its
conservative financial profile and
practice prudent fiscal strategies. This
has been endorsed in its domestic and
international credit ratings. RIL’s long-
term debt is rated ‘AAA’ from CRISIL
and ‘Ind AAA’ by Fitch, the highest
ratings awarded by these agencies. RIL’s
international debt ratings were upgraded
by both S&P and Moody’s during the
year. S&P upgraded RIL’s ratings to BBB
from BB+, while Moody’s upgraded RIL’s
rating to Baa2 from Ba2. RIL’s
international debt rating by both S&P
and Moody’s is now above India’s
sovereign rating. RIL’s short-term debt
programme is rated P1+ by CRISIL, the
highest credit rating that may be assigned
to this category.

RIL’s gross debt equity ratio, including
long-term and short-term debt as on
March 31, 2006, is a conservative 0.44.
RIL’s long-term debt as on March 31,
2006 stood at Rs 16,516 crore (US$
3,702 million). Of this debt, 63 per cent
represented foreign currency
denominated debt. The average final
maturity of RIL’s total long-term debt is
nearly 4.9 years. The average final
maturity of the long-term foreign
exchange debt is about 5.5 years.

RIL continued to demonstrate flexibility
and innovation by restructuring its debts.
RIL bought back a total of Rs 140 crore
of its debentures during the year. It

The consolidated net profit of RIL after including the contribution of its subsidiaries and
associates was Rs 9,398 crore (US$ 2,106 million). The subsidiary companies considered in
the consolidated financial statements are:

Country of
Incorporation

Proportion of
ownership
interest

Reliance Industrial Investments and Holdings Ltd

Reliance Ventures Ltd

Reliance Strategic Investments Limited

Reliance Petroleum Limited

Reliance Infrastructure Limited

Reliance Retail Limited

Reliance Middle East DMCC

India

U.A.E

Reliance Netherlands BV

Netherlands

100%

100%*

100%

* Post IPO and transfer to Chevron India Holding Pte Ltd., the ownership interest of RIL is 75%.

The significant associate companies considered in the consolidated financial statements are:

Reliance Industrial Infrastructure Limited

Reliance Europe Limited

Indian Petrochemicals Corporation Limited
through Reliance Petroinvestments Limited,
Reliance Pharmaceuticals Private Limited and
Reliance Neutraceuticals Private Limited

Capital expenditure during the year was
Rs 9,476 crore (US$ 2,124 million)
primarily on account of E&P,
implementation of value maximization
projects, expansion of petrochemical
capacities and setting up of retail
marketing outlets. Details of the capital
expenditure undertaken during the year
are as follows:

E&P

Refining

Retail Marketing

Petrochemicals

Others

Total

Rs crore

2,198

2,329

850

3,221

878

9,476

Country of
Incorporation

Proportion
of ownership
interest

India

47.23%

50.00%

46.00%

RIL 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, RIL contributed
Rs 15,950 crore (US$ 3,575 million) in
the form of various taxes and duties.

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

During the year, RIL’s exports, including
deemed exports, increased to Rs 32,691
crore (US$ 7,327 million), from Rs
25,532 crore in the previous year,
recording an annual growth of 28 per
cent. RIL continued to maintain its
leadership position as the country’s
largest exporter.

Growth is Life

availed US$ 350 million loan (equivalent
to Rs 1,519 crore), issued a Euro Yen
Bond of JPY 17.5 billion (equivalent to
US$ 150 million / Rs 670 crore) and
availed Export Credit Agency (ECA)
backed Buyer’s Credit Facility of US$ 114
million and EUR 12 million (equivalent
to Rs 559 crore). RIL further reduced its
interest burden by refinancing of US$
750 million of existing loans.

RIL meets 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, RIL raises
short-term debt in the form of fixed and
floating rate bonds / loans in Indian
Rupees and foreign currency.

RIL undertakes liability management
transactions and enters into other
structured derivatives arrangements such
as interest rate and currency swaps. This
is practiced on an ongoing basis to reduce
overall cost of debt and diversify liability
mix.

RIL had cash and cash equivalent of
Rs 4,144 crore (US$ 929 million) as on
March 31, 2006. RIL 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.

Business Review

Exploration and Production

Globally, the E&P industry registered a
record growth during the year, primarily
due to spiraling crude oil and gas prices.
With growing competition and ever
growing demand for energy, especially
from developing countries, the focus is on
energy security.

India’s share is a meagre 0.5 per cent of
global oil reserves of 1,189 billion bbl,
while it consumes 3.2 per cent of global
oil consumption every year. Oil imports

of US$ 43.8 billion were around one-
third of India’s total import bill during
the year 2005-06 as compared to US$
29.8 billion during the previous year on
account of both higher prices and
volumes.

During the year, the domestic crude oil
and gas production in India was at 32.2
Million MT and 1,137 Billion Cubic Feet.
The growing demand for crude oil and
gas in the country and policy initiative of
Government of India towards increased
E&P activity, have given a great impetus
to the Indian E&P industry raising hopes
of increased exploration. Under the New
Exploration Licensing Policy (NELP) of
Government of India 110 blocks have
been acquired by various E&P companies
for exploration. The efforts have resulted
in a number of oil and gas discoveries in
India and have changed the perception
and prospects of the Indian sedimentary
basins and the focus on Indian E&P
Industry.

RIL is the largest exploration acreage
holder among the Private sector
companies in India with 34 domestic
exploration blocks covering an area of
about 331,000 sq. km. This is in addition
to its interest in one exploration block
each in Yemen and Oman. RIL also has 5
coal bed methane (CBM) blocks covering
an area of about 4,000 sq. km. During the
year, RIL signed a Co-operation
Agreement with Ecopetrol of Columbia
for farm-in opportunities in Columbia.

RIL’s portfolio of E&P assets, gives it the
potential to create value across entire
value chain from wellhead to burner tip.
Accretion of new reserves through
exploration, development of existing oil
and gas reserves and development of
related downstream infrastructure
facilities would result in significant value
creation for RIL in future. RIL has
achieved a high success rate of 74 per
cent in terms of discoveries made from
the wells drilled thus far, excluding wells
under evaluation.

Panna Mukta Tapti (PMT) Blocks

RIL holds a 30 per cent interest in an
unincorporated Joint Venture with
British Gas and ONGC, to develop the
proven Panna-Mukta and Tapti oil and

gas fields. British Gas and ONGC have a
30 per cent and 40 per cent share in the
fields respectively. The PMT JV
commenced direct marketing of gas from
April 1, 2005. The JV is supplying gas to
consumers like Gujarat State Petroleum
Corporation, Indian Petrochemicals
Corporation Limited, Gujarat Gas
Company Limited, Gas Authority of India
Limited etc.

The Panna-Mukta fields produced 1.57
Million MT of crude oil and 46.70 billion
cubic feet of gas during the year
compared to 1.32 Million MT of crude oil
and 47.15 billion cubic feet of gas
produced during the previous year. The
Tapti field produced around 78.99 billion
cubic feet of gas during the year
compared to 74.79 billion cubit feet of
gas produced during the previous year.

The PMT JV is in a rapid phase of
development and is implementing
expanded plan of development (EPOD)
of Panna Mukta field and new revised
plan of development (NRPOD) for Tapti.
EPOD is likely to result in additional
recovery of oil and gas of 4.1 Million MT
and 237 billion cubic feet from December
2006. The plan for expanded
development of Tapti field would result in
additional gas of 210 MMSCFD from
2007.

NELP and Pre-----NELP Blocks

12 exploration blocks were awarded
under the 1st round of the NELP, 4
exploration blocks in the 2nd round, 9
blocks in the 3rd round and one block in
the 4th round of NELP. RIL has been
awarded 5 more exploration blocks in the
financial year ended March 31, 2006, in
the 5th round of NELP. The Production
Sharing Contract has been signed and
petroleum exploration license for four
blocks awarded during the year has
already been obtained.

RIL and various partners, including
ONGC Ltd. and Oil India Ltd., were
awarded two exploration blocks prior to
NELP. The Company has also acquired
the operating rights of four exploration
blocks from Tullow Oil plc, a UK
Company.

RELIANCE INDUSTRIES LIMITED

tonnes, registering a marginal growth of
0.3 per cent compared to 3.6 per cent
growth in the previous year. HSD, which
accounts for 40 per cent of the total
petroleum product demand, showed a
growth of 1.3 per cent compared to 6.9
per cent in the previous year. Motor
Spirit demand increased to 4.8 per cent
compared to 4.5 per cent in the previous
year, demand for Aviation Fuel increased
by 17.3 per cent compared to 13.3 per
cent in the previous year and LPG
demand increased by 0.6 per cent
compared to 10.1 per cent in the
previous year. The increase in demand of
these products was offset by a decline in
Naphtha and Kerosene consumption by
12.4 per cent and 0.4 per cent
respectively.

RIL’s refinery completed its maintenance
shutdown and Value Maximisation
Programme (VMP) successfully during
the months of October-November, 2005,
as a result of which its Nelson complexity
index improved to 11.3 from 9.9. Despite
the shutdown, the refinery achieved 92
per cent capacity utilization during the
year. This compares favourably with other
refineries in India and overseas which are
at 87 per cent for North America, 88 per
cent for Europe, and 90 per cent for
Asia- Pacific.

Petroleum products production details
are as follows:

Production KT

2004-05

2005-06

Gases

Light distillates

3,262

9,055

2,820

8,172

Middle distillates

14,446

14,171

Heavy distillates

Solids

1,245

3,374

1,311

3,382

Total Production

31,381

29,856

Three blocks out of the above-awarded
blocks have been relinquished as the
expected deposits were found to be sub-
economic.

During the year, RIL struck oil in the
shallow waters of KG basin in KG-III-6
Block (KG-OSN-2001/2). Currently,
commerciality of this discovery is under
evaluation.

Building on the major Dhirubhai gas
discovery, RIL continued exploratory
drilling campaign in the KG-DWN-98/3
block. 3 more exploratory wells and 2
development wells were drilled,
confirming upside potential of the block
and also helped in reducing the reservoir
risk.

The Development Plan of Dhirubhai 1
and 3 discoveries have already been
approved by Government of India and
are on track. 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.
Based on the upside potential of the
block, options of higher plateau
production from the fields is being
evaluated.

Coal Bed Methane (CBM) Blocks

The exploration in the CBM block of RIL
is also progressing as per plan. Gas In
Place (GIP) estimates of 3.65 TCF has
been concurred by the Director General
of Hydrocarbons (DGH) for Sohagpur
East and West Blocks. Plans are being
made to produce commercial CBM for
the first time in the country by 2009.

Overseas Blocks

RIL has interests in exploration of
overseas blocks, one each in Yemen and
Oman. RIL had oil discoveries in the on
land Malik 9 block in Yemen. The
development plan for the block has been
approved by the Republic of Yemen and
test production commenced in December
2005.

In the Oman offshore block where RIL is
the Operator, the existing seismic data
has been collected and 2D reprocessing
of data is underway.

RIL signed a Technical Evaluation
Agreement with ANH (Columbia’s
hydrocarbon regulator) and also entered
into a co-operation agreement with
Ecopetrol (National Oil Company of
Columbia) for farm-in opportunities in
that country.

Refining and Marketing

Petroleum refining and retailing is
intrinsic to RIL’s drive for growth and
global leadership in the core energy value
chain. RIL operates among the most
complex and energy efficient refineries in
the world. This is also the third largest
refinery in the world at any single
location. RIL’s refinery is globally
recognized as having an enviable track
record in terms of health, safety and care
for the environment.

The refinery is located at Jamnagar,
Gujarat, India and has several strategic
locational advantages. Jamnagar is on the
west coast of India in close proximity to
the Middle East, the largest crude oil
producing region in the world. This
results in lower ship turnaround time and
crude freight costs.

Globally, crude oil prices remained high
and volatile on account of geopolitical
uncertainties, production disruptions at
some of the major crude oil centers,
strong product demand and low spare
production capacity. Dubai crude oil
price averaged at US$ 53.51 per barrel
ranging between US$ 44.12 and US$
61.05. WTI and Brent crude prices per
barrel recorded a maximum of US$ 69.91
and US$ 67.33 respectively while average
prices were US$ 59.83 per barrel and
US$ 57.99 respectively. The global crude
oil demand increased to 83.6 million
barrels per day in 2005 as compared to
82.5 million barrels per day in 2004,
registering a growth rate of 1.3 percent.
Demand is expected to grow by 1.5 per
cent to 84.8 million barrels per day in
2006. International Energy Agency has
estimated a demand growth of 1.25
million b/d for 2006 compared to
estimated demand growth of 1.05 million
b/d in 2005.

Domestic demand for petroleum products
for the year increased to around 111.92
million tonnes, from 111.6 million

Growth is Life

During the year, RIL exported 10.8
million tonnes of refined products to
more than 30 countries, accounting for
35 per cent of its production. Out of the
65 per cent of products consumed in the
domestic market, sale to public sector
units accounted for 17 per cent, sale
through RIL’s retail outlets accounted for
11 per cent, sales to industrial segments
accounted for 16 per cent and captive
consumption accounted for 21 per cent.

The year also witnessed a major step
towards the greening of petroleum
products. Bharat Stage III compliant
petrol and diesel were introduced in 13
major cities and Bharat Stage II petrol
and diesel were introduced throughout
the country in 2005. It was also proposed
that Euro IV compliant fuel would be
introduced in these 13 cities from
April 1, 2010.

In a short period of two years, RIL has
created a strong brand name and several
new benchmarks in its petroleum retail
business. Its outlets sell significantly
higher volumes than the industry
average. As at March 31, 2006, 1,218
outlets were operational. RIL has
achieved a HSD retail market share of 13
per cent within two years in the retailing
of transportation fuels.

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

RIL 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 area and catering
facilities are available.

Petrochemicals

Polymers (PE, PP, PVC)

Globally, ethylene crackers and
downstream polymer plants operated at
91 per cent and 88 per cent respectively,
which were significantly higher,
compared to historical averages. The
operating rates were however, slightly
lower compared to previous year mainly
due to disruption of operations in US on
account of hurricanes Rita and Katrina.

Aided by supply constraints, margin
up-cycle in this business continued
through the year. Industry experts believe
that the current up-cycle would prevail
during 2006-07 in view of healthy global
GDP growth and some expected delays in
commissioning of upcoming Middle East
crackers. Strong operating environment
is, therefore, forecast for integrated
plastic producers like RIL.

Global demand for polymers continued at
a healthy rate with aggregate
consumption of all polymers reaching 165
MMTA during 2005. The demand for PP
reached nearly 41 MMT registering a
growth of 4 per cent, demand for
Polyethylene reached 64 MMT
registering a growth of 5.1 per cent while
demand for PVC reached 31 MMT
registering a growth of 3.2 per cent.

Polymers (PE, PP and PVC) consumption
in India reached 4.3 MMT registering an
impressive 17 per cent growth over FY
2004-05. Growth in domestic polymer
consumption far exceeded consumption
growth of 7.9 per cent in China.
Domestic sales of Indian producers grew
by 5.4 per cent whereas imports
registered a 2.8 times increase mainly due
to large imports of PVC. PP is the only
polymer for which global prices witnessed
increase of approximately 8 per cent in
FY 2005-06. In spite of the price increase,
domestic industry registered healthy
growth of 13 per cent and consumption
reached 1.33 MMT of PP. Domestic PE
consumption grew at an impressive 15
per cent after a marginal growth of 1 per
cent during FY 2004-05. The
consumption growth was due to
buoyancy in GDP and prices remaining
steady at levels similar to FY 2004-05.
LDPE consumption grew at a strong 22
per cent due to narrowing price gap
between LDPE and LLDPE. Aggregate
PE consumption crossed 1 MMT mark
for the first time, during the year. PVC
consumption achieved 26 per cent
growth after having grown marginally in
FY 2004-05. PVC growth was led by pipe
demand and growth in construction and
infrastructure sectors.

Polymer market in India is estimated at
Rs 20,000 crore. The largest sector
contributing to nearly half of the value is
flexible packaging where RIL has a share

of 43 per cent of the market in value
terms. This segment is estimated to grow
at 15 per cent per year for the next few
years. The growth is expected to get
accelerated with the boom in retail,
packaged food and grocery consumption.
Automotive and Appliances at present
are small volume sectors but growing at a
rate of 29 per cent and 24 per cent
annually respectively. In these sectors
RIL’s market share is 61 per cent and 58
per cent respectively. Other important
end use sectors contributing to polymer
consumption are Lifestyle Products and
Infrastructure. In lifestyle products, RIL
has a share of 41 per cent. Sectors like
medical, agriculture, industrial and rigid
packaging are relatively low consumers at
present but have potential for strong
growth in the future.

RIL maintained its leadership position in
the domestic market, with a market share
of 44 per cent and together with its
associate company IPCL, a market share
of 68 per cent. Domestic placement of
production increased to 81 per cent from
75 per cent.

RIL’s production capacity is 450 KTA for
Polyethylene, 1,150 KTA for
Polypropylene and 325 KTA for PVC.

Polymer production during the year was
1,845 KT, 4 per cent lower than last year,
primarily due to shutdown of Jamnagar
PP plant along with the refinery
shutdown.

KTA

03-04

1,859

04-05

05-06

1,921

1,845

RIL’s PP plants at Hazira operated at 101
per cent capacity utilization. Production
during the year was lower by 154 KT at
1,012 KT. RIL together with IPCL has a
market share of 84 per cent in PP. RIL
increased its production capacity at
Jamnagar by 280 KTA in April 2006.
With this capacity increase and capacity
of 0.9 million TPA planned in RPL, PP
will be the focus area for development in
the polymer basket of RIL. An aggressive
and focused development plan is in place
for key growth sectors like automotive,
appliances, geo-textiles and packaging.

RELIANCE INDUSTRIES LIMITED

towards providing compelling value to
the downstream textile industry. The
Reliance Technology Centre (RTC) at
Patalganga, Reliance Testing Center in
Coimbatore and Reliance Fibre
Application Center in Patalganga
together will shrink the time taken from
conceptualization of a product to its
launch in the global markets, for RIL and
its customers.

Polyester Intermediates (PX, PTA, and
MEG)

RIL is the world’s 4th largest producer of
Paraxylene (PX), 7th largest producer of
PTA and 5th largest producer of MEG. In
India, RIL is the largest manufacturer of
polyester intermediates with market share
ranging from 70 per cent to 100 per cent.

Global PTA capacity addition was at 3
million tonnes which was fully absorbed
in the market. There was no major
capacity addition in MEG. PX capacity
addition was 2 million tonnes.

Domestic demand for Polyester
intermediate grew by 5 per cent.
Operating rates for all RIL facilities
continued to be at 100 per cent. RIL has
acquired the Kurkumbh Glycol Plant (in
Maharashtra) which is now fully
operational.

RIL’s production capacity for PX is 1,956
KTA post completion of its expansion
programmed at Jamnagar. RIL’s
production capacity for PTA is 1,350
KTA and for MEG the same is 555 KTA.
RIL’s new PTA plant with a capacity of
730 KTA is under construction at Hazira
and is expected to start operation in the
first half of FY 2006-07.

RIL’s production volume for polyester
intermediates was at 3.2 million tonnes,
which grew by 2 per cent as compared to
previous period. Over 50 per cent of the
total production of polyester
intermediates was for captive
consumption.

KTA

03-04

3,026

04-05

05-06

3,147

3,220

RIL’s PE plants operated at 95 per cent
during the year. RIL together with IPCL,
has a domestic market share of 48 per
cent for PE and 78 per cent for LDPE.
Emergence of organized retailing in India
could substantially boost PE consumption
in packaging sector. Prices are expected
to remain range bound, which will also
help consumption growth. RIL is focusing
on consolidating its presence in specialty
grades and leverages its strength as a
single window supplier for all
Polyethylene products.

RIL’s PVC plant at Hazira operated at a
high level of 109 per cent. RIL together
with IPCL, has benefit of feedstock
balancing within the three manufacturing
sites to optimize grade mix. With
increasing emphasis and higher outlays
on infrastructure, housing, water supply,
health and hygiene, and micro irrigation
in India, PVC consumption is likely to
show robust growth during FY 2006-07.

Polyester (PFY, PSF, PET)

RIL has become the largest producer of
Polyester in the world in a span of just 25
years. This has been achieved through its
excellent project management, execution
capabilities and adoption of global
economies of scale.

In 2005, the increase in global polyester
production was about 3 MMT, which has
taken the world polyester production to
41 MMT, a growth of 8 per cent. The
major growth impetus came from China
and India. China’s polyester production
(including Fibers and Yarns, PET and
Films) grew by 17 per cent from 12 MMT
to 14 MMT. India and China are now the
global hubs for the production of
Polyester Fibre and Yarn contributing
over 65 per cent of global capacity.

Low per capita consumption in India
offers strong growth potential for existing
players like RIL. The per capita
consumption of polyester in India is very
low at 2.2 Kg compared to 7.2 Kg in
USA, 5.0 Kg in Europe, 10.6 Kg in
China, 7.9 Kg in Asia and a global
average of 6.0 Kg. The compounded
annual growth rate of the Indian
polyester fibre and yarn industry during
last five years has been 7.1 per cent
whereas the CAGR has been 6.1 per cent
for the global polyester fibre and yarn
industry.

The domestic demand for polyester
increased from 1.68 million tonnes to
1.85 million registering a growth of 10
per cent. RIL, along with its group
companies continues to be the market
leader with an overall 51 per cent market
share.

Indian PET bottle resin market grew by
20 per cent to 121 KTA. RIL with a share
of 52 per cent of the PET market is the
largest player.

RIL’s production capacity is 840 KTA for
PFY including the recent expansion, 810
KTA for PSF and 300 KTA for PET.
During the year, RIL’s production
volumes of PFY, PSF and PET increased
by 9 per cent to 1,129,000 tonnes.

KTA

03-04

04-05

05-06

925

1,036

1,129

RIL has maintained its focus on specialty
products, 55 per cent of PSF production
and 33 per cent of PFY production
represented niche products. With the
integration of Trevira, RIL now has the
most diversified portfolio in polyester
across commodity, specialty and niche
products.

RIL is very close to completing one of the
largest expansions in polyester capacity in
the world by adding 550,000 TPA of new
polyester capacity. With this expansion,
total polyester capacity of the group
touches two million tonnes. This
expansion is not only the largest in the
country but also has many unique
features. The machinery is well equipped
to manufacture the entire denier range. It
will improve efficiency of downstream
textile machinery with better runability
and consistency in production quality.
RIL is confident of placing the expanded
capacity in domestic and global markets.

RIL has set up a state-of-the-art
‘Reliance Fibre Application Centre’ at
Patalganga to conduct application
research of polyester fibre and spun yarn.
RIL has joined hands with Rieter
Machine Works of Switzerland – the
world’s leading manufacturer of textile
spinning machinery, to work together

Growth is Life

Cracker Products – Ethylene and
Propylene

RIL operates one of the world’s largest
grass-root, multi-feed cracker at its
Hazira complex. RIL continues to be well
positioned on the cost curve among the
naphtha-based Asian crackers with
operating rates at 100 per cent. During
the year, RIL produced 840,000 tonnes of
ethylene and 398,000 tonnes of
propylene, an increase of 3 per cent and
1 per cent respectively over the previous
year. De-bottlenecking of Hazira cracker
is planned in FY 2006-07 and will
increase the cracker capacity by 40,000
TPA of Ethylene.

During the year RIL commissioned its
Butadiene extraction facility with a
capacity of 140,000 TPA. Butadiene
product has been well accepted in the
international market. The production has
also fulfilled IPCL’s balancing
requirement of Butadiene for its
Synthetic Elastomers (Poly Butadiene
Rubber) facilities. RIL produced 90,000
tonnes of Butadiene during the year.

Aromatics and Chemicals

RIL’s Benzene production was 444,000
tonnes during the year represented an 18
per cent increase over previous year,
primarily on account of capacity
enhancement at Jamnagar. The
commissioning of extractive distillation
facilities at Jamnagar during the last
quarter allowed Benzene recovery from a
large number of intermediate streams in
the refinery. RIL maintained its
leadership in the domestic market with a
share of over 62 per cent. RIL exported
nearly 152,000 tonnes of Benzene to
consumers across the globe.

RIL’s leadership position in domestic
Toluene market was sustained at over 60
per cent. Toluene and Orthoxylene
production was 117,500 tonnes and
243,000 tonnes respectively.

RIL is the largest manufacturer of Linear
Alkyl Benzene (LAB) and Normal
Paraffin in the country. The total
production of LAB was at 117,000
tonnes. The domestic LAB market
witnessed a growth of around 4 per cent
during the year. RIL exported 40 per cent
of LAB produced during the year mainly

to countries in South East Asia, Middle
East and Europe and is systematically
penetrating new markets in West Asia
and Africa in order to counter the
competition in domestic and overseas
markets. RIL’s customers rate the quality
of its LAB at par with the best in the
international market.

The feed-stock requirement of LAB plant
is fully met captively by the Normal
Paraffin plant. In addition, RIL offers
three different grades of normal paraffins
to suit the specific needs of the domestic
Chlorinated Paraffin Wax industry. Some
of these paraffins are also used in the
specialty oil industry.

Textiles

RIL’s Textile Complex at Naroda,
Ahmedabad is one of the largest and
most modern textile complexes in India.
It’s textile products are sold under the
brand names of Only Vimal, Harmony,
Reance, RueRel and V2 (pre-cut, pre-
packed products). RIL’s flagship brand
ONLY VIMAL is one of the largest
selling brands of premium textiles in
India.

Textile Division produces about 25
million meters of fabrics both for
domestic and international markets. It is
the only textile mill in India to offer the
maximum marketed range in the most
number of product categories.

Over 70 per cent of textile division’s
exports were to discerning markets such
as Europe and USA.

Opportunities

The Indian GDP continues to grow at a
robust rate of 7 to 8 percent. The
economic growth presents several
attractive opportunities. With the
requisite financial strength and project
execution capabilities, RIL will continue
to make investments in the upstream and
the downstream energy and petroleum
sector.

RIL’s strategy for upstream exploration
and production business will be to
identify and pursue all attractive
opportunities, invest in projects that
deliver superior returns, and maximize
profitability of existing E&P operations.

RIL will capture the growth opportunities
by capitalizing growing natural gas
markets in the country.

RIL will participate in the future growth
opportunity in the refining business
through its subsidiary, RPL which is
setting up one of the largest greenfield
refinery project with a processing
capacity of 580,000 barrels per day in a
special economic zone located at
Jamnagar, India.

In the downstream petroleum sector, RIL
continues to expand its retail distribution
infrastructure across the country. RIL’s
petroleum retailing has received very
encouraging response. RIL has already set
up 1,218 outlets and expects the number
of outlets to increase to 2,000 by the end
of FY 2006-07.

RIL will continue to maintain its
leadership position in the Indian
petrochemicals industry. The domestic
demand for its petrochemicals products is
expected to register a sustained growth
for the next few years. During the year
RIL set up a new 140 KTA Butadiene
pant at Hazira, and expanded its
Paraxylene capacity by 310 KTA at
Jamnagar. RIL expanded its PP capacity
at Jamnagar by 280 KTA in April 2006
and is close to completing at 550,000
TPA expansion in polyester capacity. It
will commission a new 730 KTA PTA
plant in FY 2006-07 and its subsidiary
RPL will set up a new 900 KTA PP plant
by December 2008.

RIL will also pursue attractive inorganic
growth opportunities, which are strategic
to its intents and synergistic to its
operations.

Challenges

RIL faces normal market competition in
all its businesses from Indian as well as
international companies. RIL’s globally
competitive cost positions and well
crafted business strategies have enabled it
to retain its leading market positions. RIL
has successfully maintained its operating
efficiencies and consistently improved its
financial performance through the cycles
of commodities business.

RELIANCE INDUSTRIES LIMITED

RIL’s Major Subsidiaries and
Associates

Reliance Petroleum Limited

Reliance Petroleum Limited (RPL),
promoted by RIL and Chevron India
Holdings Pte. Limited, Singapore has
been formed to set up a Greenfield
petroleum refinery and polypropylene
plant to be located in a Special Economic
Zone in Jamnagar. The facility will be
adjacent to RIL’s existing refinery and
petrochemicals complex.

RPL plans to construct a refinery with a
complexity of 14.0, as measured using the
Nelson Complexity Index. The refinery
will have a total atmospheric distillation
capacity of approximately 580 kilo barrels
per stream day (KBPSD). The
polypropylene plant will have a capacity
to produce 0.9 million TPA.

The capital cost of the Project is
estimated at Rs 27,000 crore to be funded
through equity contribution of Rs 13,500
crore and debt of Rs 15,750 crore.
Additional money raised in excess of
project cost will be used as working
capital and contingency for the project.

RPL expects to commission the refinery
and the polypropylene plant by
December 2008. RPL has entered into
agreements with Bechtel France S.A.S to
license the technology for the major
process units of the refinery and
polypropylene plant. Bechtel will also
provide engineering, project management
and other construction services for the
project.

RIL has proven expertise in building and
operating a large refinery and
petrochemicals complex. Its existing
refinery, currently the third largest
refinery in the world by atmospheric
distillation capacity, was built in 36
months and commenced commercial
production during 2000. This refinery has
operated at near 100 per cent utilisation
during its six years of operations,
consistently outperforming the average
utilisation rate of refineries in the Asia
Pacific region, the European Union and
North America as reported by PEL
Market Services, Biannual Refining
Report, July 2005. With a Nelson
Complexity Index of 11.3, the existing

In E&P business, the major challenge for
RIL is to bring the gas the from the
KGD6 block to the end users. For
accomplishing its objective, RIL has been
working with the leading international
technology and service providers for the
development of the KGD6 block.

The government owned oil-marketing
companies dominate the petroleum
retailing in the country. RIL has obtained
the necessary approvals to set up 5,849
retail outlets across the country. RIL is in
the process of creating state-of-the-art
retail outlets, offering a wide variety of
consumer choices and services.

The import duty reduction on some of
the petrochemicals products in the recent
budget has marginal impact on RIL’s
operations. However, RIL will compete
through its operational excellence,
technical superiority, extensive marketing
and distribution network, and deep
customer relationship to maintain its
unique position in the global
marketplace.

RIL’s various businesses have grown
significantly in size and scale over the
years. RIL’s sound business strategy and
conservative financial framework have
provided stability and platform for growth
in a volatile global environment.

Risks and Concerns

At RIL, 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.

Petroleum and petrochemical products
are globally traded commodities and their
prices are subjected to international
market forces of demand-supply and
other factors that influence price
volatility. With these two businesses
presently accounting for the major
proportion of RIL’s revenues, changes in
global price levels have an impact on the
Company’s performance.

RIL’s high levels of integration, globally
competitive operations and domestic
leadership position have helped the
company in mitigating the adverse
impact of generic industry risk factors.

RIL 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
Company’s conscious efforts on
maintaining a judicious mix of markets
for its sales and thrust on specialty
products have also proved to be effective.

Foreign exchange rate volatility has an
impact on the business and on foreign
currency debt portfolio. RIL undertakes
liability management transactions and
other structured derivatives such as
interest rate swaps and currency swap on
an ongoing basis. RIL’s growing export
revenues, and foreign exchange
denominated oil and gas revenues,
provide more than sufficient cover for its
annual external debt service obligations.

Internal Controls

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

• RIL has adequate systems of internal

control in place. This is to ensure that
assets are safeguarded against loss
from unauthorized use or disposition,
and that transactions are authorized,
recorded, and reported correctly.

• RIL 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.

Growth is Life

refinery has achieved Gross Refining
Margins (“GRMs”) that are consistently
higher by US$ 2 to US$ 3.6 per barrel
than the benchmark Singapore Margins
during this period. In 2005, RIL was
named the “International Refiner of the
Year” by the Hart Energy Publishing LP. It
was ranked number one in “Energy
Performance” amongst large complex
refineries in the Asia Pacific Region in
the Solomon Benchmarking Survey, by
Solomon Associates of USA in 2003.

RPL’s proposed refinery and
polypropylene plant will be located in a
Special Economic Zone (SEZ) and will
receive certain tax benefits and
concessions under SEZ regulations,
subject to certain conditions.

RPL’s Key Competitive Strengths :

RPL’s plan to construct and operate a
refinery and polypropylene plant benefits
from the following competitive strengths:

RIL’s superior project execution skills in
constructing a complex refinery:

One of RIL’s core competences is to
conceptualise and implement multi-
billion dollar projects on time and in a
cost efficient manner. RIL has proven
track record of successfully implementing
large projects, including its existing
refinery and petrochemicals complex at
Jamnagar in Gujarat, its petrochemicals
complex at Hazira in Gujarat and
another petrochemicals complex at
Patalganga in Maharashtra. The
implementation of Jamnagar complex
required co-ordination among several
external agencies, including technology
licensors, equipment suppliers, and
construction contractors and involved a
large workforce. RPL will benefit from
RIL’s experience and expertise in the
construction of large complex refinery.

Large and complex refinery capable of using
heavier and sourer, low cost crude to
produce high quality, premium petroleum
products:

RPL’s proposed refinery is designed to
have an atmospheric distillation capacity
of approximately 580 KBPSD, which
would make it the sixth largest refinery
globally, based on current capacities.
Such a large scale of operations should

provide economies of scale, leading to a
relatively lower operating cost base. The
proposed refining facilities have been
designed to refine a variety of feedstocks
with an API gravity ranging from 15 to
50, including lower cost, heavier and
more sour crude oils and to produce high
quality transport fuels and other higher
value added petroleum products which
meet the most stringent international
environmental requirements, including
ultra low sulphur diesel (10 ppm sulphur)
and ether (MTBE or TAME) free
gasoline for the sophisticated markets of
the United States and Europe. It will also
be capable of processing bottom-of-the-
barrel products such as vacuum residue
to yield value-added products such as
LPG, naphtha, gasoline and diesel.
Unlike many refineries, RPL does not
plan to produce fuel oil, which is a low
value product.

Benefits of low capital costs:

RPL’s proposed refinery will gain from
RIL’s prior experience in constructing and
operating the Jamnagar refinery,
especially in the areas of design and
engineering, construction, labour and
resource optimisation, greater use of local
materials and resources and faster
implementation. This will result in a
significant reduction in the capital cost
for the Project and enable RPL to
achieve lower costs per barrel, adjusted
for complexity.

Strategic location with proximity to crude oil
sources and target export markets:

RPL’s proposed refinery will be located on
the west coast of India in close proximity
to the Middle East, the largest crude oil
producing region in the world. This is
expected to result in lower ship
turnaround time and crude freight costs.

Fiscal incentives by virtue of being located in
a Special Economic Zone:

An SEZ operates as a delineated area
which is deemed to be a foreign territory
for the purposes of trade operations,
duties and tariffs. RPL being an export
oriented refinery intends to export the
bulk of the production. RPL will benefit
from an income tax deduction on export
turnover for a period of five consecutive
years following the commencement of

commercial operations (with a scaled
reduction in income tax deduction for
the next five year period and, subject to
certain reinvestment conditions, for a
third five year period thereafter). RPL
will also be exempt from customs duty for
goods and services imported into or
exported from the SEZ and also from
excise duty on domestic procurement.

RPL’s strategy for the refinery operations is
three pronged:

Capitalise on forecast demand-supply
imbalances in global petroleum products:

Given the limited additions expected to
global refining capacity and the forecast
increase in demand for petroleum
products in key markets, any current
excess of refining capacity is expected to
decrease further, leading to higher
utilisation of existing refineries. Further,
increasingly stringent product
specifications will result in fewer existing
refineries being able to meet the
increasing demand for such products.
RPL’s strategy is to capitalise on this
imbalance between capacity and demand
by rapidly establishing an export-
oriented, technologically advanced
refinery to service the forecasted growth
in demand.

Retain flexibility in the refinery design to
provide us with the ability to optimize crude
oil input, product slate and product quality:

The configuration of the proposed
refinery will provide significant flexibility
to use a wide variety of low cost, heavier
crude oils to produce high quality
transportation fuels and other value
added petroleum products and thereby
take advantage of differentials between
prevailing crude oil costs and petroleum
product prices.

Incorporate best practices of RIL’s existing
refinery to establish efficient and profitable
operations and exploit synergies with RIL’s
existing refinery:

In addition to utilising the skill sets and
resources available to RIL, in
constructing the new refinery and
polypropylene plant, RPL anticipates
realising significant synergies with RIL
and its Affiliates by entering into
agreements for services in the areas of
crude sourcing, operations and

RELIANCE INDUSTRIES LIMITED

RIL Jamnagar bagged several awards on
the energy conservation from reputed
national benchmarking bodies, viz.
ICMA (Indian Chemical Manufacturers
Association) Award 2004-05 for
“Excellence in Energy conservation and
Management ; National Energy
Conservation Award 2004 as well as 2005
from BEE (Ministry of Power) ; National
Award for Excellence in Energy
management for three consecutive years
(2003, 2004, 2005) from CII
(Confederation for Indian Industries);
Oil and Gas conservation Award 2003-04
and 2004-05 from PCRA (Petroleum
Conservation Research Association) in
large products category for “Exemplary
work in Energy conservation”.

RIL, Jamnagar received “Oil & Gas
Conservation Fortnight-2005” Award
from Ministry of Petroleum & Natural
gas, viz. first prize for minimum steam
leaks.

In the Benchmark study by SHELL (Shell
Global Solutions, The Hague), RIL
Jamnagar has topped the list all over the
world and were adjudged as “Best in
class” in energy performance for the 3rd
consecutive year. The Energy Index for
RIL, Jamnagar is the lowest in the world
indicating highest energy efficiency.
There has been continuous improvement
in Corrected Energy and Loss Index.
Shell Corrected Energy and Loss Index
(CEL) for RIL has decreased from 94.3
(2001) to 86.9 (2004).

In the benchmarking study done by
Solomon Associates in 2000, 2002 &
2004 RIL Jamnagar is topping the list of
Large Complex Refineries (Gas Oil
Processing Group-4) in the Asia Pacific
& Indian Ocean. The Energy Index has
reduced from 69.2 to 62.3 from the year
2000 to the year 2004.

The performance of Patalganga unit on
Energy Conservation front shows a
continuous improvement. However, the
Energy Index for the year 2005-06 is
marginally high because of the shutdown
due to flood at PG in the month of
July’05.

maintenance, marketing of refined
petroleum products and associated
infrastructure. RIL has significant
experience in the areas of crude
procurement and refined product
marketing in the global markets.

Indian Petrochemicals Corporation
Limited (IPCL)

RIL acquired IPCL in June 2002. IPCL is
India’s second largest petrochemicals
company after RIL.

