Reliance Industries Limited
Annual Report 2013

Plain-text annual report

Book-Post 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 A n n u a l R e p o r t 2 0 1 2 - 1 3 ANNUAL REPORT 2012-13 FULFILLING INDIA’S ASPIRATIONS. WITH INNOVATION AND ENTERPRISE. Awards and Recognitions RIL continues to receive recognition for industry leadership and excellence in its fields of operations. Some of the major awards and recognitions conferred during the year include: Health, Safety and Environment Technology, Patents, R&D and Innovation l Hazira Manufacturing Division was awarded the Best Prax Prize for Innovation by QIMPRO Corporate Social Responsibility l Hazira Manufacturing Division, Reliance Community Care Centre, received a Trophy for work done under the National AIDS Control Program Phase III from Population Foundation of India l Nagothane Manufacturing Division received the National Award for Innovative Training Practices for security training practices by Indian Society for Training & Development l Dahej Manufacturing Division received the Greentech Gold Award for HR Excellence Sustainability l Hazira Manufacturing Division received the CII-ITC Sustainability Awards 2012 and the coveted Certificate of Commendation for Significant Achievement in the area of Sustainable Development Leadership l Conferred the International Refiner of the Year 2013 Award at HART Energy’s 27th World Refining & Fuel Conference l Hazira Manufacturing Division won the “Mark of Excellence Award” at the IST Convention on Leadership Excellence organised by IGCL Corporate Rankings and Ratings l Received the appreciation plaque from ASSOCHAM for its CSR activities Quality l Dahej & Hazira Manufacturing Divisions won the Three Star (highest award) at ICQCC l Received the IMC Ramkrishna Bajaj National Quality Award under the manufacturing category l Hazira Manufacturing Division received the ASQ’s International Team Excellence Award from American Society for Quality Project l Dahej Manufacturing Division received the best viewer’s choice award for implementing a Six Sigma Project from the American Society for Quality Division received the Platinum Award for its Six Sigma Project from Concept Business Excellence l Jamnagar Manufacturing Division won the QualTech Prize for Improvement (Manufacturing Process Excellence) from QIMPRO l Hazira Manufacturing l l Received the Management of Health, Safety & Environment Award from Indian Chemical Council l Dahej Manufacturing Division was awarded the Golden Peacock Environment Management Award l Hazira Manufacturing Division won the Golden Peacock Occupational Health & Safety Award l Vadodara Manufacturing Division received the CII- Environment Best Practices Award l KG-D6 operations received the International Safety Award with distinction from the British Safety Council l Jamnagar Manufacturing Division received the Safety Innovation Award from Institution of Engineers, New Delhi for the 3rd consecutive year in a row Energy & Water Conservation / Efficiency l Jamnagar Manufacturing Division (DTA) refinery received the Jawaharlal Nehru Centenary Award from the Ministry of Petroleum & Natural Gas for being among the three refineries, which have achieved the lowest specific energy consumption among Indian refineries Jamnagar Manufacturing Division received an Innovative Project award from the Bureau of Energy Efficiency, Ministry of Power, Govt. of India l Reliance Corporate IT Park, Navi Mumbai was adjudged by CII as a National Energy Efficient Unit in India FULFILLING INDIA’S ASPIRATIONS. WITH INNOVATION AND ENTERPRISE. India is on an undeniable growth trajectory, matched by few in the world, for scale and vigour. Fuelled by boundless aspirations and the infectious energy of a young populace, the country is fast progressing towards a definitive role in the global economic order. Not only is it leading to an increasing share of global commerce for India as a nation, but also catalysing consumption, resulting in the creation of a groundswell of opportunity. Addressing the aspirations of the Indian populace, our businesses are intrinsically linked to India’s growth trajectory. Given India’s unique demographic advantage, our businesses remain relevant to the youth of today who will become the leaders of tomorrow. Innovation and enterprise form the essence of this surge of opportunities and find reflection in every facet of our operations. We are making large investments in all our key business categories, i.e. Oil & Gas, Refining, Petrochemicals, Retail and 4G, to reinforce the spirit of enterprise. Across our businesses, we have demonstrated abilities to build world-scale capacities and infrastructure. We have enhanced our business footprint from the conventional energy chain to consumer businesses and delivered value. Our businesses are deeply aligned with the ethos of innovation. We have constantly endeavoured to operate at the forefront of new technologies. We have invested in continuously developing new products and seeking new applications, which are suitable for Indian markets and conditions. We have, for instance, integrated a technology platform with our Retail business. Over the years, we have tapped into the enormous opportunities presented by the Indian economy. The evolving economic landscape and the aspirations of the people have driven us to aim higher, execute our plans seamlessly and sustain the growth momentum. This has helped us touch the lives of our fellow citizens and lay the foundation for the long-term development of our nation. We understand these aspirations and the opportunities that lie within. This drives us towards continuous efforts in enterprise and innovation which act as catalysts in realising these aspirations. Contents Company Overview 02 Highlights 03 10 Year Financial Performance 04 Letter to Shareholders 06 The Board of Directors 08 Reliance Foundation 14 Company Information 15 Financial Highlights Statutory Reports 16 Notice of Annual General Meeting 84 Secretarial Audit Report 19 Management’s Discussion and Analysis 86 Directors’ Report 49 Report on Corporate Social Responsibility 102 Auditors’ Certificate on Corporate Governance 55 Report on Corporate Governance 103 Business Responsibility Report Financial Statements 113 Independent Auditors’ Report on 163 Consolidated Statement of Profit and Loss Financial Statements 116 Balance Sheet 117 Statement of Profit and Loss 118 Cash Flow Statement 120 Significant Accounting Policies 123 Notes on Financial Statements 161 Independent Auditors’ Report on Consolidated Financial Statements 162 Consolidated Balance Sheet 164 Consolidated Cash Flow Statement 166 Significant Accounting Policies on Consolidated Accounts 167 Notes on Consolidated Financial Statements 204 Financial Information of Subsidiary Companies 208 Shareholders’ Referencer 221 Members’ Feedback Form 223 Attendance Slip and Proxy Form 2 Highlights Reliance Industries Limited (RIL) largest private sector is India’s company with businesses in the energy and materials value chain. RIL is the first private sector company from India to feature in Fortune Global 500 list of ‘World’s Largest Corporations’ and ‘World’s Top 100 companies’, ranking 99th in terms of revenues and 130th in terms of profits in 2012. Operational Highlights l l l Largest refining capacity at any single location Largest producer of Polyester Fibre and Yarn 5th largest producer of Paraxylene (PX) l l l 5th largest producer of Polypropylene (PP) 8th largest producer of Mono Ethylene Glycol (MEG) 9th largest producer of Purified Terephthalic Acid (PTA) RIL’s Contribution to India’s Economic Growth 14% RIL’s exports as % of India’s exports 8.6% RIL’s weightage in the BSE Sensex 4.8% RIL as % of the Government of India’s indirect tax revenues 7.0% RIL’s weightage in the NSE Nifty 4% RIL as % of the total market capitalisation in India Fulfilling India’s Aspirations. With Innovation and Enterprise.3 10 Year Financial Performance TURNOVER (` Crore) PROFIT AFTER TAX (` Crore) (Excluding exceptional item) 56,247 73,164 89,124 118,354 139,269 146,328 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 200,400 258,651 339,792 371,119 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 5,160 7,572 9,069 11,943 15,261 15,637 16,236 20,286 20,040 21,003 0 0 0 , 0 5 0 0 0 , 0 0 1 0 0 0 , 0 5 1 0 0 0 , 0 0 2 0 0 0 , 0 5 2 0 0 0 , 0 0 3 0 0 0 , 0 5 3 0 0 0 , 0 0 4 0 0 0 , 5 0 0 0 , 0 1 0 0 0 , 5 1 0 0 0 , 0 2 0 0 0 , 5 2 NETWORTH (` Crore) MARKET CAPITALISATION (` Crore) 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 34,453 40,403 49,804 63,967 81,449 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 126,373 137,171 151,540 166,096 179,995 75,132 76,079 110,958 198,905 239,721 244,757 249,802 329,179 351,320 342,984 0 0 0 , 0 2 0 0 0 , 0 4 0 0 0 , 0 6 0 0 0 , 0 8 0 0 0 , 0 0 1 0 0 0 , 0 2 1 0 0 0 , 0 4 1 0 0 0 , 0 6 1 0 0 0 , 0 8 1 0 0 0 , 0 5 0 0 0 , 0 0 1 0 0 0 , 0 5 1 0 0 0 , 0 0 2 0 0 0 , 0 5 2 0 0 0 , 0 0 3 0 0 0 , 0 5 3 0 0 0 , 0 0 4 EARNINGS PER SHARE (`)* (Excluding exceptional item) BOOK VALUE PER SHARE (`)* 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 18.5 27.2 32.5 41.3 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 50.9 49.7 49.7 62.0 61.2 64.8 123.4 145.0 178.7 221.3 281.8 401.5 419.5 463.2 507.3 557.5 0 1 0 2 0 3 0 4 0 5 0 6 0 7 0 5 0 0 1 0 5 1 0 0 2 0 5 2 0 0 3 0 5 3 0 0 4 0 5 4 0 0 5 0 5 5 0 0 6 * Normalised on account of issue of Bonus Share in the ratio of 1:1 in 2009-10 Reliance Industries Limited4 Letter to Shareholders Dear Fellow Shareowners, The global economic scenario in FY 2012-13 continued to be fraught with challenges. Major economies witnessed slower growth and the Eurozone was full of uncertainty. As the year progressed, business environment remained difficult and operating in such a testing environment proved challenging. Despite the global challenges, we saw constructive demand growth in most of our businesses. Global oil demand was up by 0.9 million barrels per day in 2012. The demand for polymers and polyester products in India grew by 12% and 5%, respectively. We combined the strength of our portfolio and integrated business model with prudent management to realise revenue growth of 9% and net profit growth of 5%. Reliance achieved a record turnover of ` 371,119 crore ($ 68.4 billion) and net profit of ` 21,003 crore ($ 3.9 billion). RIL also achieved highest ever exports of ` 239,226 crore ($ 44.1 billion) during the year. The growth in earnings was largely driven by strong and improved refining margins during the year. We maintained high operating rates at all our manufacturing locations. Our businesses have delivered industry leading performances. This is a reflection of the quality of our assets and growing demand for our products and services across the world. Our Jamnagar refinery complex operated at over 110% of design capacity. The refineries achieved record crude processing of 68.5 MMT, surpassing its previous record. Refining margin environment remained volatile throughout the year. Despite that we achieved GRMs of $ 9.2/bbl for the year, which was highest in the last four years. RIL’s Jamnagar refinery continues to benefit by processing advantaged crude sourced from diverse markets and produce clean fuels at low operating costs. We have been successful in placing our products globally in the markets with most stringent specifications. Our Company also received the International Refiner of the Year Award from HART Energy, USA, which is a true testimony of our world-class assets and operations. Reliance is the only Asian refiner to have been conferred this award twice. Reliance’s petrochemicals business saw a mixed trend last year. The domestic demand for petrochemical products remained strong although margins were impacted by regional market conditions. The ethylene chain margins remained stable while polyester chain margins came under pressure due to excess supply, high inventory levels and slower demand growth in some key markets. We believe urbanisation and rising aspirations of the Indian consumer will continue to drive demand across all end uses, in particular apparel, housing, automobiles, organised retailing and communication. Per capita consumption of plastics in India is expected to rise from 7 kg to 20 kg over the next decade and our planned expansion is well timed to participate in this growth opportunity. In our domestic upstream business, we have rationalised our portfolio in terms of prospectivity and risk profile. Production from the KG-D6 block continued to decline during the year. To augment the production from the current fields, we have planned various activities including work-overs, side tracks and compressor addition to maximise recovery. Additionally, both RIL and BP have submitted the KG-D6 block enhancement plan using existing infrastructure to increase production from the block. Under this plan, we are planning to invest in a series of projects to develop around Mukesh D. Ambani Chairman & Managing Director Reliance achieved a record turnover of ` 371,119 crore ($ 68.4 billion) and net profit of ` 21,003 crore ($ 3.9 billion). RIL also achieved highest ever exports of ` 239,226 crore ($ 44.1 billion) during the year. The growth in earnings was largely driven by strong and improved refining margins during the year. Our businesses have delivered industry leading performances. Fulfilling India’s Aspirations. With Innovation and Enterprise.4 trillion cubic feet of discovered natural gas resources from the block. The field development plan for the R-Series project has been submitted to the Government of India for approval. This along with other projects is expected to add incremental production in the next four to five years. We believe gas from these projects will deliver energy to millions of Indians and would significantly help India in reducing import dependence. Reliance has made significant investments in the US shale gas ventures over the last two years. growth Production from our in unconventional investments liquids-rich in resource plays North America has reinforced our confidence in creating long term value for our shareholders from this diversification. US shale gas business achieved record revenues and EBITDA for the year 2012. Revenues and EBITDA more than doubled to $ 545 million and $ 422 million respectively in 2012. Our share of production in 2012 was at 101 BCFe, an increase of 166% in comparison to the previous year. With improvement in the US gas prices and continued focus on the liquids-rich acreage in the Eagle Ford area, Reliance is expected to grow this business sustainably over the next few years. Our major investments during the year were mainly concentrated on expanding capacity and boosting production capability. Our focus is to maximise the benefit of being an integrated energy Company. Integration with the refinery at Jamnagar provides us with a unique in sourcing feedstock advantage for into further value addition petrochemicals. Reliance made a significant progress in its proposed expansion plan in the petrochemicals business. Our new cracker will source the feedstock from complex refineries and build world-scale globally competitive cracker capacity. We have completed technology selection and engineering contractor selection projects. for most We have already commenced the order placement for some of the long lead equipments. We are confident of meeting our stated time lines in terms of all project executions and will see commencement of capacity additions starting this financial year. sustainable We are also setting up the world’s largest petcoke gasification facility at Jamnagar. On completion of this project, it will provide us long-term energy security for the entire Jamnagar complex at a globally competitive cost. This will help us in reducing our overall energy bill significantly. Effectively, these large projects, off-gas cracker and gasification are being implemented without relying on any new externally sourced feedstock. We are delighted to see our retail business achieving a milestone of annual revenue crossing ` 10,000 crore in FY 2012-13. Our revenues have grown by 42% on a year on year basis. More importantly, Reliance Retail has turned EBITDA positive last year. We have added 184 stores during the year, taking total number of stores to 1,466 by the end of the year. Our nationwide footprint, new store additions and strong same store sales growth has certainly strengthened our position in this sector. We believe India has a unique opportunity to surpass the world and become a leader in delivery of digital content. Reliance JioInfocomm Ltd. (RJIL) plans to provide reliable fast internet connectivity on pan India basis. In addition to connectivity, RJIL also plans to enable end- to-end solutions that address the entire value chain across various digital services in key domains of national interest such as education, financial healthcare, services, government-citizen interfaces and entertainment. RJIL has finalised key agreements with its technology partners, service providers, infrastructure providers, security, 5 application device manufacturers and other strategic partners for the project. partners, investing in Participating and India’s growth has been the fundamental principle of Reliance’s evolution. Reliance has always maintained conservative its financial profile and investment grade ratings while pursuing future growth opportunities. At Reliance, we have been and continue to remain creating focused long-term shareholder value. on the top 100 We are among companies in the world and have been globally felicitated consistently for shareholder value creation over the past three decades. committed in Reliance’s towards are We investing future. We are confident that our large capital expenditure programme will enable us to take full advantage of our market leadership positions and achieve our growth ambitions. I would like to thank all our colleagues in India and around the world for their hard work and valued contribution during 2012-13. Together we have much to look forward to as we strive to make our company even stronger and continue to focus on delivering for our customers. for I am grateful to the Board of Directors their unwavering support and guidance. I take this opportunity to express my gratitude to all our stakeholders, who have reposed trust in us and extended their constant support. With best wishes, Sincerely, Mukesh D. Ambani Chairman & Managing Director 16 April 2013 Reliance Industries Limited6 The Board of Directors 1 2 3 4 5 6 7 1. 2. Shri P. M. S. Prasad Executive Director Prof. Dipak C. Jain Independent Director 3. Shri Nikhil R. Meswani Executive Director 4. Dr. Dharam Vir Kapur Independent Director 5. 6. 7. Shri Ramniklal H. Ambani Non-Executive Non-Independent Director Shri Mansingh L. Bhakta Independent Director Shri Mukesh D. Ambani Chairman and Managing Director Fulfilling India’s Aspirations. With Innovation and Enterprise. 7 8 9 10 11 12 13 8. 9. Shri Yogendra P. Trivedi Independent Director 10. Shri Hital R. Meswani Executive Director 12. Dr. Raghunath A. Mashelkar Independent Director Shri Mahesh P. Modi Independent Director 11. Prof. Ashok Misra Independent Director 13. Shri Pawan Kumar Kapil Executive Director Reliance Industries Limited 8 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. l Reliance Foundation has touched the lives of over a million underprivileged country, the across reaching out to over 2,500 villages and various urban locations. l Reliance Foundation BIJ (Bharat India Jodo) supports programme small and marginal farmers along the value input through chain provision, technical, post-harvest as well as marketing support. l Reliance Foundation the BIJ has catalysed farmers’ formation of institutions across nearly 300 villages and has engaged with over 100,000 villagers. The programme has improved intake the nutritional rural 4,000 of over through households Reliance Nutrition Gardens. l l The Foundation’s Information Services programme links seekers with knowledge to providers knowledge provide need based, locale- specific information in local languages. Within six months of its launch, the programme has reached out to 1400 villages. Sir H N Hospital is being revamped into a 19 storey, 800,000 square feet world- class tertiary health care facility. l More than 11,000 cornea been transplants have undertaken under Reliance Foundation Drishti, the largest corporate-run cornea transplant drive. The initiative also launched India’s first registered national Hindi newspaper in Braille. Over 3,500 impaired benefit from this fortnightly circulation. visually l for All’ ‘Health initiative was launched under an outreach programme in December 2012 to provide primary and preventive health care to the poor and the vulnerable using state-of-the-art technology for service delivery. So far, over 40,000 individuals have enrolled under the family health card scheme and over 7,500 patients (of which 72% are women and children) have been provided free medical aid in the first 100 days of operation. l Menstrual hygiene programme was launched for improving health and hygiene among women through Reliance Foundation branded affordable napkins, sanitary ‘Meeta’. Currently, the initiative reaches out to 500,000 women in over 850 villages in Gujarat. l The Foundation brought a Mummy exhibition to India in partnership with BP. The exhibition had over 450,000 visitors, including over 100,000 children from across 300 schools in Mumbai. Fulfilling India’s Aspirations. With Innovation and Enterprise.Reliance Industries Limited 9 Major Products and Brands Business/ Brand Exploration & Production Product Brand End Uses Crude Oil and Natural Gas Refining, power, fertilisers, petrochemicals and other industries Refining Liquefied Petroleum Gas (LPG) Domestic and industrial fuel 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) 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 packaging of cement, food-grain, sugar, fertiliser; leno bags for packaging of fruits & vegetables, TQ & BOPP films and containers for packaging of textiles, processed food, FMCG, office stationery; components for automobile and consumer durables, moulded furniture, luggage, housewares, geo-textiles & fibres for non-woven textiles. Woven sacks, raschel bags for packaging of fruits & vegetables, containers for packaging of edible oil, processed food, FMCG, lubricants, detergents, chemicals, pesticides; industrial crates & containers, carrier bags, housewares, ropes & twines; pipes for water supply, irrigation, process industry & telecom; films for packaging of milk, edible oil, salt, processed food, roto- moulded containers for storage of water, chemicals storage and general purpose tanks, protective films and pipes for agriculture, cable sheathing, lids & caps and master batches. Ethylene Vinyl Acetate Copolymer (EVA) Footwear & hotmelt adhesives Ultra High Molecular Weight Polyethylene (UHMWPE) Reon Polyvinyl Chloride (PVC) Relpipe Poly-Olefin HDPE and PPR pipes Cisamer Poly Butadiene Rubber (PBR) 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. 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 10 Fulfilling India’s Aspirations. With Innovation and Enterprise. Business/ Brand Chemicals Relab Product Brand End Uses Linear Alkyl Benzene (LAB) Detergents 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 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 Can dye at boiling water temperature with high colour fastness Ladies outerwear, feather yarn for knitted cardigan, decorative fabric & home furnishing Recron® Recron® Stretch Recron® Cotluk Recron® Dyefast Recron® Superblack Dope dyed black with high consistency in shade Apparel, automotive, non-woven & interlining Recron® Superdye Recron® Kooltex Recron® Fibrefill Recron® 3S Recron® Certified Recron® Low Pill Recron® FeelFresh Recron® Micrelle Recron® Recrobulk Recron® Green Bright, brilliant colours and soft feel, low pill Woven & knitted apparel, furnishing & home textile Moisture management yarns Active sports and high performance wear Hollow fibres with high bounce and resilience Pillows, cushions, quilts, mattresses, furniture, toys & non- wovens Secondary Reinforcement Products Quality Certified Sleep Products Polyester Tow & Staple Fibre with unique low pill properties Anti microbial fibres & yarns Construction industry (concrete/mortar), cement (sheet & pipe), paper industry (conventional & speciality), battery industry, wetlaid industry (wall papers, filtration, wipes & hygiene products) & Asbestos replacement Pillows, cushions, blankets & quilts High-end worsted suitings, upholstery fabrics & socks Active sportswear, Intimate apparel, socks, home furnishings & garments used in healthcare industry Bi-component filament yarns Super soft and ultra comfortable fabrics Hi-bulk fibres for soft-feel & warmth Sweaters, pullovers, cardigans, shawls & jackets Eco-friendly fibres made from 100% post-consumer polyester waste Apparel & home textiles Reliance Industries Limited 11 Brand End Uses Product Business/ Brand Petrochemicals - Polyester & Fibre Intermediates Recron® Spunlace Speciality polyester fibres Specialty Polyester Filament Yarns for Silken Shimmer and Swathes of Colour in Fabrics Flame retardant Fibres & Yarns Re c o s i l k 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 Polyethylene Terephthalate (PET) High quality non-woven products for the healthcare & hygiene industry Ideal substitute for silk in dress materials, velvet, sarees, etc. and viscose filament yarn in embroidery thread. Institutional textiles for hospitality, entertainment, transport, safety etc. Also used in home textiles, fill & comfort products. Tarpaulin, Tents & Awnings Crepe, Rolled Bandages & Surgical Dressings Safeband Packaging for bottled water, beverages, confectionary, pharmaceutical, agro-chemical and food products Recron® RecoSilk Recron® FR Recron® Duratarp Recron® Safeband Relpet® Textiles Vimal Suitings, Shirtings, Readymade Garments Fabrics, suits, jackets, shirts & trousers Vimal Gifting Ready-to-stitch, take away fabric in gift packs V2 Retail Ready-to-stitch, Take away fabric Reliance Retail Food & Grocery Specialty Store Mini Hypermarket Hypermarket Wholesale Store Electronics Specialty Store Exclusive Apple Store Jewellery Specialty Store Apparel Specialty Footwear Specialty Store Books, Music, Toys & Gifts Specialty Store Furniture, Furnishing & Homeware Specialty Store Automotive Services & Products Specialty Store Fabrics Fabrics Organised retail 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 Range of Apple products like IPod and IMac Fine jewellery Men, ladies, children clothing and accessories Men, ladies, children footwear, sports, handbags and accessories Books, music, stationery, toys and gifting merchandise 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 12 Fulfilling India’s Aspirations. With Innovation and Enterprise. Business/ Brand Product Brand End Uses Italian Luxury Men’s Clothing Italian luxury sportswear brand Luxury Footwear British Shirt Authority American icon that has redefined & shaped classic American style for nearly two centuries Apparel, Accessories and Footwear for Men Apparel, Accessories and Footwear for Men Accessories and Footwear for Women Apparel and Accessories for Men Apparel and Accessories for Men Iconic Italian Lifestyle Brand Apparel, Accessories and Footwear Urban fashion & Lifestyle brand that exudes metropolitan lifestyle of New York city Fashion brand that fuses design influences from Japanese graphics and vintage Americana, with the values of British Tailoring Apparel, Accessories and Footwear Apparel, Accessories and Footwear Distinctive Fashion footwear & Accessories Accessories and Footwear for Women Fashion forward Footwear & Accessories Brand Accessories and Footwear for Women The finest toy shop in the world Toys Optical Specialty Store International Apparel, Accessories & Home Products Store Office Needs, Office Supplies and Stationery Store Iconic Japanese Sports Perfomance brand Spectacles, Sunglasses, Contact Lenses Apparel for Women, Men and Children, Lingerie, Beauty and Home Décor Office and Personal Stationery Men, Ladies Sports footwear, clothing & accessories Transportation fuels Retail distribution of fuels Fleet Management Services Highway Hospitality Services Vehicle Care Services Convenience Shopping Foods Auto LPG GAPCO Petroleum Retail Lubricants Transport fleet Highway food plaza Vehicle care service outlets Highway shopping Food Auto fuel outlet Retail distribution of fuels Lubricants Product Flow Chart Reliance Industries Limited 13 14 Fulfilling India’s Aspirations. With Innovation and Enterprise. 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 Group Company Secretary and Chief Compliance Officer K. Sethuraman 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 Shareholders’/Investors’ Grievance Committee Mansingh L. Bhakta (Chairman)1 Yogendra P. Trivedi (Chairman)2 Nikhil R. Meswani Hital R. Meswani Prof. Ashok Misra2 Remuneration Committee Mansingh L. Bhakta (Chairman)1 Yogendra P. Trivedi (Chairman)2 Dr. Dharam Vir Kapur Dr. Raghunath A. Mashelkar2 1. upto 20.07.2012 2. w.e.f. 20.07.2012 Finance Committee Mukesh D. Ambani (Chairman) Nikhil R. Meswani Hital R. Meswani Health, Safety & Environment Committee Hital R. Meswani (Chairman) Dr. Dharam Vir Kapur P.M.S. Prasad Pawan Kumar Kapil 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 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 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 - 402 125, Roha Taluka, Dist. Raigad, Maharashtra, India Patalganga B-1 to B-5 & A3, MIDC Industrial Area, P.O. Rasayani, Patalganga - 410 220 Dist. Raigad Maharashtra, India Vadodara P. O. Petrochemicals Vadodara - 391 346, Gujarat, India Registrars & Transfer Agents 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 Registered Office 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 39th Annual General Meeting on Thursday, 6th June, 2013 at 11.00 a.m. at Birla Matushri Sabhagar, 19, New Marine Lines, Mumbai 400 020. Reliance Industries Limited 15 Financial Highlights 2012-13 11-12 10-11 09-10 08-09 07-08 06-07 05-06 04-05 03-04 ` in crore $ Mn Revenue From Operations 68,365 3,71,119 3,39,792 2,58,651 2,00,400 1,46,328 1,39,269 1,18,354 89,124 73,164 56,247 Total Income 69,838 3,79,117 3,45,984 2,61,703 2,02,860 1,48,388 1,44,898 1,18,832 89,807 74,614 57,385 Earnings Before Depreciation, Finance Cost and Tax Expenses (EBDIT) 7,145 38,785 39,811 41,178 33,041 25,374 28,935 20,525 14,982 14,261 10,983 Depreciation and Amortisation 1,744 9,465 11,394 13,608 10,497 5,195 4,847 4,815 3,401 3,724 3,247 Exceptional Items Profit For the Year Equity Dividend %* Dividend Payout - - - - - (370) 4,733 - - - - 3,869 21,003 20,040 20,286 16,236 15,309 19,458 11,943 9,069 7,572 5,160 90 85 80 70 130 130 110 100 75 52.5 487 2,643 2,531 2,385 2,084 1,897 1,631 1,440 1,393 1,045 733 Equity Share Capital 595 3,229 3,271 3,273 3,270 1,574 1,454 1,393 1,393 1,393 1,396 Equity Share Suspense Account Equity Share Warrants - - - - - - - - - - 69 - - 1,682 60 - - - - - - - Reserves and Surplus 32,563 1,76,766 1,62,825 1,48,267 1,33,901 1,24,730 78,313 62,514 48,411 39,010 33,057 Net Worth 33,157 1,79,995 1,66,096 1,51,540 1,37,171 1,26,373 81,449 63,967 49,804 40,403 34,453 Gross Fixed Assets 42,787 2,32,270 2,05,493 2,21,252 2,28,004 2,18,673 1,27,235 1,07,061 91,928 59,955 56,860 Net Fixed Assets Total Assets 23,738 1,28,864 1,21,477 1,55,526 1,65,399 1,69,387 84,889 71,189 62,675 35,082 35,146 58,674 3,18,511 2,95,140 2,84,719 2,51,006 2,45,706 1,49,792 1,17,353 93,095 80,586 71,157 Market Capitalisation 46,017 2,49,802 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 Number of Employees 23,519 23,166 22,661 23,365 24,679 25,487 24,696 12,540 12,113 11,358 Contribution to National Exchequer 5,333 28,950 28,197 28,719 17,972 11,574 13,696 15,344 15,950 13,972 12,903 Key Indicators Earnings Per Share - (`) [excluding Exceptional item]* $ 2012-13 11-12 10-11 09-10 08-09 07-08 06-07 05-06 04-05 03-04 1.2 64.8 61.2 62.0 49.7 49.7 105.3 82.2 65.1 54.2 36.8 Turnover Per Share - (`) 21.2 1,149.5 1,037.8 790.5 612.9 464.9 958.1 814.2 639.6 525.0 402.8 Book Value Per Share - (`) 10.3 557.5 507.3 463.2 419.5 401.5 560.3 440.0 357.4 289.9 246.7 Debt : Equity Ratio 0.40:1 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 EBDIT / Gross Turnover % Net Profit Margin % RONW % ** ROCE % ** 10.5 5.7 12.8 11.2 10.5 11.7 15.9 16.5 5.7 12.8 11.2 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 9.2 17.0 14.0 In this Annual Report $ denotes US$ 1US$ = ` 54.285 (Exchange rate as on 31.03.2013) * Adjusted for issue of bonus shares in 2009-10 in the ratio of 1:1 ** Adjusted for CWIP and revaluation 16 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notice Notice is hereby given that the thirty-ninth Annual General Meeting of the members of Reliance Industries Limited will be held on Thursday, June 06, 2013 at 11.00 a.m. at Birla Matushri Sabhagar, 19, New Marine Lines, Mumbai 400 020, to transact the following businesses: Ordinary Business 1. 2. 3. 4. To consider and adopt the audited Balance Sheet as at March 31, 2013, the Statement of Profit and Loss for the year ended on that date and the reports of the Board of Directors and Auditors thereon. To declare a dividend on equity shares. To appoint Directors in place of those retiring by rotation. 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 approve the payment of commission to Non- Executive Directors and in this regard to consider and if thought fit, to pass, with or without modification(s), the following resolution as a Special Resolution: "RESOLVED THAT pursuant to the provisions of Sections 309, 310 and other applicable provisions, if any, of the Companies Act, 1956, the Non-Executive Directors of the Company (i.e. Directors other than the Managing Director and Whole-time Directors) be paid, by way of an annual payment, in addition to the sitting fees for attending the meetings of the Board of Directors or Committees thereof, a commission as the Board of Directors may from time to time determine, not exceeding ` 5 (five) crore per annum in the aggregate, for a period of 5 (five) years from the financial year ending March 31, 2013.” By Order of the Board of Directors K. Sethuraman Group Company Secretary and Chief Compliance Officer April 16, 2013 Registered Office: 3rd Floor, Maker Chambers IV, 222 Nariman Point, Mumbai 400 021, India e-mail: investor_relations@ril.com 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 Mahesh P. Modi, Dr. Dharam Vir Kapur, Dr. Raghunath A. Mashelkar and Shri Pawan Kumar Kapil, Directors, retire by rotation at the ensuing Meeting and being eligible, offer themselves for re-appointment. The Board of Directors of the Company commend 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 Reliance Industries Limited 17 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 Tuesday May 14, 2013 to Saturday May 18, 2013 (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 07, 2013 and June 13, 2013 to those members whose names shall appear on the Company’s Register of Members on May 13, 2013; 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, M/s. Karvy Computershare Private Limited (“Karvy”) 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 their address or bank mandates immediately to the Company / 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 2004-05, to the Investor Education and Protection Fund (the IEPF) established by the Central Government. Pursuant to the provisions of Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on June 07, 2012 (date of last Annual General Meeting) on the website of the Company (www.ril.com), as also on the Ministry of Corporate Affairs website. 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 their 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 / 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 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: 18 Fulfilling India’s Aspirations. With Innovation and Enterprise. (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. 19. Members who have not registered their e-mail addresses so far are requested to register their e-mail address so that they can receive the Annual Report and other communication from the Company electronically. 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 at Item No. 5 of the accompanying Notice: Item No. 5 The Members of the Company at the 33rd Annual General Meeting held on October 12, 2007, approved payment of commission of ` 21,00,000/- (Rupees twenty one lakh) per annum to each Non-Executive Director of the Company, i.e. Directors other than the Managing Director and Whole-time Directors of the Company, payable annually, for a period of 5 (five) financial years commencing from the financial year ending on March 31, 2008. The role, responsibilities and participation of the Non- Executive Directors in the affairs of the Company have increased over a period of time. The compensation payable to the Non-Executive Directors should therefore be commensurate with their increased role and responsibilities. Keeping in view the above, the Board of Directors, subject to the approval of Members of the Company, have approved by way of an annual payment to the Non-Executive Directors, a commission, as the Board of Directors may from time to time determine not exceeding ` 5 (five) crore per annum in the aggregate, for a period of 5 (five) years from the financial year ending March 31, 2013. The said commission shall not exceed the permissible limit under the provisions of the Companies Act, 1956 or any statutory modification(s) or re-enactment thereof. The aforesaid commission shall be paid to all such Directors in addition to the sitting fees paid to them for attending meetings of the Board and Committees thereof. All the Non-Executive Directors of the Company are deemed to be concerned or interested in this Resolution. None of the other Directors are, in any way, concerned or interested in this Resolution. Your Directors commend the Special Resolution set out at Item No. 5 of the Notice for your approval. By Order of the Board of Directors K. Sethuraman Group Company Secretary and Chief Compliance Officer April 16, 2013 Registered Office: 3rd Floor, Maker Chambers IV, 222 Nariman Point, Mumbai 400 021, India e-mail: investor_relations@ril.com Management’s Discussion And Analysis Reliance Industries Limited 19 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 The global economy in FY 2012-13 improved slowly and did not recover to the extent anticipated in the beginning of the year. Several European economies experienced recession due to high unemployment, banking fragility, fiscal tightening and sluggish growth. The U.S. economy improved marginally, driven mainly by housing and the consumer sectors; however, capital investments remained sluggish. Among the Asian economies, China, going through a political transition, experienced considerably slower growth. Deceleration in industrial output and exports weakened India’s economic growth significantly. The weak macro environment and slower growth caused the margin environment to remain volatile with downward bias. Oil demand increased by 0.9 MMBPD in 2012. Eurozone’s recession and emerging markets slowdown weakened global economy, which in turn, impacted demand growth. Increased production, particularly in North America and Iraq, helped meet this demand, partly offset by decreasing supply from some Middle Eastern countries, especially Iran and Syria. The average Brent crude oil price increased marginally in 2012 to reach $111.6 per barrel. Reliance Industries Ltd. (RIL) demonstrated its ability to perform in this challenging environment and enhanced its revenues by 9.2% to ` 371,119 crore and profits by 4.8% to ` 21,003 crore. RIL achieved record exports (15% higher) at ` 239,226 crore, as against ` 208,042 crore in FY 2011- 12. RIL’s consolidated revenue from operations for the year ended March 31, 2013 was ` 397,062 crore, an increase of 10.8% on a year on year (Y-o-Y) basis. RIL’s KG-D6 facility, completing four years of operations, produced 3.31 million barrels (MMBL) of crude oil and condensate and 336 billion cubic feet (BCF) of natural gas. In the downstream segments, RIL maintained operating rates over 100% in the refining and petrochemicals businesses. The Company processed a record 68.5 million tonnes (MMT) of crude at its Jamnagar refinery complex. RIL’s performance can be attributed to its strong integrated business model, wide product portfolio and increasing demand for its products. RIL’s facilities continued to deliver operating excellence and this is a true testimony of the quality of its manufacturing assets and human talent. RIL was featured in the Fortune Global 500 list of the world’s largest corporations for the eighth consecutive year. It was ranked 99th based on sales and 130th based on profits. Noteworthy Events RIL’s Share Buyback Programme The Company had announced India’s largest share buy-back programme in January 2012. The Board of Directors of the Company had approved buyback of up to 120,000,000 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 exchanges. During the buy-back programme which ended in January 2013, the Company bought and extinguished 46,246,280 equity shares of ` 10 each. It was 38.54% of the total buy-back offer quantity of 120,000,000 equity shares. The total amount invested in the buy-back was ` 3,366 crore and the average price at which the equity shares were bought back was ` 726.68 per share. The share buy-back reinforced investors’ confidence and provided significant support to the stock. This buy-back programme was the largest ever implemented-to-date in the history of Indian capital markets and was Earnings per Share (EPS) accretive for the Company. It is expected to supplement earnings growth from operations, for higher EPS, in the near future. RIL-BP Partnership In its second year of the partnership, RIL and BP combined their expertise in deepwater exploration and development and operations in India. Both the teams worked closely to understand the complex geology of the east-coast of India including KG-D6 block. The efforts are on, to map out an exploration and development campaign that will efficiently 20 Fulfilling India’s Aspirations. With Innovation and Enterprise. target high quality prospects in deeper zones and optimise existing as well as future development plans. RIL continued to play a pivotal role in the growth of India’s economy. It accounted for: The Company is creating a projects pipeline for the next wave of oil and gas development, which includes satellite discoveries in KG-D6 block. Under the block’s enhancement plan, the Company aims to invest in a series of projects to develop around 4 trillion cubic feet (TCF) of discovered natural gas resources over the next 3-5 years. These project implementations in the KG-D6 enhancement plan are subject to the timely regulatory and Government approvals. At current international Liquefied Natural Gas (LNG) prices, it would cost over $ 50 billion to import this gas volume into India. Gas from these projects will deliver energy to millions of Indians and would significantly help India reduce import dependence. Financial Performance Revenue from operations PBDIT PBT Cash profit Net profit ` 371,119 crore $ 68.4 billion ` 38,785 crore $ 7.1 billion ` 26,284 crore $ 4.8 billion ` 30,505 crore $ 5.6 billion ` 21,003 crore $ 3.9 billion + 9.2% (-) 2.6% + 2.1% (-) 4.6% + 4.8% The net profit for FY 2012-13 was at ` 21,003 crore ($ 3.9 billion) with a compounded annual growth rate (CAGR) of 18% over the past 10 years. RIL has announced a dividend of 90% amounting to ` 3,092 crore ($ 570 million), including dividend distribution tax. This is the highest pay-out ever by RIL and in line with its prudent distribution commitment. Highlights of RIL’s consolidated performance for the year are as follows: l l l l l Revenue from operations increased by 10.8% to ` 397,062 crore ($ 73.1 billion) PBDIT increased by 0.5% to ` 40,912 crore ($ 7.5 billion) Profit Before Tax increased by 3.2% to ` 26,150 crore ($ 4.8 billion) Cash Profit decreased by 1.5% to ` 32,115 crore ($ 5.9 billion) Net Profit increased by 5.9% to ` 20,879 crore ($ 3.8 billion) l l l 14% of country’s exports (RIL exports at $ 44.1 billion) 4.8% of indirect tax revenues 4% of total market capitalisation l Weightage of 8.6% in the Bombay Stock Exchange (BSE) Sensex l Weightage of 7.0% in the National Stock Exchange (NSE) Nifty Financial Review RIL delivered superior financial performance with improvements across key parameters. RIL achieved a Revenue from operations for the year ended 31st March 2013 of ` 371,119 crore ($ 68.4 billion), an increase of 9.2% on a Y-o-Y basis. The Refining business revenues increased by 11.6%, Petrochemicals by 9.3% while Oil & Gas revenues decreased by 35.2% on account of lower production. Higher prices accounted for 11.0% growth in revenue which was partly offset by the decrease in volumes by 1.8%. Exports were higher by 15.0% at ` 239,226 crore ($ 44.1 billion) as against ` 208,042 crore in FY 2011-12. Higher crude oil prices increased raw materials consumption by 11.4% to ` 306,127 crore ($ 56.4 billion) on a Y-o-Y basis. Employee costs were at ` 3,354 crore ($ 618 million) for the year as against ` 2,862 crore in the previous year. Other expenditure increased by 26.6% from ` 18,040 crore to ` 22,844 crore ($ 4.2 billion) primarily due to higher expenses on account of power & fuel, selling & distribution, sales tax, professional fees and repairs. Operating profit before other income and depreciation decreased by 8.4% from ` 33,619 crore to ` 30,787 crore ($ 5.7 billion) due to reduction in oil & gas and petrochemicals earnings, partially offset by higher operating profit from refining. Net operating margin was lower at 8.5% as compared to 10.2% on a Y-o-Y basis due to lower production of oil & gas and weaker petrochemicals business margins. Other income was higher at ` 7,998 crore ($ 1.5 billion) as against ` 6,192 crore primarily due to an increase in cash flows from operations that were deployed in bank deposits, mutual funds and Government securities / bonds. Reliance Industries Limited 21 Depreciation (including depletion and amortisation) was lower by 16.9% at ` 9,465 crore ($ 1.7 billion) against ` 11,394 crore in FY 2011-12. This was primarily due to lower production of oil and gas. Interest cost was higher at ` 3,036 crore ($ 559 million) as against ` 2,667 crore in FY 2011-12 principally due to higher foreign currency borrowings and depreciation of the Indian rupee. This resulted in gross interest cost being higher at ` 3,421 crore ($ 630 million) as against ` 3,097 crore in FY 2011-12. Interest capitalised was lower at ` 385 crore ($ 71 million) as against ` 430 crore. Profit after tax for the year was at ` 21,003 crore ($ 3.9 billion) as against ` 20,040 crore in the previous year. Basic EPS for the year was ` 64.8 ($ 1.2) as compared to ` 61.2 in the previous year. RIL’s consolidated revenue from operations for FY 2012-13 was ` 397,062 crore ($ 73.1 billion), an increase of 10.8% on a Y-o-Y basis. Profit after tax was at ` 20,879 crore ($ 3.8 billion), an increase of 5.9% as against ` 19,724 crore in the previous year. Basic EPS for the year was at ` 70.7 ($ 1.3), as against ` 66.2 in the previous year. The Company is debt-free on a net basis as on March 31, 2013. Return on capital employed was at 11.2% and return on equity was at 12.8%. RIL bought and extinguished 42,582,849 equity shares for a sum of ` 3,044 crore during the year. The Company cumulatively bought and extinguished 46,246,280 equity shares at a total cost of ` 3,366 crore under the buy- back scheme. The net addition to fixed assets for FY 2012-13 was ` 19,041 crore ($ 3.5 billion) including an addition of ` 1,942 crore on amalgamation of Reliance Jamnagar Infrastructure Limited. Capital expenditure was incurred principally on account of on-going expansion projects at Jamnagar, Dahej, Silvassa and Hazira. During the year, a total of ` 28,950 crore ($ 5.3 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 ` 239,226 crore ($ 44.1 billion) as against ` 208,042 crore in the previous year. RIL exported to 116 countries around the world. The exports represent 64% of the RIL’s turnover. Petroleum products constituted 89% of exports value, while the balance was contributed by petrochemicals. Resources and Liquidity In FY 2012-13, RIL tied up facilities of around $ 6.8 billion through five landmark transactions to part-finance the proposed expansion of its petrochemical plants, setting up new gasification plant and refinery off-gas cracker over the next 3-4 years. During the year, RIL signed $ 4.5 billion equivalent facilities, backed by Export Credit Agencies, which included: l l l $ 2 billion equivalent facility from Euler Hermes, the German Export Credit Agency $ 2 billion facility from the Export- Import Bank of the United States of America $ 500 million equivalent facility from Korea Trade Insurance Corporation, the South Korean Export Credit Agency These facilities will be drawn over the next 3 years as the projects progress. Besides, these will have a door-to-door tenor of over 13 years. This is in line with RIL’s objective of extending the average maturity of its long-term debt at competitive cost and diversifying funding sources. The RIL deals were the first in history to be accorded ‘Better than Sovereign’ rating by each of the above export credit agencies. For the SACE (Italian Export Credit Agency) and Euler Hermes deals, RIL has received the “Deal of the Year” awards for 2012 from Trade Finance, a leading global publication in the international trade finance market. RIL also raised $ 1.5 billion from syndicated loan facility. The deal represented the largest bank group for an unsecured syndicated loan with tenor in excess of five years in Asia in 2012 with a strong participation from a total of 28 international and Indian banks amid volatile market conditions. RIL received the “Best Loan Syndication in Asia” and “Best Corporate Issuer in Asia” awards for 2012 from The Asset, a leading Asian financial publication for this deal. In January 2013, RIL issued $ 800 million (5.875%) Senior Perpetual Notes. The Notes have no fixed maturity date and the Company will have an option, from time to time, to redeem the Notes, in whole or in part, on any semi-annual interest payment date on or after February 5, 2018 at 100% of the principal amount plus accrued interest. This was the first US Dollar bond issuance by RIL in the public markets since 1997. This landmark deal represents the first ever US Dollar senior, fixed for life, non-deferrable perpetual issuance out of Asia and the lowest coupon achieved for a 22 Fulfilling India’s Aspirations. With Innovation and Enterprise. US Dollar senior true perpetual issuance globally to date. Strategy for STAR RIL continuously undertakes liability management to reduce debt cost and diversify its liability mix. As on 31st March 2013, RIL’s total debt was at ` 72,427 crore ($ 13.3 billion). Over 91% of total debt, including short-term debt was denominated in foreign currencies. The proportion of long term debt to total debt is over 84%. RIL’s gross debt to equity ratio including long-term and short-term debt as on 31st March 2013 was 0.40, while the net debt to equity ratio was NIL. RIL’s cash and cash equivalents as at 31st March 2013 amounted to ` 82,975 crore ($ 15.3 billion). RIL continued to efficiently manage its short term resources by placing them in very liquid, highly rated securities such as bank fixed deposits, Government securities and bonds and money market mutual funds. RIL’s superior credit profile is reflected in its relationships with over 100 banks and financial institutions having commitments to the Company. 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 (local currency issuer rating). 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. Smart Transformation at Reliance (STAR) In order to make RIL “FUTURE READY”, the Company has embarked on one of the largest business transformation project - STAR. The rationale behind STAR is to enable the institutionalisation of RIL’s DNA. Powerful project management skills have been one of RIL’s biggest strengths. Supplementing these through robust business process framework and best-in- class IT solutions will allow the Company to retain its competitive advantage. It would also help the Company bring end-to-end digital chain to free up resources. This will help enhance organisational entrepreneurship and create a world-class human resource framework to retain talent and fulfill mission of being an “Employer of Choice”. l Create a world-class workforce with a well understood employee value proposition. l Build a vibrant learning environment through partnerships with best institutions to create a learning organisation, nurture talent and leadership pool. l Use best-in-class processes, coupled with well-honed best practices l Inculcate continuous process improvement culture through Business Process Management (BPM) l Build streamlined and scalable business architecture to ensure transparency and provide orchestration of “Ready to Use” Process-System-Data blocks for new ventures l Leverage “state-of-the-art” technology to automate and digitise hard-wired built-in controls, transaction level transparency and real-time visibility into key business and operational parameters l Create scalability through world-class IT backbone in the Cloud, enabling growth and merger integrations with relative ease and minimal incremental costs l Make data and solutions available through virtualisation and mobility solutions to ensure “Anytime Anywhere” computing l Use Big Data Analytics to support informed decision- making l Build a governance framework to empower people and enable success measurement in unobtrusive manner l Create a standardised and life-cycle approach to energy, process and asset management with inline monitoring and adjusting for best-in-class performance l Ensure quality-driven project execution through measured stage-gate criteria and minimal risk of business disruption l Create an integrated project management approach with operations, technology, engineering and maintenance combined in project teams through the project life-cycle l Solid Change Management program that empowers all employees to adopt and absorb new way of working and enhance entrepreneurial culture. l Provide “Online” role based training for end users to ensure power of new solutions is fully realised. Reliance Industries Limited 23 Key Milestones and Progress Achieved STAR covers three businesses, Exploration & Production, Refining & Marketing and Petrochemicals and support functions such as manufacturing, projects, procurement & contracting, logistics, human resources, finance, shared services, IT, R&D and security. RIL completed basic and detailed design, including business blueprinting for 265 end-to-end business processes. The Company’s new business architecture framework has been developed and the new organisation structure is also ready to be implemented. Further, a repository of around 40,000 process models have been developed, interlinked with solution landscape to ensure integrated process change management. The system landscape with best-in-class solutions has been finalised and is in the final stages of testing. The solutions are likely to be rolled out in phases starting from April 2013. The key state-of-the-art solutions benefitting RIL in the areas of advanced planning, plant data reconciliation and validation, operational performance management and analysis and quality management have also been implemented. A team of around 1400, inclusive of RIL employees and external consultants have been working on this initiative to make it successful. Business Performance OIL & GAS EXPLORATION AND PRODUCTION BUSINESS Business Environment - Global In 2012, crude oil prices averaged $ 111.6/bbl, while Asian LNG prices averaged $ 15.1/MMBTU. Oil prices remained high as 2012 demand increased by 0.9 MMBPD while non OPEC supply increased only by 0.60 MMBPD which increased the call on OPEC in 2012. In the year 2013, the incremental oil demand may only be 0.8 MMBPD as per the IEA Oil Market Report dated March 2013 taking the cumulative demand to 90.6 MMBPD for 2013. However, incremental non-OPEC supply would be 1.1 MMBPD due to rise in production from North American shale oil, Iraq and Canadian oil sands, offsetting declines elsewhere in the non-OPEC regions. Upstream oil and gas investment for 2012 was estimated at about $ 620 billion - higher by 8% than in 2011 and 20% than in 2008 (Source: EIA’s World Energy Outlook 2012). The increased spending reflects a combination of improved returns, spurred by higher oil prices and rising costs of current and planned projects. Despite signs of declining cost inflation with easing global commodity prices, deep and ultra-deep-water rig rates stayed high, even exceeding $ 650,000/day and the subsea market remained tight. Global LNG prices remained buoyant due to increasing demand in LNG mainly in Japan, China, India and South America contributing to the market tightness. Supply was constrained by maintenance and unscheduled interruptions on existing liquefaction plants, as well as lower-than-expected capacity additions, with only one new train Pluto in Australia coming into service. US gas prices rallied to over $ 4/MMBTU in recent months. The strength in the current rally may be sustained, as the US considers policy moves allowing LNG exports, coal-fired power plants shutdown due to proposed environmental regulations and the planned conversion of the truck and rail engine fleets into CNG. Business Environment - India Indian gas demand is expected to be more than treble to touch 600 MMSCMD by 2021-22. The domestic gas availability by then may be around 250 MMSCMD and the balance would be met through LNG imports. The regulatory environment has shown a positive trend in recent months. The government has allowed for exploration in production areas. Directionally, the Indian gas market is expected to move towards market based pricing. The recommendations of the Government appointed Rangarajan committee were a move in the right direction with efforts now directed towards achieving a transition to arms-length market pricing. As per global experts, significant gas resources in India exist in deep-water, ultra deep-water frontier areas. However, the average accumulation sizes are relatively small which adds to the cost challenges of developing these fields. These fields require market linked gas prices to strengthen India’s energy security and make these fields commercially viable. Currently LNG constitutes more than 30% of India’s gas consumption implying a high demand for natural gas even at prices in excess of $ 12/MMBTU. Currently, the regas terminals on India’s west coast are running at full capacity and the country’s LNG import bill in FY 2012-13 has touched $ 7 billion. In future, global LNG Supply is likely to improve, with a new cycle of liquefaction capacity additions starting this year. This expansion should alleviate pressure on spot prices over the medium term. However, the market 24 Fulfilling India’s Aspirations. With Innovation and Enterprise. is expected to tighten again after 2017, as Asian demand continues to grow. Besides, most of the upcoming LNG projects are getting delayed, coupled with delays in restart of Japan’s nuclear power plants. Even the shale revolution outside the US, in Asia and Latin America faces considerable hurdles on issues of water, land availability, mineral rights, public opinion and geological factors. RIL: Portfolio Overview Through continuous assessment of its portfolio in terms of prospectivity and risk profile, RIL rationalises its portfolio focusing on monetising and maximising value. RIL’s upstream business has been restructured into different sectors i.e., Conventional, CBM and Shale Gas. In this way the risks and dynamics of each sector are clearly understood and distinctly managed to maximise value and growth. Conventional Business: Currently the portfolio includes 13 Production Sharing Contracts (PSC) blocks in India of which 9 are in the active exploration/appraisal phase. There are 4 blocks which are under development and production including KG-D6 in Krishna Godavari offshore basin, Panna-Mukta and Tapti in Mumbai offshore basin and NEC-25 in the Mahanadi basin. Incrementally, there are 4 PSC blocks in international arena which includes 2 blocks each in Yemen and Peru. Coal Bed Methane (CBM): RIL currently holds two CBM blocks (Sohagpur East and Sohagpur West) in India which are in an early stage of development. North America Shale Gas: RIL has three JVs, with Pioneer Natural Resources, Carrizo Oil & Gas and Chevron. Apart from this, the Company has a successful midstream joint venture (JV) with Pioneer Natural Resources that caters primarily to the gathering and transportation needs of Pioneer upstream JV. International Business Development Initiatives RIL has signed a memorandum of understanding with PDVSA, Venezuela for exploring joint participation options in upstream heavy oil projects of the Orinoco oil belt. Cooperation with PDVSA includes providing technical assistance and RIL sharing its experience of executing large scale projects in areas of offshore upstream, refining and other downstream projects. During March 2013, RIL has also been pre-qualified by Iraq Government to participate in the bidding round for Al-Nasiriya Integrated Project which contemplates development of Nasiriya oil field along with construction and operation of a 300,000 bpd refinery in Iraq. RIL’s Current Year Performance KG-D6 Block The KG-D6 fields produced 336 BCF of natural gas and 3.31 MMBBL of crude oil and condensate in FY 2012-13 - reduction of 41% in case of liquid portion and 39% in case of natural gas on a Y-o-Y basis. The average production during the year was at 26 MMSCMD of natural gas and 9,225 BOPD of crude oil. The fall in production is mainly attributed to geological complexity, natural decline in the fields and higher than envisaged water ingress. To augment production from the current fields (D1-D3 and MA), various Base Management actions have been planned for maximising value from these fields. These include work overs, side tracks, compressor, enhancement of water handling capacity and a new well in the MA field to be undertaken in FY 2013-14. Of the revised field development plans submitted in 2012, the one for MA (D26) has been approved. The next wave of projects in KG-D6 block are envisaged to be undertaken over the next three to five years and entail a potential total investment in excess of $ 5 billion to develop around 4 trillion cubic feet (TCF) of discovered natural gas resources. At current international LNG prices, it would cost more than $ 50 billion to import this volume of gas into India. The field development plan for R-Cluster, submitted in January 2013, proposed to maximise infrastructure utilisation of existing D1 and D3 hub. It aims to install minimum essential, safe and suitable incremental facilities for R-Cluster’s integration. Similarly, development of all satellite discoveries is being planned as part of an integrated concept. Additionally, potential upside through resource accretion is being targeted by undertaking exploration drilling in the existing production area with the approval of Government of India. Currently, MJ1 exploratory well in D1-D3 ML area is under drilling. The well is targeting the Mesozoic synrift clastic petroleum system, similar to the MA oil and gas field. Panna-Mukta and Tapti (PMT) Block In the current year, PMT JV achieved the significant milestone of 500 MMBOE of oil and gas production. Panna-Mukta fields produced 8.2 MMBBL of crude oil and 71 BCF of natural gas in FY 2012-13 – reduction of 19% in case of crude oil and maintained production in case of natural gas on Y-o-Y basis. The decrease in oil Reliance Industries Limited 25 was due to natural decline, deferment of Panna-L wells and lower-than-expected oil gains from well interventions. Tapti produced 0.54 MMBBL of condensate and 43.9 BCF of natural gas in FY 2012-13 – a decline of 40% and 41% respectively, on Y-o-Y basis. The decrease was due to a natural decline in reserves and under-performance of a few wells. In PMT, the current level of production from these fields is 7.9 MMSCMD of gas and 20,400 BOPD of oil/condensate. To address declining production, the projects including development wells, infill wells, well intervention activities, Tapti gas compression modification and Panna well-head gas lift facilities have been planned in the medium term. As part of these initiatives, PMT JV has already completed further infill wells in Mid Tapti and one in South Tapti. Together, these are currently producing gas and oil at the rate of 0.80 MMSCMD. PMT JV has also identified to complete further infill wells along with six wells in Panna-L area in FY 2013-14. Additionally, Mukta-B development and drilling of exploratory prospects in Greater Mid Tapti have also been planned for future. Mukta-B development studies are being undertaken to continuously assess and define a potential development plan. Other Blocks NEC-25: The Company has submitted an Integrated Block Development Plan (IBDP) for four discoveries (D-32, D-40, D-9 and D-10) proposing for a phased manner development. The IBDP includes the two southern discoveries (J-series) for which commerciality were declared last year. During the current year, the key pre-development activity such as conceptual engineering was completed in order to facilitate the finalisation of development plan. Further, RIL has submitted a proposal for drill stem testing (DST) in J discovery to DGH which is planned to be taken up in FY 2013-14. Domestic exploration blocks: Comprehensive review of the east coast deep water basins by experts within the JV teams has led to the high grading of opportunities in the portfolio and de-risking through relinquishment of 7 blocks. Apart from KG-D6, Panna-Mukta & Tapti and NEC-25 blocks, RIL currently holds 9 blocks in Gujarat Saurashtra, Krishna Godavari, Cauvery, Cambay and Mahanadi basins. The exploration campaign in the forthcoming year is likely to target Krishna Godavari and Cauvery basin. During the year, as part of the appraisal program for CY-D6 block reviewed by the Management Committee, new 3D seismic was acquired and also one appraisal well was drilled. The result of the same is under evaluation. International Ventures: As part of portfolio rationalisation, Reliance Exploration and Production DMCC (REP- DMCC), a wholly owned subsidiary of RIL, has concluded divestment of its Working Interest (25%) in the PSC for Yemen Block-9 with Medco Yemen Malik Ltd., a wholly owned subsidiary of PT Medco Energi Internasional Tbk of Indonesia. It has also completed the transaction for divestment of its 80% working interest and operatorship in the PSCs for the Rovi and Sarta