Reliance Industries Limited
Annual Report 2012

Plain-text annual report

R e l i a n c e I n d u s t r i e s L i m i t e d ) n i . l c i a @ o f n i ( l c i a t a n g i s e d A n n u a l R e p o r t 2 0 1 1 - 1 2 Srijan Shekhar (Age Group: 5-7 years) Swapnil Agrawal (Age Group: 5-7 years) Nimish Nair (Age Group: 5-7 years) Priyanshu Patel (Age Group: 5-7 years) Sakcham Gupta (Age Group: 5-7 years) Hemal Mahavar (Age Group: 8-10 years) Aryam Bhadauria (Age Group: 8-10 years) Shrey Patel (Age Group: 11-13 years) Dhwani Sonawane (Age Group: 11-13 years) Poonjee Gupta (Age Group: 11-13 years) Pranay Sharma (Age Group: 8-10 years) Dev Chauhan (Age Group: 8-10 years) Sarth Patel (Age Group: 8-10 years) T V Sreesh (Age Group: 11-13 years) Tanya Bhatia (Age Group: 11-13 years) Pictures/ photographs shown in this report are for representation purpose only. Unless expressly authorised, Reliance Group neither claims any intellectual property rights nor will be responsible for any infringement action. PARTNERING INDIA’S NEW FUTURE. SUSTAINABLY. ANNUAL REPORT 2011-12 Partnering India’s new future. Sustainably. India has an interesting story to tell the world. A story of dynamism and confidence to face the future, on the strength of new capabilities and a vibrant market for consumption. Reliance is creating opportunities for future generations by building a unique portfolio of upstream, refining and petrochemicals business with industry-leading performance, and time- critical investments in emerging sectors. Our business growth mirrors the evolving aspirations of millions of fellow Indians to embrace an advanced quality of life. The result is an unprecedented surge in consumption across the vast social spectrum. This great Indian opportunity is the wellspring of our strength. As India helps drive global growth, we are passionately investing our resources and energies in helping accelerate India’s socio-economic progress. We are committed to sustain a culture of operational excellence, responsible resource utilisation and creating a platform for sustainable growth to benefit all stakeholders. Nation Building - The Reliance Way You can give the visually impaired a white cane and they will not fall. Or give them knowledge and they will lead. Reliance Drishti, an initiative of Reliance Reliance Foundation, envisaged to become Foundation, aims to help the visually impaired one of the foremost professional philanthropic acquire skills that will make them independent organisations in the world, focuses on and relevant in society. It has also made it five core pillars: rural transformation, a mission to bring the gift of sight to the education, health, urban renewal and arts, visually impaired, especially those who are culture & heritage. underprivileged. Till date, over 10,000 cornea transplant surgeries have been performed and lakhs of children have been provided free eye check-ups. Our way of thinking is clear... when we transform the lives of people, we transform India. Reliance Drishti recently launched India’s first registered Braille newspaper in Hindi. The newspaper is a small step that will open up a world of information and knowledge for the visually impaired. www.ril.com Contents Company’s Overview 02 Highlights 08 Reliance Foundation 03 10 Years Trend (Fiscal Year) 14 Company Information 04 Letter to Shareholders 06 The Board of Directors 15 Financial Highlights Statutory Reports 16 Notice of Annual General Meeting 86 Secretarial Audit Report 20 Management’s Discussion and Analysis 88 Directors’ Report 51 Report on Corporate Social Responsibility 107 Auditors’ Certificate on 57 Report on Corporate Governance Corporate Governance Financial Statements 109 Auditors’ Report on Financial Statements 158 Consolidated Cash Flow Statement 112 Balance Sheet 113 Statement of Profit and Loss 114 Cash Flow Statement 116 Significant Accounting Policies 119 Notes on Financial Statements 160 Significant Accounting Policies on Consolidated Accounts 161 Notes on Consolidated Financial Statements 196 Financial Information of Subsidiary Companies 155 Auditors’ Report on Consolidated 200 Shareholders’ Referencer Financial Statements 156 Consolidated Balance Sheet 157 Consolidated Statement of Profit and Loss 213 Members’ Feedback Form 215 Attendance Slip and Proxy Form 2 Partnering India's new future. Sustainably. Highlights Reliance Industries Limited (RIL) is India’s largest private sector conglomerate and a Fortune Global 500 companies with business in the energy and materials value chain. GROWING IMPORTANCE ACROSS THE GLOBE l l l l l Largest refining capacity at any single location Largest producer of Polyester Fibre and Yarn 5th largest producer of Paraxylene (PX) 5th largest producer of Polypropylene (PP) 8th largest producer of Purified Terephthalic Acid (PTA) and Mono Ethelen Glycol (MEG) RIL’S CONTRIBUTION TO INDIA’S ECONOMIC GROWTH 7.8% Weightage in the NSE Nifty 14% of India’s total exports 5.5% of the Government of India’s indirect tax revenues 9.3% Weightage in the BSE Sensex 4% of the total market capitalisation in India 10 Years Trend (Fiscal Year) Reliance Industries Limited 3 TURNOVER (` Crore) PROFIT AFTER TAX (` Crore) (Excluding exceptional item) NETWORTH (` Crore) 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 6 8 2 , 0 2 0 4 0 , 0 2 6 3 2 , 6 1 7 3 6 , 5 1 1 6 2 , 5 1 2 9 7 , 9 3 3 1 5 6 , 8 5 2 0 0 4 , 0 0 2 25,000 20,000 15,000 10,000 5,000 3 4 9 , 1 1 9 6 0 , 9 2 7 5 7 , 0 6 1 , 5 4 0 1 4 , 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 9 4 4 , 1 8 7 6 9 , 3 6 4 0 8 , 9 4 3 0 4 , 0 4 3 5 4 , 4 3 7 2 3 , 0 3 8 2 3 , 6 4 1 9 6 2 , 9 3 1 4 5 3 , 8 1 1 4 2 1 , 9 8 4 6 1 , 3 7 7 4 2 , 6 5 6 9 0 , 0 5 6 9 0 , 6 6 1 0 4 5 , 1 5 1 1 7 1 , 7 3 1 3 7 3 , 6 2 1 02 03 04 05 06 07 08 09 10 11 03 04 05 06 07 08 09 10 11 12 02 03 04 05 06 07 08 09 10 11 03 04 05 06 07 08 09 10 11 12 02 03 04 05 06 07 08 09 10 11 03 04 05 06 07 08 09 10 11 12 MARKET CAPITALISATION (` Crore) EARNINGS PER SHARE (`)* (Excluding exceptional item) BOOK VALUE PER SHARE (`)* 0 . 2 6 2 . 1 6 9 . 0 5 7 . 9 4 7 . 9 4 0 2 3 , 1 5 3 4 8 9 , 2 4 3 9 7 1 , 9 2 3 1 2 7 , 9 3 2 7 5 7 , 4 4 2 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 5 0 9 , 8 9 1 8 5 9 , 0 1 1 2 3 1 , 5 7 9 7 0 , 6 7 3 0 6 , 8 3 70 60 50 40 30 20 10 3 . 1 4 5 . 2 3 2 . 7 2 5 . 8 1 7 . 4 1 550 500 450 400 350 300 250 200 150 100 50 3 . 7 0 5 2 . 3 6 4 5 . 9 1 4 5 . 1 0 4 8 . 1 8 2 3 . 1 2 2 7 . 8 7 1 0 . 5 4 1 4 . 3 2 1 02 03 04 05 06 07 08 09 10 11 03 04 05 06 07 08 09 10 11 12 02 03 04 05 06 07 08 09 10 11 03 04 05 06 07 08 09 10 11 12 02 03 04 05 06 07 08 09 10 11 03 04 05 06 07 08 09 10 11 12 * Normalised on account of issue of Bonus Shares in the ratio of 1:1 in 2009-10 4 Partnering India's new future. Sustainably. Letter to Shareholders Dear Fellow Shareowners, FY 2011-12 has been a challenging year with unprecedented economic uncertainty in Europe, geo- political upheaval in the Middle East and a slowing down of economic growth across Asia. These events had a profound effect on demand and margin outlook for industrial products across the world. In many ways, we are still feeling the after-shocks of the financial meltdown of 2008 and 2009 with leading economies continuing to suffer from low growth and the resultant adverse impact on demand for most products and services. We have been successful in insulating and de-risking our portfolio of businesses by following a prudent operating discipline and further strengthening our rock solid foundation for investments in future growth engines. these tough Even under times, RIL delivered sustained operating and financial results from its core businesses. RIL achieved a turnover of ` 339,792 Crore ($ 66.8 Billion) and net profit of ` 20,040 Crore ($ 3.9 Billion). This was mainly achieved as a result of resilient demand for petroleum products in developing economies from around the world and on-going consumer demand in India for products and services linked to a better quality of life. Reliance was able to realise the true potential of its high quality manufacturing assets, its deep talent pool, globally accepted products and strongaccess to Indian markets. Reliance’s refineries continued to be recognised as the best-in-class refining assets built in recent times. Besides winning several accolades for their track record in safety, energy conservation and environment friendliness, they consistently operated at over 100% of design capacity. The refineries achieved their highest ever crude processing of 67.6 Million tonnes, surpassing their previous record by over a Million tonnes. The refining industry was particularly impacted by events that were not foreseeable a year ago. The natural disaster in Japan left the world shaken and created unprecedented demand for fuel oil in the region. This, combined with geo-political issues in the Middle-east resulted in sharp hike in crude prices and increased demand for heavy crudes; narrowing both product margins and light-heavy differentials. All of this resulted in lower than expected Asian complex refining margins. In this environment, Reliance was able to improve its performance with higher throughput and better margins. Our partnership with BP has redefined our strategy for the domestic oil and gas business. This partnership will endeavour to unlock the true potential of RIL’s deep- water exploration blocks by leveraging BP’s skills in sub-sea engineering and reservoir management. India Gas Solutions Private Limited, a 50:50 joint venture with BP has been set up to focus on global sourcing and marketing of natural gas in India. Demand for natural gas has been growing at an exponential rate in India and is expected to be the preferred choice of fuel given its environment friendly properties and ready acceptance by users. to unforeseen Production from the KG-D6 block has been adversely impacted mainly due reservoir complexities and water ingress in the producing fields. Significant steps have been taken by the joint technical teams in assessing options for overall reservoir management based on which, an integrated plan for work-overs and additional wells can be executed, subject to necessary regulatory and government approvals. We are committed to strengthening India’s energy security and investing in expanding our upstream business in India. As we are all aware, India acutely needs sizeable investments to develop its hydrocarbon reserves and needs to do more in creating anequitable investment climate that recognises the integral risk- reward paradigm of the upstream business. We need to take into consideration the fact that slow-down in these investments impacts the overall import bill for the nation as India continues to increase its dependence on imported LNG, benefitting producers around the world. We invested significantly in the shale gas joint ventures which are now all operational. We are contributing technical expertise and capital in development of this new business which is likely to be a growing contributor to our earnings in the future. Prevailing low gas prices have necessitated a prudent approach towards production ramp-up with focus being on the more liquid rich areas in our Eagle Ford asset. Domestic demand for petrochemical products remained strong although margins were impacted due to high feedstock prices and increased supply from the Middle East. India remained an importer of several polymer products. Our planned expansions in the petrochemical segment have commenced and are aimed principally at addressing the growing consumption in India. These expansions will leverage from downstream integration with RIL’s refining complex and the resultant feedstock security. We are creating a world-scale elastomer  Reliance Industries Limited 5 We have strengthened our balance sheet and are focused on managing our costs and prudent use of capital. Our investment grade ratings, cash balance and low net gearing place us a unique position for creating a foundation for growth. portfolio taking advantage of this feedstock integration and the growth of the automobile sector in India. Growth in our organised retail business is reflective of the changing habits and increasing aspirations of millions of fellow Indians who seek modern conveniences without losing focus on value. Over 7 Million farmers in India benefit from our farm to fork consumer retail strategy and this number is growing exponentially day by day. In a short period and as a reflection of consumer preferences, Reliance now has leadership positions in food, apparel and consumer electronics retailing in the country. With over 1,300 stores operational and more being opened, Reliance is positioned to be India’s premier retailer even as organised retailing becomes a more meaningful part of the changing consumer preference in the country. The broadband market in India is expected to leapfrog from its current user base of around 20 Million wireless and wire-line subscribers. Our foray in Broadband Access is aimed at achieving a leadership status in providing digital services to a large base of consumers and providing next generation data services. We have strengthened our balance sheet and are focused on managing our costs and prudent use of capital. Our investment grade ratings, cash balance and low net gearing place us in a unique position for creating a foundation for growth. At Reliance, we have been and continue to remain focused on creating long- term shareholder value. It is with this in mind that we have introduced India’s largest share buy-back programme in January 2012. We are passionate towards investing in Reliance’s future. I know that I am not alone in this passion and that over 50,000 Reliance employees share this hunger for outperformance and growth. We are committed to doing so with integrity and humility and are steadfast in our endeavour to achieving our goals. I am grateful to the Board of Directors for their unwavering support and guidance. I this opportunity to express my gratitude to all our stakeholders, who have reposed trust in us and extended their constant support. take With best wishes, Sincerely, Mukesh D. Ambani Chairman & Managing Director 20 April 2012 6 Partnering India's new future. Sustainably. The Board of Directors Shri Mukesh D. Ambani Shri P. M. S. Prasad Shri Hital R. Meswani Chairman and Managing Director Executive Director Executive Director Shri Mansingh L. Bhakta Shri Yogendra P. Trivedi Dr. Dharam Vir Kapur Independent Director Independent Director Independent Director  Reliance Industries Limited 7 Shri Nikhil R. Meswani Shri Pawan Kumar Kapil Shri Ramniklal H. Ambani Executive Director Executive Director Non-Executive Non-Independent Director Shri Mahesh P. Modi Prof. Ashok Misra Prof. Dipak C. Jain Independent Director Independent Director Independent Director Dr. Raghunath A. Mashelkar Independent Director bring the gift of sight to the visually impaired and to improve their quality of life. Since its beginning in 2003, Reliance Drishti has conducted over 10,000 cornea transplants across India. An important milestone was achieved on 19 March 2012 when Reliance Drishti launched India’s first registered national braille newspaper in Hindi. This newspaper will bring the gift of information to over 25,000 visually differently abled. Reliance Foundation has also instituted “Real Heroes”, an award that recognises and acknowledges ordinary Indians who are making a difference to people’s lives. In its 5th edition held in March 2012, this annual felicitation honoured 24 unsung heroes of India. The efforts of these 24 real heroes, selected from across the country and working in diverse fields of women empowerment, environment, youth, social welfare, health & disability, education & children and sports, have significantly contributed to the betterment of their communities. 8 Partnering India's new future. Sustainably. Reliance Foundation Reliance Foundation focuses on five core pillars of rural transformation, education, health, urban renewal and arts, culture & heritage. It seeks to bring corporate systems and processes to social sector with an overall aim to create and support meaningful and innovative activities that address some of India’s most pressing developmental challenges. launched Reliance BIJ Reliance Foundation in October 2010. BIJ stands for ‘Bharat India Jodo’ and aims to bridge the gap between rural and urban India by strengthening sustainable agriculture practices amongst small and marginal farmers. Reliance BIJ today is present across 8 states and is set to expand to cover most of the agro-climatic zones of India. Reliance Foundation has embarked upon a new initiative called Reliance Knowledge for Sustainable Development (RK4SD) which aims at capacity building of farmers, fisher folk and micro-enterprises for better livelihood security. RK4SD will further provide timely advisories on climatic conditions, water and weather related risks, methods of handling new pests and diseases and sharing of best practices and better farming methods. In FY 2011-12, Reliance Foundation and its associate institutions provided education to 15,000 children across 12 schools. Reliance Foundation is in the process of setting up Reliance Institute of Technology in Jamnagar and Reliance Polytechnic in Dwarka in partnership with the Gujarat government. For promoting healthcare, Reliance Foundation is creating a world class tertiary care hospital in Mumbai. The hospital will incorporate a community outreach programme catering to health needs of the underprivileged. Reliance Drishti, an initiative of Reliance Foundation, working in association with National Association for the Blind, is committed to Major Products and Brands Product Business/ Brand Exploration & Crude Oil and Natural Production Gas Refining Liquefied Petroleum Gas (LPG) Propylene Naphtha Gasoline Jet / Aviation Turbine Fuel Superior Kerosene Oil High Speed Diesel Sulphur Petroleum Coke Petrochemicals - Polymers Repol Polypropylene (PP) Relene Polyethylene (HDPE, LLDPE & LDPE) Ethylene Vinyl Acetate Copolymer (EVA) Ultra High Molecular Weight Polyethylene Reon Polyvinyl Chloride (PVC) Relpipe Poly-Olefin HDPE and PPR pipes Cisamer Poly Butadiene Rubber (PBR) Chemicals Relab Linear Alkyl Benzene (LAB) Reliance Industries Limited 9 Brand End Uses Refining, power, fertilisers, petrochemicals and other industries Domestic and industrial fuel Feedstock for polypropylene Feedstock for petrochemicals such as ethylene, propylene & fertilisers, etc. and as fuel in power plants Transport fuel Aviation fuel Domestic fuel Transport fuel Feedstock for fertilisers and pharmaceuticals Fuel for power plants and cement plants Woven sacks for cement, food-grain, sugar, fertiliser; leno bags for fruits & vegetables, TQ & BOPP films and containers for packaging textiles, processed food, FMCG, office stationery; components for automobile and consumer durables, moulded furniture, luggage, houseware, geo-textiles & fibres for non-woven textiles. Woven sacks, raschel bags for fruits & vegetables, containers for packaging edible oil, processed food, FMCG, lubricants, detergents, chemicals, pesticides, industrial crates & containers, carrier bags, houseware, ropes & twines, pipes for water supply, irrigation, process industry & telecom; films for packaging milk, edible oil, salt, processed food, roto-moulded containers for storage of water, chemical storage and general purpose tanks, protective films and pipes for agriculture, cable sheathing, lids & caps, master batches. Footwear & hotmelt adhesives Liners for material handling equipment, dock fenders, battery separators, bobbins and pickers for textile machinery, trolley wheels, prosthetics, general engineering applications like gears, valves, bushes etc. Pipes & fittings; door & window profiles, insulation & sheathing for wire & cables, rigid bottles & containers for packaging applications, footwear, flooring, partitions, roofing, I.V. fluid & blood bags. Agriculture irrigation, water supply projects, Sewerage and drainage, mines, coal fields, industrial water/fluids/effluents transportation, gas distribution network, telecom cable ducts, plumbing & construction. Tyres, tread rubber, conveyor belts, footwear, sports goods, automotive components, rollers, mechanical goods & dock fenders Detergents 1 0 Partnering India's new future. Sustainably. Business/ Brand Product Brand End Uses Petrochemicals - Polyester & Fibre Intermediates Paraxylene (PX) Purified Terephthalic Acid (PTA) Mono Ethylene Glycol (MEG) Staple Fibre Filament Yarn Texturised Yarn Twisted / Dyed Yarn Stretch yarns for comfortable fit and freedom of movement Cotton Look, Cotton Feel Yarns Can dye at boiling water temperature with high colour fastness Recron Recron Stretch Recron Cotluk Recron Dyefast Recron Superblack Dope dyed black with high consistency in shade Recron Superdye Recron Kooltex Recron Fibrefill Recron 3S Recron Certified Recron Low Pill Recron FeelFresh Recron Micrelle Bright, brilliant colours and soft feel, low pill Moisture management yarns Hollow fibres with high bounce and resilience Secondary Reinforcement Produts Quality Certified Sleep Products Polyester Tow & Staple Fibre with unique low pill properties Anti microbial fibres & yarns Bi-component filament yarns Recron Recrobulk Hi-bulk fibres for soft-feel & warmth Recron Green Recron Spunlace Eco-friendly fibres made from 100% post-consumer polyester waste Speciality polyester fibres Raw material for PTA Raw material for polyester Raw material for polyester Apparel, home textile, industrial sewing thread, automotive upholstery, carpets, canvas, luggage, spunlace & non-woven fabrics Blouse material, denim, shirting, suiting, dress material, T-shirt, sportswear, swimwear, medical bandages & diapers Dress material, shirting, suiting, furnishing fabric, curtain & bed sheet Ladies outerwear, feather yarn for knitted cardigan, decorative fabric & home furnishing Apparel, automotive, non-woven & interlining Woven & knitted apparel, furnishing & home textile Active sports and high performance wear Pillows, cushions, quilts, mattresses, furniture, toys & non-wovens Construction industry (concrete/mortar), cement (sheet & pipe), paper industry (conventional & speciality), battery industry, wetlaid industry (wall papers, filtration, wipes & hygiene products) Pillows, cushions, blankets & quilts High-end worsted suitings, upholstery fabrics & socks Active sportswear, Intimate apparel, socks, home furnishings & garments used in healthcare industry Super soft and ultra comfortable fabrics Sweaters, pullovers, cardigans, shawls & jackets Apparel & home textiles High quality non-woven products for the healthcare & hygiene industry Reliance Industries Limited 11 Business/ Brand Product Brand End Uses Petrochemicals - Polyester & Fibre Intermediates Recron ® RecoSilk Recron FR Recron Duratarp Recron Safeband Relpet Textiles Vimal Vimal Gifting V2 Retail Specialty Polyester Filament Yarns for Silken Shimmer and Swathes of Colour in Fabrics Re c o s i l k Ideal substitute for silk in dress materials, velvet, sarees, etc. and viscose filament yarn in embroidery thread. Flame retardant Fibres & Yarns Polyester Fibres with increased abrasion resistance for better water proof, tear proof and fade- proof qualities Structurally modified polyester fibre with antimicrobial and antifungal properties surgical dressings Polyethylene Terephthalate (PET) Suitings, Shirtings, Readymade Garments Ready-to-stitch, take away fabric in gift packs Ready-to-stitch, Take away fabric Institutional textiles for hospitality, entertainment, transport, safety etc. Also used in home textiles, fill & comfort products. Tarpaulin, Tents & Awnings Crepe and Rolled Bandages Safeband Packaged-water, beverages, confectionary, pharmaceutical, agro-chemical and food products Fabrics, suits, jackets, shirts & trousers Fabrics Fabrics Reliance Retail Organised retail Food & Grocery Specialty Store Mini Hypermarket Hypermarket Wholesale Store Electronics Specialty Store Fresh vegetables, grocery, general and convenience merchandise Grocery, clothing, leisure, beauty and style, electronics and home merchandise Grocery, clothing, leisure, beauty and style, electronics, home merchandise, furniture and jewellery A wholesale store for business & bulk needs Computers, mobiles, entertainment, gaming merchandise Exclusive Apple Store Range of Apple products like IPod and IMac Jewellery Specialty Store Fine jewellery Apparel Specialty Men, ladies, children clothing and accessories Footwear Specialty Store Books, Music, Toys & Gifts Specialty Store Men, ladies, children footwear, sports, handbags and accessories Books, music, stationery, toys and gifting merchandise 1 2 Partnering India's new future. Sustainably. Business/ Brand Product Brand End Uses Furniture, Furnishing & Homeware Specialty Store Automotive Services & Products Specialty Store Iconic Italian Lifestyle Brand Authentic Outdoor Foot wear and Apparel Brand Design-led furniture sets for the home & home-office, home furnishings, home decor, crockery, cutlery, glassware, cookware and kitchen aids Repair & maintenance services for 2 & 4 wheelers, wide range of tyres, batteries & other automotive accessories Apparel, footwear and accessories Footwear and apparel Luxury Sportswear Brand Men’s apparel, footwear and accessories Italian Luxury Men’s clothing Modern Outerwear lifestyle Brand specializing in footwear for extreme sports, skateboarding, snowboarding Men’s apparel, footwear and accessories Apparel, Footwear & Accessories Urban Fashion & Lifestyle Brand Apparel, Footwear & Accessories Boardsports & active outdoor lifestyle brand for men Outdoor Lifestyle Brand for Women inpired by the beach, coastal and mountain casual lifestyle Fashion Forward Footwear and Accessories Brand for Women Mens Apparel, Footwear & Accessories Womens Apparel, Footwear & Accessories Footwear and accessories Optical Specialty Store Spectacles, Sunglasses, Contact Lenses International Apparel, Accessories & Home Products Store Apparel for Women, Men and Children, Lingerie, Beauty and Home Décor The Finest Toys in the World Toys Office and Personal Stationery Men, Ladies Sports footwear, clothing & accessories Office Needs, Office Supplies and Stationery Store Iconic Japanese Sports Performance brand Transportation fuels Fleet Management Services Highway Hospitality Services Vehicle Care Services Convenience Shopping Foods Auto LPG GAPCO Petroleum Retail Lubricants Product Flow Chart Reliance Industries Limited 13 1 4 Partnering India's new future. Sustainably. Company Information Board of Directors Chairman and Managing Director Mukesh D. Ambani Executive Directors Nikhil R. Meswani Hital R. Meswani P.M.S. Prasad Pawan Kumar Kapil Non Executive Directors Ramniklal H. Ambani Mansingh L. Bhakta Yogendra P. Trivedi Dr. Dharam Vir Kapur Mahesh P. Modi Prof. Ashok Misra Prof. Dipak C. Jain Dr. Raghunath A. Mashelkar K. Sethuraman Group Company Secretary and Chief Compliance Officer Solicitors & Advocates Kanga & Co. Auditors Chaturvedi & Shah Deloitte Haskins & Sells Rajendra & Co. Board Committees Audit Committee Yogendra P. Trivedi (Chairman) Mahesh P. Modi Dr. Raghunath A. Mashelkar Corporate Governance and Stakeholders’ Interface Committee Yogendra P. Trivedi (Chairman) Mahesh P. Modi Dr. Dharam Vir Kapur Employees Stock Compensation Committee Yogendra P. Trivedi (Chairman) Mukesh D. Ambani Mahesh P. Modi Prof. Dipak C. Jain Finance Committee Mukesh D. Ambani (Chairman) Nikhil R. Meswani Hital R. Meswani Health, Safety & Environment Committee Hital R. Meswani Dr. Dharam Vir Kapur P.M.S. Prasad Pawan Kumar Kapil Remuneration Committee Mansingh L. Bhakta (Chairman) Yogendra P. Trivedi Dr. Dharam Vir Kapur Shareholders’/Investors’ Grievance Committee Mansingh L. Bhakta (Chairman) Yogendra P. Trivedi Nikhil R. Meswani Hital R. Meswani Bankers Allahabad Bank Andhra Bank Bank of America Bank of Baroda Bank of India Bank of Maharashtra Canara Bank Central Bank of India Major Plant Locations Dahej P. O. Dahej, Taluka: Vagra, Dist. : Bharuch - 392 130 Gujarat, India Gadimoga Tallarevu Mandal East Godavari District Gadimoga – 533 463 Andhra Pradesh, India Registered Office Citibank N.A Credit Agricole Corporate and Investment Bank Corporation Bank Deutsche Bank The Hong Kong and Shanghai Banking Corporation Limited HDFC Bank Limited ICICI Bank Limited IDBI Bank Limited Indian Bank Indian Overseas Bank Oriental Bank of Commerce Punjab National Bank Standard Chartered Bank State Bank of Hyderabad State Bank of India State Bank of Patiala Syndicate Bank The Royal Bank of Scotland Union Bank of India Vijaya Bank Hazira Village Mora, P.O. Bhatha Surat-Hazira Road Surat 394 510, Gujarat, India Jamnagar Village Meghpar / Padana, Taluka Lalpur Jamnagar 361 280 Gujarat, India Jamnagar SEZ Unit Village Meghpar / Padana, Taluka Lalpur Jamnagar 361 280 Gujarat, India Nagothane P. O. Petrochemicals Township, Nagothane Raigad - 402 125, Maharashtra, India Registrars & Transfer Agents Patalganga B-4, MIDC Industrial Area, P.O. Rasayani, Patalganga 410 220 Dist. Raigad Maharashtra, India Vadodara P. O. Petrochemicals Vadodara - 391 346, Gujarat, India Karvy Computershare Private Limited, Plot No. 17-24, Vittal Rao Nagar, Madhapur, Hyderabad 500 081, India. Tel: +91 40 4465 5070 - 5099 Toll Free No. 1800 425 8998; Fax: +91 40 2311 4087. e-mail: rilinvestor@karvy.com Website : www.karvy.com 38th Annual General Meeting on Thursday, June 7, 2012 at 11.00 a.m. at Birla Matushri Sabhagar, 19, New Marine Lines, Mumbai 400 020. 3rd Floor, Maker Chambers IV 222 Nariman Point, Mumbai 400 021, India Tel: +91 22 2278 5000 Fax: +91 22 2278 5111 e-mail: investor_relations@ril.com Website : www.ril.com Financial Highlights Reliance Industries Limited 15 2011-12 10-11 09-10 08-09 07-08 06-07 05-06 04-05 03-04 02-03 $ Mn ` in crore Revenue From Operations 66,790 3,39,792 2,58,651 2,00,400 1,46,328 1,39,269 1,18,354 89,124 73,164 56,247 50,096 Total Income 68,007 3,45,984 2,61,703 2,02,860 1,48,388 1,44,898 1,18,832 89,807 74,614 57,385 51,097 Earnings Before Depreciation, Finance Cost and Tax Expense (EBDIT) 7,825 39,811 41,178 33,041 25,374 28,935 20,525 14,982 14,261 10,983 9,366 Depreciation and Amortisation 2,240 11,394 13,608 10,497 5,195 4,847 4,815 3,401 3,724 3,247 2,837 Exceptional Items Profit For the Year Equity Dividend %* Dividend Payout Equity Share Capital Equity Share Suspense Account Equity Share Warrants - - - - (370) 4,733 - - - - - 3,939 20,040 20,286 16,236 15,309 19,458 11,943 9,069 7,572 5,160 4,104 85 80 70 130 130 110 100 75 52.5 2,531 2,385 2,084 1,897 1,631 1,440 1,393 1,045 733 50 698 3,271 3,273 3,270 1,574 1,454 1,393 1,393 1,393 1,396 1,396 - - - - - - 69 - - 1,682 60 - - - - - - - - - 497 643 - - Reserves and Surplus 32,005 1,62,825 1,48,267 1,33,901 1,24,730 78,313 62,514 48,411 39,010 33,057 28,931 Net Worth 32,648 1,66,096 1,51,540 1,37,171 1,26,373 81,449 63,967 49,804 40,403 34,453 30,327 Gross Fixed Assets 40,392 2,05,493 2,21,252 2,28,004 2,18,673 1,27,235 1,07,061 91,928 59,955 56,860 52,547 Net Fixed Assets Total Assets 23,878 1,21,477 1,55,526 1,65,399 1,69,387 84,889 71,189 62,675 35,082 35,146 34,086 58,013 2,95,140 2,84,719 2,51,006 2,45,706 1,49,792 1,17,353 93,095 80,586 71,157 63,737 Market Capitalisation 48,109 2,44,757 3,42,984 3,51,320 2,39,721 3,29,179 1,98,905 1,10,958 76,079 75,132 38,603 Number of Employees 23,166 22,661 23,365 24,679 25,487 24,696 12,540 12,113 11,358 12,915 Contribution to National Exchequer 5,542 28,197 28,719 17,972 11,574 13,696 15,344 15,950 13,972 12,903 13,210 Key Indicators Earnings Per Share - (`) $ 2011-12 10-11 09-10 08-09 07-08 06-07 05-06 04-05 03-04 02-03 [excluding Exceptional item]* 1.2 61.2 62.0 49.7 49.7 105.3 82.2 65.1 54.2 36.8 29.3 Turnover Per Share - (`) 20.4 1,037.8 790.5 612.9 464.9 958.1 814.2 639.6 525.0 402.8 358.8 Book Value Per Share - (`) 10.0 507.3 463.2 419.5 401.5 560.3 440.0 357.4 289.9 246.7 217.2 Debt : Equity Ratio - 0.41:1 0.44:1 0.46:1 0.63:1 0.45:1 0.44:1 0.44:1 0.46:1 0.56:1 0.60:1 EBDIT / Gross Turnover % Net Profit Margin % RONW % ** ROCE % ** 11.7 5.9 13.4 11.6 11.7 15.9 16.5 5.9 13.4 11.6 7.8 15.5 13.2 8.1 16.4 13.9 17.3 10.5 21.6 20.3 20.8 14.0 28.8 20.3 17.3 10.1 23.5 20.5 16.8 10.2 22.7 20.5 19.5 10.3 21.9 21.3 19.5 18.7 9.2 17.0 14.0 8.2 14.8 13.2 In this Annual Report $ denotes US$ 1US$ = ` 50.875 (Exchange rate as on 31.03.2012) * Adjusted for issue of bonus shares in 2009-10 in the ratio of 1:1 ** Adjusted for CWIP and revaluation 1 6 Partnering India's new future. Sustainably. Notice Notice is hereby given that the thirty-eighth Annual General Meeting of the members of Reliance Industries Limited will be held on Thursday, June 07, 2012 at 11.00 a.m. at Birla Matushri Sabhagar, 19, New 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, 2012, the Statement of Profit and Loss 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 (Registration No. 101720W), M/s. Deloitte Haskins & Sells, Chartered Accountants (Registration No. 117366W) and M/s. Rajendra & Co., Chartered Accountants (Registration No. 108355W), 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 re-appoint Shri Nikhil R. Meswani as a Whole- time Director designated as Executive Director 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 in accordance with the provisions of Sections 198, 269, 309 and 317 read with Schedule XIII and all other applicable provisions, if any, of the Companies Act, 1956 or any statutory modification(s) or re-enactment thereof, approval of the members be and is hereby accorded to the re-appointment of Shri Nikhil R. Meswani as a Whole-time Director designated as Executive Director of the Company, for a period of 5 (five) years with effect from July 01, 2013, on the terms and conditions including remuneration as set out in the Explanatory Statement annexed to the Notice convening this Meeting, with liberty to the Board of Directors (hereinafter referred to as “the Board” which term shall be deemed to include any Committee of the Board constituted to exercise its powers, including the powers conferred by this resolution) to alter and vary the terms and conditions of appointment and / or remuneration, subject to the same not exceeding the limits specified under Schedule XIII to the Companies Act, 1956 or any statutory modification(s) or re-enactment thereof. RESOLVED FURTHER THAT the Board be and is hereby authorised to do all acts and take all such steps as may be necessary, proper or expedient to give effect to this resolution.” 6. To re-appoint Shri Pawan Kumar Kapil as a Whole-time Director designated as Executive Director 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 in accordance with the provisions of Sections 198, 269, 309 and 317 read with Schedule XIII and all other applicable provisions, if any, of the Companies Act, 1956 or any statutory modification(s) or re-enactment thereof, approval of the members be and is hereby accorded to the re-appointment of Shri Pawan Kumar Kapil as a Whole-time Director designated as Executive Director of the Company, for a period of 5 (five) years with effect from May 16, 2013 on the terms and conditions including remuneration as set out in the Explanatory Statement annexed to the Notice convening this Meeting, with liberty to the Board of Directors (hereinafter referred to as “the Board” which term shall be deemed to include any Committee of the Board constituted to exercise its powers, including the powers conferred by this resolution) to alter and vary the terms and conditions of appointment and / or remuneration, subject to the same not exceeding the limits specified under Schedule XIII to the Companies Act, 1956 or any statutory modification(s) or re-enactment thereof. RESOLVED FURTHER THAT the Board be and is hereby authorised to do all acts and take all such steps as may be necessary, proper or expedient to give effect to this resolution.” By Order of the Board of Directors K. Sethuraman Group Company Secretary and Chief Compliance Officer April 20, 2012 Registered Office: 3rd Floor, Maker Chambers IV, 222 Nariman Point, Mumbai 400 021, India e-mail: investor_relations@ril.com Reliance Industries Limited 17 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 the proxy should, however, be deposited at the registered office of the Company not less than forty-eight hours before the commencement of the Meeting. 2. Corporate members intending to send their authorised representatives to attend the Meeting are requested to send to the Company a certified copy of the Board Resolution authorising their representative to attend and vote on their behalf at the Meeting. 3. In terms of Article 155 of the Articles of Association of the Company, read with Section 256 of the Companies Act, 1956, Shri M.L. Bhakta, Shri Hital R. Meswani, Prof. Dipak C. Jain and Shri P.M.S. Prasad, Directors, retire by rotation at the ensuing Meeting and being eligible, offer themselves for re- appointment. The Board of Directors of the Company commends their respective re-appointments. 4. Brief resume of all Directors including those proposed to be re-appointed, nature of their expertise in specific functional areas, names of companies in which they hold directorships and memberships / chairmanships of Board Committees, shareholding and relationships between directors inter-se as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, are provided in the Report on Corporate Governance forming part of the Annual Report. 5. An Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956, relating to the Special Business to be transacted at the Meeting is annexed hereto. 6. Members are requested to bring their attendance slip along with their copy of annual report to the Meeting. 7. 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 by the members 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 notified closure of Register of Members and Share Transfer Books from Saturday June 2, 2012 to Thursday June 7, 2012 (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 credited / dispatched between June 08, 2012 and June 14, 2012 to those members whose names shall appear on the Company’s Register of Members on June 01, 2012; in respect of the shares held in dematerialized form, the dividend will be paid to members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited as beneficial owners as on that date. 10. Members holding shares in electronic form may note that bank particulars registered against their respective depository accounts will be used by the Company for payment of dividend. The Company or its Registrars and Transfer Agents cannot act on any request received directly from the members holding shares in electronic form for any change of bank particulars or bank mandates. Such changes are to be advised only to the Depository Participant of the members. 11. Members holding shares in electronic form are requested to intimate immediately any change in their address or bank mandates to their Depository Participants with whom they are maintaining their demat accounts. Members holding shares in physical form are requested to advise any change in there address immediately to the Company/Registrars and Transfer Agents, M/s. Karvy Computershare Private Limited (Karvy). 12. Pursuant to the provisions of Section 205A(5) and 205C of the Companies Act, 1956, the Company has transferred the unpaid or unclaimed dividends for the financial years 1995-96 to 2003-04, to the Investor Education and Protection Fund (the IEPF) established by the Central Government. 13. The Securities and Exchange Board of India (SEBI) has mandated the submission of Permanent Account Number (PAN) by every participant in securities market. Members holding shares in electronic form are, therefore, requested to submit the PAN to their Depository Participants with whom they are maintaining their demat accounts. Members holding shares in physical form can submit their PAN details to the Company / Registrars and Transfer Agents, Karvy. 14. Members holding shares in single name and physical form are advised to make nomination in respect of their shareholding in the Company. The nomination 1 8 Partnering India's new future. Sustainably. form can be downloaded from the Company’s website www.ril.com under the section ‘Investor Relations’. 15. Members who hold shares in physical form in multiple folios in identical names or joint holding in the same order of names are requested to send the share certificates to Karvy, for consolidation into a single folio. 16. Non-Resident Indian Members are requested to inform Karvy, immediately of : a. Change in their residential status on return to India for permanent settlement. b. Particulars of their bank account maintained in India with complete name, branch, account type, account number and address of the bank with pin code number, if not furnished earlier. 17. Members are advised to refer to the Shareholders’ Referencer provided in the Annual Report. 18. Members are requested to fill in and send the Feedback Form provided in the Annual Report. EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956 The following Explanatory Statement sets out all material facts relating to the Special Business mentioned in the accompanying Notice: Item Nos 5 and 6 The Board of Directors of the Company (the ‘Board’), at its meeting held on April 20, 2012 has, subject to the approval of Members, re-appointed Shri Nikhil R. Meswani and Shri Pawan Kumar Kapil as Whole-time Directors, designated as Executive Directors, for a further period of 5 (five) years from the expiry of their present term, which will expire on June 30, 2013 and May 15, 2013 respectively, on the remuneration determined by the Remuneration Committee of the Board and approved by the Board. It is proposed to seek Members’ approval for the re-appointment of and remuneration payable to, Shri Nikhil R. Meswani and Shri Pawan Kumar Kapil, as Whole-time Directors, designated as Executive Directors, in terms of the applicable provisions of the Companies Act, 1956 (“the Act”). Broad particulars of the terms of re-appointment of and remuneration payable to Shri Nikhil R. Meswani and Shri Pawan Kumar Kapil are as under: (a) Salary, Perquisites and Allowances per annum Name (` in crore) Salary Perquisites and Allowances Shri Nikhil R. Meswani Shri Pawan Kumar Kapil 1.15 1.45 0.50 0.75 The perquisites and allowances, as aforesaid, shall include accommodation (furnished or otherwise) or house rent allowance in lieu thereof; house maintenance allowance together with reimbursement of expenses and / or allowances for utilisation of gas, electricity, water, furnishing and repairs; medical reimbursement; leave travel concession for self and family including dependents; medical insurance and such other perquisites and / or allowances. The said perquisites and allowances shall be evaluated, wherever applicable, as per the provisions of Income Tax Act, 1961 or any rules thereunder or any statutory modification(s) or re-enactment thereof; in the absence of any such rules, perquisites and allowances shall be evaluated at actual cost. The Company’s contribution to Provident Fund, Superannuation or Annuity Fund, to the extent these singly or together are not taxable under the Income Tax law, gratuity payable and encashment of leave shall not be included for the purpose of computation of the overall ceiling of remuneration. The increment in salary and perquisites and remuneration by way of incentive / bonus payable to Shri Pawan Kumar Kapil, as may be determined by the Board and / or the Remuneration Committee of the Board, is not to be included for the purpose of computation of the aforesaid ceiling of remuneration provided that such payment shall be within the overall ceiling of remuneration permissible under the Act. It is clarified that Employee Stock Options granted / to be granted to Shri Nikhil R. Meswani and Shri Pawan Kumar Kapil from time to time, are not to be included for the purpose of computation of the overall ceiling of remuneration. (b) Commission In addition to the salary, perquisites and allowances as set out above, Shri Nikhil R. Meswani shall be entitled to receive commission on net profits. The commission payable to him as also to Shri Mukesh D. Ambani, Chairman & Managing Director and Shri Hital R. Meswani, another Whole-time Director of the Company will be determined by the Board and/or the Remuneration Committee of the Board for each financial year. The overall remuneration including Reliance Industries Limited 19 commission to all three of them shall not exceed 0.40% of the net profits of the Company as computed in the manner referred to under Section 198(1) of the Act, or any statutory modification(s) or re-enactment thereof. No commission is proposed to be paid to Shri Pawan Kumar Kapil. (c) Reimbursement of Expenses Reimbursement of expenses incurred for travelling, boarding and lodging including for their respective spouses and attendant(s) during business trips; provision of car for use on the Company’s business; telephone expenses at residence and club membership shall be reimbursed and not considered as perquisites. (d) General (i) The office of Whole-time Director may be terminated by the Company or the concerned Director by giving the other 3 (three) months’ prior notice in writing. (ii) The employment of Whole-time Director may be terminated by the Company without notice or payment in lieu of notice: (cid:1) (cid:1) (cid:1) if the Director is found guilty of any gross negligence, default or misconduct in connection with or affecting the business of the Company or any subsidiary or associate company to which he is required to render services; or in the event of any serious repeated or continuing breach or non-observance by the Director of any of the stipulations contained in the terms of employment with the Company; or in the event the Board expresses its loss of confidence in the Director. Company or any of its subsidiary or associate company. (iv) The Whole-time Director will perform his duties as such with regard to all work of the Company and he will manage and attend to such business and carry out the orders and directions given by the Board from time to time in all respects and conform to and comply with all such directions and regulations as may from time to time be given and made by the Board and his functions will be under the overall authority of the Chairman & Managing Director. (v) The Whole-time Director shall adhere to the Company’s Code of Business Conduct and Ethics for Directors and Management personnel. Shri Nikhil R. Meswani and Shri Pawan Kumar Kapil satisfy all the conditions set out in Part - I of Schedule XIII to the Act for being eligible for the re-appointment. They are not disqualified from being appointed as Directors in terms of Section 274(1) (g) of the Act. The above may be treated as an abstract of the terms of re-appointment of Shri Nikhil R. Meswani and Shri Pawan Kumar Kapil under Section 302 of the Act. Shri Nikhil R. Meswani and Shri Pawan Kumar Kapil are interested in the resolution as set out at Item Nos 5 and 6 of the Notice which pertain to their respective re-appointments and remuneration payable to them. Further, Shri Hital R. Meswani, a Whole-time Director, may be deemed to be concerned or interested in the resolution pertaining to the re-appointment of, and remuneration payable to Shri Nikhil R. Meswani as they are related to each other. Save and except the above, none of the other Directors of the Company is, in any way, concerned or interested in the resolutions. The Board commends the resolutions as set out at Item Nos 5 and 6 of the Notice for your approval. (iii) Upon termination by whatever means of the Whole-time Director’s employment: By Order of the Board of Directors (cid:1) (cid:1) The Director shall immediately tender his resignation from the office as Director of the Company and from such other offices held by him in the Company, in any subsidiary and associate company and other entities without claim for compensation for loss of office, The Director shall not without the consent of the Company at any time thereafter represent himself as connected with the K. Sethuraman Group Company Secretary and Chief Compliance Officer April 20, 2012 Registered Office: 3rd Floor, Maker Chambers IV, 222 Nariman Point, Mumbai 400 021, India e-mail: investor_relations@ril.com 2 0 Partnering India's new future. Sustainably. Management's Discussion and Analysis Forward-looking statements The report contains forward-looking statements, identified by words like ‘plans’, ‘expects’, ‘will’, ‘anticipates’, ‘believes’, ‘intends’, ‘projects’, ‘estimates’ and so on. All statements that address expectations or projections about the future, but not limited to the Company’s strategy for growth, product development, market position, expenditures, and financial results, are forward-looking statements. Since these are based on certain assumptions and expectations of future events, the Company cannot guarantee that these are accurate or will be realised. The Company’s actual results, performance or achievements could thus differ from those projected in any forward- looking statements. The Company assumes no responsibility to publicly amend, modify or revise any such statements on the basis of subsequent developments, information or events. Overview FY 2011-12 was a challenging year. The global economy, barely a year after recession, witnessed lower economic growth, resulting primarily from the Euro Zone debt crisis and high oil prices, which were fuelled by uncertainties of supply. Rising unrest in the Middle East and North Africa (MENA) resulted in unprecedented levels of crude oil volatility. The European economies stagnated and the US witnessed a downgrade in its credit rating, while the growth engines of the global economy, China and India were forced to tighten liquidity to tame rising inflation. In addition, civil unrest in Libya and the tsunami in Japan posed further challenges. According to the International Monetary Fund (IMF), the global economy is estimated to grow at a modest pace of 3.8% in 2011, as compared to a robust 5.2% in 2010. These global events had a negative impact on demand, particularly in transportation fuels and petrochemical products. High crude oil prices hit the refining industry worldwide and resulted in reduced profitability. Despite the challenging environment, Reliance Industries Limited (RIL) performed reasonably well and grew its revenues by 31%. Its earnings were essentially flat at the PBDIT, PBT and net profit levels. RIL achieved its record level of exports which were higher by 41.8% at ` 208,042 crore ($ 40.9 billion) as against ` 146,667 crore in FY 2010-11. RIL’s consolidated revenue from operations for the year ended March 31, 2012 was ` 358,501 crore ($ 70.5 billion), an increase of 34.9% on a year-on-year basis. Profit after tax was at ` 19,724 crore ($ 3.9 billion), an increase of 2.2% as against ` 19,294 crore for the previous year. RIL’s performance can be attributed to its strong integrated energy portfolio and increasing demand for its products. The robust demand was underpinned by urbanization and growing disposable incomes in India and several emerging market economies. A transformational step was taken in oil and gas exploration business- the completion of the partnership between RIL and BP. This strategic partnership is unprecedented as it straddles India’s entire gas value chain. Operationally, RIL completed three years of operations at KG-D6. Production from KG-D6 was 5.67 million barrels (MMBL) of crude oil and condensate, and 551.31 billion cubic feet (BCF) of natural gas. In the downstream segments, RIL maintained operating rates upwards of 100% in the refining and petrochemicals business. The Company processed 67.6 million tonnes (MMT) of crude, the highest ever, at its Jamnagar refinery complex. For the seventh consecutive year, RIL was featured in the Fortune Global 500 list of the world’s largest corporations. Its rankings comprised: (cid:1) (cid:1) 134 based on sales 119 based on profits Noteworthy events RIL-BP Partnership On February 21, 2011, RIL and BP announced their strategic alliance. Under the aegis of this alliance, BP took 30% participatory interest in 21 oil and gas production sharing contracts operated by RIL in India, including the KG-D6 block. The 21 oil and gas blocks cover approximately 220,000 square kilometres. The partnership combines BP’s world-class deepwater exploration and development capabilities with RIL’s expertise in project management and operations. It will focus on exploring, discovering and producing hydrocarbons in India’s deep water blocks and will aim at significantly contributing to India’s energy security. Further, on November 18, 2011, RIL and BP announced the incorporation of India Gas Solutions Private Limited, a 50:50 Joint Venture (JV) company, which will focus on global sourcing and marketing of natural gas in India. This JV company is an integral part of the relationship between RIL and BP, and it establishes the commitment of both entities to the Indian market. The demand for gas has been growing at an exponential rate and both RIL and BP Reliance Industries Limited 21 anticipate natural gas to emerge as the preferred choice of fuel, given its properties as a cleaner and more sustainable fuel source. Financial Performance Revenue from operations ` 339,792 crore $ 66,790 million BP’s stake was at an aggregate consideration of $ 7.2 billion, subject to completion adjustments for interests to be acquired in the 21 production sharing contracts. Further performance payments of up to $ 1.8 billion could be paid based on exploration success that result in the development of commercial discoveries. RIL-SIBUR Joint Venture SIBUR is the largest petrochemical company in Russia and Eastern Europe. On February 21, 2012, RIL and SIBUR formed a JV called Reliance Sibur Elastomers Private Limited. The JV will be the first manufacturer of butyl rubber in India and with its targeted production of 100,000 tonnes of butyl rubber per annum, it will be the fourth largest producer globally. The JV will cater to the demand for synthetic rubber from the Indian automotive industry, which currently exceeds 75,000 tonnes per year and is being met through imports. Investment in the JV is in line with RIL’s vision of emerging as a significant player in the global synthetic rubber market. RIL’s share in the JV will total 74.9% while SIBUR will account for the rest. The JV will invest $ 450 million in setting up its facility, which is expected to be commissioned in 2014. RIL’s Share Buy-back Programme RIL announced a share buy-back programme on January 20, 2012, which will remain open up to January 19, 2013 or earlier as may be determined by the Company after necessary compliances. This buy-back programme is the largest-to-date in the history of Indian capital markets. The Board of Directors of the Company at its meeting held on January 20, 2012 unanimously approved the buy- back of up to twelve crore fully paid up equity shares of ` 10 each, at a price not exceeding ` 870 per equity share, payable in cash, up to an aggregate amount not exceeding ` 10,440 crore from the open market through stock exchange(s). During the year, Company has bought and extinguished 36,63,431 equity shares. Consequently a sum of ` 4 crore has been appropriated to Capital Redemption Reserve Account from Statement of Profit and Loss and ` 275 crore has been reduced from Securities Premium Reserve. The paid-up equity share capital of the Company as on March 31, 2012 has been reduced to ` 3,271 crore. PBDIT PBT Cash profit Net profit ` 39,811 crore $ 7,825 million ` 25,750 crore $ 5,061 million ` 31,994 crore $ 6,289 million ` 20,040 crore $ 3,939 million + 31% + 15% (-) 3% (-) 15% + 2% (-) 11% (-) 7% (-) 19% (-) 1% (-) 13% The net profit for FY 2011-12 was at ` 20,040 crore ($ 3,939 million) with a Compounded Annual Growth Rate (CAGR) of 20% over the past 10 years. RIL has announced a dividend of 85% amounting to ` 2,941 crore ($ 578 million), including dividend distribution tax. This is the highest pay out ever by Reliance continuing its commitment to distribution in a prudent manner. Highlights of RIL’s consolidated performance for the year are as follows: (cid:1) (cid:1) (cid:1) (cid:1) Revenue from operations increased by 34.9% to ` 358,501 crore ($ 70.5 billion) PBDIT decreased by 1.5% to ` 40,941 crore ($ 8.0 billion) Profit Before Tax increased by 5.1% to ` 25,338 crore ($ 5.0 billion) Cash Profit decreased by 3.5% to ` 32,590 crore ($ 6.4 billion) (cid:1) Net Profit increased by 2.2% to ` 19,724 crore ($ 3.9 billion) RIL continued to play a pivotal role in the growth of India’s economy. It accounted for: (cid:1) (cid:1) (cid:1) 14% of country’s exports 5.5% of the indirect tax revenues 4% of the market capitalisation (cid:1) Weightage of 9.3% in the Bombay Stock Exchange (BSE) Sensex (cid:1) Weightage of 7.8% in the National Stock Exchange (NSE) Nifty 2 2 Partnering India's new future. Sustainably. Financial Review RIL delivered superior financial performance with improvements across key parameters. The revenue from operations achieved for the year was ` 339,792 crore ($ 66.8 billion), a growth of 31.4% over the previous year. The increase in revenue was due to 2.2% rise in volumes and 29.2% rise in prices. During the year, exports, including deemed exports, were higher by 41.8% at ` 208,042 crore ($ 40.9 billion). The consumption of raw materials increased by 42.2% from ` 193,234 crore to ` 274,814 crore ($ 54.0 billion). This was mainly on account of higher crude oil prices. Traded goods purchases were ` 1,441 crore ($ 283 million) as compared to ` 1,464 crore in the previous year. Employee cost was ` 2,862 crore ($ 563 million) for the year as against ` 2,624 crore in the previous year. The operating profit before other income declined by 11.8% from ` 38,126 crore to ` 33,620 crore ($ 6.6 billion). The net operating margin for the period was 10.2% as compared to 15.4% in the previous year. Other income was higher at ` 6,192 crore ($ 1.2 billion) against ` 3,052 crore, primarily due to higher average cash balances. EBITDA decreased by 3.3% from ` 41,178 crore to ` 39,811 crore ($ 7.8 billion). Interest cost was higher at ` 2,667 crore ($ 524 million) as against ` 2,328 crore. The gross interest cost was higher at ` 3,097 crore ($ 609 million) as against ` 2,802 crore for the previous year on account of higher foreign exchange differences. The interest capitalised was lower at ` 430 crore ($ 84 million) as against ` 474 crore in the previous year. Depreciation (including depletion and amortisation) was lower at ` 11,394 crore ($ 2.2 billion), against ` 13,608 crore in the previous year, primarily on account of lower depletion charges in oil and gas business following the transfer of 30% participating interest to BP. Profit after tax was ` 20,040 crore ($ 3.9 billion) as against ` 20,286 crore for the previous year, a decrease of 1.2%. The earning per share (EPS) for the year was ` 61.2 ($ 1.2). The Company is debt-free on a net basis as compared to gearing level of 13.5% as on March 31, 2011. Return on capital employed was at 11.6% and return on equity was at 13.4%. During the year, the Company has issued and allotted 13,48,763 equity shares to the eligible staff of the Company and its subsidiaries under Employees Stock Option Scheme. The net capital expenditure for the year ended March 31, 2012 was ` 12,563 crore ($ 2.5 billion). During the year, a total of ` 28,197 crore ($ 5.5 billion) was contributed in the form of taxes and duties. RIL maintained its status as India’s largest exporter. The exports, including deemed exports, were at ` 208,042 crore ($ 40.9 billion) as against ` 146,667 crore in the previous year. RIL exported to 119 countries around the world. The exports represent 61% of the RIL’s revenue from operations. Petroleum products constitute 88%, while the balance is contributed by petrochemicals. Resources and Liquidity RIL continuously undertakes liability management to reduce cost of debt, to diversify its liability mix and extend the average maturity of its long-term debt. In FY 2011-12, the Company took advantage of low interest rates and raised capital at historically low costs. During the year, RIL refinanced $ 1.09 billion of external commercial borrowings at very competitive rates, thus reducing its cost of borrowing and extending its maturity to an average of 5 years. The Company also signed a $ 400 million equivalent facility backed by guarantee from SACE, the Italian Export Credit Agency, with a door-to-door tenor of 13 years to part-finance the proposed expansion of its petrochemical facilities, to set up a new gasification plant and refinery off-gas cracker. Additionally, Reliance Holding USA Inc., a wholly-owned subsidiary of RIL raised $ 1.0 billion through the issuance of 5.4%, 10-year Guaranteed Senior Notes in February 2012. The notes were priced through RIL’s secondary curve and were oversubscribed over 8 times as a result of significant investor demand, allowing Reliance to considerably extend its maturity profile. This offering was the first corporate bond from India in 2012 and it thus re- opened the international bond market for India. The transaction was also accredited as the largest high grade private corporate issuance in the Asian Oil & Gas sector (including Japan and Australia) and the emerging markets in the previous twelve months. RIL further priced $ 500 million re-opening of its 5.4% Guaranteed Senior Notes. The transaction was oversubscribed approximately Reliance Industries Limited 23 7.5 times and priced through secondaries with the support from 213 accounts across Asia, Europe and the US. As on March 31, 2012, RIL’s total debt was at ` 68,259 crore ($ 13.4 billion). Over 86% of its long-term debt and almost all of RIL’s short-term debt was denominated in foreign currencies. RIL’s gross debt to equity ratio, including long-term and short-term debt, as on March 31, 2012 was at 0.41, while the net debt to equity ratio was nil. As on March 31, 2012, RIL’s net gearing was nil. RIL’s cash and cash equivalents as at March 31, 2012 amounted to ` 70,252 crore ($ 13.8 billion). The increase in cash was primarily driven by a receipt of the balance consideration from BP. RIL continued to efficiently manage its surplus by placing them in liquid, highly rated instruments, such as bank fixed deposits, CDs, Government securities and bonds. RIL’s financial discipline and prudence is also reflected in the strong credit ratings ascribed by rating agencies. Moody’s has rated RIL’s international debt at investment grade Baa2, with ‘positive’ outlook. S&P has rated RIL’s international debt as BBB with a ‘positive’ outlook. Both these rating agencies continue to provide a rating to RIL, which is a notch above India’s sovereign rating. RIL’s long-term debt is rated AAA by CRISIL and ‘Ind AAA’ by Fitch, the highest rating awarded by both these agencies. RIL’s short-term debt is rated P1+ by CRISIL, the highest credit rating assigned in this category. Business Performance OIL & GAS EXPLORATION AND PRODUCTION BUSINESS Operating Environment As per International Energy Agency (IEA) estimates, global upstream oil and gas investment grew strongly in 2011, hitting a new record of over $ 550 billion. This capital spending was 9% higher than in 2010 and almost 10% higher than the previous peak in 2008. Annual upstream investment in nominal terms more than quadrupled between 2000 and 2011. It increased by 120% over this period in real terms, i.e., adjusted for cost inflation, as investment shifted to more complex projects with higher costs per barrel per day of capacity added. Crude prices increased by 40% during the year wherein Brent oil prices averaged a record $ 113/bbl as compared to $ 86.7/bbl in the previous year. On the contrary, increasing visibility on the potential of shale gas resulted in the US benchmark Henry Hub gas prices averaging at $ 3.66/MMBTU vis-à-vis $ 4.13/ MMBTU in FY 2010-11. Prices remained range-bound in the US due to excess drilling and lack of export infrastructure. However, the Asian LNG prices remained linked to crude oil and spot prices touched $ 13-14/ MMBTU. The oil demand, at 89 million barrels per day, was at a record high, owing primarily to the demand growth from emerging market countries. LNG markets In the past 5 years there has been a 40% increase in the global LNG production capacity, from approximately 176 MMT per year at the end of 2005 to 275 MMT per year at the end of 2011. By the end of 2011, 19 countries were exporting LNG, as compared to 12 countries prior to 2000. The list of LNG importing countries has grown to 26 in 2011 from 12 prior to 2000. Rapid expansion of LNG trade in recent years has occurred primarily through the commercialisation of large reserves of conventional resources and interest in developing unconventional resources, such as natural gas shale formations, has also grown significantly. The results are already noticeable in North America, where the current development of shale resources has led to a reduction in demand for its imports. USA Shale Gas In the US, demand for natural gas in both the commercial and the residential sectors was 24.4 TCF, a record high volume as per EIA’s report on annual natural gas consumption. In order to fulfil the increased demand and new forms of supply, pipeline capacity expansion projects were undertaken with reported additions of over 10 BCF/D. On the supply side, natural gas production increased to 4.8 BCF/D in 2011, a year-on-year increase of 7.9%, which is the largest increase ever recorded. The gas demand growth was not able to keep pace with supply growth, thereby causing the US gas storage inventory to reach record ever levels and gas prices reaching 10-year lows. Historically, the natural gas rig count drops sharply in a high production level environment. However, the shift towards liquids rich plays, where natural gas is essentially a by-product, has changed the US hydrocarbons industry. In December 2011, it was estimated that close to 60% of 2 4 Partnering India's new future. Sustainably. the natural gas rigs (as defined by the Smith Bits rig count) were drilling for hydrocarbon plays with enough liquids to stay active under depressed gas prices. The announcement of shut-ins, the lowering of rig counts and further coal-to-gas switching would have normally re- balanced supply and demand, but with storage at a record surplus, gas prices continued to witness downward pressure and increased domestic demand and export for LNG will take several years to materialise. RIL’s Performance KG-D6 Block KG-D6 gas catered to demand from 56 customers in critical sectors like fertiliser, LPG, power, CGD, steel, petrochemicals and refineries. KG-D6 gas fields completed 1,092 days of 100% uptime and zero-incident production. An average daily gas production from KG-D6 block for the year was 42.65 MMSCMD. The cumulative gas production was 1,808 BCF since inception, of which 551.31 BCF was produced in FY 2011-12. An average oil and condensate production for the year from the block was 15,481 barrels per day. The cumulative production of oil and condensate was 19.44 MMBL since inception, of which 5.67 MMBL was produced in FY 2011-12. In the D1-D3 gas fields, 22 wells have been drilled till date, of which 18 were producer wells. Of these, 2 wells were drilled during this year. Extensive reservoir studies are underway for augmenting additional production with the integrated (or combined or joint) efforts of RIL and BP’s technical teams. Based on the production data vis-a-vis original production geological model, validated by experts, it appears that: (cid:2) (cid:2) (cid:2) decline in pressure / production has been higher than originally predicted; volumes connected to existing wells is lower than envisaged; gas outside the main channel is in small uneconomic volumes and not participating in production. In view of the above, the Company has restated its Proved Reserves downwards. The guidelines issued by ICAI have been followed while in categorising reserves. The proved reserves have also reduced due to sale of participating interest to BP. 6 wells in the D26 field were producer wells. The well MA- 2, which was earlier a gas injection well, was converted to a production well since April 2010. Optimised Field Development Plan (OFDP) for the development of 4 satellite discoveries was approved by the Government of India in January 2012. Engineering activities, which are yet to commence will determine the future course of action. There have been re-estimation of reserves in these discoveries and RIL has restated the reserves downwards based on such results. In addition, RIL has declared the commerciality of discovery D34 of KG-D6 and restated the Proved Reserves upwards based on re-estimation. Revised plan of development for D26 field submitted to the DGH. Further an integrated development plan for gas discoveries in the KG-D6 block is being conceptualised to maximise capital efficiency and accelerate monetisation. Other Domestic Blocks The Company made a discovery in the first well drilled in CY-D6 block – Well SA1 – Discovery Dhirubhai 53. The appraisal work programme submitted which is under review with DGH. The Company submitted a proposal for commerciality of 8 discoveries in CB-10 block and also notified declaration of commerciality for D32 and D40 in NEC-25 block. During the year, as part of reassessment of its portfolio together with BP, RIL has considered 5 blocks as relinquished in its books and initiated the formal process of relinquishing these blocks. In addition to the above, RIL also relinquished 5 additional blocks from its portfolio. Consequently, RIL’s domestic oil and gas portfolio consists of 17 exploration blocks excluding KG-D6, CBM, Panna-Mukta and Tapti. The Company has issued arbitration notices in respect of obligation of Minimum Work Programme stipulated in the Production Sharing Contracts for four blocks relinquished by the Company. The amounts payable for the unfinished work under the Minimum Work Programme were agreed upon and settled in October, 2006 between the Government and the Company and were paid. Acting under a subsequent New General Policy promulgated on December 17, 2007, the Government reopened the issue and made further claims against the Company. The arbitrations relate to refund of the further amounts recovered subsequently by the Government from the Company. The Company has been advised that recovery of additional amounts by the Government is unsustainable Reliance Industries Limited 25 and the amounts in the four arbitration notices aggregate to $ 8,899,242.07. gas production in FY 2015 subject to necessary approvals from regulatory authorities. The Company has also issued a notice of arbitration to the Government in respect of Company’s entitlement to recover the entire amount of contract costs incurred by the Company as stipulated in the Production Sharing Contract. The Company has been advised that the Government cannot deny cost recovery of any element of contract costs on the ground that the levels of production mentioned in the development plan were not being achieved. The Company is following the required procedure for progressing the arbitrations. Panna-Mukta and Tapti Fields The Panna-Mukta fields produced 10.06 MMBL of crude oil and 71.24 BCF of natural gas in FY 2011-12, growing 8% and 37% respectively over the previous year, which was impacted due to a shutdown on account of a failure of sub-sea hose system and parting of anchor chains to the SBM. Tapti fields produced 0.88 MMBL of condensate and 73.79 BCF of natural gas in FY 2011-12, a decline of 28% and 22%, respectively over the previous year. This decrease in production was due to a natural decline in the reserves. Panna SPM, which had a major failure in July 2010, resulting in a complete shutdown of oil and gas production for 3 months, was repaired and resumed operations. The entire SPM system is planned to be replaced in FY 2012-13. Coal Bed Methane RIL holds 3 CBM blocks in Central India, which include Sohagpur (East), Sohagpur (West) and Sonhat (North) in the domestic unconventional portfolio. Exploration phases for Sohagpur East and West blocks were completed and these blocks entered their development phase. RIL has completed the following operations in these blocks: (cid:2) Drilled, logged and tested over 45 core holes for gas content, permeability and coal properties (cid:2) Drilled over 85 production wells Based on the additional number of wells and core holes drilled and the results achieved, proved reserves for the CBM blocks have been restated upwards. Further, RIL appointed consultants for subsurface and surface facilities design and sent a proposal for CBM pricing to MoPNG for approval. RIL plans to achieve first Shale Gas RIL entered into three JVs in 2010 as part of its strategic focus on pursuing partnerships with experienced and successful operators in the fast growing resource base of shale gas in North America. In addition to these JVs with Chevron and Carrizo in Marcellus shale play of Pennsylvania and Pioneer Natural Resources in Eagle Ford shale Play of South Texas, RIL and Pioneer also partnered in the development of midstream assets through an equity investment for servicing the gathering needs of Pioneer upstream JV. Reliance’s current assets are now most strategically located within the premier shale plays of the US, the Marcellus in Pennsylvania and the Eagle Ford in South Texas. FY 2011-12 represented a significant year of growth for the shale gas business, with significant investments in drilling, completions and facility installations. As a result of these efforts, gross production from all three JV reported an exit rate of 233 MMCFPD of gas and 34.7 MBPD of liquids in December 2011 (a 7 fold increase on year-on- year basis). Number of rigs operational increased to 19 in March 31, 2012 vis-a-vis 15 rigs that were operational a year ago. JV activities focused on further development which included: (cid:2) Drilling a total number of 231 wells across the JVs (cid:2) Focus on drilling in liquid rich wells (cid:2) Gathering agreements for gas and liquid in both plays (cid:2) Implementing cost savings in drilling, fracking and mid-stream operations Pioneer JV Operations Pioneer JV operated 12 rigs with a focus on enhancing production, assessing additional portions of the play, while testing new procedures to improve drilling performance and lower costs. Reliance’s share of production from this JV was 41.7 BCFe for the year. The JV successfully pursued a strategy of prioritising drilling in liquid rich areas. Approximately 59% of the production was of liquids. The year also saw significant expansion in the mid-stream JV to increase capacity for handling higher production from upstream JV as well as third party volumes. In 2012, tests conducted in Eagle Ford drilling included 2 6 Partnering India's new future. Sustainably. further pad drilling to evaluate optimum well spacing and to capture the efficiencies and cost reductions seen with multi-well pads. Other active Eagle Ford projects included the implementation and evaluation of artificial lift to keep oil and wet gas well unloaded. After extensive study and research, it was determined that both gas lift and rod pumping were technically viable options. The JV is currently evaluating economics as well as their pros and cons. Efforts are also underway to install additional centralised compression at multiple gathering points to assure continued flow and reduce system pressures. Chevron JV Operations During the year, the Chevron JV operated 5 rigs with accumulative production of 8.9 BCFe attributable to Reliance. To ensure value optimisation by moderating current development, the number of rigs was reduced to 4 as of March 31, 2012. Efforts to optimise well performance were initiated in Marcellus with the drilling of longer laterals. This effort will help to improve project economics of the venture’s 315,000 gross acreage position in the future. Delays were seen in pipeline construction resulting in delayed production on line. Additional delays from regulatory, logistic and surface issues challenged the efforts in getting wells turned to sales, but these constraints are expected to be alleviated by mid-2012. Carrizo JV Operations Carrizo commenced JV operated production in October 2011 with a production of 4.3 MCFPD from the core Northeast Pennsylvania (NEPA). The JV produced 1.8 BCFe, attributable to Reliance during the year with 2 operational rigs. During the year, the JV concentrated development plans in NEPA. The NEPA region was equipped with newly constructed pipeline infrastructure, which can efficiently transport gas to markets with flexibility to maximise net- back. Additionally, RIL firmed pipeline transportation contracts, which allowed its gas to flow on the congested interstate pipeline systems. Conventional Hydrocarbons: International Business Reliance has 10 blocks in its international conventional portfolio, including 3 in Yemen (1 producing and 2 exploratory), 2 each in Kurdistan, Peru and Colombia and 1 in Australia amounting to a total acreage of over 51,000 sq. km. During the year, the following activity was undertaken as part of the exploratory campaign: (cid:1) (cid:1) 2D seismic data acquisition of 42 LKM in Yemen block 37 3D seismic data acquisition of 500 sq. km. in Colombia blocks (cid:1) Well testing in Sarta block in Kurdistan The results of seismic survey in Block-41 (Oman) and well drilling in Block-K (East Timor) were not encouraging. Reliance Exploration & Production DMCC (REP DMCC) does not propose to carry on any further exploration activities in theses blocks. Hence, REP DMCC has relinquished Oman -Block 18, Oman - Block 41 and East Timor Block-K where REP DMCC had 70%, 75% and 75% participation interest respectively. The expenditure incurred on these blocks has been fully provided for in the books of REP DMCC, a wholly-owned subsidiary of RIL. Future Outlook It is expected that global energy consumption growth will average at around 1.6% per annum over the next two decades. Of this, non-OECD energy consumption is expected to be 54% higher by 2030, averaging 1.7% growth per annum, and accounting for 74% of the global energy growth. OECD energy consumption in 2030 is expected to be higher by 8%, with growth averaging at 0.3% per annum over the next two decades. The fuel mix will change relatively slowly due to long asset lifetime, but gas and non-fossil fuels will gain share at the expense of coal and crude oil. The fastest growing fuels are expected to be the renewables (including biofuels), which will grow at 7.8% per annum in the 2009-2035 time frame. Among the fossil fuels, gas is expected to grow the fastest at 1.7% per annum. Non-OECD countries are likely to account for 80% of the global rise in gas consumption, with growth averaging at around 3% per annum. Demand growth is expected to be the fastest in non-OECD Asia (4.3% per annum) and the Middle East (3.9% per annum). LNG North America was once considered to be a likely destination for LNG supplies but increase in the US natural gas production and decreasing prices in the US markets have resulted in movement of LNG supplies to higher- priced markets in South America, Europe and Asia instead. It is likely that significant shale resources also exist in other large consuming countries, including China and Reliance Industries Limited 27 several European nations. Although development of shale resources in China and other countries could