For the year ended March 31, 2006, IPCL
has, in its unaudited results, reported a 2
per cent increase in its turnover from Rs
9,386 crore to Rs 9,597 crore. The profit
after tax for the year has increased by 28
per cent from Rs 786 crore to Rs 1,005
crore. This is the highest ever profit in
the history of the IPCL. After its
acquisition by RIL, IPCL’s turnover has
grown 15 per cent CAGR whereas profits
have grown 75 per cent CAGR.

Its Board of Directors have approved
payment of an interim dividend of
Rs 5.50 per share.

The Board of Directors of IPCL have also
approved the merger of Apollo Fibres Ltd
(AFL), Central India Polyester Ltd
(CIPL), India Polyfibres Ltd (IPL), Orissa
Polyfibres Ltd (OPL), Recron Synthetics
Ltd (RSL) and Silvassa Industries Pvt Ltd
(SIPL) with IPCL. The Board has
recommended an exchange ratio of
1 equity share of IPCL for every 25 equity
shares of AFL, 23 equity shares of CIPL,
28 equity shares of IPL, 28 equity shares
of OPL, 34 equity shares of RSL and 38
equity shares of SIPL. The appointed
date of merger is April 1, 2005. The
exchange ratio has been determined on
the basis of a joint valuation report by
valuation Advisors, M/s Price
Waterhouse Coopers Pvt Ltd and SBI
Capital Markets Ltd. The proposed
merger is subject to necessary approvals
from shareholders, creditors and other
regulatory authorities and sanctions of
the courts, as may be necessary.

Reliance Industrial Infrastructure
Limited (RIIL)

RIIL was incorporated in the year 1988 as
Chembur Patalganga Pipelines Limited,

with the main object to built and operate
pipeline for transporting petroleum
products. The Company’s name was
subsequently changed to CPPL Limited,
and thereafter to its present name viz.,
Reliance Industrial Infrastructure
Limited. RIIL is in the business of
infrastructure and leasing activity.

During the year, RIL has become the
‘Promoter’ having control over Reliance
Industrial Infrastructure Limited (RIIL)
consequent to the passing of a Special
Resolution through postal ballot by the
members of the RIIL under the provisions
of Regulation 12 of the Securities and
Exchange Board of India (Substantial
Acquisition of Shares and Takeovers)
Regulations, 1997.

RIIL’s gross income for the financial year
ended March 31, 2006 was higher at Rs
75.35 crore, compared to Rs 68.67 crore
in the previous year, an increase of 9.7
per cent. As a result, the gross profit for
the year was higher at Rs 45.23 crore as
against Rs 39.29 crore in the previous
year. Interest expenditure for the year
increased by 39.6 per cent to Rs 7.02
crore from Rs 5.03 crore in the previous
year. Depreciation during the year was
lower at Rs 14.35 crore, compared to Rs
17.42 crore for the previous year. RIIL
has earned higher net profit of Rs 18.46
crore for the year as compared to Rs
17.47 crore in the previous year.

Energy Conservation

Energy conservation efforts are ongoing
activities aimed at both continuous cost
reduction and reducing green house gas
emissions. RIL’s efforts are best
exemplified by the number of awards it
has won from reputed national bodies
and by it’s standing in the benchmarking
studies carried out by international
agencies.

During the year the Hazira unit won
awards from Confederation of Indian
Industry (CII) for being the “Excellent
energy efficient unit”, “Innovative
Project” and “The Most Useful
Presentation”. It was also awarded
“Certificate of Merit” by Ministry of
Power, Govt. of India.

Growth is Life

The trend of Energy Index values is
shown graphically below:

Energy Index

*High because of Flood.

At the Hazira plant, over 40 energy
conservation projects implemented both
in the terms of process improvements
(steam and fuels) and electrical system
efficiency (power) resulted in over 1 per
cent reduction of the total energy
consumption.

Reduction in energy index to 1.88
MMkcal / MT in the year 2005-06, has
been achieved compared to 2.00 MMkcal
/ MT in the year 2004-05 on account of
energy conservation schemes and
absorption of energy efficient
technologies.

Energy Index Trend for last three years at
Hazira:

Clean Development Mechanism
(CDM)

This year marks RIL’s efforts in
identifying energy conservation projects
that qualify for registration as CDM
(Clean Development Mechanism)
projects with United Nations Framework
Convertion on Climate Change under
the Kyoto Protocol.

Two projects - “Conversion of totally
condensing STG into extraction type”

and “Heat integration through Pinch
Technology in (1) LAB Plant, (2) PX
Plant”, have been identified as potential
CDM projects from the site leading to
Certified Emission Reductions (CER) by
52,000 units/year.

The Hazira unit has implemented an
innovative energy conservation project at
its aromatics plant. The innovation is in
terms of process modification by
changing the sequence of operation in
the BTX separation train without
compromising the quality of final
products.

The Jamnagar unit has identified seven
projects as potential CDM projects and
one of the projects has been submitted
for Host country approval. The potential
CER credit will be 36,600 units/year from
the above two projects and is expected to
bring in a revenue of around 300,000
US$/annum to the company.

Research & Development

RIL continues to invest in R&D
activities towards development of new
products and application, improvement
in operating efficiencies and reduction in
manufacturing costs.

Research efforts in the Polymers and
Chemicals resulted in the developments
of catalysts and process for high value
chemicals and improved polymer grades
in addition to granting of two US and
one Korean Patents and six publications
in scientific journals.

The major highlights of RIL’s R&D efforts
in Polymers and Chemicals during the
year are:

• Novel series of external donor system

developed from concept to
production for enhancement in the
performance of polypropylene
catalysts and improved product
characteristics of woven sacks grades
suitable for high speed processing
lines.

• A quantum jump in the development
of fourth generation morphological PP
catalyst from lab to pilot scale
resulted in resin characteristic
improvement.

• Several New and improved PP grades
developed with high performance
catalyst utilizing unique PP pilot plant
capability such as BOPP grade for
high speed lines, High Impact
copolymers and heat sealable film
grade for BOPP/ Cast film.

• Polymers applications development
towards metal body replacement for
washing machine and automotives,
luggage and safety equipments and
applications for self reinforcement
polypropylene composites.

• High performance wood filled PVC
composites development and its
applications in furniture sectors in
addition to the transparent PVC
grades development.

• Eco friendly process developed for

para-diethyl benzene – a high value
specialty chemicals used in adsorptive
recovery of paraxylene.

The R&D activities conducted at
Reliance Technology Centre in
Patalganga are focussed on product and
process innovation with polyesters. The
developments are carried out for the
Staple Fibres, Filament Yarn and PET
resin businesses at RIL.

In FY 2005-06 a number of new filament
products were developed and
commercialized using the Bicomponent
Melt Spinning technology. These
products include Recron ‘Stretch’
filaments for comfort stretch in dress
materials, shirting and suiting etc. These
yarns offer elastic stretch in the fabrics
simalr to spandex. The ultra micro denier
(DPF < 0.2) filament yarns, marketed
under the Recron ‘Micrelle’ brand, were
developed using the novel concept of
splittable yarns.

The major development in Staple Fibres
concerned the introduction of Recron 3s
Short Cut Fibres for using wet laid non-
woven in end uses such as filter paper in
food processing, wall papers, etc. The
Finish Development group in RTC has
developed a number of proprietary
additives for improving the textile
processability of Staple Fibres in
downstream operations.

RELIANCE INDUSTRIES LIMITED

medical checkups of all employees besides
carrying out specialized studies and audits
including biological monitoring and
health risk assessments.

The project Change Agent Health Safety
& Environment (CASH) initiative has
empowered the line managers in the area
of occupational health and safety, thereby
making it a way of life. The objective, to
bring about a positive change and
improvement in occupational health
practices, has been achieved in all our
major sites. This project has led to a
remarkable awareness about occupational
health at all levels of employees and has
been responsible for reducing work
related diseases and injuries.

All manufacturing sites also take part in
community development through the
community medical initiatives. These
initiatives provide facilities for free
preventive and curative health care to
the nearby communities. They also
participate in the national health
programs such as Pulse Polio, Revised
National Tuberculosis Control Program
(RNTCP), National Immunization
Program and Maternal and Child Health.
These community medical centers have
been well received and utilized by the
target population.

The RIL group supports the scientific
research activities of Sir Hurkisondas
Nurrotumdas Medical Research Society
(HNMRS). Topics of national health
priorities constitute a major share of the
research projects undertaken here.

Safety

In order to give a high importance to the
Health, Safety and Environmental issues
in the company, the Director’s
Committee on HSE regularly monitors
the status of Safety performance,
practices and systems at the various sites
in comparison with the International
Standards and Best Practices and
provides necessary directions to the
group.

RIL undertook several initiatives last year
based on its core belief that all safety
incidents are preventable. In its journey
to becoming a global leader in safety, the
company had several achievements

For the packaging applications, a variety
of novel grades of PET resins were
developed. These include hot-fill resin
for food packaging, special reheat grades
for carbonated soft drinks and mineral
water packaging. RTC has also been
involved in developing process solutions
for improving the process yield and
product quality of the Relpet + grades
produced on the new generation PET
process technology platform licensed by
Invista and commercialized by RIL for
the first time in the world.

During the year RIL participated in
various research programs with Institutes
/ Industry in India and overseas. The
major efforts in basic research and
technology development were jointly
pursued at IIT (Mumbai, Chennai),
NCL- Pune, V-Life Science, Pune and
Nova Chemicals, Canada. The Joint
development efforts were focused on
Nano clay and PP nano composites, High
value chemicals, Biodegradable /
degradable polymers, Computational
analysis, Polymer additives, co monomers
for Poly-olefins etc.

RIL’s partnership with CSIR under New
Millennium India technology initiatives
(NMITLI) continued and progress
achieved on the program focus on
valuable chemicals from alkane and
development of detergent grade alcohols
from long chain paraffin’s. Government
of India recognized the R&D efforts of
the RIL group by awarding it the DSIR
award in development of p-di-ethyl
benzene process and NG-3 technology
absorption. The Golden Peacock award
for innovative technology development
was also received by RIL.

Quality

Six Sigma

In the Six Sigma Excellence Awards 2005
contest held by Symbiosis Center for
Management and Human Resource
Development, Pune the Black Belt
project of Patalganga on Instrument
Spares Inventory Level won “Runner up”
trophy under the manufacturing category.

E-Rose, a Six Sigma quarterly e-Journal
released from Patalganga has helped to
enhance the culture of six-sigma spread
at the site.

A project from Hazira on reduction in
naphtha loss in tank farm, won the
Qualtech National award.

To promote the spirit of competition and
to accelerate the six sigma culture in the
group, an annual inter-site competition
of six sigma projects was held for the first
time in March 2006.

Quality Management

RIL continues to take quality
improvement measures and strengthen
quality management systems at all
manufacturing locations.

• Shell Global Services has conferred

42 Golden Certificates on cumulative
basis to RIL’s Jamnagar facility for
excellence in reliability of product
certification.

• RIL’s Glycol Division QA/QC
laboratory at Kurkumbh was
commissioned with state-of-the-art
Laboratory Information Management
System (LIMS).

• RIL Jamnagar polymer laboratory was
accredited by NABL for conforming
to Quality Management System
(QMS) as per ISO/IEC 17025.

• Total Quality Management (TQM)

was introduced at all sites.

• “Five S” programme was implemented

complex-wide at all locations.

• Quality Loss Index (QLI), a statistical
tool to enhance performance and
productivity was implemented in all
the laboratories at all RIL locations.

• Occupational Health and Safety
Assessment System (OHSAS)
certification was implemented at all
RIL sites. The significance of OHSAS
is to identify and eliminate all
occupational health related concerns.

Health

RIL provides state of the art medical care
to all its employees through occupational
health centers located at various sites.
These occupational health centers also
focus on preventive medicine by
conducting pre-employment and periodic

Growth is Life

during the year. The Safety Management
Evaluation undertaken in the previous
year through international agencies was
followed by an improvement program
during the year. Job Safety analysis and
Job Risk assessments were further
established during the year.

The Occupational Health and Safety
Management Systems at Patalganga and
Jamnagar sites were certified to the
OHSAS 18001 standard during the year.
With this, all the three major sites of
Patalganga, Hazira and Jamnagar are now
certified with the OHSAS 18001
standard. All the three sites have earlier
received the British Safety Council’s Five
Star rating three years ago.

The Jamnagar complex completed a
major shutdown with more than 35,000
workers without any serious incident.
Special working systems were established
to handle such a mega shutdown. The
workers were trained to conduct the
shutdown activities safely. A strong
safety audit programme was established
to continuously close the gaps in the
implementation of safe practices.

In order to take RIL to world standards in
HSE, a corporate cell named the Centre
for HSE Excellence has been established.
This cell has been entrusted with the job
of structuring the HSE Management
practices at the RIL group level and of
supporting the sites to become amongst
the best managed sites in the world in
terms of Safety.

Environment

The focus and objectives for sustainable
development and business growth at RIL
is the Group’s dedication towards a clean
environment, at the workplace and the
surroundings, in line with the
organizational development.

At RIL, the various stages of a project
viz. planning, design, construction,
operation and maintenance are
integrated with the environmental
requirements at each step. As the
leading corporate group in the country,
the structured environmental monitoring,
management systems and audits ensure
compliance to all the environmental
protection laws of the land. A dedicated
Environment Health and Safety (EH&S)

Group, reporting directly to the Chief
Executive, at each manufacturing
complex monitors and audits the
environmental performance of their
respective Complex to ensure sustainable
development along with the business
objective.

As part of its measures to conserve the
natural resources, the refinery division
has commissioned a Reverse Osmosis
(RO) plant to treat the Low Dissolved
Solids wastewater from the cooling tower
and a portion of the high dissolved solids
stream from Effluent Treatment Plant.
The treated water from the RO plant is
being used for Horticulture purposes,
which has resulted in savings in
desalinated water.

RIL’s Jamnagar Marine Terminal has
successfully migrated to the stricter
requirements of ISO 14001:2004 from
the earlier 1996 standard and has been
re-certified accordingly. Jamnagar
Refinery has also migrated to ISO
14001:2004 requirements and is expected
to be certified as compliant with the new
standard in the forthcoming Surveillance
Audit.

The wastewater management system has
encompassed the installation of a filter
bed in the effluent treatment plant for
the backwash water to remove the
suspended solids from circulating within
the ETP. Further a cooling tower is also
under installation to optimize the
temperature of the effluent being treated
in the biological treatment section of the
ETP.

In preparedness for marine pollution and
oil spill response, one more inflatable
boom of 250 meter length suitable for
high sea operation has been procured and
is placed on board a pull-back tug in the
SPM operational area.

Jamnagar Refinery Complex has won the
“National Award for Excellence in Water
Management” for the year 2005 from CII.
The refinery also won the “Most Useful
Presentation” award from the CII.

RIL is involved in exploration and
development of hydrocarbons reserves in
various blocks off the East and West
coast of India. To support basic
environmental research, RIL has awarded

a multidisciplinary study on the
behavioural pattern of marine sensitive
species to Berhampur University, Orissa.
A project for restoration of mangroves
has also been awarded to the MS
Swaminathan Foundation, a noted
voluntary agency involved in
conservation of mangroves.

The Hazira Petrochemical Complex has
upgraded their Environment
Management System to the stringent ISO
14001:2004 standards requirements. A
target of 10 per cent reduction was set for
the refrigerant usage and till date the
reduction in refrigerant usage achieved is
approx 42 per cent. For productive
utilization of solid-waste, efforts are being
made to utilize the bio-sludge, coke etc.
in the cement industry. Conservation of
water resources has been maximized by
reuse and recycle of wastewater.

The Hazira Complex has always been in
the forefront of knowledge sharing by
counselling and guidance to employees,
contractors, vendors and other group
companies in various activities and
projects implemented in environment
and safety. Being committed to
development of the greenery,
approximately 12,000 trees have been
planted in the last year and an additional
area of 20,000 sq mtr is being covered for
landscaping.

The Patalganga Complex has also been
recertified to the stringent standards of
ISO 14001: 2004 Environmental
Management System. The ‘waste to
resource’ philosophy is being
continuously practised with indigenous
technological efforts on the Anaerobic
Effluent Treatment Process. This
application has created a benchmark in
PTA waste water treatment process. The
microbes in the anaerobic treatment
process metabolize the industrial COD to
produce methane rich biogas. This
biogas, a product of wastewater treatment
is utilized by the plant heaters as fuel.
The heat from the flue gas from the
captive power plant is being utilized in
the Spin Flash Dryer for drying the bio-
sludge. The new ozonation system is
implemented for improving the treated
effluent to be recycled as cooling water
make-up.

RELIANCE INDUSTRIES LIMITED

was set up in 2003. The school is a K-12
school and provides contemporary
national and international learning
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 about 940
students and over 100 faculty members
with rich experience in national and
international curricula.

The school seeks to develop the creative
potential in children, shaping them to be
critical thinkers who appreciate cultural
diversity and have 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.

The first batch of IB students has done
exceptionally well in the board
examinations and college placements. In
the examinations held in May 2005, of
the 57 students from the class of 2005, 13
achieved scores of 40 and above (against
a maximum score of 45). The average
score of 36 that the students achieved
compares remarkably well with the best
worldwide. 45 students from this batch
have gained admission to some of the top
US, UK and other countries, while 12
have opted to study with universities in
India.

As a step towards educationally
supporting deprived children, the school
has sponsored the “Dhirubhai Ambani
International School Akanksha Centre”,
in association with the Akanksha
Foundation, an NGO working to educate
children from slum areas.

Rewards and Scholarship

The Dhirubhai Ambani Foundation every
year recognises meritorious students at
district level through rewards and
scholarship schemes through “Dhirubhai
Ambani SSC – Merit Reward Scheme”

The Patalganga Complex has achieved a
36 per cent reduction in the hazardous
waste sent for secured land filling a
22 per cent reduction in the hazardous
waste sent for reprocessing. 100 per cent
of the contaminated PTA lumps are
disposed on land and the area is being
landscaped as a garden. Further a new
Incinerator is being implemented at the
PTA plant for improved reliability.

The Indian Chemical Manufacturers
Association (ICMA), conferred upon the
PG Complex the ‘DM Trivedi Award for
Introducing Advancement in Technology
having a widespread impact on the
Chemical Industry’ for the year 2004-05.

At RIL, the Environmental and Safety
aspects have been integrated and have
become the culture of the organization.
Its activities cover the entire gamut of
contractors, customers, suppliers and
association with the regulatory bodies
and community for sustainable
development.

Human Resources and
Development

RIL is a company with a global character.
It behaves, thinks and performs in a
manner that is in line with global best of
breed practices. It encourages employees
to think in synchronicity with the world
and prove his/her abilities by availing
global opportunities within the group
itself.

With presence in several countries,
Reliance offers global opportunities for its
employees. With organic business growth,
consolidation and ventures into new
areas, Reliance offers great opportunities
to work across multiple functions,
multiple disciplines as well as in multiple
geographies.

Customised training programmes that
enhance both personal as well as career
growth of employees are carried out
almost round the year. The programmes
have equipped its executives with the
capability of executing world class
projects in record time. RIL has an in-
house training programme for graduates
to develop competency in Finance and
Accounts. On successful completion of
the programme the participants are
equipped to take up higher

responsibilities in the Finance and
Accounts function.

RIL is also associated with the Indian
Institute of Management (IIM)
Bangalore and the Indian Institute of
Technology (IIT) Mumbai. It has
sponsored a number of engineers in a
customized management course, MPRE
(Management programme for Reliance
Engineers) at IIM Bangalore and several
science graduates and diploma holders to
complete a Reliance Certified
Engineering course with IIT Mumbai.
The aim to is improve professional
excellence as well as develop all round
management skills of our employees.

RIL conducts a Manufacturing
Leadership Programme for its senior
executives in association with Hewitt
Associates

Keeping in view the demands of global
marketplace, RIL is introducing
customized management programme that
trains managers in marketing and other
communication skills. It is also planning
to introduce an advanced management
programme in collaboration with an
international management institute for
its senior managers.

Social Responsibility and
Community Development

Towards community assistance and social
development, RIL has provided financial
as well as administrative support for
supplying drinking water to villages in the
vicinity of its manufacturing site and also
established a primary health center. RIL
also helps the local school children
through distribution of books annually.
Financial assistance is offered to the
cultural functions of the villagers and for
conducting medical camps and sports
events annually.

Education

Dhirubhai Ambani International
School (DAIS)

Established with an aim of providing
world class education, the Dhirubhai
Ambani International School (DAIS)

Growth is Life

and Dhirubhai Ambani Undergraduate
Scholarship Scheme”

The ‘Dhirubhai Ambani SSC Merit
Reward Scheme’ for class X and
‘Dhirubhai Ambani Undergraduate
Scholarship Scheme’ for class XII, were
instituted in 1996 for the first three
meritorious students from each of the
district of Maharashtra, Gujarat and later
in Goa. The schemes were extended in
1998 to the first meritorious student
amongst the Physically Challenged
category.

The Foundation has reached out to a
total number of 4763 meritorious
students, including 472 Physically
Challenged, from 64 districts of the states
of Maharashtra, Gujarat, Goa and the
Union Territory of Daman, Diu, Dadra
Nagar Haveli in the last 10 years.

During 2005 the SSC Merit Rewards
were received by 264 meritorious
students while 307 received the
Scholarships. They represent each of the
64 districts of the state of Maharashtra,
Gujarat, Goa and the Union Territory of
Daman, Diu, Dadra Nagar Haveli and
include 71 Physically Challenged and the
first ten in the merit order list of CBSE
for each of the state and three from Goa.

The SSC Merit Reward consists of Rs
3,000/- in cash, a good quality bicycle
which reflects the desire of the Patron
Trustee to motivate meritorious students
from Rural India. The Physically
Challenged meritorious student is
rewarded with Rs 6,000/-. The
Undergraduate Scholarship for
Meritorious HSC students, payable each
year till graduation ranges between Rs
9,500/- and Rs 31,500/- p.a. depending
up on the stream chosen by the Scholar.
A certificate of Merit from the trustees is
given ceremoniously to each of the
meritorious student.

These schemes have been well
appreciated by the students and parents
as they are purely merit based; encourage
education of a girl child and offer equal
opportunity to Physically Challenged
Meritorious students.

‘Reliance Kargil Scholarship Scheme’

The Scheme to support educational
needs of the children of defence
personnel who sacrificed their lives or
were disabled during Kargil war,
instituted with the generous contribution
from Reliance employees. During the
year 87 children received financial
support for their education from standard
IV to XII under the scheme.

“Dhirubhai Ambani Scholars Scheme”
for meritorious children of Reliance
share holders.

The Scheme was announced in 2003 as a
one time measure to commemorate the
silver jubilee of the company’s listing on
the Bombay Stock Exchange. In the first
year 900 meritorious children of the
shareholders received the Scholarships.
These Scholars are eligible to get the
scholarships annually till they complete
their undergraduate studies, provided
they secure minimum of 60 per cent
marks in each of their annual University
Examination. A total of 772 scholars,
having secured the stipulated marks/
grade at the first year university
examination continued to receive the
Scholarship for the second year for their
education leading to Degree / Diploma
course. Of these 540 scholars who are
pursuing degree courses in Engineering,
Medicine and allied subjects while the
rest 232 have chosen courses in
commerce, arts and law faculties.

Healthcare Initiative
Sir Hurkisondas Nurrotumdas Hospital
and Research Centre

RIL extends extensive financial support
and professional expertise to Sir
Hurkisondas Nurrotumdas Hospital and
Research Centre (HNHRC), a charitable
hospital offering free and subsidized
services to a good proportion of the
patients availing of its various diagnostic
and treatment facilities. During the year
9,966 patients received treatment as
indoor patients. At the Outdoors, 38,454
patients availed of the services at P.T.
Clinic, the popular Diagnostic Centre of
the Hospital, where registration is
entirely free to all.

The Hospital continues its age old
tradition of rendering every service in the
Casualty free. An average annual growth
rate of around 10 per cent is witnessed in
the outdoor patient population during
the past few years. The Hospital is
equipped with state-of-the-art operation
theatres optimally used for specialized
surgeries.

Free Health Screening Camps continue
to be organized. Among the important
events during the year were a check-up
scheme at concessional rate offered at
the Hospital throughout the monsoon
season, a health screening programme
conducted during August-September
2005, and a diabetic foot camp
conducted in December 2005.

The Free Health Check up on every 1st
and 3rd Sundays for the benefit of senior
citizens, and the Free Check-up on every
2nd and 4th Sundays for the Elders and/
or the Physically challenged are being
continued. Such programmes have gone
a long way in educating the community
on prevention of diseases, and on
promotion of healthy lifestyles.

Continuing Medical Education
Programmes are organized in
collaboration with the ‘C’ Ward
Association of Family Physicians. One
such programme organized in November
2005 was attended by a large number of
Family Physicians as also members of the
public. The Hospital also contributes to
Education by offering facilities to Medical
students to pursue DNB and CPS courses
as well as conducting Diploma in Nursing
Program. Resident doctors showed good
performance at the various DNB
Examinations conducted by the National
Board. The Hospital received sanction of
four new seats for DNB in Family
Medicine. Resident doctors also brought
in 100 per cent results for three
consecutive terms at the CPS
Examinations, while the Nursing students
continue their tradition of producing 100
per cent results.

RELIANCE INDUSTRIES LIMITED

Moti Khavdi, Nani Khavdi, Kanalus,
Meghpar, Padana, Gagva, Setalus, etc. In
community meals, practically all the
villagers of a particular village eat from
one kitchen, irrespective of caste and
creed. The meals are followed by cultural
events which mainly focus on folk
culture, devotional songs and music.

Renovation of village school building at
Jogvad, overhead water tank at village
Padana, a temple of Goddess Khodiyar at
village Meghpar, a temple at Navagam,
community hall and gaushala at Moti
Khavdi, chania otta, community hall,
Shri Ram temple and gaushala at Nani
Khavdi was taken up during the year
2005-06.

During two months of acute drinking
water shortage, Sikka, Moti Khavdi and
Padana villages were supplied with
drinking water through tankers. A pump-
set and PA systems were donated for the
community use.

RIL, Jamnagar continued to participate
in development of Dwarka pilgrims.
During the year, it completed
construction of an approach road on a
difficult terrain of marshy land near the
confluence of Gomati river and Arabian
sea at Dwarka. Kokila Dhiraj Dham, a
guest house for devotees was made
operational during the year under report.

At Hazira

Reliance Industries Limited, Hazira has a
cluster of 7 villages in which company
provides community services like health
care at the doorstep, educational
infrastructure facilities and holds regular
calendar of extra-curricular activities.
Following activities were carried out
during the year 2005-06.

Teachers Training Programme: During
the interaction with the surrounding
schools, it was found that to improve the
knowledge level and competitiveness of
students, it is necessary to impart training
to the teachers for the modern
educational systems. A two-day seminar
was organised at Sharda Vidyalaya
Ichhapore on 29th and 30th April 2005.
Noted educationists were invited as
faculty members to impart the training on

Sir Hurkisondas Nurrotumdas Medical
Research Society, Mumbai.

The Reliance group supports the
scientific research activities of Sir
Hurkisondas Nurrotumdas Medical
Research Society (HNMRS). The Society
commenced scientific research activities
since 1974 -75 and has completed 120
research projects. The scientists from the
society presented 161 papers at the
National and International Conferences.
Topics of national health priorities
constitute a major share of the research
projects undertaken here.

The researchers are motivated to move
out of the four walls of the hospital to
carry out epidemiological studies and
community based surveys. Population in
the neighbourhood of Sir H.N.Hospital,
children in the nearby schools, and
susceptible sections of the population
were screened from time to time by teams
of medical / paramedical professionals, as
part of various research projects.

These studies helped in assessing the
prevalence of health disorders which
might have escaped detection in the
absence of such professional
interventions. Community based studies
related to the early detection of Type 2
diabetes revealed increased prevalence of
insulin resistance, a well-known
cardiovascular risk factor among urban
Indians in Mumbai. A similar survey
carried out on a rural population in the
Sindhudurg District revealed
comparatively less prevalence of diabetes
but the presence of a different
combination of risk factors.

Dhirubhai Ambani Hospital, Lodhivali,
Dist. Ragiad

Dhirubhai Ambani Hospital attaches a
very high importance to improve the
quality of life in surrounding
communities. It extends prompt and
specialised services to the Mumbai-Pune
highway accident victims. Trauma
patients are provided free life saving
treatment. Besides taking care of
hospitalization requirements, the hospital
provides poor patients and senior citizens
subsidized treatment – both in the
outpatient and in-patient departments.

The hospital provided timely support to
neighbouring community during the
recent floods in Maharashtra. The flood
relief work was carried out through Red
Cross society. Two medical centers –
Dhirubhai Ambani Hospital, Lodhivali
and IPCL, Nagothane were working for
the flood affected people in Raigad
district. The other flood affected districts
were also covered for supply of flood
relief kits.

A total of two camps were organized
during the year - Eye Camp and Ante-
Natal Check-up Camp. 79 operations
were conducted during the eye camp.

A seminar was conducted for Raigad
district doctors on “Obesity management’
through a Specialist to educate them on
the latest treatment methodologies.

A Cancer and AIDS prevention program
was conducted at neighbouring industry
for their employees by doctors of
Dhirubhai Ambani hospital

Community Development

At Jamnagar

RIL’s Jamnagar Complex continues to
serve the urban and village community
during the year 2005-06. These activities
were in the area of health, education,
cultural support, creating/augmenting
village infrastructure, fodder to cow-
sheds in villages, supply of drinking water,
distribution of sweets to village children
in primary schools, gifts to garba girls in
the villages, support to sports and
academic events, seminars etc. Supply of
fodder to more than 1,100 cow on a
regular basis throughout the year in eight
villages itself has an annual budget of
Rs 26 lakhs for several years.

RIL, Jamnagar organized multi-diagnostic
camp at village Moti Khavdi where in
more than 1,000 village patients took
advantage of expert medical diagnosis
and free medicines. A mobile medical
van for surrounding villages is a regular
medical assistance provided to
surrounding villages.

During the year under report, in order to
strengthen one to one relationship,
community meals programs were held in

Growth is Life

new and modern teaching methods. 45
teachers from primary, secondary and
higher secondary level participated in the
function.

To asses the impact, a follow up
programme was also organised at
Sanjivani High School, Damka. Teachers
expressed their views and difficulties in
implementing the new methods on which
the experts explained and solved their
problem. Teachers demanded more such
follow-up programmes for the betterment
of their students.

New water Pipeline for Mora village:
As part of its community development
efforts, RIL started providing potable
water to Mora village since 1992, initially
with tankers and subsequently by laying a
1.5 Km. pipeline in 1996.

As part of the community development
activity, a team of Reliance Executives
visited schools in Junagam and suggested
to the school authorities to develop water
recharging facility, which is being
implemented.

The Hazira DoT programme

The Reliance HIV and TB control
centre, now nearing completion of its two
years of operations has made some
landmark achievements both at national
and international levels. This was
established to provide awareness,
advocacy, counselling, treatment and
social support to patients afflicted from
these two dreaded diseases, the centre
has been consistently providing these
services to the target groups.

The centre has seen and registered over
11,500 patients of which 330 are under
antiretroviral treatment for AIDS, 200
under DOT therapy for Tuberculosis,
1125 treated for sexually transmitted
diseases. Approximately 800 HIV positive
patients are under constant medical
surveillance and monitoring. The centre
has provided awareness programs for all
the contract and regular labour working
at its location, truck drivers visiting its
warehouses, and children in all the
neighbouring schools.

RIL HIV and TB control centre awarded
a commendation certificate at the 2005
Awards for Business Excellence by the
Global Coalition on AIDS / HIV on the
September 28, 2005 in Washington DC.
The project has been ranked amongst
the 20 best projects at ICC-UNDP-IBLF
World Business Awards 2006 in support
of the Millennium Development Goals.
The RNTCP (Government of India) has
acknowledged the efforts and results of
sputum conversion rates of the centre in
its Annual national report published
from New Delhi.

Patalganga Community Health and
Safety

A HIV/AIDS education drive is carried
out on regular basis for the tanker
drivers / cleaners who transport
chemicals to/from RIL-Patalganga. A
total of 459 drivers were given lectures,
pamphlets etc. to create awareness on
the subject.

A blood donation camp was organized at
PG, in which 287 voluntary donors
participated. The collected blood was
sent to blood banks of HN hospital -
Mumbai and Dhirubhai Ambani
Hospital Lodhivali.

The Complex also conducted special
Health Awareness programs ‘Protection
from Epidemic and Flood Related
Diseases’ after the floods that affected
this region.

The doctors impart training on
significance of Occupational Health to
the Engineers of various industries, from
all over the country. This is done on an
honorary basis through the Indian
Association of Occupational Health and
National Safety Council forum.

Several activities were taken up by our
Safety group towards creating an
awareness on various safety related
facets in all age groups with the objective
of making “Safety” a way of life.

A program on “Hazardous Goods
Transportation” was conducted for all
the tanker drivers of industries in
Patalganga. A prominent role was played
by faculty from RIL-PG in this effort.

A program on “Home Appliance Safety”
was conducted for the families of
Lodhivali colony to create a greater
awareness on safety for saving precious
lives.

A presentation on “Safe Living” was
given to teachers and school children of
JH Ambani School. Booklets on LPG and
electrical safety were also distributed on
the occasion.

Community Education

RIL is playing a key role in nation
building by providing an opportunity to
the college students across the country to
visit our plants for an industrial exposure,
so that they can relate their theoretical
inputs with industrial practice. 350
students visited our manufacturing
facilities in the year 2005-06. RIL also
provides opportunities to Engineering
college students to undergo in-plant
training / projects as part of their
academic curriculum, thus enabling them
to appreciate application of theoretical
knowledge and get an exposure to
industrial practices. Several students
underwent in-plant training in
FY 2005-06.

Special Support – Prevention of Fire
and Loss of Life

RIL has always played an active role in
protecting lives, environment and
property of the neighbouring community.
This is done through active support of
the Fire and Safety departments for
various incidents outside Patalganga such
as controlling fire in Warehouse
Corporation on Mumbai-Pune highway,
assistance in controlling Phenol leakage
from a tanker near Pen, District Raigad,
Maharashtra; providing support for
controlling fire at M/s Ooms Polymer
Modified Bitumen Pvt. Ltd. Panvel, Navi
Mumbai and containing the fire in MSEB
transformer near Apta, District Raigad,
Maharashtra. Support was also provided
for controlling a Naphtha leak at
Kamothe village off Mumbai-Pune
highway.

RELIANCE INDUSTRIES LIMITED

Retail and Franchising Awards

• Franchise Award 2005

(cid:1) Innovative Retail Concept of the

year – Special Award

(cid:1) Best Franchisor of the year

Award – 2005 Star Award, Hall of
Fame across all categories

• Innovation and Technology in

Franchising – (The Reid & Taylor
Awards for Retail Excellence ) at The
India Retail Summit 2005 for its
various innovations in Petroleum
Retailing

• Retail Concept of the year for

Reliance Truck Stops– Images Retail
Awards at India Retail Forum 2005

Awards and Recognition

During the year under review, RIL was
recognized by various organizations for its
excellent performance. Our Chairman &
Managing Director Shri Mukesh D.
Ambani had the distinction and honour
of being the co-chair at the World
Economic Forum in Davos, Switzerland.

Some of the major awards conferred on
RIL are:

Corporate Ranking

• RIL is the only private sector

company from India to feature in the
Fortune Global 500 list of World’s
largest Corporation, for the second
year in a row

• Certificate of Merit’ in the Refinery
Sector for the ‘National Energy
Conservation Awards-2005’ from
Ministry of Power

• Oil and Gas Conservation Fortnight
Award, Ministry of Petroleum and
Natural Gas

Quality

• Silver’ at the 20th International Team
Excellence Competition organised by
the American Society for Quality
(ASQ)

• Quality Circle Pragati PSF unit of

Hazira won silver medal at
International convention of Quality
Circles in Singapore.

• In terms of growth, RIL found place

• IMC Ramakrishna Bajaj National

in the elite world’s top 25 climbers in
the Fortune Global 500 companies

• ‘Best Overall Company’ at the Stevie

Awards

Quality Commendation Certificate

• Golden Appreciation From Shell For
Quality Pacesetting Under SMPCS,
Shell Global Solutions, Netherlands

Health Safety and Environment (HSE)

Exports

• CII ‘National Award for Excellence in

• Synthetic and Rayon Textiles Export

Water Management’

• National Award for Research and
Development Efforts in Industry

• ‘International Safety Award presented
by the British Safety Council, UK

Energy Management

• First Prize’ from Petroleum

Conservation Research Association

• CII “National Award for Excellence
in Energy Management - 2005”

Promotion Council (SRTEPC) awards
for exports.

• Best Exporter Award by the

Government of Gujarat for the year
2000-01 and 2001-02.

Management Awards

• Golden Peacock Innovation

Award

• 2005 ASTD BEST Award

• IMC ‘Super Brand Award’

• PCRA Energy Conservation Award

• Golden Jubilee Memorial Trust

For 2005, Ministry Of Petroleum and
Natural Gas

Excellence Award

• Mahatma Gandhi Shram Sahyog

• CII Award For Excellence In Energy

Puraskar

Management

• ICMA Award For Excellence In

Energy Conservation and
Management

• DSIR national award for R&D efforts

in industry for Absorption / up
gradation of imported technology

Growth is Life

Report on Corporate Governance

Corporate Governance is based on the
principles of integrity, fairness, equity,
transparency, accountability and
commitment to values. Good governance
practices stem from the culture and
mindset of the organisation. As
shareholders across the globe evince keen
interest in the practices and performance
of companies, Corporate Governance has
emerged on the centre stage.

Reliance is committed to good
governance practices that create long
term sustainable shareholder value.
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,
varied expertise 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 applicable 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.

With expert assistance from Indian and
international firms, Reliance had
launched a programme last year to review
its policies and practices of Corporate
Governance with a clear goal to not
merely comply with statutory
requirements in letter and spirit but also
to implement the best international
practices of Corporate Governance, in
the overall interest of all the
stakeholders.

The Corporate Governance and
Stakeholders’ Interface Committee,
consisting of Independent Directors, has
examined various Corporate Governance
issues in detail and with the help of
experts, recommended to the Board to
adopt, inter alia, the following :

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

• A comprehensive Corporate

Governance Manual incorporating all
policies and procedures for effective
governance.

• Reporting templates to ensure

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

• A programme to adopt all the

requirements of the revised Clause 49
including non-mandatory
requirements.