blocks in the Kurdistan Region to subsidiaries of Chevron Corporation. During the year, REP-DMCC has also relinquished 2 blocks in Columbia – Borojo North & Borojo South and W06-5 block in Australia. Thus, the current portfolio of international blocks consists of 2 blocks operated by REP- DMCC in Yemen and 2 blocks in Peru as a non-operator. CBM Development activities are progressing in RIL’s 2 CBM blocks (Sohagpur East and West) with first gas being targeted in FY 2014-15. The development phase for these blocks has been extended till December 2014 for Sohagpur East and October 2014 for Sohagpur West. RIL is awaiting approval for its gas pricing formulae, submitted to MoPNG in September 2011. During FY 2012-13, Petroleum and Natural Gas Regulatory Board had invited bids for development of Shahdol Phulpur Natural Gas Pipeline. The proposed pipeline will connect the RIL’s Sohagpur CBM blocks to the HVJ line at Phulpur and will enable RIL to market the CBM gas on the national gas grid. RIL through its subsidiary Reliance Gas Pipelines Limited has submitted its bid for the construction of the Shahdol Phulpur Natural Gas Pipeline. Update on Arbitration KG-D6: The Government of India, by its letter in May 2012 has communicated that it proposes to disallow certain costs which the PSC relating to Block KG-DWN-98/3 entitles RIL to recover. RIL continues to maintain that a Contractor is entitled to recover all of its costs under the terms of the PSC and there are no provisions that entitle the Government to disallow the recovery of any Contract Cost as defined in the PSC. The company has already initiated arbitration on the above issue. Both RIL and the 26 Fulfilling India’s Aspirations. With Innovation and Enterprise. Government have appointed respective arbitrators and they are yet to appoint the third and presiding arbitrator. PMT: Certain disputes that arose out of two production sharing contracts relating to the Panna-Mukta and Tapti offshore oil and gas fields have been referred to arbitration. The majority of disputes referred to arbitration revolve around primarily on the correct interpretation of the PSCs. The Government has also asserted a number of counterclaims in respect of both PSCs. In its defence, the Government had raised a number of jurisdictional objections to the claims relating to royalties, cess and service tax as well as certain aspects of the claims relating to audit. Arbitration Tribunal has by majority held that these disputes are arbitrable; however, Government has challenged the Tribunal’s decision on arbitrability before the Hon’ble Delhi High Court. The Hon’ble Delhi High Court has on March 22, 2013 passed an order ruling that it has jurisdiction to decide the application filed by the Government challenging the Tribunal’s decision on arbitrability of the aforesaid issues under Section 34 of the Arbitration & Conciliation Act, 1996. The Company is evaluating the judgment of the Delhi High Court and may consider options to appeal the said judgment before appropriate forum. North American Shale Gas Business The United States’ unconventional shale boom is arguably one of the biggest breakthroughs in energy sector in several decades. Eagle Ford and Marcellus remain among the most competitive and attractive shale plays in North America. Reliance is among the leading players in these chosen plays. Marcellus is currently believed to be the largest discovered unconventional gas field in the United States and potentially one of the largest world-wide with estimated net recoverable resource of 318 TCFe. Marcellus Shale is one of the lowest-cost North American gas fields and large portions of the play can break-even at $ 3.50 - $ 4.00/ MMBTU. Reliance has strong presence in the Marcellus shale play through its JVs with Chevron and Carrizo. Eagle Ford is seen as a key source of oil production growth. Eagle Ford is now known to have three distinct regions – an oil window towards the north, a dry gas window to the south and a wet gas/condensate window in the centre (considered to be sweet spot). Reliance-Pioneer joint venture is one of the most active players in the Eagle Ford shale play with acreages in all three areas with a material portion of acreage in the sweet spot. Business Environment Demand for natural gas in the US is likely to remain sensitive to weather, inventory levels and coal-to-gas switching by power plants. Winter heating has been muted compared to long term winter demand (though some improvement seen during Q1-CY2013) and there has been lower coal-to-gas switching on account of anticipated gas price of higher than $ 3.50/MMBTU. On the other hand, near term supplies from unconventional sources is expected to continue to grow for several reasons. Increased production in oily plays like Eagle Ford is also leading to increased production of associated gas; drilling efficiencies in all key basins are temporarily mitigating the impact of lower rig count; and infrastructure projects continue to push Eagle Ford and Marcellus production higher. Reflecting this demand-supply dynamics, natural gas prices are expected to be stable around the current levels in 2013. Impact of gas exports could be seen from 2015 onwards. Dynamics of the US oil markets are somewhat different. The US is the largest contributor of oil supply growth over last few years. Onshore crude oil production has increased by 23% over the last year. The strong performance has been driven by shale oil, which has grown by at least 50% each year since 2010. Oil inventories had fallen to their low in 1H-2012, but now are rebuilt somewhat and thus the prices are expected to remain stable. Brent-WTI differentials are unlikely to widen much further. Planned expansion of pipeline and storage capacity in the Midwest will allow sufficient storage and transport capacity to support production growth. Natural Gas Liquid (NGL) supply is expected to remain in abundance due to continued associated gas production from oily areas. In short term, there is lower processing capacity to take all of NGL putting pressure on NGL prices. There are announced petrochemical expansions that can absorb this increased production of NGLs; but till such time, prices may remain under pressure. Shale Gas Business Performance Highlights RIL forayed into the North American Shale Gas business, through strategic partnership with experienced and successful operators in the competitive shale plays of Marcellus and Eagle Ford in 2010. RIL entered into 45% working interest (WI) partnership with Pioneer Natural Reliance Industries Limited 27 Resources for development of Eagle Ford acreages, in addition to a 49.9% equity ownership in a midstream JV that caters to the gathering and transportation needs of Pioneer upstream JV. Additionally, during the same year, RIL entered into a 40% WI partnership with Atlas Energy, which has since been acquired by Chevron and a 60% WI partnership with Carrizo Oil & Gas for development of significant acreages in the Marcellus shale. Successful joint ventures with Pioneer, Carrizo and Chevron have enabled RIL to achieve the position of being among the significant players in these chosen shale plays. FY 2012-13 was a pivotal year for RIL’s North American Shale Gas business. It gained significant growth momentum and delivered superior performance despite adverse market conditions imposed by low gas prices and higher service costs. Reliance developed strong capabilities by building a team of experienced professionals. It was a landmark year strategically, as Reliance completed carry obligations in the Carrizo and Pioneer JVs and transitioned into post- carry mode, allowing for improved governance rights and increased alignment on activity levels. Impressive all-round growth was achieved. Revenues and EBITDA from the shale gas business more than doubled to $ 545 million and $ 422 million respectively in 2012. Proved reserves grew by 135% from 788 BCFe in 2011 to 1.86 TCFe by 2012. Reliance share of gross production grew by 166% Y-o-Y to 101 BCFe. Net sales volumes thus grew by 165% to 85 BCFe in 2012. Benefiting from continued focus on drilling of liquid-rich wells, share of liquids in overall production stood impressive at 43% and accounted for 76% of revenues in 2012. Strong growth, amidst industry challenges, demonstrates development progress and maturity levels of operations. During 2012, the joint ventures drilled 255 wells and put 228 wells on production, taking the cumulative number of producing wells to 385 at the year end, as compared to 157 producing wells at the end of 2011. With learning from performance of larger number of producing wells and analysis of engineering interpretations, Reliance gained significant knowledge on “sweet-spots” in its acreages that helped optimise growth and pursue value accretive drilling. Reliance realised superior benchmark differentials, benefiting from expansion of client base to high-value clients who offer premium to WTI. The Company embarked on a successful hedging program, with necessary risk management systems put in place and focused on production for 2H-2012 and 2013. The business achieved positive impact on JV partners. RIL succeeded in ensuring Partners’ focus on costs and several high-impact initiatives that led to significant cost savings, though its impact was partly offset by cost creeps and scope changes. Improvement in drilling efficiencies and completion costs were seen over the quarters and was more prominent in Pioneer and Carrizo. Shifting to white sand instead of ceramic proppant in Eagle Ford, use of pad drilling and zipper fraccing and drilling longer laterals were among the few initiatives pursued during the year. Reliance successfully completed Reserve Based Lending (RBL) facility in Pioneer JV, with initial borrowing base of $ 415 million. This asset backed financing enables Reliance to put the Pioneer JV on a self-funded growth path in future. Similar initiatives are being pursued at other JVs. Pioneer Midstream JV attained significant maturity and successfully transformed from “project implementation” to “operating” mode. Growth capex was funded primarily through internal cash and JV-level credit facilities. The midstream joint venture is expected to be cash-flow positive in the coming year. Pioneer JV Highlights Pioneer Upstream JV operated with 10 rigs, drilled 133 wells and put 135 wells on production during the year. Producing well count jumped from 111 in December 2011 to 246 by December 2012, thus enabling strong growth in production volumes. Reliance’s share of production (gross) at 11.83 MMBOE reflected a growth of 137% over 2011 levels. Share of liquids remained high at 62% in 2012. Proved reserves more than doubled from 527 BCFe in 2011 to 1.08 TCFe in 2012. With regular pad drilling, closer spacing is getting established and more Proved Undeveloped (PUD) reserves are added. It is anticipated that Proved Developed Producing (PDP) reserve would increase further, as active pursuit of choke management is arresting declines and maintaining higher yields. Reliance has now developed a good understanding of heterogeneity of the play with sweet spots and marginal areas, which has helped in high-grading of development activities. Remarkable improvement in drilling efficiencies and completion costs helped the JV to more than offset the impact of industry service cost inflation. Increased use of pad drilling, zipper fraccing and use of sand as proppant as well as benefits of other ongoing initiatives should help reduce unit F&D costs in the future. Carrizo JV Highlights Despite a slow start, Carrizo JV attainted significant growth momentum in 2012. JV drilled 37 wells and put 30 on 28 Fulfilling India’s Aspirations. With Innovation and Enterprise. production during the year. Producing a well count of 38 reflects a growth of 375% Y-o-Y. Net proved reserves more than tripled to 234 BCFe in 2012. Exit rate of production at 106 MMCFD in December 2012, compares impressively with 18 MMCFD achieved in December 2011. JV is pursuing paced development in view of the challenging pricing environment, but remains focused on expedited development of North Eastern Pennsylvania (NEPA) acreages. NEPA acreages are in the sweet spot of the Marcellus play and the performance of NEPA wells has been encouraging, with a much lesser decline thus offer superior economics. JV made significant progress in its appraisal efforts for the C-counties (85% of JV acreages). Results of the appraisal activity are being studied. In the interim, JV would pursue cost-effective lease renewal strategy towards retaining optionality on the acreages. Chevron JV Highlights Chevron JV gained development momentum during the second half, though suffered initially on account of continued delay in the availability of midstream infrastructure during the first half of the year. Midstream availability improved considerably during second half of the year. JV drilled 85 wells and put 63 on production during the year. Cumulatively the number of producing wells was impressive at 101 in December 2012, reflecting a growth of 166% Y-o-Y. Exit rate of production at 185 MMCFD in December 2012, reflects a growth of 143% over 76 MMCFD achieved in December 2011. Net proved reserves nearly tripled to 542 BCF in 2012. Well performance has varied and reflected heterogeneity and geological complexity of the acreage. Cost reduction efforts yielded limited success. JV realised some cost savings in procurement and rig mob/demob operations, but their impact were masked by higher well pad construction costs in the difficult terrains. Focus in the areas of pad optimisation, facility standardisation, central water impoundment and supply chain management are expected to yield lower costs in the coming year. Enhanced focus on development optimisation, drilling efficiency improvement, water management, adoption of zipper frac and other completion cost reduction initiatives are expected to yield desired reduction in well costs over the next three years. JV is pursuing paced development in view of the challenging pricing environment and remains focused on 6.0 BCF dry gas areas while retaining optionality on acreages through low cost lease renewals and their expedited development with any improvement in market conditions. RIL E&P Outlook By the end of 2012, fields in the KG-D6 block had produced 2 TCF of gas and 22 million barrels of oil, creating unprecedented value for the Nation through nearly $ 35 billion in energy import savings. In partnership with BP, RIL plans to become a major player across the gas value chain in India. The JV has made significant progress towards finding new resources through exploration by identifying new prospects in its deepwater acreages in the East Coast. Further, the JV through extensive efforts is poised to unlock value from its existing discovered resource base by advancing its planning for the next wave of projects in KG-D6 and NEC-25. RIL’s CBM block continues to make steady progress towards developing the Sohagpur East and West blocks to produce first gas by FY 2014-15. Reliance expects to see continued growth momentum in the shale business during FY 2013-14. Natural gas prices have improved in recent weeks, crossing the $ 4/MMBTU. While oil price outlook is stable, NGL prices remain under pressure on continued supply side pressures. Well costs remain stable as benefits of ongoing cost and efficiency improvements are partly offset by inflation in service costs. Reliance remains focused on liquid-rich development activities at the Eagle Ford JV and paced development in its Marcellus JVs. Optimising HBP (Held by Production) efforts and pursuing cost effective lease renewal for retaining optionality on resources is the common theme across JVs. In future, the Company will continue to focus on efficiency improvement and cost reduction, optimising netback through enriched product and customer mix, as well as high grading of development to ensure superior return on incremental capital spending. To complement the existing asset base, RIL continues to look at new opportunities globally that are a strategic fit with capabilities and integrated petroleum value chain. In the upstream business, RIL aspires to: l l l Become a global top 10 independent hydrocarbon producer through significant and sustainable value creation Be India’s top player across the gas value chain Responsible operations from an environment and people perspective Reliance Industries Limited 29 l l Have best in class people, processes and technology Be recognised as a “Partner of Choice” for its stakeholders The chief enablers for the business model to achieve the above aspiration would be: l l l To grow profitably, organically or inorganically, while strengthening its Indian and international positions Continued integrated presence across upstream, midstream infrastructure and downstream Implementing Centres of Excellence and partnership models to bring and help adopt best processes, technologies and people globally REFINING AND MARKETING BUSINESS Business Environment The main market themes for the year were, firstly, crude oscillating in a range driven by competing sentiments on the ongoing global economic health versus geopolitical supply security concerns. Secondly, margins - the key driver of refining business profitability, starting the year weak, but progressively strengthening as new capacity addition was delayed and widespread refinery shutdowns, planned and unplanned. This year witnessed a reduction in refining capacity, primarily because of closures of refineries in the West. Four major refining assets, Markus Hook - US East Coast, Hovensa and Aruba – US off shore and Coryton – UK, ceased operations this year. Some of these locations are planned to be converted into import facilities. The third theme was that the spot LNG prices firmed up towards the end of 2012, under pinned by strong seasonal demand in the second half coupled with supply short falls, primarily from Africa. It is more than four years since the recession, triggered by the banking crisis in the US and the world is still recovering from its effects. The counterbalance for the oil markets to the impact of economic concerns on demand, were political tensions across the world – Iran, Sudan, Nigeria, North Korea, Libya and Algeria, all resulting in supplies disruptions or potential disruptions and maintaining a “risk premium” on crude prices. Oil demand growth continues to remain skewed towards the developing nations, led primarily by China followed by India, Middle East and Latin American economies. OECD nations continue to see a declining demand and many believe that the demand in these nations is past its peak and unlikely to return on a sustained growth path. In addition to maturing economy and low growth, increasing efficiency standards and focus on use of non-fossil fuels including the biofuels has supported this decline. Oil demand growth in Non OECD in 2012 was 1.4 MMBPD while OECD demand shrank by 0.6 MMBPD. Indian oil demand grew by 130 KBPD to 3.65 MMBPD. Crude prices started the financial year at the top of the range buoyed by fears of fallout from “Arab Spring”. Prices witnessed a steep crash in the first quarter as mounting possibility of default in peripheral Europe held centre stage in price movements. Adding to the woes were weak economic data from the two biggest economies US and China. Starting in the July, EU and US sanctions against Iran set in, halving the exports from the Persian nation. OPEC, led by Saudi and supported by Iraq resumed the role of a swing producer; ramping up the production, keeping the market well supplied and thus avoiding an oil price spike. The world has gradually become accustomed to oil prices in three digits. Marginal production cost and the finance requirements of many OPEC countries and oil companies provide a support to oil prices at around $ 90/bbl. Product Cracks and Margins Cracks - the difference between product price and crude oil price, strengthened across the barrel during the year, supporting global refining margins. Diesel and economic growth are strongly correlated. Middle distillates (diesel and jet kerosene), in recent years, have been the key contributor to refining margins in Asia and Europe. On a Y-o-Y basis, both jet-kero and gasoil margins in Asia strengthened, supporting RIL margins. Middle distillates have been the strongest growing product for a number of years. In 2012, middle distillate demand grew by over 400 KBPD, contributing to over 40% of global oil demand growth. Diesel, in most of Asia, continues to remain highly subsidised, further adding to the growth. Cracks ($/bbl) Naphtha Gasoline Gasoil Fuel Oil Singapore Complex RIL Q1 Q2 Q3 Q4 -8.5 10.6 15.4 -1.3 6.7 -6.0 12.4 19.3 -2.4 9.1 -3.9 10.1 17.5 -9.0 6.5 -1.7 15.3 19.6 -7.3 8.7 FY 2012- 13 -5.0 12.1 17.9 -5.0 7.7 FY 2011- 12 -4.6 11.5 17.8 -2.6 7.8 7.6 9.5 9.6 10.1 9.2 8.6 30 Fulfilling India’s Aspirations. With Innovation and Enterprise. The trend of refiners shifting to middle distillates production is now also seen in the US. Increasing efficiency standards and Corporate Average Fuel Economy (CAFE) standards have promoted the use of smaller cars. This is now beginning to have an impact on the gasoline demand in the US – its biggest market. In response, the US refiners are shifting to more middle distillate yields and exporting to the short Latin American market. On light distillates, naphtha margins have been stable Y-o-Y; but, gasoline has witnessed remarkable strength, especially in the year’s last quarter. This was primarily on account of unplanned outages, refinery closures on the US East Coast and the Hovensa refinery in the Caribbean due to poor gasoline oriented unit margins. Fuel oil’s weakness, especially in the second half of the year, on account of weak Chinese demand and ample supplies from the west, widened the light heavy differentials, supporting complex refining margins. Singapore complex refining margins were robust, particularly in the second half of the year. Strength in gasoline cracks, an important constituent of benchmark margins, along with widening octane spreads and overall bullish middle distillates helped the benchmark margin surge towards 10 year high levels. Capacity additions in 2012 were primarily for expansions in the existing refineries. This was offset by closures in the US, Europe and Asia/Far East, leading to a net capacity reduction of about 250 KBPD. Oil demand growth, much higher at 850 KBPD, was also supportive of higher margins. These closures also resulted in improved average refinery utilisation rates in North America (83.6% in 2012 v/s 82.9% in 2011) and Europe (80.5% in 2012 v/s 78.3% in 2011); while utilisation rates in Asia improved marginally to 85.8%. In comparison, the Jamnagar refinery complex operated at a record utilisation rate of 110%, built on a relentless focus on continuous improvement. RIL Performance Overall, RIL’s refining business had a record financial performance for FY 2012-13 with Gross Refining Margin (GRM) averaging $ 9.2/ bbl, as against $ 8.6/ bbl in FY 2011-12. Though the refining margins remained weak in the first half, margins strengthened in the second half with weakness in fuel oil cracks widening the light heavy differentials and supporting complex refining margins. The margins were also supported by unplanned refinery outages in the second half of the year. RIL’s refineries continue to outperform their global peers, given their competitive strength to process challenged feedstock and produce clean fuels, at low operating costs. Total exports of refined products from both refineries reached $ 39.3 billion during the year, as compared to $ 36.0 billion in the previous year. Exports of refined products were 41.2 MMT as compared to 39.6 MMT during the same period last year. RIL Operating Model The goal of R&M business within RIL is to deliver industry leading returns and be a source of medium-term growth, while focusing on health, safety and environment. The key asset within R&M is the Jamnagar Refinery - the world’s largest and the most complex refinery. This is supported by a sophisticated trading, supply and marketing operation. RIL’s operations ensure access to a very wide variety of feed stock to produce products, meeting the most stringent specifications globally. The key components of the business model include: Asset Advantage: Operating close to 1.4 MMBPD, Jamnagar is the largest refinery in the world. Within the system many of the key units are also the largest in the world. It is composed of two refinery developments, one which supplies domestic and export demand and another which is completely dedicated to the export market. Both these refineries were built in a record time of three years which together with scale has given us an industry leading capital per barrel of capacity outlay. Supporting the refinery is a marine facility giving access to the world’s largest crude and product vessels. The facility is capable of handling the largest oil tankers, VLCC sized vessels to offload crude at the Single Point Mooring (SPM) facilities. The Company’s export facilities support the largest of product carriers. This allows the refineries to competitively access all major markets - Sao Paulo, New York Harbour, Rotterdam, Singapore. The scale of operations and its energy efficiency allow the Company to have one of the lowest operating costs globally. Asset Optimisation: The Company prioritises safety in all its operations. RIL has extensively utilised the safety processes and programmes of DuPont, the recognised industry leader in the industry. This year, British Safety Council, U.K. awarded DTA refinery with the “Sword Reliance Industries Limited 31 of Honour 2012” for Occupational Health and Safety Management System. The SEZ refinery was conferred the prestigious “Globe of Honour” for its Environmental Management System. FY 2012-13 was an outstanding year for operational performance with new records set at Jamnagar refinery complex, including a record crude consumption of 68.5 MMT at an average capacity utilisation of 110%, surpassing the global peers. RIL completed a significant shutdown in March 2013 to budget and schedule, including modifications to improve throughput and yield. RIL’s integrated Supply and Trading team works real-time with the refinery operations to optimise asset utilisation. Trading offices in Houston, London, Singapore and Mumbai gives the Company a global coverage for crude supplies and market outlets. The configuration at Jamnagar is amongst the most complex in the world. In practical terms this gives us the technical ability to process almost all grades of crude oil produced and meet the increasingly differentiated and more demanding product specifications. The crude and supply trading teams select a crude diet using processes that optimise against the tremendous flexibility of the system and then source the crudes across the globe. So far, the refinery has processed 119 different grades of crudes in addition to other semi-refined feed-stocks from simple refineries. Given its ongoing appetite for heavy crude, RIL entered in a 15 year agreement with PDVSA of Venezuela for supply of crude. The agreement provides RIL with security of supply and allows it to optimise around that supply while providing PDVSA a material Asian end user market. The facilities at Jamnagar enable RIL to produce products, capable of meeting the most stringent environmental norms, even after processing high sulphur feed-stocks. This gives RIL an edge of being able to cater to the needs of nearly all markets across the world. The product trading team stationed across RIL’s global offices identifies the market shorts and collectively places the products in the highest netback regions. This year Jamnagar produced 7 new product grades, catering to specific needs, helping RIL penetrate into high value niche markets. Tankage at the major trading hubs also allows the Company to better serve its customers, benefit from the seasonality capturing the upside from the resulting market structure. The Jamnagar marine facility, which runs material shipping and marine operations, handled nearly 1,500 ships this year. RIL’s marketing team caters to India’s Public Sector Unit deficits, helping meet growing energy needs. The marketing operations also have expanding aviation fuels and LPG businesses. In East African marketing businesses, RIL realised strong GAPCO volume growth, with sales increasing by 81% to 2,372 TKL. At the end of the year, 287 retail outlets were operational in Southern and Western regions and North Eastern states of India. Resuming operation in all geographies and scaling up of sales would be possible after clarity on implementation of market determined prices for gasoline and diesel. Creating Sustainable Leadership Refining business has embedded the overall business transformation process underway across RIL. The goal is to create the systems and processes to allow the business to operate efficiently at the current scale and readily allow expansion. It is a holistic exercise governing organisation, clarity on roles and responsibilities, governance and structure to cutting edge digitisation across the entire business. Petcoke Project Update One of its key forward actions is the coke gasification project which is expected to put RIL’s energy and hydrogen costs at par or better than the refineries in the US, where natural gas prices have fallen dramatically with the shale revolution. The project is designed to convert the lowest cost fossil fuels – coal and coke into gas. The project is based on world-beating Phillips 66 technology and is currently in the execution stage. Upon completion, this will significantly improve the energy efficiency of Jamnagar complex and contribute favourably to its profitability. This enhanced complexity, as a result of this project, will make the Jamnagar configuration even more robust. PETROCHEMICALS BUSINESS Business Environment Ethylene Ethylene is the raw material used in the manufacturing of polymers like Polyethylene (PE), Polyvinyl Chloride (PVC) and polystyrene, as well as ethylene oxide and ethylene glycols. These products are used for various end 32 Fulfilling India’s Aspirations. With Innovation and Enterprise. markets such as packaging, transportation, electronics, textiles and construction. Global ethylene production totalled 127.9 MMT during the year, with an operating rate of 85.7%. The slow global incremental demand at 1.9 MMT was due to the European crisis and subdued Chinese demand. Global ethylene prices remained high, supported by high crude oil and naphtha prices and plant turnarounds. Asian ethylene margins improved during the year due to PE and ethylene price increases. World Ethylene supply/demand 2012 Production by feedstock Demand by end use Production : 127.9 MMT Demand : 129.1 MMT Naphtha Ethane Propane Butane Others 48% PE 35% Ethylene Oxide 8% EDC 4% EBZ 5% Others 60% 15% 10% 6% 9% Source: IHS Capacity additions have changed the supply scenario. During the year, 89% of capacity additions were from the Middle East and Asia. The Middle East has a share of 19% of global capacity while Asia’s share stands at 34%. With the capacity becoming operational in the Middle East, the overall feedstock mix for crackers changed in favor of gas. Lower NGL prices on account of shale gas availability provided a significant advantage to US ethane cracking as compared to integrated naphtha cracking. Globally, naphtha-based operators experienced cost increases due to higher input costs compared to gas based operators. Global Polymers Market Global ethylene demand is dominated by the production of PE (HDPE, LLDPE and LDPE), which is used primarily in a wide variety of non-durable goods applications including packaging materials. Global thermoplastics market in FY 2012-13 was estimated at 208 MMT. Of this, PE accounted for 38% of all plastic consumption, followed by polypropylene (PP) and PVC which accounted for 25% and 18% of the total plastic demand, respectively. Global capacity addition of PP was 2 MMT while incremental growth in demand was 1.76 MMT. Consequently, operating rates declined to 82.4% from 84% in the previous year. Total global PE capacity addition was 1.48 MMT while incremental growth in demand was 2.0 MMT. Operating rates for PE remained stable at 83.6%. Global incremental demand of PE grew by 2.5% to 2.0 MMT. Global capacity addition of PE during the year was 1.48 MMT, with majority (56%) of capacity additions coming in Asia and the Middle East. While Asia led the demand growth for PE, new capacities were built predominantly in the Middle East. Global Polyolefins+PVC Demand (In MMT) 2012 2011 PE PP PVC Ethylene Propylene Source: IHS 79 54 37 129 84 77 52 36 127 82 % Growth 2012 vs 2011 2.5% 3.4% 2.7% 1.5% 1.7% Global demand for PVC grew 2.7%, while operating rates decreased to 68.9% from 71.6% in the previous year. Incremental demand of 0.97 MMT lagged behind capacity additions of 3.29 MMT. Prices and deltas-Polymers Product prices were mixed during the year. PP deltas were marginally lower (from $ 140/MT in FY12 to $ 134/MT in FY13) as decrease in PP prices (on lower demand) was marginally higher than the drop in propylene prices. HDPE delta improved (from $ 430/MT to $ 482/MT) as naphtha prices softened (growing supply & demand concern) and HDPE prices improved marginally. PVC deltas improved (from $ 488/MT to $ 535/MT) due to sharp fall in EDC prices on account of higher availability from the North American markets. Product Prices: South East Asia Price($/MT) Dubai Crude ($/bbl) Naphtha(FOB AG) PP HDPE PVC Source: Platts FY 2012- 13 107 891 1427 1373 994 FY 2011- 12 110 931 1481 1361 1050 Change % -3% -4% -4% 1% -5% Reliance Industries Limited 33 Indian Polymer Market Despite being among the fastest growth markets globally, India’s per capita plastic consumption (PE, PP and PVC) at 6.6 Kg remains far behind those of the US (67.3 Kg), China (36.7 Kg) and Brazil (24.6 Kg). However, it is advancing at 2.5 times its GDP growth. Besides, the subcontinent’s surging industrialisation and increasingly powerful economy holds immense untapped growth potential. Global automobiles, electronics, telecommunications, food processing, packing and healthcare companies have established large manufacturing bases in India. Joint ventures, foreign investments and access to technology from developed countries have opened new vistas to further facilitate the growth of the industry. Infrastructure investments have ensured more than 10% growth rate for the sector. Moreover, the agricultural sector’s focus on plasti-culture under micro-irrigation scheme will further boost demand. India’s manufacturing capacity of polymer products is estimated to reach 12 MMTPA in 2017, from 8.3 MMTPA in 2012. Polymer consumption in India is poised to grow multifold, with the help of new developments in packaging applications, infrastructure growth, modernisation of agriculture sector, improved healthcare facilities, improved lifestyle and disposable incomes, automobile demand and rural penetration. Polymer packaging product’s development has revolutionised Indian lives. India’s packaging polymer consumption, accounting for over 60% of total polymers consumed, reached 5.5 MMT in 2012 and is expected to reach 10 MMT by 2020. The key growth drivers for this sector are foods and processed food items, FMCG and cosmetics. RIL Performance RIL maintained its leadership position in the polymer industry with domestic market share of 41% and commodity polymer production share of 62%. RIL’s cracker operating rate was at 91%. RIL produced 4.4 MMT of all polymers including PP, PE and PVC and exported around 0.8 MMT during the year. RIL Polymer Production (In KT) PP PE PVC Total FY 2012-13 2810 992 620 4422 FY 2011-12 2740 1077 638 4455 PP: RIL, the world’s 5th largest PP producer, has 2.8 MMT installed capacity, with production facilities at Jamnagar, Hazira, Nagothane and Vadodara. In FY 2012-13, the Company experienced a record PP production of 2,810 KT, up by 3% from FY 2011-12. RIL continues to lead the domestic PP market with 64% market share. India’s PP consumption for FY 2012-13 is estimated to be 3.1 MMT, growing at 13% over FY 2011-12. The product is mainly used in manufacturing monofilaments, woven bags, appliances, houseware, flexible packaging, lamination film, textile and non-woven. New grades introduced into the market by RIL to counter imports, include: l l l Repol SR70N heat sealable grade for food packaging application, a substitute for imported grades SRX100, with improved aesthetics Repol H050MN, modified for better draw-down and improved thermoforming characteristics PE: The domestic demand for PE has grown by 10% over the past year. Major end-uses of PE are containers, rigid packaging, lamination film, pouches, shrink films, career bags and pipes. HDPE, LLDPE and LDPE demand have grown by 10%, 13% and 18.9% Y-o-Y basis, respectively. RIL has a total PE capacity of 1.1 MMT with production locations at Hazira, Nagothane, Vadodara and Dahej. RIL has market shares of 18% in HDPE, 37% in LLDPE and 42% in LDPE. It leads the domestic PE market with 28% market share. The Company has increased its market share in high-value sectors in HDPE (like pipe, rotomolding and high flow). Besides, it has maintained its existing share in LDPE’s high-value sectors (like milk packaging, extrusion coating and injection molding). RIL’s round-the-year grade development activities include: l l LLDPE Relene LL40RA040 launch for LL Rotomolding sector Introduction of Black Pipe Compounding Grade LLDPE Relene 45GP004B for HD PVC: PVC finds applications in irrigation pipes, drinking water supply, sewerage schemes, profiles for the building industry, wires and cables. Pipes and fittings continue to account for 74% of the domestic PVC demand. India’s PVC consumption was estimated to be 2.24 MMT in FY 2012-13, growing by 14% over the previous year. 34 Fulfilling India’s Aspirations. With Innovation and Enterprise. With a 28% market share, RIL’s PVC capacity is 0.65 MMT with facilities at Hazira, Dahej and Vadodara. In FY 2012-13, India imported about 1,044 KT of PVC, 370 KT higher than the previous year. RIL introduced a new PVC grade with a medium porosity resin 67GER01F to capture the aesthetically-concerned customer. RIL also initiated discussions on value-added products such as High K Value resins and its use in critical insulation and high-strength applications. New Developments and Growth Initiatives RIL helped create new markets by conducting and participating in 50 Rishta events throughout India. The Company also promoted the use of Block Bottom bags. RIL has been successful in attracting investments for 12 convertex lines for patented Adstar/Adpro bags production for cement packaging. This will address issues such as quality, aesthetic quotient in packaging, reduced labour availability in the labour-intensive raffia industry and others. PP-made geotextile has immense potential in road construction and in river and sea embankment. Several states have specified its use in the embankment projects. RIL worked with the Textile Ministry and other nodal agencies to facilitate new investments in geotextile. PP-Nonwoven forms an ideal cover in banana plantations. RIL has tied up new projects with several agriculture institutes to establish PP in plantation of other fruits and vegetables. Besides increased production, it helps farmers grow high-quality products for the export market. RIL has been successful in replacing glass and paper with PP in flavoured milk and glucose beverages. Polymers Project Update RIL announced the setting up of a Refinery Off-Gas Cracker (ROGC) at its Jamnagar location. This cracker, expected to be among the world’s largest ethylene crackers, will use refinery off-gas as feedstock. Products from the cracker will be utilised for the new downstream petrochemical facilities being built at Jamnagar. The facility will have an installed capacity of 1.4 MMTPA of ethylene, 0.2 MMTPA of propylene and its downstream capacities for polyethylene and polypropylene. RIL has completed the licensing and technology selection for these projects and the same are currently at various stages of implementation. Chemicals Business The global scenario for chemicals during the year was mixed, as the US and EU faced sluggish local economies due to high unemployment levels, sovereign debt crisis and declining output levels. In recent years, the global chemical and petrochemical industries have moved eastward towards Asia and the Middle East with major hubs being set up in these regions. India faces major competition from hubs in China, Singapore and the Middle East for which it needs to maintain competitiveness and cost. The chemicals industry supplies products to industries such as the pharmaceuticals, construction, agriculture, packaging industry, automobile and electronics industries. RIL is the leading producer of linear alkyl benzene, butadiene and the only producer of polybutadiene rubber and acrylonitrile in India. RIL also has leadership position in aromatics segment constituting benzene, toluene and xylene. Benzene: Benzene’s global capacity in 2012 was 60 MMT with average operating rate of 74%. The demand for the year was at 44 MMT, of which around 82% was from styrene (used for manufacturing plastics and elastomers) phenol (used to make phenolic resins and nylon intermediates) and cyclohexane (used to make Caprolactum and Nylon Resins). Globally, Benzene has excess capacity with over 11.5 MMT increase in the past 4-5 years. RIL’s benzene production was at 743 KT for the year, a growth of 1% from last year. Benzene exports mainly to the US, Europe and Middle East increased by 8%. Toluene, a major product of BTX group, registered production volumes of 85 KT. Butadiene: Global capacity in 2012 was 12.5 MMT with an operating rate of 80%. North-East Asia remains the world’s largest market with a global market share of 45% followed by the US and Europe at 23% and 21%, respectively. Demand grew at 3% on a Y-o-Y basis, driven by Polybutadiene Rubber (PBR), Styrene Butadiene Rubber (SBR), ABS and SB Latex, which are used mainly in the automobile Industry. Global capacity addition is expected to grow by 2.9 MMT by 2017 to 15.4 MMT. In Asia, capacity addition is expected to grow by 2 MMT to reach 8.4 MMT in 2017. In India, the strong demand for BD is expected to grow at a CAGR of 32% to 451 KTA by 2017 in line with new Reliance Industries Limited 35 downstream capacities coming up. These include 150 KTA SBR and 40 KTA PBR by RIL and 120 KTA SBR by other players, expected to go on stream in FY 2013-14. RIL produced 169 KT of butadiene. Demand at 114 KT in India was driven by downstream sectors including PBR, ABS and SB Latex, which remained flat on Y-o-Y basis. Polybutadiene Rubber: PBR’s global demand, which generated mostly from the automobile industry, is estimated at 3.2 MMT in 2012. The demand for synthetic rubber in 2013 is expected to grow at 6% to reach 3.4 MMT. RIL is India’s only PBR manufacturer. The product’s domestic consumption is estimated at 167 KTA and is expected to reach 180 KTA by 2013-14, growing at about 8%. Linear Alkyl Benzene (LAB): LAB is almost entirely consumed in surfactant intermediate for detergents. Global LAB consumption is around 3.2 MMTPA, as against a 3.7 MMTPA capacity. The demand growth is at 2% globally and at 4-5% in Asia. South East Asia, Middle East and Africa emerged as the growth engines of LAB consumption. Global capacity addition is expected to grow 0.15 MMT to reach 3.85 MMT by 2017. With an installed capacity of 182 KTA, RIL is the largest LAB producer in India. RIL's capacity utilisation for the year was at 90% due to tightness in normal paraffins. The industry grew at 6%, in line with GDP growth. Chemical Products Project Update RIL has planned investments at Hazira for setting up a world scale SBR plant and a unique nickel/neodymium catalyst-based swing PBR plant is to be operational in 2013-14. These investments will help the Company in maintaining its leading position in elastomers sector in Indian sub-continent. PBR: New PBR capacity of 40,000 tonnes taking total PBR capacity to 115,000 tonnes. SBR: A new facility for styrene butadiene rubber (SBR) with a capacity of 150,000 tonnes. Butyl Rubber: RIL entered into a JV with SIBUR, Russia, for setting up butyl rubber production facility at Jamnagar, India. The plant with 100,000 tonnes of initial capacity of butyl rubber is currently under execution. Polyester Chain Business Environment: Polyester The global fibre and textile industry faced subdued demand in consumer segment during the past year, due to volatile economic situations in the US and Europe and geo-political disturbances in Africa and the Middle East region. The overall global fibre consumption during FY 2012-13 reached 81 MMT, rising by 3% over the previous year. Only Asia’s demand increased, while that for the rest of the world declined. Polyester fibre and yarn continued to be the major contributor to the growth of fibre demand, increasing by 7% to 44 MMT. Demand largely increased in Asian countries with China contributing 9% growth. Global polyester fibre and yarn capacity increased by 10%, impacting operating rates, which declined to 78% compared to 80% in the previous year. Prices during the year declined by 10-12% from FY 2011- 12, as buyers turned cautious given the slow downstream demand and chose to cut losses by controlling inventory. Margins continued to be under pressure with polyester delta dropping 23%-27% to $ 166-240/MT. Over the past few years, the polyester industry enhanced the use of recycled polyester, derived from recycling PET bottles. Currently, over 6 MMT of clean flakes are produced from recycled PET waste. Among them, a major portion is used to manufacture recycled fibre, while the rest is used in sheeting and blow-moulding. Global Polyester Feedstock Scenario Feedstock markets, impacted by cautious market sentiments, experienced an overall price drop compared to FY 2011-12. PX prices remained largely stable, while those for PTA and MEG declined by 9% and 10% respectively. PX witnessed a better year, with about 2 MMT lesser capacity additions than anticipated, keeping operating rates high near to 90%. Demand was pegged at 33 MMT, rising 3% from FY 2011-12. China witnessed 20% demand increase due to downstream PTA capacity additions. Additionally, investments planned in downstream PTA ensured that markets remained short. Planned/unplanned outages in the third quarter pushed PX margins to a 14-month high. The FY 2012-13 deltas increased 2% over last year to $ 606/MT amidst overall positive demand sentiments from the large PTA base. Planned capacity additions continued to impact the PTA markets. During the year, capacity grew by 12% to 59 MMT. Demand, however, grew by 5% to 50 MMT. Overcapacity dented operating rates, which slipped to 83%, compared to over 90% in the past two years. China accounted for 85% of the global capacity growth in the 36 Fulfilling India’s Aspirations. With Innovation and Enterprise. last two years, leaving little room for capacity expansion outside China. Due to overcapacity in PTA and inadequate PX capacity build-up, PTA prices remained under pressure. Margins were consequently eroded and the FY 2012-13 average delta was below breakeven at $ 80/MT. MEG markets witnessed no significant capacity additions during the year. High inventory at Chinese ports during the first half of the year lent some bearishness to prices, which recovered in the second half as inventory gradually reduced. Demand increased 4% to 23 MMT during the year. China accounted for most of the demand increase. Operating rates were at 81%, the best in past five years. Delta over naphtha declined 18% to $ 429/MT, largely due to the slack downstream demand. However the margins continued to remain above the long term average. Global PET Scenario The US and European discretionary spending reduction and poor weather conditions, impacted PET bottles demand. Prices in FY 2012-13 declined 11% to $ 1450/MT. Further delta declined 25% to $ 167/MT due to bearish sentiments and the rapid capacity build-up. During the year, global PET capacity grew 9% to 22 MMT, with production rising by only 6% to 18 MMT. China alone accounted for 46% of the capacity growth. The large capacity build up in China forced many producers to reduce operating rates and cut down inventory in the second half of the year. Global Cotton Scenario Global cotton production in the 2012-2013 cotton year surpassed consumption, leading to closing stocks reaching historical high. Record Chinese strategic cotton reserve procurement helped stabilise both Chinese and global cotton prices. Moreover, procurement prices, fixed by China Reserve, were substantially higher than the international rates, putting pressure on the competitiveness of the Chinese spinners. By the end of the 2012-13 cotton season, China is estimated to have about 10 MMT closing stock which translates to over 50% of the global stocks and almost a year’s Chinese domestic consumption. Developments in the Indian Market Cotton and polyester are the major raw materials for India’s textile industry. Cotton and polyester together account for around 90% of India’s textile mill consumption of all fibres. India’s per capita fibre consumption is around 5 kg, almost half the global level. Polyester is likely to play a dominant role in capturing the major incremental demand share to bridge this gap. The domestic prices of polyester and cotton witnessed less volatility during the year as compared to the volatility in cotton prices last year. This improved the profitability and viability of downstream textile industry. However, continued power shortage in key downstream textile and packaging manufacturing centres, especially in Southern India, limited polyester demand growth. The downstream polyester demand remained depressed earlier in the year, amidst subdued global markets due to high polyester inventories, lower margins and steep decline in the feedstock prices. Domestic demand improved in the second half of the year. Also, delayed monsoon in India led to healthy demand for PET from the water and beverage segments. During FY 2012-13, domestic polyester demand grew by 5.1%, led by 10% growth from the PET and 4.4% growth from the PSF. In the PFY segment, FDY witnessed a growth rate of 10% over the last year. PFY, PSF and PET demand was around 2.3 MMT, 0.82 MMT and 0.57 MMT, of which RIL’s share was around 24%, 68% and 46% respectively. In case of feedstock, PTA demand was at 4.0 MMT, up by 10%, amidst the incremental demand on start-up of new polyester capacities in the country. MEG demand is estimated at 1.7 MMT, up by 7%. PX demand is estimated at 2.3 MMT, up by 5%. RIL Performance RIL is the world’s largest polyester fibre and yarn producer with a capacity of around 2.4 MMT across nine sites in India and Malaysia. The company is undergoing capacity expansions across the polyester chain to strengthen its backward integration and provide affordable raw materials to the Indian textile industry. The Company’s Malaysian operations continued to develop new markets and enhanced its market presence in Korea and Indonesia by value-added product mix. Recron Malaysia commissioned a 100 KTA state-of-the-art PFY plant during the year. With the planned addition of 1.5 MMT of polyester capacity at Silvassa and Dahej, RIL’s capacity (including Recron Malaysia) will be 3.9 MMT. RIL’s total polyester production (PFY, PSF and PET) was 1.6 MMT in 2012-13, down by 2.1% due to planned PFY facility turnaround. Reliance Industries Limited 37 Polyester Production (In KT) PFY PSF PET Total FY 2012-13 665 612 351 1627 FY 2011-12 696 613 353 1662 RIL’s total fibre intermediates production (PX, PTA and MEG) in FY 2012-13 was at 4.7 MMT, largely steady as compared to the previous year. Fibre Intermediates Production (In KT) PX PTA MEG Total FY 2012-13 1995 2087 682 4764 FY 2011-12 2004 2069 683 4756 RIL is the world’s 5th largest PX producer, 8th largest MEG and 9th largest PTA producer. Post expansions, the Company will further strengthen its rank across the polyester chain. Outlook Global textile fibre industry is expected to grow 24 MMT by 2020 to 105 MMT. Of this polyester will account for over 68% of global demand growth. India is poised to strengthen its global foothold with polyester production share rising to 10% of global volume from the current 8%. The global PET industry is likely to witness capacity growth of 10 MMT by 2015 to about 32 MMT. With supplies likely to remain above incremental demand, utilisation rates are expected to remain under pressure in the medium term. For feedstock, tight PX market conditions are likely to continue till 2014 until planned capacity additions are executed. The year 2015 would witness PX capacity growth of 12 MMT over 2012. Operating rates are expected to be maintained above 80%. PTA markets will continue to witness oversupply, with excess capacities likely to make China self-sufficient in the next two years. China is likely to emerge as a major influence in the global MEG markets by 2015 with 85% of global MEG expansions. Any issue in the operational success of MEG manufactured from the planned coal-based DMO process, would lead to product shortage and impact prices. India’s all fibre textile mill consumption is likely to grow at a 5.2% CAGR between 2012 and 2020 to 12.3 MMT. The CAGR growth for the demands for PFY and PSF are expected to be 8.6% and 5.4%, respectively. Polyester is likely to account for a major 60% of incremental domestic fibre demand between 2012 and 2020. As per Technopak projections, India’s total textile and apparel market size (domestic and export), estimated at $ 89 billion in 2011, is projected to grow at a 9% CAGR to reach $ 223 billion by 2021. The domestic textile and apparel market size was $ 58 billion in 2011 and is projected to grow to $ 141 billion by 2021. The key growth segments are technical textiles which is likely to see a 10% CAGR, followed by 9% in apparels and 8% in home textiles. Polyester Chain Project Update Reliance has embarked upon a major polyester chain expansion to take full advantage of the feedstock integration and the domestic growth opportunity. These include setting up of a world-scale 1.8 MMTPA of PX plant, doubling the PTA capacity to 4.3 MMTPA and expanding polyester portfolio by 1.5 MMTPA. Implementation of all these projects have begun in full swing and are expected to see production from newly commissioned projects in phases over the next 2-3 years. Opportunities across the Energy Chain The growing Indian economy creates unprecedented opportunities for RIL to significantly invest and expand in each of its core businesses. In FY 2013-14, the Indian economy is expected to grow at about 6% and the demand for hydrocarbons will also continue to rise. Although there has been significant growth in domestic production of oil and gas, India is far from being self-sufficient in this sector. With increasing demand for oil and gas and foreign exchange constraints, it is imperative that production of hydrocarbons in the country be maximised. Delayed regulatory approvals in the oil and gas sector for the past two years have adversely affected exploration and development activity in India. However, the recent improvement in pace of approvals indicate a policy change. The submission of the Rangarajan Committee Report, which has addressed the sector’s key issues, also indicates positive tractions in the environment. RIL and BP, under their KG-D6 block enhancement plan, are planning to invest in a series of projects to develop around 4 TCF of discovered natural gas resources from the block. This plan, when implemented, would entail a potential total investment in excess of $ 5 billion over the 38 Fulfilling India’s Aspirations. With Innovation and Enterprise. next three to five years. The field development plan for the Satellite and R-Series discoveries has been submitted to the government for approval. This and other projects, would add incremental production from 2017 and beyond. The implementation of various projects in the KG-D6 enhancement plan is subject to regulatory and Government approvals. Additionally, RIL is also working on developing NEC-25 and CBM blocks, which are subject to timely approvals. Reliance has made significant investments in the emerging and exciting resource base of shale gas in USA. The shale gas business is enabling RIL to unlock huge potential in the context of unconventional hydrocarbons and increasing its global and geological footprint in this business. All the three US shale gas ventures are operational and the development activities continue to have significant momentum, doubling the sales volumes and wells drilled in last one year. RIL is targeting a meaningful ramp-up in production over the next three to five years. Currently, more than 500 wells are in operation with drilling inventory of around 3,000-4,000 wells. While the Company is now following a liquids-driven strategy, focusing on the shale assets with condensates and oil in Eagle Ford JV, the recovery of US natural gas prices over the medium term would likely encourage more production from the Marcellus shale gas assets going forward. The shale gas business is now a significant part of RIL’s E&P portfolio. RIL’s refining assets are among the world’s best owing to the scale, complexity and configuration. These features allow it to produce ultra-clean fuels at low cost from heavy, acidic crudes that trade at significant discounts to the lighter varieties. This implies that RIL, on average, earns higher refining margins among its global peer group, which allows it to operate its refinery at high utilisation rates even during periods of weak demand amid economic slowdown. The global macro-economic environments as well as the oil demand seem to be recovering slowly. The 2013 demand growth, mainly driven by the non-OECD markets, is expected to be around 0.8 MMBPD. RIL is expected to be a major beneficiary of constructive refining outlook over the medium term owing to its high exposure to middle-distillates in its product slate. The global refining cycle is also likely to benefit from delays in new projects and continued mothballing of refineries in US/ Europe. Moreover, with the planned pet-coke gasification unit, RIL’s normalised refining margins would structurally move up, as the syn-gas output from the pet-coke gasification unit would replace the expensive LNG that it is currently using for the utilities associated in the refinery. RIL operates a fully integrated petrochemical business that is also among the most diversified across Asia in terms of product offerings. This effectively makes the business less exposed over the long term in terms of feedstock cost swings and severe margin compression in any particular product chain. RIL is building capacities to capture demand growth in Indian markets for polyesters, polymers and elastomers; thus enhancing leading market positions in core businesses. Over the next 3-4 years, RIL is making large investments in its petrochemicals business to expand the overall volumes by more than 60%. Moreover, the new ROGC project will enhance the long-term competitiveness of RIL’s petrochemical assets as it brings down the Company’s positioning in the ethylene cost curve. After the completion of all the petrochemical expansions over the next three years, RIL is expected to be among the top five petrochemical producers globally for most of its products. The other element of RIL’s long-term competitive edge stems from its presence in the Indian market where petrochemical demand is growing rapidly, propelled by strong economic growth. The domestic market for polymers and polyester has been growing at around 8-10% on a Y-o-Y basis. Given India’s low per capita polymers and polyester products consumption of around 5-6 kg and the economy’s resilience, this segment is likely to experience demand increase. Challenges, Risks and Concerns RIL is focused on its new projects – establishment of pet- coke gasification facility at Jamnagar and petrochemicals facilities expansions across locations, including Jamnagar, Dahej and Silvassa. The Company is confident to overcome the challenge of timely completion of the upcoming cracker and gasification projects and has industry leading track record of implementing complex project on time. Extreme weather conditions, an uneven sub-sea terrain, strong submarine currents and a tight supply chain market makes it difficult to develop R-series and Satellite fields in KG-D6 block. RIL and BP together are required to deploy advanced skills, processes and technologies to produce gas from water depths of over 1,500 metres. RIL and BP are confident that once the existing discoveries are developed, these, along with KG-D6 explorations, will help enhance domestic production significantly. RIL’s refining and marketing business competes globally with a number of large energy companies. Some of these players are also producer of crude oil and are integrated with their refining operations. The price of crude oil, key feedstock for the refining business, gets impacted due to Reliance Industries Limited 39 changes in demand-supply environment and overall macro- economic conditions. The merchant nature of its refining business means that RIL faces extensive competition in international markets for the sale of key transportation fuels. Any slowdowns in the global economy, resulting in downturn for the refining industry may adversely affect RIL’s financial performance. However, RIL benefits from the quality of its assets, an unprecedented level of operational integration as well as an experienced team that has demonstrated its ability to deliver globally competitive refining margins and consistently high operating rates. RIL has been working for years to provide safe, reliable and affordable petrochemical products to consumers, mainly in India. The primary challenge facing the industry is economically meeting the growing demand for polymer and polyester products. And it is not just that demand is increasing, but the product applications are changing as well. Thus, RIL needs to find ways of using its resources as efficiently as possible to meet the shifting demand. Feedstock integration, lower operating costs and high operating rates are critical for profitability in the petrochemicals business. RIL has successfully maintained high operating rates on the back of strong domestic demand and a balanced portfolio of liquid and gas-based crackers. RIL borrows funds in the domestic and international markets to meet long-term and short-term funding requirements. Funds are primarily raised for its operations and new projects, therefore is subject to risks arising from interest rate fluctuations since majority of RIL’s borrowing are floating rate debt. Fluctuations in the exchange rate between the US Dollar and the Indian rupee, may also adversely affect the financial condition of the Company. Internal Controls RIL has a well-established internal control system, which is commensurate with the size and nature of its business and complexity of its operations. The Company strives to maintain a dynamic system of internal controls and procedures — including internal control over financial reporting — designed to ensure reliable financial record- keeping, transparent financial reporting and disclosure and protection of physical and intellectual property. The Company has an internal audit function which conducts regular internal audits to examine the adequacy and compliance with policies, plans and statutory requirements. Audits are led by professional audit managers and supported by experienced personnel drawn from across the organisation. The management duly considers and takes appropriate action on the recommendations made by the statutory auditors, internal auditors and the independent Audit Committee of the Board of Directors. RIL has global IT and communication networks and applications to support its business activities. The IT security processes protecting these systems are in place and are subject to assessment as part of the review of internal control. RIL’s manufacturing facilities endorse the highest health, safety, security and environmental standards and maintain operational integrity. Major Subsidiaries Retail Business The Indian retail industry has experienced high growth over the last decade with a noticeable shift towards organised retailing formats. The industry is moving towards a modern concept of retailing. The size of India's retail market was estimated at $ 435 billion in 2010. Of this, $ 414 billion (95% of the market) was traditional retail and $ 21 billion (5% of the market) was organised retail. India's retail market is expected to grow at 7% over the next 10 years, reaching a size of $ 850 billion by 2020. Traditional retail is expected to grow at 5% and reach a size of $ 650 billion, while organised retail is expected to grow at 25% and reach a size of $ 200 billion by 2020. The growing middle class is an important factor contributing to the growth of retail in India. By 2030, it is estimated that 91 million households will be ‘middle class’, up from 21 million today. Also by 2030, 570 million people are expected to live in cities, nearly twice the population of the United States today. India’s retail industry was globally the fifth most attractive market for investment in 2012. This growing popularity of the country’s retail sector helped increase awareness for quality brands and products. The country’s retail sector, specially organised retail is growing rapidly, keeping pace with the unprecedented rise in customer spending. Even though the consumption story remains strong for India over a longer term period, the economy is still exposed to blips in the short term. There is a protracted weakness in consumer’s discretionary spending due to higher inflation, marginal real wage growth and low level of macroeconomic activity. Private Final Consumption Expenditure (PFCE) is at an eight-year low. Consumer spending has been impacted as banks have exercised caution in lending and have also tightened their rules on issuance of credit cards. 