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Reliance Industries Ltd.

BSE: 500325 Sector: Oil & Gas
NSE: RELIANCE ISIN Code: INE002A01018
BSE 16:01 | 19 Feb 1216.35 -3.40
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NSE 15:59 | 19 Feb 1216.10 -4.00
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OPEN 1219.20
PREVIOUS CLOSE 1219.75
VOLUME 403246
52-Week high 1328.75
52-Week low 881.00
P/E 21.84
Mkt Cap.(Rs cr) 771,004
Buy Price 1215.00
Buy Qty 4.00
Sell Price 1216.35
Sell Qty 451.00
OPEN 1219.20
CLOSE 1219.75
VOLUME 403246
52-Week high 1328.75
52-Week low 881.00
P/E 21.84
Mkt Cap.(Rs cr) 771,004
Buy Price 1215.00
Buy Qty 4.00
Sell Price 1216.35
Sell Qty 451.00

Reliance Industries Ltd. (RELIANCE) - Director Report

Company director report

Board’s Report

Dear Members

The Board of Directors are pleased to present the Company’s Forty-first AnnualReport (Post-IPO) and the Company’s audited financial statements (standalone andconsolidated) for the financial year ended March 31 2018.

Financial Results

The Company’s financial performance for the year ended March 31 2018 issummarised below:

STANDALONE CONSOLIDATED
2017-18 2016-17 2017-18 2016-17
crore US$ crore US$ crore US$ crore US$
million* million* million* million*
Profit Before Tax 45725 7016 40777 6288 49426 7584 40034 6173
Less: Current Tax 8953 1374 8333 1285 10098 1549 8880 1369
Deferred Tax 3160 485 1019 157 3248 498 1321 204
Profit for the year 33612 5157 31425 4846 36080 5537 29833 4600
Add: Other Comprehensive Income (3503) (537) 2192 338 (1635) (251) 1827 282
Total Comprehensive Income for the year 30109 4620 33617 5184 34445 5286 31660 4882
Less: Total Comprehensive Income attributable to Non Controlling Interest - - 9 1 (64) (10)
Total Comprehensive Income attributable to owners of the Company 30109 4620 33617 5184 34436 5285 31724 4892
Add: Balance in Profit and Loss Account (Adjusted) 34506 5999 25679 4638 14467 2413 7851 1393
Add: Transferred from Capital Reserve Account - - - -
Add: Transferred from Revaluation Reserve 327 50
Add: Transferred from Share in Reserve of Associates 10 2
Add: Transferred from Share Based Payments Reserve 4 1 4 1
Less: On account of Amalgamation / Divestment of Stake - - (283) (43) (252) (39)
Less: Securities Premium on Redemption of (144) (22)
Non-Cumulative Optionally Convertible Preference Shares
Sub-Total 64619 10620 59296 9822 48817 7686 39323 6246
Less: Appropriation
Transferred to Statutory Reserve - - 221 34 66 10
Transferred to General Reserve 25000 3836 24790 3823 25000 3836 24790 3823
Transferred to Capital Redemption Reserve - - 2 0 - -
Transferred to Debenture Redemption Reserve 4134 634 - - 4145 636 - -
Dividend on Equity Shares^ 3255 499 - - 3255 499 - -
Tax on Dividend^ 661 101 - - 661 101 - -
Closing Balance (including Other Comprehensive 31569 5550 34506 5999 15533 2580 14467 2413
Income)

* 1 US$ = 65.175 Exchange Rate as on March 31 2018 (1 US$ = 64.85 as on March 312017) ^ Pertaining to dividend for the financial year 2016-17

Results of Operations and the State of Company’s Affairs

The Highlights of the Company’s performance (Standalone) for the year ended March31 2018 are as under:

Value of sales and services increased by 19.0 % to 315357 crore (US$ 48.4 billion).

Exports increased by 19.2 % to 176117 crore (US$ 27.0 billion).

PBDIT increased by 15.4 % to 59961 crore (US$ 9.2 billion).

Profit Before Tax increased by 12.1 % to 45725 crore (US$ 7.0 billion).

Cash Profit increased by 13.3 % to 46352 crore (US$ 7.1 billion).