• Some of the best Governance

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

The Board of Directors of the Company
(the Board) 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
highest standards of Corporate
Governance in the overall interest of all
the stakeholders.

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 INDUSTRIES LIMITED

Shri Ambani directed and led the
creation of the world’s largest
grassroot petroleum refinery at
Jamnagar, India, with a present
capacity of 660,000 barrels per day
(33 million tonnes per year)
integrated with petrochemicals, power
generation and port and related
infrastructure. Shri Ambani had set
up the largest and most complex
information and communications
technology initiative in the world in
the form of Reliance Infocomm
Limited.

Shri Ambani is steering Reliance’s
initiatives in a world scale, offshore
and onshore oil and gas exploration
and production program, creation of a
pan-India petroleum retail network
and setting up of a new export-
oriented refinery through RIL’s
subsidiary Reliance Petroleum Limited
(RPL) with a capacity of
approximately 580,000 barrels per
stream day integrated with a 0.9
MMTPA polypropylene plant.

Shri Ambani’s Achievements
include:

• Ranked 42nd among the ‘World’s

Most Respected Business Leaders’ and
second among the four Indian CEOs
featured in a survey conducted by
Pricewaterhouse Coopers and
published in Financial Times,
London, November 2004.

• Conferred the World Communication

Award for the ‘Most Influential
Person in Telecommunications in
2004’ by Total Telecom, October,
2004.

• Chosen ‘Telecom Man of the Year
2004’ by Voice and Data magazine,
September, 2004.

• Ranked 13th in Asia’s Power 25 list
of ‘The Most Powerful People in
Business’ published by Fortune
magazine, August, 2004.

Reliance believes that all its actions
must serve the underlying goal of
enhancing overall shareholder value
on a sustained basis.

2. Board Composition and Particulars

of Directors

Board Composition

The Company’s policy is to maintain
optimum combination of Executive
and Non-Executive Directors. The
Board consists of 12 Directors, out of
which 7 are Independent Directors.
The Board believes that its current
composition is appropriate.
Composition of the Board and
category of Directors are as follows:

Category

No. of Shares Held

% to total Shareholding

Promoter & Promoter Group *

Mutual Funds & Unit Trust of India

Banks, Financial Institutions and Insurance Companies

Foreign Institutional Investors

Private Corporate Bodies

Indian Public

Non Resident Indians / Overseas Corporate Bodies

Depository under GDR facility

Grand Total

667479044

24512932

80023873

297552868

59966845

189420166

13009774

61542539

1393508041

47.90

1.76

5.74

21.35

4.30

13.60

0.93

4.42

100.00

* The Company (RIL) was founded by late Shri Dhirubhai Ambani. Shri Mukesh D. Ambani is now the Promoter of the Company.

Top 10 Shareholders

Sl. No.

Name of the Shareholder(s)

No of Shares

% to total Shareholding

Petroleum Trust (Through Trustees For Sole
Beneficiary - M/S Reliance Industrial
Investments & Holdings Limited)

Life Insurance Corpn. of India

The Bank of New York As Depository (For GDRs)

Ekalavya Mercantile Private Limited

Bahar Trading Private Limited

Bhumika Trading Private Limited

Ekansha Enterprise Private Limited

Anumati Mercantile Private Limited

Reliance Enterprises Limited

Madhuban Merchandise Private Limited

104660154

63169498

61542539

61337013

43328996

43111811

43109798

43109368

37709123

34233723

7.51

4.53

4.42

4.40

3.11

3.09

2.71

2.46

Growth is Life

Shareholding Pattern by Size

Electronic

Physical

Total

Category of
Shares

Holders

Shares % to total
Shares

Holders

Shares % to total
Shares

Holders

% to total
Shares

8.75

1.62

1.16

0.52

0.29

0.25

0.55

0.49

1 - 500 7 33 854

6 40 13 322

4.86 12 19 808 5 78 57 526

76.97 19 53 662 12 18 70 848

501 - 1000

24 713

1 75 29 896

1.33

7 334

50 33 364

6.70

32 047

2 25 63 260

1001 - 2000

9 516

1 32 89 056

1.01

2 073

28 25 010

3.76

11 589

1 61 14 066

2001 - 3000

2 500

61 80 684

3001 - 4000

986

34 65 091

4001 - 5000

661

30 26 475

5001 - 10000

972

68 24 814

10001 - 20000

442

62 69 682

0.47

0.26

0.23

0.52

0.47

443

10 90 448

163

5 71 865

4 50 641

113

8 01 286

6 96 636

Above 20000

1 028

1 19 77 43 626

90.85

58 38 619

1.45

0.76

0.60

1.07

0.92

7.77

2 943

72 71 132

1 149

40 36 956

760

34 77 116

1 085

76 26 100

492

69 66 318

1 079 1 20 35 82 245

86.37

TOTAL

7 74 672

1 31 83 42 646

100.00

12 30 134

7 51 65 395

100.00 20 04 806 1 39 35 08 041

100.00

Geographical Distribution of Shareholders

Sr. Name of
No the City

Physical
Holders % age

Shares % age Holders % age

Shares % age

Electronic

Total

1 MUMBAI

213578

10.65 21878204

1.57

184302

9.19

1212542626

87.01

397880

19.84

1234420830

88.58

DELHI

108931

5.43

6527535

0.47

65621

AHMEDABAD 74890

3.74

3543615

0.25

47523

KOLKATA

51055

2.55

3280158

0.24

36407

BANGLORE

34767

1.73

2017802

0.14

29460

CHENNAI

33393

1.67

1773439

0.13

26283

PUNE

25156

1.25

1557511

0.11

24252

HYDERABAD 27844

1.39

1345073

0.10

19172

VADODRA

24824

1.24

1273457

0.09

18504

3.27

2.37

1.82

1.47

1.31

1.21

0.96

0.92

24447526

1.75

174552

13344403

0.96

122413

8562496

0.61

87462

4955186

0.36

64227

6275665

0.45

59676

4595882

0.33

49408

2430182

0.18

47016

2452880

0.18

43328

8.70

6.11

4.37

3.20

2.98

2.46

2.35

2.16

30975061

16888018

11842654

6972988

8049104

6153393

3775255

3726337

10 Others

635696

31.71 31968601

2.29

323148

16.12

38735800

2.78

958844

47.83

70704401

2.22

1.21

0.85

0.50

0.58

0.44

0.28

0.27

5.07

Total

1230134

61.36 75165395

5.39

774672

38.64

1318342646

94.61

2004806

100.00

1393508041

100.00

14.12

Build up of Equity Share Capital

Sl. No.

Particulars

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 Limited (Merged with the Company)

Rights Issue - II NRIs

Debenture - Series - III Conversion

Rights Issue - II

RELIANCE INDUSTRIES LIMITED

Allotment Date

No. of Shares

October 19, 1975

1 100

May 9, 1977

59 50 000

September 28, 1979

December 31, 1979

9 40 000

6 47 832

September 19, 1980

45 23 359

December 31, 1980

May 15, 1981

June 23, 1981

September 22, 1981

8 40 575

24 673

2 43 200

1 40 800

October 6, 1981

23 80 518

December 31, 1981

8 42 529

December 31, 1981

April 12, 1982

June 15, 1982

27 168

81 059

774

August 31, 1982

19 20 000

September 9, 1982

1 942

Shareholders of Sidhpur Mills Co Limited (Merged with the Company) - II

December 29, 1982

Bonus Issue- II

September 30, 1983

1 11 39 564

Shareholders of Sidhpur Mills Co Limited (Merged with the Company) - III

September 30, 1983

371

Debenture - Series - IV Conversion

September 30, 1983

64 00 000

Shareholders of Sidhpur Mills Co Limited (Merged with the Company) - IV

Shareholders of Sidhpur Mills Co Limited (Merged with the Company) - V

Debenture - Series - I Conversion

Debenture - Series - II Conversion

April 5, 1984

June 20, 1984

617

October 1, 1984

97 66 783

December 31, 1984

2 16 571

Shareholders of Sidhpur Mills Co Limited (Merged with the Company) - VI

January 31, 1985

Consolidation of Fractional Coupon Shares

April 30, 1985

45 005

Debenture - Series - E Conversion

Debenture - Series - III Conversion

Debenture - Series - IV Conversion

Shareholders of Sidhpur Mills Co Limited (Merged with the Company) - VII

December 31, 1985

Consolidation of Fractional Coupon Shares

December 31, 1985

Shareholders of Sidhpur Mills Co Limited (Merged with the Company) - VIII

November 15, 1986

Shareholders of Sidhpur Mills Co Limited (Merged with the Company) - IX

April 1, 1987

Debenture - Series - G Conversion

Right Issue - III

August 1, 1987

6 60 30 100

February 4, 1988

3 15 71 695

April 30, 1985

53 33 333

July 5, 1985

December 17, 1985

52 835

42 871

106

610

40 284

169

Growth is Life

Sl. No.

Particulars

Allotment Date

No. of Shares

February 4, 1988

29 35 380

Debenture - Series - G Conversion

Shareholders of Sidhpur Mills Co Limited (Merged with the Company) - X

June 2, 1988

Shareholders of Sidhpur Mills Co Limited (Merged with the Company) - XI

October 31, 1988

Shareholders of Sidhpur Mills Co Limited (Merged with the Company) - XII

November 29, 1990

Shareholders of Sidhpur Mills Co Limited (Merged with the Company) - XIII

May 22, 1991

Shareholders of Sidhpur Mills Co Limited (Merged with the Company) - XIV

October 10, 1991

322

Euro Issue- GDR-I

June 3, 1992

1 84 00 000

Shareholders of Sidhpur Mills Co Limited (Merged with the Company)

4 060

Shareholders of Reliance Petrochemicals Limited (RPL)
(Merged with the Company)

Loan Conversion

Debenture - Series - H Conversion

Warrant Conversion (Debenture - Series F)

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)

Warrants Conversion

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

Bonus Issue - III

Conversion of 3.5% ECB Due 1999 - VII

Conversion of 3.5% ECB Due 1999 - VIII

Conversion of Warrants

December 4, 1992

7 49 42 763

July 7, 1993

3 16 667

August 26, 1993

3 64 60 000

August 26, 1993

1 03 16 092

February 23, 1994

2 55 32 000

March 1, 1994

18 38 950

August 3, 1994

87 40 000

October 21, 1994

2 45 45 450

December 22, 1994

75 472

March 16, 1995

9 95 75 915

March 10, 1995

74 80 000

May 24, 1997

544

July 11, 1997

13 31 042

July 22, 1997

6 05 068

September 13, 1997

18 64 766

October 22, 1997

18 15 755

November 4, 1997

1 03 475

December 20, 1997

46 60 90 452

December 4, 1997

15 68 499

September 27, 1999

7 624

January 12, 2000

12 00 00 000

Shareholders of Reliance Petroleum Limited (Merged with the Company)

October 23, 2002

34 26 20 509

Total

Less : Shares Bought Back and extinguished

Total Equity as on March 31, 2006

139 63 77 536

28 69 495

139 35 08 041

RELIANCE INDUSTRIES LIMITED

14.13 Corporate Benefits

Dividend Declared for the last 10 Years

Financial Year

Dividend Declaration Date Dividend Rate (%)

2004-05

2003-04

2002-03

2001-02

2000-01

1999-00

1998-99

1997-98

1996-97

1995-96

03/08/2005

24/06/2004

16/06/2003

31/10/2002

15/06/2001

13/06/2000

24/06/1999

26/06/1998

26/06/1997

18/07/1996

75.00

52.50

50.00

47.50

42.50

40.00

37.50

35.00*

65.00

60.00

* Dividend after Bonus Issue in the ratio of 1:1

Bonus Issues of Fully Paid-up Equity
Shares

Financial Year

Ratio

1980-81

1983-84

1997-98

3:5

6:10

1:1

14.14. Dematerialisation of Shares

94.61% of the Company’s Paid up Equity
Share Capital has been dematerialised
upto March 31, 2006 (93.66% upto
March 31, 2005). Trading in Equity
Shares of the Company is permitted only
in dematerialised form as per notification
issued by SEBI.

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 2005-2006
is given below:

BSE

NSE BSE +
NSE

No. of shares
(in million)

3.53

7.60

11.13

Value
(Rs. million) 2129.55 4441.34 6570.89

[Source : This information is compiled
from the data available from the websites
of BSE and NSE]

14.15 Outstanding GDRs/Warrants
and Convertible Bonds,
Conversion

Outstanding GDRs as on March
31, 2006 represent 6,15,42,539
shares constituting 4.42% 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.

14.16 Locations of Manufacturing

Facilities

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

Jamnagar Complex
Village Motikhavdi,
P.O. Digvijay Gram,
Dist. Jamnagar – 361 140
Gujarat State, India.

Kurkumbh Complex
D-1, M.I.D.C. Kurkumbh
Taluka Daund
Dist. Pune – 413 801
Maharashtra, India

Patalganga Complex
B-4, Industrial 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.

Growth is Life

14.17 Address for Correspondence:

15.Compliance Certificate of the

Whistle Blower policy:

(i)

Investor Correspondence -

Auditors

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 held in Physical
form
Karvy Computershare Private
Limited
46, Avenue 4, Street No. 1
Banjara Hills
Hyderabad – 500 034
E-Mail: rilinvestor@karvy.com

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

Shri S. Sudhakar
Asst. Vice President - Corporate
Secretarial
Reliance Industries Limited
3rd Floor, Maker Chambers IV
222, Nariman Point
Mumbai 400 021
Email:investor_relations@ril.com

14.18 Transfer of unpaid/unclaimed

amounts to Investor Education
and Protection Fund:

During the year under review,
the Company has credited
Rs. 3.49 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 :

Type of Transfer Amount Transferred

(Rs. in crore)

Dividend

Interest on
Debentures

Total Amount
Transferred

3.08

0.41

3.49

Certificate from the Auditors of the
Company, M/s. Chaturvedi & Shah,
Deloitte, Haskins & Sells and
Rajendra & Co., confirming
compliance with the conditions of
Corporate Governance as stipulated
under Clause 49 of Listing
Agreement, 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.

16. Adoption of Non-Mandatory
Requirements of Clause 49

The Company complies with the
following Non-mandatory
requirements stipulated under
Clause 49.

Remuneration Committee:

The Company has constituted
Remuneration Committee to
recommend / review remuneration of
the Managing Director and Whole-
time Directors based on their
performance and defined assessment
criteria.

Communication to shareholders:

Half yearly Reports covering financial
results are sent to Members at their
registered addresses.

Audit Qualification:

Company is in the regime of
unqualified financial statements.

Training of Board Members:

During the year, the Company has
organised a two day training
programme on Corporate Governance
for the Directors of the Company.

Mechanism for evaluating non-
executive Board Members:

Currently the Company is developing
a suitable process for assessing the
effectiveness of the Board and the
Committees.

The Company has a whistle blower
mechanism wherein the employees
are free to report violations of laws,
rules, regulations or unethical
conduct to their immediate supervisor
or such other person as may be
notified by the management to the
workgroups. Such reports received
will be reviewed by the Corporate
Governance and Stakeholders
Interface Committee from time to
time. The confidentiality of those
reporting violations shall be
maintained and they shall not be
subjected to any discriminatory
practices.

17.Secretarial Audit Report

The Company has voluntarily
appointed Dr. K.R. Chandratre,
Practicing Company Secretary, to
conduct Secretarial Audit of the
Company for the financial year ended
March 31, 2006, who has submitted
his report confirming the compliance
with all the applicable provisions of
various corporate laws. The
Secretarial Audit Report is annexed.

18.Capital Integrity Audit

The 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.

19.Fee to Statutory Auditors

The fee paid to the Statutory
Auditors for the year was Rs. 7.41
crore (previous year Rs. 4.50 crore),
including Rs. 3.20 crore (previous
year Rs. 2.30 crore) as fees paid for
certification in finance & tax matters.

Secretarial Audit Report

The Board of Directors
Reliance Industries Limited
Maker Chambers IV
Nariman Point
Mumbai 400 021

I have examined the registers, records
and documents of Reliance Industries
Limited (“the Company”) for the
financial year ended on March 31, 2006
according to the provisions of-

• The Companies Act, 1956 and the

Rules made under that Act;

• The Depositories Act, 1996 and the
Bye-laws framed under the Act;

• The Securities and Exchange Board
of India (Substantial Acquisition of
Shares and Takeovers) Regulations,
1997

• The Securities and Exchange Board
of India (Prohibition of Insider
Trading) Regulations, 1992; and

• The Listing Agreement with the

Mumbai Stock Exchange Limited and
National Stock Exchange of India
Limited and Luxembourg Stock
Exchange.

1. Based on my examination and

verification of the records produced
to me and according to the
information and explanations given
to me by the Company, I report that
the Company has, in my opinion,
complied with the provisions of the
Companies Act, 1956 (“the Act”)
and the Rules made under the Act
and Memorandum and Articles of
Association of the Company, with
regard to:

(a) maintenance of various statutory

registers and documents and making
necessary entries therein;

(b) closure of Register of Members/

Debenture Holders;

resolutions required to be filed with
the Registrar of Companies;

(d) service of documents by the company
on its Members, and Registrar of
Companies.

(e) Notice of Board meetings and

Committee meetings of Directors;

(f) the meetings of Directors and

Committees of Directors including
passing of resolutions by circulation;

(g) the 31st annual general meeting held

on August 3, 2005;

(h) the meetings of shareholders and

creditors held pursuant to the order
of the Bombay High Court held on
October 21, 2005 for approval of the
scheme of arrangement;

(i) minutes of proceedings of General
Meetings and of Board and other
meetings;

(j) approvals of shareholders, the Board
of Directors, the Committee of
Directors and government
authorities, wherever required;

(k) constitution of the Board of Directors
and appointment, retirement and
re-appointment of directors;

(l) remuneration paid to the Directors
other than Managing and Whole-
time Directors;

(m) appointment and remuneration of the
Managing and Whole-time Directors;

(n) appointment and remuneration of
Auditors and Cost Auditors;

(o) transfers and transmissions of the
Company’s shares and debentures
and issue and delivery of original and
duplicate certificates of shares and
debentures;

(p) declaration and payment of dividends

and redemption of debentures/
preference shares;

(q) transfer of certain amounts as
required under the Act to the
Investor Education and Protection
Fund;

(r) borrowings and registration,

modification and satisfaction of
charges;

(s) Investment of Company’s funds

including inter corporate loans and
investments and loans to Directors
and others;

(t) contracts, common seal, registered

office and publication of name of the
Company; and

(u) generally, all other applicable

provisions of the Act and the Rules
made under that Act;

I further report that:

(a) the Company’s Directors have

complied with the requirements as to
disclosure of interests and concerns
in contracts and arrangements,
shareholdings / debenture holdings

RELIANCE INDUSTRIES LIMITED

and directorships in other companies
and interests in other entities.

(b) Company has obtained all necessary

approvals of the Central
Government, Company Law Board,
Registrar of Companies or such other
authorities, as the case may be, under
the various provisions of the Act.

against or show cause notice received
by the Company and no fines or
penalties were imposed on the
Company under the Act against the
Company, its Directors and Officers.

I further report that the Company
has complied with the provisions of
the Depositories Act, 1996 and the
Bye-laws framed thereunder by the
Depositories with regard to
dematerialisation / rematerialisation
of securities and reconciliation of
records of dematerialized securities
with all securities issued by the
Company.

I further report that:

(a) the Company has complied with the
requirements under the Listing
Agreements entered into with
Mumbai Stock Exchange Limited,
National Stock Exchange of India
Limited and Luxembourg Stock
Exchange.

(b) the Company has complied with the
provisions of the Securities and
Exchange Board of India (Substantial
Acquisition of Shares and Takeovers)
Regulations, 1997 with regard to the
disclosures and maintenance of
records required under the
Regulations.

(c) the Company has complied with the
provisions of the Securities and
Exchange Board of India (Prohibition
of Insider Trading) Regulations, 1992
with regard to disclosures and
maintenance of records required
under the Regulations.

Sd/-

Dr K R Chandratre
Practising Company Secretary
Certificate of Practice No. 5144

Place : Mumbai
Dated: April 18, 2006

Growth is Life

Shareholders’ Referencer*

Contents

At a Glance

Investor Service and Grievance Handling Mechanism

Matters Relating to Shareholders

Dividend
(A)

(B)
(C)

Course of Action in case of Non-receipt of Dividend, Revalidation of
Dividend Warrants etc.
Payment of Dividend through ECS Facility
Unclaimed Dividend

II. Dematerialisation / Rematerialisation of Shares

III. Nomination Facility

IV. Transfer / Transmission / Transposition / Duplicate Certificates etc.

V. Miscellaneous

(A)
(B)
(C)

Change of address
Change of name
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

ECS Mandate Form

Claim Form for receiving unpaid dividend from General Revenue Account
of the Central Government

3. Nomination Form (Form 2B)

List of Investor Service Centres of Karvy

151

153

155

157

* 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.

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 94% 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
Certified Registrar and Transfer
Agent, is the Registrar and Transfer
Agent of the Company.

• The Company’s Equity Shares are

listed on the National Stock
Exchange of India Limited (NSE)
and the Bombay Stock Exchange
Limited (BSE). The Global
Depository Receipts (GDRs) issued
by the Company are listed on
Luxembourg Stock Exchange.

RELIANCE INDUSTRIES LIMITED

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.

Investor Services under MCA 21 Portal

Ministry of Company Affairs (MCA) has
launched a major e-Governance
initiative christened as “MCA 21” on the
MCA portal (www.mca.gov.in). One of
the key benefits of this initiative includes
timely redressal of investor grievances.

MCA 21 system accepts complaints
under the eForm prescribed, which has to
be filed online. The nature of complaint
may relate to

• Shares / Dividend

• Debentures / Bond

• Fixed Deposits - non receipt of

amount

• Miscellaneous - non receipts

• Any other

The status of complaint can be viewed by
quoting the Service Request Number
(SRN) provided at the time of filing the
complaint.

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 R&TA would
request the concerned shareholder to
execute an indemnity before issuing the

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 of share certificate / 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 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

Growth is Life

duplicate warrant.

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) facility

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 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.

What are the benefits of ECS Facility?

Bhubhaneshwar, Chandigarh, Chennai,
Coimbatore, Guwahati, Hyderabad,
Jaipur, Kanpur, Kolkata, Mumbai,
Nagpur, New Delhi, Patna, Pune,
Surat, Thiruvananthapuram and
Vadodara. As per Reserve Bank of India,
this service will be extended to some
more centres.

How to avail of ECS Facility?

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 Depository.
The Company cannot make any change
in such records received from the
Depository.

Some of the major benefits of ECS
Facility are:

Can ECS Facility be opted out by
investors?

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.

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.

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 19 centres,
viz., Ahmedabad, Bangalore,

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.

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:

RELIANCE INDUSTRIES LIMITED

Chart 1

Status of unclaimed and unpaid dividend for different years

Dividend for
1994- 95 or before

Dividend for
1995- 96, 1996- 97
and 1997-98

Dividend for
1998-99 and
thereafter

Transferred to Central
Transfer of
unpaid dividend General Revenue Account Government’s Investor

Transferred to

of the Central Government Education and Protection

Will be transferred
to IEPF on due
date(s)

Fund (IEPF)

Claims for
unpaid dividend Maharashtra*

Can be claimed from ROC, Can not be claimed

Can be claimed
from the Company’s
R&TA within
the time limits
provided in
Chart 2 given below

* Shareholders who have not encashed their dividend warrant(s) relating to one or more of
the financial year(s) upto 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 - 3).

Chart 2

Information in respect of unclaimed and unpaid dividends declared for 1998-99 and
thereafter

Financial year
ended

Date of declaration
of Dividend

Last date for claiming
unpaid Dividend

31.03.1999

31.03.2000

31.03.2001

31.03.2002

31.03.2003

31.03.2004

31.03.2005

24.06.1999

13.06.2000

15.06.2001

31.10.2002

16.06.2003

24.06.2004

03.08.2005

23.06.2006

12.06.2007

14.06.2008

30.10.2009

15.06.2010

23.06.2011

02.08.2012

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

Growth is Life

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
only 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.

• 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
shareholders so wish.

How to dematerialise shares?

The procedure for dematerialising shares
is as under:

• Open Beneficiary Account with a
Depository Participant (DP)
registered with SEBI.

• Submit Demat Request Form (DRF)
as given by the DP, duly signed by all
the holders with the names and
signatures in the same order as
appearing in the concerned
certificate(s) and the Company
records, alongwith requisite
documentary proof and PAN details.

• 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 S. P. Venugopal
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: spvenu@karvy.com

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 (residing at 19
centres stated hereinabove) 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 ?

• Shareholders 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.

Can a nomination once made be
revoked / varied?

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 / debentureholders. This facility
is mainly 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 - 4) 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.

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.

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. Joint Shareholders may together
appoint a nominee.

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. In case of joint holding, all the
rights shall vest in the nominee only in
the event of death of all the joint holders.
The nominee is required to apply to the
Company by reporting the attested copy
of 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.

RELIANCE INDUSTRIES LIMITED

IV. Transfer / Transmission /
Transposition / 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 Rs. 100 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
presentation 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 (held in physical form) 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.

The procedure for registration of shares
gifted (held in demat form) is the same as
the procedure for transfer of shares in
demat form in off market mode.

Growth is Life

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.

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.

For shares held in demat form, investors
are advised to approach their DP
concerned for transmission/transposition
of the shares the Company.

What is the procedure for obtaining
duplicate share certificate(s) in case of
loss / misplacement of original share
certificate(s)?

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 share certificate(s) 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 the
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 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.

What is the procedure for splitting of a
share certificate into smaller lots?

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.

What is the procedure for authorising
any other person to deal with the
shares of the Company?

Shareholders may write to the Company’s
R&TA enclosing the relevant share

Shareholders need to execute a Power of
Attorney in favour of the concerned

RELIANCE INDUSTRIES LIMITED

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 and 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.

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:

Service Standards
(No. of working days)

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.

VI.Shareholders’ General Rights

• 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. once 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.

VII.Duties / Responsibilities 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 price sensitive
information.

• To participate effectively in the
proceedings of shareholders’
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.

VIII. General Safeguards

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 (Client ID and 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

(A) Registrations

Sl. No.

Particulars

Transfers

Transmission

Transposition

Deletion of Name

Folio Consolidation

Change of Name

Demat

Remat

Issue of Duplicate Certificate

Replacement of Certificate

Certificate Consolidation

Certificate Split

Growth is Life

(B) Correspondence

Sl. No.

Particulars

1
2
3
4

1
2
3

1
2
3
4
5
6
7
8

Queries / Complaints
Non-receipt of Annual Reports
Non-receipt of Dividend Warrants
Non-receipt of Interest/Redemption Warrants
Non-receipt of Certificate

Event Related
TDS certificate related
Allotment / call money
Others

Requests
Change of Address
Revalidation of Dividend Warrants
Revalidation of Redemption Warrants
Bank Mandate / Details
Nomination
Power of Attorney
Multiple Queries
IEPF Letters

Service Standards
(No. of working days)

2
4
4
2

2
4
2

2
3
3
2
2
2
4
3

Undelivered Share Certificates &
Warrants

Scheme for disposal of ‘Odd Lot’ Equity
Shares

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 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.

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 realize 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
Bombay Stock Exchange / 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.

• Securities Transaction Tax (STT) is

payable as under –

– @ 0.125% (w.e.f. June 1, 2006) on
both the purchaser and the seller
in respect of delivery based
transactions.

– @ 0.017% (w.e.f. June 1, 2006) on
the seller in respect of derivatives.

– @ 0.025% (w.e.f. June 1, 2006) on
the seller in respect of transactions
in securities not being settled by
actual delivery.

RELIANCE INDUSTRIES LIMITED

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.

Shareholders are requested to
give their feedback in the
Feedback Form attached to the
Notice of the Annual General
Meeting.

Registrar of Companies, Maharashtra
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)
2nd Floor, NTC House,
15, N.M. Marg, Ballard Estate,
Mumbai 400 038
Tel +91 22 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

Bombay Stock Exchange Limited (BSE)
Phrioze Jeejeebhoy Towers,
Dalal Street, Mumbai 400 001
Tel +91 22 2272 1233 / 4
Fax +91 22 2272 1919
isc@bseindia.com
www.bseindia.com

The National Stock Exchange of India
Limited (NSE)
“Exchange Plaza”
Plot No. C/1, “G” Block
Bandra-Kurla Complex,
Bandra (E), Mumbai 400 051
Tel +91 22 2659 8100 / 8114
Fax +91 22 2659 8120
ignse@nse.co.in
www.nseindia.com

Contact Details

Depositories

National Securities Depository Limited
Trade World, A Wing, 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 400 023
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 / 2332 3031
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 /
2288 0962 - 70
Fax +91 22 2204 5633 / 2202 1073
iggc@sebi.gov.in
www.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 8510 - 13 /
2659 8526 - 27
Fax +91 22 2659 8514 / 18
iggc@sebi.gov.in
www.sebi.gov.in

Growth is Life

Directors’ Report

Dear Shareholders,

Your Directors are pleased to present the 32nd Annual Report and the audited accounts for the year ended March 31, 2006.

Financial Results

The performance of the Company for the financial year ended March 31, 2006 is summarised below:

Gross profit before interest,
depreciation

Less: Interest

Depreciation

Less : Transfer from Revaluation Reserve
Less : Transfer from General Reserve

Profit before Tax

Less: Provision for Current Taxation

Provision for Fringe Benefit Tax

Provision for Deferred Tax

Profit after Tax

Add: Balance in Profit and Loss Account

Amount Available for Appropriation

Appropriations :

General Reserve

Debenture Redemption Reserve

Proposed dividend on Equity Shares

Tax on dividend

Tax on Dividend for earlier years

Balance carried to Balance Sheet

4,853.73
1,452.82
-

2005-2006

2004-2005

Rs. Crs. US$ Mn*

Rs. Crs.

US$Mn*

14,982.01

3,358

877.04

197

3,400.91

762

10,704.06

2,399

900.00

30.72

704.00

9,069.34

8,967.86

18,037.20

202

158

2,032

2,010

4,042

13,382.16

2,999

37.00

1,393.51

195.44

3,029.09

312

679

18,037.20

4,042

3,784.57
-
61.07

14,260.84

1,468.66

3,723.50

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

8,967.86

13,163.74

3,260

336

851

2,073

161

181

1,731

1,278

3,009

686

239

2,050

3,009

* 1 US $ = Rs 44.615 Exchange Rate as on March 31, 2006 (1 US $ = Rs 43.745 as on March 31, 2005)

Results of Operations

Turnover for the year increased by 22 per
cent from Rs 73,164 crore to Rs 89,124
crore (US$ 19,976 million). RIL scaled
the unique milestone of becoming the
first Indian private sector company to
record a net profit of over US$ 2 billion
thereby doubling its profit in a span of
just 24 months.

RIL’s net profit for the year was Rs. 9,069
crore (US$ 2,033 million), thereby
registering a Compounded Annual
Growth Rate (CAGR) of 28 per cent over
the past five years. Cash profit increased

to Rs 13,174 crore (US$ 2,953 million)
from Rs 12,087 crore in the previous year,
an increase of 9%.

Dividend

Your Directors have recommended a
dividend of Rs. 10.00 per Equity Share
(last year Rs. 7.50 per Equity Share) on
139,35,08,041 Equity Shares of Rs 10/-
each for the financial year ended March
31, 2006, 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 June 2, 2006 and (ii) all those

Members whose names appear on that
date as beneficial owners as furnished by
National Securities Depository Limited
and Central Depository Services (India)
Limited.

RIL has consistently increased dividend
paid out for the past 14 years. In the past
5 years, the dividend paid out has
increased at the rate of 25.5% on an
annualised basis.

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

RELIANCE INDUSTRIES LIMITED

The successful implementation of the
Scheme for demerger has resulted in
enhancement of the shareholder value.

Subsidiaries

During the year, Reliance Industries
(Middle East) DMCC, Reliance Power
Limited, Reliance Patalganga Power
Limited, Reliance Thermal Energy
Limited, Jayamkondam Power Limited,
Reliance Natural Resources Limited
(formerly Global Fuel Management
Services Limited), Reliance Energy
Ventures Limited, Hirma Power Limited,
Reliance Communication Ventures
Limited, Reliance Capital Ventures
Limited, Relene Petrochemicals Limited,
Reliance Infrastructure Limited (formerly
Reliance Project Engineering Associates
Private Limited), Reliance Petroleum
Limited, Reliance Retail Limited and
Reliance Netherlands BV (subsidiary of
Reliance Ventures Limited) became
subsidiaries of the Company.
Subsequently, pursuant to the Scheme of
Arrangement for demerger, Reliance
Power Limited, Reliance Patalganga
Power Limited, Reliance Thermal Energy
Limited, Jayamkondam Power Limited,
Reliance Natural Resources Limited
(formerly Global Fuel Management
Services Limited), Reliance Energy
Ventures Limited, Hirma Power Limited,
Reliance Communication Ventures
Limited and Reliance Capital Ventures
Limited ceased to be subsidiaries of the
Company. Further during the year,
Reliance Power Ventures Limited,
Reliance LNG Limited, Reliance Gas
Pipelines Limited (formerly Gas
Transportation & Infrastucture Company
Limited), Reliance Technologies LLC,
Reliance do Brasil Indústria e Comércio
de Produtos Têxteis, Químicos,
Petroquímicos e Derivados Limited
(Reliance Brazil LLC.) and Relene
Petrochemicals Private Limited have
ceased to be subsidiaries of the Company.

Reliance Petroleum Limited (RPL), a
subsidiary of the Company, made IPO of
135 crore equity shares of Rs.10/- each at
Rs.60/- (including a premium of Rs.50/-)
per share, through 100% book building
process and the IPO received an
overwhelming response from all the
categories of investors.

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 and petrochemicals businesses.
While benefits from such contracts will
accrue in the future years, their progress
is periodically monitored.

Additionally, some of the landmark
events of the year included the following:

• Reliance demonstrated a new

strategic move to unlock enormous
value for its shareholders by
reorganizing RIL’s business through a
process of demerger. In this process,
RIL’s investments in power generation
and distribution, financial services
and telecommunication services were
demerged in to separate entities and
RIL’s shareholders received shares in
the new entities in the same
proportion of their equity holdings in
RIL.

• RIL commenced the setting up of a
new refinery through its subsidiary
Reliance Petroleum Limited (RPL).
The capital cost of the RPL project is
estimated at Rs. 27,000 crore
(approximately US$ 6 billion). RPL
expects to commission the project by
around December 2008. RPL recently
completed its Initial Public Offering
and is now a listed entity on the
major stock exchanges in India
thereby creating tremendous value for
RIL’s shareholders. RIL holds 75% in
RPL and has invested Rs 6,750 crore
as equity contribution in RPL.

• RIL’s business performance and strong
capital structure were duly recognized
through an upward re-rating of its

borrowings by international credit
rating agencies, namely Moodys’ and
Standard & Poor. RIL is now rated
above India’s sovereign rating and is
at Baa2 (Moodys’) and BBB (S & P).
The upgrade reflects Reliance’s
competitive position in refining and
petrochemicals and overall moderate
financial profile.

• RIL announced the closure of the

buy-back of equity shares with effect
from August 2, 2005. This was
pursuant to the programme achieving
its key objective of ensuring a positive
impact on the stock price thereby
contributing to maximization of
overall shareholder value.

• The Board of Directors gave its

consent to pursue Retail Business
through a subsidiary of the Company.
The Board has approved the initial
phase of setting up of hypermarkets /
supermarkets / convenience stores /
specialty stores etc. in select cities
and towns covering the entire
geographical region in the country at
an estimated cost of US$ 750 million.

Scheme of Arrangement for demerger

During the year, the Company has,
pursuant to the provisions of Sections
391 to 394 of the Companies Act, 1956,
and with the approvals of the
shareholders and creditors as also of the
Hon’ble High Court of Judicature at
Bombay, has demerged and transferred,
through a Scheme of Arrangement (the
Scheme), its undertakings / businesses
pertaining to (a) Coal based Energy
Undertaking to Reliance Energy Ventures
Limited; (b) Gas based Energy
Undertaking to Reliance Natural
Resources Limited (formerly Global Fuel
Management Services Limited); (c)
Financial Services Undertaking including
Insurance to Reliance Capital Ventures
Limited; and (d) Telecommunications
Undertaking to Reliance Communication
Ventures Limited. The shareholders of
the Company, other than the specified
shareholders, as defined in the Scheme
were allotted equity shares by the
Resulting Companies, in terms of the
Scheme. The shares of the resulting
companies are listed on the Stock
Exchanges.

Growth is Life

The equity shares of RPL will be listed on
Bombay Stock Exchange Limited (BSE)
and The National Stock Exchange of
India Limited (NSE).

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, Reports of the Board of
Directors and Auditors of the subsisting
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.

Fixed Deposits

The Company has not accepted any fixed
deposits during the year under review.

Delisting

During the year, the Company’s equity
shares were delisted from the Calcutta
Stock Exchange Association Limited
(CSE). The Company’s equity shares
continue to remain listed on Bombay
Stock Exchange Limited (BSE) and The
National Stock Exchange of India
Limited (NSE).

Directors

Pursuant to the provisions of Section 260
of the Companies Act, 1956 and Article
135 of the Articles of Association of the
Company, Prof. Dipak C. Jain was
appointed as an Additional Director with
effect from August 4, 2005. Prof. Dipak
C. Jain 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. Dipak C. Jain for the
office of Director, liable to retire by
rotation.

In terms of Article 155 of the Articles of
Association of the Company, Shri Nikhil
R. Meswani, Shri H. S. Kohli and Shri
Y.P. Trivedi, retire by rotation and being
eligible, offer themselves for
reappointment at the ensuing Annual
General Meeting.

Brief resume of the Directors proposed to
be appointed/reappointed, nature of their
expertise in specific functional areas and
names of companies in which they hold
directorships and memberships/
chairmanships of Board Committees, as
stipulated under Clause 49 of Listing
Agreements 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 and
that there are no material departures
from the same;

(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, 2006 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, M/s. Deloitte Haskins &
Sells, 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
reappointment.

The Company has received letters from
all of them to the effect that their
appointment / reappointment, 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 /
reappointment 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.

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 March 31, 2006.