slow the growth of their demand for imports, exploitation of unconventional resources will not necessarily be countervailing to growing international trade. The demand for natural gas in India is expected to witness a CAGR of 20% over the next five years and could be touching 359 MMSCMD by 2017. India’s domestic production by 2017 will only be 209 MMSCMD, which implies that LNG imports will be nearly 150 MMSCMD (~42% of domestic consumption), making India a significant player in the global gas market. be evaluated with 6 wells (4 horizontal and 2 vertical). Additionally, seismic acquisitions will aid in the placement of laterals to optimise well performance. To further enhance this evaluation, the JV has successfully retrieved whole core of the Marcellus Shale, which will be analysed to further assess ‘C-County’ reservoir properties. The Pioneer JV will continue to focus on liquid rich areas of their acreage and on capital efficiencies, whilst in parallel fully appraising the remaining acreage. This JV will provide a dominant portion of our revenues and earnings in FY 2012-13 due to high liquids content and number of producing wells. Shale Gas REFINING AND MARKETING BUSINESS FY 2012-13 will be a challenging year for shale gas, given the continuous weak gas prices, increasing wells costs in Eagle Ford due to market pressures and the need for drilling activity obligations to hold certain oil and gas leases, which will potentially expire in the near term. In light of the current gas supply and industry conditions, the JVs will take a long-term view around commodity price fluctuations, and will move forward with execution and capital efficiency improvement plans for enabling both cost reductions and well performance enhancement. In FY 2012-13, RIL will begin to transition into a post carry period in both the Carrizo and Pioneer JVs. It is expected that the business environment will be challenging, both for commodity pricing and service industry optionality. To meet these challenges, RIL will work with the JV partners to ‘right size’ levels of activity and portfolio mix, based on commodity pricing, industry conditions and various ‘self- help’ initiatives. These efforts will aid in maximising returns on capital expenditures for 2012, while retaining high value acreage in the JVs. The Chevron JV has set aggressive cost reduction targets for FY 2012-13 with cost improvements to be achieved in both drilling and the completion of wells. In addition, to reduce location costs, efforts to maximise the number of producing wells per pad will be underway. New technology and processes will be deployed to collect, store and use water for both drilling and completion operations, which will aid in offsetting the low gas price environment and increased well costs. Exploratory efforts in Carrizo JV operations for FY 2012-13 will be focused on assessing approximately 90,000 acres located in Central PA (‘C Counties’) which will preliminarily Summary FY 2011-12 was a year of sharp contrasts. In the first half the environment was very supportive, in part a result of Japanese refinery shutdowns post the tsunami. This culminated in a record level of business underlying performance in 2Q. But in the second half of the year a number of factors came into play resulting in a very challenging environment — concerns about the robustness of the economic recovery strengthened, particularly in Europe; Japanese fuel oil demand for power generation helping crush light to heavy crude differentials; and a strong rally in crude prices as a result of Iranian political tension that did not fully pass through to product markets. It was a year in which there were several investments and actions to ensure that Reliance’s competitive advantage was maintained. These included debottlenecking of important process unit capacities, increased recovery of high value products through enhanced operating efficiency, and various energy conservation measures. On the market side, eight new crudes were run for the first time consistent with the strategy of always looking for the most economic feedstock; and there was an increase in placing middle distillates and gasoline into higher value eastern markets. Marketing volumes to the domestic Indian state oil companies were above FY 2010-11 with 8.5 MMT of gasoil compared to 7 MMT in FY 2010-11. The market has moderately readjusted as FY13 has commenced as expected. But there are many challenges ahead. Energy costs for eastern refiners are now significantly higher than in the West; there is a significant level of new refining capacity coming on in India as well 2 8 Partnering India's new future. Sustainably. as China and the Middle East both adding to product availability and competing for heavier crudes. However, the refining margin scenario may improve due to demand recovery from emerging markets and mothballing of old and inefficient refineries in US/Europe. Apart from these factors, there are also regular delays in new capacities that can potentially help the cycle sustain for the medium term. The business has identified a suite of investments and actions to ensure that not only will the business compete in this environment but actually significantly enhance medium term performance without any real improvement in the external environment. Operating Environment Crude Oil Oil prices started the year strongly with the removal of most Libyan production (1.6 MBPD) from the market. This also resulted in light sweet crudes fetching higher premiums over the heavier grades, pushing the light-heavy differentials to over $ 5/bbl. Brent prices then declined by over $ 10/bbl by the middle of the year. But all this was reversed in the second half with Brent prices rallying back to about $ 125/bbl and the light heavy differential contracting sharply. WTI continued to trade at a considerable discount to Brent as a result of infrastructure constraints preventing the new Canadian and northern US crudes being able to access the Gulf Coast. This gave the Mid-Western refiners access to supernormal returns. According to IEA, oil demand in FY 2011-12 grew approximately to 89.1 million b/d (+0.8 MBPD y-o-y). OECD nations witnessed a demand decline of almost 600 KBPD, while the non-OECD nations, led by China, witnessed a demand growth of over 1.3 MBPD. Crude supply increased by over 1.2 MBPD with negligible contributions from non-OPEC countries. Average Crude Oil Prices ($ / bbl) FY 2010-11 FY 2011-12 Max Min Average Max Min Average Brent Dated WTI Dubai 116.9 106.8 111.6 67.6 65.6 68.2 86.7 128.2 102.7 83.3 113.7 84.2 124.2 75.3 96.5 114.7 97.2 110.1 (Source: Platts) Refinery Capacity and Utilisation An estimated 1.4 MBD of refining capacity was added in FY 2011-12. However, with closures in the US refineries, the net capacity additions for the year were about 550 KBPD. Average refinery utilisation rates for the year remained largely unchanged for North America (83.4%) and Asia (82.5%). Europe, however, witnessed a decline of almost 2% in the refinery operating rates, to 76.7%. This compares to utilisation rates for Jamnagar of close to 110%. Margins The first half of the year was very positive with margins led by demand for middle distillates and underpinned by incremental Japanese import demand. Complex margins at Singapore hit a peak of over $ 10/bbl in August and averaged more than $ 8.83/bbl over the year, comparable to the very strong market of 2008. China halted its gasoil exports over the summer to avoid power cuts from burning less coal to meet environmental commitments, boosting middle distillate cracks. Two of the largest refineries in Asia - Taiwan’s Formosa and Singapore’s Bukom region, suffered unexpected outages providing further upside to the margins for Asian refiners. Margins in the US were unreasonably high on account of the wide gap between WTI from other global crude markers. High unemployment and economic gloom resulted in slow growth in oil product demand in the US but refinery closures and reconfigurations, access to cheap gas as well as healthy demand from export markets, allowed the US refiners to improve their margins on a year-on-year basis. Singapore US Europe $/bbl FY-11 FY-12 FY-11 FY-12 FY-11 FY-12 -4.5 11.4 18.2 17.8 -2.5 7.4 10.3 15.7 13.2 -9.2 18.4 24.4 32.3 29.2 3.5 -2.0 6.7 13.6 14.5 -8.9 -8.3 6.4 15.8 17.2 -8.5 0.3 Naphtha 8.3 Gasoline 14.8 Jet Kero 13.7 Diesel -5.3 FO (Source: Platts) Light Distillates FY 2011-12 remained a volatile year for light distillates. Asian gasoline cracks improved year-on-year but naphtha margins witnessed a steep decline. The US, which is the backbone for global gasoline demand, remained lacklustre, Reliance Industries Limited 29 In the summer season, air conditioning requirements boosted the demand for fuel oils from the power generation sector, especially in the Middle East. Japanese power demand has added some 400 KBPD to oil demand, about half of which is being met by fuel oil. Fuel oil even traded at a premium to Dubai in January when Singapore on- shore fuel oil stocks dropped to their lowest levels in 3 years. Some correction was seen but average Singapore fuel oil cracks gained $ 3/bbl. RIL’s Performance Highlights Overall, RIL had a very strong first half performance as it benefited both from the combination of strong middle distillate and gasoline cracks, and a wide light heavy crude differential. In the second half not only did cracks in general weaken, but complex refiners were doubly disadvantaged because of the collapse in light heavy crude spreads following on from the fuel oil strength. Hence the indicative Jamnagar margin was $ 10.2 per barrel in the first half but this fell to 7.2 in the second half. In FY 2011-12, RIL processed 67.6 MMT of crude and achieved an average utilisation of 109%, which is significantly higher than the average utilisation rates for refineries globally. Exports of refined products were at $ 36 billion. This accounted for 39.6 MMT of product as compared to 38.6 MMT the previous year. In terms of the overall trend in the total domestic market, demand growth continues to be strong, partly as a result of the domestic subsidy programme. During the year, the domestic demand for petroleum products increased from 138 MMT to 144.2 MMT, reflecting a growth of 4.5%. But the market remains an export market overall with Indian refining capacity increased to 213.8 MMT from 193.4 MMT. Product-wise demand and growth during the last two years is given in the table below: FY- 2011-12 FY- Growth % 2010-11 (In KT) Diesel Gasoline ATF LPG Kerosene Naphtha 64,680 14,992 5,536 14,929 8,228 9,467 59,878 14,192 5,079 13,901 8,928 8,966 8.0% 5.6% 9.0% 7.4% -7.8% 5.6% (IPR March 2012) but the growing demand for transport fuels in emerging economies partly offset this downfall. Asian gasoline cracks began the year on a strong note on account of high demands from Japan and opened arbitrage to the US. Strong regional demand from countries like Indonesia, Malaysia, Pakistan and the Middle East further supported these cracks. Unplanned outage of 540 KBD Formosa Petrochemicals refinery proved positive for Asian gasoline, pushing the cracks to the highest point of the year in the second quarter. In line with the seasonal trends, gasoline witnessed a decline in the third quarter. Refinery run rates remained high to feed the growing middle distillates demand, putting gasoline in an over-supplied position. The cracks turned negative for a brief period but ended the year at average levels. Average Singapore gasoline cracks improved by almost $ 3/bbl on a year-on-year basis. Taking cues from fragile economic situations and lower petrochemical demand, naphtha witnessed a dismal period for almost the entire year. Heavy cracker maintenance and ample supplies weakened the cracks right from the beginning of the year. Availability of low-cost gas in the US further marked a dent in the demand for naphtha. The situation deteriorated on account of unplanned and prolonged outage at Formosa Petrochemicals plant in Taiwan. The third quarter witnessed the worst period of oversupply and Naphtha cracks plunged to as low as $ (-)17/bbl. Middle Distillates Due to strong demand prospects, middle distillates fared better than their light counterparts and were the backbone for refining margins in FY 2011-12. The US emerged as a major exporter to Latin American countries like Brazil and Mexico, which witnessed a high demand for transport fuel and supply shortfalls due to low refining production. The lack of gasoil-rich crudes from Libya limited the middle distillate supply to its biggest consumer, Europe. Japan shifted its traditional role from a net exporter of gasoil to a large gasoil importer, pushing Asian gasoil cracks to over $ 25/bbl before correction. Overall, the Asian gasoil cracks averaged and gained $ 4/bbl year-on-year providing some support to complex refiners like RIL. Residual Fuel Oil Fuel oil cracks witnessed a volatile year. Boosted by increased Japanese demand, low sulphur grades strengthened more than high sulphur grades. Strong cracks for middle distillates and reasonable margins on gasoline led to higher utilisation of cracking capacity and eventually led to tighter supplies for fuel oil. 3 0 Partnering India's new future. Sustainably. The demand of MS and HSD, which together constitute more than half of the consumption of petroleum products, registered a growth of 5.6% and 8.0% respectively during the year as compared to the previous year. Several actions and investment were undertaken to ensure that RIL’s competitive advantage was strengthened and maintained: RIL USA Inc RIL is placing gasoline and alkylates in American markets through RIL USA Inc. North America and Latin American countries offer an attractive export destinations for RIL’s gasoline. RIL USA has storages in Bahamas and New York area to capture freight economics and blend margins whenever opportunities arise. (cid:1) Debottlenecking of important process unit capacities (e.g. CDU, Coker, VGOHT, DHDS, LCOHC, Alkylation etc.) During the year, US gasoline market was weaker than anticipated. However, demand from Latin American regions was higher than previous year. (cid:1) Enhanced recovery of high value products through increased operating efficiency (cid:1) Widening of feedstock processing window (cid:1) Various energy conservation measures GAPCO RIL consolidated operations of its GAPCO subsidiaries in East Africa. GAPCO group owns and operates large storage facilities and has a retail distribution network in Tanzania, Uganda, Rwanda and Kenya. It also owns and operates large coastal storage terminals in Dar-e-Salaam (Tanzania), Mombasa (Kenya) and inland terminal at Kampala (Uganda) and has well-spread depots in East Africa. The Government of Tanzania commenced bulk procurement of gasoil, gasoline and Jet Kero through Product Importation Committee (PIC). Subsequent to continuous representations made by the industry to the Government, EWURA (Energy and Water Regularity Authority of Tanzania) revised the retail and wholesale pricing formula, which resulted in improved margins for OMCs. Regulatory challenges grew in the Eastern African Community (EAC) region due to the high cost of petroleum products. GAPCO emerged as a brand of repute known for reliable quality and quantity of auto fuels at its retail outlets. It significantly improved its standing in the Eastern African market. The group also emerged as a key supplier to the neighbouring countries and signed a term contract for supplies to Zambia from Dar-e-Salaam Terminal in Tanzania. During the financial year ended 31st December, 2011, 1248 KT of petroleum products were sold and its operations were profitable. During the Financial year ended on 31st December, 2011, the company has sold 42.88 million barrels which includes gasoline and alkylate from RIL and blend stocks purchased from the local markets. Its operations were profitable. Future Outlook In FY 2012-13, net refining capacity additions of 2.6 MBD are estimated. Asia, led by China and India, is expected to contribute above 50% of this addition. The Middle East and Latin America will contribute the major part of the balance. Growth in refinery capacity addition is expected to outpace growth in demand and will keep a check on operating rates. Demand in Europe and the US is expected to shrink or at best stay unchanged. European refiners are already facing the brunt of economic slowdown and high oil prices. FY 2011-12 witnessed several refinery closures in Europe and the US. These closures will take off some of the burden from other refiners, but the overall outlook for refining industry in these regions continues to remain challenging. The situation of oversupply may be partially mitigated with additional closures in Europe and the US and due to delays in the commissioning of new projects slated to become operational during this period. Much of the new Eastern capacity has sophisticated upgrading capability, including cokers, which will potentially increase the demand for heavy oil. On the other hand the increased availability of lighter crudes in the US is leading to the cancellation of coker projects in the Gulf Coast and a switch in slates away from the heavy Arabian crudes. Emerging economies, especially in Asia, may feel pressure from the sluggish European economy, and are likely to see some slowdown in demand growth. At a time when inflationary pressure has moderated and China and India could ease monetary policies to boost economic growth, Reliance Industries Limited 31 this will maintain a strong outlook for gasoline growth in the region. The addition of new ethylene crackers will support naphtha margins in the medium-term. Middle distillate sector will remain the driver for Asian refining margins. Subsidy on diesel in emerging economies in Asia will shield the retail consumers from high and volatile oil prices, supporting strong demand growth. Reconstruction work in Japan is also likely to provide further boost in demand. Asia’s fuel oil market has eased due to an increase in the arrival of more bunker-grade fuel supplies from the Middle East. Overall, the outlook for Asian refining industries continues to remain positive to the rest of the world. For RIL, Jamnagar refining complex is highly competitive given its flexibility in crude slate, product slate and low operating costs. Forward plans are built on the basis that the environment will remain challenging and therefore cash and profit growth need to be driven on the back of self- help. A wide range of measures are being planned to further strengthen its competitive position: given the high oil prices, a number of schemes including petcoke gasification are under various stages of implementation with a view to achieving a sharp reduction in energy cost. These measures are being supplemented by many others that seek to improve the yield pattern as well as operating & cost efficiencies. Focus would also be on maximisation of netbacks through optimisation of product placement around the world. PETROCHEMICALS BUSINESS Operating Environment Ethylene Ethylene is a raw material used in manufacturing polymers like polyethylene, polyvinyl chloride and polystyrene, as well as organic chemicals like ethylene oxide and ethylene glycols. These products are used for various end markets, such as packaging, transportation, electronics, textiles and construction. Global ethylene markets recovered from oversupply that stemmed primarily from expanded capacity in the Middle East and Asia and recessionary global conditions. Global ethylene capacity grew by 3.6 MMT, while supply grew by 3.4 MMT. Global ethylene production totalled 125.6 MMT during the year, representing improved operating rate of 85.2% as compared to 84.9% in the previous year. Global ethylene prices remained high due to higher crude oil and naphtha prices and plant turnarounds. Asian ethylene margins were under pressure as polyethylene prices did not increase in line with naphtha costs. Global demand continued to be slow due to European crisis and stagnant Chinese demand. World Ethylene Supply/Demand – 2011 Production by feedstock Demand by end use Production : 125.6 MMT Demand : 125.6 MMT Naphtha Ethane Propane Butane Others 49% 35% 8% 4% 4% P E Ethylene Oxide E D C E B Z Others 60% 14% 11% 6% 9% (Source: CMAI 2012) Capacity additions in recent times have dramatically changed the supply scenario. During the year, 90% of capacity additions were from the Middle East and Asia. The Middle East now accounts for 18% of global ethylene capacity as compared to 11% in 2006 and Asia for 33% as compared to 29% in 2006. With the operational capacity in the Middle East, the feedstock mix for cracker changed in favour of gas. Lower NGL prices on account of shale gas availability provided a significant advantage to the US ethane cracking costs as compared to integrated naphtha cracking. High energy and naphtha prices resulted in pressure on margins as well. Globally, naphtha-based operators experienced cost increases due to higher input costs. Polymers Polymers witnessed growth driven by applications where plastics delivered a cost advantage and performance enhancement. Consumption of global commodity plastics in FY 2011-12 was estimated at 205 MMT. This included products like polyethylene (PE), polypropylene (PP), polyvinyl chloride (PVC), Polystyrene, ABS, PET and Poly- carbonate. Of this, PE accounted for 37% of all plastic consumption, followed by PP and PVC which accounted for 26% and 18% of the total plastic demand respectively. 3 2 Partnering India's new future. Sustainably. Global Poly-olefins + PVC Demand RIL’s Performance (In MMT) 2009 2010 2011 Growth% 2011 vs 2010 LDPE LLDPE HDPE PP PVC Ethylene Propylene 18 19 31 45 32 111 69 (Source: CMAI 2012) 18 22 33 50 35 122 76 19 23 35 51 36 125 78 1.7% 5.5% 3.8% 2.2% 3.2% 2.7% 2.4% During the year, global capacity addition of PP was 3.5 MMT while incremental growth in demand was 1.1 MMT. Consequently, operating rates declined to 81.1% vis-à- vis 83.5% in FY 2010-11. Global capacity addition of PE, driven mainly from Asia and Middle East was 2.44 MMT while incremental demand grew by 3.7% to 2.7 MMT. Operating rates for PE improved to 82.9% from 82.1% in the previous year. Global capacity addition of PVC was 4.68 MMT while demand increased by 1.1 MMT. The operating rates decreased to 71.1% from 76% in the previous year. Product price recovery continued throughout the year (~4- 10%), although it was slower than inflation rates of feedstock prices. Asian Polyolefin margins were under pressure as feedstock costs rose faster than product prices. Asian PVC margins improved as feedstock (EDC) costs declined and product prices stabilised. Average Product Prices Price ($/MT) FY-12 FY-11 % change Dubai Crude Naphtha PP HDPE PVC (Source: Platts) 110 950 1479 1363 1050 84 758 1376 1239 1007 31% 25% 7% 10% 4% RIL maintained its leadership position with a domestic market share of 47% and commodity polymer production share of 65% in FY 2011-12. RIL’s polymer production for the year was higher by 8.5% as compared to FY 2010-11 due to stable plant operating performance. RIL’s cracker operating rate was at 98.2%. Polymer production in KT FY-12 FY-11 % change 2740 1077 638 4455 2497 978 631 4106 10% 10% 1% 8% PP P E PVC Total PP RIL’s PP production was at record level at 2740 KT, up by 10%. It exported a record 825 KT. Imports increased by 2% but with introduction of new grades and consistent supplies; imports could come under pressure in the near term. RIL introduced a new random co-polymer grade SRX100, catering to the fast growing packaging sector and high clarity random PP grades which are currently imported. Transparent containers in water purifier were developed by using new grades SRX 100 and SRM 100NC replacing engineering plastics. PP containers were used for flavoured milk and malt milk products, which helped to conserve energy at all stages from manufacturing to transportation. RIL’s market outreach programme ‘Rishta’ continued throughout India with special emphasis on agriculture and infrastructure sectors. Additionally, RIL initiated several agricultural research projects with leading nodal agencies to improve the use of polypropylene non-woven covers. New applications were developed for preparation, storage, and transport of silage for use as fodder replacing concrete structures. RIL also worked with the Ministry of Textile to create awareness of the benefit of geotextiles in road, railways and river embankment. RIL is also working towards spreading awareness about new products like geo-bags, geo-tubes and gabions to protect against natural calamities and provide better living conditions. Reliance Industries Limited 33 PE RIL’s PE production was higher by 10% at 1077 KT in FY 2011-12. PE market share increased to 32% from 29% the previous year. Increased focus helped RIL to increase its market share from 38% to 44% in LLDPE. The domestic LDPE demand grew by 17%. RIL maintained its market shares in LLDPE and HDPE in growth sectors like Raffia/ MF, GPBM, IM, and Butene Film. In LDPE, the Company expanded its market share in general purpose film, milk packaging and extrusion coating sectors. In the PE business, since market expansion with value- added grades provides an edge over the competition, grade development activities were undertaken by RIL during FY 2011-12. These included: (cid:1) (cid:1) Introduction of HDPE Relene F46003E for HD Film sector Introduction of LDPE Relene 24FA040 for LD General Purpose Film sector PVC PVC is a major product for the infrastructure sector, applied in irrigation pipes, drinking water supply, sewerage schemes, profiles for the building industry, wires and cables. PVC consumption in India was estimated to be 1.99 MMT in FY 2011-12, which represented a growth of 3% over the previous financial year. India imported about 747 KT (73 KT higher than FY 2010-11) of PVC. Pipes and fittings continued to be the major market accounting for 73% of the domestic PVC demand. Future Outlook Around 24.6 MMT of additional ethylene capacity is likely to be added over the next five years. Around 95% of incremental capacity of PP and around 92% of incremental capacity of PE is expected in Asia and the Middle East in the next five years, reflecting the region’s growing prominence in this sector. Around 82% of incremental capacity of PVC is expected to come up in Asia and the Middle East in the next five years. RIL, with its portfolio of PP grades being produced through multi-line production, is well-positioned to capture the future growth. RIL continues to work with major Original Equipment Manufacturers (OEM) of automotive and appliances for replacing several parts with Polypropylene. Notable among these is the development of components for automotive with long glass fibre filled Polypropylene compound, which is a light-weight material and thereby provides fuel efficiency with safety. CHEMICALS BUSINESS Operating Environment Demand growth from sectors like paints, pharmaceuticals, detergents, tyres etc. contributed to the driving force for growth of chemical sector in India. The operating environment for various chemicals is summarised below: Benzene: The global capacity of benzene in FY 2011-12 was 57.2 MMT against a production of 41.6 MMT, resulting in an average operating rate of 73%. Globally, there is now an excess capacity due to increases in the past 4-5 years by more than 9.5 MMT. Butadiene: North-East Asia remained the largest market globally with a market share of 45% followed by 22% and 21% by USA and Europe respectively. The demand grew by 3% on a year-on-year basis. Poly-butadiene Rubber: It is the second largest synthetic rubber among elastomers having an estimated demand at 3 MMT. Global demand for synthetic rubber in coming years is expected to grow at 7.8% annually. Caustic Soda: Globally, the installed capacity of caustic soda was about 93 MMT (dry). The global consumption of caustic soda during the year increased to 65.8 MMT (dry), an increase of about 4.4% over the previous year. The operating rates averaged at 71% with capacity additions in China, which led to over-supply in the Asian region. Linear Alkyl Benzene (LAB): Globally, the consumption of LAB was pegged close to 3.1 MMTPA against a capacity of 3.5 MMTPA. On an average, the consumption growth was 2.9% per annum, and is expected to continue at this rate, driven primarily by the Asian demand. Acrylonitrile: The global capacity of acrylonitrile in FY 2011-12 was 6.1 MMT against production of 5.2 MMT, resulting in average operating rate of 85%. The demand for the year was 5.04 MMT. Methyl Tertiary Butyl Ether: The global capacity during the year was 17.1 MMT against a production of 14.6 MMT with operating rate of 86%. The demand for the year was 14.6 MMT. RIL’s Performance The Indian chemical industry was in line with the global business environment with an exception of the elastomer segment, which varied due to excessive demand from the 3 4 Partnering India's new future. Sustainably. automobile sector. RIL maintained its leadership position in aromatic segment, constituting benzene, toluene and xylene. Benzene: RIL’s benzene production was 734 KT, reflecting a growth of 1% in FY 2011-12. Total sales for the year was 745 KT, including 440 KT for exports, 207 KT for domestic and 98 KT for captive consumption. 440 KT of benzene was exported mainly to the US, Europe and the Middle East. Toluene, a major by-product of BTX group, registered production volumes of 101 KT. Butadiene: RIL produced 183 KT of butadiene during the year, of which 67 KT was exported after meeting the entire domestic requirement and captive consumption. The demand from downstream sectors covering SBS rubber, PBR, ABS and styrene butadiene latex recovered during the year and the total demand generated was 114 KT. Poly-butadiene Rubber: RIL is the only manufacturer of PBR in India. During the year, the Company produced 78 KT, increasing 2.6% on a year-on year basis. Most of this production was sold in the domestic market, where consumption was estimated at 154 KTA. Caustic Soda: RIL has an annual capacity to produce 168 KTA of caustic soda and 141 KT of chlorine. RIL’s capacity utilisation for the year was at 97% as against average domestic capacity utilisation of 75%. Linear Alkyl Benzene (LAB): With an installed capacity of 182 KTA, RIL is fifth largest producer of LAB globally. During the year, the Company became the leading domestic producer of LAB, by market share, with production of 166 KT. Tightening of normal paraffins resulted in lower utilization of LAB capacity. Acrylonitrile: RIL is India’s sole producer of acrylonitrile with a capacity of 40 KTA. RIL’s production caters to 30% of the domestic market demand, with the rest being fulfilled from imports. During the year, RIL sold 36 KT to the domestic market and exported 1.5 KT. The poor demand from the derivatives (Acrylic Fibre and ABS) and the economic scenario adversely impacted Acrylonitrile prices and sales in the third quarter of FY 2011-12. Future Outlook RIL’s crackers at Hazira, Nagothane, Dahej and Vadodara are among the globally integrated petrochemical complexes with upstream refining, E&P and downstream chemical facilities. RIL is a leading producer of Butadiene, Benzene, PBR and LAB in India. It also produces basic aromatic building blocks of the highest purity, conforming to the product grades. These include toluene, mixed-xylene and ortho-xylene. A new facility to produce butene-1 (40 KTA) and Methyl Tertiary Butyl Ether (144 KTA) has commenced from December 2011. RIL foresees large opportunities in elastomers and other diverse chemicals. It has announced the setting up a facility for manufacturing 100 KTA of butyl rubber in India. A new ESBR project of 150 KTA and additional PBR capacity of 40 KTA are also being executed. This is a significant step towards the Company’s commitment to service India’s growing automotive sector by bringing in complex technologies. POLYESTER FIBRE AND FILAMENT BUSINESS Operating Environment The unpredictable volatility in global economies impacted the textile markets and demand in major consuming economies turned cautious and slower. Many producers across the globe shifted or set up new manufacturing bases at low-cost centres, mostly in the Asian countries. Competitiveness of the Chinese exports eroded as the Chinese government made Yuan market dominated. As a result, Yuan strengthened by 5%, while other major Asian currencies depreciated by 5-9% against the US dollar. In addition, labour costs also impacted cost structures in China. During FY 2011-12, cotton markets continued to be an area of significant interest. Encouraged by high prices in cotton marketing year FY 2010-11, farmers planted about 8% more acres for the next season. However, at the time of the harvest, demand prospects in major consuming countries faltered. Downstream players in major processing centres across the globe lowered operating rates leading to huge stock piles. Consequently, cotton prices plunged by 10% in contrast to 100% increase witnessed in FY 2010-11. The Chinese reserve purchases by the Government were also not enough to hold up the surge in supplies in most producing countries. The high volatility in cotton prices and ambiguous outlook forced downstream players to opt for polyester due to lesser price volatility and greater reliability of steady supplies of polyester. Consumption of polyester fibre and yarn during 2011 thus increased by 7% to 39 MMT. During the year, polyester prices increased by 5-6% over the previous year, mainly owing to cost push from feedstock and energy. The unfriendly demand scenario kept markets unreceptive and pressure on margins Reliance Industries Limited 35 increased, lowering delta by 24-30%. Producers turned cautious to keep plant operations in control to avoid piling of inventories. Polyester capacity additions were predominantly seen in PFY, accounting for about 70% of the total 4 MMT. PSF witnessed restart of some idled capacity owing to the surge in demand, arising from fluctuations in cotton prices and better margins in PSF. It is expected that by 2015 polyester capacity would increase by about 12 MMT, largely in PFY. Most of these capacity additions of about 9 MMT are planned in China. At the same time, global demand is likely to grow by 7 MMT by the same period. PET PET global demand growth during 2011 was at 7%. The year saw high demand created by growth in packaged drinking water. Uncertain prices encouraged buyers to scout for smaller purchase volumes at more frequent intervals with shorter delivery times to avoid inventories pile ups. This buying pattern favoured the local producers largely in USA and Europe. In addition, the depreciation of Euro during the year made imports costlier, thus promoting domestic producers. Many plants intermittently stopped their operations, which helped to keep the markets balanced in most parts of the globe and demand growth kept prices favourably high. Prices thus gained about 15% during the year. Light-weighting and use of food grade recycled PET was common, particularly in North America and West Europe. A stronger commitment to developing technology for renewable raw materials was seen. Major beverage companies announced and developed bottles entirely from renewable sources. Feedstock Overall prices for polyester feedstock increased, following the strong oil prices and ethylene markets. PX was marked up by 33%, PTA by 11% and MEG by 21%. There were shortages in supplies in PX and MEG markets. With no new MEG capacity being added, the existing plants operated at almost same rates as last year and booked higher margins. MEG delta surged 17% higher over last year’s average. PTA markets, on the other hand, were hit by capacity additions of about 4 MMT during 2011. While the supplies increased, cautious downstream buying prevented large price hikes, which pressurised PTA margins and delta for the year was about 47% lower than FY 2010-11. PTA delta reached almost breakeven during the third quarter of the year, which forced many producers to shut operations to cut losses. Also the exchange rate arbitrage between Asian and European nations favoured the producers in Europe who catered to local requirements. Similar condition prevailed in USA and consequently Asian producers suffered low margins. Domestic Operating Environment India continued to hold a crucial position in global textile industry, owing to its advantages of adequate availability of raw materials, relatively lower conversion costs, skilled manpower and favourable demographics. Cotton and polyester accounted for around 92% of the total fibre requirements of Indian textile mills. As per government estimates, cotton and man-made fibre consumption in India is in the ratio of 59:41 as against the 40:60 ratio globally. The lower per capita fibre consumption in India of around 5 kgs as against global average of 11 kgs indicated huge potential for expansion of fibre consumption. Other major demand drivers included rising disposable income and working population, emerging non- apparel applications of fibre and industry-friendly government policies. In FY 2011-12, the textile industry was impacted due to volatile cotton markets. Within a span of around 5-6 months, the international and domestic cotton prices saw historic peak and subsequently a steep fall. The uptrend was primarily due to shortage of cotton availability across the world and certain government policies on cotton and cotton yarn exports, which were not receptive to textile industry growth. Consequently, the industry resorted to panic buying and stocked cotton. But, with the beginning of declining trend in cotton prices, the industry faced problems in sourcing of cotton, impacting the downstream demand as well. End-users moved into strict wait-and-watch mode and the textile industry faced huge pile-up of unused cotton and cotton yarn inventory, leading to severe stock losses. Man-made fibres, especially polyester fibre and yarn, fared relatively better as volatility in prices of polyester was much lower as compared to cotton. Major textile production centres in Andhra Pradesh, Tamil Nadu and some Northern states faced severe power shortages, adversely affecting output and profitability of the mills. Labour shortage was also prominent during the year. Government restrictions on raw cotton and cotton yarn exports were witnessed along with some proactive measures to assist the domestic and export community 3 6 Partnering India's new future. Sustainably. against the backdrop of weakened demand and continuous economic uncertainties from the West. Technological Upgradation Fund Scheme (TUFS) was restructured and higher allocations were provided. The high potential growth segment, technical textiles was included within its ambit. The textile ministry proposed to make TUFS a part of the Twelfth Five Year Plan beginning from April 2012. Government announced ` 900 crore incentives for the exporters in October 2011. The Focus Product Scheme was extended to include Polyester Textured Yarn (PTY), Fully Drawn Yarn (FDY) and polyester textile grade chips. A Special Focus Market Scheme was introduced, which provided additional 1% duty credit for exports to specific countries. Government also scrapped the DEPB scheme and introduced Revised Duty Drawback Scheme with effect from October 01, 2011. Government approved 21 new integrated Textile Parks in nine states of India with a project cost of ` 2,100 crore over a period of 36 months. The new Textile Parks are expected to leverage an investment of over ` 9,000 crore and generate over 4 lakh jobs. RIL’s Performance RIL continued to hold top rankings in polyester and feedstock markets, constantly reaping the benefits of backward integration. Consolidated polyester capacity of RIL stood at 2.4 MMT. According to PCI, RIL held the 1st rank in polyester fibre and filament capacity, 5th rank in PX and 8th in PTA and MEG. RIL catered to 38% of the domestic market and exported to over 100 destinations. During FY 2011-12, domestic polyester demand grew moderately at 2% over FY 2010-11. The momentum was led by 17% growth in PET followed by 2.8% growth in PFY. RIL contributed to 25% of the domestic PFY demand of around 2.2 MMT, 69% of the domestic PSF demand of 0.8 MMT and 47% of the domestic PET demand of 0.5 MMT. The production volumes of polyester declined by 2.4% to 1663 KT. PFY production decreased by 5.5% to 695 KT, while PSF and PET production were almost steady at 615 KT and 352 KT. In case of polyester feedstock, domestic PTA demand during the year was around 3.5 MMT, down by 3% from the previous year. MEG domestic demand was around 1.7 MMT, up by 4% and PX domestic demand was 2.2 MMT, up by 7% compared to the previous year. Fibre intermediates production (PX, PTA and MEG) of 4756 KT marked an increase by 5% and PX production increased by 9% to 2004 KT, PTA production was up by 2% at 2069 KT, while that of MEG was marginally higher at 683 KT. During the year, the Company enhanced its market reach through improved customer interaction at various open forums and through electronic and print media. RIL developed PET resins that improved shelf life of perishable goods by providing barrier for oxygen and carbon dioxide exchange through container surface. The Company also developed hygiene products, such as hydrophilic spun- lace fibre, which has better moisture absorbability and is used for high absorbent hygiene products, micro spun- lace fibres for extra soft hygiene applications and trilobal spun-lace fibres. It also launched a specialised pillow for relief from neck pain while sleeping. RIL innovations for textile industry during the year included Recosilk – a specialised thread for embroidery applications, Recron Bind and a product that increases knitted fabric structure strength. RIL’s contribution to nature protection led development of products to substitute harmful carcinogenic asbestos in roofing applications, siliconised fibres for soil stabilisation and fine denier fibres for the construction industry. Recron Malaysia Update RIL acquired Recron Malaysia in 2008. Recron Malaysia is an integrated polyester unit having downstream textile operations like spun yarn and fabric production. It has a polyester capacity of more than 500 KTA and fabric production of 600 million meters per annum. Since acquisition, the Company has undergone significant improvement in terms of its operations and profitability. FY 2011-12 proved to be a challenging year amidst global economic uncertainties and disturbances in several parts of the world. Demand from key markets of Syria and Egypt was impacted by geo-political concerns. Besides, the Malaysian Baht also appreciated by around 5% against the US dollar, which in turn impacted export earnings. Sales during FY 2011-12 increased by 9% to $ 1.2 billion. Exports continued to account for 90% of the total sales and were spread across 65 countries. The Company continued to hold a dominant domestic market share of 60% in grey fabric, PET and PTY and was profitable. The India Malaysia CECA came into effect from July 2011, which envisaged the liberalisation of trade in goods, trade in services, investments and other areas of economic co-operation. Reliance Industries Limited 37 Future Outlook The global feedstock demand is expected to rise in line with the polyester production. MEG demand is expected to grow by 6 MMT by 2015, while capacity additions are also foreseen at 6 MMT. This will assist plant operating rates favourably. PTA demand is expected to rise by 14 MMT by 2015, while capacity additions are expected to rise sharply by 32 MMT. The PTA capacity addition will require large investments in feedstock PX, of which only 13 MMT is planned till 2015. The large PTA addition may lead to price moderations, but a constraint in PX supplies will determine the operating rates of these new plants and the subsequent market balance. Demand growth of 6.4% in PET has been estimated during 2012, predominantly in Asia/Pacific region. PET capacity additions, however, will rise above the demand growth and are likely to pressure operating rates. About 60% of this capacity addition is expected in China. As per the recent Fitch Ratings report, the outlook for Indian textile industry for FY 2012-13 is expected to be stable for synthetic textiles and negative to stable for cotton textiles, depending on the segment of the value chain. The study estimates that cotton textiles will face challenges of slower demand pick-up and loss of margins before an anticipated recovery from the fall in cotton prices. Synthetic textiles will benefit from substitution of higher- priced cotton products and a greater demand for blended textiles. As per Technopak estimates, the Indian textile industry, over the long term, has a potential to grow to $ 220 billion by 2020 from its current size of around $ 80 billion, at a CAGR of around 10-11%. Such ambitious targets will be led by a significant incremental fibre demand, and polyester is likely to account for the majority share, given the limitations and restrictions associated with natural and other fibres. Opportunities across the energy chain In the domestic E&P business, RIL through the strategic alliance with BP is poised to benefit from their expertise in sub-sea engineering and reservoir management. With regards to KG-D6, access to production data gives incremental analytics on field behaviour and sub-surface geology. RIL and BP’s collective technical capabilities, access to relevant resources and timely regulatory / government approvals can go a long way in arresting production decline and help in ramping up production. RIL is committed to investing in this business, but simultaneously remain conscious of its responsibility of deploying capital prudently. RIL’s foray in to the shale business is enabling it to focus on creating huge capabilities in the context of unconventional hydrocarbons and horizontal drilling while simultaneously increasing its global and geological footprint in this business. In the US energy mix, the proportion of gas is set to increase in future as demand for cleaner and safer fuels grows. Also, technology evolves to make the shale gas business more mainstream in the context of developing hydrocarbons in North America. RIL’s shale gas JVs in Marcellus and Eagle ford blocks in US are likely to contribute to RIL’s medium term earnings growth. Moreover, the presence of liquid-rich resources in the RIL-Pioneer JV in Eagle Ford makes it an attractive proposition even during the current low gas prices environment. Refining business performance will be primarily governed by the global economic environment and crude oil price movement. Global economic environment will continue to weigh heavy on the refining margin performance. While, economic outlook continues to remain uncertain, refining margins are expected to remain range bound in near term. The global refining cycle may swing for an up-cycle in the next few quarters driven by limited capacity additions, demand recovery based on economic forecasts and major mothballing of refineries in US/Europe. Apart from these factors, there are also regular delays in new capacities that can potentially help the cycle sustain for medium term. RIL is building one of the largest coke gasification facilities in the world with capital expenditure of $ 4 billion over the next 3-4 years. This will significantly increase the complexity and profitability of the refinery and also make it more environmentally friendly. This will further enhance bottom-of-the-barrel conversion in terms of value creation. RIL benefits from its leadership position in key petrochemical and polyester products. It is ranked among the top 10 producers of most petrochemical products. The domestic market for polymers as well as polyester has been growing at around 8-10% on a year-on-year basis. Despite recent demand slowdown and lowering margins in Asia, RIL continues to benefit due to its wide product portfolio and integrated business model. RIL has a balanced portfolio of liquid and gas based crackers and it is in the top quartile in both capital and operating cost terms. Given India’s low per capita consumption of polymers and polyester products of around 3.5 to 4 kg, and the resilience of the economy, the demand for these products is expected to see double digit growth in the 3 8 Partnering India's new future. Sustainably. medium term. RIL is accelerating further downstream integration program with new cracker and aromatics chain. RIL has commenced the largest ever capital expenditure program in the history of its petrochemicals business. RIL plans to invest $ 8 billion across polyester and polymers chain over the next 3-4 years. RIL is also investing in expanding its rubber business which will be integrated with required feedstock available from the two large refineries at Jamnagar. Asia has become a large base for automotive tyre manufacturing and is one of the largest consumers of these rubber products. RIL will have strong portfolios of plastics, rubbers and polyester chain which can give sustainable cash flows in future. Challenges, Risks and Concerns A significant portion of RIL’s revenue is attributable to sales of crude oil, natural gas, refined products and petrochemical products, the prices of which are affected by worldwide prices of feedstock and end products. Historically, these prices have been cyclical, sensitive to relative changes in supply and demand, the availability of feedstock and general economic conditions. Any slowdown in global economic growth, cyclical down turns in the refining and petrochemicals industry and major changes in the prices of feedstock and end products may adversely effect margins, business, financial condition and results of operations. Evaluations of oil and gas reserves involve multiple uncertainties and require exploration and production companies to make extensive judgments as to future events based upon the information available. The crude oil and natural gas initially in place and further reserves and resources data are estimates based primarily on internal technical analyses prepared by RIL. Such estimates reflect the best judgment as applicable at the time of their preparation, based on geological and geophysical analyses and appraisal work, and may differ significantly from previous estimates. RIL is subject to risks arising from interest rate fluctuations. RIL borrows funds in the domestic and international markets to meet the long-term and short-term funding requirements for its operations and funding its growth initiatives. A majority of the RIL’s borrowings are floating rate debt and hence are exposed to upward movement in interest rates. Changes in the exchange rate between the US Dollar and the Indian rupee may have a negative impact on RIL’s results of operations and financial condition. RIL maintains its accounts and reports its financial results in rupees. Most of RIL’s revenue and costs are either linked to or denominated in US Dollars. Further, RIL makes substantial purchases of services and equipment in foreign currencies. As such, RIL is exposed to risks relating to exchange rate fluctuations. RIL uses various derivative instruments to manage the risks arising from fluctuations in exchange rates and interest rates. Internal Controls RIL operates in a global environment straddling multiple jurisdictions and complex regulatory frameworks. Our governance and compliance processes, which include the review of internal control over financial reporting ensure that all the assets of the Company are safeguarded and protected against any loss and that all the transactions are properly authorised, recorded and reported. RIL conducts regular internal audits to test compliance with the statutory requirements. Audits are led by professional audit managers and supported by experienced personnel drawn from across the organisation. Audit results are used by management to create detailed action plans where the businesses have not yet achieved full compliance with the requirements. Key findings are reported to senior management and summary reports are considered by the Audit Committee of the Board. RIL maintains global IT and communication networks and applications to support its business activities. IT security processes protecting these systems are in place and subject to assessment as part of the review of internal control over financial reporting. The nature of the industries in which RIL operates means that many of its activities are highly regulated by health, safety and environmental laws. As regulatory standards and expectations are constantly developing, RIL also maintains high priority towards keeping the highest standards of health, safety and environmental norms while maintaining operational integrity. Major Subsidiaries India is among the largest and fastest growing major economies in the world. With demographics in India’s favour and rising aspirations, there is a strong consumption growth in physical and digital retailing. RIL’s foray, through its subsidiaries is aimed at capturing these large scale opportunities in creating unprecedented value for all its stakeholders. Reliance Retail Limited Operating Environment The overall size of the retail industry in India is estimated at $ 470 billion. This industry is characterised by a low organized retail penetration of 6% as multiple Reliance Industries Limited 39 intermediaries, including 12 million kiranas, dominate this industry (as per Technopak). towards building a services platform for supporting retail development and value creation. Growth Drivers The key drivers for growth and transformation in retail industry are: Increasing Urbanisation: Urban India has grown by nearly five times in the last fifty years. Urbanisation indicates growing proportion of people in middle and upper income classes, providing impetus to retail growth. Changing demographic profile: With 65% of the Indian population under the age of 35 and a median age of 26 years, India has one of the world’s youngest populations. A Combination of young population, nuclearisation of families and increasing number of working women acts as major growth driver in retail. Rising incomes and propensity towards disposability: Rapid economic growth over the last few years has resulted in a sustained increase in per capita incomes in India, resulting in discretionary household spending, which in turn leads to retail growth. Aspirational lifestyle: Rapid globalisation, media proliferation and increasing internet penetration have led to an increase in awareness levels about world class brands and products. With rise in disposable income levels, the consumer is willing to spend more on self, giving impetus to retail. Financial Sector: The increased availability of credit cards and retail loans has boosted the organised retail industry. Challenges The key challenges in the retail industry are: Real estate: Availability of real estate at reasonable prices, at desirable location, acceptable scheme and access and sustainable economics. Manpower: Availability of skilled manpower to manage the back-end and front-end operation of organised retailers. Supply Chain: The lack of adequate and appropriate facilities like cold storage and efficient supply chain in the country acts as an infrastructure bottleneck. RIL’s Performance RIL launched Reliance Retail six years ago. Since inception, Reliance Retail has relentlessly worked During the year under review, Reliance Retail witnessed strong growth in sales from existing stores and also added new stores. At a consolidated level, Reliance Retail has posted a revenue from operations of ` 7,599 crore for the financial year representing a growth of 25% over last year. Despite challenging macro-economic conditions most of the retail formats have delivered well over 20% same store sales growth. Same stores sales growth has been well above the growth declared by peer retailers in respective formats which indicates the robustness of the business model. It has made significant investments in building back-end as well as front-end retail infrastructure and some of the key areas where the Company has built capabilities include: Warehousing and logistics infrastructure: Reliance Retail has created a robust and state of the art supply chain infrastructure comprising of an integrated network of city distribution centres, regional distribution centres and import distribution centres across the country. It has also developed a robust delivery mechanism, which manages delivery from the distribution centres to over 1,300 stores. IT infrastructure: Physical infrastructure is supported by robust technology led systems that ensures stock optimisation and provides a healthy fill rate at distribution centres and stores. Strong IT infrastructure has helped Reliance Retail to drive some of the major productivity improvement initiatives. Human capital and talent pipeline development: Under the aegis of Reliance Retail Academy, several academies have been started to train hired staff for specific roles. Focused training programmes have been developed to improve productivity and deliver better customer experience at the store. Currently, Reliance Retail has an employee base of about 25,000 people, including store associates, corporate staff and associates in distribution centres, processing centres, collection centres and other facilities. Front-end infrastructure development: Reliance Retail has built relationships with leading mall developers and property consultants and special efforts have been made to improve store execution timelines, to optimise capex through value engineering and indigenisation and to implement energy management and conservation efforts, 4 0 Partnering India's new future. Sustainably. while maintaining an unwavering focus on enriching the consumer experience. Reliance Retail has also invested in planning tools that have helped in achieving standardised and efficient store layouts. Standardisation in visual merchandising requirements, spanning all formats, has also helped stores to improve go-to market timelines and manage costs better. Compliances: Retail is a highly regulated industry and there are a large number of compliances that need to be met. Reliance Retail ensures that all its formats and business units comply with applicable laws and for that purpose, it has adopted a strong process based approach in maintaining over 7,000 licences, apart from trade compliances across a network of over 1,300 stores. Food supply chain: Reliance Retail operates fresh food distribution centres that have cross dock facility for fruits and vegetables. It has temperature controlled facilities for frozen and chilled products, ripening chambers for fruits and reefer transportation that delivers fresh produce to hundreds of stores across the country. Reliance operates over 15 distribution centres for fresh food and over 50 facilities comprising of collection centres and processing centers. These facilities eliminate waste in the supply chain, preserves food items in hygienic conditions and provides higher benefits both to farmers and consumers. During FY 2011-12, Reliance stressed on its back-end operations and store expansion capability by successfully adding more than 200 stores across value and specialty formats. Reliance Retail’s performance across its two formats – value format and speciality format is summarised below: Ahmedabad. Reliance Market will create sustained value by generating employment and self-belief in small shopkeepers, as it partners with the traditional trade. The first pilot store boasting an area of 100,000 sq.ft. caters to kirana stores, small businesses, restaurants and various other institutional buyers. Specialty Formats Reliance Digital Consumer Durable, IT and Telecom (CDIT) market is one of the largest categories of consumption in India. The market has been historically operated through the traditional channel that occupies nearly 85% of the trade. The CDIT market in India is estimated at ` 115,000 crore in 2011. The current market is growing at over 13% and is expected to touch ` 215,000 crore by 2016 (not including services). Reliance Digital aims to provide ‘solutions’ to the customer through end-to-end services. It operates multiple formats ranging from full size Reliance Digital stores to Reliance Digital Express stores. In FY 2011-12, Reliance Digital more than doubled its store count to 75 operational stores and established itself as the market leader in the category. It also operated 19 iStores in partnership with Apple. It witnessed a 20% sales growth achieved primarily through enhanced integration of ResQ, the service arm of Reliance Digital. One of the significant achievements of Reliance Digital was the launch of private label brand ‘Reconnect’, which includes wide categories of products like flat panel TVs, kitchen appliances, air conditioners and various accessories. Reconnect is positioned from the perspective of affordability, user experience and aspiration. Value Formats Reliance Trends Food and grocery remained the single largest retail category in 2011 in India with sales of ` 16,25,000 crore accounting for 69% of the total retail market. Organised retail accounted for a little below 3% of the sales in this category. RIL’s value format comprising of Reliance Fresh, Reliance Super, Reliance Mart, Delight and Autozone, consisted of over 700 stores and contributed to dominant share of retail space and revenue from operations. During the year, Reliance Retail launched its new prototype of ‘Reliance Mart’ and ‘Reliance Super’ and also its first ‘wholesale’ format under the name of ‘Reliance Market’ in The overall apparel market in India was estimated at ` 175,000 crore in 2011 with organised retail accounting for close to 16% of the overall sales in this segment. The sector is expected to grow to ` 250,000 crore by 2016 at a CAGR of 7.5% with organised retailers accounting for ` 40,000 crore in sales. Reliance Trends, the apparel, luggage and accessories specialty format of Reliance Retail has achieved the distinction of becoming India’s largest fashion destination in FY 2011-12, with 90 stores across 59 cities and 18 states. This significant milestone was achieved in just 4 years of its launch - a ramp up that is unparalleled compared to other leading players in this industry. Reliance Industries Limited 41 Reliance Footprint The footwear industry in India is estimated to be about ` 25,000 crore and growing at 13% per annum. The industry has been relatively more organised with modern trade occupying nearly 35% share. Reliance Footprint has established itself as India’s first multi-brand store with over 50 national and international brands of footwear. Asics, the world famous sports shoe, sportswear and accessory brand is in exclusive distribution relationship with Reliance Footprint. Reliance Footprint focused on expansion during the year and opened 50 new stores taking the current store count to 88 stores across 57 cities. Reliance Jewels In a ` 130,000 crore industry in India, modern jewellery retail contributes to less than 10%. The potential and opportunity for modern jewellery retail to grow rapidly and gain a higher market share is strong. Reliance Jewels expanded to 38 stores in FY 2011-12. Reliance TimeOut The Indian market for books, music and stationery industry was estimated to be more than ` 25,000 crore in 2011. Reliance TimeOut offers a wide range of products including books, entertainment, stationery, toys, gifts and personal accessories. It expanded to 38 stores in FY 2011-12. Partnerships with key brands Reliance Retail operates various partnerships in the lifestyle category. Reliance Brands To introduce high fashion in India, Reliance Brands has partnered with iconic brands, such as Diesel, Paul & Shark, Ermenegildo Zegna and Timberland to name a few. The number of brands in Reliance Brands’ portfolio of partnerships exceeds 30 brands, of which the Company co-owns 20 brands for the India territory while the remaining are licenses/franchises. The number of stores grew to 50. During the year Reliance Brands announced partnerships with: (cid:1) Iconix Brand Group, a brand management company that owns the fashion and home brands such as Ed Hardy, Mossimo, London Fog and Ocean Pacific. The partnership will own the brand rights from the Iconix portfolio for the Indian territory (cid:1) Kenneth Cole to license the merchandise for retail and premium wholesale in India for the American clothing brand (cid:1) Thomas Pink for a franchise arrangement Marks and Spencer Reliance Retail’s partnership with Marks and Spencer continues to grow rapidly since the formation of the JV in 2008. In a period of 4 years, the business has seen rapid retail development. The JV has witnessed 20% same store sales growth and has doubled its retail space in FY 2011-12. Marks & Spencer has a ubiquitous presence in the retail landscape of the large cities in India and is on an aggressive store roll-out plan. Vision Express is Europe’s largest optical chain with over 4000 stores in 30 countries. In India, Vision Express retails optical products through a JV of Reliance Retail and GrandVision. Vision Express offers customers’ eye wear and offers the most comprehensive 11 step eye test in the country. The tests are conducted on the finest international equipment. Vision Express ramped up its presence at a rapid pace by adding 55 stores during the year, taking the store count to over 150 stores. Office Depot Reliance Retail operates a JV with Office Depot Inc., a global supplier of office products and services for providing office supplies to the Indian institutional market. The JV has built a significant business through a network of 8 branch offices across the country. The retail footprint of Office Depot stores, set up by Reliance Retail, is undergoing test marketing in Bangalore. This network of 4 stores has provided reasonable understanding of the demand for office products in a retail environment. Future Outlook Overall retail sales are expected to grow to approximately $ 675 billion by 2016 from the current $ 470 billion, offering immense opportunities for expansion of organised retail. 4 2 Partnering India's new future. Sustainably. Reliance Retail seeks to add alternative channels to reach out to customers. These channels will provide the convenience of anytime, anywhere shopping with an access to a wide variety of products, thereby making the shopping experience more enjoyable. Saturating markets and gaining market share in certain key markets is integral to Reliance Retail’s strategy for future growth. Reliance Retail will continue to add density of stores to gain market share across the country. It will work with its supplier base to offer differentiated product experience to customers. A central theme is provided by the Loyalty Programme, which has over 9 million registered customers. Infotel Broadband Operating Environment From less than 5 million mobile users in 2001, India has grown to more than 800 million mobile users and continues to add close to 10 million new customers every month. India is now the second largest and the fastest growing telecom market in the world. Despite the growth in telecom, India has not kept pace with the world in terms of more advanced communication technologies. Today, broadband in India only has around 1% market penetration (13 million connections) compared to the West where there is over 60% market penetration and China, which has a rapidly growing market of over 150 million broadband users. Broadband access to the internet will fundamentally change the way Indians work, live and play. The internet provides access to millions of applications, services and content, delivering a wide array of offerings, such as email, voice and video communications, news, productivity, social networking, games, education, health and fitness, finance, travel and e-commerce. For businesses too, business to business (B-to-B) transactions can be efficiently and universally consummated via the internet, instead of point-to-point proprietary systems. Such rapid, ubiquitous and just-in-time access to relevant information has the potential to bring unprecedented efficiency to enterprise activities like manufacturing and supply chain. Update on Infotel During 2010, RIL acquired a 95% stake in the equity of Infotel Broadband Services Limited. with the intention of creating a nation-wide network of next-generation wireless broadband services. Infotel was the only successful bidder in all of the 22 circles in the Broadband Wireless Access (‘BWA’) auction conducted by Department of Telecommunication, Government of India. Reliance can now offer fourth generation wireless infocomm services across the nation through the 20 Mhz, contiguous, pan- India spectrum secured through this acquisition. Reliance plans to use LTE technology for its country wide network deployment to provide connectivity and related digital services to its customers. LTE is an advanced technology with capability to pack more bits per hertz of spectrum (called spectral efficiency), thereby providing better throughput, network capacity, performance management and drive down the unit cost of delivering bandwidth. The global ecosystem for LTE is also developing rapidly. As on date, there are 300 operators investing in LTE across 90 countries and there are 50 networks based on LTE technology in 30 countries already in commercial stage. LTE-capable devices are rapidly developing to meet current and future needs of operators and their customers. There are over 200 LTE devices launched globally, addressing a variety of market segments and needs – routers, dongles, modules, notebooks, smartphones, tablets, PC cards to name a few. These include products like Apple’s fourth generation i-phone, their third generation i-pad tablet, the android based Samsung Galaxy Note and Microsoft’s 4G LTE Windows phone. In addition to LTE and its future versions, Reliance will continue to evaluate and deploy other technologies, both wireless and wireline, to offer comprehensive broadband solutions to consumers, small businesses, enterprises, government and other entities. Broadband networks are necessary, but not sufficiently available for digital services to develop fully in India. The concurrent development of the following four areas is required to provide superior customer experience with respect to digital services: (cid:1) (cid:1) (cid:1) (cid:1) Broadband network, which provides high speed reliable connectivity Broadband-enabled devices, which enables smooth interface and rich interaction Locally relevant digital content, services and applications Support services to assist customers across the entire consumer lifecycle. Reliance Industries Limited 43 Globally, many operators have focused primarily on the creation of the broadband network. However, Reliance will focus on making available all the components of the entire digital value chain. To deliver such end-to-end solutions, Reliance will collaborate with strategic partners including service providers, infrastructure providers, device manufacturers and other participants in the ecosystem. Reliance will also leverage its broadband network to support the requirements for homeland security applications and services, which can benefit from the advantages of low latency and assured quality of services that are integral to 4G networks. Insurgency and terrorism have become global challenges, and in light of the recent terrorist attacks on major cities, the citizens of India have a dire need for digital surveillance and security services. The traditional security platforms have been found inadequate to address the new challenges associated with global terrorism and there is a need to support the efforts of our law enforcement agencies with intelligent and real- time electronic and digital solutions. Reliance is working with global partners to bring state-of-the-art homeland security solutions to the Indian market. Other Developments Reliance Haryana SEZ Limited The development activity of Model Economic Township (MET) in the district of Jhajjar Haryana has begun with some of the leading Japanese multinationals undertaking the development of their industrial units. The State Government has recommended the project to be declared as a node of the Delhi Mumbai Industrial Corridor which is under consideration by appropriate authorities. The MET has been envisioned to be developed as an industrial infrastructure to support economic growth through a JV between Reliance Ventures Limited (a subsidiary of RIL), Infrastructure Leasing And Financial Services Limited (IL&FS) in a public-private partnership framework with the Government of Haryana through HSIIDC Limited (a Government of Haryana company). Reliance Haryana SEZ Limited (RHSL), a JV of RVL and HSIIDC, will demerge the MET project at Jhajjar to enable induction of IL&FS. RIL – D. E. Shaw JV In FY 2010-11, RIL and the D. E. Shaw group formed a JV to build a leading financial services business in India. This will incorporate the D. E. Shaw group’s investment and technology expertise with Reliance’s operational knowledge and extensive presence across India to offer a comprehensive array of financial services to the Indian marketplace. This JV is awaiting necessary regulatory approvals for the commencement of business activities. Acquisition of Stake in Extramarks Education Infotel Broadband Services Limited (Infotel), a subsidiary of RIL, acquired a 38.5% stake in Extramarks Education Private Limited. (Extramarks), a company focused on school education and digital learning. The investment in Extramarks has been made through an affiliate company Reliance Strategic Investments Ltd. This investment will enable Extramarks pursue its aggressive growth plans in further developing services and wider market penetration. Extramarks’ digital distribution model will provide invaluable services to the student community across age groups including education support and study help at affordable prices. Increase of Stakes in EIH Limited In FY 2010-11, RIL, through its wholly-owned subsidiary Reliance Industries Investment and Holding Private Limited, acquired 14.8% of EIH Limited from Oberoi Hotels Private Limited and certain other promoters. During the year, RIL further increased its stake to 18.53% in EIH Limited. Acquisition of Stake in TV-18 During the year, companies effectively wholly owned by RIL, entered into binding agreement with TV18 Broadcast Limited (TV18) for divesting the investments in various ETV channels being operated and managed by Eenadu Group. Completion of this divestment is subject to receipt of regulatory approvals and completion of the proposed rights issue of Network18 Media & Investments Limited (‘Network18’) and TV18. Independent Media Trust (‘Trust’), a trust of which RIL is a sole beneficiary, has entered into subscription agreement with promoter companies of Network 18 for subscribing to the zero coupon optionally convertible debentures (ZOCD) to enable the Promoter Companies of Network18 4 4 Partnering India's new future. Sustainably. to subscribe to the promoters entitlement and unsubscribed portion of the proposed rights issue of Network18 and TV18. Infotel Broadband Services Limited (‘Infotel’), a subsidiary of RIL, has entered into a content license agreement with Network18 and TV18, under which Infotel shall have preferential access to (i) the content of all the media and web properties of Network 18 and its associates and (ii) programming and digital content of all the broadcasting channels of TV18 and its associates on a first right basis as a most preferred customer. RESEARCH & DEVELOPMENT, TECHNOLOGY DEVELOPMENT AND INNOVATION Research & Technology and Innovation continue to be one of the key focus areas to drive growth of Reliance Industries Limited (RIL) besides ensuring sustainability and helping the company take a leap in rural transformation. Consistent with RIL’s aspiration to become a best in class technology developer ‘Reliance Technology Group’ (RTG) is working as a focal point to integrate Research and Technology (R&T) initiatives across the organisation. In addition to developing new products and technologies for existing businesses/manufacturing, RTG is also working on building capabilities to develop breakthrough technologies that will create new businesses for RIL. To strengthen the R&T capabilities at RIL, work is underway to create a world class R&T center in Mumbai with best in class physical infrastructure and an environment conducive for attracting and retaining the best global R&T talent. RTG continues to focus on four broad categories of Research and Development (R&D), advanced technical services, support to capital projects, and capability building. To support the above activities the group consists of highly qualified, energised team of engineers and scientists. In the Refining area RTG has expanded its horizon to include thermal cracking and hydro-processing as key areas of research besides continuing to pursue research in the area of fluid catalytic cracking, crude processing and providing advanced technical support through computational fluid dynamics and other advanced simulation tools. In the Petrochemicals area, RTG is providing technology support to olefin crackers, polymers, fiber intermediates, linear alkyl benzene (LAB), and polyester. The focus areas in petrochemicals include efficient asset utilization, development of specialty product grades/materials, development of catalysts/additives for cost reduction, value addition to by-product streams, and leveraging opportunities at the chemicals/oil interface. RTG is also working on breakthrough technologies, such as fuel cells, carbon fibers, bio-fuels, and gasification of several types of feedstock. Some major on-going/completed projects include: (cid:1) Development/commercialisation of a process for propylene maximization in refinery. (cid:1) Development of in-house additive for propylene maximisation in refinery. (cid:1) Development of highly active fluidised catalytic cracking (FCC) catalyst for improved conversion. (cid:1) Development of mesoporous zeolite to improve product selectivity in FCC units. (cid:1) Development of process for improving BMCI (Bureau of mining correlation index) of Clarified slurry oil. (cid:1) Development of a process for conversion of low value hydrocarbon streams to light olefins. (cid:1) Development of technology for removal of chlorides from hydrocarbon stream by new process. (cid:1) Development of a new process for acidity reduction of crude oils. (cid:1) Development of a process for crude de-asphalting. (cid:1) Development of technology for mitigation of corrosion in heavy vacuum gas oil circuit. (cid:1) Determination of actual corrosion potential of high acid crudes. (cid:1) Application of molecular compositional blending models. (cid:1) Application of computational fluid dynamics studies for troubleshooting and process improvements in refineries and petrochemical plants. Reliance Industries Limited 45 (cid:1) Development of a new catalyst, process and product for ultra-high molecular weight polyethylene (UHMWPE). (cid:1) Development of technology for regeneration and alternate applications of spent catalysts and adsorbents. (cid:1) Development of superabsorbent polymers. (cid:1) Development of microbial and photocatalytic processes for effluent treatment. (cid:1) Development of technology for defluoridation process for plant wastewater. (cid:1) Development of specialty chemicals from the C6-C8 by-product stream of polyethylene plants. (cid:1) Development of catalyst and process for on purpose Hexene-1 production from ethylene. (cid:1) Development of a process for chlorinated polyvinyl chloride. (cid:1) Application of computational studies of next generation catalyst system for olefin polymerisation. (cid:1) Development of sixth generation catalyst system and products for poly-olefins production. (cid:1) Development of processes with productivity improvement for purified terepthalic acid. (cid:1) Development of more environment friendly processes for purified terepthalic acid manufacture. (cid:1) Development of alternate polyester for stretch and comfort fabrics. (cid:1) Development of hollow filaments for light weight and insulation fabrics. (cid:1) Development of alternate polyester for bonding application. (cid:1) Productivity enhancement for coarse and super- coarse polyester filament yarns. (cid:1) Development of technology for value addition of by- (cid:1) Development of new hydrophilic spun lace fibres for product olefins. non-woven applications. (cid:1) Development of a new generation paraffin (cid:1) Development of indigenous spin finishes for polyester dehydrogenation catalyst. and indigenous additives. (cid:1) Development of a continuous catalytic regeneration (CCR) reforming catalyst for xylenes production. (cid:1) Increased the capacity of carbon black polyester staple fibers through master-batch injection. (cid:1) Development of technology for coke-less cracking. (cid:1) Development of materials for catalytic applications. (cid:1) Development of technology for methanol to olefins conversion using micro porous materials. (cid:1) Development of self-healing elastomers. (cid:1) Development of an improved catalyst system for higher productivity of polypropylene. (cid:1) (cid:1) Improvement in the morphological behaviour of catalyst systems for 1-alkene polymerisation. Expansion of catalyst precursor production. (cid:1) Development of technology for multi-phase polyolefin product characterization and development initiatives. (cid:1) Creation of advanced poly-olefins synthesis and characterisation facilities for in-house development. (cid:1) Development of anti-pilling polyester, binder fibre, UV stable polyester, insect repellent, fire retardant and multifunctional yarns. (cid:1) Development of cobalt-free polyethylene terephthalate resin. (cid:1) Development of technology for product performance enhancement in recycled polyethylene terephthalate. (cid:1) Development of specialty polyester yarn for replacing other yarns such as viscose, nylon, cotton and acrylics. (cid:1) Development of polyethylene terephthalate bottles for packaging oxygen sensitive foods and beverages. (cid:1) Development of extrusion blow moulding grade polyethylene terephthalate. (cid:1) Replacement of asbestos fibres with polyester. 