40 Fulfilling India’s Aspirations. With Innovation and Enterprise. Despite the prevailing challenges in the macro-economic environment, modern trade continues to grow. As economic growth brings more of India’s people into the consuming classes organised retail attracts more and more shoppers into its open doors. By 2015, more than 300 million shoppers are likely to patronise organised retail chains. The government is also taking steps to bring more investments in the industry which would not only create more jobs, build ecosystem for farmers and small scale producers and connect them to the benefits of modern retail but also benefit millions of consumers with superior experience and value. Higher penetration of organised retail would enable better realisation of price to farmers. Farmers will gain support from the retailers with whom they will share a common interest. This is expected to enhance productivity of farming activity. Organised retail’s attempts at creating a better retail experience and bringing producers and customers closer have yielded dividends and is evidenced by the rapid acceptance of this new paradigm in retailing by the customers and farmer community. The India growth story is real and is here to stay. Retail Business Update The retail business continued its growth journey during the year with new store launches as well as strong same store sales growth. The business accomplished a milestone by crossing revenue of ` 10,000 crore during the year. The business grew by 42% to reach revenue of ` 10,800 crore as against ` 7,599 crore registered in the previous financial year. The business achieved cash breakeven with earnings before depreciation, finance cost and tax expense (EBDIT) of ` 78 crore. The milestone of crossing ` 10,000 crore revenue and reaching cash breakeven at EBDIT level is a significant step in retail business’s journey towards attaining market leadership by democratising access to all types of products and services across all segments for the discerning Indian customer. The format sectors collectively witnessed a two year CAGR of 33% in revenues. By each format sector the two year CAGR was as follows – Value Formats and Others at 19%, Digital at 76%, Fashion and Lifestyle at 45%, Jewellery at 57% and Brands at 82%. During the last financial year, retail business strengthened its backend operations and store expansion capability by successfully adding 184 stores across format sectors and now operates a total of 1,466 stores spanning 129 cities across India covering an area of over 9 million square feet. The results of various efficiency improvement initiatives taken under the leadership of best retail managerial talent with an undistracted focus on providing superior customer shopping experience has helped in attaining robust growth across all format sectors during this year. The retail business witnessed strong same store sales growth ranging from 7% to 18% across various format sectors over last year. Reorganisation during the Year During the year under review, the realignment and consolidation of the various formats of retail businesses being carried on by the subsidiary companies of Reliance Retail Limited, was proposed, subject to necessary approvals of the High Court of Judicature at Bombay. The consolidation exercise and consequent reduction in the number of companies will help in enhancing operational flexibility, efficiencies and greater and optimal utilisation of resources and also lead to significant reduction in the multiplicity of legal and regulatory compliances. Accordingly, many activities relating to organised retail business shall be consolidated in a single company, namely, Reliance Fresh Limited. The section below gives an overview of the various format sectors under the umbrella of retail business. Value Formats and Others During the year Value Formats opened 10 new stores, further consolidating their position as the largest grocery retailer in the country. In order to provide its growing customer base with more choice, Value Formats continued launching their private labels. Private label sales represented significant contribution of overall FMCG Food, Non-Food, Dairy & Staples sales and contributed 9% of revenues for Value Formats. With its philosophy of inclusive growth, value formats have been forging strong bonds with farmers and small manufacturers. As a part of its ‘Farm to Fork approach’, Value Formats sourced most of the produce in fruits and vegetables from the farmers. Value Formats also undertook an ambitious program of refreshing all ‘Reliance Fresh’ stores by adding larger assortment to the store and making the customer journey in the store more enjoyable. To ensure that all associates can provide customer service that stands true to its brand promise of ‘Aapki Khushi, Hamari Khushi’ and to foster a culture of connectedness Reliance Industries Limited 41 with customers, Value Formats have undertaken a company-wide learning initiative named ‘WorkSmart’. Over 10,000 store associates have completed 160,000 online learning modules during the year. In order to cater to the requirements of Kirana, HORECA (hotels, restaurants, caterers) and institutions with the best product assortment ‘Reliance Market’ was launched in 2011 to cater to this wholesale opportunity. Reliance Market is built on the principle of offering inclusive growth. Reliance Market is positioned as a cash and carry wholesale format, catering to the trading and business community, to provide them with an alternative channel for products that they need for their businesses, to either re-sell (Kirana & Traders), use (small and large companies) or re-process (hotels, restaurants, canteens, caterers etc.). The format is a key enabler to their entrepreneurial spirit and helps generate and sustain employment thereby delivering on its brand promise of “Aapka Market, Aapka Fayda”. The first Reliance Market store launched in Ahmedabad has completed one full year of operations. The store has 125,000 customers of which 24,000 are Kirana traders. The learnings through the launch and operation of the first store have provided significant inputs to strengthen the processes and systems required for scaling up of the format. Aggressive growth is planned for this format in the current financial year. Several productivity enhancement initiatives that were commenced by value formats have resulted in improved operating parameters for the stores. These measures are endeavoured to make them India’s favourite retailer. Retail business’s loyalty program, Reliance One, now enjoys patronage of over 13 million customers contributing nearly 65% to the sales during the year. Digital Sector Consumer durables, 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 ` 119,000 crore in 2012. The current market is growing at over 10% and is expected to touch ` 215,000 crore by 2016 (excluding services). Penetration levels of CDIT products are low when compared to other developing markets. As disposable income increases, more people would adopt technology products. New technology innovations and trends will drive replacement as well as overall market. Reliance Digital format aims at bringing solutions to the customer as a retailer that doesn’t just sell products; it offers solutions that enhance customers’ lives. It achieves this through the total services concept and end-to-end solutions selling aided by expert technology guides. To service customers and delight them at every touch point, Reliance Digital follows the ethos: “We bring technology to life for you”. In order to meet the requirements of consumers in a connected world, ‘Reliance Digital Express’ format was launched last year. The store provides cutting edge technology solutions to the customers and helps them connect with their world from anywhere at any time. The store retails most compelling products carefully chosen by technology experts and enthusiasts. The products and services are retailed by hand-picked and trained, knowledgeable and courteous store staff. The technology concepts that are experienced by the customers in this store are easily replicated at the customer’s home by ResQ experts, thus helping the customers lead a totally connected life, at all times. Reconnect, the private label of Reliance Digital offers products built on cutting edge technology in consumer electronics and durables space contributed to 4% of the overall revenues for Digital during the year. Reliance Digital continues to strengthen ResQ, the service arm of the Digital. It is a full-fledged service organisation and is India’s first multi-product, multi-brand and multi-location service network that provides solutions encompassing end-to-end product life cycle requirements for entire range of CDIT products and other value added services. During the year, Reliance Digital continued to grow its store count by adding a total of 46 stores. Reliance Digital now operates 139 stores which include iStores operating under a partnership with Apple. Reliance Digital is in process of expanding its overall retail footprint through both Digital and Digital Express stores. The business has seen robust growth last year based on a well-defined and meticulously implemented key value proposition anchored on ‘Solutions and Services’. Fashion and Lifestyle The apparel market accounts for 8% of India’s consumption expenditure at around ` 200,000 crore and is expected to 42 Fulfilling India’s Aspirations. With Innovation and Enterprise. grow fourfold over the next decade while the footwear industry is estimated to be about ` 25,000 crore and growing at 13% annually. The industry has been relatively more organised with modern trade accounting for 35% market share. In a period of 4 years, the business has seen rapid retail development. The business launched its first ‘in-touch’ store this year. The new concept prominently displays its various sub-brands and increases vibrant product offerings thereby bringing the product to life in a much better way. This growth will be driven not only by favourable demographics but dramatic changes in people’s lifestyle ranging from media exposure to cultural norms to increased awareness. These lifestyle changes are driving consumers to purchase more fashion driven products. Given the diversity of Indian consumer preferences and varied propensity to consume, there is a case for segmenting consumption categories along a spectrum ranging from ‘value based’ to ‘aspiration based’. Retail business has been pursuing a strategy that would capture the fashion trends through ‘tiering’ of formats encompassing the entire consuming class. The business has invested in building its design capability and strengthening its sourcing including by going to most advantageous markets around the world. Reliance Trends has positioned itself as an affordable fashion destination with an apt tag line of “Sirf Dikhne Mein Mehenga”. Reliance Trends has achieved the distinction of becoming a leading value fashion specialty retailer. Staying true to its mission of democratising fashion, Reliance Trends has been the first national apparel specialty retailer to enter Tier I, II and III towns with relevant offerings adapted for such markets. Reliance Trends is well on its path to become the clothier of the nation. Reliance Trends' growth is supported by a strong portfolio of private label brands contributing over 60% of the business. Reliance Footprint, with over 50 national, international and private label brands under one roof for footwear and accessories consolidated its position as the largest family footwear destination store in the country. Reliance Footprint continued its exclusive distribution relationship with Asics, a leading manufacturer of premium sports shoes and apparels. For customers who are looking for international fashion and are keen to shop at world-class shopping environment, such customers are being served by many of Company’s partnership brands. Marks and Spencer is an international brand that brings in British heritage to Indian doorsteps. Retail chain under the partnership with Marks and Spencer continues to grow rapidly since the formation of the Joint Venture in 2008. Vision Express is a brand in the retails business portfolio which is brought to India through a Joint Venture with Grand Vision, Europe’s largest optical chain with over 4,600 stores in over 40 countries. Vision Express caters to customer needs by offering the benefits of surety, affordability, quality, world-class designs and decades of optical expertise. From trendy spectacles, comfortable progressive lenses, to in-vogue international sunglasses designs, Vision Express’s unique collections aspire to meet the comfort quotient and eye care needs of every genre. During the year Fashion & Lifestyle saw an addition of 95 stores taking the total count to 448 stores. Jewellery The jewellery industry was beset by increase in gold and diamond prices last year, which affected jewellery demand. Despite the adverse industry trends and weakened consumer outlook, Reliance Jewels continued to expand and added 14 stores during the course of the year to end at 51 stores making it one of the fastest growing retail chains in the category. The business improved significantly and the chain improved its profile in the minds of the consumers. Several initiatives were undertaken to improve operational efficiencies which reflected in significant improvement in sales. However, there is still a huge opportunity for the growth of modern jewellery retail in India, with young consumers exhibiting greater interest in the category. Based on the solid foundations that the business has been built on, Reliance Jewels plans to grow its presence rapidly in the market. Brands Reliance Brands has a portfolio of 40 brands that span across the entire spectrum of luxury, bridge to luxury, high-premium and high-street lifestyle space. Reliance Brands has adopted a multi-pronged strategy for growing its presence. For brands that are in its portfolio and are launched, the focus has been to expand their presence in newer markets while for the brands that were added to the portfolio in recent times, the focus is to launch them. To further grow its portfolio of brands, Reliance Brands continue to partner with new and revered international brands. During the last financial year, Reliance Brands Reliance Industries Limited 43 has added five new partnerships to its portfolio of brands. customers during the entire product lifecycle. l Brooks Brothers – America’s oldest clothing retailer with a heritage that goes all the way back to America’s first president. Reliance Brands has formed a JV with Brooks Brothers during the year. l Dune – Premium women’s shoes and bags brand from UK. Reliance Brands has a long term franchise relationship with Dune. l Superdry – “British Design & Spirit of Japan”. This British brand has formed a long term distribution relationship with Reliance Brands. l Stuart Weitzman – For years Stuart Weitzman has been a favourite with leading Hollywood actresses. Reliance Brands has formed a long term distribution relationship with Stuart Weitzman. l REISS – Reliance Brands announced long term Distribution relationship with REISS, UK-based fashion brand. During the year, Reliance Brands also launched its first mono-brand online commerce website for the brand STEVE MADDEN (stevemadden.in). Reliance Brands has a network of 68 stores in 11 cities and has made steady inroads into the premium consumer base across the country. Future Outlook The Indian retail sector is expected to continue its growth trajectory. Organised retailing is expected to grow at a faster rate thereby garnering a larger share of the market from the current 8% to around 20% by 2020 due to the changing consumer preferences and other growth drivers of organised retail in the country. Retail business is in a unique position to capitalise on the growing opportunity in India. It is undertaking expansion of all existing formats to strengthen its leadership position vis-à-vis competition. This can be achieved by growing in existing markets and entering newer markets with the intention of ‘Bettering the Lives of Indians Everyday’. Digital Sector would be one of the growth verticals for the coming year. Reliance Digital stores and Digital Express stores would be rolled out in Tier-I and Tier-II cities and would bring the connected world experience to consumers. The focus would be to further strengthen ResQ, the service arm of the Digital format. ResQ brings in strong service orientation towards meeting the requirements of the Retail business seeks to add alternative channels to reach out to customers and has been intensely working on creating a multi-channel model that would benefit customers by offering them convenience of shopping anywhere, anytime and at the best available value proposition. All formats would be working relentlessly to further their leadership positions in respective sectors making them the favourite shopping destination for Indian customers. Reliance Jio Infocomm Operating Environment From less than 5 million mobile users in 2001, India has grown to more than 860 million mobile users achieving more than 70% teledensity. The enormous growth of the telecommunications in the country has not been accompanied by a corresponding growth of the broadband connections. Today, broadband in India has only around 1% market penetration (15 million broadband connections - excluding internet access by wireless phone subscribers) compared to other European and Asian countries. The broadband access to people can truly transform lives of Indians by getting access to a wide array of offerings, such as access to internet, email, voice and video communications, news, productivity, social networking, games, education, health and fitness, finance, travel, e-commerce, e-governance and homeland security services. Taking cognisance of transformational potential of converged services, the Government is working towards putting in place a new policy framework for licensing, spectrum management and migration to digital addressable systems in broadcasting. The policy envisions providing secure, reliable, affordable and high quality converged telecommunication services anytime, anywhere under one licence for accelerated inclusive socio-economic development. Reliance Jio Infocomm Limited RIL’s subsidiary, Reliance Jio Infocomm Limited “RJIL” (formerly Infotel Broadband Services Limited, which is the only private player with Broadband Wireless Access (BWA) spectrum in all the 22 telecom circles of India), plans to provide reliable fast internet connectivity through the 20 MHz, contiguous, pan-India BWA spectrum. In addition to connectivity, RJIL also plans to enable end- to-end solutions that address the entire value chain across various digital services in key domains of national interest such as, education, healthcare, security, financial services, 44 Fulfilling India’s Aspirations. With Innovation and Enterprise. government-citizen interfaces and entertainment. RJIL aims to comprehensively address the requisite components of the customer need, thereby fundamentally enhancing the opportunity and experience of hundreds of millions of Indian citizens and organisations. RJIL plans to use TDD LTE technology for its country wide next generation network deployment to provide connectivity and related digital services to its customers. In addition to LTE and its future versions, it 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. RJIL will focus on making available all the components of the entire digital value chain. To deliver such end-to-end solutions, RJIL has finalised key agreements with its technology partners, service providers, infrastructure providers, application partners, device manufacturers and other strategic partners for the project. It aims to create a digital eco system which can be used to benefit the industry, the government and, above all, the people of this country. RJIL has also completed the detailed planning for Pan India implementation of the infrastructure needed for the project. RJIL continues to attract the best talent in the industry and is focusing on building a high performance team. The key leadership talent required for the setting up of the business are in place in the respective geographies and are currently leading the implementation phase. India has a unique opportunity to leapfrog the world and become the global leader in ubiquitous delivery of digital content, applications and services. RJIL is confident that in coming years, through its digital services Reliance would fundamentally change the lives of hundreds of millions of ordinary Indians. Reliance Haryana SEZ Limited The Model Economic Township (MET) has been envisioned to be developed as an industrial infrastructure to support economic growth in a public private partnership framework with the Government of Haryana through HSIIDC Limited (a Government of Haryana company). The Company is engaged in the process of land consolidation with the support of Government of Haryana. The start-up phase of operationalisation of MET in the district Jhajjar of Haryana commenced during the year. Panasonic India Ltd, a leading Japanese consumer electronics company have commenced production facility in the industrial colony. Additionally, Denso Haryana Ltd, a major Japanese auto component manufacturer is also likely to commission their plant shortly. Innovation, Research & Development Research, technology and innovation continue to be RIL’s major focus areas to create value and provide a competitive edge to meet current and future needs. Reliance Technology Group (RTG), the Company’s centre of research and technology, contributes to RIL’s growth by buying, customising and developing the right technology, at the right cost and at the right time. RTG consists of two types of technical teams: (i) Technology groups focusing primarily on advanced troubleshooting, support to capital projects, profit and reliability improvements in RIL’s manufacturing plants and (ii) R&D groups concentrating mainly on new product, process and catalyst development to support existing business and creating breakthrough technologies for new businesses. In the refining area, RTG has expanded its horizon to include molecule-based process optimisation. RTG continues to pursue research in the areas of coking, hydro- processing, Fluidized Catalytic Cracking (FCC) and crude processing. It also provides advanced technical support through computational fluid dynamics and many other advanced simulation tools. In FCC, an innovative technology helps generate extremely high olefin yields from lower-value feedstock. Several laboratory and pilot-scale studies have been completed establishing yields to be expected at commercial scale. Coking process research at RIL will get a major boost as the state-of-the-art coker pilot plant will be fully commissioned soon. This facility will be used to carry out research projects for upgrading refinery residue streams into value-added products. This facility will also be used to support current operations. The research facilities, being developed by the hydro- processing research team, are expected to be fully functional by the next financial year. With the Jamnagar refining complex having substantial hydro-processing capacity, this facility is expected to help improve commercial hydro-processing performance. The crude processing research team has made significant progress by developing a new process for Total Acid Reliance Industries Limited 45 Number (TAN) reduction in crude and kerosene products which shall facilitate processing of more high-TAN crudes. A new area of research actively being pursued is carbon dioxide capture from the refinery flue gas. This work supports RIL’s commitment to ameliorating long-term environmental issues. The modelling and simulation group is engaged in resolving several refinery and petrochemicals reliability issues using computational fluid dynamics and other simulation tools. These issues include: improving run length of coker furnaces and design changes for coker drum feed entry and FCC cyclone. The Company’s upgrade of refining LP models is set to enable more sophisticated optimizations in crude selection. Moreover, new analytical techniques are being developed and deployed for rapid crude characterization and molecule-based modelling and optimization of intra- refinery streams and processes. Separation methods are continuously being enhanced. In the petrochemicals area, RTG is providing technology support to olefin crackers, polymers, fibre intermediates, linear alkyl benzene and polyester. The focus areas include efficient asset utilization, development of specialty product grades, materials and catalysts, value addition to by-product streams and leveraging opportunities at the chemicals and oil interface. Several projects in the following areas have been completed or are on-going across the refining and petrochemicals businesses: l l l l l l l l product improvement process improvements energy efficiency enhancing product value to customer application development catalyst development additive development automation technology l molecule management As the sole industry partner in the New Millennium Indian Technology Leadership Initiative project on indigenous “Polymer Electrolyte Membrane” (PEM) Fuel Cell technology development, RIL is playing a major role in scale-up trials of PEM fuel cells after a recently successful lab-scale demonstration of PEM fuel cell technology. Collaborative research projects with IIP Dehradun, IIT Mumbai, PDPU Ahmedabad, Delhi University, Himachal Pradesh Horticultural University and others are also being undertaken to jointly develop new breakthrough technologies and to establish synergistic collaboration with academia and industrial technology. RIL has joined an industry program at Tulsa University which will provide valuable information for enhancing and trouble-shooting process operations. Additional highlights of RTG include: l l Scientists and engineers at RTG have been invited as speakers/presenters at various prestigious conferences Engineers at RTG have been invited as Advisory Committee Members in the Department of Scientific and Industrial Research New Delhi (DSIR), Govt. of India programs Innovation Innovation is not new to Reliance, thanks to innovation that the company has always stayed ahead of the curve. However, RIL plans to actively nurture innovation across the organisation in order to achieve its aim of remaining as one of the most innovative companies in the world. The Reliance Innovation Council – comprising Nobel Laureates, global strategists and thought leaders met in February 2013, to give direction to RIL’s innovation agenda. The meeting was a great success and many path- breaking ideas emerged from this eminent setting. The Reliance Innovation Leadership Centre has led various programmes to integrate innovation ‘as a way of life’ within the organisation. Under one such programme, potential innovation leaders are being taken through a systematic and methodical programme on innovation. Each of them will implement a substantial innovation project and through the project they will not only generate exponential value for RIL but also help institutionalize innovation within the organization. The Leading Expert Access Programme (LEAP) is inspiring RIL employees by providing a platform for interaction with global iconic achievers and distinguished personalities. 46 Fulfilling India’s Aspirations. With Innovation and Enterprise. Innovation is incomplete if it does not lead to new businesses. Some game changing technologies in the energy space are being incubated which would lead to innovation led growth for Reliance in the future. Clean Development Mechanism The Company 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 2012-13, three of our CDM projects got total 34,692 CERs issued from UNFCCC. Audit of one more project is completed and request for issuance of 86,912 CERs will shortly be submitted to UNFCCC. Human Resources Development RIL’s talent base, as on March 31, 2013 stands at 23,519. This year, the Company has strengthened last year’s HR focus to align the business functionally and build people’s capability. Redefining the contours for a futuristic HR Organisation With the Vision to be an “Employer of Choice” in its operating geographies, RIL’s HR fraternity undertook several projects in FY 2012-13 to create building blocks for a world-class organisation. Some of these initiatives are: l Creating a world-class HR academy to develop the existing HR team l l l l Hiring high-calibre professionals to augment the current team to lead the HR for the future, by building the grounds-up cadres, as well as, induction of the leaders in senior leadership positions A robust HCM System roll-out to support the global, multi-geography and multi-business organisation Review and revision of all the HR policies and programmes Unveiling RIL’s “Employee Value Proposition” (EVP) to set a foundational block for people management practices All the changes that were being made needed considerable efforts in “change management”. Reliance ensured that most of the leaders are trained on change management. The internal corporate communications tools including newsletters, town hall meetings, webinars etc. were also used to train leaders on change management. While the previous year focused on establishing the Centres of Excellence for Talent Acquisition, Talent Management, Learning and Development, Compensation & Benefits and Industrial Relations, the current year was focused on strengthening the same through influx of some high calibre professionals externally and internally. More than 100 new HR professionals, including Senior Management personnel, were added to the HR team across the group and across several locations. Building Employee Skills and Capabilities for the future RIL believes in the mantra of lifelong learning. The L&D team focused on developing and operationalizing Focused Learning Academies. The FC&A Academy was launched last year. This year saw the launching of new Academies in the areas of HR, Civil, Mechanical, Electrical, Instrumentation, Health, Safety & Environment (HSE), Fire, Operations, Technology, Procurement & Contracting, Leadership and Managerial Skills Development. RIL partnered with leading Institutions and professional bodies across the world in pursuit of knowledge building so as to bring in world class experience and expertise. The primary focus of all these academies is to ensure that knowledge, skills and capabilities are developed in-house thus helping the organisation to scale up its requirements for the future. The Reliance Accelerated Leadership Program (RALP) which was institutionalised two years ago continued to be a centre piece of our future leadership pipeline with 25 talented professionals adding on to the band wagon of growth and history. The focus of RALP which was restricted to only 4 functions (namely IT, HR, F&A and P&C) till last year, has now been expanded to include businesses like Refining & Marketing, Exploration & Production, Petrochemicals and Telecom as well. During the current financial year, RIL hired 75 management graduates and 436 graduate engineers from the country’s leading institutes as a part of its campus recruitment initiative. The numbers are only likely to increase in future. 2,129,770 man-days of learning were delivered in the current year. Our quest is to create a world-class platform for the learning of all employees. Six-Sigma initiatives continued to reap rich dividends during the year. RIL’s Six Sigma process, linked to the Company’s Vision, Mission & Business Strategy, is a management-driven initiative to improve the organisation’s performance. Reliance Industries Limited 47 FY 2012-13 saw 173 employees undergo green belt six sigma training and 11 employees reach Reliance Certified Black Belt programme’s completion stage. The FY 2012-13, saw 28 certified Six Sigma Black Belts working in all manufacturing sites and Reliance Corporate Park and 314 black belts and green belts involved in improvement projects. The year saw the completion of 68 Six Sigma projects in which 408 supervisory personnel were engaged resulting in annualised saving of ` 112 crore. Awards and Recognition Some of the major awards and recognitions conferred to RIL are: Leadership l l “International Refiner of the Year – 2013” Award at HART Energy’s 27th World Refining & Fuel Conference held at San Antonio, Texas, USA “Mark of Excellence Award” (Hazira Manufacturing Division) at the IST Convention on Leadership Excellence organised by India’s Greatest Corporate Leaders forum powered by DNA Corporate Rankings and Ratings l l RIL was awarded Application Level A+ certification by Global Reporting Initiative (GRI) for its FY 2011- 12 Sustainability Report – “Partnering India’s New Future. Sustainably” Appreciation plaque by ASSOCHAM in recognition for the Company’s outstanding CSR activities in 2012 Quality l l l l Three Star (Highest award) at International Convention on Quality Control Circle at Kuala Lumpur, Malaysia (Dahej Manufacturing Division and Hazira Manufacturing Division) Golden Peacock National Quality Award 2012 (Nagothane Manufacturing Division) IMC Ramkrishna Bajaj National Quality Award under the manufacturing category for the year 2012 ASQ’s International Team Excellence Award from American Society for Quality at the World Conference on Quality & Improvement at USA (Hazira Manufacturing Division) Project l l l Best viewer’s choice award (Dahej Manufacturing division) for implementing six sigma project in “Improving productivity of Gas Cracker Plant by resolving propylene compressor discharge pressure issue” from American Society for Quality at California, USA PLATINUM AWARD for the Six Sigma Project, CBE-2012 from Concept Business Excellence (Hazira Manufacturing Division) The 1st Prize Trophy for Best Business Process Excellence Program implemented in Manufacturing Industries over 2 years from International Quality Productivity Centre (IQPC) (Jamnagar Manufacturing Division) l WINNER for QualTech Prize for Improvement (Manufacturing Process Excellence) for the project “Significant Yield improvement ex DTA FCC” from QIMPRO (Jamnagar Manufacturing Division) l CII-Six Sigma National Award for 2012 (Vadodara Manufacturing Division) Health, Safety and Environment l l l l l l l ICC Award for Management of Health Safety and Environment from Indian Chemical Council The Sword of Honour from British Safety Council, U.K, for Excellence in Health, Safety and Welfare (Barabanki Manufacturing Division) The Golden Peacock Environment Management Award for 2012 (Dahej Manufacturing Division) ‘Golden Peacock Occupational Health & Safety Award’ for 2012 (Hazira Manufacturing Division) The BSC – Sword of Honour in Occupational Health & Safety Management by British Safety Council (BSC), UK (Jamnagar Manufacturing Division) The BSC - Globe of Honour in Environmental Management System by British Safety Council, UK (Jamnagar Manufacturing Division) The CII - Environment Best Practices Award 2012, rated as “Most Innovative Environmental Project” 48 Fulfilling India’s Aspirations. With Innovation and Enterprise. for “Reduction of Colour in Acrylonitrile Effluent” (Vadodara Manufacturing Division) l l Winner of Eleventh Green Tech Safety Award – 2012 in Petrochemicals Sector (Vadodara Manufacturing Division) l l l l International Safety Award by British Safety Council, UK (Barabanki Manufacturing Division) State-level ‘Dr. R.J.Rathi Award’ for Green Initiatives in Industries in Maharashtra for 2012 from Mahratta Chamber of Commerce, Industries & Agriculture, Pune (Nagothane Manufacturing Division) The “International Safety Award” with distinction for 2012 from British Safety Council (KG-D6 operations) The Safety Innovation Award 2012 from Institution of Engineers, New Delhi for the third consecutive year in a row (Jamnagar Manufacturing Division) Energy & Water Conservation / Efficiency Jawaharlal Nehru Centenary Award from the Ministry of Petroleum & Natural Gas for being among the three refineries which have achieved the lowest specific energy consumption among Indian refineries (Jamnagar Manufacturing Division - DTA refinery) Indian Chemical Council Award for Excellence in Energy Conservation and Management for 2011 (Hazira Manufacturing Division) Excellent Energy Efficient Unit Award by CII for 9th consecutive time (Hazira Manufacturing Division) The National Award for Excellence in Energy Management - 2012 from CII and declared as Excellent Energy Efficient Unit (Jamnagar Manufacturing Division - DTA Refinery) Innovative Project award from Bureau of Energy Efficiency (BEE), Ministry of Power, Government of India (Jamnagar Manufacturing Division) l l l l l l Adjudged by CII as a National Energy-efficient Unit in India (Reliance Corporate IT Park Ltd, Navi Mumbai) Technology, Patents, R & D and Innovation l l Shri Ratilal Tribhovandas Nanavati Award for outstanding work in Research & Development for 2009-11 by The Southern Gujarat Chamber of Commerce & Industries, Surat (Hazira Manufacturing Division –RTG) The BEST PRAX PRIZE FOR INNOVATION – 2012 for the project − Reduction in packaging consumables (paper-based) in Polyester POY plant by QIMPRO (Hazira Manufacturing Division) Corporate Social Responsibility l l l l l l Trophy for its work done under the National AIDS Control Program phase-III from Population Foundation of India (Hazira Manufacturing Division- Reliance Community Care Centre) The Golden Peacock Award - 2012 for Corporate Social Responsibility by Institute of Directors (IOD) (Vadodara Manufacturing Division) Red Cross Gold Medal for the “Reliance Dhirubhai Ambani Protsahan” Educational initiative from Governor of Andhra Pradesh for FY 2011-12 Golden Peacock National Training Award – 2012 (Patalganga Manufacturing Division) The National Award for Innovative Training Practices for security training practices by Indian Society for Training and Development (Nagothane Manufacturing Division) The Greentech Gold Award for HR Excellence (Dahej Manufacturing Division) Retail l ‘Most Promising Brand of the Year Award’ at North- East Consumer Awards 2012 (Reliance Trends) Sustainability Federation of Gujarat Industries Award - 2011 for Excellence in Energy Conservation and Best Utilization of Alternative Energy (Vadodara Manufacturing Division) l Hazira Manufacturing Division received the CII- ITC Sustainability Awards 2012 and received the coveted Certificate of Commendation for Significant Achievement in the area of Sustainable Development. Report on Corporate Social Responsibility Reliance Industries Limited 49 RIL nurtures stakeholder relationships to understand pertinent material issues, develop businesses, enhance shareholder value and manage risks better. It is the relationship, trust and commitment to stakeholder interest, and the warm reciprocal of the same by the stakeholders, that make RIL robust, resilient and sustainable. Health, Safety & Environment (HSE) Health RIL focuses on achieving excellence in occupational and personal health of employees at all manufacturing sites as well as at its offices. With this objective, it has undertaken ‘Mission Wellness’ to improve and maintain employee health. Reliance has set up state-of-the-art Occupational Health Centres (OHC) at all manufacturing, E&P locations and major office complexes. Besides emergency medical services, the OHCs also offer preventive, promotive and curative health services to its employees. These OHCs are equipped with state-of-the-art diagnostic and therapeutic equipment and are manned by qualified occupational health specialists. The OHC’s also carry out extensive health, education and awareness sessions and diagnostic camps. The hospitals have been upgraded to include on line X-Ray reporting. During FY 2012-13, RIL’s Multi Chemical Terminal at Bhopal received BSC five-star rating for Occupational Health & Safety by British Safety Council. Besides, the pathology laboratories at Jamnagar, Nagothane, Vadodara and Dahej Manufacturing Divisions were awarded with National Accreditation Board for Testing & Calibration Laboratories (NABL) certification. The Jamnagar Township Hospital was accredited with NABH. Special groups like Arogyam/ Swasthy Committee were formed to take care of lifestyle diseases. All Reliance employees undergo regular periodic medical examinations. The medical check-up facility is also extended to Contractor’s employees at the manufacturing sites. The results are computerised and analysed to provide targeted interventions at the individual and group levels. An automated ‘High Alert’ system has been implemented to prevent any medical complications. The employees are also supported for hospitalisation by regular liaison and cashless admission facilities in pan-India hospitals. The de-addiction activity is effectively implemented at most of the RIL locations as Quit Tobacco drive. An ambitious program ‘Work Life Project’ has been undertaken across the manufacturing sites including the Polyester sites, with focus on Emotional Health as a part of Resilience Management. Missionaries are trained to increase awareness regarding emotional health & psychological well-being. RIL’s Community Medical Centres, established near most of its manufacturing divisions, provide comprehensive healthcare services to local villagers. Safety RIL is committed to provide a safe workplace to its employees and contractors; and safety to the communities where it operates. In pursuit of the same, RIL continues to work towards its aim of zero injuries and zero incidents. As Reliance forays into newer segments of businesses, institutionalising HSE Management systems across all business segments is vital. During the year, RIL worked towards “One Reliance” standardization of systems and processes under its Business Transformation initiative. IT enablement of processes is underway, which is a big leap towards strengthening of HSE governance and compliance systems across all businesses and functions. While establishing HSE standards in steady state operations, RIL targeted its major focus areas to include process safety and construction safety for its large scale upcoming projects. Efforts are being made to embed the RIL HSE standards and processes from project conceptualisation stage onwards. RIL believes that continuous learning and upgrading of systems and processes are indispensable as we move ahead with our vision of achieving best-in-industry status with respect to safety systems and culture. Benchmarking of Process Safety Management was undertaken during the year across six petrochemical manufacturing sites vis-à-vis the global best-practices to identify potential improvement areas in capacities and systems. RIL recognizes that personnel competency is a key area to ensure safe and efficient operations. While taking a step in this direction, a learning academy dedicated to HSE was established. HSE assurance systems and processes were reviewed to ensure their robustness and alignment to the designed intent. RIL also successfully completed Responsible Care® surveillance audit this year after being certified for RC 14001 compliance last year. Being a Responsible Care signatory, focus is being laid upon safety of the community through improvement in the safety systems beyond operational boundaries. RIL engaged world renowned third party resource for assessing the Crisis Management and Emergency Response system and provide guidance for improvement. In order to strengthen Responsible Care Management System, the efforts were directed towards establishing a Product Stewardship initiative with an aim to institutionalize the same in the coming year. 50 Fulfilling India’s Aspirations. With Innovation and Enterprise. Environment RIL is committed to ensure environmentally sustainable and responsible operations to achieve highest standards of environmental excellence. The manufacturing divisions have not only instituted internationally accepted Environmental Management System based on ISO-14001, but the major sites are also integrated with Quality Management and Occupational Health & Safety Management Systems. At Hazira, the Energy Management System has been certified with ISO 50001:2011 RIL is in constant endeavour to be fully compliant with all applicable environmental regulations. In order to mitigate the potential environmental impacts on society, risk analysis of all new proposed projects are done and necessary measures are being incorporated to mitigate adverse environmental impacts prior to project commissioning. RIL follows the GRI G3.1 Guidelines (including GRI 3.1 Oil & Gas Sector Supplement) for reporting environmental performance indicators. RIL follows a comprehensive method for the preparation of Environmental Impact Assessment (EIA) studies, for new and expanding projects. The focus is on an integrated approach for conservation of natural resources while protecting the environment. EIA studies consist of terrestrial EIA, Marine EIA, Satellite imagery based land use, land cover and morphological assessment including the dynamic modelling methods. In continuation of efforts to improve environmental footprint, during this financial year, a continuous (Real time) ambient air monitoring station was instituted at Jamnagar for major air pollutants. The three-tier environment audit system has also been put in place. Trained and qualified internal environment auditors perform First Party audits followed by Inter-Site audit teams carrying out the Second Party audit for each of the instituted Group standards. The third tier audit includes high level environmental audit by external agencies such as Gujarat Pollution Control Board (GPCB) recognized auditors, British Safety Council, UK, etc. With the conduct of environment five-star audit by BSC- UK for RIL’s onshore and offshore Exploration and Production operations at Gadimoga, all manufacturing divisions/locations have been covered for this audit. To reduce water dependence from natural sources, majority of manufacturing divisions have taken up rain water harvesting and engaged in maximum possible recycling of treated wastewater. The upgradation of reuse of treated water for horticulture and for dust suppression in coke area at Jamnagar had reduced the desalt water demand. A rain water harvesting project has been implemented at a high school near Hazira to save 1000 m3 per annum of rainwater from roof-top to benefit 1,450 school children in a water starved area. At Patalganga, an organic waste processor was installed to convert canteen waste into organic manure. Maintenance and performance improvements of the assets are given a priority at RIL. In this context, all pollution abatement facilities e.g. effluent treatment plants and inside battery limit air emission control and waste disposal facilities are maintained and operated in line with the industrial best practices. RIL efforts such as mangrove plantation and its maintenance in the coastal areas, maintenance of green belts and gardens in and around manufacturing units, vermi-compost of waste and its use as manure etc. are imbibed in the culture of sustaining the earth’s environment. During the year, various manufacturing divisions and business units observed World Environment Day, Earth day, Water day, Ozone day etc. to propagate environmental awareness among employees, communities and the schools from neighbouring regions. During FY 2012-13, RIL developed a group standard for Corporate GHG accounting and reporting and trained GHG champions across the manufacturing sites. This concerted effort has provided tremendous opportunities to continuously improve for better environmental management. Social Responsibility and Community Development Education To build a rich pool of human resources for India, RIL has developed its own network of 12 schools in and around the manufacturing units of the company at Jamnagar, Surat, Vadodara, Patalganga, Nagothane and Nagpur benefitting more than 15,000 students. These schools promote the education among the children of the underprivileged communities. The J .H. Ambani School at Patalganga provided education to many 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 initiatives were taken during the year. These included construction of a school building at Meghpar village in Jamnagar; construction of exclusive girls’ school at Motikhavdi; distribution of school benches at Nagothane; providing school kits at Jamnagar; distributing school bags to children at Nagpur and Silvassa and providing notebooks and uniforms to schoolchildren of Gadimoga and Bhairavapalem Panchayat. Also, financial support was extended to ‘Bruhad Gujarat Sanskrit Parishad’ for imparting knowledge on Sanskrit, Karmakand and Astrology. Reliance Industries Limited 51 A school for the differently abled being run at Surat sought to address the issues relating to learning disability and dyslexia in children. A district level quiz competition called “Reliance Dhirubhai Ambani Quiz” is an annual affair in Andhra Pradesh. Reliance Dhirubhai Ambani Protsahan Scheme The Reliance Dhirubhai Ambani Protsahan Scheme encourages the meritorious poor students to pursue higher studies. The students securing high marks in SSC examination are helped to get free education at the leading residential colleges. The scheme, so far, has helped 1,134 students to continue higher education. “Mumbai Indians Education for All” Initiative Mumbai Indians has supported projects that have impacted more than 10,000 children in 3 years. Mumbai Indians supported projects ranging from providing access to quality education to the underprivileged children, supporting girl child education, imparting life skills to the differently abled and creating a level field by providing support classes to the vulnerable children. Mumbai Indians also raises goodwill and awareness for the partnering NGOs through its website, player meets and media bytes. The IPL matches provide children with an opportunity of seeing a live cricket match amidst 30,000 cheering fans. Over 2500 kids from 5 NGOs have attended the home IPL matches of Mumbai Indians since 2010. The children express themselves freely while cheering for the players, learn team work, exercise discipline while travelling and entering the stadium and above all get an opportunity to enjoy their right to entertainment. Some children are selected by the TV crew to relay their experience to millions of viewers across the world- something that thrills them and builds their confidence. Mumbai Indians has raised over ` 17 million for 5 partner NGOs since 2010. An iconic blue band was launched with Sachin Tendulkar’s signature to raise awareness and funds. Till date, over 50,000 blue bands have been sold. Dhirubhai Ambani International School Dhirubhai Ambani International School (DAIS), Mumbai, established in 2003 as a world-class centre of learning, has just crossed another milestone of completing 10 years. In furtherance of its mission, in a short span of a decade, this young institution has carved a niche for itself by emerging as a school of the future, a school of choice, with its focus on all-round development of children as well as their academic excellence. The Hindustan Times Top Schools Survey 2012 has ranked Dhirubhai Ambani International School the No. 1 School in Mumbai. In 2012, the Education World in its Survey of India’s Most Respected Schools, has ranked DAIS as No. 2 International School in India. DAIS has been ranked No. 1 on Academic Reputation, No. 1 on Individual Attention to Students, No.1 on Co-curricular Education, No.1 on Competence of Faculty and No.1 on Leadership / Management Quality. Building on the schools excellent academic record and its three streams - the ICSE, the IGCSE and the IB Diploma, its students performed impressively in the 2012 examinations. The IB Diploma 2012 batch earned higher average scores as against the world average, placing DAIS among the top ten schools of the world. Moreover, the school continued its excellent performance on university placements, with its students getting admission at renowned universities and colleges of the UK, USA and so on. This year, two DAIS students have received the prestigious Manmohan Singh Undergraduate Scholarships to fund their studies at the University of Cambridge. DAIS’s students continued their excellent co-curricular and extra-curricular activities, winning prizes at state, national and international levels in basketball, football, athletics, judo, karate, cricket, swimming, squash and other sports. They have also won prizes at the World Robotics Olympiad, the Commonwealth Essay Competition and the National Science Fair. The DAIS students also received the prestigious Hindustan Times Scholarship. The Annual Dhirubhai Ambani International School Model United Nations (DAIMUN) Conference 2012 deliberated on ‘Media and Democracy’. With a view to making our society more equitable and harmonious and to instil in children early on the attributes of service orientation and care for others, the school ensures that they actively participate in service to the local community. Students from Class III onwards work with old age homes, orphanages, underprivileged and mentally challenged children, while senior students work with NGOs like Advitya, Akanksha, Muktangan, Pratham, Aarambh and Aseema. The Dhirubhai Ambani International School Akanksha Centre, started in 2003, has till date educated 58 children from the low-income communities and in 2013, for the first time, 8 children have appeared for their class 10 Board examinations from such communities. The infrastructure work that students have undertaken in two remote villages - Hassachipatti and Kumbharghar – is almost complete. They are now focusing on providing education to children and enhancing livelihood opportunities for the villagers through microfinance. To support the various service initiatives, students organized ‘Lakshya’ a fete and raised substantial funds for weaker sections of the society. 52 Fulfilling India’s Aspirations. With Innovation and Enterprise. Community Healthcare Mobile medical vans are used to provide curative healthcare across RIL’s manufacturing sites. RIL provides a 24X7 emergency ambulance services from the Himachal borders to Hoshiarpur. RIL focuses on raising awareness and providing treatment for HIV/AIDS patients. A clinic ‘Hamrahi’, in Allahabad, provides voluntary testing and counselling for HIV/ AIDS, primarily for truckers and nearby residents. The Reliance HIV & TB Control Centre (NACO Designated ART centre) at Hazira has served over 78,000 patients. Among them, over 2,900 HIV-positive patients have been enrolled for clinical monitoring. Over 525 patients, including 52 in FY 2012-13, have received DOT therapy for tuberculosis. The 32-bedded Community Care Centre and Reliance AIDS Care Hospital at Hazira has served more than 3,150 patients. Further, the employees at RIL’s Exploration and Production sites and the Reliance Ladies Club (an association of spouses of RIL managerial employees) at Hazira have undertaken initiatives “Chirudeepam” and “Project Hope” respectively with an aim to support children affected by AIDS and supplying them with nutritive kits every month. Similarly, the Jamnagar manufacturing division runs ‘Project Balkalyan’ to provide nutritional support to HIV-infected children. All HIV positive children receive nutritional kits when they visit the centre for monthly follow-up. New projects include Khushi Clinic for HIV prevention, treatment, care and counselling support to the truckers and cleaners. RIL Jamnagar employees adopted HIV-affected children under Project Gift to provide them with nutritional kits during the year. Blood donation camps were also organised in various manufacturing divisions and locations. Over 1,400 blood units were collected in the Reliance Corporate Park’s blood donation camps. During the year, all sites organised free medical camps and provided free medicines to local rural and tribal patients. Manufacturing sites provided emergency ambulance support to roadside accident victims. Many manufacturing sites have also conducted health awareness programs in local schools and nearby small-scale Industries. Sishu- Mangalam project at Jamnagar was undertaken during the year to check malnutrition in the children of BPL families. During the year, training for Anganwadi care takers and the mothers were conducted at Gadimoga on various aspects including women health, hygiene, breast cancer awareness, nutrition requirement during pregnancy, child care, family planning etc. New Primary Health Centre (PHC) at Gadimoga has been constructed with in-patient facilities which can accommodate 30 beds and is equipped with an Operation theatre, Labour room, Pathology laboratory, Doctor consultation rooms, Rest rooms with elaborate medical waste disposal facility. Moreover, RIL operated two PHC sub-centres at Bhairavapalem and Laxmipathipuram during the year. RIL’s PHC at Dahej catered to community needs to 23 nearby villages under National Rural Health Mission Program. Dhirubhai Ambani Hospital During the year, the Dhirubhai Ambani Hospital at Lodhivali engaged significantly to improve the quality of life in surrounding communities. It provided free medical care to trauma victims of Road Traffic Accident (RTA), till the patient is stabilised. The hospital also offered subsidised medical facilities to economically weaker persons of society in surrounding areas. It also conducted medical diagnostic camps for local people. The hospital also engaged in offering free consultation, counselling, investigation and treatment to HIV/AIDS patients. During the year, the Dhirubhai Ambani Hospital organised 18 camps for free medical consultation and diagnosis. Around 1,900 patients attended these camps and were provided with free medicines. Besides, free medical care was also provided to 56 RTA patients during the year. In February 2013, cataract surgery camp was conducted with the help of Lions Club Mumbai and Khopoli, where 114 patients were operated for cataract. Free or highly subsidised medical care and treatment was provided to over 1,600 residents of surrounding villages. In its ART Clinic, the Dhirubhai Ambani Hospital offered free consultation, counselling, investigation and treatment to more than 3800 HIV/AIDS patients. Heritage Conservation During the year, RIL was engaged in development work on heritage conservation at Dwarka and Nathdwara. During Navaratri Festival 2012, various organisations conducting Navaratri Garba and dances were financially supported to strengthen Gujarat’s cultural heritage. Durga Puja was also enthusiastically celebrated at various manufacturing sites. Promoting Sports and Sportsmen With the aim of promoting Sports in India, RIL has instituted the IMG Reliance ‘Scholarship for India Programme’. These scholarships were awarded to 29 aspiring Indian Sportspersons for full time training and coaching at one of the best sports training facilities in the world – The IMG Academies, Florida. These talented young sportspersons are from the fields of Tennis, Basketball, and Football. These young sportspersons underwent rigorous physical and mental training, were given the best-in-class sport education and were exposed to high quality competition. Reliance Industries Limited 53 Recipient of these scholarships brought several laurels to the community. 14 of these scholars have become part of under-17 Indian National football team and represented India in AFC Cup in the FY 2012-13. Additionally, IMG Reliance signed a 15-year agreement with the AIFF, to improve, popularize and promote the game of football throughout India, from the grassroots to the professional level. IMG Reliance is in a long term agreement with the Basketball Federation of India (BFI) to create a new professional basketball league and manage all aspects of the commercial rights to the game in India. IMG Reliance operates the Aircel Chennai Open, India and South Asia’s only ATP World Tour event. Having completed 18 years of the tournament, it is one of the longest running ATP 250 events in the world. Through the Aircel Chennai Open, India’s top tennis talent get the chance to compete with the world’s best players on a world class platform. Promoting Indian/ Rural Art, IMG Reliance has initiated Indian Textile Day at Lakme Fashion Week .The aim of the show is to highlight textile traditions and heritage that might be little known and undiscovered and help connect emerging Indian textile designers to the mainstream and modern fashion business, thereby creating a new creative channel for their engagement and growth. RIL during the year supported cricket, billiard, snooker, football, chess, hockey, badminton, tennis, kabbadi etc. in various towns and villages across the country. However, the highlight of the year for the Company remains organising the ‘Sabarmati Marathon’ in partnership with the Ahmedabad Municipal Corporation. Safety Initiatives for Community As part of its unique safety initiative, RIL established an air conditioned Truckers’ Safety Training Centre at Hazira. This centre is fully equipped with audio-video equipment to impart training to truck drivers on safety rules, efficient driving techniques, understanding hazards associated with various materials and emergency responses. More than 200,000 drivers have been trained through this initiative since its inception in 2005. During the FY 2012-13, more than 32,000 drivers were trained. The manufacturing sites also provided fire tender services to local villages. Environment Initiatives for Community The Hoshiarpur Manufacturing Division collaborated with local industry and forest department under “Green Hoshiarpur Project” to plant trees in the city. Community Development Reliance Rural Development Trust (RRDT) RRDT during the year worked in 266 villages, constructing 173 Anganawadi buildings, 88 concrete roads and other rural facilities. RRDT has been able to reach to 5,923 villages till date and has completed construction of Anganawadi buildings, panchayat office buildings, community halls, concrete roads, water storage tanks, check dams etc. Community Development Initiatives At Hazira, a 1,000 metre potable water pipeline was replaced to fulfil water requirements of villagers at Mora, Jamnagar. RIL took a major initiative to support conservation of water by actively participating in the dredging and deepening of Ranjit Sagar Dam. A mini solar power plant provided solar-power connections at about 100 houses. A TV run on solar power at a Jamnagar Panchayat helped bring the tribal-lot into main-stream India. A community hall at Motikhavdi was also constructed to meet the needs of the local villagers. A Jamatkhana, for the fishermen community at Sikka was also constructed which facilitated the villagers to organize the social, cultural and religious gatherings on different occasions. Disaster Relief As part of the disaster relief measures, Reliance has been supporting the Andhra Pradesh Government and District Administration to provide immediate relief materials to the victims of natural calamities and fire accidents. During the FY 2012-13, RIL extended substantial financial grant for rehabilitation of one such village affected in a major fire accident. Livelihood Support RIL has always been at the forefront of implementing initiatives especially for the welfare of rural women and youth. Various skill upgradation programmes and vocational training programmes have been imparted to unemployed youth of surrounding villages to enhance their employability. Reliance Foundation Reliance Foundation focuses on five core pillars - Rural Transformation, Education, Health, Urban Renewal and Arts, Culture & Heritage. The Foundation’s activities covered over 2500 villages and various urban locations in India and touched the lives of over 1,000,000 underprivileged during the year. An overview of the Foundation’s programmes and impact is given below: Reliance Foundation BIJ: To address the developmental gap between rural Bharat and urban India, Reliance Foundation BIJ programme was the Foundation. This programme aims to support small and marginal farmers along the value chain through input provision, technical, post-harvest as well as marketing support. Till date, the Foundation has catalysed the formation of farmers’ institutions across nearly 300 villages and has engaged with over 100,000 villagers through the Reliance Foundation BIJ programme. Apart initiated by 54 Fulfilling India’s Aspirations. With Innovation and Enterprise. initiated from working with the small and marginal farmers to promote sustainable agriculture, the Foundation also works towards enhancing the nutritional intake of over 4,000 rural households through Reliance Nutrition Gardens. Information Services: Recognising the need for timely, accurate and value-added information, the Foundation focuses on ‘Participatory Knowledge Management’. It currently reaches to over 1400 villages through multiple mediums including field demonstrations, local cable TV programmes, advisories, bulletins and live phone- in programmes. The information provided is based on identified needs of the community and aims at capacity building of farmers, fisher folk and livestock owners for better livelihood security. Community Services: To promote holistic development of an entire community – be it a district or a village, Reliance Foundation has its Community Services programme. To begin with, steps have been taken in Shahdol district in Madhya Pradesh to address the prioritised needs of the community through healthcare, educational and livelihood training programmes. These programmes directly reach out to over 5,000 villagers from across 20 villages in Shahdol. The Foundation has also impacted communities of over 25 villages in Gujarat and Maharashtra by providing hospital and school improvement materials, including infrastructural and facility support. Health Programmes: To provide quality primary and preventive health care to the underprivileged, Reliance Foundation launched the community health outreach programme as part of its ‘Health for All’ initiative in December 2012. Under this programme, mobile medical units equipped with state-of-the-art technology for biometric mapping and electronic health records were started. Currently operating in Mumbai city, these units cater to health needs of over 40,000 individuals. On International Women’s Day 2013, Reliance Foundation launched the menstrual hygiene programme in Kheda district, Gujarat. Through this initiative, Reliance Foundation aims to raise awareness regarding menstrual hygiene by working with village based volunteers. The Foundation is also addressing this critical gap by introducing its affordable brand of high quality sanitary napkins, ‘Meeta’. In the first phase, the Foundation will reach out to 500,000 women in over 850 villages in Anand and Kheda districts of Gujarat. Arts, Culture & Heritage: Reliance Foundation is re-imagining the ways to protect and promote India’s priceless heritage to not only sustain but also to make art and culture relevant to the younger generations. In the FY 2012-13, Reliance Foundation paid tribute to the great artist of yesteryears during Abbaji concert, lent support to great living treasures during the Elephanta Festival 2013, connected with the youth through its collaboration with A.R.Rehman to create a music video, ‘Infinite Love’ and supported a research on India’s intangible culture. The Foundation, in partnership with BP and in association with Chhatrapati Shivaji Maharaj Vastu Sangrahalaya (CSMVS), Mumbai and British Museum, brought Mummy: The Inside Story to India. This unique exhibition helped to increase the footfall of CSMVS, which received over 450,000 visitors, including over 100,000 children from across 300 schools. Reliance Foundation Drishti: Reliance Foundation works towards improving the quality of life of the visually impaired through its Reliance Foundation Drishti programme, which is run in association with the National Association for the Blind (NAB). Having completed over 11,000 corneal transplants across India, Reliance Foundation Drishti has today become the largest cornea transplant drive in India, supported by a corporate. In 2012, Reliance Foundation Drishti launched India’s first registered national Braille newspaper in Hindi, marking an important milestone of this exemplary initiative. This newspaper is made available to over 32,000 visually impaired people, educating and empowering them with information and knowledge. H N Hospital: Reliance Foundation is revamping Sir H N Hospital into a 19-storey, 800,000 square feet world-class tertiary healthcare facility. Dhirubhai Ambani Foundation Dhirubhai Ambani Foundation (DAF) focuses on education and public healthcare. The Foundation’s "Dhirubhai Ambani Undergraduate Scholarship Scheme" has been motivating students excelling at the +2 level to pursue higher education. The Foundation’s “Dhirubhai Ambani SSC Merit Reward Scheme” has been offering one-time reward to the Board toppers at Std X exams. Both the Schemes are implemented with Maharashtra, Goa, Gujarat, Daman & Diu and Dadra Nagar Haveli, on a district-wise basis for the State Education Boards and state-wise basis for CBSE. DAF has introduced a special scheme to enable physically challenged students to study graduate courses. The top- five physically challenged students from each state, as certified by the State Boards, are eligible for scholarships and rewards. This scheme has received enthusiastic support at the country level. During FY 2012-13, 149 of the 395 rewards and 128 of the 393 scholarships, conferred by DAF, went to the physically challenged category. Till date, the schemes have benefited 9,665 students, of whom 1,893 are physically challenged. Report on Corporate Governance In accordance with Clause 49 of the Listing Agreement with 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: "Between my past, the present and the future, there is one common factor: Relationship and Trust. This is the foundation of our growth." - Founder Chairman Shri Dhirubhai H. Ambani At Reliance, Corporate Governance is all about maintaining a valuable relationship and trust with all the stakeholders. At Reliance, we consider our stakeholders as our partners in our success and we remain committed to maximizing stakeholder value, be it shareholders, employees, suppliers, customers, investors, communities or policy makers. This emanates from our strong belief that sound governance system based on relationship and trust is integral to creating value on an overall basis. We have a defined policy framework for ethical conduct of businesses. We believe that any business conduct can be ethical only when it rests on the nine core values of Honesty, Integrity, Respect, Fairness, Purposefulness, Trust, Responsibility, Citizenship and Courage. 