Secretarial Audit Report

Your Company voluntarily appointed
Dr. K.R. Chandratre, Practicing
Company Secretary, to conduct
Secretarial Audit of the Company for the
financial year ended March 31, 2006.
The Secretarial Audit Report addressed
to the Board of Directors of the Company
is attached to this Annual Report. The
Secretarial Audit Report confirms that
the Company has complied with all the
applicable provisions of the Companies
Act, 1956, Depositories Act, 1996,

RELIANCE INDUSTRIES LIMITED

Listing Agreement with the Stock
Exchanges, Securities Contracts
(Regulation) Act, 1956 and all the
Regulations of SEBI as applicable to the
Company, including the Securities and
Exchange Board of India (Substantial
Acquisition of Shares and Takeovers)
Regulations, 1997 and the Securities and
Exchange Board of India (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 Unpaid/Unclaimed amounts
to IEPF

Pursuant to the provisions of Section
205A(5) of the Companies Act, 1956,
the declared dividends and interest on
debentures which remained unpaid/
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

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 Corporate
Governance practices and have
implemented all the stipulations
prescribed. Over and above the statutory
requirements, your Company has
implemented several best corporate
governance practices as prevalent
globally.

Report on Corporate Governance as
stipulated under Clause 49 of the Listing
Agreements with the Stock Exchanges in
India forms part of the Annual Report.

Certificate from the Auditors of the
Company, M/s. Chaturvedi & Shah,
M/s. Deloitte Haskins & Sells and
M/s. Rajendra & Co., confirming
compliance of conditions of Corporate
Governance as stipulated under the
aforesaid Clause 49, is annexed to this
Report.

Acknowledgement

Your Directors would like to express their
grateful appreciation for 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

Place : Mumbai,
April 27, 2006

Growth is Life

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

Energy conservation through
continuous improvement in efficiency
is given a very high priority at all our
plants and offices. Our Refinery has
been placed in the top quartile in the
Energy Intensity Index of refineries
across the world by Solomon
Associates and has been adjudged as
the pace setter Refinery in Energy
Index according to a benchmarking
study done by energy major Shell. At
our Hazira and Naroda sites, captive
power and steam generation has been
switched over to Natural Gas from
liquid fuels resulting in significant
reduction in specific energy cost. Two
energy efficiency projects estimated
23391 Certified Emission Ratings
(CERs) per annum has been validated
under The Kyoto Protocol for
registration as Clean Development
Mechanism (CDM) projects with
UNFCCC. In order to extend the
energy conservation drive to the
employees and their families at large,
an Energy Month Celebration was
observed during November, 2005 &
December, 2005 which was
culminated with Energy Day
Celebration on December 16, 2005.

Some of the other major energy
conservation measures carried out
during the year are listed below:

1) High efficiency reverse osmosis
was commissioned at Hazira,
which is one of its first kinds in
India for fresh water application.
The project is expected to almost
double the cycle of concentration
for boiler operations.

2) An optimizer for steam and power

system was developed and
implemented at Jamnagar to
adjust controllable parameters
continually to reduce energy
consumption.

3) Heat recovery from HRSG flue
gases for ETP sludge dewatering
and drying at Patalganga.

4) Upgradation of Effluent treatment
system and use of biogas in PX
process heater at Patalganga.

5) DM Water consumption was
reduced by more than 10% at
Naroda through better utilization
of valves and reducing leakages.

6) GT to HRSG duct insulation work

was completely renovated at
Naroda resulting in achieving
steam temperature required for
steam turbine operation even at
very low loads of gas turbine.

(b)Additional investment /proposals

being implemented for reduction of
consumption of energy

1) An energy conservation study for
process plants has been initiated
with the help of advanced process
simulation using principles of
pinch analysis.

2) A prototype project for usage of

solar energy for power generation
is being executed for assessing its
suitability at Hazira.

3) Research & Development project

is planned to carry out the techno-
economic feasibility study of Fuel
Cell Technology.

4) A power recovery train is planned
to be commissioned at Hazira to
further enhance the energy
efficiency of the PTA plant.

above for reduction in consumption
of energy and on the cost of
production of goods

1) At our Refinery, fuel and loss as

percentage of crude oil processed
has been reducing for the past
three years, indicating continuous
improvement in energy efficiency
of the refinery.

2) At Hazira and Patalganga sites,
the energy index has shown a
reducing trend over the last three

years on account of energy
conservation schemes and
absorption of energy efficient
technologies.

(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

1) Research and Development

(R & D)

R&D efforts of RIL group is
recognized by Govt of India through
prestigious DSIR award in
development of Para Diethyl
Benezene process and NG3
technology absorption. We also
received the Golden Peacock award
for innovative technology
development for Para Diethyl
Benzene.

a) Specific areas in which the
research and development
(R & D) is being carried out

1) Extractive distillation unit

commissioned in Paraxylene plant
for extracting benzene from Light
Reformate.

2) Field signature method has been

used in Crude & vacuum
distillation unit.

3) H Scan technique has been used
for hydrogen plant & placed at
reformer tubes

4) Novel series of external donor

system developed from concept to
production for Polypropylene
plant.

5) Development of fourth generation
morphological PP catalyst from lab
to pilot scale.

6) Polymer application development
towards metal body replacement
of weighing machine and

RELIANCE INDUSTRIES LIMITED

to maintain better product slate
consistently.

3) H Scan technique finds out
thickness, measurement and
condition of tubes in terms of
cracks, voids, flaws etc. leading to
consistent plant operation

4) Enhancement in the performance
of polypropylene catalysts by
Novel series of external donor
system and improved product
characteristics of woven sacks
grades suitable for high speed
processing lines.

5) Development of fourth generation
morphological PP catalyst resulted
in improvement in resin
characteristic.

6) Throughput at PP system is

increased with improvement in
Bulk Density, with help of MagTi
based catalyst.

7) Based on the results from the

study on Oxy reactor,
modifications are being carried out
in the reactor of VCM plant
which will improve reliability and
run length of Oxy reactor.

8) By Installation of Combined-

Cooling-Heating & Power Project
at Retail Outlet Plant, fuel
utilization efficiency has been
increased.

9) Developed lightweight wool-

blended fabrics with very high
abrasion resistance and tensile
properties suitable for uniform
fabrics.

10)Development of new polymer and
polyester product grades has
created new applications and has
also resulted in substitution of
either competing products or
imports, thereby leading to higher
sales in the domestic market.

automotives, luggage and safety
equipments and application for
reinforcement PP composites.

7) High performance wood filled

PVC composites development and
its application and development of
transparent PVC grades

8) MagTi based catalyst prepared and
successfully tested in fluidized bed
reactor in PP plant.

9) Spherical Magnesium Ethoxide

based catalyst produced in house
and trial taken in PP reactor to
produce Random and Homo
grades.

10)Installation of Combined-Cooling-
Heating & Power Project at Retail
Outlet Plant, Hazira.

11)Development of lightweight

wool-blended fabrics with high
abrasion resistance & tensile
properties.

12)Optimization of water & oil

repellent high performance fabrics
with Non-Iron properties after
repeated washings.

13)Development of Cool & Dry

Polyester-rayon suiting having
moisture management as well as
stain release properties.

14)Development of Polyester-wool-
Silk tri-blends and wool-silk
blended fabrics for international
market on worsted spinning
system.

15)Optimization of finishing process

from stretch fabrics to get
dimensionally stable bi-stretch
and weft-stretch fabrics.

16)Development of Polyester &

Rayon chenille furnishing fabrics
using package-dyed chenille yarns.

17)Study and development of light
weight inherent flame-retardant
and stain repellent Polyester
fabrics for protective end use.

18)Development of new filament

products using the Bicomponent
Melt Spinning technology. These

products include Recron ‘Stretch’
filaments for comfort stretch in
dress materials, shirting & suiting
etc.

19)Ultra micro denier (DPF < 0.2)
filament yarns, marketed under
the Recron ‘Micrelle’ brand, were
developed using the novel concept
of splittable yarns. These filaments
offer soft touch, improved
moisture transport and visual
aesthetic through cross dyeing of
the two types of polymer segments
used in the yarns.

20)Cationic dyeable ‘Superdye’

filament yarns dyeable at 90°C
were commercialized for nylon
replacement.

21)Introduction of Recron 3s Short
Cut Fibres for using wet laid
nonwovens in end uses such as
filter paper in food processing, wall
papers, etc.

22)For the packaging applications, a
variety of novel grades of PET
resins were developed. These
include hotfill resin for food
packaging, special reheat grades
for carbonated soft drinks and
mineral water packaging.

23)Evaluation of downstream

processability of the speciality fibre
products, development of 100%
bioactive spun yarn NE 30, NE 4.5
spun yarn on open end spinning.

24)Optimisation of polyester fibre
with different cut length in
Polyester- Cotton blend.

25)Development of Process Parameter
of 100% Cotluk spun yarn etc.

b) Benefits derived as a result of

R & D efforts

1) The Extraction Distillation unit

has resulted in increased Benzene
production and improved quality
of gasoline due to extraction of
benzene from Light reformate
stream.

2) Field signature method is a

corrosion monitoring technique
and helps in early warning signal

Growth is Life

c) Future plan of action

1) Development of premium grade

gasoline and diesel, and
development of Oxygenate free
gasoline

2) Standardization of processing and
finishing process for Nano-finishes
on Polyester-Rayon and Polyester
wool Fabrics.

3) Optimization of back-coating

application on furnishing fabrics
including chenille fabrics to
impart stability to fabric and to
increase abrasion resistance.

4) Development of high wet-fast

Navy shade for Polyester-Rayon
blended uniform fabric with stain
repellent properties.

5) Optimization of processing and

finishing techniques to have silk-
touch on Polyester-rayon fabrics.

6) Development of amino acid and

other health finishes on Polyester-
wool blended fabrics.

d) Expenditure on R & D

a) Capital

b) Recurring

Total

c) Total R & D as a
percentage of
total turnover

Rs. Crore

63.48

46.86

110.34

0.12

2. Technology Absorption, Adoption

and Innovation

a) Efforts made towards technology

absorption, adoption and
innovation:

1) Butadiene Extraction Plant

commissioned after receipt of
basic Engineering Documents
from Technology Licensor.

2) PSF plant commissioned at Hazira

with new technology by M/s
Zimmer.

3) Impact grade in PP successfully
produced with SHAC 310 and
ADT 1000B.

4) A new Catalyst Recovery Unit

commissioned with technology of
M/S Invista for recovery of
precious metals like cobalt and
manganese. Recovered metals will
be recycled back to the process.

5) Scheme developed and

implemented for removal of
chlorinated hydrocarbons from
waste coke generated in VCM
plant.

6) Reduction in generation of Glycol
Residue-I in MEG-3 plant by
chemical cleaning and passivation
of the system.

7) Incorporating Swing Reactor

Technology in PE – II plant for
production of LLDPE.

8) In-house design and

implementation of C5
hydrogenation scheme in spare C4
hydrogenation unit.

9) Capacity enhancement / New

grade development / Improvement
and Cost reduction :

• PP plant production increase
by extruder screw speed
increase, melt pump
modification and installation of
larger screenpack.

• 3 new grades namely, Spun
lace, Low elongation and
Optically Whitened virgin
product developed in PSF.

• Dimer impurity in butadiene

product reduced from 150ppm
to 50ppm by undertaking
various process improvement
steps.

• LP flash steam generation in
LP condensate tank in PE
plant has resulted in saving of
LP steam @ 2TPH per plant.

• Provision of VFD in booster

Pump in PE plants for
increasing the capacity.

• Two new 35 MW Gas Turbines

with 125 TPH HRSGs
installed at Hazira.

• VCM plant capacity increased
from 900 MTPD of VCM to
1014 MTPD of VCM through
in house study and
modifications.

• New grade of low cost Optical
whitener developed for use in
PSF plant.

b) Benefits derived as a result of the

above efforts

1) Value addition in Cracker by-
product due to butadiene
extraction.

2) Production of PSF from new plant.

3) Value addition to byproduct from

catalyst production facility.

4) Potential to produce additional PP
with improved product quality in
Fiber and Impact grades.

5) Stripping of chlorinated

hydrocarbons from coke helped in
safe disposal of solid waste
generated in VCM plant.

6) Reduction in generation of Glycol
Residue-I in MEG-3 plant by 3
MT per day.

7) Additional production of LLDPE.

8) Increased ethylene + propylene
yield when C5 is recycled and
cracked in furnaces.

9) Capacity enhancement / New

grade development / Improvement
and Cost reduction :

• Potential increase in PP plant
by approximately 12 KTA.

• 3 new grades in PSF are for
capturing high value niche
market with specialty grades.

RELIANCE INDUSTRIES LIMITED

• Better Butadiene product

quality and acceptability in
market, especially export
market and improved customer
satisfaction.

• Recovery of energy as flash
steam in both PE plants.

• Potential increase in

production capacity in PE
plants by 5 KTA.

• The steam and power demand
for new projects met through
these new installations in CPP.

• Higher VCM production.

• Lower variable operating cost

in PSF.

c) Information regarding imported technology

Product

Technology from

Year of
Import

Status of
implementation /
absorption

PET Resin [RELPET PLUS]
[NG3]

INVISTA (U.S.A)
/ UOP SINCO (ITALY)

2003

Full

Butadiene

JSR, Japan

2005

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.30,819.60 Crore (US$ 6907.90 million)

2. Total Foreign Exchange earned and used

a. Total Foreign Exchange earned

b. Total savings in foreign exchange

through products manufactured by
the Company and deemed exports
(US$ 9,912 million)

Subtotal (a+b)

c. Total Foreign Exchange used

Rs. Crore

30,820.65

44,224.23

75,044.88

60,520.85

Growth is Life

Form 'A'

Form for disclosure of particulars with respect to conservation of energy

A. Power & Fuel Consumption

2005-06

2004-05

1 Electricity

a) Purchased Units ( lacs )

Total Cost ( Rs. in crore ) #
Rate/Unit (Rs.) #

b) Generation through captive power facilities

Through Steam Turbine/Generator
Units ( lacs )
KWH per unit of fuel
Total Cost ( Rs. in crore )
Cost/Unit (Rs.)

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 Fuels 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 Fuels consumed

5 Gas

Quantity ( 1000 M3 )

6 GT fuels

Quantity ( K.Ltrs )

# Excluding Demand Charges

927.82
27.69
2.98

187.28
6.37
3.40

23,887.90
4.78
1,070.60
4.48

23,945.63
4.79
976.90
4.08

23.40
3.54
6.78

19.20
3.58
6.13

26,497.95
4.77
2.27

25,131.76
5.84
1.85

200,344.21
234.93
11.73

161,335.01
178.37
11.06

1,320.68
3.22
24.40

1,657.68
3.06
18.48

559,440.41
349.62
6,249.46

150,258.78
56.71
3,774.01

1,639,818.20

1,424,732.42

993,165.57

1,001,884.24

RELIANCE INDUSTRIES LIMITED

B. Consumption per unit of Production

Product

Electricity
(KWH)

Furnace Oil/ LSHS (kgs) Gas (SM3)

HSD/ HFHSD

(Ltrs)
Previous Current

Year

Current
Year

Previous
Year

Current
Year

Previous
Year

Current
Year

Previous
Year

Fabrics ( Per 1000 mtrs)

4,532

4,058

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)

722

420

369

640

525

517

330

607

141

368

254

700

416

374

627

562

545

337

320

706

143

298

255

111

326

317

590

720

257

236

Mumbai,
April 27, 2006.

For and on behalf of the Board of Directors

Mukesh D. Ambani
Chariman & Managing Director

Growth is Life

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)

Eklavya Mercantille Private Limited

Bahar Trading Private Limited

Bhumika Trading Private Limited

Ekansha Enterprise Private Limited

Anumati Mercantille Private Limited

Sanatan Textrade Private Limited

Reliance Consolidated Enterprises Private Limited

Pams Investments and Trading Company Private Limited

Rajlaxmi Securities Private Limited

Fiery Investments and Leasing Private Limited

Clarion Investments and Trading Company Private Limited

Hercules Investments Private Limited

Nikhil Investments Company Private Limited

Orson Trading Private Limited

Real Fibres Private Limited

Jagdanand Investments and Trading Company Private Limited

Jagdishvar Investments and Trading Company Private Limited

Kankhal Investments and Trading Company Private Limited

Kardam Commercials Private Limited

Kedareshwar Investments and Trading Company Private Limited

Krish Commercials Private Limited

Kshitij Commercials Private Limited

Nityapriya Commercials Private Limited

Priyash Commercials Private Limited

Pusti Commercials Private Limited

Reliance Enterprises Limited

Madhuban Merchandise Private Limited

Amur Trading Private Limited

Tresta Trading Private Limited

Ornate Traders Private Limited

Reliance Chemicals Private Limited

Reliance Polyolefins Private Limited

Lazor Syntex Private Limited

Aavaran Textiles Private Limited

Reliance Aromatics and Petrochemicals Private Limited

Reliance Welfare Association

Reliance Energy and Project Development Private Limited

Vita Investment & Trading Company Private Limited

Reliance Industrial Infrastructure Limited

Dainty Investment & Leasings Private Limited

Jogiya Traders Private Limited

RELIANCE INDUSTRIES LIMITED

Auditors’ Certificate on
Corporate Governance

To the Members,

RELIANCE INDUSTRIES LIMITED

We have examined the compliance of conditions of Corporate Governance by Reliance
Industries Limited, for the year ended on 31st March 2006, 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, and based on the representations made by the Directors and the Management, 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 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

For Rajendra & Co.
Chartered Accountants

For Deloitte Haskins & Sells
Chartered Accountants

D. Chaturvedi
Partner
Membership No.: 5611

A. R. Shah
Partner
Membership No.: 47166

P. R. Barpande
Partner
Membership No.: 15291

Place: Mumbai
Dated: April 27, 2006.

Growth is Life

Auditors’ Report

To the Members of
RELIANCE INDUSTRIES LIMITED

We have audited the attached Balance Sheet of RELIANCE INDUSTRIES LIMITED as at March 31, 2006, the Profit and Loss Account
and also the Cash Flow Statement for the year ended on that date annexed thereto. 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 misstatement. 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
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 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;

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, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of

account;

d) As explained in Note 3 of Schedule O, in accordance with the Scheme of Arrangement approved by the Hon’ble High Court of

Mumbai, the adjustment for net assets transferred has been appropriated against the Revaluation Reserve.

Having regard to this, in our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report
are in compliance with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956.

e) On the basis of written representations received from the Directors as on March 31, 2006 and taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on March 31, 2006 from being appointed as a director in terms of
clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

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 give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2006;

(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 the Cash Flow Statement, of the cash flows for the year ended on that date.

For Chaturvedi & Shah
Chartered Accountants

For Rajendra & Co.
Chartered Accountants

For Deloitte Haskins & Sells
Chartered Accountants

D. Chaturvedi
Partner
Membership No.: 5611

A. R. Shah
Partner
Membership No.: 47166

P. R. Barpande
Partner
Membership No.: 15291

Mumbai
April 27, 2006

Annexure to Auditor’s Report
Referred to in Paragraph 2 of our report of even date

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
except in respect of Naroda
complex and the retail outlets
wherein the fixed assets
register is in the process of
being updated.

b) As explained to us, all the fixed
assets have been physically
verified by the management 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.

In our opinion, the Company
has not disposed of a
substantial part of its fixed
assets during the year and the
going concern status of the
Company is not affected.

In respect of its inventories:

a) The inventory has been

physically verified during the
year by the management. In our
opinion, the frequency of
verification is reasonable.

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 inventory. As
explained to us, there were no
material discrepancies noticed
on physical verification of
inventory as compared to the
book records.

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 given loan to
one party. In respect of the said
loan, the maximum amount
outstanding at any time during
the year is Rs. 753.78 crores
and year-end balance is Rs.
458.60 crores.

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 said interest free loan
given to a wholly owned
subsidiary of the Company is
repayable on demand and there
is no repayment schedule.

In respect of the loan given by
the Company, the same is
repayable on demand and
therefore the question of
overdue amount does not arise.

e) The Company has not taken

any new loans during the year.
The Company had taken loans
in the past from one party
whose balance at the beginning
of the financial year was
Rs. 1,600 crore. The Company
has repaid the loan in its
entirety during the financial
year.

In our opinion and according to
the information and
explanations given to us, the
rate of interest and other terms
and conditions are not prima
facie prejudicial to the interest
of the Company.

RELIANCE INDUSTRIES LIMITED

g) The interest payments in

respect of the said loan upto
the dates of repayment were
regular and the principal
amount has been repaid during
the year.

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 and 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 control
systems.

In respect of the contracts or
arrangements referred to in Section
301 of the Companies Act, 1956:

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.

In our opinion and according to
the information and
explanations given to us, there
are no transactions in
pursuance of contracts or
arrangements entered in the
register maintained under
section 301 of the Companies
Act, 1956 aggregating during
the year to Rs. 5,00,000/-
(Rupees Five Lakhs only) or
more in respect of any party in
the said financial year.

6. According to the information and
explanations given to us, the
Company has not accepted any
deposits from the public. Therefore,
the provisions of Clause (vi) of the
Companies (Auditor’s Report)
Order, 2003 are not applicable to
the Company.

Growth is Life

In our opinion, the Company has an
internal audit system
commensurate with the size and
nature of its business.

8. The Central Government has

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,
carried out a detailed examination
of the same.

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 any 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 31st March,
2006 for a period of more than
six months from the date of
becoming payable except a sum
of Rs. 2.37 crores in respect of
Investor Education and
Protection Fund.

b. The disputed statutory dues

aggregating to Rs. 1,444.42
crore, that have not been
deposited on account of
disputed matters pending
before appropriate authorities
are as under:

Sr. Name of
No. the Statute Dues

Nature of

Amount Period to
(Rs. in which the
crore)

amount
relates

Forum where
dispute is
pending

Income Tax Income-Tax/
Act, 1961

Penalties

787.41

2002-03

Commissioner of
Income-Tax
Commissioner of

157.89

1989-90 to 1992-93,
1995-96 to 2001-02 & Income-Tax (Appeals)
2002-03

Central
Excise Duty
Excise Act, and Service
1944

Tax

16.50

1994-95 to 1996-97 & Commissioner of
1998-99 to 2005-06

Central Excise
(Appeals)

270.76

1987-88,
1991-92 to 1992-93 & Service Tax Appellate
1994-95 to 2004-05

Central Excise and

Tribunal

0.06

1992-93 & 1995-96

High Court

30.40

1991-92 to 1994-95 & Supreme Court
1997-98 to 1998-99

Central
Sales Tax
Act, 1956
and Sales
Tax Act of
various
states

Customs
Act, 1962

Sales Tax/
Entry Tax

11.42

1999-2000 &
2002-03 to 2003-04 & Deputy Commissioner
2002-03 to 2004-05

Joint Commissioner/

(Appeals)

9.41

139.50

Appellate Tribunal

1994-95, 2001-02 &
2002-03
1990-91 to 1993-94 & High Court
1997-98 to 2001-02

Custom Duty

19.82

1992-93 to 2000-01

Commissioner of
Customs (Appeals)

____________________________________________________________________________

1.25

2002-03

Customs Tribunal

____________________________________________________________________________

TOTAL

1,444.42

10. The Company does not have

accumulated losses at the end of
the financial year. The Company
has not incurred cash losses during
the financial year covered by the
audit and in the immediately
preceding financial year.

11. Based on our audit procedures and
according to the information and
explanations 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.

RELIANCE INDUSTRIES LIMITED

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 issues
during the year.

21. In our opinion and according to the
information and explanations given
to us, no material fraud on or by the
company has been noticed or
reported during the course of our
audit.

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.

13. In our opinion, the Company is not
a chit fund or a nidhi / mutual
benefit fund / society. Therefore,
the provisions of clause (xiii) of the
Companies (Auditor’s Report)
Order, 2003 are not applicable to
the Company.

14. The Company has maintained

proper records of the transactions
and contracts in respect of dealing
or trading in shares, securities,
debentures and other investments
and timely entries have been made
therein. All shares, securities,
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 utilization of the same, the
funds have been temporarily
invested in current investments
and placed as fixed deposits with
banks. 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
explanations 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.

For Chaturvedi & Shah
Chartered Accountants

For Rajendra & Co.
Chartered Accountants

For Deloitte Haskins & Sells
Chartered Accountants

D. Chaturvedi
Partner
Membership No.: 5611

A. R. Shah
Partner
Membership No.: 47166

P. R. Barpande
Partner
Membership No.: 15291

Mumbai
April 27, 2006

Growth is Life

Balance Sheet as at 31st March, 2006

Schedule

As at
31st March, 2006

(Rs. in crore)

As at
31st March, 2005

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

‘A’
‘B’

‘C’
‘D’

‘E’

‘F’

‘G’

‘H’

‘I’

‘N’

‘O’

1,393.17
48,411.09

7,664.90
14,200.71

84,970.13
29,253.38
55,716.75
6,957.79

10,119.82
4,163.62
2,146.16
25.06
16,454.66
8,119.79

24,574.45

12,563.50
3,890.98
16,454.48

1,393.09
39,010.23

49,804.26

40,403.32

21,865.61
4,970.82

76,640.69

62,674.54
5,846.18

18,784.59
4,266.82

63,454.73

35,082.28
17,051.46

7,972.90
10,811.69

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

13,659.72
3,471.80
17,131.52

8,119.97

76,640.69

11,320.99

63,454.73

As per our Report of even date

For and on behalf of the Board

For Chaturvedi & Shah
Chartered Accountants

For Rajendra & Co.
Chartered Accountants

For Deloitte Haskins & Sells
Chartered Accountants

D. Chaturvedi
Partner

A.R. Shah
Partner

P. R. Barpande
Partner

Mumbai
April 27, 2006

M. D. Ambani -
H. R. Meswani -
R. H. Ambani
M. L. Bhakta
Y. P. Trivedi
Dr. D. V. Kapur
M. P. Modi
S. Venkitaramanan
Prof. Ashok Misra
Prof. Dipak C. Jain
V. M. Ambani -

}

Chairman & Managing Director
Executive Director

Directors

Company Secretary

RELIANCE INDUSTRIES LIMITED

Profit and Loss Account for the year ended 31st March, 2006

Schedule

2005-06

(Rs. in crore)

2004-05

INCOME

Turnover
Less: Excise Duty/ Service Tax Recovered

89,124.46
7,913.13

73,164.10
7,112.80

Net Turnover
Other Income
Variation in Stocks

EXPENDITURE

Purchases
Manufacturing and Other Expenses
Interest and Finance Charges
Depreciation
Less: Transferred from Revaluation Reserve
Less: Transferred from General Reserve
[Refer Note 4, Schedule ‘O’]

‘J’
‘K’

‘L’
‘M’

Profit Before Tax

Provision for Current Tax
Provision for Fringe Benefit Tax
Provision for Deferred Tax

Profit after Tax

Add: Balance brought forward from Previous year

Amount Available for Appropriations

APPROPRIATIONS

General Reserve [Refer Note 5, Schedule ‘O’]
Debenture Redemption 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 face value of
Rs. 10 each (in Rupees)
[Refer Note 13, Schedule ‘O’]

Significant Accounting Policies

Notes on Accounts

‘N’

‘O’

81,211.33
682.92
2,131.19
84,025.44

2,516.13
66,527.30
877.04

3,400.91

73,321.38

10,704.06
900.00
30.72
704.00

9,069.34
8,967.86

18,037.20

15,008.11

3,029.09

65.08

4,853.73
1,452.82
-

13,382.16
37.00
1,393.51
195.44
-

66,051.30
1,449.81
(524.35)
66,976.76

2,356.55
50,359.37
1,468.66

3,723.50

57,908.08

9,068.68
705.00
-
792.00

7,571.68
5,592.06

13,163.74

4,195.88

8,967.86

54.24

3,784.57
-
61.07

3,000.00
-
1,045.13
146.58
4.17

As per our Report of even date

For and on behalf of the Board

For Chaturvedi & Shah
Chartered Accountants

For Rajendra & Co.
Chartered Accountants

For Deloitte Haskins & Sells
Chartered Accountants

D. Chaturvedi
Partner

A.R. Shah
Partner

P. R. Barpande
Partner

Mumbai
April 27, 2006

M. D. Ambani -
H. R. Meswani -
R. H. Ambani
M. L. Bhakta
Y. P. Trivedi
Dr. D. V. Kapur
M. P. Modi
S. Venkitaramanan
Prof. Ashok Misra
Prof. Dipak C. Jain
V. M. Ambani -

}

Chairman & Managing Director
Executive Director

Directors

Company Secretary

Growth is Life

Cash Flow Statement for the year 2005-06

A: CASH FLOW FROM OPERATING ACTIVITIES:

Net Profit before tax as per Profit and Loss Account
Adjusted for:

Net Prior Year Adjustments
Investment written off / Provided

Dimunition in the value of Current Investments
Provision for doubtful claims
(Profit) / Loss on Sale / Discarding of Assets

Depreciation
Transferred from Revaluation Reserve
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

0.88
-

23.43
-
0.27

4,853.73
(1,452.82)
-

40.63
(88.38)
(22.44)

(473.72)
877.03

826.27
(2,706.94)

(1,338.09)

2005-06

(Rs. in crore)

2004-05

10,704.06

9,068.68

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

3,758.61

14,462.67

4,046.24

13,114.92

1,739.76
(181.66)

3,129.42

(3,218.76)

11,243.91

(0.88)
(941.45)

10,301.58

(9,427.31)
16.95

(45,745.00)
42,624.53
(115.96)

493.47
22.44

(12,130.88)

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

(8,162.34)

RELIANCE INDUSTRIES LIMITED

Cash Flow Statement for the year 2005-06 (Contd.)

2005-06

(Rs. in crore)

2004-05

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 from / (Used in) Financing Activities

0.49
-

6,090.12
(4,879.46)

1,909.14
(1,185.26)
(1,568.36)

366.67

Net Increase / (Decrease) in Cash and Cash Equivalents

(1,462.63)

Opening Balance of Cash and Cash Equivalents

Closing Balance of Cash and Cash Equivalents

3,608.79

2,146.16

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

As per our Report of even date

For and on behalf of the Board

For Chaturvedi & Shah
Chartered Accountants

For Rajendra & Co.
Chartered Accountants

For Deloitte Haskins & Sells
Chartered Accountants

D. Chaturvedi
Partner

A.R. Shah
Partner

P. R. Barpande
Partner

Mumbai
April 27, 2006

M. D. Ambani -
H. R. Meswani -
R. H. Ambani
M. L. Bhakta
Y. P. Trivedi
Dr. D. V. Kapur
M. P. Modi
S. Venkitaramanan
Prof. Ashok Misra
Prof. Dipak C. Jain
V. M. Ambani -

}

Chairman & Managing Director
Executive Director

Directors

Company Secretary

Growth is Life

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)

Issued, Subscribed and Paid up:

139 35 08 041 Equity Shares of Rs. 10 each fully paid up

(139 35 08 041)

Less: Calls in arrears - by others

1,393.51

0.34

TOTAL

As at
31st March, 2006

(Rs. in crore)

As at
31st March, 2005

2,500.00

500.00

3,000.00

1,393.17

1,393.51

0.42

2,500.00

500.00

3,000.00

1,393.09

1. Of the above Equity Shares:
48 17 70 552
(48 17 70 552)

(a)

Shares out of the issued and subscribed share capital before the buyback of shares were allotted as 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
(33 04 27 345)

Shares out of the issued and subscribed share capital before the buyback of shares were allotted on 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 previous year, the Company bought back and extinguished 28,69,495 equity shares.

3. 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).

RELIANCE INDUSTRIES LIMITED

Schedules forming part of the Balance Sheet

SCHEDULE ‘B’

RESERVES AND SURPLUS

Revaluation Reserve

As at
31st March, 2006

(Rs. in crore)

As at
31st March, 2005

As per last Balance Sheet
Add: On Revaluation [Refer Note 4 (a), Schedule ‘O’]

Less: Net Assets transferred on Demerger
[Refer Note 3, Schedule ‘O’]
Less: Transferred to Profit and Loss Account
[Refer Note 4, Schedule ‘O’]
Less: Deduction on sale/ discarding of Revalued Assets

2,729.88
22,497.34

25,227.22
19,119.55

1,452.82

4.66

2,733.53
-

3.65

Capital Reserve

As per last Balance Sheet

Capital Redemption Reserve

4,650.19

291.28

2,729.88

291.28

As per last Balance Sheet
Add: Transferred from General Reserve on buyback of Equity Shares

887.94
-

885.07
2.87

887.94

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 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*

Add: Transferred from Profit and Loss Account

15,467.66
-
0.25

15,467.41
1.84

550.02
37.00

10,117.84

-
-

10,117.84
13,382.16

Profit and Loss Account

TOTAL

15,825.07
146.74
210.67

15,467.66
2.25

15,465.57

15,465.41

550.02
-

587.02

550.02

7,181.78

2.87
61.07

7,117.84
3,000.00

23,500.00

3,029.09

48,411.09

10,117.84

8,967.86

39,010.23

*Cumulative amount transferred on account of Depreciation on Revaluation Rs. 2,563.43 crore (Previous Year Rs. 2,563.43 crore).

Growth is Life

Schedules forming part of the Balance Sheet

SCHEDULE ‘C’

SECURED LOANS

DEBENTURES

Non Convertible Debentures

B WORKING CAPITAL LOANS

From Banks
Foreign Currency Loans
Rupee Loans

As at
31st March, 2006

(Rs. in crore)

As at
31st March, 2005

6,038.35

7,074.75

1,150.53
476.02

864.84
33.31

1,626.55

898.15

TOTAL

7,664.90

7,972.90

1. (a) Debentures referred to in A above to the extent of Rs. 3,266.67 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. 2,205.43 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 installments, on various dates with the earliest redemption
being on 30th April, 2006 and the last being on 24th November, 2018. The debentures are redeemable as follows: Rs. 981.40 crore in
financial year 2006-07, Rs. 1,143.65 crore in financial year 2007-08, Rs. 976.00 crore in financial year 2008-09, Rs. 742.30 crore in
financial year 2009-10, Rs. 175.00 crore in financial year 2010-11, Rs. 250.00 crore in financial year 2011-12, Rs. 470.00 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) From Banks
ii) From Others

B Short Term

i) From Banks
ii) From Others

TOTAL

As at
31st March, 2006

(Rs. in crore)

As at
31st March, 2005

8,323.28
2,154.13

3,666.80
56.50

6,459.40
1,809.73

10,477.41

8,269.13

886.06
1,656.50

3,723.30

14,200.71

2,542.56

10,811.69

RELIANCE INDUSTRIES LIMITED

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
INTANGIBLE ASSETS :
Technical Knowhow fees**
Software **
Sub-Total
Total
Previous Year
Capital Work-in-Progress

Gross Block
Revaluation Additions

Depreciation

Net Block

Deductions/
As at
Adjustments 31-03-2006

For the
Year

Upto
31-03-2006

As at
31-03-2006

As at
31-03-2005

(Rs. in crore)

-
-
527.29
20,980.87
640.67
348.51
-
-
-
-
-
22,497.34

2.49
64.45
668.49
6,616.03
340.85
38.28
32.43
38.13
17.03
38.84
-
7,857.02

4.03

72.70
12.34 419.14
153.92 4,222.44
445.12 73,339.39
21.35 1,950.58
14.47 1,272.20
40.07 297.12
52.09 135.74
- 276.41
8.84 117.31
- 646.97
82,750.00

752.23

1.06
-
139.68
4,258.47
98.69
77.80
20.83
21.01
9.09
12.53
71.37
4,710.53

6.78
-
955.14
25,407.61
598.88
384.37
135.25
68.07
193.81
58.57
342.38
28,150.86

65.92
419.14
3,267.30
47,931.78
1,351.70
887.83
161.87
67.67
82.60
58.74
304.59
54,599.14

68.29
367.03
2,333.00
24,681.20
472.05
587.06
166.86
69.65
74.66
38.60
375.96
29,234.36

As at
01-04-2005

74.24
367.03
3,180.58
46,187.61
990.41
899.88
304.76
149.70
259.38
87.31
646.97
53,147.87

-
9.98
9.98

-
-
-

-
9.98
9.98

-
2.00
2.00

-
9.65
9.65

-
-
2.33
0.33
0.33 2.33

1,750.11
217.86
1,967.97
55,125.82
53,502.91

-
-
-
22,497.34
-

176.86
65.32
242.18
8,099.20
3,862.77

- 1,926.97
- 283.18
-
2,210.15

940.48
152.39
1,092.87
752.23 84,970.13 4,853.73* 29,253.38
24,872.83

100.55
40.65
141.20

2,239.86 55,125.82

3,784.57

986.49
130.79
1,117.28

910.18
106.12
1,016.30
55,716.75 30,252.99
30,252.99
6,957.79 4,829.29

NOTES :
a)
b)

Leasehold Land includes Rs. 0.11 crore (Previous year Rs. 0.11 crore) in respect of which lease-deeds are pending execution.
Buildings include:
i)
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

Cost of shares in Co-operative Societies Rs. 0.03 crore ( Previous Year Rs. 0.01 crore).