Net Profit increased by 7.0 % to 33612 crore (US$ 5.2 billion).

Gross Refining Margin stood at US$ 11.6 / bbl for the year ended March 31 2018.

Financial Performance Review and Analysis (Consolidated)

The Company achieved a consolidated turnover of 430731 crore (US$ 66.1 billion) forthe year ended March 31 2018 an increase of 30.5 % as compared to 330180 crore in theprevious year. Increase in revenue is primarily on account of higher volumes with start-upof petrochemicals projects and uptrend in prices of products in refining and petrochemicalbusinesses. Turnover was also boosted by robust growth in retail business which recorded a104.9 % surge in turnover to 69198 crore. Brent crude oil price averaged US$ 57.5 /bbl inFY2017-18 as compared to US$ 48.6/bbl in the previous year. Exports (including deemedexport) from India were marginally higher at 176117 crore (US$ 27.0 billion) as against147755 crore in the previous year.

Dividend

The Board of Directors has recommended a dividend of 6/- per equity share of 10/- eachon the increased paid-up share capital post issue of bonus shares during the financialyear 2017-18 in the ratio of 1:1 (last year 11/- per equity share) for the financial yearended March 31 2018 amounting to 4281 crore (inclusive of dividend distribution tax of728 crore). The dividend payment is subject to approval of members at the ensuing AnnualGeneral Meeting.

The dividend payout is in accordance with the Company’s Dividend DistributionPolicy. The Dividend Distribution Policy of the Company is annexed herewith marked as AnnexureI to this Report.

Bonus Shares

During the year under review the Company has issued and allotted 3080334238 bonusshares to the equity shareholders in the ratio of 1:1 (i.e. one fully paid equity share ofRs. 10/- each for one fully paid equity share).

Material changes affecting the Company

There have been no material changes and commitments affecting the financial position ofthe Company between the end of the financial year and date of this report. There has beenno change in the nature of business of the Company.

Management’s Discussion and Analysis Report

Management’s Discussion and Analysis Report for the year under review asstipulated under the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 ("Listing Regulations") is presentedin a separate section forming part of the Annual Report. The developments in businessoperations / performance of the Company and its major subsidiaries consolidated with theCompany are as below:

Refining & Marketing Business

FY 2017-18 refining EBIT increased by 3.2% y-o-y to a record of Rs. 25869 croresupported by strong product demand lower freight rates effective crude sourcing androbust risk management. With a countrywide operational network of 1313 fuel outlets theCompany covers the key highways in the country. Customer count enrolled in Reliance’sindustry leading fleet program Trans-Connect grew by 31% during FY 2017-18. Supported bythe network presence and the growing fleet customer count Company’s outletsregistered an outstanding Pump throughput of double the industry average during the year.

Petrochemicals Business

FY 2017-18 revenue growth was primarily due to higher volumes from new Paraxylene ROGCand its downstream units (PE and MEG) with the segment achieving its highest everproduction level of 30.8 MMT up 24% y-o-y. Petrochemicals segment EBIT increased sharplyby 63.0% to its highest ever level of 21179 crore ($ 3.2 billion). Earnings weresupported by favorable product deltas across integrated polyester chain PP PVC alongwith the growth in volumes. EBIT margin was higher by nearly 300bps to 16.9% reflectingCompany’s strengthened cost positions across product chains and unmatched feedstockflexibility.

Oil and Gas (Exploration & Production) Business

FY 2017-18 revenues increased by 0.3% to `5204 crore. This marginal change was onaccount of better price realisations and ramp up of production in CBM which were partlyoffset by decline in production in KG D6 and Shale Gas. Consequently upstream operationsregistered negative EBIT of `(1536) crore.

During the year Reliance divested its holdings in the Marcellus shale JV which wasoperated by Carrizo Oil & Gas. Reliance continues to focus on value maximization inthe remaining two JVs with focus on improvement in well design and execution efficiency.

The Company commenced commercial production from its Coal Bed Methane (CBM) block SP(West) CBM 2001/1 in March 2017. More than 200 wells were put on production withproduction ramp up crossing the 1 MMSCMD level during the year.