4 6 Partnering India's new future. Sustainably. RTG is actively participating in various collaborative projects in India and overseas with institutes such as IIP Dehradun, IIT Mumbai, PARC USA, Tulsa University USA, PDDU Ahmedabad etc. to jointly develop new breakthrough technologies and establish synergies with academia and industrial R&D. RIL continues to be a sole industry partner in the New Millennium Indian Technology Leadership Initiative (NMITLI) project on indigenous PEM Fuel Cell technology development. RTG has built in-house capacity to develop clean development mechanism (CDM) projects and obtain the registration and issuance of the same in the form of certified emission reductions (CERs) from the United Nations Framework Convention Climate Change (UNFCCC). Some additional highlights of RTG are given below: (cid:1) All the RTG labs are recognised by the Department Scientific and Industrial Research New Delhi (DSIR), Govt. of India. (cid:1) (cid:1) Scientists and engineers at RTG are invited as speakers/presenters at various conferences. RTG is highly focused on creation and protection of intellectual property (IP) for the company; RIL’s patent portfolio is increasing. RTG will continue to support the R&T needs of the organisation to get maximum utilisation of RIL assets; in countering potential technology related threats to our businesses; and in identifying, developing, and implementing technology related opportunities to fuel RIL’s future growth. Innovation Innovation is ingrained in the DNA of RIL since inception. RIL has reinvented many businesses and changed the game over the last few decades. As it reaches for greater heights, the organisation will strive to institutionalise innovation as a way of life leading to innovation led growth. A distinguished Reliance Innovation Council (RIC) comprising global thought leaders provides the vision for innovation to the organisation. Through physical meetings in India and constant deliberations with the leadership of Reliance, the council gives direction to the strategic thinking of the organisation. It is indeed an excellent opportunity to get insights and advice from Nobel Laureates and other luminaries of stature. This year the RIC was held on the 10th and 11th of February 2012. It was attended by all the RIC members. As always, breakthrough thinking over two days with the leadership of RIL led to new direction promising path breaking outcomes. Going beyond the two day meeting, RIC members also provide on-going guidance to help shape some of the innovative technologies that are under development. The Reliance Innovation Leadership Centre (RIL-C) which services the council, implements the innovation agenda throughout the organization. Its primary focus is to design and deploy innovation programmes that would help make RIL one of the most innovative companies in the world. The aspiration is to climb higher on this limitless ladder of excellence. The Leading Expert Access Programme (LEAP) strives to inspire the human resource of Reliance through talks and lectures by global innovation leaders. These leaders share their work, life and experiences which leave indelible marks on the minds of our people. From Nobel Laureates to corporate leaders and from social crusaders to policy makers LEAP speakers have enthralled and inspired our people. Some exciting initiatives addressing the creation of next businesses based on emerging technologies are showing great promise. RIL surely is well on its way in creating new exponential value through innovation led growth! Clean Development Mechanism RIL has built in-house capacity to develop Clean Development Mechanism (CDM) projects and obtain the registration and issuance of the same in the form of Certified Emission Reductions (CERs) from the United Nations Framework Convention Climate Change (UNFCCC). In FY 2011-12, following three projects of RIL were registered at UNFCCC: a) Energy efficiency through heat recovery at Vadodara manufacturing complex of IPCL. b) Biomass based process steam generation project at Barabanki Manufacturing Division. c) Solar Power Generation Project at Khinwsar, Rajasthan. Verification audits of four of the registered projects for Reliance Industries Limited 47 issuance of more than one lakh CERs are in progress. Site audits have been are completed and request for issuance will be submitted shortly by the auditors to UNFCCC. the centre piece of our people strategy, is an unequivocal success, towards investing in youth and building a pipeline of young talent. Human Resources Development RIL talent base as on March 31, 2012 stands at 23,166. As the Organisation continues to grow exponentially and takes significant strides towards being a Global major, there is an increasingly sharper focus on the HR functional alignment with the business and building people capability. Redefining the contours for a futuristic HR Organisation Keeping in view the need of the current times, the HR Organisation has undergone significant change. During the year the focus has been on the establishment of Centres of Excellence focused specifically on Talent Acquisition, Talent Management, Learning & Development, Compensation & Benefits and Industrial Relations. Business Transformation [BT] striding towards creation of an “Employer Brand” The BT journey that we had embarked over a year ago is turning out to be truly transformational. The design work on the organisational architecture, benchmarking of all HR business processes, policies and systems with the best in class and creating a HR framework for the future has been completed. The year ahead is going to be an extremely challenging one which will focus on relentless and seamless implementation .From the people, process, HR practices and HR system perspective, the organisation is well and truly on its way to being an “Employer of Choice”. Creating a robust pipeline of Leaders The year gone by has seen a huge focus on building a truly global talent base. There has been considerable emphasis on Leadership hiring to cater to both our current and future requirements. The endeavour to seek out and recruit the best talent in the world has paid rich dividends, with close to 100 leadership recruitments in the current year consisting of a diverse mix of expatriates and in country talent, with about 20% being expatriates. The Reliance Accelerated Leadership Programme [RALP], The hiring process for RALP was through an extremely robust and stringent recruitment process. 32 professionals across four functional streams – IT, HR, FC&A and P&C, in the age bracket of 27-34 are being groomed to occupy leadership positions over the next few years. To specifically work on the Business Transformation initiative, we recruited 37 bright young professionals, primarily from the Consulting Industry, in the experience bracket of 4-7 years. Our campus recruitment initiatives, continues to grow from strength to strength. During the current year we hired 55 Management Graduates, 37 Chartered Accountants and 340 Graduate Engineers from leading institutes across the country. The numbers are only likely to swell in the future. Building Skills and Capabilities of the Workforce There were a total of 16,87,893 man-hours of learning which was delivered in the current year including six sigma training of 21,156 man-hours. Six Sigma initiatives continued during the year to reap rich dividends. RIL’s Six Sigma process is designed to improve the performance of the organization, which is a management driven initiative, linked to RIL’s Vision, Mission & Business Strategy to meet its short and long term business objectives. As a part of Business Transformation, the process of Six Sigma has been standardized, to be called “Improve Performance” which is subdivided into three sub- processes, namely, a) Performance Benchmarking & Gap Analysis b) Idea Management c) Knowledge Management In the FY 11-12, the employee who have undergone green belt training were 102, certified as Reliance Certified Green Belts being 4 and Reliance Certified Black Belts at completion stage being 11 Nos. The FY 11-12, saw 23 Certified Six Sigma Black Belts working in all manufacturing sites and 115 black belts and green belts involved in improvement projects. The year saw the completion of 102 Six Sigma projects in which 612 4 8 Partnering India's new future. Sustainably. supervisory personnel were engaged and resulting in annualised saving of INR 36 crore. Keeping in line with RIL’s commitment to develop in-house talent, the first in the series of academies, was rolled out in the form of the FC&A Academy. The coming year will see us partner with leading institutes across the world to establish the Leadership Academy, the Manufacturing Academy and the Other Functional Academy’s. Our quest is towards creation of a world class platform for learning for all employees in the Organisation. AWARDS AND RECOGNITION Some of the major awards and recognitions conferred on RIL are as follows: Leadership (cid:1) (cid:1) (cid:1) Shri. Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries Ltd. received the ‘Business Leader of the Year’ award at the Hello Hall of Fame Awards, 2011. Shri H.S.Kohli President, Reliance Industries Limited was conferred upon with the D. M. Trivedi Life Time Achievement Award by the Indian Chemical Council (ICC) for his contribution to chemical industry. RIL received the Euromoney Deals Award for the year 2011 for the deal between RIL and BP Plc. Corporate Rankings and Ratings (cid:1) (cid:1) (cid:1) (cid:1) RIL continues to be featured for the seventh consecutive year, in the Fortune Global 500 list of the World’s Largest Corporations and ranked 134th based on Revenues. RIL is the only Indian company to feature in “2012 Global 100 Most Sustainable Companies of the world” by Corporate Knights. Reliance Industries Limited (RIL) was awarded Application Level A+ certification by Global Reporting Initiative (GRI) for its FY 2010-11 Sustainability Report – “New Businesses. New Technologies. New Partnerships. (2011)”. Boston Consulting Group and Business Week rank RIL among the top 50 innovative companies of the world. Quality (cid:1) Allahabad Manufacturing Division got Performance Excellence trophy from IMC Ramakrishna Bajaj the National Quality Awards 2011 under manufacturing category. (cid:1) Hazira Manufacturing Division won “Silver” Award at International Convention for Quality Control Circles (ICQCC) 2011 organized by Union of Japanese Scientists and Engineers (JUSE) at Yokohama, Japan. (cid:1) Hazira Manufacturing Division won the American Society for Training & Development (ASTD) Award for “TQM Training Program” with respect to RIL’s exemplary practices in work place learning and development. (cid:1) Nagpur Manufacturing Division received the “International Star Award for Quality (ISAQ)” at Business Initiative Directions (BID) Convention, London. Project (cid:1) Vadodara Manufacturing Division won the “Highest Par Excellence Award - 2011” for the Lean Six Sigma project from Quality Circle Forum of India (QCFI). (cid:1) (cid:1) Patalganga Manufacturing Division bagged Six Sigma award in the category of “Best Innovative Continuous Improvement” at the Lean & Process Improvement Six Sigma Summit organized by International Quality & Productivity Center (IQPC) at Singapore. Patalganga Manufacturing Division received the national level first prize at 5th Six Sigma Competition from CII in the category of “Best Quality improvement Project in Continuous Manufacturing Organization”. (cid:1) Hazira Manufacturing Division won First & Second honours in the “Best Process Improvement Project” in manufacturing category at Lean Six Sigma & Process Improvement Summit organized by International Quality & Productivity Center (IQPC) in New Delhi. (cid:1) Hazira Manufacturing Division awarded the Qualtech Award- 2011 in “Manufacturing Improvement category” at Qimpro Convention, 2011 for the Six Sigma project. Reliance Industries Limited 49 Health, Safety and Environment (cid:1) RIL received the Responsible Care RC 14001 certification (as per American Chemistry Council specification) issued by M/s DNV and registered at the American National Accreditation Board (ANAB), USA. (cid:1) Vadodara Manufacturing Division received the CII Environment Best Practices Award 2012 for “Most Innovative Environmental Project”. (cid:1) KG-D6 operations were given Five Star Safety Rating by the British Safety Council, UK in recognition of good safety practices. (cid:1) Allahabad Manufacturing Division received the Gold Award in Textile sector for outstanding achievement in safety management from Greentech Foundation. (cid:1) KG-D6 operations are selected for the Best Processing Plant by the Oil Industry Safety Directorate, Ministry of Petroleum and Natural Gas (MoPNG). (cid:1) Barabanki Manufacturing Division received the Five Star certification from British Safety Council in 2011. (cid:1) Hazira Manufacturing Division won American Society for Training & Development (ASTD) Award for “Safety & Operational Training for Employees & Contractors”. (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) Jamnagar DTA Refinery received the British Safety Council Five Star Certification in Occupational Health & Safety Management. Jamnagar DTA Refinery was honoured with the Five Star Award for Health & Safety Management by the British Safety Council, UK. The Jamnagar SEZ Refinery received the Five Star Award for Environment Management System by the British Safety Council, UK. Jamnagar SEZ Refinery awarded 10th Annual Greentech Safety Award 2011 in Platinum Category in Petroleum Refinery sector, for the outstanding achievement in Safety Management. Jamnagar SEZ Refinery received Srishti’s ‘G-Cube Award-2010’ for ‘Good, Green, Governance’. Both, DTA and SEZ refineries at Jamnagar were awarded with Safety Innovation Award 2011 from Institution of Engineers, New Delhi for implementation of Innovative Safety Management System. Jamnagar SEZ Refinery received the Golden Peacock Environment Management Award for the year 2011 from GPA Secretariat, New Delhi. (cid:1) Naroda Manufacturing Division received the British Safety Council Five Star Certification on Environment. (cid:1) KG-D6 operations were awarded the British Safety Council – Sword of Honour towards best safety performance. Energy & Water Conservation / Efficiency (cid:1) Hazira Manufacturing Division won the First Prize in “National Energy Conservation Award 2011” in the Petrochemical sector awarded by Ministry of Power. (cid:1) Hazira Manufacturing Division won the “Excellent Energy Efficient Unit Award” for FY 2010-11 during the Energy Summit organized by CII for the 8th consecutive time. (cid:1) (cid:1) (cid:1) (cid:1) Jamnagar DTA Refinery received the CII Excellent Energy Efficient Unit Award for 2011. Jawaharlal Nehru Centenary Award for specific energy consumption from Centre for High Technology (CHT), Ministry of Petroleum and Natural Gas (MoPNG) was received by Jamnagar DTA Refinery. Jamnagar SEZ Refinery received the National Energy Conservation award 2011, from Bureau of Energy Efficiency, Ministry of Power. Reliance Corporate IT Park, Navi Mumbai received the 1st prize at 7th Maharashtra State level Energy Conservation Award for the year 2009-10 in Commercial Building Category. Technology, Patents, R & D and Innovation (cid:1) (cid:1) (cid:1) RTG received National Technology Award for in house technology development in polypropylene catalyst. RTG scientists have received the Vividhlaxi Audyogik Samshodhan Vikas Kendra (VASVIK) Award. RTG received the “NOCIL award for excellence in 5 0 Partnering India's new future. Sustainably. design or development of process plant and equipment” and “Eminent Chemical Engineer Award” from the Indian Institute of Chemical Engineers (IIChE) (cid:1) (cid:1) Hazira Manufacturing Division won the Golden Peacock Eco-Innovation Award for 2011 in Petrochemical sector, awarded by World Environment Foundation (WEF) in association with Institute of Directors (IOD). (cid:1) Hazira Manufacturing Division won the National Award 2011 for successful commercialization of indigenous technology from Ministry of Science & Technology. Corporate Social Responsibility (cid:1) Dahej Manufacturing Site received the 2nd Annual Greentech HR Gold Award 2012 in Training Excellence. (cid:1) RIL inducted into Palladium Balanced Scorecard Hall of Fame for Executing Technology having achieved execution excellence through use of Balanced Scorecard. (cid:1) Hazira Manufacturing Division won the Golden Peacock National HR Excellence Award-2011 in Petrochemical sector. (cid:1) Hazira Manufacturing Division won the Golden Peacock Global Award for CSR 2011 in Petrochemical sector. RIL Group Manufacturing Services (GMS) received the American Society for Training & Development (ASTD) Best Award, 2011 for workplace learning & performance. Retail (cid:1) (cid:1) (cid:1) (cid:1) Reliance Trends received the ‘Retail Marketing Campaign of the Year Award’ at the Asia Retail Congress 2011. Reliance Trends received the ‘Innovative Retail Concept Award for Performax’ at the Asia Retail Congress 2011. Reliance Trends received the ‘Retailer of the Year 2011 Award’ for the ‘Fashion & Lifestyle’ category at the Asia Retail Congress 2011. Reliance Trends received the ‘Most Admired Retailer of Store Brands Award’ under the ‘Apparel & Clothing’ category at the Primal Label Forum, 2011. Sustainability (cid:1) RIL won the prestigious National Golden Peacock Award 2011 for its outstanding contribution in the field of corporate sustainability. (cid:1) Hazira Manufacturing Division won the prestigious CII-ITC Sustainability Award for the year 2011 for its strong commitment towards sustainable excellence. Report on Corporate Social Responsibility Reliance Industries Limited 51 RIL upholds a deep conviction in Corporate Social Responsibility (CSR) that transcends all operations and businesses. Reliance has contributed to the growth of all its stakeholders and to the transformation of the society at large. The efforts in this direction have fortified RIL into a robust, resilient and sustainable company. At RIL, dispensing CSR has encompassed a broad range of activities. It implies not only protecting the health and ensuring the well-being and security of our employees, but that of the local communities also, in which we operate. It equally extends to suppliers, customers and consumers. In spirit and action, RIL is committed to its policy of “Safety of persons overrides all production targets”. In a larger perspective, such endeavours are taking Reliance towards social institution building for sustainability and building a strong and vibrant India. Baroda. At its manufacturing divisions and E&P locations, RIL has developed Community Medical Centres. These centres provide comprehensive health services - preventive and curative - to the residents of neighbouring villages. In Andhra Pradesh, a Primary Health Centre (PHC) has been established by RIL to serve nine villages of Gadimoga and Bhairavapalem panchayats. The health centre has a provision to accommodate 30 beds for inpatient treatment. It is ready to be handed over to the Government of Andhra Pradesh. Showing sensitivity towards emotional health and psychological well-being of its employees, Reliance has launched the Work Life Project across various sites. It goes beyond physical health and focuses on promoting emotional health and psychological well-being, among people, through trained ‘missionaries’. Health, Safety & Environment (HSE) Safety Health RIL focuses on achieving excellence in occupational and personal health of all its employees. With this objective, RIL has undertaken ‘Mission Wellness’ at all its manufacturing sites, Exploration and Production (E&P ) locations, as well as its offices to improve and maintain employee health, RIL has set up state-of-the-art Occupational Health Centres (OHC) at all manufacturing, E&P locations and major office complexes including the Reliance Corporate Park (RCP). The OHCs are well equipped to provide comprehensive emergency medical services, and also offer preventive, promotive and curative health services to the employees. With wellness of one and all as the agenda, all Reliance employees as well as its contractors’ employees at manufacturing sites undergo regular periodic medical examinations. A High Alert system has been implemented to prevent any medical complications. For driving awareness against lifestyle diseases, the Company’s medical and occupational health departments organise structured monthly programmes for health awareness, offering daily health tips and personal counselling. Such health awareness programmes are conducted across all sites and major offices. A noteworthy addition to health infrastructure this year is the establishment of, state of the art Special Burns Treatment unit at the hospitals at Dahej, Nagothane and In 2007, RIL embarked upon the journey towards world class HSE Management System. The goal set by Mr. Mukesh D. Ambani, Chairman & Managing Director was ‘Radical Complete Transformation of Safety Culture to achieve World Class Safety Standards’ in partnership with DuPont Safety Resources. Standardization of HSE processes and their integration into business processes was undertaken as a part of the Business Transformation initiative. The integration included defining safety related controls. RIL’s Petrochemical and Refinery manufacturing facilities continued to institutionalize RIL HSE Management System. This was achieved by making the line management responsible for HSE implementation through safety sub- committee approach. Risk Management and Process Hazard Analysis were further strengthened to help mitigate the risks and for more efficient and effective Emergency Response planning. As a consequence there was reduction in inventory of some toxic materials at sites. Under “1- Reliance,” the process of integrating Safety Management System began across the RIL Group, including upstream operations and Polyester sites. RIL, as a signatory to the ‘Responsible Care’ movement, invited DNV to assess its facilities in line with the requirements of RCMS 14000. In the initial phase, the Head Office facilities at RCP and Hazira manufacturing facility were audited by DNV. Based on this audit, RIL is now certified to the RCMS 14000 standard. 5 2 Partnering India's new future. Sustainably. RIL continued to strengthen its networking with national and international organisations in the safety arena. To continuously improve safety performance, the internal auditing process for safety was further strengthened. For this, First Party and Second Party Audits, in line with the RIL Group Standards, were instituted in the areas of Process Safety Management, Workplace Safety, Contractor Safety Management, Fire and Distribution Safety. Environment Committed to the environmental stewardship programme, RIL has undertaken several measures in this direction. (cid:1) (cid:1) (cid:1) (cid:1) RIL’s manufacturing divisions and upstream gas handling terminal have instituted ISO-14001 Environmental Management System (EMS), and obtained re-certification wherever necessary. For harnessing the optimum benefit of the system in majority of manufacturing divisions and offshore gas handling terminal, it has been integrated with ISO: 9001:2008 Quality Management System and ISO- 18001:2007 Occupational Health and Safety Management Systems (OSHA). RIL follows the Global Reporting Initiative’s G3.1 Guidelines for developing its environment performance indicators. The Integrated Management System (IMS) is also audited by a third party and accreditation is provided. (cid:1) A “Responsible Care” initiative of ICC has been initiated to further strengthen the RIL’s commitment to HSE. The selection of project, assessing its impact on the society and the environment, including the engagement of neighbouring community and other stakeholders, is an on-going activity at upstream and all manufacturing locations. This concerted effort is aimed at developing environmental initiatives to address RIL’s long term target of becoming water positive, carbon neutral company with maximum possible recycling and reuse of wastes. What has been achieved is a significant trend towards reduction in specific emissions, energy consumption and discharges, with a marked increase in effluent and waste recycling. RIL in its constant endeavour to be fully compliant with all applicable environmental regulations, has instituted a compliance management system. Therefore, prior to the commissioning of projects, the potential environmental impacts and risk analysis of all new proposed projects are considered. If required, necessary measures are incorporated to mitigate adverse environmental impacts prior to commissioning of the projects. Continuing its relentless drive to meet world class environmental performance during FY11-12, RIL developed a group standard and second party audit protocol for the electronic waste management. During this financial year, an international agency was engaged to develop group-wide Environmental Management Process. Taking this further, under the project STAR, a road map has been drawn for the implementation of an integrated system-based processes transformation. RIL has developed and instituted a three-tier audit system. During FY11-12, half of the standards for second party audits were covered and the remaining ones have been planned in the following year. The third tier audit includes environment audit by external agencies which include annual audit by Gujarat Pollution Control Board (GPCB) recognised auditors in Gujarat; and ISO-14001:2004 audits by the accreditation agencies. This year a five star environmental audit by British Safety Council, UK was performed at Jamnagar SEZ refinery, Vadodara manufacturing division, Patalganga manufacturing division and Naroda textile division. With this, RIL’s 13 manufacturing divisions have been audited for its environmental management by the British Safety Council (BSC). Hazira manufacturing division, along with Head Office, was audited for the Responsible care RC-14001 and both were certified by the ICC. Maintenance of assets and improvement of their performance are given top priority at RIL. In this context all pollution abatement facilities such as effluent treatment plants, in-side battery limit air emission control, and waste disposal facilities are maintained and operated in line with the industry’s best practices. To further the cause of environmental sustenance, in every manner possible, most of RIL’s manufacturing divisions have taken up rain-water harvesting initiatives. This reduces dependence for water on natural sources. RIL’s efforts such as mangrove plantation and its maintenance in the coastal areas, with the help of international agencies creation & maintenance of green belts and gardens in and around the upstream and manufacturing units; vermi-compost of waste and its use Reliance Industries Limited 53 as manure; and recycling of treated water in cooling water system and in horticulture activities are imbued in our culture of sustaining the earth’s environment. Social Responsibility and Community Development Education Evolving lives through education and building a rich pool of human resource for India, RIL has developed its own network of 11 schools in and around the manufacturing units of the company in Jamnagar, Surat, Vadodara, Patalganga, Nagothane and Nagpur benefitting more than 15000 students . These schools promote education among children of the underprivileged communities. The J. H. Ambani School, Patalganga, provided education to nearly 90 underprivileged children from nearby villages in Lodhivali during the current year. To attract children to attend school, and foster a love for knowledge among them, several initiates are launched from time to time. For instance, school kits including books, uniforms, shoes and stationary items were provided to students from schools falling under Nagpur, Allahabad, Gadimoga and Bhairavapalam Panchayats. At Hazira, an initiative, Vanche Vidhyarthi, was launched to inculcate the habit of reading in children, wherein more than 2,600 books were distributed to 5 schools. A district level quiz competition, known as the ‘Reliance Dhirubhai Ambani Quiz’, is an annual affair in Andhra Pradesh. In its second year of launch, in FY 11-12, more than 1,300 students from over 300 schools participated in this event. The J. H. Ambani School in Patalganga supported a network of institutions working towards the education of differently abled children. A school for the differently abled being run at Surat sought to address the issues relating to learning disability and dyslexia in children. Reliance Dhirubhai Ambani Protsahan Scheme The Reliance Dhirubhai Ambani Protsahan Scheme is a novel step towards encouraging the meritorious poor students to pursue higher studies. The students who excelled in SSC examination were provided free education at intermediate (10 +2) level in leading residential colleges. So far, the scheme has enabled over 900 students to gain access to quality education, unburdened by financial constraints. The scope of this scheme was further extended to provide financial support to the deserving toppers of the Protsahan Scheme to pursue their professional courses in Engineering and Medicine. Dhirubhai Ambani International School Dhirubhai Ambani International School recognizes the imperative of imparting an educational experience that is world-class in every respect and which prepares children for global citizenship. The Education World, in its Survey of India’s Most Respected Schools, ranked Dhirubhai Ambani International School as No. 1 on Academic Reputation and on Individual Attention to Students. Building on the school’s excellent academic record across all its three streams (the ICSE, the IGCSE and the IB Diploma), its students achieved impressive results in the examinations held in 2011 as well. Also, the school’s performance on university placement continued to be excellent. While the academic laurels of the students of the Dhirubhai Ambani International School were noteworthy, equally laudable was the service orientation of its students. The students worked with NGOs like Advitya, Akanksha, Muktangan, Pratham, Aarambh and Aseema for education of the underprivileged children. Through ‘Across the Road’ neighbourhood service initiative, the students reached out to community members in Bandra-Kurla Complex, Mumbai, with education and health programmes. The ‘Empowering Villages Everywhere’ initiative provided solar lamps to villages where electricity was scarce, besides assisting them in education and employment avenues. Healthcare RIL, in partnership with the Government of Gujarat, created a society named the ‘Dahej Health & Welfare Society’ (DHWS) to run a 50 bed hospital for secondary level healthcare facilities at Dahej. RIL has invested in the society and takes care of its daily expenses. This hospital shall provide free treatment to the Below Poverty Line families and will extend up to 70% subsidy to the patients referred by the PHCs. The hospital will also provide outdoor medical services and organise health awareness camps for the nearby communities. In Patalganga, the Dhirubhai Ambani Hospital provides quality medical care to neighbouring communities. The hospital provided free or highly subsidized medical care to over 1,000 residents of surrounding villages during FY11-12. Curative healthcare was also provided through mobile medical vans. To cater to emergencies caused by accidents, RIL provided a 24X7 ambulance service from the borders of Himachal to Hoshiarpur. 5 4 Partnering India's new future. Sustainably. RIL also focuses on raising awareness and providing treatment for HIV/AIDS. A clinic ‘Hamrahi’ operating in Allahabad provided voluntary testing and counselling for HIV/AIDS An anti-retroviral treatment (ART) clinic run at Dhirubhai Ambani Hospital, Patalganga provided free consultation, counselling and investigation to over 2,500 patients during FY11-12. RIL provided financial assistance for setting up a new ART centre in the East Godavari District of Andhra Pradesh and is now ready for operations. In addition, the Company also renovated the ART centre in the Government Hospital at Amalapuram, A.P. and financed the purchase of latest machines and equipment. The ART Centre at Hazira has catered to more than 65,000 patients. More than 2,700 HIV positive patients have been enrolled under clinical monitoring; and more than 400 patients have received DOT therapy for tuberculosis including 37 in the FY 11-12. The Community Care Centre & Reliance AIDS Care Hospital at Hazira has catered to more than 2,500 patients. The centre and the hospital have a number of resident orphans who are HIV positive and are not fit for staying in a standard orphanage home due to their need for constant health monitoring. To educate these children, a small scale school called “Pathshala” was inaugurated. Further, the employees at E&P sites and the Reliance Ladies Club at Hazira initiatives “Chirudeepam” and “Project Hope” respectively continued with aim to support children affected by AIDS and supplying them with nutritive kit every month, as per the WHO standard. Similarly, the Jamnagar manufacturing division runs ‘Project Balkalyan’, with an objective to provide nutritional support to children affected with HIV infection. Nutritional kits were distributed to all HIV positive children when they visited the centre for monthly follow-up. Hazira Manufacturing Division, through Reliance Ladies Club (an association of spouses of RIL managerial employees) has an on-going child adoption programme to take care of nutritional requirements of HIV positive children. Blood donation camps were also organised in various manufacturing divisions and locations. It is noteworthy that more than 700 units of blood were collected in the blood donation camps held at Reliance Corporate Park. To further the cause of health and sanitation, awareness campaigns, RIL provided supplementary financial assistance for the construction of individual sanitary toilets at household level. More than 300 families of Gadimoga Panchayat villages benefited from the individual sanitary facilities. The commissioning of the new state-of-art tertiary care multi-specialty hospital in the premises of the Sir H.N. Hospital & Research Centre will ensure a significant upgradation in the abilities, activities and outreach. Reliance Drishti Reliance Drishti is an initiative launched in partnership with the National Association for the Blind (NAB) in 2003. By the end of FY11-12, the project completed over 10,000 free cornea grafting procedures for the underprivileged. Marking a historic event, Reliance Drishti launched India’s first registered national Hindi newspaper in braille on 19th March, 2012 at Mumbai. This newspaper will be widely circulated through institutional partners to over 20,000 visually impaired persons across the country. Reliance Drishti seeks to enable children to empathise with the needs of the visually challenged by raising awareness through organising painting competitions for children. The winning art entries are used in various ways to reach millions of people with the message of eye donation. The painting contests during FY11-12 received an overwhelming response of over 12,000 children. Heritage Conservation Taking pride in the rich cultural heritage of India, RIL has sponsored the construction of Dwarka Parisar. It was completed in a record time of one and half years. Constructed on a fifty-fifty Public-Private Partnership with the Government of Gujarat, the Dwarka Parisar was dedicated to the public in May 2011. A public road was also constructed at Dwarka and the banks of river Gomati were cleaned. Kokila Dhiraj Dham at Dwarka continues to provide reasonable accommodation to pilgrims. RIL also renovated the village temples in Gadimoga Panchayat. Disaster Relief Always reaching out to people affected by natural calamities, the Company, in the FY 11-12, provided tarpaulins for cyclone affected people in Puduchery. Clothes, food materials and A/C sheets were provided to the fire affected villagers in Allahabad. For a swifter response, a free of cost Fire Tender service was extended both in Allahabad and Patalganga. Promoting Sports and Sportsmen Promoting sports in India, RIL has instituted the IMG Reliance Scholarship. This scholarship was awarded to 28 aspiring Indian sportspersons for full time training and Reliance Industries Limited 55 coaching at one of the best sports training facilities in the World – the IMG Academies, Florida. These talented young sportspersons were from varied fields including Tennis, Basketball and Football. These young sportsmen underwent rigorous physical and mental training, were given the best in class sports education and were exposed to high quality competition. Recipients of these scholarships brought several laurels to the community. Safety Initiatives for Community In a unique safety initiative, RIL established a Truckers’ Safety Training Centre at Hazira. This centre, fully equipped with air conditioning and audio-video equipment, provided training to truck drivers. These training programmes included safety rules, efficient driving techniques, understanding hazards associated with various materials and responses in case of emergencies. More than 100,000 drivers have been trained through this initiative since its inception in 2005. Environment Initiatives for Community Carrying on its environment preservation drive perenially, RIL undertook large plantation drives at villages in Vadodara, Patalganga, Reliance Corporate Park (RCP), Ghansoli gaon and Gavalidev hill, Ghansoli. A programme of power generation from renewable sources was also initiated to make the HIV DOTS centre at Mora Village, Hazira, a “Model Renewable Village Centre”. In a unique initiative to promote environment friendly culture amongst employees, Share-a-Ride, a pool transport initiative was introduced in RCP. An online portal was created to strengthen this initiative. In addition, eco- friendly battery operated golf carts and bicycles, both with zero emission levels were deployed for internal transportation at RCP. Reliance Rural Development Trust (RRDT) During FY11-12, RRDT continued to create rural infrastructure in tandem with the Gokul Gram Yojana of the Government of Gujarat. RRDT undertook 382 new works in 354 beneficiary villages of 79 talukas under 24 districts of Gujarat. Construction of over 250 facilities were completed including 219 Anganwadi buildings, 41 cement concrete roads and one check dam with 0.6 mcft water storage capacity. With this 40th check dam being built during the FY11-12, the water holding capacity of the RRDT built check dams rose to 10 mcft, benefiting 1,165 hectares of rural land in Gujarat. Concrete roads were also constructed in 5 villages and drains were laid for Padana village. Catering to the health and sanitation needs of the villages, Moti Khavdi Medical Centre and a Mobile Medical Van continued to serve the rural community. For creating a more permanent solution to the water shortage problems in the area, water pipelines were laid in Padana village. Sulabh International, a sanitation agency, was engaged to keep the public places in the entire Meghpar village clean on a daily basis. Catering to the educational needs of the communities, the Trust constructed a school building for Meghpar village. Over 1,500 school-kits were also distributed to students of 69 schools in 42 villages in Jamnagar and Lalpur Taluka on commencement of the academic year 11-12. Dhirubhai H. Ambani Memorial House was constructed at Chorwad, the native place of RIL’s Founder Chairman, Mr. Dhirubhai Ambani. This memorial drew hundreds of visitors each day since it opened for public. ‘Dhirubhai Ambani Vanijya Bhavan’, the new premises of Jamnagar Chamber of Commerce and Industry, was constructed and inaugurated, in April, 2011. During FY11-12, liberal support to individuals and institutions including NGOs in the areas of education, health, culture, business and sports was extended by RRDT. Donations were made to tribal schools; and schools for sanskrit teaching; students were sponsored for higher studies; events like van mahotsavs, medical conferences, seminars of environmental importance and discourses on maritime security and anti-piracy were sponsored; traffic islands and beautification of airports was carried out and donations were made on the occasion of festivals. Acknowledging and supporting talent RIL has instituted “UAA-Dhirubhai Ambani Lifetime Achievement Award”, jointly with the UDCT Alumni Association (UAA) for innovative and outstanding contribution in the field of chemical sciences and continues to recognize scientists from both India and around the world through this award. This year, this award was conferred on Professor C N R Rao, FRS, Padma Vibhushan. Prof. Rao is Linus Pauling Professor, Honorary President of Jawaharlal Nehru Centre for Advanced Scientific Research, Bangalore and Chairman, Scientific Advisory Council to the Prime Minister of India. 5 6 Partnering India's new future. Sustainably. “Real Heroes”, is an initiative of RIL which recognises and acknowledges ordinary Indians who are making a difference to people’s lives. In the annual felicitation held in March, 2012, 24 ‘Real Heroes’ of India were honoured. The efforts of these 24 Real Heroes, selected from across the country and working in diverse fields of Women Empowerment, Environment, Youth, Social Welfare, Health & Disability, Education & Children and Sports, were recognised. All of them have significantly contributed to the betterment of communities. These ordinary citizens have displayed exemplary service to the nation by placing the society before them. Reliance Foundation Established in 2010, Reliance Foundation is the heart of the enterprise. It epitomizes the inspiration and the aspiration of the founder and the present promoters of the RIL Group. It focuses on five core pillars: Rural Transformation, Education, Health, Urban Renewal, and Arts, Culture & Heritage. For realising the aspiration of seeing rural life in its development phase in all aspects, the Reliance Foundation launched Reliance bij (the acronym of Bharat India Jodo) in October 2010. Sowing the seeds of rural transformation, Reliance bij focuses on supporting marginalized farmers, generally plagued by constraints of low farm productivity and increasing natural resource degradation. Reliance bij aims to bridge the ever widening gap between the developmental and prosperity levels of rural and the urban parts of the country. Its vision is to see a rural community thriving on farming and ‘to make farming a first choice profession’, with best practices and modern agricultural techniques. Reliance bij provides support to small and marginal farmers through input support, technical assistance, post-harvest and marketing support. At village level, bij helps in forming Village Farmers’ Associations (VFA) where farmers come together to plan, decide and act on various issues that impact their produce and their village unit as a whole. Also, the bij team facilitates the formation of a Producer Company (PC) which provides commercial and financial interface to the communities. PC achieves this by way of aggregating their need for quick, cheaper and reliable access to a variety of goods and services. These requirements comprise information on various farming practices, subsidies, training, access to credit, mechanisation of various farming operations, collection, storage and sale of farm commodities. The Reliance Foundation, through Reliance bij, promotes sustainable agriculture practices. These include diversified farm practices like bee keeping and animal husbandry, which also provide additional sources of livelihood to the farming families. To encourage farmers to adopt sustainable farming practices, demonstration farms called Dharti farms have been set up. Further, to demonstrate the process of homestead vegetable garden, Reliance Nutrition Gardens are cultivated in villages. To build a knowledge repository of the vast traditional practices, Mouda Farm Research activities, near Nagpur, were initiated. For promoting education at all levels, Reliance Foundation launched an initiative to establish a world-class multidisciplinary university in Maharashtra. Envisioning technical skills at various levels in the upcoming generation of India, the Foundation is in the process of establishing the Reliance Institute of Technology in Jamnagar and the Reliance Polytechnic in Dwarka, in partnership with the Government of Gujarat. Dhirubhai Ambani Foundation The Dhirubhai Ambani Foundation (DAF) focuses on promoting education. Its ‘Dhirubhai Ambani Undergraduate Scholarship Scheme’ has been motivating students excelling at the +2 level and assisting them to pursue higher education. The Foundation’s “Dhirubhai Ambani SSC Merit Reward Scheme” recognises the standard X Board examination merit holders. Special efforts are made to reach out to the physically differently abled and the girl child through such educational schemes. Both these schemes are implemented in Maharashtra, Goa, Gujarat, Daman, Diu and Dadra Nagar Haveli on a district- wise basis for the State Education Boards and on a state- wise basis for the CBSE Board. For the rest of the country, these schemes cover only the physically differently abled category of the State Boards. In FY11-12, DAF conferred 329 rewards and 289 scholarships. Of these, 144 rewards and 99 scholarships went to the physically differently abled category. Till date, these schemes have benefited 8,734 students, 1,596 of those are physically differently abled. Reliance Industries Limited 57 Report on Corporate Governance In accordance with Clause 49 of the Listing Agreement with the BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE) (Clause 49) and some of the best practices followed internationally on Corporate Governance, the report containing the details of corporate governance systems and processes at Reliance Industries Limited is as under: 1. Statement on Company’s philosophy on Code of Governance Corporate Governance is a set of systems and practices to ensure that the affairs of the company are being managed in a way which ensures accountability, transparency, fairness in all its transactions in the widest sense and meet its stakeholders aspirations and societal expectations. Good governance practices stem from the culture and mindset of the organisation and at Reliance we are committed to meet the aspirations of all our stakeholders. This is demonstrated in shareholder returns, high credit ratings, governance processes and an entrepreneurial, performance focused work environment. Our customers have benefited from high quality products delivered at the most competitive prices. The demands of corporate governance require professionals to raise their competency and capability levels to meet the expectations in managing the enterprise and its resources effectively with the highest standards of ethics. It has thus become crucial to foster and sustain a culture that integrates all components of good governance by carefully balancing the complex inter- relationship among the board of directors, audit committee, accounting, corporate secretarial team, auditors and senior management - the CEO and CFO. At Reliance, our employee satisfaction is reflected in the stability of our senior management, low attrition across various levels and substantially higher productivity. Above all, we feel honoured to be an integral part of India’s social development. Details of several such initiatives are available in the section on Corporate Social Responsibility. At Reliance, it is our belief that as we move closer towards our aspirations of becoming a global corporation, our corporate governance standards must be globally benchmarked. This gives us the confidence of having put in the right building blocks for future growth and ensuring that we achieve our ambitions in prudent and sustainable manner. Reliance not only adheres to the prescribed corporate governance practices as per Clause 49 but is also committed to sound corporate governance principles and practices and constantly strives to adopt emerging best practices worldwide. It is our endeavor to achieve higher standards and provide oversight and guidance to management in strategy implementation and risk management and fulfillment of stated goals and objectives. Over the years governance processes and systems have been strengthened at Reliance and the corporate governance has always been an integral part of the way the business is done. At Reliance we consider stakeholders as partners in our success and we remain committed to maximising stakeholder value, be it shareholders, employees, suppliers, customers, investors, communities or policy makers. This emanates from our strong belief that sound governance is integral to creating value on an overall basis. Since our Initial Public Offer (IPO) we have an enviable track record of growth over 34 years. We have grown by a Compounded Annual Growth Rate (CAGR) of Revenues 27%, EBITDA 28% and Net Profit 29%. The financial markets have endorsed this sterling performance and the market capitalisation has increased by CAGR of 34% during the same period. In terms of distributing wealth to our shareholders, apart from having a track record of uninterrupted dividend payout, we have also delivered a consistent unmatched shareholder returns since listing. What epitomises the impact of all that we do is the fact that our shareholder base has grown from 52,000 after the IPO to around 3.4 million now. Corporate governance is a journey for constantly improving sustainable value creation and is an upward moving target. We have undertaken several initiatives towards maintaining the highest standards of Governance and these include: Independent Board with defined role and responsibilities: A majority of the Board, 7 out of 13, are independent directors. The Board’s actions and decisions are aligned with the Company’s best interests. It is committed to the goal of sustainably increasing the Company’s value. The Audit Committee, Remuneration Committee and Corporate Governance and Stakeholders’ Interface Committee comprise only independent directors. The Company has defined guidelines and established framework for the meetings of the Board and Board Committees. These guidelines seek to systematise the decision-making process at the meeting of the Board and Board Committees in an informed and efficient manner. The Board critically evaluates strategic direction of the Company, management policies and their effectiveness. The agenda for Board reviews include strategic review from each of the Board committees, a detailed analysis and review of annual strategic and operating plans and capital allocation and budgets. Additionally, the Board reviews financial reports from the CFO and business reports from each of the sector heads. Frequent and detailed interaction sets the agenda and provides the strategic roadmap for the future growth of the Company. 5 8 Partnering India's new future. Sustainably. Ethics Policies: Reliance always strives to conduct its business and develop its relationships in a manner that is dignified, distinctive and responsible. In this direction, we have adopted various codes and policies which act as enablers to carry our duties in an ethical way. Some of these codes and policies are: 1. Code for Board of Directors and Board Committees. 2. Code of Business Conduct and Ethics for Directors/ Management Personnel. 3. Code of Conduct for Prohibition of Insider Trading. 4. Code of Ethics and Business Policies. Policy document on Values and Commitments. 5. 6. Manual on Corporate Governance. 7. Health, Safety and Environment (HSE) Policy. 8. Code of Financial Reporting, Disclosure & Transparency. Audits and internal checks and balances: M/s. Deloitte Haskins & Sells, Chartered Accountants, M/s. Chaturvedi & Shah, Chartered Accountants, one of India’s leading audit firms and a member of the Nexia’s global network of independent accounting and consulting firms and M/s. Rajendra & Co., Chartered Accountants, one of India’s oldest audit firms, the three leading audit firms, audit the accounts of the Company. The Company has a Management Audit Cell as well outside internal auditors that reviews internal controls and operating systems and procedures. A dedicated Legal Compliance Cell ensures that the Company conducts its business with high standards of legal, statutory and regulatory compliances. The Company has instituted a legal compliance programme in conformity with best international standards, supported by a robust online system that covers all manufacturing units of the Company as well as its subsidiary companies. The gamut of this system includes statutes such as, industrial and labour laws, taxation laws, corporate and securities laws and health, safety and environment regulations. At the heart of our processes is the wide use of technology that ensures robustness and integrity of financial reporting, internal controls, allows optimal use and protection of assets, facilitates accurate and timely compilation of financial statements and management reports and ensure compliance with statutory laws, regulations and company policies. Best Corporate Governance practices: Reliance maintains the highest standards of Corporate Governance; it is the Company’s constant endeavour to adopt the best Corporate Governance practices keeping in view the international codes of Corporate Governance and practices of well-known global companies. Some of the best global governance norms put into practice include the following: (cid:1) The Company has a designated Lead Independent Director with a defined role. (cid:1) All securities related filings with Stock Exchanges and SEBI are reviewed every quarter by the Shareholders’/ Investors’ Grievance Committee of Directors of the Company. (cid:1) (cid:1) (cid:1) The Company has an independent Board Committee for matters related to corporate governance and stakeholders’ interface and nomination of Board members. Internal audit of the Company is conducted by independent auditors. The Company also undergoes secretarial audit conducted by an independent company secretary who is in whole-time practice. The quarterly audit reports are placed before the Board and the annual audit report placed before the Board is included in the Annual Report. Corporate Social Responsibility (CSR): Social welfare and community development is at the core of the Reliance’s CSR philosophy and this continues to be a top priority. Reliance embraces responsibility for impact of its operations and actions on all stakeholders including society and community at large. The CSR teams at Reliance’s manufacturing divisions interact with the neighbouring community on regular basis. Reliance’s contributions to the community are in the areas of health, education, infrastructure development (drinking water, improving village infrastructure, construction of schools, etc.), environment (effluent treatment, tree plantation, treatment of hazardous waste, etc.), relief and assistance in the event of a natural disaster and contributions to other social development organisations. Reliance also supports and partners with several NGOs in community development and health initiatives. Besides focusing primarily on the welfare of economically and socially deprived sections of society, Reliance also aims at developing techno-economically viable and environment- friendly products and services for the benefit of millions of its consumers, while at the same time ensuring the highest standards of safety and environment protection in its operations. Reporting on triple bottom-line performance: Reliance commenced annual reporting on its triple-bottom-line performance from the Financial Year 2004-05. All its sustainability reports are externally assured and Global Reporting Initiative (GRI) application level checked. The Reliance Industries Limited 59 maiden report received ‘in-accordance’ status from GRI and all subsequent reports are ‘GRI G3 Checked A+’ application level reports. From Financial Year 2006-07, in addition to referring GRI G3 Sustainability Reporting Guidelines, Reliance refers to the American Petroleum Institute / the International Petroleum Industry Environmental Conservation Association Sustainability Reporting Guidelines and the United Nations Global Compact Principles. Reliance has also aligned its sustainability activities with the focus areas of the World Business Council for Sustainable Development. From the Financial Year 2011-12, Reliance is additionally referring to GRI G3.1 – Oil & Gas Sector Supplement; and has aligned with the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business framed by the Government of India. Shareholders communications: The Board recognises the importance of two-way communication with shareholders and giving a balanced report of results and progress and responds to questions and issues raised in a timely and consistent manner. Reliance’s corporate website: www.ril.com has information for institutional and retail shareholders alike. Shareholders seeking information may contact the Company directly or through any of Investor service centres of the Company’s Registrars and Transfer Agents spread over 80 cities across India, details of which are available on the Company’s website www.ril.com. Reliance ensures that queries, complaints and suggestions are responded in a timely and consistent manner. A shareholder referencer is provided with this report which is quite comprehensive and informative. Employees Stock Option Scheme: One of the widest programmes of its kind in the Indian corporate sector, the Company’s Employees’ Stock Option Programme was introduced in 2007. The programme has ensured complete alignment of individual interests with the growth imperatives of the Company. Role of the Company Secretary in overall governance process: The Company Secretary plays a key role in ensuring that the Board procedures are followed and regularly reviewed. The Company Secretary ensures that all relevant information, details and documents are made available to the Directors and senior management for effective decision-making at the meetings. The Company Secretary is primarily responsible to ensure compliance with applicable statutory requirements and is the interface between the management and regulatory authorities for governance matters. All the Directors of the Company have access to the advice and services of the Company Secretary. Observance of the Secretarial Standards issued by the Institute of Company Secretaries of India: The Institute of Company Secretaries of India (ICSI), one of the premier professional bodies in India, has issued Secretarial Standards on important aspects like Board meetings, General meetings, Payment of Dividend, Maintenance of Registers and Records, Minutes of Meetings, Transmission of Shares and Debentures, Passing of Resolutions by Circulation, Affixing of Common Seal and Board’s Report. Although these standards are recommendatory in nature, the Company substantially adheres to the standards voluntarily. 2. Board of Directors Board composition and category of Directors The Company’s policy is to maintain optimum combination of Executive and Non-Executive Directors. The composition of the Board and category of Directors is as follows: Category Name of Directors Promoter Director Executive Directors Non-Executive Non- Independent Director Mukesh D. Ambani Chairman and Managing Director Nikhil R. Meswani Hital R. Meswani P.M.S. Prasad Pawan Kumar Kapil Ramniklal H. Ambani Independent Directors Mansingh L. Bhakta Yogendra P. Trivedi Dr. Dharam Vir Kapur Mahesh P. Modi Prof. Ashok Misra Prof. Dipak C. Jain Dr. Raghunath A. Mashelkar All the independent Directors of the Company furnished a declaration at the time of their appointment as also annually that they qualify the conditions of their being independent. All such declarations were/are placed before the Board. No Director is related to any other Director on the Board in terms of the definition of ‘relative’ given under the Companies Act, 1956, except Shri Nikhil R. Meswani and Shri Hital R. Meswani, who are related to each other as brothers. 6 0 Partnering India's new future. Sustainably. What constitutes independence of Directors For a Director to be considered independent, the Board determines that the Director does not have any direct or indirect material pecuniary relationship with the Company. The Board has adopted guidelines which are in line with the applicable legal requirements. Lead Independent Director The Board of Directors of the Company has designated Shri Mansingh L. Bhakta as the Lead Independent Director. The role of Lead Independent Director is as follows: (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) To preside over all meetings of Independent Directors. To ensure that there is adequate and timely flow of information to Independent Directors. To liaise between the Chairman and Managing Director, the Management and the Independent Directors. To advise on the necessity of retention or otherwise of consultants who report directly to the Board or the Independent Directors. To preside over meetings of the Board and Shareholders when the Chairman and Managing Director is not present or where he is an interested party. To perform such other duties as may be delegated to the Lead Independent Director by the Board/ Independent Directors. Directors’ Profile A brief resume of all the Directors, nature of their expertise in specific functional areas and names of companies in which they hold directorships, memberships/ chairmanships of Board Committees and their shareholding in the Company are provided below: Shri Mukesh D. Ambani is a Chemical Engineer from the Institute of Chemical Technology, Mumbai (earlier University Department of Chemical Technology, University of Mumbai). He has pursued MBA from Stanford University, USA. Shri Mukesh D. Ambani, son of Shri Dhirubhai H. Ambani, Founder Chairman of the Company joined Reliance in 1981. He initiated Reliance’s backward integration journey from textiles into polyester fibres and further into petrochemicals, petroleum refining and going up-stream into oil and gas exploration and production. He created several new world class manufacturing facilities involving diverse technologies that have raised Reliance’s petrochemicals manufacturing capacities from less than a million tonnes to about twenty million tonnes per year. Working hands-on, Shri Mukesh D. Ambani led the creation of the world’s largest grassroots petroleum refinery at Jamnagar, India, with a current capacity of 660,000 barrels per day (33 million tonnes per year) integrated with petrochemicals, power generation, port and related infrastructure. Further, he steered the setting up of another 27 million tonnes refinery next to the existing one in Jamnagar. With an aggregate refining capacity of 1.24 million barrels of oil per day at any single location in the world has transformed “Jamnagar” as the ‘Refining Hub of the World’. In September 2008, when the first drop of crude oil flowed from the Krishna-Godavari basin, Shri Mukesh D. Ambani’s vision of energy security for India was being realized. Under his leadership, RIL is set to transform India’s energy landscape from the oil & gas flowing from Dhirubhai 1 & 3 Natural gas - a low carbon, low polluting green fuel that will flow from oil fields which will create value and be beneficial to a large section of India’s society. Shri Mukesh D. Ambani had set up one of the largest and most complex information and communications technology initiative in the world in the form of Reliance Infocomm Limited (now Reliance Communications Limited). Shri Mukesh D. Ambani is also steering Reliance’s development of infrastructure facilities and implementation of a pan-India organized retail network spanning multiple formats and supply chain infrastructure. Shri Mukesh D. Ambani’s achievements have been acknowledged at national and international levels. Over the years, some of the awards and recognition bestowed on him are : (cid:1) Awarded the Dean’s Medal by University of Pennsylvania’s Eduardo Glandt, Dean of the School of Engineering and Applied Science in 2010 for his leadership in the application of Engineering and Technology. (cid:1) Awarded the Indian Merchant’s Chamber (IMC) ‘Juran Quality Medal 2009’ in 2010. (cid:1) (cid:1) (cid:1) (cid:1) Ranked the 5th best performing CEO in the world by the Harvard Business Review in its ranking of the top 50 global CEOs . Bestowed the US-India Business Council (USIBC) ‘Global Vision 2007’ Award for Leadership in 2007. Conferred ‘ET Business Leader of the Year’ Award by The Economic Times (India) in the year 2006. Conferred the Degree Honoris Causa, Honorary Doctorate by the Maharaja Sayajirao University in 2007. Reliance Industries Limited 61 (cid:1) (cid:1) Conferred the India Business Leadership Award by CNBC-TV18 in 2007. Received the first NDTV-Profit ‘Global Indian Leader Award’ from Hon’ble Prime Minister of India, Shri Manmohan Singh in New Delhi in the year 2006. (cid:1) Had the distinction and honour of being the Co-chair at the World Economic Forum in Davos, Switzerland in 2006. (cid:1) (cid:1) (cid:1) 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, in 2004. Conferred the World Communication Award for the ‘Most Influential Person’ in Telecommunications by Total Telecom, in 2004. Conferred the ‘Asia Society Leadership Award’ by the Asia Society, Washington D.C., USA, in 2004. Shri Mukesh D. Ambani is a member of the Prime Minister’s Council on Trade and Industry, Government of India and the Board of Governors of the National Council of Applied Economic Research, New Delhi. Shri Mukesh D. Ambani is a Member of Millennium Development Goals (MDG) Advocacy Group (MDG Advocate) constituted by United Nations (UN) and a Member of The Foundation Board of World Economic Forum. On invitation to Shri Mukesh D. Ambani, Reliance Industries Limited, became a Council Member of World Business Council for Sustainable Development (WBCSD) in 2007. Shri Ambani has been elected as Vice Chairman of WBCSD Executive Committee in 2008 and re-elected in 2010. Further, he is a member of the Indo-US CEOs Forum, International Advisory Board of the National Board of Kuwait, Advisory Council for the Graduate School of Business, Stanford University, International Advisory Board of Brookings, McKinsey Advisory Council, Member of The Business Council, Asia Business Council and London School of Economics India Advisory Group. He is the Chairman, Board of Governors of the Indian Institute of Management, Bangalore, Chairman of Pandit Deendayal Petroleum University, Gandhinagar. Shri Ambani is Co-Chair of India-Russia CEO Council, Co-Chair of Japan-India Business Leader’s Forum and a Member of the Governing Board of Public Health Foundation of India (PHFI). He has been appointed as a Director by the Board of Directors of the Bank of America Corporation on its Board. He is the first non-American to occupy such a position. He is the Chairman of Reliance Retail Limited, Infotel Broadband Services Limited and a Director of Reliance Foundation, Pratham Education Foundation, IMG Reliance Private Limited and Reliance Europe Limited. At RIL, he is the Chairman of the Finance Committee and a Member of the Employees Stock Compensation Committee. He is the Chairman of Audit Committees of Reliance Retail Limited and Infotel Broadband Services Limited. He is Promoter of the Company and holds 36,15,846 shares of the Company in his name as on March 31, 2012. Shri Nikhil R. Meswani is a Chemical Engineer. He is the son of Shri Rasiklal Meswani, one of the Founder Directors of the Company. He joined Reliance in 1986 and since July 01, 1988 he is a Whole-time Director designated as Executive Director on the Board of the Company. He is primarily responsible for Petrochemicals Division and has contributed largely to Reliance to become a global leader in Petrochemicals. In addition, he continues to shoulder several other corporate responsibilities. He also takes keen interest in IPL cricket franchise “Mumbai Indians”. He was the President of Association of Synthetic Fibre Industry and was also the youngest Chairman of Asian Chemical Fibre Industries Federation. He was named Young Global Leader by the World Economic Forum in 2005 and continues to actively participate in the activities of the Forum. He is also a member of the Young Presidents’ Organisation. He was honoured by the Institute of Economic Studies, Ministry of Commerce & Industry, the Textile Association (India), Ministry of Textiles. He is also a distinguished Alumnus of the University Institute of Chemical Technology (UICT), Mumbai. He is a Director of Reliance Commercial Dealers Limited. He is a member of the Finance Committee and the Shareholders’/Investors’ Grievance Committee of the Company. He is the Chairman of the Audit Committee of Reliance Commercial Dealers Limited. He holds 2,78,374 shares of the Company in his name as on March 31, 2012. Shri Hital R. Meswani graduated with Honours in the Management & Technology programme from the University of Pennsylvania, U.S.A. where he received a Bachelor of Science Degree in Chemical Engineering from 6 2 Partnering India's new future. Sustainably. the School of Engineering and Applied Sciences and a Bachelor of Science Degree in Economics from the Wharton Business School. He joined Reliance Industries Limited in 1990. He is on the Board of the Company as Whole-time Director designated as Executive Director since August 4, 1995, with overall responsibility of the Petroleum Business and all Manufacturing, Technology and Project activities of the group. He is a Director of Reliance Industrial Investments and Holdings Limited and Reliance Commercial Dealers Limited. He is the Chairman of the Audit Committee of Reliance Industrial Investments and Holdings Limited and is a member of the Audit Committee of Reliance Commercial Dealers Limited. He is a member of the Finance Committee and Shareholders’/Investors’ Grievance Committee and Chairman of the Health, Safety and Environment Committee of the Company. He has been instrumental in the execution of several mega projects of the group including the Hazira Petrochemicals complex and the world’s largest Refinery complex at Jamnagar. He has been awarded an Honorary Fellowship by IChemE (Institution of Chemical Engineers – the International Professional body for Chemical, Biochemical and Process Engineers) in recognition of his contribution to the process industries. He is the recipient of The 2011 D. Robert Yarnall Award from The Engineering Alumni Society of the University of Pennsylvania. He also serves on the Board of Overseers at the University of Pennsylvania. He holds 2,11,886 shares of the Company in his name as on March 31, 2012. Shri P.M.S. Prasad has been appointed as a Whole-time Director designated as Executive Director of the Company with effect from August 21, 2009. He has been with the Company for about 31 years. Currently, he spearheads the Upstream and Refining business, which comprises Exploration and Production and Refinery supply and trading. Over the years, he has held various positions in the fibres, petrochemicals and petroleum business of the Company. He was also the Project Director of the Jamnagar refinery and petrochemicals complex. Under his leadership, Reliance, in a span of 10 years since inception in the Exploration and Production business, made the largest gas discovery in 2002 and has since commissioned India’s first and one of the world’s largest deep water gas production facilities. He holds Bachelor’s degrees in Science and Engineering. He was awarded an honorary doctorate degree by the University of Petroleum Engineering Studies, Dehradun in recognition of his outstanding contribution to the Petroleum sector. He is on the Board of Governors of the University of Petroleum & Energy Studies, India. He has been conferred the Energy Executive of the Year 2008 award by Petroleum Economist in recognition of his leadership in diversifying RIL from a refining and petrochemicals group into a successful vertically diversified Exploration and Production business. He is a member of Health, Safety and Environment Committee of the Company. He is a Director of Reliance Commercial Dealers Limited, Mangal Deep Commercials Private Limited and Nandika Mercantile Private Limited. He is member of the Audit Committee of Reliance Commercial Dealers Limited. He holds 36,666 shares of the Company in his name as on March 31, 2012. Shri Pawan Kumar Kapil has been appointed as a Whole- time Director designated as Executive Director of the Company with effect from May 16, 2010. He holds Bachelor’s degree in Chemical Engineering and has a rich experience of more than four decades in the Petroleum Refining Industry. He joined Reliance in 1996 and led the commissioning and start-up of the Jamnagar complex. He was associated with this project since conception right through Design, Engineering, Construction and Commissioning. He also led the commissioning of the manufacturing operations in the Special Economic Zone (SEZ) at Jamnagar by Reliance. He started his career in 1966 with the Indian Oil Corporation. In the initial years he worked in various capacities in Operations, Technical Services and start-up/ commissioning of various Refinery Process Units/ facilities in Barauni and Gujarat Refineries. Being a person with a strong penchant for analytical work and high technology skills, he was chosen to head the Central Technical Services Department at the Corporate Office of Indian Oil Corporation. Here he did extensive work in ‘expansion of the existing refineries’, ‘energy optimisation’, ‘debottlenecking studies’ and ‘long range planning’. Then he moved to Mathura Refinery as the head of Refinery Operations. From Mathura he was picked up to become the Director (Technical) of Oil Coordination Committee (OCC) - the ‘Think Tank’ of the Ministry of Petroleum, the Government of India. He has travelled extensively and has been to USA, Russia, the Middle East, Reliance Industries Limited 63 Europe and the Far East in connection with refinery design, technology selection, crude sourcing, etc. Having served for 28 years in Indian Oil Corporation and OCC in various capacities, he rose to the position of Executive Director and spearheaded the setting up of Panipat Refinery for the Indian Oil Corporation. He has been the Site President of the Jamnagar complex of the Company since 2001. Under his able leadership, in 2005, the Jamnagar Refinery became the first Asian Refinery to be declared the ‘Best Refinery in the world’, at the ‘World Refining & Fuel Conference’ at San Francisco, USA. Both Refineries have bagged many national and international awards for Excellence in Safety performance, Energy conservation & Environment management, including the ‘Golden Peacock Global Award for Sustainability for the year 2010’. In recognition of his excellent achievements, the CHEMTECH Foundation had conferred on him the “Outstanding Achievement Award for Oil Refining” in 2008. He is also a Member of the Research Council of the Indian Institute of Petroleum, Dehradun. He is a member of Health, Safety and Environment Committee of the Company. He holds 16,776 shares of the Company in his name as on March 31, 2012. Shri Ramniklal H. Ambani is one of the senior most Directors of the Company. He is the elder brother of Shri Dhirubhai H. Ambani, the Founder Chairman of the Company and has been instrumental in chartering the growth of the Company during its initial years of textile operations from its factory at Naroda, in Ahmedabad. He along with Late Shri Dhirubhai H. Ambani set up and operated the textiles plant at Naroda, Ahmedabad and was responsible in establishing the Reliance Brand “VIMAL” in the textiles market in the country. He was appointed as a Chairman of Gujarat Industrial Development Corporation Ltd. (GIDC) for 2 years from 6th June 1978. In 1980, he was appointed as a Director of the Gujarat Industrial Investments Corporation Limited (GIIC) and continuing his services since last 30 years. He is also Chairman of Audit Committee in GIIC Ltd. He is Director of Sintex Industries Ltd since 1994 and is also member of Remuneration Committee of Sintex Industries Ltd. He holds 1,72,632 shares of the Company in his name as on March 31, 2012. Shri Mansingh L. Bhakta is senior partner of Messers Kanga & Company, a leading firm of Advocates and