Private Limited with a right of occupancy of certain area of a commercial premises.

iii) Rs. 29,125 (Previous Year Rs. 29,125) towards 5 shares of Rs. 200 each of Bombay Gujarat Art Silk Vepari Mahajan Co-operative Shops & Warehouse Society Limited,
60 shares of Rs. 100 each of New Piece Goods Bazar Co. Limited, 15 shares of Rs. 100 each of Pandesara Industrial Co-operative Society Limited, 20 shares of Rs. 200
each of The Bombay Market Art Silk Co-operative (Shops & Warehouses) Society Limited and 225 shares of Rs. 100 each, Rs. 25 paid up of Crimpers Industrial
Co-operative Society Limited, with a right of occupancy of certain area of concerned commercial premises.

c) Capital-work-in progress includes:

Rs. 486.91 crore on account of pre-operative expenses. (Previous Year Rs. 225.64 crore)

i)
ii) Rs. 320.58 crore on account of cost of construction materials at site. (Previous Year Rs. 426.40 crore)
iii) Rs. 438.36 crore on account of advance against capital expenditure. (Previous Year Rs. 851.44 crore)

d) Additions/ Deletions and Capital work-in-Progress is net of a gain of Rs. 39.17 crore on account of exchange difference during the year. (Previous Year a gain of Rs. 54.37 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 Rs. 22,497.34 crore being the amount added on revaluation of Building, Plant and Machinery, Electrical Installations and Equipments as at 01.08.2005.
g) Deduction from Gross Block includes assets demerged on 31st August, 2005 amounting to Rs. 355.40 crore as per the Scheme of Arrangement approved by the Hon’ble

High Court of Mumbai on 9th December, 2005 effective from 21st December, 2005 as below:

Leasehold Land
Freehold Land

i)
ii)
iii) Buildings
iv) Plant & Machinery
v)
vi) Equipment
vii) Furniture & Fixtures
viii) Vehicles
ix) Aircrafts and Helicopter

Electrical Installation

* Refer to Note 4 , Schedule ‘O’
** Other than internally generated

(Rs. in crore)
4.03
12.34
151.15
67.44
18.49
13.15
39.32
40.64
8.84
355.40

Growth is Life

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
(Rs. Nil; Previous Year Rs. 20,000)

7 Years National Savings Certificate (Deposited with
Sales Tax Department)(Rs. 11,000;Previous Year Rs. 12,000)

6 Years National Savings Certificate
(Deposited with Sales Tax Department)

Trade Investments

In Equity Shares Unquoted,fully paid up

- The Art Silk Co-operative Society Limited of
(165) Rs. 100 each (Rs. NIL;Previous Year Rs. 16,500)

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)

11,08,500 Reliance Europe Limited of Sterling Pound 1 each

(11,08,500)

- Reliance Petroproducts Private Limited of
(118) Rs. 10 each (Rs. NIL; Previous year Rs. 1,180)
- Reliance Global Trading Private Limited of
(145) Rs. 10 each (Rs. NIL; Previous Year Rs. 1,450)

In Equity Shares Unquoted, Partly Paid Up

- Reliance Global Trading Private Limited of

(226) Rs. 10 each, Rs. 2.50 paid up (Rs. NIL; Previous Year Rs. 565)

- Reliance Petroproducts Private Limited of

(182) Rs. 10 each, Rs. 2.50 paid up (Rs. NIL; Previous Year Rs. 455)

Other Investments

In Equity Shares-Quoted, fully paid up

- Reliance Energy Limited of Rs. 10 each

(15,51,549) (Company under the same management till 18th June, 2005)

- Reliance Capital Limited of Rs. 10 each

(6,00,89,966)

0.08

0.01

10.00

13.00

3.93

26.93

69,80,000 Reliance Industrial Infrastructure Limited of Rs. 10 each

16.58

(69,80,000)

16.58

As at
31st March, 2006

(Rs. in crore)
As at
31st March, 2005

0.08

0.01

0.09

10.00

13.00

3.93

26.93

33.73*

485.80*

16.58

536.11

RELIANCE INDUSTRIES LIMITED

Schedules forming part of the Balance Sheet

SCHEDULE ‘F’ (Contd.)

As at
31st March, 2006

(Rs. in crore)
As at
31st March, 2005

In Equity Shares-Unquoted, fully paid up

- Reliance Telecom Limited of Rs. 10 each

(51,02,080)

- Reliance Infocomm Limited of Re 1 each

(31,50,00,000) (Company under the same management till 26th June, 2005)
- Reliance General Insurance Company Limited of Rs. 10 each

(2,55,00,175)

- Reliance Life Insurance Company Limited of Rs. 10 each

(5,00,175)

- Reliance Communications Infrastructure Limited of Re 1 each
(90,00,00,000) (Company under the same management till 26th June, 2005)

- Air Control & Chemical Engineering Co. Limited of

(1,000) Rs. 100 each
22,500 Reliance LNG Limited of Rs. 10 each

(45,000)

In Preference Shares-Unquoted, fully paid up

- 10% Cumulative Redeemable / Optionally Convertible

(162,00,00,000) Preference Shares of Reliance Infocomm Limited of Re. 1 each
(Company under the same Management till 26th June, 2005)

In Debentures-Unquoted, fully paid up

- Deep Discount Bonds of Reliance Communications

(6,40,140) Infrastructure Limited of Maturity Value Rs. 68,550 each
(Company under the same Management till 26th June, 2005)

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

- Reliance Power Venture Limited of Rs. 10 each

(20,20,000)

20,20,000 Reliance Ventures Limited of Rs. 10 each

(20,20,000)

20,20,200 Reliance Strategic Investments Limited of Rs. 10 each

(20,20,200)

- Reliance Gas Pipelines Limited (Formerly Gas Transportation

(50,000) & Infrastructure Company Limited) of Rs. 10 each
- Reliance Technologies LLC. (90% Interest)

(-)

- Reliance Do Brasil Industria E Comercio De Produtos

(5,56,400) Texteis, Quimicos, Petroquimicos E Derivados Ltda
(Reliance Brazil LLC.) of 1 Reais each

0.02

147.50

2.02

10,000 Reliance Netherland B.V. of Euro 1 each

0.06

(10,000)

5,450 Reliance Industries (Middle East)

(-) DMCC of AED 1000 each

50,000 Reliance Infrastructure Limited of Rs. 10 each

(-)

270,00,00,000 Reliance Petroleum Limited of Rs. 10 each

(-) (Refer Note 4 below)

21,50,50,000 Reliance Retail Limited of Re 10 each

(-)

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

6.55

0.05

2,700.00

215.05

3,073.25

10.00

4.46*

31.50*

25.50*

0.50*

2,331.00*

0.01

0.05

2,393.02

8,100.00

1,600.02

16.60

12,629.15

147.50

2.02

0.05

0.88

0.06

154.55

10.00

Growth is Life

Schedules forming part of the Balance Sheet

SCHEDULE ‘F’ (Contd.)

As at
31st March, 2006

(Rs. in crore)
As at
31st March, 2005

In Debentures of Subsidiary Companies-Unquoted, fully paid up

2,79,90,000 0% Unsecured Convertible Debentures of Reliance

279.90

(2,79,90,000) Industrial Investments and Holdings Limited

of Rs. 100 each

8,83,143 0% Unsecured Optionally Convertible Debentures of
(8,83,143) Reliance Industrial Investments and Holdings Limited

of Rs. 5000 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
11.75% GOI 2006
11.90% GOI 2007

In Treasury Bills-Quoted
91 days Treasury Bills
364 days Treasury Bills

In Units-Unquoted

- Reliance Liquid Fund-Treasury Plan-Institutional Plan-

(14,54,06,713) Growth Option-Growth Plan of Rs. 10 each

- Reliance Liquid Fund - Cash Plan of Rs. 10 each

(1,65,81,915)

- Reliance Floating Rate Fund-Growth Plan-

(9,71,36,418) Growth Option of Rs. 10 per unit

- Reliance Floating Rate Fund-Monthly

(9,93,31,499) Dividend Plan of Rs. 10 per unit

- Reliance Long Term Gilt Plan-Retail Plan-

(10,68,39,963) Growth Option of Rs. 10 per unit

7,15,08,763 HDFC Mutual Fund-HDFC Liquid

(-) Fund-Premium Plus-Plan Growth of Rs. 10 per unit
11,47,93,693 Principal PNB Asset Management-Principal Cash Management
(-) Liquid option Institutional-Prem-Plan Growth of Rs.10 per unit

9,57,47,048 Kotak Mahindra Mutual Fund-Kotak Liquid Fund-

(-) Institutional-Premium-Growth of Rs. 10 per unit
23,44,30,323 Birla Sunlife Mutual Fund-Birla Cash Plus-Institutional

(-) Premium Growth of Rs. 10 per unit

441.58

721.48

85.67
-
-
-
165.33
254.01
505.01

-
1.91
1.91

100.00

125.00

135.06

260.17

3,81,93,704 SBI Mutual Fund Magnum Iinstitutional Income Fund

43.00

(-) Savings Growth of Rs. 10 per unit

24,46,617 DSP Merrill Lynch Liquid Fund-Institutional

(-) Growth of Rs. 1000 per unit

14,68,12,696 Prudential ICICI Institutional Liquid Plan-Super
(-) Institutional -Growth of Rs. 10 per unit

249.78

149.95

25,27,892 Standard Chartered Mutual Fund-G69 Standard Chartered 252.95

(-) Liquidity Manager Plus Growth of Rs. 1000 per unit
5,09,39,321 UTI Mutual Fund-UTI Money Market Fund Growth Plan

100.00

(-) of Rs. 10 per unit

7,29,57,908 ABN AMRO Assets Management - ABN AMRO Floating

75.00

(-) Rate Fund-Institutional-Plus-Growth of Rs. 10 per unit

279.90

441.58

721.48

3,804.73
3,848.35

886.03
13,542.20

92.15
670.20
25.69
30.16
-
-

818.20

415.32
1699.32
2114.64

235.00

19.42

100.00

122.00

Total (B)

Total (A+B)

1,490.91

576.42

1,997.83

5,846.18

3,509.26

17,051.46

RELIANCE INDUSTRIES LIMITED

Schedules forming part of the Balance Sheet

SCHEDULE ‘F’ (Contd.)

NOTES :
1. (*) Represent investments demerged as per the Scheme of Arrangement as at 31st August, 2005, approved by the Hon’ble High Court of

Mumbai on 9th December, 2005 and was effective from 21st December, 2005.
Investment in 165 Equity Shares of Art Silk Co-operative Society Limited of Rs. 16,500 has been written off during the year.

2.
3. During the year 162,00,00,000 10% Cumulative Redeemable Optionally Convertible Preference Shares of Reliance Infocomm Limited of
Rs. 8,100 crore along with accrued premium of Rs. 1,108.27 crore upto 31st March, 2005 were convereted into 287,75,85,350 Equity Shares
of Reliance Infocomm Limited of Re. 1 each. These equity shares were demerged to Reliance Communication Ventures Limited on 31st
August, 2005 as per the Scheme of Arrangement approved by the Hon’ble High Court of Mumbai on 9th December, 2005 and which was
effective from 21st December, 2005.
Investment in 270,00,00,000 Equity Shares of Reliance Petroleum Limited are subject to a lock in period of 1 year.

INVESTMENTS
AGGREGATE VALUE OF

Quoted Investments
Unquoted Investments

As at 31st March, 2006
Book Value Market Value
780.71
-

523.58
5,322.60

(Rs. in crore)

As at 31st March, 2005
Book Value Market Value
4,156.40
-

3,469.03
13,582.43

Movements during the year
Investments Purchased and Demerged / Sold / Cancelled during the year

Certificate of Deposits
ABN Amro Bank
Allahabad Bank
American Express Bank
Federal Bank
HDFC Bank
ICICI Bank
IDBI Bank
Ing Vysya Bank
Jammu & Kashmir Bank
Karnataka Bank
Kotak Mahindra Bank
State Bank of Bikaner & Jaipur
State Bank of Indore
State Bank of Patiala
State Bank of Travancore
UTI Bank

Face Value (Rs.)
1 00 000
1 00 000
1 00 000
1 00 000
1 00 000
1 00 000
1 00 000
1 00 000
1 00 000
1 00 000
1 00 000
1 00 000
1 00 000
1 00 000
1 00 000
1 00 000

Nos.
4,000
16,500
2,000
2,000
4,000
30,000
2,500
16,500
24,000
7,000
11,000
9,500
7,500
1,500
7,500
13,500

Mutual Fund Units
ABN AMRO Asset Management- Flexi-Debt-Fund-Regular Growth
ABN AMRO Asset Management- Floating Rate Fund-Short Term-Institutional-Growth
ABN AMRO Asset Management-Cash Fund-Institutional Plus-Growth
ABN AMRO Asset Managment- Cash Fund-Institutional Growth
Birla Sun Life Mutual Fund-Birla Bond Plus-Institutional-Growth
Birla Sun Life Mutual Fund-Birla Cash Plus-Institutional Premium-Growth
Deutsche Mutual Fund Floating Rate Reg-Growth
Deutsche Insta Cash Plus Fund Institutional Growth Option
DSP Merrill Lynch Liquid Fund-Institutional Plan-Growth
DSP Merrill Lynch Liquidity Fund - Regular Growth
G69 Standard Chartered Liquidity Manager Plus Growth
HDFC Cash Management Fund-Saving Plan-Growth
HDFC Mutual Fund-HDFC Liquid Fund-Premium Plus-Plan Growth
HSBC Cash Fund Institutional Plus - Growth Option
HSBC Mutual Fund-Floating Rate Fund-Short Term-Institutional Option-Growth
ING Vysya Mutual Fund-Liquid Fund-Super Institutional-Growth Plan
JM Mutual Fund High Liquidity Fund super Institutional Plan Growth Option
JM Mutual Fund-JM Floater Fund-Long Term-Premium-Growth

Face Value (Rs.) Nos. (in Lakhs)
716.64
475.75
5,272.63
11,131.99
776.00
8,514.45
1,369.45
11,378.87
129.74
13,307.43
27.49
4,377.01
8,466.44
16,149.66
2,142.35
6,223.50
12,895.91
476.69

10
10
10
10
10
10
10
10
1 000
10
1 000
10
10
10
10
10
10
10

Cost (Rs. in crore)
38.00
162.77
19.69
19.22
38.86
281.36
24.04
161.77
236.71
68.34
103.40
88.94
70.10
14.29
72.65
132.50

Cost (Rs. in crore)
75.00
50.00
533.00
1,160.03
100.00
934.87
150.00
1,205.38
1,312.00
2,188.00
275.00
619.00
1,135.00
1,717.00
221.00
633.00
1,373.11
50.00

Growth is Life

Schedules forming part of the Balance Sheet

SCHEDULE ‘F’ (Contd.)
Mutual Fund Units (Contd.)
Kotak Mahindra Mutual Fund-Floater Fund-Short Term-Growth
Kotak Mahindra Mutual Fund- Liquid Fund-Institutional Premium-Growth
Prudential ICICI Institutional Liquid Plan-Super Institutional Growth
Prudential ICICI Liquid Plan Institutional Plus Growth Option
PNB-Principal-Floating Rate Fund-SMP Institutional Option Growth
PNB Principal Cash Management Liquid Option Institutional-Premium-Plan Growth
PNB-Principal Floating Rate Fund-Flexi-Maturity-Plan Institutional Option Growth Plan
PNB-Principal Income Fund-Short Term-Institutional-Growth Plan
Reliance Liquid Fund -Cash Plan Growth Option
SBI Magnum Institutional Income Fund Savings Growth
Standard Chartered Mutual Fund-GCCG Grindlays Cash Fund-Super Institutional Plan C-Growth
Standard Chartered Mutual Fund Floating Rate-Short Term-Super Institutional Plan C-Growth
Standard Chartered Mutual Fund-Standard Chartered-Liquidity Manager -Growth
Templeton India Treasury Management A/c Super-Institutional-Plan Growth
Templeton India Treasury MGT A/c Institutional-Growth
UTI Mutual Fund-Floating Rate Fund-Short Term Plan-Growth Option
UTI Liquid Cash Plan Institutional-Growth Option

Face Value (Rs.) Nos. (in Lakhs)
1,797.63
6,586.37
8,063.78
16,270.04
950.87
20,826.26
473.80
219.20
7,460.94
4,108.61
23,538.57
2,247.38
3,099.06
40.73
58.36
2,715.44
151.57

10
10
10
10
10
10
10
10
10
10
10
10
10
1000
1000
10
1000

Government Securities & Treasury Bills
9.90% GOI 2005
10.20% GOI 2005
11.68% GOI 2006
11.75% GOI 2006
7.55% GOI 2010
9.39% GOI 2011
6.85% GOI 2012
7.27% GOI 2013
7.37% GOI 2014
7.38% GOI 2015
7.46% GOI 2017
7.49% GOI 2017
8.07% GOI 2017
91 Days Treasury Bills
182 Days Treasury Bills
364 Days Treasury Bills

Preference Shares of:
Reliance Telecom Limited

Equity Shares of:
Reliance Energy Limited
Reliance Telecom Limited
World Tel Holding Bermuda
Reliance Capital Ventures Limited
Reliance Communication Ventures Limited
Reliance Energy Ventures Limited
Reliance Natural Resources Limited
(fomerly known as Global Fuel Management Services Limited)
Relene Petrochemicals Limited
Reliance Patalganga Power Limited
Reliance Thermal Energy Private Limited
Jayamkondam Power Private Limited
Reliance Power Limited
Hirma Power Private Limited (Rs. 43,625)

Note: The above does not include movements on account of Collateralised Borrowings and Lending Obligations.

Cost (Rs. in crore)
200.00
913.91
813.00
2,719.00
100.00
2,225.11
50.00
25.00
874.00
454.00
2,516.00
241.00
312.00
415.00
608.00
300.00
1,700.00

70.15
32.99
52.65
10.54
1,405.81
162.45
569.67
117.68
832.96
30.65
50.30
52.32
1,012.67
399.97
141.34
2,534.85

100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100

70.00
32.59
50.00
10.00
1,360.00
145.00
570.00
115.00
810.00
30.00
50.00
50.00
950.00
405.00
145.00
2,642.00

450.00

444.34

10
10
$ ‘0.05
10
5
10
5

10
10
10
10
10
10

893.73
19.93
0.70
0.50
1.00
0.50
1.00

3,090.10
0.50
0.50
0.50
0.50
4.23

2,878.94
52.59
1.93
0.05
0.05
0.05
0.05

309.01
0.05
0.05
0.05
0.05
0.00

RELIANCE INDUSTRIES LIMITED

Schedules forming part of the Balance Sheet

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

As at

31st March, 2006

(Rs. in crore)

As at
31st March, 2005

834.27
4,169.29
1,739.60
3,376.66

21.91
4,141.71

679.45
3,748.36
971.45
2,013.62

10,119.82

7,412.88

42.18
3,885.63

4,163.62

3,927.81

1.61

2.07

235.02
2.68

1,906.85

382.08
0.36

3,224.28

2,146.16

3,608.79

OTHER CURRENT ASSETS
Interest Accrued On Investments
Premium Accrued on Investments in Preference Shares $

24.94
0.12

979.32
1,108.34

TOTAL

* Includes balances with non-scheduled banks as follows:

25.06

16,454.66

2,087.66

17,037.14

As at
31st March, 2006

As at
31st March, 2005

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
Hongkong and Shanghai Banking Corporation, New York
Stadtsparkasse Koln, Frankfurt (Previous Year Rs. 2,036)

-
0.20
0.07
0.28
0.11
0.06
1.86
0.10

-
0.07
0.07
0.08
0.11
0.03
-
-

(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
-
0.14

2005-06
-
0.59
0.18
1.24
0.21
0.11
1.86
0.15

$ Premium accrued on Investments in Preference Shares represents Rs. 0.12 crore (Previous Year Rs. 0.07 crore) receivable on investments

in Preference Shares of Reliance Ventures Limited, a wholly owned Subsidiary of the Company.

Growth is Life

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, 2006

(Rs. in crore)
As at
31st March, 2005

4,509.95

7,703.73

1,535.82
69.88

1,418.72
69.88

1,465.94
1,412.92
730.98

8,119.79

1,348.84
1,846.17
516.63

11,415.37

Advances include Rs. 25.00 crore Share Application money paid to Reliance Infrastructure Limited, a wholly owned Subsidiary of the Company.
Lease Rent receivable as at 31st August, 2005, amounting to Rs. 46.20 crore was demerged as per the Scheme of Arrangement approved by the
Hon’ble High Court of Mumbai on 9th December, 2005 and which was effective from 21st December, 2005.

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 Fringe Benefit Tax
Provision for Wealth Tax
Provision for Leave encashment/Superannuation/Gratuity
Other Provisions
Proposed Dividend
Tax on Dividend

TOTAL

As at
31st March, 2006

(Rs. in crore)
As at
31st March, 2005

7.41
12,159.46
0.81
58.29
27.11
-
0.19
310.23

900.00
30.72
20.65
238.60
1,112.06
1,393.51
195.44

4.48
13,205.28
2.74
51.84
28.40
0.03
0.54
366.41

12,563.50

13,659.72

705.00
-
12.65
174.57
1,387.87
1,045.13
146.58

3,890.98

16,454.48

3,471.80

17,131.52

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, 2005 of Rs. 254.12 crore as per the estimated pattern of despatches. During the year Rs. 237.56 crore was utilized for clearance
of goods and unused balance of Rs. 16.56 crore was reversed. Liability recognized under this class for the year is Rs. 267.24 crore which is
outstanding as on 31st March, 2006. Actual outflow is expected in the next financial year. The Company had recognised customs duty liability
on goods imported under advance license of Rs. 902.91 crore as at 31st March, 2005. During the year further provision of Rs. 1,010.20 was made
and sum of Rs. 1,356.09 crore were reversed on fulfilment of export obligation. Closing Balance on this account as at 31st March, 2006 is Rs
557.02 crore. Other class of liabilities where recognition is based on substantial degree of estimation relate to supplier / third party claims,
rebates or demands against the company. Any additional information in this regard can be expected to prejudice seriously the position of the
company.

RELIANCE INDUSTRIES LIMITED

Schedules forming part of the Balance Sheet

SCHEDULE ‘I’ (Contd.)

@ Small scale industrial undertakings to whom amounts are due have been determined based on the information available with the company

and are as follows :
Aadi Energy Systems Pvt. Ltd., Accurate Paper Tube P Ltd., Aditya Industries, Air Filter Industries Pvt. Ltd., Ajanta Sheet Metal Works,
Ajanta Timber Mart, Aksh India Ltd.,Alchem Industries, Alplas Polymers, Ankleshwar Ammonia Supply Co, Anthia Machine Tools,
Arpan International, ARham Steels Pvt. Ltd., Alliance Fittings & Forgings Ltd., Ashvin Corporation, Asian Engineering, Auto Strap
India, Atisha Engineers, Axis Industries, B H Enterprise, B S Exports, B. Patel & Sons, Baliga Lihting Equipment, Bliss Anand Pvt.
Limited, Biltube India Limited, Champ Instruments & Engineers, Chetan Electric Industries, Chhatariya Firetech Industries, Comet
Industries, Comet Brass Products, Compack Industries, Cosmo Enterprises, Comet Engineers,Dabir Industries, Devhari Polymers, Dhruvi
Pharma Pvt. Ltd., Dhruvil Enterprises, Dinsons Self Sticks Pvt Ltd., EAC Engineers,EBY Fasteners, Fluid-O-Tech Enterprise, Fourwents
Engineering Company, GE Capital Transportation, Hamon Thermopack Engineers Pvt.Ltd., Hrp Industries, Impression, Indu Magnetic
Private Limited, Industrial Engineering, Interlabels Industries (P) Limited, J & B Marketing, K M Enterprises, Kagaz Packaging, Kantilal
Chunilal & Sons Appliances Pvt Ltd., Kas Plastics, Lotus Fibre, M&G Analyser Systems, Mahavir Motors, Mahavir Spinning Mills Ltd.,
M S Fittings Mfg. Co., MTL Instruments Pvt. Limited, Manohar Engineering Works, Mehta Cad-Cam Systems, Metasal Speciality
Chemicals, Met-Pro Chemicals, Micro Engineering Pvt. Ltd., Mitesh Enterprise, N K Electric & Engineering Co, N Sunderlal & Co,
Narlabs, National Chemical Industries, Neha Agencies, Neha Engineering, New Forge Industries, Nice Pack Industries Pvt Ltd., Nitin
Fire Protection Industries, Oshiama Minerals & Chemicals, PLA Chem Industries, P S Corporation, Pack Print Industries, Paras
Enterprises, Phansalkar Industries, Pipefit Engineers Pvt Ltd., Pooja Paper Crafts, Prabhat Trading Co., Programmed Engg. Products Pvt.
Ltd., Precise Tools, Rajkamal Plastic Industries, Reliance Industrial Products, Riddhi Forms Pvt Ltd., S M Enterprise, SIP Tools, S S
Engineering Works, S.M.Enterprises, Sanghvi Pallet Corporation, Sarigam Containers Private Limited, Seco Instruments Pvt. Ltd.,
Seigmet Minerals Corporation., Shakti Chemical & Minerals, Sheelas Engineering Works, Shree Ganesh Brush Co, Shree Ganesh
Enterprises, Shree Krishna Packaging, Shriram Engineering Works, Sigma Polymer Industries, SPM Metallic Industries, Sri Saibaba
Cotton Waste Spg. Mills, Sucheta Enterprises, Swastik Acids & Chemicals, Times Print-N-Pack, Tohem Enterprises, Tos Engineers, Ultra
Pure Gas (I) Pvt Ltd., Vajrachem, Venus Engineering, Vibronics Pvt. Ltd., V M Corporation.

* Includes for capital expenditure Rs. 728.18 crore (Previous year Rs. 525.37 crore).

# These figures do not include any amounts, due and outstanding, to be credited to Investor Education and Protection Fund except Rs. 2.37

crore (Previous Year 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

Interest Received :
From Current Investments
From Long Term Investments
From Others
[Tax Deducted at Source Rs. 66.39 crore
(Previous Year Rs. 12.05 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

2005-2006

(Rs. in crore)

2004-2005

22.44

20.40

94.03
88.01
291.63

0.41
87.97

58.10
207.36
103.15

15.99
31.18

368.61

910.76

47.17
17.82
85.05

1,449.81

473.67

0.05

88.38
6.32
92.06

682.92

Growth is Life

Schedules forming part of the Profit and Loss Account

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

SCHEDULE ‘L’

3,376.66
1,739.60

2,013.62
971.45

(Rs. in crore)

2005-06

2004-05

2,013.62
971.45

5,116.26

2,985.07

2,757.04
752.38

2,985.07

2,131.19

3,509.42

(524.35)

(Rs. in crore)
2004-05

MANUFACTURING AND OTHER EXPENSES

2005-06

RAW MATERIAL CONSUMED
MANUFACTURING EXPENSES

Stores, Chemicals and Packing Materials
Electric Power, Fuel and Water
Machinery Repairs
Building Repairs
Labour, Processing, Production Royalty and Machinery Hire Charges
Excise Duty
Lease Rent
Exchange Differences (Net)

1,396.98
1,146.26
249.75
45.37
418.56
333.54
16.57
105.94

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 Welfare and other amenities

774.68
100.35

103.42

SALES AND DISTRIBUTION EXPENSES

Samples, Sales Promotion and Advertisement Expenses
Brokerage, Discount and Commission
Warehousing and Distribution Expenses
Sales Tax including defeased / Service Tax

ESTABLISHMENT EXPENSES

Insurance
Rent
Rates & Taxes
Other Repairs
Travelling Expenses
Payment to Auditors
Professional Fees
Loss on Sale / Discarding of Assets
General Expenses *
Wealth Tax
Charity and Donations

34.63
287.00
1,775.93
2,636.19

218.01
139.73
203.33
107.06
89.82
7.48
255.22
6.59
370.15
8.00
25.70

55,826.18

43,575.32

1,486.17
907.94
177.14
65.23
126.83
132.47
17.88
(153.57)

3,712.97

2,760.09

615.10
121.70

109.60

978.45

846.40

114.56
245.89
1,009.78
454.72

4,733.75

1,824.95

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

1,431.09
66,682.44
155.14

66,527.30

1,362.21
50,368.97
9.60

50,359.37

* Includes Dimunition in value of current investments Rs. 23.43 crore (Previous Year Rs. 2.94 crore) and Provision for Doubtful Claims of

Rs. NIL (Previous Year Rs. 69.88 crore).

RELIANCE INDUSTRIES LIMITED

Schedules forming part of the Profit and Loss Account

SCHEDULE ‘M’

INTEREST AND FINANCE CHARGES

2005-06

Debentures
Fixed Loans
Others

TOTAL

Significant Accounting Policies

SCHEDULE ‘N’

SIGNIFICANT ACCOUNTING POLICIES
A. Basis of Preparation of Financial Statements

543.08
219.97
113.99

877.04

(Rs. in crore)
2004-05

816.39
210.74
441.53

1,468.66

The financial statements are 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 are 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 / value added tax 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.

E. 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 refining where it is so amortised on straight-line basis.

F. Depreciation

Depreciation on fixed assets is 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 is charged over its residual life on straight line method (SLM); on fixed bed catalyst depreciation is provided over its
useful life ranging from 2 to 9 years; on fixed bed catalysts having life of less than 2 years 100% depreciation is provided in the year of
addition; 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 is provided as aforesaid over
the residual life of the respective plants; on development rights and producing properties depreciation is 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 is
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 amounts added on revaluation depreciation is charged as aforesaid over the residual life
of the assets as certified by the valuers; on assets acquired under finance lease from 1st April, 2001 depreciation is spread over the lease term.

Growth is Life

SCHEDULE ‘N’ (Contd.)

G. 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 recognized in prior accounting period 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
recognized as exchange difference and the premium paid on forward contracts has been recognized over the life of the contract.

(d) 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, after providing for obsolescence, if any. Cost of inventories
comprises 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, excise duty and sales during trial run period, adjusted for discounts (net),
Value Added Tax and gain / loss on corresponding hedge contracts.

L. Excise Duty and Sales Tax

Excise duty is 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.

O. Financial Derivatives and Commodity Hedging Transactions

Financial Derivatives and 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.

RELIANCE INDUSTRIES LIMITED

SCHEDULE ‘N’ (Contd.)

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 are
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 asset 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 is debited to the profit
and loss account in the year of payment.

S. Issue Expenses

Issue expenses pertaining to the projects are capitalised.

T. Premium on Redemption of Bonds / Debentures

Premium on redemption of Bonds / Debentures, net of tax impact, 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 recognized 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 recognized but are disclosed in the notes.
Contingent Assets are neither recognized 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. 99.01 crore (Previous Year Rs. 346.88 crore).

The Company’s Scheme of Arrangement (Scheme), to demerge certain undertakings to four resulting companies was approved by
the Hon’ble High Court of Mumbai on 9th December, 2005 and is effective from 21st December, 2005.

In terms of the Scheme, the assets and liabilities relatable to the demerged undertakings have been transferred at values appearing
in the books of accounts as on the close of business on 31st August, 2005. Accordingly, net assets of Rs. 19,119.55 crore were demerged
to the four resulting entities i.e. Reliance Communication Ventures Limited – Rs. 15,389.35 crores, Reliance Energy Venture
Limited – Rs. 2,921.02 crore, Reliance Capital Ventures Limited – Rs. 512.41 crore and Reliance Natural Resources Limited
(formerly Global Fuel Management Services Limited) – Rs. 296.77 crore.

The net assets transferred have been appropriated against the Revaluation Reserve, pursuant to the Court order.

(a) The Company, based on the report by international valuers, has revalued plant, Equipment and buildings situated at
Patalganga, Hazira and Jamnagar as at 1st August, 2005 by an amount of Rs. 22,497.34 crore and an equivalent amount has been
credited to Revaluation Reserve Account. Consequent to the revaluation, there is an additional charge for depreciation of Rs.
1,409.08 crore for the year and an equivalent amount has been withdrawn from Revaluation Reserve and credited to the Profit
and Loss Account.

(b) The Gross Block of Fixed Assets includes Rs. 2,725.22 crore (Previous Year Rs. 2,729.88 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. 43.74 crore (Previous Year Rs. 61.07 crore) and an equivalent amount, which was hitherto being withdrawn from General
Reserves, has now been withdrawn from Revaluation Reserve and credited to the Profit and Loss Account. This has no impact
on the profit for the year.

Transfer to General Reserve from Profit and Loss Account include Rs. 12,850.00 crore transferred on 31st August, 2005.

Growth is Life

SCHEDULE ‘O’ (Contd.)

(a)

Payment to Auditors:

(i) Audit Fees
(ii) Tax Audit Fees
(iii) For Certification and Consultation in finance and tax matters
(iv) Expenses Reimbursed

(b) Cost Audit Fees

Managerial Remuneration:

(a)

Executive Directors
Salaries
(i)
(ii)
Perquisites
(iii) Commission
(iv) Leave salary / Encashment
(v) Contribution to Provident fund and Superannuation fund
(vi) Provision for Gratuity

2005-06
4.20
0.50
2.70
0.01

7.41

0.07

2005-06
1.41
1.60
40.22
0.42
0.35
0.36

44.36

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% per annum up to 18th June, 2005
and 0.402% per annum thereafter (Previous Year @ 0.67% per annum)
Less: Salaries & Perquisites of the Directors eligible for commission

Balance Commission

2005-06
10,704.06
3,400.91
6.59
-
-
42.31

14,153.87
4,853.73
0.05
7.79
6.32
88.38

9,197.60

42.31
2.09

40.22

(Rs. in crore)

2004-05
2.00
0.50
1.80
0.20

4.50

0.06

(Rs. in crore)

2004-05
1.65
1.46
51.59
-
0.40
0.09

55.19

(Rs. in crore)

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

(b) General Expenses includes Rs. 0.33 crore (Previous year Rs. 0.22 crore) towards sitting fees paid to non-executive directors.

(c) The Shareholders at the Annual General Meeting of the Company held on 3rd August, 2005, approved payment of commission
of Rs. 1.00 crore per annum to Non-Executive Directors of the Company provided that such amount does not exceed 1% of the
Net Profit of the Company, computed in the manner referred to under Section 198(1) of the Companies Act, 1956. Accordingly,
salaries and wages includes Rs. 2.00 crore (Previous year Rs. Nil) towards Commission paid to Non-Executive directors, of
which a sum of Rs. 1.00 crore relates to 2004-05.

A sum of Rs. 0.88 crore (net debit) [Previous Year Rs. 2.86 crore (net debit)] is included under Establishment expenses representing
Net Prior Period Items.

Expenditure on account of Premium on forward exchange contracts to be recognized in the Profit and Loss Account of subsequent
accounting period aggregate to Rs. 93.92 crore (Previous Year Rs.5.16 crore).

RELIANCE INDUSTRIES LIMITED

SCHEDULE ‘O’ (Contd.)

10.

(a)

Fixed assets taken on finance lease prior to April 1, 2001, amount to Rs. 170.56 crore (Previous year Rs. 218.68 crore).
Future obligations towards lease rentals under the lease agreements as on 31st March, 2006 amount to Rs. 1.98 crore
(Previous year Rs. 5.33 crore).

Within one year
Later than one year and not later than five years
Later than five years

Total

2005-06
0.14
0.58
1.26

1.98

(Rs. in crore)
2004-05
2.41
1.52
1.40

5.33

(b) The Company has acquired Ships on finance lease on or after April 1, 2001, amounting to Rs. 9.98 crore (Previous Year Rs. 9.98

crore). The minimum lease rentals outstanding as of 31st March, 2006 in respect of these assets are as follows:

Due

Total Minimum Lease
Payments outstanding

Future Interest on
Outstandings

As At

(Rs. in crore)

Present Value of
Minimum Lease
Payments

As At

31st March, 2006 31st March, 2005

2005-06 2004-05

31st March, 2006 31st March, 2005

Within one year

Later than one year and
not later than five years

Later than five years

Total

0.81

1.93

0.81

2.74

0.81

1.93

0.81

2.74

Lease rentals are charged on the basis of agreed terms.
(i)
(ii) Assets are taken on lease over a period of 3 to 5 years.

(d) The Company has taken an Aircraft on operating lease and lease rent amounting to Rs. 13.99 crore (Previous Year Rs. 10.34

crore) 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

11.

(a)

(i) Assets given on finance lease on or after 1st April, 2001

2005-06

13.45
53.76
72.19
139.40

(Rs. in crore)

2004-05

13.14
52.54
84.25
149.93

Particulars

Total

Not later than
one year

2005-06 2004-05

Later than one year
and not later than
five years
2005-06 2004-05

Gross Investment
Less: Unearned Finance Income

Present Value of Minimum Lease Rental

-
-

78.78
30.62

48.16

-
-

11.37
6.83

4.54

-
-

45.47
19.91

25.56

(Rs. in crore)

Later than
five years

2005-06 2004-05

-
-

21.94
3.88

18.06

(ii) The assets given on lease have been demerged as per the Scheme of Arrangement approved by the Hon'ble High Court
of Mumbai on 9th December, 2005 at the values appearing in the books of accounts as on the close of business of
31st August, 2005.

(iii) General Description of Lease terms:

Lease rentals are charged on the basis of agreed rate of interest.

•
• Assets are given on lease for a period of 10 years.

Growth is Life

SCHEDULE ‘O’ (Contd.)

(b)

(i)

Plant and Machinery, Electrical Installation and Equipment given on operating lease amounts to Rs. 15.27 crore
(Previous Year Rs. 17.66 crore).

(ii) Depreciation on Assets given on operating lease Rs. 2.39 crore (Previous Year Rs. 2.28 crore).

(iii) Future lease rentals receivable within a period of one year for such assets are Rs. 0.15 crore. (Previous Year Rs. 0.15

crore).

(c) Miscellaneous income includes income from finance lease of Rs. 2.85 crore (Previous Year Rs. 7.40 crore) and income from

operating lease of Rs. 0.15 crore (Previous Year Rs. 9.97 crore).

12.

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)

13.

EARNINGS PER SHARE (EPS)

(a) Net Profit as per Profit and Loss Account

(Rs. in crore)

(b) Weighted Average number of equity shares

used as denominator for calculating EPS

(c)

Basic and Diluted Earnings per share of
face value of Rs. 10 each (Rs.) :

As at 31st
March, 2006

(Rs. in crore)
As at 31st
March, 2005

5,092.52

4,633.46

121.70

4,970.82

2005-06

9,069.34

366.64

4,266.82

2004-05

7,571.68

139,35,08,041

139,59,09,459

65.08

54.24

14.

As per Accounting Standard 18, issued by the Institute of Chartered Accountants of India, the disclosures of transactions
with the 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

Relationship

10.

11.

12.

13.

14.

15.

16.

17.

Reliance Industrial Investments and Holdings Limited

Subsidiary Companies

Reliance Ventures Limited

Reliance Strategic Investments Limited

Reliance Industries (Middle East) DMCC

Reliance Petroleum Limited

Reliance Infrastructure Limited

Reliance Retail Limited

Reliance Patalganga Power Limited (from 5th August, 2005 to 31st August, 2005)

Reliance Thermal Energy Private Limited (from 5th August, 2005 to 31st August, 2005)

Jayamkondam Power Private Limited (from 5th August, 2005 to 31st August, 2005)

Reliance Power Limited (from 5th August, 2005 to 31st August, 2005)

Hirma Power Private Limited (from 5th August, 2005 to 31st August, 2005)

Reliance Capital Ventures Limited (from 11thAugust, 2005 to 31st August, 2005)

Reliance Communication Ventures Limited (from 11th August, 2005 to 31st August, 2005)

Reliance Energy Ventures Limited (from 9th August, 2005 to 31st August, 2005)

Reliance Natural Resources Limited (from 9th August, 2005 to 31st August, 2005)

Reliance Power Ventures Limited (upto 28th March, 2006)

RELIANCE INDUSTRIES LIMITED

SCHEDULE ‘O’ (Contd.)

Sr No.

Name of the Related Party

Relationship

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.

47.

48.

49.

50.

51.

52.

53.