Retail Business

Reliance Retail achieved a turnover of 69198 crore in FY 2017-18 more than doublingfrom the turnover of 33765 crore achieved last year. The business delivered an EBIT of2064 crore for FY 2017-18 more than doubling from 784 crore achieved last year. Duringthe year Reliance Retail added 221 stores and 3736 Jio Points.

Reliance Retail operated 7573 retail stores in over 4400 cities covering an area of17.7 million sq. ft. as on March 31 2018. Reliance Retail operated 495 petro retailoutlets as on March 31 2018.

Digital Services

Despite competitive pressures Digital Services business recorded revenues of 23916crore with year-end subscribers’ base at 186.6 million and Segment EBIT was at 3174crore for the year with EBIT margin of 13.3%. This is strong financial performance withinvery first year of commercial operations demonstrating strong fundamental and operatingleverage of the business.

Media and Entertainment

Network18 subsidiary viz. TV18 took operational control of and raised its stake to 51%in entertainment JV viz. Viacom18. TV18 can drive value-addition and synergies across themulti-platform group comprising broadcast digital filmed and experiential entertainmentand media businesses.

Network18 reported revenues of 1839 crore (+23% y-o-y despite tepid industryenvironment) and EBIT of (25) crore on a consolidated basis.

The sharp revenue escalation is led by the impact of subsidiary TV18 acquiring controlof entertainment JV Viacom18 partly offset by HomeShop18 ceasing to be a subsidiary dueto its share-swap acquisition of ShopCJ during the last quarter of the fiscal.

Credit Rating

The Company’s financial discipline and prudence is reflected in the strong creditratings ascribed by rating agencies as given below:

Instrument Rating Agency Rating Outlook Remarks
International Debt S&P BBB+ Stable Two notches above India’s sovereign rating
International Debt Moody’s Baa2 Stable At par with India’s sovereign rating
Long Term Debt CRISIL CRISIL AAA Stable Highest rating awarded by CRISIL
Long Term Debt India Ratings IND AAA Stable Highest rating awarded by India Ratings

Consolidated Financial Statement

In accordance with the provisions of the Companies Act 2013 ("the Act") andInd AS 110 Consolidated Financial Statement read with Ind AS - 28 Investments inAssociates and Ind AS 31 Interests in Joint Ventures the audited consolidated financialstatement is provided in the Annual Report.

Subsidiaries Joint Ventures and Associate Companies

During the year under review companies listed in Annexure II to this Reporthave become or ceased to be Company’s subsidiaries joint ventures or associatecompanies.

A statement containing the salient features of the financial statement of subsidiary /associate / joint venture companies as per Section 129(3) of the Act is provided asAnnexure A to the consolidated financial statement and therefore not repeated to avoidduplication.

The audited financial statement including the consolidated financial statement of theCompany and all other documents required to be attached thereto is put on theCompany’s website and may be accessed at: http://www.ril.com/ InvestorRelations/Financial Reporting.aspx The financial statements of each of the subsidiaries isput on the Company’s website and may be accessed at: http://www.ril.com/InvestorRelations/Downloads.aspx. These documents will also be available forinspection on all working days during business hours at the Registered Office of theCompany.

The Company has formulated a Policy for determining Material Subsidiaries. The Policymay be accessed at: http://www.ril.com/DownloadFiles/IRStatutory/Material-Subsidiaries.pdf

Secretarial Standards

The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2 relatingto ‘Meetings of the Board of Directors’ and ‘General Meetings’respectively have been duly followed by the Company.

Directors’ Responsibility Statement

Your Directors state that:

a) in the preparation of the annual accounts for the year ended March 31 2018 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same; b) theDirectors have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at March 31 2018 and of the profit year endedon that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a going concern basis;

e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively;

f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating

Corporate Governance

The Company is committed to maintain the highest standards of Corporate Governance andadhere to the Corporate Governance requirements set out by the Securities and ExchangeBoard of India (SEBI). The Company has also implemented several best governance practices.The report on Corporate Governance as stipulated under the Listing Regulations forms anintegral part of this Report. The requisite certificate from the Auditors of the Companyconfirming compliance with the conditions of Corporate Governance is attached to thereport on Corporate Governance.