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 essence of Corporate Governance lies in promoting and maintaining integrity, transparency and accountability in the higher echelons of management. 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 Reliance Industries Limited 55 the complex inter-relationship among the board of directors, audit committee, accounting and 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 a 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 being followed worldwide. It is our endeavor to achieve higher standards and provide oversight and guidance to management in strategy implementation, risk management and fulfilment 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, stakeholders’ interests are taken into account before making any business decision and Reliance has the distinction of consistently rewarding its shareholders over 35 eventful years from its first IPO. Since then Reliance has moved from one big idea to another big idea and these milestones fuel our relentless pursuit of ever-higher goals. We have grown by a Compounded Annual Growth Rate (CAGR) of Revenues 28%, 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 a consolidated present base of around 3.2 million. For decades Reliance is weaving its own growth story with an eye on India’s industrial and economic development; 56 Fulfilling India’s Aspirations. With Innovation and Enterprise. transforming the Indian economy with larger than life projects and world class execution. Underlying this quest is Reliance’s core belief in the motto – What is good for India is good for Reliance. 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: role Independent Board with defined and responsibilities: A majority of the Board, 7 out of 13, are independent directors. At Reliance, it is our belief that an enlightened Board consciously creates a culture of Board leadership to provide a long-term vision and policy thinking in order to improve the quality of governance. 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 related party transactions, 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. Ethics Policies: Reliance always strives to conduct its business and develop its relationships in a manner that is dignified, distinctive and responsible. At Reliance, we adhere to ethical standards to ensure integrity, in transparency, dealings with all stakeholders. In this direction, we have adopted various codes and policies which act as enablers to carry out our duties in an ethical way. Some of these codes and policies are: 1. Code for Board of Directors and Board Committees. independence and accountability 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. 5. Policy document on Values and Commitments. 6. Manual on Corporate Governance. 7. Health, Safety and Environment (HSE) Policy. 8. Code of Financial Reporting, Disclosure & Transparency. 9. Business Responsibility Policy Manual. 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, Member of Prime Global, an association of Independent Accounting Firms, the three leading audit firms, audit the accounts of the Company. The Company has a Management Audit Cell besides outside internal auditors that reviews internal controls and operating systems and procedures. A dedicated Legal Compliance Cell ensures that the Company conducts its businesses 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. Management Initiatives for Controls and Compliance: sub-set of Business Transformation initiative A undertaken by the management to support higher growth, institutionalisation of best processes and new structures for governance, is dedicated for management of risk, controls and compliances across the organisation. Reliance applies a common and systematic approach to Reliance Industries Limited 57 our deeply-held belief in the principle of symbiotic relationship with the local communities, recognising that business ultimately has a purpose – to serve human needs. Close and continuous interaction with the people and communities in and around the manufacturing divisions has been the key focus while striving to bring around qualitative changes and supporting the underprivileged. We provide community medical centres near most of our manufacturing divisions. 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, safety, education, infrastructure development (drinking water, improving village infrastructure, heritage conservation, construction of schools, village roads and drainages, etc.), environment (effluent treatment, tree plantation, treatment of hazardous waste, etc.), relief and assistance in the event of a natural disaster, livelihood support, promoting sports and sportsmen 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 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. the management of risk, controls and compliances in an integrated manner. Reliance is in the process of developing a world-class integrated compliance framework to provide reasonable assurance to the Management and the Board of Directors regarding design and effectiveness of internal control framework of the Company. Framework has been documented to give a complete end to end view of: 1. 2. 3. the process key control points responsible organisations The above information forms a basis for the management to develop and maintain a transparent and effective Internal Control system. 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: l The Company has a designated Lead Independent Director with a defined role. All securities related filings with Stock Exchanges and SEBI are reviewed every quarter by the Shareholders’/ Investors’ Grievance Committee of Directors of the Company. 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. l l l l Corporate Social Responsibility (CSR): Social welfare and community development is at the core of 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. It revolves around 58 Fulfilling India’s Aspirations. With Innovation and Enterprise. Social, Environmental and Economic Responsibilities: Reliance is committed to create value for the nation and enhance the quality of life across the entire socio- economic spectrum. To strengthen its commitment to responsible business, the Board of the Company has adopted Business Responsibility Policy Manual based on the principles of National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business as issued by the Ministry of Corporate Affairs, Government of India. In sync with the same and Clause 55 of the Listing Agreement, a Business Responsibility Report is attached forming part of the Annual Report. This Report is in addition to RIL’s Sustainability Reporting in accordance with Global Reporting Initiative (GRI). importance of Shareholders communications: The Board recognises the 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 related to their shareholding 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 complaints and suggestions of its shareholders are responded in a timely and consistent manner. A Shareholders’ Referencer is provided with this annual 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 to maintain optimum is combination of Executive and Non-Executive Directors. The composition of the Board and category of Directors is as follows: Category Promoter Director Executive Directors Name of Directors Mukesh D. Ambani Chairman and Managing Director Nikhil R. Meswani Hital R. Meswani P.M.S. Prasad Pawan Kumar Kapil Non-Executive Non- Independent Director 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 at the time of their first appointment to the Board and thereafter at the first meeting of the Board in every financial year, give a declaration that they meet with the criteria of independence as provided under clause 49 of the listing agreement. No Director is related to any other Director on the Board, except Shri Nikhil R. Meswani and Shri Hital R. Meswani, who are related to each other as brothers. Reliance Industries Limited 59 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. Shri Mukesh D. Ambani is also steering Reliance’s development and implementation of a pan-India organized retail network spanning multiple formats and supply chain infrastructure. infrastructure facilities of Shri Mukesh D. Ambani is also setting up one of the most complex 4G broadband wireless services offering end to end solutions that address the entire value chain across various digital services in key domains of national interest such as Education, Healthcare, Security, Financial Services, Government-Citizen interfaces and Entertainment. 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: l In 2013, he was conferred ‘Enterprenuer of the Decade’ by All India Management Association. In 2010, awarded the Dean’s Medal by University of Pennsylvania’s Eduardo Glandt, Dean of the School of Engineering and Applied Science for his leadership in the application of Engineering and Technology. In 2010, named among the most powerful people in the world by Forbes magazine in its list of “68 people who matter most”. In 2010, awarded the Indian Merchant’s Chamber (IMC) ‘Juran Quality Medal 2009’. In 2009, ranked the 5th best performing CEO in the world by the Harvard Business Review in its ranking of the top 50 global CEOs. l l l l 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. 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: l 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. l l l l l Directors’ Profile A brief resume of all the Directors, nature of their in specific functional areas and names expertise of companies they hold directorships, memberships/ chairmanships of Board Committees and their shareholding in the Company are provided below: in which Shri Mukesh D. Ambani is a Chemical Engineer from 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 has 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 fourteen million tonnes per year. He is envisaging doubling these capacities to twenty seven million tonnes per annum within a short span. Working hands-on, Shri Mukesh D. Ambani led the creation of the world’s largest grassroots petroleum 60 Fulfilling India’s Aspirations. With Innovation and Enterprise. 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. Shri Mukesh D. Ambani is a member of the Indo-US CEOs Forum, International Advisory Board of the National Bank of Kuwait, International Advisory Council of Bank of America, The Brookings, McKinsey & Company, Council on Foreign Relations, Member of The Business Council and 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 and Chairman of Pandit Deendayal Petroleum University, Gandhinagar. 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, Reliance Jio Infocomm Limited (Formerly known as 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 Committee of Reliance Retail Limited. He is Promoter of the Company and holds 36,15,846 shares of the Company in his name as on March 31, 2013. 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 such as Corporate Affairs and Group’s taxation policies. 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, 2013. 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 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 Refining Business and all Manufacturing, Research & Technology and Project Execution 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. Reliance Industries Limited 61 He is the recipient of The 2011 D. Robert Yarnall Award from The Engineering Alumni Society of the University of Pennsylvania. led the commissioning of the manufacturing operations in the Special Economic Zone (SEZ) at Jamnagar by Reliance. 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, 2013. Shri P.M.S. Prasad is a Whole-time Director designated as Executive Director of the Company since August 21, 2009. He has been with the Company for about 32 years. Over the years, he has held various positions in the Fibres, Petrochemicals, Refining & Marketing and Exploration & Production Businesses of the Company. 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 the Health, Safety and Environment Committee of the Company. He is a Director of Reliance Commercial Dealers Limited and some other Private Limited Companies. He is a 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, 2013. 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 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, 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 from 2001 to 2010. He is currently heading Group Manufacturing Services (GMS) since 2011 and working towards achieving excellence in the areas of HSE, Technology, Reliability and Operations of all Manufacturing Sites covering Refineries, Petrochemicals and Polyester Plants of the Company. 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. 62 Fulfilling India’s Aspirations. With Innovation and Enterprise. He is a member of the Health, Safety and Environment Committee of the Company. He holds 10,276 shares of the Company in his name as on March 31, 2013. 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 1981, he was appointed as a Director of the Gujarat Industrial Investment Corporation Limited (GIIC) and continuing his services since last 32 years. He is also Chairman of Audit Committee in GIIC Ltd. He is a Director of Sintex Industries Ltd since 1994 and is also a member of the Remuneration Committee of Sintex Industries Ltd. He holds 1,72,632 shares of the Company in his name as on March 31, 2013. 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 58 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 Micro Inks Limited, the Indian Merchant’s Chamber, Mumbai, JCB India Limited and Jyoti CNC Automation Limited. He is the Lead Independent Director of the Company. He is a member of the Audit Committees of Micro Inks Limited and JCB India Limited. He is a 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 2011’. Last year was the sixth consecutive year in which he has been so nominated. He holds 3,20,000 shares of the Company in his name as on March 31, 2013. 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 was the Hon’ Counsel of Republic of Ethiopia. He is the Chairman of Sai Service Station Limited and Trivedi Consultants Private Limited. He is the Director of The Supreme Industries Limited, Zodiac Clothing Company Limited, The Seksaria Biswan Sugar Factory Limited, New Consolidated Construction Company Limited, Emami Limited and Metro Exporters Private Limited. 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 Indian Merchants Chamber, 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 Shareholders’/ Investors’ Grievance Committee, the Remuneration Committee, the Corporate Governance and Stakeholders’ Interface Committee and the Employees’ Stock Compensation Committee of the Company. 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, 2013. Reliance Industries Limited 63 is Chairman of Audit Committees of Honda Siel Power Products Limited and GKN Driveline (India) Limited, Shareholders’/Investors’ Relations Committees of Honda Siel Power Products Limited and DLF Limited, Remuneration Committees of Honda Siel Power Products Limited and GKN Driveline (India) Limited, Chairman’s Executive Committee of GKN Driveline (India) Limited and Corporate Governance Committee of DLF Limited. He is a member of Audit Committees of Zenith Birla (India) Limited and DLF Limited and Equity Issuance Committee of DLF Limited. He holds 13,544 shares of the Company in his name as on March 31, 2013. 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; (Insurance), Economic Affairs Special Secretary 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. 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, 2013. 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, 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, for which he was described as a Model Manager by the Board of Executive Directors of World Bank. and liberalisation 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 including practices 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. initiatives In recognition of his services and significant contributions in the field of Technology, Management and Industrial Development, Technological Jawaharlal Nehru 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. ENERTIA Awards 2010 also 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. He is the 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 Siel 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 64 Fulfilling India’s Aspirations. With Innovation and Enterprise. 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 1977-2000 and at Monsanto Chemical Co. from 1974-1977. 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 its Audit Committee and Compensation Committee. He is a member of the Board of Governors of IIT Delhi, member of the IIT Council and a member of the Central Advisory Board of Education of MHRD. He is a member of the Shareholders’/ Investors’ Grievance Committee of the Company and a Member of the Investment Committee for Aditya Birla Private Equity – Sunrise Fund. 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 several scientific journals. He holds 2,300 shares of the Company in his name as on March 31, 2013. Prof. Dipak C. Jain has a M.S. in Mathematical Statistics from Guwahati University, India and a Ph.D. in Marketing from the University of Texas at Dellas, United States of America. Prof. Jain is a distinguished teacher and scholar. He had been Dean of the Kellogg School of Management, Northwestern University, Evanston, Illinois, United States of America from 2001 to 2009 and an Associate Dean from 1996 to 2001. Currently, he is the Dean of INSEAD, a leading business school with three campuses at Fontainebleau (Paris), France, Singapore, and Abu Dhabi. He has more than 30 years’ experience in management 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, United States of America, Global Logistic Properties, Singapore and Northern Trust Bank, United States of America. 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, 2013. 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). Thirty universities have honoured him with honorary include Universities of London, doctorates, which Salford, Pretoria, Wisconsin and Delhi. Reliance Industries Limited 65 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, IKP Knowledge Park, Piramal Enterprises Limited (formerly 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 and the Remuneration Committee of the Company. He is a member of the Audit Committees of Tata Motors Limited, Hindustan Unilever Limited and Piramal Enterprises Limited (formerly 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, 2013. 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/ Executive Committee comprising senior management personnel. 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. 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 five 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 to matters advance, particularly with regard 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 subsidiary companies, global business environment, all business areas of the Company including business opportunities, business strategy and the risk management practices before the quarterly/annual financial results of the Company. taking on record The information required to be placed before the Board includes: l l l l l General notices of interest of Directors. Appointment, remuneration and resignation of Directors. Formation/Reconstitution of Board Committees. Terms of reference of Board Committees. The minutes of the Board meetings of unlisted subsidiary companies. 66 Fulfilling India’s Aspirations. With Innovation and Enterprise. l Minutes of meetings of Audit Committee and other l l l l l l l l l l l l l l l l l l Committees of the Board. Declaration of independent directors at the time of appointment/annually. Appointment or resignation of Chief Financial Officer and Company Secretary. Annual operating plans of businesses, capital budgets and any updates. Quarterly results for the Company and its operating divisions or business segments. Annual Financial results of the Company, Auditors’ Report and the Report of the Board of Directors. Quarterly Secretarial Audit reports submitted by the Secretarial Auditors. Dividend declaration. Quarterly summary of all long-term borrowings made, bank guarantees issued, loans and investments made. Significant changes in accounting policies and internal controls. Takeover of a company or acquisition of a controlling or substantial stake in another company. 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. Quarterly details of foreign exchange exposures and the steps taken by management to limit the risks of adverse exchange rate movement, if material. Appointment of and 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 investments, mergers and acquisitions. Details of any joint venture, acquisitions of companies or collaboration agreement. Status of business risk exposures, its management and related action plans. l Making of loans and investment of surplus funds. l 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. l l l l l l l l l l Show cause, demand, prosecution notices and penalty notices which are materially important. Fatal or serious accidents, dangerous occurrences, any material effluent or pollution problems. Any material default in financial obligations to and by the Company, or substantial non-payment for goods sold by the Company. 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. Significant labour problems and their proposed solutions. Any in Human Resources/Industrial Relations front like implementation of Voluntary Retirement Scheme, etc. significant development that Transactions 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. Reliance Industries Limited 67 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. E. Post meeting follow-up mechanism 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. 4. Number of Board meetings held and the dates on which held Five Board meetings were held during the year, as against the minimum requirement of four meetings. The details of the Board meetings held are as under: Date Sl. No. Board Strength No. of Directors Present 1 2 3 4 April 20, 2012 July 20, 2012 October 15, 2012 January 18, 2013 5 March 29, 2013 13 13 13 13 13 10 13 13 12 13 2 Last AGM No. of Other 1 Directorship(s) Attendance at meetings during 2012-13 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 Board Meetings 5 5 5 5 4 5 5 5 5 4 5 4 4 Yes Yes Yes Yes Yes No Yes Yes Yes Yes Yes No Yes 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 Audit Committees and Shareholders’/Investors’ Grievance Committees in all public limited companies (excluding Reliance Industries Limited) have been considered. Video/tele-conferencing facilities are used to facilitate directors travelling abroad or present at other locations to participate in the meetings. 2 1 2 1 Nil 2 3 6 5 1 1 2 5 No. of Membership(s) / Chairmanship(s) of Board Committees in other Companies 1 (as Chairman) 1 (as Chairman) 2 (including 1 as Chairman) 1 Nil 1 (as Chairman) 2 2 6 (including 4 as Chairman) Nil 1 1 3 68 Fulfilling India’s Aspirations. With Innovation and Enterprise. 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 1. Yogendra P. Trivedi - Independent Director (Chairman of the Committee) 2. Mahesh P. Modi - Independent Director 3. Dr. Raghunath A. Mashelkar - Independent Director Shareholders’/ Investors’ Grievance Committee 1. Mansingh L. Bhakta - Independent Director (Chairman of the Committee)a 2. Yogendra P. Trivedi - Independent Director (Chairman of the Committee)b 3. Nikhil R. Meswani - Executive Director 4. Hital R. Meswani - Executive Director 5. Prof. Ashok Misra – Independent Directorc Remuneration Committee 1. Mansingh L. Bhakta - Independent Director (Chairman of the Committee)a 2. Yogendra P. Trivedi - Independent Director (Chairman of the Committee)b Corporate Governance and Stakeholders’ Interface Committee 1. Yogendra P. Trivedi - Independent Director (Chairman of the Committee) 2. Mahesh P. Modi - Independent Director 3. Dr. Dharam Vir Kapur – Independent Director 3. Dr. Dharam Vir Kapur - Independent Director 4. Dr. Raghunath A. Mashelkar – Independent Directorc 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. P.M.S. Prasad - Executive Director 4. 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 a. up to July 20, 2012; b. Chairman w.e.f. July 20, 2012 and c. w.e.f. July 20, 2012 Shri K. Sethuraman, Group Company Secretary and Chief Compliance Officer is the Secretary of all Board Committees. Reliance Industries Limited 69 Meetings of the Board Level Committees held during the year and attendance of Directors: d l e h s g n i t e e M 5 4 1 1 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 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 . . L h g n i s n a M a t k a h B . P a r d n e g o Y i d e v i r T l i p a K . K P . NA NA NA NA NA NA NA 4 4 NA NA 1* NA NA NA NA NA 1* NA NA NA NA NA NA 5 4 1 1 r i V m a r a h D . r D r u p a K NA . i d o M P h s e h a M 4 a r s i M k o h s A . f o r P n i a J . C k a p i D . f o r P . A h t a n u h g a R . r D r a k l e h s a M NA NA 3 NA NA 3** NA NA 1 1 NA NA NA 0*** 0 NA NA NA 1 NA NA NA NA NA 1 NA 1 NA 1 NA NA NA 7 7 4 7 3 3 NA NA 4 NA NA NA NA NA NA NA NA NA NA NA NA NA NA – Not a member of the Committee * Up to July 20, 2012. One meeting of each of the Committee held during his tenure. ** Appointed as a Member w.e.f. July 20, 2012. Three meetings held during his tenure. *** Appointed as a Member w.e.f. July 20, 2012. No meeting 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. 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. 70 Fulfilling India’s Aspirations. With Innovation and Enterprise. 2 3 4 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 2 3 4 5 6 Oversight of the Company’s financial reporting process and its financial the disclosure of information to ensure that the financial statements are correct, sufficient and credible. 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. Approval of payment to Statutory Auditors including Cost Auditors for any other services rendered by them. Reviewing with the management, the annual financial statements before submission to the Board for approval, with particular reference to: l 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. l l l 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. Disclosure of related party transactions. Qualifications in draft audit report. l l l Reviewing with the management, the quarterly financial statements before submission to the Board for approval. 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 to the Board to take up steps in this matter. Reviewing with the management, the performance of Statutory Auditors including Cost Auditors and Internal Auditors, adequacy of internal control systems. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official reporting structure, the department, heading coverage and frequency of internal audit. Discussion with Internal Auditors, any significant findings and follow up thereon. 7 8 9 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 and 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: l l The management discussion and analysis of financial condition and results of operations; significant Statement of (as defined by transactions Committee), submitted by management; l Management letters/letters of internal control weaknesses issued by the Statutory Auditors; Internal audit reports relating to internal control weaknesses; and related party the Audit l Reliance Industries Limited 71 Selection of Independent Directors: to 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 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 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 2 3 4 5 6 7 8 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 the employee shall exercise the vested options in the event of termination or resignation of an employee. time period within which 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, vesting and exercise of options in case of employees who are on long leave. The procedure for cashless exercise of options, if any. (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 l The appointment, removal and terms of remuneration of Internal Auditors. 17 Reviewing the financial statements and in particular the investments made by the unlisted subsidiaries of the Company. General Secretarial Department Executives of Accounts Department, Finance 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 in XBRL mode for the financial year ended March 31, 2012 was February 28, 2013 and the Cost Audit Reports were filed by the Lead Cost Auditor on January 17, 2013. The due date for filing the Cost Audit Reports for the financial year ended March 31, 2013 is September 30, 2013. 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 2 3 4 5 6 7 Observance of practices of Corporate Governance at all levels and to suggest remedial measures wherever necessary. Provision of correct inputs to the media so as to preserve and protect the Company’s image and standing. Dissemination of factually correct information to the investors, institutions and public at large. Interaction with the existing and prospective FIIs and rating agencies, etc. 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. Recommendation for nomination of Directors on the Board. 72 Fulfilling India’s Aspirations. With Innovation and Enterprise. 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. Review management. banking arrangements and cash Exercise all powers to borrow moneys (otherwise than by issue of debentures) within the limits approved by the Board and taking necessary actions connected including refinancing for therewith optimisation of borrowing costs. Giving of guarantees/issuing letters of comfort/ providing securities within the limits approved by the Board. 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. 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. 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. 2 3 4 5 6 7 8 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 during 2012-13: Name of the Director Salary 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 Perquisites and allowances 0.60 1.45 1.45 1.33 0.75 Retiral benefits Commission payable 0.89 0.24 0.24 0.16 0.09 9.35 8.32 8.32 - - Performance Linked Incentive* - - - 3.12 0.65 Total 15.00 11.05 11.05 5.47 1.99 * Performance Linked Incentive for financial year 2011-12 was paid during financial year 2012-13 ` in crore Stock Options granted Nil Nil Nil Nil Nil Reliance Industries Limited 73 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: Type of Complaints Number of Complaints 275 2265 144 142 2826 Non-Receipt of Annual Reports Non-Receipt of Dividend Warrants Non-Receipt of Interest/ Redemption Warrants Non-Receipt of Certificates Total As on March 31, 2013, 10 complaints were outstanding which were resolved by April 4, 2013. 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 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. 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 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 The Chairman and Managing Director’s compensation has been set at ` 15 crore as against ` 38.93 crore that he is eligible 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 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. Sitting fee and commission to the Non-Executive Directors: 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 ` in lakhs Sitting Fee 1.00 1.40 3.40 2.20 1.80 1.60 1.00 1.40 13.80 Each of the Non-Executive Directors will also be paid commission amounting to ` 50 lakhs on an annual basis and the total commission payable to such directors shall not exceed ` 5 (five) crore per annum in the aggregate. During the year, the Company has paid ` 0.29 crore 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 & Transfer Agents of the Company and 74 Fulfilling India’s Aspirations. With Innovation and Enterprise. Director takes appropriate steps to present such views to the Chairman and Managing Director. 8. 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 2012-13. Mukesh D. Ambani Chairman and Managing Director 9. Subsidiary Framework Companies’ Monitoring 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 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 the subsidiary companies Company’s Board. is placed before 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. 10. 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 Date Time 2011-12 2010-11 2009-10 June 07, 2012 June 03, 2011 June 18, 2010 11.00 a.m. 11.00 a.m. 11.00 a.m. Special Resolution Passed Nil Nil Nil (ii) Special Resolution passed through Postal Ballot No special resolution was passed through Postal Ballot during the Financial Year 2012-13. None of the businesses proposed to be transacted in the ensuing Annual General Meeting require passing a special resolution through Postal Ballot. 11. 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 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 the Standalone Financial Statements, 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 share, investments, optimization of market Reliance Industries Limited 75 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 the Stock Exchanges. (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. All periodical compliance filings like shareholding pattern, corporate governance report, media releases, etc. are filed electronically on NEAPS. (x) BSE Corporate Compliance & Listing Centre (the “Listing Centre”): The Listing Centre of BSE is a web based application designed by BSE for corporates. All periodical compliance filings like shareholding pattern, corporate governance report, media releases, etc. are also filed electronically on the Listing Centre. (xi) SEBI Complaints Redress System (SCORES): The in a investor complaints are processed 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. (xii) 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 legal requirements, profitability, 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. liquidity and 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. However, SEBI has issued Show Cause Notices in the last three years in connection with (i) sale of shares of erstwhile Reliance Petroleum Limited; (ii) the allotment of equity shares of the Company to certain companies against detachable warrants attached to privately placed debentures issued by the Company and (iii) disclosure of Earnings Per Share and diluted Earnings Per Share in the filing with the Stock Exchanges in respect of shares against warrants issued in April, 2007. The Company has submitted its reply for the same. 12. Means of Communication (i) Quarterly Results: Quarterly Results of the Company are published ‘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. in (iii) Presentations to Investors Institutional / 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 is Relations’ where shareholders available. The Annual Report of the Company is also available on the website in a user-friendly and downloadable form. information (v) Annual Report: Annual Report containing, inter alia, Audited Annual Accounts, Consolidated Financial Statements, Directors’ Report, Auditors’ 76 Fulfilling India’s Aspirations. With Innovation and Enterprise. (xiii) Shareholders’ Feedback Survey: The Company had sent feedback forms seeking shareholders’ views on various matters relating to investor services and the Annual Report 2011-12. The feedback received from the shareholders was placed before the Shareholders’/Investors’ Grievance Committee. 13. General Shareholder Information (i) Company Registration Details is registered in the State of The Company Identity Maharashtra, Number (CIN) allotted the Company by the Ministry of Corporate Affairs (MCA) is L17110MH1973PLC019786. India. The Corporate to (ii) Annual General Meeting (Day, Date, Time and Venue): Thursday, June 06, 2013 at 11.00 a.m. Birla Matushri Sabhagar, 19, New Marine Lines, Mumbai 400 020 (iii) Financial Year: April 1, 2013 to March 31, 2014 (iv) Financial Calendar (tentative) Results for the quarter ending: June 30, 2013 - Third week of July, 2013 September 30, 2013 - Third week of October, 2013 December 31, 2013 - Third week of January, 2014 March 31, 2014 - Third week of April, 2014 Annual General Meeting - June, 2014 (v) Date of Book Closure Tuesday, May 14, 2013 to Saturday, May 18, 2013 (both days inclusive) for payment of dividend. (vi) Dividend Payment Date Credit/dispatch of dividend warrants between June 7, 2013 and June 13, 2013. (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 IDBI Trusteeship Services Limited Asian Building, Ground Floor, 17, R. Kamani Marg, Ballard Estate, Mumbai 400 001 (b) (c) Axis Trustee Services Limited Axis House, 2nd Floor, Wadia International Centre, Pandurang Budhkar Marg, Worli, Mumbai 400 025 D) Payment of Listing Fees: Annual listing fee for the year 2013-14 has been paid by the Company to BSE and NSE. Annual maintenance and listing agency fee for the calendar year 2013 has been paid by the Company to the Luxembourg Stock Exchange. E) Payment of Depository Fees: Annual Custody/ Issuer fee for the year 2013-14 has been paid by the Company to NSDL and CDSL. Reliance Industries Limited 77 (viii) Stock Market Price Data Month National Stock Exchange (NSE) (In ` per share) BSE Limited (BSE) (In ` per share) Month’s High Price Month’s Low Price Month’s High Price Month’s Low Price April 2012 May 2012 June 2012 July 2012 August 2012 September 2012 October 2012 November 2012 December 2012 January 2013 February 2013 March 2013 762.90 751.40 742.95 746.10 824.90 881.60 862.00 814.90 849.80 955.00 901.00 869.40 723.70 673.05 673.40 706.65 730.55 760.05 682.35 761.10 789.75 836.25 805.75 764.40 762.40 750.90 742.50 745.00 824.95 881.00 860.40 814.55 849.40 954.80 900.60 869.00 724.05 671.00 673.50 707.30 730.50 760.10 792.35 761.00 789.60 836.30 805.80 765.00 (ix) Share Price Performance in comparison to broad based indices – BSE Sensex and NSE Nifty as on March 31, 2013 BSE (% Change) NSE (% Change) RIL Sensex RIL Nifty 3.40% 8.23% 3.34% 7.31% -26.16% -3.13% -26.33% -2.59% 43.99% 7.46% 43.90% 8.26% -31.67% 20.40% -31.78% 20.02% FY 2012-13 2 years 3 years 5 years (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 Investor Service Centres of Karvy List of Computershare Private Limited is available on the website of the Company 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, 2013 Category code Category of shareholder Number of shareholders Total number of shares As a percentage of (A+B+C) (A) (1) (2) (B) (1) Shareholding of Promoter and Promoter 1 Group Indian Foreign Total Shareholding of Promoter and Promoter Group 2 Public Shareholding Institutions 70* 0 146 39 41 357 0 70* 146 39 41 357 2 105 92 87 66 000 45.34 0.00 45.34 28.77 78 Fulfilling India’s Aspirations. With Innovation and Enterprise. Category code Category of shareholder (2) (C) (1) (2) Non-institutions Total Public Shareholding Shares held by Custodians and against which Depository Receipts have been issued Promoter and Promoter Group Public Number of shareholders 31 59 658 31 61 763 Total number of shares 72 18 49 105 165 06 15 105 As a percentage of (A+B+C) 22.36 51.13 0 1 0 11 41 06 920 0.00 3.53 100.00 TOTAL (A) + (B) + (C) 31 61 834 322 86 63 382 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. *As per disclosure under regulation 30(2) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, furnished by the promoters. B) Shareholding Pattern by Size as on March 31, 2013 Sl. No. Category (Shares) 1 2 3 4 5 6 7 8 9 Up to 500 501 - 1000 1001 - 2000 2001 - 3000 3001 - 4000 4001 - 5000 5001 - 10000 10001 - 20000 Above 20000 TOTAL C) Build up of Equity Share Capital Sl. No. Particulars 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 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 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 Holders 30 31 891 77 105 32 706 8 574 3 589 1 983 3 173 1 134 1 679 31 61 834 Shares 20 45 98 535 5 41 61 190 4 53 63 129 2 08 93 273 1 24 60 936 89 38 531 2 18 89 392 1 58 75 206 284 44 83 190 322 86 63 382 % of Total Shares 6.34 1.68 1.41 0.65 0.39 0.28 0.68 0.49 88.10 100.00 Allotment Date No. of Shares October 19, 1975 1 100 59 50 000 May 9, 1977 September 28, 1979 December 31,1979 September 19, 1980 December 31, 1980 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 9 40 000 6 47 832 45 23 359 8 40 575 24 673 2 43 200 1 40 800 23 80 518 8 42 529 27 168 81 059 774 19 20 000 41 1 942 Sl. No. Particulars 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 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 Rights Issue III Debenture Series G Conversion Shareholders of Sidhpur Mills Co Limited (Merged with the Company) X 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 Conversion of 3.5% ECB Due 1999 I Reliance Industries Limited 79 Allotment Date No. of Shares 1 11 39 564 371 September 30, 1983 September 30, 1983 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 97 66 783 2 16 571 91 45 005 53 33 333 52 835 42 871 106 610 December 31, 1985 November 15, 1986 40 284 April 1, 1987 169 August 1, 1987 6 60 30 100 3 15 71 695 29 35 380 25 February 4, 1988 February 4, 1988 June 2, 1988 October 31, 1988 November 29, 1990 May 22, 1991 October 10, 1991 10 322 46 25 June 3, 1992 1 84 00 000 4060 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 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 March 10, 1995 May 24, 1997 74 80 000 544 80 Fulfilling India’s Aspirations. With Innovation and Enterprise. Sl. No. Particulars 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 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 Shareholders of Reliance Petroleum Limited (Merged with the Company) Bonus Issue IV ESOS – Allotment 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 January 22, 2013 Total Equity as on March 31, 2013 Allotment Date No. of Shares 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 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 October 13, 2007 6 01 40 560 October 3, 2008 Various dates in 2008-09 September 30, 2009 12 00 00 000 1 49 632 6 92 52 623 November 28,2009 1 62 67 93 078 5 30 426 Various dates in 2009-10 Various dates in 2010-11 Various dates in 2011-12 February 22, 2013 29 99 648 13 48 763 1 86 891 -28 69 495 -4 62 46 280 322 86 63 382 (xiii) Corporate Benefits to Investors b. Bonus Issues of Fully Paid-up Equity Shares a. Dividend Declared for the last 10 Years Financial Year Dividend Declaration Dividend per Share* 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 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 June 07, 2012 5 5.25 7.5 10 11 13 13 7 2010-11 2011-12 * Share of paid-up value of `10 per share. Note: Dividend of ` 9.00 per share, recommended by the Directors on April 16, 2013, is subject to declaration by the shareholders at the ensuing Annual General Meeting. 8 8.5 Financial Year 1980-81 1983-84 1997-98 2009-10 Ratio 3:5 6:10 1:1 1:1 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. Reliance Industries Limited 81 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 Depository and ICICI Bank Limited is the Custodian of all the Equity Shares underlying the GDRs issued by the Company. RIL GDR Price Movement over last 1 year DR Close Price (Source : Bank of New York Mellon website) (b) Employee Stock Options: The Company has not granted any Options during the financial year 2012-13. Members may refer to the disclosures set out under Annexure I to the Directors’ Report with regard to particulars of Employees’ Stock Options. (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 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 95.28 2.30 2.42 100.00 97.58% of Company’s paid-up Equity Share Capital has been dematerialised upto March 31, 2013 (97.49% up to March 31, 2012). 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 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 2012-13 is given below: BSE NSE Total Shares (nos.) 4 34 133 30 90 171 35 24 304 Value (in ` crore) 34.32 244.98 279.30 [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, 2013 represent 11,41,06,920 equity shares constituting 3.53% 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. 82 Fulfilling India’s Aspirations. With Innovation and Enterprise. 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 Dharamshala 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 Nagothane Manufacturing Division P. O. Petrochemicals Township Nagothane - 402 125, Roha Taluka, Dist. Raigad, 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-1 to B-5 & A3, 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, CYDWN-2001/2, KG-DWN-2003/1, CB-ONN-2003/1, KG-DWN-2004/4, MN-DWN-2004/1, MN-DWN-2004/2 and KG-DWN-2005/2. CBM Blocks SP (West) – CBM – 2001/1, SP (East) – CBM – 2001/1 (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. e-mail: investor_relations@ril.com (xix) Transfer of unpaid/unclaimed amounts Investor Education and Protection Fund to During the year under review, the Company has credited ` 6.53 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, 2013 is ` 99.27 crore. Pursuant to the provisions of Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on June 07, 2012 (date of last Annual General Meeting) on the website of the Company (www.ril.com), as also on the Ministry of Corporate Affairs website. (xx) Equity Shares in the Suspense Account In terms of Clause 5A(I) and Clause 5A(II) of the Listing Agreement, the Company reports the following details in respect of equity shares lying in the suspense accounts which were issued in demat form and physical form, respectively: Reliance Industries Limited 83 Particulars Demat Number of Shareholders Aggregate Number of shareholders and the outstanding shares in the suspense account lying as on April 1, 2012 Number of shareholders who approached the Company for transfer of shares from suspense account during the year 97 1 Physical Number of equity shares 1,322 Number of Shareholders (phase wise transfers) 1,64,437 Number of equity shares 64,13,975 14 1,346* 1,18,583* 1 14 96 from 1,300 1,308 1,14,717 Number of shareholders to whom shares were the suspense transferred account during the year Aggregate Number of shareholders and the outstanding shares in the suspense account lying as on March 31, 2013 *3,866 shares held by 46 shareholders were transferred from the suspense account on April 3, 2013. The voting rights on the shares outstanding in the suspense accounts as on March 31, 2013 shall remain frozen till the rightful owner of such shares claims the shares. 14. 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. 62,99,258 1,63,137 judicial pronouncements 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 encompassing important laws are regularly circulated to the Directors. 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. 16. 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. This Certificate has also been forwarded to the Stock Exchanges where the securities of the Company are listed. and Non- 15. Adoption of Mandatory 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 84 Fulfilling India’s Aspirations. With Innovation and Enterprise. 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, 2013 according to the provisions of- l l l l l The Companies Act, 1956 and the Rules made under that Act; The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and 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’) l 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; l l l l l l 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; and The Memorandum and Articles of Association; 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) maintenance of various statutory registers and documents and making necessary entries therein; (b) closure of the Register of Members / Debenture holders; (c) forms, returns, documents and resolutions required to be filed with the Registrar of Companies and the Central Government; (d) service of documents by the Company on its Members, Debenture holders, Debenture Trustees, Auditors and the Registrar of Companies; (e) notice of Board meetings and Committee (f) (g) meetings of Directors; the meetings of Directors and Committees of Directors including passing of resolutions by circulation; the 38th Annual General Meeting held on June 7, 2012; (h) minutes of proceedings of General Meetings and of the Board and its Committee meetings; (i) 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; (j) (k) payment of remuneration to Directors including the Managing Director and Whole-time Directors; (l) appointment and remuneration of Auditors and (m) Cost Auditors; transfers and transmissions of the Company’s shares and debentures, and issue and dispatch of duplicate certificates of shares; (n) payment of interest on debentures and redemption of debentures; (o) declaration and payment of dividends; (p) transfer of certain amounts as required under the Act to the Investor Education and Protection Fund and uploading of details of unpaid and unclaimed dividends on the websites of the Company and the Ministry of Corporate Affairs; (q) borrowings and registration, modification and satisfaction of charges wherever applicable; Reliance Industries Limited 85 dematerialised securities with all securities issued by the Company. The Company has complied with the provisions of the FEMA 1999 and the Rules and Regulations made under that Act to the extent applicable to ODI, FDI and ECB. I further report that: (a) 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, 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; 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. (b) (c) (d) (e) (f) I further report that based on the information received and records maintained there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines. Dr K R Chandratre Practising Company Secretary Certificate of Practice No. 5144 April 16, 2013 5. 6. (r) investment of the Company’s funds including inter corporate loans and investments and loans to others; (t) (s) 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; (u) Allotment of equity shares of the Company pursuant to Employees Stock Option Scheme; (v) Buy-back of equity shares of the Company; (w) Directors’ report; (x) contracts, common seal, registered office and publication of name of the Company; and (y) 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. 3. 4. The Company has complied with the provisions of the Securities Contracts (Regulations) Act, 1956 and the Rules made under the Act, with regard to maintenance of minimum public shareholding. 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 86 Fulfilling India’s Aspirations. With Innovation and Enterprise. Directors’ Report Dear Shareholders, Your Directors are pleased to present the 39th Annual Report and the audited accounts for the financial year ended March 31, 2013. Financial Results The financial performance of the Company, for the year ended March 31, 2013 is summarised below: Profit before Tax Less: Current Tax Deferred Tax Profit for the year Add: Balance in Profit & Loss Account Add: On Amalgamation Less: Appropriation: Transferred to General Reserve Transferred to Capital Redemption Reserve on buy back of Equity Shares Proposed Dividend on Equity Shares Tax on Dividend Closing Balance 2012-13 2011-12 ` crore $ Mn* ` crore $ Mn* 26,284 5,244 37 21,003 7,609 1,116 29,728 4,842 966 7 3,869 1,668 206 5,743 25,750 5,150 560 20,040 6,514 - 5,061 1,012 110 3,939 1,453 - 26,554 5,392 18,000 3,316 16,000 3,145 43 2,628 447 8,610 8 484 82 4 2,531 410 1 497 81 1,853 7,609 1,668 * 1 $ = ` 54.285 Exchange Rate as on March 31, 2013 (1 $ = ` 50.875 as on March 31, 2012) Results of Operations The global economy in the Financial Year (FY) 2012-13 improved slowly, but was short on expectations. Several European economies experienced recession due to high unemployment, banking fragility, fiscal tightening and sluggish growth. The U.S. economy improved marginally, driven mainly by housing and the consumer sectors; however, capital investments remained sluggish. Among the Asian economies, China going through a political transition, experienced considerably slow growth. Deceleration in industrial output and exports weakened India’s economic growth significantly. FY 2012-13 proved to be a challenging year amidst global economic uncertainties and disturbances in many parts of the world. Despite these constraints and challenging environment, the Company performed reasonably well and the highlights of the performance are as under: l Revenue from operations increased by 9.2% to ` 371,119 crore ($68.4 billion) Exports increased by 15% to ` 239,226 crore ($ 44.1 billion) l l l l l l PBDIT decreased by 2.6% at ` 38,785 crore ($ 7.1 billion) Profit Before Tax increased by 2.1% at ` 26,284 crore ($ 4.8 billion) Cash Profit was at ` 30,505 crore ($ 5.6 billion) Net Profit increased by 4.8% to ` 21,003 crore ($3.9 billion) Gross Refining Margin was $ 9.2 / bbl for the year ended March 31, 2013 The consolidated revenue from operations of the Company for the year ended March 31, 2013 was ` 397,062 crore, an increase of 10.8% on a Year-on-Year basis. 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 ` 28,950 crore ($ 5.3 billion) was paid in the form of various taxes and duties. The Company featured in the Fortune Global 500 list of the world’s largest corporations for the eighth consecutive year. The company was ranked 99th based on sales and 130th based on profits. Reliance Industries Limited 87 Buy-Back of Equity Shares Employees’ Stock Option Scheme The Buy-back Offer announced by the Company on January 20, 2012 was closed on January 19, 2013. Pursuant to the said Buy-back, the Company bought back and extinguished 4,62,46,280 equity shares of ` 10 each of an aggregate face value of ` 46,24,62,800 (which includes 36,63,431 equity shares of `10 each bought back in FY 2011-12). Consequent to the Buy-back, the paid- up equity share capital of the Company as on March 31, 2013 (excluding allotment of shares made during the year pursuant to Employees Stock Option Scheme) stood at ` 3228,47,61,257. the The Buy-back programme was largest ever implemented to-date in the history of Indian capital markets and was EPS (Earnings Per Share) accretive for the Company. It is expected to supplement earnings growth from operations, for higher EPS, in the near future. Dividend Your Directors have recommended a dividend of ` 9.00 per Equity Share (last year ` 8.50 per Equity Share) for the financial year ended March 31, 2013, amounting to ` 3075 crore (inclusive of tax of ` 447 crore and net of reversal of excess provision of previous year) one of the highest payout by any private sector domestic company. The dividend will be paid to members whose names appear in the Register of Members as on May 13, 2013; 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. The Employees’ Stock Compensation Committee, constituted in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (‘the SEBI Guidelines’), administers and monitors the Employees’ Stock Option Scheme of the Company. The applicable disclosures as stipulated under the SEBI Guidelines as at March 31, 2013 (cumulative position) are provided in Annexure I to this Report. The issuance of equity shares pursuant to exercise of Options does not affect the statement of profit and loss 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 In its second year of the partnership, Reliance Industries Limited (RIL) and BP combined their expertise in deepwater exploration and development and operations in India. Both the teams worked closely to understand the complex geology of the east-coast of India including KG-D6 block. The efforts are on to map out an exploration and development campaign that will efficiently target high quality prospects in deeper zones and optimise existing as well as future development plans. Smart Transformation At Reliance (STAR) The Company has embarked on one of the largest business transformation project STAR in order to make RIL “FUTURE READY”. It would help the Company bring end-to-end digital chain to free up resources, will also help enhance organisational entrepreneurship, create a world-class human resource framework to retain talent and fulfill mission of being an “Employer of Choice”. 88 Fulfilling India’s Aspirations. With Innovation and Enterprise. Shale Gas Business FY 2012-13 was a pivotal year for RIL’s North American Shale Gas business. It gained significant growth momentum and delivered superior performance despite adverse market conditions imposed by low gas prices and higher service costs. It was landmark year strategically, as Reliance completed carry obligations in the Carrizo and Pioneer JVs and transitioned into post-carry mode, allowing for improved governance rights and increased alignment on activity levels. Retail Business The retail business continued its growth journey during the year with new store launches as well as strong same store sales growth. The business accomplished a milestone by crossing a revenue of ` 10,000 crore during the year. The business grew by 42% to reach revenue of ` 10,800 crore as against ` 7,599 crore registered in the previous financial year. The business has achieved cash break- even with earnings before depreciation, finance cost and tax expense (EBDIT) of ` 78 crore. The milestone of crossing ` 10,000 crore revenue and reaching cash break- even at EBDIT level is a significant step in Reliance Retail’s journey towards attaining market leadership by democratizing access to all types of products and services across all segments for the discerning Indian customer. During the year under review, the realignment and consolidation of the various formats of retail businesses being carried on by the subsidiary companies of Reliance Retail Limited, was proposed, subject to necessary approvals of the High Court of Judicature at Bombay. The consolidation exercise and consequent reduction in the number of companies will help in enhancing operational flexibility, efficiencies and greater and optimal utilisation of resources and also lead to significant reduction in the multiplicity of legal and regulatory compliances. Infocomm Business Reliance Jio Infocomm Limited “RJIL” (formerly Infotel Broadband Services Limited) with Broadband Wireless Access (BWA) spectrum in all the 22 telecom circles of India, plans to provide reliable fast internet connectivity through the 20 MHz, contiguous, Pan-India BWA spectrum. In addition to connectivity, RJIL also plans to enable end-to-end solutions that address the entire value chain across various digital services in key domains of national interest such as education, healthcare, security, financial services, government-citizen interfaces and entertainment. RJIL aims to comprehensively address the requisite components of the customer need, thereby fundamentally enhancing the opportunity and experience of hundreds of millions of users in India. RJIL has finalized key agreements with its technology partners, service providers, infrastructure providers, application partners, device manufacturers and other strategic partners for the project. It aims to create a digital eco system which can be used to benefit the industry, the government and, above all, the people of this country. RJIL has also completed the detailed planning for Pan India implementation of the infrastructure needed for the project. Reliance Haryana SEZ The Model Economic Township (MET) has been envisioned to be developed as an industrial infrastructure to support economic growth in a public private partnership framework with the Government of Haryana through HSIIDC Limited (a Government of Haryana company). The start-up phase of operationalization of MET in the district Jhajjar of Haryana has commenced during the year. Reliance Jamnagar Infrastructure Limited During the year under review, Reliance Jamnagar Infrastructure Limited, a wholly owned subsidiary which was acting as a co-developer in the Jamnagar SEZ got amalgamated with the Company. Expansion of Operations Your Company has commenced implementing significant expansion plans in the Petrochemical business and on completion over the next 3 to 4 years, the overall volume is expected to increase by more than 60%. Your Company is also setting up the world’s largest petcoke gasification facility at Jamnagar to convert the lowest cost fossil fuels - coal and coke into gas. Consolidated Financial Statements In accordance with the Accounting Standard (AS) -21 on Consolidated Financial Statements read with 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, Statement of Profit and Loss 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 Reliance Industries Limited 89 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 and their business operations during the year under review are covered in the Management’s Discussion and Analysis Report. of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received letters from all of them to the effect that their re-appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for re-appointment 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. Directors Cost Auditors Shri Mahesh P. Modi, Dr. Dharam Vir Kapur, Dr. Raghunath A. Mashelkar and Shri Pawan Kumar Kapil, Directors, retire by rotation and being eligible, offer themselves for re-appointment 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, 2013, 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, 2013 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 The Company has appointed the following cost auditors for conducting Cost Audit for the financial year 2012-13: (i) For the Textiles Business - M/s. Kiran J. Mehta & Co, Cost Accountants; (ii) For the Chemicals Business - M/s. Diwanji & Associates, Cost Accountants, M/s. K. G. Goyal & Associates, Cost Accountants, M/s. V. J. Talati & Co., Cost Accountants, M/s. Bandyopadhyaya Bhaumik & Co., Cost Accountants, M/s Shome & Banerjee, Cost Accountants, M/s. Kiran J. Mehta & Co, Cost Accountants and M/s. Dilip M. Malkar & Co., Cost Accountants; (iii) For the Polyester Business - Shri Suresh D. Shenoy, Cost Accountant, M/s. V. Kumar & Associates, Cost Accountants; (iv) For Electricity Generation - M/s. Dilip M. Malkar & Co., Cost Accountants; (v) For Petroleum Business - M/s. V. J. Talati & Co., Cost Accountants; and (vi) For Oil & Gas Business - M/s Kiran J. Mehta & Co., Cost Accountants; Shri Suresh D. Shenoy, Cost Accountant; M/s Bandyopadhyaya Bhaumik & Co., Cost Accountants and M/s Shome & Banerjee, Cost Accountants. M/s Shome & Banerjee, Cost Accountants have been nominated as the Lead Cost Auditor of the Company. 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 the Secretarial Audit. The Secretarial Audit Report for the financial year ended March 31, 2013, is provided in the Annual Report. 90 Fulfilling India’s Aspirations. With Innovation and Enterprise. 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), 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, The Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998, Listing Agreements with the Stock Exchanges and the Memorandum and Articles of Association of the Company. 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 relating to energy conservation, The particulars 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 Annexure-II to this Report. Transfer of amounts to Investor Education and Protection Fund Pursuant to the provisions of Section 205A(5) and 205C 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. Pursuant to the provisions of Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on June 07, 2012 (date of last Annual General Meeting) on the website of the Company (www.ril.com), as also on the Ministry of Corporate Affairs website. 