Reliance Do Brasil Industria E Comercio De Produtos Texteis, Quimicos,

Petroquimicos E Derivados Ltda (Reliance Brazil LLC.) (upto 28th March, 2006)

Relene Petrochemicals Limited (from 8th June, 2005 to 21st March, 2006)

Subsidiary Companies

Reliance Technologies LLC. (upto 28th March, 2006)

Reliance Gas Pipelines Limited (Formerly Gas Transportation &

Infrastructure Company Limited) (upto 31st March, 2006)

Reliance LNG Limited (upto 28th March, 2006)

Reliance Netherland B.V.

Reliance Industrial Infrastructure Limited

Reliance Europe Limited

Reliance Petroinvestments Limited

Reliance Rubber and Chemicals Limited

Indian Petrochemicals Corporation Limited (IPCL)

Reliance Neutraceuticals Private Limited

Reliance Pharmaceuticals (India) Private Limited

Reliance Utilities and Power Limited

Reliance Ports and Terminals Limited

Rosche Trading Private Limited (upto 25th March, 2006)

Reliance Infocomm Limited (upto 31st August, 2005)

Reliance Communications Infrastructure Limited (upto 31st August, 2005)

Reliance Capital Limited (upto 31st August, 2005)

Reliance Telecom Limited (upto 31st August, 2005)

Reliance Energy Limited (upto 31st August, 2005)

Reliance General Insurance Company Limited (upto 31st August, 2005)

Reliance Life Insurance Company Limited (upto 31st August, 2005)

Trevira GmbH

Unincorporated Oil and Gas Joint Ventures

Shri Mukesh D. Ambani

Shri Anil D. Ambani (upto 18th June, 2005)

Shri Nikhil R. Meswani

Shri Hital R. Meswani

Shri H. S. Kohli

Dhirubhai Ambani Foundation

Jamnaben Hirachand Ambani Foundation

Hirachand Govardhandas Ambani Public Charitable Trust

Sir. Hurkisondas Nurrotumdas Medical Research Society

Jamnaben Hirachand Ambani Education Trust

Dhirubhai Ambani Institute of Information and Communication Technology,

Gandhinagar (upto 31st August, 2005)

Associate Companies

and Joint Ventures

Key Managerial

Personnel

Others

100

Growth is Life

SCHEDULE ‘O’ (Contd.)

(ii)

Transactions during the year with related parties (Excluding reimbursements):

4,406.87

4,900.92

Name of the Company/
Nature of Transactions
With Subsidiary Companies

Reliance Ventures Limited - Subsidiary
Opening Balance as on 1st April
- Investment in Equity Shares
- Investment in Preference Shares
- Premium on Redemption of
Preference Shares Accrued
- Loans
Transactions:
Net movement in loans
Premium on Redemption of
Preference Shares
Interest Income on ICD
Purchase of Reliance Telecom Limited
Equity Shares
Purchase of Reliance Telecom Limited
Preference Shares
Purchase of Equity Shares of
World Tel Holding Bermuda
Closing Balance as on 31st March
- Investment in Equity Shares
- Investment in Preference Shares
- Premium on Redemption of
Preference Shares Accrued
- Loans

(Rs. in crore)
2004-05

2005-06

2.02
10.00
0.07

2.02
10.00
-

355.52
0.05

494.05
0.07

5.76
(52.59)

(444.34)

(1.93)

-
-

2.02
10.00
0.12

2.02
10.00
0.07

4,051.35

4,406.87

Reliance Strategic Investments Limited - Subsidiary
Opening Balance as on 1st April
- Investment in Equity Shares
Closing Balance as on 31st March
- Investment in Equity Shares

2.02

Reliance Industrial Investments and Holdings Limited -

Name of the Company/
Nature of Transactions
With Subsidiary Companies

Reliance Petroleum Limited - Subsidiary

(Rs. in crore)
2004-05

2005-06

Transactions:
Investment in Equity Shares
Sale of Certificate of Deposit
Guarantee Given
Closing Balance as on 31st March
- Investment in Equity Shares
- Guarantee**

(2,700.00)
1,172.30
6,573.28

2,700.00
6,573.28

**Rs. 6,573.28 crore utilised out of
total guarantee of Rs. 11,300.00 crore issued.

Reliance Infrastructure Limited - Subsidiary

Transactions:
Investment in Equity Shares
Share Application money paid
Rent Income (Re .1)
Closing Balance as on 31st March
- Investment in Equity Shares
- Advances receivable in cash or kind
- Sundry Debtors (Re. 1)

(0.05)
(25.00)
-

0.05
25.00
-

Reliance Do Brasil Industria E Comercio De Produtos Texteis,
Quimicos,Petroquimicos E Derivados Ltda (Reliance Brazil LLC)
(Subsidiary upto 28th March, 2006)

2.02

Opening Balance as on 1st April
- Investment in Equity Shares
Closing Balance as on 31st March
- Investment in Equity Shares

0.88

Relene Petrochemicals Limited
(Subsidiary between 8th June, 2005 to 21st March, 2006)

Subsidiary

Opening Balance as on 1st April
- Investment in Equity Shares
- Interest on Debentures Accrued
- Investment in Debentures
- Loans
Transactions:
Net Movement in Loans
Purchase of Equity shares of
Reliance Energy Limited

Sale of Equity Shares in

Reliance Power Ventures Limited

Closing Balance as on 31st March
- Investment in Equity Shares
- Investment in Debentures
- Loans

147.50
-
721.48
753.78

295.18
(214.89)

147.50
18.36
721.48
794.22

40.44
-

2.02

147.50
721.48
458.60

147.50
721.48
753.78

(294.00)
(5.97)
5.55
(510.78)
2.73
4.42

Transactions:
Investment in Equity Shares
Share application money Paid
Sale of Products
Purchase of Materials
Commission on Consignment Sales Received
Guarantee Given
Transactions between 22nd March, 2006
to 28th March, 2006 - Associate:
(16.19)
Purchase of Materials
Commission on Consignment Sales Received
0.23
Closing Balance as on 31st March -

Reliance Industries (Middle East) DMCC - Subsidiary
Transactions:
Investment in Equity Shares
Guarantee Given
Closing Balance as on 31st March
- Investment in Equity Shares
- Guarantee

(6.55)
89.23

6.55
89.23

Reliance Netherland BV - Subsidiary
Opening Balance as on 1st April

- Guarantee

Transactions:
Investment in Equity Shares
Closing Balance as on 31st March
- Investment in Equity Shares
- Guarantee

-
-

453.36

(0.06)

0.06
432.04

-
453.36

-
-
-

-
-

-
-
-

-
-
-
-
-
-

-
-
-

RELIANCE INDUSTRIES LIMITED

101

SCHEDULE ‘O’ (Contd.)

Name of the Company/
Nature of Transactions
With Subsidiary Companies (Contd.)

(Rs. in crore)
2004-05

2005-06

Reliance Gas Pipelines Limited
(Subsidiary Upto 31st March, 2006)
(Formerly Gas Transportation & Infrastructure Company Limited)

Opening Balance as on 1st April

- Investment in Equity Shares 0.05
- Advances
40.03
-
- Sundry Debtors

Transactions:
Advances Given
Advances Received
Guarantees Given

(24.80)
64.83
561.32

Closing Balance as on 31st March

- Investment in Equity Shares -
-
- Advances
- Guarantees
561.32

0.05
30.30
0.01

(9.73)
-
-

0.05
40.03
-

Reliance LNG Limited (Subsidiary upto 28th March, 2006)

Opening Balance as on 1st April

Name of the Company/
Nature of Transactions
With Companies Demerged effective 1st September, 2005

2005-06

(Rs. in crore)
2004-05

Reliance Infocomm Limited - Associate

Opening Balance as on 1st April

- Investment in Equity Shares*
- Investment in Preference Shares
- Sundry Debtors
- Sundry Creditors
- Advances receivable in cash or kind
- Premium receivable on
Preference Shares
- Guarantee

Transactions:
Rental Income
Tower Sales
Sale of Fixed Assets
Sale of Investments
Lease Rental Income
Service Income
Telephone Expenses
Purchase of Fixed Assets
Premium Accrued on Investment

31.50
8,100.00
0.32
(90.73)
13.46
1,108.27

31.50
8,100.00
-
-
14.57
197.58

180.55

1,344.28

9.84
16.24
-
-
-
-
(2.61)
-
-

25.70
55.11
218.59
0.63
2.04
59.36
(16.68)
(0.50)
910.69

- Investment in Equity Shares 0.05

0.05

on Preference Shares

Closing Balance as on 31st March

to Equity Shares *

- Investment in Equity Shares 0.02

0.05

Premium on redemption of Preference

(1,108.27)

Conversion of Preference Shares

(8,100.00)

Reliance Power Ventures Limited
(Subsidiary upto 28th March, 2006)

Shares - Converted to Equity Shares *

Closing Balance as on 31st March

Opening Balance as on 1st April

Reliance Commmunications Infrastructure Limited - Associate

2.02
1,396.50

2,503.05 (1,106.55)
-
-
-

- Investment in Equity Shares 2.02
- Advances
2,503.05
Transactions:
Net movement in Loans / Advances
Interest Expense on ICD Taken (21.19)
Interest Income on ICD Given 2.17
Sale of Equity Shares of Relene
309.01
Petrochemicals Limited
Sale of Equity Shares of
Reliance Technology LLC.
Sale of Equity Shares of Reliance Brazil LLC.
Sale of Equity Share of Reliance LNG Limited
Purchase of Government Securities
Sale of Government Securities
Purchase of Equity shares of
Reliance Energy Limited

0.88
0.03
(370.04)
369.18
(2,664.05)

0.42

-
-
-
-
-

Closing Balance as on 31st March

- Advances receivable in cash or kind
2.15
- Investment in Equity Shares -
-
- Advances

-
2.02
2,503.05

Reliance Retail Limited - Subsidiary
Transactions:
Investment in Equity Shares
Closing Balance as on 31st March

(215.05)

- Investment in Equity Shares 215.05

Opening Balance as on 1st April

- Investments in DDB’s
- Investments in Equity Shares*
- Loans taken
- Interest Receivable on DDB’s
- Advances receivable in cash or kind
- Interest Payable on ICD

1,600.02
2,331.00

1,600.02
2,331.00
(1,600.00) (1,147.00)
732.02
37.60
(75.31)

939.38
34.70
(39.41)

Transactions:
Loans repaid
Bandwidth,Telephone,Internet

& Leaseline charges
Interest Expense on ICD
Interest Income on DDB’s
Rent Income
Loans taken
Rent Paid
Sale of Fixed Assets
Lease Rental Income
Processing & Hire Income
Sale of Products
Other Income

(1,600.00) (2,282.00)
(40.33)

(16.00)

(57.18)
88.00
4.29
-
-
-
-
0.05
-
-

(95.23)
207.34
10.11
2,735.00
(0.45)
1,187.44
5.36
19.32
1,090.08
0.22

Closing Balance as on 31st March

102

Growth is Life

SCHEDULE ‘O’ (Contd.)

Name of the Company/
Nature of Transactions
With Companies Demerged effective 1st September, 2005 (Contd.)

(Rs. in crore)
2005-06 2004-05

Name of the Company/
Nature of Transactions
With Companies Demerged effective 1st September, 2005

2005-06

(Rs. in crore)
2004-05

Reliance Capital Limited - Associate

Reliance Life Insurance Company Limited - Associate

Opening Balance as on 1st April

- Investments in Equity Shares *
- Other Deposits
- Leased Fixed assets
- Sundry Creditors
- Advance receivable in cash or kind

485.80
4.01
2.74
-
-

485.80
18.09
4.66
(72.53)
60.86

Transactions:
Dividend Income
Rent Expenses
Lease Deposit Repaid
Lease Charges
Lease terminated during the year
Purchase of asset
Loans Taken
Loans Repaid
Interest Paid
Purchase of Government Securities
Purchase of Hand Sets
Advance Given
Advance Received back
Sale of Investments
Interest Income
Other Expenses

17.43
18.03
(5.28)
(1.25)
(14.08)
(3.62)
(5.14)
(0.78)
(1.92)
(1.93)
-
(0.01)
-
1,555.02
- (1,555.02)
-
(7.58)
-
(52.86)
-
(281.04)
- (4,151.63)
-
4,151.63
-
117.37
-
19.16
-
(0.08)

Closing Balance as on 31st March

Reliance Telecom Limited - Associate

Opening Balance as on 1st April

- Investments in Equity Shares*
- Guarantee
- Advances receivable in cash or kind

4.46
125.08
-

5.10
298.91
2.46

Transactions:
Bank Guarantee Commission Received

0.80

3.34

Closing Balance as on 31st March

Reliance Energy Limited - Associate

Opening Balance as on 1st April

- Investments in Equity Shares*
- Sundry Debtors

Transactions:
Income towards Fuel Management Fee
Dividend Income
Purchase of Government Securities
Sale of G Series Debentures

33.73
5.28

33.73
3.43

1.94
2.04
-
-

3.85
0.74
(14.99)
1,488.92

Closing Balance as on 31st March

Opening Balance as on 1st April

- Investments in Equity Shares *
- Advances receivable in cash or kind

Closing Balance as on 31st March

0.50
-

0.50
0.05

Reliance General Insurance Company Limited - Associate

Opening Balance as on 1st April

- Investments in Equity Shares*
- Advances receivable in cash or kind

25.50
0.52

25.50
1.65

Transactions:
Insurance Premium
Claims received
Purchase of Government Securities
Sale of G Series Debentures
Professional Charges Received
Rent

Closing Balance as on 31st March

(7.86)
0.03
-
-
-
-

Reliance Patalganga Power Private Limited - Subsidiary
(From 5th August, 2005 to 31st August, 2005)

Transactions:
Investment in Equity Shares *

Closing Balance as on 31st March

(0.05)

Reliance Thermal Energy Private Limited - Subsidiary
(From 5th August, 2005 to 31st August, 2005)

Transactions:
Investment in Equity Shares *

Closing Balance as on 31st March

(0.05)

Jayamkondam Power Private Limited - Subsidiary
(From 5th August, 2005 to 31st August, 2005)

Transactions:
Investment in Equity Shares *

Closing Balance as on 31st March

(0.05)

Reliance Power Limited - Subsidiary
(From 5th August, 2005 to 31st August, 2005)

Transactions:
Investment in Equity Shares *

Closing Balance as on 31st March

(0.05)

(56.74)
2.39
(19.91)
127.85
4.88
1.00

SCHEDULE ‘O’ (Contd.)

Name of the Company/
Nature of Transactions
With Companies Demerged effective 1st September, 2005 (Contd.)

2005-06

(Rs. in crore)
2004-05

Hirma Power Private Limited - Subsidiary
(From 5th August, 2005 to 31st August, 2005)

Transactions:
Investment in Equity Shares (Rs. 43426 )*

Closing Balance as on 31st March

Reliance Capital Ventures Limited - Subsidiary
(From 11th August, 2005 to 31st August, 2005)

Transactions:
Investment in Equity Shares *
Net assets Demerged

Closing Balance as on 31st March

(0.05)
(512.41)

Reliance Communication Ventures Limited - Subsidiary
(From 11th August, 2005 to 31st August, 2005)

Transactions:
Investment in Equity Shares *
Net assets Demerged

(0.05)
(15,389.35)

Closing Balance as on 31st March

Reliance Energy Ventures Limited - Subsidiary
(From 9th August, 2005 to 31st August, 2005)

Transactions:
Investment in Equity Shares *
Net assets Demerged

(0.05)
(2,921.02)

Closing Balance as on 31st March

Reliance Natural Resources Limited - Subsidiary
(Formerly Global Fuel Management Services Limited)
(From 9th August, 2005 to 31st August, 2005)

Transactions:
Investment in Equity Shares *
Net assets Demerged

Closing Balance as on 31st March

(0.05)
(296.77)

-
-

* The Investment in all the above companies are demerged through
a scheme of arrangements approved by Hon’ble High Court of
Mumbai. Since, as per the arrangements, the operation of the
scheme shall come into effect from 1st September, 2005, the
transactions only upto 31st August, 2005 have been considered
for the above companies. The Closing balance as on 31st March,
2006 are not shown due to the reason that these are not related
party as on that date.

RELIANCE INDUSTRIES LIMITED

103

Name of the Company/
Nature of Transactions
With Associates & Others

Reliance Industrial Infrastructure Limited

Opening Balance as on 1st April
- Investments in Equity Shares
- Sundry Creditors
- Deposits
- Guarantee
- Lease Fixed Assets
- Advance
- Advances receivable in cash or kind

Transactions:
Hire Charges Paid
IT assistance
Facility Charges
Raw Water Charges
Dividend Income
Finance Lease Cost
Fixed Asset Purchased
Interest Income
Service Income
Closing Balance as on 31st March
- Investments in Equity Shares
- Sundry Creditors
- Deposits
- Guarantee

(Rs. in crore)
2004-05

2005-06

16.58
(7.28)
35.00
4.04
-
-
-

(8.43)
(9.75)
(2.17)
(6.41)
2.23
-
(33.77)
2.04
-

16.58
(4.79)
35.00
4.04

16.58
(4.25)
35.00
-
2.15
60.47
0.53

(4.04)
(6.00)
-
(5.35)
2.23
(0.05)
(23.05)
1.82
0.60

16.58
(7.28)
35.00
4.04

Indian Petrochemicals Corporation Limited

Opening Balance as on 1st April

- Sundry Debtors
- Advances receivable in cash or kind
- Sundry Creditors

18.68
21.41
(119.89)

123.45
6.70
(316.14)

Transactions:
Purchase of Capital Goods
Purchases of Materials
Sale of Products
Job Conversion Income
Service Income
Interest Income
Closing Balance as on 31st March

(0.09)
(512.79)
2,750.36
9.43
-
-

-
(546.98)
2,633.53
7.32
98.94
0.37

- Sundry Debtors
- Advances receivable in cash or kind
- Sundry Creditors

125.82
2.26
(7.23)

18.68
21.41
(119.89)

Reliance Utilities and Power Limited

Opening Balance as on 1st April

- Deposits
- Sundry Debtors
- Sundry Creditors

Transactions:
Electric Power, Fuel and Water
Other Income
Rent Expenses
Closing Balance as on 31st March

- Deposits
- Sundry Debtors
- Sundry Creditors

200.00
0.03
(0.69)

200.00
-
(0.55)

(329.42)
0.04
(0.04)

(349.39)
0.03
-

200.00
0.10
(27.46)

200.00
0.03
(0.69)

104

Growth is Life

SCHEDULE ‘O’ (Contd.)

Name of the Company/
Nature of Transactions
With Associates & Others (Contd.)

Reliance Europe Limited

Opening Balance as on 1st April
- Investments in Equity Shares
- Sundry Creditors
- Advances
- Guarantee

Transactions:
Purchase of Capital Goods
Professional fees paid
Charter Hire charges

Closing Balance as on 31st March
- Investments in Equity Shares
- Sundry Creditors
- Advances
- Guarantee

Reliance Ports and Terminals Limited

Opening Balance as on 1st April

- Deposits
- Sundry Debtors
- Guarantee

Transactions:
Hire Charges Paid
Product Handling charges
Rent Expense
Tug Hire Income
Warehousing and Distribution Charges
Rent Income

Closing Balance as on 31st March

- Deposits
- Sundry Debtors
- Sundry Creditors
- Guarantee

Trivera GmBH

Opening Balance as on 1st April

- Sundry Debtors

Transactions:
Sale of Products
Closing Balance as on 31st March

- Sundry Debtors

Others
Donation given to
Dhirubhai Ambani Foundation
Hirachand Govardhandas Ambani

Public Charitable Trust

Jamnaben Hirachand Ambani Foundation
Sir H. N. Medical Research Society
Dhirubhai Ambani Memorial Trust

(Rs. in crore)
2004-05

2005-06

Name of the Company/
Nature of Transactions
With Associates & Others

(Rs. in crore)
2004-05

2005-06

Payments to Key Managerial Personnel
Shri Mukesh D. Ambani
Shri Anil D. Ambani (upto 18th June, 2005)
Shri Nikhil R. Meswani
Shri Hital R. Meswani
Shri H. S. Kohli

(24.77)
(5.48)
(6.31)
(6.30)
(1.50)

(21.90)
(21.90)
(5.59)
(5.59)
(0.21)

3.93
(4.09)
9.63
87.49

3.93
(4.10)
0.02
-

(137.86)
(16.58)
(9.70)

-
(16.82)
(26.66)

3.93
(3.60)
-
89.23

3.93
(4.09)
9.63
87.49

900.00
4.29
0.98

900.00
8.79
22.44

(50.00)
(85.72)
(84.16)
7.92
(679.51)
-

(50.00)
(87.46)
(84.00)
8.12
(646.15)
0.11

900.00
8.79
(105.34)
0.98

900.00
4.29
-
0.98

0.54

18.71

8.38

(2.85)
(0.47)

(0.25)
(0.90)
-

(7.56)
(0.28)

(0.64)
-
(0.01)

RELIANCE INDUSTRIES LIMITED

105

SCHEDULE ‘O’ (Contd.)

15.

Loans and advances in the nature of Loans given to Subsidiaries and Associates etc:

A) Loans and Advances in the nature of Loans

Sr Name of the Company

Reliance Industrial Investments & Holdings Limited*
Reliance Ventures Limited
Reliance Power Ventures Limited

Reliance Gas Pipelines Limited (formerly Gas
Transportation & Infrastructure Company Limited)
Recron Synthetics Limited

* Excluding Debentures of Rs.721.48 Crore.

As at

As at 31st

31st March, 2006 31st March, 2005

Subsidiary
Subsidiary
Subsidiary

Subsidiary

458.60
4,051.35
-

753.78
4,406.87
2,503.05

40.03

(Rs. in crore)
Maximum

Balance during
the year

753.78
4,634.54
2,581.71

50.83

Other

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 and are re-payable on demand.

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 Company 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.

No.

1.
2.
3.

Notes:

(a)

(b)

(c)

(d)

Investment by the loanee in the shares of the company

*None of the loanees have, per se, made investments in shares of the Company. These investments represent shares of the Company

allotted as a result of amalgamation of erstwhile Reliance Petroleum Limited with the Company under the Scheme approved by the
Hon'ble High Court of Bombay and Gujarat and subsequent inter se transfer of shares amongst them.

Sr. Name of the Company
No.

2
3

4
5
6

*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

16.

(a) Disclosure of the Company's Interest in Oil and Gas Joint Ventures:

No. of Shares

(Rs. in crore)
Amount
of loans

104,660,155
31,119,999
2,971,000

1,029,000
30,597,462
86,000

1,180.07
276.48
302.07

302.07
375.57
1.12

Sr. Name of the Fields
No.

In the Joint Ventures

1
2
3

4
5
6

Panna Mukta
Tapti
NEC - OSN - 97/2
KG - DWN - 98/3
GS - OSN - 2000/1
GK - OSJ - 3
GK - OS - 5

% Interest

Sr No

30%(30%)
30%(30%)
90%(90%)

90%(90%)
90%(90%)
60%(60%)

40%(40%)

8
9
10

11
12
13

Name of the Fields
In the Joint Ventures

CB - ON/1
AS - ONN - 2000/1
KG - DWN - 2001/1
Yemen (Block 9)
NEC - DWN - 2002/1
KG - DWN - 2003/1
MN - DWN - 2003/1

% Interest

40%(40%)
90%(90%)
90%(90%)

25%(25%)
90%(90%)
90%( - )
85%( - )

Figures in bracket represents previous year's % Interest.

106

Growth is Life

SCHEDULE ‘O’ (Contd.)

(b) Net Quantities of interest in proved reserves and proved developed reserves within India:

Proved Reserves
(Million MT)

2005-06

2004-05

Proved Developed
Reserves (Million MT)

2005-06

2004-05

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

5.70

1.53
Nil
0.52

6.71

5.18

0.95
Nil
0.43

5.70

Proved Reserves
(Million M3)*

2005-06

2004-05

172,626
7,168

Nil
1,123
178,671

136,437
37,225

Nil
1,036
172,626

4.12

0.04
Nil
0.52

3.64

3.62

0.93
Nil
0.43

4.12

Proved Developed
Reserves (Million M3)*
2004-05

2005-06

14,476
Nil

Nil
1,123
13,353

13,380
2,132

Nil
1,036
14,476

* 1 cubic meter = 35.315 cubic feet and 1 cubic feet = 1000 BTU

Oil:
Beginning of the year 2005-06
Additions
Deletion
Production
Closing balance for the year 2005-06

Gas:
Beginning of the year 2005-06
Additions
Deletion

Production
Closing balance for the year 2005-06

Proved Reserves

(Million MT)

Proved Developed

Reserves (Million MT)

1.28

Nil
Nil
Nil
1.28

Nil

Nil
Nil
Nil
Nil

Proved Reserves
(Million M3)*

Proved Developed
Reserves (Million M3)*

Nil
301
Nil

Nil
301

Nil
Nil
Nil

Nil
Nil

* 1 cubic meter = 35.315 cubic feet and 1 cubic feet = 1000 BTU

17.

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, including subsidiaries and associates. Accordingly segment information
as required under Accounting Standard 17 (AS-17) on Segment Reporting is included under the Notes to Consolidated Financial
Statements.

RELIANCE INDUSTRIES LIMITED

107

SCHEDULE ‘O’ (Contd.)

18.

PROJECT DEVELOPMENT EXPENDITURE
(in respect of Projects upto 31st March, 2006, included under Capital work-in-progress)

Opening Balance

Add: Project Development Expenditure transferred from

Profit and Loss Account
Interest Capitalised

Less: Project Development Expenses Capitalised during the year

Closing Balance

19.

ADDITIONAL INFORMATION

2005-06

2004-05

225.64

112.62

(Rs. in crore)

155.14
636.75

9.60
296.69

791.89

1017.53
530.62

486.91

306.29

418.91
193.27

225.64

(A) Estimated amount of contracts remaining to be executed on

Capital accounts and not provided for:
In respect of joint ventures
(i)

(ii) In respect of others

(B) Uncalled liability on partly paid Shares
(Rs. NIL; Previous Year Rs. 19,935)

(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)

In respect of joint ventures

(b)

In respect of others*

*Includes Rs. 6,573.28 crore (Previous Year Rs. NIL) utilised out of total guarantee of

Rs. 11,300.00 crore issued on behalf of Reliance Petroleum Limited

(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) In respect of joint ventures

(b) 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

(Rs. in crore)
As at

31st March, 2006

31st March, 2005

728.42

14,157.12

633.20

3,313.97

2,349.19

2,003.52

7,741.26

651.81

429.40

48.06

578.12

13.27

5,964.48

52.55

195.05

517.61

208.82

5,333.82

(D) The Income-Tax assessments of the Company have been completed up to Assessment Year 2003-2004. The disputed demand
outstanding up to the said Assessment Year is Rs. 1,215.28 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.

108

Growth is Life

SCHEDULE ‘O’ (Contd.)

20.

LICENSED AND INSTALLED CAPACITY
(As certified by the Management)

E
F
G

H
I
J

K
L
M

N
O
P

Q
R

Refining of Crude Oil

Ethylene
Propylene

i
ii
iii Benzene

iv Toluene
v Xylene
vi Butadine & Other C4s

Paraxylene

i
ii Orthoxylene
iii Toluole

i Mono Ethylene Glycol
ii 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
Man-made fibre on cotton system (Spindles)

i Man-made Fabrics (Looms)
ii Knitting M/C

Linear Alkyl Benzene
Butadine

UNIT

Mill. MT

MT
MT
MT

Nos
Nos
Nos

Nos
MT
MT

Licensed Capacity
2004-05

2005-06

Installed Capacity
2004-05

2005-06

N.A.

750,000*
365,000*
291,000*

197,000*
165,000*
225,000*

1,646,000*
150,000*
N.A.

300,000*
37,500*
50,000*

N.A.

750,000*
365,000*
291,000*

197,000*
165,000*
225,000*

1,646,000*
150,000*
N.A.

300,000*
37,500*
50,000*

N.A.
N.A.
N.A.

22
N.A.
N.A.

N.A.
N.A.
N.A.

22
N.A.
N.A.

750,000
365,000
675,000

197,000
165,000
225,000

750,000
365,000
345,000

197,000
165,000
225,000

1,856,000
420,000
180,000

1,646,000
175,000
180,000

475,000
46,000
66,000

325,000
450,000
80,000

475,000
37,500
50,000

325,000
450,000
80,000

1,150,000
1,150,000
1,350,000
1,350,000
523,700 + 197,300 +

550,000
290,000
30,000

24,094
23,040
305

20
115,000
140,000

300,000
290,000
30,000

24,094
23,040
305

20
115,000
N.A.

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.

21.

(a) The Ministry of Company Affairs, Government of India vide its Order No. 46/19/2006-CL-III dated 22nd February, 2006
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) (I) & (2), 3(ii)(b) of Part II, Schedule VI to the Companies Act, 1956.

(b) The Ministry of Companies Affairs, Government of India vide its Order No.47/18/2006-CL-III dated 26th April, 2006 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.

SCHEDULE ‘O’ (Contd.)

22.

PRODUCTION MEANT FOR SALE:

Products

Crude Oil
Gas

Petroleum Products
Ethylene
Benzene

Toluene
Xylene
Orthoxylene

Paraxylene
Ethylene Glycol
PVC

PE
PP
PTA

Polyester Filament Yarn
Polyester Staple Fibre
PSF Spun Yarn

ASF Spun Yarn
PET
Fibre Fill

Fabrics
Normal Paraffin
LAB

Butadine

RELIANCE INDUSTRIES LIMITED

109

Unit

2005-06

MT
BBTU

'000 MT
MT
MT

MT
MT
MT

Mtrs. in Lacs
MT
MT

466,168
30,255

20,622
-

423,581

107,975
53,523
242,216

528,887
294,943
353,086

420,443
1,012,167
556,947

347,426
333,800
3,433

116
219,887
35,075

181.88
23,513
116,867

90,514

2004-05

383,018
34,502

24,819
5,687
350,890

114,901
56,203
145,565

571,510
223,984
327,269

414,956
1,165,769
558,047

347,566
340,144
1,286

172
146,060
29,791

195.50
21,423
120,184
-

Production meant for Sale includes production through Toll Conversion, wherever applicable.

23.

FINANCIAL AND DERIVATIVE INSTRUMENTS

Derivative contracts entered into by the company and outstanding as on 31st March, 2006

(i)

For hedging currency and Interest rate related Risks:

Nominal amounts of derivative contracts entered into by the company and outstanding as on 31st March, 2006 amount to Rs.
6,807.66 crore. Category wise break-up is given below.

Sr.

2
3

Particulars

Interest Rate Swaps

Currency Swaps
Options

(Rs. in crore)

As At

31st March, 2006

3,636.50

1,066.88
2,104.28

110

Growth is Life

SCHEDULE ‘O’ (Contd.)

(ii)

For hedging commodity related risks :

Category wise break up is given below

Sr.
No

1
2

3
4
5

Particulars

Net forward swaps
Futures

Spreads
Margin hedging
Net Options

Petroleum
product sales

768
150

1,300
37,800
12,300

(in Kbbl)
Crude oil
purchases

130
830

6,425
-

8,600

All derivative and financial instruments acquired by the company are for hedging purposes only.

Foreign currency exposure that are not hedged by derivative instruments as on 31st March, 2006 amount to Rs. 15,073.49
crore.

Note: Previous Year figures are not included as the above disclosure has become mandatory in respect of accounting periods ending

on or after 31st March, 2006.

24.

VALUE OF IMPORTS ON CIF BASIS IN RESPECT OF

Raw Materials and Traded Goods
Stores & spares, dyes and chemicals
Capital goods

25.

EXPENDITURE IN FOREIGN CURRENCY:

Interest on foreign currency loans
Technical know-how and engineering fees
Oil and gas activity

Production Royalty
Professional fees
Freight and forwarding

Other matters

26.

VALUE OF RAW MATERIALS CONSUMED:

Imported
Indigenous

2005-06

52,945.19
927.96
2,681.15

2005-06

530.85
234.82
1,724.92

291.76
134.68
515.12

299.84

(Rs. in crore)
2004-05

39,578.32
714.34
642.29

(Rs. in crore)
2004-05

414.76
242.04
1,311.05
-

153.49
286.79

194.16

2005-06

2004-05

Rs. in
crore

% of
Consumption

Rs. in
crore

% of
Consumption

53,264.73
2,561.45

55,826.18

95.41
4.59

100.00

39,972.02
3,603.30

43,575.32

91.73
8.27

100.00

RELIANCE INDUSTRIES LIMITED

111

SCHEDULE ‘O’ (Contd.)

27.

VALUE OF STORES, CHEMICALS AND PACKING MATERIALS CONSUMED

Rs. in
crore

649.19
747.79

1,396.98

2005-06

% of
Consumption

46.47
53.53

100.00

Rs. in
crore

667.97
818.20

1,486.17

2004-05

% of
Consumption

44.94
55.06

100.00

Imported
Indigenous

28.

EARNINGS IN FOREIGN EXCHANGE

FOB value of exports
Interest
Others

29.

EXPENDITURE ON RESEARCH AND DEVELOPMENT

Revenue expenditure including amortisation of deferred cost and
unamortised deferred research & development Expenditure
Capital expenditure on research & development

Total

30.

REMITTANCE IN FOREIGN CURRENCY ON ACCOUNT OF DIVIDEND

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)
b)
c)

Number of Non Resident Shareholders
Number of Equity Shares held by them
(i) Amount of Dividend Paid ( Gross) ( Rs. in crore)

Tax Deducted at Source Rs. Nil (Previous year Rs. Nil)

16,695
31,27,41,972
234.56

16,985
31,67,81,817
166.31

(ii) Year to which dividend relates

2004-2005

2003-2004

2005-06

30,819.60
1.02
0.03

2005-06

46.86
63.48

110.34

(Rs. in crore)
2004-05

23,741.33
0.01
4.12

(Rs. in crore)
2004-05

40.26
21.06

61.32

2005-06

2004-05

112

Growth is Life

Balance Sheet Abstract and Company’s General Business Profile

State Code:

III. Position of Mobilisation and Deployment of Funds (Amount Rs. crore)

Total Assets:

I. Registration Details

Registration No.

Balance Sheet Date:

II. Capital Raised during the year (Amount Rs. crore)

Public Issue:

Bonus Issue:

Conversion of Bonds:

N I

Total Liabilities :

Sources of Funds

Paid-up Capital:

Secured Loans:

Deferred Tax Liability :

Application of Funds

Net Fixed Assets :

Current Assets :

IV. Performance of Company (Amount Rs. crore)

Turnover :

Net Turnover:

Profit Before Tax:

Earnings per share in Rs.

Rights Issue:

Private Placement:

Reserves & Surplus:

Unsecured Loans:

Current Liabilities

Investments:

Total Expenditure :

Profit After Tax:

Dividend : Rs. per share

V. Generic Names of Three Principal Products of Company (as per monetary terms)

Item Code No. (ITC Code):

.
Product Description:

B U L K
Item Code No. (ITC Code):

P E T R O L

E U M

P R O D U C T S

0
Product Description:

P O L Y
Item Code No. (ITC Code):

P R O P Y L E N E

(

P P

)

1
6
Product Description:

5 0

P O L

Y E

S T E R

S T A P

L E

I B R E

(

)

N I

1 The Financial Year
of the Subsidiary
Companies ended on

2 Date from which they
became Subsidiary
Companies

3 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

b. Extent of Interest of
holding Company at
the end of the financial
year of the Subsidiary
Companies

4 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, 2006

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, 2006
ii) For the previous

Financial years of the
Subsidiary Companies
since they became the
Holding Company’s
subsidiaries

RELIANCE INDUSTRIES LIMITED

113

Statement Pursuant to Section 212 of the Companies Act, 1956, relating to
Company’s Interest in Subsidiary Companies for the financial year 2005-06

Name of Subsidiary
Company

Reliance Industrial Reliance
Ventures
Investments and
Limited
Holdings Limited

Reliance
Industries
(Middle East)
DMCC

Reliance
Strategic
Investments
Limited

Reliance
Petroleum
Limited

Reliance
Infrastructure
Limited

Reliance
Retail
Limited

Reliance
Netherland
B.V.

31-03-2006

31-12-2005

31-03-2006

31-12-2005

30-12-1988

7-10-1999

11-5-2005

28-12-2001

24-10-2005

01-10-2005

10-02-2006

28-03-2006

14,75,04,400 Equity
Shares of the face
value of Rs.10 each
fully paid-up

5,650 Equity
Shares of face

20,20,000
Equity Shares
of the face value value of
of Rs.10 each
fully paid-up

AED 1000
each fully
paid-up

20,20,200
50,000 Equity
270,00,00,000
Equity Shares Equity Shares Shares of the
of the face
of the face
face value of
value of Rs.10 Rs.10 each fully
value of Rs.10
each fully
each fully
paid-up
paid-up

paid-up

1,00,000

21,50,50,000
Equity Shares Equity Shares
of the face
valueof Rs.10
each fully
paid-up

of the face
valueof Euro
1 each fully
paid-up

100%

Rs.7538.41 Lakhs

Rs.214.46 Lakhs

(AED 3.17Lakhs) (Rs.1317.65
(Rs.38.90 Lakhs) Lakhs)

ii) For the previous

Rs.21859.62 Lakhs

(Rs.240.87
Lakhs)

Not Applicable

(Rs.0.74
Lakhs)

Not
Applicable

(Rs.0.53
Lakhs)

Euro 2.89
Lakhs
Rs.154.32
Lakhs
Not
Applicable

NIL

Rs. 2673.89 Lakhs

NIL

Not Applicable

NIL

Not Applicable NIL

NIL

Note : 1. Figures in bracket represent losses.

Mumbai
April 27, 2006

For and on behalf of the Board

M. D. Ambani -
H. R. Meswani -
R. H. Ambani
M. L. Bhakta
Y. P. Trivedi
Dr. D. V. Kapur
M. P. Modi
S. Venkitaramanan
Prof. Ashok Misra
Prof. Dipak C. Jain
V. M. Ambani -

}

Chairman & Managing Director
Executive Director

Directors

Company Secretary

114

Growth is Life

Details of Subsidiary Companies

Name of Subsidiary
Company

Reliance Industrial
investments and
Holdings Limited

Reliance
Ventures
Limited

Capital

147.50

2.12

Reserves

295.48

9.62

Total Assets

1,660.40

4,127.73

Total Liabilities

1,660.40

4,127.73

Investments

1,659.02

877.71

Turnover / Total Income

80.40

13.05

Profit Before taxation

75.38

2.31

Reliance
Industries
(Middle East)
DMCC

6.93
AED 5650000

-
-

6.59
AED 5371704

-
-

26.79
AED 21832419

(0.39)
AED (317027)

(Rs. in crore)

Reliance
Strategic
Investments
Limited

Reliance
Petroleum
Limited

Reliance
Infrastructure
Limited

Reliance
Retail
Limited

Reliance
Netherland
B.V.