Solicitors in Mumbai. He has been in practice for over 57 years and has vast experience in legal field and particularly on matters relating to corporate laws, banking and taxation. He is a legal advisor to leading foreign and Indian companies and banks. He has also been associated with a large number of Euro issues made by Indian companies. He was the Chairman of the Taxation Law Standing Committee of LAWASIA, an Association of Lawyers of Asia and Pacific, which has its headquarters in Australia. He is a Director of Ambuja Cements Limited, Micro Inks Limited, the Indian Merchant’s Chamber, Mumbai, JCB India Limited and Abhijeet Power Limited. He is the Lead Independent Director of the Company. He is the Chairman of the Shareholders’/ Investors’ Grievance Committee and the Remuneration Committee of the Company. He is the Chairman of the Share Allotment & Transfer Committee, the Compensation and Remuneration Committee and the Banking Matters Committee of Ambuja Cements Limited and a member of the Audit Committees of Micro Inks Limited, Ambuja Cements Limited, JCB India Limited and Abhijeet Power Limited. He is also a member of Share Transfer and Investors’ Grievance Committee and IPO Committee of Abhijeet Power Limited. He is recipient of Rotary Centennial Service Award for Professional Excellence from Rotary International. In its normal annual survey conducted by Asia Law Journal, Hong Kong, a leading International law journal, he has been nominated as one of ‘the Leading Lawyers of Asia 2010’. Last year was the fifth consecutive year in which he has been so nominated. He holds 3,00,000 shares of the Company in his name as on March 31, 2012. Shri Yogendra P Trivedi is practicing as senior advocate in Supreme Court. He is a member of the Rajya Sabha. He holds important positions in various fields viz.economics, professional, political, commercial, education, medical, sports and social. He has received various Awards and merits for his contribution in various fields. He was a Director in Central Bank of India and Dena Bank, amongst many other reputed companies. He was the past President of the Indian Merchants’ Chamber and presently is a Member of the Managing Committee. He was on the Managing Committee of ASSOCHAM and the International Chamber of Commerce. He is the Chairman of Sai Service Station Limited and Trivedi Consultants Private Limited. He is the Director of Colosseum Sports & Recreation International, The Supreme Industries Limited, Birla Power Solutions Limited, 6 4 Partnering India's new future. Sustainably. Zodiac Clothing Company Limited, The Seksaria Biswan Sugar Factory Limited, New Consolidated Construction Company Limited, Emami Limited and several private limited companies. He is the Chairman of Indo African Chamber of Commerce. He was the President of the Cricket Club of India. He was the past President of the Western India Automobile Association. He is also Member of the All India Association of Industries, W.I.A.A. Club, B.C.A Club, Orient Club, the Yachting Association of India and Yacht Club. He is also the Chairman of the Audit Committee, the Corporate Governance and Stakeholders’ Interface Committee and the Employees’ Stock Compensation Committee of the Company. He is also a Member of the Shareholders’/Investors’ Grievance Committee and the Remuneration Committee of the Company. Mr. Trivedi is the Chairman of the Audit Committee of Birla Power Solutions Limited. He is a Member of the Audit Committee of Zodiac Clothing Company Limited and the Seksaria Biswan Sugar Factory Limited. He has been conferred Honorary Doctorate (Honoris Causa) by Fakir Mohan University, Balasore, Odisha. He holds 27,984 shares of the Company in his name as on March 31, 2012. Dr. Dharam Vir Kapur is an honours Graduate in Electrical Engineering with wide experience in Power, Capital Goods, Chemicals and Petrochemicals Industries. He had an illustrious career in the government sector with a successful track record of building vibrant organisations and successful project implementation. He served Bharat Heavy Electricals Limited (BHEL) in various positions with distinction. Most remarkable achievement of his career was establishment of a fast growing systems oriented National Thermal Power Corporation (NTPC) of which he was the founder Chairman-cum-Managing Director. ENERTIA Awards 2010 conferred Life Time Achievement Award on Dr. Kapur for his contribution to the Power and Energy Sector and for his leadership in the fledgling NTPC for which he was described as a Model Manager by the Board of Executive Directors of World Bank. As Secretary to the Government of India in the Ministries of Power, Heavy Industry and Chemicals & Petrochemicals during 1980-86, he made significant contributions with introduction of new management practices and liberalisation initiatives including authorship of “Broad banding” and “Minimum economic sizes” in industrial licensing. He was also associated with a number of national institutions as Member, the Atomic Energy Commission; Member, the Advisory Committee of the Cabinet for Science and Technology; Chairman, the Board of Governors, IIT Bombay (1983-94); Member, the Board of Governors, IIM Lucknow and Chairman, the National Productivity Council. In recognition of his services and significant contributions in the field of Technology, Management and Industrial Development, Jawaharlal Nehru Technological University, Hyderabad, conferred on him the degree of D.Sc. He is recipient of “India Power, Life Time Achievement Award” presented by the Council of Power Utilities, for his contributions to Energy and Industry sectors. He is Chairman (Emeritus) of Jacobs H&G (P) Limited and Chairman of GKN Driveline (India) Limited and Drivetech Accessories Limited. He is also a Director on the Boards of Honda Seil Power Products Limited, Zenith Birla (India) Limited, DLF Limited and other private limited companies. Earlier he was a Director on the Boards of Tata Chemicals Limited, Larsen & Toubro Limited and Ashok Leyland Limited. He is a member of the Corporate Governance and Stakeholders’ Interface Committee, the Remuneration Committee and the Health, Safety and Environment Committee of the Company. He is Chairman of Audit Committees of Honda Seil Power Products Limited and GKN Driveline (India) Limited, Shareholders’/Investors’ Relations Committees of Honda Seil Power Products Limited and DLF Limited, Chairman’s Executive Committee of GKN Driveline (India) Limited, Corporate Governance Committee of DLF Limited and Compliance Committee of DLF Limited. He is a member of Audit Committees of Zenith Birla (India) Limited and DLF Limited and Remuneration Committee of Honda Seil Power Products Limited. He holds 13,544 shares of the Company in his name as on March 31, 2012. Shri Mahesh Prasad Modi, M.Sc (Econ.) (London), Fellow, Economic Development Institute of the World Bank, held high positions in the Government of India as Chairman of Telecom Commission & Secretary, Telecommunications Department & Director General, Telecommunications; Secretary, the Ministry of Coal; Special Secretary (Insurance), Economic Affairs Department; and Joint Secretary, the Ministry of Petroleum, Chemicals and Fertilizers. He has served as Director on the Board of Directors of many public sector and private sector companies, including: GAIL (Founder Director), IPCL, BPCL, CRL, BRPL, Life Insurance Corporation of India, General Insurance Corporation, Mangalore Refinery & Petrochemicals, Essar Shipping, BSES, ICICI Prudential Life Insurance Co. and India Advisory Board of BHP Billiton. He has considerable management experience, particularly in the fields of energy, petrochemicals, telecom and insurance. Reliance Industries Limited 65 He is a member of the Audit Committee, the Employees’ Stock Compensation Committee and the Corporate Governance and Stakeholders’ Interface Committee of the Company. He is a Director on the Board of FACOR Power Limited. He holds 2,924 shares of the Company in his name as on March 31, 2012. Prof. Ashok Misra is a B.Tech. in Chemical Engineering from IIT Kanpur, M.S. in Chemical Engineering from the Tufts University and a Ph.D. in Polymer Science & Engineering from the University of Massachusetts. He has also completed the ‘Executive Development Programme’ and ‘Strategies for Improving Directors’ Effectiveness Programme’ at the Kellogg School of Management, Northwestern University. He was the Director at the Indian Institute of Technology, Bombay from 2000 to 2008, where he made significant contribution taking the institute to greater heights. During his tenure the IIT Bombay was transformed into a leading Research & Development institute, while at the same time maintaining its reputation as a leader in quality engineering education. Prior to this he was at IIT Delhi from 1977 to 2000 and at Monsanto Chemical Co. from 1974 to 1977. He is currently the Chairman-India, Intellectual Ventures. He is a Fellow of the National Academy of Sciences, India (President from 2006 to 2008); the Indian National Academy of Engineering, the Indian Institute of Chemical Engineers, the Indian Plastics Institute and the Maharashtra Academy of Sciences. He is the Founder President of the Polymer Processing Academy and the former President of the Society of Polymer Science, India. He is an Independent Director on the Board of Jubilant Industries Limited and a member of the Board of Governors of IIT Delhi. He was on the Board of National Thermal Power Corporation Limited for 6 years. He is/has been on the Boards or Councils of several national and international institutions. He has received several awards including the Distinguished Alumnus Awards from all his alma maters – IIT Kanpur, Tufts University and University of Massachusetts. He was awarded the Distinguished Service Award by IIT Delhi during its Golden Jubilee in 2011. He was awarded the Doctor of Science by Thapar University, Patiala. He has co-authored a book on Polymers, was awarded 6 patents and has over 150 international publications. He is on the editorial board of 4 scientific journals. He holds 2,300 shares of the Company in his name as on March 31, 2012. Prof. Dipak C. Jain is a M.S. in Mathematical Statistics from Guwahati University. He is a Ph.D. in Marketing and M.S. in Management Science from the University of Texas. Prof. Jain is a distinguished teacher and scholar. He had been Dean of the Kellogg School of Management, Northwestern University, Evanston, Illinois, USA from July, 2001 to March, 2011. He is the Dean of INSEAD, a leading business school with three campuses - Fontainebleau (Paris), France, Singapore and Abu Dhabi. He has more than 26 years’ experience in management and education. He has published several articles in international journals on marketing and allied subjects. His academic honors include the Sidney Levy Award for Excellence in Teaching in 1995; the John D.C. Little Best Paper Award in 1991; Kraft Research Professorships in 1989-90 and 1990-91; the Beatrice Research Professorship in 1987-88; the Outstanding Educator Award from the State of Assam in India in 1982; Gold Medal for the Best Post- Graduate of the Year from Guwahati University in India in 1978; Gold Medal for the Best Graduate of the Year from Darrang College in Assam in India in 1976; Gold Medal from Jaycees International in 1976; the Youth Merit Award from Rotary International in 1976; and the Jawaharlal Nehru Merit Award, the Government of India in 1976. He is a Director of Hindustan Media Ventures Limited and HT Global Education. He is also a Director of John Deere & Company, Global Logistic Properties and Northern Trust Bank (companies incorporated outside India). He is a member of the Employees’ Stock Compensation Committee of the Company. He is a Director of Reliance Retail Limited and also a member of its Audit Committee. He does not hold any shares of the Company in his name as on March 31, 2012. Dr. Raghunath Anant Mashelkar, an eminent scientist, is a Ph.D. in Chemical Engineering. He is the National Research Professor and also the President of Global Research Alliance, a network of publicly funded R&D institute from Asia-Pacific, Europe and USA with over 60,000 scientists. Formerly, Dr. Mashelkar was the Director General of the Council of Scientific and Industrial Research (CSIR) for over eleven years. He was also the President of Indian National Science Academy (INSA). He is the only third Indian Engineer to have been elected as Fellow of Royal Society (FRS), London in the twentieth century. He is Foreign Associate of National Academy of Science, USA (2005), Foreign Fellow of US National Academy of Engineering (2003), Fellow of Royal Academy of Engineering, U.K. (1996), and Fellow of American Academy of Arts & Science (2011). 6 6 Partnering India's new future. Sustainably. Thirty universities have honoured him with honorary doctorates, which include Universities of London, Salford, Pretoria, Wisconsin and Delhi. He has won over 50 awards and medals from several bodies for his outstanding contribution in the field of science and technology. He is the only scientist so far to have won the JRD Tata Corporate Leadership Award (1998) and the Star of Asia Award (2005) at the hands of George Bush Sr., the former President of USA. The President of India honoured Dr. Mashelkar with Padmashri (1991) and with Padmabhushan (2000), which are two of the highest civilian honours in recognition of his contribution to nation building. He is a Director of Tata Motors Limited, Hindustan Unilever Limited, Thermax Limited, KPIT Cummins Infosystems Limited, Sakal Papers Limited, IKP Knowledge Park, Piramal Healthcare Limited and several private limited companies. He is also a Director of Reliance Gene Medix Plc. (company incorporated outside India). He is a member of the Audit Committee of the Company. He is a member of the Audit committees of Tata Motors Limited, Hindustan Unilever Limited and Piramal Healthcare Limited. He is a member of the Remuneration Committee of Hindustan Unilever Limited and KPIT Cummins Infosystems Ltd. He does not hold any shares of the Company in his name as on March 31, 2012. 3. Board Meetings, Board Committee Meetings and Procedures A. Institutionalised decision making process The Board of Directors is the apex body constituted by the shareholders for overseeing the overall functioning of the Company. The Board provides and evaluates the strategic direction of the Company, management policies and their effectiveness and ensures that the long-term interests of the shareholders are being served. The Chairman and Managing Director is assisted by the Executive Directors/senior managerial personnel in overseeing the functional matters of the Company. The Board has constituted seven standing Committees, namely Audit Committee, Corporate Governance and Stakeholders’ Interface Committee, Employees Stock Compensation Committee, Finance Committee, Health, Safety and Environment Committee, Remuneration Committee and Shareholders’/Investors’ Grievance Committee. The Board is authorised to constitute additional functional Committees, from time to time, depending on the business needs. During the year under review, the Board has constituted a Committee comprising four independent Directors, viz., Shri Y.P. Trivedi, Dr. D.V. Kapur, Shri M.P. Modi and Prof. Ashok Misra to oversee all matters pertaining to the Buy- back of equity shares of the Company, Shri Y.P. Trivedi being the Chairman of the Committee. The internal guidelines of the Company for Board/Board Committee meetings facilitate the decision making process at the meetings of the Board/Board Committees in an informed and efficient manner. The following sub-sections deal with the practice of these guidelines at Reliance. B. Scheduling and selection of agenda items for Board meetings (i) Minimum six pre-scheduled Board meetings are held every year. Apart from the above, additional Board meetings are convened by giving appropriate notice to address the specific needs of the Company. In case of business exigencies or urgency of matters, resolutions are passed by circulation. (ii) The meetings are usually held at the Company’s office at Maker Chambers IV, 222, Nariman Point, Mumbai 400 021. (iii) All divisions/departments of the Company are advised to schedule their work plans well in advance, particularly with regard to matters requiring discussion/approval/decision at the Board/Board Committee meetings. All such matters are communicated to the Company Secretary in advance so that the same could be included in the agenda for the Board/Board Committee meetings. (iv) The Board is given presentations covering Finance, Sales, Marketing, major business segments and operations of the Company, over view of the business operations of major subsidary companies, global business environment, all business areas of the Company including business opportunities, business strategy and the risk management practices before taking on record the quarterly/annual financial results of the Company. The information required to be placed before the Board includes: (cid:1) General notices of interest of Directors. (cid:1) Appointment, remuneration and resignation of Directors. (cid:1) (cid:1) (cid:1) Formation/Reconstitution of Board Committees. Terms of reference of Board Committees. The minutes of the Board meetings of unlisted subsidiary companies. Reliance Industries Limited 67 (cid:1) Any material default in financial obligations to and by the Company, or substantial non payment for goods sold by the Company. (cid:1) Any issue, which involves possible public or product liability claims of substantial nature, including any judgment or order, which may have passed strictures on the conduct of the Company or taken an adverse view regarding another enterprise that can have negative implications on the Company. (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) Significant labour problems and their proposed solutions. Any significant development in Human Resources/Industrial Relations like implementation of Voluntary Retirement Scheme, etc. front Transactions that involve substantial payment towards goodwill, brand equity or intellectual property. Brief on statutory developments, changes in government policies, etc. with impact thereof, directors’ responsibilities arising out of any such developments. Compliance Certificate certifying compliance with all Laws as applicable to the Company. Reconciliation of Share Capital Audit Report under SEBI (Depositories and Participants) Regulations, 1996. Brief on information disseminated to the press. (v) The Chairman of the Board and the Company Secretary in consultation with other concerned members of the senior management, finalise the agenda for the Board meetings. C. Board material distributed in advance The agenda and notes on agenda are circulated to the Directors, in advance, in the defined agenda format. All material information is incorporated in the agenda for facilitating meaningful and focused discussions at the meeting. Where it is not practicable to attach any document to the agenda, the same is tabled before the meeting with specific reference to this effect in the agenda. In special and exceptional circumstances, additional or supplementary item(s) on the agenda are permitted. D. Recording Minutes of proceedings at Board and Committee meetings The Company Secretary records the minutes of the proceedings of each Board and Committee meeting. Draft minutes are circulated to all the members of the Board/ Board Committee for their comments. The minutes are entered in the Minutes Book within 30 days from conclusion of the meeting. (cid:1) Minutes of meetings of Audit Committee and other Committees of the Board. (cid:1) Declaration of independent directors at the time of appointment/annually. (cid:1) Appointment or resignation of Chief Financial Officer and Company Secretary. (cid:1) Annual operating plans of businesses, capital budgets and any updates. (cid:1) Quarterly results for the Company and its operating divisions or business segments. (cid:1) Annual Financial results of the Company, Auditors’ Report and the Report of the Board of Directors’. (cid:1) Quaterly Secretarial Audit reports submitted by the (cid:1) Secretarial Auditors. (cid:1) Dividend declaration. (cid:1) Quarterly summary of all long-term borrowings made, bank guarantees issued, loans and investments made. Significant changes in accounting policies and internal controls. Sale of material nature of investments, subsidiaries, assets, which is not in normal course of business. Statement of significant transactions, related party transactions and arrangements entered by unlisted subsidiary companies. (cid:1) (cid:1) (cid:1) Quarterly details of foreign exchange exposures and the steps taken by management to limit the risks of adverse exchange rate movement, if material. (cid:1) (cid:1) Appointment of and the fixing of remuneration of the Auditors as recommended by the Audit Committee. Internal Audit findings and External Audit Reports (through the Audit Committee). Proposals for major investment, mergers and acquisitions. (cid:1) (cid:1) Details of any joint venture, acquisitions of companies (cid:1) or collaboration agreement. Status of business risk exposures, its management and related action plans. (cid:1) Making of loans and investment of surplus funds. (cid:1) Non-compliance of any regulatory, statutory or listing requirements and shareholders service such as non- payment of dividend, delay in share transfer (if any), etc. (cid:1) (cid:1) Show cause, demand, prosecution notices and penalty notices which are materially important. Fatal or serious accidents, dangerous occurrences, any material effluent or pollution problems. 6 8 Partnering India's new future. Sustainably. E. Post meeting follow-up mechanism 4. Number of Board meetings held and the dates on The Guidelines for Board and Board Committee meetings facilitate an effective post meeting follow-up, review and reporting process for the decisions taken by the Board and Board Committees thereof. The important decisions taken at the Board/Board Committee meetings are communicated to the departments/divisions concerned promptly. Action taken report on the decisions/minutes of the previous meeting(s) is placed at the immediately succeeding meeting of the Board/Board Committee for noting by the Board/Board Committee. F. Compliance The Company Secretary, while preparing the agenda, notes on agenda, minutes, etc. of the meeting(s), is responsible for and is required to ensure adherence to all the applicable laws and regulations including the Companies Act, 1956 read with the Rules issued thereunder and the Secretarial Standards recommended by the Institute of Company Secretaries of India. which held Six Board meetings were held during the year, as against the minimum requirement of four meetings. The Company has held at least one Board meeting in every three months. The details of the Board meetings are as under: Sl. Date No. Board No. of Strength Directors Present 1 2 3 4 5 April 21, 2011 July 25, 2011 October 15, 2011 November 25, 2011 January 20, 2012 6 March 23, 2012 13 13 13 13 13 13 11 13 10 10 12 13 5. Attendance of Directors at Board meetings, last Annual General Meeting (AGM) and number of other Directorships and Chairmanships / Memberships of Committees of each Director in various companies: Name of the Director Attendance of meetings during 2011-12 No. of Other Directorship(s)1 Board Meetings Last AGM No. of Membership(s) / Chairmanship(s) of Board Committees in other Companies2 6 6 6 4 3 6 6 6 6 5 6 5 4 Mukesh D. Ambani Nikhil R. Meswani Hital R. Meswani P.M.S. Prasad Pawan Kumar Kapil Ramniklal H. Ambani Mansingh L. Bhakta Yogendra P. Trivedi Dr. Dharam Vir Kapur Mahesh P. Modi Prof. Ashok Misra Prof. Dipak C. Jain Dr. Raghunath A. Mashelkar 1The Directorships held by Directors as mentioned above, do not include Alternate Directorships and Directorships in foreign companies, companies registered under Section 25 of the Companies Act, 1956 and private limited companies. 2In accordance with Clause 49, Memberships/Chairmanships of only the Audit Committees and Shareholders’/Investors’ Grievance Committees in all public limited companies (excluding Reliance Industries Limited) have been considered. 2 (as Chairman) 1 (as Chairman) 2 (including 1 as Chairman) 1 Nil 1 (as Chairman) 6 (including 1 as Chairman) 3 (including 1 as Chairman) 6 (including 4 as Chairman) Nil 1 1 3 Yes Yes Yes No Yes Yes Yes Yes Yes Yes Yes No Yes 2 1 2 1 Nil 2 4 8 5 1 1 2 6 Video/tele-conferencing facilities are also used to facilitate directors travelling abroad or present at other locations to participate in the meetings. Reliance Industries Limited 69 6. Board Committees: A. Standing Committees Details of the Standing Committees of the Board and other related information are provided hereunder: Composition of Board Level Committees Audit Committee Shareholders’/ Investors’ Grievance Committee 1. Yogendra P. Trivedi - Independent Director 1. Mansingh L. Bhakta - Independent Director (Chairman of the Committee) (Chairman of the Committee) 2. Mahesh P. Modi - Independent Director 2. Yogendra P. Trivedi - Independent Director 3. Dr. Raghunath A. Mashelkar - Independent 3. Nikhil R. Meswani - Executive Director Director 4. Hital R. Meswani - Executive Director Remuneration Committee 1. Mansingh L. Bhakta - Independent Director Corporate Governance and Stakeholders’ Interface Committee (Chairman of the Committee) 1. Yogendra P. Trivedi - Independent Director 2. Yogendra P. Trivedi - Independent Director 3. Dr. Dharam Vir Kapur - Independent Director (Chairman of the Committee) 2. Mahesh P. Modi - Independent Director 3. Dr. Dharam Vir Kapur - Independent Director Employees’ Stock Compensation Committee Health, Safety & Environment Committee 1. Yogendra P. Trivedi - Independent Director 1. Hital R. Meswani - Executive Director (Chairman of the Committee) (Chairman of the Committee) 2. Mukesh D. Ambani - Chairman and Managing 2. Dr. Dharam Vir Kapur - Independent Director Director 3. Mahesh P. Modi - Independent Director 4. Prof. Dipak C. Jain - Independent Director 3. 4. P.M.S. Prasad - Executive Director Pawan Kumar Kapil - Executive Director Finance Committee 1. Mukesh D. Ambani - Chairman and Managing Director (Chairman of the Committee) 2. Nikhil R. Meswani - Executive Director 3. Hital R. Meswani - Executive Director Shri K. Sethuraman, Group Company Secretary and Chief Compliance Officer is the Secretary of all Board Committees. 7 0 Partnering India's new future. Sustainably. Meetings of the Board Level Committees held during the year and attendance of Directors i n a b m A . D h s e k u M i n a w s e M R . l i h k i N i n a w s e M R . l a t i H d a s a r P . . S M P . a t k a h B . L h g n i s n a M l i p a K . K P . NA NA NA NA NA NA NA 4 3 NA NA NA NA NA NA NA 4 1 NA NA NA NA NA NA 1 NA NA NA NA NA r u p a K r i V m a r a h D . r D NA i d o M . P h s e h a M 6 n i a J . C k a p i D . f o r P NA r a k l e h s a M . A h t a n u h g a R . r D 4 NA NA NA NA 1 NA NA NA 3 2 NA NA NA 1 1 NA i d e v i r T . P a r d n e g o Y 6 4 1 3 1 NA NA 7 7 4 7 1* 2 NA NA 4 NA NA NA NA NA NA NA NA NA NA NA d l e H s g n i t e e M 6 4 1 3 1 4 7 Name of the Committee Audit Committee Shareholders’/ Investors’ Grievance Committee Remuneration Committee Corporate Governance and Stakeholders’ Interface Committee Employees’ Stock Compensation Committee Health, Safety & Environment Committee Finance Committee NA – Not a member of the Committee * Appointed w.e.f July 25, 2011. Two meetings held during his tenure. Terms of Reference and other details (i) Audit Committee Composition: All the members of the Audit Committee possess financial / accounting expertise / exposure. The composition of the Audit Committee meets with the requirements of Section 292A of the Companies Act,1956 and Clause 49 of the Listing Agreement. Objective: The Audit Committee assists the Board in its responsibility for overseeing the quality and integrity of the accounting, auditing and reporting practices of the Company and its compliance with the legal and regulatory requirements. The Committee’s purpose is to oversee the accounting and financial reporting process of the Company, the audits of the Company’s financial statements, the appointment, independence, performance and remuneration of the statutory auditors including the Cost auditors, the performance of internal auditors and the Company’s risk management policies. Reliance Industries Limited 71 to the Board to take up steps in this matter. 7 Reviewing with the management, the performance of Statutory including Cost Auditors and Internal Auditors, adequacy of internal control systems. 8 Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure, coverage and frequency of internal audit. 9 Discussion with Internal Auditors, any significant findings and follow up thereon. 10 Reviewing the findings of any internal investigations by the Internal Auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board. 11 Discussion with Statutory Auditors including Cost Auditors before the audit commences, about the nature and scope of audit as well as post audit discussion to ascertain any area of concern. 12 To look into the reasons for substantial defaults, if any, in the payment to the depositors, debenture holders, shareholders (in case of non payment of declared dividends) and creditors. 13 To review the functioning of the Whistle Blower Mechanism. 14 Approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience & background, etc. of the candidate. 15 Carrying out such other functions as may be specifically referred to the Committee by the Board of Directors and/or other Committees of Directors of the Company. 16 To review the following information: (cid:1) (cid:1) The management discussion and analysis of financial condition and results of operations; Statement of significant related party transactions (as defined by the Audit Committee), submitted by management; (cid:1) (cid:1) Management letters/letters of internal control weaknesses issued by the Statutory Auditors; Internal audit reports relating to internal control weaknesses; and The appointment, removal and terms of remuneration of Internal Auditors. (cid:1) 17 Reviewing the financial statements and in particular the investments made by the unlisted subsidiaries of the Company. 2 3 4 Terms of Reference: The terms of reference / powers of the Audit Committee are as under : A. Powers of Audit Committee 1 To investigate any activity within its terms of reference. To seek information from any employee. To obtain outside legal or other professional advice. To secure attendance of outsiders with relevant expertise, if it considers necessary. B. The role of Audit Committee includes 1 Oversight of the Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statements are correct, sufficient and credible. 2 Recommending to the Board, the appointment, reappointment and, if required, the replacement or removal of Statutory Auditors including Cost auditors and fixation of audit fees. 3 Approval of payment to Statutory Auditors including Cost auditors for any other services rendered by them. 4 Reviewing with the management, the annual financial statements before submission to the Board for approval, with particular reference to: (cid:1) Matters required to be included in the Directors’ Responsibility Statement to be included in the Directors’ Report in terms of sub-section (2AA) of Section 217 of the Companies Act, 1956. Changes, if any, in accounting policies and practices and reasons for the same. (cid:1) (cid:1) (cid:1) Major accounting entries involving estimates based on the exercise of judgment by the management. Significant adjustments made in the financial statements arising out of audit findings. Compliance with listing and other legal requirements relating to financial statements. (cid:1) (cid:1) Disclosure of related party transactions. (cid:1) Qualifications in draft audit report. 5 Reviewing with the management, the quarterly financial statements before submission to the Board for approval. 6. Reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document/prospectus/notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations 7 2 Partnering India's new future. Sustainably. General Executives of Accounts Department, Finance Department, Secretarial Department and Management Audit Cell and Representatives of the Statutory and Internal Auditors attend the Audit Committee Meetings. The Cost Auditors appointed by the Company under Section 233B of the Companies Act, 1956 attend the Audit Committee Meeting, where cost audit reports are discussed. The due date for filing the Cost Audit Reports for the financial year ended March 31, 2011 was September 30, 2011 and the Cost Audit Reports were filed by the Cost Auditors on September 26, 2011 and September 27, 2011. The due date for filing the Cost Audit Reports for the financial year ended March 31, 2012 is September 30, 2012. The Chairman of the Audit Committee was present at the last Annual General Meeting. (ii) Corporate Governance and Stakeholders’ Interface (CGSI) Committee Terms of Reference: The terms of reference of the Corporate Governance and Stakeholders’ Interface Committee, inter alia, include the following: 1 Observance of practices of Corporate Governance at all levels and to suggest remedial measures wherever necessary. Provision of correct inputs to the media so as to preserve and protect the Company’s image and standing. 2 3 Dissemination of factually correct information to the 5 4 investors, institutions and public at large. Interaction with the existing and prospective FIIs and rating agencies, etc. Establishing oversight on important corporate communication on behalf of the Company with the assistance of consultants/advisors, if necessary. Ensuring institution of standardised channels of internal communications across the Company to facilitate a high level of disciplined participation. 7 Recommendation for nomination of Directors on the 6 Board. Selection of Independent Directors: Considering the requirement of the skill-sets on the Board, eminent persons having an independent standing in their respective field/profession and who can effectively contribute to the Company’s business and policy decisions are considered by the Corporate Governance and Stakeholders’ Interface Committee, which also acts as Nomination Committee, for appointment inter alia of 2 3 4 5 6 7 independent directors on the Board. The number of directorships and memberships held in various committees of other companies by such persons is also considered. The Board considers the recommendations of the Committee and takes appropriate decision. (iii) Employees Stock Compensation Committee Terms of Reference: The Committee was formed inter alia to formulate detailed terms and conditions of the Employees Stock Option Scheme including: 1 The quantum of options to be granted under Employees Stock Option Scheme per employee and in aggregate. The conditions under which option vested in employees may lapse in case of termination of employment for misconduct. The exercise period within which the employee should exercise the option and that the option would lapse on failure to exercise the option within the exercise period. The specified time period within which the employee shall exercise the vested options in the event of termination or resignation of an employee. The right of an employee to exercise all the options vested in him at one time or at various points of time within the exercise period. The procedure for making a fair and reasonable adjustment to the number of options and to the exercise price in case of corporate actions such as rights issues, bonus issues, merger, sale of division and others. The grant, vest and exercise of option in case of employees who are on long leave. The procedure for cashless exercise of options, if any. 8 (iv) Finance Committee Terms of Reference: The Terms of Reference of the Finance Committee, inter-alia, include the following : 1 Review the Company’s financial policies, risk assessment and minimisation procedures, strategies and capital structure, working capital and cash flow management and make such reports and recommendations to the Board with respect thereto as it may deem advisable. 2 Review banking arrangements and cash management. Exercise all powers to borrow moneys (otherwise than 3 by issue of debentures) within the limits approved by the Board and taking necessary actions connected therewith including refinancing for optimisation of borrowing costs. 4 Giving of guarantees/issuing letters of comfort/ Reliance Industries Limited 73 providing securities within the limits approved by the Board. 5 Borrow monies by way of loan and/or issuing and allotting bonds/notes denominated in one or more foreign currencies in international markets, for the purpose of refinancing the existing debt, capital expenditure, general corporate purposes including working capital requirements and possible strategic investments within the limits approved by the Board. Provide corporate guarantee/performance guarantee by the Company within the limits approved by the Board. 6 7 Approve opening and operation of Investment Management Accounts with foreign banks and appoint them as agents, establishment of representative/sales offices in or outside India etc. 8 Carry out any other function as is mandated by the Board from time to time and/or enforced by any statutory notification, amendment or modification as may be applicable. 9 Other transactions or financial issues that the Board may desire to have them reviewed by the Finance Committee. 10 Delegate authorities from time to time to the executives/authorised persons to implement the decisions of the Committee. 11 Regularly review and make recommendations about changes to the charter of the Committee. (v) Health, Safety and Environment (HS&E) Committee Terms of Reference: The Health, Safety and Environment Committee has been constituted, inter alia, to monitor and ensure maintaining the highest standards of environmental, health and safety norms and compliance with applicable pollution and environmental laws at all works / factories / locations of the Company and to recommend measures, if any, for improvement in this regard. The Committee reviews, inter alia, the Health, Safety and Environment Policy of the Company, performance on health, safety and environment matters and the procedures and controls being followed at various manufacturing facilities of the Company and compliance with the relevant statutory provisions. (vi) Remuneration Committee Terms of Reference: The Remuneration Committee has been constituted to recommend/review remuneration of the Managing Director and Whole- time Directors, based on their performance and defined assessment criteria. Remuneration policy, details of remuneration and other terms of appointment of Directors: The remuneration policy of the Company is directed towards rewarding performance, based on review of achievements on a periodic basis. The remuneration policy is in consonance with the existing industry practice. Remuneration paid to the Chairman and Managing Director and the Whole-time Directors, including Stock Options granted during 2011-12: Name of the Director Salary Perquisites and allowances Retiral Commission benefits payable Performance Linked Incentive Mukesh D. Ambani Nikhil R. Meswani Hital R. Meswani P.M.S. Prasad Pawan Kumar Kapil 4.16 1.04 1.04 0.86 0.50 0.60 1.45 1.45 1.37 0.75 0.78 0.18 0.18 0.15 0.09 9.46 8.32 8.32 - - - - - 2.62 0.65 ` in crore Stock Options granted Nil Nil Nil Nil Nil Total 15.00 10.99 10.99 5.00 1.99 The Chairman and Managing Director’s compensation has been set at ` 15 crore as against ` 38.82 crore that he is elgible as per the shareholders’ approval, reflecting his desire to continue to set a personal example for moderation in managerial compensation levels. The performance criteria for the Executive Directors who are entitled for Performance Linked Incentive (PLI) is determined by the Remuneration Committee. The tenure of office of the aforesaid Managing Director and Whole-time Directors is for a period of 5 years, except Shri Pawan Kumar Kapil, whose tenure is for a period of 3 years, from their respective dates of appointments and can be terminated by either party by giving three months’ notice in writing. There is no separate provision for payment of severance fees. The Non-Executive Directors are paid sitting fee at the 7 4 Partnering India's new future. Sustainably. rate of ` 20,000/- for attending each meeting of the Board and/or Committee thereof. Each of the Non-Executive Directors is also paid commission amounting to ` 21,00,000/- on an annual basis and the total commission payable to such Directors shall not exceed 1% of the net profits of the Company. Sitting fee and commission to the Non-Executive Directors, for 2011-12 are as detailed below: Name of the Non-Executive Director Ramniklal H. Ambani Mansingh L. Bhakta Yogendra P. Trivedi Dr. Dharam Vir Kapur Mahesh P. Modi Prof. Ashok Misra Prof. Dipak C. Jain Dr. Raghunath A. Mashelkar Total During the year, the Company has paid ` 0.57crore as professional fees to M/s. Kanga & Co., a firm in which Shri Mansingh L. Bhakta, Director of the Company, is a partner. There were no other pecuniary relationships or transactions of the Non-Executive Directors vis-à-vis the Company. The Company has not granted any stock option to any of its Non-Executive Directors. (vii) Shareholders’ / Investors’ Grievance Committee Terms of Reference: The Shareholders’/Investors’ Grievance Committee, inter alia, approves issue of duplicate certificates and oversees and reviews all matters connected with transfer of securities of the Company. The Committee also looks into redressal of shareholders’/ investors’ complaints related to transfer of shares, non- receipt of annual reports, non-receipt of declared dividend, etc. The Committee oversees performance of the Registrars and Transfer Agents of the Company and recommends measures for overall improvement in the quality of investor services. The Committee also monitors implementation and compliance with the Company’s Code of Conduct for Prohibition of Insider Trading in pursuance of SEBI (Prohibition of Insider Trading) Regulations, 1992. Compliance Officer Shri K. Sethuraman, Group Company Secretary and Chief Compliance Officer, is the Compliance Officer for complying with the requirements of the Securities Laws and the Listing Agreements with the Stock Exchanges. Investor Grievance Redressal The number of complaints received and resolved to the satisfaction of investors during the year under review and their break-up are as under: Sitting Fee 1.20 2.20 4.20 2.80 2.80 1.20 1.20 1.60 17.20 Commission 21.00 21.00 21.00 21.00 21.00 21.00 21.00 21.00 168.00 ` in lakhs Total 22.20 23.20 25.20 23.80 23.80 22.20 22.20 22.60 185.20 Type of Complaints Non-Receipt of Annual Reports Non-Receipt of Dividend Warrants Non-Receipt of Interest/ Redemption Warrants Non-Receipt of Certificates Total Number of Complaints 201 2023 202 156 2582 There were no outstanding complaints as on March 31, 2012. 108 requests for transfers and 256 requests for dematerialisation were pending for approval as on March 31, 2012, which were approved and dealt with by April 2, 2012. Given below is a chart showing reduction in investor’s complaints. Number of Complaints Received B. Functional Committees: The Board is authorised to constitute one or more Functional Committees delegating thereto powers and duties with respect to specific purposes. Meetings of such Reliance Industries Limited 75 of their stakeholders. The Company does not have any material unlisted subsidiary and hence is not required to nominate an independent director of the Company on the Board of any subsidiary. The Company monitors performance of subsidiary companies, inter alia, by the following means: (a) Financial statements, in particular the investments made by the unlisted subsidiary companies, are reviewed quarterly by the Audit Committee of the Company. (b) All minutes of Board meetings of the unlisted subsidiary companies are placed before the Company’s Board regularly. (c) A statement containing all significant transactions and arrangements entered into by the unlisted subsidiary companies is placed before the Company’s Board. Prof. Dipak C. Jain, Independent Director of the Company has been appointed as a Director on the Board of Reliance Retail Limited, a subsidiary of the Company. 9. General Body Meetings (i) Annual General Meetings The Annual General Meetings of the Company during the preceding three years were held at Birla Matushri Sabhagar, 19, New Marine Lines, Mumbai - 400 020. The date and time of the Annual General Meetings held during the preceding three years and the special resolution(s) passed thereat are as follows: Year Time Date Special Resolution Passed Nil Nil Nil 2010-11 2009-10 2008-09 June 03, 2011 June 18, 2010 November 17, 2009 11.00 a.m. 11.00 a.m. 11.00 a.m. (ii) Special Resolution passed through Postal Ballot No special resolution was passed through Postal Ballot during the Financial Year 2011-12. None of the businesses proposed to be transacted in the ensuing Annual General Meeting require passing a special resolution through Postal Ballot. 10. a. Disclosure on materially significant related party transactions i.e. transactions of the Company of material nature, with its Promoters, the Directors and the management, their relatives or subsidiaries, etc. that may have potential conflict with the interests of the Company at large None of the transactions with any of the related Committees are held as and when the need arises. Time schedule for holding the meetings of such Functional Committees are finalised in consultation with the Committee Members. Procedure at Committee Meetings The Company’s guidelines relating to Board meetings are applicable to Committee meetings as far as may be practicable. Each Committee has the authority to engage outside experts, advisors and counsels to the extent it considers appropriate to assist in its work. Minutes of the proceedings of the Committee meetings are placed before the Board meetings for perusal and noting. 7. Code of Business Conduct & Ethics for Directors/ Management Personnel The Code of Business Conduct & Ethics for Directors/ Management Personnel (‘the Code’), as recommended by the Corporate Governance and Stakeholders’ Interface Committee and adopted by the Board, is a comprehensive Code applicable to all Directors and Management Personnel. The Code while laying down, in detail, the standards of business conduct, ethics and governance, centres around the following theme: “The Company’s Board of Directors and Management Personnel are responsible for and are committed to setting the standards of conduct contained in this Code and for updating these standards, as appropriate, to ensure their continuing relevance, effectiveness and responsiveness to the needs of local and international investors and all other stakeholders as also to reflect corporate, legal and regulatory developments. This Code should be adhered to in letter and in spirit.” A copy of the Code has been put on the Company’s website www.ril.com. The Code has been circulated to all the Directors and Management Personnel and the compliance of the same is affirmed by them annually. A declaration signed by the Chairman and Managing Director of the Company is given below: I hereby confirm that the Company has obtained from all the members of the Board and Management Personnel, affirmation that they have complied with the Code of Business Conduct & Ethics for Directors/Management Personnel in respect of the financial year 2011-12. Mukesh D. Ambani Chairman and Managing Director 8. Subsidiary Monitoring Framework All subsidiary companies of the Company are Board managed with their Boards having the rights and obligations to manage such companies in the best interest 7 6 Partnering India's new future. Sustainably. parties were in conflict with the interest of the Company. Attention of members is drawn to the disclosure of transactions with the related parties set out in Note No. 30 of Notes on Accounts, forming part of the Annual Report. The Company’s major related party transactions are generally with its Subsidiaries and Associates. The related party transactions are entered into based on considerations of various business exigencies such as synergy in operations, sectoral specialization and the Company’s long-term strategy for sectoral investments, optimization of market share, profitability, legal requirements, liquidity and capital resources of subsidiaries and associates. All related party transactions are negotiated on arms length basis and are intended to further the interests of the Company. b. Details of non-compliance by the Company, penalties, strictures imposed on the Company by Stock Exchanges or SEBI, or any other statutory authority, on any matter related to capital markets, during the last three years. There has been no instance of non-compliance by the Company on any matter related to capital markets during the last three years and hence no penalties or strictures have been imposed on the Company by the Stock Exchanges or SEBI or any other statutory authority. SEBI has issued Show Cause Notices in connection with (i) sale of shares of erstwhile Reliance Petroleum Limited and (ii) the allotment of equity shares of the Company to certain companies against detachable warrants attached to privately placed debentures issued by the Company. The Company has submitted its reply to the same. 11. Means of Communication (i) Quarterly Results: Quarterly Results of the Company are published in ‘Financial Express’/‘Indian Express’ and ‘Navshakti’ and are displayed on the Company’s website www.ril.com. (ii) News Releases, Presentations, etc.: Official news releases and Official Media Releases are sent to the Stock Exchanges. (iii) Presentations to Institutional Investors / Analysts: Detailed Presentations are made to Institutional Investors and Financial Analysts, on the unaudited quarterly financial results as well as the annual audited financial results of the Company. These presentations are also uploaded on the Company’s website www.ril.com (iv) Website: The Company’s website www.ril.com contains a separate dedicated section ‘Investor Relations’ where shareholders information is available. The Annual Report of the Company is also available on the website in a user-friendly and downloadable form. (v) Annual Report: Annual Report containing, inter alia, Audited Annual Accounts, Consolidated Financial Statements, Directors’ Report, Auditors’ Report and other important information is circulated to members and others entitled thereto. The Management’s Discussion and Analysis (MD&A) Report forms part of the Annual Report and is displayed on the Company’s website www.ril.com. (vi) Chairman’s Communique: Printed copy of the Chairman’s Speech is distributed to all the shareholders at the Annual General Meetings. The same is also placed on the website of the Company and sent to Stock Exchange. (vii) Reminder to Investors: Reminders for unclaimed shares, unpaid dividend/unpaid interest or redemption amount on debentures are sent to the shareholders/ debenture holders as per records every year. (viii) Corporate Filing and Dissemination System (CFDS): The CFDS portal jointly owned, managed and maintained by BSE and NSE is a single source to view information filed by listed companies. All disclosures and communications to BSE & NSE are filed electronically through the CFDS portal and hard copies of the said disclosures and correspondence are also filed with the stock exchanges. (ix) NSE Electronic Application Processing System (NEAPS): The NEAPS is a web based application designed by NSE for corporates. The Shareholding Pattern and Corporate Governance Report are also filed electronically on NEAPS. (x) SEBI Complaints Redress System (SCORES) : The investor complaints are processed in a centralized web based complaints redress system. The salient features of this system are: Centralised database of all complaints, online upload of Action Taken Reports (ATRs) by the concerned companies and online viewing by investors of actions taken on the complaint and its current status. (xi) Designated Exclusive email-id: The Company has designated the following email-ids exclusively for investor servicing. (a) For on Annual Report queries - Investor_relations@ril.com (b) For queries in respect of shares in physical mode- rilinvestor@karvy.com Reliance Industries Limited 77 (xii) Shareholders’ Feedback Survey: The Company had sent feedback forms seeking shareholders’ views on various matters relating to investor services and the Annual Report 2010-11. The feedback received from the shareholders was placed before the Shareholders’/ Investors’ Grievance Committee. 12. General Shareholder Information (i) Company Registration Details The Company is registered in the State of Maharashtra, India. The Corporate Identity Number (CIN) allotted to the Company by the is Ministry of Corporate Affairs (MCA) L17110MH1973PLC019786. (ii) Annual General Meeting (Day, Date, Time and Venue): Thursday, June 07, 2012 at 11.00 a.m. Birla Matushri Sabhagar, 19, New Marine Lines, Mumbai 400020 (iii) Financial Year: April 1, 2012 to March 31, 2013 (iv) Financial Calendar (tentative) Results for the quarter ending: June 30, 2012 - Fourth week of July, 2012 September 30, 2012 - Third week of October, 2012 December 31, 2012 - Third week of January, 2013 March 31, 2013 - Third week of April, 2013 Annual General Meeting - June, 2013 (v) Date of Book Closure Saturday, June 02, 2012 to Thursday, June 07, 2012 (both days inclusive) for payment of dividend. (vi) Dividend Payment Date Credit/dispatch of dividend warrants between June 8, 2012 and June 14, 2012. (vii) Listing on Stock Exchanges A) Equity Shares (i) BSE Limited (BSE) Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400 001 Scrip Code 500325 (ii) National Stock Exchange of India Limited (NSE) ‘‘Exchange Plaza”, Bandra-Kurla Complex, Bandra (E), Mumbai 400 051 Trading Symbol - RELIANCE EQ ISIN : INE002A01018 B) Global Depository Receipts (GDRs) (i) Listing Luxembourg Stock Exchange, 11, Avenue de la Porte-Neuve, L – 2227, Luxembourg. Also traded on International Order Book System (London Stock Exchange) and PORTAL System (NASD, USA) Trading Symbol RILYP, CUSIP 759470107 (ii) Overseas Depository The Bank of New York Mellon Corporation 101 Barclay Street, New York, NY 10286 USA. (iii) Domestic Custodian ICICI Bank Limited, Empire Complex, E7/F7, 1st Floor, 414, Senapati Bapat Marg, Lower Parel, Mumbai 400 013. C) Debt Securities (i) The Wholesale Debt Market (WDM) Segment of BSE & NSE. (ii) Debenture Trustees (a) Axis Bank Limited Axis House, C-2, Wadia International Centre, Pandurang Budhkar Marg, Worli, Mumbai 400 025. (b) IDBI Trusteeship Services Limited Asian Building, Ground Floor, 17, R. Kamani Marg, Ballard Estate, Mumbai 400 023. (c) Axis Trustee Services Limited 2nd Floor, Axis House, Bombay Dyeing Mills Compound, Pandurang Budhkar Marg, Worli, Mumbai 400 025. D) Payment of Listing Fees: Annual listing fee for the year 2012-13 has been paid by the Company to BSE and NSE. Annual maintenance and listing agency fee for the calendar year 2012 has been paid by the Company to the Luxembourg Stock Exchange. E) Payment of Depository Fees : Annual Custody/ Issuer fee for the year 2012-13 has been paid by the Company to NSDL and CDSL. 7 8 Partnering India's new future. Sustainably. (viii) Stock Market Price Data Month National Stock Exchange (NSE) (In ` per share) Bombay Stock Exchange (BSE) (In ` per share) April 2011 May 2011 June 2011 July 2011 August 2011 September 2011 October 2011 November 2011 December 2011 January 2012 February 2012 March 2012 Month’s High Price 1065.90 986.80 967.00 907.00 838.90 859.00 904.00 905.00 844.60 827.90 864.70 830.00 Month’s Low Price 970.00 898.35 828.10 823.15 712.00 747.55 761.75 751.00 689.00 687.15 765.35 718.00 Month’s High Price 1065.55 987.00 967.90 906.00 845.00 859.00 899.90 902.00 819.00 825.00 864.45 829.45 Month’s Low Price 971.65 899.25 829.00 824.00 713.55 748.50 761.65 751.15 690.00 687.55 765.75 719.40 (ix) Share Price Performance in comparison to broad based indices – BSE Sensex and NSE Nifty as on March 31, 2012 BSE (% Change) NSE (% Change) FY 2011-12 2 years 3 years 5 years RIL -28.59% -30.37% -1.75% 9.37% S e n s e x -10.50% -0.70% 79.27% 33.14% RIL -28.71% -30.38% -1.90% 9.16% Nifty -9.23% 0.88% 75.29% 38.57% (x) Registrars and Transfer Agents Karvy Computershare Private Limited Plot No.17-24, Vittal Rao Nagar, Madhapur, Hyderabad - 500 081. Tel:+91 40-44655070-5099 Toll Free No.18004258998 Fax +91 40-23114087 e-mail: rilinvestor@karvy.com Website: www.karvy.com List of Investor Service Centres of Karvy Computershare Private Limited is available on the website of the Company http://www.ril.com. (xi) Share Transfer System Share transfers are processed and share certificates duly endorsed are returned within a period of 7 days from the date of receipt, subject to the documents being valid and complete in all respects. The Board has delegated the authority for approving transfer, transmission etc. of the Company’s securities to the Managing Director and/or Company Secretary. A summary of transfer/transmission of securities of the Company so approved by the Managing Director/ Company Secretary is placed at every Board meeting/ Shareholders’/Investors’ Grievance Committee. The Company obtains from a Company Secretary in Practice half-yearly certificate of compliance with the share transfer formalities as required under Clause 47 (c) of the Listing Agreement and files a copy of the said certificate with the Stock Exchanges. (xii) A) Distribution of Shareholding as on March 31, 2012 Category Category of shareholder code (A) (1) (2) Shareholding of Promoter and Promoter Group1 Indian Foreign Total Shareholding of Promoter and Promoter Group Public Shareholding2 Institutions Non-institutions Total Public Shareholding Shares held by Custodians and against which Depository Receipts have been issued Promoter and Promoter Group Public TOTAL (A) + (B) + (C) (B) (1) (2) (C) (1) (2) Reliance Industries Limited 79 Number of shareholders Total number As a percentage of (A+B+C) of shares 62 0 62 146 39 23 383 0 146 39 23 383 2 125 34 03 919 34 06 044 92 45 55 435 76 99 61 726 169 45 17 161 0 1 34 06 107 0 11 26 18 796 327 10 59 340 44.75 0.00 44.75 28.26 23.54 51.80 0.00 3.44 100.00 1For definitions of “Promoter Shareholding” and “Promoter Group” refer to Clause 40A of Listing Agreement. 2For definition of “Public Shareholding”, refer to Clause 40A of Listing Agreement. B) Shareholding Pattern by Size as on March 31, 2012 Sl. No. Category (Shares) 1 2 3 4 5 6 7 8 9 1 - 500 501 - 1000 1001 - 2000 2001 - 3000 3001 - 4000 4001 - 5000 5001 - 10000 10001 - 20000 Above 20000 TOTAL Holders 32 68 307 81 813 34 661 9 044 3 773 2 141 3 374 1 206 1 788 34 06 107 C) Build up of Equity Share Capital Sl. No. 1 2 3 4 5 6 Particulars Subscribers To Memorandum Shareholders of Reliance Textile Industries Limited (Merged with the Company) Conversion of Loan Rights Issue - I Bonus Issue - I Debenture Series I Conversion Shares % of Total Shares 21 94 16 480 5 74 41 833 4 81 07 740 2 20 21 552 1 31 01 763 96 46 413 2 32 30 285 1 66 80 336 286 14 12 938 327 10 59 340 Allotment Date October 19, 1975 May 9, 1977 September 28, 1979 December 31,1979 September 19, 1980 December 31, 1980 6.71 1.76 1.47 0.67 0.40 0.29 0.71 0.51 87.48 100.00 No. of Shares 1 100 59 50 000 9 40 000 6 47 832 45 23 359 8 40 575 8 0 Partnering India's new future. Sustainably. Particulars Sl. No. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 Consolidation of Fractional Coupon Shares Conversion of Loan 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 NRI Debenture Series III Conversion Rights Issue II Shareholders of Sidhpur Mills Co Limited (Merged with the Company) II Bonus Issue- II Shareholders of Sidhpur Mills Co Limited (Merged with the Company) III Debenture Series IV Conversion 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 Shareholders of Sidhpur Mills Co Limited (Merged with the Company) VI Consolidation of Fractional Coupon Shares Debenture Series E Conversion Debenture Series III Conversion Debenture Series IV Conversion Shareholders of Sidhpur Mills Co Limited (Merged with the Company) VII Consolidation of Fractional Coupon Shares Shareholders of Sidhpur Mills Co Limited (Merged with the Company) VIII Shareholders of Sidhpur Mills Co Limited (Merged with the Company) IX Debenture Series G Conversion Right Issue III Debenture Series G Conversion Shareholders of Sidhpur Mills Co Limited (Merged with the Company) X Allotment Date May 15,1981 June 23, 1981 September 22, 1981 October 6, 1981 December 31, 1981 December 31, 1981 April 12, 1982 June 15, 1982 August 31, 1982 September 9, 1982 December 29, 1982 No. of Shares 24 673 2 43 200 1 40 800 23 80 518 8 42 529 27 168 81 059 774 19 20 000 41 1 942 September 30, 1983 September 30, 1983 1 11 39 564 371 September 30, 1983 April 5, 1984 64 00 000 617 June 20, 1984 50 October 1, 1984 December 31, 1984 January 31, 1985 April 30, 1985 April 30, 1985 July 5,1985 December 17, 1985 December 31, 1985 December 31, 1985 November 15, 1986 April 1, 1987 August 1, 1987 February 4, 1988 February 4, 1988 June 2, 1988 97 66 783 2 16 571 91 45 005 53 33 333 52 835 42 871 106 610 40 284 169 6 60 30 100 3 15 71 695 29 35 380 25 Particulars Sl. No. 38 39 40 41 42 43 44 Shareholders of Sidhpur Mills Co Limited (Merged with the Company) XI Shareholders of Sidhpur Mills Co Limited (Merged with the Company) XII Shareholders of Sidhpur Mills Co Limited (Merged with the Company) XIII Shareholders of Sidhpur Mills Co Limited (Merged with the Company) XIV Euro Issue GDR-I Shareholders of Sidhpur Mills Co Limited (Merged with the Company) Shareholders of Reliance Petrochemicals Limited (Merged with the Company) Loan Conversion Debenture Series H Conversion Euro Issue GDR II Loan Conversion 45 46 47 Warrant Conversion (Debenture Series F) 48 49 50 Warrant Conversion (Debenture Series J) 51 52 53 Private Placement of Shares Conversion of Reliance Petrochemicals Limited Debentures Shareholders of Reliance Polypropylene Limited and Reliance Polyethylene Limited (Merged with the Company) 54 Warrants Conversion 55 56 57 58 59 60 61 62 63 64 65 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 Shareholders of Reliance Petroleum Limited (Merged with the Company) Shareholders of Indian Petrochemicals Corporation Limited (Merged with the Company) Exercise of Warrants ESOS - Allotment 66 67 68 Reliance Industries Limited 81 Allotment Date No. of Shares October 31, 1988 November 29, 1990 May 22, 1991 October 10, 1991 June 3, 1992 10 322 46 25 1 84 00 000 4 060 December 4, 1992 7 49 42 763 July 7, 1993 August 26, 1993 August 26, 1993 February 23, 1994 March 1, 1994 August 3, 1994 October 21, 1994 December 22, 1994 March 16, 1995 March 10, 1995 May 24, 1997 July 11, 1997 July 22, 1997 September 13, 1997 October 22, 1997 November 4, 1997 December 20, 1997 December 4, 1997 September 27, 1999 January 12, 2000 October 23, 2002 3 16 667 3 64 60 000 1 03 16 092 2 55 32 000 18 38 950 87 40 000 2 45 45 450 75 472 9 95 75 915 74 80 000 544 13 31 042 6 05 068 18 64 766 18 15 755 1 03 475 46 60 90 452 15 68 499 7 624 12 00 00 000 34 26 20 509 October 13, 2007 6 01 40 560 October 3, 2008 Various dates in 2008-09 12 00 00 000 1 49 632 8 2 Partnering India's new future. Sustainably. Sl. No. 69 70 71 72 73 Particulars Shareholders of Reliance Petroleum Limited (Merged with the Company) Bonus Issue IV ESOS - Allotment ESOS – Allotment ESOS - Allotment Less: Shares Bought Back and extinguished on January 24, 2005 Less: Shares Bought Back and extinguished from February 08, 2012 to March 28, 2012 Total Equity as on March 31, 2012 Allotment Date No. of Shares September 30, 2009 6 92 52 623 November 28, 2009 Various dates in 2009-10 Various dates in 2010-11 Various dates in 2011-12 1 62 67 93 078 5 30 426 29 99 648 13 48 763 -28 69 495 -36,63,431 327 10 59 340 (xiii) Corporate Benefits to Investors a. Bonus Issues of Fully Paid-up Equity Shares Financial Year 1980-81 1983-84 1997-98 2009-10 Ratio 3:5 6:10 1:1 1:1 b. Dividend Declared for the last 10 Years Financial Year Dividend Declaration Dividend per Share* 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 October 31, 2002 June 16, 2003 June 24, 2004 August 03, 2005 June 27, 2006 March 10, 2007 June 12, 2008 October 7, 2009 June 18, 2010 (post bonus issue 1:1) June 03, 2011 4.75 5.00 5.25 7.50 10.00 11.00 13.00 13.00 7.00 8.00 * Share of paid-up value of ` 10 per share. Note: Dividend of ` 8.50 per share, recommended by the Directors on April 20, 2012, is subject to declaration by the shareholders at the ensuing Annual General Meeting. c. Shares issued on Demerger Consequent upon the demerger of the Coal based, Gas based, Financial services and Telecommunications undertakings/businesses of the Company in December, 2005, the shareholders of the Company were allotted equity shares of the four companies, namely, Reliance Energy Ventures Limited (REVL), Reliance Natural Resources Limited (RNRL), Reliance Capital Ventures Limited (RCVL) and Reliance Communication Ventures Limited (RCoVL) in the ratio of one equity share of each of the companies for every equity share held by the shareholders except specified shareholders, in Reliance Industries Limited, as on the record date fixed for the purpose. Accordingly, 122,31,30,422 equity shares each of REVL, RNRL, RCVL and RCoVL were allotted on January 27, 2006. (xiv) Dematerialisation of Shares Sl. No. Mode of Holding 1 2 3 NSDL CDSL Physical TOTAL % age 94.98 2.51 2.51 100.00 97.49% of Company’s paid-up Equity Share Capital has been dematerialised upto March 31, 2012 (97.14% up to March 31, 2011). Trading in Equity Shares of the Company is permitted only in dematerialised form. (xv) Liquidity The Company’s Equity Shares are among the most liquid Reliance Industries Limited 83 RIL GDR Price Movement over last 1 year DR Close Price Source : Bank of New York Mellon website (b) Employee Stock Options: 68,817 Options have been granted during the financial year 2011-12. Each Option, upon exercise of the same, would give rise to one equity share of `10/- each fully paid up. The exercise is made at the market price prevailing as on the dates of the grant plus applicable taxes as may be levied on the Company in this regard. Options vest over one year to a maximum period of seven years, depending upon specified criteria. The Options can be exercised during a period of five years or such other period as the Employees Stock Compensation Committee may decide from the date of vesting. The Options unexercised during the exercise period would lapse. Members may refer to the disclosures set out under Annexure I to the Directors’ Report with regard to particulars of Employees Stock Option. (xvii) Plant Locations Allahabad A/10-A/27, UPSIDC Industrial Area P. O. T.S.L. Allahabad - 211 010, Uttar Pradesh, India. Barabanki Dewa Road, P.O. Somaiya Nagar Barabanki - 225 123, Uttar Pradesh, India. Dahej P. O. Dahej, Taluka: Vagra, Dist: Bharuch - 392 130, Gujarat, India 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 2011-12 is given below: BSE NSE Total Shares (nos.) 7 19 755 43 06 074 50 25 829 Value (in ` crore) 59.21 356.67 415.88 [Source: This information is compiled from the data available from the websites of BSE and NSE] (xvi) Outstanding GDRs / Warrants and Convertible Bonds, Conversion Date and likely impact on equity (a) GDRs: Outstanding GDRs as on March 31, 2012 represent 11,26,18,796 equity shares constituting 3.44% of the paid-up Equity Share Capital of the Company. Each GDR represents two underlying equity shares in the Company. GDR is not a specific time-bound instrument and can be surrendered at any time and converted into the underlying equity shares in the Company. The shares so released in favor of the investors upon surrender of GDRs can either be held by the investors concerned in their name or sold off in the Indian secondary markets for cash. To the extent of the shares so sold in Indian markets, GDRs can be reissued under the available head room. RIL GDR Program - Important Information RIL GDRs are listed at Luxembourg Stock Exchange. GDRs are traded on International Order Book (IOB) of London Stock Exchange. GDRs are also traded amongst Qualified Institutional Investors in the Portal System of NASD, USA. RIL GDRs are exempted securities under US Securities Law. RIL GDR program has been established under Rule 144A and Regulation S of the US Securities Act, 1933. Reporting is done under the exempted route of Rule 12g3- 2(b) under the US Securities Exchange Act, 1934. The Bank of New York Mellon is the Depositary and ICICI Bank Limited is the Custodian of all the Equity Shares underlying the GDRs issued by the Company. 8 4 Partnering India's new future. Sustainably. Gadimoga Tallarevu Mandal East Godavari District Gadimoga – 533 463, Andhra Pradesh, India Hazira Village Mora, P.O. Bhatha, Surat Hazira Road, Surat - 394 510, Gujarat, India. Hoshiarpur Dharmshala Road, V.P.O. Chohal District Hoshiarpur - 146 024, Punjab, India. Jamnagar Village Meghpar/Padana, Taluka Lalpur Jamnagar - 361 280, Gujarat, India. Jamnagar SEZ Unit Village Meghpar/Padana, Taluka Lalpur Jamnagar - 361 280, Gujarat, India. Nagothane P. O. Petrochemicals Township Nagothane, Raigad - 402 125, Maharashtra, India. Nagpur Village Dahali, Mouda Ramtek Road Tehsil Mouda – 441 104, District Nagpur Maharashtra, India. Naroda 103/106, Naroda Industrial Estate Naroda, Ahmedabad - 382 330, Gujarat, India. Patalganga B-4, MIDC Industrial Area, P.O. Rasayani, Patalganga – 410 220 Dist. Raigad Maharashtra, India. Silvassa 342, Kharadpada, Naroli, Near Silvassa Union Territory of Dadra & Nagar Haveli - 396 235, India. Vadodara P. O. Petrochemicals Vadodara - 391 346, Gujarat, India. Oil & Gas Blocks Panna Mukta, Tapti, NEC-OSN-97/2, KG -DWN-98/ 3, GS - OSN - 2000/1, CY-PR-DWN-2001/3, KK-DWN-2001/1, KK- DWN-2001/2, CYDWN-2001/2, KG-DWN-2003/1, MN- DWN-2003/1, CB-ONN-2003/1, KG-DWN-2004/ 4, KG- DWN-2004/7, MN-DWN-2004/1, MN-DWN 2004/2, MN- DWN-2004/3, MN-DWN-2004/4, MN-DWN-2004/5 and KG-DWN-2005/2. CBM Blocks SP (West) – CBM – 2001/1, SP (East) – CBM – 2001/1, SH (North) – CBM - 2003/II (xviii) Address for Correspondence (a) Investor Correspondence For Shares/Debentures held in Physical form Karvy Computershare Private Limited Plot No.17-24,Vittal Rao Nagar, Madhapur, Hyderabad - 500 081. Tel:+91 40-44655070-5099 Toll Free No.18004258998 Fax +91 40-23114087 e-mail: rilinvestor@karvy.com Website: www.karvy.com For Shares/Debentures held in Demat form Investors’ concerned Depository Participant(s) and / or Karvy Computershare Private Limited. (b) Any query on Annual Report Shri S. Sudhakar Vice President, Corporate Secretarial Reliance Industries Limited, 3rd Floor, Maker Chambers IV, 222, Nariman Point, Mumbai 400 021. Email:investor_relations@ril.com (xix) Transfer of unpaid/unclaimed amounts to Investor Education and Protection Fund During the year under review, the Company has credited ` 4.45 crore, lying in the unpaid / unclaimed dividend account, to the Investor Education and Protection Fund (IEPF) pursuant to Section 205C of the Companies Act, 1956 read with the Investor Education and Protection Fund (Awareness and Protection of Investors) Rules, 2001. The cumulative amount transferred to IEPF up to March 31, 2012 is ` 92.74 crore. (xx) Equity Shares in the Suspense Account a) In terms of Clause 5A(I) of the Listing Agreement, the Company reports the following details in respect of equity shares lying in the suspense account which were issued in demat form pursuant to the public issue of erstwhile Reliance Petroleum Limited (amalgamated with the Company): Reliance Industries Limited 85 Number of Number of equity shares 1348 share holders 99 2 2 26 26 97 1322 Aggregate Number of shareholders and the outstanding shares in the suspense account lying as on April 1, 2011 Number of shareholders who approached the Company for transfer of shares from suspense account during the year Number of shareholders to whom shares were transferred from the suspense account during the year Aggregate Number of shareholders and the outstanding shares in the suspense account lying as on March 31, 2012 b) In terms of Clause 5A(II) of the Listing Agreement, the Company has dematerialised and transferred 64,13,975 equity shares of the Company issued in physical form to 1,64,437 shareholders and remaining unclaimed, to the ‘Reliance Industries Limited - Unclaimed Suspense Account’. No shares were transferred from the suspense account to the shareholders’ accounts, during the year. The voting rights on the shares outstanding in the suspense account as on March 31, 2012 shall remain frozen till the rightful owner of such shares claims the shares. 13. Compliance Certificate of the Auditors Certificate from the Auditors of the Company, M/s. Chaturvedi & Shah, M/s. Deloitte Haskins & Sells and M/s. Rajendra & Co., confirming compliance with the conditions of Corporate Governance as stipulated under Clause 49, is attached to the Directors’ Report forming part of the Annual Report. This Certificate has also been forwarded to the Stock Exchanges where the securities of the Company are listed. 14. Adoption of Mandatory and Non-Mandatory Requirements of Clause 49 The Company has complied with all mandatory requirements and has adopted following non-mandatory requirements of 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 were sent to members at their registered addresses. Audit Qualification The Company is in the regime of unqualified financial statements. Training of Board Members The Board members are provided with the necessary documents/brochures, reports and internal policies to enable them to familiarize with the Company’s procedures and practices. Periodic presentations are made at the Board and Board Committee Meetings, on business and performance updates of the Company, global business environment, business strategy and risks involved. Quarterly updates on relevant statutory changes and landmark judicial pronouncements encompassing important laws are regularly circulated to the Directors. Meetings of Independent Directors The Independent Directors of the Company meet from time to time as they deem appropriate without the presence of Executive Directors or management personnel. These meetings are conducted in an informal and flexible manner to enable the Independent Directors to discuss matters pertaining to the affairs of the company and put forth their views to the Lead Independent Director. The Lead Independent Director takes appropriate steps to present such views to the Chairman and Managing Director. Whistle Blower policy The Company promotes ethical behaviour in all its business activities and has put in place a mechanism of reporting illegal or unethical behaviour. The Company has a whistle blower policy 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. The confidentiality of those reporting violations is maintained and they are not subjected to any discriminatory practice. 15. CEO and CFO Certification The Chairman and Managing Director and the Chief Financial Officer of the Company give annual certification on financial reporting and internal controls to the Board in terms of Clause 49. The Chairman and Managing Director and the Chief Financial Officer also give quarterly certification on financial results while placing the financial results before the Board in terms of Clause 41 of the Listing Agreement. 8 6 Partnering India's new future. Sustainably. Secretarial Audit Report The Board of Directors Reliance Industries Limited 3rd Floor, Maker Chambers IV 222 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, 2012 according to the provisions of- (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) The Companies Act, 1956 and the Rules made under that Act; The Securities Contracts (Regulation) Act, 1956 (‘SCRA’), the Rules made under that Act; The Depositories Act, 1996 and the Regulations and Bye-laws framed under that Act; The Foreign Exchange Management Act, 1999 and the Rules and Regulations made under that Act to the extent applicable to Overseas Direct Investment (ODI), Foreign Direct Investment (FDI) and External Commercial Borrowings (ECB); The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992; The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999; The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; and The Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998; (cid:1) The Equity Listing Agreements with BSE Limited and National Stock Exchange of India Limited and GDR Listing Agreement with Luxembourg Stock Exchange and Debt Listing Agreements with National Stock Exchange of India Limited and BSE Limited. 1. Based on my examination and verification of the registers, records and documents 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 the Memorandum and Articles of Association of the Company, with regard to: (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) (n) maintenance of various statutory registers and documents and making necessary entries therein; closure of the Register of Members / Debenture holders; forms, returns, documents and resolutions required to be filed with the Registrar of Companies and the Central Government; service of documents by the Company on its Members, Debenture holders, Debenture Trustees, Auditors and the Registrar of Companies; notice of Board meetings and Committee meetings of Directors; the meetings of Directors and Committees of Directors including passing of resolutions by circulation; the 37th Annual General Meeting held on June 3, 2011; minutes of proceedings of General Meetings and of the Board and its Committee meetings; approvals of the Members, the Board of Directors, the Committees of Directors and the government authorities, wherever required; constitution of the Board of Directors / Committee(s) of Directors, appointment, retirement and re-appointment of Directors including the Managing Director and Whole- time Directors; payment of remuneration to Directors including the Managing Director and Whole- time Directors; appointment and remuneration of Auditors and Cost Auditors; transfers and transmissions of the Company’s shares and debentures, and issue and dispatch of duplicate certificates of shares; payment of interest on debentures and redemption of debentures; (o) declaration and payment of dividends; (p) (q) (r) (s) (t) (u) (v) (w) (x) transfer of certain amounts as required under the Act to the Investor Education and Protection Fund; 3. borrowings and registration, modification and satisfaction of charges wherever applicable; investment of the Company’s funds including inter corporate loans and investments and loans to others; giving guarantees in connection with loans taken by subsidiaries and associate companies; form of balance sheet as prescribed under Part I, form of statement of profit and loss as prescribed under Part II and General Instructions for preparation of the same as prescribed in Schedule VI to the Act; Buy-back of equity shares of the Company; Directors’ report; contracts, common seal, registered office and publication of name of the Company; and generally, all other applicable provisions of the Act and the Rules made under the Act. 2. I further report that: (a) (b) (c) (d) the Directors have complied with the requirements as to disclosure of interests and concerns in contracts and arrangements, shareholdings / debenture holdings and directorships in other companies and interests in other entities; the Directors have complied with the disclosure requirements in respect of their eligibility of appointment, their being independent and compliance with the code of Business Conduct & Ethics for Directors and Management Personnel; the Company has obtained all necessary approvals under the various provisions of the Act; and there was no prosecution initiated and no fines or penalties were imposed during the year under review under the Act, SEBI Act, SCRA, Depositories Act, Listing Agreement and Rules, Regulations and Guidelines framed under these Acts against / on the Company, its Directors and Officers. Reliance Industries Limited 87 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 dematerialised securities with all securities issued by the Company. 