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. Business Responsibility Report SEBI, vide its Circular CIR/CFD/DIL/8/2012 dated August 13, 2012, mandated the top 100 listed entities, based on market capitalisation at BSE and NSE, to include Business Responsibility Report as part of the Annual Report describing the initiatives taken by the companies from Environmental, Social and Governance perspective. Accordingly, the Business Responsibility Report is attached and forms part of the Annual 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 16, 2013 Reliance Industries Limited 91 Annexure – I during the year 2012-13 are listed below: Disclosures required under the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 Allahabad Manufacturing Division l Optimization of Dow heat consumption polymerization by modifying split box. in (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 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 52,15,360; (e) The total number of shares arising as a result of exercise of options – 52,15,360; (f) Options lapsed – 2,19,53,179; (g) Variation in terms of options – Exercise Period for Options vested under the first tranche was extended up to July 6, 2013; (h) Money realised by exercise of options – ` 359,98,32,048; (i) total number of options in force [(a) – (d) – (f)] – 3,25,61,678; (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 (k) Diluted Earnings Per Share (EPS) before exceptional items pursuant to issue of shares on exercise of Options calculated in accordance with AS-20 ‘Earnings Per Share’ is ` 64.82. 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 Barabanki Manufacturing Division l Replacement of 70W HPSV Lamps with 30W and 42W LED Lamps. Replacement of 250W Metal Halide Lamps with 150W Green Energy Efficient Lamps. Dahej Manufacturing Division l Reactor feed preheater is replaced with higher size for better heat recovery based on Pinch study of MEG Plant. Optimization of steam & power system using online optimizer. Steam saving in Propylene compressor by troubleshooting antisurge valve opening problem in Ethane Propane Recovery Unit. Power saving by replacement of air compressor's 1st stage inter cooler in Air Separation plant. Vacuum improvement of Caustic Evaporation Unit by re-tubing of second effect evaporator and plugging of tubes in first and third effect evaporator. Increasing insulation thickness of MP and LP steam header in yard piping based on Economical Insulation thickness in view of increase in Fuel Price. Hazira Manufacturing Division l Uprating Gas Turbine capability of Gas Turbine (GT-4) at CPP&U plant. Uprating Gas Turbine capability of Gas Turbine (GT-1) and running it in Advanced Process Control in manual mode at CPP&U plant. Burner optimization in Heat Recovery Steam Generators at CPP&U plant. Replacing MP steam consumption with LP steam consumption in Dehydrator Reboiler in MEG plant. LP steam saving by Pure Terephthalic Acid dryer outlet temperature optimization. 50% capacity Boiler Feed Pump (BFP) operation resulting in LP steam savings at CPP&U plant. Power saving due to stoppage of vapour Pressure Swing Absorption plant based on oxygen optimization after catalyst change out at MEG plant. l l l l l l l l l l l l l Modification in operating philosophy of oxygen compressor at MEG plant. 92 Fulfilling India’s Aspirations. With Innovation and Enterprise. Hoshiarpur Manufacturing Division l Saving in electricity consumption by replacing traditional lights with CFL. Jamnagar Manufacturing Division (DTA) l Grid Transformer Relay setting change facilitated reduction in Steam Turbine Generator condensation load in CPP. Reduction in Lean Amine circulation through increased Methyl ethanolamine strength from 35 to 37.5 wt % in Lean Amine in sulphur complex. LP steam reduction in air preheater in all Coker heaters improving heater efficiency. l l l MP steam reduction in stripper by optimizing process conditions in Diesel Hydrotreater plant. l MP steam reduction in Crude unit by maintaining l l l reduced LP steam super heat temperature. C3-C4 fuel saving by routing PP line D degassing column vent to fuel gas header instead to flare system. Condensate recovery in Sulphur Recovery Unit. Heat recovery from Light Coker Gas Oil pump around to preheat cold Vacuum Residue from tanks to reduce firing in Coker heaters. Jamnagar Manufacturing Division (SEZ) l Peak firing enablement of Gas Turbine resulting in operation of 4 GT’s instead of 5 GT’s. Use of Light Coker Gas Oil stream as heating media instead of MP steam in Stripper Reboiler of Coker plant. Reduction in fuel by reducing reflux rate in the stripper column in Heavy Naphtha Hydrotreater plant. Five pumps operation instead of six at Refinery Tank farm for crude units feeding. Feed temperature of Heavy Naphtha Hydrotreater stripper increased which resulted in fuel saving in Reboiler by extracting additional energy from air cooler. Velocity HP steam optimization in all passes of heater, in Coker plant. l l l l l l MP steam saving in Naphtha Splitter by reducing l l reflux rate. Furnace stack O2 reduction from 3 to 1.5% in Crude Distillation Unit furnaces and improving efficiency, by stack O2 optimization. Power saving in Vent Gas Recovery compressor by optimal distribution of load between two trains of Polypropylene units. l l HP steam saving in turbine by reduction of Alkylation refrigeration discharge pressure from 5.2 to 5.03 Kg / cm2 in Alkylation Unit. Power saving by impeller trimming of 5 Gasoline and 5 Diesel transfer pumps at Refinery Tank farm. Nagothane Manufacturing Division l (GT-51) Converting a turbine from steam driven to motor driven resulting in reduction in steam generation at CPP. Uprating Gas Turbine improvement in heat rate of 195 Kcal / KWH. Optimized the De-aerators pressure in CPP based on availability of LP steam in the complex. through Reduced Pressure Reducing & De-superheating System and maximized HP extraction from Propylene Refrigeration Turbine. the HP steam let down resulting in Stoppage of Steam Turbine Generator at CPP plant. Patalganga Manufacturing Division l Silvassa Manufacturing Division l Improved Power Factor by Installation of 2 capacitors of 7500 KVAR. Vadodara Manufacturing Division l Direct supply of Polymer Grade Propylene from Naphtha Cracker Plant to Polypropylene Copolymer Plant. Shifting of 40 MT / hr steam load from Aux boiler to Heat Recovery Steam Generator. Change in control philosophy at steam network to avoid steam venting at Acrylo Nitrile plant. In Naphtha Cracker Plant, optimization of De- aerator after installation of Dissolved Oxygen Analyser to reduce steam consumption. Steam to flare control valve output indication and control on Distributed Control System (Naphtha Cracker Plant). Ethylene Glycol recycle water optimization (reduction of recycle water in re-absorber, reactor inlet and aldehyde purge). Improved condensate recovery by increased flow circulation (from integrated offsite plant to Poly Butadiene Rubber plant). Gas Turbine (GT1) component up rate to reduce heat rate and improve power generation. Replacement of damper having twin blade (air ceiling) to ensure minimum leakage of flue gas at Gas Turbine (GT1) & repair of deformed duct as well as internal insulation. l l l l l l l l l l l Reliance Industries Limited 93 higher efficiency for propane cooling instead of operating high capacity chiller at low efficiency. Jamnagar Manufacturing Division (SEZ) l Installation of thermo compressor at Fluidised Catalytic Cracker Unit for Low medium Pressure steam. Heat recovery from crude column overhead vapour in Crude Distillation Unit. Use of LP steam in Deisohexaniser reboiler in place of MP steam. l l l MP steam production from Diesel product circuit in Vacuum Gas Oil Hydrotreater Units 3 Nagothane Manufacturing Division l Uprating Gas Turbine Generator. l Installation of small air compressors so as to stop the operation of a bigger compressor. Naroda Manufacturing Division l Replacement of 161 old motors with Energy Efficient Motors. Vadodara Manufacturing Division l Instead of operating two boilers at part load to increase efficiency, operation of only one aux boiler to meet steam demand. Replacement of DM water coil in waste heat boiler to reduce the stack temperature at Naphtha Cracker plant. Replacement of two existing chillers with energy efficient chillers in Poly Vinyl Chloride plant. Installation of new footprint turbine for Charge Gas Compressor and Propylene Refrigeration Compressor for cracker plant. Installation of a turbine at Naphtha Cracker Plant for power generation from SHP Steam let-down. Impact of measures of (a) and (b) given above for reduction of energy consumption and consequent impact on the cost of production of goods: l l l l (c) Allahabad Manufacturing Division l Optimization of Dow heat consumption in polymerization by modifying split box, resulting in heat consumption reduction by 0.05 MMKCal / MT chip and financial savings of ` 0.33 crore per annum. Barabanki Manufacturing Division l Replacement of 70W HPSV Lamps with 30W and 42W LED Lamps, resulting in power saving of 633 KWH per annum. Replacement of 250W Metal Halide Lamps with l l l (b) Additional Stoppage of one Cooling Water pump in Integrated Offsite Plant Cooling Tower by isolating two cells. Dry ice cleaning of heater convection bank. investments/proposals being implemented for reduction of consumption of energy: Dahej Manufacturing Division l Conversion of electrolyser from 2nd Generation to Energy efficient 5th Generation elements and membranes in Chlor Alkali plant. Installation of Hydraulic Turbine in Ethane Propane Recovery Unit. Reduction in steam consumption of Gas Cracker Unit by supply of ethylene to Vinyl Chloride Monomer plant directly from ethylene tower. Reduction in steam consumption of Gas Cracker Unit by De-aerator feed heating by LP condensate in Gas Cracker Unit. LP steam supply to Vinyl Chloride Monomer plant from CPP for stopping MP to LP let-down in Vinyl Chloride Monomer. Revamping of condensate stripper in Gas Cracker Unit. Application of new insulation material on VHP steam line from CPP to Ethane Propane Recovery Unit. Preheat slurry stripper feed with centrate water in PVC . Use of quench water instead of LP steam in Lead reactor Preheater based on Pinch study conducted in Gas Cracker Unit. Increased recovery in MEG plant. Increasing the size of LP steam Import control valve in MEG Plant to maximize Steam Turbine Generator Extraction in CPP and Reduce LP to LLP let down of MEG Plant. Reduction in steam consumption in MEG Plant by installing condensate pot in place of steam trap. steam generation and condensate l l l l l l l l l l l Hazira Manufacturing Division l Operation of Heads-1 preheater to reduce steam consumption at Heads-1 column at Vinyl Chloride Monomer plant. Jamnagar Manufacturing Division (DTA) l HP steam reduction in Stripper Reboiler by implementing hot separator equipment in Tatoray Unit-2. Power reduction by operating smaller chiller at l 94 Fulfilling India’s Aspirations. With Innovation and Enterprise. Dahej Manufacturing Division l 150W Green Energy Efficient Lamps resulting in power saving of 720 KWH per annum. Reactor feed preheater is replaced with higher size for better heat recovery based on Pinch study of MEG Plant, resulting in fuel saving of 1.06 MMKCal / hr and financial savings of ` 1.26 crore for the year. Optimization of steam & power system using online optimizer, resulting in fuel saving of 3.58 MMKCal / hr and financial savings of ` 4.48 crore per annum. Steam saving in Propylene compressor by troubleshooting antisurge valve opening problem in Ethane Propane Recovery Unit, resulting in fuel saving of 2.47 MMKCal / hr and financial savings of ` 2.56 crore per annum. Power saving by replacement of air compressor's 1st stage inter cooler in Air Separation plant, resulting in fuel saving of 0.51 MMKCal / hr and financial savings of ` 1.24 crore per annum. Vacuum improvement of Caustic Evaporation Unit by re-tubing of second effect evaporator and plugging of tubes in first and third effect evaporator, resulting in fuel saving of 2.46 MMKCal / hr and financial savings of ` 2.17 crore per annum. Increasing insulation thickness of MP and LP steam header in yard piping based on Economical Insulation thickness in view of increase in Fuel Price, resulting in fuel saving of 0.99 MMKCal / hr and financial savings of ` 1.24 crore per annum. Conversion of electrolyser from 2nd Generation to Energy efficient 5th Generation elements and membranes in Chlor Alkali plant, shall result in power saving of 8,670 KW / hr and financial savings of ` 73.59 crore per annum. Installation of Hydraulic Turbine in Ethane Propane Recovery Unit, shall result in power saving of 387 KW / hr and financial savings of ` 2.37 crore per annum. Reduction in steam consumption of Gas Cracker Unit by supply of ethylene to Vinyl Chloride Monomer plant directly from ethylene tower, shall result in fuel saving of 1.6 MMKCal / hr and financial savings of ` 7.49 crore per annum. Reduction in steam consumption of Gas Cracker Unit by De-aerator feed heating by LP condensate in Gas Cracker Unit, shall result in fuel saving of 0.7 MMKCal / hr and financial savings of ` 3.19 crore per annum. l l l l l l l l l l l l l l l l l LP steam supply to Vinyl Chloride Monomer plant from CPP for stopping MP to LP let-down in Vinyl Chloride Monomer, shall result in fuel saving of 4.95 MMKCal / hr and financial savings of ` 22.46 crore per annum. Revamping of condensate stripper in Gas Cracker Unit, shall result in fuel saving of 1.8 MMKCal / hr and financial savings of ` 8.17 crore per annum. Application of new insulation material on VHP steam line from CPP to Ethane Propane Recovery Unit, shall result in fuel saving of 1.2 MMKCal / hr and financial savings of ` 5.24 crore per annum. Preheat slurry stripper feed with centrate water in PVC, shall result in fuel saving of 1.02 MMKCal / hr and financial savings of ` 4.63 crore per annum. Use of quench water instead of LP steam in Lead reactor Preheater based on Pinch study conducted in Gas Cracker Unit, shall result in fuel saving of 0.7 MMKCal / hr and financial savings of ` 3.19 crore per annum. Increased steam generation and condensate recovery in MEG plant, shall result in fuel saving of 1.5 MMKCal / hr plant and financial savings of ` 6.71 crore per annum. Increasing the size of LP steam Import control valve in MEG Plant to maximize Steam Turbine Generator Extraction in CPP and Reduce LP to LLP let down of MEG Plant, shall result in fuel saving of 0.5 MMKCal / hr and financial savings of ` 2.24 crore per annum. Reduction in steam consumption in MEG Plant by installing condensate pot in place of steam trap, shall result in fuel saving of 0.35 MMKCal / hr and financial savings of ` 1.6 crore per annum. Hazira Manufacturing Division l Uprating Gas Turbine capability of Gas Turbine (GT-4) at CPP&U plant, resulting in potential energy saving of 31150 MMKCal and equivalent financial savings of ` 11.04 crore per annum. Uprating Gas Turbine capability of GT-1 and running it in Advanced Process Control in manual mode at CPP&U plant, resulting in potential energy saving of 22680 MMKCal and equivalent financial savings of ` 8.03 crore per annum. Burner optimization in Heat Recovery Steam Generators at CPP&U plant, resulting in potential energy saving of 20871 MMKCal and equivalent financial savings of ` 7.39 crore per annum. Replacing MP steam consumption with LP steam consumption in Dehydrator Reboiler in MEG plant, resulting in potential energy saving of 8080 l l l Reliance Industries Limited 95 l l l l MP steam reduction in Crude unit by maintaining reduced LP steam super heat temperature, resulting in MP steam saving of 8.2 TPH and financial savings of ` 2.79 crore per annum. C3-C4 fuel saving by routing PP line D degassing column vent to fuel gas header instead to flare system, resulting in fuel saving of 0.96 MT / day and financial savings of ` 1.56 crore per annum. Condensate recovery in Sulphur Recovery Unit, resulting in LP steam saving of 1.36 TPH and financial savings of ` 2.18 crore per annum. Heat recovery from Light Coker Gas Oil pump around to preheat cold Vacuum Residue from tanks to reduce firing in Coker heaters, resulting in MP steam saving of 8 TPH and financial savings of ` 13.99 crore per annum. HP steam reduction in Stripper Reboiler by implementing hot separator equipment in Tatoray Unit-2, shall result in HP steam saving of 5.7 TPH and financial savings of ` 0.93 crore per annum. Power reduction by operating smaller chiller at higher efficiency for propane cooling instead of operating high capacity chiller at low efficiency, shall result in power saving of 96000 KWH / day and financial savings of ` 2.39 crore per annum. l l Jamnagar Manufacturing Division (SEZ) l Peak firing enablement of Gas Turbine resulting in operation of 4 GT’s instead of 5 GT’s, resulting in fuel saving of 115.2 MT / day due to improved efficiency of Gas Turbine and financial savings of ` 152.85 crore per annum. Use of Light Coker Gas Oil stream as heating media instead of MP steam in Stripper Reboiler of Coker plant, resulting in MP steam saving of 12 TPH and financial savings of ` 17.17 crore per annum. Reduction in fuel by reducing reflux rate in the stripper column in Heavy Naphtha Hydrotreater plant, resulting in fuel saving of 4.3 MT / day and financial savings of ` 6.16 crore per annum. Five pumps operation instead of six at Refinery Tank farm for crude units feeding, resulting in MP steam saving of 15864 KWH / day by stopping the sixth pump and financial savings of ` 1.93 crore per annum. Feed temperature of Heavy Naphtha Hydrotreater stripper increased which resulted in fuel saving in Reboiler by extracting additional energy from air cooler, resulting in fuel saving of 2.5 MT / day and financial savings of ` 3.59 crore per annum. Velocity HP steam optimization in all passes of l l l l l l l l resulting temperature optimization, MMKCal and equivalent financial savings of ` 3.18 crore per annum. LP steam saving by Pure Terephthalic Acid dryer outlet in potential energy saving of 4616 MMKCal and equivalent financial savings of ` 1.82 crore per annum. 50% capacity Boiler Feed Pump (BFP) operation resulting in LP steam savings at CPP&U plant, resulting in potential energy saving of 4384 MMKCal and equivalent financial savings of ` 1.73 crore per annum. Power saving due to stoppage of Vapour Pressure Swing Absorption plant based on oxygen optimization after catalyst change out at MEG plant, resulting in potential energy saving of 4390 MMKCal and equivalent financial savings of ` 1.60 crore for the year. l Modification in operating philosophy of oxygen compressor at MEG plant, resulting in potential energy saving of 2927 MMKCal and equivalent financial savings of ` 1.07 crore per annum. Operation of Heads-1 preheater to reduce steam consumption at Heads-1 column at Vinyl Chloride Monomer plant, shall result in anticipated energy saving of 3517 MMKCal and equivalent financial savings of ` 1.39 crore per annum. l Hoshiarpur Manufacturing Division l Saving in electricity consumption by replacing traditional lights with CFL, resulting in power saving of 2.5 KW / hr. Jamnagar Manufacturing Division (DTA) l in resulting in CPP, Grid Transformer Relay setting change facilitated reduction in Steam Turbine Generator condensation load fuel saving of 10.2 MT / day and financial savings of ` 14.17 crore per annum. Reduction in Lean Amine circulation through increased Methyl ethanolamine strength from 35 to 37.5 wt % in Lean Amine in sulphur complex, resulting in LP steam saving of 10 TPH and financial savings of ` 14.74 crore per annum. LP steam reduction in air preheater in all Coker heaters improving heater efficiency, resulting in fuel saving of 0.98 MT / day and financial savings of ` 1.36 crore per annum. l l l MP steam reduction in stripper by optimizing process conditions in Diesel Hydrotreater plant, resulting in MP steam saving of 1.5 TPH and financial savings of ` 2.95 crore per annum. 96 Fulfilling India’s Aspirations. With Innovation and Enterprise. heater, resulting in HP steam saving of 1000 Kg / hr in Coker plant and financial savings of ` 1.61 crore per annum. l l l l MP steam saving in Naphtha Splitter by reducing reflux rate, resulting in MP steam saving of 5 TPH and financial savings of ` 8.08 crore per annum. Furnace stack O2 reduction from 3 to 1.5% in Crude Distillation Unit furnaces and improving efficiency, resulting fuel saving of 5.9 MT / day by stack O2 optimization and financial savings of ` 7.86 crore per annum. Power saving in Vent Gas Recovery compressor by optimal distribution of load between two trains of Polypropylene units, resulting in power saving of 11184 KWH / day and financial savings of ` 1.48 crore per annum. HP steam saving in turbine by reduction of Alkylation refrigeration discharge pressure from 5.2 to 5.03 Kg / cm2 in Alkylation Unit, resulting in HP steam saving of 3.5 TPH and financial savings of ` 5.75 crore per annum. Power saving by impeller trimming of 5 Gasoline and 5 Diesel transfer pumps at Refinery Tank farm, resulting in electricity saving of 9600 KWH / day and financial savings of ` 1.15 crore per annum. Installation of thermo compressor at Fluidised Catalytic Cracker Unit for Low medium Pressure steam, shall result in MP steam saving of 30 TPH and financial savings of ` 6.33 crore per annum. Heat recovery from crude column overhead vapour in Crude Distillation Unit, shall result in MP steam saving of 29 TPH and financial savings of ` 55.99 crore per annum. Use of LP steam in Deisohexaniser reboiler in place of MP steam, shall result in MP steam saving of 4.2 TPH and financial savings of ` 9.15 crore per annum. l l l l l MP steam production from Diesel product circuit in Vacuum Gas Oil Hydrotreater Units 3, shall result in MP steam saving of 17 TPH and financial savings of ` 22.69 crore per annum. Nagothane Manufacturing Division l Converting a turbine from steam driven to motor driven resulting in reduction in steam generation at CPP, resulting in fuel saving of 5.28 MMKCal / hr and financial savings of ` 13.68 crore per annum. Uprating Gas Turbine in improvement in heat rate of 195 Kcal/KWH, resulting in fuel saving of 3 MMKCal/hr and resulting (GT-51) l l l l let down the HP steam financial savings of ` 7.18 crore for the year. Optimized the De-aerators pressure in CPP based on availability of LP steam in the complex, resulting in fuel saving of 1.76 MMKCal/hr and financial savings of ` 2.54 crore for the year. Reduced through Pressure Reducing & De- superheating System and maximized HP extraction from Propylene Refrigeration Turbine, resulting in energy saving of 1.57 MMKCal / hr and financial savings of ` 4.16 crore per annum. Uprating Gas Turbine Generator, shall result in fuel saving of 1.5 MMKCal / hr and financial savings of ` 3.59 crore per annum. Installation of small air compressors so as to stop the operation of a bigger compressor, shall result in power saving of 512 KW and financial savings of ` 2.24 crore per annum. Naroda Manufacturing Division l Replacement of 161 old motors with Energy Efficient Motors, shall result in annual power saving of 18,86,698 KWH and financial savings of ` 1.21 crore per annum. l Patalganga Manufacturing Division l Stoppage of Steam Turbine Generator at CPP plant, resulting in energy saving of 53602 MMKCal and financial savings of ` 15 crore for the year. Silvassa Manufacturing Division l Improved Power Factor by Installation of 2 capacitors of 7500 KVAR, resulting in financial savings of ` 1.51 crore for the year. Vadodara Manufacturing Division l Direct supply of Polymer Grade Propylene from Naphtha Cracker Plant to Polypropylene Copolymer plant, resulting in energy saving of 6419 MMKCal and financial savings of ` 1.99 crore for the year. Shifting of 40 MT / hr steam load from Aux boiler to Heat Recovery Steam Generator, resulting in energy saving of 36097 MMKCal and financial savings of ` 11.19 crore for the year. Change in control philosophy at steam network to avoid steam venting at Acrylo Nitrile plant, resulting in energy saving of 3935 MMKCal and financial savings of ` 1.22 crore for the year. In Naphtha Cracker Plant, optimization of De- aerator after installation of Dissolved Oxygen Analyser to reduce steam consumption, resulting in energy saving of 3387 MMKCal and financial savings of ` 1.05 crore for the year. l l l l l l l l l l l l l l Steam to flare control valve output indication and control on Distributed Control System (Naphtha Cracker Plant), resulting in energy saving of 5097 MMKCal and financial savings of ` 1.58 crore for the year. recycle water optimization Ethylene Glycol (reduction of recycle water in re-absorber, reactor inlet and aldehyde purge), resulting in energy saving of 4065 MMKCal and financial savings of ` 1.26 crore for the year. Improved condensate recovery by increased flow circulation (from Integrated offsite plant to Poly Butadiene Rubber plant), resulting in energy saving of 4935 MMKCal and financial savings of ` 1.53 crore for the year. Gas Turbine (GT1) component up rate to reduce heat rate and improve power generation, resulting in energy saving of 21048 MMKCal and financial savings of ` 6.52 crore for the year. Replacement of damper having twin blade (air ceiling) to ensure minimum leakage of flue gas at Gas Turbine (GT1) & repair of deformed duct as well as internal insulation, resulting in energy saving of 18454 MMKCal and financial savings of ` 5.72 crore for the year. Stoppage of one Cooling Water pump in Integrated Offsite Plant Cooling Tower by isolating two cells, resulting in energy saving of 8690 MMKCal and financial savings of ` 2.69 crore for the year. Dry ice cleaning of heater convection bank, resulting in energy saving of 5091 MMKCal and financial savings of ` 1.58 crore for the year. Instead of operating two boilers at part load to increase efficiency, operation of only one aux boiler to meet steam demand, shall result in annual energy saving of 38710 MMKCal and financial savings of ` 12 crore per annum. Replacement of DM water coil in waste heat boiler to reduce the stack temperature at Naphtha Cracker plant, shall result in annual energy saving of 6935 MMKCal and financial savings of ` 2.15 crore per annum. Replacement of two existing chillers with energy efficient chillers in Poly Vinyl Chloride plant, shall result in annual energy saving of 6355 MMKCal and financial savings of ` 1.97 crore per annum. Installation of new footprint turbine for Charge Gas Compressor and Propylene Refrigeration Compressor for cracker plant, shall result in annual energy saving of 89032 MMKCal and financial savings of ` 27.60 crore per annum. Reliance Industries Limited 97 l Installation of a turbine at Naphtha Cracker Plant for power generation from SHP Steam let-down, shall result in annual energy saving of 26935 MMKCal and financial savings of ` 8.35 crore per annum. energy (d) Total energy consumption consumption per unit of production as per Form ‘A’ attached hereto: B. TECHNOLOGY ABSORPTION (e) Efforts made in technology absorption - as per and 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 High stability catalyst additive for maximizing petrochemicals co-production in fluidized catalytic cracking. Novel fluid catalytic cracking process for converting low-value streams to light olefins. New process to remove chloride from hydrocarbon streams. Detailed characterization technique to predict, monitor and control gasoline blending. Online composition prediction and composition- based process models to plan, monitor and control refinery process. Extraction of relatively hydrogen-rich stream from a low-quality refinery stream. The use of feed properties and operating conditions to optimize petroleum coke quality. Advanced concept for gasifying petroleum coke. Separation of olefins from coker gas oil for linear alkyl benzene (LAB) production. Determination of crude corrosion potential and requisite mitigation. Removal of heat stable salts and sodium from refinery streams. Hydroisomerization catalyst for diesel production and low pressure, ultra-low sulphur diesel hydrotreating catalyst. Carbon dioxide capture from flue gas. Technology development to process low-cost, heavy crudes. Computational fluid dynamics studies for trouble shooting plant operations. New process for acidity reduction of crude. Hydroprocessing kinetic model development l l l l l l l l l l l l l l l l l 98 Fulfilling India’s Aspirations. With Innovation and Enterprise. in recovery for high performance, for effective monomer including deactivation kinetics, and mechanistic model with catalyst parameters. Fundamental ethylene reactor model. Process and catalyst polypropylene homo polymer grades. Process and catalyst system for high performance, impact polypropylene and biaxially oriented polypropylene grades. Compounded pipe-grade resin for water and gas applications. Specialty multilayer films for aseptic packaging. Specialty high flow melt blown polypropylene grades. Development of metallocene-grade polyethylene film. Upgradation of existing polymer extrusion systems for quality improvement and capacity enhancement. Online tool for establishing the safe operating boundaries and operating window for high pressure polyolefins plant. Process polyolefin plants. Commercialization of terpolymer grade for heat sealing film application. Process and catalyst for producing ultra-high molecular weight polyethylene with targeted range of molecular weight and high density grades. Technology using high performance catalyst for manufacturing alpha olefins. Novel homogeneous catalysts and process for ethylene polymerization. Regeneration and alternate applications of spent catalysts and adsorbents. Synthesis and characterization of noble metal nano-particles and their deposition on commercial catalysts. Lab-scale development of superabsorbent polymers. Specialty polyethylene products. Lab-scale and photocatalytic processes for effluent treatment in acrylonitrile and polyvinyl chloride plants. Catalytic process for production of 1-hexene. Next generation paraffin dehydrogenation catalyst. Identification of novel materials for catalytic applications. Self-healing elastomers. Novel catalyst system for 1,3-butadiene. of microbial development in-house l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l l Identification of an environmentally friendly process for purified terepthalic acid (PTA) manufacture. Implementation of an energy-efficient separation process in PTA plants. Degassing drum installation in PTA to reduce methyl acetate losses. Development of specialty polyester yarn. Development of barrier polyethylene terephthalate (PET) resin for packaging oxygen sensitive foods and beverages. Specialty yarns such as insect repellant yarn, multifunctional yarn and conducting polyester yarn. Low antimony polyester products. Use of polyester fibres as replacement for hazardous asbestos fibres in cement roof sheets. Hydrophilic spun lace fibres for non-woven wipes. Development of cobalt-free polyester resin. PET resin with high impact strength. Improved properties of recycled PET. Catalyst for polyester productivity enhancement and color improvement. Development of bi-shrinkage yarns for improved fabric feel and profiled yarns for differentiated effects. Polytrimethylene terephthalate (PTT) based staple fibre. 2. Benefits derived as a result of the above R&D l in-house (based on Potential benefit of ` 30 crore per annum by replacing proprietary catalyst with mixture of generic catalyst and additive. Benefit of ` 8 crore per annum from replacement of imported catalyst system for homo polypropylene manufacturing catalyst development). In-house technology for 1-hexene manufacture. Production of ultra-high molecular weight polyethylene based on process and novel catalyst. Degassing drum installation in PTA plant at Patalganga to reduce methyl acetate losses has resulted in a savings of ` 3 crore per annum. Reliability improvements in coker furnace. Potential benefit of ` 13.8 crore per annum through research in polyester. 3. Future plan of action. l Creation of coking and hydroprocessing related facilities and process development. Process for widening of crude window through total l l l l l l l Reliance Industries Limited 99 4. Expenditure on R & D a) Capital b) Revenue Total ` Crore 738 380 1118 Total R & D expenditure is 0.30% of the total turnover. Technology absorption, adoption and innovation 1. Efforts, in brief, made towards technology l l l l l l l l l l l l l absorption, adoption and innovation New catalytic cracking technology for high light olefin yields from low value hydrocarbon streams. Purification of normal olefins from coker gas oil for LAB production. Selection of preferred refinery configurations, based on economics and technology evaluation. Selection of technology for gasification, cracking, LDPE, LLDPE, paraxylene (PX), acetic acid and other projects. Improvement and innovation for in-house catalysts with higher efficiency (activity and throughput) for producing polypropylene. In-house production of 1-butene catalyst. Selection and pilot plant studies for improved catalysts for transalkylation. Replacement of dimethyl disulphide as sulphiding agent with DSO in crackers. Development of reactor models in various refinery/ petrochemicals plants. Comparative evaluation and benchmarking of various technologies. PTT spinning technology development. Technical evaluation of design of internals in new generation polyester plants. Development of profiled cross-section spun-lace polyester fibre for hygiene products. l Micro spun-lace fibre for wet wipes and hygiene l l products. Productivity enhancement micro and super micro polyester staple fiber. Fine denier conjugate fibre for filling applications. 2. Benefits derived as a result of the above efforts l New indigenous technology development and IP value creation. l l acid number reduction and other methods. High-throughput facilities for catalyst development and new product evaluation. Computational fluid dynamics studies of plant equipment for reliability improvement. l Molecular characterization of crude and refinery l l l streams. Value addition to low value refinery streams. Cetane improvement additive. Improved catalyst system for producing impact co- polymers and biaxially oriented polypropylene. l Morphological catalyst system for 1-alkene l polymerization. Next generation polypropylene catalyst systems for specialty products. l l l l l for l l l automotive polypropylene l Multiphasic applications. High performance morphological catalyst system for slurry phase polypropylene. Improved, high activity catalyst system for solution phase polyethylene. Supported high activity catalyst system for gas phase polyethylene. High performance catalyst system for slurry polyethylene. Creation of advanced polyolefins synthesis facilities for in-house development. Lower silver content catalyst for ethylene oxidation. Alternative routes for 1,3-butadiene production. Process for significant coke reduction during thermal cracking of hydrocarbons. Novel materials for catalyst, adsorbent, support and gas storage applications. New catalyst material for olefin removal from aromatics streams. Alternate additives / catalyst for making specialty resins. Spin finish for flat yarn and partially oriented yarn. Polyester recycling initiatives for diverse end uses. Exploring unconventional treatments of polyesters for specific end-use requirements. New generation technology under development for specialty filaments. High insulating, polyester fabrics for apparel use. Development of different profiled cross-section polyester fibre for filling applications. Replacement of PVA in asbestos sheets. l l l l l l l l l l 100 Fulfilling India’s Aspirations. With Innovation and Enterprise. l l l Higher productivity of catalyst system and improved production rate for polypropylene. Benefit of ` 4.2 crore by technical support to dryer problem at Hazira. Potential benefits of ` 22.9 crore per annum from polyester technology projects. 3. Information regarding Imported Technology Product Technology import from Year of import Status implementation / absorption Isobutylene Isoprene Rubber (IIR) Sibur, Russia 2012-13 Under Implementation ROGC (Refinery Off-gas Cracker) for production of Ethylene & Propylene Technip, France 2012-13 Under implementation Mono Ethylene Glycol (MEG) DOW Process Technologies, USA 2012-13 Under implementation Linear Low Density Polyethylene Project at Jamnagar Univation Technologies LLC, USA 2012-13 Under implementation Low Density Polyethylene Project at Jamnagar LyondellBasell, Germany 2012-13 Under implementation Air Separation Unit production for Oxygen Linde - Germany 2012 -13 Under implementation Petcoke Gasification for Syngas P66 – USA 2012-13 Under implementation Acid Gas Recovery for cleaning Syngas Linde - Germany 2012 -13 Under implementation Partially oriented yarn/Fully drawn yarn (POY/FDY) Invista/ Chemtex/Barmag/ TMT 2011-2013 Plant under construction Polyethylene Terephthalate (PET) Invista/Chemtex/Buhler 2011-2013 Plant under construction 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 ` 2,27,883 crore (US$ 41,979 million). 2. Total Foreign exchange earned and used a. Total Foreign Exchange Earned b. Total savings in Foreign Exchange through products manufactured by the Company and deemed exports (US$ 25,404 million) Subtotal (a+b) c. Total Foreign Exchange used ` crore 2,28,092 1,37,906 3,65,998 2,95,546 Reliance Industries Limited 101 Form ‘A’ Form for disclosure of particulars with respect to conservation of energy Part ‘A’ Power & Fuel Consumption 1 Electricity Current Year Previous Year 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 (`) c) Own Generation 1) 2) 3) Through Diesel Generator Units (Lacs) KWH per unit of fuel Fuel Cost/Unit (`) Through Steam Turbine/Generator Units (Lacs) KWH per unit of fuel Fuel Cost/Unit (`) Through Wind Mill Turbine Units (Lacs) Purchased Fuels consumed 2 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 5,055.13 255.92 5.06 53,679.73 6.31 4,057.95 7.56 376.40 3.88 11.08 50,761.34 5.53 6.33 3,760.66 170.58 4.54 52,605.28 5.66 3,609.07 6.86 500.03 4.08 9.31 53,212.68 4.20 5.21 23.81 24.82 36,304.06 150.27 41.39 5,266.93 25.37 48.17 19,11,848.90 5,050.61 26,417.39 35,188.69 12.18 3,460.65 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 58,11,841.76 69,39,994.21 5,68,883.09 3,56,106.53 102 Fulfilling India’s Aspirations. With Innovation and Enterprise. B. Consumption per unit of Production Product Electricity (KWH) Furnace Oil/ HSD/ HFHSD (Ltrs) LSHS (kgs) Gas (SM3) Current Year Previous Year Current Year Previous Year Current Year Previous Year Current Year Previous 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) Cyclohexane (per MT) 4,469 2 4,566 737 715 2 362 299 624 428 418 523 294 544 237 206 73 645 2,621 493 39 2 - - 2 - - 357 17 13 - - - - 0 0 302 - 1 0 - 593 - - 441 2 2 - 1 0 - 432 0 0 - - 530 0 0 2 3 301 - - 87 89 571 - - - 1 245 - - 29 55 198 - - 3 5 73 0 8 - - 634 3 5 - - 2,606 (0) 6 - - 446 - - - - 37 461 446 80 77 84 73 14 13 538 481 79 72 31 34 9 15 54 46 26 44 73 66 309 270 75 70 491 482 91 92 (38) (23) - - For and on behalf of the Board of Directors Mukesh D. Ambani Chairman and Managing Director April 16, 2013 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 2013, 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. 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 Chartered Accountants (Registration No. 101720W) (Registration No. 117366W) (Registration No. 108355W) D. Chaturvedi A. Siddharth Partner Partner A. R. Shah Partner Membership No.: 5611 Membership No.: 31467 Membership No.:47166 Mumbai April 16, 2013 Business Responsibility Report Reliance Industries Limited 103 Section A: General Information about the Company 1. Corporate Identity Number (CIN) of the Company: L17110MH1973PLC019786 2. Name of the Company: Reliance Industries Limited divisions at Allahabad, Barabanki, Dahej, Hazira, Hoshiarpur, Jamnagar, Nagothane, Nagpur, Naroda, Patalganga, Silvassa, Vadodara. Exploration and production at KGD6 – Gadimoga, Panna Mukta Tapti, CBM Blocks; and various other regional marketing offices. 3. Registered address: 3rd Floor, Maker Chambers IV, 222 Nariman Point, Mumbai 400 021, India 10. Markets served by the Company - Local/State/ National/International: 4. Website: www.ril.com 5. E-mail id: sustainability.report@ril.com 6. 7. Financial Year reported: 2012-13 Sector(s) that the Company is engaged in (industrial activity code-wise) Exploration and production of Oil & Gas, Refining, Petrochemicals and fibre intermediates), Textiles (Polymers, Polyester Industrial Group 061 062 131 139 192 201 203 Description Extraction of crude petroleum Extraction of natural gas Spinning, weaving and finishing of textiles Manufacture of other Textiles Manufacture of refined petroleum products Manufacture of basic chemicals, fertilizer and nitrogen compounds, plastics and synthetic rubber in primary forms Manufacture of man-made fibres As per National Industrial Classification – Ministry of Statistics and Programme Implementation 8. List three key products/services the Company manufactures/provides (as in balance sheet) that Transportation Fuels, Polymers and Polyester Fibre 9. Total number of locations where business activity is undertaken by the Company i. of Number International Locations (Provide details of major 5): RIL has business activity undertaken in more than 16 international locations and the major ones are USA, Malaysia, Kenya, Uganda, Rwanda and Tanzania. ii. Number of National Locations: RIL has business activity carried out in more than 50 domestic locations with manufacturing In addition to serving the Indian markets, RIL exported to 116 countries worldwide, during the FY 2012-13. Section B: Financial Details of the Company 1. Paid up Capital (INR): 3,229 Crore 2. Total Turnover (INR): 371,119 Crore 3. Total Profit After Taxes (INR): 21,003 Crore 4. Total spending Social Responsibility (CSR) as percentage of profit after tax (%) on Corporate 1.7% 5. List of activities in which expenditure in 4 above has been incurred: The major areas in which the above expenditure has been incurred includes education, healthcare, livelihood support, rural development, heritage conservation, environment and safety initiatives for the community. Section C: Other Details 1. Does the Company have any Subsidiary Company/ Companies? Yes. The number of subsidiary companies of RIL as on March 31, 2013: 121 2. Do the Subsidiary Company/Companies participate in the BR Initiatives of the parent company? If yes, then indicate the number of such subsidiary company(s) Yes, RIL encourages its subsidiary companies to participate in its group wide Business Responsibility (BR) initiatives on a wide range of topics. All subsidiaries are aligned to the activities under the aegis of Reliance Foundation. RIL’s subsidiaries like Reliance Fresh, Reliance Trends, etc. have taken part in initiatives across issues like farm engagement activities, training and skill development of youth, community connected activities and promotion of education, etc. 104 Fulfilling India’s Aspirations. With Innovation and Enterprise. 3. Do any other entity/entities (e.g. suppliers, distributors etc.) that the Company does business with participate in the BR initiatives of the Company? If yes, then indicate the percentage of such entity/entities? [Less than 30%, 30-60%, More than 60%] Yes, RIL actively supports its suppliers and distributors to participate in the company’s social responsibility initiatives. Currently less than 30% of other entities participate in the BR initiatives of the Company. environmental and Section D: BR Information 1. Details of Director/Directors responsible for BR a) Details of the Director/Directors responsible for implementation of the BR policy/policies. The Corporate Governance and Stakeholders’ the Board of Interface (CG) Committee of Directors is responsible for the implementation of the BR policies. The following are the committee members: l l l DIN: 00001879 Name: Shri Yogendra P. Trivedi (Chairman) Designation: Independent Director DIN: 00001982 Name: Shri Mahesh P. Modi (Member) Designation: Independent Director DIN: 00001604 Name: Dr. Dharam Vir Kapur (Member) Designation: Independent Director Sl. No. Questions 1. Do you have policy/policies for.... 2. Has the policy being formulated in consultation with the relevant stakeholders? 3. Does the policy conform to any national / international standards? If yes, specify? (The policies are based on the NVG-guidelines in addition to conformance to the spirit of international standards like ISO 9000, ISO 14000, OHSAS 18000, UNGC guidelines and ILO principles ) 4. Has the policy being approved by the Board? Is yes, has it been signed by MD/owner/CEO/appropriate Board Director? 5. Does the company have a specified committee of the Board/ Director/Official to oversee the implementation of the policy? Details 00001879 1. b) Details of the BR head Sl. No. Particulars DIN (if applicable) Name Designation Telephone number e-mail id 2. 3. 4. 5. Shri Yogendra P. Trivedi Chairman of the CG Committee 022 - 2363 3600 trivedi_yogendra@yahoo.co.in 2. Principle-wise (as per NVGs) BR Policy/policies (Reply in Y/N) P1 – Businesses should conduct and govern themselves with Ethics, Transparency and Accountability. P2 – Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle. P3 – Businesses should promote the well-being of all employees. P4 – Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalized. P5 – Businesses should respect and promote human rights. P6 – Businesses should respect, protect, and make efforts to restore the environment. P7 – Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible manner. P8 – Businesses should support inclusive growth and equitable development. P9 – Businesses should engage with and provide value to their customers and consumers in a responsible manner. P 1 Y Y N Y Y P 2 Y1 - - - - P 3 Y Y P 4 Y Y P 5 Y Y P 6 Y Y P 7 Y Y P 8 Y Y P 9 Y Y Y N Y Y N N N Y Y Y Y Y Y Y Y Y Y Y Y Y Y Reliance Industries Limited 105 Sl. No. Questions 6. Indicate the link for the policy to be viewed online? 7. Has the policy been formally communicated to all relevant internal and external stakeholders? 8. Does the Company have in-house structure to implement the policy/policies? 9. Does the Company have a grievance redressal mechanism related to the policy/policies to address stakeholders' grievances related to the policy/policies? P 1 P 2 P 3 P 4 P 5 P 6 P 7 P 8 P 9 - The policies have been communicated to key internal stakeholders of RIL. The communication is an on-going process to cover all internal and external stakeholders. Yes, the Company has an in-house structure which is reviewed by the Corporate Governance and Stakeholders’ Interface Committee of the Board of Directors. Corporate Governance and Stakeholders’ Interface Committee of the Board of Directors undertakes the responsibility of addressing stakeholder concerns related to the BR policies. 10. Has the Company carried out independent audit/evaluation of the working of this policy by an internal or external agency? RIL’s policies pertaining to Health, Safety and Environment have been evaluated by external agencies viz. DNV, LRQA, BVQi. 1The policy is embedded in the Environment policy, Business communication policy and CSR policy. 2a. If answer to Sl. No. 1 against any principle, is 'No', please explain why: (Tick up to 2 options) Sl. No. 1. 2. 3. 4. 5. Questions P 1 P 2 P 3 P 4 P 5 P 6 P 7 P 8 P 9 The Company has not understood the Principles The Company is not at a stage where it finds itself in a position to formulate and implement the policies on specified principles The Company does not have financial or manpower resources available for the task Not Applicable It is planned to be done within next 6 months It is planned to be done within the next 1 year 6. Any other reason (please specify) 3. Governance related to BR l Indicate the frequency with which the Board of Directors, Committee of the Board or CEO to assess the BR performance of the Company. Within 3 months, 3-6 months, Annually, More than 1 year The CG Committee assesses periodically the BR performance of the Company. l Does the Company publish a BR or a Sustainability Report? What is the hyperlink for viewing this report? How frequently it is published? RIL publishes its Sustainability Report annually based on Global Reporting Initiative’s latest reporting guidelines. The last published Sustainability Report for FY 2011-12 and all the previous reports are available at http://ril. com/html/aboutus/sustainability_report.html 106 Fulfilling India’s Aspirations. With Innovation and Enterprise. Section E: Principle-wise performance Principle 1 1. Does the policy relating to ethics, bribery and corruption cover only the Company? Yes/No. Does it extend to the Group/Joint Ventures Suppliers/Contractors/ NGOs/Others? RIL’s policy on bribery and anti-corruption covers all individuals worldwide working with it and its subsidiaries at all levels and grades, including directors, senior executives, officers, employees (whether permanent, fixed-term or temporary), consultants, contractors or any other person associated with RIL. The well defined policy lists tenets on ethical business conduct, definitions and the framework for reporting concerns. 2. How many stakeholder complaints have been received in the past financial year and what percentage was satisfactorily resolved by the management? If so, provide details thereof, in about 50 words or so. As specified in the Report on Corporate Governance, 2826 investor complaints were received during the FY 2012-13, which have been fully resolved. In other cases, necessary clarifications were furnished. Principle 2 1. List up to 3 of your products or services whose design has incorporated social or environmental concerns, risks and/or opportunities. RIL has invested over the years in product innovation and thereby reducing the adverse impact of its operations on the environment while producing socially relevant products. The following is a list of some of our key innovations and the positive impact that they have created: a. Recron FR – Flame retardant fibres and yarn aimed at improving the safety of the user. b. Recron 3S - Used in the construction and paper industry. It can replace pulp (wood) in the paper industry and also used as a substitute for hazardous asbestos fibre in asbestos cement production. It is also being used to reinforce concrete in various airports, roads, defence establishments, etc. helping to provide a better and safer infrastucture. c. Recron Green - Polyester fibres of superior and consistent quality using post-consumer PET bottles. RIL has established a countrywide network to collect the used PET bottles from all over the country, which are transported to the Company’s Hoshiarpur and Barabanki plants, for conversion into Polyester Fibre. 2. For each such product, provide the following details in respect of resource use (energy, water, raw material etc.) per unit of product (optional): i. Reduction during sourcing/production/ distribution achieved since the previous year throughout the value chain. ii. Reduction during usage by consumers (energy, water) has been achieved since the previous year. 3. Does the Company have procedures in place for sustainable sourcing (including transportation)? If yes, what percentage of your inputs was sourced sustainably? The Company’s motto is to establish long term relationship with its vendors and include them in its growth story. RIL has procedures in place to do a thorough check before finalizing on prospective vendors. In addition to techno-commercial aspects, emphasis is also laid on factors like environmental practices and existing certifications, safe working conditions, prevention of child labour and general housekeeping. The Company provides technical and R&D support to vendors and shares best practices with them. RIL’s officials interact with them on a regular basis and also conduct periodic audits of their facilities. The selection procedure of RIL’s transport vendors (Truck and Containers) involves scrutiny at various levels like young vehicle/container fleet, presence of mandatory inspections and safe driving procedures. Further, the Company urges its large group of transport vendors to focus on load and route optimization to ensure fuel efficiency and reduce the environmental impact due to transportation. 4. Has the Company taken any steps to procure goods and services from local & small producers, including communities surrounding their place of work? If yes, what steps have been taken to improve their capacity and capability of local and small vendors? In order to ensure a positive impact of sourcing of our raw materials and other resources as well as product distribution, RIL supports, encourages and develops local vendors. E.g., the Company Reliance Industries Limited 107 its packaging material at the polyester and polymer manufacturing sites by reducing or optimizing use of materials. l At Jamnagar, substantial quantity of water required for Jamnagar refinery is obtained by desalination of sea water there by saving the fresh water resources of the area which is generally arid area. All the water after industrial use is recycled and used in greenbelt, mango groves, etc. The site has zero discharge of water. Principle 3 1. Please indicate the Total number of employees. 23519 as on 31st March, 2013. 2. Please indicate the Total number of employees hired on temporary/ contractual/ casual basis. 29462 as on 31st March, 2013. 3. Please indicate the Number of permanent women employees. 1139 as on 31st March, 2013. 4. Please indicate the Number of permanent employees with disabilities 82 as on 31st March, 2013. 5. Do you have an employee association that is recognized by management? RIL has multiple manufacturing sites and offices. It has various unions and associations of employees for collective bargaining at respective sites. 6. What percentage of your permanent employees this recognized employee is members of association? Almost 100% of non-supervisory permanent employees at manufacturing locations are members of unions and are governed by wage agreements. 7. Please indicate the Number of complaints relating to child labour, forced labour, involuntary labour, sexual harassment in the last financial year and pending, as on the end of the financial year. developed a local vendor for the supply of a highly hazardous chemical (Tri Ethyl Aluminium). The same facility has been extended to the supply of two more chemicals Di ethyl Aluminium Ethoxide and Di ethyl Aluminium Chloride. Various contracts have been entered with local villagers around RIL’s plants in vehicle hiring, material handling, housekeeping, waste handling led and horticulture. These contracts have to entrepreneurship development around the manufacturing sites and have created employment for the local populace. Through financial assistance and encouragement, the Company has supported many small suppliers, predominantly civil contractors and transport suppliers, some of whom have now entered into second and third generation of service. With RIL’s credentials to support them, these local vendors have now been able to secure work contracts in other companies and nearby locations. 5. Does the Company have a mechanism to recycle products and waste? If yes, what is the percentage of recycling of products and waste (separately as <5%, 5-10%, >10%). Also, provide details thereof, in about 50 words or so. l RIL partners with various agencies to encourage end-of-life recycling and reuse. It has established a countrywide network to collect the used PET bottles from all over the country, which are transported to the Hoshiarpur and Barabanki plants, for conversion of such bottles into Polyester Fibre. This project has seen a steady increase in the requirement of post-consumer PET bottle requirement per month. l Company recycled materials amounts to less than 1% of its total material consumption. l At vermi-composting, the the Naroda manufacturing unit, industrial waste is converted into manure significantly through reducing the waste discharged from the plant. The Effluent Treatment Plant (ETP) sludge is now utilized to generate ‘bio-manure’ through this vermi-composting method. l The Company has also focused on reducing 108 Fulfilling India’s Aspirations. With Innovation and Enterprise. Category Sl. No. of No financial year complaints filed during the No of complaints pending as on end of the financial year 1. Child labour/forced labour/involuntary labour Sexual harassment 2. 3. Discriminatory employment or Involuntary Since RIL does not hire Child Labour, Forced Labour. Labour No Reported Case. No Reported Case RIL does not discriminate in the recruitment process. No Reported Case. Not Applicable Not Applicable Not Applicable 8. What safety & skill up-gradation training was provided in the last year? l l l l Permanent Employees Permanent Women Employees Casual/Temporary/Contractual Employees Employees with Disabilities Employee training and development is an essential the Company’s people strategy. element of RIL has a robust training procedure and it does not differentiate on any parameters in terms of identifying and imparting training to its employees. RIL’s permanent employees received safety and skill up-gradation training to the tune of 18.67 lac man hours in 2012-13.The permanent women employees received 0.84 lac man hours of training, casual /temporary /contractual employees received 2.63 lac man hours of training and employees with disabilities received 133 man hours of training. All its contractual employees receive mandatory safety training before entering their premises and receive on the job training through the contractor and the Company. Principle 4 1. Has the company mapped its internal and external stakeholders? Yes. The stakeholders have been mapped and the key categories are as below: i) Government and regulatory authorities ii) Employees iii) Customers iv) Local community v) Investors and shareholders vi) Suppliers vii) Trade unions viii) NGOs is a structured RIL engages with its identified stakeholders on an ongoing basis through a constructive consultation process. There stakeholder engagement programme which entails specific engagement mechanisms for each stakeholder group. The Company follows a system of timely feedback and response through formal and informal channels of communication to ensure that the stakeholder remains current and updated. information 2. Out of the above, has the Company identified the disadvantaged, vulnerable & marginalized stakeholders? Yes. The Company has identified the disadvantaged, vulnerable & marginalized stakeholders. 3. Are there any special initiatives taken by the Company to engage with the disadvantaged, vulnerable and marginalized stakeholders. If so, provide details thereof, in about 50 words or so. A large number of RIL’s livelihood support programmes are women centric and have helped them become independent and gain a steady source of income through a range of different vocations. The Company also aims to improve the access to quality education through adopting schools in and around its manufacturing units. These educational institutions include children from the underprivileged communities whose fee is completely or partially waived. Meritorious students are assisted with scholarships to pursue higher education in the colleges. Students who are physically challenged are specially assisted to pursue high education in colleges. During the FY 2012-13, 788 rewards and scholarships were conferred. Additionally, ‘Mumbai Indians’ supported projects in areas of providing access to quality education for underprivileged children, supporting girl child education, imparting life skills to the differently-abled and creating a level field by providing support classes to the vulnerable children. Reliance Industries Limited 109 as contractors, suppliers and customers for shared responsibility towards environment protection. RIL encourages sharing of process and product innovations within the group and extending it to benefit the industry and key members of its value chain. 2. Does the Company have strategies/initiatives to address global environmental issues such as climate change, global warming, etc? Y/N. If yes, please give hyperlink for webpage etc. Yes. One of the key strategic pillars of RIL’s sustainability strategy is ensuring energy security. In its endeavour to become a key global energy player, the Company has strengthened its focus in recent years on opportunities to harness alternative energy sources. RIL undertakes continuous activities to improve energy efficiency and thereby improve its Green House Gas (GHG) performance. It has a separate Clean Development Mechanism Cell to focus on climate change mitigation projects. 3. Does the Company identify and assess potential environmental risks? Y/N Yes. RIL has a mechanism to identify potential environmental risks at all its manufacturing divisions and E&P locations. Mitigation measures and the environmental parameters are internalized at all stages of project design, execution, construction, operation and maintenance. All of the Company’s manufacturing divisions/ locations are ISO 14001, ISO 18001 certified. In addition, all these sites have also been covered under the British Safety Council UK’s environment five star audit. The periodic audits help RIL identify potential risks at our locations. 4. Does the Company have any project related to Clean Development Mechanism? If so, provide details thereof, in about 50 words or so. Also, if Yes, whether any environmental compliance report is filed? Yes. RIL’s registered and prospective Clean Development Mechanism (CDM) projects are related to energy efficiency enhancements, renewable energy projects and use of biomass in the process as a fuel. In FY 2012-13, three of its CDM projects got a total of 34692 Certified Emission Reductions from United Nations Framework Convention on Climate Change (UNFCCC) post submission of validation and verification reports. Audit of one more project has been completed and request for issuance of (“CERS”) issued RIL partners with the National Association for the Blind for providing free cornea transplants for the underprivileged and providing aid towards diagnosis of blindness at an early age. In 2012 Reliance Drishti launched India’s first registered national Braille newspaper in Hindi. For its trucker community RIL conducts AIDS awareness programs on a large scale including skits and role plays. ‘Hamrahi’, a clinic operating in Allahabad provides voluntary testing and counselling for HIV/ AIDS primarily for truckers and nearby residents. The ART Centre at Hazira has catered to more than 78,000 patients. Further, the employees at E&P sites and the Reliance Ladies Club (an association of spouses of RIL managerial employees) at Hazira with initiatives “Chirudeepam” and “Project Hope” respectively support children affected by AIDS and supply them with nutritive kit every month, as per the WHO standard. Principle 5 1. Does the policy of the Company on human rights cover only the Company or extend to the Group/ Joint Ventures/ Suppliers/ Contractors/ NGOs/ Others? that a The Company believes sustainable organization rests on a foundation of ethics and respect for human rights. RIL adheres to the statutes of India’s Factories Act, 1948, which embodies some of the human rights principles such as prevention of child labour, forced labour and compulsory labour. RIL promotes awareness of the importance of respecting human rights within its value chain and discourage instances of abuse. 2. How many stakeholder complaints have been received in the past financial year and what percent was satisfactorily resolved by the management? There were no reported complaints during the FY 2012-13. Principle 6 1. Does the policy related to Principle 6 cover only the Company or extends to the Group/Joint Ventures/Suppliers/Contractors/NGOs/others. Nurturing and safeguarding the environment for long-term sustainability is the primary objective of RIL’s environment policy. The Company strives to inculcate the responsibility of environmental preservation and management not only amongst its employees but also other stakeholder groups such 110 Fulfilling India’s Aspirations. With Innovation and Enterprise. 86912 CERs will shortly be submitted to UNFCCC. Environmental aspects of each CDM project are elaborated in details as part of its Project Design Document and the Company does not file any separate report for environmental compliance for its CDM Projects. It is ensured that all necessary environmental and statutory clearances are in place for the CDM projects. 5. Has the Company undertaken any other initiatives on - clean technology, energy efficiency, renewable energy, etc. Y/N. If yes, please give hyperlink for web page etc. Yes. Increasing energy efficiency across all manufacturing divisions forms an integral part of RIL’s operations. Each of the Company’s facilities places special emphasis to identify and undertake initiatives to enhance their energy efficiency. Please refer to Page No. 91 of the annual report for energy conservation initiatives. RIL’s corporate head office has been taken up as demonstration project for deployment of renewable energy and sustainable waste management. During 2012-13 it has undertaken installation of solar photovoltaic panels on rooftop, utilization of daylight through “light pipes” and generation of biogas and organic manure by anaerobic digestion of food and garden waste. RIL continues to focus on renewable energy opportunities and during the year a feasibility study for assessing repowering potential of its existing wind farms at Upleta was initiated. Wind power generation at Jamnagar is also under consideration. As the sole industry partner in the New Millennium Indian Technology Leadership Initiative project on indigenous PEM Fuel Cell technology development, RIL is playing a major role in scale-up trials of PEM fuel cells after recently concluded successful demonstration of the PEM fuel cell technology in the lab. 6. Are the Emissions/Waste generated by the Company within the permissible limits given by CPCB/SPCB for the financial year being reported? Yes. Our emissions/waste generated reports are regularly submitted to CPCB/SPCB by the Company and no non-conformances have been observed. 7. Number of show cause/legal notices received from CPCB/SPCB which are pending (i.e. not resolved to satisfaction) as on end of Financial Year. There are no pending or unresolved show cause/ legal notices received from CPCB/SPCB as on end of the FY 2012-13. Principle 7 1. Is your Company a member of any trade and chamber or association? If yes, name only those major ones that your business deals with. Yes. RIL is a member of The World Economic Forum, The American Chemistry Council (ACC), Indian Chemical Council (ICC), The Chemicals and Petroleum Manufacturers Association (CPMA), Gulf Petrochemicals & Chemicals Association (GPCA), European Petrochemicals Association (EPCA), Association of Oil and Gas Operators in India (AOGO) and World Business Council for Sustainable Development (WBCSD). 