Book-Post Reliance Industries Limited ANNUAL REPORT 2012-13 Annual Report 2012-13 FULFILLING INDIA’S ASPIRATIONS. WITH INNOVATION AND ENTERPRISE. WorldReginfo - 7e848d9d-1778-40c7-ba7d-bb3a41e5563f 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: Leadership Health, Safety and Technology, Patents, R&D Environment and Innovation l Conferred the International Refiner of the Year 2013 l Received the Management l Hazira Manufacturing Award at HART Energy’s of Health, Safety & Division was awarded 27th World Refining & Environment Award from the Best Prax Prize for Fuel Conference Indian Chemical Council Innovation by QIMPRO l Hazira Manufacturing l Dahej Manufacturing Division won the “Mark Division was awarded Corporate Social Responsibility of Excellence Award” at the Golden Peacock the IST Convention on Environment Management l Hazira Manufacturing Leadership Excellence Award Division, Reliance organised by IGCL l Hazira Manufacturing Community Care Centre, Division won the Golden received a Trophy for work Corporate Rankings Peacock Occupational done under the National and Ratings Health & Safety Award AIDS Control Program Phase III from Population l l Received the appreciation Vadodara Manufacturing Foundation of India Division received the CII- plaque from ASSOCHAM l Nagothane Manufacturing for its CSR activities Environment Best Practices Award Division received the National Award for FULFILLING INDIA’S ASPIRATIONS. Quality l KG-D6 operations received Innovative Training the International Safety Practices for security WITH INNOVATION AND ENTERPRISE. l Dahej & Hazira Award with distinction from training practices by Indian Manufacturing Divisions the British Safety Council Society for Training won the Three Star (highest l Jamnagar Manufacturing & Development India is on an undeniable growth trajectory, matched by few in the world, for scale and vigour. Fuelled by boundless award) at ICQCC Division received the Safety aspirations and the infectious energy of a young populace, the country is fast progressing towards a definitive role l Dahej Manufacturing Innovation Award from l Received the IMC Division received the in the global economic order. Institution of Engineers, Ramkrishna Bajaj National Greentech Gold Award for New Delhi for the 3rd Not only is it leading to an increasing share of global commerce for India as a nation, but also catalysing Quality Award under the HR Excellence consumption, resulting in the creation of a groundswell of opportunity. manufacturing category consecutive year in a row Sustainability Addressing the aspirations of the Indian populace, our businesses are intrinsically linked to India’s growth l Hazira Manufacturing Energy & Water trajectory. Given India’s unique demographic advantage, our businesses remain relevant to the youth of today Division received the Conservation / Efficiency l Hazira Manufacturing who will become the leaders of tomorrow. ASQ’s International Team Excellence Award from Division received the CII-ITC l Jamnagar Manufacturing Sustainability Awards 2012 Innovation and enterprise form the essence of this surge of opportunities and find reflection in every facet of American Society for Quality Division (DTA) refinery and the coveted Certificate our operations. received the Jawaharlal of Commendation for Project Nehru Centenary Award Significant Achievement We are making large investments in all our key business categories, i.e. Oil & Gas, Refining, Petrochemicals, Retail from the Ministry of in the area of Sustainable and 4G, to reinforce the spirit of enterprise. l Dahej Manufacturing Petroleum & Natural Gas Development Division received the best for being among the three Across our businesses, we have demonstrated abilities to build world-scale capacities and infrastructure. We have viewer’s choice award for refineries, which have enhanced our business footprint from the conventional energy chain to consumer businesses and delivered value. implementing a Six Sigma achieved the lowest specific Project from the American energy consumption among Our businesses are deeply aligned with the ethos of innovation. We have constantly endeavoured to operate at Society for Quality Indian refineries 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 l Hazira