4. I further report that: (a) (b) (c) (d) (e) (f) the Company has complied with the requirements under the Equity Listing Agreements entered into with the BSE Limited and the National Stock Exchange of India Limited and GDR Listing Agreement with Luxembourg Stock Exchange and the Debt Listing Agreements with National Stock Exchange of India Limited and BSE Limited; the Company has complied with the provisions of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997/2011 including the provisions with regard to disclosures and maintenance of records required under the said Regulations; the Company has complied with the provisions of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 including the provisions with regard to disclosures and maintenance of records required under the Regulations; the Company has complied with the provisions of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 with regard to implementation of Employee Stock Option Scheme, grant of Options and other aspects; the Company has complied with the provisions of the Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; and The Company has complied with the provisions of Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998. Dr K R Chandratre Practising Company Secretary Certificate of Practice No. 5144 April 20, 2012 8 8 Partnering India's new future. Sustainably. Directors' Report Dear Shareholders, Your Directors are pleased to present the 38th Annual Report and the audited accounts for the financial year ended March 31, 2012. Financial Results The financial performance of the Company, for the year ended March 31, 2012 is summarised below: Profit before Depreciation and Amortisation Expenses, Finance Costs and Tax Expenses Less: Finance Costs Depreciation and Amortisation Expenses Less: Transfer from Revaluation Reserve 13,734 2,340 Profit before Tax Less: Current Tax Deferred Tax Profit for the year Add: Balance in Profit & Loss Account Less: Appropriation: Transferred to General Reserve Transferred to Captial Redemption Reserve on buy back of Equity Shares Proposed Dividend on Equity Shares Tax on Dividend Closing Balance 2011-2012 2010-2011 ` crore $ Mn* ` crore $ Mn* 39,811 2,667 7,825 524 41,178 2,328 9,234 522 16,241 2,633 11,394 25,750 5,150 560 20,040 6,514 26,554 2,240 5,061 1,012 110 3,939 1,453 5,392 13,608 25,242 4,320 636 20,286 5,000 25,286 3,051 5,661 969 143 4,549 1,114 5,663 16,000 3,145 16,000 3,588 4 2,531 410 7,609 1 497 81 1,668 - 2,385 387 6,514 - 535 87 1,453 * 1 $ = ` 50.875 Exchange Rate as on March 31, 2012 (1 $ = ` 44.595 as on March 31, 2011) Results of Operations FY2011-12 was a challenging year. The global economy, barely a year after recession, witnessed lower economic growth, resulting primarily from the Euro Zone debt crisis and high oil prices, which were fuelled by uncertainties of supply. Rising unrest in Middle East and North Africa resulted in unprecedented levels of crude oil volatility. The European economies stagnated and the US witnessed a downgrade in its credit rating, while the growth engines of the global economy, China and India were forced to tighten liquidity to tame rising inflation. In addition, civil unrest in Libya and the tsunami in Japan posed further challenges. Despite these constraints and the challenging environment, the Company performed reasonably well and the highlights of the performance are as under: (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) Revenue from operations increased by 31.4% to ` 339,792 crore ($66.8 billion) Exports increased by 41.8% to ` 208,042 crore ($ 40.9 billion) PBDIT decreased by 3.3% to ` 39,811 crore ($ 7.8 billion) Profit Before Tax increased by 2.0% to ` 25,750 crore ($ 5.1 billion) Cash Profit decreased by 7.3% to ` 31,994 crore ($ 6.3 billion) (cid:1) Net Profit decreased by 1.2% to ` 20,040 crore ($3.9 billion) (cid:1) Gross Refining Margin at $ 8.6 / bbl for the year ended March 31, 2012 Reliance Industries Limited 89 The Company 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, a total of ` 28,197 crore ($ 5.5 billion) was paid in the form of various taxes and duties. Buy Back of Equity Shares The Board of Directors of the Company at its meeting held on January 20, 2012 unanimously approved the Buy- back of up to twelve crore fully paid-up equity shares of ` 10 each (hereinafter referred to as "Buy-back"), at a price not exceeding ` 870 per equity share, payable in cash, up to an aggregate amount not exceeding ` 10,440 crore, representing approximately 7.22% of the Company’s total paid-up Equity Capital and Free Reserves as on March 31, 2011. The Buy-back is being made out of the free reserves and / or the securities premium account of the Company, from the open market through Stock Exchange(s) in India, as per the provisions contained in the Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998. The Buy-back Offer is open up to January 19, 2013 or such earlier date as may be determined by the Company after necessary compliances. Pursuant to the aforesaid Buy-back Offer, the Company has bought back and extinguished 36,63,431 equity shares of ` 10 each of an aggregate face value of ` 3,66,34,310 as of March 31, 2012. Consequent to the Buy-back, the paid- up equity share capital of the Company as on March 31, 2012 has been reduced to ` 3271,05,93,400. The Buy Back Committee constituted by the Board oversees all matters pertaining to the Buy-back of equity shares of the Company. Dividend Your Directors have recommended a dividend of ` 8.50 per Equity Share (last year ` 8 per Equity Share) for the financial year ended March 31, 2012, amounting to ` 2,941 crore (inclusive of tax of ` 410 crore) one of the highest ever payout by any private sector domestic company. The dividend will be paid to members whose names appear in the Register of Members as on June 1, 2012; in respect of shares held in dematerialised form, it will be paid to members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited, as beneficial owners as on that date. The dividend payout for the year under review has been formulated in accordance with shareholders’ aspirations and the Company’s policy to pay sustainable dividend linked to long term growth objectives of the Company to be met by internal cash accruals. Credit Rating The Company continues to have the highest domestic credit ratings of AAA from CRISIL (S&P subsidiary) and Fitch. Moody’s and S&P have reaffirmed investment grade ratings for international debt of the Company, as Baa2 positive outlook (local currency issuer rating) and BBB positive outlook respectively. The Company’s international rating from Moody’s and S&P is higher than the country’s sovereign rating. Strong credit ratings by leading international agencies reflect the Company’s financial discipline and prudence. Employees Stock Option Scheme The Company implemented the Employees Stock Option Scheme (‘‘Scheme’’) in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (‘the SEBI Guidelines’). The Employees Stock Compensation Committee, constituted in accordance with the SEBI Guidelines, administers and monitors the Scheme. The applicable disclosures as stipulated under the SEBI Guidelines as at March 31, 2012 (cumulative position before opening the Buy back offer) are provided in the Annexure I to this Report. The issuance of equity shares pursuant to exercise of Options does not affect the profit and loss account of the Company, as the exercise is made at the market price prevailing as on the date of the grant plus taxes as applicable. The Company has received a certificate from the Auditors of the Company that the Scheme has been implemented in accordance with the SEBI Guidelines and the resolution passed by the shareholders. The Certificate would be placed at the Annual General Meeting for inspection by members. 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. Some of the Major events of the year include the following: RIL – BP Partnership Reliance Industries Limited (RIL) and BP announced the incorporation of India Gas Solutions Private Limited, a 50:50 joint venture (JV) company, which will focus on global sourcing and marketing of natural gas in India. This joint venture company is a significant step in cementing the relationship between RIL and BP, and it establishes the commitment of both the parties to the Indian market. The 9 0 Partnering India's new future. Sustainably. demand for gas has been growing at an exponential rate and both RIL and BP anticipate natural gas to emerge as the preferred choice of fuel, given its properties as a cleaner and more sustainable fuel source. Shale Gas RIL entered into three JVs in 2010 as part of its strategic focus on pursuing partnerships with experienced and successful operators in the fast growing resource base of shale gas in North America. In addition to these JVs with Chevron and Carrizo in Marcellus shale play of Pennsylvania and Pioneer Natural Resources in Eagle Ford shale Play of South Texas, RIL and Pioneer also partnered in the development of midstream assets through an equity investment for servicing the gathering needs of Pioneer upstream JV. Reliance’s current assets are now most strategically located within the premier shale plays of the US, the Marcellus in Pennsylvania and the Eagle Ford in South Texas. FY 2011-12 represented a significant year of growth for the shale gas business, with significant investments in drilling, completions and facility installations. As a result of these efforts, gross production from all three JV reported an exit rate of 233 MMCFPD of gas and 34.7 MBPD of liquids in December’11 (a 7 fold increase on year-on-year basis). RIL-SIBUR Joint Venture RIL and SIBUR formed a joint venture called Reliance Sibur Elastomers Private Limited. The JV will be the first manufacturer of butyl rubber in India and with its targeted production of 100,000 tonnes of butyl rubber per annum, it will be the fourth largest producer globally. The JV will cater to the demand for synthetic rubber from the Indian automotive industry, which currently exceeds 75,000 tonnes per year and is being met through imports. Investment in the JV is in line with RIL’s vision of emerging as a significant player in the global synthetic rubber market. RIL’s share in the JV will total 74.9% while SIBUR will account for the rest. The JV will invest $450 million in setting up its facility, which is expected to be commissioned in mid-2014. Reliance Retail Limited Since inception, Reliance Retail has relentlessly worked towards building a services platform for supporting retail development and value creation. It has made significant investments to build back-end as well as front-end retail infrastructure and some of the key areas where the Company has built capabilities include, warehousing and logistics infrastructure, front-end infrastructure development, IT infrastructure and food and supply chain. During FY 2011-12, Reliance Retail stressed on its back- end operations and store expansion capability by successfully adding more than 200 stores across value and specialty formats. Reliance Retail operates across its two formats – value format and speciality format. Reliance Retail’s value format comprises Reliance Fresh, Reliance Super, Reliance Mart, Delight and Autozone, consisting of over 700 stores and contributed to dominant share of retail space and turnover. Speciality value format comprises Reliance Digital, Reliance Trends, Reliance Footprint and Reliance Timeout. Reliance Retail operates various partnerships in the lifestyle category and comprises Reliance Brands, Marks and Spencer, Vision Express and Office Depot. Infotel Broadband RIL has acquired 95% stake in the equity of Infotel Broadband Services Limited (Infotel) with the intention of creating a nation-wide network of next-generation wireless broadband services. Infotel was the only successful bidder in all of the 22 circles in the Broadband Wireless Access (“BWA”) spectrum auction conducted by the Department of Telecommunications, Government of India. Reliance can now offer fourth generation wireless infocom services across the nation through the 20 Mhz, contiguous, pan-India spectrum secured through this acqusition. Reliance Haryana SEZ Limited The development activity of Model Economic Township (MET) in the district of Jhajjar Haryana has begun with some of the leading Japanese multinationals undertaking the development of their industrial units. The State Government has recommended the project to be declared as a node of the Delhi Mumbai Industrial Corridor which is under consideration by appropriate authorities. The MET has been envisioned to be developed as an industrial infrastructure to support economic growth through a Joint Venture between Reliance Ventures Limited (a Wholly Owned Subsidiary of the Company) and Infrastructure Leasing & Financial Services Limited (IL&FS) in a public private partnership framework with the Government of Haryana through HSIIDC Limited (a Government of Haryana company). Acquisition of Stake in TV-18 During the year, companies effectively wholly owned by RIL, entered into binding agreement with TV18 Broadcast Limited (TV18) for divesting the investments in various ETV channels being operated and managed by Eenadu Group. Completion of this divestment is subject to receipt of regulatory approvals and completion of the proposed rights issue of TV18 and Network18 Media & Investments Limited (“Network18”), the holding company of TV18 and TV18. Reliance Industries Limited 91 Infotel, a subsidiary of RIL, has entered into a content license agreement with Network18 and TV18, under which Infotel shall have preferential access to (i) the content of all the media and web properties of Network 18 and its associates and (ii) programming and digital content of all the broadcasting channels of TV18 and its associates on a first right basis as a most preferred customer. 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 and AS-27 on Financial Reporting of Interest in Joint Ventures, the audited Consolidated Financial Statements are provided in the Annual Report. Subsidiaries In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. However the financial information of the subsidiary companies is disclosed in the Annual Report in compliance with the said circular. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection at the Registered Office of the Company and that of the respective subsidiary companies. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies. Details of major subsidiaries of the Company are covered in Management’s Discussion and Analysis Report forming part of the Annual Report. Directors Shri M.L. Bhakta, Shri Hital R. Meswani, Prof. Dipak C. Jain and Shri P.M.S. Prasad, Directors, retire by rotation and being eligible, offer themselves for reappointment at the ensuing Annual General Meeting. 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 for the year ended March 31, 2012, the applicable accounting standards read with requirements set out under Schedule VI to the Companies Act, 1956, have been followed and there are no material departures from the same; (ii) the Directors have selected such accounting policies and applied them consistently and made judgments 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, 2012 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. 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 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 reappointment within the meaning of Section 226 of the said Act. The Notes on Financial Statements referred to in the Auditors’ Report are self-explanatory and do not call for any further comments. Cost Auditors The Central Government has approved the appointment of the following cost auditors for conducting Cost Audit for the financial year 2011-12: (i) For the textiles business - M/s. Kiran J. Mehta & Co, Cost Accountants; (ii) For the chemicals business – Shri S. N. Bavadekar, Cost Accountant, M/s. V. J. Talati & Co., Cost Accountants, M/s. Diwanji & Associates, Cost Accountants, M/s. K. G. Goyal & Associates, Cost Accountants; M/s Bandyopadhyaya, Bhaumik & Co., Cost Accountants; (iii) For the polyester business – Shri Suresh D. Shenoy, Cost Accountant, M/s. V. Kumar & Electricity Associates, Cost Accountants. (iv) For Generation - Shri S.N. Bavadekar, Cost Accountant; and (v) For Petroleum Business – Shri S.N. Bavadekar, Cost Accountant; M/s Kiran J. Mehta & Co., Cost Accountants; Shri Suresh D. Shenoy, Cost Accountant; M/s Bandyopadhyaya Bhaumik & Co., Cost Accountants; M/s Shome & Banerjee, Cost Accountants. 9 2 Partnering India's new future. Sustainably. Secretarial Audit Report As a measure of good corporate governance practice, the Board of Directors of the Company appointed Dr. K.R. Chandratre, Practicing Company Secretary, to conduct Secretarial Audit. The Secretarial Audit Report for the financial year ended March 31, 2012, is provided in the Annual Report. The Secretarial Audit Report confirms that the Company has complied with all the applicable provisions of the Companies Act, 1956, Securities Contracts (Regulation) Act, 1956, Depositories Act, 1996, The Foreign Exchange Management Act, 1999 to the extent applicable to Overseas Direct Investment (ODI), Foreign Direct Investment (FDI) and External Commercial Borrowings (ECB) and all the Regulations and Guidelines of SEBI as applicable to the Company, including The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992, The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 and The Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998 and Listing Agreements with the Stock Exchanges. 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 set out in the annexure to the Directors’ Report. Having regard to 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. Any member 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-II to this Report. Transfer of amounts to Investor Education and Protection Fund Pursuant to the provisions of Section 205A(5) of the Companies Act, 1956, relevant amounts which remained unpaid or unclaimed for a period of 7 years have been transferred by the Company to the Investor Education and Protection Fund. Corporate Governance The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The Company has also implemented several best Corporate Governance practices as prevalent globally. The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report. The requisite Certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49, is attached to this Report. Acknowledgement Your Directors would like to express their appreciation for the assistance and co-operation received from the financial institutions, banks, Government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the executives, staff and workers of the Company. For and on behalf of the Board of Directors Mukesh D. Ambani Chairman and Managing Director April 20, 2012 Annexure – I Disclosures required under the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidlines, 1999 (a) Options granted - 5,97,30,217; (b) Exercise Price - 5,74,56,000 options granted at an exercise price of ` 642 per option (adjusted for bonus issue), 54,000 options granted at an exercise price of ` 842 per option (adjusted for bonus issue); 20,16,000 options granted at an exercise price of ` 1146 per option (adjusted for bonus issue); 1,00,200 options granted at an exercise price of ` 644.50 per option (adjusted for bonus issue); 16,000 options granted at an exercise price of ` 995 per option; 19,200 options granted at an exercise price of ` 929 per option; 4,100 options granted at an exercise price of ` 972 per option; 18,000 options granted at an exercise price of ` 871 per option; 23,717 options granted at an exercise price of ` 847 per option; 15,000 options granted at an exercise price of ` 765 per option and 8,000 options granted Reliance Industries Limited 93 Dahej Manufacturing Division (cid:1) Increased the residue gas exchanger area in the GCU plant. (cid:1) Gas Turbine 01 uprated in CPP. (cid:1) (cid:1) (cid:1) In cooling tower 04 one GRP fan replaced with FRP fan. Energy saving due to Vapor Compression Refrigeration (VCR) performance improvement at the PVC plant. Rerouting of recycle water for better heat recovery in MEG plant. Hazira Manufacturing Division (cid:1) Advanced Process Control (APC) implementation in Gas Turbine GT-2 and steam network. (cid:1) Uprating Gas turbine capability of GT-2 and GT-7 at (cid:1) (cid:1) (cid:1) CPP&U plant. Improvement in waste heat recovery performance of Make Up Water Heater (MUWH ) # 4 and MUWH # 7 at CPP&U plant. Reduction in steam and power consumption in CP-2 & CP-3 by commissioning of glycol ejector in place of steam ejector. Reduction in steam consumption by reducing the water / aqueous Ethylene Oxide (EO) ratio in glycol reactors at MEG-I plant. (cid:1) (cid:1) (cid:1) Utilization of waste steam generated from Flash Drum (D1-1406) to POY plant resulting in LP Steam savings at PTA-I plant. Reduction in N2 consumption by implementation of various N2 conservation measures and consumption optimization in various areas of CP operations at POY/ PET plant. Provision of steam distribution pipes inside the pre- crimper & draw steam box and installation of sparger pipes in DM-8 resulting in steam savings at PSF CP- 11 plant. Power consumption reduction by installation of “auto- control logic” in Quench Air Humidification Units (AHU’s) of 12 spinning machines in Du-Pont plant (CP-1, 2, 4 and 5). Reduction in operating pressure of 3rd PTA Crystallizer (D1-1403) resulting in SHP steam savings at PTA-I plant. Reduction in 2nd Combuster Preheater (E3-162) condensate temperature resulting in SHP steam savings at PTA plant. (cid:1) (cid:1) (cid:1) at an exercise price of ` 715 per option. The above exercise prices exclude all applicable taxes, as may be levied in this regard; (c) Options vested 2,84,45,590; (d) Options exercised 50,28,469; (e) The total number of shares arising as a result of exercise of options – 50,28,469; (f) Options lapsed – 1,55,73,428; (g) Variation in terms of options – Nil; (h) Money realised by exercise of options – ` 347,98,48,026; (i) total number of options in force [(a) – (d) – (f)] – 3,91,28,320; (j) Employee wise details of options granted to: (i) Senior Management Personnel: Shri Nikhil R. Meswani – 14,00,000, Shri Hital R. Meswani - 14,00,000, Shri P.M.S. Prasad - 10,00,000 and Shri P.K. Kapil – 1,00,000 (ii) Any other employee who received a grant in any one year of options amounting to 5% or more of options granted – Nil (iii) Identified employees, who were granted options, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant – Nil and (iv) Diluted Earnings Per Share(EPS) before exceptional items pursuant to issue of shares on exercise of Options calculated in accordance with Accounting Standard (AS) 20 ‘Earnings Per Share’ is ` 61.21. Annexure – II Particulars required under the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 A. Conservation of Energy (a) Energy conservation measures taken: Major energy conservation measures carried out during the year 2011-12 are listed below: Allahabad Manufacturing Division (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) Energy saving by clubbing cooling water utility and cooling water process circuits thereby running only one cooling pump instead of two pumps used. Reduction of steam consumption by switching from pressure regulated valve to control valve and process optimisation. Saving on fuel oil by using control valve mechanism to regulate column temperature, thereby reducing heat load. Installation of transparent sheets in warehouse leading to reduction in lighting load. Replacement of tube lights with LED’s. (cid:1) Barabanki Manufacturing Division Installation of Solar Lights. Replacement of conventional luminaries with energy efficient luminaries. Installation of Eco Ventilators. (cid:1) (cid:1) 9 4 Partnering India's new future. Sustainably. Hoshiarpur Manufacturing Division (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) Power saving due to non operation of TSU III Drive (Motor & Gear Box) because of process modification for manufacture of PSF conjugate. Power saving due to non operation of return air fan of POY quench AHU. Power saving due to stoppage of monomer pump of POY after process modification. Power saving by installing acrylic sheets & tur bo ventilators. Power saving by replacing of traditional lights with CFL. Jamnagar Manufacturing Division (DTA) (cid:1) (cid:1) Fuel reduction in heaters through excess air reduction, maximizing heat recovery in convection section & air preheaters. Reduction of LP steam consumption in Amine treating units by increasing amine concentration thereby reducing lean amine circulation rate. Reductions in fuel consumption in Diesel Hydrotreater (DHT) unit, by routing Hot Heavy Kerosene directly from crude unit to DHT feed bypassing tank farm. (cid:1) Heat up by MP steam eliminated by optimizing reformer (cid:1) (cid:1) (cid:1) (cid:1) splitter feed temperature. Reduction in power by reducing recycle flow in Plat former Net-Gas Compressor. Power output increased by maximizing flue gas flow through expander after tuning inlet valve in Fluidized Catalytic Cracking (FCC) unit. Flare loss reduction by continuous monitoring/ identification/rectification of passing valves, reducing N2 purge to flare system and maximizing recovery through fuel gas recovery system. (cid:1) Online cleaning provision of convection section coils provided for additional heat recovery from Plat former Heater flue gas. Earlier coils were inaccessible for cleaning online. Power consumption reduction by maximizing flow through power recovery turbine in Vacuum Gas Oil Hydrotreater (VGOHT) units. (cid:1) Jamnagar Manufacturing Division (SEZ) (cid:1) (cid:1) Fuel reduction in process heaters through excess air reduction, maximizing heat recovery in convection section and air preheaters, operating combustion control system in auto mode. Stopping one gas turbine out of five during winter months thereby improving the heat rate. (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) Stoppage of one Back Pressure Turbine (BPT) out of two, in CPP to improve the efficiency of operation. Routing hot Vacuum Gas Oil (VGO) to FCC from VGO HT-4 bypassing LP Steam generator and thus reducing LP steam dumping. Saving of power & LP steam dumping by interconnection of CPP Boiler Feed Water (BFW) header & refinery header. Provision to feed hot Coker Kerosene directly to Diesel Hydro Desulfurization (DHDS) Unit to avoid cold feed processing. Routing of vent gases from degassing column to Fuel Gas header in Poly Propylene (PP) Unit for reducing the flaring. Installation of Magnetic Resonator in fuel gas line to burners in crude furnace for the reduction of fuel. Reduction in 4th stage discharge pressure in hydrogen compression system to reduce the power consumption. Increasing the level span of the Coker Unit flare system seal pot V52 for preventing LLP Flaring. Nagothane Manufacturing Division (cid:1) Reduction of steam consumption at LDPE plant. (cid:1) Anti-corrosion coating (Corrocoat) of 12 nos cooling water pumps. Nagpur Manufacturing Division (cid:1) (cid:1) (cid:1) Power saving due to stoppage of spray water pumps in Air Washer 2 and Air Washer 3 after process modifications. Power saving due to stoppage of Godets in Take up in line 12 of POY plant after process modification. Power saving due to removal of hot water coil from line 13 and 14 Air Washers after process modifications. Naroda Manufacturing Division (cid:1) (cid:1) (cid:1) Power saving by repalcement of Borewell Pump of Borewell#2 with new energy efficient Pump Motor Set. Power saving by stopping 3 nos. underloaded 1MVA transformers located at Sub Station 5 and Sub Station 1. Stopping effluent transfer pump and using gravity at Effluent Treatment Plant (ETP). (cid:1) (cid:1) Upgrading the Worsted Humidification Plants by replacing Centifugal Fans by Axial Flow Fans. Power saving by lowering Set Point of Air Compressor and optimising the hole in weaving looms. Energy saving by converting “Single Pass” to “ Three (cid:1) Reliance Industries Limited 95 Pass” of Fabric in Float Drier of Harish Scouring Machine. (b) Additional investments / proposals being implemented for reduction of consumption of energy: Patalganga Manufacturing Division Dahej Manufacturing Division (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) Burners of LAB Heaters BA-951, BA-201 & BA-601 were changed from oil fired to dual fired. Burner tips of BA-801 (already dual fired) were replaced at NG project Phase 2 in the LAB plant resulting in the energy savings. Power saving due to Cooling water Pump B corrocoated in EC plant. Power saving due to Staggered switching of P25 A/B to ensure one pump running instead of 2 pumps in EC plant. 60W GLS lamps replaced with 11W CFL lamps (400 nos). 350 Nos 18W LED tubelights provided in place of 40W normal tube lights. Power saving due to Energy efficient Encon blades installed in E-5010A/B fin fans at the PX plant. Replacement of faulty traps at the Patalganga Manufacturing Division resulting in steam savings. Power saving due to Corrocoating of CP7 cooling water pumps 3 nos. Silvassa Manufacturing Division (cid:1) Replacement of 68 nos. old DTY machines with energy efficient new DTY Machines in Plant I. Vadodara Manufacturing Division (cid:1) Refractory replacement for reduction in radiation heat losses in Naptha Cracker heater H101 and H102. (cid:1) Modification done to supply excess O2 to ACN plant from UB2 air separation unit thereby stopping of BBP N2O2 plant. Repair and replacement of steam traps of PPCP plant. (cid:1) (cid:1) (cid:1) Transferring HF stripper column bottom material to benzene column using differential pressure only; thus stopping AP-5 A/B (HF stripper bottom pump). Installation of new tandem type design bypass damper with air sealing to reduce flue gas losses from bypass damper. (cid:1) Heat rate reduction by uprating GT 2. (cid:1) LMP steam header pressure reduction thereby giving a considerable reduction to GTPP stack temperature. (cid:1) Minimisation of heat losses from both GT’s hot flue gas duct at GTPP. (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) Installation of one new electrolyzer with fifth generation elements at the Chlor Alkali Plant. Increasing MP and LP steam lines insulation thickness in yard piping. Installation of hydraulic Turbine in EPRU plant. LP ethylene scheme from GCU to VCM to offload C2R and C3R in GCU plant. Preheating Slurry Stripper Feed with Centrate Water in PVC plant. Hazira Manufacturing Division (cid:1) Steam Turbine STG-2 load reduction resulting in SHP steam savings. (cid:1) Deaerator # 3, 4 process optimization resulting in LP Steam saving at CPP&U plant. Hoshiarpur Manufacturing Division (cid:1) (cid:1) Replacement of existing chilling machines with energy efficient chilling machines. Energy saving by installing inverter on raw water / cooling water pump. Jamnagar Manufacturing Division (DTA) (cid:1) Heat recovery from Light Cycle Gas Oil (LCGO) Pump around to preheat cold Vacuum Residue (VR) from tanks to reduce firing in coker heaters. Power saving by replacing aluminum Fin Fan blades with FRP blades in hydrogen Unit & Light Naphtha Unionfiner Unit. (cid:1) Jamnagar Manufacturing Division (SEZ) (cid:1) Heat recovery from Coker LCGO pump around in stripper reboiler for saving MP Steam Nagothane Manufacturing Division (cid:1) (cid:1) Power augmentation of Gas Turbine uprate. Converting 10-P-41A from Steam turbine drive to motor drive. Nagpur Manufacturing Division (cid:1) Power saving due to stoppage of Godgets in Take up in lines 13 and 14 at POY plant. Patalganga Manufacturing Division (cid:1) (cid:1) Power saving due to replacement of blades of Fin Fans of Paraffin column in LAB plant with ENCON blades. Power saving due to corrocating of one cooling water pump at EC plant. 9 6 Partnering India's new future. Sustainably. (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) Power saving due to installation of Variable Frequency Drive (VFD) on DM water pump at EC plant. Power saving due to relocating VAM machine from EC plant to utilities. Power saving due to use of Energy Efficient Encon blades in all Fin Fans at PX plant. Power saving due to single pump operation at PX plant. Steam trap replacement at PX plant resulted in savings of steam. Power saving due to 1 more VAM chillers for Utility plant. CP1 Vapour dow line reinsulation resulted in savings of fuel. (cid:1) Glycol ejectors for CP 4,5 and 6 resulted in savings of steam & power. Silvassa Manufacturing Division (cid:1) Replacement of old small sized compressors with highly energy efficient big size compressors. Vadodara Manufacturing Division (cid:1) Stoppage of one Aux boiler at IOP plant. (cid:1) Uprating GT1 to reduce heat rate and increase power output at GTPP plant. (cid:1) (cid:1) Upgrade MOC (SS316 to Duplex SS) of Waste Heat Boiler DM water bank at NCP plant and avoiding flare header chocking. Replacement of GT1 Bypass Stack Damper at GTPP plant. Installation of two new energy efficient chillers in place of the present refrigeration compressors of KPC make at PVC plant. (cid:1) (cid:1) Use of excess LDPE LLP steam at IOP deaerator at IOP plant. (cid:1) (cid:1) (cid:1) Installation of Flare steam MOV with digital control at DCS at NCP plant. Refractory replacement of H-104 at NCP plant. IOP Cooling Tower Optimization at IOP plant. (cid:1) GT1 Duct Replacement at GTPP plant. (cid:1) (cid:1) Reflux optimization at T-410 column at PBR 1 plant. Change in Control philosophy at steam Network to avoid steam venting at ACN plant. (cid:1) H-107 and H-108 heater damper to be made operative to reduce the Excess O2 at the stack in NCP plant. (c) Impact of measures of (a) and (b) given above for reduction of energy consumption and consequent impact on the cost of production of goods: Allahabad Manufacturing Division (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) Energy saving by clubbing cooling water utility and cooling water process circuits thereby running only one cooling pump resulting in power cost saving of ` 0.03 crore per annum. Reduction of steam consumption by switching from pressure regulated valve to control valve and process optimisation resulting in annual steam saving of 9264 MT and financial savings of ` 2.84 crore per annum. Saving on fuel oil by using control valve mechanism to regulate column temperature, thereby reducing heat load resulting in annual heat saving of 1354 MKCal and financial savings of ` 0.68 crore per annum. Installation of transparent sheets in warehouse leading to reduction in lighting load , thereby resulting in annual power saving of 47974 KWH and the financial savings of ` 0.02 crore per annum. Replacement of tube lights with LED’s resulting in annual power saving of 27209 KWH and financial saving of ` 0.01 crore per annum. Barabanki Manufacturing Division (cid:1) (cid:1) Installation of Solar Lights resulting in annual power saving of 1533 KWH and financial savings of ` 0.0007 crore per annum. Replacement of conventional luminaries with energy efficient luminaries, resulting in annual power saving of 4701 KWH and financial savings of ` 0.002 crore per annum. Installation of Eco Ventilators resulting in annual power saving of 36792 KWH and financial savings of ` 0.02 crore per annum. Dahej Manufacturing Division (cid:1) (cid:1) Increased the residue gas exchanger area in the GCU plant resulting in energy saving of 1 MT / hr of steam and financial savings of ` 0.92 crore per annum. (cid:1) Gas Turbine 01 uprated in CPP resulting in fuel saving of 0.33 MT / hr and financial savings of ` 7.97 crore per annum. In cooling tower 04 one GRP fan replaced with FRP fan resulting in power saving of 30 KW / hr and financial savings of ` 0.06 crore per annum. Energy saving due to Vapor Compression Refrigeration (VCR) performance improvement at the PVC plant resulting in power saving of 71.75 KW / hr and financial savings of ` 0.14 crore per annum. (cid:1) (cid:1) Reliance Industries Limited 97 (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) savings of ` 0.96 crore (approx) per annum. Reduction in N2 consumption by implementation of various N2 conservation measures and consumption optimization in various areas of CP operations at POY/ PET plant resulting in annual energy saving of 3261 Gcal and financial savings of ` 0.90 crore (approx) per annum. Provision of steam distribution pipes inside the pre- crimper & draw steam box and installation of sparger pipes in DM-8 resulting in annual steam saving of 2810 Gcal at PSF CP-11 plant and financial savings of ` 0.87 crore (approx) per annum. Power consumption reduction by installation of “auto- control logic” in Quench Air Humidification Units (AHU’s) of 12 spinning m/c’s in Du-Pont plant (CP-1, 2, 4 and 5) resulting in annual energy saving of 2757 Gcal and financial savings of ` 0.86 crore (approx) per annum. Reduction in operating pressure of 3rd PTA Crystallizer (D1-1403) resulting in annual SHP steam savings of 2734 Gcal at PTA-I plant and financial savings of ` 0.84 crore (approx) per annum. Reduction in 2nd Combuster Preheater (E3-162) condensate temperature resulting in annual SHP steam saving of 2656 Gcal at PTA plant and financial savings of ` 0.82 crore (approx) per annum. Steam Turbine STG-2 load reduction resulting in annual SHP steam savings of 7337 Gcal and financial savings of ` 3.33 crore (approx) per annum. (cid:1) Deaerator # 3, 4 process optimization resulting in annual LP Steam saving of 7067 Gcal at CPP&U plant and financial savings of ` 3.20 crore (approx) per annum. Hoshiarpur Manufacturing Division (cid:1) (cid:1) (cid:1) (cid:1) Power saving due to non operation of TSU III Drive (Motor & Gear Box) because of process modification for manufacture of PSF conjugate resulting in annual power saving of 156480 KWH and financial savings of ` 0.09 crore per annum. Power saving due to non operation of return air fan of POY quench AHU resulting in annual power saving of 394200 KWH and financial savings of ` 0.24 crore per annum. Power saving due to stoppage of monomer pump of POY after process modification resulting in annual power saving of 297840 KWH and financial savings of ` 0.18 crore per annum. Power saving by installing acrylic sheets & turbo ventilators resulting in power annual saving of 131400 (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) Rerouting of recycle water for better heat recovery in MEG plant resulting in energy saving of 1.64 MT / hr of steam and financial savings of ` 1.03 crore per annum. Installation of one new electrolyzer with fifth generation elements at the Chlor Alkali Plant shall result in annual power saving of 0.5 MW and financial savings of ` 11.31 crore per annum. Increasing MP and LP steam lines insulation thickness in yard piping shall result in fuel saving of 0.08 MT/ Hr and financial savings of ` 2.08 crore per annum. Installation of hydraulic Turbine in EPRU plant shall result in annual power saving of 0.387 MW and financial savings of ` 1.19 crore per annum. LP ethylene scheme from GCU to VCM to offload C2R and C3R in GCU plant shall result in annual steam saving of 1.3 MT and financial savings of ` 1.19 crore per annum. Preheating Slurry Stripper Feed with Centrate Water in PVC plant shall result in annual steam saving of 0.38 MT and financial savings of ` 0.34 crore per annum. Hazira Manufacturing Division (cid:1) Advanced Process Control (APC) implementation in Gas Turbine GT-2 and steam network resulting in annual energy saving of 21875 Gcal and financial savings of ` 6.78 crore (approx) per annum. (cid:1) (cid:1) Uprating Gas turbine capability of GT-2 and GT-7 at CPP&U plant resulting in annual energy saving of 22491 Gcal and financial savings of ` 6.63 crore (approx) per annum. Improvement in waste heat recovery performance of Make Up Water Heater (MUWH ) # 4 and MUWH # 7 at CPP&U plant resulting in annual energy saving of 13222 Gcal and financial savings of ` 4.10 crore (approx) per annum. Reduction in steam and power consumption in CP-2 & CP-3 by commissioning of glycol ejector in place of steam ejector resulting in annual energy saving of 9452 Gcal and financial savings of ` 2.93 crore (approx) per annum. Reduction in steam consumption by reducing the water aqueous Ethylene Oxide (EO) ratio in glycol reactors at MEG-I plant resulting in annual energy saving of 7437 Gcal and financial savings of ` 2.62 crore (approx) per annum. (cid:1) (cid:1) (cid:1) Utilization of waste steam generated from Flash Drum (D1-1406) to POY plant resulting in annual LP steam savings of 3099 Gcal at PTA-I plant and financial 9 8 Partnering India's new future. Sustainably. (cid:1) (cid:1) (cid:1) KWH and financial savings of ` 0.08 crore per annum. Power saving by replacing of traditional lights with CFL resulting in annual power saving of 6132 KWH and financial savings of ` 0.004 crore per annum. Replacement of existing chilling machines with energy efficient chilling machines shall result in annual power saving of 426300 KWH and financial savings of ` 0.25 crore per annum. Energy saving by installing inverter on raw water / cooling water pump shall result in annual power saving of 36000 KWH and financial savings of ` 0.02 crore per annum. Jamnagar Manufacturing Division (DTA) (cid:1) (cid:1) (cid:1) Fuel reduction in heaters through excess air reduction, maximizing heat recovery in convection section & air preheaters resulting in fuel saving of 16 TPD and financial savings of ` 18.17 crore (approx) per annum. Reduction of LP steam consumption in Amine treating Units by increasing amine concentration and thereby reducing lean amine circulation rate resulting in LP steam saving of 11 TPH and financial savings of ` 11.45 crore (approx) per annum. Reductions in fuel consumption in Diesel Hydrotreater (DHT) unit, by routing Hot Heavy Kerosene directly from crude unit to DHT feed bypassing tank farm resulting in fuel saving of 9.1 TPD and financial savings of ` 10.29 crore (approx) per annum. Heat rejected through air cooler was eliminated. (cid:1) (cid:1) (cid:1) Heat up by MP steam eliminated by optimizing Reformer splitter feed temperature. This resulted in 17 TPH MP of steam being saved for 4000 hrs operation in a year and financial savings of ` 9.53 crore (approx) per annum. Reduction in power by reducing recycle flow in Plat former Net-Gas Compressor resulting in power saving of 33.6 MW per day and financial savings of ` 8.74 crore (approx) per annum. Power output increased by maximizing flue gas flow through expander after tuning inlet valve in Fluidized Catalytic Cracking (FCC) unit resulting in net output power increase by 1.2 MW and financial savings of ` 7.49 crore (approx) per annum. Flare loss reduction by continuous monitoring/ identification/rectification of passing valves, reducing N2 purge to flare system and maximizing recovery through fuel gas recovery system resulting in flared quantity reduction by 6 TPD and financial savings of ` 6.81 crore (approx) per annum. (cid:1) (cid:1) Online cleaning provision of convection section coils provided for additional Heat recovery from Plat former Heater flue gas. Earlier coils were inaccessible for cleaning online. This resulted in MP steam generation increase by 5 TPH and financial savings of ` 5.88 crore (approx) per annum. Power consumption reduction by maximizing flow through power recovery turbine in Vacuum Gas Oil Hydrotreater (VGOHT) units. This resulted in power saving of 16 MW per day and financial savings of ` 4.16 crore (approx) per annum. (cid:1) (cid:1) Heat recovery from Light Cycle Gas Oil (LCGO) Pump around to preheat cold Vacuum Residue (VR) from tanks to reduce firing in coker heaters. This shall result in reduction in fuel by 11.4 TPD and financial savings of ` 10.22 crore (approx) per annum Power saving by replacing aluminum Fin Fan blades with FRP blade in hydrogen unit & Light Naphtha Unionfiner unit. This shall result in power saving of 2263 KWH per day and financial savings of ` 0.59 crore (approx) per annum. (cid:1) Jamnagar Manufacturing Division (SEZ) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) Fuel reduction in process heaters through excess air reduction, maximizing heat recovery in convection section and air preheaters, operating combustion control system in auto mode resulting in fuel saving of 9.7 TPD and financial savings of ` 8.66 crore (approx) per annum. Stopping one Gas Turbine out of five during winter months there by improving the heat rate resulting in fuel saving of 42 TPD and financial savings of ` 5.01 crore (approx) per annum. Stoppage of one Back Pressure Turbine (BPT) out of two, in CPP to improve the efficiency of operation resulting in fuel saving of 15.3 TPD and financial savings of ` 13.61 crore (approx) per annum. Routing hot Vacuum Gas Oil (VGO) to FCC from VGO HT-4 bypassing LP Steam generator and thus reducing LP Steam dumping resulting in saving of 7 TPH of LP Steam dumping and financial savings of ` 2.68 crore (approx) per annum. Saving of power & LP steam dumping by interconnection of CPP Boiler Feed Water (BFW) header & refinery header resulting in annual power saving of 890 KWH and financial savings of ` 3.21 crore (approx) per annum. Provision to feed hot Coker Kerosene directly to Diesel Hydro Desulfurization (DHDS) Unit to avoid cold feed processing resulting in fuel saving of 2.2 TPD and financial savings of ` 1.95 crore (approx) per annum. Reliance Industries Limited 99 (cid:1) resulting in annual power saving of 70080 KWH and financial savings of ` 0.04 crore (approx) per annum. Power saving due to stoppage of Godgets in Take up in lines 13 and 14 at POY plant shall result in annual power saving of 52560 KWH and financial savings of ` 0.03 crore (approx) per annum. Naroda Manufacturing Division (cid:1) (cid:1) (cid:1) Power saving by replacement of Borewell Pump of Borewell#2 with new energy efficient Pump Motor Set resulting in annual power saving of 137 GJ and financial savings of ` 0.02 crore per annum. Power saving by stopping 3 nos. underloaded 1MVA transformers located at Sub Station 5 and Sub Station 1 resulting in annual power saving of 232 GJ and financial savings of ` 0.04 crore per annum. Stopping effluent transfer pump and using gravity at Effluent Treatment Plant (ETP) resulting in annual power saving of 255 GJ and financial savings of ` 0.05 crore per annum. (cid:1) (cid:1) Upgrading the Worsted Humidification Plants by replacing Centifugal Fans by Axial Flow Fans resulting in annual power saving of 466 GJ and financial savings of ` 0.08 crore per annum. Power saving by lowering Set Point of Air Compressor and optimising the hole in weaving looms resulting in annual power saving of 958 GJ and financial savings of ` 0.17 crore per annum. Energy saving by converting “Single Pass” to “ Three Pass” of Fabric in Float Drier of Harish Scouring Machine resulting in annual power saving of 4672 GJ and financial savings of ` 0.17 crore per annum. (cid:1) Patalganga Manufacturing Division (cid:1) (cid:1) (cid:1) (cid:1) Burners of LAB Heaters BA-951, BA-201 & BA-601 were changed from oil fired to dual fired. Burner tips of BA-801 (already dual fired) were replaced at NG project Phase 2 in the LAB plant resulting in annual steam saving of 12000 MT and financial saving of ` 13.00 crore per annum. Power saving due to Cooling water Pump B corrocoated in EC plant resulting in annual power saving of 211200 KWH and financial saving of ` 0.13 crore per annum. 60W GLS lamps replaced with 11W CFL lamps (400 nos) resulting in annual power saving of 54000 KWH and financial saving of ` 0.03 crore per annum. 350 Nos 18W LED tubelights provided in place of 40W normal tube lights resulting in annual power saving of 42000 KWH and financial saving of ` 0.02 crore per annum. (cid:1) (cid:1) (cid:1) (cid:1) Routing of vent gases from degassing column to Fuel Gas header in Poly Propylene (PP) Unit for reducing the flaring resulted in reduction of flaring by 2.2 TPD and financial savings of ` 1.95 crore (approx) per annum. Installation of Magnetic Resonator in fuel gas line to burners in crude furnace for the reduction of fuel resulting in fuel saving of 0.7 TPD and financial savings of ` 0.61 crore (approx) per annum. Reduction in 4th stage discharge pressure in hydrogen compression system to reduce the power consumption resulting in annual power saving of 0.35 MW and financial savings of ` 1.26 crore (approx) per annum. Increasing the level span of the Coker Unit flare system seal pot V52 for preventing LLP Flaring resulted in reduction of 3.0 TPD of flaring and financial savings of ` 2.68 crore (approx) per annum. (cid:1) Heat recovery from Coker LCGO pump around in stripper reboiler for saving MP Steam of 10.5 TPH and financial savings of ` 7.20 crore (approx) per annum. Nagothane Manufacturing Division (cid:1) Reduction of steam consumption at LDPE plant resulting in annual reduction of LP steam consumption by 15330 MT and HP steam consumption by 5840 MT and financial savings of ` 1.07 crore per annum. (cid:1) (cid:1) Anti-corrosion coating (Corrocoat) of 12 nos cooling water pumps resulting in annual power saving of 2643 MW and financial savings of ` 0.41 crore per annum. Power augmentation of Gas Turbine uprate shall result in saving heat rate of 104 KCal / KWH and financial savings of ` 18.21 crore per annum. Converting 10-P-41A from Steam turbine drive to motor drive shall result in steam saving of 5.73 MT / hr and financial savings of ` 3.82 crore per annum. (cid:1) Nagpur Manufacturing Division (cid:1) (cid:1) (cid:1) Power saving due to stoppage of spray water pumps in Air Washer 2 and Air Washer 3 after process modifications resulting in annual power saving of 122640 KWH and financial savings of ` 0.07 crore (approx) per annum. Power saving due to stoppage of Godets in Take up in line 12 of POY plant after process modification resulting in annual power saving of 21900 KWH and financial savings of ` 0.01 crore (approx) per annum. Power saving due to removal of hot water coil from line 13 and 14 Air Washers after process modifications 100 Partnering India's new future. Sustainably. (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) Power saving due to Energy efficient Encon blades installed in E-5010A/B fin fans at the PX plant resulting in annual power saving of 24883 KWH and financial saving of ` 0.02 crore per annum. Replacement of faulty traps at the Patalganga Manufacturing Division resulting in annual steam saving of 11699 MT and financial savings of ` 2 crore per annum. Power saving due to replacement of blades of Fin Fans of Paraffin column in LAB plant with ENCON blades shall result in annual power saving of 97780 KWH and financial saving of ` 0.04 crore per annum. Power saving due to corrocating of one cooling water pump at EC plant shall result in annual power saving of 365000 KWH and financial saving of ` 0.10 crore per annum. Power saving due to installation of Variable Frequency Drive (VFD) on DM water pump at EC plant shall result in annual power saving of 62050 KWH and financial saving of ` 0.03 crore per annum. Power saving due to relocating VAM machine from EC plant to utilities shall result in annual power saving of 3603600 KWH and financial saving of ` 1.80 crore per annum. Power saving due to use of Energy Efficient Encon blades in all Fin Fans at PX plant shall result in annual power saving of 749680 KWH and financial saving of ` 0.45 crore per annum. Power saving due to single pump operation at PX plant shall result in annual power saving of 1988520 KWH and financial saving of ` 1.19 crore per annum. Steam trap replacement at PX plant shall result in annual steam saving of 5294 Tons and financial saving of ` 0.45 crore per annum. Power saving due to 1 more VAM chillers for Utility plant shall result in annual power saving of 5544000 KWH and financial saving of ` 2.77 crore per annum. CP1 Vapour dow line reinsulation shall result in annual fuel saving of 6000 MMKCal and financial saving of ` 1.80 crore per annum. (cid:1) Glycol ejectors for CP 4,5 and 6 shall result in annual steam saving of 26280 Tons & power saving of 262800 KWH and financial saving of ` 5.13 crore per annum. Silvassa Manufacturing Division (cid:1) Replacement of 68 nos. old DTY machines with energy efficient new DTY Machines in Plant I resulting in annual energy savings of 0.9 MW (approx) and financial savings of ` 3.35 crore per annum. (cid:1) Replacement of old small sized compressors with highly energy efficient big size compressors shall result in annual energy saving of 1.7 MW (approx) and financial savings of ` 6.41 crore per annum. Vadodara Manufacturing Division (cid:1) Refractory replacement for reduction in radiation heat losses in Naptha Cracker heater H101 and H102 resulted in fuel saving of 503138 Kcal / hr and financial savings of `1.52 crore per annum. (cid:1) (cid:1) (cid:1) (cid:1) Modification done to supply excess O2 to ACN plant from UB2 air separation unit thereby stopping of BBP N2O2 plant resulting in power saving of 730 KW / hr and financial savings of `1.90 crore per annum. Stoppage of steam venting in PPCP plant resulting in LP steam saving of 600 Kg / hr and financial savings of `1.17 crore per annum. Transferring HF stripper column bottom material to benzene column using differential pressure only; thus stopping AP-5 A/B (HF stripper bottom pump) resulting in annual power saving of 77.76 MW and financial savings of ` 0.02 crore per annum. Installation of new tandem type design bypass damper with air sealing to reduce flue gas losses from bypass damper resulting in energy saving of 15.48 MMKCal per day and financial savings of `1.92 crore per annum. (cid:1) Heat rate reduction by uprating GT2 resulting in energy saving of 61.90 MMKCal per day and financial savings of ` 7.69 crore per annum. LMP steam header pressure reduction thereby giving a considerable reduction to GTPP stack temperature resulting in energy saving of 14.98 MMKCal per day and financial savings of ` 1.86 crore per annum. (cid:1) Minimisation of heat losses from both GT’s hot flue gas duct at GTPP resulting in energy saving of 5.47 MMKCal per day and financial savings of ` 0.68 crore per annum. Stoppage of one Aux boiler at IOP plant shall result in steam saving of 45 MT / hr and financial savings of ` 15.77 crore per annum. (cid:1) (cid:1) (cid:1) Uprating GT 1 to reduce heat rate and increase power output at GTPP plant shall result in energy saving of 61.90 MMKCal per day and financial savings of ` 7.69 crore per annum. (cid:1) Upgrade MOC (SS316 to Duplex SS) of Waste Heat Boiler DM water bank at NCP plant and avoiding flare header chocking shall result in annual energy saving of 10558 MMKCal and financial savings of ` 3.17 crore per annum. Replacement of GT 1 Bypass Stack Damper at GTPP plant shall result in energy saving of 15.48 MMKCal (cid:1) (cid:1) per day and financial savings of ` 1.92 crore per annum. Installation of two new energy efficient chillers in place of the present refrigeration compressors of KPC make at PVC plant shall result in annual power saving of 3178 MW and financial savings of ` 1.91 crore per annum. (cid:1) (cid:1) Use of excess LDPE LLP steam at IOP deaerator at IOP plant shall result in steam saving of 1.5 MT / hr and financial savings of ` 1.51 crore per annum. Installation of Flare steam MOV with digital control at DCS at NCP plant shall result in steam saving of 1 MT / hr and financial savings of ` 1.01 crore per annum. Refractory replacement of H-104 at NCP plant shall result in annual energy saving of 2640 MMKCal and financial savings of ` 0.79 crore per annum. IOP Cooling Tower Optimization at IOP plant shall result in power saving of 130 KW / hr and financial savings of ` 0.68 crore per annum. (cid:1) (cid:1) (cid:1) (cid:1) GT 1 Duct Replacement at GTPP plant shall result in energy saving of 5.47 MMKCal per day and financial savings of ` 0.68 crore per annum. Reflux optimization at T-410 column at PBR 1 plant shall result in steam saving of 0.5 MT / hr and financial savings of ` 0.50 crore per annum. Change in control philosophy at steam network to avoid steam venting at ACN plant shall result in steam saving of 0.3 MT / hr and financial savings of ` 0.30 crore per annum. (cid:1) (cid:1) H-107 and H-108 heater damper to be made operative to reduce the excess O2 in the stack at NCP plant shall result in energy saving of 0.065 MMKCal / hr and financial savings of ` 0.14 crore per annum. (d) Total energy consumption and energy consumption per unit of production as per Form ‘A’ attached hereto: B. TECHNOLOGY ABSORPTION (e) Efforts made in technology absorption - as per Form B given below: Form B Research and Development (R&D) 1. Specific areas in which the research and development (R&D) is being carried out by the Company (cid:1) Development/commercialization of a process for propylene maximization in refinery. (cid:1) Development of in-house additive for propylene Reliance Industries Limited 101 maximization in refinery. (cid:1) Development of highly active fluidized catalytic cracking (FCC) catalyst for improved conversion. (cid:1) Development of mesoporous zeolite to improve product selectivity in FCC units. (cid:1) (cid:1) Development of process for improving BMCI (Bureau of mining correlation index) of Clarified slurry oil. Process for conversion of low value hydrocarbon streams to higher value light olefins. Removal of chlorides from hydrocarbon streams by a new process. (cid:1) (cid:1) Development of offline component stream characterization to predict, monitor and control gasoline blending. (cid:1) Development of online composition prediction and composition based process models to plan, monitor, and control. (cid:1) Development of a process to maintain product quality and optimize gasoline/ diesel blending based on intermediates. (cid:1) Development of technology to process cheaper and heavier crudes to widen crude blend window in the refinery. (cid:1) Application of computational fluid dynamics (CFD) studies for trouble shooting and process improvements in refineries and petrochemical plants. (cid:1) Development of a new process for acidity reduction of crude oil. (cid:1) Development of mathematical models for vacuum gas (cid:1) oil hydrotreating processes. Coker furnace studies to reduce refinery costs. (cid:1) Development of polyolefin inorganic catalyst precursor technology to improve yield and reduce cost. (cid:1) Development of catalyst technology for high performance polypropylene homo and impact copolymers grades. (cid:1) Development of catalyst for producing ultra-high molecular weight polyethylene and high density poly ethylene grades. (cid:1) Development of specialty polypropylene products. Productivity improvement of polyolefins catalyst systems. (cid:1) (cid:1) Development of novel routes for synthesis of organic modifiers for polyolefins. (cid:1) Application of computational analysis to 102 Partnering India's new future. Sustainably. high performance catalyst systems for olefin polymerization. (cid:1) Development of capability for coloured polyester yarn. (cid:1) Use of improved analytical method development for (cid:1) polyolefins catalyst systems and products. Productivity enhancement for coarse and super- coarse polyester filament yarn products. (cid:1) Process and technology development based on in-house catalyst development for manufacturing alpha olefins. (cid:1) Development of anti-pilling polyester fibre, binder fibre and UV stable polyester fibre. (cid:1) Development of cobalt free polyethylene (cid:1) Development of a new polypropylene grade for heat terephthalate resin. seal applications. (cid:1) Development of new polypropylene grade for high flow melt blown applications. (cid:1) Enhancement of product performance in recycled polyethylene terephthalate. (cid:1) Development of spin finishes for specialty polyester (cid:1) Development of novel homogeneous catalysts and products. process for ethylene polymerization. (cid:1) (cid:1) Regeneration and alternate applications of spent catalysts and adsorbents. Synthesis and characterization of platinum nano- particles and their deposition on silica/alumina surface. (cid:1) Development of superabsorbent polymers. (cid:1) Development of specialty polyethylene products. (cid:1) Development of microbial and photocatalytic processes for effluent treatment. (cid:1) Development of a catalytic process for production of on purpose hexene-1 from ethylene. (cid:1) Development of a process for chlorinated polyvinyl chloride. (cid:1) Development of a new generation paraffin dehydrogenation catalyst. (cid:1) Development of coke less cracking process. (cid:1) Development of materials for catalytic applications. (cid:1) Development of methanol to olefins conversion using micro porous materials. (cid:1) Development of self-healing elastomers. (cid:1) Development of a novel catalyst system for 1,3- butadiene. (cid:1) Development of a more environmentally friendly process for purified terepthalic acid manufacture. (cid:1) Development of alternate polyester products for stretch and comfort fabrics. (cid:1) Development of hollow filaments for light weight and insulation fabrics. (cid:1) Development of alternate polyester products for bonding application. (cid:1) Development of extrusion blow moulding grade polyethylene terephthalate. (cid:1) Development of specialty polyester yarn replacing other yarns such as viscose, nylon, cotton and acrylics. (cid:1) Development of polyethylene terephthalate bottles for packaging oxygen sensitive foods and beverages. (cid:1) Development of specialty yarns such as insect repellant yarn, multifunctional yarn, and conducting polyester yarn. (cid:1) Replacement of asbestos fibres with polyester. (cid:1) Development of Gen-3 polyester packaging for enhancing the shelf life of fruits and vegetables. 2. Benefits derived as a result of the above R&D (cid:1) (cid:1) (cid:1) Potential benefit of ` 30 crore per annum from high conversion catalyst trial in refinery fluidized catalytic cracking unit. Potential savings of ` 18 crore per annum by rectifying the root cause of polypropylene odor and increasing coker LPG processing in propylene recovery unit. Potential benefit of ` 60 crore per annum through additional propylene recovery from fluidized catalytic cracking (FCC) fuel gas. Benefit of ` 7 crore per annum from replacement of imported catalyst for polypropylene manufacturing (based on in-house catalyst development). Benefit of ` 12 crore per annum from replacement of imported donors and development of new donors for polypropylene manufacturing (based on in-house catalyst development). Benefit of ` 9 crore per annum from development of new polypropylene grades for high end applications. (cid:1) Development of 1-Hexene manufacturing based on (cid:1) (cid:1) (cid:1) Reliance Industries Limited 103 in-house developed technology for captive consumption. Potential benefits of ` 17 crore per annum from polyester R&D projects. (cid:1) (cid:1) Development of a process for purified terephthalic acid from inexpensive raw materials. (cid:1) Development of technology for inorganic materials from spent catalysts. 3. Future plan of action (cid:1) Creation of hydroprocessing related facilities and process development. (cid:1) Development of ‘New generation spinnerets’ for productivity increase and functional enhancements. (cid:1) Development of eco-friendly/green partially oriented (cid:1) Development of a process for widening the crude yarn. window. (cid:1) Application of high throughput testing facilities for refinery catalyst development and evaluation. (cid:1) Application of computational fluid dynamics studies of plant equipment for reliability improvement. (cid:1) Application of molecular characterization to crude and refinery streams. (cid:1) Development of technologies for value creation for refinery streams. (cid:1) Development of adsorbents and a process for CO2 capture from flue gas. (cid:1) Development of sixth generation polypropylene catalyst systems for specialty products. (cid:1) Development of high efficient catalyst precursor processes for polyolefins. (cid:1) Advanced macro and micro structural studies of polyolefins. (cid:1) Application of high throughput testing facilities for catalyst evaluation in polyolefins. (cid:1) Development of high value products from catalyst residue systems. (cid:1) Development of low silver catalyst for ethylene oxidation. (cid:1) Development of alternative routes for production of 1,3-butadiene. (cid:1) Development of a process for cokeless thermal cracking of hydrocarbons. (cid:1) Development of technology for biomass to value added chemicals. (cid:1) Development of novel materials for catalyst, adsorbent, support and gas storage applications. (cid:1) Utilization and recycle of spent catalyst, chemicals and polymers etc. (cid:1) Development of technology for ethane to value added chemicals. (cid:1) Development of technology for CO2 to value added chemicals. (cid:1) Development of technology for up-scaling of moisture management yarns. (cid:1) Development of anti-pilling polyester through continuous polymerization route. (cid:1) Development of technology for in-house black master batch capacity expansion. (cid:1) Development of technology to produce alkali resistant polyester staple fiber. (cid:1) Development of polyethylene terephthalate resin with high glass transition temperature and high impact strength. (cid:1) Development of an extrusion blow moulding grade polyethylene terephthalate resin. (cid:1) Improvement of sparkle / gloss in carpet fiber using in-house developed catalyst. (cid:1) Development of new spunlace fibres with special attributes for value generation. (cid:1) Development of antimony free polyester catalysts. 4. Expenditure on R & D a) Capital b) Revenue Total ` crore 654 335 989 Total R & D expenditure is 0.3% of total Revenue from Operations. Technology absorption, adoption and innovation 1. Efforts, in brief, made towards technology absorption, adoption and innovation (cid:1) (cid:1) (cid:1) (cid:1) Comparative evaluation of various technologies. Revamp of vacuum distillation unit slopwax bed for improving run length. Study of equilibrium selectivity among olefins in fluidized catalytic cracking process. Critical review of design of internals in hydro processing units. 104 Partnering India's new future. Sustainably. (cid:1) Analysis of flow dynamics in a cyclone in FCC, using basic performance equations and computational fluid dynamics. (cid:1) Analysis of minor component stripping process in a distillation column using rigorous mass transfer approach. (cid:1) Modifications in refinery coker to improve quench efficiency. (cid:1) (cid:1) (cid:1) (cid:1) Comparative evaluations of different designs of crude preheat exchangers and identifying scope of improvisation. Revamp of coker fractionator to overcome performance limitations. Evaluation of performance of alumina for the purified terepthalic acid plant at Hazira. In-house production of Butene-1 catalyst. (cid:1) Value addition to waste polypropylene powder. (cid:1) Design and installation of a new N2O2 drier for moisture and CO2 removal from air at Vadodara. (cid:1) Adsorbent and process for chloride and moisture removal of Freon-R123. (cid:1) Adsorbent and process for para diethylbenzene purification (oxygenates removal). (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) Selection and pilot plant studies for alternative catalyst systems for polyolefins. Improvement and innovation in in-house developed catalyst system process for higher efficiency. Technical manufacturing processes. trouble shooting of polyolefin Technology developed for stretch yarn with alternate polyester. Technology developed for hollow filaments. (cid:1) New generation technology under development for monofilament, industrial yarn and fully drawn yarn. (cid:1) (cid:1) In-house development of various simulation models for polymerization and spinning process. Polyester staple fiber based product to improve the shelf life of fruits and vegetables in ambient storage conditions. (cid:1) (cid:1) (cid:1) (cid:1) Development of easy dye-able polyester yarn for various end uses. (cid:1) Development of super micro denier polyester staple fiber. (cid:1) Production of dope dyed polyester staple fiber. (cid:1) Development of technology for low pill fiber and tow in polyester. (cid:1) Development of polyester staple fiber with high shrink properties. (cid:1) (cid:1) Productivity increase initiatives in polyester. Expansion of continuous polymerization based cationic dyeable yarns and full dull yarns. (cid:1) Development of alternate additives for polyester. (cid:1) Initiatives for improving quality of various products in polyester manufacturing. 2. Benefits derived as a result of the above efforts (cid:1) Development of basis for selection of fluidized catalytic cracking technology and catalyst/additive. (cid:1) Methodology developed for equipment selection and performance evaluation in vacuum distillation unit. (cid:1) Modified configuration of slopwax bed is being implemented and is expected to increase the run length. (cid:1) Factors to maximize propylene selectivity in fluidized catalytic cracking were established. (cid:1) Opportunities for improvement in flow distribution in hydro processing units were identified. (cid:1) Factors that contribute to erosion problems in fluidized catalytic cracking cyclone were understood. (cid:1) Key operating parameters that would affect stripping were identified and used as basis for design. (cid:1) Quench efficiency was improved in coker. (cid:1) Higher productivity of catalyst system and improved production rate for polypropylene. Low cost catalyst precursor for polyethylene. Benefit of ` 4.5 crore by Revamp of dryer in N2O2 in Vadodara. Benefit of ` 0.6 crore by Freon drying at Hazira. Reliance Industries Limited 105 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 ` 1,98,269 crore (US$ 38,972 million). 2. Total Foreign exchange earned and used ` crore 1,98,474 92,224 a. Total Foreign Exchange Earned b. Total savings in Foreign Exchange through products manufactured by the Company and deemed exports (US$ 18,128 million) Subtotal (a+b) c. Total Foreign Exchange used 2,90,698 2,64,317 (cid:1) (cid:1) (cid:1) Benefit of ` 1.19 crore by production of Butene-1 catalyst. Benefit of ` 0.36 crore by value addition to waste polypropylene powder. Potential benefits of ` 25 crore per annum from all polyester technology projects. 3. Information regarding Imported Technology Year of import 2011-12 Status implementation / absorption Project Under Implementation 2011-12 Project Under Implementation Product Technology Italy import from Polimeri Styrene butadiene Europa, rubber (SBR) Project at Hazira Poly JSR butadiene Corporation, rubber (PBR )-III Project at Hazira Japan Form ‘A’ Form for disclosure of particulars with respect to conservation of energy Part ‘A’ Power & Fuel Consumption 1 Electricity a) Purchased Units (Lacs) Total Cost (` In Crores) # Rate/Unit (`) # b) Generation through captive power facilities 1) Through Steam Turbine/Generator Units (Lacs) KWH per unit of fuel Total Cost (` In Crores) Cost/Unit (`) Current Year Previous Year 3,760.66 3,887.53 170.58 4.54 150.95 3.88 52,605.28 52,193.98 5.66 3,609.07 6.86 5.45 2,141.79 4.10 106 Partnering India's new future. Sustainably. Cont.. c) Own Generation 1) Through Diesel Generator Units (Lacs) KWH per unit of fuel Fuel Cost/Unit (`) 2) Through Steam Turbine/Generator Units (Lacs) KWH per unit of fuel Fuel Cost/Unit (`) 3) Through Wind Mill Turbine 2 Units (Lacs) Purchased Fuels consumed Furnace Oil Quantity (K.Ltrs) Total Cost (` In crores) Average rate per Ltr. (`) 3 Diesel Oil Quantity (K. Ltrs) Total Cost (` In crores) Average rate per Ltr. (`) 4 Others (a) Gas Quantity ( 1000 M3 ) Total Cost (` In crores) Average rate per 1000M3 (`) (b) Coal / Husk / Wood Fire Quantity Total Cost (` In crores) Average rate per MT (`) Internal Fuels consumed 5 Gas Quantity ( 1000 M3 ) 6 GT fuels Quantity ( K.Ltrs ) # Excluding Demand Charges Current Year Previous Year 500.03 4.08 9.31 776.06 4.17 6.88 53,212.68 54,475.91 4.20 5.21 4.43 3.04 24.82 22.38 38,027.50 138.05 36.30 3,812.18 16.61 43.57 9,75,810.86 2,508.32 25,704.99 31,158.90 9.45 3,033.58 55,374.86 145.24 26.23 2,280.45 8.62 37.81 7,26,304.93 788.50 10,856.33 32,882.75 8.62 2,621.70 69,39,994.21 43,78,642.26 3,56,106.53 1,99,443.16 Reliance Industries Limited 107 B. Consumption per unit of Production Product Electricity (KWH) Furnace Oil/ HSD/ HFHSD (Ltrs) LSHS (Kgs) Gas (SM3) Current Previous Current Previous Current Previous Current Previous Year Year Year Year Year Year Year Year Fabrics ( Per 1000 mtrs) 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) PET (per MT) PX (per MT) Petro-products (per MT) PBR (per MT) Caustic Soda (per MT) Acrylonitrile (per MT) 4,566 715 357 302 593 441 432 530 301 571 245 198 73 634 2,606 446 4,704 708 357 307 600 454 438 563 302 587 251 209 75 612 2,613 484 For and on behalf of the Board of Directors Mukesh D. Ambani Chairman and Managing Director April 20, 2012 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 2012, 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 implementation 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. 2 2 13 0 - - - - 2 87 - 29 3 - - - 1 2 13 0 8 - - - 1 81 - 5 1 - - - - - - - 0 2 0 0 0 - - - - 0 3 (0) - - - - 1 5 2 2 0 - - - - 16 11 (7) 461 80 84 14 538 79 34 15 54 26 73 309 75 491 91 (38) 473 88 92 12 306 66 31 17 61 48 74 366 78 506 79 (64) 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 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 For Deloitte Haskins & Sells For Rajendra & Co. Chartered Accountants Chartered Accountants (Registration No. 117366W) (Registration No. 101720W) Chartered Accountants (Registration No. 108355W) D. Chaturvedi Partner Membership No.: 5611 Membership No.: 31467 A. Siddharth Partner A. R. Shah Partner Membership No.:47166 Mumbai April 20, 2012 108 Partnering India's new future. Sustainably. Financial Statements & Notes Reliance Industries Limited 109 with by this report are in compliance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956. e) On the basis of written representations received from the Directors as on March 31, 2012 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2012 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 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: in the case of the Balance Sheet, of the state (i) of affairs of the Company as at March 31, 2012; f) (ii) in the case of the Statement of Profit and Loss, 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 For Deloitte Haskins & Sells For Rajendra & Co. Chartered Accountants Chartered Accountants (Registration No. 117366W) (Registration No. 101720W) Chartered Accountants (Registration No. 108355W) D. Chaturvedi Partner Membership No.: 5611 Membership No.: 31467 A. Siddharth Partner A. R. Shah Partner Membership No.:47166 Mumbai Date : April 20, 2012 Auditors’ Report To the Members of Reliance Industries Limited 1. We have audited the attached Balance Sheet of RELIANCE INDUSTRIES LIMITED as at March 31, 2012, the Statement of Profit and Loss and 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. 2. We conducted our audit in accordance with the 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. 3. 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. 4. Further to our comments in the Annexure referred to in paragraph 3 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; b) c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account; In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt d) 110 Partnering India's new future. Sustainably. Annexure to Auditors’ Report Referred to in Paragraph 3 of our report of even date 1. In respect of its fixed assets: a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information. b) As explained to us, all the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification. c) In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected. 2. In respect of its inventories: a) The inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable. b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. c) The Company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventories as compared to the book records. 3. In respect of the loans, secured or unsecured, granted or taken by the Company to / from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956: a) The Company has given loans to two subsidiaries. In respect of the said loans, the maximum amount outstanding at any time during the year was ` 10,254 crore and the year-end balance is ` 10,239 crore (including interest free loan of ` 6,615 crore). b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of the loans given by the Company, are not prima facie prejudicial to the interest of the Company. c) The principal amounts are repayable over a period of three to five years, while the interest is payable annually at the discretion of the Company. d) In respect of the said loans and interest thereon, there are no overdue amounts. e) The Company has not taken any loan during the year from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. Consequently, the requirements of Clauses (iii) (f) and (iii) (g) of paragraph 4 of the Order are not applicable. 4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchases of inventory and fixed assets and 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 system. 5. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956: (a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been so entered. (b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts / arrangements entered in the Register maintained under section 301 of the Companies Act, 1956 and exceeding the value of ` 5,00,000 in respect of each party during the year have been made at prices which appear reasonable as per information available with the Company. 6. According to the information and explanations given to us, the Company has not accepted any deposit from the public. Therefore, the provisions of Clause (vi) of paragraph 4 of the Order are not applicable to the Company. 7. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business. 8. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete. 9. In respect of statutory dues: a) According to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess, and other statutory dues have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were Reliance Industries Limited 111 clause (xiii) of paragraph 4 of the Order 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 and 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 interest of the Company. 