2. Have you advocated/lobbied through above associations for the advancement or improvement of public good? Yes / No; if yes specify the broad areas ( drop box: Governance and Administration, Economic Reforms, Inclusive Development Energy security, Water, Food Security, Sustainable Business Principles, Others) Policies, RIL works closely with the Indian Centre for Plastics in the Environment (ICPE) on a voluntary basis and provide technical and financial support to help the organization plan and implement initiatives identified by the chemical and petrochemical industries. Principle 8 1. Does the Company have specified programmes/ initiatives/projects in pursuit of the policy related to Principle 8? If yes details thereof. RIL has a CSR policy that reflects its objective of economic and social development. It also reflects the Company’s intent to utilise energy resources responsibly and engage with its stakeholders to understand their needs and respond to them accordingly. Further information about the specified programmes and initiatives in pursuit of the policy can be found in the Report on Corporate Social Responsibility on Page No. 49 of the annual report. 2. Are the programmes/projects undertaken foundation/ through team/own external NGO/government structures/any other organization? in-house RIL has instituted registered Trusts and Foundations to cater to the various socio-economic needs of the country. They are as listed below: Reliance Industries Limited 111 Principle 9 1. What percentage of customer complaints/ consumer cases are pending as on the end of financial year? RIL conducts regular Customer Relation Meets (CRM) to educate and appraise customers about all aspects of its products and takes their feedback their concerns. in addition to understanding The Company has a separate framework to deal with customer complaints. As at 31st March 2013, of the customer complaints received during the FY 2012-13, 98.8% were resolved. 2. Does the Company display product information on the product label, over and above what is mandated as per local laws? Yes/No/N.A./ Remarks (additional information) All marketing communication efforts of the Company adhere to the brand standards/ guidelines with regard to visual manifestation, brand promise and relevancy and saliency of the target group. RIL follows all legal statutes with respect to product labelling and display of product information. Is there any case filed by any stakeholder against the Company regarding unfair trade practices, irresponsible advertising and/or anti-competitive behaviour during the last five years and pending as on end of financial year? If so, provide details thereof, in about 50 words or so. Nil 4. Did your Company carry out any consumer survey/ consumer satisfaction trends? Yes. Third-party mystery customer audits, customer satisfaction index and call centre evaluation studies are conducted periodically to ensure fulfilment of the service delivery promise, conformance to internal norms and standards, identification of process improvement areas, and to understand customer attitude and behaviour. After every financial year customer feedback formats are sent to customers and based on the score received from the customers, customer satisfaction index is plotted for the specific products. Other modes of tapping customer feedback are web based customer experience surveys, factory visits for customers and direct one-on-one meeting with the plant personnel. RIL considers customer complaint redressal as an integral part of customer care and customer satisfaction and of prime importance to the Company. l Reliance Rural Development Trust (RRDT) l Dhirubhai Ambani Foundation (DAF) l Reliance Foundation (RF) l Sir Hurkisondas Nurrotumdas Hospital and Research Centre 3. Have you done any impact assessment of your initiative? RIL continuously seeks feedback to understand the impact of its initiatives which also includes visits by its CSR teams on a periodic basis. In addition feedback is also sought from the village heads/ Sarpanch to get an understanding of the impacts of the initiatives and opportunities for improvement. Recently, Reliance Foundation applied for ISO certification for its Bharat India Jodo (BIJ) programme. A team of external auditors conducted a site audit at Netrang cluster and the same was followed by documentation audit. A letter of Recommendation for ISO 9001 Certification has been issued by the auditors. 4. What is your Company's direct contribution to community development projects- Amount in INR and the details of the projects undertaken? 3. Community Development expenditure incurred by RIL is on various projects pertaining to education, healthcare, livelihood support, rural development, heritage conservation, environment, safety etc. RIL’s contribution to community development amounts to ` 351 Crores during FY 2012-13. 5. Have you taken steps to ensure that this community development initiative is successfully adopted by the community? Please explain in 50 words or so. through The Company involves the community in decision- making process, right from the problem identification stage, implementation. The extensive engagement with the community establishes joint ownership of projects. All concerns are amicably addressed and the initiatives are adopted since they are designed as per the identified and prioritized needs of the communities, implemented with the active participation of the communities and progress is jointly evaluated with the community representatives. Regular verification is conducted by teams to ensure that initiatives implemented are sustained while feedback provided by community is incorporated and the learning cycle is mapped for each initiative. 112 Fulfilling India’s Aspirations. With Innovation and Enterprise. Financial Statements & Notes Independent Auditors’ Report To the Members of Reliance Industries Limited Report on the Financial Statements We have audited the accompanying financial statements of Reliance Industries Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2013, the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the Financial Statements Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India including Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 (“the Act”). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Reliance Industries Limited 113 financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: (a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013; (b) In the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and (c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date. Report on Other Legal and Regulatory Requirements 1. As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”) issued by the Central Government of India in terms of Section 227(4A) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order. 2. As required by Section 227(3) of the Act, we report b. that: a. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose 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. The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account. In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in section 211(3C) of the Act; d. c. e. On the basis of the written representations received from the directors as on March 31, 2013, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of Section 274(1)(g) of the Act. For Chaturvedi & Shah Chartered Accountants (Registration No. 101720W) For Deloitte Haskins & Sells Chartered Accountants (Registration No. 117366W) For Rajendra & Co. Chartered Accountants (Registration No. 108355W) D. Chaturvedi Partner Membership No.: 5611 A. Siddharth Partner Membership No.: 31467 A. R. Shah Partner Membership No.:47166 Mumbai Date : April 16, 2013 114 Fulfilling India’s Aspirations. With Innovation and Enterprise. Annexure to Independent Auditors’ Report Referred to in Paragraph 1 under the heading of “Report on other Legal and Regulatory Requirements” 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. 2. 3. b) As explained to us, all the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification. In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected. c) 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. 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. b) 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. 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 ` 20,316 crore and the year-end balance is ` 18,226 crore (including interest free loan of ` 13,944 crore). 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. In respect of the said loans and interest thereon, there are no overdue amounts. d) b) 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. (b) 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. 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. 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. 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. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business. 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. 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 4. 5. 6. 7. 8. 9. Reliance Industries Limited 115 Annexure to Independent Auditors’ Report Referred to in Paragraph 1 under the heading of “Report on other Legal and Regulatory Requirements” of our report of even date Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess, and other statutory dues have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2013 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, 2013 to be credited to Investor Education and Protection Fund of ` 10 crore, which are held in abeyance due to pending legal cases, have not been considered. b) The disputed statutory dues aggregating ` 1,035 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) Period to which the amount relates 1. Central Excise Act, 1944 Excise Duty and Service Tax 17 Various years from 1995-96 to 2010-11 111 Various years from 1991-92 to 2010-11 1 Various years from 1982-83 to 1985-86 60 Various years from 1991-92 to 2009-10 2. Central Sales Tax Act, 1956 and Sales Tax Acts of various states Sales Tax/ VAT and Entry Tax Forum where dispute is pending Commissioner of Central Excise (Appeals) Central Excise & Service Tax Appellate Tribunal High Court Joint/Deputy Commissioner/ Commissioner (Appeals) 450 Various years from 1993-94 to 2008-09 Sales Tax Appellate Tribunal 125 Various years from 1994-95 to 2009-10 High Court 1 2007-08 to 2008-09 Supreme Court 3. Customs Act, 1962 Custom Duty 15 2007-08 255 2007-08 Joint/Deputy Commissioner/ Commissioner (Appeals) Central Excise & Service Tax Appellate Tribunal TOTAL 1,035 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 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 Chartered Accountants (Registration No. 101720W) For Deloitte Haskins & Sells Chartered Accountants (Registration No. 117366W) For Rajendra & Co. Chartered Accountants (Registration No. 108355W) D. Chaturvedi Partner Membership No.: 5611 A. Siddharth Partner Membership No.: 31467 A. R. Shah Partner Membership No.:47166 Mumbai Date : April 16, 2013 116 Fulfilling India’s Aspirations. With Innovation and Enterprise. Reliance Industries Limited balance Sheet as at 31st March, 2013 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 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 Mumbai Date : April 16, 2013 A. Siddharth Partner A.R. Shah Partner K. Sethuraman Company Secretary Note As at 31st March, 2013 (` in crore) As at 31st March, 2012 1 2 1 3 4 5 6 7 8 9 9 9 9 10 11 12 13 14 15 16 17 3,229 1,76,766 3,271 1,62,825 1,79,995 25 1,66,096 - 48,034 12,122 55,205 60,156 10,593 40,324 13,713 4,258 83,286 3,18,511 68,888 2,95,140 88,001 25,722 3,695 4,059 26,979 14,340 1,74,535 1,62,796 27,029 35,955 18,424 39,598 11,089 249 43,012 12,193 11,511 45,787 21,640 4,348 82,962 26,786 13,525 5,591 24,143 21,528 28,366 42,729 11,880 49,547 10,974 480 1,43,976 3,18,511 1,32,344 2,95,140 1 to 36 For and on behalf of the Board M.D. Ambani - Chairman & Managing Director N.R. Meswani } Executive Directors H.R. Meswani P.M.S. Prasad P. K. Kapil R.H. Ambani }Directors M.L. bhakta y.P. Trivedi Dr. D.V. Kapur M.P. Modi Prof. Ashok Misra Prof. Dipak C. Jain Dr. R.A. Mashelkar Reliance Industries Limited Statement of Profit and Loss for the year ended 31st March, 2013 Reliance Industries Limited 117 Note 2012-13 (` in crore) 2011-12 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 Earnings per equity share of face value of ` 10 each Basic and Diluted (in `) 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 Mumbai Date : April 16, 2013 A. Siddharth Partner A.R. Shah Partner K. Sethuraman Company Secretary 18 19 20 21 22 23 24 25 3,60,297 7,998 3,29,904 6,192 3,68,295 3,36,096 3,06,127 502 (3,317) 3,354 3,036 9,465 22,844 3,42,011 26,284 5,244 37 21,003 2,74,814 1,441 (872) 2,862 2,667 11,394 18,040 3,10,346 25,750 5,150 560 20,040 26 64.82 61.21 1 to 36 For and on behalf of the Board M.D. Ambani - Chairman & Managing Director N.R. Meswani } Executive Directors H.R. Meswani P.M.S. Prasad P. K. Kapil R.H. Ambani }Directors M.L. bhakta y.P. Trivedi Dr. D.V. Kapur M.P. Modi Prof. Ashok Misra Prof. Dipak C. Jain Dr. R.A. Mashelkar 118 Fulfilling India’s Aspirations. With Innovation and Enterprise. Reliance Industries Limited Cash Flow Statement for the year 20 12-13 2011-12 A: CASH FLOW FROM OPERATING ACTIVITIES: Net Profit before tax as per Statement of Profit and Loss 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) Net Cash from Operating Activities b: CASH FLOW FROM INVESTING ACTIVITIES: Purchase of Fixed Assets Sale of Fixed Assets / Transfer of Participating Interest Purchase of Investments Sale / Redemption of Investments Movement in Loans and Advances Interest Income Dividend Income Net Cash (used in) Investing Activities 2012-13 26,284 (` in crore) 2011-12 25,750 1 21 13,734 (2,340) 801 (1,635) (10) (4,414) 2,667 (516) (6,130) 3,876 3 34 11,537 (2,072) 1,039 (1,658) (77) (6,245) 3,036 5,594 (6,086) 6,274 5,597 31,881 5,782 37,663 (3) (4,665) 32,995 (15,944) 33 (4,79,071) 4,81,203 (7,546) 6,451 77 (14,797) 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) Cash Flow Statement for the year 2012-13 (Contd.) Reliance Industries Limited 119 2011-12 C: CASH FLOW FROM FINANCING ACTIVITIES: Proceeds from Issue of Share Capital Share Application Money 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) Financing Activities Net Increase in Cash and Cash Equivalents Opening balance of Cash and Cash Equivalents Add: On Amalgamation (` 16,96,263) (Refer Note No. 33) Closing balance of Cash and Cash Equivalents Note : 2012-13 12 25 (3,087) 10,262 (10,306) 1,274 (2,924) (3,505) (8,249) 9,949 39,598 - 49,547 (` in crore) 2011-12 87 - (279) 5,229 (8,456) (2,111) (2,772) (3,163) (11,465) 12,463 27,135 - 39,598 Share application money given to Subsidiary / Associate aggregating to ` NIL (Previous Year ` 935 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 Mumbai Date : April 16, 2013 A. Siddharth Partner A.R. Shah Partner K. Sethuraman Company Secretary For and on behalf of the Board M.D. Ambani - Chairman & Managing Director N.R. Meswani } Executive Directors H.R. Meswani P.M.S. Prasad P. K. Kapil R.H. Ambani }Directors M.L. bhakta y.P. Trivedi Dr. D.V. Kapur M.P. Modi Prof. Ashok Misra Prof. Dipak C. Jain Dr. R.A. Mashelkar 120 Fulfilling India’s Aspirations. With Innovation and Enterprise. 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) Operating Leases: Rentals are expensed with reference to lease terms and other considerations. (i) Finance leases prior to 1st April, 2001: Rentals are expensed with reference to lease terms and other considerations. (ii) Finance leases on or after 1st April, 2001: The lower of the fair value of the assets and present value of the minimum lease rentals is capitalised as fixed assets with corresponding amount shown as lease liability. The principal component in the lease rental is adjusted against the lease liability and the interest component is charged to Profit and Loss account. c) However, rentals referred to in (a) or (b) (i) above and the interest component referred to in (b) (ii) above pertaining to the period upto the date of commissioning of the assets are capitalised. d) All assets given on finance lease are shown as receivables at an amount equal to net investment in the lease. Initial direct costs in respect of lease are expensed in the year in which such costs are incurred. Income from lease assets is accounted by applying the interest rate implicit in the lease to the net investment. E. Intangible Assets Intangible Assets are stated at cost of acquisition 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 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 Reliance Industries Limited 121 SIGNIFICANT ACCOuNTING POLICIES 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. (c) Non monetary foreign currency items are carried at cost. (d) 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. (e) Any income or expense on account of exchange difference either on settlement or on translation is recognised in the Profit and Loss account except in 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. 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. K. 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. L. 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 122 Fulfilling India’s Aspirations. With Innovation and Enterprise. SIGNIFICANT ACCOuNTING POLICIES provided as also provision made for goods lying in bonded warehouses. Sales tax / Value added tax paid is charged to Profit and Loss account. M. 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. (ii) 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. N. 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. O. 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. P. 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. q. 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. R. 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. S. Premium on Redemption of bonds / Debentures Premium on redemption of bonds / debentures, net of tax impact, are adjusted against the Securities Premium Account. T. 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. Reliance Industries Limited 123 Notes on Financial Statements for the year ended 31st March, 2013 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 (500,00,00,000) 100,00,00,000 (100,00,00,000) Equity Shares of ` 10 each Preference Shares of ` 10 each Issued, Subscribed and Paid up: 322,86,63,382 (327,10,59,340) Equity Shares of ` 10 each fully paid up Less: Calls in arrears - by others [` 3,653 (Previous Year ` 3,653)] As at 31st March, 2013 (` in crore) As at 31st March, 2012 5,000 1,000 6,000 5,000 1,000 6,000 3,229 - 3,271 - 3,229 3,229 3,271 3,271 1.1 1.2 1.3 1.4 1.5 TOTAL 162,67,93,078 (162,67,93,078) 6,92,52,623 (12,93,93,183) 45,04,27,345 (45,04,27,345) 17,18,83,624 (17,18,83,624) 4,62,46,280 (36,63,431) Shares were allotted as Bonus Shares in the last five years by capitalisation of Securities Premium and Reserves. Shares were allotted in the last five years pursuant to the various Schemes of amalgamation without payments being received in cash. Shares were allotted on conversion / surrender of Debentures and Bonds, conversion of Term Loans, exercise of warrants, against Global Depository Shares (GDS) and re-issue of forfeited equity shares, since inception. Shares held by Subsidiaries do not have Voting Rights and are not eligible for Bonus Shares Shares were bought back and extinguished in the last five years. 1.6 The details of Shareholders holding more than 5% shares : Name of the Shareholder Life Insurance Corporation of India As at 31st March, 2013 As at 31st March, 2012 No. of Shares % held No. of Shares % held 25,77,59,467 7.09 7.98 23,19,67,257 1.7 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 No. of Shares 327,33,74,008 13,48,763 36,63,431 327,10,59,340 1.8 The Company has reserved issuance of 13,37,43,590 (Previous year 13,39,30,481) 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 not granted any options to the eligible employees [Previous year 68,817 options, 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 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. As at 31st March, 2013 No. of Shares 327,10,59,340 1,86,891 4,25,82,849 322,86,63,382 124 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Financial Statements for the year ended 31st March, 2013 1.9 Share application money pending allotment represents application money received on account of employees stock option scheme. 2. RESERVES AND SuRPLuS Revaluation Reserve As per last Balance Sheet Less: Transferred to Profit and Loss Account (Refer Note No. 9.9) Capital Reserve As per last Balance Sheet Capital Redemption Reserve As per last Balance Sheet Add : On Amalgamation (Refer Note No. 33) 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 : On Amalgamation (Refer Note No. 33) 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 ` 9.0/- (Previous year ` 8.5/-)] Tax on dividend** TOTAL As at 31st March, 2013 (` in crore) As at 31st March, 2012 3,127 2,072 5,467 2,340 1,055 291 3,127 291 4 1 43 50,677 12 50,689 - 3,044 47,645 - - - 4 48 4 50,878 85 50,963 11 275 50,677 - 47,645 1,117 50,677 1,117 1,00,000 18,000 84,000 16,000 1,18,000 1,00,000 7,609 1,116 21,003 29,728 18,000 43 2,628 447 6,514 - 20,040 26,554 16,000 4 2,531 410 8,610 1,76,766 7,609 1,62,825 * Cumulative amount withdrawn on account of Depreciation on Revaluation is ` 2,563 crore. Reliance Industries Limited 125 Notes on Financial Statements for the year ended 31st March, 2013 ** Proposed Dividend on Equity Shares and Tax on Dividend are net of reversal of excess provision of previous year pertaining to Equity Shares bought back before the record date of Dividend, aggregating to ` 17 crore. 3. LONG TERM bORROWINGS Secured Non Convertible Debentures Long Term Maturities of Finance Lease Obligations (Refer Note No. 9.7 and 30) unsecured Bonds Term Loans- from banks Deferred payment liabilities TOTAL (` in crore) As at 31st March, 2013 Current Non Current As at 31st March, 2012 Current Non Current 1,842 147 4,182 22 6,024 168 3,044 20 1,989 4,204 6,192 3,064 9,066 31,951 6 41,023 43,012 - 13,697 3 13,700 17,904 4,564 37,269 9 41,842 48,034 - 6,753 3 6,756 9,820 3.1 Non Convertible Debentures referred above to the extent of: a) b) ` 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 units) of the Company. ` 2,500 crore are secured by way of first mortgage / charge on the immovable properties situated at Jamnagar Complex (other than SEZ units) of the Company. c) ` 1,300 crore are secured by way of first mortgage / charge on all the properties situated at Hazira Complex d) e) f) g) and at Patalganga 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. ` 30 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. 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% Zero Coupon Debentures 2014-15 133 - 250 - 26 2015-16 133 - - - 31 2016-17 133 - - - - 2017-18 133 - - - - 2018-19 133 - - 370 - 3.3 Finance Lease obligations are secured against leased assets. (` in crore) 2020-21 - 500 - - - 126 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Financial Statements for the year ended 31st March, 2013 3.4 Maturity profile and Rate of interest of Bonds are as set out below : Maturity Profile (` in crore) 2015-16 932 - - - - - - - - - - - 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% 2096-97 - - - - - - - - - 68 - - 3.5 Bonds include, 5.875% Senior Perpetual Notes (the “Notes”) of ` 4,343 crore. The Notes have no fixed maturity date and the Company will have an option, from time to time, to redeem the Notes, in whole or in part, on any semi- annual interest payment date on or after February 5, 2018 at 100% of the principal amount plus accrued interest. Maturity Profile of Unsecured Term Loans are as set out below : 2016-17 - 271 879 - 706 - - - - - 355 - 2018-19 - - - 206 - 923 - - - - - - 2046-47 - - - - - - - - - - - 52 2026-27 - - - - - - - 184 120 - - - 2027-28 - - - - - - 27 - - - - - 3.6 Term Loans- from banks 1-2 years 3,637 4. DEFERRED TAx LIAbILITy (Net) 31st March, 2012 Deferred Tax Liability Related to fixed assets Deferred Tax Assets Disallowances under the Income Tax Act, 1961 TOTAL 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/Packing Credit Rupee Loans TOTAL Maturity Profile 2-3 years 6,525 3-4 years 8,854 beyond 4 years 12,935 (` in crore) (` in crore) As at 31st March, 2013 As at 31st March, 2012 12,293 100 12,193 12,207 85 12,122 As at 31st March, 2013 (` in crore) As at 31st March, 2012 406 27 738 19 433 757 10,978 100 9,736 100 11,078 11,511 9,836 10,593 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. Reliance Industries Limited 127 Notes on Financial Statements for the year ended 31st March, 2013 6. TRADE PAyAbLES Micro, Small and Medium Enterprises Others TOTAL (` in crore) As at 31st March, 2013 66 45,721 45,787 As at 31st March, 2012 33 40,291 40,324 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 7. OTHER CuRRENT LIAbILITIES 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 Other Payables * TOTAL * # (` in crore) As at 31st March, 2013 - - - - - - - As at 31st March, 2012 - - - - - - - (` in crore) As at 31st March, 2013 17,882 22 As at 31st March, 2012 9,800 20 340 152 1 1 1,430 1,812 21,640 424 129 1 1 1,189 2,149 13,713 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 ` 10 crore (Previous Year ` 9 crore) which is held in abeyance due to legal cases pending. 8. SHORT TERM PROVISIONS Provisions for Employee Benefits (Refer Note No. 22.1) Proposed dividend Tax on dividend Provision for Wealth tax Other Provisions # TOTAL (` in crore) As at 31st March, 2013 126 As at 31st March, 2012 191 2,643 449 44 1,086 4,348 2,531 410 79 1,047 4,258 128 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Financial Statements for the year ended 31st March, 2013 # 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, 2012 of ` 326 crore as per the estimated pattern of despatches. During the year, ` 326 crore was utilised for clearance of goods. Provision recognised under this class for the year is ` 336 crore which is outstanding as on 31st March, 2013. Actual outflow is expected in the next financial year. The Company had recognised customs duty liability on goods imported of ` 704 crore as at 31st March, 2012. During the year, further provision of ` 339 crore was made and sum of ` 296 crore was reversed on fulfilment of export obligation. Closing balance on this account as at 31st March, 2013 is ` 747 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. 9. FIxED ASSETS Description Gross block As at 01-04-2012 Additions / Adjustment Deductions/ Adjustments As at 31-03-2013 As at 01-04-2012 Depreciation / Amortisation Deductions/ Adjustments For the year (` in crore) Net block As at 31-03-2013 As at 31-03-2013 As at 31-03-2012 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 1,577 1,221 7,792 1,34,993 3,582 6,459 524 316 386 46 1,56,896 318 10 328 1,57,224 3,403 488 35,179 9,199 48,269 2,05,493 2,21,253 45 89 730 3,066 9 106 18 90 1 - 4,154 - - - 4,154 - 6 4,091 - 4,097 8,251 12,98 1 - 1 6 486 - 15 20 29 - - 557 - - - 557 - 13 - 20 33 590 28,741 1,622 1,309 8,516 1,37,573 3,591 6,550 522 377 387 46 1,60,493 318 10 328 1,60,821 3,403 481 39,270 9,179 52,333 2,13,154 2,05,493 242 - 2,568 62,319 1,564 1,556 336 171 254 23 69,033 180 10 190 69,223 1,725 428 19,525 869 22,547 91,770 78,546 54 - 518 7,950 164 314 35 50 14 4 9,103 24 - 24 9,127 185 11 2,742 75 3,013 12,140 13,734 - - 2 435 - 14 19 21 - - 491 - - - 491 - 13 - - 13 504 510 296 - 3,084 69,834 1,728 1,856 352 200 268 27 77,645 204 10 214 77,859 1,910 426 22,267 944 25,547 1,03,406 91,770 1,326 1,309 5,432 67,739 1,863 4,694 170 177 119 19 82,848 114 - 114 82,962 1,493 55 17,003 8,235 26,786 1,09,748 1,13,723 13,525 5,591 1,335 1,221 5,224 72,674 2,018 4,903 188 145 132 23 87,863 138 - 138 88,001 1,678 60 15,654 8,330 25,722 1,13,723 3,695 4,059 $ * 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 : Cost of shares in Co-operative Housing Societies ` 1 crore (Previous Year ` 1 crore). ` 5 crore (Previous Year ` 5 crore) in respect of which conveyance is pending. i) ii) iii) ` 93 crore (Previous Year ` 93 crore) in shares of Companies / Societies with right to hold and use certain area of Buildings. Notes on Financial Statements for the year ended 31st March, 2013 Reliance Industries Limited 129 9.3 Intangible assets - Others include : i) Jetties amounting to ` 812 crore (Previous Year ` 812 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. ` 8,367 crore (Previous Year ` 8,387 crore) in preference shares of subsidiaries and lease premium paid with right to hold and use Land and Buildings. ii) 9.4 Capital Work-in-Progress and Intangible Assets under development include : i) ii) ` 2,795 crore (Previous Year ` 2,320 crore) on account of project development expenditure. ` 4,685 crore (Previous Year ` 933 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, Capital Work-in-Progress, Intangible Assets - Development Rights and Intangible Assets under development includes ` 5,070 crore (net loss) [Previous Year ` 7,558 crore (net loss)] on account of exchange difference during the year. 9.7 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, 2013 are as follows: (` in crore) Total Minimum Lease Payments outstanding As at 31st March 2013 37 147 36 220 2012 36 146 73 255 Future interest on Outstanding Lease Payments 2012-13 15 35 2011-12 16 44 1 51 7 67 Present value of Minimum Lease Payments As at 31st March 2013 22 112 35 169 2012 20 102 66 188 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, 2013, included under Capital work-in-progress and Intangible Assets under development) 2012-13 2,320 (` in crore) 2011-12 1,886 98 385 37 430 Opening Balance Add: Transferred from Profit and Loss Account (Refer Note No. 25) Interest Capitalised Less: Closing balance Project Development Expenses Capitalised during the year 467 2,353 33 2,320 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 ` 2,072 crore (Previous Year ` 2,340 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. 9.10 Additions for the year includes freehold land ` 56 crore, buildings ` 674 crore, plant and machinery ` 1,189 crore, furniture and fixtures ` 12 crore, vehicles ` 10 crore and software ` 1 crore on amalgamation of Reliance Jamnagar Infrastructure Limited with the Company. Accumulated depreciation of ` 603 crore on the above assets has included in depreciation for the year. (Refer Note No. 33) 483 2,803 8 2,795 130 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Financial Statements for the year ended 31st March, 2013 10. NON-CuRRENT INVESTMENTS (Long Term Investments) Trade Investments In Equity Shares - unquoted, fully paid up 1,00,00,000 (1,00,00,000) Petronet India Limited of ` 10 each In Equity Shares of Associate Companies - unquoted, fully paid up 64,29,20,000 (64,29,20,000) 62,63,125 (62,63,125) 11,08,500 (11,08,500) 52,00,000 (26,00,000) Gujarat Chemical Port Terminal Company Limited of ` 1 each Indian Vaccines Corporation Limited of ` 10 each Reliance Europe Limited of Sterling Pound 1 each Reliance Utilities and Power Private Limited Class ‘A’ shares of ` 1 each [` 40,40,000 (Previous Year ` 19,90,000)] Reliance Utilities Private Limited Class ‘A’ shares of ` 1 each [` NIL (Previous Year ` 20,50,000)] - (26,00,000) As at 31st March, 2013 (` in crore) As at 31st March, 2012 10 10 64 1 4 - - 69 10 10 64 1 4 - - 69 In Preference Shares of Associate Company - unquoted, fully paid up 50,00,00,000 (50,00,00,000) 9% Non-Cumulative Redeemable Preference 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 (68,60,064) Reliance Industrial Infrastructure Limited of ` 10 each In Equity Shares of Associate Company - unquoted, fully paid up 22,500 (22,500) Reliance LNG Limited of ` 10 each [` 2,25,000 (Previous Year ` 2,25,000)] 2,000 2,000 2,000 2,000 2,079 2,079 16 16 - - 16 16 - - Notes on Financial Statements for the year ended 31st March, 2013 Reliance Industries Limited 131 Reliance Jio Infocomm Limited of `10 each Reliance Exploration & Production DMCC of AED 1000 each Reliance Global Business B.V. of Euro 0.01 each [` 1,25,400 (Previous Year ` 1,25,400)] Reliance Industrial Investments and Holdings Limited of `10 each Reliance Industries (Middle East) DMCC of AED 1000 each Reliance Jamnagar Infrastructure Limited of ` 10 each Reliance Retail Limited of `10 each In Equity Shares of Subsidiary Companies - unquoted, fully paid up 4,79,76,90,000 (4,79,76,90,000) - (1,76,200) 2,00,000 (2,00,000) 14,75,04,400 (14,75,04,400) 42,450 (42,450) - (10,00,00,000) - (5,22,00,00,000) 20,20,200 (20,20,200) 26,91,150 (26,91,150) 65,50,001 (59,00,001) 50,000 (50,000) Reliance Strategic Investments Limited of ` 10 each Reliance Ventures Limited of ` 10 each RIL (Australia) Pty Limited of Aus $ 1 each Reliance Energy Generation and Distribution Limited of ` 10 each [` 5,00,000 (Previous Year ` 5,00,000)] Reliance Commercial Associates Limited of ` 10 each Reliance Gas Pipelines Limited of ` 10 each [` 5,01,256 (Previous Year ` NIL)] 5,66,70,00,000 (-) 50,000 (-) In Preference shares of Subsidiary Companies - unquoted, fully paid up 5,92,70,31,111 (6,60,77,27,511) 4,02,800 (4,02,800) Reliance Global Business B.V. Class ‘A’ Shares of Euro 0.01 each 9% Non Cumulative Compulsorily Convertible Preference Shares of Reliance Strategic Investments Limited of ` 1 each 5% Non Cumulative Compulsorily Convertible Preference Shares of Reliance Industries (Middle East) DMCC of AED 1000 each 63,436 (3,54,156) As at 31st March, 2013 (` in crore) As at 31st March, 2012 4,798 4,798 - - 148 46 - - 2 2,351 25 - 5,667 - 211 - 148 46 100 5,220 2 2,351 22 - - - 13,037 12,898 13,053 12,914 382 113 85 426 113 474 132 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Financial Statements for the year ended 31st March, 2013 - (24,82,316) - (18,50,000) - (62,000) - (2,58,00,00,000) 2,64,70,00,000 (-) 5% Non Cumulative Compulsorily Convertible Preference Shares of Reliance Exploration & Production DMCC of AED 1000 each 10% Non-Cumulative Optionally Convertible Preference Shares of Reliance Jamnagar Infrastructure Limited of ` 10 each Reliance Netherlands B.V. Class ‘A’ Shares of Euro 1 each [` NIL (Previous Year ` 37,57,820)] 9% Cumulative Optionally Convertible Preference Shares of Reliance Retail Limited of ` 10 each 9% Cumulative Redeemable Preference Shares of Reliance Jio Infocomm Limited of ` 10 each In Preference shares of Subsidiary Company - unquoted, partly paid up - (1,37,000) Reliance Netherlands B.V. Class ‘A’ Shares of Euro 1 each (Euro 0.60 each paid up) In Debentures of Subsidiary Companies - unquoted, Fully paid up 2,79,90,000 (2,79,90,000) 8,83,143 (8,83,143) 0% Unsecured Convertible Debentures of Reliance Industrial Investments and Holdings Limited of ` 100 each 0% Unsecured Convertible Redeemable Debentures of Reliance Industrial Investments and Holdings Limited of ` 5,000 each In Government Securities-unquoted 6 Years National Savings Certificate (Deposited with Sales Tax Department and other Government Authorities ) [` 1,69,920 (Previous Year ` 2,43,420)] In Government Securities-quoted 8.33% GOI 2026 In Fixed Maturity Plan - quoted fully paid up As at 31st March, 2013 - - - - 2,647 3,227 - - 280 442 (` in crore) As at 31st March, 2012 3,121 925 - 2,580 - 7,639 1 1 3,227 7,640 280 442 722 722 - 650 - - 2,50,00,000 (5,00,00,000) 2,50,00,000 (-) 19,00,00,000 (47,00,00,000) Axis Fixed Term Plan - (Series 21/22/34) - Growth Baroda Pioneer Fixed Maturity Plan - Series C - Growth Birla Sunlife Fixed Term Plan - (Series ES/EV/EY/FC/GA/GB/GF) - Growth 25 25 190 50 - 470 Notes on Financial Statements for the year ended 31st March, 2013 Reliance Industries Limited 133 As at 31st March, 2013 3,00,00,000 (-) 40,00,00,000 (40,50,00,000) 17,00,00,000 (20,30,00,000) 35,20,00,000 (54,70,00,000) 1,50,00,000 (4,50,00,000) 86,50,00,000 (71,50,00,000) 7,00,00,000 (19,20,00,000) - (3,50,00,000) 34,50,00,000 (15,00,00,000) 29,50,00,000 (27,00,00,000) 12,50,00,000 (-) 6,50,00,000 (3,50,00,000) 45,00,00,000 (-) 12,00,00,000 (17,30,00,000) 38,00,00,000 (16,00,00,000) 10,00,00,000 (4,00,00,000) 25,00,00,000 (13,50,00,000) 14,00,00,000 (-) BNP Paribas Fixed Term Fund - Series 24 A - Growth DSP Blackrock Fixed Maturity Plan - (Series 37/38/43/88/89/91/93) - Growth DWS Fixed Maturity Plan - (Series 6/7/9/10/26/28/30) - Growth HDFC Fixed Maturity Plan - Growth (Series 21/23/24) HSBC Fixed Term Plan - (Series 86/90) - Growth ICICI Prudential Fixed Maturity Plan - Cumulative (Series 62/63/65/66/67) IDFC Fixed Maturity Plan - (Series 7/8/11/14/65) - Growth India Bulls Fixed Maturity Plan - Growth JP Morgan Fixed Maturity Plan - (Series 6/12/13/16/18) - Growth Kotak Fixed Maturity Plan - (Series 76/80/82/97/98/99/101/102/103) - Growth L&T Fixed Maturity Plan - VII - Growth LIC Nomura MF Fixed Maturity Plan - (Series 52/56/58) - Growth Reliance Fixed Horizon Fund - XXII/XXIII (Series 5/9/33) - Growth Religare Fixed Maturity Plan - (Series XIII/XIV/XVII/XVIII) - Growth SBI Debt Fund - (Series 2/12/13/14/15/25) - Growth Sundaram Fixed Term Plan - (Series CQ/DC/DF/DH) - Growth Tata Fixed Maturity Plan - (Series 39/40/42) - Growth UTI Fixed Income Fund - (Series XIII - III / XIV - VII) - Growth 30 400 170 352 15 865 70 - 345 295 125 65 450 120 380 100 250 140 (` in crore) As at 31st March, 2012 - 405 203 547 45 715 192 35 150 270 - 35 - 173 160 40 134 - 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 4,412 22,064 24,143 5,078 5,329 19,065 3,624 24,900 26,979 3,640 3,945 23,339 134 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Financial Statements for the year ended 31st March, 2013 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 * # (` in crore) As at 31st March, 2013 1,208 1,469 18,308 475 68 21,528 As at 31st March, 2012 1,190 1,741 10,243 1,100 66 14,340 Includes Loans to Employees. Includes ` NIL (Previous Year ` 42 crore) to Reliance Haryana SEZ Limited, ` 2 crore (Previous Year ` NIL) to Reliance Industrial Infrastructure Limited. 11.1 Loans and Advances in the nature of Loans given to Subsidiaries : A) Loans and Advances in the nature of Loans Name of the Company Sr No. As at 31st March, 2013 As at 31st March, 2012 1. Reliance Industrial Investments and Subsidiary 17,306 9,622 (` in crore) Maximum balance during the year 19,135 Holdings Limited* Subsidiary 2. Reliance Ventures Limited Subsidiary 3. Reliance Strategic Investments Limited 4. Reliance Retail Limited Subsidiary 5. Reliance Exploration & Production DMCC Subsidiary 6. Reliance Brands Limited Subsidiary * Excluding Debentures of ` 722 crore (Previous Year ` 722 crore) - - 920 71 11 - - 617 - - 1,767 2,421 1,181 72 11 (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 ` 13,944 crore paid to Reliance Industrial Investments and Holdings Limited. b) (c) Loans to employees as per Company’s policy are not considered. Investment by the loanee in the shares of the Company (i) *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 Reliance Commercial Land & Infrastructure Limited Reliance Global Business B.V. Reliance Gas Corporation Limited No. of Shares 4,30,10,000 18,00,000 50,000 Notes on Financial Statements for the year ended 31st March, 2013 Reliance Industries Limited 135 Reliance Universal Enterprises Limited Indiawin Sports Private Limited Reliance Corporate Services Limited Reliance Industries Investment and Holding Limited Reliance Security Solutions Limited Mark Project Services Private Limited GenNext Innovation Ventures Limited Kanhatech Solutions Limited Reliance Sibur Elastomers Private Limited Reliance Payment Solutions Limited Reliance Exploration & Production DMCC Sr No. Name of the Company 4 5 6 7 8 9 10 11 12 13 14 In Preference Shares : Sr No. Name of the Company 1 2 3 Reliance Industries Investment and Holding Limited Reliance Jio Infocomm Limited Reliance Exploration & Production DMCC (iii) Investment by Reliance Exploration & Production DMCC in Subsidiaries (iv) (v) Gulf Africa Petroleum Corporation Central Park Enterprises DMCC In Equity Shares : Sr No. Name of the Company 1 2 Investment by Reliance Retail Limited in Subsidiaries in Equity Shares: Sr No. Name of the Company Reliance Fresh Limited 1 Reliance Retail Finance Limited 2 Reliance Retail Insurance Broking Limited 3 Reliance Financial Distribution and Advisory Services Limited 4 Reliance-GrandOptical Private Limited 5 Investment by Reliance brands Limited in Subsidiaries in Equity Shares: Sr No. Name of the Company 1 2 3 Reliance Style Fashion India Private Limited Reliance Styles India Limited Reliance Lifestyle Holdings Limited No. of Shares 38,55,000 26,50,000 10,000 50,000 50,000 5,000 50,000 72,00,000 8,83,86,308 20,00,000 1,76,200 No. of Shares 32,12,300 12,50,00,000 13,79,816 No. of Shares 16,720 367 No. of Shares 10,50,000 20,20,000 40,00,000 50,000 50,000 No. of Shares 10,10,000 50,000 50,000 11.2 (i) Assets given on finance lease on or after 1st April, 2001 Particulars Total Not later than one year Later than one year and not later than five years (` in crore) Later than five years Gross Investment Less: Unearned Finance Income Present Value of Minimum Lease Rental 2012-13 2011-12 2012-13 2011-12 2012-13 2011-12 2012-13 2011-12 - - 21 1 17 1 3 - 3 - 4 - - - - - 3 20 3 16 - 4 - - (ii) General Description of Lease terms: Lease rentals are charged on the basis of agreed rate of interest. • • Assets are given on lease for a period of five years. 136 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Financial Statements for the year ended 31st March, 2013 As at 31st March, 2013 (` in crore) As at 31st March, 2012 12. CuRRENT INVESTMENTS Investment in Government Securities - quoted 7.59% GOI 2016 8.20% GOI 2025 8.33% GOI 2026 8.97% GOI 2030 Investment in Debentures or bonds - quoted, Fully Paid up Axis Bank Limited CitiFinancial Consumer Finance India Limited EXIM Bank of India 5 278 102 149 - - 30 - (250) - (1,000) 300 (1,250) 38,200 (18,387) 6,500 (10,750) 15,095 (15,095) 42,63,562 (32,62,862) 5,150 (5,550) 7,250 (3,500) 49,44,752 (49,44,752) 42,74,393 (42,76,093) 40 (920) 595 (450) - (550) 650 (250) 1,320 (1,370) Housing Development Finance Corporation Limited 3,828 Infrastructure Development Finance Company Limited India Infrastructure Finance Company Limited Indian Railway Finance Corporation Limited LIC Housing Finance Limited National Bank for Agriculture and Rural Development National Highways Authority of India Power Finance Corporation Limited Power Grid Corporation of India Limited Rural Electrification Corporation Limited Steel Authority of India Limited Tata Steel Limited Tata Power Company Limited 647 149 521 515 726 494 688 5 59 - 58 133 5 - - - 534 5 25 98 120 1,822 1,060 149 350 545 349 494 858 112 44 53 26 142 Investment in Debentures or bonds - unquoted, Fully Paid up Tata Sons Limited 3,000 (-) 7,853 300 6,247 - Investment in Fixed Maturity Plan - quoted, Fully Paid up 5,00,00,000 (6,50,00,000) Axis Fixed Term Plan - (Series 15/16/21/22) - Growth 50 65 Notes on Financial Statements for the year ended 31st March, 2013 Reliance Industries Limited 137 As at 31st March, 2013 (` in crore) As at 31st March, 2012 2,50,00,000 (1,20,00,000) 12,00,00,000 (-) 57,50,00,000 (61,00,00,000) 1,50,00,000 (-) 5,00,00,000 (-) - (10,00,00,000) 53,00,00,000 (41,00,00,000) 32,80,00,000 (14,30,00,000) 5,00,00,000 (-) 62,70,00,000 (44,00,00,000) 4,50,00,000 (-) 88,00,00,000 (39,00,00,000) - (5,00,00,000) 2,98,46,064 (12,04,25,008) 3,00,00,000 (-) 9,96,19,002 (-) 2,50,00,000 (-) 44,30,00,000 (15,50,00,000) 12,00,00,000 (-) 3,50,00,000 (-) 21,50,00,000 (10,50,00,000) 36,00,00,000 (23,00,00,000) Baroda Pioneer Fixed Maturity Plan - (Series A/2) - Growth Birla Sun Life Fixed Term Plan - (Series FM/FO/FP) - Dividend Birla Sun Life Fixed Term Plan - (Series DB/DL/DN/DO/DQ/ DS/ES/EV/EW/EY/FA/FC/FD/FM/FO/FP/HD)- Growth Birla Sunlife Interval Income Fund - Annual Plan 5 - Growth BNP Paribas Fixed Term Fund Series 25A - Growth Canara Robeco Fixed Maturity Plan - (Series 6 / 7) - Growth DSP Blackrock Fixed Maturity Plan - (Series 7/10/12/16/18/37/38/39/43/44/90/94) - Growth DWS Fixed Maturity Plan - (Series 6/7/9/10/11/18/27/29/90/92) - Growth HDFC Annual Interval Fund - Series 1 - Growth HDFC Fixed Maturity Plan (Series XVI/XVIII/XIX/XXI) - Growth HSBC Fixed Term Series 86 - Growth ICICI Prudential Fixed Maturity Plan (Series 54/59/62/63/67) - Cumulative ICICI Prudential Fixed Maturity Plan Series 55 - Dividend ICICI Prudential Interval Fund Annual Interval Plan - I Institutional Cumulative ICICI Prudential Interval Fund Series VI Annual Interval Plan - C - Growth ICICI Prudential Long Term Plan Premium Plus - Annual Dividend IDBI Fixed Maturity Plan Series - III - Growth IDFC Fixed Maturity Plan - (Series 7/8/12/13/52/64/65/66/78/79) - Growth IDFC Series Interval Fund - (Series I/II) - Growth Indiabulls Fixed Maturity Plan - Growth JP Morgan India Fixed Maturity Plan - (Series 6/8/17) - Growth Kotak Fixed Maturity Plan (Series 57/60/62/76/80/82/83/100) - Growth 25 120 575 15 50 - 530 328 50 627 45 880 - 32 30 100 25 443 120 35 215 360 12 - 610 - - 100 410 143 - 440 - 390 50 130 - - - 155 - - 105 230 138 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Financial Statements for the year ended 31st March, 2013 As at 31st March, 2013 (` in crore) As at 31st March, 2012 4,00,00,000 (-) 14,50,00,000 (-) 11,00,00,000 (-) 24,80,00,000 (6,00,00,000) 14,00,00,000 (-) 53,00,00,000 (76,50,00,000) 6,50,00,000 (2,20,00,000) 13,50,00,000 (24,00,00,000) 5,49,80,083 (6,66,98,706) 13,00,00,000 (2,61,12,073) 22,50,00,000 (-) L&T Fixed Maturity Plan - VII - Growth LIC Nomura MF Fixed Maturity Plan (Series 52/53/54/60/61) - Growth Reliance Fixed Horizon Fund - XXIII - Series 6 - Growth Religare Fixed Maturity Plan - (Series VIII/IX/XIII/XIV/XVII/XVIII) - Growth SBI Debt Fund (Series 5/7) - Dividend SBI Debt Fund (Series 1/6/7/11/12/13/17/18/19/23/24) - Growth Sundaram Fixed Term Plan (Series BK/BN/CQ/ DG) - Growth Tata Fixed Maturity Plan (Series 34/36/37/39/40) - Growth UTI Fixed Income Interval Fund - Annual Interval Plan (Series - II/III) - Institutional Growth UTI Fixed Term Income Fund Series IX / XII - Dividend UTI Fixed Term Income Fund Series XIV - V/VI/VII - Growth Investment in Mutual Fund - unquoted 11,08,67,422 (-) 1,31,48,48,855 (41,19,71,606) 5,56,20,512 (-) 2,31,91,812 (-) 4,59,45,325 (-) 5,96,310 (-) 11,14,37,619 (-) 48,23,954 (-) 11,66,82,484 (-) 1,04,54,867 (-) 4,66,90,013 (-) Axis Short Term Fund - Institutional Growth Birla Sunlife Dynamic Bond Fund - Retail - Growth Birla Sunlife Short Term Fund - Growth Canara Robeco Short Term Fund - Regular Growth Canara Robeco Short Term Institutional Growth Fund DSP Black Rock Liquidity Fund - Institutional Plan Growth DSP BlackRock Short Term Fund - Growth DSP BlackRock Strategic Bond Fund -Institutional Plan - Growth DWS GILT Fund - Regular Plan - Growth DWS Insta Cash Plus Fund - Super Institutional Plan - Bonus DWS Money Plus Fund - Regular Plan (Principle Units) - Bonus 40 145 110 248 140 530 65 135 70 130 225 135 2,418 225 30 60 100 210 625 150 - 46 - - - 60 - 765 22 240 83 26 - 6,493 4,036 - 730 - - - - - - - - - Notes on Financial Statements for the year ended 31st March, 2013 Reliance Industries Limited 139 As at 31st March, 2013 (` in crore) As at 31st March, 2012 14,48,86,484 (2,48,38,796) 12,93,69,261 (3,77,86,469) 60,38,424 (-) 19,73,54,869 (-) 14,69,19,109 (-) 22,67,48,577 (-) 86,58,009 (-) 25,68,76,110 (-) 22,68,83,560 (-) 16,70,54,915 (-) 3,46,29,245 (-) 42,70,29,582 (3,99,55,814) 14,42,759 (-) 4,39,26,695 (-) 2,33,10,265 (-) 42,82,45,478 (-) 9,99,03,094 (-) 1,75,479 (-) 23,42,26,669 (-) 10,38,13,700 (-) 46,01,17,659 (-) 11,10,88,159 (-) 8,84,33,460 (-) DWS Premier Bond Fund - Premium Plus Plan - Growth DWS Short Maturity Fund - Premium Plus Growth DWS Treasury Fund - Cash - Regular Plan - Bonus HDFC Short Term Opportunities Fund - Growth HDFC Floating Rate Income Fund - Long Term Plan - Growth HDFC High Interest Fund - Short Term Plan - Growth HDFC Liquid Fund Growth HDFC Medium Term Opportunities Fund - Growth HDFC Short Term Plan - Growth HSBC Income Fund Short Term Institutional Plus Growth ICICI Prudential Gilt Treasury Plan - Growth ICICI Prudential Institutional Short Term Plan - Cumulative Option ICICI Prudential Liquid - Growth IDBI Short Term Bond Fund - Growth IDFC - SSIF - Medium Term - Plan - Growth IDFC - SSIF - Short Term - Plan D - Growth IDFC Banking Debt Fund - Regular Plan - Growth IDFC Cash Fund - Growth - (Regular Plan) IDFC Super Saver Income Fund -Medium Term - Plan B - Growth J P Morgan India Short term Income Fund - Growth J P Morgan India Treasury Fund - Direct Plan - Bonus 150 147 59 240 300 500 20 305 485 180 100 975 25 50 45 625 100 25 285 125 700 JM High Liquidity Fund - Bonus Option - Bonus Units 109 Kotak Bond (Short Term) - Growth 185 25 40 - - - - - - - - - 85 - - - - - - - - - - - 140 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Financial Statements for the year ended 31st March, 2013 As at 31st March, 2013 7,51,00,293 (-) 1,17,585 (7,37,24,677) 5,81,04,402 (-) 4,70,53,586 (-) 12,02,16,390 (-) 13,27,54,784 (-) 18,67,56,236 (-) 52,63,28,065 (-) 1,90,032 (-) 18,37,26,275 (-) 4,32,75,524 (-) 3,02,49,315 (-) 9,21,73,180 (-) 1,94,65,573 (-) 37,23,783 (-) 1,90,537 (-) 30,35,68,335 (-) 20,30,859 (-) L & T - Short Term Opportunities Fund - Growth LIC Nomura MF Liquid Fund - Growth DWS Treasury Fund - Investment - Bonus Morgan Stanley Short Term Bond Fund - Institutional Plus Growth Reliance Income Fund - Growth - Bonus Option Religare Active Income Fund - Growth Religare Short Term Fund - Growth SBI Dynamic Bond Fund - Growth SBI Premier Liquid Fund - Growth SBI Short Term Debt Fund - Growth Sundaram Flexible Fund Short - Term Plan - Growth Sundaram Monthly Income Plan MOD Bonus (Principal Units) Tata Income Fund Plan A - Appreciation Option - Bonus TATA Short Term Bond Fund Plan A - Growth UTI Floating Rate Fund - STP - Growth UTI Money Market Fund - Institutional Plan - Growth UTI Short Term Income Fund Institutional - Growth Option UTI Treasury Advantage Fund - Institutional Plan 80 25 75 60 131 175 285 725 35 235 80 34 97 40 700 25 400 250 (` in crore) As at 31st March, 2012 - 141 - - - - - - - - - - - - - - - - Investment in Certificate of Deposits with Scheduled banks - unquoted Total Current Investments Aggregate amount of quoted investments Market Value of quoted investments Aggregate amount of unquoted investments 13,186 - 28,366 14,880 15,460 13,486 1,021 15,720 27,029 10,288 10,453 16,741 Notes on Financial Statements for the year ended 31st March, 2013 Reliance Industries Limited 141 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, 2013 7,882 13,820 6,361 10,819 3,794 53 42,729 As at 31st March, 2013 41 11,839 11,880 As at 31st March, 2013 740 15 48,792 49,547 (` in crore) As at 31st March, 2012 8,342 11,008 5,274 7,944 3,333 54 35,955 (` in crore) As at 31st March, 2012 14 18,410 18,424 (` in crore) As at 31st March, 2012 875 14 38,709 39,598 # * Balance with Banks includes Unclaimed Dividend of ` 152 crore (Previous Year ` 129 crore) Fixed deposits with banks include deposits of ` 13,173 crore (Previous Year ` 6,860 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, 2013 3,674 (` in crore) As at 31st March, 2012 4,169 2,549 399 4,352 10,974 1,525 358 5,037 11,089 * # 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. 17. OTHER CuRRENT ASSETS Interest accrued on Investment TOTAL As at 31st March, 2013 480 480 (` in crore) As at 31st March, 2012 249 249 142 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Financial Statements for the year ended 31st March, 2013 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 [(` NIL (Previous Year ` 14,64,610)] Other non operating income * TOTAL 2012-13 3,71,021 98 3,71,119 10,822 3,60,297 2012-13 2,73,790 88,108 8,173 950 3,71,021 2012-13 (` in crore) 2011-12 3,39,721 71 3,39,792 9,888 3,29,904 (` in crore) 2011-12 2,45,335 80,625 12,620 1,141 3,39,721 (` in crore) 2011-12 892 460 4,893 74 3 1,234 424 - 431 109 3,874 6,245 4,414 6 4 77 10 1,060 575 - 1,658 18 7,998 1,635 133 6,192 * Other non operating income includes income from finance lease of ` 1 crore (Previous Year ` 3 crore). 20. COST OF MATERIALS CONSuMED Imported Indigenous TOTAL 20.1 PARTICuLARS OF MATERIALS CONSuMED Particulars Crude Oil Others TOTAL ` in crore 2,77,824 28,303 3,06,127 2012-13 % of Consumption 90.75 9.25 100.00 ` in crore 2,51,583 23,231 2,74,814 2012-13 2,79,316 26,811 3,06,127 2011-12 % of Consumption 91.55 8.45 100.00 (` in crore) 2011-12 2,53,997 20,817 2,74,814 Reliance Industries Limited 143 Notes on Financial Statements for the year ended 31st March, 2013 21. CHANGES IN INVENTORIES OF FINISHED GOODS, STOCK-IN-PROCESS AND STOCK-IN-TRADE 10,872 6,361 7,998 5,274 13,272 644 Inventories (at close) Finished Goods / Stock-in-Trade Stock-in-Process Inventories (at commencement) Finished Goods / Stock-in-Trade Stock-in-Process Add: on Amalgamation (Refer Note No. 33) TOTAL 22. EMPLOyEE bENEFITS ExPENSE Salaries and Wages Contribution to Provident and other funds Staff Welfare Expenses TOTAL 7,998 5,274 7,491 4,909 12,400 - (` in crore) 2011-12 13,272 12,400 (872) (` in crore) 2011-12 2,433 215 214 2,862 2012-13 17,233 13,916 (3,317) 2012-13 2,925 218 211 3,354 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 : Employer’s Contribution to Provident Fund Employer’s Contribution to Superannuation Fund Employer’s Contribution to Pension Scheme 2012-13 91 15 19 (` in crore) 2011-12 80 15 15 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 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. 144 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Financial Statements for the year ended 31st March, 2013 I) Reconciliation of opening and closing balances of Defined Benefit Obligation (` in crore) Defined Benefit obligation at beginning of year On Amalgamation (Refer Note No. 33) Current Service Cost Interest Cost Actuarial (gain) / loss Benefits paid Defined Benefit obligation at year end Gratuity (Funded) Leave Encashment (unfunded) 2012-13 436 2 31 34 26 (29) 500 2011-12 383 - 27 32 17 (23) 436 2012-13 137 1 9 9 25 (53) 128 2011-12 179 - 8 11 39 (100) 137 II) Reconciliation of opening and closing balances of fair value of Plan Assets Fair value of Plan assets at beginning of year On Amalgamation (Refer Note No. 33) 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 (` in crore) Gratuity (Funded) 2012-13 394 2 34 10 92 (29) 503 44 2011-12 327 - 29 2 59 (23) 394 31 (` in crore) 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 Gratuity (Funded) As at 31st March Leave Encashment (unfunded) As at 31st March 2013 503 500 (3) 2012 394 436 42 2013 - 128 128 2012 - 137 137 (` in crore) Gratuity (Funded) Leave Encashment (unfunded) 2012-13 31 34 (34) 16 47 2011-12 27 32 (29) 15 45 2012-13 9 9 - 25 43 2011-12 8 11 - 39 58 Notes on Financial Statements for the year ended 31st March, 2013 Reliance Industries Limited 145 V) Investment Details : GOI Securities Public Securities State Government Securities Insurance Policies Others (including bank balances) VI) Actuarial assumptions % Invested As at 31st March, 2013 5.70 4.60 1.68 87.84 0.18 100.00 As at 31st March, 2012 7.52 6.18 2.42 83.72 0.16 100.00 Mortality Table (LIC) Discount rate (per annum) Expected rate of return on plan assets (per annum) Rate of escalation in salary (per annum) Gratuity (Funded) Leave Encashment (unfunded) 2012-13 1994-96 (ultimate) 8% 8% 6% 2011-12 1994-96 (Ultimate) 8.50% 8.50% 6% 2012-13 1994-96 (ultimate) 8% - 6% 2011-12 1994-96 (Ultimate) 8.50% - 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. 22.2 The Company had announced Voluntary Separation Scheme (VSS) for the employees during the previous year. A sum of ` NIL (Previous Year ` 5 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 (Refer Note No. 9.10) Less: Transferred from revaluation reserve (Refer Note No. 9.9) TOTAL 2012-13 2,152 16 868 3,036 2012-13 11,537 2,072 9,465 (` in crore) 2011-12 1,966 18 683 2,667 (` in crore) 2011-12 13,734 2,340 11,394 146 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Financial Statements for the year ended 31st March, 2013 25. OTHER ExPENSES 2012-13 (` in crore) 2011-12 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 [` 44,00,000] Selling and Distribution Expenses Warehousing and distribution Expenses Sales tax / VAT 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 3,799 7,166 1,569 28 698 (73) 36 - 4,935 1,102 635 1,090 404 97 611 145 229 122 18 48 283 3,482 4,094 1,829 40 728 161 (28) 1 4,380 821 192 10,307 13,223 6,672 5,393 705 255 122 522 83 258 82 17 45 288 3,047 98 22,844 2,377 37 18,040 Less: Transferred to Project Development Expenditure TOTAL # 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 1,725 2,074 3,799 2012-13 % of Consumption 45.41 54.59 100.00 ` in crore 1,816 1,666 3,482 2011-12 % of Consumption 52.15 47.85 100.00 25.2 VALuE OF IMPORTS ON CIF bASIS IN RESPECT OF Raw Materials and Stock-in-Trade Stores, Chemicals and Packing Materials Capital goods 2012-13 2,81,719 3,260 2,204 (` in crore) 2011-12 2,54,248 3,120 325 Reliance Industries Limited 147 Notes on Financial Statements for the year ended 31st March, 2013 25.3 PAyMENT TO AuDITORS AS : (a) Auditor Statutory Audit Fees Tax Audit Fees (b) Certification and Consultation Fees (c) Cost Audit Fees (Previous Year ` 39,85,000) TOTAL 2012-13 7 1 9 1 18 (` in crore) 2011-12 7 1 9 - 17 25.4 A sum of ` 3 crore [Previous Year ` 1 crore] is included under establishment expenses representing Net Prior Period Items. 25.5 ExPENDITuRE IN FOREIGN CuRRENCy : Oil and Gas Activity Repairs to Machinery (Includes ` 5 crore for SEZ units) Repairs to Building (` 8,41,593) Employee Benefits Expense (Includes ` 6,61,989 for SEZ units) Sales Promotion Expenses (Includes ` 2 crore for SEZ units) Brokerage and Commission (Includes ` 2 crore for SEZ units) Ocean Freight (Includes ` 669 crore for SEZ units) Warehousing and Distribution Expenses (Includes ` 1,141 crore for SEZ units) Insurance (Includes ` 14,78,002 for SEZ units) Rent Rates & Taxes (Includes ` 2,674 for SEZ units) Other Repairs (Includes ` 1 crore for SEZ units) Travelling Expenses Professional Fees (Includes ` 22 crore for SEZ units) Charity and Donations Labour Processing, Production Royalty and hire Charges (Includes ` 10 crore for SEZ units) Bank Charges (Includes ` 8 crore for SEZ units) General Expenses (Includes ` 9 crore for SEZ units) Interest Expenses (Includes ` 459 crore for SEZ units) 2012-13 1,565 42 - 24 34 46 1,328 1,487 2 6 1 13 13 179 12 11 19 114 (` in crore) 2011-12 1,633 84 1 40 29 31 1,085 1,349 2 5 1 15 9 204 9 1 15 74 1,501 1,392 148 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Financial Statements for the year ended 31st March, 2013 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 iii) Basic and Diluted Earnings per share (`) iv) Face Value per equity share (`) 27. EARNINGS IN FOREIGN ExCHANGE FOB value of exports [Excluding captive transfers to Special Economic Zone of ` 21,480 crore (Previous Year ` 21,278 crore)] Interest Others 2012-13 21,003 2011-12 20,040 3,23,99,64,480 3,27,42,26,242 64.82 10.00 2012-13 2,27,883 2 207 61.21 10.00 (` in crore) 2011-12 1,98,269 1 204 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: 2012-13 (Final Dividend) 2011-12 (Final Dividend) a) Number of Non Resident Shareholders b) Number of Equity Shares held by them c) (i) Amount of Dividend Paid (Gross) ( ` in Crore) (ii) Tax Deducted at Source (iii) Year to which dividend relates 40,266 57,01,32,298 485 - 2011-12 40,493 59,71,01,671 478 - 2010- 11 29. Fixed assets taken on finance lease prior to 1st April, 2001, amount to ` 444 crore (Previous Year ` 444 crore). Future obligations towards lease rentals under the lease agreements as on 31st March, 2013 amount to ` 2 crore (Previous Year ` 3 crore). Within one year (` 44,00,000) Later than one year and not later than five years TOTAL 2012-13 - 2 2 (` in crore) 2011-12 1 2 3 Reliance Industries Limited 149 Notes on Financial Statements for the year ended 31st March, 2013 30. RELATED PARTy DISCLOSuRES : As per Accounting Standard 18, the disclosures of transactions with the related parties are given below: (i) List of related parties where control exists and related parties with whom transactions have taken place and relationships: Relationship Subsidiary Companies Name of the Related Party Reliance Industrial Investments and Holdings Limited Reliance Ventures Limited Reliance Strategic Investments Limited Reliance Industries (Middle East) DMCC Reliance Retail Limited Reliance Netherlands B.V. (Liquidated on 27th March, 2013) Reliance Haryana SEZ Limited Reliance Fresh Limited Retail Concepts and Services (India) Limited Sr. No. 1 2 3 4 5 6 7 8 9 10 Reliance Retail Insurance Broking Limited 11 Reliance Dairy Foods Limited 12 Reliance Exploration & Production DMCC 13 Reliance Retail Finance Limited 14 RESQ Limited 15 Reliance Commercial Associates Limited 16 Reliancedigital Retail Limited 17 Reliance Financial Distribution and Advisory Services Limited 18 RIL (Australia) Pty Limited 19 Gapco Kenya Limited 20 Gapco Rwanda Limited 21 Gapco Tanzania Limited 22 Gapco Uganda Limited 23 Gapoil (Zanzibar) Limited 24 Gulf Africa Petroleum Corporation 25 Transenergy Kenya Limited 26 Recron (Malaysia) Sdn Bhd 27 Reliance Payment Solutions Limited * 28 Reliance Brands Limited 29 Reliance Footprint Limited 30 Reliance Trends Limited 31 Reliance Lifestyle Holdings Limited 32 Reliance Universal Ventures Limited 33 Delight Proteins Limited 34 Reliance Autozone Limited 35 Reliance F&B Services Limited 36 Reliance Gems and Jewels Limited 37 Reliance Integrated Agri Solutions Limited Strategic Manpower Solutions Limited 38 * Formerly known as Reliance Retail Travel & Forex Services Limited 150 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Financial Statements for the year ended 31st March, 2013 Relationship Subsidiary Companies Name of the Related Party Sr. No. 39 Reliance Agri Products Distribution Limited 40 Reliance Digital Media Limited 41 Reliance Food Processing Solutions Limited 42 Reliance Home Store Limited 43 Reliance Leisures Limited 44 Reliance Loyalty & Analytics Limited 45 Reliance Retail Securities and Broking Company Limited 46 Reliance Supply Chain Solutions Limited 47 Reliance Trade Services Centre Limited 48 Reliance Vantage Retail Limited 49 Wave Land Developers Limited 50 Reliance-GrandOptical Private Limited 51 Reliance Universal Commercial Limited 52 Reliance Petroinvestments Limited 53 Reliance Global Commercial Limited 54 Reliance People Serve Limited 55 Reliance Infrastructure Management Services Limited 56 Reliance Global Business B.V. 57 Reliance Gas Corporation Limited 58 Reliance Global Energy Services Limited 59 Kanhatech Solutions Limited ** 60 Reliance Global Energy Services (Singapore) Pte. Limited 61 Reliance Personal Electronics Limited 62 Reliance Polymers (India) Limited 63 Reliance Polyolefins Limited 64 Reliance Aromatics and Petrochemicals Limited 65 Reliance Energy and Project Development Limited 66 Reliance Chemicals Limited 67 Reliance Universal Enterprises Limited 68 Reliance Review Cinema Limited 69 Reliance Replay Gaming Limited Two Sisters Foods India Limited 70 71 International Oil Trading Limited (Liquidated on 7th February 2013) 72 RIL USA Inc. 73 Reliance Commercial Land & Infrastructure Limited 74 Reliance Corporate IT Park Limited 75 Reliance Eminent Trading & Commercial Private Limited 76 Reliance Progressive Traders Private Limited 77 Reliance Prolific Traders Private Limited 78 Reliance Universal Traders Private Limited 79 Reliance Prolific Commercial Private Limited 80 Reliance Comtrade Private Limited 81 Reliance Ambit Trade Private Limited 82 Reliance Petro Marketing Limited ** Formerly known as Reliance One Enterprises Limited Notes on Financial Statements for the year ended 31st March, 2013 Reliance Industries Limited 151 Relationship Subsidiary Companies Name of the Related Party Sr. No. 83 LPG Infrastructure (India) Limited 84 Reliance Corporate Centre Limited 85 Reliance Convention and Exhibition Centre Limited 86 Central Park Enterprises DMCC 87 Reliance International B. V. 88 Reliance Corporate Services Limited Indiawin Sports Private Limited 89 90 Reliance Holding USA Inc. 91 Reliance Marcellus LLC 92 Reliance Jio Infocomm Limited *** 93 Reliance Strategic (Mauritius) Limited 94 Reliance Eagleford Midstream LLC 95 Reliance Eagleford Upstream LLC 96 Reliance Eagleford Upstream GP LLC 97 Reliance Eagleford Upstream Holding LP 98 Mark Project Services Private Limited 99 Reliance Energy Generation and Distribution Limited 100 Reliance Marcellus II LLC 101 Reliance Security Solutions Limited 102 Reliance Industries Investment and Holding Limited 103 Reliance Office Solutions Private Limited 104 Reliance Style Fashion India Private Limited 105 GenNext Innovation Ventures Limited 106 Reliance Home Products Limited 107 Infotel Telecom Limited 108 Reliance Styles India Limited 109 Rancore Technologies Private Limited 110 Omni Symmetry LLC 111 Reliance Sibur Elastomers Private Limited 112 Surela Investment and Trading Private Limited 113 Model Economic Township Limited 114 Delta Corp East Africa Limited 115 Delta Square Limited 116 Kaizen Capital LLP 117 Affinity Names Inc 118 Reliance USA Gas Marketing LLC 119 Reliance Aerospace Technologies Limited 120 Reliance Gas Pipelines Limited 121 Achman Commercial Private Limited 122 Reliance Jio Infocomm Pte Limited 123 Reliance do Brasil Industria e Comercio de Produtos Texteis, Quimicos, Petroquimicos e Derivados Ltda. *** Formerly known as Infotel Broadband Services Limited 152 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Financial Statements for the year ended 31st March, 2013 Name of the Related Party Sr. No. 124 Reliance Hyper Realty Limited # (amalgamated with Reliance Commercial Land & Infrastructure Limited w.e.f. 01.04.2012) 125 Reliance Commercial Realty Assets Limited ## (amalgamated with Reliance Commercial Land & Infrastructure Limited w.e.f. 01.04.2012) 126 Reliance Oil and Gas Mauritius Limited (amalgamated with Reliance Energy Generation and Distribution Limited w.e.f. 01.04.2012) 127 Reliance Exploration and Production Mauritius Limited (amalgamated with Reliance Energy Generation and Distribution Limited w.e.f. 01.04.2012) Relationship Subsidiary Companies 128 Reliance Industrial Infrastructure Limited 129 Reliance Europe Limited 130 Reliance LNG Limited 131 Indian Vaccines Corporation Limited 132 Gujarat Chemical Port Terminal Company Limited 133 Reliance Utilities and Power Private Limited 134 Reliance Utilities Private Limited 135 Reliance Ports and Terminals Limited 136 Reliance Gas Transportation Infrastructure Limited 137 Reliance Commercial Dealers Limited 138 Shri Mukesh D. Ambani 139 Shri Nikhil R. Meswani 140 Shri Hital R. Meswani 141 Shri P.M.S. Prasad 142 Shri P.K.Kapil 143 Dhirubhai Ambani Foundation 144 Jamnaben Hirachand Ambani Foundation 145 Hirachand Govardhandas Ambani Public Charitable Trust 146 HNH Trust and HNH Research Society 147 Reliance Foundation # Formerly known as Reliance Hypermart Limited ## Formerly known as Reliance Wellness Limited (ii) Transactions during the year with related parties : Sr. No. Nature of Transactions (Excluding reimbursements) Subsidiaries Associates 1. 