2.02

2,700.00

0.05

215.05

0.00

1,014.79

3,153.33

25.04

212.62

1,014.79

3,153.33

25.04

212.62

454.78

798.53

0.45

1.51

12.78

(13.18)

0.53
Euro 100000

1.31
Euro 245924

2.15
Euro 402577

0.07
Euro 12501

2.60
Euro 487418

1.54
Euro 289497

Provision For Taxation

0.00

0.16

Profit After taxation

75.38

2.14

(0.39)
AED (317027)

(13.18)

1.54
Euro 289497

Proposed Dividend

Exchange Rate as on 31.12.2005:1 Euro = Rs. 53.305, 1 AED = Rs.12.2703

Notes:

1. The Company owns 100% interest in all its major Subsidiaries.

2. The Company’s significant transactions with its Subsidiaries relate to investments made and loans and advances given for strategic

investments in associates.

3. Company’s investments, loans and advances to Subsidiaries as on 31st March, 2006 aggregate to Rs. 8,339.68 crore.

4. The Company’s investments, loans and advances to Subsidiaries and the internal accruals / borrowings of Subsidiaries are deployed

directly / indirectly by the Subsidiaries as follows:

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 in to Reliance Industries Limited in 2001-02).

Zero Coupon Optionally Convertible Debentures / Loans of Reliance Polyolefins Private Limited

Zero Coupon Optionally Convertible Debentures / Loans of Reliance Chemicals Private Limited

Zero Coupon Optionally Convertible Debentures / Loans of Reliance Aromatics and Petrochemicals Private Limited

Zero Coupon Optionally Convertible Debentures / Loans of Reliance Energy and Project Development Private Limited

Other Investments / Assets

Total Assets

5. Please also refer Note 15 of Schedule “O” of the notes to accounts.

Rs in crore

2,527.80

1,654.96

375.57

276.48

302.07

4,763.69

10,202.64

RELIANCE INDUSTRIES LIMITED

115

Consolidated Financial
Statements and Notes

116

Growth is Life

Consolidated Financial
Statements and Notes

Auditors’ Report on
Consolidated Financial Statements

TO THE BOARD OF DIRECTORS
RELIANCE INDUSTRIES LIMITED

We have audited the attached Consolidated Balance Sheet of Reliance Industries Limited
(“the Company”) and its subsidiaries as at 31st March, 2006, and also the Consolidated Profit
and Loss Account and the Consolidated Cash Flow Statement for the year ended on that
date annexed thereto. These financial statements are the responsibility of the Company’s
Management and have been prepared by the Management on the basis of separate financial
statements and other financial information regarding components. 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. Those Standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. 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
statement presentation. We believe that our audit provides a reasonable basis for our
opinion.

Financial statements of subsidiaries, which reflect total assets of Rs. 10,193.90 crores as at
31st March, 2006, total revenues of Rs. 54.51 crores and net cash flows amounting to
Rs. 451.08 crores for the year then ended, have been audited by one or jointly by two of us
and financial statement of associate in which the share of profit of the Company is Rs. 8.78
crores, have been audited by one of us; and

For remaining, financial statements of subsidiaries, which reflect total assets of Rs.1,105.07
crores as at 31st March, 2006, total revenues of Rs. 1,832.78 crores and net cash flows
amounting to Rs. 11.77 crores for the year then ended and financial statement of associate
in which the share of profit of the Company is Rs. 3.59 crores, which 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 their reports.

The Company’s share of profit in associate aggregating to Rs. 462.30 crores for the year
ended 31st March, 2006 have been accounted based on un-audited financial results, which
has been reviewed by two of us jointly and as explained in note 4 of Schedule N, the said un-
audited financial results are subject to accounting effects on account of merger pending
necessary approvals.

RELIANCE INDUSTRIES LIMITED

117

We report that the consolidated financial statements have been prepared by the Company’s
management in accordance with the requirements of Accounting Standard 21, Consolidated
Financial Statements and Accounting Standard 23, Accounting for Investments in Associates
in Consolidated Financial Statements issued by the Institute of Chartered Accountants of
India. As explained in Note No. 5 of Schedule N, in accordance with the Scheme of
arrangement approved by Hon’ble High Court of Mumbai, the adjustment for net assets
transferred has been appropriated against the revaluation reserve.

Based on our audit and on consideration of reports of other auditors on separate financial
statements and on the other financial information of the components, and to the best of our
information and according to the explanations given to us, we are of the opinion that the
attached consolidated financial statements give a true and fair view in conformity with the
accounting principles generally accepted in India:

(a)

(b)

(c)

in the case of the Consolidated Balance Sheet, of the consolidated state of affairs of
the Company and its subsidiaries as at 31st March, 2006;

in the case of the Consolidated Profit and Loss Account, of the consolidated profits of
the Company and its subsidiaries for the year then ended; and

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

For Rajendra & Co.
Chartered Accountants

For Deloitte Haskins & Sells
Chartered Accountants

D. Chaturvedi
Partner
Membership No.: 5611

A. R. Shah
Partner
Membership No.: 47166

P. R. Barpande
Partner
Membership No.: 15291

Place: Mumbai
Dated: 27th April, 2006

118

Growth is Life

Consolidated Balance Sheet as at 31st March, 2006

Schedule

As at
31st March, 2006

(Rs. in crore)

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

‘A’
‘B’

‘C’
‘D’

‘E’

‘F’

‘G’

‘H’

1,393.17
49,634.86

7,664.90
15,677.90

87,840.75
31,550.08

56,290.67
8,896.20

845.55
5,821.26

10,345.26
4,351.67
2,616.41
25.01

17,338.35
7,673.82

25,012.17

12,870.91
4,201.66

17,072.57

51,028.03
457.25

23,342.80
4,970.82

79,798.90

41,093.67
0.05

18,817.09
4,266.82

64,177.63

1,393.09
39,700.58

8,005.40
10,811.69

55,127.49
24,873.37

30,254.12
4,870.57

65,186.87

35,124.69

16,533.77
6,550.20

6,666.81

23,083.97

7,412.88
3,927.81
3,610.72
1,453.31

16,404.72
6,697.21

23,101.93

13,662.23
3,470.75

17,132.98

7,939.60
5.62

79,798.90

5,968.95
0.02

64,177.63

Significant Accounting Policies
Notes on Accounts

‘M’
‘N’

As per our Report of even date

For and on behalf of the Board

For Chaturvedi & Shah
Chartered Accountants

For Rajendra & Co.
Chartered Accountants

For Deloitte Haskins & Sells
Chartered Accountants

D. Chaturvedi
Partner

A.R. Shah
Partner

P. R. Barpande
Partner

Mumbai
April 27, 2006

M. D. Ambani -
H. R. Meswani -
R. H. Ambani
M. L. Bhakta
Y. P. Trivedi
Dr. D. V. Kapur
M. P. Modi
S. Venkitaramanan
Prof. Ashok Misra
Prof. Dipak C. Jain
V. M. Ambani -

}

Chairman & Managing Director
Executive Director

Directors

Company Secretary

RELIANCE INDUSTRIES LIMITED

119

Consolidated Profit and Loss Account for the year ended 31st March, 2006
(Rs. in crore)

Schedule

2005-06

2004-05

INCOME

Turnover
Less: Excise Duty / Services Tax Recovered
Net Turnover
Other Income (including Share in Associates)
Variation in Stocks

EXPENDITURE

Purchases
Manufacturing and Other Expenses
Interest
Depreciation
Less: Transferred from Revaluation Reserve
Less: Transferred from General Reserve
[Refer Note 6, Schedule ‘N’]

‘I’
‘J’

‘K’
‘L’

Profit Before Tax and Exceptional Item

(Loss) / Profit on sale of subsidiaries

Profit Before Tax

Provision for Current Tax
Provision for Fringe Benefit 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
Dividend adjustment on consolidation
Reserve adjustment on sale of subsidiaries
Taxation for Earlier Years
Statutory Reserve of Subsidiaries written back

Amount Available for Appropriations

APPROPRIATIONS

Debenture Redemption Reserve
Statutory Reserve
General Reserve [Refer Note 7, Schedule 'N']
Proposed Dividend on Preference Shares
Proposed Dividend on Equity Shares
Tax on Dividend
Tax on Dividend for earlier years

90,937.94
7,913.13

73,710.46
7,112.80

83,024.81
1,204.64
2,120.16

86,349.61

2,541.59
68,254.73
934.56

3,494.93

75,225.81

11,123.80
(99.54)

11,024.26
894.78
30.72
704.00

9,394.76
3.47

9,398.23
9,247.07
78.50
0.20
-
15.91

18,739.91

14,999.25

3,740.66

67.44

66,597.66
1,499.70
(524.35)

67,573.01

2,356.55
50,920.21
1,474.07

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

4,203.55

9,247.07

54.65

3,788.43
-
61.07

1.33
6.34
3,000.00
-
1,045.13
146.58
4.17

4,947.75
1,452.82
-

27.70
0.43
13,382.16
0.01
1,393.51
195.44
-

Balance Carried to Balance Sheet

Basic and Diluted Earning per Share of face value of Rs.10 each (in Rupees)
[Refer Note 15, Schedule 'N']

Significant Accounting Policies
Notes on Accounts

‘M’
‘N’

As per our Report of even date

For and on behalf of the Board

For Chaturvedi & Shah
Chartered Accountants

For Rajendra & Co.
Chartered Accountants

For Deloitte Haskins & Sells
Chartered Accountants

D. Chaturvedi
Partner

A.R. Shah
Partner

P. R. Barpande
Partner

Mumbai
April 27, 2006

M. D. Ambani -
H. R. Meswani -
R. H. Ambani
M. L. Bhakta
Y. P. Trivedi
Dr. D. V. Kapur
M. P. Modi
S. Venkitaramanan
Prof. Ashok Misra
Prof. Dipak C. Jain
V. M. Ambani -

}

Chairman & Managing Director
Executive Director

Directors

Company Secretary

120

Growth is Life

Consolidated Cash Flow Statement for the year 2005 - 06

A: CASH FLOW FROM OPERATING ACTIVITIES:

Net Profit before tax as per Profit and Loss Account
Adjusted for:

Share in Income of Associates
Net Prior Year Adjustments
Investment written off / Provided
Dimunition in the value of Current Investments
Investment Grant (non cash income)
Provision for doubtful claims
(Profit) / Loss on Sale / Discarding of Assets
Depreciation
Transferred from Revaluation Reserve
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

(474.67)
0.88
-
23.43
(0.45)
0.05
0.27
4,947.75
(1,452.82)
-
37.77
(95.66)
(43.61)
(491.95)
934.56

858.38
(2,698.00)
(1,354.21)

2005-06

(Rs. in crore)

2004-05

11,024.26

9,125.45

(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

3,385.55

14,409.81

4,005.66

13,131.11

1,739.79
(181.66)
3,124.97

(3,193.83)
11,215.98
(0.88)
(941.96)
10,273.14

(11,405.48)
20.99
(45,545.88)
44,961.41
(1,776.24)
512.20
43.66

(13,189.34)

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)

RELIANCE INDUSTRIES LIMITED

121

Consolidated Cash Flow Statement for the year 2005 - 06 (Contd.)

2005-06

(Rs. in crore)

2004-05

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
Miscellaneous Expenditure

Net Cash from / (Used in) Financing Activities

Net Increase / (Decrease) in Cash and Cash Equivalents

450.49
-
6,090.12
(5,002.09)
3,085.88
(1,106.77)
(1,596.06)
(5.12)

1,916.45

(999.75)

Opening Balance of Cash and Cash Equivalents
Add: upon addition of New subsidiaries
Less: upon sale of subsidiaries

3,610.72
6.98
1.54 3,616.16

270.88
-
45.76

Closing Balance of Cash and Cash Equivalents

2,616.41

0.07
(149.61)
7,149.70
(7,731.66)
(2,282.67)
(771.84)
(1,920.17)
-

(5,706.18)

3,385.60

225.12

3,610.72

As per our Report of even date

For and on behalf of the Board

For Chaturvedi & Shah
Chartered Accountants

For Rajendra & Co.
Chartered Accountants

For Deloitte Haskins & Sells
Chartered Accountants

D. Chaturvedi
Partner

A.R. Shah
Partner

P. R. Barpande
Partner

Mumbai
April 27, 2006

M. D. Ambani -
H. R. Meswani -
R. H. Ambani
M. L. Bhakta
Y. P. Trivedi
Dr. D. V. Kapur
M. P. Modi
S. Venkitaramanan
Prof. Ashok Misra
Prof. Dipak C. Jain
V. M. Ambani -

}

Chairman & Managing Director
Executive Director

Directors

Company Secretary

122

Growth is Life

Schedules forming part of the Consolidated 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)

Issued, Subscribed and Paid up:

139 35 08 041 Equity Shares of Rs. 10 each fully paid up

1,393.51

(139 35 08 041)

Less: Calls in arrears - by others

0.34

TOTAL

1. Of the above Equity Shares:

As at
31st March, 2006

(Rs. in crore)

As at
31st March, 2005

2,500.00

500.00

3,000.00

1,393.17

2,500.00

500.00

3,000.00

1,393.09

1,393.51

0.42

(a)

(b)

48 17 70 552
(48 17 70 552)

Shares out of the issued and subscribed share capital before the buyback of shares were allotted as Bonus
Shares by capitalisation of Share Premium and Reserves.

52 31 98 799
(52 31 98 799)

(c)

33 04 27 345
(33 04 27 345)

2. During the Previous Year, the Company bought back and extinguished 28,69,495 equity shares.

3. 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).

RELIANCE INDUSTRIES LIMITED

123

Schedules forming part of the Consolidated Balance Sheet

SCHEDULE ‘B’

RESERVES AND SURPLUS

Revaluation Reserve

As per last Balance Sheet
Add: On Revaluation [Refer Note 6(a) to Schedule ‘N’]

Less: Net Assets transferred on Demerger [Refer Note No.5, Schedule 'N']
Less: Transferred to Profit and Loss Account [Refer Note 6 to Schedule 'N']
Less: Deduction on sale/ discarding of Revalued Assets

Capital Reserve

As per last Balance Sheet
Add: On Consolidation of New Subsidiaries

Exchange Fluctuation Reserve

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 Profit and Loss Account

Statutory Reserve

As per last Balance Sheet
Add: Transferred from Profit and Loss Account
Less: Write back on De-subsidiarisation of
Reliance Power Ventures Limited

General Reserve

As per last Balance Sheet
Less: Transferred to Capital redemption Reserve
on buy back of Equity shares
Less: Transferred to Profit and Loss Account*

Add: Transferred from Profit and Loss Account

Shares in Reserves of Associates
Revaluation Reserves :
As per last Balance Sheet
Additions during the year
Less: Write back of Reserves on Demerger of Associates

Capital Reserves :
As per last Balance Sheet
Less: Write back of Reserves on Demerger of Associates

Profit and Loss Account

TOTAL

As at
31st March, 2006

(Rs. in crore)

As at
31st March, 2005

2,729.88
22,497.34

25,227.22
18,792.18
1,452.82
4.66

291.28
167.86

887.94
-

15,467.66
-
0.25

15,467.41
1.84

559.32
27.70

15.91
0.43
15.91

10,121.79
-

-
10,121.79
13,382.16

338.28
-
328.57

9.71

43.70
43.70

2,733.53
-

2,733.53
-
-
3.65

291.28
-

885.07
2.87

2,729.88

291.28
-

4,977.56

459.14
2.88

887.94

15,825.07
146.74
210.67

15,467.66
2.25

15,465.57

15,465.41

587.02

557.99
1.33

9.57
6.34
-

559.32

0.43

15.91

7,185.73
2.87

61.07
7,121.79
3,000.00

23,503.95

10,121.79

318.33
19.95
-

338.28

43.70
-

43.70

9.71
3,740.66

49,634.86

381.98
9,247.07

39,700.58

* Cumulative amount transferred on account of Depreciation on Revaluation Rs. 2,563.43 crore (Previous Year Rs. 2,563.43 crore)

124

Growth is Life

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
Foreign Currency Loans
Rupee Loans

TOTAL

As at
31st March, 2006

(Rs. in crore)

As at
31st March, 2005

6,038.35

-
-

1,150.53
476.02

7,074.75

37.20
4.70

32.50

6,038.35

7,107.25

864.84
33.31

1,626.55

7,664.90

898.15

8,005.40

(a) Debentures referred to in A above to the extent of Rs. 3,266.67 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.

(d) Debentures referred to in A above are redeemable at par, in one or more installments, on various dates with the earliest
redemption being on 30th April, 2006 and the last being on 24th November, 2018. The debentures are redeemable as follows:
Rs.981.40 crore in financial year 2006-07, Rs.1,143.65 crore in financial year 2007-08, Rs.976.00 crore in financial year 2008-09,
Rs.742.30 crore in financial year 2009-10, Rs.175.00 crore in financial year 2010-11, Rs.250.00 crore in financial year 2011-12,
Rs.470.00 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)
ii)

From Banks
From Others

B. Short Term

i)
ii)
iii)

From Banks
From Others
Interest accrued and Due

TOTAL

As at
31st March, 2006

(Rs. in crore)

As at
31st March, 2005

8,483.20
2,155.35

3,882.51
1,151.93
4.91

6,459.40
1,809.73

10,638.55

8,269.13

886.06
1,656.50
-

5,039.35
15,677.90

2,542.56
10,811.69

RELIANCE INDUSTRIES LIMITED

125

Schedules forming part of the Consolidated Balance Sheet

SCHEDULE ‘E’

FIXED ASSETS

Gross Block

Depreciation

Description

As at
01-04-2005

Revaluation Additions @ Deductions/
Adjustments

As at
31-03-2006

For the
Year

Upto
31-03-2006

(Rs. in crore)

Net Block
As at
31-03-2006

As at
31-03-2005

Total
Previous Year
Capital Work-in-Progress

74.24
367.03
3,180.63
46,188.68
990.41
900.17
305.02
149.70
259.38
87.31
646.97
53,149.54

-
9.98
9.98

1,750.11
217.86
-
1,967.97

-
-
527.29
20,980.87
640.67
348.51
-
-
-
-
-
22,497.34

2.49
64.45
1,253.57
8,557.60
340.85
269.10
32.65
38.24
17.03
38.84
-
10,614.82

4.03
12.34
153.92
512.44
21.35
24.49
40.33
52.09
-
8.84
-
829.83

72.70
419.14
4,807.57
75,214.71
1,950.58
1,493.29
297.34
135.85
276.41
117.31
646.97
85,431.87

1.06
-
148.59
4,329.31
98.69
91.52
20.89
21.04
9.09
12.53
71.37

6.78
-
1,306.82
27,075.48
598.88
582.40
135.31
68.10
193.81
58.57
342.38
4,804.09 * 30,368.53

-
-
-

-
-
-
-

-
-
-

176.86
65.32
188.75
430.93

-
-
-

-
-
-
-

-
9.98
9.98

-
2.00
2.00

1,926.97
283.18
188.75
2,398.90

100.55
40.65
0.46
141.66

-
9.65
9.65

940.48
152.39
79.03
1,171.90

31,550.08
24,873.37

55,127.49
53,573.85

22,497.34 11,045.75
3,896.63

829.83
2,342.99

87,840.75 4,947.75
3,788.43
55,127.49

65.92
419.14
3,500.75
48,139.23
1,351.70
910.89
162.03
67.75
82.60
58.74
304.59
55,063.34

68.29
367.03
2,333.05
24,682.06
472.05
587.16
166.98
69.65
74.66
38.60
375.96
29,235.49

-
0.33
0.33

-
2.33
2.33

986.49
130.79
109.72
1,227.00

56,290.67
30,254.12
8,896.20

910.18
106.12
-
1,016.30

30,254.12

4,870.57

a)
b)

Leasehold Land includes Rs. 0.11 crore (Previous Year 0.11 crore) in respect of which lease-deeds are pending execution.
Buildings include :
i)
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

Cost of shares in Co-operative Societies Rs. 0.03 crore (Previous Year Rs. 0.01 crore).

Limited with a right of occupancy of certain area of a commercial premises.

iii) Rs.29,125 (Previous Year Rs.29,125) towards 5 shares of Rs.200 each of Bombay Gujarat Art Silk Vepari Mahajan Co-operative Shops & Warehouse Society Limited, 60 shares
of Rs.100 each of New Piece Goods Bazar Co. Limited, 15 shares of Rs.100 each of Pandesara Industrial Co-operative Society Limited, 20 shares of Rs.200 each of The Bombay
Market Art Silk Co-operative (Shops & Warehouses) Society Limited and 225 shares of Rs.100 each, Rs.25 paid up of Crimpers Industrial Co-operative Society Limited,
with a right of occupancy of certain area of concerned commercial premises.

c) Capital-work-in progress includes :

Rs.486.91 crore on account of pre-operative expenses (Previous Year Rs.226.17 crore).

i)
ii) Rs.320.58 crore on account of cost of construction materials at site. (Previous Year Rs.426.40 crore).
iii) Rs.438.36 crore on account of advance against capital expenditure. (Previous Year Rs.851.44 crore).

d) Additions/ Deletions and Capital work in Progress is net of a gain of Rs.39.17 crore on account of exchange difference during the year. (Previous Year a gain of Rs.54.37 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 Rs.22,497.34 crore being the amount added on revaluation of Building, Plant and Machinery, Electrical Installations and Equipments as at 01.08.2005.
g) Deduction from Gross Block includes assets demerged on 31st August, 2005 amounting to Rs. 355.40 crore as per the Scheme of Arrangement approved by the Hon'ble High

Court of Mumbai on 9th December, 2005 effective 21st December, 2005 as below:

Leasehold Land
Freehold Land

i)
ii)
iii) Buildings
iv) Plant & Machinery
v)
vi) Equipments
vii) Furniture & Fixtures
viii) Vehicles
ix) Aircrafts & Helicopters

Electrical Installations

Rs. in crore
4.03
12.34
151.15
67.44
18.49
13.15
39.32
40.64
8.84
355.40

* Refer to Note 6 , Schedule 'N'
** Other than internally generated
@ Additions include Reliance Netherlands BV's consolidated opening Gross Block of Rs. 2,887.34 crore.

126

Growth is Life

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

As at
31st March, 2006

(Rs. in crore)

As at
31st March, 2005

834.27
4,226.58
1,739.60
3,544.81

21.91
4,329.76

679.45
3,748.36
971.45
2,013.62

10,345.26

7,412.88

42.18
3,885.63

4,351.67

3,927.81

1.61

2.54

236.07
21.46

2,357.27
-

24.94
0.07

382.55
0.36

3,224.32
0.95

2,616.41

3,610.72

25.01

17,338.35

793.30
660.01

1,453.31

16,404.72

RELIANCE INDUSTRIES LIMITED

127

Schedules forming part of the Consolidated Balance Sheet

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

Note:

As at
31st March, 2006

(Rs. in crore)

As at
31st March, 2005

5,599.85
69.93

4,404.17
69.88

5,529.92
1,412.92
730.98

7,673.82

4,334.29
1,846.17
516.75

6,697.21

Lease rent receivable as at 31st August 2005, amounting to Rs. 46.20 crore were demerged as per the Scheme of Arrangement approved by the
Hon. High Court of Mumbai on 9th December, 2005 and which was effective from 21st December, 2005.

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 Income Tax
Provision for Fringe Benefit Tax
Provision for Wealth Tax
Provision for Leave encashment/ Superannuation / Gratuity
Other Provisions
Proposed Dividend
Tax on Dividend

TOTAL

As at
31st March, 2006

(Rs. in crore)

As at
31st March, 2005

7.41
12,446.71
0.81
58.29
27.11
-
0.19
330.39

944.14
30.72
20.65
412.78
1,204.42
1,393.51
195.44

4.48
13,207.79
2.74
51.84
28.40
0.03
0.54
366.41

12,870.91

13,662.23

703.92
-
12.65
174.60
1,387.87
1,045.13
146.58

4,201.66

17,072.57

3,470.75

17,132.98

Includes for capital expenditure Rs.728.18 crore (Previous Year Rs.525.37 crore).

# These figures do not include any amounts, due and outstanding, to be credited to Investor Education and Protection Fund except

Rs. 2.37 crore (Previous Year Rs. 1.17 crore) which is held in abeyance due to legal cases pending.

128

Growth is Life

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. 66.39 crore
(Previous Year Rs. 12.05 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

Share in Associates
Less: Elimination of Inter Company Profits

TOTAL

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

Opening stock of Subsidiary acquired during the year

TOTAL

2005-06

(Rs. in crore)

2004-05

43.61

94.41
88.01
309.53

0.41
95.25

474.67
-

491.95

95.66

6.32
92.43

474.67

1,204.64

58.10
207.54
103.60

15.99
31.18

455.34
385.71

369.24

910.76

47.17

17.82
85.08

69.63

1,499.70

2005-06

(Rs. in crore)

2004-05

3,544.81
1,739.60

2,013.62
971.45

2,985.07
179.18

5,284.41

3,164.25

2,120.16

2,013.62
971.45

2,757.04
752.38

3,509.42
-

2,985.07

3,509.42

(524.35)

RELIANCE INDUSTRIES LIMITED

129

Schedules forming part of the Consolidated Profit and Loss Account

SCHEDULE ‘K’

MANUFACTURING AND OTHER EXPENSES

2005-06

(Rs. in crore)

2004-05

RAW MATERIAL CONSUMED

56,626.42

43,575.32

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

ESTABLISHMENT EXPENSES

Insurance
Rent
Rates & Taxes
Other Repairs
Travelling Expenses
Payment to Auditors
Professional Fees
Loss on Sale / Discarding of Assets
General Expenses*
Wealth Tax
Charity and Donations

1,396.98
1,146.26
375.58
45.37
564.45
333.54
16.57
108.84

1,171.95

193.89
103.42

53.65
304.43
1,846.65
2,636.19

230.11
150.12
203.33
107.20
102.64
7.51
259.33
6.59
390.96
8.00
25.70

1,486.17
907.94
177.14
65.23
651.84
132.47
17.88
(151.29)

3,987.59

3,287.38

626.29

121.70
109.60

1,469.26

857.59

116.75
245.89
1,009.78
454.72

4,840.92

1,827.14

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

1,491.49

68,415.68

160.95

68,254.73

1,382.53

50,929.96

9.75

50,920.21

* Includes Dimunition in value of current investments Rs. 23.43 crore (Previous Year Rs. 2.94 crore) and Provision for Doubtful Claims of
Rs. 0.05 crore (Previous Year Rs. 69.88 crore).

130

Growth is Life

Schedules forming part of the Consolidated Profit and Loss Account

SCHEDULE ‘L’

INTEREST

Debentures
Fixed Loans
Others

TOTAL

SCHEDULE ‘M’

2005-06

569.03
219.97
145.56

934.56

(Rs. in crore)
2004-05

820.86
210.74
442.47

1,474.07

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, being non-integral foreign operations, 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 exchange fluctuation reserve.

c) 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.

i) 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.

j) 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 (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.

RELIANCE INDUSTRIES LIMITED

131

Notes on Consolidated Accounts

SCHEDULE ‘N’

NOTES ON ACCOUNTS TO CONSOLIDATED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT

1. The subsidiary companies considered in the consolidated financial statements are:

Name of the Subsidiaries

Reliance Industrial Investments and Holdings Limited
Reliance Industries (Middle East) DMCC
Reliance Ventures Limited
Reliance Strategic Investments Limited
Reliance Petroleum Limited
Reliance Infrastructure Limited
Reliance Netherland B.V.
Reliance Retail Limited

Country of
incorporation

India
U.A.E.
India
India
India
India
Netherlands
India

Proportion of
ownership interest

100%
100%
100%
100%
100%
100%
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 Power Ventures Limited
Reliance Technologies LLC.
Gas Transportation & Infrastructure Company Limited
Reliance Do Brasil Industria E Comercio De Produtos Texteis, Quimicos, Petroquimicos E Derivados Ltda (Reliance Brazil LLC.)

2. The significant associate companies considered in the consolidated financial statements are:

Name of the Associates

Reliance Industrial Infrastructure Limited
Indian Petrochemical Corporation Limited*
Reliance Europe Limited

Country of
incorporation

Proportion of
ownership interest

India
India
U.K.

46.23%
46.00%
50.00%

* Through Reliance Ventures Limited, Reliance Strategic Investments Limited, Reliance Pharmaceuticals (India) Private Limited,
Reliance Neutraceuticals Private Limited and Reliance Petroinvestments Limited.

3. The Consolidated audited financial statement of Reliance Netherland B.V. upto 31st December, 2005, and Reliance Industries (Middle
East) DMCC upto 31st December, 2005 have been prepared in accordance with International Financial Reporting Standard. The
difference in accounting policies between the company and its subsidiary is not material and there are no significant inter company
transactions from 1st January, 2006 to 31st March, 2006.

4. The Company's share in its associate, Indian Petrochemicals Corporation Limited, aggregating to Rs. 462.30 crores has been
accounted based on un-audited financial results for the year ended 31st March, 2006. The Board of Directors of the said company
have approved the merger of six entities with effect from 1st April, 2005, subject to necessary approvals and the accounting effect
consequent to said merger proposal will be given by the said company on obtaining the required approvals and the courts’ sanctions.
Accordingly, such financial results are subject to adjustment on account of the merger. However, the statutory auditors have carried
out the limited review of the financials of the said Company.

132

Growth is Life

Notes on Consolidated Accounts

SCHEDULE ‘N’ (Contd.)

5. The Company's Scheme of Arrangement (Scheme), to demerge certain undertakings to four resulting companies was approved by the

Hon’ble High Court of Mumbai on 9th December, 2005 and is effective from 21st December, 2005.

In terms of the Scheme, the assets and liabilities relatable to the demerged undertakings have been transferred at values appearing in the
books of accounts as on the close of business on 31st August, 2005. Accordingly, net assets of Rs.19,119.55 crore were demerged to the four
resulting entities i.e. Reliance Communication Ventures Limited - Rs.15,389.35 crore, Reliance Energy Venture Limited - Rs.2,921.02
crore, Reliance Capital Ventures Limited - Rs.512.41 crore and Reliance Natural Resources Limited (formerly Global Fuel Management
Services Limited) - Rs.296.77 crore. The aggregate carrying amount of the above assets, in the consolidated financial statements of
Rs. 18,792.18 crore (after consolidation adjustments of Rs. 327.37 crore) is appropriated against the revaluation reserve, pursuant to the
Court order.

6. (a) The Company, based on the report by international valuers, has revalued plant, Equipment and buildings situated at Patalganga,
Hazira and Jamnagar as at 1st August, 2005 by an amount of Rs.22,497.34 crore and an equivalent amount has been credited to
Revaluation Reserve Account. Consequent to the revaluation, there is an additional charge for depreciation of Rs.1,409.08 crore for the
year and an equivalent amount has been withdrawn from Revaluation Reserve and credited to the Profit and Loss Account.

(b) The Gross Block of Fixed Assets include Rs.2,725.22 crore (Previous Year Rs.2,729.88 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.43.74 crore
(Previous Year Rs.61.07 crore) and an equivalent amount, which was hitherto being withdrawn from General Reserves, has now been
withdrawn from Revaluation Reserve and credited to the Profit and Loss Account. This has no impact on the profit for the year.

7. Transfer to General Reserve from Profit and Loss Account include Rs.12,850.00 crore transferred on 31st August, 2005.

8. Minority Interest includes share application money received by Reliance Petroleum Limited of Rs. 450.00 crore (Previous Year Rs. Nil).

9. During the year, Reliance Retail Limited, the Company's subsidiary, established Reliance Retail Employees Restricted Stock Unit Plan
(RRSU2006). The subsidiary is authorized to issue up to Fifty One crore Restricted Stock Units (RSU’s) to Eligible Employees (including
employees of Reliance Industries Limited, the holding company) under RRSU 2006. The RSU’s vest at the end of one year from the date
of grant and upon vesting the employees are entitled to one equity share for every RSU. The excess of fair price on the date of grant over
the exercise price is recognized as deferred compensation cost and amortized over the vesting period. As on 31st March, 2006, the company
has granted fifty one crore RSU’s under RRSU 2006 and no RSU’s have vested till 31st March, 2006. No deferred compensation cost has
been recognized by the subsidiary since difference between the fair value and the exercise price is nil.

10. Turnover includes Income from Services of Rs. 99.01 crore (Previous Year Rs. 893.24 crore).

11. Managerial Remuneration:

ii)

iii)

iv)

vi)

Salaries

Perquisites

Commission

Leave salary / Encashment

Contribution to provident fund and Superannuation fund

Provision for gratuity

(Rs. in crore)

2005-06

2004-05

1.41

1.60

40.22

0.42

0.35

0.36

44.36

1.65

1.46

51.59

0.40

0.09

55.19

12. A sum of Rs. 0.88 crore (net debit) (Previous Year Rs. 2.86 crore (net debit) is included under Establishment expenses representing Net

Prior Period Items.

13. Expenditure on account of Premium on forward exchange contacts to be recognized in Profit and Loss Account of subsequent accounting

period aggregate to Rs.93.99 crore (Previous Year Rs.5.16 crore).

RELIANCE INDUSTRIES LIMITED

133

Notes on Consolidated Accounts

SCHEDULE ‘N’ (Contd.)

14. The deferred tax liability as at 31st March, 2006 comprise of the following:

(a) Deferred Tax Liability
Related to fixed assets

(b) Deferred Tax Assets

Disallowance u/s 43B of the Income Tax Act, 1961

(c)

Provision for deferred tax (Net)

15. EARNINGS PER SHARE (EPS)

(a) Net Profit as per Profit and Loss Account

(Rs. in crore)

As at 31st
March, 2006

5,092.52

121.70

4,970.82

2005-06

9,398.23

(Rs. in crore)
As at 31st
March, 2005

4,633.80

366.98

4,266.82

2004-05

7,628.23

(b) Weighted Average number of equity shares

139,35,08,041

139,59,09,459

used as denominator for calculating EPS

(c)

Basic and Diluted Earnings per share of
face value of Rs.10 each (Rs.):

67.44

54.65

16. FINANCIAL AND DERIVATIVE INSTRUMENTS

(a) Derivative contracts entered into by the company and outstanding as on 31st March, 2006

(i)

For hedging Currency and Interest Rate Related Risks:

Nominal amounts of derivative contracts entered into by the company and outstanding as on 31st March, 2006 amount to
Rs. 6,807.66 crore.

Category wise break up is given below

Sr.No

Particulars

Interest Rate Swaps

Currency Swaps

Options

(ii)

For hedging commodity related risks :

Category wise break up is given below

Sr. No

Particulars

Net forward swaps

Futures

Spreads

Margin hedging

Net Options

(Rs. in crore)

As At 31st

March, 2006

3,636.50

1,066.88

2,104.28

Petroleum
product sales
768

150

1,300

37,800

12,300

(in Kbbl)
Crude oil
purchases
130

830

6,425

8,600

(b) All derivative and financial instruments acquired by the company are for hedging purposes only.

(c)

Foreign currency exposure that are not hedged by derivative instruments as on 31st March, 2006 amount to Rs.15,073.49 crore.

Note: Previous Year figures are not included as the above disclosure has become mandatory in respect of accounting periods ending on or after

31st March, 2006.

134

Growth is Life

Notes on Consolidated Accounts

SCHEDULE ‘N’ (Contd.)

17. 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
2005-2006 2004-2005

Refining
2005-2006 2004-2005

Others

Unallocable

Sub-Total

Eliminations

Total

2005-2006

2004-2005 2005-2006 2004-2005

2005-2006

2004-2005 2005-2006 2004-2005 2005-2006 2004-2005

1 Segment Revenue
External Turnover
Inter Segment Turnover
Gross Turnover
Less: Excise duty/Service Tax
recovered
Net Turnover

2 Segment Result before Interest

and Taxes
Less: Interest Expense
Add: Interest Income
Profit Before Tax
Current Tax
Fringe Benefit Tax
Deferred Tax
Net Profit after Tax
3 Other Information
Segment Assets
Segment Liabilities
Capital Expenditure
Depreciation
Non Cash Expenses other
than depreciation

32,801.61
-
32,801.61
3,243.70

29,744.75
-
29,744.75
3,587.59

56,363.94
14,753.45
71,117.39
4,667.72

41,342.12
10,357.90
51,700.02
3,516.92

1,772.39
100.91
1,873.30
1.71

2,623.59
-
2,623.59
8.29

-
-
-
-

90,937.94
14,854.36
105,792.30
7,913.13

73,710.46
10,357.90
84,068.36
7,112.80

-
(14,854.36)
(14,854.36)
-

-
(10,357.90)
(10,357.90)
-

90,937.94
-
90,937.94
7,913.13

73,710.46
-
73,710.46
7,112.80

29,557.91

26,157.16

66,449.67

48,183.10

1,871.59

2,615.30

97,879.17

76,955.56

(14,854.36)

(10,357.90)

83,024.81

66,597.66

4,712.84
-
-
4,712.84
-
-
-
4,712.84

36,277.96
5,238.59
3,770.13
1,438.07

3,762.46
-
-
3,762.46
-
-
-
3,762.46

14,536.94
4,961.13
1,241.83
1,447.66

5,915.68
-
-
5,915.68
-
-
-
5,915.68

43,181.53
7,493.63
5,337.69
1,730.65

5,520.66
-
-
5,520.66
-
-
-
5,520.66

30,533.74
7,897.58
2,332.26
1,574.89

1,111.84
-
-
1,111.84
-
-
-
1,111.84

7,327.68
826.17
2,447.14
320.65

1,191.77
-
-
1,191.77
-
-
-
1,191.77

19,053.55
2,771.55
1,703.00
607.38

(270.02)
934.56
491.95
(712.63)
894.78
30.72
704.00
(2,342.13)

10,084.30
3,514.18
629.08
5.56

(244.61)
1,474.07
369.24
(1,349.44)
705.22
-
792.00
(2,846.66)

17,186.38
1,502.72
101.92
97.43

11,470.34
934.56
491.95
11,027.73
894.78
30.72
704.00
9,398.23

96,871.47
17,072.57
12,184.04
3,494.93

10,230.28
1,474.07
369.24
9,125.45
705.22
-
792.00
7,628.23

81,310.61
17,132.98
5,379.01
3,727.36

69.88

23.48

69.88

-
-
-
-
-
-
-
-

-
-
-
-

11,470.34
934.56
491.95
11,027.73
894.78
30.72
704.00
9,398.23

96,871.47
17,072.57
12,184.04
3,494.93

10,230.28
1,474.07
369.24
9,125.45
705.22
-
792.00
7,628.23

81,310.61
17,132.98
5,379.01
3,727.36

23.48

69.88

(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

(c) The Previous Year amounts in resepect of “Other Segment” included businesses carried out through associates demerged during the year.