Manufacturing l Jamnagar Manufacturing platform with our Retail business. Division received the Division received an Platinum Award for its Six Innovative Project award Over the years, we have tapped into the enormous opportunities presented by the Indian economy. The evolving Sigma Project from Concept from the Bureau of Energy economic landscape and the aspirations of the people have driven us to aim higher, execute our plans seamlessly Business Excellence Efficiency, Ministry of Power, Govt. of India and sustain the growth momentum. This has helped us touch the lives of our fellow citizens and lay the foundation l Jamnagar Manufacturing for the long-term development of our nation. Division won the QualTech l Reliance Corporate IT Park, Prize for Improvement Navi Mumbai was adjudged We understand these aspirations and the opportunities that lie within. This drives us towards continuous efforts (Manufacturing Process by CII as a National Energy in enterprise and innovation which act as catalysts in realising these aspirations. Excellence) from QIMPRO Efficient Unit in India WorldReginfo - 7e848d9d-1778-40c7-ba7d-bb3a41e5563f Contents Company Overview 02 Highlights 08 Reliance Foundation 03 10 Year Financial Performance 14 Company Information 04 Letter to Shareholders 15 Financial Highlights 06 The Board of Directors 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 164 Consolidated Cash Flow Statement 116 Balance Sheet 166 Significant Accounting Policies on 117 Statement of Profit and Loss Consolidated Accounts 118 Cash Flow Statement 167 Notes on Consolidated Financial Statements 120 Significant Accounting Policies 204 Financial Information of 123 Notes on Financial Statements Subsidiary Companies 161 Independent Auditors’ Report on 208 Shareholders’ Referencer Consolidated Financial Statements 221 Members’ Feedback Form 162 Consolidated Balance Sheet 223 Attendance Slip and Proxy Form WorldReginfo - 7e848d9d-1778-40c7-ba7d-bb3a41e5563f 2 Fulfilling India’s Aspirations. With Innovation and Enterprise. Highlights Reliance Industries Limited (RIL) is India’s largest private sector 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 Largest refining capacity at l 5th largest producer of any single location Polypropylene (PP) l Largest producer of Polyester l 8th largest producer of Mono Fibre and Yarn Ethylene Glycol (MEG) l 5th largest producer of l 9th largest producer of Paraxylene (PX) Purified Terephthalic Acid (PTA) RIL’s Contribution to India’s Economic Growth 14% 4.8% 7.0% RIL’s exports as % RIL as % of the Government RIL’s weightage in the of India’s exports of India’s indirect tax revenues NSE Nifty 8.6% 4% RIL’s weightage RIL as % of the total in the BSE Sensex market capitalisation in India WorldReginfo - 7e848d9d-1778-40c7-ba7d-bb3a41e5563f Reliance Industries Limited 3 10 Year Financial Performance TURNOVER (` Crore) PROFIT AFTER TAX (` Crore) (Excluding exceptional item) 03-04 56,247 03-04 5,160 04-05 73,164 04-05 7,572 05-06 89,124 05-06 9,069 06-07 118,354 06-07 11,943 07-08 139,269 07-08 15,261 08-09 146,328 08-09 15,637 09-10 200,400 09-10 16,236 10-11 258,651 10-11 20,286 11-12 339,792 11-12 20,040 12-13 371,119 12-13 21,003 5,000 10,000 15,000 20,000 25,000 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 NETWORTH (` Crore) MARKET CAPITALISATION (` Crore) 03-04 34,453 03-04 75,132 04-05 40,403 04-05 76,079 05-06 49,804 05-06 110,958 06-07 63,967 06-07 198,905 07-08 81,449 07-08 329,179 08-09 126,373 08-09 239,721 09-10 137,171 09-10 351,320 10-11 151,540 10-11 342,984 11-12 166,096 11-12 244,757 12-13 179,995 12-13 249,802 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 EARNINGS PER SHARE (`)* BOOK VALUE PER SHARE (`)* (Excluding exceptional item) 03-04 18.5 03-04 123.4 04-05 27.2 04-05 145.0 05-06 32.5 05-06 178.7 06-07 41.3 06-07 221.3 07-08 50.9 07-08 281.8 08-09 49.7 08-09 401.5 09-10 49.7 09-10 419.5 10-11 62.0 10-11 463.2 11-12 61.2 11-12 507.3 12-13 64.8 12-13 557.5 30 10 20 40 50 60 70 150 200 50 100 250 300 350 400 450 500 550 600 * Normalised on account of issue of Bonus Share in the ratio of 1:1 in 2009-10 WorldReginfo - 7e848d9d-1778-40c7-ba7d-bb3a41e5563f 4 Fulfilling India’s Aspirations. With Innovation and Enterprise. 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.