2. 3. 4. 5. 6. Purchase of Fixed Assets Purchase / Subscription of Investments Sale / Transfer / Redemption of Investments Capital Advance given Net Loans and advances, Deposits given / (returned) Revenue from Operations 52 5 8,317 4,225 11,498 3,265 - 42 7,546 3,151 26,166 19,661 43 105 - - - - 2 - 27 17 336 312 Associates Key Managerial Personnel Enterprises over which Key Managerial Personnel are able to exercise significant influence Key Managerial Personnel - - - - - - - - - - - - (` in crore) Others Total - - - - - - - - - - - - 95 110 8,317 4,225 11,498 3,265 2 42 7,573 3,168 26,502 19,973 Notes on Financial Statements for the year ended 31st March, 2013 Reliance Industries Limited 153 Sr. No. Nature of Transactions (Excluding reimbursements) Subsidiaries Associates 7. 8. 9. Other Income Purchases / Material Consumed 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, 2013 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 842 673 2,319 357 - - - 1 6 29 - - 21 53 - 29 760 261 41 38 - - 16 18 16,986 21,260 5,977 3,952 - 42 21,973 14,400 - 299 540 753 167 187 29,867 28,446 134 36 9 7 167 151 1,325 1,140 408 408 - - - - 2,845 2,381 - - 56 36 258 - - - - - 2,085 2,085 30 25 2 - 9 12 1,469 1442 252 405 2 1 1,213 1137 1 1 Key Managerial Personnel - - - - - - - - - - 44 44 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (` in crore) Total Others - - - - - - - - - - - - - - - - - - - - 218 210 - - - - - - - - - - - - - - - - - - - - 851 680 2,486 508 1,325 1,140 408 409 6 29 44 44 2,866 2,434 - 29 816 297 299 38 218 210 16 18 19,071 23,345 6,007 3,977 2 42 21,982 14,412 1,469 1741 792 1,158 169 188 31,080 29,583 135 37 Note : Figures in italic represents Previous Year’s amount including transactions with Erstwhile Reliance Jamnagar Infrastructure Limited. 154 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Financial Statements for the year ended 31st March, 2013 Disclosure in Respect of Material Related Party Transactions during the year : 1. 2. 3. Purchase of Fixed Assets include Reliance Fresh Limited ` 1 crore (Previous Year ` 2 crore), Reliance Industrial Infrastructure Limited ` 2 crore (Previous Year ` 1 crore), Reliance Jamnagar Infrastructure Limited ` NIL (Previous Year ` 2 crore), Reliancedigital Retail Limited ` 4 crore (Previous Year ` 1 crore), Reliance Ports and Terminals Limited ` 41 crore (Previous Year ` 104 crore), Reliance Footprint Limited ` 1 crore (Previous Year ` NIL), Reliance Security Solutions Limited ` 3 crore (Previous Year ` NIL), Reliance Haryana SEZ Limited ` 43 crore (Previous Year ` NIL). Purchase / Subscription of Investments include Reliance Exploration & Production DMCC ` NIL (Previous Year ` 558 crore), Reliance Exploration & Production Mauritius Limited ` NIL (Previous Year ` 348 crore), Reliance Oil & Gas Mauritius Limited ` NIL (Previous Year ` 95 crore), Reliance Jio Infocomm Limited ` 2,647 crore (Previous Year ` 642 crore), Reliance Retail Limited ` NIL (Previous Year ` 2,580 crore ), RIL (Australia) Pty Limited ` 3 crore (Previous Year ` 2 crore), Reliance Commercial Associates Limited ` 5,667 crore (Previous Year ` NIL). Sale / Transfer of Investments include to Reliance Energy Generation and Distribution Limited ` NIL (Previous Year ` 3,265 crore), Reliance Industrial Investments and Holdings Limited ` 1,544 crore (Previous Year ` NIL), Reliance Universal Ventures Limited ` 7,800 crore (Previous Year ` NIL). Redemption of Investments by Reliance Global Business B.V. ` 49 crore (Previous Year ` NIL), Reliance Industries (Middle East) DMCC ` 431 crore (Previous Year ` NIL), Reliance Exploration & Production DMCC ` 1,673 crore (Previous Year ` NIL), Reliance Netherlands B.V. ` 1 crore (Previous Year ` NIL). 4. Capital Advances given include Reliance Haryana SEZ Limited ` NIL (Previous Year ` 42 crore), Reliance Industrial Infrastructure Limited ` 2 crore (Previous Year ` NIL). 5. Loans given during the year include Reliance Industrial Investments and Holdings Limited ` 7,684 crore (Previous Year ` 2,625 crore), Reliance Retail Limited ` 303 crore (Previous Year ` 617 crore), Reliance Exploration & Production DMCC ` 71 crore (Previous Year ` NIL), Reliance Brands Limited ` 11 crore (Previous Year ` NIL). Deposits given during the year include Gujarat Chemical Port Terminal Company Limited ` 27 crore (Previous Year ` 17 crore). Loans returned during the year include Gapco Tanzania Limited ` NIL (Previous Year ` 84 crore), Reliance Exploration & Production DMCC ` NIL (Previous Year ` 8 crore). Advances in the nature of application money returned during the year Reliance Prolific Traders Private Limited ` 523 crore (Previous Year ` NIL). 6. Revenue from Operations include to Reliance Jamnagar Infrastructure Limited ` NIL (Previous Year ` 1 crore), Reliance Retail Limited ` NIL (Previous Year ` 6 crore), Gapco Kenya Limited ` 6,559 crore (Previous Year ` 4,559 crore), Gapco Tanzania Limited ` 2,937 crore (Previous Year ` 526 crore), Recron (Malaysia) Sdn Bhd ` 367 crore (Previous Year ` 124 crore), Reliance Trends Limited ` 6 crore (Previous Year ` 5 crore), LPG Infrastructure (India) Limited ` 392 crore (Previous Year ` 269 crore), Reliance Petro Marketing Limited ` 77 crore (Previous Year ` 216 crore), RIL USA Inc. ` 14,242 crore (Previous Year ` 12,572 crore), Reliance Industrial Investments and Holdings Limited ` 679 crore (Previous Year ` 733 crore), Reliance Fresh Limited ` 9 crore (Previous Year ` 6 crore), Reliance Gems and Jewels Limited ` 475 crore (Previous Year ` 504 crore), Reliance Utilities Private Limited ` NIL (Previous Year ` 145 crore), Reliance Utilities and Power Private Limited ` 243 crore (Previous Year ` NIL), Reliance Ports and Terminals Limited ` 6 crore (Previous Year ` 20 crore), Reliance Gas Transportation Infrastructure Limited ` 86 crore (Previous Year ` 147 crore), Reliance Corporate IT Park Limited ` 2 crore (Previous Year ` 5 crore), Reliance Industries (Middle East) DMCC ` NIL (Previous Year ` 100 crore), Reliance Jio Infocomm Limited ` 408 crore (Previous Year ` 35 crore), Reliancedigital Retail Limited ` 4 crore (Previous Year ` NIL), Reliance Progressive Traders Private Limited ` 5 crore (Previous Year ` NIL), Reliance Prolific Traders Private Limited ` 1 crore (Previous Year ` NIL), Reliance Eminent Trading & Commercial Private Limited ` 2 crore (Previous Year ` NIL), Gujarat Chemical Port Terminal Company Limited ` 1 crore (Previous Year ` NIL). Reliance Industries Limited 155 Notes on Financial Statements for the year ended 31st March, 2013 7. Other Income from Reliance Industrial Investments and Holdings Limited ` 371 crore (Previous Year ` 315 crore), Reliance Ventures Limited ` 108 crore (Previous Year ` 40 crore), Reliance Strategic Investments Limited ` 86 crore (Previous Year ` 71 crore), Reliance Exploration & Production DMCC ` 2 crore (Previous Year ` NIL), Gapco Kenya Limited ` 2 crore (Previous Year ` 4 crore), Gapco Tanzania Limited ` 2 crore (Previous Year ` 4 crore), Recron (Malaysia) Sdn Bhd ` 6 crore (Previous Year ` 7 crore), Reliance Jio Infocomm Limited ` 41 crore (Previous Year ` 39 crore), Reliance Retail Limited ` 72 crore (Previous Year ` 16 crore), RIL USA Inc. ` 25 crore (Previous Year ` 18 crore), Reliance Holdings USA Inc. ` 122 crore (Previous Year ` 132 crore), Reliance Eagleford Upstream Holding LP ` NIL (Previous Year ` 2 crore), Reliance Marcellus LLC ` 3 crore (Previous Year ` 10 crore), Reliance Corporate IT Park Limited ` 1 crore (Previous Year ` 3 crore), Reliance Industrial Infrastructure Limited ` NIL (Previous Year ` 2 crore), Reliance Europe Limited ` 5 crore (Previous Year ` 5 crore), Gapco Uganda Limited ` 1 crore (Previous Year ` 1 crore), Reliance Gems and Jewels Limited ` NIL (Previous Year ` 11 crore), Reliance Utilities and Power Private Limited ` 3 crore (Previous Year ` NIL), Reliance Ports and Terminals Limited ` 1 crore (Previous Year ` NIL). 8. Purchases / material consumed from Recron (Malaysia) Sdn Bhd ` 1 crore (Previous Year ` 2 crore), Reliance Petro Marketing Limited ` 2 crore (Previous Year ` 3 crore), Reliance Jamnagar Infrastructure Limited ` NIL (Previous Year ` 350 crore), Reliance Ports and Terminals Limited ` 154 crore (Previous Year ` 138 crore), Reliance Industrial Infrastructure Limited ` 12 crore (Previous Year ` 11 crore), Reliance Footprint Limited ` 2 crore (Previous Year ` 2 crore), Gujarat Chemical Port Terminal Company Limited ` 1 crore (Previous Year ` 2 crore), Reliance Industries (Middle East) DMCC ` 2,314 crore (Previous Year ` NIL). 9. Electric Power, Fuel and Water charges paid to Reliance Utilities and Power Private Limited ` 1,325 crore (Previous Year ` 369 crore), Reliance Utilities Private Limited ` NIL (Previous Year ` 771 crore). 10. Hire Charges paid to Reliance Industrial Infrastructure Limited ` 30 crore (Previous Year ` 21 crore), Gujarat Chemical Port Terminal Company Limited ` 57 crore (Previous Year ` 66 crore), Reliance Gas Transportation Infrastructure Limited ` 196 crore (Previous Year ` 235 crore), Reliance Ports and Terminals Limited ` 125 crore (Previous Year ` 86 crore), Reliance Corporate IT Park Limited ` NIL (Previous Year ` 1 crore). 11. Employee Benefits Expense include to Reliance People Serve Limited ` 3 crore (Previous Year ` 3 crore), Reliance Fresh Limited ` 3 crore (Previous Year ` 20 crore), Reliance Polyolefins Limited ` NIL (Previous Year ` 5 crore), Reliance Trends Limited ` NIL (Previous Year ` 1 crore). 12. Payment to Key Managerial 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 ` 5 crore), Shri P.K. Kapil ` 2 crore (Previous Year ` 2 crore). 13. Sales and Distribution Expenses include to Reliance Fresh Limited ` NIL (Previous Year ` 43 crore), Reliance Ports and Terminals Limited ` 2,835 crore (Previous Year ` 2,370 crore), Gujarat Chemical Port Terminal Company Limited ` 10 crore (Previous Year ` 11 crore), Reliance Jamnagar Infrastructure Limited ` NIL (Previous Year ` 7 crore), Gapco Kenya Limited ` NIL (Previous Year ` 3 crore ), Reliance Commercial Land and Infrastructure Limited ` 5 crore (Previous Year ` NIL), Reliance Polyolefins Limited ` 16 crore (Previous Year ` NIL). 14. Rent paid to Reliance Jamnagar Infrastructure Limited ` NIL (Previous Year ` 29 crore). 15. Professional Fees paid to Reliance Supply Chain Solutions Limited ` NIL (Previous Year ` 18 crore), Reliance Corporate IT Park Limited ` 736 crore (Previous Year ` 240 crore), Reliance Netherlands B.V. ` NIL (Previous Year ` 1 crore), Reliance Europe Limited ` 37 crore (Previous Year ` 27 crore), GenNext Ventures LLP ` NIL (Previous Year ` 2 crore), Reliance Industrial Infrastructure Limited ` 19 crore (Previous Year ` 9 crore), Reliance Security Solutions Limited ` 1 crore (Previous Year ` NIL), Indiawin Sports Private Limited ` 23 crore (Previous Year ` NIL). 156 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Financial Statements for the year ended 31st March, 2013 16. General Expenses include to Reliance Fresh Limited ` 14 crore (Previous Year ` 11 crore), Reliance Trends Limited ` 6 crore (Previous Year ` 3 crore), Reliance Gems and Jewels Limited ` 7 crore (Previous Year ` 7 crore), Reliancedigital Retail Limited ` 1 crore (Previous Year ` 3 crore), Indiawin Sports Private Limited ` 12 crore (Previous Year ` 14 crore), Reliance Commercial Dealers Limited ` 258 crore. 17. Donations to Dhirubhai Ambani Foundation ` 1 crore (Previous Year ` 86 crore), Jamnaben Hirachand Ambani Foundation ` 8 crore (Previous Year ` 8 crore), HNH Trust and HNH Research Society ` 2 crore (Previous Year ` 3 crore), Hirachand Govardhandas Ambani Public Charitable Trust ` 1 crore (Previous Year ` 1 crore), Reliance Foundation ` 206 crore (Previous Year ` 112 crore). 18. Finance Costs include to Reliance Corporate IT Park Limited ` 16 crore (Previous Year ` 18 crore). 19. Loans and Advances include Reliance Industrial Investments and Holdings Limited ` 17,642 crore (Previous Year ` 9,905 crore), Reliance Retail Limited ` 928 crore (Previous Year ` 621 crore), Reliance Strategic Investments Limited ` NIL (Previous Year ` 22 crore), Gapco Kenya Limited ` 2 crore (Previous Year ` 2 crore), Gapco Tanzania Limited ` 2 crore (Previous Year ` 2 crore), Gapco Uganda Limited ` 1 crore (Previous Year ` 1 crore), Reliance Jio Infocomm Limited ` NIL (Previous Year ` 10 crore), Recron (Malaysia) Sdn Bhd ` 6 crore (Previous Year ` 7 crore), Reliance Europe Limited ` 8 crore (Previous Year ` 12 crore), RIL USA Inc. ` NIL (Previous Year ` 2 crore), Reliance Holding USA Inc. ` NIL (Previous Year ` 18 crore), Reliance Marcellus LLC ` NIL (Previous Year ` 2 crore), Reliance Energy Generation and Distribution Limited ` 3,265 crore (Previous Year ` 3,265 crore), Reliance Exploration & Production DMCC ` 72 crore (Previous Year ` NIL), Reliance Corporate IT Park Limited ` 3 crore (Previous Year ` 20 crore), Reliance Prolific Traders Private Limited (Application Money) ` NIL (Previous Year ` 523 crore), Reliance Ventures Limited ` 42 crore (Previous Year ` NIL), Reliance Brands Limited ` 11 crore (Previous Year ` NIL). 20. Deposits include Reliance Jamnagar Infrastructure Limited ` NIL (Previous Year ` 299 crore), Gujarat Chemical Port Terminal Company Limited ` 69 crore (Previous Year ` 42 crore), Reliance Utilities and Power Private Limited ` 350 crore (Previous Year ` 200 crore), Reliance Ports and Terminals Limited ` 1,050 crore (Previous Year ` 1,050 crore), Reliance Utilities Private Limited ` NIL (Previous Year ` 150 crore). 31. (a) Disclosure of the Company’s Interest in Oil and Gas Joint Ventures: Sr. No. 1 2 3 4 5 6 7 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 KG-DWN-2005/2 % Interest (30%) 30% 30% (30%) 60% (60%) 60% (60%) 90% (90%) 60% (60%) 50% (50%) Name of the Fields in the Sr. Joint Ventures No. CY-PR-DWN-2001/3 8 9 CY-DWN-2001/2 10 CB-ONN-2003/1 11 KG-DWN-2004/4 12 MN-DWN-2004/1 13 MN-DWN-2004/2 % Interest 70% (70%) (70%) 70% (70%) 70% (70%) 70% (70%) 70% (70%) 70% Figures in bracket represent Previous Year’s (%) Interest. (b) Disclosure of the blocks surrendered during the year: Sr. No. Name of the Fields 1 2 3 4 KK-DWN-2001/1 KK-DWN-2001/2 MN-DWN-2003/1 KG-DWN-2004/7 % Interest 70% 70% 55% 70% Sr. No. Name of the Fields 5 6 7 8 MN-DWN-2004/3 MN-DWN-2004/4 MN-DWN-2004/5 SH (NORTH)-CBM-2003/11 % Interest 70% 70% 70% 100% Reliance Industries Limited 157 Notes on Financial Statements for the year ended 31st March, 2013 (c) 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 Gas: 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 2012-13 Proved Developed Reserves (Million MT) 2012-13 2011-12 3.06 - - (0.60) 2.46 8.29 (1.69) (2.61) (0.93) 3.06 2.42 - - (0.60) 1.82 7.66 (1.65) (2.66) (0.93) 2.42 Proved Reserves (Million M3*) 2011-12 2012-13 Proved Developed Reserves (Million M3*) 2012-13 2011-12 1,03,958 - 59 (6,732) 97,285 1,85,821 (56,621) (12,418) (12,824) 1,03,958 25,159 - 43 (6,732) 18,470 1,07,362 (30,543) (38,836) (12,824) 25,159 * 1 cubic meter (M3) = 35.315 cubic feet and 1 cubic feet = 1000 BTU (d) The Government of India, by its letter of 02 May 2012 has communicated that it proposes to disallow certain costs which the PSC relating to Block KG-DWN-98/3 entitles RIL to recover. RIL continues to maintain that a Contractor is entitled to recover all of its costs under the terms of the PSC and there are no provisions that entitle the Government to disallow the recovery of any Contract Cost as defined in the PSC. The Company has already initiated arbitration on the above issue. 32. As per Accounting Standard (AS) 17 on “Segment Reporting”, segment information has been provided under the Notes to Consolidated Financial Statements. 33. The figures for the current year include figures of Reliance Jamnagar Infrastructure Limited (RJIL), the wholly owned subsidiary company engaged in infrastructure development and maintenance developer of the operating Special Economic Zone, which is amalgamated with the Company with effect from 1st April, 2011 as per the Scheme of Amalgamation (the Scheme) sanctioned by the Hon’ble High Court of Gujarat at Ahmedabad, and are therefore to that extent not comparable with those of previous year. The Scheme became effective on 22nd October, 2012, the appointed date of the Scheme being 1st April, 2011. In accordance with the scheme and as per approval of the High Court: a) The assets, liabilities, reserves, rights and obligations of erstwhile RJIL have been transferred to and vested with the Company with effect from 1st April, 2011 and have been recorded at their respective book values, under the pooling of interest method of accounting for amalgamation as prescribed in Accounting Standard 14 on Accounting for Amalgamations. b) Being a wholly owned subsidiary company, 10,00,00,000 equity shares & 18,50,000, 10% non-cumulative optionally convertible preference shares of erstwhile RJIL held by the Company have been cancelled against Share Capital of the amalgamating company and no shares has been issued in pursuance to scheme of amalgamation. c) Amount added on amalgamation to profit and loss account is inclusive of profit for the period 1st April 2011 till 31st March 2012 and is net of stamp duty paid on amalgamation. 158 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Financial Statements for the year ended 31st March, 2013 34. CONTINGENT LIAbILITIES AND COMMITMENTS ( ` in crore) (I) Contingent Liabilities (A) Claims against the company / disputed liabilities not acknowledged as debts (a) (b) In respect of joint ventures In respect of others (B) Guarantees (i) Guarantees to Banks and Financial Institutions against credit facilities extended to third parties (a) (b) In respect of joint ventures In respect of others (ii) 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) In respect of joint ventures (a) In respect of others (b) (II) Commitments (A) Estimated amount of contracts remaining to be executed on capital account and not provided for: In respect of Joint Ventures (a) In respect of others (b) (B) Uncalled Liability on Shares and other investments partly paid ` NIL [Previous Year ` 37,19,139] (C ) Other commitments (a) Sales tax deferral liability assigned (b) Guarantee against future cash calls * As at 31st March, 2013 As at 31st March, 2012 - 1,663 - 1,343 - 31,080 - 258 160 5,099 - 3,961 441 7,948 - 2,345 1,645 - 29,583 - 159 228 5,167 - 631 340 9,923 - 3,560 3,141 * The Company has issued guarantees against future cash calls to be made by JV Partners of its wholly owned subsidiary Reliance Marcellus LLC. (III) The Income-Tax assessments of the Company have been completed up to Assessment Year 20 10-11. The disputed demand outstanding up to the said Assessment Year is ` 1,192 crore. Based on the decisions of the Appellate authorities and the interpretations of other relevant provisions, the Company has been legally advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made. Reliance Industries Limited 159 Notes on Financial Statements for the year ended 31st March, 2013 35. FINANCIAL AND DERIVATIVE INSTRuMENTS a) Derivative contracts entered into by the Company and outstanding as on 31st March, 2013 (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 ` 1,27,469 crore (Previous Year ` 86,561 crore). Category wise break up is given below: Particulars As at 31st March, 2013 (` in crore) As at 31st March, 2012 Interest Rate Swaps Currency Swaps Options Forward Contracts 32,431 3,319 2,307 89,412 32,193 4,199 25,138 25,031 Sr. No. 1 2 3 4 (ii) For hedging commodity related risks : Category wise break up is given below : Particulars Sr. No. As at 31st March, 2013 Crude Oil Petroleum purchases product sales 7,334 3,794 44,900 - 16,575 5,488 50,366 23,895 (in Kbbl) As at 31st March, 2012 Crude oil Petroleum purchases product sales 16,722 2,309 25,193 2,720 18,842 5,879 81,337 8,875 Forward swaps Futures Spreads Options 1 2 3 4 In addition the Company has net margin hedges outstanding for contracts relating to petroleum product sales of 85,168 kbbl (Previous Year 81,869 kbbl). b) Foreign currency exposures that are not hedged by derivative instruments as on 31st March, 2013 amount to ` 71,627 crore (Previous Year ` 82,198 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 Mumbai Date : April 16, 2013 A. Siddharth Partner A.R. Shah Partner K. Sethuraman Company Secretary For and on behalf of the Board M.D. Ambani - Chairman & Managing Director N.R. Meswani } Executive Directors H.R. Meswani P.M.S. Prasad P. K. Kapil R.H. Ambani }Directors M.L. bhakta y.P. Trivedi Dr. D.V. Kapur M.P. Modi Prof. Ashok Misra Prof. Dipak C. Jain Dr. R.A. Mashelkar 160 Fulfilling India’s Aspirations. With Innovation and Enterprise. Consolidated Financial Statements & Notes Independent Auditors’ Report To The Board of Directors of Reliance Industries Limited Report on the Consolidated Financial Statements 1. We have audited the accompanying consolidated financial statements of RELIANCE INDUSTRIES LIMITED (the “Company”) and its subsidiaries (collectively referred to as “the Group”), which comprise the Consolidated Balance Sheet as at March 31, 2013, the Consolidated Statement of Profit and Loss and the Consolidated Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the Consolidated Financial Statements 2. Management is responsible for the preparation of these consolidated financial statements that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Group in accordance with accounting principles generally accepted in India including Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 (“the Act”). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the consolidated financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility 3. 4. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Group’s preparation and presentation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Reliance Industries Limited 161 Opinion 5. In our opinion and to the best of our information and according to the explanations given to us, and based on consideration of the reports of the other auditors on the financial statements / consolidated financial statements of the subsidiaries and associates as noted below, the consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India: (a) (b) (c) in the case of the Consolidated Balance Sheet, of the state of affairs of the Group as at March 31, 2013; 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. Other Matters 6. Financial statements / consolidated financial statements of certain subsidiaries which reflect total assets (net) of ` 55,953 crore as at March 31, 2013, total revenue (net) of ` 45,263 crore and net cash flows amounting to ` 131 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 an associate in which the share of profit of the Group is ` 11 crore have been audited by one of us. 7. We did not audit the financial statements / consolidated financial statements of certain subsidiaries, whose financial statements / consolidated financial statements reflect total assets (net) of ` 38,202 crore as at March 31, 2013 / December 31, 2012, total revenues (net) of ` 13,483 crore and net cash flows amounting to ` (355) crore for the year ended on that date and financial statements of an associate in which the share of profit of the Group is ` 1 crore. These financial statements / consolidated financial statements have been audited by other auditors whose reports have been furnished to us and our opinion, is based solely on the reports of the other auditors. 8. We have relied on the unaudited financial statements of certain associates wherein the Group’s share of profit aggregate ` 3 crore. These unaudited financial statements as approved by the respective Boards 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 associates is based solely on such approved unaudited financial statements. Our opinion is not qualified in respect of other matters. For Chaturvedi & Shah Chartered Accountants (Registration No. 101720W) For Deloitte Haskins & Sells Chartered Accountants (Registration No. 117366W) For Rajendra & Co. Chartered Accountants (Registration No. 108355W) D. Chaturvedi Partner Membership No.: 5611 Mumbai Date : April 16, 2013 A. Siddharth Partner Membership No.: 31467 A. R. Shah Partner Membership No.:47166 162 Fulfilling India’s Aspirations. With Innovation and Enterprise. Reliance Industries Limited Consolidated Balance Sheet as at 31st March, 2013 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 Balances Short-term Loans and Advances Other current Assets TOTAL Significant Accounting Policies Notes on financial statements As per our Report of even date Note As at 31st March, 2013 (` in crore) As at 31st March, 2012 1 2 1 3 4 5 6 7 8 9 10 10 10 10 11 12 13 14 15 16 17 18 19 2,936 1,79,094 2,979 1,66,466 1,82,030 25 949 1,69,445 - 799 70,960 11,588 531 18,362 49,700 23,655 4,557 98,715 34,772 17,191 32,761 13,979 9,025 - 28,869 54,601 9,750 50,456 10,455 1,783 65,352 11,567 421 83,079 77,340 17,283 40,368 17,553 4,403 96,274 3,62,357 79,607 3,27,191 1,03,169 35,645 6,495 18,868 11,423 6,741 1 2,06,443 1,82,342 27,173 46,692 16,939 40,731 9,754 3,560 1,55,914 3,62,357 1,44,849 3,27,191 1 to 35 For and on behalf of the Board M.D. Ambani - Chairman & Managing Director For Chaturvedi & Shah Chartered Accountants For Deloitte Haskins & Sells Chartered Accountants For Rajendra & Co. Chartered Accountants D. Chaturvedi Partner Mumbai Date : April 16, 2013 A. Siddharth Partner A.R. Shah Partner K. Sethuraman Company Secretary N.R. Meswani } Executive Directors H.R. Meswani P.M.S. Prasad P. K. Kapil R.H. Ambani }Directors M.L. Bhakta y.P. Trivedi Dr. D.V. Kapur M.P. Modi Prof. Ashok Misra Prof. Dipak C. Jain Dr. R.A. Mashelkar Reliance Industries Limited Consolidated Statement of Profit and Loss for the year ended 31st March, 2013 Reliance Industries Limited 163 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 (Profit) / Loss transferred (to) / from 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 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 Mumbai Date : April 16, 2013 A. Siddharth Partner A.R. Shah Partner K. Sethuraman Company Secretary 2012-13 3,97,062 7,867 4,04,929 3,26,779 10,425 (4,954) 5,179 3,463 11,232 26,588 3,78,712 26,217 5,327 4 20,886 (7) 20,879 70.65 70.65 (` in crore) 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 Note 20 21 22 23 24 25 26 27 27 1 to 35 For and on behalf of the Board M.D. Ambani - Chairman & Managing Director N.R. Meswani } Executive Directors H.R. Meswani P.M.S. Prasad P. K. Kapil R.H. Ambani }Directors M.L. Bhakta y.P. Trivedi Dr. D.V. Kapur M.P. Modi Prof. Ashok Misra Prof. Dipak C. Jain Dr. R.A. Mashelkar 164 Fulfilling India’s Aspirations. With Innovation and Enterprise. Reliance Industries Limited Consolidated Cash Flow Statement for the year 2012-13 A: CASH FLOW FROM OPERATING ACTIVITIES: Net Profit before tax as per Statement of Profit and Loss Adjusted for: 2012-13 26,217 (` in crore) 2011-12 25,408 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 16 (67) 3 95 13,393 (2,081) (80) 1,129 (1,768) - (131) (5,816) 3,463 7,289 (7,525) 7,608 Miscellaneous Expenditure written off Share in Income of Associates Net Prior Year Adjustments 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) 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 Purchase of Investments Sale / Redemption of Investments Movement in Loans and Advances Interest Income Dividend Income Net Cash (used in) Investing Activities 8,156 34,373 7,372 41,745 (3) (4,824) - 36,918 (30,726) 2,138 (4,84,826) 4,82,102 (2,610) 6,144 128 (27,650) 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) Consolidated Cash Flow Statement for the year 2012-13 (Contd.) Reliance Industries Limited 165 C: CASH FLOW FROM FINANCING ACTIVITIES: Proceeds from Issue of Share Capital Proceeds from Issue of Share Capital to Minority Redemption of preference Share Capital of Minority Share Application Money 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 Miscellaneous Expenditure / Issue expenses Net Cash from / (used in) Financing Activities Net Increase in Cash and Cash Equivalents Opening Balance of Cash and Cash Equivalents Add: Upon addition of Subsidiaries 40,731 49 Closing Balance of Cash and Cash Equivalents 2012-13 12 390 (10) 25 (3,087) 19,182 (10,532) 2,004 (2,949) (4,626) (1) 408 9,676 40,780 50,456 (` in crore) 2011-12 87 7 - - (279) 6,108 (9,545) 2,389 (2,772) (3,585) - (7,590) 10,592 30,139 40,731 30,139 - 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 Mumbai Date : April 16, 2013 A. Siddharth Partner A.R. Shah Partner K. Sethuraman Company Secretary For and on behalf of the Board M.D. Ambani - Chairman & Managing Director N.R. Meswani } Executive Directors H.R. Meswani P.M.S. Prasad P. K. Kapil R.H. Ambani }Directors M.L. Bhakta y.P. Trivedi Dr. D.V. Kapur M.P. Modi Prof. Ashok Misra Prof. Dipak C. Jain Dr. R.A. Mashelkar 166 Fulfilling India’s Aspirations. With Innovation and Enterprise. 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 Statement of Profit and Loss 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) Investment in Associate Companies has been accounted under the equity method as per Accounting Standard (AS) 23 - “Accounting for Investments in Associates in Consolidated Financial Statements”. i) 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. j) 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. Reliance Industries Limited 167 Notes on Consolidated Financial Statements for the year ended 31st March, 2013 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 (500,00,00,000) 100,00,00,000 (100,00,00,000) Equity Shares of ` 10 each Preference Shares of ` 10 each Issued, Subscribed and Paid up: 293,63,08,755 (297,87,04,713) Equity Shares of ` 10 each fully paid up Less: Calls in arrears - by others [` 3,653 (Previous Year ` 3,653)] As at 31st March, 2013 (` in crore) As at 31st March, 2012 5,000 1,000 6,000 5,000 1,000 6,000 2,936 - 2,979 - 2,936 2,936 2,979 2,979 1.1 1.2 1.3 1.4 TOTAL 1,45,94,41,214 (1,45,94,41,214) 6,92,52,419 (12,93,92,979) 45,04,27,345 (45,04,27,345) 4,62,46,280 (36,63,431) Shares were allotted as Bonus Shares in the last five years by capitalisation of Securities Premium and Reserves. Shares were allotted in the last five years pursuant to the various Schemes of amalgamation without payments being received in cash. Shares were allotted on conversion / surrender of Debentures and Bonds, conversion of Term Loans, exercise of warrants, against Global Depository Shares (GDS) and re-issue of forfeited equity shares, since inception. Shares were bought back and extinguished in the last five years. 1.5 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 No. of Shares 298,10,19,381 13,48,763 36,63,431 297,87,04,713 1.6 The Company has reserved issuance of 13,37,43,590 (Previous year 13,39,30,481) 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 not granted any options to the eligible employees [Previous year 68,817 options, 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 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. As at 31st March, 2013 No. of Shares 297,87,04,713 1,86,891 4,25,82,849 293,63,08,755 1.7 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. 1.8 Share application money pending allotment represents application money received on account of employees stock option scheme. 168 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Consolidated Financial Statements for the year ended 31st March, 2013 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) Add: Transferred from Minority Interest 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 / redemption of 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 Statutory Reserve As per last Balance Sheet Add : Transferred from Minority Interest [Previous Year (` 1,72,043)] Add : Transferred from Profit and Loss Account As at 31st March, 2013 (` in crore) As at 31st March, 2012 3,740 - 3,740 2,081 2 603 49 652 80 13 43 45,258 12 45,270 - 3,044 42,226 - 78 2 6 6,085 9 6,094 2,356 2 1,661 3,740 572 1,097 697 (24) 673 70 9 4 603 1,069 56 13 45,459 85 45,544 11 275 45,258 - 42,226 45,258 1,117 1,117 72 - 6 86 78 Notes on Consolidated Financial Statements for the year ended 31st March, 2013 Reliance Industries Limited 169 2. RESERVES AND SURPLUS (Contd.) 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 of Tax for earlier years (net) [Previous Year (` 28,34,742)] (Short) Provision of Tax for earlier years (net) - Minority Interest [(` 43,379); Previous Year ` NIL] Less: Expenses on Amalgamation Add: Profit for the year Less: Appropriations Transferred to Statutory reserve Transferred to General Reserve Transferred to Capital Redemption reserve on buy back / redemption of shares Proposed Dividend on Equity shares** [Dividend per Share ` 9.0/-; (Previous Year ` 8.5/-)] Tax on Dividend** Proposed Dividend on preference shares (Minority Interest ` 19,880/-; Previous Year ` 19,880/-) Tax on Dividend on preference shares (Minority Interest ` 3,379/-; Previous Year ` 3,225/-) TOTAL As at 31st March, 2013 (` in crore) As at 31st March, 2012 1,00,004 18,000 84,004 16,000 1,18,004 1,00,004 10 10 14,574 (54) - 10 20,879 35,389 6 18,000 43 2,628 447 - - 13,801 - - - 19,724 33,525 6 16,000 4 2,531 410 - - 14,265 1,79,094 14,574 1,66,466 * Cumulative amount withdrawn on account of Depreciation on Revaluation is ` 2,563 crore. ** Proposed Dividend on Equity Shares and Tax on Dividend are net of reversal of excess provision of previous year pertaining to Equity Shares bought back before the record date of Dividend, aggregating to ` 17 crore. In view of the loss for the year, the subsidiary Company Reliance Jio Infocomm Limited has not created the Debenture Redemption Reserve of ` 252 crore (Previous Year ` 152 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. 2.1 170 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Consolidated Financial Statements for the year ended 31st March, 2013 3. LONG TERM BORROWINGS Secured Non Convertible Debentures Term Loans from Banks Long Term Maturities of Finance Lease Obligations Unsecured Bonds / Debentures Term Loans- from Banks Deferred payment Liabilities TOTAL As at 31st March, 2013 Current Non Current (` in crore) As at 31st March, 2012 Current Non Current 1,842 4,182 6,024 3,044 7 32 4 11 5 38 2 10 1,881 4,197 6,067 3,056 28,347 - 14,376 - 40,726 13,697 44,900 6,753 6 3 9 3 69,079 13,700 59,285 6,756 70,960 17,897 65,352 9,812 3.1 Non Convertible Debentures referred above to the extent of: a) b) ` 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 units) of the Company. ` 2,500 crore are secured by way of first mortgage / charge on the immovable properties situated at Jamnagar Complex (other than SEZ units) of the Company. c) ` 1,300 crore are secured by way of first mortgage / charge on all the properties situated at Hazira Complex and at Patalganga Complex of the Company. d) e) f) g) ` 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. ` 30 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. 3.2 Secured term Loans from banks are secured by hypothecation of vehicles and are repayable over a period of 3 to 5 years. 3.3 Finance Lease Obligations are secured against leased assets Notes on Consolidated Financial Statements for the year ended 31st March, 2013 Reliance Industries Limited 171 4. DEFERRED TAx LIABILITy (Net) Deferred Tax Liability Related to Fixed Assets Deferred Tax Assets Related to fixed Assets Disallowances under the Income Tax Act, 1961 Carried forward Loss of subsidiaries TOTAL 5. LONG TERM PROVISIONS Provisions for Annuities Others # TOTAL As at 31st March, 2013 (` in crore) As at 31st March, 2012 14,682 14,336 38 109 2,947 45 93 2,631 3,094 11,588 2,769 11,567 As at 31st March, 2013 231 300 531 (` in crore) As at 31st March, 2012 236 185 421 # Includes provision for Decommissioning and Liability for derivative transactions. 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 As at 31st March, 2013 (` in crore) As at 31st March, 2012 601 27 1,004 19 628 1,023 17,569 110 14,627 1,580 17,679 55 18,362 16,207 53 17,283 6.1. * Includes Buyers Credit/Packing Credit Working Capital Loans referred above to the extent of : a) ` 453 crore (Previous Year ` 863 crore) are secured by legal charges over certain properties and 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. ` 175 crore (Previous Year ` 160 crore) is secured by hypothecation of Plant and Machinery. b) 172 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Consolidated Financial Statements for the year ended 31st March, 2013 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 Other payables * TOTAL (` in crore) As at 31st March, 2013 66 As at 31st March, 2012 33 49,634 49,700 40,335 40,368 (` in crore) As at 31st March, 2013 17,886 As at 31st March, 2012 9,802 11 690 152 1 1 2,017 2,897 23,655 10 523 129 1 1 1,375 5,712 17,553 * # Includes statutory dues, security deposits, 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 ` 10 crore (Previous Year ` 9 crore) which is held in abeyance due to legal cases pending. 9. SHORT TERM PROVISIONS Provisions for Employee Benefits Proposed Dividend Tax on Dividend Provision for Wealth tax Provision for Income Tax (Net of advance tax) Other provisions * TOTAL (` in crore) As at 31st March, 2013 194 As at 31st March, 2012 235 2,643 449 46 7 1,218 4,557 2,531 410 79 50 1,098 4,403 * Includes primarily provision for customs duty, Excise Duty on Finished Goods, Other duties and taxes. Reliance Industries Limited 173 Notes on Consolidated Financial Statements for the year ended 31st March, 2013 10. FIxED ASSETS (` in crore) Description Gross Block Depreciation / Amortisation Net Block As at 01-04-2012 Additions Deductions/ Adjustments As at 31-03-2013 As at 01-04-2012 For the Year Deductions/ Adjustments As at 31-03-2013 As at 31-03-2013 As at 31-03-2012 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 2,584 6,222 11,458 225 261 481 - 1 - 2,809 6,482 11,939 1,39,964 3,092 343 1,42,713 4,314 8,141 980 384 386 45 97 400 119 104 1 - 21 66 29 36 - - 4,390 8,475 1,070 452 387 45 393 - 3,082 63,598 1,633 1,805 430 197 254 23 109 - 345 7,959 201 413 72 55 14 4 2 - (5) 391 2 21 22 25 - - 500 - 3,432 71,166 1,832 2,197 480 227 268 27 2,309 6,482 8,507 2,191 6,222 8,376 71,547 76,366 2,558 6,278 590 225 119 18 2,681 6,336 550 187 132 22 1,74,478 4,780 496 1,78,762 71,415 9,172 458 80,129 98,633 1,03,063 274 10 284 4 - 4 - - - 278 10 288 168 10 178 28 - 28 - - - 196 10 206 82 - 82 106 - 106 1,74,762 4,784 496 1,79,050 71,593 9,200 458 80,335 98,715 1,03,169 3,469 621 50,847 3,776 58,713 2,33,475 2,38,293 21 56 4,091 1 4,169 8,953 26,665 (2) 8 935 20 961 3,492 669 54,003 3,757 61,921 1,457 31,483 2,40,971 2,33,475 1,725 495 19,977 871 23,068 94,661 80,193 185 45 3,890 79 4,199 13,399 14,827 - 9 109 - 118 576 359 1,910 531 23,758 950 27,149 1,582 138 30,245 2,807 34,772 1,744 126 30,870 2,905 35,645 1,07,484 1,33,487 1,38,814 94,661 1,38,814 17,191 32,761 6,495 18,868 Capital Work-in-Progress Intangible Assets under Development $ 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) ii) Cost of shares in Co-operative Housing Societies ` 1 crore (Previous Year ` 1 crore). ` 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. 174 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Consolidated Financial Statements for the year ended 31st March, 2013 10.3 Intangible assets - Others include : i) ii) Jetties amounting to ` 812 crore (Previous Year ` 812 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. ` 2,899 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) ` 5,849 crore (Previous Year ` 3,948 crore) on account of project development expenditure. ` 5,804 crore (Previous Year ` 1,406 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, capital Work-in-progress , Intangible Assets - Development rights and Intangible Assets under Development include ` 5,948 crore (net loss) [Previous Year ` 7,924 crore (net loss)] on account of exchange difference during the year. 10.7 Project Development Expenditure: (in respect of Projects upto 31st March, 2013, included under Capital Work-in-progress and Intangible Assets under Development) Opening Balance Add: Transferred from Profit and Loss Account (Refer Note No. 26) Expenses on Project under Construction Interest Capitalised Less: Project Development Expenses Capitalised during the year Closing Balance (` in crore) 2012-13 2011-12 3,948 2,460 128 485 1,296 123 255 1,208 1,909 8 5,849 1,586 98 3,948 10.8 The Gross Block of Fixed Assets includes ` 38,517 crore (Previous Year ` 38,517 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 ` 2,081 crore (Previous Year ` 2,356 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. 10.9 Depreciation for the year includes ` 6 crore (Previous Year ` NIL) capitalised during the year. Notes on Consolidated Financial Statements for the year ended 31st March, 2013 Reliance Industries Limited 175 11. NON-CURRENT INVESTMENTS (Long Term Investments) A . INVESTMENTS IN ASSOCIATES In Equity Shares - quoted, fully paid up 68,60,064 (68,60,064) Reliance Industrial Infrastructure Limited of ` 10 each In Equity Shares - Unquoted, fully paid up 11,08,500 (11,08,500) 22,500 (22,500) 5,000 (5,000) 74,99,990 (74,99,990) - (10,40,000) - (7,12,47,314) 62,63,125 (62,63,125) 64,29,20,000 (64,29,20,000) 52,00,000 (26,00,000) - (26,00,000) 5,000 (5,000) - (2,000) - (25,000) - (250) 37,24,971 (37,24,971) 51,54,872 (49,04,372) 3,72,38,095 (2,20,00,000) 46,87,500 (46,87,500) Reliance Europe Limited of Sterling Pound 1 each Reliance LNG Limited of ` 10 each [` 2,22,012 ; (Previous Year ` 2,22,012)] Reliance Commercial Trading Private Limited of ` 10 each Reliance Commercial Dealers Limited of `10 each Delta Hydrocarbon S.A. Luxembourg Delta Corp East Africa Limited of KES 10 each Indian Vaccines Corporation Limited of `10 each Gujarat Chemical Port Terminal Company Limited of ` 1 each Reliance Utilities and Power Private Limited Class ‘A’ shares of ` 1 each [` 40,40,000 ; (Previous Year ` 19,90,000)] Reliance Utilities Private Limited Class ‘A’ shares of ` 1 each [` NIL ; (Previous Year ` 20,50,000)] Gaurav Overseas Private Limited of ` 10 each Reliance Investments Holdings B.V. of Euro 50 each Paradise Global Enterprises B.V. of Euro 1 each [` NIL ; (Previous Year ` 17,16,668)] Reliance Investments Sarl of Euro 25 each [` NIL ; (Previous Year ` 69)] Deccan Cargo & Express Logistics Private Limited of ` 100 each EFS Midstream LLC Algenol LLC Aurora Algae Inc Extramarks Education Private Limited of ` 10 each As at 31st March, 2013 (` in crore) As at 31st March, 2012 136 136 30 - - 10 - - 1 70 - - - - - - - 1,372 451 157 125 125 125 28 - - 10 27 93 1 68 - - - 1 - - - 1,133 503 117 125 176 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Consolidated Financial Statements for the year ended 31st March, 2013 11. NON-CURRENT INVESTMENTS (Long Term Investments) 5,000 (-) 5,000 (-) 5,000 (-) 5,000 (-) Reliance Jio Private Limited of ` 10 each [` 50,000 ; (Previous Year ` NIL)] Reliance Jio Cloudworks Private Limited of ` 10 each [` 50,000 ; (Previous Year ` NIL)] Reliance Jio Electronics Private Limited of ` 10 each [` 50,000 ; (Previous Year ` NIL)] Reliance Jio Media Private Limited of ` 10 each [` 50,000 ; (Previous Year ` NIL)] In Preference Shares - Unquoted, Fully paid up 50,00,00,000 (50,00,00,000) 9% Non Cumulative Redeemable Preference Shares of Reliance Gas Transportation Infrastructure Limited of ` 10 each In Debentures - Unquoted, Fully Paid Up 4,22,335 (4,22,335) 30,47,704 (30,47,704) 1,00,000 (-) Zero Coupon Secured Optionally Convertible Redeemable Debentures of Reliance Commercial Trading Private Limited of ` 1000 each Compulsorily Convertible Debentures of Deccan Cargo & Express Logistics Private Limited of ` 100 each 9% Optionally Fully Convertible Debentures of Extramarks Education Private Limited of ` 10,000 each In Limited Liability Partnership GenNext Ventures LLP [` 2,00,000 ; (Previous Year ` NIL)] Total Investment in Associates (A) INVESTMENTS IN OTHERS B. In Government Securities-Unquoted 6 Years National Savings Certificate (Deposited with Sales Tax Department and other Government Authorities) [` 23,49,560 ; (Previous Year ` 19,43,420)] In Government Securities-quoted 8.33% GOI 2026 Trade Investments In Equity Shares-Unquoted, fully paid up 1,00,00,000 (1,00,00,000) 5,000 (5,000) 25 (25) Petronet India Limited of ` 10 each Retailers Association’s Skill Council of India of ` 10 each [` 1,00,000 ; (Previous Year ` 1,00,000)] The Colaba Central Co-operative Consumer’s Wholesale and Retail Stores Limited (Sahakari Bhandar) of ` 200 each. [` 5,000 ; (Previous Year ` 5,000)] As at 31st March, 2013 - (` in crore) As at 31st March, 2012 - - - - 2,216 2,000 2,000 42 3 100 145 - - - - 650 650 10 - - 10 4,497 - - - 2,106 2,000 2,000 42 3 - 45 - - - - - - 10 - - 10 4,276 Reliance Industries Limited 177 Notes on Consolidated Financial Statements for the year ended 31st March, 2013 11. NON-CURRENT INVESTMENTS (Long Term Investments) Other Investments In Equity Shares-quoted, fully paid up As at 31st March, 2013 (` in crore) As at 31st March, 2012 10,59,07,273 (10,59,07,273) 4,85,32,764 (4,85,32,764) 17,50,954 (9,12,919) 97,25,000 (-) 89,82,030 (-) 7,69,000 (-) 41,73,123 (-) 9,33,011 (5,40,727) - (8,72,011) 1,44,00,000 (1,44,00,500) 19,48,680 (14,87,160) - (2,28,232) - (2,67,751) - (1,80,258) EIH Limited of ` 2 each 1,433 1,433 Himachal Futuristic Communications Limited of ` 1 each ICICI Bank Limited of ` 10 each NMDC Limited of ` 1 each NTPC Limited of ` 10 each Oil India Limited of ` 10 each Oil and Natural Gas Corporation Limited of ` 5 each State Bank of India of ` 10 each HDFC Bank Limited of ` 2 each Housing Development Finance Corporation Limited of ` 2 each Den Networks Limited of ` 10 each Axis Bank Limited of ` 10 each Canara Bank of ` 10 each Punjab National Bank of ` 10 each 57 174 142 134 42 136 199 - 949 19 - - - 57 79 - - - - 112 39 949 13 26 12 16 3,285 2,736 In Equity Shares-Unquoted, fully paid up 85,000 (85,000) 2,53,800 (2,53,800) 5,000 (5,000) 34,53,378 (33,78,378) 1,000 (1,000) National Stock Exchange of India Limited of ` 10 each Shinano Retail Private Limited of `10 each (` 25,38,000 ; previous Year ` 25,38,000) Reliance Apparel India Private Limited of ` 10 each (` 1,00,000 ; previous Year ` 1,00,000) Terra Power LLC Air Controls and Chemical Engineering Company Limited of ` 1 each (` 1,500 ; Previous Year ` 1,500) 28 - - 83 - 28 - - 10 - 178 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Consolidated Financial Statements for the year ended 31st March, 2013 11. NON-CURRENT INVESTMENTS (Long Term Investments) 1,500 (1,500) - (18) 1,800 (1,800) 400 (-) 910 (-) 860 (-) Reliance Research and Development Services Private Limited of ` 10 each (` 15,000, previous Year ` 15,000) Parabool Enterprises BV of Euro 100 each Teesta Retail Private Limited of ` 10 each (` 18,000 ; previous Year ` 18,000) Sonali Land Private Limited of ` 10 each [` 4,000 ; (Previous Year ` NIL)] Reliance First Private Limited of ` 10 each [` 9,114 ; (Previous Year ` NIL)] Reliance Tankages Private Limited of ` 10 each [` 8,600 ; (Previous Year ` NIL)] In Debentures - quoted, fully paid up 1,500 (-) HDB Financial Services Limited - 9.43% Secured Redeemable Non Convertible Debentures of ` 5,00,000 each In Debentures - Unquoted, fully paid up 44,05,550 (-) 2,000 (-) - (1,00,00,000) D. E. Shaw India Securities Private Limited - 7.90% Optionaly convertible Debentures of ` 100 each Indiabulls Housing Finance Limited - 10.60% Secured Redeemable Non Convertible Debentures of ` 10,00,000 each Zero coupon Unsecured Optionally Fully Convertible Debentures of Reliance K G Exploration & Production Private Limited of ` 10 each In Fixed Maturity Plan - quoted, fully paid up 2,50,00,000 (5,00,00,000) 2,50,00,000 (-) 19,00,00,000 (47,00,00,000) 3,00,00,000 (-) Axis Fixed Term Plan - (Series 21/22/34) - Growth Baroda Pioneer Fixed Maturity Plan - Series C - Growth Birla Sunlife Fixed Term Plan - (Series ES/EV/EY/FC/GA/GB/GF) - Growth BNP Paribas Fixed Term Fund - Series 24 A - Growth 40,00,00,000 DSP Blackrock Fixed Maturity Plan - (40,50,00,000) (Series 37/38/43/88/89/91/93) - Growth 17,00,00,000 DWS Fixed Maturity Plan - (20,30,00,000) (Series 6/7/9/10/26/28/30) - Growth 35,20,00,000 (54,70,00,000) HDFC Fixed Maturity Plan - Growth (Series 21/23/24) As at 31st March, 2013 - (` in crore) As at 31st March, 2012 - - - - - - 111 75 75 72 200 - 272 25 25 190 30 400 170 352 47 - - - - 85 - - - - 10 10 50 - 470 - 405 203 547 Reliance Industries Limited 179 Notes on Consolidated Financial Statements for the year ended 31st March, 2013 11. NON-CURRENT INVESTMENTS (Long Term Investments) As at 31st March, 2013 (` in crore) As at 31st March, 2012 1,50,00,000 (4,50,00,000) 86,50,00,000 (71,50,00,000) 7,00,00,000 (19,20,00,000) - (3,50,00,000) 34,50,00,000 (15,00,00,000) 29,50,00,000 (27,00,00,000) 12,50,00,000 (-) 6,50,00,000 (3,50,00,000) 45,00,00,000 (-) HSBC Fixed Term Plan - (Series 86/90) - Growth ICICI Prudential Fixed Maturity Plan - Cumulative (Series 62/63/65/66/67) IDFC Fixed Maturity Plan - (Series 7/8/11/14/65) - Growth India Bulls Fixed Maturity Plan - Growth JP Morgan Fixed Maturity Plan - (Series 6/12/13/16/18) - Growth Kotak Fixed Maturity Plan - (Series 76/80/82/97/98/99/101/102/103) - Growth L&T Fixed Maturity Plan - VII - Growth LIC Nomura MF Fixed Maturity Plan - (Series 52/56/58) - Growth Reliance Fixed Horizon Fund - XXII/XXIII (Series 5/9/33) - Growth 12,00,00,000 Religare Fixed Maturity Plan - (17,30,00,000) (Series XIII/XIV/XVII/XVIII) - Growth 38,00,00,000 (16,00,00,000) 10,00,00,000 (4,00,00,000) 25,00,00,000 (13,50,00,000) 14,00,00,000 (-) SBI Debt Fund - (Series 2/12/13/14/15/25) - Growth Sundaram Fixed Term Plan - (Series CQ/DC/DF/DH) - Growth Tata Fixed Maturity Plan - (Series 39/40/42) - Growth UTI Fixed Income Fund - (Series XIII - III / XIV - VII) - Growth 15 865 70 - 345 295 125 65 450 120 380 100 250 140 45 715 192 35 150 270 - 35 - 173 160 40 134 - 4,412 3,624 In Mutual Fund - Unquoted fully paid up - (1,15,35,485) - (3,37,19,111) DWS Insta Cash Plus Fund - Institutional - Bonus Option of ` 10 each DWS Insta Cash Plus Fund - Bonus Option of ` 10 each In Public Sector Undertaking/Public Financial Institution & Corporate Bonds - quoted, fully paid up - (1,287) 11.80% TISCO Perpetual bonds of ` 10,00,000 each - - - - - In Others 11,53,511 (7,20,000) Faering Capital India Evolving Fund of ` 1,000 each 115 11 33 44 131 131 72 180 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Consolidated Financial Statements for the year ended 31st March, 2013 11. NON-CURRENT INVESTMENTS (Long Term Investments) As at 31st March, 2013 (` in crore) As at 31st March, 2012 3,79,028 (4,05,950) 50,000 (50,000) 5,000 (5,000) 2,000 (2,000) 21,600 (21600) 25,000 (25,000) HDFC India Real Estate of ` 1,000 per unit JM Financial Property Fund - I of ` 9,547.42 per unit; (Previous Year ` 9,722.59 per unit) MPM Bioventure IV-QP, LP, USA Multiples Private Equity Fund - Scheme 1 of ` 1,00,000 each, ` 46,350 paid up (Previous Year ` 25,700 paid up) Peninsula Realty Fund of ` 1,00,000 each Urban Infrastructure Opportunities Fund of ` 87,500 per unit (Previous Year ` 91,500 per unit) LICHFL Urban Development Fund of ` 10,000 each (` 2,000 paid up) Sundaram Mutual Fund (` NIL, previous Year ` 5,000) In ETF - quoted, fully paid up 3,99,000 (-) Kotak Gold Exchange traded fund of ` 100 each Total Investments in Others (B) Total Long Term Investments (A + B) 12. LONG-TERM LOANS AND ADVANCES 40 48 99 24 26 192 5 - 549 118 118 43 49 101 13 23 201 5 - 507 - - 9,482 13,979 7,147 11,423 (Unsecured and Considered Good) As at 31st March, 2013 2,467 2,733 86 693 3,046 9,025 Includes ` 2 crore (Previous Year ` NIL) to Reliance Industrial Infrastructure Limited. Includes ` 1,977 crore (Previous Year ` 1,873 crore) relating to Deposits with related parties (Refer Note No. 28) Includes claims receivable from statutory authorities, loans to employees etc. Capital Advances# Deposits## Loans and Advances to related parties (Refer Note No. 28) Advance Income Tax (Net of Provision) Other Loans and Advances* TOTAL # ## * (` in crore) As at 31st March, 2012 2,260 2,453 277 1,329 422 6,741 13. OTHER NON CURRENT ASSETS Miscellaneous Expenditure (to the extent not written off or adjusted) (` 7,61,510) TOTAL As at 31st March, 2013 - (` in crore) As at 31st March, 2012 1 - 1 Reliance Industries Limited 181 Notes on Consolidated Financial Statements for the year ended 31st March, 2013 14. CURRENT INVESTMENTS As at 31st March, 2013 (` in crore) As at 31st March, 2012 164 - Investment in Equity Shares - quoted, Fully Paid up 74,62,500 (-) 18,88,171 (-) - (4,61,520) NTPC Limited of ` 10 each Oil and Natural Gas Corporation Limited of ` 5 each Den Networks Limited of ` 10 each Investment 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 Investment in Government Securities - quoted 7.59% GOI 2016 8.20% GOI 2025 8.33% GOI 2026 8.97% GOI 2030 6.35% GOI 2020 8.53% MAHA SDL 2020 (` 30,264 ; Previous Year ` 30,000) 8.13% GOI 2022 (Previous Year ` 48,000) 7.80% GOI 2020 (` 7,91,120; Previous Year ` 7,91,000) 8.79% GOI 2021 8.88% Gujarat 2022 (` 20,13,200; Previous Year ` NIL) 9.12% Gujarat 2022 8.85% MAHA SDL 2022 (` 19,01,520; Previous Year ` NIL) 9.24% Punjab 2022 (` 4,03,620; Previous Year ` NIL) 8.13% OIL MKT COS SB 2021 (` NIL; Previous Year ` 14,80,000) 8.65% WB 2021 (` NIL; Previous Year ` 1,00,000) 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 101 106 58 - 5 278 102 149 1 - 22 - 16 - 2 - - - - - - - - - - 4 47 - - 4 5 - - - 1 - - - - - - - - - - 3 1 1 2 2 3 575 18 182 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Consolidated Financial Statements for the year ended 31st March, 2013 Investment in Debentures or Bonds - quoted, Fully Paid up As at 31st March, 2013 (` in crore) As at 31st March, 2012 - (250) - (1,000) 349 (1,250) 38,307 (18,387) 6,500 (10,750) 15,095 (15,095) 42,63,562 (32,62,862) 5,153 (5,550) 7,250 (3,500) 49,44,752 (49,44,752) 42,74,393 (42,76,093) 120 (920) 595 (450) - (550) 650 (250) 1,320 (1,370) Axis Bank Limited CitiFinancial Consumer Finance India Limited EXIM Bank of India - - 35 Housing Development Finance Corporation Limited 3,839 Infrastructure Development Finance Company Limited India Infrastructure Finance Company Limited Indian Railway Finance Corporation Limited LIC Housing Finance Limited National Bank for Agriculture and Rural Development National Highways Authority of India Power Finance Corporation Limited Power Grid Corporation of India Limited Rural Electrification Corporation Limited Steel Authority of India Limited Tata Steel Limited Tata Power Company Limited Investment in Debentures or Bonds - Unquoted, Fully Paid up Tata Sons Limited 3,000 (-) Investment in Fixed Maturity Plan - quoted, Fully Paid up 5,00,00,000 (6,50,00,000) 2,50,00,000 (1,20,00,000) 12,00,00,000 (-) Axis Fixed Term Plan - (Series 15/16/21/22) - Growth Baroda Pioneer Fixed Maturity Plan - (Series A/2) - Growth Birla Sun Life Fixed Term Plan - (Series FM/FO/FP) - Dividend 25 98 120 1,822 1,060 149 350 545 349 494 858 112 44 53 26 142 65 12 - 6,247 - 647 149 521 515 726 494 688 15 59 - 58 133 50 25 120 7,879 300 Notes on Consolidated Financial Statements for the year ended 31st March, 2013 Reliance Industries Limited 183 As at 31st March, 2013 (` in crore) As at 31st March, 2012 57,50,00,000 (61,00,00,000) 1,50,00,000 (-) 5,00,00,000 (-) - (10,00,00,000) 53,00,00,000 (41,00,00,000) 32,80,00,000 (14,30,00,000) 5,00,00,000 (-) 62,70,00,000 (44,00,00,000) 4,50,00,000 (-) 88,00,00,000 (39,00,00,000) - (5,00,00,000) 2,98,46,064 (12,04,25,008) 3,00,00,000 (-) 9,96,19,002 (-) 2,50,00,000 (-) 44,30,00,000 (15,50,00,000) 12,00,00,000 (-) 3,50,00,000 (-) 21,50,00,000 (10,50,00,000) 36,00,00,000 (23,00,00,000) 4,00,00,000 (-) 14,50,00,000 (-) Birla Sun Life Fixed Term Plan - (Series DB/DL/DN/DO/DQ/ DS/ES/EV/EW/EY/FA/FC/FD/FM/FO/FP/HD)- Growth Birla Sunlife Interval Income Fund - Annual Plan 5 - Growth BNP Paribas Fixed Term Fund Series 25A - Growth Canara Robeco Fixed Maturity Plan - (Series 6 / 7) - Growth DSP Blackrock Fixed Maturity Plan - (Series 7/10/12/16/18/37/38/39/43/44/90/94) - Growth DWS Fixed Maturity Plan - (Series 6/7/9/10/11/18/27/29/90/92) - Growth HDFC Annual Interval Fund - Series 1 - Growth HDFC Fixed Maturity Plan (Series XVI/XVIII/XIX/XXI) - Growth HSBC Fixed Term Series 86 - Growth ICICI Prudential Fixed Maturity Plan (Series 54/59//62/63/67) - Cumulative ICICI Prudential Fixed Maturity Plan Series 55 - Dividend ICICI Prudential Interval Fund Annual Interval Plan - I Institutional Cumulative ICICI Prudential Interval Fund Series VI Annual Interval Plan - C - Growth ICICI Prudential Long Term Plan Premium Plus - Annual Dividend IDBI Fixed Maturity Plan Series - III - Growth IDFC Fixed Maturity Plan - (Series 7/8/12/13/52/64/65/66/78/79) - Growth IDFC Series Interval Fund - (Series I/II) - Growth Indiabulls Fixed Maturity Plan - Growth JP Morgan India Fixed Maturity Plan - (Series 6/8/17) - Growth Kotak Fixed Maturity Plan (Series 57/60/62/76/80/82/83/100) - Growth L&T Fixed Maturity Plan - VII - Growth LIC Nomura MF Fixed Maturity Plan (Series 52/53/54/60/61) - Growth 575 15 50 - 530 328 50 627 45 880 - 32 30 100 25 443 120 35 215 360 40 145 610 - - 100 410 143 - 440 - 390 50 130 - - - 155 - - 105 230 - - 184 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Consolidated Financial Statements for the year ended 31st March, 2013 As at 31st March, 2013 (` in crore) As at 31st March, 2012 11,00,00,000 (-) 24,80,00,000 (6,00,00,000) 14,00,00,000 (-) 53,00,00,000 (76,50,00,000) 6,50,00,000 (2,20,00,000) 13,50,00,000 (24,00,00,000) 5,49,80,083 (6,66,98,706) 13,00,00,000 (2,61,12,073) 22,50,00,000 (-) Reliance Fixed Horizon Fund - XXIII - Series 6 - Growth Religare Fixed Maturity Plan - (Series VIII/IX/XIII/XIV/XVII/XVIII) - Growth SBI Debt Fund (Series 5/7) - Dividend SBI Debt Fund (Series 1/6/7/11/12/13/17/18/19/23/24) - Growth Sundaram Fixed Term Plan (Series BK/BN/CQ/DG) - Growth Tata Fixed Maturity Plan (Series 34/36/37/39/40) - Growth UTI Fixed Income Interval Fund - Annual Interval Plan (Series - II/III) - Institutional Growth UTI Fixed Term Income Fund Series IX / XII - Dividend UTI Fixed Term Income Fund Series XIV - V/VI/VII - Growth Investment in Mutual Fund - Unquoted 11,08,67,422 (-) 1,31,48,48,855 (41,19,71,606) 5,56,20,512 (-) 2,31,91,812 (-) 4,59,45,325 (-) 5,96,310 (-) 11,14,37,619 (-) 48,23,954 (-) 11,66,82,484 (-) 1,04,54,867 (-) 4,66,90,013 (-) 14,48,86,484 (2,48,38,796) Axis Short Term Fund - Institutional Growth Birla Sunlife Dynamic Bond Fund - Retail - Growth Birla Sunlife Short Term Fund - Growth Canara Robeco Short Term Fund - Regular Growth Canara Robeco Short Term Institutional Growth Fund DSP Black Rock Liquidity Fund - Institutional Plan Growth DSP BlackRock Short Term Fund - Growth DSP BlackRock Strategic Bond Fund -Institutional Plan - Growth DWS GILT Fund - Regular Plan - Growth DWS Insta Cash Plus Fund - Super Institutional Plan - Bonus DWS Money Plus Fund - Regular Plan (Principle Units) - Bonus DWS Premier Bond Fund - Premium Plus Plan - Growth 110 248 140 530 65 135 70 130 225 135 2,418 225 30 60 100 210 625 150 - 46 150 6,493 4,036 - 60 - 765 22 240 83 26 - - 730 - - - - - - - - - 25 Notes on Consolidated Financial Statements for the year ended 31st March, 2013 Reliance Industries Limited 185 As at 31st March, 2013 12,93,69,261 (3,77,86,469) 60,38,424 (-) 19,73,54,869 (-) 14,69,19,109 (-) 22,67,48,577 (-) 86,58,009 (-) 25,68,76,110 (-) 22,68,83,560 (-) 16,70,54,915 (-) 27,12,060 (-) 3,46,29,245 (-) 42,70,29,582 (3,99,55,814) 14,42,759 (-) 4,39,26,695 (-) 2,33,10,265 (-) 42,82,45,478 (-) 9,99,03,094 (-) 1,75,479 (-) 23,42,26,669 (-) 10,38,13,700 (-) 46,01,17,659 (-) 11,10,88,159 (-) DWS Short Maturity Fund - Premium Plus Growth DWS Treasury Fund - Cash - Regular Plan - Bonus HDFC Short Term Opportunities Fund - Growth HDFC Floating Rate Income Fund - Long Term Plan - Growth HDFC High Interest Fund - Short Term Plan - Growth HDFC Liquid Fund Growth HDFC Medium Term Opportunities Fund - Growth HDFC Short Term Plan - Growth HSBC Income Fund Short Term Institutional Plus Growth ICICI Prudential Liquid fund - Growth ICICI Prudential Gilt Treasury Plan - Growth ICICI Prudential Institutional Short Term Plan - Cumulative Option ICICI Prudential Liquid - Growth IDBI Short Term Bond Fund - Growth IDFC - SSIF - Medium Term - Plan - Growth IDFC - SSIF - Short Term - Plan D - Growth IDFC Banking Debt Fund - Regular Plan - Growth IDFC Cash Fund - Growth - (Regular Plan) IDFC Super Saver Income Fund -Medium Term - Plan B - Growth J P Morgan India Short term Income Fund - Growth J P Morgan India Treasury Fund - Direct Plan - Bonus JM High Liquidity Fund - Bonus Option - Bonus Units 147 59 240 300 500 20 305 485 180 47 100 975 25 50 45 625 100 25 285 125 700 109 (` in crore) As at 31st March, 2012 40 - - - - - - - - - - 85 - - - - - - - - - - 186 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Consolidated Financial Statements for the year ended 31st March, 2013 8,84,33,460 (-) 7,51,00,293 (-) 1,17,585 (7,37,24,677) 5,81,04,402 (-) 4,70,53,586 (-) 12,02,16,390 (-) 13,27,54,784 (-) 18,67,56,236 (-) 52,63,28,065 (-) 1,90,032 (-) 18,37,26,275 (-) 4,32,75,524 (-) 3,02,49,315 (-) 9,21,73,180 (-) 1,94,65,573 (-) 37,23,783 (-) 1,90,537 (-) 30,35,68,335 (-) 20,30,859 (-) 49,784 (-) - (15,00,000) 2,70,06,021 (1,27,72,028) Kotak Bond (Short Term) - Growth L & T - Short Term Opportunities Fund - Growth LIC Nomura MF Liquid Fund - Growth DWS Treasury Fund - Investment - Bonus Morgan Stanley Short Term Bond Fund - Institutional Plus Growth Reliance Income Fund - Growth Plan - Bonus Option Religare Active Income Fund - Growth Religare Short Term Fund - Growth SBI Dynamic Bond Fund - Growth SBI Premier Liquid Fund - Growth SBI Short Term Debt Fund - Growth Sundaram Flexible Fund Short - Term Plan - Growth Sundaram Monthly Income Plan MOD Bonus (Principal Units) Tata Income Fund Plan A - Appreciation Option - Bonus TATA Short Term Bond Fund Plan A - Growth UTI Floating Rate Fund - STP - Growth UTI Money Market Fund - Institutional Plan - Growth UTI Short Term Income Fund Institutional - Growth Option UTI Treasury Advantage Fund - Institutional Plan Birla Sunlife Floating Rate Fund Short Term Growth Birla Sunlife Short Term Fixed Maturity Plan -Series-1 HDFC Liquid Fund Premium Plan - Daily Dividend As at 31st March, 2013 185 80 25 75 60 131 175 285 725 35 235 80 34 97 40 700 25 400 250 1 - 33 (` in crore) As at 31st March, 2012 - - 141 - - - - - - - - - - - - - - - - - 2 42 Notes on Consolidated Financial Statements for the year ended 31st March, 2013 Reliance Industries Limited 187 As at 31st March, 2013 28,13,853 (-) 8,38,534 (-) 24,599 (-) 6,04,758 (7,94,199) 37,41,132 (-) 1,43,956 (-) 35,24,215 (26,04,607) 9,61,89,785 (-) 1,90,639 (1,41,586) - (4,50,000) - (5,00,120) - (9,09,761) 47,177 (39,140) 317 (-) HDFC Liquid Fund - Growth HDFC Liquid Fund - Dividend HDFC Cash Management Fund-Savings Plan-Direct Plan - Dividend (` 3,00,000; Previous Year ` NIL) HDFC Cash Management Fund-Savings Plan - Dividend ICICI Prudential Liquid Super Institutional - Dividend ICICI Prudential Liquid Plan - Direct - Growth ICICI Prudential Institutional Liquid Plan-Super Institutional Daily Dividend IDFC Banking Debt Fund - Regular Plan - Growth Fund JM High Liquidity Fund (Previous Year ` 25,00,000) Kotak Fixed Maturity Plan 6M Series 9 (` NIL; Previous Year ` 25,00,000) Reliance Fixed Horizon Fund XXI Series3 Growth Tata Fixed Income Portfolio Fund-B2 SBI-Premier Liquid Fund - Growth SBI - Premier Liquid Fund Super Institutional - Growth (` 5,59,864; Previous Year ` NIL) 6 1 - 1 37 3 36 97 1 - - - 9 - (` in crore) As at 31st March, 2012 - - - 1 - - 26 - - - 1 1 7 - Investment in certificate of deposits with Scheduled Banks - Unquoted Total Current Investments 15. INVENTORIES Raw Materials Raw Materials in Transit Stock-in-Process Stock-in-Trade Finished Goods Stores, Chemicals and Packing Materials TOTAL 13,458 - 28,869 1,101 15,720 27,173 As at 31st March, 2013 7,938 13,820 11,537 3,428 13,913 3,965 54,601 (` in crore) As at 31st March, 2012 8,446 11,008 10,535 1,935 11,218 3,550 46,692 188 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Consolidated Financial Statements for the year ended 31st March, 2013 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, 2013 60 9,690 9,750 As at 31st March, 2013 1,205 59 49,192 50,456 (` in crore) As at 31st March, 2012 50 16,889 16,939 (` in crore) As at 31st March, 2012 1,41 2 34 39,285 40,731 # * Balance with Banks includes Unclaimed Dividend of ` 152 crore (Previous Year ` 129 crore) Fixed deposits with banks include deposits of ` 13,189 crore (Previous Year ` 6,891 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*# TOTAL As at 31st March, 2013 8 2,809 421 7,217 10,455 (` in crore) As at 31st March, 2012 12 1,861 378 7,503 9,754 * Netted off for Loans and Advances considered doubtful ` 70 crore (Previous Year ` 72 crore) # Includes primarily Interest Receivable on Fixed Deposits with banks, Share Application Money, Advance to sundry creditors and advance to employees. 19. OTHER CURRENT ASSETS Interest accrued on Investment Share Application Money Others * TOTAL * Includes Interest Receivables. 20. REVENUE FROM OPERATIONS Sale of products Income from services Less: Excise Duty/ Service tax recovered TOTAL As at 31st March, 2013 510 955 318 1,783 (` in crore) As at 31st March, 2012 261 3,143 156 3,560 2012-13 4,06,427 1,965 4,08,392 11,330 3,97,062 (` in crore) 2011-12 3,67,560 1,011 3,68,571 10,070 3,58,501 Notes on Consolidated Financial Statements for the year ended 31st March, 2013 Reliance Industries Limited 189 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 [` NIL (Previous Year ` 14,64,610)] Share in income of Associates Other non operating income TOTAL 22. 