The Directors are pleased to present the 39th Annual Report and the
audited accounts for the financial year ended March 31, 2013.
The financial performance of the Company, for the year ended March 31,
2013 is summarised below:
Rs. crore $ Mn* Rs. crore $ Mn*
Profit before Tax 26,284 4,842 25,750 5,061
Less: Current Tax 5,244 966 5,150 1,012
Deferred Tax 37 7 560 110
Profit for the year 21,003 3,869 20,040 3,939
Add: Balance in Profit &
Loss Account 7,609 1,668 6,514 1,453
Add: On Amalgamation 1,116 206 - -
29,728 5,743 26,554 5,392
Transferred to General Reserve 18,000 3,316 16,000 3,145
Transferred to Capital Redemption
Reserve on buy back of
Equity Shares 43 8 4 1
Proposed Dividend on Equity Shares 2,628 484 2,531 497
Tax on Dividend 447 82 410 81
Closing Balance 8,610 1,853 7,609 1,668
* 1 $ = Rs. 54.285 Exchange Rate as on March 31, 2013 (1 $ = Rs. 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
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:
- Revenue from operations increased by 9.2% to Rs. 371,119 crore ($68.4
- Exports increased by 15% to Rs. 239,226 crore ($ 44.1 billion)
- PBDIT decreased by 2.6% at Rs. 38,785 crore ($ 7.1 billion)
- Profit Before Tax increased by 2.1% at RS. 26,284 crore ($ 4.8
- Cash Profit was at Rs. 30,505 crore ($ 5.6 billion)
- Net Profit increased by 4.8% to Rs. 21,003 crore ($3.9 billion)
- Gross Refining Margin was $ 9.2 / bbl for the year ended March 31,
The consolidated revenue from operations of the Company for the year
ended March 31, 2013 was Rs. 397,062 crore, an increase of 10.8% on a
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 RS. 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.
Buy-Back of Equity Shares
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 Rs. 10 each
of an aggregate face value of Rs. 46,24,62,800 (which includes
36,63,431 equity shares of Rs. 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 RS.
The Buy-back programme was the 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.
Your Directors have recommended a dividend of Rs. 9.00 per Equity Share
(last year Rs. 8.50 per Equity Share) for the financial year ended
March 31, 2013, amounting to Rs. 3075 crore (inclusive of tax of Rs.
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.
The Company continues to have the highest domestic credit ratings of
AAA from CRISIL (S&P subsidiary) and Fitch. Moody's and S&P have
reaffirmed investment grade ratings for international debt of the
Company, as Baa2 positive outlook (local currency issuer rating) and
BBB positive outlook respectively. The Company's international rating
from Moody's and S&P is higher than the country's sovereign rating.
Strong credit ratings by leading international agencies reflect the
Company's financial discipline and prudence.
Employees' Stock Option Scheme
The 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
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:
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
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".
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.
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 Rs. 10,000
crore during the year. The business grew by 42% to reach revenue of
Rs. 10,800 crore as against Rs. 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
Rs. 78 crore. The milestone of crossing Rs. 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
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.
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 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.
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
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
(iv) the Directors have prepared the annual accounts of the Company on
a `going concern' basis.
Auditors and Auditors' Report
M/s. Chaturvedi & Shah, Chartered Accountants, M/s. Deloitte Haskins &
Sells, Chartered Accountants and M/s. Rajendra & Co., Chartered
Accountants, Statutory Auditors of the Company, hold office until the
conclusion of the ensuing Annual General Meeting and are eligible for
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.
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
(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 & Baneijee, Cost Accountants, M/s. Kiran J.
Mehta & Co, Cost Accountants and M/s. Dilip M. Malkar & Co., Cost
(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
(v) For Petroleum Business - M/s. V. J. Talati & Co., Cost Accountants;
(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
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.
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
Particulars of Employees
In terms of the provisions of Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975 as
amended, the names and other particulars of the employees are set out
in the annexure to the Directors' Report. Having regard to the
provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report
excluding the aforesaid information is being sent to all the members of
the Company and others entitled thereto. Any member interested in
obtaining such particulars may write to the Company Secretary at the
Registered Office of the Company.
Energy Conservation, Technology Absorption and Foreign Exchange
Earnings and Outgo
The particulars relating to energy conservation, technology absorption,
foreign exchange earnings and outgo, as required to be disclosed under
Section 217(1)(e) of the Companies Act, 1956 read with the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules,
1988 are provided in 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.
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.
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