16. The Company has raised new term loans during the year. The term loans outstanding at the beginning of the year and those raised during the year have been 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. 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 / 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 year. For Chaturvedi & Shah For Deloitte Haskins & Sells For Rajendra & Co. Chartered Accountants Chartered Accountants (Registration No. 117366W) (Registration No. 101720W) Chartered Accountants (Registration No. 108355W) D. Chaturvedi Partner Membership No.: 5611 Membership No.: 31467 A. Siddharth Partner A. R. Shah Partner Membership No.:47166 Mumbai Date : April 20, 2012 Annexure to Auditors’ Report Referred to in Paragraph 3 of our report of even date outstanding as at March 31, 2012 for a period of more than six months from the date of becoming payable. Amounts due and outstanding for a period exceeding 6 months as at March 31, 2012 to be credited to Investor Education and Protection Fund of ` 9 crore, which are held in abeyance due to pending legal cases, have not been considered. b) The disputed statutory dues aggregating ` 828 crore that have not been deposited on account of disputed matters pending before appropriate authorities are as under: Sr. No Name of the Statute Nature of the Dues Amount (` in crore) 1. Central Excise Act, 1944 Excise Duty and Service Tax 2. Central Sales Tax Act, 1956 and Sales Tax Acts of various states Sales Tax/ VAT and Entry Tax 3. Customs Act, 1962 Custom Duty 1 9 104 4 0 2 6 398 1 240 Period to which the amount relates Various years from 1995-96 to 2010-11 Various years from 1991-92 to 2010-11 Various years from 1991-92 to 2009-10 Various years from 1993-94 to 2009-10 Various years from 1997-98 to 2009-10 2007-08 2005-06 and 2007-08 Forum where dispute is pending Commissioner of Central Excise (Appeals) Central Excise & Service Tax Appellate Tribunal Joint/Deputy Commissioner/ Commissioner (Appeals) Sales Tax Appellate Tribunal High Court Supreme Court Central Excise & Service Tax Appellate Tribunal TOTAL 828 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 and debenture holders. 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 / nidhi / mutual benefit fund / society. Therefore, the provisions of 112 Partnering India's new future. Sustainably. Reliance Industries Limited Balance Sheet as at 31st March, 2012 Note As at 31st March, 2012 (` in crore) As at 31st March, 2011 EQUITY AND LIABILITIES Shareholders’ Funds Share Capital Reserves and Surplus Share Application Money Pending Allotment Non-Current Liabilities Long Term Borrowings Deferred Tax Liability (net) Current Liabilities Short Term Borrowings Trade Payables Other Current Liabilities Short Term Provisions TOTAL ASSETS Non-Current Assets Fixed Assets Tangible Assets Intangible Assets Capital Work-in-Progress Intangible Assets under Development Non-Current Investments Long Term Loans and Advances Current Assets Current Investments Inventories Trade Receivables Cash and Bank Balances Short Term Loans and Advances Other Current Assets 1 2 3 4 5 6 7 8 9 9 9 9 10 11 12 13 14 15 16 17 TOTAL Significant Accounting Policies Notes on Financial Statements As per our Report of even date 1 to 36 For Chaturvedi & Shah Chartered Accountants For Deloitte Haskins & Sells Chartered Accountants For Rajendra & Co. Chartered Accountants D. Chaturvedi Partner A. Siddharth Partner A.R. Shah Partner Mumbai April 20, 2012 K. Sethuraman Company Secretary 3,271 1,62,825 3,273 1,48,267 1,66,096 - 1,51,540 9 48,034 12,122 10,593 40,324 13,713 4,258 88,001 25,722 3,695 4,059 26,979 14,340 27,029 35,955 18,424 39,598 11,089 249 60,156 62,686 51,124 11,562 12,304 34,844 18,735 4,601 68,888 2,95,140 70,484 2,84,719 93,084 49,623 2,759 9,469 23,209 10,698 1,62,796 1,88,842 14,443 29,825 17,442 27,135 6,833 199 1,32,344 2,95,140 95,877 2,84,719 Chairman & Managing Director Executive Directors - } For and on behalf of the Board M.D. Ambani N.R. Meswani H.R. Meswani P.M.S. Prasad R.H. Ambani M.L. Bhakta Y.P. Trivedi Dr. D.V. Kapur M.P. Modi Prof. Ashok Misra } Directors Reliance Industries Limited Statement of Profit and Loss for the year ended 31st March, 2012 Reliance Industries Limited 113 Note 2011-12 (` in crore) 2010-11 INCOME Revenue from Operations Other Income Total Revenue EXPENDITURE : Cost of Materials Consumed Purchases of Stock-in-Trade Changes in Inventories of Finished Goods, Stock-in-Process and Stock-in-Trade Employee Benefits Expense Finance Costs Depreciation and Amortisation Expense Other Expenses Total Expenses Profit Before Tax Tax Expenses Current Tax Deferred Tax Profit for the year 18 19 20 21 22 23 24 25 Earnings per equity share of face value of ` 10 each Basic and Diluted (in `) Significant Accounting Policies Notes on Financial Statements 26 1 to 36 As per our Report of even date For Chaturvedi & Shah Chartered Accountants For Deloitte Haskins & Sells Chartered Accountants For Rajendra & Co. Chartered Accountants D. Chaturvedi Partner A. Siddharth Partner A.R. Shah Partner Mumbai April 20, 2012 K. Sethuraman Company Secretary 3,29,904 6,192 3,36,096 2,74,814 1,441 (872) 2,862 2,667 11,394 18,040 3,10,346 25,750 5,150 560 20,040 61.21 2,48,170 3,052 2,51,222 1,93,234 1,464 (3,243) 2,624 2,328 13,608 15,965 2,25,980 25,242 4,320 636 20,286 62.00 Chairman & Managing Director Executive Directors - } For and on behalf of the Board M.D. Ambani N.R. Meswani H.R. Meswani P.M.S. Prasad R.H. Ambani M.L. Bhakta Y.P. Trivedi Dr. D.V. Kapur M.P. Modi Prof. Ashok Misra } Directors 114 Partnering India's new future. Sustainably. Reliance Industries Limited Cash Flow Statement for the year 2011-12 A: CASH FLOW FROM OPERATING ACTIVITIES: Net Profit before tax as per Profit and Loss Account 25,750 25,242 2011-12 (` in crore) 2010-11 Adjusted for: Net Prior Year Adjustments Loss on Sale / Discard of Assets (net) Depreciation and Amortisation Expense Transferred from Revaluation Reserve Effect of Exchange Rate Change Net gain on Sale of Investments Dividend Income Interest Income Finance Costs Operating Profit before Working Capital Changes Adjusted for: Trade and Other Receivables Inventories Trade and Other 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 / Transfer of Participating Interest Advance for Transfer of Participating Interest Purchase of Investments Sale of Investments Movement in Loans and Advances Interest Income Dividend Income Net Cash (used in) Investing Activities 1 21 13,734 (2,340) 801 (1,635) (10) (4,414) 2,667 (516) (6,130) 3,876 8,825 34,575 (2,770) 31,805 (1) (4,830) 26,974 (8,008) 23,245 - (3,32,438) 3,15,388 (3,126) 1,883 10 (3,046) 3 34 16,241 (2,633) (834) (340) (2) (2,621) 2,328 (6,948) (2,844) 9,861 12,176 37,418 69 37,487 (3) (4,204) 33,280 (12,366) 242 9,004 (2,57,541) 2,43,474 (5,477) 2,329 2 (20,333) Cash Flow Statement for the year 2011-12 (Contd.) C: CASH FLOW FROM FINANCING ACTIVITIES: Proceeds from Issue of Share Capital Buyback of Equity Shares Proceeds from Long Term Borrowings Repayment of Long Term Borrowings Short Term Borrowings (net) Dividends Paid (including dividend distribution tax) Interest Paid Net Cash (used in) / from Financing Activities Net Increase in Cash and Cash Equivalents Opening Balance of Cash and Cash Equivalents Closing Balance of Cash and Cash Equivalents Note : Reliance Industries Limited 115 2011-12 87 (279) 5,229 (8,456) (2,111) (2,772) (3,163) (11,465) 12,463 27,135 39,598 (` in crore) 2010-11 193 - 4,921 (5,589) 6,411 (2,431) (2,780) 725 13,672 13,463 27,135 Share application money given to Subsidiary / Associate aggregating to ` 935 crore (Previous Year ` 17 crore) have been converted into investments in Equity / Preference Shares. As per our Report of even date For Chaturvedi & Shah Chartered Accountants For Deloitte Haskins & Sells Chartered Accountants For Rajendra & Co. Chartered Accountants D. Chaturvedi Partner A. Siddharth Partner A.R. Shah Partner Mumbai April 20, 2012 K. Sethuraman Company Secretary Chairman & Managing Director Executive Directors - } For and on behalf of the Board M.D. Ambani N.R. Meswani H.R. Meswani P.M.S. Prasad R.H. Ambani M.L. Bhakta Y.P. Trivedi Dr. D.V. Kapur M.P. Modi Prof. Ashok Misra } Directors 116 Partnering India's new future. Sustainably. SIGNIFICANT ACCOUNTING POLICIES A. Basis of Preparation of Financial Statements The financial statements are prepared under the historical cost convention, except for certain fixed assets which are revalued, in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956. 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 recoverable taxes 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) b) c) d) Operating Leases: Rentals are expensed with reference to lease terms and other considerations. (i) (ii) Finance leases prior to 1st April, 2001: Rentals are expensed with reference to lease terms and other considerations. 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. 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. 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 net of recoverable taxes less accumulated amortisation / depletion. 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 intangible assets are capitalised. F. Depreciation and Amortisation Depreciation on fixed assets is provided to the extent of depreciable amount on written down value method (WDV) at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 over their useful life except,: on fixed assets pertaining to refining segment and SEZ units, depreciation is provided on Straight Line method (SLM) over their useful life; on fixed bed catalyst with a life of 2 years or more, depreciation is provided over its useful life; 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; premium on leasehold land is amortised over the period of lease; technical know how is amortised over the useful life of the underlying assets SIGNIFICANT ACCOUNTING POLICIES Reliance Industries Limited 117 and computer software is amortised over a period of 5 years; on intangible assets - development rights, depletion 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; intangible assets - others are amortised over the period of agreement of right to use, provided in case of jetty the aggregate amount amortised to date is not less than the aggregate rebate availed by the Company; on amounts added on revaluation, depreciation is provided 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 provided over the lease term. G. Impairment of Assets An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting 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 recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of the transaction. (b) Monetary items denominated in foreign currencies at the year end are restated at year end rates. In case of items which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of the contract is recognised as exchange difference and the premium paid on forward contracts is recognised over the life of the contract. Non monetary foreign currency items are carried at cost. (c) (d) (e) In respect of branches, which are integral foreign operations, all transactions are translated at rates prevailing on the date of transaction or that approximates the actual rate at the date of transaction. Branch monetary assets and liabilities are restated at the year end rates. 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 case of long term liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets. I. Investments Current investments are carried at 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. J. K. Inventories Items of inventories are measured at lower of cost and net realisable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other costs including manufacturing overheads 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. Revenue Recognition Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operations includes sale of goods, services, sales tax, service tax, excise duty and sales during trial run period, adjusted for discounts (net), Value Added Tax (VAT) and gain / loss on corresponding hedge contracts. Dividend income is recognized when right to receive is established. Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable. 118 Partnering India's new future. Sustainably. SIGNIFICANT ACCOUNTING POLICIES L. M. N. O. P. Q. R. S. T. Excise Duty / Service Tax and Sales Tax / Value Added Tax Excise duty / Service tax is accounted on the basis of both, payments made in respect of goods cleared / services provided as also provision made for goods lying in bonded warehouses. Sales tax / Value added tax paid is charged to Profit and Loss account. Employee Benefits (i) Short-term employee benefits are recognised as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered. Post employment and other long term employee benefits are recognised as an expense in the Profit and Loss account for the year in which the employee has rendered services. The expense is recognised at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the Profit and Loss account. In respect of employees stock options, the excess of fair price on the date of grant over the exercise price is recognised as deferred compensation cost amortised over the vesting period. (ii) (iii) Employee Separation Costs Compensation to employees who have opted for retirement under the voluntary retirement scheme of the Company is charged to the Profit and Loss account in the year of exercise of option. 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 its intended use. All other borrowing costs are charged to Profit and Loss account. Financial Derivatives and Commodity Hedging Transactions In respect of derivative contracts, premium paid, gains / losses on settlement and losses on restatement are recognised in the Profit and Loss account except in case where they relate to the acquisition or construction of fixed assets, in which case, they are adjusted to the carrying cost of such assets. 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 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. 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 taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred tax asset is recognised and carried forward only to the extent that there is a virtual certainty that the asset will be realised in future. Premium on Redemption of Bonds / Debentures Premium on redemption of bonds / debentures, net of tax impact, are adjusted against the Securities Premium Account. Provisions, 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 recognised but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements. Notes on Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 119 The previous year figures have been regrouped / reclassified, wherever necessary to conform to the current year presentation. 1. SHARE CAPITAL Authorised Share Capital: 500,00,00,000 Equity Shares of ` 10 each (500,00,00,000) 100,00,00,000 Preference Shares of ` 10 each (100,00,00,000) Issued, Subscribed and Paid up: 327,10,59,340 Equity Shares of ` 10 each fully (327,33,74,008) paid up Less: Calls in arrears - by others [` 3,653 (Previous Year ` 3,653)] TOTAL As at 31st March, 2012 As at 31st March, 2011 (` in crore) 5,000 1,000 6,000 3,271 3,271 3,271 - 5,000 1,000 6,000 3,273 3,273 3,273 - 1.1 162,67,93,078 Shares out of the issued, subscribed and paid up share capital were allotted as Bonus Shares in the last five (162,67,93,078) years by capitalisation of Securities Premium and Reserves. 1.2 12,93,93,183 Shares out of the issued, subscribed and paid up share capital were allotted in the last five years pursuant (12,93,93,183) to the various Schemes of amalgamation without payments being received in cash. 1.3 45,04,27,345 Shares out of the issued, subscribed and paid up share capital were allotted on conversion / surrender of (45,04,27,345) Debentures and Bonds, conversion of Term Loans, exercise of warrants, against Global Depository Shares (GDS) and re-issue of forfeited equity shares, since inception. 1.4 17,18,83,624 Shares out of the issued, subscribed and paid up share capital held by Subsidiaries do not have Voting Rights (17,18,83,624) and are not eligible for Bonus Shares 1.5 The details of Shareholders holding more than 5% shares : Name of the Shareholder Life Insurance Corporation of India 1.6 The reconciliation of the number of shares outstanding is set out below : Particulars Equity Shares at the beginning of the year Add : Shares issued on exercise of Employee Stock Options Less : Shares cancelled on buy back of Equity Shares Equity Shares at the end of the year As at 31st March, 2012 As at 31st March, 2011 No. of Shares % held No. of Shares % held 7.10 23,19,67,257 7.09 23,24,95,218 As at 31st March, 2012 No. of Shares 327,33,74,008 13,48,763 36,63,431 327,10,59,340 As at 31st March, 2011 No. of Shares 327,03,74,360 29,99,648 - 327,33,74,008 1.7 The Company has reserved issuance of 13,39,30,481 (Previous year 13,52,79,244) Equity Shares of ` 10/- each for offering to eligible employees of the Company and its subsidiaries under Employees Stock Option Scheme (ESOS). During the year, the Company has granted 68,817 [Previous year 35,200] Options to the eligible employees which includes 4,100 options at a price of ` 972/- per option, 18,000 options at a price of ` 871/- per option, 23,717 options at a price of ` 847 per option, 15,000 options at a price of ` 765 per option and 8,000 options at a price of ` 715 per option (Previous year, 16,000 options at a price of ` 995 per option and 19,200 options at a price of ` 929 per option) plus all applicable taxes, as may be levied in this regard on the Company. The options would vest over a maximum period of 7 years or such other period as may be decided by the Employees Stock Compensation Committee from the date of grant based on specified criteria. 1.8 The Board of Directors of the Company approved the buyback of upto 12 crore fully paid up equity shares of ` 10/- each, at a price not exceeding ` 870/- payable in cash, upto an aggregate amount not exceeding ` 10,440 crore from the open market through Stock Exchange(s). During the year, the Company has bought back and extinguished 36,63,431 Equity Shares of ` 10/- each. 120 Partnering India's new future. Sustainably. Notes on Financial Statements for the Year ended 31st March, 2012 2. RESERVES AND SURPLUS As at 31st March, 2012 (` in crore) As at 31st March, 2011 Revaluation Reserve As per last Balance Sheet Less: Transferred to Profit and Loss Account (Refer Note No. 9.9) Less: Utilised on Demerger Adjustments 5,467 2,340 - Capital Reserve As per last Balance Sheet Capital Redemption Reserve As per last Balance Sheet Add : Transferred from Profit and Loss Account on buy back of Equity Shares Securities Premium Reserve As per last Balance Sheet Add : On issue of shares Less: On Redemption of Debentures/Bonds Less : On buy back of Equity Shares Less: Calls in arrears - by others [` 2,21,548 (Previous Year ` 2,21,548)] Debentures Redemption Reserve As per last Balance Sheet General Reserve* As per last Balance Sheet Add: Transferred from Profit and Loss Account Profit and Loss Account As per last Balance Sheet Add: Profit for the year Less: Appropriations Transferred to General Reserve Transferred to Capital Redemption Reserve on buy back of Equity Shares Proposed Dividend on Equity Shares [Dividend per Share ` 8.5/- (Previous year ` 8/-)] Tax on Dividend TOTAL - 4 50,878 85 50,963 11 275 50,677 - 84,000 16,000 6,514 20,040 26,554 16,000 4 2,531 410 3,127 291 8,804 2,633 704 - - 5,467 291 4 - 50,689 189 50,878 - - 50,878 - 68,000 16,000 50,878 1,117 50,677 1,117 1,00,000 84,000 5,000 20,286 25,286 16,000 - 2,385 387 7,609 1,62,825 6,514 1,48,267 * Cumulative amount withdrawn on account of Depreciation on Revaluation is ` 2,563 crore. Notes on Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 121 3. LONG TERM BORROWINGS Secured Non Convertible Debentures Long Term Maturities of Finance Lease Obligations (Refer Note No. 9.7) Unsecured Bonds Term Loans- from banks Deferred payment liabilities TOTAL As at 31st March, 2012 (` in crore) As at 31st March, 2011 Current Non Current Non Current Current 6,024 3,044 168 20 9,353 188 655 18 6,192 3,064 9,541 673 4,564 - 3,976 - 37,269 6,753 37,595 3,499 9 3 12 41,842 6,756 41,583 48,034 9,820 51,124 3 3,502 4,175 3.1 Non Convertible Debentures referred above to the extent of: a) b) c) d) e) f) g) h) ` 1,593 crore are secured by way of first mortgage / charge on the immovable properties situated at Hazira Complex and at Jamnagar Complex (other than SEZ unit) of the Company. ` 5,000 crore are secured by way of first mortgage / charge on the immovable properties situated at Jamnagar Complex (other than SEZ unit) of the Company. ` 1,720 crore are secured by way of first mortgage / charge on all the properties situated at Hazira Complex and at Patalganga Complex of the Company. ` 110 crore are secured by way of first mortgage / charge on certain properties situated at village Mouje Dhanot, District Kalol in the State of Gujarat and on fixed assets situated at Hoshiarpur Complex of the Company. ` 50 crore are secured by way of first mortgage / charge on certain properties situated at Ahmedabad in the State of Gujarat and on fixed assets situated at Nagpur Complex of the Company. ` 44 crore are secured by way of first mortgage / charge on certain properties situated at Surat in the State of Gujarat and on fixed assets situated at Allahabad Complex of the Company. ` 51 crore are secured by way of first mortgage / charge on movable and immovable properties situated at Thane in the State of Maharashtra and on movable properties situated at Baulpur Complex of the Company. ` 500 crore are secured by way of first mortgage / charge on the immovable properties situated at Jamnagar Complex (SEZ unit) of the Company. 122 Partnering India's new future. Sustainably. Notes on Financial Statements for the Year ended 31st March, 2012 3.2 Maturity profile and Rate of interest of Non Convertible Debentures are as set out below : Rate of Interest 6.25% 8.75% 9.25% 10.75% 11.45% 11.90% Zero Coupon Debentures 2013-14 133 - 250 - 1,224 2,500 75 2014-15 133 - 250 - - - 26 Maturity Profile 2015-16 133 - - - - - 31 2016-17 133 - - - - - - 2017-18 133 - - - - - - 3.3 Finance Lease obligations are secured against leased assets. 3.4 Maturity profile and Rate of interest of Bonds are as set out below : Rate of Interest 2.86% 6.21% 6.24% 6.34% 6.51% 6.61% 7.63% 8.25% 9.38% 10.25% 10.38% 10.50% 2015-16 1,011 - - - - - - - - - - - 2016-17 - 254 824 - 662 - - - - - 332 - Maturity Profile 2018-19 - - - 193 - 865 - - - - - - 2026-27 - - - - - - - 173 112 - - - 2027-28 - - - - - - 26 - - - - - 3.5 Maturity Profile of Unsecured Term Loans are as set out below : 2018-19 133 - - 370 - - - 2046-47 - - - - - - - - - - - 49 (` in crore) 2020-21 - 500 - - - - - (` in crore) 2096-97 - - - - - - - - - 63 - - (` in crore) 1-2 years 12,920 Maturity Profile 2-3 years 3,418 3-4 years 5,926 Beyond 4 years 15,005 Term Loans- from banks 4. DEFERRED TAX LIABILITY (Net) Deferred Tax Liability Related to fixed assets Deferred Tax Assets Disallowances under the Income Tax Act, 1961 TOTAL As at 31st March, 2012 (` in crore) As at 31st March, 2011 12,207 85 12,122 11,743 181 11,562 Notes on Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 123 5. SHORT TERM BORROWINGS Secured Working Capital Loans From Banks Foreign Currency Loans Rupee Loans Unsecured Other Loans and Advances From Banks Foreign Currency Loans - Buyers Credit Rupee Loans TOTAL As at 31st March, 2012 (` in crore) As at 31st March, 2011 738 19 312 251 757 563 9,736 100 11,741 - 9,836 10,593 11,741 12,304 5.1 Working capital loans are secured by hypothecation of present and future stock of raw materials, stock-in- process, finished goods, stores and spares (not relating to plant and machinery), book debts, outstanding monies, receivables, claims, bills, materials in transit, etc. save and except receivables of Oil and Gas Division. 5.2 Other Loans and Advances from banks include commercial paper of ` NIL (Previous Year ` NIL). Maximum balance outstanding at any time during the year being ` NIL (Previous Year ` 4,825 crore). 6. TRADE PAYABLES Micro, Small and Medium Enterprises Others TOTAL As at 31st March, 2012 33 40,291 40,324 (` in crore) As at 31st March, 2011 8 34,836 34,844 6.1 The details of amounts outstanding to Micro, Small and Medium Enterprises based on available information with the Company is as under: Particulars Principal amount due and remaining unpaid Interest due on above and the unpaid interest Interest paid Payment made beyond the appointed day during the year Interest due and payable for the period of delay Interest accrued and remaining unpaid Amount of further interest remaining due and payable in succeeding years As at 31st March, 2012 (` in crore) As at 31st March, 2011 - - - - - - - - - - - - - - 124 Partnering India's new future. Sustainably. Notes on Financial Statements for the Year ended 31st March, 2012 7. OTHER CURRENT LIABILITIES (` in crore) As at 31st March, 2012 As at 31st March, 2011 Current maturities of long term debt (Refer Note No. 3) Current maturities of finance lease obligations (Refer Note No. 3 and 9.7) Interest accrued but not due on borrowings Unclaimed Dividends # Application money received and due for refund # Unpaid matured debentures and interest accrued thereon # Creditors for Capital Expenditure Advance for Transfer of Participating Interest Other Payables * TOTAL 9,800 20 424 129 1 1 1,189 - 2,149 13,713 4,157 18 491 111 1 1 2,777 9,004 2,175 18,735 * Includes statutory dues, security deposit and advance from customers. # These figures do not include any amounts, due and outstanding, to be credited to Investor Education and Protection Fund except ` 9 crore (Previous Year ` 8 crore) which is held in abeyance due to legal cases pending. 8. SHORT TERM PROVISIONS Provisions for Superannuation/Gratuity/Leave Encashment (Refer Note No. 22.1) Proposed Dividend Tax on Dividend Provision for Wealth Tax Other Provisions # TOTAL (` in crore) As at 31st March, 2012 As at 31st March, 2011 191 2,531 410 79 1,047 4,258 246 2,385 387 64 1,519 4,601 # The Company had recognised liability based on substantial degree of estimation for excise duty payable on clearance of goods lying in stock as on 31st March, 2011 of ` 345 crore as per the estimated pattern of despatches. During the year, ` 345 crore was utilised for clearance of goods. Provision recognised under this class for the year is ` 326 crore which is outstanding as on 31st March, 2012. Actual outflow is expected in the next financial year. The Company had recognised customs duty liability on goods imported under advance license of ` 1,135 crore as at 31st March, 2011. During the year, further provision of ` 1,243 crore was made and sum of ` 1,674 crore was reversed on fulfilment of export obligation. Closing balance on this account as at 31st March, 2012 is ` 704 crore. Other class of provisions where recognition is based on substantial degree of estimation relate to disputed customer / supplier / third party claims, rebates or demands against the Company. Any additional information in this regard can be expected to seriously prejudice the position of the Company. Notes on Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 125 9. FIXED ASSETS (` in crore) Description Gross Block Depreciation / Amortisation Net Block As at 01-04-2011 Additions Deductions/ Adjustments As at As at 31-03-2012 01-04-2011 For the Year Deductions/ Adjustments 31-03-2012 Upto As at 31-03-2012 As at 31-03-2011 TANGIBLE ASSETS : OWN ASSETS : Leasehold Land Freehold Land Buildings Plant & Machinery Electrical Installations Equipments $ Furniture & Fixtures Vehicles Ships Aircrafts & Helicopters Sub-Total LEASED ASSETS : Plant & Machinery Ships Sub-Total Total (A) INTANGIBLE ASSETS : * Technical Knowhow fees Software Development Rights Others Total (B) Total (A + B) Previous Year 1,557 1,162 7,593 1,32,367 3,513 6,286 519 284 386 68 20 67 221 3,147 72 179 11 64 - - - 8 22 521 3 6 6 32 - 22 1,577 1,221 7,792 1,34,993 3,582 6,459 5 2 4 3 1 6 3 8 6 4 6 187 - 2,298 54,965 1,393 1,247 304 156 240 28 55 - 272 7,820 172 312 36 39 14 5 - - 2 2 4 2 - 2,568 1,335 1,221 5,224 466 62,319 72,674 1 3 4 24 - 10 1,564 1,556 3 3 6 1 7 1 2 5 4 2 3 2,018 4,903 1 8 8 1 4 5 1 3 2 2 3 1,370 1,162 5,295 77,402 2,120 5,039 215 128 146 40 1,53,735 3,781 6 2 0 1,56,896 60,818 8,725 5 1 0 69,033 87,863 92,917 318 10 3 2 8 - - - - - - 3 1 8 1 0 3 2 8 151 10 1 6 1 29 - 2 9 - -- - 1 8 0 1 0 1 9 0 1 3 8 - 1 3 8 167 - 1 6 7 1,54,063 3,781 6 2 0 1,57,224 60,979 8,754 5 1 0 69,223 88,001 93,084 3,211 486 54,459 9,034 67,190 192 2 8,841 165 9,200 - - 28,121 - 28,121 3,403 4 8 8 35,179 9,199 48,269 2,21,253 12,981 28,741 2,05,493 2,15,865 5,963 576 2,21,252 1,565 412 14,828 762 17,567 78,546 62,605 160 16 4,697 107 4,980 13,734 16,241 - - - - - 5 1 0 301 1,725 4 2 8 19,525 8 6 9 22,547 91,770 78,545 1,678 6 0 15,654 8,330 25,722 1,646 74 39,631 8,272 49,623 1,13,723 1,42,707 1,42,707 3,695 4,059 2,759 9,469 Capital Work-in-Progress Intangible Assets under Development $ Includes Office Equipments * Other than internally generated 9.1 Leasehold Land includes ` 203 crore (Previous Year ` 203 crore) in respect of which lease-deeds are pending execution. 9.2 Buildings include : i) Cost of shares in Co-operative Housing Societies ` 1 crore (Previous Year ` 1 crore). ii) ` 5 crore (Previous Year ` 5 crore) in respect of which conveyance is pending. iii) ` 93 crore (Previous Year ` 93 crore) in shares of Companies / Societies with right to hold and use certain area of Buildings. 9.3 Intangible assets - Others include : i) Jetties amounting to ` 812 crore (Previous Year ` 647 crore), the Ownership of which 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. ii) ` 8,387 crore (Previous Year ` 8,387 crore) in preference shares of subsidiaries and lease premium paid with right to hold and use Land and Buildings. 126 Partnering India's new future. Sustainably. Notes on Financial Statements for the Year ended 31st March, 2012 9.4 Capital Work-in-Progress and Intangible Assets under development include : i) ii) ` 2,320 crore (Previous Year ` 1,886 crore) on account of project development expenditure. ` 933 crore (Previous Year ` 666 crore) on account of cost of construction materials at site. 9.5 Gross Block includes ` 12,901 crore added on revaluation of Building, Plant & Machinery and Equipments as at 01.01.2009 based on reports issued by international valuers. 9.6 Additions in Plant and Machinery, Intangible Assets - Development Rights and Intangible Assets under development includes ` 7,558 crore (net loss) [Previous Year ` 121 crore (net loss)] on account of exchange difference during the year. i) In respect of Fixed Assets acquired on finance lease on or after 1st April, 2001, the minimum lease rentals outstanding as on 31st March, 2012 are as follows: 9.7 Total Minimum Lease Payments outstanding As at 31st March 2011 2012 36 36 146 146 Future interest on Outstanding Lease Payments 2011-12 16 44 2010-11 18 53 (` in crore) Present value of Minimum Lease Payments As at 31st March 2011 18 93 2012 20 102 73 255 110 292 7 67 15 86 66 188 95 206 Within one year Later than one year and not later than five years Later than five years Total ii) General Description of Lease terms: (a) Lease rentals are charged on the basis of agreed terms. (b) Assets are taken on lease over a period of 5 to 10 years. 9.8 Project Development Expenditure (in respect of Projects up to 31st March, 2012, included under Capital work-in-progress and Intangible Assets under development) Opening Balance Add: Transferred from Profit and Loss Account (Refer Note No. 25) Interest Capitalised Less: Project Development Expenses Capitalised during the year Closing Balance 2011-12 1,886 (` in crore) 2010-11 1,453 37 430 30 474 467 2,353 33 2,320 504 1,957 71 1,886 9.9 The Gross Block of Fixed Assets includes ` 38,122 crore (Previous Year ` 38,122 crore) on account of revaluation of Fixed Assets carried out since inception. Consequent to the said revaluation there is an additional charge of depreciation of ` 2,340 crore (Previous Year ` 2,633 crore) and an equivalent amount has been withdrawn from Revaluation Reserve and credited to the Profit and Loss Account. This has no impact on profit for the year. Notes on Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 127 10. NON-CURRENT INVESTMENTS (Long Term Investments) As at 31st March, 2012 (` in crore) As at 31st March, 2011 Trade Investments In Equity Shares - Unquoted, fully paid up 1,00,00,000 Petronet India Limited of ` 10 each (1,00,00,000) In Equity Shares of Associate Companies - Unquoted, fully paid up 64,29,20,000 Gujarat Chemicals Port Terminal Company (64,29,20,000) Limited of ` 1 each 62,63,125 Indian Vaccines Corporation Limited (62,63,125) of ` 10 each 11,08,500 Reliance Europe Limited of Sterling (11,08,500) Pound 1 each 26,00,000 Reliance Utilities and Power Private (19,90,000) Limited Class 'A' shares of ` 1 each [` 19,90,000 (Previous Year ` 19,90,000)] 26,00,000 Reliance Utilities Private Limited (20,50,000) Class 'A' shares of ` 1 each [` 20,50,000 (Previous Year ` 20,50,000)] In Preference Shares of Associate Company - Unquoted, fully paid up 50,00,00,000 9% Non-Cumulative Redeemable Preference (50,00,00,000) Shares of Reliance Gas Transportation Infrastructure Limited of ` 10 each Total Trade Investments (A) Other Investments In Equity Shares of Associate Company - Quoted, fully paid up 68,60,064 Reliance Industrial Infrastructure Limited (68,60,064) of ` 10 each In Equity Shares of Associate Company - Unquoted, fully paid up 22,500 Reliance LNG Limited of ` 10 each (22,500) [` 2,25,000 (Previous Year ` 2,25,000)] 10 10 64 1 4 - - 69 10 10 64 1 4 - - 69 2,000 2,000 2,000 2,000 2,079 2,079 16 16 - - 16 16 - - 128 Partnering India's new future. Sustainably. Notes on Financial Statements for the Year ended 31st March, 2012 In Equity Shares of Subsidiary Companies - Unquoted, fully paid up 4,79,76,90,000 Infotel Broadband Services Limited (51,96,90,000) of `10 each 1,76,200 Reliance Exploration & Production DMCC (1,76,200) of AED 1000 each - Reliance Exploration & Production (33,65,75,000) Mauritius Limited of USD 1 each 2,00,000 Reliance Global Business B.V. (2,00,000) of Euro 0.01 each [` 1,25,400 (Previous Year ` 1,25,400)] 14,75,04,400 Reliance Industrial Investments and (14,75,04,400) Holdings Limited of `10 each 42,450 Reliance Industries (Middle East) (42,450) DMCC of AED 1000 each 10,00,00,000 Reliance Jamnagar Infrastructure Limited (10,00,00,000) of ` 10 each - Reliance Oil & Gas Mauritius Limited (50,000) of USD 1 each [` NIL (Previous Year ` 23,27,000)] 522,00,00,000 Reliance Retail Limited of `10 each (339,00,00,000) 20,20,200 Reliance Strategic Investments Limited (20,20,200) of ` 10 each 26,91,150 Reliance Ventures Limited of ` 10 each (26,91,150) 59,00,001 RIL (Australia) Pty Limited of Aus $ 1 each (55,00,001) 50,000 Reliance Energy Generation and Distribution (-) Limited of ` 10 each [` 5,00,000 (Previous Year ` NIL)] In Equity Shares of Subsidiary Companies - Unquoted, partly paid up - Reliance Retail Limited of ` 10 each (610,00,00,000) (` 3 each paid up) - Infotel Broadband Services Limited (427,80,00,000) of `10 each (` 8.50 each paid up) As at 31st March, 2012 (` in crore) As at 31st March, 2011 4,798 211 - - 148 46 100 - 5,220 2 2,351 22 - 520 211 1,554 - 148 46 100 - 3,390 2 2,351 20 - 12,898 8,342 - - - 1,830 3,636 5,466 12,914 13,824 Notes on Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 129 As at 31st March, 2012 (` in crore) As at 31st March, 2011 In Preference Shares of Subsidiary Companies - Unquoted, fully paid up 660,77,27,511 Reliance Global Business B.V. 'A' (660,77,27,511) Class Shares of Euro 0.01 each 4,02,800 9% Non Cumulative Compulsorily Convertible (4,02,800) Preference Shares of Reliance Strategic Investments Limited of ` 1 each 3,54,156 5% Non Cumulative Compulsorily Convertible (3,54,156) Preference Shares of Reliance Industries (Middle East) DMCC of AED 1000 each 24,82,316 5% Non Cumulative Compulsorily Convertible (20,62,316) Preference Shares of Reliance Exploration & Production DMCC of AED 1000 each 18,50,000 10% Non-Cumulative Optionally Convertible (18,50,000) Preference Shares of Reliance Jamnagar Infrastructure Limited of ` 10 each 62,000 Reliance Netherlands B.V. Class 'A' Shares of Euro ( 62,000) 1 each [` 37,57,820 (Previous Year ` 37,57,820)] - 5% Non-Cumulative Compulsorily Convertible (1,46,500) Preference Shares of Reliance Exploration & Production Mauritius Limited of USD 1000 each - 5% Non-Cumulative Compulsorily Convertible (1,37,622) Preference Shares of Reliance Oil & Gas 258,00,00,000 Mauritius Limited of USD 1000 each 9% Cumulative Optionally Convertible Preference (-) Shares of Reliance Retail Limited of ` 10 each In Preference Shares of Subsidiary Company - Unquoted, partly paid up 1,37,000 Reliance Netherlands B.V. Class 'A' (1,37,000) Shares of Euro 1 each (Euro 0.60 each paid up) In Debentures of Subsidiary Companies - Unquoted, Fully paid up 2,79,90,000 0% Unsecured Convertible Debentures (2,79,90,000) of Reliance Industrial Investments and Holdings Limited of ` 100 each 8,83,143 0% Unsecured Convertible Redeemable (8,83,143) Debentures of Reliance Industrial Investments and Holdings Limited of ` 5000 each In Government Securities-Unquoted 6 Years National Savings Certificate (Deposited with Sales Tax Department and other Government Authorities ) [` 2,43,420 (Previous Year ` 2,66,420)] 426 113 474 3,121 925 - - - 2,580 7,639 1 1 280 442 426 113 474 2,563 925 - 653 614 - 5,768 1 1 7,640 5,769 280 442 722 722 - - - - 130 Partnering India's new future. Sustainably. Notes on Financial Statements for the Year ended 31st March, 2012 As at 31st March, 2012 (` in crore) As at 31st March, 2011 In Mutual Fund - Quoted fully paid up Face Value ` 10 each 5,00,00,000 Axis Fixed Term Plan - (Series 21/22) - Growth (-) 47,00,00,000 Birla Sunlife Fixed Term Plan - (Series ES/EV/EY/FC) - Growth (-) 40,50,00,000 DSP Blackrock Fixed Maturity Plan - (15,00,00,000) (Series 18/37/38/43) - Growth 20,30,00,000 DWS Fixed Maturity Plan - (Series 6/7/9/10) - Growth (-) 54,70,00,000 HDFC Fixed Maturity Plan - (17,50,00,000) (Series XVI/XXI) - Growth 4,50,00,000 HSBC Fixed Term Plan - Series 86 - Growth (-) 71,50,00,000 ICICI Prudential Fixed Maturity Plan - Cumulative (3,00,00,000) (Series 62/63/54) 19,20,00,000 IDFC Fixed Maturity Plan - (Series 7/8/65) - Growth (-) 3,50,00,000 India Bulls Fixed Maturity Plan - Growth (-) 15,00,00,000 JP Morgan Fixed Maturity Plan - Series VI - Growth (-) 27,00,00,000 Kotak Fixed Maturity Plan - (Series 76/80/82) - Growth (-) 3,50,00,000 LIC Nomura MF Fixed Maturity Plan - (-) Series 52 - Growth 17,30,00,000 Religare Fixed Maturity Plan - (-) (Series XIII/XIV) - Growth 16,00,00,000 SBI Debt Fund - (Series 11/12/13) - Growth (40,00,00,000) 4,00,00,000 Sundaram Fixed Term Plan - Growth (-) 13,50,00,000 Tata Fixed Maturity Plan - (Series 39/40) - Growth (-) - Canara Robeco Fixed Maturity Plan - (6,00,00,000) Series 6 - Growth Plan Total Other Investments (B) Total Non Current Investments (A + B) Aggregate amount of quoted investments Market Value of quoted investments Aggregate amount of unquoted investments 50 470 405 203 547 45 715 192 35 150 270 35 173 160 40 134 - - - 150 - 175 - 30 - - - - - - 400 - - 60 3,624 24,900 26,979 3,640 3,945 23,339 815 21,130 23,209 831 1,249 22,378 Notes on Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 131 11. LONG TERM LOANS AND ADVANCES (Unsecured and Considered Good) Capital Advances # Deposits with Related parties (Refer Note No. 30) Loans and Advances to Related Parties (Refer Note No. 30) Advance Income Tax (Net of Provision) Other Loans and Advances* TOTAL As at 31st March, 2012 1,190 1,741 10,243 1,100 66 14,340 (` in crore) As at 31st March, 2011 591 1,699 7,108 1,229 71 10,698 *Includes Loans to Employees. # Includes ` 42 crore (Previous Year ` NIL) to Reliance Haryana SEZ Limited. 11.1 Loans and Advances in the nature of Loans given to Subsidiaries and Associates : A) Loans and Advances in the nature of Loans Sr Name of the Company No. 1. Reliance Industrial Investments and Holdings Limited* 2. Reliance Ventures Limited 3. Reliance Strategic Investments Limited 4. Reliance Retail Limited 5. Gapco Tanzania Limited 6. Reliance Exploration & Production DMCC 7. Gujarat Chemicals Port Terminal Company Limited Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Associate (` in crore) As at 31st As at 31st Maximum March, 2012 March, 2011 Balance during the year 9,622 778 1,917 632 84 9 42 9,622 - - 617 - - - 6,997 - - - 84 8 25 * Excluding Debentures of ` 722 crore (Previous Year ` 722 crore) (a) Loans and Advances shown above, fall under the category of ‘Long Term Loans & Advances' in nature of Loans and are re-payable within 3 to 5 years. (b) All the above loans and advances are interest bearing except for an amount of ` 6,615 crore paid to Reliance Industrial Investments and Holdings Limited. (c) Loans to employees as per Company's policy are not considered. B) (i) Investment by the loanee in the shares of the Company *None of the loanees and loanees of subsidiary companies 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 (amalgamation in 2001-02) and Indian Petrochemicals Corporation Limited with the Company under the Schemes approved by the Hon’ble High Court of Judicature at Bombay and Gujarat and certain subsequent inter se transfer of shares. Sr No. Name of the Company 1. 2. *Reliance Aromatics and Petrochemicals Limited *Reliance Energy and Project Development Limited No. of Shares 2,98,89,898 20,58,000 (` in crore) Amount 274 303 (ii) Investment by Reliance Industrial Investments and Holdings Limited in subsidiaries In Equity Shares : Sr No. Name of the Company 1. 2. 3. 4. Reliance Commercial Land & Infrastructure Limited Reliance Global Business B.V. Reliance Gas Corporation Limited Reliance Universal Enterprises Limited No. of Shares 4,30,10,000 18,00,000 50,000 38,55,000 132 Partnering India's new future. Sustainably. Notes on Financial Statements for the Year ended 31st March, 2012 Sr No. Name of the Company No. of Shares 5. 6. 7. 8. 9. 10. 11. 12. 13. Indiawin Sports Private Limited Reliance Corporate Services Limited Reliance Industries Investment and Holding Limited Reliance Security Solutions Limited Mark Project Services Private Limited Reliance One Enterprises Limited GenNext Innovation Ventures Limited Reliance Commercial Associates Limited Reliance Sibur Elastomers Private Limited In Preference Shares : Sr No. Name of the Company 1. 2. Reliance Industries Investment and Holding Limited Infotel Broadband Services Limited (iii) Investment by Reliance Ventures Limited in subsidiaries In Equity Shares : Sr No. Name of the Company 1. Reliance Haryana SEZ Limited (iv) Investment by Reliance Strategic Investments Limited in subsidiaries In Equity Shares : Sr No. Name of the Company 1. 2. 3. Reliance Global Commercial Limited Reliance Universal Commercial Limited Reliance Strategic (Mauritius) Limited In Preference Shares : Sr No. Name of the Company 1. Reliance Polymers (India) Limited (v) Investment by Reliance Exploration & Production DMCC in subsidiaries In Equity Shares : Sr No. Name of the Company 1. 2. Reliance International B. V. Central Park Enterprises DMCC (vi) Investment by Reliance Retail Limited in Subsidiaries In Equity Shares: Sr No. Name of the Company Reliance Brands Limited 1. Reliance Fresh Limited 2. Reliance Office Solutions Private Limited 3. Reliance Retail Finance Limited 4. Reliance Retail Insurance Broking Limited 5. Reliance Financial Distribution & Advisory Services Limited 6. Reliance Trends Limited 7. Reliance Gems and Jewels Limited 8. Reliancedigital Retail Limited 9. Reliance-GrandOptical Private Limited 10. Strategic Manpower Solutions Limited 11. 26,50,000 10,000 50,000 50,000 5,000 50,000 50,000 50,000 10,000 No. of Shares 28,51,200 12,50,00,000 No. of Shares 46,250 No. of Shares 25,500 25,000 40,000 No. of Shares 40,400 No. of Shares 20,000 367 No. of Shares 8,08,60,000 10,50,000 51,20,000 20,20,000 40,00,000 50,000 10,50,000 10,10,000 10,50,000 50,000 50,000 Notes on Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 133 11.2 (i) Assets given on finance lease on or after 1st April, 2001 Particulars Gross Investment Less: Unearned Finance Income Present Value of Minimum Lease Rental Total Not later than one year Later than one year and not later than five years (` in crore) Later than five years 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 21 1 20 48 4 44 17 1 16 27 3 24 4 - 4 21 1 20 - - - - - - (ii) General Description of Lease terms: (cid:127) Lease rentals are charged on the basis of agreed rate of interest. (cid:127) Assets are given on lease for a period of five years. 12. CURRENT INVESTMENTS As at 31st March, 2012 (` in crore) As at 31st March, 2011 Investment in Government Securities - Quoted, Fully Paid up 7.59% GOI 2016 5 5 Investment in Debentures or Bonds - Quoted, Fully Paid up 250 Axis Bank Limited (-) 1,000 CitiFinancial Consumer Finance (1,000) India Limited 1,250 EXIM Bank of India (2,250) 18,387 Housing Development Finance (15,187) Corporation Limited 10,750 Infrastructure Development Finance (5,000) Company Limited 15,095 India Infrastructure Finance Company Limited (-) 32,62,862 Indian Railway Finance (1,450) Corporation Limited 5,550 LIC Housing Finance Limited (12,500) 3,500 National Bank for Agriculture and Rural Development (-) 49,44,752 National Highways Authority of India (-) 42,76,093 Power Finance Corporation Limited (5,500) 25 98 120 1,822 1,060 149 350 545 349 494 858 - 98 220 1,531 483 - 139 1,218 - - 552 134 Partnering India's new future. Sustainably. Notes on Financial Statements for the Year ended 31st March, 2012 As at 31st March, 2012 (` in crore) As at 31st March, 2011 920 Power Grid Corporation of India Limited (920) 450 Rural Electrification Corporation Limited (1,350) 550 Steel Authority of India Limited (1,500) 250 Tata Steel Limited (-) 1,370 Tata Power Company Limited (-) Investment in Mutual Fund - Quoted, Fully Paid up 6,50,00,000 Axis Fixed Term Plan - (Series 13/15/16) - Growth (6,00,00,000) 1,20,00,000 Baroda Pioneer FMP - (Series 1/2) - Growth (1,50,00,000) 61,00,00,000 Birla Sun Life Fixed Term Plan - (1,38,00,00,000) (Series CM/CO to CW/DB/DL/DN/DO/DQ/DS/EW/FA) Growth 10,00,00,000 Canara Robeco Fixed Maturity Plan - (Series 6 -13/ 7) (5,00,00,000) - Growth 41,00,00,000 DSP Blackrock FMP - (Series 7/10/12 to18/39) (75,00,00,000) - Growth 14,30,00,000 DWS Fixed Maturity Plan - (Series 11/90/92) - Growth (-) - Fidelity Mutual Fund - Series 5 - Growth (3,50,00,000) 44,00,00,000 HDFC FMP (Series XIV/XVI/XVIII/XXI/XIX) (13,80,00,000) - Growth - HSBC Fixed Term (Series 79) - Growth (10,00,00,000) 39,00,00,000 ICICI Prudential FMP Series 51/54/55/56/59/63 - (1,26,50,00,000) Cumulative 5,00,00,000 ICICI Prudential FMP Series 55 - Dividend (-) 12,04,25,008 ICICI Prudential Interval Fund - (-) Institutional Cumulative - (7,50,00,000) IDBI FMP (Series I) - Growth 15,50,00,000 IDFC Fixed Maturity Plan - (47,00,00,000) Yearly (Series 37/38/40/41/42/52/64/66) - Growth 112 44 53 26 142 65 12 610 100 410 143 - 440 - 390 50 130 - 155 112 131 146 - - 6,247 4,630 60 15 1,380 50 750 - 35 138 100 1,265 - - 75 470 Notes on Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 135 As at 31st March, 2012 (` in crore) As at 31st March, 2011 10,50,00,000 JPM Fixed Maturity Plan - (Series 8) - Growth (-) - (18,00,00,000) JPMorgan India Fixed Maturity Plan (Series 1) - Growth 23,00,00,000 Kotak Fixed Maturity Plan (Series 57/60/62/83) (-) - Growth 6,00,00,000 Religare Fixed Maturity Plan (Series- IX/VIII) - (-) Growth 76,50,00,000 SBI Debt Fund (Series- 6/7/9/10/11/12/17/18/19) - (32,50,00,000) Growth 2,20,00,000 Sundaram Fixed Term Plan - Growth (2,50,00,000) 24,00,00,000 Tata Fixed Maturity Plan (Series 31/34/36/37) - Growth (6,40,00,000) 6,66,98,706 UTI Fixed Income Interval Fund (Series II/III/IX-I) - (15,00,00,000) Growth 2,61,12,073 UTI Fixed Income Fund (Series IX-IV) - (-) Dividend - Reinvestment 105 - 230 60 765 22 240 83 26 Investment in Units - Quoted 41,19,71,606 Birla Sunlife Dynamic Bond Fund - Retail - Growth 730 (-) 2,48,38,796 DWS Premium Bond Fund - Premium Plus Growth Plan (-) 3,77,86,469 DWS Short Maturity Fund - Premium Plus Growth Plan (-) 3,99,55,814 ICICI Prudential Institutional Short Term Plan - (-) Cumulative Option 7,37,24,677 LIC Nomura MF Liquid Fund - Growth Plan (-) 25 40 85 141 4,036 - 180 - - 325 25 64 150 - - - - - - 5,082 Investment in Commercial Paper - Quoted Housing Development Finance Corporation Limited - 94 1,021 - Investment in Certificate of Deposits with Scheduled Banks - Quoted Total Current Investments Aggregate amount of quoted investments Market Value of quoted investments - 15,720 27,029 27,029 27,494 94 4,632 14,443 14,443 14,590 136 Partnering India's new future. Sustainably. Notes on Financial Statements for the Year ended 31st March, 2012 13. INVENTORIES Raw Materials Raw Materials in Transit Stock-in-Process Finished Goods Stores, Chemicals and Packing Materials Stock-in-Trade TOTAL 14. TRADE RECEIVABLES (Unsecured and Considered Good) Over six months Others TOTAL 15. CASH AND BANK BALANCES Balance with Banks # Cash on hand Fixed deposits with banks * TOTAL As at 31st March, 2012 8,342 11,008 5,274 7,944 3,333 54 (` in crore) As at 31st March, 2011 6,130 8,446 4,909 7,376 2,849 115 35,955 29,825 As at 31st March, 2012 14 18,410 (` in crore) As at 31st March, 2011 14 17,428 18,424 17,442 As at 31st March, 2012 875 14 38,709 (` in crore) As at 31st March, 2011 590 15 26,530 39,598 27,135 # Balance with Banks includes Unclaimed Dividend of ` 129 crore (Previous Year ` 111 crore) * Fixed deposits with banks include deposits of ` 6,860 crore (Previous Year ` 14,255 crore) with maturity of more than 12 months. 16. SHORT TERM LOANS AND ADVANCES (Unsecured and Considered Good) Loans and Advances to Related Parties (Refer Note No. 30) Balance with Customs, Central Excise Authorities Deposits Others*# TOTAL As at 31st March, 2012 4,169 (` in crore) As at 31st March, 2011 2,402 1,525 358 5,037 11,089 1,223 394 2,814 6,833 * Netted for Loans and Advances considered doubtful ` 70 crore (Previous Year ` 70 crore) # Includes primarily Interest Receivable on Fixed Deposits with Banks, Advance to sundry creditors and Forward Premium on derivative contracts. Notes on Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 137 17. OTHER CURRENT ASSETS Interest accrued on Investment TOTAL 18. REVENUE FROM OPERATIONS Sale of Products Income from Services Less: Excise Duty/ Service Tax Recovered TOTAL 18.1 PARTICULARS OF SALE OF PRODUCTS Particulars Petroleum Products Petrochemicals Products Oil & Gas Others TOTAL 19. OTHER INCOME Interest From Current Investments From Long Term Investments From Others Dividend From Current Investments From Long Term Investments Net gain on Sale of Investments From Current Investments From Long Term Investments Adjustment to the carrying amount of investments [(` 14,64,610)] Other non operating income * TOTAL As at 31st March, 2012 249 249 (` in crore) As at 31st March, 2011 199 199 2011-12 3,39,721 71 3,39,792 9,888 3,29,904 2011-12 2,45,335 80,625 12,620 1,141 3,39,721 2011-12 (` in crore) 2010-11 2,58,571 80 2,58,651 10,481 2,48,170 (` in crore) 2010-11 1,79,263 63,155 15,630 523 2,58,571 (` in crore) 2010-11 431 109 3,874 6 4 1,060 575 - 482 - 2,139 4,414 2,621 - 2 430 - (90) 2 340 89 3,052 10 1,635 133 6,192 *Other non operating income includes income from finance lease of ` 3 crore (Previous Year ` 6 crore). 138 Partnering India's new future. Sustainably. Notes on Financial Statements for the Year ended 31st March, 2012 20. COST OF MATERIALS CONSUMED Imported Indigenous TOTAL 20.1 PARTICULARS OF MATERIALS CONSUMED Particulars Crude Oil Others TOTAL 21. CHANGES IN INVENTORIES OF FINISHED GOODS, STOCK-IN-PROCESS AND STOCK-IN-TRADE Inventories (at close) Finished Goods / Stock-in-Trade Stock-in-Process Inventories (at commencement) Finished Goods / Stock-in-Trade Stock-in-Process TOTAL 22. EMPLOYEE BENEFITS EXPENSE Salaries and Wages Contribution to Provident and Other Funds Staff Welfare Expenses TOTAL ` in crore 2,51,583 23,231 2,74,814 2011-12 % of Consumption 91.55 8.45 100.00 ` in crore 1,77,226 16,008 1,93,234 2010-11 % of Consumption 91.72 8.28 100.00 7,998 5,274 7,491 4,909 2011-12 2,53,997 20,817 2,74,814 2011-12 13,272 12,400 (872) 2011-12 2,433 215 214 2,862 7,491 4,909 6,278 2,879 (` in crore) 2010-11 1,82,873 10,361 1,93,234 (` in crore) 2010-11 12,400 9,157 (3,243) (` in crore) 2010-11 2,179 243 202 2,624 22.1 As per Accounting Standard 15 “Employee benefits”, the disclosures as defined in the Accounting Standard are given below : Defined Contribution Plans Contribution to Defined Contribution Plans, recognised as expense for the year is as under : (` in crore) 2010-11 Employer’s Contribution to Provident Fund 64 Employer’s Contribution to Superannuation Fund 13 15 Employer’s Contribution to Pension Scheme The Company’s Provident Fund is exempted under section 17 of Employees’ Provident Fund and Miscellaneous Provisions Act, 1952. Conditions for grant of exemption stipulate that the employer shall make good deficiency, if any, in the interest rate declared by the trust vis-a-vis statutory rate. Defined Benefit Plan The employees’ gratuity fund scheme managed by a Trust (Life Insurance Corporation of India for SEZ unit of the Company) is a defined benefit plan. The present value of obligation is determined based on actuarial valuation 2011-12 80 15 15 Notes on Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 139 using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognised in the same manner as gratuity. I) Reconciliation of opening and closing balances of Defined Benefit Obligation Gratuity (Funded) Leave Encashment (Unfunded) (` in crore) Defined Benefit obligation at beginning of year Current Service Cost Interest Cost Actuarial (gain) / loss Benefits paid Defined Benefit obligation at year end Reconciliation of opening and closing balances of fair value of Plan Assets 2011-12 383 27 32 17 (23) 436 2010-11 300 36 24 40 (17) 383 II) 2011-12 179 8 11 39 (100) 137 2010-11 297 16 17 42 (193) 179 (` in crore) Gratuity (Funded) 2011-12 327 29 2 59 (23) 394 31 2010-11 269 24 2 49 (17) 327 26 (` in crore) Leave Encashment (Unfunded) As at 31st March 2011 2012 - - 179 137 179 137 (` in crore) Gratuity (Funded) As at 31st March 2011 327 383 56 2012 394 436 42 Gratuity (Funded) Leave Encashment (Unfunded) 2011-12 27 32 (29) 15 45 2010-11 36 24 (24) 38 74 2011-12 8 11 - 39 58 2010-11 16 17 - 42 75 Fair value of Plan assets at beginning of year Expected return on plan assets Actuarial gain / (loss) Employer contribution Benefits paid Fair value of Plan assets at year end Actual return on plan assets III) Reconciliation of fair value of assets and obligations Fair value of Plan assets Present value of obligation Amount recognised in Balance Sheet IV) Expenses recognised during the year Current Service Cost Interest Cost Expected return on Plan assets Actuarial (gain) / loss Net Cost 140 Partnering India's new future. Sustainably. Notes on Financial Statements for the Year ended 31st March, 2012 V) Investment Details : GOI Securities Public Securities State Government Securities Insurance Policies Others (including bank balances) VI) Actuarial assumptions % Invested As at 31st March, 2012 7.52 6.18 2.42 83.72 0.16 100.00 As at 31st March, 2011 9.15 9.51 4.04 77.12 0.18 100.00 Gratuity (Funded) Leave Encashment (Unfunded) 2010-11 1994-96 2011-12 1994-96 Mortality Table (LIC) 2010-11 1994-96 (Ultimate) 8.25% Discount rate (per annum) - Expected rate of return on plan assets (per annum) Rate of escalation in salary (per annum) 6 % The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary. The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of Plan assets held, assessed risks, historical results of return on plan assets and the Company’s policy for plan assets management. 2011-12 1994-96 (Ultimate) (Ultimate) (Ultimate) 8.25% 8.50% - 8.25% 6 % 6 % 8.50% 8.50% 6 % 22.2 The Company announced a Voluntary Separation Scheme (VSS) for the employees of one of the units during the year. A sum of ` 5 crore (Previous Year ` 3 crore) has been paid during the year and debited to Statement of Profit and Loss under the head “Employee Benefits Expense”. 23. FINANCE COSTS Interest Expenses Other borrowing costs Applicable loss on foreign currency transactions and translation TOTAL 24. DEPRECIATION AND AMORTISATION EXPENSE Depreciation and Amortisation Less: Transferred from revaluation reserve (Refer Note No. 9.9) TOTAL 2011-12 1,966 18 683 2,667 2011-12 13,734 2,340 11,394 (` in crore) 2010-11 2,125 20 183 2,328 (` in crore) 2010-11 16,241 2,633 13,608 Notes on Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 141 25. OTHER EXPENSES 2011-12 (` in crore) 2010-11 Manufacturing expenses Stores, Chemicals and Packing Materials Electric Power, Fuel and Water Labour Processing, Production Royalty and Machinery Hire Charges Repairs to Building Repairs to Machinery Exchange Difference (Net) Excise Duty # Lease Rent Selling and Distribution Expenses Warehousing and Distribution Expenses Sales tax /VAT/Service tax Other selling and Distribution Expenses Establishment Expenses Professional fees General Expenses Rent Insurance Rates & Taxes Other Repairs Travelling Expenses Payment to Auditors Loss on Sale /Discard of Fixed Assets Charity and Donations 3,482 4,094 1,829 40 728 161 (28) 1 4,380 821 192 705 255 122 522 83 258 82 17 45 288 3,378 2,255 2,284 29 632 (368) 34 1 4,195 756 402 8,245 10,307 5,393 5,353 666 500 103 529 67 243 74 14 58 143 Less: Transferred to Project Development Expenditure TOTAL 2,377 37 18,040 2,397 30 15,965 # Excise Duty shown under expenditure represents the aggregate of excise duty borne by the Company and difference between excise duty on opening and closing stock of finished goods. 25.1 VALUE OF STORES, CHEMICALS AND PACKING MATERIALS CONSUMED : Imported Indigenous TOTAL ` in crore 1,816 1,666 3,482 2011-12 % of Consumption 52.15 47.85 100.00 2010-11 % of Consumption 51.04 48.96 100.00 ` in crore 1,724 1,654 3,378 142 Partnering India's new future. Sustainably. Notes on Financial Statements for the Year ended 31st March, 2012 25.2 VALUE OF IMPORTS ON CIF BASIS IN RESPECT OF Raw Materials and Stock-in-Trade Stores, Chemicals and Packing Materials Capital goods 25.3 PAYMENT TO AUDITORS AS : (a) (b) (c) Auditor Statutory Audit Fees Tax Audit Fees Certification and Consultation Fees Cost Audit Fees [` 39,85,000 (Previous Year ` 22,15,000)] TOTAL 2011-12 2,54,248 3,120 325 2011-12 7 1 9 - 17 (` in crore) 2010-11 1,74,914 2,051 502 (` in crore) 2010-11 6 1 7 - 14 25.4 A sum of ` 1 crore (net debit) [Previous Year ` 3 crore (net debit)] is included under establishment expenses representing Net Prior Period Items. 25.5 EXPENDITURE IN FOREIGN CURRENCY : Capital Contracts (Includes ` 2,35,330 for SEZ unit) Oil and Gas Activity Technical and Engineering Fees Repairs to Machinery (Includes ` 2 crore for SEZ unit) Repairs to Building Employee Benefits Expense Sales Promotion Expenses Brokerage and Commission (Includes ` 2 crore for SEZ unit) Ocean Freight (Includes ` 525 crore for SEZ unit) Warehousing and Distribution Expenses (Includes ` 980 crore for SEZ unit) Insurance (Includes ` 14,55,709 for SEZ unit) Rent Rates & Taxes (Includes ` 21,059 for SEZ unit) Other Repairs (Includes ` 3 crore for SEZ unit) Travelling Expenses Professional Fees (Includes ` 20 crore for SEZ unit) Charity and Donations Labour Processing, Production Royalty and Hire Charges (Includes ` 34,05,332 for SEZ unit) Bank Charges (Includes ` 6 crore for SEZ unit) Establishment Expenses (Includes ` 5 crore for SEZ unit) Interest Expenses (Includes ` 498 crore for SEZ unit) 2011-12 167 1,633 - 84 1 40 29 31 1,085 1,349 2 5 1 15 9 204 9 1 15 74 1,392 (` in crore) 2010-11 166 3,804 192 92 4 20 31 55 1,488 1,036 2 5 1 8 7 113 16 - 20 54 1,368 Notes on Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 143 26. EARNINGS PER SHARE (EPS) i) Net Profit after tax as per Statement of Profit and Loss attributable to Equity Shareholders (` in crore) ii) Weighted Average number of equity shares used as denominator for calculating EPS Basic and Diluted Earnings per share (`) Face Value per equity share (`) iii) iv) 27. EARNINGS IN FOREIGN EXCHANGE FOB value of exports [Excluding captive transfers to Special Economic Zone of ` 21,278 crore (Previous Year ` 13,178 crore)] Interest Others 2011-12 2010-11 20,040 20,286 3,27,42,26,242 3,27,18,51,032 61.21 10.00 2011-12 62.00 10.00 (` in crore) 2010-11 1,98,269 1,40,546 1 204 7 4 28. 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) (ii) Amount of Dividend Paid ( Gross) ( ` in Crore) Tax Deducted at Source 2011-12 (Final Dividend) 2010-11 (Final Dividend) 40,493 40,299 59,71,01,671 59,60,33,421 478 - 417 - (iii) Year to which dividend relates 2010-11 2009-10 29. Fixed assets taken on finance lease prior to 1st April, 2001, amount to ` 444 crore (Previous Year ` 512 crore). Future obligations towards lease rentals under the lease agreements as on 31st March, 2012 amount to ` 3 crore (Previous Year ` 4 crore). Within one year Later than one year and not later than five years Later than five years [` 38,57,534] TOTAL 2011-12 (` in crore) 2010-11 1 2 - 3 1 2 1 4 144 Partnering India's new future. Sustainably. Notes on Financial Statements for the Year ended 31st March, 2012 30. RELATED PARTY DISCLOSURES : (i) As per Accounting Standard 18, the disclosures of transactions with the related parties are given below: List of related parties where control exists and related parties with whom transactions have taken place and relationships: Relationship Subsidiary Companies Sr. No. Name of the Related Party 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 Reliance Industrial Investments and Holdings Limited Reliance Ventures Limited Reliance Strategic Investments Limited Reliance Industries (Middle East) DMCC Reliance Jamnagar Infrastructure Limited Reliance Retail Limited Reliance Netherlands B.V. Reliance Haryana SEZ Limited Reliance Fresh Limited Retail Concepts and Services (India) Limited Reliance Retail Insurance Broking Limited Reliance Dairy Foods Limited Reliance Exploration & Production DMCC Reliance Retail Finance Limited RESQ Limited Reliance Commercial Associates Limited Reliancedigital Retail Limited Reliance Financial Distribution and Advisory Services Limited RIL (Australia) Pty Limited Reliance Hypermart Limited Gapco Kenya Limited Gapco Rwanda Limited Gapco Tanzania Limited Gapco Uganda Limited Gapoil (Zanzibar) Limited Gulf Africa Petroleum Corporation Transenergy Kenya Limited Recron (Malaysia) Sdn Bhd Reliance Retail Travel & Forex Services Limited Reliance Brands Limited Reliance Footprint Limited Reliance Trends Limited Reliance Wellness Limited Reliance Lifestyle Holdings Limited Reliance Universal Ventures Limited Delight Proteins Limited Notes on Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 145 Sr. No. Name of the Related Party Relationship 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 Reliance Autozone Limited Reliance F&B Services Limited Reliance Gems and Jewels Limited Reliance Integrated Agri Solutions Limited Strategic Manpower Solutions Limited Reliance Agri Products Distribution Limited Reliance Digital Media Limited Reliance Food Processing Solutions Limited Reliance Home Store Limited Reliance Leisures Limited Reliance Loyalty & Analytics Limited Reliance Retail Securities and Broking Company Limited Reliance Supply Chain Solutions Limited Reliance Trade Services Centre Limited Reliance Vantage Retail Limited Wave Land Developers Limited Reliance-GrandOptical Private Limited Reliance Universal Commercial Limited Reliance Petroinvestments Limited Reliance Global Commercial Limited Reliance People Serve Limited Reliance Infrastructure Management Services Limited Reliance Global Business B.V. Reliance Gas Corporation Limited Reliance Global Energy Services Limited Reliance One Enterprises Limited Reliance Global Energy Services (Singapore) Pte. Limited Reliance Personal Electronics Limited Reliance Polymers (India) Limited Reliance Polyolefins Limited Reliance Aromatics and Petrochemicals Limited Reliance Energy and Project Development Limited Reliance Chemicals Limited Reliance Universal Enterprises Limited International Oil Trading Limited Reliance Review Cinema Limited Reliance Replay Gaming Limited Two Sisters Foods India Limited (Formerly Reliance Nutritional Food Processors Limited) RIL USA Inc. Reliance Commercial Land & Infrastructure Limited Subsidiary Companies 146 Partnering India's new future. Sustainably. Notes on Financial Statements for the Year ended 31st March, 2012 Sr. No. Name of the Related Party Relationship 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 Reliance Corporate IT Park Limited Reliance Eminent Trading & Commercial Private Limited Reliance Progressive Traders Private Limited Reliance Prolific Traders Private Limited Reliance Universal Traders Private Limited Reliance Prolific Commercial Private Limited Reliance Comtrade Private Limited Reliance Ambit Trade Private Limited Reliance Petro Marketing Limited LPG Infrastructure (India) Limited Reliance Corporate Centre Limited Reliance Convention and Exhibition Centre Limited Central Park Enterprises DMCC Reliance International B. V. Reliance Corporate Services Limited Reliance Oil and Gas Mauritius Limited Reliance Exploration and Production Mauritius Limited Indiawin Sports Private Limited Reliance Holding USA Inc. Reliance Marcellus LLC Infotel Broadband Services Limited Reliance Strategic (Mauritius) Limited Reliance Eagleford Midstream LLC Reliance Eagleford Upstream LLC Reliance Eagleford Upstream GP LLC Reliance Eagleford Upstream Holding LP Mark Project Services Private Limited Reliance Energy Generation and Distribution Limited Reliance Marcellus II LLC Reliance Security Solutions Limited Reliance Industries Investment and Holding Private Limited Reliance Office Solutions Private Limited Reliance Style Fashion India Private Limited GenNext Innovation Ventures Limited Reliance Home Products Limited Infotel Telecom Limited Reliance Styles India Limited Rancore Technologies Private Limited Omni Symmetry LLC Reliance Sibur Elastomers Private Limited GenNext Ventures LLP Subsidiary Companies Notes on Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 147 Sr. No. Name of the Related Party Relationship 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 Reliance Industrial Infrastructure Limited Reliance Europe Limited Reliance LNG Limited Indian Vaccines Corporation Limited Gujarat Chemicals Port Terminal Company Limited Reliance Utilities and Power Private Limited Reliance Utilities Private Limited Reliance Ports and Terminals Limited Reliance Gas Transportation Infrastructure Limited Shri Mukesh D. Ambani Shri Nikhil R. Meswani Shri Hital R. Meswani Shri P.M.S. Prasad Shri P.K.Kapil Dhirubhai Ambani Foundation Jamnaben Hirachand Ambani Foundation Hirachand Govardhandas Ambani Public Charitable Trust HNH Trust and HNH Research Society Reliance Foundation (ii) Transactions during the year with related parties : Associates Key Managerial Personnel Enterprises over which Key Managerial Personnel are able to exercise significant influence Sr. Nature of Transactions No. (Excluding reimbursements) Purchase of Fixed Assets 1. 2. 3. Purchase / Subscription of Investments Sale / Transfer of Investments 4. Capital Advance given 5. Net Loans and advances given / (returned) 6. Revenue from Operations 7. Other Income 8. Purchases / Material Consumed Subsidiaries Associates Key Managerial Others (` in crore) Total 5 - 4,225 7,541 3,265 - 42 - 3,151 5,400 19,661 16,934 673 1,037 357 506 Personnel - - - - - - - - - - - - - - - - 105 - - 52 - - - - 17 19 312 219 7 6 151 1 - - - - - - - - - - - - - - - - 110 - 4,225 7,593 3,265 - 42 - 3,168 5,419 19,973 17,153 680 1,043 508 507 148 Partnering India's new future. Sustainably. Notes on Financial Statements for the Year ended 31st March, 2012 Sr. No. Nature of Transactions (Excluding reimbursements) 9. Electric Power, Fuel and Water 10. Hire Charges 11. Employee Benefits Expense 12. Payment to Key Managerial Personnel 13. Sales and Distribution Expenses 14. Rent 15. Professional Fees 16. General Expenses 17. Donations 18. Finance Cost Balance as at 31st March, 2012 19. Investments 20. Trade Receivables 21. Capital Advance 22. Loans & Advances 23. Deposits 24. Trade and other payables 25. Finance Lease Obligations 26. Financial Guarantees 27. Performance Guarantees Subsidiaries Associates Key Managerial Others Personnel (` in crore) Total - - 1 - 29 41 - - 53 50 29 - 261 112 38 43 - - 18 19 21,260 20,299 3,952 3,423 42 - 14,400 9,478 299 299 753 133 187 206 28,446 20,922 36 121 1,140 917 408 790 - 21 - - 2,381 2,572 - - 36 17 - 9 - - - - 2,085 2,085 25 14 - - 12 32 1442 1,400 405 331 1 - 1137 716 1 7 - - - - - - 44 41 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 210 26 - - - - - - - - - - - - - - - - - - - - 1,140 917 409 790 29 62 44 41 2,434 2,622 29 - 297 129 38 52 210 26 18 19 23,345 22,384 3,977 3,437 42 - 14,412 9,510 1741 1,699 1,158 464 188 206 29,583 21,638 37 128 Note : Figures in italic represents Previous Year’s amount. Notes on Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 149 Disclosure in Respect of Material Related Party Transactions during the year : 1. Purchase of Fixed Assets include Reliance Fresh Limited ` 2 crore (Previous Year ` NIL), Reliance Industrial Infrastructure Limited ` 1 crore (Previous Year ` NIL), Reliance Jamnagar Infrastructure Limited ` 2 crore (Previous Year ` NIL), Reliancedigital Retail Limited ` 1 crore (Previous Year ` NIL), Reliance Ports and Terminals Limited ` 104 crore (Previous Year ` NIL). 2. Purchase / Subscription of Investments include Reliance Industries (Middle East) DMCC ` NIL (Previous Year ` 20 crore), Reliance Exploration & Production DMCC ` 558 crore (Previous Year ` 440 crore) (including conversion of share application money of ` 11 crore into Preference Shares), Reliance Global Business B.V. ` NIL (Previous Year ` 101 crore), Reliance Exploration & Production Mauritius Limited ` 348 crore (Previous Year ` 2,208 crore), Reliance Oil & Gas Mauritius Limited ` 95 crore (Previous Year ` 614 crore), Infotel Broadband Services Limited ` 642 crore (Previous Year ` 4,156 crore) (including conversion of share application money of ` 46 crore into Equity Shares), Reliance Retail Limited ` 2,580 crore (Previous Year ` NIL) (including conversion of share application money of ` 878 crore into Preference Shares), RIL (Australia) Pty Limited ` 2 crore (Previous Year ` 2 crore), Gujarat Chemicals Port Terminal Company Limited ` NIL (Previous Year ` 52 crore). 3. Sale / Transfer of Investments include to Reliance Energy Generation and Distribution Limited ` 3,265 crore (Previous Year ` NIL). 4. Capital Advances given include Reliance Haryana SEZ Limited ` 42 crore (Previous Year ` NIL). 5. Loans given during the year include Reliance Industrial Investments and Holdings Limited ` 2,625 crore (Previous Year ` 4,348 crore), Gujarat Chemicals Port Terminal Company Limited ` 17 crore (Previous Year ` 19 crore), Reliance Retail Limited ` 617 crore (Previous Year ` NIL). Loans returned during the year include Gapco Tanzania Limited ` 84 crore (Previous Year ` 180 crore), Reliance Exploration & Production DMCC ` 8 crore (Previous Year ` 15 crore), Reliance Gas Corporation Limited ` NIL (Previous Year ` 6 crore), Reliance Corporate IT Park Limited ` NIL (Previous Year ` 53 crore), Gujarat Chemicals Port Terminal Company Limited ` NIL (Previous Year ` 17 crore). Advances in the nature of application / call money advances to Reliance Retail Limited ` NIL (Previous Year ` 726 crore), Infotel Broadband Services Limited ` NIL (Previous Year ` 46 crore), Reliance Exploration & Production DMCC ` NIL (Previous Year ` 11 crore), Reliance Prolific Traders Private Limited ` NIL (Previous Year ` 523 crore). 6. Revenue from Operations include to Reliance Jamnagar Infrastructure Limited ` 1 crore (Previous Year ` NIL), Reliance Retail Limited ` 6 crore (Previous Year ` 136 crore), Gapco Kenya Limited ` 4,559 crore (Previous Year ` 3,750 crore), Gapco Tanzania Limited ` 526 crore (Previous Year ` 750 crore), Recron (Malaysia) Sdn Bhd ` 124 crore (Previous Year ` 41 crore), Reliance Trends Limited ` 5 crore (Previous Year ` 3 crore), LPG Infrastructure (India) Limited ` 269 crore (Previous Year ` 226 crore), Reliance Petro Marketing Limited ` 216 crore (Previous Year ` 809 crore), RIL USA Inc. ` 12,572 crore (Previous Year ` 10,210 crore), Reliance Industrial Investments and Holdings Limited ` 733 crore (Previous Year ` 948 crore), Reliance Fresh Limited ` 6 crore (Previous Year ` 2 crore), Reliance Gems and Jewels Limited ` 504 crore (Previous Year ` 59 crore), Reliance Utilities Private Limited ` 145 crore (Previous Year ` NIL), Reliance Ports and Terminals Limited ` 20 crore (Previous Year ` 5 crore), Reliance Gas Transportation Infrastructure Limited ` 147 crore (Previous Year ` 213 crore), Reliance Corporate IT Park Limited ` 5 crore (Previous Year ` NIL), Reliance Industries (Middle East) DMCC ` 100 crore (Previous Year ` NIL), Infotel Broadband Services Limited ` 35 crore (Previous Year ` NIL). 7. Other Income from Reliance Industrial Investments and Holdings Limited ` 315 crore (Previous Year ` 884 crore), Reliance Ventures Limited ` 40 crore (Previous Year ` 19 crore), Reliance Strategic Investments Limited ` 71 crore (Previous Year ` 10 crore), Reliance Jamnagar Infrastructure Limited ` NIL (Previous Year ` 2 crore), Reliance Exploration & Production DMCC ` NIL (Previous Year ` 1 crore), Gapco Kenya Limited ` 4 crore (Previous Year ` 2 crore), Gapco Tanzania Limited ` 4 crore (Previous Year ` 8 crore), Recron (Malaysia) Sdn Bhd ` 7 crore (Previous Year ` 5 crore), Infotel Broadband Services Limited ` 39 crore (Previous Year ` 13 crore), Reliance Retail Limited ` 16 crore (Previous Year ` 3 crore), RIL USA Inc. ` 18 crore (Previous Year ` 13 crore), Reliance Holdings USA Inc. ` 132 crore (Previous Year ` 60 crore), Reliance Eagleford Upstream Holding LP ` 2 crore (Previous Year ` 2 crore), Reliance Marcellus LLC ` 10 crore (Previous Year ` 9 crore), Reliance Corporate IT Park Limited ` 3 crore (Previous Year ` 6 crore), Reliance Industrial Infrastructure Limited ` 2 crore (Previous Year ` 2 crore), Reliance Europe Limited ` 5 crore (Previous Year ` 3 crore), Gapco Uganda Limited ` 1 crore (Previous Year ` NIL), Reliance Gems and Jewels Limited ` 11 crore (Previous Year ` NIL). 8. Purchases / material consumed from Recron (Malaysia) Sdn Bhd ` 2 crore (Previous Year ` 6 crore), Reliance Petro Marketing Limited ` 3 crore (Previous ` 108 crore), Reliance Jamnagar Infrastructure Limited ` 350 crore (Previous Year ` 392 crore), Reliance Ports and Terminals Limited ` 138 crore (Previous Year ` 1 crore), Reliance 150 Partnering India's new future. Sustainably. Notes on Financial Statements for the Year ended 31st March, 2012 Industrial Infrastructure Limited ` 11 crore (Previous Year ` NIL), Reliance Footprint Limited ` 2 crore (Previous Year ` NIL), Gujarat Chemicals Port Terminal Company Limited ` 2 crore (Previous Year ` NIL). 9. Electric Power, Fuel and Water charges paid to Reliance Utilities and Power Private Limited ` 369 crore (Previous Year ` 292 crore), Reliance Utilities Private Limited ` 771 crore (Previous Year ` 625 crore). 10. Hire Charges paid to Reliance Industrial Infrastructure Limited ` 21 crore (Previous Year ` 22 crore), Gujarat Chemicals Port Terminal Company Limited ` 66 crore (Previous Year ` 44 crore), Reliance Gas Transportation Infrastructure Limited ` 235 crore (Previous Year ` 652 crore), Reliance Ports and Terminals Limited ` 86 crore (Previous Year ` 72 crore), Reliance Corporate IT Park Limited ` 1 crore (Previous Year ` NIL). 11. Employee Benefits Expense to Reliance Retail Limited ` NIL (Previous Year ` 33 crore), Reliance People Serve Limited ` 3 crore (Previous Year ` 2 crore), Strategic Manpower Solutions Limited ` NIL (Previous Year ` 4 crore), Reliance Fresh Limited ` 20 crore (Previous Year ` 2 crore), Reliance Industrial Infrastructure Limited ` NIL (Previous Year ` 21 crore), Reliance Polyolefins Limited ` 5 crore (Previous Year ` NIL), Reliance Trends Limited ` 1 crore (Previous Year ` NIL). 12. Payment to Key Management Personnel include to Shri Mukesh D. Ambani ` 15 crore (Previous Year ` 15 crore), Shri Nikhil R. Meswani ` 11 crore (Previous Year ` 11 crore), Shri Hital R. Meswani ` 11 crore (Previous Year ` 11 crore), Shri P.M.S. Prasad ` 5 crore (Previous Year ` 2 crore), Shri P.K. Kapil ` 2 crore (Previous Year ` 2 crore). 13. Sales and Distribution Expenses include to Reliance Fresh Limited ` 43 crore (Previous Year ` 49 crore), Reliance Netherlands B.V. ` NIL (Previous Year ` 1 crore), Reliance Ports and Terminals Limited ` 2,370 crore (Previous Year ` 2,562 crore), Gujarat Chemicals Port Terminal Company Limited ` 11 crore (Previous Year ` 10 crore), Reliance Jamnagar Infrastructure Limited ` 7 crore (Previous Year ` NIL), Gapco Kenya Limited ` 3 crore (Previous Year ` NIL). 14. Rent paid to Reliance Jamnagar Infrastructure Limited ` 29 crore (Previous Year ` NIL). 15. Professional Fees paid to Reliance Supply Chain Solutions Limited ` 18 crore (Previous Year ` 9 crore), Reliance Corporate IT Park Limited ` 240 crore (Previous Year ` 102 crore), Reliance Netherlands B.V. ` 1 crore (Previous Year ` NIL), Reliance Europe Limited ` 27 crore (Previous Year ` 17 crore), GenNext Ventures LLP ` 2 crore (Previous Year ` NIL), Reliance Industrial Infrastructure Limited ` 9 crore (Previous Year ` NIL). 16. General Expenses include to Reliance Hypermart Limited ` NIL (Previous Year ` 2 crore), Reliance Retail Limited ` NIL (Previous Year ` 8 crore), Reliance Footprint Limited ` NIL (Previous Year ` 2 crore), Reliance Fresh Limited ` 11 crore (Previous Year ` 20 crore), Reliance Polyolefins Limited ` NIL (Previous Year ` 4 crore), Reliance Trends Limited ` 3 crore (Previous Year ` 3 crore), Reliance Gems and Jewels Limited ` 7 crore (Previous Year ` 2 crore), Reliance Industrial Infrastructure Limited ` NIL (Previous Year ` 9 crore), Reliancedigital Retail Limited ` 3 crore (Previous Year ` NIL), Indiawin Sports Private Limited ` 14 crore (Previous Year ` NIL). 17. Donations to Dhirubhai Ambani Foundation ` 86 crore (Previous Year ` 18 crore), Jamnaben Hirachand Ambani Foundation ` 8 crore (Previous Year ` 6 crore), HNH Trust and HNH Research Society ` 3 crore (Previous Year ` 2 crore), Hirachand Govardhandas Ambani Public Charitable Trust ` 1 crore (Previous Year ` NIL), Reliance Foundations ` 112 crore (Previous Year ` NIL). 18. Finance Costs include to Reliance Corporate IT Park Limited ` 18 crore (Previous Year ` 19 crore). 