Hence the amounts of the Previous Year are not comparable.

Notes on Consolidated Accounts

SCHEDULE ‘N’ (Contd.)

(ii) Secondary Segment Information:

Segment Revenue - External Turnover

- Within India

- Outside India

Total Revenue

Segment Assets

- Within India

- Outside India

Total Assets

Segment Liability

- Within India

- Outside India

Total Liability

Capital Expenditure

- Within India

- Outside India

Total Expenditure

RELIANCE INDUSTRIES LIMITED

135

(Rs. in crore)

2005-2006

2004-2005

57,775.09

33,162.85

90,937.94

92,053.49

4,817.98

96,871.47

16,473.85

598.72

17,072.57

12,061.64

122.40

12,184.04

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

18. PROJECT DEVELOPMENT EXPENDITURE

(In respect of Projects up to 31st March, 2006, included under Capital work-in-progress)

Opening Balance

Add: Project Development Expenditure transferred from

Profit and Loss Account
Interest Capitalised

160.95
636.75

Less: Project Development Expenses Capitalised during the year
Less: De-subsidiarised during the year

Closing Balance

2005-06

226.17

797.70

1,023.87

530.62
0.53

492.72

(Rs. in crore)
2004-05

9.75
296.69

113.00

306.44

419.44

193.27
-

226.17

136

Growth is Life

Notes on Consolidated Accounts

SCHEDULE ‘N’ (Contd.)

19.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

(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 (including third

party bills discounting)

(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

As at 31st
March, 2006

728.42

29,511.02

2,349.19

646.71

429.40

48.06

578.12

13.27

(Rs. in crore)
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

(vi) Sales tax deferral liability assigned

5,964.48

5,333.82

(D)The Income-Tax assessments of the Company have been completed up to Assessment Year 2003-04. The disputed demand outstanding
up to the said Assessment Year is Rs.1,216.44 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.

RELIANCE INDUSTRIES LIMITED

137

Notes on Consolidated Accounts

SCHEDULE ‘N’ (Contd.)

20.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 Industrial Infrastructure Limited

Associate Companies and Joint Ventures

Reliance Europe Limited

Reliance Petroinvestments Limited

Reliance Rubber and Chemicals Limited

Indian Petrochemicals Corporation Limited (IPCL)

Reliance Nutraceuticals Private Limited

Reliance Pharmaceuticals (India) Private Limited

Reliance Utilities and Power Limited

Reliance Ports and Terminals Limited

Rosche Trading Private Limited (upto 25th March, 2006)

Reliance Infocomm Limited (upto 31st August, 2005)

Reliance Communications Infrastructure Limited (upto 31st August, 2005)

Reliance Capital Limited (upto 31st August, 2005)

Reliance Telecom Limited (upto 31st August, 2005)

Reliance Energy Limited (upto 31st August, 2005)

Reliance General Insurance Company Limited (upto 31st August, 2005)

Reliance Life Insurance Company Limited (upto 31st August, 2005)

Relene Petrochemicals Limited (from 22nd March, 2006 to 28th March, 2006)

Unincorporated Oil and Gas Joint Ventures

Shri Mukesh D. Ambani

Shri Anil D. Ambani (upto 18th June, 2005)

Shri Nikhil R. Meswani

Shri Hital R. Meswani

Shri H. S. Kohli

Dhirubhai Ambani Foundation

Jamnaben Hirachand Ambani Foundation

Hirachand Govardhandas Ambani Public Charitable Trust

HNH Trust and HNH Research Society

Jamnaben Hirachand Ambani Education Trust

Dhirubhai Ambani Institute of Information and Communication
Technology, Gandhinagar (upto 31st August, 2005)

Key Managerial Personnel

Others

(Rs. in crore)
2005-06 2004-05

Name of the Company/
Nature of Transactions
Subsidiaries With Associates:

With Reliance Telecom Limited
Opening Balance as on 1st April

- Investments in Equity Shares
(Rs. 438) (Previous Year Rs. 438)

52.59

Closing Balance as on 31st March

(444.34)
-

-
-

Reliance Power Ventures Limited
(Subsidiary upto 28th March, 2006)

(Rs. in crore)
2005-06 2004-05

138

Growth is Life

Notes on Consolidated Accounts

SCHEDULE ‘N’ (Contd.)

(ii) Transactions during the year with related parties (Excluding reimbursements):

Name of the Company/
Nature of Transactions
Subsidiaries With Associates:

Reliance Ventures Limited

With Reliance Telecom Limited
Opening Balance as on 1st April

- Investments in Equity Shares

Transactions:
Investments in Preference Shares
Closing Balance as on 31st March

With Rosche Trading Private Limited
(Associate Upto 25th March, 2006)
Opening Balance as on 1st April

- Investments in Equity Shares
0.05
- Investments in Preference Shares 0.50

Closing Balance as on 31st March

- Investments in Equity Shares
-
- Investments in Preference Shares -

0.05
0.50

With Reliance Petroinvestments Limited
Opening Balance as on 1st April

- Investments in Equity Shares
- Loans
Transactions:
Loans Given
Loans Received back
Closing Balance as on 31st March

4.44

4.44
2,579.09 2,608.03

(0.06)
51.35

(0.02)
28.97

- Investments in Equity Shares
- Loans

4.44

4.44
2,527.80 2,579.09

Reliance Industrial Investments and
Holdings Limited-Subsidiary

With Reliance Energy Limited
Opening Balance as on 1st April

- Investments in Equity Shares

214.89

Transactions:
Dividend Received
Closing Balance as on 31st March

1.91
-

6.54
-

With Reliance Pharmaceuticals (India)
Private Limited
Transactions:
Sale of Equity Shares of Reliance
Power Ventures Limited

With Reliance Nutraceuticals Private Limited
Transactions:
Sale of Equity Shares of Reliance
Power Ventures Limited

1.01

With Reliance Energy Limited
Opening Balance as on 1st April

- Investments in Equity Shares
- Investments in Warrants

2,032.94 1,444.42
-

568.01

Transactions:
Investments in Equity Shares
Investments in Warrants
Dividend Received
Miscellaneous Income
Closing Balance as on 31st March

(631.11)
(63.11)
19.67
-
-

(588.52)
(568.01)
31.63
0.01
-

With Reliance Pharmaceuticals (India)
Private Limited
Transactions:
Advance against Preference
Share application Money

With Reliance Nutraceuticals
Private Limited
Transactions:
Advance against Preference
Share application Money

With Indian Petrochemicals
Corporation Limited
Transactions:
ICD Taken
Interest on ICD
Closing Balance as on 31st March
Interest Payable on ICD
ICD

With Reliance Pharmaceuticals
(India) Private Limited
Opening Balance as on 1st April

(2.22)

1,000.00
(25.95)

(20.12)
(1000.00)

- Investment in Equity Shares
(Rs.40,000) (Previous Year Nil)
- Loans & Advances

2.22

Closing Balance as on 31st March
- Investment in Equity Shares
(Rs.40,000) (Previous Year Rs.40,000)
- Loans & Advances

-
-

2.22

With Reliance Petroinvestments Limited
Transactions:
Compensation charges

(0.02)

Reliance Strategic and Investments
Limited - Subsidiary

RELIANCE INDUSTRIES LIMITED

139

Notes on Consolidated Accounts

SCHEDULE ‘N’ (Contd.)

Name of the Company/
Nature of Transactions
Subsidiaries With Associates: (Contd.)

(Rs. in crore)
2005-06 2004-05

Name of the Company/
Nature of Transactions
With Demerged Associates effective 1st September, 2005

(Rs. in crore)
2005-06 2004-05

With Reliance Nutraceuticals Private Limited
Opening Balance as on 1st April

- Investment in Equity Shares
(Rs.30,000) (Previous Year Nil)
- Loans & Advances

Closing Balance as on 31st March
- Investment in Equity Shares
(Rs. 30,000) (Previous Year Rs. 30,000)
- Loans & Advances

2.22

Relene Petrochemicals Limited - Subsidiary
(Subsidiary between 8th June, 2005 to 21st March, 2006)

With Indian Petrochemicals Corporation Limited
Transactions from 8th June, 2005 to 21st March, 2006:
Purchases of Materials
Sale of Products

(27.52)
87.86

Reliance Infrastructure Limited-Subsidiary
With Reliance Utilities and Power Limited
Transactions:
Rent Income (Re. 1)
Closing Balance as on 31st March
- Sundry Debtors (Re. 1)

2.22

-
-

Name of the Company/
Nature of Transactions
With Demerged Associates effective 1st September, 2005

(Rs. in crore)
2005-06 2004-05

Reliance Infocomm Limited - Associate
Opening Balance as on 1st April

31.50

- Investment in Equity Shares*
31.50
- Investment in Preference Shares 8,100.00 8,100.00
- Sundry Debtors
-
- Sundry Creditors
-
14.57
- Advances receivable in cash or kind
- Premium receivable on
Preference Shares
- Guarantee

197.58
180.55 1,344.28

0.32
(90.73)
13.46

1,108.27

Transactions:
Rental Income
Tower Sales
Sale of Fixed Assets
Sale of Investments
Lease Rental Income
Service Income
Telephone Expenses
Purchase of Fixed Assets
Premium Accrued on Investment
on Preference Shares
Conversion of Preference Shares
to Equity Shares*
Premium on redemption of Preference
Shares - Converted to Equtiy Shares*
Closing Balance As on 31st March

9.84
16.24
-
-
-
-
(2.61)
-
-

(8,100.00)

(1,108.27)

25.70
55.11
218.59
0.63
2.04
59.36
(16.68)
(0.50)
910.69

Reliance Commmunications Infrastructure Limited - Associate

Opening Balance as on 1st April
- Investments in DDB’s
- Investments in Equity Shares*
- Loans taken
- Interest receivable on DDB’s
- Advances receivable in cash or kind
- Interest Payable on ICD

1,600.02 1,600.02
2,331.00 2,331.00
(1,600.00) (1,147.00)
732.02
37.60
(75.31)

939.38
34.70
(39.41)

Transactions:
Loans repaid
Bandwidth,Telephone,Internet
& Leaseline charges
Interest Expense on ICD
Interest Income on DDB’s
Rent Income
Loans taken
Rent Paid
Sale of Fixed Assets
Lease Rental Income
Processing & Hire Income
Sale of Products
Other Income
Closing Balance As on 31st March

(1,600.00) (2,282.00)
(40.33)

(16.00)

(95.23)
(57.18)
207.34
88.00
4.29
10.11
- 2,735.00
(0.45)
- 1,187.44
5.36
-
0.05
19.32
- 1,090.08
0.22
-
-
-

Reliance Capital Limited - Associate

Opening Balance as on 1st April

- Investments in Equity Shares*
- Other Deposits
- Leased Fixed Assets
- Sundry Creditors
- Advances receivable in cash or kind

485.80
4.01
2.74
-
-

485.80
18.09
4.66
(72.53)
60.86

Transactions:
Dividend Income
Rent Expenses
Lease Deposit Repaid
Lease Charges
Lease terminated during the year
Purchase of Asset
Loans Taken
Loans Repaid
Interest Paid
Purchase of Government Securities
Purchase of Hand Sets
Advance Given
Advance Received back
Sale of Investments
Interest Income
Other Expenses
Closing Balance As on 31st March

17.43
18.03
(5.28)
(1.25)
(14.08)
(3.62)
(5.14)
(0.78)
(1.92)
(1.93)
-
(0.01)
- 1,555.02
- (1,555.02)
(7.58)
-
(52.86)
-
-
(281.04)
- (4,151.63)
- 4,151.63
117.37
-
-
19.16
(0.08)
-
-
-

140

Growth is Life

Notes on Consolidated Accounts

SCHEDULE ‘N’ (Contd.)

Name of the Company/
Nature of Transactions
With Demerged Associates effective 1st September, 2005 (Contd.)

(Rs. in crore)
2005-06 2004-05

Name of the Company/
Nature of Transactions
With Associates & Others

(Rs. in crore)
2005-06 2004-05

Reliance Telecom Limited - Associate

Reliance Industrial Infrastructure Limited

Opening Balance as on 1st April

- Investments in Equity Shares*
- Guarantee
- Advances receivable in cash or kind

4.46
125.08
-

5.10
298.91
2.46

Transactions:
Bank Guarantee Commission Received
Closing Balance As on 31st March

Reliance Energy Limited - Associate

0.80
-

3.34
-

Opening Balance as on 1st April

- Investments in Equity Shares*
- Sundry Debtors

33.73
5.28

33.73
3.43

Transactions:
Income towards Fuel Management Fee
Dividend Income
Purchase of Government Securities
Sale of G Series Debentures
Closing Balance As on 31st March

3.85
1.94
0.74
2.04
-
(14.99)
- 1,488.92
-
-

Reliance Life Insurance Company Limited - Associate

Opening Balance as on 1st April

- Investments in Equity Shares 16.58 16.58
(4.25)
- Sundry Creditors
35.00
- Deposits
- Guarantee
-
2.15
- Lease Fixed Assets
60.47
- Advance
0.53
- Advances receivable in cash or kind

(7.28)
35.00
4.04
-
-
-

(8.43)
(9.75)
(2.17)
(6.41)
2.23
-
(33.77)
2.04
-

- Investments in Equity Shares 16.58
(4.79)
- Sundry Creditors
35.00
- Deposits
4.04
- Guarantee

(4.04)
(6.00)
-
(5.35)
2.23
(0.05)
(23.05)
1.82
0.60

16.58
(7.28)
35.00
4.04

- Investments in Equity Shares*
- Advance receivable in cash or kind

Closing Balance As on 31st March

0.50
-
-

0.50
0.05
-

Indian Petrochemicals Corporation Limited

Opening Balance as on 1st April

Reliance General Insurance Company Limited - Associate

Opening Balance as on 1st April

- Investments in Equity Shares*
- Advances receivable in cash or kind

25.50
0.52

25.50
1.65

Transactions:
Insurance Premium
Claims received
Purchase of Government Securities
Sale of G Series Debentures
Professional Charges Received
Rent
Closing Balance As on 31st March

(7.86)
0.03
-
-
-
-
-

(56.74)
2.39
(19.91)
127.85
4.88
1.00
-

- Sundry Debtors
- Advances receivable in cash or kind
- Sundry Creditors

18.68 123.45
6.70
(316.14)

21.41
(119.89)

Transactions:
Purchase of Capital Goods
Purchases of Materials
Sale of Products
Job Conversion Income
Service Income
Interest Income
Closing Balance as on 31st March

(0.09)
-
(512.79)
(546.98)
2,750.36 2,633.53
7.32
9.43
98.94
-
0.37
-

- Sundry Debtors
- Sundry Creditors
- Advances receivable in cash or kind

125.82
(7.23)
2.26

18.68
(119.89)
21.41

RELIANCE INDUSTRIES LIMITED

141

Notes on Consolidated Accounts

SCHEDULE ‘N’ (Contd.)

Name of the Company/
Nature of Transactions
With Associates & Others (Contd.)

(Rs. in crore)
2005-06 2004-05

Name of the Company/
Nature of Transactions
With Associates & Others

Reliance Europe Limited

Relene Petrochemicals Limited

(Rs. in crore)
2005-06 2004-05

Opening Balance as on 1st April

(Associate between 22nd March, 2006 to 28th March, 2006)

Transactions:
Purchase of Materials
Commission on Consignment Sales Received
Closing Balance as on 31st March

(16.19)
0.23
-

-
-
-

(2.85)

Donation given to
Dhirubhai Ambani Foundation
Hirachand Govardhandas Ambani
Public Charitable Trust
(0.47)
Jamnaben Hirachand Ambani Foundation
(0.25)
Sir H.N. Medical Research Society
(0.90)
Dhirubhai Ambani Memorial Trust -

Payments to Key Managerial Personnel
Shri Mukesh D. Ambani
Shri Anil D. Ambani (upto 18th June, 2005)
Shri Nikhil R. Meswani
Shri Hital R. Meswani
Shri H.S. Kohli

(24.77)
(5.48)
(6.31)
(6.30)
(1.50)

(7.56)

(0.28)
(0.64)
-
(0.01)

(21.90)
(21.90)
(5.59)
(5.59)
(0.21)

- Investments in Equity Shares
- Sundry Creditors
- Advances
- Guarantee

3.93
(4.09)
9.63
87.49

3.93
(4.10)
0.02
-

Transactions:
Purchase of Capital Goods
Professional fees paid
Charter Hire charges
Closing Balance as on 31st March

(137.86)
(16.58)
(9.70)

-
(16.82)
(26.66)

Others

- Investments in Equity Shares
- Sundry Creditors
- Advances
- Guarantee

3.93
(3.60)
-
89.23

3.93
(4.09)
9.63
87.49

Reliance Utilities and Power Limited

Opening Balance as on 1st April

- Deposits
- Sundry Debtors
- Sundry Creditors

200.00 200.00
-
0.03
(0.55)
(0.69)

Transactions:
Electric Power and Fuel Charges
Other Income
Rent Expenses

(329.42)
0.04
(0.04)

(349.39)
0.03
-

Closing Balance as on 31st March

- Deposits
- Sundry Debtors
- Sundry Creditors

200.00
0.10
(27.46)

200.00
0.03
(0.69)

Reliance Ports and Terminals Limited

Opening Balance as on 1st April

- Deposits
- Sundry Debtors
- Guarantee

900.00
4.29
0.98

900.00
8.79
22.44

Transactions:
Hire Charges Paid
Product Handling charges
Rent Expense
Tug Hire Income
Warehousing and Distribution Charges
Rent Income
Closing Balance as on 31st March

(50.00)
(85.72)
(84.16)
7.92
(679.51)
-

(50.00)
(87.46)
(84.00)
8.12
(646.15)
0.11

- Deposits
- Sundry Debtors
- Sundry Creditors
- Guarantee

900.00
8.79
(105.34)
0.98

900.00
4.29
-
0.98

As at
31st March, 2006

(Rs. in crore)
As at
31st March, 2005

142

Growth is Life

Notes on Consolidated Accounts

SCHEDULE ‘N’ (Contd.)

21. DETAILS OF INVESTMENTS :

A. INVESTMENTS IN ASSOCIATES

LONG TERM INVESTMENTS

Other Investments
In Equity Shares - quoted, fully paid up

- Reliance Energy Limited of Rs.10 each

(8,10,63,496)

- Reliance Capital Limited of Rs.10 each

(6,00,89,966)

69,80,000 Reliance Industrial Infrastructure Limited

(69,80,000) of Rs.10 each

In Equity Shares - Unquoted, fully paid up

- Reliance Telecom Limited of Rs. 10 each

(70,95,130)

- Reliance Infocomm Limited of Re. 1 each

(31,50,00,000)

- Reliance General Insurance Company Limited of Rs. 10 each

(2,55,00,175)

- Reliance Life Insurance Company Limited of Rs. 10 each

(5,00,175)

- Reliance Communications Infrastructure Limited of

(90,00,00,000) Re. 1 each

11,08,500 Reliance Europe Limited of Sterling Pound 1 each

(11,08,500)

22,500 Reliance LNG Limited of Rs. 10 each

(-)

73.73

21.02

0.02

44,38,777 Reliance Petroinvestments Limited of Rs.10 each

750.78

(44,38,777)

- Rosche Trading Private Limited of Rs.10 each

(50,000)

In Warrants Unquoted, Partly Paid Up

- Reliance Energy Limited of Rs.640 each,

(98,61,228 ) Rs. 576 paid up

In Preference Shares Unquoted, Fully paid up

- 10% Cumulative Redeemable/Optionally Convertible

(162,00,00,000) Preference Shares of Reliance Infocomm Limited

of Re. 1 each

In Preference Shares Unquoted, Partly paid up

- Rosche Trading Private Limited of Rs.100 each,

(90,000) Rs.55 paid up

In Debentures Unquoted, fully paid up

- Deep Discount Bonds of Reliance Communications

(6,40,140) Infrastructure Limited of Maturity Value Rs. 68,550 each

771.82

2,912.26*

641.91*

67.43

3,621.60

59.46*

22.83*

34.60*

0.50*

2,220.53*

17.43

288.24

0.05

2,643.64

568.01

8,100.00

0.50

1,600.02

Total Investment in Associates (A)

845.55

16,533.77

RELIANCE INDUSTRIES LIMITED

143

As at
31st March, 2006

(Rs. in crore)
As at
31st March, 2005

0.08

-
-

0.01

0.09

0.08

-
-

0.01

10.00

13.00

Notes on Consolidated Accounts

SCHEDULE ‘N’ (Contd.)

B. INVESTMENTS IN OTHERS

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 (Rs. Nil; Previous Year Rs. 20,000)
7 Years National Savings Certificate (Deposited with Sales
Tax Department) (Rs 11,000; Previous Year Rs. 12,000)
6 Years National Savings Certificate(Deposited with Sales
Tax Department)

Trade Investments
In Equity Shares Unquoted, fully paid up

- The Art Silk Co-operative Society Limited of Rs. 100 each

(165) (Rs. Nil; Previous Year Rs.16,500)

1,00,00,000 Petronet India Limited of Rs. 10 each
(1,00,00,000)

1,30,00,000 Petronet VK Limited of Rs. 10 each

(1,30,00,000)

- Reliance Petroproducts Private Limited Of Rs. 10 each

(118) (Rs.Nil; Previous Year Rs.1,180)

- Reliance Global Trading Private Limited of Rs.10 each

(145) (Rs Nil; Previous Year Rs.1,450)

10.00

13.00

23.00

In Equity Shares Unquoted, Partly Paid up

225 Crimpers Industrial Co-operative Society Limited of Rs.100

(225) each, Rs. 25 paid up (Rs. 5,625;Previous Year Rs. 5,625)
- Reliance Global Trading Private Limited of Rs.10 each,

(226) Rs.2.50 paid up (Rs Nil; Previous Year Rs.565)

- Reliance Petroproducts Private Limited of Rs. 10 each,

(182) Rs.2.50 paid up (Rs. Nil; 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)

85,71,420 ICICI Bank Limited of Rs.10 each

(-)

23.00

4.05

0.01

450.00

454.06

0.00

4.05

0.01

4.06

0.09

23.00

144

Growth is Life

Notes on Consolidated Accounts

SCHEDULE ‘N’ (Contd.)

As at
31st March, 2006

(Rs. in crore)
As at
31st March, 2005

In Equity Shares - Unquoted, fully paid up

- Air Control & Chemical Engineering Co. Limited of

(1,000) Rs. 100 each

- Treuhandgemeinschaft Deutsche Chemiefaser GmbH,

(-) Frankfurt / Main

- Reliance Netherlands B.V. of Euro 1 Each

(10,000)

- Farvision Securities Private Limited of Rs.100 each

(1,700)

- Observer (India) Limited of Rs.10 each

(22,900)

150 Reliance Aromatics & Petrochemicals Private Limited

(150) of Rs.10 each (Rs.1,500; Previous Year Rs.1,500)

185 Reliance Energy & Project Development Private Limited

(185) of Rs.10 each (Rs.1,850; Previous Year Rs.1,850)

- Glory Bullion Trading Private Limited of Rs.10 each

(900) (NIL; Previous Year Rs. 9,000)

0.01

- Kunj Bihari Agrotech Research Private Limited of Rs.100 each

(90) (NIL; Previous Year Rs.9,000)

- New Empire Millinium Investments and Trading Private Limited

(900) of Rs.10 each (Rs.Nil; Previous Year Rs.9,000)

- WorldTel Holding Limited, Bermuda of US$ 0.05 each

(69,524)

3,000 Reliance Nutraceuticals Private Limited of Rs. 10 each

(3,000) (Rs.30,000; Previous Year Rs.30,000)

4,000 Reliance Pharmaceuticals (India) Private Limited of

(4,000) Rs. 10 each (Rs.40,000; Previous Year Rs.40,000)

Trevira UK Limited
Trevira Italia S.r.l., Mailand
Trevira Iberica S.L., Barcelona
Trevira France S.a.r.l, Paris
Trevira Polska Sp. z o.o., Lodz
Industriepark Werk Bobingen GmbH & Co. KG, Bobingen
Industriepark Werk Bobingen Verwaltungsgesellschaft GmbH,
Bobingen

0.19
2.06
0.08
0.40
0.13
10.61
0.07

In Debentures quoted, fully paid up

1,250 14% Non Convertible Debentures of

(1,250) MH Mills & Industries Limited of Rs.45 each

13.55

0.01

0.06

0.09

0.04

1.93*

-
-
-
-
-
-
-

2.13

0.01

RELIANCE INDUSTRIES LIMITED

145

Notes on Consolidated Accounts

SCHEDULE ‘N’ (Contd.)

As at
31st March, 2006

(Rs. in crore)
As at
31st March, 2005

In Debentures Unquoted, fully paid up

27,60,200 Reliance Polyolefins Private Limited (Zero coupon Optionally 276.02

(40,13,900) Fully Convertible Debentures of Rs.1,000 each)

- Reliance Chemicals Private Limited (Series I) (Zero coupon
(1,74,000) Optionally Fully Convertible Debentures of Rs.1,000 each)
19,47,242 Reliance Chemicals Private Limited (Series II) (Zero coupon 194.72

(28,84,042) Optionally Fully Convertible Debentures of Rs.1,000 each)
20,08,860 Reliance Aromatics and Petrochemicals Private Limited
(32,39,660) (Zero coupon Optionally Fully Convertible Debentures of

Rs.1,000 each)

20,08,760 Reliance Energy & Project Development Private Limited
(32,39,560) (Zero coupon Optionally Fully Convertible Debentures of

200.89

200.88

Rs.1,000 each)

401.39

17.40

288.40

323.97

323.96

Interest in a Beneficiary Trust

872.51

1,355.12

1,340.13

1,654.96

Adjustment for exchange difference on consolidation of subsidiaries

Provision for dimunition in the value of investments

Total Long Term Investments

(0.02)

3,018.16

1,361.32

1,654.96

(0.42)

(0.02)

3,038.93

CURRENT INVESTMENTS

Other Investments

In Goverment Securities Quoted
11.99% GOI 2009
6.18% GOI 2005
10.20% GOI 2005
11.75% GOI 2006
11.90% GOI 2007
9.90% GOI 2005

In Treasury Bills Quoted
91 Days Treasury Bills
364 Days Treasury Bills

In Certificate of Deposits
2,500 ABN Amro Bank Limited
2,000 HDFC Bank Limited
30,000 ICICI Bank Limited
2,500 IDBI Bank Limited
3,500 Jammu & Kashmir Bank Limited
4,000 Karnataka Bank Limited
9,500 State Bank of Bikaner and Jaipur
7,500 State Bank of Indore
1,500 State Bank of Patiala
2,500 State Bank of Travancore
10,000 Kotak Mahindra Bank Limited
7,500 ING Vysya Bank Limited

85.67
-
-
165.33
254.01
-
505.01

-
1.91
1.91

23.47
19.32
282.50
24.19
33.76
38.77
89.32
70.35
14.38
23.94
93.41
72.55
785.96

92.15
670.20
25.69
-
-
30.16
818.20

415.32
1699.32
2,114.64

-
-
-
-
-
-
-
-
-
-
-
-
-

146

Growth is Life

Notes on Consolidated Accounts

SCHEDULE ‘N’ (Contd.)

Other Investments In Units Unquoted

24,85,430 Reliance Income Fund (Growth plan) units of

4.78

2.01

As at
31st March, 2006

(Rs. in crore)
As at
31st March, 2005

(12,34,611) Rs.10 each

- Reliance Liquid Fund-Treasury Plan-Institutional

(14,54,06,713) Plan-Growth Option-Growth Plan of Rs.10 each
- Reliance Liquid Fund - Cash Plan of Rs.10 each

(1,65,81,915)

- Reliance Floating Rate Fund-Growth
(9,71,36,418) Plan-Growth Option of Rs.10 per unit
- Reliance Floating Rate Fund-Monthly

(9,93,31,499) Dividend Plan of Rs.10 per unit

- Reliance Long Term Gilt Plan-Retail

(10,68,39,963) Plan-Growth Option of Rs.10 each

7,15,08,763 HDFC Mutual Fund-HDFC Liquid Fund-Premium

(-) Plus-Plan Growth of Rs.10 per unit

11,47,93,693 Principal PNB Asset Management-Principal Cash

(-) Management Liquid option Institutional-Premium-

Plan Growth of Rs.10 per unit
9,57,47,048 Kotak Mahindra Mutual Fund-Kotak Liquid

(-) Fund-Institutional-Premium-Growth of Rs.10 per unit

100.00

125.00

135.06

23,44,30,323 Birla Sunlife Mutual Fund-Birla Cash Plus-Institutional

260.17

(-) Premium Growth of Rs.10 per unit

3,81,93,704 SBI Mutual Fund Magnum Iinstitutional Income

(-) Fund Savings Growth of Rs.10 per unit
24,46,617 DSP Merrill Lynch Liquid Fund-Institutional-

(-) Growth of Rs.1,000 per unit

14,68,12,696 Prudential ICICI Institutional Liquid Plan-Super

(-) Institutional-Growth of Rs.10 per unit

15,06,844 Investments with Standard Chartered Liquidity Fund

(-) Daily Dividend Plan of Rs.10 each.

2,74,944 Birla Cash Plus of Rs.10 each.

(-)

43.00

249.78

149.95

1.51

0.45

25,27,892 Standard Chartered Mutual Fund-G69 Standard Chartered 252.95

(-) Liquidity Manager Plus-Growth of Rs.1,000 per unit

12,570,217 Standard Chartered Liquidity Fund-Daily
(-) Dividend Plan of Rs. 10 each.

5,09,39,321 UTI Mutual Fund-UTI Money Market Fund-

(-) Growth Plan of Rs.10 per unit

12.57

100.00

7,29,57,908 ABN AMRO Assets Management-ABN AMRO Floating

75.00

(-) Rate Fund-Institutional-Plus-Growth of Rs.10 per unit

235.00

19.42

100.00

122.00

Total Current Investments

Investment in Others (B)

Total (A) + (B)

1,510.22

578.43

2,803.10

5,821.26

6,666.81

3,511.27

6,550.20

23,083.97

RELIANCE INDUSTRIES LIMITED

147

Notes on Consolidated Accounts

SCHEDULE ‘N’ (Contd.)

(1) (*) Represent investments demerged as per the Scheme of Arrangement as at 31st August, 2005 approved by the Hon. High Court of

Mumbai on 9th December, 2005 and was effective from 21st December, 2005.

(2) Investment in 165 Equity Shares of Art Silk Co-operative Society Limited of Rs.16,500 has been written off during the year.

(3) During the year 162,00,00,000 10% Cumulative Redeemable Optionally Convertible Preference Shares of Reliance Infocomm Limited of
Rs. 8,100 crore along with accrued premium of Rs. 1,108.27 crore upto 31st March, 2005 were convereted into 287,75,85,350 Equity Shares
of Reliance Infocomm Limited of Rs.1 each. These equity shares were demerged to Reliance Communications Ventures Limited on
31st August, 2005 as per the Scheme of Arrangement approved by the Hon. High Court of Mumbai on 9th December, 2005 and which was
effective from 21st December, 2005.

INVESTMENTS

As at
31st March, 2006

(Rs. in crore)
As at
31st March, 2005

AGGREGATE VALUE OF

Book Value Market Value Book Value Market Value

Quoted Investments

Unquoted Investments

1,034.78

1,289.01

6,558.57

8,373.09

5,632.03

16,525.82

Reconciliation of Consolidated Net Profit determined under Indian GAAP
to Consolidated Net Income in accordance with US GAAP

The following reconciliation between Consolidated 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 Consolidated net profit determined under Indian GAAP with net income according to US GAAP.

Year ended 31st March, 2006

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

Other

Notes

Rs.
(crore)

9,398

US $
(million)

2,107

(91)

(108)

(106)

219

372

(20)

(24)

Consolidated net income in accordance with US GAAP*

9,735

2,182

1 US $ = Rs. 44.615 (Exchange rate as on 31.03.2006)

*The carrying value of the net assets demerged during the year under the scheme of demerger is Rs. 19,006 crore (US$ 4,260 million) as per
US GAAP.

148

Growth is Life

Reconciliation of Consolidated Net Profit determined under Indian GAAP
to Consolidated Net Income in accordance with US GAAP (contd.)

Notes to Reconciliation of Consolidated 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 :

1. 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.

2. Indirect Preoperative Expenses

Under Indian GAAP, certain indirect expenses incurred during construction are capitalized. Under US GAAP, such indirect costs are
expensed as incurred.

3. 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. 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.

6. 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.

RELIANCE INDUSTRIES LIMITED

149

Market Value Added (MVA)

MVA is the Market Value of the Shareholders’ Equity minus the Book Value of Shareholders’ Equity.

Total Market Value of Equity Shares
Less : Book Value of Shareholders’ Equity
Market Value Added

Rs. in crore
As at 31st
March, 2006

1,10,958
49,804
61,154

Total Shareholders’ Return (TSR)

TSR is the Total Return to the Shareholders’ measured as the Change in Equity Value of the Company over the
period, plus dividends paid during the period, expressed as percentage of the begining Equity Value.

TSR over a three year period - 1st April, 2003 to 31st March, 2006

Market Capitalisation as at 31st March, 2006
Less : Market Capitalisation as at 1st April, 2003

Add: Equity Dividend paid 1st April, 2003 to 31st March, 2006

Incremental Gain over the Period

Total Shareholders’ Return

Annualised Return (%) per annum

TSR over one year period - 1st April, 2005 to 31st March, 2006

Market Capitalisation as at 31st March, 2006
Less : Market Capitalisation as at 1st April, 2005

Add: Equity Dividend paid 1st April, 2005 to 31st March, 2006

Incremental Gain over the Period

Return (%) for the year 2005-06

Rs. in crore

1,10,958
38,603
72,355

2,476

74,831

194%

43%

Rs. in crore

1,10,958
76,079
34,879

1,045

35,924

47%

The above TSR would be higher if the market value of equity shares issued on demerger during 2005-06 is included.

150

Growth is Life

Notes

ELECTRONIC CLEARING SERVICES (ECS) MANDATE FORM

RELIANCE INDUSTRIES LIMITED

151

Annexure 1 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,

FORM FOR ELECTRONIC CLEARING SERVICES FOR PAYMENT OF DIVIDEND

Please fill-in the information in CAPITAL LETTERS in ENGLISH ONLY.

FOR OFFICE USE ONLY

ECS
Ref. No.

(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

For shares held in physical form

Master
Folio No.

For shares held in electronic form

DP. Id

Client Id

Name of Sole / First holder

Bank name

Branch name

Branch code

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

Account type
[Please Tick ((cid:1)) wherever applicable]

A/c. No. (as appearing
in the cheque book)

Effective date of this
mandate

(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)
(cid:1)(cid:1)(cid:1)(cid:1)(cid:1)

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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, the Company/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 : _____________________

(Signature of Sole / First holder)

Notes :
1. Whenever the Shares in the given folio are entirely dematerialised, then this ECS mandate form will stand rescinded.
2. For shares held in dematerialised mode nomination is required to be filed with the Depository Participant in their prescribed form.

152

Growth is Life

RELIANCE INDUSTRIES LIMITED

153

Annexure 2 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
3rd Floor, Maker Chambers IV, 222,
Nariman Point, Mumbai 400 021.

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

(i) Preference shares (with distinctive numbers)

(ii) Equity shares (with distinctive numbers)

Financial year to which the dividend relates.

Amount due

(i) 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)

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2. Signature of witness, with name, date, address and occupation

Notes:

Indemnity Bond should be furnished on non-judicial stamp paper of the requisite value, in case the claim exceeds Rs.2500/-.

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.

154

Growth is Life

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
______________________ 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 :

RELIANCE INDUSTRIES LIMITED

155

Annexure 3 to Shareholders’ Referencer

Nomination Form
[To be filled in by individual(s)]

To,

From

Name of the shareholder and address

Reliance Industries Limited
C/o. Karvy Computershare Private Limited
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 ((cid:1))

1. Service

2. Business

3. Student

4. Household

5. Professional

6. Farmer

7. Others

Nominee’s Address

Telephone No.

Email Address

Specimen signature
of Nominee / Guardian
(in case nominee
is a minor)

*To be filled in case nominee is a minor
Kindly take the aforesaid details on record.
Thanking you,
Yours faithfully,

Pin Code

Fax No.

STD Code

Date..................................

Name(s) of equity shareholder(s) {as appearing on the Certificate(s)}

Signature (as per specimen with Company)

Sole/1st holder
(Name & Address)

2nd holder

3rd holder

4th holder

Witnesses (two)

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Name and Address of Witness

Signature & Date

156

Growth is Life

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 Agents 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 Shareholder.

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)

Annexure 4 to Shareholders’ Referencer
List of Investor Service Centres of Karvy Computershare Private Limited

City / Centre

STD Code

Phone - 0ffice

Fax Nos.

E-Mail

RELIANCE INDUSTRIES LIMITED

157

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

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

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

VISHAKAPATNAM - GAJUWAKA 0891

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
francisjf@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

158

Growth is Life

RELIANCE INDUSTRIES LIMITED

159

ATTENDANCE SLIP

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

PLEASE FILL THIS ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE OF THE MEETING HALL.
Joint shareholders may obtain additional Attendance Slip at the venue of the meeting.

DP. Id*

Client Id*

NAME AND ADDRESS OF THE SHAREHOLDER

Master Folio No.

No. of Shares.

I hereby record my presence at the 32nd ANNUAL GENERAL MEETING of the Company held on Tuesday, June 27, 2006 at
11.00 a.m. at Birla Matushri Sabhagar, 19, New Marine Lines, Mumbai 400 020.

*Applicable for investors holding shares in dematerialised form.

Signature of the shareholder / proxy

PROXY FORM

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

DP. Id*

Client Id*

Master Folio No.

No. of Shares.

I/We ................................................................................................................................................................................................... of
............................................................................................................................... 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 32nd ANNUAL GENERAL MEETING of the Company to be held on
Tuesday, June 27, 2006 at 11.00 a.m. or at any adjournment thereof.

e
r
e
h

t
u
C

Signed this ......................................... day of .............................................. 2006.

* 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.