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 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 2012-13 (` in crore) 2011-12 751 129 3,287 5,816 4,167 15 15 131 30 1,026 670 - 1,768 67 85 7,867 1,696 70 231 6,194 (` in crore) 2012-13 2011-12 13,153 10,535 28,878 23,688 10,965 9,879 20,844 - 922 489 4,405 95 36 1,303 465 - 17,341 11,537 13,153 10,535 23,688 236 23,924 (4,954) 2012-13 4,529 329 321 5,179 2012-13 2,574 21 868 3,463 20,844 (2,844) (` in crore) 2011-12 3,378 295 282 3,955 (` in crore) 2011-12 2,187 23 683 2,893 190 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Consolidated Financial Statements for the year ended 31st March, 2013 25. DEPRECIATION AND AMORTISATION ExPENSE Depreciation and Amortisation Less: Transferred from revaluation reserve (Refer Note No. 10.8) Less: Transferred from capital reserve TOTAL 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 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 2012-13 13,393 2,081 80 11,232 2012-13 (` in crore) 2011-12 14,827 2,356 70 12,401 (` in crore) 2011-12 3,943 4,740 1,876 115 849 255 (28) 1 4,747 824 458 11,751 104 14,848 49 7,425 6,029 749 1,216 574 557 117 306 149 22 55 51 290 4,285 7,993 1,651 86 837 (57) 50 3 5,364 1,105 956 876 987 762 652 212 260 226 24 110 - 285 4,086 Less: Transfer to Project Development Expenditure (Net) 123 TOTAL 21,847 # Excise Duty shown under expenditure represents the aggregate of excise duty borne by the Company and 4,394 128 26,588 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 ` NIL (Previous Year ` 258 crore), an exceptional item. ^ An exceptional item 26.1 A sum of ` 3 crore [Previous Year ` 1 crore] is included under establishment expenses representing Net Prior Period Items. Reliance Industries Limited 191 Notes on Consolidated Financial Statements for the year ended 31st March, 2013 27. EARNINGS PER SHARE (EPS) i) Net Profit after tax (after adjusting Minority Interest) as per Statement of Profit and Loss (` in crore) ii) (Short) provision of tax for earlier years (net) (` in crore) iii) [Previous Year (` 28,34,742)] (Short) Provision of Tax for earlier years (net) - Minority Interest [(` 43,379); Previous Year ` NIL] iv) Net profit attributable to equity shareholders (` in crore) v) Net Profit before Exceptional item (` in crore) vi) Weighted Average number of equity shares used as denominator for calculating EPS 2012-13 20,879 (54) 2011-12 19,724 - 20,825 20,825 294,76,09,853 19,724 20,033 298,18,71,615 vii) Basic and Diluted Earnings per share (`) viii) Basic and Diluted Earnings (before exceptional items) per share (`) ix) Face Value per equity share (`) 70.65 70.65 10.00 66.15 67.18 10.00 28. Related Party Disclosures : (i) List of related parties and relationships: Relationship Associate Companies / Joint Ventures Name of the Related Party Sr. No. 1. Reliance Industrial Infrastructure Limited 2. Reliance Europe Limited 3. Reliance LNG Limited 4. Indian Vaccines Corporation Limited 5. Gujarat Chemical Port Terminal Company Limited 6. Reliance Utilities and Power Private Limited 7. Reliance Utilities Private Limited 8. Reliance Ports and Terminals Limited 9. Reliance Gas Transportation Infrastructure Limited 10. Reliance Commercial Dealers Limited 11. Reliance Commercial Trading Private Limited 12. Diesel Fashion India Reliance Private Limited 13. Atri Exports Private Limited 14. Shree Salasar Bricks Private Limited 15. N.C. Trading Company Private Limited 16. KCIPI Trading Company Private Limited 17. Prakhar Commercials Private Limited 18. Pepino Farms Private Limited 19. Marugandha Land Developers Private Limited 20. Jaipur Enclave Private Limited 21. Einsten Commercials Private Limited 22. Ashwani Commercials Private Limited 23. Vishnumaya Commercials Private Limited 24. Carin Commercials Private Limited 25. Netravati Commercials Private Limited 192 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Consolidated Financial Statements for the year ended 31st March, 2013 Name of the Related Party Sr. No. 26. Rakshita Commercials Private Limited 27. Kaniska Commercials Private Limited 28. Rocky Farms Private Limited 29. Centura Agro Private Limited 30. Fame Agro Private Limited 31. Noveltech Agro Private Limited 32. Honeywell Properties Private Limited 33. Parinita Commercials Private Limited 34. Chander Commercials Private Limited 35. Creative Agrotech Private Limited 36. Reliance-Vision Express Private Limited 37. Marks and Spencer Reliance India Private Limited 38. Reliance-GrandVision India Supply Private Limited 39. Office Depot Reliance Supply Solutions Private Limited 40. Supreme Tradelinks Private Limited 41. Reliance Paul & Shark Fashions Private Limited 42. Gaurav Overseas Private Limited 43. Reliance Innovative Building Solutions Private Limited 44. Deccan Cargo & Express Logistics Private Limited 45. IMG Reliance Private Limited 46. EFS Midstream LLC 47. Zegna South Asia Private Limited 48. D.E. Shaw India Securities Private Limited 49. India Gas Solutions Private Limited 50. Algenol LLC 51. Aurora Algae Inc. 52. Extramarks Education Private Limited 53. GenNext Ventures LLP 54. Iconix Lifestyle India Private Limited 55. In Vogue Brand Solutions Private Limited 56. Reliance Jio Cloudworks Private Limited 57. Reliance Jio Electronics Private Limited 58. Reliance Jio Media Private Limited 59. Reliance Jio Private Limited 60. Shri Mukesh D. Ambani 61. Shri Nikhil R. Meswani 62. Shri Hital R. Meswani 63. Shri P.M.S. Prasad 64. Shri P. K. Kapil Relationship Associate Companies / Joint Ventures Key Managerial Personnel Reliance Industries Limited 193 Notes on Consolidated Financial Statements for the year ended 31st March, 2013 Name of the Related Party Sr. No. 65. Dhirubhai Ambani Foundation 66. Jamnaben Hirachand Ambani Foundation 67. Hirachand Govardhandas Ambani Public Charitable Trust 68. HNH Trust and HNH Research Society 69. Reliance Foundation (ii) Transactions during the year with related parties : Relationship Enterprises over which Key Managerial Personnel are able to exercise significant influence Nature of Transactions (Excluding reimbursements) Associates Sr. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. Purchase of Fixed Assets Purchase / Subscription of Investments Sale / Transfer / Redemption of Investments Capital Advance given Net Loans and advances, Deposits given / (returned) Unsecured Loans (taken) / repaid Revenue from Operations Other Income Purchases / Material Consumed 10. Electric Power, Fuel and Water 11. Hire Charges 12. Employee Benefits Expense 13. Payment to Key Managerial Personnel 14. Sales and Distribution Expenses 15. Rent Key Managerial Personnel - - - - - - - - - - - - - - - - - - - - - - - - 44 44 - - - - (` in crore) Total Others - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 48 248 210 1,106 1 - 2 - (22) 221 - (27) 385 321 12 7 167 151 1,325 1,140 423 408 - 5 44 44 2,845 2,381 1 - 48 248 210 1,106 1 - 2 - (22) 221 - (27) 385 321 12 7 167 151 1,325 1,140 423 408 - 5 - - 2,845 2,381 1 - 194 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Consolidated Financial Statements for the year ended 31st March, 2013 Nature of Transactions (Excluding reimbursements) Associates Sr. No. 16. Professional Fees 17. General expenses 18. Donations 19. Finance Cost 20. Investment written off (net) Balance as at 31st March, 2013 21. Investments 22. Trade Receivables 23. Capital Advance 24. Loans and Advances 25. Deposits 26. Unsecured Loans 27. Trade and Other Payables 28. Finance Lease Obligations 29. Financial Guarantees 30. Performance Guarantees Note : Figures in italic represents Previous Year’s amount. 56 36 275 - - - 5 33 - 51 4,264 4,097 33 26 2 - 94 289 1,977 1,873 55 53 257 498 13 15 1,213 1,137 1 1 Key Managerial Personnel - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (` in crore) Total Others - - - - 218 210 - - - - - - - - - - - - - - - - - - - - - - - - 56 36 275 - 218 210 5 33 - 51 4,264 4,097 33 26 2 - 94 289 1,977 1,873 55 53 257 498 13 15 1,213 1,137 1 1 Disclosure in respect of Material Related Party Transactions during the year : 1. Purchase of Fixed Assets include Reliance Ports and Terminals Limited ` 46 crore (Previous Year ` 248 crore), Reliance Industrial Infrastructure Limited ` 2 crore (Previous Year ` NIL). Purchase / Subscription of Investments include EFS Midstream LLC ` NIL (Previous Year ` 474 crore), Algenol LLC ` 26 crore (Previous Year ` 504 crore), Aurora Algae LLC ` 84 crore (Previous Year ` 117 crore), Extramarks Education Private Limited ` 100 crore (Previous Year ` NIL), Reliance Commercial Dealers Limited ` NIL (Previous Year ` 2 crore), Delta Corp East Africa Limited ` NIL (Previous Year ` 9 crore). 2. Reliance Industries Limited 195 Notes on Consolidated Financial Statements for the year ended 31st March, 2013 3. Sale / Transfer / Redemption of investments include Reliance Investments Holdings B.V. ` 1 crore (Previous Year ` NIL). 4. Capital Advances given include Reliance Industrial Infrastructure Limited ` 2 crore (Previous Year ` NIL). 5. Loans given during the year include Reliance Commercial Trading Private Limited ` 1 crore (Previous Year ` 4 crore), Reliance Commercial Dealers Limited ` NIL (Previous Year ` 67 crore), Gujarat Chemical Port Terminal Company Limited ` NIL (Previous Year ` 17 crore), Delta Corp East Africa Limited ` NIL (Previous Year ` 8 crore). Loan returned during the year include Reliance Commercial Dealers Limited ` 69 crore (Previous Year ` NIL). Deposits given include Gujarat Chemical Port Terminal Company Limited ` 27 crore (Previous Year ` NIL), Atri Exports Private Limited ` 1 crore (Previous Year ` NIL), Shree Salasar Bricks Private Limited ` 2 crore (Previous Year ` NIL), Ashwani Commerical Private Limited ` 17 crore (Previous Year ` NIL), Einsten Commercials Private Limited ` NIL (Previous Year ` 1 crore), Carin Commercials Private Limited ` NIL (Previous Year ` 86 crore), Kaniska Commercials Private Limited ` NIL (Previous Year ` 23 crore), Gaurav Overseas Private Limited ` NIL (Previous Year ` 15 crore). Deposits return during the year include Kaniska Commercials Private Limited ` 1 crore (Previous Year ` NIL). 6. Unsecured Loan taken during the year include Reliance Europe Limited ` NIL (Previous Year ` 27 crore). 7. Revenue from Operations includes Reliance Ports and Terminals Limited ` 7 crore (Previous Year ` 22 crore), Reliance Gas Transportation and Infrastructure Limited ` 134 crore (Previous Year ` 153 crore), Reliance Utilities Private Limited ` NIL (Previous Year ` 145 crore), Reliance Utilities and Power Private Limited ` 243 crore (Previous Year NIL), Gujarat Chemical Port Terminal Company Limited ` 1 crore (Previous Year ` NIL). 8. Other Income includes Interest from Reliance Industrial Infrastructure Limited ` NIL (Previous Year ` 2 crore), Guarantee Commission from Reliance Europe Limited ` 5 crore (Previous Year ` 5 crore), Reliance Utilities and Power Private Limited ` 3 crore (Previous Year ` NIL), Reliance Ports and Terminals Limited ` 1 crore (Previous Year ` NIL), Extramarks Education Private Limited ` 3 crore (Previous Year ` NIL). Purchases / Material Consumed includes Reliance Ports and Terminals Limited ` 154 crore (Previous Year ` 138 crore), Reliance Industrial Infrastructure Limited ` 12 crore (Previous Year ` 11 crore), Gujarat Chemical Port Terminal Company Limited ` 1 crore (Previous Year ` 2 crore). 9. 10. Electric Power, Fuel and Water charges paid to Reliance Utilities and Power Private Limited ` 1,325 crore (Previous Year ` 369 crore), Reliance Utilities Private Limited ` NIL (Previous Year ` 771 crore). 11. Hire Charges paid to Reliance Industrial Infrastructure Limited ` 30 crore (Previous Year ` 21 crore), Gujarat Chemical Port Terminal Company Limited ` 57 crore (Previous Year ` 66 crore), Reliance Gas Transportation Infrastructure Limited ` 196 crore (Previous Year ` 235 crore), Reliance Ports and Terminals Limited ` 140 crore (Previous Year ` 86 crore). 12. Employee Benefits Expense include Reliance Gas Transportation Infrastructure Limited ` NIL (Previous Year ` 5 crore). 13. Payment to Key Managerial 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 ` 5 crore), Shri P.K. Kapil ` 2 crore (Previous Year ` 2 crore). 14. Sales and Distribution Expenses include Reliance Ports and Terminals Limited ` 2,835 crore (Previous Year ` 2,370 crore), Gujarat Chemical Port Terminal Company Limited ` 10 crore (Previous Year ` 11 crore). 15. Rent paid to Reliance Industrial Infrastructure Limited ` 1 crore (Previous Year ` NIL). 16. Professional Fees include Reliance Europe Limited ` 37 crore (Previous Year ` 27 crore), Reliance Industrial Infrastructure Limited ` 19 crore (Previous Year ` 9 crore). 17. General expenses include Reliance Commercial Dealers Limited ` 258 crore (Previous Year ` NIL), Reliance Ports and Terminals Limited ` 17 crore (Previous Year ` NIL). 18. Donations to Dhirubhai Ambani Foundation ` 1 crore (Previous Year ` 86 crore), Jamnaben Hirachand Ambani Foundation ` 8 crore (Previous Year ` 8 crore), HNH Trust and HNH Research Society ` 2 crore (Previous Year ` 3 crore), Hirachand Govardhandas Ambani Public Charitable Trust ` 1 crore (Previous Year ` 1 crore), Reliance Foundation ` 206 crore (Previous Year ` 112 crore). 196 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Consolidated Financial Statements for the year ended 31st March, 2013 19. Finance Cost include Reliance Industrial Infrastructure Limited ` 4 crore (Previous Year ` 8 crore), Reliance Europe Limited ` 1 crore (Previous Year ` 1 crore), Reliance Ports and Terminals Limited ` NIL (Previous Year ` 24 crore). Investment written off (net) includes Deccan Cargo and Express Logistics Private Limited ` NIL (Previous Year ` 51 crore). 20. 21. Loans and Advances include Reliance Europe Limited ` 8 crore (Previous Year ` 12 crore), Reliance Commercial Dealers Limited ` 76 crore (Previous Year ` 145 crore), Reliance Commercial Trading Private Limited ` 10 crore (Previous Year ` 9 crore), Delta Corp East Africa Limited ` NIL (Previous Year ` 65 crore), Shree Salasar Bricks Private Limited ` NIL (Previous Year ` 31 crore), Atri Exports Private Limited ` NIL (Previous Year ` 18 crore), Jaipur Enclave Private Limited ` NIL (Previous Year ` 4 crore), Marugandha Land Developers Private Limited ` NIL (Previous Year ` 5 crore). 22. Deposits include Reliance Utilities and Power Private Limited ` 350 crore (Previous Year ` 200 crore), Reliance Ports and Terminals Limited ` 1,050 crore (Previous Year ` 1,050 crore), Reliance Utilities Private Limited ` NIL (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 ` 53 crore (Previous Year ` 36 crore), Einsten Commercials Private Limited ` 43 crore (Previous Year ` 43 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 ` 95 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 ` 22 crore (Previous Year ` 23 crore), Gaurav Overseas Private Limited ` 17 crore (Previous Year ` 17 crore) and Gujarat Chemical Port Terminal Company Limited ` 69 crore (Previous Year ` 42 crore), Shree Salasar Bricks Private Limited ` 33 crore (Previous Year ` NIL), Atri Exports Private Limited ` 19 crore (Previous Year ` NIL), Jaipur Enclave Private Limited ` 4 crore (Previous Year ` NIL), Marugandha Land Developers Private Limited ` 5 crore (Previous Year ` NIL). 23. Unsecured loans include Reliance Europe Limited ` 55 crore (Previous Year ` 53 crore). 29. CONTINGENT LIABILITIES AND COMMITTMENTS As at 31st March, 2013 (` in crore) As at 31st March, 2012 (I) Contingent Liabilities (A) Claims against the company / disputed liabilities not acknowledged as debts (a) (b) In respect of joint ventures 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 - 1,734 - 3,159 - 229 160 5,309 - 1,396 - 1,159 - 123 228 5,314 Reliance Industries Limited 197 Notes on Consolidated Financial Statements for the year ended 31st March, 2013 (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: In respect of Joint Ventures (a) In respect of others (b) (B) Uncalled Liability on Shares and Other Investments Partly paid (C) Other commitments Sales tax deferral liability assigned - 3,961 448 15,547 243 2,345 - 631 344 18,092 294 3,560 ( III) The Income-Tax assessments of the Company have been completed up to Assessment Year 20 10-11. The disputed demand outstanding up to the said Assessment Year is ` 1,192 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. FINANCIAL AND DERIVATIVE INSTRUMENTS a) Derivative contracts entered into by the Company and outstanding as on 31st March, 2013 (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, 2013 amount to ` 1,29,553 crore (Previous Year ` 88,598 crore). Category wise break up is given below : Particulars As at 31st March, 2013 (` in crore) As at 31st March, 2012 Interest Rate Swaps Currency Swaps Options Forward Contracts 33,181 4,444 2,307 89,621 34,068 4,199 25,138 25,193 Sr. No. 1 2 3 4 (ii) For hedging commodity related risks : Category wise break up is given below : Particulars Sr. No. 1 2 3 4 Forward swaps Futures Spreads Options Petroleum product sales (in Kbbl) 7,334 6,259 44,900 - As at 31st March, 2013 Other Crude Oil products purchases (in Kbbl) 16,575 5,488 50,366 23,895 (in Kg) 1,101 - - - Petroleum product sales (in Kbbl) 16,722 4,809 25,193 2,720 As at 31st March, 2012 Other Crude oil products purchases (in Kbbl) 18,842 5,879 81,337 8,875 (in Kg) 1,214 - - - In addition, the Company has net margin hedges outstanding for contracts relating to petroleum product sales of 85,168 kbbl (Previous Year 81,869 kbbl). Foreign currency exposures that are not hedged by derivative instruments as on 31st March 2013 amount to ` 79,912 crore (Previous Year ` 89,892 crore). b) 198 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Consolidated Financial Statements for the year ended 31st March, 2013 31. 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 Non-Current Assets Current Investments Current Assets (ii) Liabilities Long Term Borrowings Non-Current Liabilities and Provisions Short Term Borrowings Current Liabilities and Provisions (iii) Income (iv) Expenses (` in crore) As at 31st March, 2013 As at 31st March, 2012 144 - 47 9 197 - 19 10 77 333 406 126 25 29 39 139 - 14 20 73 277 338 32. 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 / associates are not material and there are no material transactions from 1st January, 2013 to 31st March, 2013 in respect of subsidiaries / associates having financial year ended 31st December, 2012. 33. 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”. Reliance Industries Limited 199 Notes on Consolidated Financial Statements for the year ended 31st March, 2013 (i) Primary Segment Information : Petrochemicals Particulars Refining Oil and Gas Others Unallocable (` in crore) Total 2012-13 2011-12 2012-13 2011-12 2012-13 2011-12 2012-13 2011-12 2012-13 2011-12 2012-13 2011-12 1 Segment Revenue External Turnover 94,137 86,338 2,90,427 2,58,697 11,100 13,896 Inter Segment Turnover Gross Turnover Less: Excise duty / Service Tax recovered Net Turnover 2 Segment Result before Interest and Taxes Less: Interest Expense Add: Interest Income Add: Exceptional Item 40 94,177 6,807 87,370 7,159 - - - 124 82,496 67,835 108 278 86,462 3,72,923 3,26,532 11,208 14,174 5,388 4,012 4,496 198 59 81,074 3,68,911 3,22,036 9,060 12,815 9,847 11,010 3,668 - - - - - - - - - - - - Profit Before Tax 7,159 9,060 12,815 9,847 3,668 Current Tax Deferred Tax - - - - - - - - - - 14,115 5,555 - - (258) 5,297 - - - - - - - (101) 3,463 5,816 - 2,252 5,327 4 - - - - - 4,08,392 3,68,571 - - 4,08,392* 3,68,571* 11,330 10,070 3,97,062 3,58,501 111 23,864 24,443 2,893 4,167 (51) 1,334 5,226 465 3,463 5,816 - 26,217 5,327 4 2,893 4,167 (309) 25,408 5,226 465 12,728 1,850 14,578 313 14,265 323 - - - 9,640 523 10,163 127 10,036 (130) - - - 323 (130) - - - - 323 7 330 Profit after Tax (before adjustment for Minority Interest) Add: Share of (Profit) / Loss transferred to Minority Profit after Tax (after adjustment for Minority Interest) Other Information 3 Segment Assets Segment Liabilities Capital Expenditure Depreciation and Amortisation Non Cash Expenses other than depreciation and Amortisation 7,159 9,060 12,815 9,847 3,668 5,297 - - (14) (37) - - 7,159 9,060 12,801 9,810 3,668 5,297 (130) (3,079) (4,357) 20,886 19,717 44 - - (7) 7 (86) (3,079) (4,357) 20,879 19,724 48,889 42,432 1,08,419 1,09,523 6,929 8,134 2,058 - 7,213 2,197 2,137 - 40,998 35,040 3,778 4,434 - 2,746 4,398 - 53,067 3,748 13,739 4,028 34 43,048 3,162 15,859 5,191 258 35,091 32,347 1,16,891 99,841 3,62,357 3,27,191 2,571 5,835 454 - 1,392 3,098 439 - 3,208 6,174 806 258 - 669 236 51 57,454 32,292 11,232 34 52,981 24,569 12,401 309 *Total Gross Turnover is after elimination of inter segment turnover of ` 84,494 crore (Previous Year ` 68,760 crore). (ii) As per Accounting Standard on Segment Reporting (AS-17), 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 200 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Consolidated Financial Statements for the year ended 31st March, 2013 (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 2012-13 1,42,299 2,66,093 4,08,392 3,21,946 40,411 3,62,357 53,602 3,852 57,454 21,931 10,361 32,292 (` in crore) 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 34. 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 Retail Limited Reliance Netherlands B.V. * (Liquidated on 27th March, 2013) 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 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 Payment Solutions Limited # Country of Incorporation India Proportion of ownership interest 100.00% India India U.A.E. India Netherlands India India India India India U.A.E. India India India India India Australia Kenya Rwanda Tanzania Uganda Zanzibar Mauritius Kenya Malaysia India 100.00% 100.00% 100.00% 91.01% 100.00% 92.50% 91.01% 91.01% 91.01% 91.01% 100.00% 91.01% 91.01% 94.45% 91.01% 91.01% 100.00% 76.00% 76.00% 76.00% 76.00% 76.00% 76.00% 76.00% 100.00% 100.00% Notes on Consolidated Financial Statements for the year ended 31st March, 2013 Reliance Industries Limited 201 Name of the Subsidiaries Country of Incorporation 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 U.K. India Singapore India India India India India India India Reliance Brands Limited Reliance Footprint Limited Reliance Trends 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 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 Kanhatech Solutions 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 (Liquidated on 7th February, 2013) British Virgin Island Reliance Review Cinema Limited Reliance Replay Gaming Limited Two sisters Foods India 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 India India India U.S.A India India India India Proportion of ownership interest 94.45% 91.01% 91.01% 94.45% 94.45% 91.01% 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% 100.00% 100.00% 91.01% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 72.00% 100.00% 91.01% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 91.01% 91.01% 45.51% 100.00% 100.00% 100.00% 100.00% 100.00% 202 Fulfilling India’s Aspirations. With Innovation and Enterprise. Notes on Consolidated Financial Statements for the year ended 31st March, 2013 Name of the Subsidiaries 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 Indiawin Sports Private Limited Reliance Holding USA Inc.* Reliance Marcellus LLC* Reliance Jio Infocomm 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 Reliance Home Products Limited Infotel Telecom Limited Reliance Styles India Limited Rancore Technologies Private Limited Omni Symmetry LLC * Reliance Sibur Elastomers Private Limited Surela Investment and Trading Private Limited Model Economic Township Limited Delta Corp East Africa Limited Delta Square Limited Kaizen Capital LLP Affinity Names Inc. * Reliance USA Gas Marketing LLC * Reliance Aerospace Techonologies Limited Reliance Gas Pipelines Limited Achman Commercial Private Limited Reliance Jio Infocomm Pte. Limited Reliance do Brasil Indústria e Comércio de Produtos Têxteis, Químicos, Petroquímicos e Derivados Ltda.* Country of Incorporation India India India India India India India India India U.A.E Netherlands India 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 U.S.A. India India India Kenya Kenya U.K. U.S.A. U.S.A. India India India Singapore Brazil ## Formerly known as Infotel Broadband Services Limited # Formerly known as Reliance Retail Travel & Forex Services Limited ** Formerly known as Reliance One Enterprises Limited * Subsidiary Company having 31st December as a reporting date. Proportion of ownership interest 100.00% 100.00% 100.00% 100.00% 100.00% 91.01% 91.01% 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% 94.45% 100.00% 91.01% 95.00% 94.45% 95.00% 100.00% 74.90% 100.00% 92.50% 58.80% 58.80% 49.98% 100.00% 100.00% 100.00% 100.00% 91.01% 95.00% 99.98% Reliance Industries Limited 203 Notes on Consolidated Financial Statements for the year ended 31st March, 2013 35. The significant Associates / Joint Ventures considered in the consolidated financial statements are: Name of the Associates / Joint Ventures Reliance Industrial Infrastructure Limited Reliance Europe Limited # Reliance LNG Limited Gujarat Chemical Port Terminal Company Limited Reliance Commercial Dealers Limited Reliance-Vision Express Private Limited Reliance-Grandvision India Supply 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 & Shark Fashions Private Limited IMG Reliance Private Limited EFS Midstream LLC # D. E. Shaw India Securities Private Limited ** India Gas Solutions Private Limited Extramarks Education Private Limited Supreme Tradelinks Private Limited Gaurav Overseas Private Limited Reliance Commercial Trading Private Limited Deccan Cargo & Express Logistics Private Limited GenNext Ventures LLP Algenol LLC # Aurora Algea Inc. # Iconix Lifestyle India Private Limited In Vogue Brand Solutions Private Limited Reliance Jio Cloudworks Private Limited Reliance Jio Electronics Private Limited Reliance Jio Media Private Limited Reliance Jio Private Limited ** Formerly known as Basis Point securities Private Limited # Associate Company having 31st December as a reporting date. Country of Incorporation India Proportion of ownership interest 45.43% U.K. India India India India India India India India India India India India U.S.A India India India India India India India India U.S.A. U.S.A. India India India India India India 50.00% 45.00% 41.80% 50.00% 45.51% 45.51% 44.60% 50.00% 44.60% 45.51% 44.60% 45.51% 50.00% 50.00% 50.00% 50.00% 38.46% 44.60% 50.00% 50.00% 30.89% 50.00% 42.18% 34.61% 45.51% 44.60% 50.00% 50.00% 50.00% 50.00% 204 Fulfilling India’s Aspirations. With Innovation and Enterprise. Financial Information of Subsidiary Companies Reporting Currency INR INR INR INR USD MN INR INR INR INR INR INR INR INR INR INR INR INR INR AUD MN INR Sr. No. Name of Subsidiary Company 1 Reliance Industrial Investments and Holdings Limited 2 Reliance Ventures Limited 3 Reliance Strategic Investments Limited 4 Reliance Industries (Middle East) DMCC 5 Reliance Retail Limited * 6 Reliance Haryana SEZ Limited 7 Reliance Fresh Limited * 8 Retail Concepts & Services (India) Limited * 9 Reliance Retail Insurance Broking Limited 10 Reliance Dairy Foods Limited 11 Reliance Exploration & Production DMCC 12 Reliance Retail Finance Limited 13 RESQ Limited * 14 Reliance Commercial Associates Limited 15 Reliancedigital Retail Limited * 16 Reliance Financial Distribution and Advisory Services Limited * 17 RIL (Australia) Pty Limited 18 Gapco Kenya Limited 19 Gapco Rwanda Limited 20 Gapco Tanzania Limited Capital Reserves Total Assets Total Liabilities Invest m ents Turnover/ Total Income Profit Before Taxation Provision for Taxation Profit After Taxation Proposed Dividend ` in crore Country 149.06 647.78 19,646.17 19,646.17 2,705.38 679.49 (11.97) 0.01 (11.98) - India 2.69 2.33 158.22 28.77 8,315.90 0.05 1.05 0.05 4.00 2,367.48 2,427.10 2,427.10 1,122.01 1,168.14 1,187.73 1,187.73 609.30 (99.54) (18.10) (98.51) (49.53) 295.82 53.79 295.82 53.79 - - 9,164.87 9,164.87 816.83 4,991.01 4,991.01 - 120.12 104.89 1,696.76 308.53 24.69 6.53 12.31 18.98 (34.26) (6.23) (60.18) (14.48) (1,349.87) 6,268.54 6,268.54 190.94 5,255.99 (119.67) (0.04) 0.01 0.01 - - (0.01) 0.81 2.46 - - - (0.14) (64.89) - 11.50 16.52 (34.26) (6.23) (60.18) (14.34) (54.78) (0.01) - - India India - U.A.E - - - - - India India India India 2.83 10.21 10.21 4.75 20.50 3.00 0.56 2.44 - India USD MN 423.45 (336.72) 0.05 (62.34) 2,328.76 (1,851.79) 2.02 0.05 6,000.00 99.80 (9.17) (2.23) 214.49 593.73 107.96 101.83 26.02 214.49 593.73 107.96 101.83 26.02 8,445.40 8,445.40 1.05 0.05 (104.66) (28.92) 984.39 29.02 984.39 29.02 37.09 6.55 93.18 (37.09) (6.55) 0.51 0.09 0.51 0.09 230.80 1,850.09 1,850.09 KSH MN 1,459.54 3,615.22 28,980.09 28,980.09 - 1,09,299.80 INR FRW MN INR 3.91 448.50 103.32 1.55 177.67 303.49 15.58 15.58 1,786.91 1,786.91 839.05 839.05 TZS MN 29,910.00 87,855.00 2,42,888.00 2,42,888.00 0.01 - - 101.75 0.00 - 513.24 18.31 3.33 0.06 32.13 0.32 0.01 2,166.38 - - - - 2.96 0.00 0.00 6,977.70 72.30 8,290.13 1,738.41 (36.57) (34.92) (6.35) (0.02) (3.24) (2.21) (2.67) (0.20) (17.50) (3.09) 20.26 317.36 (1.06) (121.32) 62.13 (13.33) - - - - - (3.31) - - - 10.95 171.50 (0.27) (31.03) 31.30 (23.24) (34.92) (6.35) (0.02) (3.24) (2.21) 0.64 (0.20) (17.50) (3.09) 9.31 145.86 (0.79) (90.29) 30.83 - India - U.A.E - - - India India - India - - India India - Australia - - Kenya - - Rwanda - Tanzania 5,03,236.00 17,985.00 9,060.00 8,925.00 - 518.57 17.11 5.37 11.74 - Uganda 2,53,745.27 8,370.07 2,625.77 5,744.30 - 0.07 19.10 - - 2.70 42.31 5,586.18 3,106.02 0.02 4.93 (6.93) (1.26) 2.25 35.24 0.01 3.00 - - - - 0.01 1.93 (6.93) (1.26) 2.25 35.24 (208.09) (115.70) (86.22) (47.94) (121.87) (67.76) - Zanzibar - - Mauritius - - Kenya - - Malaysia - - - - - - - - - - - - - - - 21 Gapco Uganda Limited INR 17.88 89.35 143.18 143.18 USH MN 8,750.10 43,722.63 70,059.41 70,059.41 22 Gapoil (Zanzibar) Limited INR TZS MN 23 Gulf Africa Petroleum Corporation INR 24 Transenergy Kenya Limited 25 Recron (Malaysia) Sdn Bhd 1.73 500.00 120.99 22.00 7.66 (1.19) 7.05 7.05 (343.51) 2,044.23 2,044.23 (50.60) 300.82 300.82 (9.20) (5.83) 54.70 1.86 29.11 54.70 1.86 29.11 KSH MN 120.00 (91.29) INR RM MN 4.50 2.50 1,500.79 3,521.39 3,521.39 834.47 1,957.96 1,957.96 USD MN INR 26 Reliance Payment Solutions Limited 27 Reliance Brands Limited 28 Reliance Footprint Limited * 29 Reliance Trends Limited * 30 Reliance Lifestyle Holdings Limited 31 Reliance Universal Ventures Limited INR INR INR INR INR INR 2.00 (1.33) 1.75 1.75 0.06 0.04 (0.01) - (0.01) - India 80.86 1.05 1.05 0.05 0.05 (48.38) (16.24) (28.45) (10.99) 288.46 223.08 809.53 54.52 288.46 223.08 809.53 54.52 (8.56) 8,400.47 8,400.47 97.11 0.01 0.01 - - 62.71 239.84 878.55 50.46 0.02 (36.37) (12.92) (23.45) (1.00) (2.64) (5.82) (0.19) (0.71) (1.56) - - (0.29) (1.08) (5.82) (0.19) - - - - - India India India India India As on 31.12.2012: 1 EUR = ` 72.5125, 1 US $ = ` 54.9950, 1 RM = ` 17.9850, 1 KSH = ` 0.6384, 1 FRW = ` 0.0872, 1 TZS = ` 0.0345, 1 USH = ` 0.0204, 1 BRL = ` 26.7918; Exchange Rate as on 31.3.2013, 1 EUR = ` 69.4950, 1 US $ = ` 54.2850, 1 Aus $ = ` 56.6250, 1 KSH = ` 0.6353, 1 SGD = ` 43.7200, 1 GBP = ` 82.2275. * Financial Information is based on Unaudited Results. Reliance Industries Limited 205 Financial Information of Subsidiary Companies Sr. No. Name of Subsidiary Company Reporting Currency Capital Reserves Total Assets Total Liabilities Invest m ents Turnover/ Total Income Profit Before Taxation Provision for Taxation Profit After Taxation Proposed Dividend ` in crore Country 32 Delight Proteins Limited 33 Reliance Autozone Limited * 34 Reliance F&B Services Limited 35 Reliance Gems and Jewels Limited * 36 Reliance Integrated Agri Solutions Limited * 37 Strategic Manpower Solutions Limited 38 Reliance Agri Products Distribution Limited * 39 Reliance Digital Media Limited * 40 Reliance Food Processing Solutions Limited 41 Reliance Home Store Limited * 42 Reliance Leisures Limited * 43 Reliance Loyalty & Analytics Limited * 44 Reliance Retail Securities and Broking Company Limited * 45 Reliance Supply Chain Solutions Limited * 46 Reliance Trade Services Centre Limited * 47 Reliance Vantage Retail Limited 48 Wave Land Developers Limited 49 Reliance-GrandOptical Private Limited 50 Reliance Universal Commercial Limited 51 Reliance Petroinvestments Limited 52 Reliance Global Commercial Limited 53 Reliance People Serve Limited 54 Reliance Infrastructure Management Services Limited 55 Reliance Global Business B. V. 56 Reliance Gas Corporation Limited 57 Reliance Global Energy Services (Singapore) Pte. Ltd. 58 Kanhatech solutions Limited 59 Reliance Global Energy Services Limited 60 Reliance Personal Electronics Limited * 61 Reliance Polymers (India) Limited 62 Reliance Polyolefins Limited 63 Reliance Aromatics and Petrochemicals Limited 64 Reliance Energy and Project Development Limited 65 Reliance Chemicals Limited 66 Reliance Universal Enterprises Limited 67 Reliance Review Cinema Limited INR INR INR INR INR INR INR INR INR INR INR INR INR INR INR INR INR 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 0.56 148.16 KSH MN 2,332.11 0.05 0.05 8.88 0.05 0.05 0.05 412.04 59.29 0.05 6.56 1.50 INR INR INR INR INR INR INR EUR MN INR INR SGD MN INR INR GBP MN INR INR INR INR INR INR INR INR (14.52) (9.81) (3.73) (19.04) (0.32) (26.05) (0.13) (3.48) (118.93) (0.09) (27.71) (10.51) (1.24) 2.71 (16.76) (40.87) 35.10 552.42 (0.02) 0.01 26.02 30.62 3.97 645.88 0.01 5.38 0.02 2.01 53.78 0.16 134.13 0.61 0.06 7.34 0.36 85.74 203.05 26.02 30.62 3.97 645.88 0.01 5.38 0.02 2.01 53.78 0.16 134.13 0.61 0.06 7.34 0.36 85.74 203.05 3,196.20 3,196.20 0.04 4.49 0.04 4.49 175.16 185.43 185.43 0.01 (2.36) (0.01) 17.34 2.50 (0.01) 0.96 0.22 4.49 0.65 0.37 429.61 61.82 8.89 8.88 2.03 4.49 0.65 0.37 429.61 61.82 8.89 8.88 2.03 0.01 0.01 0.00 0.01 - - - - 0.01 - 0.01 - - - - - - - - 4.48 184.47 4.48 - - - - 2.76 - - - - - - 62.71 37.41 12.49 758.72 0.00 270.75 0.00 0.04 0.27 - 104.50 - 0.07 (3.17) (2.88) (1.08) (4.08) 0.00 (3.63) (0.01) (0.11) (36.97) (0.02) (10.31) (0.00) (0.04) 95.72 (0.31) 0.02 - 37.21 585.78 - 0.00 0.02 0.00 3.03 2.06 0.33 0.05 - 10.14 2.32 0.11 20.72 2.52 0.01 0.02 16.00 0.02 (0.01) (2.46) 37.09 583.85 (0.00) (0.00) (0.02) (0.00) (0.05) 0.01 0.18 0.03 (0.00) 0.92 0.21 (0.51) 1.56 0.19 (0.01) (0.00) 10.56 (0.00) 10.00 (0.89) 10.60 10.60 4.11 0.50 0.05 4.41 13.26 4.11 1.56 0.19 (0.92) 2,180.50 2,581.65 2,503.44 9.37 1.14 0.28 9.37 1.14 0.28 2,184.97 2,631.78 2,781.38 2,184.97 2,631.78 2,781.38 0.01 2,605.82 2,781.36 1.01 951.80 1,256.31 1,256.31 1,255.99 0.02 (0.00) 7.58 13.26 0.05 2,598.64 2,606.23 2,606.23 2,604.91 3,403.43 3,416.70 3,416.70 3,416.56 (1.01) 0.19 0.19 0.01 0.02 0.02 1.52 (0.00) 0.01 (0.16) (1.37) (1.17) - (1.85) - - - - 25.85 - (4.03) - - - - - 0.85 13.44 - - - - - 0.00 - - - 0.05 0.01 - 0.41 0.05 - - 3.50 - - - 0.01 - (1.80) (1.71) (1.08) (2.23) 0.00 (3.63) (0.01) (0.11) (62.82) (0.02) (6.28) (0.00) (0.04) (0.31) (0.01) (2.46) 36.24 570.41 (0.00) (0.00) (0.02) (0.00) (0.05) 0.01 0.18 0.03 (0.00) 0.87 0.20 (0.51) 1.15 0.14 (0.01) (0.00) 7.06 (0.00) (0.00) (0.00) 0.00 (0.16) - - - - - - - - - - - - - - - - - - - - - - - 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 0.79 Singapore 0.18 India - U K - - - - - - - - - India India India India India India India India As on 31.12.2012: 1 EUR = ` 72.5125, 1 US $ = ` 54.9950, 1 RM = ` 17.9850, 1 KSH = ` 0.6384, 1 FRW = ` 0.0872, 1 TZS = ` 0.0345, 1 USH = ` 0.0204, 1 BRL = ` 26.7918; Exchange Rate as on 31.3.2013, 1 EUR = ` 69.4950, 1 US $ = ` 54.2850, 1 Aus $ = ` 56.6250, 1 KSH = ` 0.6353, 1 SGD = ` 43.7200, 1 GBP = ` 82.2275. * Financial Information is based on Unaudited Results. 206 Fulfilling India’s Aspirations. With Innovation and Enterprise. Financial Information of Subsidiary Companies Sr. No. Name of Subsidiary Company Reporting Currency Capital Reserves Total Assets Total Liabilities Invest m ents Turnover/ Total Income Profit Before Taxation Provision for Taxation Profit After Taxation Proposed Dividend ` in crore Country 68 Reliance Replay Gaming Limited * 69 Two Sisters Foods India Limited 70 Reliance Commercial Land & Infrastructure Limited 71 Reliance Corporate IT Park Limited 72 Reliance Eminent Trading & commercial Private Limited 73 Reliance Progressive Traders Private Limited 74 Reliance Universal Traders Private Limited 75 Reliance Prolific Traders Private Limited INR INR INR INR INR INR INR INR 0.05 10.00 46.90 (1.13) (10.03) 0.10 3.19 0.10 3.19 - - 1,945.41 5,294.93 5,294.93 70.89 0.20 0.07 5.38 2,976.32 (119.00) 3,282.26 3,282.26 14.67 2,051.30 2,256.20 2,256.20 - - 2,290.69 0.12 (0.48) (4.08) 4.43 5.49 (5.47) 13.96 1,742.42 2,216.54 2,216.54 0.00 1.51 (10.66) 10.12 41.49 97.08 97.08 12.87 1,422.38 2,383.26 2,383.26 - (1.74) 0.00 (2.31) 76 Reliance Prolific Commercial Private INR 1.66 331.27 364.87 364.87 - - - - - 0.02 0.00 0.15 0.07 0.00 - - - - 216.62 404.76 29,609.36 5,384.01 - - 87.17 0.00 - - - - - - 0.00 0.00 0.02 (0.06) 0.14 0.07 2.90 (71.66) (13.03) (0.22) (0.04) (0.00) (0.00) (0.00) (0.04) (0.01) (5.40) Limited 77 Reliance Comtrade Private Limited 78 Reliance Ambit Trade Private Limited 79 Reliance Petro Marketing Limited 80 LPG Infrastructure (India) Limited 81 RIL USA Inc. 82 Central Park Enterprises DMCC INR INR INR INR INR USD MN INR USD MN 83 Reliance Corporate Services Limited 84 Reliance Corporate Centre Limited 85 Reliance Convention and Exhibition Centre Limited 86 Reliance International B.V. INR INR INR INR 87 Indiawin Sports Private Limited 88 Reliance Holding USA, Inc. * EUR MN INR INR USD MN 1.48 1.93 4.11 0.05 16.50 3.00 0.55 0.10 0.06 0.05 0.05 0.14 0.02 2.65 0.27 0.05 241.41 465.83 106.47 8.02 (4.73) (0.86) (0.66) (0.12) (0.01) (0.00) (0.00) 0.69 0.10 243.12 490.80 156.29 134.18 243.12 490.80 156.29 134.18 3,609.82 3,609.82 656.39 656.39 0.22 0.04 89.68 0.07 0.22 0.04 89.68 0.07 111.90 111.90 0.92 0.13 0.92 0.13 (96.01) 133.64 133.64 6.50 184.56 3,144.56 25,844.85 25,844.85 571.79 4,699.49 4,699.49 89 Reliance Marcellus LLC * INR 1,014.93 (208.76) 8,466.81 8,466.81 USD MN 184.55 (37.96) 1,539.56 1,539.56 7,822.20 (16.88) 18,760.74 18,760.74 8.11 90 Reliance Jio Infocomm Limited 91 Reliance Strategic (Mauritius) Limited INR INR USD MN 92 Reliance Eagleford Midstream LLC * INR USD MN 93 Reliance Eagleford Upstream LLC * INR 94 Reliance Eagleford Upstream GP LLC * USD MN INR USD MN 0.33 0.06 257.38 46.80 1,255.92 228.37 0.16 0.03 (0.27) (0.05) 0.11 0.02 0.11 0.02 - - 110.65 1,371.96 1,371.96 1,371.80 20.12 249.47 249.47 249.44 11,903.78 11,903.78 1,255.70 2,164.52 2,164.52 228.33 0.11 0.02 0.11 0.02 (0.16) (0.03) (0.01) (0.00) 95 Reliance Eagleford Upstream INR 1,255.81 1,224.13 14,518.13 14,518.13 Holding LP * 96 Mark Project Services Private Limited 97 Reliance Energy Generation and Distribution Limited USD MN 228.35 222.59 2,639.90 2,639.90 INR INR 0.05 0.05 (0.46) 0.00 0.00 371.80 3,636.37 3,636.37 690.68 125.59 - - 0.11 0.02 - - - - 1.70 0.31 (134.30) (24.42) 230.65 (153.99) 41.94 0.05 - - - - - - - - 2,611.66 474.89 - 0.02 (28.00) (5.75) ( 0.11 ) ( 0.02 ) 138.92 25.26 (0.10) (0.02) (0.00) (0.00) 754.59 137.21 (0.14) (0.11) - - - 0.99 - - - - 0.01 - 0.07 0.02 2.45 (26.07) (4.74) - - - - - (0.00) (0.00) - 162.62 29.57 - - - - - - - - - - - - - - - (0.48) (4.08) 4.43 4.50 (5.47) (10.66) (1.74) (2.31) 0.01 (0.06) 0.07 0.05 0.45 - - India India - India - - - - - - - - - - India India India India India India India India India India (45.59) - U S A (8.29) (0.22) (0.04) (0.00) (0.00) (0.00) (0.04) (0.01) (5.40) (296.92) (53.99) (153.99) (28.00) (5.75) (0.11 ) (0.02 ) 138.92 25.26 (0.10) (0.02) (0.00) (0.00) 754.59 137.21 (0.14) (0.11) - - U.A.E - - - - India India India - Netherlands - - India - USA - - USA - - India - Mauritius - USA - - USA - - - USA - USA - - India - India As on 31.12.2012: 1 EUR = ` 72.5125, 1 US $ = ` 54.9950, 1 RM = ` 17.9850, 1 KSH = ` 0.6384, 1 FRW = ` 0.0872, 1 TZS = ` 0.0345, 1 USH = ` 0.0204, 1 BRL = ` 26.7918; Exchange Rate as on 31.3.2013, 1 EUR = ` 69.4950, 1 US $ = ` 54.2850, 1 Aus $ = ` 56.6250, 1 KSH = ` 0.6353, 1 SGD = ` 43.7200, 1 GBP = ` 82.2275. * Financial Information is based on Unaudited Results. Financial Information of Subsidiary Companies Reliance Industries Limited 207 Sr. No. Name of Subsidiary Company 98 Reliance Marcellus II LLC * 99 Reliance Security Solutions Limited 100 Reliance Industries Investment and Holding Limited 101 Reliance Office Solutions Private Limited * Reporting Currency INR USD MN INR INR INR 553.30 100.61 0.05 3.26 5.12 Capital Reserves Total Assets Total Liabilities Invest m ents (59.06) 3,968.88 3,968.88 (10.74) 721.68 721.68 0.15 7.80 7.80 - - - 1,430.19 1,433.48 1,433.48 1,433.38 Turnover/ Total Income Profit Before Taxation 148.60 (52.85) 27.02 13.32 13.84 (9.61) 0.28 11.72 1.17 6.78 6.78 3.14 3.72 2.53 102 Reliance Style Fashion India Private INR 1.01 (8.38) 13.76 13.76 Limited 103 GenNext Innovation Ventures Limited 104 Reliance Home Products Limited * 105 Reliance Styles India Limited 106 Infotel Telecom Limited 107 Rancore Technologies Private Limited 108 Omni Symmetry LLC * 109 Achman Commercial Private Limited 110 Reliance Sibur Elastomers Private Limited 111 Model Economic Township Limited 112 Affinity Names Inc * 113 Reliance Aerospace Technologies Limited 114 Reliance Gas Pipelines Limited 115 Surela Investment and Trading Private Limited 116 Delta Corp East Africa Limited INR INR INR INR INR INR USD MN INR INR INR INR USD MN INR INR INR INR 0.05 0.05 0.05 6.05 0.05 3.57 0.65 0.05 118.01 0.05 1.21 0.22 0.05 0.05 0.05 (0.01) (26.61) (0.01) (0.16) (0.06) - - (1.28) 1.94 (0.00) - - (0.01) (0.00) (0.10) 0.05 9.13 0.04 5.93 0.05 9.13 0.04 5.93 68.77 68.77 3.57 0.65 6.77 3.57 0.65 6.77 0.05 1.21 0.22 0.05 0.20 22.04 0.05 1.21 0.22 0.05 0.20 22.04 120.07 120.07 96.89 183.50 37.17 243.85 243.85 KSH MN 2,888.38 585.10 3,838.32 3,838.32 117 Delta Square Limited 118 Kaizen Capital LLP INR KSH MN INR GBP MN 119 Reliance USA Gas Marketing LLC * INR USD MN 120 Reliance Jio Infocomm Pte. Ltd. # INR USD MN INR 121 Reliance do Brasil Indústria e Comércio de Produtos Têxteis, Químicos, Petroquímicos e Derivados Ltda. 0.01 0.10 - - 0.01 0.00 0.11 0.02 3.97 5.69 89.53 - - (0.01) (0.00) - - (3.86) 7.27 7.27 114.51 114.51 6.74 0.82 0.00 0.00 0.11 0.02 0.19 6.74 0.82 0.00 0.00 0.11 0.02 0.19 BRL MN 1.48 (1.44) 0.07 0.07 10.44 (4.32) - 25.21 - 0.07 2.19 - - 0.24 3.54 (0.00) (6.13) (0.00) 0.01 0.04 (2.86) (0.52) (1.27) 2.77 0.00 (0.00) - - - - 0.15 148.03 2,330.11 16.13 - - (0.00) (0.00) (0.07) 39.03 614.29 9.56 253.88 150.46 37.91 4.61 - - - - 5.26 0.64 (0.01) (0.00) - - - - - - 0.49 - - - - - - - - 0.00 2.49 - - - - - - - - - - - - Provision for Taxation Profit After Taxation Proposed Dividend ` in crore Country - - 0.14 0.03 - - - 5.42 - 0.09 0.03 - - - 0.83 - - - - - 0.00 10.20 160.47 3.12 49.12 - - - - - - (52.85) - USA (9.61) 0.14 11.69 - - - India India 2.53 - India (4.32) - India (0.00) (11.55) (0.00) (0.08) 0.01 (2.86) (0.52) (1.27) 1.94 (0.00) - - (0.00) (0.00) (0.07) 28.83 453.82 6.44 101.34 5.26 0.64 (0.01) (0.00) - - - - - - - India India India India India - USA - - - India India India - USA - - India - - India India - Kenya - - Kenya - - U.K. - - U.S.A. - - Singapore - 0.56 (0.03) 0.00 (0.03) - Brazil 0.21 (0.01) 0.00 (0.01) - # The first accounting year of the company will be ending on 31st December 2013 / 31st March 2014 As on 31.12.2012: 1 EUR = ` 72.5125, 1 US $ = ` 54.9950, 1 RM = ` 17.9850, 1 KSH = ` 0.6384, 1 FRW = ` 0.0872, 1 TZS = ` 0.0345, 1 USH = ` 0.0204, 1 BRL = ` 26.7918; Exchange Rate as on 31.3.2013, 1 EUR = ` 69.4950, 1 US $ = ` 54.2850, 1 Aus $ = ` 56.6250, 1 KSH = ` 0.6353, 1 SGD = ` 43.7200, 1 GBP = ` 82.2275. * Financial Information is based on Unaudited Results. 208 Fulfilling India’s Aspirations. With Innovation and Enterprise. Shareholders’ Referencer AT A GLANCE       Presently, the Company has around 3.2 million 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. 97.58% of the Company’s Equity Shares are held in demat form. 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. I N V E S T O R S E RV I C E A N D G R I E VA N C E 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. 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. 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 Reliance Industries Limited 209 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. 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 Opt for Corporate Benefits in Electronic Form Dealing in Securities 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, 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. What is the Process of trading in Securities? The normal course of trading in the Indian market context 210 Fulfilling India’s Aspirations. With Innovation and Enterprise. is briefed below: Step 1. Step 2. Step 3. Investor / trader decides to trade. Places order with a broker to buy / sell the required quantity of respective securities. Best priced order matches based on price-time priority. Step 4. Order execution is electronically communicated Step 5. to the broker’s terminal. 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. Pay-in of funds and securities before T+2 day. Pay-out of funds and securities on T+2 day. Step 7. Step 8. 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. What is Delivery Instruction Slip (DIS) and what precautions one needs to observe with respect to DIS? To give delivery of the securities, 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:   Ensure and insist with DP to issue DIS book. 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. Avoid using loose slips. Do not leave signed blank DIS with anyone viz., broker/sub-broker, DPs or any other person/entity. Keep the DIS book under lock and key when not in use. If only one entry is made in the DIS book, strike out remaining space to prevent misuse. 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: Default password provided by the broker is changed  before placing of order. 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. Adequate training on usage of software. 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?  Avoid placing order from shared PCs / through cyber cafés. Log out after having finished trading to avoid misuse. Ensure that one does not click on “remember me” option while signing in from non-regular location. Do not leave the terminal unattended while one is “signed-in” to the trading system. Protect your personal computer against viruses by placing a firewall and an anti-virus solution. Do not open email attachments from people you do not know.      DIVIDEND Payment of Dividend Dividend is paid under three modes viz: (a) National Electronic Clearing Services (NECS) (b) National Electronic Fund Transfer (NEFT) (c) Physical dispatch of Dividend Warrant 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. Reliance Industries Limited 211 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 91 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. b. c. d. Investor need not make frequent visits to his bank for depositing the physical paper instruments. Prompt credit to the bank account of the investor through electronic clearing. Fraudulent encashment of warrants is avoided. Exposure to delays / loss in postal service avoided. e. As there can be no loss in transit of warrants, issue 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 60,225 branches of 122 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 investors opt out of NECS Facility? 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. Course of Action in case of Non-receipt of Dividend, Revalidation of Dividend Warrant, etc. What should a shareholder do in case of non-receipt of dividend? 212 Fulfilling India’s Aspirations. With Innovation and Enterprise. 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:  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 with one of the depository participants, for this purpose.  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) and Clause 5A (II) 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 suspense accounts at the beginning 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 suspense accounts during the year and the aggregate number of shareholders along with number of unclaimed shares lying in the suspense accounts at the end of the year, 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. Where can the status of unclaimed dividend be verified? The Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on June 07, 2012 (date of last Annual General Meeting) on the website of the Company (www.ril.com), as also on the Ministry of Corporate Affairs website which can be accessed by the shareholders. 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 213 Chart 1: Status of unclaimed and unpaid dividend for different years: Dividend upto 1994-95 Transfer of unpaid dividend Claims for unpaid dividend Transferred to General Revenue account of the Central Government Can be claimed from ROC, Maharashtra* Dividend for 1995-96 to 2004-05 Transferred to Central Government’s Investor Education and Protection Fund (IEPF) Cannot be claimed Dividend for 2005-06 and thereafter 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 2005-06 and thereafter Financial year ended RIL Date of declaration of dividend 27.06.2006 10.03.2007 12.06.2008 07.10.2009 18.06.2010 03.06.2011 07.06.2012 31.03.2006 31.03.2007 (Interim) 31.03.2008 31.03.2009 31.03.2010 31.03.2011 31.03.2012 DEMATERIALISATION / REMATERIALISATION OF SHARES Last date for claiming unpaid dividend 26.06.2013 08.03.2014 11.06.2015 06.10.2016 17.06.2017 02.06.2018 06.06.2019   What is Dematerialisation of shares? 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.        Erstwhile IPCL (Merged with RIL) Date of declaration of dividend 25.05.2006 10.03.2007 Last date for claiming unpaid dividend 24.05.2013 08.03.2014 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 Ease in pledging the shares Benefits of Demat   Elimination of bad deliveries Elimination of all risks associated with physical certificates No stamp duty on transfers Immediate transfer / trading of securities   How to dematerialise shares? The procedure for dematerialising shares is as under :  Open Beneficiary Account with a DP registered with SEBI. Submit Demat Request Form (DRF) as given by the DP, duly signed by all the holders with the names and signatures in the same order as appearing in the  214 Fulfilling India’s Aspirations. With Innovation and Enterprise.   concerned certificate(s) and the Company records, along with the share certificate(s). 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. 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 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).  What is the procedure for rematerialisation of shares? Shareholders should submit duly filled in  Rematerialisation Request Form (RRF) to the concerned DP. DP intimates the relevant Depository of such requests. DP submits RRF to the Company’s R&TA. Depository confirms rematerialisation request to the Company’s R&TA. The Company’s R&TA updates accounts and prints certificate(s) and informs the Depository.      Depository updates the Beneficiary Account of the shareholder by deleting the shares so rematerialised. Share certificate(s) is despatched to the shareholder. NOMINATION FACILITY What is nomination facility and to whom is it 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). Minor(s) 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 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. Reliance Industries Limited 215 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 or to the DP as may be applicable by reporting death of the nominator along with the attested copy of the death certificate. 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 15 days 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 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 216 Fulfilling India’s Aspirations. With Innovation and Enterprise. 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 electronic holdings these documents have to be submitted to the concerned DP. 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). In case of electronic holdings these documents have to be submitted to the concerned DP. 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 of address such as attested copies of Ration Card / PAN Card / Passport / Latest Electricity or Telephone Bill / Lease Agreement, Aadhaar Card, 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, 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 Particulars Sl. No. Folio Consolidation Change of Name Transfers 1 Transmission 2 3 Transposition 4 Deletion of Name 5 6 7 Demat Remat 8 9 Issue of Duplicate Certificate 10 Replacement of Certificate 11 Certificate Consolidation 12 Certificate Split (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 Allotment / call money 2 Others Service Standards (No. of working days) 4 4 4 3 3 3 3 3 35 3 3 3 Service Standards (No. of working days) 2 4 4 2 4 2 Reliance Industries Limited 217 Particulars Sl. No. Requests Service Standards (No. of working days) 1 2 3 Change of Address Revalidation of Dividend Warrants Revalidation of Redemption Warrants Bank Mandate / Details 4 5 Nomination 6 7 Multiple Queries IEPF Letters 8 Power of Attorney 2 3 3 2 2 2 4 3 Reminder Letters to Investors 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. 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 :  This Scheme is available to Indian national residents 218 Fulfilling India’s Aspirations. With Innovation and Enterprise. in respect of any master folio having holdings up to 49 shares; 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); The odd lot shares offered under the Scheme are sold through designated brokers in the BSE / NSE; 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:  No tax is payable by shareholders on dividend. However, the Company is required to pay dividend tax @ 15% and surcharge @10% (proposed in the Budget 2013-14) together with education cess @ 2% and higher education cess @ 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%; (Surcharge @ 10% proposed in the Budget 2013-14 for income exceeding ` 1 crore in the case of individuals also.) 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) b) 20% of the capital gain computed after substituting ‘cost of acquisition’ with ‘indexed cost of acquisition’ together with education cess @ 2% and higher education cess @ 1% in the case of ‘individuals’. (Surcharge @ 10% proposed in the Budget 2013-14 for income exceeding ` 1 crore in the case of individuals also.) 10% of the capital gain computed before substituting ‘cost of acquisition’ with ‘indexed cost of acquisition’ together with education cess @ 2% and higher education cess @ 1% in the case of ‘individuals’. (Surcharge @ 10% proposed in the Budget 2013-14 for income exceeding ` 1 crore in the case of individuals also.)  STT is payable as under NIL in the case of purchaser & @ 0.001% in the case of seller in respect of delivery based transaction (proposed in the Budget 2013-14, w.e.f. 1st June, 2013) @ 0.017% by the seller in respect of Sale of an option in securities and @ 0.01% in the case of seller in respect of sale of futures in securities (proposed in the Budget 2013-14, w.e.f. 1st June, 2013) @ 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. All companies against whom complaints are pending on SCORES, will have to take necessary steps within 7 days of receipt of complaint through SCORES and resolve the complaint within 30 days of receipt of complaint and also keep the complainant duly informed of the action taken. 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”. Reliance Industries Limited 219 this sub-regulation; and such change exceeds 2% of total shareholding or voting rights in the company. E-voting To widen the participation of shareholders in company decisions, the Securities and Exchange Board of India (SEBI) has directed top 500 listed companies to provide e-voting facility to their shareholders from October, 2012 onwards, in respect of those businesses which are transacted through postal ballot.    SHAREHOLDERS’ GENERAL RIGHTS  To receive not less than 21 days notice of general meetings unless consented for a shorter notice. To receive notice and forms for Postal Ballots in terms of the provisions of the Companies Act, 1956 and the concerned Rules issued thereunder. To receive copies of Balance Sheet and Statement of Profit and Loss 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. To participate and vote at general meetings either personally or through proxy (proxy can vote only in case of a poll). To receive dividends and other corporate benefits like bonus, rights etc. once approved. To demand poll on any resolution at a general meeting in accordance with the provisions of the Companies Act, 1956. To inspect statutory registers and documents as permitted under law. 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      To remain abreast of corporate developments, company specific information and take informed investment decision(s). To be aware of relevant statutory provisions and ensure effective compliance therewith. To deal with only SEBI registered intermediaries while dealing in the securities. Not to indulge in fraudulent and unfair trading in securities nor to act upon any unpublished price sensitive information. To participate effectively in the proceedings of shareholders’ meetings. To contribute to the Greener Environment and      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 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 220 Fulfilling India’s Aspirations. With Innovation and Enterprise. accordingly register email addresses to enable the Company to send all documents / notices including Annual Reports electronically. To register nominations, which would help the nominees to get the shares transmitted in their favour without any hassles. To respond to communications seeking shareholders’ approval through Postal Ballot. To respond to communications of SEBI / Depository / DP / Brokers / Sub-brokers / Other Intermediaries / Company, seeking investor feedback / comments.    DEALING IN SECURITIES MARkET DO’S    Transact only through Stock Exchanges. Deal only through SEBI registered intermediaries. Complete all the required formalities of opening an account properly (Client registration, Client agreement forms etc). Ask for and sign “Know Your Client Agreement”. Read and properly understand the risks associated with investing in securities / derivatives before undertaking transactions. Assess the risk - return profile of the investment as well as the liquidity and safety aspects before making your investment decision. Ask all relevant questions and clear your doubts with your broker before transacting. Invest based on sound reasoning after taking into account all publicly available information and on fundamentals. Beware of the false promises and to note that there are no guaranteed returns on investments in the Stock Market. Give clear and unambiguous instructions to your broker / sub-broker / DP. Be vigilant in your transactions. Insist on a contract note for your transaction. Verify all details in the contract note, immediately on receipt. Always settle dues through the normal banking channels with the market intermediaries. Crosscheck details of your trade with details as available on the exchange website. Scrutinize minutely both the transaction and the holding statements that you receive from your DP.                       Keep copies of all your investment documentation. Handle DIS Book issued by DP’s carefully. Insist that the DIS numbers are pre-printed and your account number (client id) be pre-stamped. In case you are not transacting frequently make use of the freezing facilities provided for your demat account. Pay the margins required to be paid in the time prescribed. Deliver the shares in case of sale or pay the money in case of purchase within the time prescribed. Participate and vote in general meetings either personally or through proxy. Be aware of your rights and responsibilities. In case of complaints, approach the right authorities for redressal in a timely manner. DON’TS     Don’t undertake off-market transactions in securities. Don’t deal with unregistered intermediaries. Don’t fall prey to promises of unrealistic returns. Don’t invest on the basis of hearsay and rumours; verify before investment. Don’t forget to take note of risks involved in the investment. Don’t be misled by rumours circulating in the market. Don’t blindly follow media reports on corporate developments, as some of these could be misleading. Don’t follow the herd or play on momentum - it could turn against you. Don’t be misled by so called hot tips. Don’t try to time the market. Don’t hesitate to approach the proper authorities for redressal of your doubts / grievances. Don’t leave signed blank DISs of your demat account lying around carelessly or with anyone. Do not sign blank DIS and keep them with DP or broker to save time. Remember your carelessness can be your peril. Do not keep any signed blank transfer deeds.           NOTE The contents of this Referencer are for the purpose of general information. Readers are advised to refer to the relevant Acts / Rules / Regulations / Guidelines / Clarifications. Reliance Industries Limited 221 Members Feedback Form 2012-2013 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 Quality of Financial and non- financial information in the Annual Report Information on Company’s Website Contents Presentation Contents Presentation Contents Presentation Contents Presentation 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. 222 Fulfilling India’s Aspirations. With Innovation and Enterprise. 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  DP Id* Client Id* Reliance Industries Limited 223 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 39tH AnnuAl GeneRAl MeetInG of the Company held on Thursday, June 6, 2013 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 / h er………………………………...……….......................................... of …………………....................……………..................................... as my/our proxy to vote for me/us and on my/our behalf at the 39th Annual General Meeting of the Company to be held on Thursday, June 6, 2013 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 Mahesh P. Modi b) Dr. Dharam Vir Kapur c) Dr. Raghunath A. Mashelkar d) Shri Pawan Kumar Kapil 4. Appointment of Auditors 5. Commission to Non-Executive Directors For Against  Signed this…………………. day of …………………………. 2013 * Applicable for investors holding shares in electronic form. Please see the instructions overleaf Signature Affix a 15 paise Revenue Stamp 224 Fulfilling India’s Aspirations. With Innovation and Enterprise. 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. Awards and Recognitions RIL continues to receive recognition for industry leadership and excellence in its fields of operations. Some of the major awards and recognitions conferred during the year include: Health, Safety and Environment Technology, Patents, R&D and Innovation l Hazira Manufacturing Division was awarded the Best Prax Prize for Innovation by QIMPRO Corporate Social Responsibility l Hazira Manufacturing Division, Reliance Community Care Centre, received a Trophy for work done under the National AIDS Control Program Phase III from Population Foundation of India l Nagothane Manufacturing Division received the National Award for Innovative Training Practices for security training practices by Indian Society for Training & Development l Dahej Manufacturing Division received the Greentech Gold Award for HR Excellence Sustainability l Hazira Manufacturing Division received the CII-ITC Sustainability Awards 2012 and the coveted Certificate of Commendation for Significant Achievement in the area of Sustainable Development Leadership l Conferred the International Refiner of the Year 2013 Award at HART Energy’s 27th World Refining & Fuel Conference l Hazira Manufacturing Division won the “Mark of Excellence Award” at the IST Convention on Leadership Excellence organised by IGCL Corporate Rankings and Ratings l Received the appreciation plaque from ASSOCHAM for its CSR activities Quality l Dahej & Hazira Manufacturing Divisions won the Three Star (highest award) at ICQCC l Received the IMC Ramkrishna Bajaj National Quality Award under the manufacturing category l Hazira Manufacturing Division received the ASQ’s International Team Excellence Award from American Society for Quality Project l Dahej Manufacturing Division received the best viewer’s choice award for implementing a Six Sigma Project from the American Society for Quality Division received the Platinum Award for its Six Sigma Project from Concept Business Excellence l Jamnagar Manufacturing Division won the QualTech Prize for Improvement (Manufacturing Process Excellence) from QIMPRO l Hazira Manufacturing l l Received the Management of Health, Safety & Environment Award from Indian Chemical Council l Dahej Manufacturing Division was awarded the Golden Peacock Environment Management Award l Hazira Manufacturing Division won the Golden Peacock Occupational Health & Safety Award l Vadodara Manufacturing Division received the CII- Environment Best Practices Award l KG-D6 operations received the International Safety Award with distinction from the British Safety Council l Jamnagar Manufacturing Division received the Safety Innovation Award from Institution of Engineers, New Delhi for the 3rd consecutive year in a row Energy & Water Conservation / Efficiency l Jamnagar Manufacturing Division (DTA) refinery received the Jawaharlal Nehru Centenary Award from the Ministry of Petroleum & Natural Gas for being among the three refineries, which have achieved the lowest specific energy consumption among Indian refineries Jamnagar Manufacturing Division received an Innovative Project award from the Bureau of Energy Efficiency, Ministry of Power, Govt. of India l Reliance Corporate IT Park, Navi Mumbai was adjudged by CII as a National Energy Efficient Unit in India FULFILLING INDIA’S ASPIRATIONS. WITH INNOVATION AND ENTERPRISE. India is on an undeniable growth trajectory, matched by few in the world, for scale and vigour. Fuelled by boundless aspirations and the infectious energy of a young populace, the country is fast progressing towards a definitive role in the global economic order. Not only is it leading to an increasing share of global commerce for India as a nation, but also catalysing consumption, resulting in the creation of a groundswell of opportunity. Addressing the aspirations of the Indian populace, our businesses are intrinsically linked to India’s growth trajectory. Given India’s unique demographic advantage, our businesses remain relevant to the youth of today who will become the leaders of tomorrow. Innovation and enterprise form the essence of this surge of opportunities and find reflection in every facet of our operations. We are making large investments in all our key business categories, i.e. Oil & Gas, Refining, Petrochemicals, Retail and 4G, to reinforce the spirit of enterprise. Across our businesses, we have demonstrated abilities to build world-scale capacities and infrastructure. We have enhanced our business footprint from the conventional energy chain to consumer businesses and delivered value. Our businesses are deeply aligned with the ethos of innovation. We have constantly endeavoured to operate at the forefront of new technologies. We have invested in continuously developing new products and seeking new applications, which are suitable for Indian markets and conditions. We have, for instance, integrated a technology platform with our Retail business. Over the years, we have tapped into the enormous opportunities presented by the Indian economy. The evolving economic landscape and the aspirations of the people have driven us to aim higher, execute our plans seamlessly and sustain the growth momentum. This has helped us touch the lives of our fellow citizens and lay the foundation for the long-term development of our nation. We understand these aspirations and the opportunities that lie within. This drives us towards continuous efforts in enterprise and innovation which act as catalysts in realising these aspirations. Book-Post 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 A n n u a l R e p o r t 2 0 1 2 - 1 3 ANNUAL REPORT 2012-13 FULFILLING INDIA’S ASPIRATIONS. WITH INNOVATION AND ENTERPRISE. 

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