19. Loans and Advances include Reliance Industrial Investments and Holdings Limited ` 9,905 crore (Previous Year ` 7,792crore), Reliance Retail Limited ` 621 crore (Previous Year ` 879 crore), Reliance Strategic Investments Limited ` 22 crore (Previous Year ` NIL), Gapco Kenya Limited ` 2 crore (Previous Year ` NIL), Gapco Tanzania Limited ` 2 crore (Previous Year ` 85 crore), Gapco Uganda Limited ` 1 crore (Previous Year ` NIL), Infotel Broadband Services Limited ` 10 crore (Previous Year ` 59 crore), Recron (Malaysia) Sdn Bhd ` 7 crore (Previous Year ` 5 crore), Reliance Europe Limited ` 12 crore (Previous Year ` 7 crore), RIL USA Inc. ` 2 crore (Previous Year ` 1 crore), Reliance Holding USA Inc. ` 18 crore (Previous Year ` 60 crore), Reliance Eagleford Upstream Holding LP ` NIL (Previous Year ` 2 crore), Reliance Marcellus LLC ` 2 crore (Previous Year ` 9 crore), Reliance Energy Generation and Distribution Limited ` 3,265 crore (Previous Year ` NIL), Reliance Exploration and Production DMCC ` NIL (Previous Year ` 19 crore), Gujarat Chemicals Port Terminal Company Limited ` NIL (Previous Year ` 25 crore), Reliance Corporate IT Park Limited ` 20 crore (Previous Year ` 44 crore), Reliance Prolific Traders Private Limited (Application Money) ` 523 crore (Previous Year ` 523 crore). 20. Deposits includes Reliance Jamnagar Infrastructure Limited ` 299 crore (Previous Year ` 299 crore), Gujarat Chemicals Port Terminal Company Limited ` 42 crore (including conversion of loan given) (Previous Year ` NIL), Reliance Utilities and Power Private Limited ` 200 crore (Previous Year ` 200 crore), Reliance Ports and Terminals Limited ` 1,050 crore (Previous Year ` 1,050 crore), Reliance Utilities Private Limited ` 150 crore (Previous Year ` 150 crore). Notes on Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 151 31. (a) Disclosure of the Company’s Interest in Oil and Gas Joint Ventures: Sr. No. Name of the Fields in the Joint Ventures Panna Mukta Tapti NEC - OSN - 97/2 KG - DWN - 98/3 GS - OSN - 2000/1 KG-DWN-2003/1 MN-DWN-2003/1 KG-DWN-2005/2 CY-PR-DWN-2001/3 KK-DWN-2001/1 1 2 3 4 5 6 7 8 9 10 % Interest 30% (30%) 30% (30%) 60% (90%) 60% (90%) 90% (90%) 60% (90%) 55% (85%) 50% (50%) 70% (100%) 70% (100%) Sr. No. Name of the Fields in the Joint Ventures KK-DWN-2001/2 CY-DWN-2001/2 CB-ONN-2003/1 KG-DWN-2004/4 KG-DWN-2004/7 MN-DWN-2004/1 MN-DWN-2004/2 MN-DWN-2004/3 MN-DWN-2004/4 MN-DWN-2004/5 11 12 13 14 15 16 17 18 19 20 % Interest 70% (100%) 70% (100%) 70% (100%) 70% (100%) 70% (100%) 70% (100%) 70% (100%) 70% (100%) 70% (100%) 70% (100%) Figures in bracket represent Previous Year’s (%) Interest. (b) During the year the company received regulatory approvals for transfer of 30% Participating Interest (PI) in 21 Oil& Gas production sharing contracts including KG D6 to Ms BP Exploration (Alpha) Limited (BP). Consequently, the proceeds, net of adjustments for revenue and costs from 1st January 2011 to 30th August 2011(closing date) amounting to ` 32,198 crore have been netted off from the cost incurred against the said blocks appearing in the Intangible Assets - Development Rights and Intangible Assets under Development forming a part of Fixed Assets. (c) Disclosure of the blocks surrendered during the year: Sr. No. Name of the Fields GK - OSJ - 3 1 AS-ONN-2000/1 2 KG-DWN-2001/1 3 NEC-DWN-2002/1 4 KG - DWN -98/1 5 % Interest 60% 90% 60% 100% 70% Sr. No. Name of the Fields 6 7 8 9 10 MN - DWN 98/2 KG-OSN-2001/2 KG-OSN-2001/1 PR-DWN-2001/1 CY-PR-DWN-2001/4 % Interest 70% 100% 100% 70% 70% (d) Net Quantities of Company’s interest (on gross basis) in proved reserves and proved developed reserves : Oil: Beginning of the year Reduction on transfer of participating interest Revision of estimates Production Closing balance for the year Proved Reserves (Million MT) 2011-12 2010-11 Proved Developed Reserves (Million MT) 2010-11 2011-12 8.29 (1.69) (2.61) (0.93) 3.06 11.11 - (1.44) (1.38) 8.29 7.66 (1.65) (2.66) (0.93) 2.42 8.62 - 0.42 (1.38) 7.66 Proved Reserves (Million M3*) 2011-12 2010-11 Proved Developed Reserves (Million M3*) 2010-11 2011-12 Gas: 1,85,821 Beginning of the year (56,621) Reduction on transfer of participating interest (12,418) Revision of estimates (12,824) Production Closing balance for the year 1,03,958 * 1 cubic meter (M3) = 35.315 cubic feet and 1 cubic feet = 1000 BTU 2,11,214 - (5,771) (19,622) 1,85,821 1,07,362 (30,543) (38,836) (12,824) 25,159 1,30,823 - (3,839) (19,622) 1,07,362 152 Partnering India's new future. Sustainably. Notes on Financial Statements for the Year ended 31st March, 2012 32. As per Accounting Standard (AS) 17 on “Segment Reporting”, segment information has been provided under the Notes to Consolidated Financial Statements. 33. Reliance Jamnagar Infrastructure Limited, a wholly owned subsidiary of the Company has on 26th March 2012 filed a Scheme for amalgamation with the Company with the Hon'ble High Court of Gujarat at Ahmedabad. The Scheme shall be given effect to in the Books with effect from the Appointed Date of 1st April, 2011, upon receipt of the necessary approvals. 34. CONTINGENT LIABILITIES AND COMMITMENTS As at 31st March, 2012 (` in crore) As at 31st March, 2011 (I) Contingent Liabilities (A) Claims against the company / disputed liabilities not acknowledged as debts (a) (b) (B) Guarantees In respect of joint ventures In respect of others (i) (ii) In respect of joint ventures In respect of others Guarantees to Banks and Financial Institutions against credit facilities extended to third parties (a) (b) Performance Guarantees (a) (b) In respect of joint ventures In respect of others (iii) Outstanding guarantees furnished to Banks and Financial Institutions including in respect of Letters of Credits (a) (b) In respect of joint ventures In respect of others (C) Other Money for which the company is contingently liable (i) Liability in respect of bills discounted with Banks (Including third party bills discounting) (a) (b) In respect of joint ventures In respect of others (II) Commitments (A) Estimated amount of contracts remaining to be executed on capital account and not provided for: (a) (b) In respect of Joint Ventures In respect of others (B) Uncalled Liability on Shares and other investments partly paid [` 37,19,139] (C ) Other commitments - 1,343 - 29,583 - 159 228 5,167 - 631 340 9,923 - - 1,617 - 21,638 - 236 24 3,473 - 2,296 10 9,578 4,912 Sales tax deferral liability assigned 4,468 8,053 * The Company has issued gurantees against future cash calls to be made by JV Partners of its wholly owned (a) (b) Guarantee against future cash calls * 3,560 3,141 subsidiary Reliance Marcellus LLC. Notes on Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 153 (III) The Income-Tax assessments of the Company have been completed up to Assessment Year 2009-10. The disputed demand outstanding up to the said Assessment Year is ` 1,292 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. 35. FINANCIAL AND DERIVATIVE INSTRUMENTS a) Derivative contracts entered into by the Company and outstanding as on 31st March, 2012 (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 amount to ` 86,561 crore (Previous Year ` 98,586 crore). Category wise break up is given below: (` in crore) As at 31st March, 2011 34,254 4,567 28,181 31,584 As at 31st March, 2012 32,193 4,199 25,138 25,031 Particulars Interest Rate Swaps Currency Swaps Options Forward Contracts Sr. No. 1 2 3 4 (ii) For hedging commodity related risks : Category wise break up is given below : Sr. No. Particulars As at 31st March, 2012 Petroleum Crude Oil (in Kbbl) As at 31st March, 2011 Petroleum Crude oil product sales purchases product sales purchases 21,420 9,453 51,227 - In addition the Company has net margin hedges outstanding for contracts relating to petroleum product sales of 81,869 kbbl (Previous Year 79,308 kbbl). Forward swaps Futures Spreads Options 16,722 2,309 25,193 2,720 18,842 5,879 81,337 8,875 14,757 2,194 33,768 - 1 2 3 4 b) Foreign currency exposures that are not hedged by derivative instruments as on 31st March,2012 amount to ` 82,198 crore (Previous Year ` 65,893 crore). 36. The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2 and 3 dated 8th February 2011 and 21st February 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements. As per our Report of even date For Chaturvedi & Shah Chartered Accountants For Deloitte Haskins & Sells Chartered Accountants For Rajendra & Co. Chartered Accountants D. Chaturvedi Partner A. Siddharth Partner A.R. Shah Partner Mumbai April 20, 2012 K. Sethuraman Company Secretary Chairman & Managing Director Executive Directors - } For and on behalf of the Board M.D. Ambani N.R. Meswani H.R. Meswani P.M.S. Prasad R.H. Ambani M.L. Bhakta Y.P. Trivedi Dr. D.V. Kapur M.P. Modi Prof. Ashok Misra } Directors 154 Partnering India's new future. Sustainably. Consolidated Financial Statements & Notes Auditors’ Report on Consolidated Financial Statements Reliance Industries Limited 155 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 (collectively referred to as "the Group") as at 31st March, 2012, and the Consolidated Statement of Profit and Loss 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 the 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. 1. Financial statements / consolidated financial statements of certain subsidiaries and joint ventures, which reflect total assets of ` 56,679 crore as at 31st March, 2012, total revenue of ` 39,496 crore and net cash flows amounting to ` 51 crore for the year then ended, have been audited by one or jointly by two of us or one of us with other and financial statements of certain associates in which the share of profit of the Group is ` 11 crore have been audited by one of us. 2. We did not audit the financial statements of certain subsidiaries, whose financial statements reflect total assets of ` 2,213 crore as at 31st December, 2011/ 31st March, 2012, total revenue of ` 91 crore and cash flows amounting to ` (2) crore for the year then ended and financial statements of an associate in which the share of profit of the Group is ` 0.15 crore. These financial statements and other financial information have been audited by other auditors whose reports have been furnished to us, and our opinion is based solely on the report of other auditors. 3. We have relied on the unaudited consolidated financial statements of certain subsidiaries and joint ventures whose consolidated financial statements reflect total assets of ` 19,624 crore as at 31st December, 2011 / 31st March 2012, total revenue of ` 8,526 crore, cash flows amounting to ` (1,920) crore for the year then ended and on the unaudited financial statements of certain associates wherein the Group's share of profit aggregates ` 30 crore. These unaudited financial statements / consolidated financial statements as approved by the respective Board of Directors of these companies have been furnished to us by the Management and our report in so far as it relates to the amounts included in respect of the subsidiaries and associates is based solely on such approved unaudited financial statements / consolidated financial statements. 5. 4. We report that the consolidated financial statements have been prepared by the Company's management in accordance with the requirements of Accounting Standard (AS) 21, Consolidated Financial Statements, AS 23, Accounting for Investments in Associates in Consolidated Financial Statements and AS 27, Financial Reporting of Interests in Joint Ventures, as notified by the Companies (Accounting Standards) Rules, 2006. Based on our audit as aforesaid, and on consideration of reports of other auditors on the 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: in the case of the Consolidated Balance Sheet, (i) of the State of Affairs of the Group as at 31st March, 2012; in the case of the Consolidated Statement of Profit and Loss, of the Profit of the Group for the year ended on that date; and in the case of the Consolidated Cash Flow Statement, of the Cash Flows of the Group for the year ended on that date. (iii) (ii) For Chaturvedi & Shah For Deloitte Haskins & Sells For Rajendra & Co. Chartered Accountants Chartered Accountants (Registration No. 117366W) (Registration No. 101720W) Chartered Accountants (Registration No. 108355W) D. Chaturvedi Partner Membership No.: 5611 Membership No.: 31467 A. Siddharth Partner A. R. Shah Partner Membership No.:47166 Mumbai April 20, 2012 156 Partnering India's new future. Sustainably. Reliance Industries Limited Consolidated Balance Sheet as at 31st March, 2012 EQUITY AND LIABILITIES Shareholders’ Funds Share Capital Reserves and Surplus Share Application Money Pending Allotment Minority Interest Non-Current Liabilities Long Term Borrowings Deferred Tax Liability (net) Long Term Provisions Current Liabilities Short Term Borrowings Trade Payables Other Current Liabilities Short Term Provisions TOTAL ASSETS Non-Current Assets Fixed Assets Tangible Assets Intangible Assets Capital Work-in-Progress Intangible Assets under Development Non-Current Investments Long Term Loans and Advances Other Non-Current Assets Current Assets Current Investments Inventories Trade Receivables Cash and Bank Balance Short-Term Loans and Advances Other Current Assets TOTAL Significant Accounting Policies Notes on Financial Statements As per our Report of even date For Chaturvedi & Shah Chartered Accountants For Deloitte Haskins & Sells Chartered Accountants For Rajendra & Co. Chartered Accountants D. Chaturvedi Partner A. Siddharth Partner A.R. Shah Partner Mumbai April 20, 2012 K. Sethuraman Company Secretary Note As at 31st March, 2012 (` in crore) As at 31st March, 2011 2,979 1,66,466 2,981 1,51,112 1,69,445 - 799 77,340 1,54,093 9 802 77,521 66,236 11,071 214 13,752 36,107 20,493 4,742 79,607 3,27,191 75,094 3,07,519 1,07,149 50,951 5,339 22,835 6,911 6,839 1 1,82,342 2,00,025 14,685 38,520 15,696 30,139 5,891 2,563 1,44,849 3,27,191 1,07,494 3,07,519 65,352 11,567 421 17,283 40,368 17,553 4,403 1,03,169 35,645 6,495 18,868 11,423 6,741 1 27,173 46,692 16,939 40,731 9,754 3,560 1 2 3 4 5 6 7 8 9 10 10 10 10 11 12 13 14 15 16 17 18 19 1 to 38 Chairman & Managing Director Executive Directors - } For and on behalf of the Board M.D. Ambani N.R. Meswani H.R. Meswani P.M.S. Prasad R.H. Ambani M.L. Bhakta Y.P. Trivedi Dr. D.V. Kapur M.P. Modi Prof. Ashok Misra } Directors Reliance Industries Limited Consolidated Statement of Profit and Loss for the year ended 31st March, 2012 Reliance Industries Limited 157 Note 20 21 22 23 24 25 26 INCOME Revenue from Operations Other Income Total Revenue EXPENDITURE : Cost of Materials Consumed Purchases of Stock-in-Trade Changes in Inventories of Finished Goods, Stock-in-Process and Stock-in-Trade Employee Benefits Expense Finance Costs Depreciation and Amortisation Expense Other Expenses Total Expenses Profit before Tax Tax Expenses Current Tax Deferred Tax Profit for the year (before adjustment for Minority Interest) Add: Share of Loss transferred to Minority Interest Profit for the year (after adjustment for Minority Interest) Earnings per equity share of face value of ` 10 each Basic and Diluted (in `) Basic and Diluted (in `) (Before exceptional items) Significant Accounting Policies Notes on Financial Statements 27 27 1 to 38 As per our Report of even date For Chaturvedi & Shah Chartered Accountants For Deloitte Haskins & Sells Chartered Accountants For Rajendra & Co. Chartered Accountants D. Chaturvedi Partner A. Siddharth Partner A.R. Shah Partner Mumbai April 20, 2012 K. Sethuraman Company Secretary 2011-12 3,58,501 6,194 3,64,695 2,91,800 9,235 (2,844) 3,955 2,893 12,401 21,847 3,39,287 25,408 5,226 465 19,717 7 19,724 66.15 67.18 (` in crore) 2010-11 2,65,811 2,543 2,68,354 2,01,850 7,032 (4,458) 3,324 2,411 14,121 20,019 2,44,299 24,055 4,412 371 19,272 22 19,294 64.75 67.83 Chairman & Managing Director Executive Directors - } For and on behalf of the Board M.D. Ambani N.R. Meswani H.R. Meswani P.M.S. Prasad R.H. Ambani M.L. Bhakta Y.P. Trivedi Dr. D.V. Kapur M.P. Modi Prof. Ashok Misra } Directors 158 Partnering India's new future. Sustainably. Reliance Industries Limited Consolidated Cash Flow Statement for the year 2011-12 A: CASH FLOW FROM OPERATING ACTIVITIES: Net Profit before tax as per Profit and Loss Statement Adjusted for: 2011-12 25,408 (` in crore) 2010-11 24,055 Miscellaneous Expenditure written off Share in Income of Associates Net Prior Year Adjustments Impairment of Assets Loss on Sale / Discard of Assets (net) Depreciation and Amortisation Expense Transferred from Revaluation Reserve Transferred from Capital Reserve Effect of Exchange Rate Change Net gain on Sale of Investments Exceptional Item Dividend Income Interest Income Finance Costs Operating Profit before Working Capital Changes Adjusted for: Trade and Other Receivables Inventories Trade and Other Payables Cash Generated from Operations Net Prior Year Adjustments Taxes Paid Net Prior Year Adjustments on Account of Subsidiaries Net Cash from Operating Activities B: CASH FLOW FROM INVESTING ACTIVITIES: Purchase of Fixed Assets Sale of Fixed Assets / Transfer of Participating Interest Advance for Transfer of Participating Interest Purchase of Investments Sale of Investments Movement in Loans and Advances Interest Income Dividend Income Net Cash (used in) Investing Activities 3 59 3 1 168 16,820 (2,634) (65) (848) (531) 917 (5) (1,742) 2,411 (7,103) (4,092) 10,156 13 (70) 1 - 32 14,827 (2,356) (70) 1,010 (1,696) 309 (30) (4,167) 2,893 (1,068) (7,724) 2,044 10,696 36,104 (6,748) 29,356 (1) (4,881) 9 24,483 (16,381) 23,317 - (3,32,414) 3,17,422 676 1,052 27 (6,301) 14,557 38,612 (1,039) 37,573 (3) (4,243) 11 33,338 (33,865) 261 9,004 (2,56,162) 2,48,060 (1,345) 2,000 3 (32,044) Consolidated Cash Flow Statement for the year 2011-12 (Contd.) Reliance Industries Limited 159 C: CASH FLOW FROM FINANCING ACTIVITIES: Proceeds from Issue of Share Capital Proceeds from Issue of Share Capital to Minority Buyback of Equity Shares Proceeds from Long Term Borrowings Repayment of Long Term Borrowings Short Term Borrowings (net) Dividends Paid (including dividend distribution tax) Interest Paid Net Cash (used in) / from Financing Activities Net Increase in Cash and Cash Equivalents Opening Balance of Cash and Cash Equivalents Add: Upon addition of Subsidiaries Closing Balance of Cash and Cash Equivalents 2011-12 87 7 (279) 6,108 (9,545) 2,389 (2,772) (3,585) (7,590) 10,592 30,139 40,731 (` in crore) 2010-11 193 3 - 20,475 (6,025) 6,252 (2,431) (3,517) 14,950 16,244 13,895 30,139 13,891 4 30,139 - Note : Share application money given to Associates aggregating to ` NIL (Previous Year ` 17 crore) have been converted into investments in Equity Shares. As per our Report of even date For Chaturvedi & Shah Chartered Accountants For Deloitte Haskins & Sells Chartered Accountants For Rajendra & Co. Chartered Accountants D. Chaturvedi Partner A. Siddharth Partner A.R. Shah Partner Mumbai April 20, 2012 K. Sethuraman Company Secretary Chairman & Managing Director Executive Directors - } For and on behalf of the Board M.D. Ambani N.R. Meswani H.R. Meswani P.M.S. Prasad R.H. Ambani M.L. Bhakta Y.P. Trivedi Dr. D.V. Kapur M.P. Modi Prof. Ashok Misra } Directors 160 Partnering India's new future. Sustainably. SIGNIFICANT ACCOUNTING POLICIES ON CONSOLIDATED ACCOUNTS A. Principles of consolidation The consolidated financial statements relate to Reliance Industries Limited (‘the Company’) and its subsidiary companies, associates and joint ventures. 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 in accordance with Accounting Standard (AS) 21 - “Consolidated Financial Statements” b) c) Interest in Joint Ventures have been accounted by using the proportionate consolidation method as per Accounting Standard (AS) 27 - “Financial Reporting of Interest in Joint Ventures”. 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. d) 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. e) The difference between the proceeds from disposal of investment in subsidiaries and the carrying amount of its assets less liabilities as of the date of disposal is recognised in the consolidated Profit and Loss account being the profit or loss on disposal of investment in subsidiary. f) 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. g) 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. h) i) j) Investment in Associate Companies has been accounted under the equity method as per (AS 23) - “Accounting for Investments in Associates in Consolidated Financial Statements”. The Company accounts for its share in change in 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 Statement of Profit and Loss to the extent such change is attributable to the associates’ Profit or Loss through its reserves for the balance, based on available information. The difference between the cost of investment in the associates and the share of net assets at the time of acquisition of shares in the associates is identified in the financial statements as Goodwill or Capital Reserve as the case may be. k) 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. B. Investments other than in subsidiaries and associates have been accounted as per Accounting Standard (AS) 13 on “Accounting for Investments”. C. Other significant accounting policies These are set out under “Significant Accounting Policies” as given in the Company’s separate financial statements. Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 161 The previous year figures have been regrouped / reclassified, wherever necessary to conform to the current year presentation. 1. SHARE CAPITAL Authorised Share Capital 500,00,00,000 Equity Shares of ` 10 each (500,00,00,000) 100,00,00,000 Preference Shares of ` 10 each (100,00,00,000) Issued, Subscribed and Paid up: 297,87,04,713 Equity Shares of ` 10 each fully (298,10,19,381) paid up Less: Calls in arrears - by others [` 3,653 (Previous Year ` 3,653)] TOTAL As at 31st March, 2012 (` in crore) As at 31st March, 2011 5,000 1,000 6,000 2,979 2,979 2,979 - 5,000 1,000 6,000 2,981 2,981 2,981 - 1.1 145,94,41,214 Shares out of the issued, subscribed and paid up share capital were allotted as Bonus Shares in the last five (145,94,41,214) years by capitalisation of Securities Premium and Reserves. 1.2 12,93,92,979 Shares out of the issued, subscribed and paid up share capital were allotted in the last five years pursuant to (12,93,92,979) the various Schemes of amalgamation without payments being received in cash. 1.3 45,04,27,345 Shares out of the issued, subscribed and paid up share capital were allotted on conversion / surrender of (45,04,27,345) Debentures and Bonds, conversion of Term Loans, exercise of warrants, against Global Depository Shares (GDS) and re-issue of forfeited equity shares, since inception. 1.4 The reconciliation of the number of shares outstanding is set out below : Particulars Equity Shares at the beginning of the year Add : Shares issued on exercise of Employee Stock Options Less : Shares cancelled on buy back of Equity Shares As at 31st March, 2012 No. of Shares 298,10,19,381 13,48,763 36,63,431 As at 31st March, 2011 No. of Shares 297,80,19,733 29,99,648 - Equity Shares at the end of the year 297,87,04,713 298,10,19,381 1.5 The Company has reserved issuance of 13,39,30,481 (Previous Year 13,52,79,244) Equity Shares of ` 10/- each for offering to eligible employees of the Company and its subsidiaries under Employees Stock Option Scheme (ESOS). During the year, the Company has granted 68,817 [Previous Year 35,200] Options to the eligible employees which includes 4,100 options at a price of ` 972/- per option, 18,000 options at a price of ` 871/- per option, 23,717 options at a price of ` 847 per option, 15,000 options at a price of ` 765 per option and 8,000 options at a price of ` 715 per option (Previous Year, 16,000 options at a price of ` 995 per option and 19,200 options at a price of ` 929 per option) plus all applicable taxes, as may be levied in this regard on the Company. The options would vest over a maximum period of 7 years or such other period as may be decided by the Employees Stock Compensation Committee from the date of grant based on specified criteria. 1.6 Issued, Subscribed and paid up capital excludes 29,23,54,627 (Previous Year 29,23,54,627) equity shares directly held by subsidiaries/trust, before their becoming subsidiaries of the Company, which have been eliminated. 1.7 The Board of Directors of the Company approved the buyback of upto 12 crore fully paid up equity shares of ` 10/- each, at a price not exceeding ` 870/- payable in cash, upto an aggregate amount not exceeding ` 10,440 crore from the open market through Stock Exchange(s). During the year the company has bought back and extinguished 36,63,431 Equity Shares of ` 10/- each. 162 Partnering India's new future. Sustainably. Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 2. RESERVES AND SURPLUS Revaluation Reserve As per last Balance Sheet Add: On Revaluation Less: Transferred to Profit and Loss Account (Refer Note No. 10.8) Less: Transferred to / (from) Minority Interest Less: Utilised on Demerger Adjustments Capital Reserve As per last Balance Sheet Add: On Consolidation of Subsidiaries (Net) Less: Transferred to Profit and Loss Account Exchange Fluctuation Reserve Capital Redemption Reserve As per last Balance Sheet Add : Transferred from Profit and Loss Account on buy back of Equity Shares Securities Premium Reserve As per last Balance Sheet Add : On issue of shares Less : On Redemption / buy back of Debentures/Bonds Less : On buy back of Equity Shares Less : Elimination on Consolidation Less : Calls in arrears - by others (` 2,21,548; Previous Year ` 2,21,548) Debentures Redemption Reserve As per last Balance Sheet (` in crore) As at 31st March, 2012 As at 31st March, 2011 6,085 9 6,094 2,356 (2) - 697 (24) 673 70 9 4 45,459 85 45,544 11 275 - 45,258 - 9,414 12 9,426 2,634 3 704 3,740 6,085 817 (55) 762 65 9 - 697 (142) 603 1,069 13 9 45,394 190 45,584 - - 125 45,459 - 45,258 1,117 45,459 1,117 Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 163 Statutory Reserve As per last Balance Sheet Less : Transferred to Minority Interest (` 1,72,043; Previous Year ` 28,387) Add : Transferred from Profit and Loss Account General Reserve* As per last Balance Sheet Add: Transferred from Profit and Loss Account Share in Reserves of Associates Revaluation Reserve As per last Balance Sheet Profit and Loss Account As per last Balance Sheet (Short) Provision for Tax for earlier years [(` 28,34,742); Previous Year (` 36,78,049)] Excess Provision for Tax for earlier years - Minority Interest [` NIL; Previous Year ` 4,40,334)] Add: Profit for the year Less: Appropriations Transferred to Statutory Reserve Transferred to General Reserve Transferred to Capital Redemption Reserve on buy back of Equity Shares Proposed Dividend on Equity Shares [Dividend per Share ` 8.5/-; (Previous Year ` 8/-)] Tax on Dividend Proposed Dividend on Preference Shares (Minority Interest ` 19,880/-; Previous Year ` 19,880/-) Tax on Dividend on Preference Shares (Minority Interest ` 3,225/-; Previous Year ` 3,225/-) TOTAL As at 31st March, 2012 (` in crore) As at 31st March, 2011 72 - 6 55 - 17 78 72 84,004 16,000 68,004 16,000 1,00,004 84,004 10 10 13,801 - - 19,724 33,525 6 16,000 4 2,531 410 - - 13,297 - - 19,294 32,590 17 16,000 - 2,385 387 - - 14,574 1,66,466 13,801 1,51,112 2.1 * Cumulative amount withdrawn on account of Depreciation on Revaluation is ` 2,563 crore. In view of the loss for the year, the subsidiary Company Infotel Broadband Services Limited has not created the Debenture Redemption Reserve of ` 152 crore (Previous Year ` 52 crore) in terms of section 117C of the Companies Act, 1956. The Company shall create the Debenture Redemption Reserve out of profits, if any, in the future years. 164 Partnering India's new future. Sustainably. Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 3. LONG TERM BORROWINGS Secured Non Convertible Debentures Term Loans from Banks Long Term Maturities of Finance Lease Obligation Unsecured Bonds / Debentures Term Loans- from Banks Deferred Payment Liabilities TOTAL (` in crore) As at 31st March, 2012 As at 31st March, 2011 Non Current Current Non Current Current 6,024 3,044 9,353 5 38 2 10 3 42 6,067 3,056 9,398 14,376 44,900 9 59,285 65,352 - 6,753 3 6,756 9,812 12,542 44,284 12 56,838 66,236 655 3 4 662 - 3,499 3 3,502 4,164 3.1 Non Convertible Debentures referred above to the extent of: a) b) c) d) e) f) g) h) ` 1,593 crore are secured by way of first mortgage / charge on the immovable properties situated at Hazira Complex and at Jamnagar Complex (other than SEZ unit) of the Company. ` 5,000 crore are secured by way of first mortgage / charge on the immovable properties situated at Jamnagar Complex (other than SEZ unit) of the Company. ` 1,720 crore are secured by way of first mortgage / charge on all the properties situated at Hazira Complex and at Patalganga Complex of the Company. ` 110 crore are secured by way of first mortgage / charge on certain properties situated at village Mouje Dhanot, District Kalol in the State of Gujarat and on fixed assets situated at Hoshiarpur Complex of the Company. ` 50 crore are secured by way of first mortgage / charge on certain properties situated at Ahmedabad in the State of Gujarat and on fixed assets situated at Nagpur Complex of the Company. ` 44 crore are secured by way of first mortgage / charge on certain properties situated at Surat in the State of Gujarat and on fixed assets situated at Allahabad Complex of the Company. ` 51 crore are secured by way of first mortgage / charge on movable and immovable properties situated at Thane in the State of Maharashtra and on movable properties situated at Baulpur Complex of the Company. ` 500 crore are secured by way of first mortgage / charge on the immovable properties situated at Jamnagar Complex (SEZ unit) of the Company. Secured Term Loans from banks are secured by hypothecation of vehicles and are repayable over a period of 3 to 5 years. Finance Lease Obligations are secured against leased assets 3.2 3.3 Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 165 4. DEFERRED TAX LIABILITY (Net) Deferred Tax Liability Related to Fixed Assets Deferred Tax Assets Related to Fixed Assets Disallowance under the Income Tax Act, 1961 Carried Forward Loss of Subsidiaries TOTAL As at 31st March, 2012 (` in crore) As at 31st March, 2011 14,336 12,479 1,577 93 1,099 318 189 901 2,769 11,567 1,408 11,071 5. LONG TERM PROVISIONS (` in crore) As at 31st March, 2011 207 Provisions for Annuities 7 Others # TOTAL 214 # Includes provision for Decommissioning, Assets retirement obligations and Liability for derivative transaction. As at 31st March, 2012 236 185 421 6. SHORT TERM BORROWINGS Secured Working Capital Loans From Banks Foreign Currency Loans Rupee Loans Unsecured A. Other Loans and Advances From Banks Foreign Currency Loans * Rupee Loans Loans from related parties (Refer Note No. 28) B. TOTAL * Includes Buyers Credit 6.1. Working Capital Loans referred above to the extent of : As at 31st March, 2012 (` in crore) As at 31st March, 2011 1,004 19 312 252 1,023 564 14,627 1,580 13,158 8 16,207 53 17,283 13,166 22 13,752 a) ` 863 crore (Previous Year ` 563 crore) are secured by hypothecation of present and future stock of raw materials, stock-in-process, finished goods, stores and spares (not relating to plant and machinery), book debts, outstanding monies, receivables, claims, bills, materials in transit, etc. save and except receivable of Oil and Gas Division. ` 160 crore (Previous Year ` NIL) is secured by hypothecation of Plant and Machinery. ` NIL (Previous Year ` 1 crore) are secured by way of lien against term deposits with banks. 6.2 Other loans and advances from banks include commercial paper of ` NIL (Previous Year ` NIL). Maximum balance b) c) outstanding at any time during the year being ` NIL (Previous Year ` 4,825 crore). 166 Partnering India's new future. Sustainably. Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 7. TRADE PAYABLES Micro, Small and Medium Enterprises Others TOTAL 8. OTHER CURRENT LIABILITIES Current maturities of long term debt (Refer Note No. 3) Current maturities of finance lease obligations (Refer Note No. 3) Interest accrued but not due on borrowings Unclaimed Dividend # Application money received and due for refund # Unpaid matured debentures and interest accrued thereon # Creditors for Capital Expenditure Advance for Transfer of Participating Interest Other Payables * TOTAL (` in crore) As at 31st March, 2012 As at 31st March, 2011 33 40,335 40,368 8 36,099 36,107 (` in crore) As at 31st March, 2012 As at 31st March, 2011 9,802 10 523 129 1 1 1,375 - 5,712 17,553 4,160 4 615 111 1 1 2,825 9,004 3,772 20,493 * Includes statutory dues, security deposits, Interest Accrued, advance from customers and Income received in advance. # These figures do not include any amounts, due and outstanding, to be credited to Investor Education and Protection Fund except ` 9 crore (Previous Year ` 8 crore) which is held in abeyance due to legal cases pending. 9. SHORT TERM PROVISIONS Provisions for Superannuation/Gratuity/Leave Encashment Proposed Dividend Tax on Dividend Provision for Wealth Tax Provision for Income Tax Other Provisions * TOTAL (` in crore) As at 31st March, 2012 As at 31st March, 2011 235 2,531 410 79 50 1,098 4,403 276 2,385 387 64 43 1,587 4,742 * Includes primarily provision for customs duty, Excise Duty on Finished Goods, Other duties and taxes. Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 167 10. FIXED ASSETS (` in crore) Description Gross Block Depreciation / Amortisation Net Block As at Additions/ Deductions/ 01-04-2011 Adjustments Adjustments As at As at 31-03-2012 01-04-2011 For the Year Deductions/ Adjustments Upto 31-03-2012 As at 31-03-2012 As at 31-03-2011 2,396 5,884 10,905 1,36,573 4,125 7,790 863 341 386 68 1,69,331 TANGIBLE ASSETS : OWN ASSETS : Leasehold Land Freehold Land Buildings Plant & Machinery Electrical Installations Equipments $ Furniture & Fixtures Vehicles Ships Aircrafts & Helicopters Sub-Total LEASED ASSETS : Plant & Machinery Ships Sub-Total Total (A) INTANGIBLE ASSETS* : Technical Knowhow fees Software Development Rights Others Total (B) Total (A+B) Previous Year Capital Work-in-Progress Intangible Assets under Development 3,266 616 61,195 3,605 68,682 2,38,293 2,24,126 270 10 2 8 0 1,69,611 200 360 639 4,113 208 385 129 82 - - 6,116 4 - 4 6,120 203 6 20,165 171 20,545 26,665 15,251 12 22 86 722 19 34 12 39 - 23 9 6 9 - - - 9 6 9 - 1 30,513 - 30,514 31,483 1,084 2,584 6,222 11,458 1,39,964 4,314 8,141 9 8 0 3 8 4 3 8 6 4 5 1,74,478 2 7 4 1 0 2 8 4 1,74,762 3,469 6 2 1 50,847 3,776 58,713 2,33,475 2,38,293 272 - 2,728 55,674 1,432 1,405 364 172 240 28 62,315 137 10 1 4 7 62,462 1,565 444 14,961 761 17,731 80,193 63,934 117 - 343 8,321 203 404 69 50 14 5 9,526 31 - 3 1 9,557 160 43 4,957 110 5,270 14,827 16,820 (4) - (11) 397 2 4 3 25 - 10 4 2 6 - - - 4 2 6 - (8) (59) - (67) 3 5 9 561 3 9 3 - 3,082 63,598 1,633 1,805 4 3 0 1 9 7 2 5 4 2 3 71,415 1 6 8 1 0 1 7 8 71,593 1,725 4 9 5 19,977 8 7 1 23,068 94,661 80,193 2,191 6,222 8,376 76,366 2,681 6,336 5 5 0 1 8 7 1 3 2 2 2 1,03,063 1 0 6 - 1 0 6 1,03,169 1,744 1 2 6 30,870 2,905 35,645 1,38,814 1,58,100 6,495 18,868 2,124 5,884 8,177 80,899 2,693 6,385 499 169 146 40 1,07,016 133 - 1 3 3 1,07,149 1,701 172 46,234 2,844 50,951 1,58,100 5,339 22,835 $ Includes Office Equipments * Other than internally generated 10.1 Leasehold Land includes ` 203 crore (Previous Year ` 203 crore) in respect of which lease-deeds are pending execution. 10.2 Buildings include : i) Cost of shares in Co-operative Housing Societies ` 1 crore (Previous Year ` 1 crore). ii) ` 5 crore (Previous Year ` 5 crore) in respect of which conveyance is pending. iii) ` 93 crore (Previous Year ` 93 crore) in shares of Companies / Societies with right to hold and use certain area of Buildings. 168 Partnering India's new future. Sustainably. Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 10.3 Intangible assets - Others include : i) ii) Jetties amounting to ` 812 crore (Previous Year ` 647 crore), the Ownership of which 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. ` 2,919 crore (Previous Year ` 2,919 crore) in shares of companies and lease premium paid with right to hold and use Land and Buildings. 10.4 Capital Work-in-Progress and Intangible Assets under Development include: i) ii) ` 3,948 crore (Previous Year ` 2,460 crore) on account of project development expenditure. ` 1,406 crore (Previous Year ` 1,594 crore) on account of cost of construction materials at site. 10.5 Gross Block includes ` 11 crore added on revaluation of Buildings, Plant & Machinery and Storage Tanks as at 31.12.2010, ` 12,901 crore added on revaluation of Buildings, Plant & Machinery and Equipments as at 01.01.2009, ` 238 crore added on revaluation of Buildings, Plant & Machinery and Storage Tanks as at 31.12.2009 and ` 155 crore added on revaluation of Buildings, Plant & Machinery and Storage Tanks as at 22.12.2008, based on reports issued by international valuers. 10.6 Additions in Plant and Machinery, Intangible Assets - Development Rights and Intangible Assets under Development include ` 7,924 crore (net loss) [Previous Year ` 41 crore (net gain)] on account of exchange difference during the year. 10.7 Project Development Expenditure: (in respect of Projects upto 31st March, 2012, included under Capital Work-in-Progress and Intangible Assets under Development) Opening Balance Add: Transferred from Profit and Loss Statement (Refer Note No. 26) Expenses on Project under Construction Interest Capitalised In respect of Subsidiary acquired during the year Less: Project Development Expenses Capitalised during the year 2011-12 2,460 (` in crore) 2010-11 2,005 123 255 1,208 - 30 8 1,024 16 1,586 98 1,078 623 Closing Balance 2,460 10.8 The Gross Block of Fixed Assets includes ` 38,517 crore (Previous Year ` 38,517 crore) on account of revaluation of Fixed Assets. Consequent to the said revaluation, there is an additional charge of depreciation of ` 2,356 crore (Previous Year ` 2,634 crore) and an equivalent amount, has been withdrawn from Revaluation Reserve and credited to the Statement of Profit and Loss. This has no impact on profit for the year. 3,948 Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 169 11. NON-CURRENT INVESTMENTS (Long Term Investments) A . INVESTMENTS IN ASSOCIATES In Equity Shares - Quoted, fully paid up 68,60,064 Reliance Industrial Infrastructure Limited (68,60,064) of ` 10 each In Equity Shares - Unquoted, fully paid up 11,08,500 Reliance Europe Limited of Sterling Pound 1 each (11,08,500) 22,500 Reliance LNG Limited of ` 10 each (22,500) (` 2,22,012 ; Previous Year ` 2,22,012) 5,000 Reliance Commercial Trading Private Limited (5,000) of ` 10 each (` NIL ; Previous Year ` NIL) 74,99,990 Reliance Commercial Dealers Limited of ` 10 each (49,99,990) 10,40,000 Delta Hydrocarbons S.A. Luxembourg (10,40,000) 7,12,47,314 Delta Corp East Africa Limited of KES 10 each (7,12,47,314) 62,63,125 Indian Vaccines Corporation Limited of ` 10 each (62,63,125) 64,29,20,000 Gujarat Chemicals Port Terminal Company Limited (64,29,20,000) of ` 1 each 26,00,000 Reliance Utilities Private Limited Class ‘A’ Shares (22,50,000) of ` 1 each (` 20,50,000 ; Previous Year ` 22,50,000) 26,00,000 Reliance Utilities and Power Private Limited Class ‘A’ Shares (22,70,000) of ` 1 each (` 19,90,000 ; Previous Year ` 22,70,000) 5,000 Gaurav Overseas Private Limited of ` 10 each (5,000) 2,000 Reliance Investments Holdings B.V. (2,000) of Euro 50 each 25,000 Paradise Global Enterprises B.V. of Euro 1 each (25,000) (` 17,16,688 ; Previous Year ` 14,93,750) 250 Reliance Investments Sarl of Euro 25 each (250) (` 69 ; Previous Year ` 60) 37,24,971 Deccan Cargo & Express Logistics Private Limited (37,24,971) of ` 100 each EFS Midstream LLC 49,04,372 Algenol LLC (-) 2,20,00,000 Aurora Algae Inc. (-) 46,87,500 Extramarks Education Private Limited of ` 10 each (-) As at 31st March, 2012 (` in crore) at 31st March, 2011 As 125 125 28 - - 10 27 93 1 68 - - - 1 - - - 1,133 503 117 125 2,106 114 114 28 - - 7 22 64 1 58 - - - 1 - - - 527 - - - 708 170 Partnering India's new future. Sustainably. Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 As at 31st March, 2012 (` in crore) As at 31st March, 2011 2,915 In Preference Shares - Unquoted, Fully paid up 50,00,00,000 9% Non Cumulative Redeemable Preference Shares of 2,000 (50,00,00,000) Reliance Gas Transportation Infrastructure Limited of ` 10 each 2,000 2,000 2,000 In Debentures - Unquoted, Fully Paid Up 4,22,335 Zero Coupon Secured Optionally Fully (4,22,335) Convertible Debentures of Reliance Commercial Trading Private Limited of ` 1,000 each. 30,47,704 Compulsorily Convertible Debentures of (30,47,704) Deccan Cargo & Express Logistics Private Limited of ` 100 each. Total Investment in Associates (A) B. INVESTMENTS IN OTHERS In Government and other Securities - Unquoted 6 Years National Savings Certificate (Includes deposited with Sales Tax Department and other Govt. Authorities) (` 19,43,420 ; Previous Year ` 10,66,420) Trade Investments In Equity Shares-Unquoted, fully paid up 1,00,00,000 Petronet India Limited of ` 10 each (1,00,00,000) 25 The Colaba Central Co-operative Consumer’s (25) Wholesale and Retail Stores Limited. (Sahakari Bhandar) of ` 200 each (` 5,000 ; Previous Year ` 5,000) 5,000 Retailers Association’s Skill Council of India of ` 10 each (-) (` 1,00,000 ; Previous Year ` NIL) Other Investments In Equity Shares-Quoted, fully paid up 14,87,160 Den Networks Limited of ` 10 each (19,84,860) 10,59,07,273 EIH Limited (8,45,92,273) of ` 2 each 4,85,32,764 Himachal Futuristic Communications Limited (4,85,32,764) of ` 1 each 4,276 42 3 45 - - 10 - - 10 13 42 51 93 - - 10 - - 10 17 1,433 57 1,241 57 Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 171 As at 31st March, 2012 (` in crore) As at 31st March, 2011 8,72,011 HDFC Bank Limited of ` 2 each (-) 1,44,00,500 HDFC Limited of ` 2 each (-) 2,28,232 Axis Bank Limited of ` 10 each (-) 2,67,751 Canara Bank Limited of ` 10 each (-) 9,12,919 ICICI Bank Limited of ` 10 each (-) 1,80,258 Punjab National Bank of India of ` 10 each (-) 5,40,727 State Bank of India of ` 10 each (-) In Equity Shares-Unquoted, fully paid up 85,000 National Stock Exchange of India Limited (85,000) of ` 10 each 1,000 Air Control and Chemical Engineering Company (1,000) Limited of ` 1 each (` 1,500 ; Previous Year ` 1,500) 1,500 Reliance Research and Development Services Private (1,500) Limited of `10 each (` 15,000 ; Previous Year ` 15,000) 18 Parabool Enterprises B.V. (18) of Euro 100 each 2,53,800 Shinano Retail Private Limited of `10 each (1,800) (` 25,38,000 ; Previous Year ` 18,000) - Sharanya Trading Private Limited of ` 10 each (1,800) (` NIL ; Previous Year ` 18,000) 1,800 Teesta Retail Private Limited of `10 each (` 18,000 ; Previous Year ` 18,000) (1,800) 5,000 Reliance Apparel India Private Limited of `10 each (-) (` 1,00,000 ; Previous Year ` NIL) 33,78,378 Terra Power LLC (-) In Preference Shares - Unquoted, Fully paid up - 10% Non Cumulative Optionally Convertible (14,00,000) Preference Shares of Shinano Retail Private Limited of ` 10 each 39 949 26 12 79 16 112 2,736 28 - - 47 - - - - 10 85 - - - - - - - - - 1,315 28 - - 43 - - - - - 71 700 700 172 Partnering India's new future. Sustainably. Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 As at 31st March, 2012 (` in crore) As at 31st March, 2011 In Debentures - Quoted, fully paid up (5,000) - Citi Corporation Finance (India) Limited - Secured Non Convertible Redeemable Debentures of ` 1,00,000 each - Series 324 (5,000) - Citi Corporation Finance (India) Limited - Secured Non Convertible Redeemable Debentures of ` 1,00,000 each - Series 325 (5,000) (40,000) - Citi Corporation Finance (India) Limited - Secured Non Convertible Redeemable Debentures of ` 1,00,000 each - Series 331 - Citifinancial Consumer Finance India Limited - Non Convertible Redeemable Debentures of ` 1,00,000 each - Series 428 In Debentures - Unquoted, fully paid up 1,00,00,000 Zero Coupon Unsecured Optionally Fully (1,00,00,000) Convertible Debentures of Reliance KG Exploration & Production Private Limited of ` 10 each In Units of Fixed Maturity Plan - Quoted, fully paid up (Face Value of ` 10 each) 5,00,00,000 Axis Fixed Term Plan - (Series 21/22) - Growth (-) 47,00,00,000 Birla Sunlife Fixed Term Plan (-) - (Series ES/EV/EY/FC) - Growth 40,50,00,000 DSP Blackrock Fixed Maturity Plan (15,00,00,000) - (Series 18/37/38/43) - Growth 20,30,00,000 DWS Fixed Maturity Plan (-) - (Series 6/7/9/10) - Growth 54,70,00,000 HDFC Fixed Maturity Plan - (Series XVI/XXI) - Growth 4,50,00,000 HSBC Fixed Term Plan - Series 86 - Growth (17,50,00,000) (-) 71,50,00,000 ICICI Prudential Fixed Maturity Plan - Cumulative (3,00,00,000) 19,20,00,000 IDFC Fixed Maturity Plan - (Series 7/8/65) - Growth (Series 62/63/54) (-) 3,50,00,000 India Bulls Fixed Maturity Plan - Growth (-) 15,00,00,000 JP Morgan Fixed Maturity Plan - Series VI - Growth (-) 27,00,00,000 Kotak Fixed Maturity Plan - (Series 76/80/82) - Growth (-) 3,50,00,000 LIC Nomura MF Fixed Maturity Plan (-) - Series 52 - Growth - - - - - 10 10 50 470 405 203 547 45 715 192 35 150 270 35 50 50 50 400 550 10 10 - - 150 - 175 - 30 - - - - - Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 173 As at 31st March, 2012 (` in crore) As at 31st March, 2011 17,30,00,000 Religare Fixed Maturity Plan - (Series XIII/XIV) - Growth 16,00,00,000 SBI Debt Fund - (Series 11/12/13) - Growth (-) (40,00,00,000) 4,00,00,000 Sundaram Fixed Term Plan - Growth (-) 13,50,00,000 Tata Fixed Maturity Plan - (Series 39/40) - Growth (-) - Canara Robeco Fixed Maturity Plan (6,00,00,000) - Series 6 - Growth Plan In Units-Unquoted, fully paid up (-) 1,15,35,485 DWS Insta Cash Plus Fund - Institutional - Bonus Option of ` 10 each 3,37,19,111 DWS Insta Cash Plus Fund - Bonus Option of ` 10 each (-) In Public Sector Undertakings / Public Financial Institutions & Corporate Bonds - Quoted, fully paid up 1,287 11.80% TISCO Perpetual Bonds (-) of ` 10,00,000 each In Others 7,20,000 Faering Capital India Evolving Fund (4,50,000) of ` 1,000 each 4,05,950 HDFC India Real Estate of ` 1,000 per unit (8,85,476) 50,000 JM Financial Property Fund - I of ` 9,722.59 per unit (50,000) (Previous Year ` 10,000 per unit) MPM Bioventure IV - QP, LP, USA 5,000 Multiples Private Equity Fund Scheme 1 (5,000) of ` 1,00,000 each (` 25,700 paid up) 2,000 Peninsula Realty Fund of ` 1,00,000 each. (2,000) 21,600 Urban Infrastructure Opportunities Fund (20,000) of ` 91,500 per unit (Previous Year ` 1,00,000 per unit) - Urban Infrastructure Opportunities Fund (8,000) of ` 1,00,000 per unit (` 20,000 paid up) 25,000 LICHFL Urban Development Fund (-) of ` 10,000 each (` 2,000 paid up) Sundaram Mutual Fund (` 5,000 ; Previous Year ` NIL) 173 160 40 134 - 3,624 11 33 44 131 131 72 43 49 101 13 23 201 - 5 - 507 - 400 - - 60 815 - - - - - 45 95 50 92 3 21 200 19 - - 525 Total Long Term Investments (A + B) Total Investments in Others (B) 7,147 11,423 3,996 6,911 174 Partnering India's new future. Sustainably. Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 12. LONG-TERM LOANS AND ADVANCES (Unsecured Considered Good) Capital Advances Deposits# Loans and Advances to Related Parties (Refer Note No. 28) Advance Income Tax (Net of Provision) Other Loans and Advances* TOTAL As at 31st March, 2012 (` in crore) As at 31st March, 2011 2,260 2,453 277 1,329 422 6,741 1,568 2,141 146 1,428 1,556 6,839 # Includes ` 1,873 crore (Previous Year ` 1,705 crore) relating to Deposits with related parties (Refer Note No. 28) * Includes claims receivable from statutory authorities, loans to employees etc. 13. OTHER NON CURRENT ASSETS Miscellaneous Expenditure (to the extent not written off or adjusted) TOTAL 14. CURRENT INVESTMENTS Investments in Debentures - Quoted, fully paid up 5,000 Citi Corporation Finance (India) Limited - (-) Secured Non Convertible Redeemable Debentures of ` 1,00,000 each - Series 331 Investments in Equity Shares-Quoted, fully paid up 4,61,520 Den Networks Limited of ` 10 each (-) Investments in Government Securities - Quoted, fully paid up As at 31st March, 2012 1 1 As at 31st March, 2012 (` in crore) As at 31st March, 2011 1 1 (` in crore) As at 31st March, 2011 47 4 - - 7.59 % GOI 2016 7.99 % GOI 2017 6.35 % GOI 2020 8.53 % MHA SDL 2020 (` 30,000) 8.13 % OIL MKT COS SB 2021 (` 14,80,000 ; Previous Year ` NIL) 8.13% GOI 2022 (` 48,000 ; Previous Year ` NIL) 7.80% GOI 2020 (` 7,91,000 ; Previous Year ` NIL) 8.65% WB 2021 (` 1,00,000 ; Previous Year ` NIL) 8.75% SAIL 9.64% PGC 2016 Bond 9.35% PGC 2016 Bond 8.08% GOI 2022 8.97% Kerala GS 2022 9.48% REC SR 101 5 - 1 - - - - - 3 1 1 2 2 3 5 1 1 3 - - - - - - - - - - 18 10 Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 175 As at 31st March, 2012 (` in crore) As at 31st March, 2011 Investments in Units of Fixed Maturity Plan - Quoted, fully paid up (Face Value of ` 10 each) 6,50,00,000 Axis Fixed Term Plan - (Series 13/15/16) - Growth (6,00,00,000) 1,20,00,000 Baroda Pioneer Fixed Maturity Plan - (Series 1/2) (1,50,00,000) 61,00,00,000 Birla Sun Life Fixed Term Plan - - Growth (1,38,00,00,000) (Series CM CO to CW/DB/DL/DN/DO/DQ/DS/EW/FA) Growth 10,00,00,000 Canara Robeco Fixed Maturity Plan - (Series 6 -13/ 7) (5,00,00,000) 41,00,00,000 DSP Blackrock Fixed Maturity Plan - (Series 7/10/11 to18/39) - Growth - Growth (75,00,00,000) 14,30,00,000 DWS Fixed Maturity Plan - (Series 11/90/92) - Growth (-) - Fidelity Mutual Fund - Series 5, Plan F - Growth (3,50,00,000) 44,00,00,000 HDFC Fixed Maturity Plan (13,80,00,000) - (Series XIV/XVI/XVIII/XXI/XIX) - Growth - HSBC Fixed Term (Series 79) - Growth (10,00,00,000) 39,00,00,000 ICICI Prudential Fixed Maturity Plan (1,26,50,00,000) - Series 51/54/55/56/59/63 - Cumulative 5,00,00,000 ICICI Prudential Fixed Maturity Plan - Series 55 - Dividend (-) 12,04,25,008 ICICI Prudential Interval Fund - Institutional Cumulative IDBI Fixed Maturity Plan (Series I) - Growth (-) - (7,50,00,000) 15,50,00,000 IDFC Fixed Maturity Plan (47,00,00,000) - Yearly (Series 37/38/40/41/42/52/64/66) - Growth 10,50,00,000 JPM Fixed Maturity Plan - (Series 8) - Growth (-) - (18,00,00,000) JPMorgan India Fixed Maturity Plan (Series 1) - Growth 23,00,00,000 Kotak Fixed Maturity Plan (Series 57/60/62/83) (-) - Growth 6,00,00,000 Religare Fixed Maturity Plan (Series- IX/VIII) (-) - Growth Plan 7,650,00,000 SBI Debt Fund (Series- 6/7/9/10/11/12/17/18/19) (32,50,00,000) - Growth 2,20,00,000 Sundaram Fixed Term Plan - Growth (2,50,00,000) 24,00,00,000 Tata Fixed Maturity Plan (Series 31/34/36/37) - Growth (6,40,00,000) 6,66,98,706 UTI Fixed Income Interval Fund (Series II/III/IX-I) (15,00,00,000) - Growth 2,61,12,073 UTI Fixed Income Interval Fund (Series IX-IV) (-) - Dividend - Reinvestment 65 12 610 100 410 143 - 440 - 390 50 130 - 155 105 - 230 60 765 22 240 83 26 60 15 1,380 50 750 - 35 138 100 1,265 - - 75 470 - 180 - - 325 25 64 150 - 4,036 5,082 176 Partnering India's new future. Sustainably. Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 As at 31st March, 2012 (` in crore) As at 31st March, 2011 1,021 15,720 Investment in Units - Quoted 41,19,71,606 Birla Sunlife Dynamic Bond Fund - Retail - Growth (-) 2,48,38,796 DWS Premium Bond Fund - Premium Plus Growth Plan (-) 3,77,86,469 DWS Short Maturity Fund - Premium Plus Growth Plan (-) 3,99,55,814 ICICI Prudential Institutional Short Term Plan (-) - Cumulative Option 7,37,24,677 LIC Nomura MF Liquid Fund - Growth Plan (-) Investments in certificate of deposits with Scheduled Banks - Quoted Investments in Debentures/Bonds - Quoted, fully paid up 250 Axis Bank Limited (-) 1,000 CitiFinancial Consumer Finance (1,000) India Limited 1,250 EXIM Bank of India (2,250) 18,387 Housing Development Finance (15,187) Corporation Limited 10,750 Infrastructure Development Finance (5,000) Company Limited 15,095 India Infrastructure Finance Company Limited (-) 32,62,862 Indian Railway Finance Corporation Limited (1,450) 5,550 LIC Housing Finance Limited (12,500) 3,500 National Bank for Agriculture and Rural Development (-) 49,44,752 National Highways Authority of India (-) 42,76,093 Power Finance Corporation Limited (5,500) 920 Power Grid Corporation of India Limited (920) 450 Rural Electrification Corporation Limited (1,350) 550 Steel Authority of India Limited (1,500) 1,370 Tata Power Company Limited (-) 250 Tata Steel Limited (-) 730 25 40 85 141 25 98 120 1,822 1,060 149 350 545 349 494 858 112 44 53 142 26 - 4,632 - - - - - - 98 220 1,531 483 - 139 1,218 - - 552 112 131 146 - - 6,247 4,630 Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 177 Investments in Commercial Paper - Quoted Housing Development Finance Corporation Limited Investments in Units-Unquoted 15,00,000 Birla Sun Life Short Term Fixed Maturity Plan Series I (10,00,000) of ` 10 each - DWS Insta Cash Plus Fund - Institutional (1,15,35,485) - Bonus Option of ` 10 each - DWS Insta Cash Plus Fund (3,37,19,111) - Bonus of ` 10 each (96,14,297) 7,94,199 HDFC Cash Management Fund - Saving Plan - Daily Dividend Reinvestment of ` 10 each - HDFC Mutual Fund - Cash Management Fund (86,548) of ` 10 each - HDFC Liquid Fund - Growth (17,52,359) of ` 10 each 1,27,72,028 HDFC Liquid Fund Premium - Daily Dividend (12,26,39,186) - ( 2,328) re-investment of ` 10 each HDFC Floating Rate Income Fund-Short Term Plan - Wholesale Option - Daily Dividend Reinvestment of `10 each (` NIL ; Previous Year ` 23,466) 26,04,607 ICICI Prudential Institutional Liquid Plan (20,79,483) - Super Institutional Daily Dividend of ` 100 each 4,50,000 Kotak Fixed Maturity Plan 6M Series 9 (7,50,000) of ` 10 each (` 25,00,000) - Reliance Regular Saving Fund - Debt Plan (1,54,91,563) Institutional Dividend of ` 12 each - SBI-Magnum Insta Cash Fund - Cash Option (6,44,967) of ` 10 each - SBI MF SDFC 90D (2,75,10,915) of ` 10 each 1,41,586 JM High Liquidity Fund (-) (` 25,00,000 ; Previous Year ` NIL) 5,00,120 Reliance Fixed Horizon Fund XXI - Series 3 - Growth (-) 39,140 SBI Premier Liquid Fund - Super Institutional - Growth (-) 9,09,761 Tata Fixed Income Portfolio Fund - B2 (-) As at 31st March, 2012 (` in crore) As at 31st March, 2011 - 2 - - 1 - - 42 - 26 - - - - - 1 7 1 94 - 94 1 11 33 10 1 3 150 - 22 1 1 1 3 - - - - Total Current Investments 80 27,173 237 14,685 178 Partnering India's new future. Sustainably. Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 15. INVENTORIES Raw Materials Raw Materials in Transit Stock-in-Process Stock-in-Trade Finished Goods Stores, Chemicals and Packing Materials TOTAL 16. TRADE RECEIVABLES (Unsecured and Considered Good) Over six months Others TOTAL 17. CASH AND BANK BALANCES Balance with Banks # Cash on hand Fixed deposits with banks * TOTAL As at 31st March, 2012 (` in crore) As at 31st March, 2011 8,446 11,008 10,535 1,935 11,218 3,550 46,692 6,200 8,446 9,879 1,158 9,807 3,030 38,520 As at 31st March, 2012 (` in crore) As at 31st March, 2011 50 16,889 16,939 29 15,667 15,696 As at 31st March, 2012 (` in crore) As at 31st March, 2011 1,412 34 39,285 40,731 845 30 29,264 30,139 # Balance with Banks includes Unclaimed Dividend of ` 129 crore (Previous Year ` 111 crore) * Fixed deposits with banks include deposits of ` 6,891 crore (Previous Year ` 14,611 crore) with maturity of more than 12 months. 18. SHORT-TERM LOANS AND ADVANCES (Unsecured and Considered Good) Loans and Advances to Related Parties (Refer Note No. 28) Balance with Customs, Central Excise Authorities Deposits Others*# As at (` in crore) As at 31st March, 2012 31st March, 2011 12 1,861 378 7,503 7 1,484 394 4,006 TOTAL * Netted off for Loans and Advances considered doubtful ` 72 crore (Previous Year ` 72 crore) # Includes primarily Interest Receivable on Fixed Deposits with banks, Bond Application Money, Advance to 9,754 5,891 sundry creditors, Forward Premium on derivatives contracts and advance to employees. Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 179 19. OTHER CURRENT ASSETS Interest accrued on Investment Share Application Money Others * TOTAL * Includes Interest Receivables and Contract Revenue Receivables. 20. REVENUE FROM OPERATIONS Sale of Products Income from Services TOTAL Less: Excise Duty/ Service Tax Recovered 21. OTHER INCOME Interest From Current Investments From Long Term Investments From Others Dividend From Current Investments From Long Term Investments Net Gain on Sale of Investments From Current Investments From Long Term Investments Adjustment to the carrying amount of investments (` 14,64,610) Share in Associates Other non operating income TOTAL (` in crore) As at 31st March, 2012 As at 31st March, 2011 261 3,143 156 3,560 2011-12 3,67,560 1,011 3,68,571 10,070 3,58,501 2011-12 227 2,274 62 2,563 (` in crore) 2010-11 2,76,079 293 2,76,372 10,561 2,65,811 (` in crore) 2010-11 751 129 3,287 15 15 1,026 670 - 487 2 1,253 4,167 1,742 3 3 30 6 512 131 (112) 1,696 70 231 6,194 531 (60) 324 2,543 180 Partnering India's new future. Sustainably. Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 22. CHANGES IN INVENTORIES OF FINISHED GOODS, STOCK-IN-PROCESS AND STOCK-IN-TRADE 2011-12 (` in crore) 2010-11 Inventories (at close) Finished Goods / Stock-in-Trade Stock-in-Process Inventories (at commencement) Finished Goods / Stock-in-Trade Stock-in-Process Opening Stock of Subsidiaries acquired during the year TOTAL 23. EMPLOYEE BENEFITS EXPENSE Salaries and Wages Contribution to Provident and Other Funds Staff Welfare Expenses TOTAL 24. FINANCE COSTS Interest Expenses Other borrowing costs Applicable loss on foreign currency transactions and translation TOTAL 25. DEPRECIATION AND AMORTISATION EXPENSE Depreciation and Amortisation Less: Transferred from Revaluation Reserve (Refer Note No. 10.8) Less: Transferred from Capital Reserve TOTAL 13,153 10,535 10,965 9,879 20,844 - 10,965 9,879 23,688 20,844 9,553 6,827 16,380 6 20,844 (2,844) 2011-12 3,378 295 282 3,955 2011-12 2,187 23 683 2,893 2011-12 14,827 2,356 70 12,401 16,386 (4,458) (` in crore) 2010-11 2,781 308 235 3,324 (` in crore) 2010-11 2,208 20 183 2,411 (` in crore) 2010-11 16,820 2,634 65 14,121 Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 181 26. OTHER EXPENSES Manufacturing expenses Stores, Chemicals and Packing Materials Electric Power, Fuel and Water Labour, Processing, Production Royalty and Machinery Hire Charges Repairs to Building Repairs to Machinery Exchange Difference (Net) Excise Duty # Lease Rent Land Development and Construction Expenditure Selling and distribution expenses Warehousing and Distribution Expenses Sales Tax /VAT/Service Tax Other Selling and Distribution Expenses Establishment expenses Professional Fees General Expenses * Rent Insurance Rates & Taxes Other Repairs Travelling Expenses Payment to Auditors Loss on Sale / Discard of Assets Investments Written Off ^ Charity and Donations 2011-12 (` in crore) 2010-11 11,751 104 6,029 3,943 4,740 1,876 115 849 255 (28) 1 4,747 824 458 749 1,216 574 557 117 306 149 22 55 51 290 3,796 2,834 2,421 101 752 (248) 95 3 4,636 761 493 557 1,671 455 553 98 292 124 18 193 110 144 9,754 190 5,890 Less: Transfer to Project Development Expenditure (Net) TOTAL 4,086 123 21,847 4,215 30 20,019 # Excise Duty shown under expenditure represents the aggregate of excise duty borne by the Company and difference between excise duty on opening and closing stock of finished goods. * Includes expenses incurred in Oman- Block 18, Oman- Block 41 and East Timor-Block K amounting to ` 258 crore (Previous Year ` 807 crore), an exceptional item. ^ An exceptional item 26.1 A sum of ` 1 crore (net debit) [Previous Year ` 3 crore (net debit)] is included under establishment expenses representing Net Prior Period Items. 182 Partnering India's new future. Sustainably. Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 2011-12 19,724 - 2010-11 19,294 - 19,724 20,033 298,18,71,615 19,294 20,211 297,94,96,405 66.15 67.18 10.00 64.75 67.83 10.00 Relationship Associate Companies / Joint Ventures 27. EARNINGS PER SHARE (EPS) i) ii) Net Profit after tax (after adjusting Minority Interest) as per Statement of Profit and Loss (` in crore) (Short) provision for tax for earlier years (` in crore) [(` 28,34,742); Previous Year (` 32,37,715)] Net profit attributable to equity shareholders (` in crore) iii) Net Profit before Exceptional item (` in crore) iv) v) Weighted Average number of equity shares used as denominator for calculating EPS Basic and Diluted Earnings per share (`) vi) vii) Basic and Diluted Earnings (before exceptional items) per share (`) viii) Face Value per equity share (`) 28. Related Party Disclosures : (i) List of related parties and relationships: Sr No. Name of the Related Party 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. Reliance Industrial Infrastructure Limited Reliance Europe Limited Reliance LNG Limited Indian Vaccines Corporation Limited Gujarat Chemicals Port Terminal Company Limited Reliance Utilities and Power Private Limited Reliance Utilities Private Limited Reliance Ports and Terminals Limited Reliance Gas Transportation Infrastructure Limited Reliance Commercial Dealers Limited Reliance Commercial Trading Private Limited Delta Hydrocarbons S A Luxembourg Delta Corp East Africa Limited Diesel Fashion India Reliance Private Limited Atri Exports Private Limited Shree Salasar Bricks Private Limited N.C. Trading Company Private Limited KCIPI Trading Company Private Limited Prakhar Commercials Private Limited Pepino Farms Private Limited Marugandha Land Developers Private Limited Jaipur Enclave Private Limited Einsten Commercials Private Limited Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 183 Sr No. Name of the Related Party Relationship 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. 54. 55. 56. 57. 58. 59. Ashwani Commercials Private Limited Vishnumaya Commercials Private Limited Carin Commercials Private Limited Netravati Commercials Private Limited Rakshita Commercials Private Limited Kaniska Commercials Private Limited Rocky Farms Private Limited Centura Agro Private Limited Fame Agro Private Limited Noveltech Agro Private Limited Honeywell Properties Private Limited Parinita Commercials Private Limited Chander Commercials Private Limited Creative Agrotech Private Limited Reliance-Vision Express Private Limited Marks and Spencer Reliance India Private Limited Reliance Vornado Development Private Limited Reliance Vornado Management Private Limited Reliance-GrandVision India Supply Private Limited Office Depot Reliance Supply Solutions Private Limited Supreme Tradelink Private Limited Reliance Paul And Shark Fashions Private Limited Gaurav Overseas Private Limited Reliance Innovative Building Solutions Private Limited Reliance Investments Holdings B.V. Reliance Investments Sarl Paradise Global Enterprises B.V. Deccan Cargo and Express Logistics Private Limited IMG Reliance Private Limited EFS Midstream LLC Zegna South Asia Private Limited Basis Point Securities Private Limited India Gas Solutions Private Limited Algenol LLC Aurora Algae Inc. Extramarks Education Private Limited Associate Companies / Joint Ventures 184 Partnering India's new future. Sustainably. Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 Sr No. Name of the Related Party Relationship 60. 61. 62. 63. 64. 65. 66. 67. 68. 69. Shri Mukesh D. Ambani Shri Nikhil R. Meswani Shri Hital R. Meswani Shri P.M.S. Prasad Shri P. K. Kapil Dhirubhai Ambani Foundation Jamnaben Hirachand Ambani Foundation Hirachand Govardhandas Ambani Public Charitable Trust HNH Trust and HNH Research Society Reliance Foundation Key Managerial Personnel Enterprises over which Key Managerial Personnel are able to exercise significant influence (ii) Transactions during the year with related parties : Sr. Nature of Transactions No. 1. (Excluding reimbursements) Purchase of Fixed Assets 2. 3. 4. 5. 6. 7. 8. 9. Purchase / Subscription of Investments Net Loans and advances given / (returned) Unsecured Loans (taken) / repaid Revenue from Operations Other Income Purchases / Material Consumed Electric Power, Fuel and Water Hire Charges 10. Employee Benefits Expense 11. Payment to Key Managerial Personnel 12. Sales and Distribution Expenses 13. Professional Fees 14. General expenses 15. Donations Associates Key Managerial Others (` in crore) Total 248 144 1,106 693 221 (9) (27) 310 321 233 7 6 151 1 1,140 917 408 790 5 21 - - 2,381 2,573 36 17 - 12 - - Personnel - - - - - - - - - - - - - - - - - - - - 44 41 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 210 26 248 144 1,106 693 221 (9) (27) 310 321 233 7 6 151 1 1,140 917 408 790 5 21 44 41 2,381 2,573 36 17 - 12 210 26 Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 185 Sr. Nature of Transactions No. (Excluding reimbursements) 16. Finance Cost 17. Investment written off (net) Balance as at 31st March, 2012 18. Investments 19. Trade Receivables 20. Loans & Advances 21. Deposits 22. Unsecured Loan 23. Trade and Other Payables 24. Financial Guarantees 25. Performance Guarantees Note : 1. Figures in Italic represents Previous Year’s amount. Associates Key Managerial Others Personnel (` in crore) Total 33 24 51 - 4,097 2,860 26 14 289 153 1,873 1,705 53 22 498 354 1,137 716 1 7 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 33 24 51 - 4,097 2,860 26 14 289 153 1,873 1,705 53 22 498 354 1,137 716 1 7 Disclosure in respect of Material Related Party Transactions during the year : 1. 2. Purchase of Fixed Assets include Reliance Ports and Terminals Limited ` 248 crore (Previous Year ` 144 crore). Purchase / Subscription of Investments include Gujarat Chemicals Port Terminal Company Limited ` NIL (Previous Year ` 52 crore), Deccan Cargo & Express Logistics Limited ` NIL (Previous Year ` 114 crore), EFS Midstream LLC ` 474 crore (Previous Year ` 527 crore), Reliance Commercial Dealers Limited ` 2 crore (Previous Year ` NIL), Delta Corp East Africa Limited ` 9 crore (Previous Year ` NIL), Algenol LLC ` 504 crore (Previous Year ` NIL), Aurora Algae LLC ` 117 crore (Previous Year ` NIL). Loans given during the year include Reliance Commercial Dealers Limited ` 67 crore (Previous Year ` NIL), Reliance Commercial Trading Private Limited ` 4 crore (Previous Year ` NIL), Delta Corp East Africa Limited ` 8 crore (Previous Year ` NIL), Gujarat Chemicals Ports Terminal Company Limited ` 17 crore (Previous Year ` NIL), Loans returned during the year include Gujarat Chemicals Ports Terminal Company Limited ` NIL (Previous Year ` 17 crore). Deposits given include Einsten Commercials Private Limited ` 1 crore (Previous Year ` NIL), Carin Commercials Private Limited ` 86 crore (Previous Year ` NIL), Kaniska Commercials Private Limited ` 23 crore (Previous Year ` NIL), Gaurav Overseas Private Limited ` 15 crore (Previous Year ` 1 crore), Honeywell Properties Private Limited ` NIL (Previous Year ` 7 crore). Unsecured Loan taken during the year include Reliance Europe Limited ` 27 crore (Previous Year ` NIL), Unsecured loans repaid during the year include Reliance Ports and Terminals Limited ` NIL (Previous Year ` 310 crore). Revenue from Operations includes Reliance Ports and Terminals Limited ` 22 crore (Previous Year ` 9 crore), Reliance Gas Transportation and Infrastructure Limited ` 153 crore (Previous Year ` 220 crore), Reliance Utilities Private Limited ` 145 crore (Previous Year ` 3 crore). 3. 4. 5. 6. 186 Partnering India's new future. Sustainably. Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 7. 8. 9. Other Income includes Interest from Reliance Industrial Infrastructure Limited ` 2 crore (Previous Year ` 2 crore), Guarantee Commission from Reliance Europe Limited ` 5 crore (Previous Year ` 3 crore). Purchases / Material Consumed includes Reliance Ports and Terminals Limited ` 138 crore (Previous Year ` 1 crore), Reliance Industrial Infrastructure Limited ` 11 crore (Previous Year ` NIL), Gujarat Chemicals Ports Terminal Company Limited ` 2 crore (Previous Year ` NIL). Electric Power, Fuel and Water charges paid to Reliance Utilities and Power Private Limited ` 369 crore (Previous Year ` 292 crore), Reliance Utilities Private Limited ` 771 crore (Previous Year ` 625 crore). 11. 10. Hire Charges paid to Reliance Industrial Infrastructure Limited ` 21 crore (Previous Year ` 21 crore), Gujarat Chemicals Port Terminal Company Limited ` 66 crore (Previous Year ` 44 crore), Reliance Gas Transportation Infrastructure Limited ` 235 crore (Previous Year ` 652 crore), Reliance Ports and Terminals Limited ` 86 crore (Previous Year ` 72 crore). Payment to Key Management Personnel include to Shri Mukesh D. Ambani ` 15 crore (Previous Year ` 15 crore), Shri Nikhil R. Meswani ` 11 crore (Previous Year ` 11 crore), Shri Hital R. Meswani ` 11 crore (Previous Year ` 11 crore), Shri P.M.S. Prasad ` 5 crore (Previous Year ` 2 crore), Shri P.K. Kapil ` 2 crore (Previous Year ` 2 crore). Sales and Distribution Expenses include Reliance Ports and Terminals Limited ` 2,370 crore (Previous Year ` 2,563 crore), Gujarat Chemicals Ports Terminal Company Limited ` 11 crore (Previous Year ` 10 crore). Professional Fees include Reliance Europe Limited ` 27 crore (Previous Year ` 17 crore), Reliance Industrial Infrastructure Limited ` 9 crore (Previous Year ` NIL). Employee Benefits Expense include Reliance Industrial Infrastructure Limited ` NIL (Previous Year ` 21 crore), Reliance Gas Transportation Infrastructure Limited ` 5 crore (Previous Year ` NIL). 14. 12. 13. 17. 18. 15. General expenses include Reliance Industrial Infrastructure Limited ` NIL (Previous Year ` 9 crore). 16. Donations to Dhirubhai Ambani Foundation ` 86 crore (Previous Year ` 18 crore), Jamnaben Hirachand Ambani Foundation ` 8 crore (Previous Year ` 6 crore), HNH Trust and HNH Research Society ` 3 crore (Previous Year ` 2 crore), Hirachand Govardhandas Ambani Public Charitable Trust ` 1 crore (Previous Year ` NIL), Reliance Foundation ` 112 crore (Previous Year ` NIL). Finance Cost include Reliance Ports and Terminals Limited ` 24 crore (Previous Year ` 24 crore), Reliance Europe Limited ` 1 crore (Previous Year ` NIL), Reliance Industrial Infrastructure Limited ` 8 crore (Previous Year ` NIL). Investment written off (net) includes Deccan Cargo and Express Logistics Private Limited ` 51 crore (Previous Year ` NIL). Loans and Advances include Gujarat Chemicals Port Terminal Company Limited ` NIL (Previous Year ` 25 crore), Reliance Europe Limited ` 12 crore (Previous Year ` 7 crore), Reliance Commercial Dealers Limited ` 145 crore (Previous Year ` NIL), Shree Salasar Bricks Private Limited ` 31 crore (Previous Year ` 31 crore), Atri Exports Private Limited ` 18 crore (Previous Year ` 18 crore), Jaipur Enclave Private Limited ` 4 crore (Previous Year ` 4 crore), Marugandha Land Developers Private Limited ` 5 crore (Previous Year ` 5 crore), Reliance Commercial Trading Private Limited ` 9 crore (Previous Year ` 6 crore) and Delta Corp East Africa Limited ` 65 crore (Previous Year ` 57 crore). 19. 20. Deposits include Reliance Utilities and Power Limited ` 200 crore (Previous Year ` 200 crore), Reliance Ports and Terminals Limited ` 1,050 crore (Previous Year ` 1,050 crore), Reliance Utilities Private Limited ` 150 crore (Previous Year ` 150 crore), Rocky Farms Private Limited ` 29 crore (Previous Year ` 29 crore), Chander Commercials Private Limited ` 33 crore (Previous Year ` 33 crore), Honeywell Properties Private Limited ` 50 crore (Previous Year ` 50 crore), Parinita Commercials Private Limited ` 6 crore (Previous Year ` 6 crore), Creative Agrotech Private Limited ` 15 crore (Previous Year ` 15 crore), Ashwani Commercials Private Limited ` 36 crore (Previous Year ` 36 crore), Einsten Commercials Private Limited ` 43 crore (Previous Year ` 41 crore), Vishnumaya Commercials Private Limited ` 9 crore (Previous Year ` 9 crore), Netravati Commercials Private Limited ` 6 crore (Previous Year ` 6 crore), Fame Agro Private Limited ` 3 crore (Previous Year ` 3 crore), Centura Agro Private Limited ` 8 crore (Previous Year ` 8 crore), Noveltech Agro Private Limited ` 3 crore (Previous Year ` 3 crore), Rakshita Commercials Private Limited ` 6 crore (Previous Year ` 6 crore), Carin Commercials Private Limited ` 95 crore (Previous Year ` 9 crore), Prakhar Commercials Private Limited ` 48 crore (Previous Year ` 48 crore), Pepino Farms Private Limited ` 1 crore (Previous Year ` 1 crore), Kaniska Commercials Private Limited ` 23 crore (Previous Year ` NIL), Gaurav Overseas Private Limited ` 17 crore (Previous Year ` 2 crore) and Gujarat Chemicals Port Terminal Company Limited ` 42 crore (including conversion of loan given) (Previous Year ` NIL). 21. Unsecured loan include Reliance Europe Limited ` 53 crore (Previous Year ` 22 crore). Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 187 29. CONTINGENT LIABILITIES AND COMMITTMENTS As at 31st March, 2012 (` in crore) As at 31st March, 2011 (I) Contingent Liabilities (A) Claims against the company / disputed liabilities not acknowledged as debts (a) In respect of joint ventures (b) In respect of others (B) Guarantees (i) Guarantees to Banks and Financial Institutions against credit facilities extended to third parties (a) In respect of joint ventures (b) In respect of others (ii) Performance Guarantees (a) In respect of joint ventures (b) In respect of others (iii) Outstanding guarantees furnished to Banks and Financial Institutions including in respect of Letters of Credits (a) In respect of joint ventures (b) In respect of others (C) Other Money for which the company is contingently liable (i) Liability in respect of bills discounted with Banks (Including third party bills discounting) (a) In respect of joint ventures (b) In respect of others (II) Commitments (A) Estimated amount of contracts remaining to be executed on capital account and not provided for: (a) In respect of Joint Ventures (b) In respect of others (B) Uncalled Liability on Shares and Other Investments Partly paid (C) Other commitments (a) Sales tax deferral liability assigned (b) Guarantee against future cash calls * - 1,396 - 1,159 - 123 228 5,314 - 631 344 18,092 294 3,560 - 1 1,666 - 833 - 236 24 3,658 - 2,296 14 10,462 408 4,468 8,053 * The Company has issued guarantees against future cash calls to be made by JV partners of its wholly owned subsidiary Reliance Marcellus LLC. 188 Partnering India's new future. Sustainably. Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 (III) The Income-Tax assessments of the Company have been completed up to Assessment Year 2009-10. The disputed demand outstanding up to the said Assessment Year is ` 1,292 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. 30. During the year the Company received regulatory approvals for transfer of 30% Participating Interest (PI) in 21 Oil& Gas production sharing contracts including KG D6 to Ms BP Exploration (Alpha) Limited (BP). Consequently, the proceeds, net of adjustments for revenue and costs from 1st January 2011 to 30th August 2011(closing date) amounting to ` 32,198 crore have been netted off from the cost incurred against the said blocks appearing in the Intangible Assets - Development Rights and Intangible Assets under Development forming a part of Fixed Assets. 31. Reliance Jamnagar Infrastructure Limited, a wholly owned subsidiary of the Company has on 26th March 2012 filed a Scheme for amalgamation with the Company with the Hon'ble High Court of Gujarat at Ahmedabad. The Scheme shall be given effect to in the Books with effect from the Appointed Date of 1st April, 2011, upon receipt of the necessary approvals. 32. On 14 February 2012 and 28 February 2012, Reliance Holding USA, Inc. a wholly owned subsidiary of the Company, has issued $1,000 million and $500 million, respectively, of 5.40% Guaranteed Senior Notes due on 2022. Proceeds from the issues were partly utilized to repay $921 million outstanding short-term loans, and the remainder is being used to make other business investments and for general corporate purposes. 33. FINANCIAL AND DERIVATIVE INSTRUMENTS a) Derivative contracts entered into by the Company and outstanding as on 31st March, 2012. (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, 2012 amount to ` 88,598 crore (Previous Year ` 1,00,715 crore). Category wise break up is given below : Sr. No. Particulars 1 2 3 4 Interest Rate Swaps Currency Swaps Options Forward Contracts As at 31st March, 2012 34,068 4,199 25,138 25,193 (ii) For hedging commodity related risks : Category wise break up is given below : (` in crore) As at 31st March, 2011 36,254 4,567 28,181 31,713 As at 31st March, 2012 As at 31st March, 2011 Sr. No. Particulars Petroleum Crude Oil product purchases products Other Petroleum Crude oil Other product purchases products sales (in Kbbl) 16,722 4,809 25,193 2,720 1 2 3 4 Forward swaps Futures Spreads Options (in Kbbl) 18,842 5,879 81,337 8,875 In addition the Company has net margin hedges outstanding for contracts relating to petroleum product sales of 81,869 kbbl (Previous Year 79,308 kbbl). Foreign currency exposures that are not hedged by derivative instruments as on 31st March 2012 amount to ` 89,892 crore (Previous Year ` 72,650 crore). (in Kbbl) 21,420 9,453 51,227 1,800 (in Kg) 592 - - - (in Kg) 1,214 - - - sales (in Kbbl) 14,757 2,194 33,768 - b) Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 189 34. In respect of jointly controlled entities, the Company’s share of assets, liabilities, income and expenditure of the joint venture companies are as follows: Particulars (i) Assets Fixed Assets Non-Current Investments Current Investments Current Assets Non-Current Assets (ii) Liabilities Short Term Borrowings Current Liabilities and Provisions Non-Current Liabilities and Provisions Deferred Tax (iii) Income (iv) Expenses (` in crore) As at 31st March, 2012 As at 31st March, 2011 126 25 39 139 29 20 73 14 - 277 338 112 - 53 115 4 8 74 - (2) 175 222 35. The audited/unaudited financial statements of foreign subsidiaries / associates have been prepared in accordance with the Generally Accepted Accounting Principle of its Country of Incorporation or International Financial Reporting Standards. The differences in accounting policies of the Company and its subsidiaries are not material and there are no material transactions from 1st January, 2012 to 31st March, 2012 in respect of subsidiaries having financial year ended 31st December, 2011. 36. Segment Information: The Company has identified three reportable segments viz. Petrochemicals, Refining and Oil & Gas. 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) b) 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”. 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”. 190 Partnering India's new future. Sustainably. Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 (i) Primary Segment Information : (` in crore) Particulars Petrochemicals Refining Oil and Gas Others Unallocable Total 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 1 Segment Revenue External Turnover 86,338 67,648 2,58,697 1,86,542 13,896 Inter Segment Turnover 124 4 4 67,835 48,633 278 Gross Turnover 86,462 67,692 3,26,532 2,35,175 14,174 15,706 1,620 17,326 9,640 523 10,163 6,476 215 6,691 Less: Excise duty / Service Tax recovered Net Turnover 5,388 81,074 2 Segment Result before Interest 4,468 4,496 6,010 5 9 3 127 8 0 63,224 3,22,036 2,29,165 14,115 17,322 10,036 6,611 - - - - - - - - - - 3,68,571 2,76,372 - - 3,68,571* 2,76,372* 10,070 10,561 3,58,501 2,65,811 and Taxes Less: Interest Expense Add: Interest Income Add: Exceptional Item Profit Before Tax Current Tax Deferred Tax Profit after Tax (before adjustment for Minority Interest) Add: Share of (Profit) / Loss transferred to Minority Profit after Tax (after adjustment for Minority Interest) 3 Other Information Segment Assets Segment Liabilities Capital Expenditure Depreciation and Amortisation Non Cash Expenses other than depreciation and Amortisation 9,060 9,540 9,847 9,182 5,555 6,717 (130) (460) - - - 9,060 - - - - - 9,540 - - - - - 9,847 - - - - - 9,182 - - - - (258) 5,297 - - - - (917) 5,800 - - - - - (130) - - - - - (460) - - 111 2,893 4,167 (51) 1,334 5,226 465 662 2,411 1,742 - (7) 4,412 371 24,443 2,893 4,167 (309) 25,408 5,226 465 25,641 2,411 1,742 (917) 24,055 4,412 371 9,060 9,540 9,847 9,182 5,297 5,800 (130) (460) (4,357) (4,790) 19,717 19,272 - - (37) (25) - - 4 4 4 7 - - 7 2 2 9,060 9,540 9,810 9,157 5,297 5,800 (86) (413) (4,357) (4,790) 19,724 19,294 42,432 45,695 1,09,523 1,05,470 43,048 7,213 2,197 2,137 5,932 548 2,215 35,040 2,746 4,398 32,145 1,328 3,967 3,162 15,859 5,191 64,917 4,120 10,592 7,377 1,392 3,098 439 1,319 13,589 312 - - - - 258 918 - - 6,174 13,930 669 236 5 1 819 250 112 52,981 24,569 12,401 57,446 26,876 14,121 309 1,030 32,347 26,245 99,841 65,190 3,27,191 3,07,517 *Total Gross Turnover is after elimination of inter segment turnover of ` 68,760 crore (Previous Year ` 50,511 crore). (ii) As per Accounting Standard on Segment Reporting (AS-17), “Segment Reporting”, the Company has reported segment information on consolidated basis including businesses conducted through its subsidiaries. (iii) 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, Poly Butadiene Rubber, Polyester Yarn, Polyester Fibre, Purified Terephthalic Acid, Paraxylene, Ethylene Glycol, Olefins, Aromatics, Linear Alkyl Benzene, Butadiene, Acrylonitrile, Caustic Soda and Polyethylene Terephthalate. — The refining segment includes production and marketing operations of the petroleum products. — The oil and gas segment includes exploration, development and production of crude oil and natural gas. — The businesses, which were not reportable segments during the year, have been grouped under the “Others” segment. This mainly comprises of: * Textile * Retail Business * SEZ development * Telecom / Broadband Business Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 191 (iv) Secondary Segment Information: 1. 2. 3. 4. 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 2011-12 1,21,618 2,46,953 3,68,571 2,98,786 28,405 3,27,191 50,749 2,232 52,981 14,810 9,759 24,569 (` in crore) 2010-11 1,05,348 1,71,024 2,76,372 2,88,353 19,165 3,07,517 55,863 1,584 57,447 19,974 6,902 26,876 37. The Subsidiary companies considered in the consolidated financial statements are: Name of the Subsidiaries Reliance Industrial Investments and Holdings Limited (including Petroleum Trust) Reliance Ventures Limited Reliance Strategic Investments Limited Reliance Industries (Middle East) DMCC * Reliance Jamnagar Infrastructure Limited Reliance Retail Limited Reliance Netherlands B.V. * Reliance Haryana SEZ Limited Reliance Fresh Limited Retail Concepts and Services (India) Limited Reliance Retail Insurance Broking Limited Reliance Dairy Foods Limited Reliance Exploration & Production DMCC * Reliance Retail Finance Limited Country of Proportion of Incorporation ownership interest India 100.00% India India U.A.E. India India Netherlands India India India India India U.A.E. India 100.00% 100.00% 100.00% 100.00% 91.01% 100.00% 92.50% 91.01% 91.01% 91.01% 91.01% 100.00% 91.01% 192 Partnering India's new future. Sustainably. Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 Name of the Subsidiaries RESQ Limited Reliance Commercial Associates Limited Reliancedigital Retail Limited Reliance Financial Distribution and Advisory Services Limited RIL (Australia) Pty Limited Reliance Hypermart Limited Gapco Kenya Limited * Gapco Rwanda Limited * Gapco Tanzania Limited * Gapco Uganda Limited * Gapoil (Zanzibar) Limited * Gulf Africa Petroleum Corporation * Transenergy Kenya Limited * Recron (Malaysia) Sdn Bhd * Reliance Retail Travel & Forex Services Limited Reliance Brands Limited Reliance Footprint Limited Reliance Trends Limited Reliance Wellness Limited Reliance Lifestyle Holdings Limited Reliance Universal Ventures Limited Delight Proteins Limited Reliance Autozone Limited Reliance F&B Services Limited Reliance Gems and Jewels Limited Reliance Integrated Agri Solutions Limited Strategic Manpower Solutions Limited Reliance Agri Products Distribution Limited Reliance Digital Media Limited Reliance Food Processing Solutions Limited Reliance Home Store Limited Reliance Leisures Limited Reliance Loyalty & Analytics Limited Reliance Retail Securities and Broking Company Limited Reliance Supply Chain Solutions Limited Country of Proportion of Incorporation ownership interest India India India India Australia India Kenya Rwanda Tanzania Uganda Zanzibar Mauritius Kenya Malaysia India India India India India India India India India India India India India India India India India India India India India 91.01% 100.00% 91.01% 91.01% 100.00% 100.00% 76.00% 76.00% 76.00% 76.00% 76.00% 76.00% 76.00% 100.00% 91.01% 91.01% 91.01% 91.01% 100.00% 91.01% 91.01% 91.01% 91.01% 91.01% 91.01% 91.01% 91.01% 91.01% 91.01% 91.01% 91.01% 91.01% 91.01% 91.01% 91.01% Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 193 Reliance Global Energy Services (Singapore) Pte. Limited Singapore Name of the Subsidiaries Reliance Trade Services Centre Limited Reliance Vantage Retail Limited Wave Land Developers Limited Reliance-GrandOptical Private Limited Reliance Universal Commercial Limited Reliance Petroinvestments Limited Reliance Global Commercial Limited Reliance People Serve Limited Reliance Infrastructure Management Services Limited Reliance Global Business B.V. Reliance Gas Corporation Limited Reliance Global Energy Services Limited Reliance One Enterprises Limited Reliance Personal Electronics Limited Reliance Polymers (India) Limited Reliance Polyolefins Limited Reliance Aromatics and Petrochemicals Limited Reliance Energy and Project Development Limited Reliance Chemicals Limited Reliance Universal Enterprises Limited International Oil Trading Limited Reliance Review Cinema Limited Reliance Replay Gaming Limited Two Sisters Foods India Limited (Formerly Reliance Nutritional Food Processors Limited) RIL USA Inc.* Reliance Commercial Land & Infrastructure Limited Reliance Corporate IT Park Limited Reliance Eminent Trading & Commercial Private Limited Reliance Progressive Traders Private Limited Reliance Prolific Traders Private Limited Reliance Universal Traders Private Limited Reliance Prolific Commercial Private Limited Reliance Comtrade Private Limited Country of Proportion of Incorporation ownership interest India India Kenya India India India India India India Netherlands India U.K. India India India India India India India India 91.01% 100.00% 100.00% 91.01% 100.00% 100.00% 100.00% 91.01% 91.01% 100.00% 100.00% 100.00% 100.00% 100.00% 91.01% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% British Virgin Island 100.00% India India India U.S.A India India India India India India India India 91.01% 91.01% 45.51% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 194 Partnering India's new future. Sustainably. Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 Name of the Subsidiaries Reliance Ambit Trade Private Limited Reliance Petro Marketing Limited LPG Infrastructure (India) Limited Reliance Corporate Centre Limited Reliance Convention and Exhibition Centre Limited Central Park Enterprises DMCC * Reliance International B. V. Reliance Corporate Services Limited Reliance Oil and Gas Mauritius Limited Reliance Exploration and Production Mauritius Limited Indiawin Sports Private Limited Reliance Holding USA Inc.* Reliance Marcellus LLC* Infotel Broadband Services Limited Reliance Strategic (Mauritius) Limited Reliance Eagleford Midstream LLC* Reliance Eagleford Upstream LLC* Reliance Eagleford Upstream GP LLC* Reliance Eagleford Upstream Holding LP* Mark Project Services Private Limited Reliance Energy Generation and Distribution Limited Reliance Marcellus II LLC* Reliance Security Solutions Limited Reliance Industries Investment and Holding Limited Reliance Office Solutions Private Limited Reliance Style Fashion India Private Limited GenNext Innovation Ventures Limited GenNext Ventures LLP Reliance Home Products Limited Infotel Telecom Limited Reliance Styles India Limited Rancore Technologies Private Limited Omni Symmetry LLC * Reliance Sibur Elastomers Private Limited * Subsidiary Company having 31st December as a reporting date. Country of Proportion of Incorporation ownership interest India India India India India U.A.E Netherlands India Mauritius Mauritius India U.S.A U.S.A India Mauritius U.S.A U.S.A U.S.A U.S.A India India U.S.A India India India India India India India India India India U.S.A. India 100.00% 91.01% 91.01% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 95.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 91.01% 91.01% 100.00% 100.00% 91.01% 95.00% 91.01% 95.00% 100.00% 74.90% Notes on Consolidated Financial Statements for the Year ended 31st March, 2012 Reliance Industries Limited 195 38. The significant Associates / Joint Ventures considered in the consolidated financial statements are: Reliance Industrial Infrastructure Limited Reliance Europe Limited # Reliance LNG Limited Gujarat Chemicals Port Terminal Company Limited Reliance Commercial Dealers Limited Reliance-Vision Express Private Limited Reliance-Grandvision India Supply Private Limited Reliance Vornado Management Private Limited Reliance Vornado Development Private Limited Marks and Spencer Reliance India Private Limited Reliance Innovative Building Solutions Private Limited Diesel Fashion India Reliance Private Limited Office Depot Reliance Supply Solutions Private Limited Zegna South Asia Private Limited Reliance Paul and Shark Fashions Private Limited IMG Reliance Private Limited EFS Midstream LLC # Basis Point Securities Private Limited Delta Corp East Africa Limited India Gas Solutions Private Limited Extramarks Education Private Limited Supreme Tradelink Private Limited Gaurav Overseas Private Limited Reliance Commercial Trading Private Limited Deccan Cargo and Express Logistics Private Limited Delta Hydrocarbons S.A., # Associate Company having 31st December as a reporting date. As per our Report of even date For Chaturvedi & Shah Chartered Accountants For Deloitte Haskins & Sells Chartered Accountants For Rajendra & Co. Chartered Accountants D. Chaturvedi Partner A. Siddharth Partner A.R. Shah Partner Mumbai April 20, 2012 K. Sethuraman Company Secretary India U.K. India India India India India India India India India India India India India India U.S.A India Kenya India India India India India India Luxembourg 45.43% 50.00% 45.00% 41.80% 50.00% 45.51% 45.51% 45.51% 45.51% 44.59% 50.00% 44.59% 45.51% 44.59% 45.51% 50.00% 50.00% 50.00% 43.61% 50.00% 38.46% 44.59% 50.00% 50.00% 30.89% 23.15% Chairman & Managing Director Executive Directors - } For and on behalf of the Board M.D. Ambani N.R. Meswani H.R. Meswani P.M.S. Prasad R.H. Ambani M.L. Bhakta Y.P. Trivedi Dr. D.V. Kapur M.P. Modi Prof. Ashok Misra } Directors 196 Partnering India's new future. Sustainably. Financial Information of Subsidiary Companies Sr. Name of Subsidiary Company No. Reporting Capital Reserves Currency Total Total Assets Liabilities ments Invest- Turnover/ Total Income ` in crore Profit Provision Profit Proposed Country Before for Taxation Taxation Taxation After Dividend 149.11 670.07 12,152.98 12,152.98 2,210.03 733.09 (102.68) - (102.68) 2,355.98 2,368.36 2,368.36 791.67 41.43 1.02 1,151.62 1,230.39 1,230.39 372.20 108.92 36.75 (63.04) (11.87) 554.04 104.33 554.04 104.33 101.85 2,103.28 2,549.10 2,549.10 - - - 565.36 106.46 (58.73) (11.06) 395.37 235.18 8,315.90 (38.33) 8,920.70 8,920.70 766.39 94.45 (0.89) (0.13) 1.51 0.22 1.51 0.22 0.89 0.13 28.50 4.15 (35.19) 4,610.52 4,610.52 - 96.84 (28.38) (1.03) (0.27) (0.04) 2.69 2.34 572.31 107.77 1.65 0.24 0.05 0.10 7.50 - - - (0.52) - - - 0.92 29.25 (58.73) (11.06) 235.18 (0.51) (0.27) (0.04) (28.38) 1.05 (1,295.09) 5,007.73 5,007.73 245.04 3,860.37 (422.53) (148.77) (273.76) 0.05 4.00 0.05 (0.03) 0.39 0.03 4.75 0.03 4.75 - - 0.06 (0.06) - (0.06) 16.82 2.88 0.91 1.97 (39.10) 214.96 214.96 0.01 427.74 (24.61) (8.36) (16.25) INR USD MN 3,841.88 723.45 (1,754.43) (330.37) 2,204.55 415.13 2,204.55 415.13 26.55 5.00 112.74 21.23 (384.96) (72.49) 99.82 (5.93) (0.02) 101.91 101.91 101.82 8.78 36.04 8.78 36.04 0.00 0.01 0.05 14.51 0.03 (0.01) (3.00) (0.00) (105.31) 751.87 751.87 0.01 1,234.04 (82.46) (27.33) (55.13) (28.72) 16.44 16.44 3.20 (0.43) 7.15 (7.58) - - - 0.95 - (384.96) (72.49) (0.01) (3.95) (0.00) - - - (18.31) (3.46) (0.43) 13.70 2.59 13.70 2.59 176.34 176.34 1.15 0.00 0.00 0.00 (0.21) (0.04) (0.15) - - - 91.03 1,459.54 216.38 3,469.35 1,013.63 16,251.81 1,013.63 16,251.81 2.36 267.96 18.73 2,130.97 18.73 2,130.97 - 5,765.20 - 92,435.48 119.87 1,921.87 - 125.98 - 14,331.70 3.15 358.65 37.98 608.89 1.11 125.74 1 2 3 4 5 6 7 8 9 Reliance Industrial Investments and Holdings Limited Reliance Ventures Limited Reliance Strategic Investments Limited Reliance Industries (Middle East) DMCC Reliance Jamnagar Infrastructure Limited Reliance Retail Limited Reliance Netherlands B. V. Reliance Haryana SEZ Limited Reliance Fresh Limited 1 0 Retail Concepts & Services (India) Limited 1 1 Reliance Retail Insurance Broking Limited 1 2 Reliance Dairy Foods Limited 1 3 Reliance Exploration & Production DMCC 1 4 Reliance Retail Finance Limited 1 5 RESQ Limited 1 6 Reliance Commercial Associates Limited 1 7 Reliancedigital Retail Limited 1 8 Reliance Financial Distribution and Advisory Services Limited 1 9 RIL (Australia) Pty Limited 2 0 Reliance Hypermart Limited 2 1 Gapco Kenya Limited 2 2 Gapco Rwanda Limited 2 3 Gapco Tanzania Limited 2 4 Gapco Uganda Limited 2 5 Gapoil (Zanzibar) Limited 2 6 Gulf Africa Petroleum Corporation * 2 7 Transenergy Kenya Limited 2 8 Recron (Malaysia) Sdn Bhd INR INR INR INR USD MN INR INR INR EUR MN INR INR INR INR INR INR INR INR INR INR INR AUD MN INR INR KSH MN INR FRW MN INR TZS MN INR USH MN INR TZS MN INR USD MN INR KSH MN INR RM MN 2.02 0.05 0.05 1.05 0.05 31.22 5.90 0.05 3.94 448.50 99.30 29,910.00 18.55 8,750.10 1.66 500.00 116.83 22.00 7.48 120.00 4.19 2.50 262.01 78,919.00 936.78 2,82,164.00 936.78 2,82,164.00 - 2,075.35 - 6,25,104.00 107.83 32,480.00 32.42 9,764.00 80.51 37,978.33 148.40 69,998.64 148.40 69,998.64 (1.15) (345.44) (42.17) (7.94) (7.89) (126.53) 1,588.39 948.15 7.21 2,171.04 7.21 2,171.04 315.07 59.33 0.11 1.77 315.07 59.33 0.11 1.77 3,634.45 2,169.50 3,634.45 2,169.50 - - - - - - - - - - 672.08 3,17,016.80 26.64 12,566.93 5.53 2,610.52 0.06 19.18 - - 0.20 3.27 6,377.76 3,807.05 0.02 4.96 (7.12) (1.34) 0.11 1.73 74.20 44.29 - - - - - - 13.82 8.25 (0.21) (0.04) (0.15) 81.89 1,312.98 2.05 232.91 75.42 22,716.00 21.11 9,956.41 0.02 4.96 (7.12) (1.34) 0.11 1.73 60.38 36.04 - - - - - - - - - - - - - - - - - - - - - - - - - India India India U.A.E India India Netherlands India India India India India U.A.E India India India India India Australia India Kenya Rwanda Tanzania Uganda Zanzibar - Mauritius - Kenya - Malaysia As on 31.12.2011: 1 Euro = ` 68.6675, 1 US $ = ` 53.1050, 1 RM = ` 16.7525, 1 KSH = ` 0.6237, 1 FRW = ` 0.0879, 1 TZS = ` 0.0332, 1 USH = ` 0.0212; Exchange Rate as on 31.3.2012, 1 Euro = ` 67.8675, 1 US $ = ` 50.8750, 1 Aus $ = ` 52.9100, 1 KSH = ` 0.6126, 1 SGD = ` 40.4775, 1 GBP = ` 81.4575. Financial Information of Subsidiary Companies Sr. Name of Subsidiary Company No. Reporting Capital Reserves Currency Total Total Assets Liabilities ments Invest- Turnover/ Total Income Reliance Industries Limited 197 ` in crore Profit Provision Profit Proposed Country Before for Taxation Taxation Taxation After Dividend 1.00 (1.33) 0.06 0.06 - 0.01 (0.02) - (0.02) 2 9 Reliance Retail Travel & Forex Services Limited 3 0 Reliance Brands Limited 3 1 Reliance Footprint Limited 3 2 Reliance Trends Limited 3 3 Reliance Wellness Limited 3 4 Reliance Lifestyle Holdings Limited 3 5 Reliance Universal Ventures Limited 3 6 Delight Proteins Limited 3 7 Reliance Autozone Limited 3 8 Reliance F&B Services Limited 3 9 Reliance Gems and Jewels Limited 4 0 Reliance Integrated Agri Solutions Limited 4 1 Strategic Manpower Solutions Limited INR INR INR INR INR INR INR INR INR INR INR INR INR 4 2 Reliance Agri Products Distribution Limited INR 4 3 Reliance Digital Media Limited INR 4 4 Reliance Food Processing Solutions Limited INR 4 5 Reliance Home Store Limited 4 6 Reliance Leisures Limited 4 7 Reliance Loyalty & Analytics Limited 4 8 Reliance Retail Securities and Broking Company Limited 4 9 Reliance Supply Chain Solutions Limited 5 0 Reliance Trade Services Centre Limited 5 1 Reliance Vantage Retail Limited 5 2 Wave Land Developers Limited INR INR INR INR INR INR INR 150.91 150.91 40.04 30.85 (27.45) (8.76) (18.69) 203.24 203.24 875.55 875.55 1.17 23.41 0.90 24.40 33.08 1.32 1.17 23.41 0.90 24.40 33.08 1.32 689.01 689.01 0.01 7.54 0.06 3.11 82.43 0.07 0.01 7.54 0.06 3.11 82.43 0.07 0.01 0.01 1.15 - - 0.01 0.01 0.00 0.01 - - - - 0.01 - 155.36 (0.15) 0.45 (0.60) 489.09 (16.46) (5.11) (11.35) - 28.19 0.01 41.10 26.92 1.66 475.49 0.02 190.31 0.02 3.06 0.34 0.11 (0.10) (2.61) (0.06) - - - (7.07) (2.39) (5.45) (0.34) (0.59) (0.05) (5.07) (0.00) (0.37) (1.89) - (1.43) - 0.96 (11.45) (3.87) (0.03) - (0.10) (2.61) (0.06) (4.68) (3.56) (0.34) 0.84 (0.00) (1.33) (7.58) (0.03) - (0.05) 5.66 (10.73) 159.06 159.06 0.01 96.76 (16.12) (5.19) (10.93) 0.64 0.04 25.73 0.67 87.98 0.64 0.04 25.73 0.67 87.98 - - 0.01 0.11 7.58 131.88 - - 3.11 0.01 0.43 7.05 (0.07) (0.03) (0.42) (3.76) (2.39) 0.41 6.67 - - - - - 0.13 2.11 (0.07) (0.03) (0.42) (3.76) (2.39) 0.28 4.55 80.86 1.05 1.05 0.05 0.05 0.05 0.05 0.05 0.05 1.01 0.05 0.05 0.05 0.05 0.05 0.05 1.05 0.05 0.05 1.01 0.05 0.56 (24.93) (15.95) (27.37) (0.22) (5.17) (8.37) (12.72) (8.10) (2.65) (16.81) (0.32) (22.42) (0.12) (3.37) (56.11) (0.07) (21.43) (10.51) (1.20) 3.02 (16.75) (38.42) (1.10) (17.99) (0.02) 0.01 INR KSH MN 142.87 2,332.11 5 3 Reliance-GrandOptical Private Limited 5 4 Reliance Universal Commercial Limited 5 5 Reliance Petroinvestments Limited 5 6 Reliance Global Commercial Limited 5 7 Reliance People Serve Limited 5 8 Reliance Infrastructure Management Services Limited 5 9 Reliance Global Business B. V. 6 0 Reliance Gas Corporation Limited 6 1 Reliance Global Energy Services (Singapore) Pte. Ltd. INR INR INR INR INR INR INR EURO MN INR INR SGD MN 6 2 Reliance One Enterprises Limited INR 0.05 0.05 8.88 0.05 0.05 0.05 448.60 66.10 0.05 6.07 1.50 0.05 141.91 2,316.58 141.91 2,316.58 72.93 1,190.54 0.04 4.49 0.04 4.49 - 4.48 175.18 185.57 185.57 184.47 0.01 (2.31) (0.02) 16.76 2.47 (0.01) 0.85 0.21 (0.38) 4.49 0.53 0.03 4.49 0.53 0.03 465.77 68.63 465.77 68.63 6.14 7.04 1.74 0.44 6.14 7.04 1.74 0.44 4.48 - - 465.64 68.61 0.01 - - - - (0.00) - (0.00) 0.01 0.03 0.01 2.65 - 0.34 0.05 0.00 0.02 0.00 (0.29) (0.00) 0.14 0.02 - (0.00) 0.00 - 0.00 0.63 - - - - 0.00 0.02 0.00 (0.92) (0.00) 0.14 0.02 (0.00) 2.02 0.20 0.04 0.16 0.61 Singapore 0.50 0.02 0.05 (0.33) 0.01 0.04 0.15 - (0.33) - India As on 31.12.2011: 1 Euro = ` 68.6675, 1 US $ = ` 53.1050, 1 RM = ` 16.7525, 1 KSH = ` 0.6237, 1 FRW = ` 0.0879, 1 TZS = ` 0.0332, 1 USH = ` 0.0212; Exchange Rate as on 31.3.2012, 1 Euro = ` 67.8675, 1 US $ = ` 50.8750, 1 Aus $ = ` 52.9100, 1 KSH = ` 0.6126, 1 SGD = ` 40.4775, 1 GBP = ` 81.4575. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - India India India India India India India India India India India India India India India India India India India India India India India Kenya India India India India India India Netherlands India 198 Partnering India's new future. Sustainably. Financial Information of Subsidiary Companies Sr. Name of Subsidiary Company No. Reporting Capital Reserves Currency Total Total Assets Liabilities ments Invest- Turnover/ Total Income ` in crore Profit Provision Profit Proposed Country Before for Taxation Taxation Taxation After Dividend 6 3 Reliance Global Energy Services INR Limited * GBP MN 6 4 Reliance Personal Electronics Limited 6 5 Reliance Polymers (India) Limited 6 6 Reliance Polyolefins Limited 6 7 Reliance Aromatics and Petrochemicals Limited 6 8 Reliance Energy and Project Development Limited | 6 9 Reliance Chemicals Limited 7 0 Reliance Universal Enterprises Limited 7 1 Reliance Review Cinema Limited 7 2 Reliance Replay Gaming Limited 7 3 Two Sisters Foods India Limited (Formerly Reliance Nutritional Food Processors Limited) 7 4 Reliance Commercial Land & Infrastructure Limited 7 5 Reliance Corporate IT Park Limited 7 6 Reliance Eminent Trading & Commercial Private Limited INR INR INR INR INR INR INR INR INR INR INR INR INR 4.07 0.50 0.05 4.41 1.63 10.02 10.02 0.20 (0.91) 1.23 0.33 1.23 0.33 - - - 2,180.51 2,184.97 2,184.97 0.01 13.26 2,574.59 2,609.28 2,609.28 2,608.29 4.11 2,503.44 2,781.38 2,781.38 2,781.36 18.08 1.38 0.33 1.06 2.22 0.01 0.00 5.00 0.01 0.17 (0.07) (0.00) 1.38 0.01 0.04 - - 0.48 0.00 0.13 (0.07) (0.00) 0.90 0.01 1.01 951.81 1,256.32 1,256.32 1,255.99 0.03 0.03 0.01 0.02 7.58 2,598.64 2,606.23 2,606.23 2,604.91 13.26 3,403.42 3,416.69 3,416.69 3,416.56 0.05 0.05 7.50 (0.85) (0.64) (5.95) 0.22 0.12 2.81 0.22 0.12 2.81 0.01 - 0.15 0.01 0.02 1.26 0.49 0.05 0.01 0.01 (0.29) (0.37) (4.05) 46.90 1,940.74 3,057.62 3,057.62 0.01 - (0.00) 0.00 0.00 0.18 0.09 - - 2,634.83 (123.51) 2,925.65 2,925.65 25.00 969.98 0.87 0.14 14.67 2,056.78 2,205.18 2,205.18 - - - 0.01 0.01 - - - - - - - 0.02 (4.55) 0.84 (8.41) - (0.33) 0.08 0.03 0.00 0.21 7 7 Reliance Progressive Traders Private Limited INR 13.96 1,753.08 1,965.17 1,965.17 7 8 Reliance Universal Traders Private Limited 7 9 Reliance Prolific Traders Private Limited INR INR 10.12 43.23 84.93 84.93 12.87 1,424.69 2,224.78 2,224.78 8 0 Reliance Prolific Commercial Private Limited INR 8 1 Reliance Comtrade Private Limited 8 2 Reliance Ambit Trade Private Limited 8 3 Reliance Petro Marketing Limited 8 4 LPG Infrastructure (India) Limited 8 5 RIL USA inc. 8 6 International Oil Trading Limited 8 7 Central Park Enterprises DMCC 8 8 Reliance Corporate Services Limited 8 9 Reliance Corporate Centre Limited 9 0 Reliance Convention and Exhibition Centre Limited INR INR INR INR INR USD MN INR USD MN INR USD MN INR INR INR 1.66 1.48 1.93 4.11 0.05 15.93 3.00 0.25 0.05 0.53 0.10 0.06 0.05 0.05 331.25 241.46 465.76 106.43 7.57 39.46 7.43 0.46 0.09 (0.42) (0.08) (0.01) - - 336.57 336.57 243.08 243.08 472.46 472.46 162.90 162.90 0.04 300.54 106.78 106.78 (0.00) 305.46 2,700.81 508.58 2,700.81 508.58 - 27,801.95 5,235.28 - 0.71 0.14 0.11 0.02 56.53 88.83 0.71 0.14 0.11 0.02 56.53 88.83 111.90 111.90 - - - - 54.51 - - - - - - - - - (1.35) 0.02 (0.00) 0.20 0.06 1.96 6.16 1.16 (0.00) (0.00) (0.21) (0.04) (0.00) - - 0.01 0.01 (0.47) (0.46) (4.05) (0.00) 0.73 (4.55) (8.41) (0.33) (1.37) 0.01 - (0.00) 0.06 0.02 1.66 0.05 0.01 - - - - - - - 0.14 0.04 0.30 6.11 1.15 (0.00) (0.00) (0.21) (0.04) (0.00) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - U K India India India India India India India India India India India India India India India India India India India India India U S A British Virgin Island U.A.E India India India As on 31.12.2011: 1 Euro = ` 68.6675, 1 US $ = ` 53.1050, 1 RM = ` 16.7525, 1 KSH = ` 0.6237, 1 FRW = ` 0.0879, 1 TZS = ` 0.0332, 1 USH = ` 0.0212; Exchange Rate as on 31.3.2012, 1 Euro = ` 67.8675, 1 US $ = ` 50.8750, 1 Aus $ = ` 52.9100, 1 KSH = ` 0.6126, 1 SGD = ` 40.4775, 1 GBP = ` 81.4575. Financial Information of Subsidiary Companies Total Income - - 3.26 0.48 Sr. Name of Subsidiary Company No. Reporting Capital Reserves Currency Total Total Assets Liabilities ments Invest- Turnover/ 9 1 Reliance International B.V. 9 2 Indiawin Sports Private Limited 9 3 Reliance Exploration and Production Mauritius Limited * 9 4 Reliance Oil and Gas Mauritius Limited * 9 5 Reliance Holdings USA, Inc. 9 6 Reliance Marcellus LLC INR EURO MN INR INR USD MN INR USD MN INR USD MN INR USD MN 0.95 0.14 1.29 0.19 1.29 0.19 0.14 0.02 2.65 (90.61) 134.10 134.10 0.34 170.72 2,839.59 (0.05) 2,839.33 2,839.33 2,828.34 558.15 797.77 156.81 (0.01) (1.78) (0.35) 558.10 558.10 555.94 806.93 158.61 806.93 158.61 0.27 0.05 3,323.15 625.77 16,214.07 3,053.21 16,214.07 3,053.21 499.13 98.11 630.67 118.76 - - - - - - 980.05 184.55 (52.89) (9.96) 4,668.51 879.11 4,668.51 879.11 - - 137.33 25.86 9 7 Infotel Broadband Services Limited INR 5,175.20 (11.13) 15,109.58 15,109.58 5.56 0.13 9 8 Reliance Strategic (Mauritius) Limited * 9 9 Reliance Eagleford Midstream LLC 100 Reliance Eagleford Upstream LLC 101 Reliance Eagleford Upstream GP LLC 102 Reliance Eagleford Upstream Holding LP 103 Mark Project Services Private Limited 104 Reliance Energy Generation and Distribution Private Limited 105 Reliance Marcellus II LLC 106 Reliance Security Solutions Limited 107 Reliance Industries Investment and Holding Limited 108 Reliance Office Solutions Private Limited 109 Reliance Style Fashion India Private Limited 110 Gennext Innovation Ventures Limited 111 Gennext Ventures LLP 112 Reliance Home Products Limited 113 Reliance Styles India Limited 114 Infotel Telecom Limited 115 Rancore Technologies Private Limited 116 Omni Symmetry LLC INR USD MN INR USD MN INR USD MN INR USD MN INR USD MN INR INR INR USD MN INR INR INR INR INR INR INR INR INR INR INR USD MN 0.20 0.04 248.53 46.80 1,212.71 228.36 0.16 0.03 1,212.65 228.35 0.05 0.05 534.29 100.61 0.05 2.52 (0.15) (0.03) (27.30) (5.14) (0.06) (0.01) (0.01) (0.00) 453.41 85.38 (0.32) (0.01) (6.00) (1.13) 0.01 0.05 0.01 1,133.69 213.48 7,229.24 1,361.31 0.16 0.03 0.05 0.01 - - 1,133.69 213.48 1,133.42 213.43 7,229.24 1,361.31 0.16 0.03 - - 0.11 0.02 8,156.98 1,536.01 8,156.98 1,536.01 0.01 0.01 3,264.59 3,264.59 2,724.66 513.07 2,724.66 513.07 0.77 0.77 - - - - - - - 1,238.69 1,433.41 1,433.41 1,433.38 - - - - - - - - 1,216.85 229.14 - 0.03 3.77 0.71 3.50 9.47 5.12 (1.35) 6.06 6.06 1.01 0.05 0.02 0.05 0.05 6.05 0.05 6.48 1.22 (4.06) (0.00) - (15.06) (0.01) (0.08) (0.07) (1.27) (0.24) 11.72 0.05 0.59 15.22 0.04 5.97 11.72 0.05 0.59 15.22 0.04 5.97 39.68 39.68 5.36 1.01 5.36 1.01 - - - - - - 0.96 - - - 5.36 (0.95) 0.14 (1.09) 4.56 - 1.79 40.77 - 0.28 - - - (4.03) (0.00) 0.02 (9.11) (0.01) (0.00) (0.01) (1.27) (0.24) - - 0.01 (2.97) - - (0.03) - - (4.03) (0.00) 0.01 (6.14) (0.01) (0.00) 0.02 (1.27) (0.24) As on 31.12.2011: 1 Euro = ` 68.6675, 1 US $ = ` 53.1050, 1 RM = ` 16.7525, 1 KSH = ` 0.6237, 1 FRW = ` 0.0879, 1 TZS = ` 0.0332, 1 USH = ` 0.0212; Exchange Rate as on 31.3.2012, 1 Euro = ` 67.8675, 1 US $ = ` 50.8750, 1 Aus $ = ` 52.9100, 1 KSH = ` 0.6126, 1 SGD = ` 40.4775, 1 GBP = ` 81.4575. * Financial Information is based on Unaudited Results. Reliance Industries Limited 199 ` in crore Profit Provision Profit Proposed Country Before for Taxation Taxation Taxation After Dividend 0.34 0.05 (0.39) (0.25) (0.05) (1.53) (0.30) (55.87) (10.52) (41.69) (7.85) (5.32) (0.10) (0.02) (14.71) (2.77) (0.05) (0.01) (0.00) (0.00) 434.45 81.81 (0.10) (0.00) (5.84) (1.10) 0.02 7.72 0.07 0.01 - - - - - 0.27 0.04 (0.39) (0.25) (0.05) (1.53) (0.30) 100.85 18.99 (156.66) (29.50) - - - - - - - - - - - - - - - - - 0.01 - (41.69) (7.85) (5.32) (0.10) (0.02) (14.71) (2.77) (0.05) (0.01) (0.00) (0.00) 434.45 81.81 (0.10) (0.00) (5.84) (1.10) 0.01 7.72 - - - Netherlands India - Mauritius - - - - - - - Mauritius USA USA India - Mauritius - - - - - - - - - - - - - - - - - - - - - - - USA USA USA USA India India USA India India India India India India India India India India USA 200 Partnering India's new future. Sustainably. Shareholders’ Referencer AT A GLANCE (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) Presently, the Company has around 3.4 million folios of shareholders holding Equity Shares in the Company. The Company’s Equity Shares are listed on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE). The Global Depository Receipts (GDRs) of the Company are listed on the Luxembourg Stock Exchange and traded on International Order Book (London Stock Exchange) and also PORTAL System (NASD, USA). The Company’s Equity Shares are most actively traded security on both BSE and NSE. The Company’s Equity Shares are under compulsory trading in demat form only. 97.49% of the Company’s Equity Shares are held in demat form. (cid:1) Karvy Computershare Private Limited (Karvy), Hyderabad, an ISO 9002 Certified Registrars and Transfer Agents, is the Registrars and Transfer Agents (R&TA) of the Company. INVESTOR SERVICE AND GRIEVANCE HANDLING MECHANISM All investor service matters are being handled by Karvy. Karvy, the largest Registrar in the country having a vast number of Investor Service Centres across the country, discharges investor service functions effectively, efficiently and expeditiously. 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 Internal Securities Auditors to concurrently audit the securities related transactions being handled at Karvy and communications exchanged 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’. These standards are periodically reviewed by the Company. Any deviation therefrom is examined by the Internal Securities Auditors. COMPANY’S RECOMMENDATIONS TO THE SHAREHOLDERS / INVESTORS The following are the Company’s recommendations to shareholders/investors: Open Demat Account and Dematerialise your shares Investors should convert their physical holdings of securities into demat holdings. Holding securities in demat form helps investors to get immediate transfer of securities. No stamp duty is payable on transfer of shares held in demat form and risks associated with physical certificates such as forged transfers, fake certificates and bad deliveries are avoided. More benefits and procedure involved in dematerialisation are covered later in this Referencer. Consolidate Multiple Folios Investors should consolidate their shareholding held in multiple folios. This would facilitate one-stop tracking of all corporate benefits on the shares and would reduce time and efforts required to monitor multiple folios. Register NECS Mandate and furnish correct bank account particulars with Company/Depository Participant (DP) Investors holding the shares in physical form should provide the National Electronic Clearing Service (NECS) mandate to the Company and investors holding the shares in demat form should ensure that correct and updated particulars of their bank account are available with the Depository Participant (DP). This would facilitate in receiving direct credits of dividends, refunds etc., from companies and avoid postal delays and loss in transit. Investors must update their new bank account numbers allotted after implementation of Core Banking Solution (CBS) to the Company in case of shares held in physical form and to the DP in case of shares held in demat form. Submit Nomination Form Investors should register their nominations in case of physical shares with the Company and in case of dematerialised shares with their DP. Nomination would help the nominees to get the shares transmitted in their favour without any hassles. Investors must ensure that nomination made is in the prescribed Form and must be witnessed by two witnesses in order to be effective. The Form may be downloaded from the Company’s website www.ril.com under the section “Investor Relations”. Deal with Registered Intermediaries Investors should transact through a registered intermediary who is subject to regulatory discipline of SEBI, as it will be responsible for its activities, and in case the intermediary does not act professionally, investors may take up the matter with SEBI/Stock Exchanges. Reliance Industries Limited 201 Obtain documents relating to purchase and sale of securities A valid Contract Note/Confirmation Memo should be obtained from the broker/sub-broker, within 24 hours of execution of purchase or sale of securities and it should be ensured that the Contract Note/Confirmation Memo contains order number, order time, trade number, trade time, security descriptions, bought and sold quantity, price, brokerage, service tax and securities transaction tax. In case the investors have any doubt about the details contained in the contract note, they can avail the facility provided by BSE/NSE to verify the trades on BSE/NSE websites. It is recommended that this facility be availed in respect of a few trades on random basis, even if there is no doubt as to the authenticity of the trade/transaction. Monitor holdings regularly Demat account should not be kept dormant for long period of time. Periodic statement of holdings should be obtained from the concerned DP and holdings should be verified. Where the investor is likely to be away for a long period of time and where the securities are held in electronic form, the investor can make a request to the DP to keep the account frozen so that there can be no debit to the account till the instruction for freezing the account is countermanded by the investor. Transfer securities before Book Closure/ Record Date The corporate benefits on the securities lying in the clearing account of the brokers cannot be made available to the members directly by the Company. In case an investor has bought any securities, he must ensure that the securities are transferred to his demat account before the book closure / record date. Opt for Corporate Benefits in Electronic Form In case of non cash corporate benefits like split of shares / bonus shares, the holders of shares in physical form must opt to get the shares in electronic form by providing the details of demat account to the R&TA. Register for SMS alert facility Investors should register their mobile numbers with DPs for SMS alert facility. National Securities Depository Limited and Central Depository Services (India) Limited proactively inform the investors of transaction in the demat account by sending SMS. Investors will be informed about debits and credits to their demat account without having to call-up their DPs and investors need not wait for receiving Transaction Statements from DPs to know about the debits and credits. Register e-mail address: To support the ‘Green Initiative’ in the Corporate Governance taken by the Ministry of Corporate Affairs, to contribute towards greener environment and to receive all documents, notices, including Annual Reports and other communications of the Company, investors should register their e-mail addresseses with Karvy, if shares are held in physical mode or with their DP, if the holding is in electronic mode. Exercise caution There is likelihood of fraudulent transfers in case of folios with no movement or where the shareholder has either expired or is not residing at the address registered with the Company. Company / DP should be updated on any change of address or contact details. Similarly, information of death of shareholder should also be communicated. Mode of Postage Share certificates and high value dividend / interest warrants / cheques / demand drafts should not be sent by ordinary post. It is recommended that investors should send such instruments by registered post or courier. Intimate mobile number Intimate your mobile number and changes therein if any to Karvy, if shares are held in physical mode or to your DP if the holding is in electronic mode, to receive communications on corporate actions and other information of the Company. CONCEPTS AND PROCEDURES FOR SECURITIES RELATED MATTERS Dealing in Securities The Company’s Equity Shares are under compulsory trading in demat form only. What are the types of accounts for dealing in securities in demat form? Beneficial Owner Account (B.O. Account) / Demat Account: An account opened with a DP in the name of investor for the purpose of holding and transferring securities. Trading Account: An account opened by the broker in the name of the investor for maintenance of transactions executed while buying and selling of securities. Bank Account: A bank account in the name of the investor which is used for debiting or crediting money for trading in the securities market. 202 Partnering India's new future. Sustainably. What is the Process of trading in Securities? The normal course of trading in the Indian market context is briefed below: Step 1. Investor / trader decides to trade. Step 2. Places order with a broker to buy / sell the required quantity of respective securities. Step 3. Best priced order matches based on price-time priority. Step 4. Order execution is electronically communicated to the broker’s terminal. Step 5. Trade confirmation slip issued to the investor / trader by the broker. Step 6. Within 24 hours of trade execution, contract note is issued to the investor / trader by the broker. Step 7. Pay-in of funds and securities before T+2 day. Step 8. Pay-out of funds and securities on T+2 day. (cid:1) (cid:1) Personally fill in target account-id and all details in the DIS. If the DIS booklet is lost / stolen / not traceable, the same must be intimated to the DP, immediately, in writing. On receipt of such intimation, the DP will cancel the unused DIS of the said booklet. What is online trading in securities? Online trading in securities refers to the facility available to an investor for placing his own orders using the internet trading platform offered by the trading member viz., the broker. The orders so placed by the investor using internet would be routed through the trading member. What precautions an online investor must take? Investor trading online must take the following precautions: (cid:1) Default password provided by the broker is changed before placing of order. Ensure and insist with DP to issue DIS book. (cid:1) Avoid placing order from shared PCs / through cyber In case of short or bad delivery of funds / securities, the exchange orders for an auction to settle the delivery. If the securities could not be bought in the auction, the transaction is closed out as per SEBI guidelines. (cid:1) (cid:1) What is Delivery Instruction Slip (DIS) and what precautions one needs to observe with respect to DIS? To give the delivery, one has to fill in a form called Delivery Instruction Slip (DIS). DIS may be compared to cheque book of a bank account. The following precautions are to be taken in respect of DIS: (cid:1) (cid:1) (cid:1) (cid:1) Ensure that DIS numbers are pre-printed and DP takes acknowledgment for the DIS booklet issued to the investor. Ensure that your account number [client id] is pre-stamped. If the account is a joint account, all the joint holders have to sign the instruction slips. Instruction cannot be executed if all joint holders have not signed. (cid:1) Avoid using loose slips. (cid:1) Do not leave signed blank DIS with anyone viz., broker/sub-broker, DPs or any other person/entity. (cid:1) Keep the DIS book under lock and key when not in use. The password is not shared with others and password is changed at periodic intervals. Proper understanding of the manner in which the online trading software has to be operated. (cid:1) Adequate training on usage of software. (cid:1) The online trading system has facility for order and trade confirmation after placing the orders. What are the other safety measures an online client must observe? cafés. (cid:1) (cid:1) Log out after having finished trading to avoid misuse. Ensure that one does not click on “remember me” option while signing on from non-regular location. (cid:1) Do not leave the terminal unattended while one is “signed-in” to the trading system. (cid:1) Protect your personal computer against viruses by placing a firewall and an anti-virus solution. (cid:1) Do not open email attachments from people you do not know. DIVIDEND Payment of Dividend (cid:1) If only one entry is made in the DIS book, strike out remaining space to prevent misuse. Dividend is paid under three modes viz: (a) National Electronic Clearing Services (NECS) Reliance Industries Limited 203 (b) National Electronic Fund Transfer (NEFT) d. Exposure to delays / loss in postal service avoided. (c) Physical dispatch of Dividend Warrant e. As there can be no loss in transit of warrants, issue Payment of dividend through National Electronic Clearing Service (NECS) facility What is payment of dividend through NECS Facility and how does it operate? NECS facility is a centralised version of ECS facility. The NECS system takes advantage of the centralised accounting system in banks. Accordingly, the account of a bank that is submitting or receiving payment instructions is debited or credited centrally at Mumbai. The branches participating in NECS can, however, be located anywhere across the length and breadth of the country. What is payment of dividend through NEFT Facility and how does it operate? NEFT is a nation-wide payment system facilitating electronic transfer of funds from one account to another. Dividend payment through NEFT denotes payment of dividend electronically through RBI clearing to selected bank branches which have implemented Core Banking Solutions (CBS). This extends to all over the country, and is not necessarily restricted to the 90 designated centres where payment can be handled through ECS. To facilitate payment through NEFT, the shareholder is required to ensure that the bank branch where his/her account is operated, is under CBS and also records the particulars of the new bank account with the DP with whom the demat account is maintained. What is payment of dividend through Direct Credit and how does it operate? The Company will be appointing one bank as its Dividend banker for distribution of dividend. The said banker will carry out direct credit to those investors who are maintaining accounts with the said bank, provided the bank account details are registered with the DP for dematerialised shares and / or registered with the Company’s R&TA prior to the payment of dividend for shares held in physical form. What are the benefits of NECS (payment through electronic facilities)? Some of the major benefits are : a. Investor need not make frequent visits to his bank for depositing the physical paper instruments. b. Prompt credit to the bank account of the investor through electronic clearing. c. Fraudulent encashment of warrants is avoided. of duplicate warrants is avoided. Which cities provide NECS Facility? NECS has no restriction of centres or of any geographical area inside the country. Presently 51,000 branches of 116 banks participate in NECS. How to avail of NECS Facility? Investors holding shares in physical form may send their NECS Mandate Form, duly filled in, to the Company’s R&TA. The Form may be downloaded from the Company’s website www.ril.com under the section “Investor Relations”. However, if shares are held in dematerialised form, NECS mandate has to be sent to the concerned DP directly, in the format prescribed by the DP. Investors must note that NECS essentially operates on the new and unique bank account number, allotted by banks post implementation of Core Banking Solutions (CBS) for centralized processing of inward instructions and efficiency in handling bulk transactions. In this regard, shareholders are requested to furnish the new bank account number allotted by the banks post implementation of CBS, along with a copy of cheque pertaining to the concerned account, to the R&TA of the Company in case the shareholders hold shares in physical form and to the concerned DP in case the shareholders hold shares in demat form. In case the shareholders do not provide their new account number allotted after implementation of CBS, please note that NECS to the shareholders’ old account may either be rejected or returned. Why the Company cannot 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 bank account details furnished by the concerned Depository. Therefore, investors are requested to keep their bank particulars updated with their concerned DP. Can NECS Facility be opted out by investors? Investors have a right to opt out from this mode of payment by giving an advance notice of four weeks, prior to payment of dividend, either to the Company’s R&TA or to the concerned DP, as the case may be. 204 Partnering India's new future. Sustainably. Course of Action in case of Non-receipt of Dividend, Revalidation of Dividend Warrant, etc. with one of the depository participants, for this purpose. What should a shareholder do in case of non-receipt of dividend? (cid:1) Shareholders may write to the Company’s R&TA, furnishing the particulars of the dividend not received, and quoting the folio number /DPID and Client ID particulars (in case of dematerialised shares). On expiry of the validity period, if the dividend warrant is still shown as unpaid in the records of the Company, duplicate warrant will be issued. The R&TA would request the concerned shareholder to execute an indemnity before issuing the duplicate warrant. 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 for issue of duplicate 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 for issue of duplicate warrant. Validity of Dividend warrant is three months from the date of issue of the warrant. Unclaimed Shares What are the Regulatory provisions and procedure governing unclaimed shares lying in physical form with the Company or its R&TA ? As per amended Clause 5A of the Listing Agreement with the Stock Exchanges: (cid:1) In terms of sub-clause (I), for shares issued pursuant to a public issue or any other issue, which remain unclaimed and are lying in the escrow account, the Company, after complying with the procedure prescribed therein, shall credit the unclaimed shares to a demat suspense account opened by the Company In terms of sub-clause (II), for shares issued in physical form pursuant to a public issue or any other issue, which remain unclaimed, the Company, after complying with the procedure prescribed therein, shall transfer all such unclaimed shares into one folio in the name of “Unclaimed Suspense Account” and shall demateralise such shares with one of the depository participants. What is the status of compliance by the Company with regard to these provisions? In terms of Clause 5A (I) of the Listing Agreement, details relating to unclaimed shares such as the aggregate number of shareholders along with number of unclaimed shares lying in the suspence account at the begining of the year, number of shareholders who had approached the Company claiming the unclaimed shares, number of shareholders, to whom the said unclaimed shares were transferred from the suspence account during the year and the aggregate number of shareholders along with number of unclaimed shares lying in the suspense account at the end of the year, are published in the Corporate Governance Report. In terms of Clause 5A(II) of the Listing Agreement, details relating to the aggregate number of shareholders along with the number of unclaimed shares issued in physical form and transfered in dematerialised form to the “Unclaimed Suspense Account”, are published in the Corporate Governance Report. UNCLAIMED / UNPAID DIVIDEND What are the Statutory provisions governing unclaimed dividend? With effect from October 31, 1998, any money transferred to the ‘unpaid dividend account’ of the Company and remaining unpaid or unclaimed for a period of 7 years from the date it becomes due, shall 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 Chart 1 below: Reliance Industries Limited 205 Chart 1: Status of unclaimed and unpaid dividend for different years Dividend upto 1994-95 Dividend for 1995-96 to 2003-2004 Dividend for 2004-2005 and thereafter Transfer of unpaid dividend Transferred to General Revenue account of the Central Government Claims for unpaid dividend Can be claimed from ROC, Maharashtra* Transferred to Central Government’s Investor Education and Protection Fund (IEPF) Cannot be claimed Will be transferred to IEPF on due date (s) 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. Chart 2: Information in respect of unclaimed and unpaid dividends declared for 2004-05 and thereafter Financial year ended RIL Erstwhile IPCL (Merged with RIL) Date of declaration of dividend Last date for Claiming unpaid dividend Date of declaration of dividend 31.03.2005 31.03.2006 31.03.2007 (Interim) 31.03.2008 31.03.2009 31.03.2010 31.03.2011 03.08.2005 27.06.2006 10.03.2007 12.06.2008 07.10.2009 18.06.2010 03.06.2011 02.08.2012 26.06.2013 08.03.2014 11.06.2015 06.10.2016 17.06.2017 02.06.2018 27.06.2005 25.05.2006 10.03.2007 Last date for Claiming unpaid dividend 26.06.2012 24.05.2013 08.03.2014 DEMATERIALISATION/REMATERIALISATION OF SHARES (cid:1) Elimination of all risks associated with physical certificates What is Dematerialisation of shares? (cid:1) No stamp duty on transfers Dematerialisation (Demat) is the process by which securities held in physical form are cancelled and destroyed and the ownership thereof is entered into and retained in a fungible form in a depository by way of electronic balances. Why dematerialise shares? Trading in Compulsory Demat Form 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 only in demat form on the Stock Exchanges. Benefits of Demat (cid:1) Elimination of bad deliveries (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) Immediate transfer / trading of securities Faster settlement cycle Faster disbursement of non cash corporate benefits like rights, bonus, etc. SMS alert facility Lower brokerage is charged by many brokers for trading in dematerialised securities Periodic status reports and information available on internet Ease related to change of address of investor Elimination of problems related to transmission of demat shares Ease in portfolio monitoring 206 Partnering India's new future. Sustainably. (cid:1) Ease in pledging the shares How to dematerialise shares? The procedure for dematerialising shares is as under : (cid:1) Open Beneficiary Account with a DP registered with SEBI. (cid:1) 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 along with the share certificate(s). (cid:1) Demat confirmations are required to be completed in 21 days as against 30 days (excluding time for despatch) for physical transfer. Service standards prescribed by the Company for completing demat is three days from the date of the receipt of requisite documents for the purpose. (cid:1) Receive a confirmation statement of holdings from the DP. Statement of holdings is sent by the DPs from time to time. Can I dematerialize shares held jointly, in the same combination of names, but the sequence of names is different? Depositories provide “Transposition cum Demat facility” to help joint holders to dematerialize securities in different sequence of names. For this purpose, DRF and Transposition Form should be submitted to the DP. What is the SMS alert facility? NSDL and CDSL have launched SMS Alert facility for demat account holders whereby the investors can receive alerts for debits (transfers) in their demat accounts and for credits in respect of corporate actions for transfers, IPO and offer for sale. Under this facility, investors can receive alerts, a day after such debits (transfers) / credits take place. These alerts are sent to those account holders who have provided their mobile numbers to their DPs. Alerts for debits are sent, if the debits (transfers) are up to five ISINs in a day. In case debits (transfers) are for more than five ISINs, alerts are sent with a message that debits for more than five ISINs have taken place and that the investor can check the details with the DP. What is rematerialisation of shares? It is the process through which shares held in demat form are converted into physical form by issuance of share certificate(s). (cid:1) What is the procedure for rematerialisation of shares? Shareholders should submit duly filled in Rematerialisation Request Form (RRF) to the concerned DP. (cid:1) DP intimates the relevant Depository of such requests. (cid:1) DP submits RRF to the Company’s R&TA. (cid:1) Depository confirms rematerialisation request to the (cid:1) Company’s R&TA. The Company’s R&TA updates accounts and prints certificate(s) and informs the Depository. (cid:1) Depository updates the Beneficiary Account of the shareholder by deleting the shares so rematerialised. (cid:1) Share certificate(s) is despatched to the shareholder. NOMINATION FACILITY What is nomination facility and to whom it is more useful? Section 109A of the Companies Act, 1956 provides the facility of nomination to shareholders. This facility is mainly useful for individuals holding shares in sole name. In the case of joint holding of shares by individuals, nomination will be effective only in the event of death of all joint holders. What is the procedure for appointing a nominee? Investors, especially those who are holding shares 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 may be downloaded from the Company’s website, www.ril.com under the section “Investor Relations”. However, 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. 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. In case of joint holding, joint holders together have to appoint the 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 cannot be appointed as a nominee(s). Minors can, however, be appointed as a nominee. Can a nomination once made be revoked / varied? It is possible to revoke / vary a nomination once made. If nomination is made by joint holders, and one of the joint Reliance Industries Limited 207 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 holders may together appoint a nominee. Is nomination form required to be witnessed ? A nomination form must be witnessed by two witnesses. 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 death of the nominator along with the attested copy of the death certificate. 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. What are the rights of a nominee vis-a-vis legal heirs of the deceased shareholder? As per the provisions of section 109A of the Companies Act, 1956 and as held by Hon’ble Delhi and Mumbai High Courts, the securities would vest on the nominee upon the death of the registered holder notwithstanding the rights of the legal heirs of the deceased. TRANSFER / TRANSMISSION / TRANSPOSITION / DUPLICATE CERTIFICATES ETC. What is the procedure for transfer of shares in favour of transferee(s)? Transferee(s) need to send share certificate(s) along with share transfer deed in the prescribed form 7B, 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 under the Listing Agreement and two months under the Companies Act, 1956. Is submission of Permanent Account Number (PAN) mandatory for transfer / transmission / transposition of shares in physical form? SEBI has made it mandatory to furnish a copy of the PAN to the Company / R&TA in the following cases, viz., (a) for securities market transactions and off-market transactions involving transfer of shares in physical form; (b) Deletion of name of the deceased holder(s), where the shares are held in the name of two or more shareholders; (c) Transmission of shares to legal heir(s), where deceased shareholder was the sole holder of the shares; and (d) Transposition of shares – where there is a change in the order of names in which physical shares are held jointly in the names of two or more shareholders. What should transferee (purchaser) do in case transfer form is returned with objections? Transferee needs to immediately proceed to get the errors/ discrepancies corrected. Transferee needs to contact the transferor (seller) either directly or through his broker for rectification or replacement with good securities. After rectification or replacement of the securities, the same can be resubmitted for effecting transfer. In case the errors are non rectifiable, purchaser has recourse to the seller and his broker through the Stock Exchange to get back his money. However, in case of off-market transactions, matter should be settled with the seller only. Can single holding of shares be converted into joint holdings or joint holdings into single holding? If yes, what is the procedure involved in doing the same? Yes, conversion of single holding into joint holdings or joint holdings into single holding or transfer within the family members leads to a change in the pattern of ownership, and therefore, procedure for a normal transfer as mentioned above needs to be followed. 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 ` 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. What is the procedure for getting shares in the name of surviving shareholder(s), in case of joint holding, 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 208 Partnering India's new future. Sustainably. 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 the 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, along with 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) shall 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 Will probated by the Court, along with 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 along with 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 transposition of the shares. 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 and submit documents as required by the R&TA. What is the procedure for splitting of a share certificate into smaller lots? Shareholders may write to the Company’s R&TA enclosing the relevant share certificate for splitting into smaller lots. The share certificates, after splitting, will be sent by the Company’s R&TA to the shareholders at their registered address. What is the procedure to get the certificates issued in various denominations consolidated into a single certificate? Consolidation of share certificates helps in saving costs in the event of dematerialising shares and also provides convenience in holding the shares physically. Shareholders having certificates in various denominations under the same folio should send all the certificates to the Company’s R&TA for consolidation of all the shares into a single certificate. If the shares are not under the same folio but have the same order of names, the shareholder should write to the Company’s R&TA for the prescribed form for consolidation of folios. This will help the investors to efficiently monitor the holding and the corporate benefits receivable thereon. MISCELLANEOUS Change of address What is the procedure to get change of 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 along with Pin Code, to the Company’s R&TA. 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. 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) along with the supporting documents like marriage certificate, Reliance Industries Limited 209 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. Authority to another person to deal with shares What is the procedure for authorising any other person to deal with the shares of the Company? Shareholder needs to execute a Power of Attorney in favour of the concerned person and submit a notarised copy of the same to the Company’s R&TA. After scrutiny of the documents, the R&TA shall register the Power of Attorney and inform the shareholders concerned about the registration number of the same. Whenever a transaction is done by the Power of Attorney holder, this registration number should be quoted in the communication. INITIATIVES TAKEN BY THE COMPANY Setting new benchmarks in Investor Service The service standards that have been set by the Company for various investor related transactions / activities are as follows : (A) Registrations Sl. No. 1. 2. 3. Particulars Transfers Transmission Transposition 4. Deletion of Name 5. 6. Folio Consolidation Change of Name 7. Demat 8. 9. Remat Issue of Duplicate Certificate 10. Replacement of Certificate 11. Certificate Consolidation 12. Certificate Split Service Standards (No. of working days) 7 4 4 3 3 3 3 3 35 3 3 3 (B) Correspondence Particulars Sl. No. Queries / Complaints 1. Non-receipt of Annual Reports 2. Non-receipt of Dividend Warrants 3. Non-receipt of Interest/ Redemption Warrants 4. Non-receipt of Certificate Event Based 1. TDS Certificate 2. Allotment / call money 3. Others Requests 1. 2. 3. 4. Change of Address Revalidation of Dividend Warrants Revalidation of Redemption Warrants Bank Mandate / Details 5. Nomination 6. Power of Attorney 7. Multiple Queries 8. IEPF Letters Reminder Letters to Investors Service Standards (No. of working days) 2 4 4 2 2 4 2 2 3 3 2 2 2 4 3 The Company gives an opportunity by sending reminder 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 along with transfer forms duly filled in and signed, free of cost; the stamp duty involved in such cases will be borne by the Company. 210 Partnering India's new future. Sustainably. Scheme for disposal of ‘Odd Lot’ Equity Shares At the Annual General Meeting of the Company held on June 26, 1998, our Founder Chairman Shri Dhirubhai H. Ambani, announced, for the benefit of small shareholders, a scheme for disposal of ‘Odd Lot’ shares (the Scheme) to facilitate such shareholders to realise the full market value without having to suffer a discount for odd lots. In order to assist small shareholders in disposal of such odd lot shares held in physical form, the Company has formed a Trust known as ‘Reliance Odd Lot Shares Trust’ which will dispose off the odd lot shares on behalf of the shareholders. The salient features of the Scheme in force from July 1, 1998, are as under : (cid:1) This Scheme is available to Indian national residents in respect of any master folio having holdings up to 49 shares; (cid:1) 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 along with the relevant share certificate(s); (cid:1) The odd lot shares offered under the Scheme are sold through designated brokers in the BSE / NSE; (cid:1) All costs of implementing the Scheme will be borne by the Company. 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: (cid:1) No tax is payable by shareholders on dividend. However, the Company is required to pay dividend tax @ 15% and surcharge @5% together with education cess @ 2% and higher education cess @ 1%; (cid:1) Short Term Capital Gains (STCG) tax is payable in case the shares are sold within 12 months from the date of purchase @ 15% in case of ‘individuals’ together with education cess @ 2% and higher education cess @ 1%; (cid:1) No Long Term Capital Gains (LTCG) tax is payable on sale of shares through a recognised stock exchange, provided Securities Transaction Tax (STT) has been paid and shares are sold after 12 months from the date of purchase. In any other case, lower of the following is payable as long term capital gain tax: (a) 20% of the capital gain computed after substituting ‘cost of acquisition’ with ‘indexed cost of acquisition’; (b) 10% of the capital gain computed before substituting ‘cost of acquisition’ with ‘indexed cost of acquisition’. (cid:1) STT is payable as under - @ 0.125% by both the purchaser and the seller in respect of delivery based transactions (@0.10% w.e.f. July 1, 2012); - @ 0.017% by the seller in respect of derivatives; - @ 0.025% by the seller in respect of transactions in securities not being settled by actual delivery. INVESTOR SERVICING AND GRIEVANCE REDRESSAL - EXTERNAL AGENCIES Ministry of Corporate Affairs Ministry of Corporate Affairs (MCA) 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 status of complaint can be viewed by quoting the Service Request Number (SRN) provided at the time of filing the complaint. Securities and Exchange Board of India (SEBI) SEBI, in its endeavour to protect the interest of investors, has provided a platform wherein the investors can lodge their grievances. This facility is available on the SEBI website (www.sebi.gov.in) under the Investor Guidance Section. SEBI Complaints Redress System (SCORES) The investor complaints are processed in a centralized web based complaints redress system. The salient features of this system are: Centralised database of all complaints. Online upload of Action Taken Reports (ATRs) by the concerned companies and Online viewing by investors of actions taken on the complaint and its current status. Stock Exchanges National Stock Exchange of India Limited (NSE) - NSE has formed an Investor Grievance Cell (IGC) to redress investors’ grievances electronically. The investors have to log on to the website of NSE i.e. www.nseindia.com and go to the link “Investors Service”. BSE Limited (BSE) - BSE provides an opportunity to the investors to file their complaints electronically through its website www.bseindia.com under the “Investor Grievances”. Depositories National Securities Depository Limited (NSDL) - In order Reliance Industries Limited 211 to help its clients resolve their doubts, queries, complaints, NSDL has provided an opportunity wherein they can raise their queries by logging on to www.nsdl.co.in under the “Investors” section or an email can be marked mentioning the query to relations@nsdl.co.in. Central Depository Services (India) Limited (CDSL) - Investors who wish to seek general information on depository services may mail their queries to investors@cdslindia.com. With respect to the complaints / grievances of the demat account holders relating to the services of the DP, mails may be addressed to complaints@cdslindia.com Other Information Permanent Account Number (PAN) It has become mandatory to quote PAN before entering into any transaction in the securities market. The Income Tax Department of India has highlighted the importance of PAN on its website: www.incometaxindia.gov.in wherein lot of queries with respect to PAN have been replied to in the FAQ section. Insider Trading In order to prohibit insider trading and protect the rights of innocent investors, SEBI has enacted the SEBI (Prohibition of Insider Trading) Regulations 1992. As per Regulation 13 of the said Regulations initial and continual disclosures are required to be made by investors as under: Initial Disclosure As per sub-regulation (1), any person who holds more than 5% shares or voting rights in any listed company shall disclose to the company in Form A, the number of shares or voting rights held by such person, on becoming such holder, within 2 working days of : (a) the receipt of intimation of allotment of shares; or (b) the acquisition of shares or voting rights, as the case may be. Continual Disclosure As per sub-regulation (3), any person who holds more than 5% shares or voting rights in any listed company shall disclose to the company in Form C, the number of shares or voting rights held and change in shareholding or voting rights, even if such change results in shareholding falling below 5%, if there has been change in such holdings from the last disclosure made under sub- regulation (1) or under this sub-regulation; and such change exceeds 2% of total shareholding or voting rights in the company. SHAREHOLDERS’ GENERAL RIGHTS (cid:1) To receive not less than 21 days notice of general meetings unless consented for a shorter notice. (cid:1) To receive notice and forms for Postal Ballots in terms of the provisions of the Companies Act, 1956 and the concerned Rules issued thereunder. (cid:1) To receive copies of Balance Sheet and Profit and Loss Account along with all annexures / attachments (Generally known as Annual Report) not less than 21 days before the date of the annual general meeting unless consented for a shorter period. (cid:1) To participate and vote at general meetings either personally or through proxy (proxy can vote only in case of a poll). (cid:1) To receive dividends and other corporate benefits like bonus, rights etc. once approved. (cid:1) To demand poll on any resolution at a general meeting in accordance with the provisions of the Companies Act, 1956. (cid:1) To inspect statutory registers and documents as permitted under law. (cid:1) To require the Board of Directors to call an extraordinary general meeting in accordance with the provisions of the Companies Act, 1956. DUTIES / RESPONSIBILITIES OF INVESTORS (cid:1) To remain abreast of corporate developments, company specific information and take informed investment decision(s). (cid:1) To be aware of relevant statutory provisions and ensure effective compliance therewith. (cid:1) To deal with only SEBI registered intermediaries while dealing in the securities. (cid:1) Not to indulge in fraudulent and unfair trading in securities nor to act upon any unpublished price sensitive information. (cid:1) To participate effectively in the proceedings of shareholders’ meetings. (cid:1) To contribute to the Greener Environment and accordingly register email addresses to enable the Company to send all documents / notices including Annual Reports electronically. (cid:1) To register nominations, which would help the nominees to get the shares transmitted in their favour without any hassles. 212 Partnering India's new future. Sustainably. (cid:1) To respond to communications seeking shareholders’ (cid:1) Insist that the DIS numbers are pre-printed and your approval through Postal Ballot. account number (client id) be pre stamped. (cid:1) To respond to communications of SEBI / Depository / DP / Brokers / Sub-brokers / Other Intermediaries / Company, seeking investor feedback / comments. (cid:1) In case you are not transacting frequently make use of the freezing facilities provided for your demat account. (cid:1) Pay the margins required to be paid in the time DEALING IN SECURITIES MARKET prescribed. DO’S (cid:1) Transact only through Stock Exchanges. (cid:1) Deal only through SEBI registered intermediaries. (cid:1) Complete all the required formalities of opening an account properly (Client registration, Client agreement forms etc). (cid:1) Ask for and sign “Know Your Client Agreement”. (cid:1) Read and properly understand the risks associated with investing in securities / derivatives before undertaking transactions. (cid:1) Assess the risk - return profile of the investment as well as the liquidity and safety aspects before making your investment decision. (cid:1) Ask all relevant questions and clear your doubts with your broker before transacting. (cid:1) Invest based on sound reasoning after taking into account all publicly available information and on fundamentals. (cid:1) Beware of the false promises and to note that there are no guaranteed returns on investments in the Stock Market. (cid:1) Give clear and unambiguous instructions to your broker / sub-broker / DP. (cid:1) Be vigilant in your transactions. (cid:1) Insist on a contract note for your transaction. (cid:1) Verify all details in the contract note, immediately on receipt. (cid:1) Always settle dues through the normal banking channels with the market intermediaries. (cid:1) Crosscheck details of your trade with details as available on the exchange website. (cid:1) Scrutinize minutely both the transaction and the holding statements that you receive from your DP. (cid:1) Keep copies of all your investment documentation. (cid:1) Handle DIS Book issued by DP’s carefully. (cid:1) Deliver the shares in case of sale or pay the money in case of purchase within the time prescribed. (cid:1) Participate and vote in general meetings either personally or through proxy. (cid:1) Be aware of your rights and responsibilities. (cid:1) In case of complaints, approach the right authorities for redressal in a timely manner. DON’TS (cid:1) Don’t undertake off-market transactions in securities. (cid:1) Don’t deal with unregistered intermediaries. (cid:1) Don’t fall prey to promises of unrealistic returns. (cid:1) Don’t invest on the basis of hearsay and rumours; verify before investment. (cid:1) Don’t forget to take note of risks involved in the investment. (cid:1) Don’t be misled by rumours circulating in the market. (cid:1) Don’t blindly follow media reports on corporate developments, as some of these could be misleading. (cid:1) Don’t follow the herd or play on momentum - it could turn against you. (cid:1) Don’t be misled by so called hot tips. (cid:1) Don’t try to time the market. (cid:1) Don’t hesitate to approach the proper authorities for redressal of your doubts / grievances. (cid:1) Don’t leave signed blank DISs of your demat account lying around carelessly or with anyone. (cid:1) Do not sign blank DIS and keep them with DP or broker to save time. Remember your carelessness can be your peril. (cid:1) Do not keep any signed blank transfer deeds. NOTE The contents of this Referencer are for the purpose of general information. The readers are advised to refer to the relevant Acts / Rules / Regulations / Guidelines / Clarifications. Reliance Industries Limited 213 Members Feedback Form 2011-2012 Name : ............................................................................. e-mail id :. ............................................................................................. Address : .............................................................................................................................................................................................. DP ID. : ............................................................................................................................................................................................... Client ID. : .......................................................................................................................................................................................... Folio No. : ........................................................................................................................................................................................... (in case of physical holding) No. of equity shares held : ................................................................. Signature of member Excellent Very Good Good Satisfactory Unsatisfactory Directors' Report and Management's Discussion and Analysis Report on Corporate Governance Shareholders' Referencer Contents Presentation Contents Presentation Contents Presentation Quality of Financial and non- financial information in the Annual Report Contents 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. 214 Partnering India's new future. Sustainably. BUSINESS REPLY INLAND LETTER Postage will be paid by the Addressee Business Reply Permit No. MBI-S-1363 Nariman Point Mumbai - 400 021 No postage stamp necessary if posted in INDIA To, Shri S. Sudhakar Vice President - Corporate Secretarial Reliance Industries Limited Registered Office: 3rd Floor, Maker Chambers IV 222, Nariman Point Mumbai 400 021 Fold (cid:1) DP Id* Client Id* Reliance Industries Limited 215 ATTENDANCE SLIP Registered Office: 3rd Floor, Maker Chambers IV, 222, Nariman Point, Mumbai 400 021. PLEASE FILL ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE OF THE MEETING HALL Joint shareholders may obtain additional Slip at the venue of the meeting. Master Folio No. No. of Shares NAME AND ADDRESS OF THE SHAREHOLDER I hereby record my presence at the 38TH ANNUAL GENERAL MEETING of the Company held on Thursday, June 7, 2012 at 11.00 a.m. at Birla Matushri Sabhagar, 19, New Marine Lines, Mumbai 400 020. * Applicable for investors holding shares in electronic form. Signature of Shareholder / proxy PROXY FORM Registered Office: 3rd Floor, Maker Chambers IV, 222, Nariman Point, Mumbai 400 021. DP Id* Client Id* Master Folio No. 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 38th Annual General Meeting of the Company to be held on Thursday, June 7, 2012 at 11.00 a.m. and at any adjournment thereof. ** I wish my above Proxy to vote in the manner as indicated in the box below: Resolutions 1. Adoption of Accounts, Reports of the Board of Directors and Auditors 2. Declaration of Dividend on Equity Shares 3. Re-appointment of the following Directors retiring by rotation: a) Shri M.L. Bhakta b) Shri Hital R. Meswani c) Prof. Dipak C. Jain d) Shri P.M.S. Prasad 4. Appointment of Auditors 5. Re-appointment of and remuneration payable to Shri Nikhil R. Meswani as a Whole-time Director 6. Re-appointment of and remuneration payable to Shri Pawan Kumar Kapil as a Whole-time Director For Against (cid:1) Signed this…………………. day of …………………………. 2012 * Applicable for investors holding shares in electronic form. Please see the instructions overleaf Signature Affix a 15 paise Revenue Stamp 216 Partnering India's new future. Sustainably. NOTE: (1) The proxy, to be valid, should be deposited at the Registered Office of the Company at 3rd Floor, Maker Chambers IV, 222 Nariman Point, Mumbai 400 021 not less than 48 hours before the time fixed for holding the meeting or adjourned meeting. (2) A Proxy need not be a member of the Company. **(3) This is only optional. Please put a 'X' in the appropriate column against the resolutions indicated in the Box. If you leave the 'For' or 'Against' column blank against any or all the resolutions, your Proxy will be entitled to vote in the manner as he/she thinks appropriate. Should you so desire, you may also appoint the Chairman or the Company Secretary of the Company as your Proxy, who shall carry out your mandate as indicated above in the event of a poll being demanded at the meeting. (4) Appointing a proxy does not prevent a member from attending the meeting in person if he so wishes. (5) In the case of jointholders, the signature of any one holder will be sufficient, but names of all the jointholders should be stated. Partnering India’s new future. Sustainably. India has an interesting story to tell the world. A story of dynamism and confidence to face the future, on the strength of new capabilities and a vibrant market for consumption. Reliance is creating opportunities for future generations by building a unique portfolio of upstream, refining and petrochemicals business with industry-leading performance, and time- critical investments in emerging sectors. Our business growth mirrors the evolving aspirations of millions of fellow Indians to embrace an advanced quality of life. The result is an unprecedented surge in consumption across the vast social spectrum. This great Indian opportunity is the wellspring of our strength. As India helps drive global growth, we are passionately investing our resources and energies in helping accelerate India’s socio-economic progress. We are committed to sustain a culture of operational excellence, responsible resource utilisation and creating a platform for sustainable growth to benefit all stakeholders. Nation Building - The Reliance Way You can give the visually impaired a white cane and they will not fall. Or give them knowledge and they will lead. Reliance Drishti recently launched India’s first registered Braille newspaper in Hindi. The newspaper is a small step that will open up a world of information and knowledge for the visually impaired. Reliance Drishti, an initiative of Reliance Foundation, aims to help the visually impaired acquire skills that will make them independent and relevant in society. It has also made it a mission to bring the gift of sight to the visually impaired, especially those who are underprivileged. Till date, over 10,000 cornea transplant surgeries have been performed and lakhs of children have been provided free eye check-ups. Reliance Foundation, envisaged to become one of the foremost professional philanthropic focuses on organisations transformation, five education, health, urban renewal and arts, culture & heritage. the world, rural core pillars: in Our way of thinking is clear... when we transform the lives of people, we transform India. www.ril.com R e l i a n c e I n d u s t r i e s i L m i t e d ) n i i . l c a @ o f n i ( l c a i t a i n g s e d A n n u a l R e p o r t 2 0 1 1 - 1 2 Srijan Shekhar (Age Group: 5-7 years) Swapnil Agrawal (Age Group: 5-7 years) Nimish Nair (Age Group: 5-7 years) Priyanshu Patel (Age Group: 5-7 years) Sakcham Gupta (Age Group: 5-7 years) Hemal Mahavar (Age Group: 8-10 years) Aryam Bhadauria (Age Group: 8-10 years) Shrey Patel (Age Group: 11-13 years) Dhwani Sonawane (Age Group: 11-13 years) Poonjee Gupta (Age Group: 11-13 years) Pranay Sharma (Age Group: 8-10 years) Dev Chauhan (Age Group: 8-10 years) Sarth Patel (Age Group: 8-10 years) T V Sreesh (Age Group: 11-13 years) Tanya Bhatia (Age Group: 11-13 years) Pictures/ photographs shown in this report are for representation purpose only. Unless expressly authorised, Reliance Group neither claims any intellectual property rights nor will be responsible for any infringement action. PARTNERING INDIA’S NEW FUTURE. SUSTAINABLY. ANNUAL REPORT 2011-12 

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