Business Responsibility Report

As stipulated under the Listing Regulations the Business Responsibility Reportdescribing the initiatives taken by the Company from an environmental social andgovernance perspective is attached as a part of the Annual Report.

Contracts or Arrangements with Related Parties

All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in its ordinary course of business and on an arms’length basis.

During the year the Company had not entered into any contract / arrangement /transaction with related parties which could be considered material in accordance with thepolicy of the Company on materiality of related party transactions.

The Policy on Materiality of Related Party Transactions and on dealing with RelatedParty Transactions as approved by the Board may be accessed on the Company’s websiteat: http://www.ril.com/DownloadFiles/IRStatutory/Policy-on-Materiality-of-RPT.pdf

There were no materially transactions which could have potential conflict with interestof the Company at large.

Members may refer to Note 31 to the standalone financial statement which sets outrelated party disclosures pursuant to Ind AS.

Corporate Social Responsibility (CSR)

During the year under review the Company has won the Golden Peacock Award 2017 for thesuccess of its Corporate Social Responsibility initiatives and in particular for thetransformative work done by Reliance Foundation (RF) the CSR arm of the Company. Underthe able leadership of its Founder and Chairperson Smt. Nita M. Ambani RF has touchedthe lives of 20 million people across India covering more than 13500 villages and 100urban locations. The Company was recognized by the Awards Jury under the Chairmanship ofJustice (Dr.) Arijit Pasayat former Judge Supreme Court of India. Golden Peacock Awardis instituted by the Institute of Directors (IOD) India in 1991 and are regarded as abenchmark of Corporate Excellence worldwide.

The Corporate Social Responsibility and Governance Committee (CSR&G Committee) hasformulated and recommended to the Board a Corporate Social Responsibility Policy (CSRPolicy) indicating the activities to be undertaken by the Company which has been approvedby the Board.

The CSR Policy may beaccessedonthe Company’swebsite identification of elements ofrisk and their at: http://www.ril.com/DownloadFiles/IRStatutory/CSR-Policy.pdf

The key philosophy of CSR initiatives of the Company is guided by three corecommitments of Scale Impact and Sustainability.

The Company has identified following focus areas for CSR engagement:

Rural Transformation: Creating sustainable livelihood solutionsaddressing poverty hunger and malnutrition.

Environment: Environmental sustainability ecological balanceconservation of natural resources and promoting bio-diversity. financial control systemsby the

Health: Affordable solutions for healthcare through improved accessawareness and health seeking behaviour.

Education and Sports: Access to quality education training and skillenhancement building sports & skills in young students.

Disaster Response: Managing and responding to disaster.

Arts Culture and Heritage: Protection and promotion of India’s artculture and heritage.

The Company also undertakes other need based initiatives in compliance with ScheduleVII to the Act.

During the year the Company spent 745 crore (around 2.12% of the average net profitsof last three financial years) on CSR activities.

The annual report on CSR activities is annexed herewith marked as Annexure IIIto this Report.

Risk Management

Your Company has an elaborate Group Risk Management Framework which is designed toenable risks to be identified assessed and mitigated appropriately. The Risk ManagementCommittee of the Company has been entrusted with the responsibility to assist the Board in(a) Overseeing and approving the Company’s enterprise wide risk management framework;and (b) Overseeing that all the risks that the organisation faces such as Strategic andCommercial Safety and Operations Compliance and Control and Financial risks have beenidentified and assessed and there is an adequate risk management infrastructure in placecapable of addressing those risks.

More details on Risk Management indicating development and implementation of RiskManagement policy including are covered in Managements Discussion and Analysis sectionwhich forms part of this Report.

Internal Financial Controls

Internal Financial Controls are an integrated part of the risk management processaddressing financial and financial reporting risks. The internal financial controls havebeen documented digitised and embedded in the business processes.

Assurance on the effectiveness of internal financial controls is obtained throughmanagement reviews control self-assessment continuous monitoring by functional expertsas wellastestingoftheinternal internal auditors during the course of their audits. Webelieve that these systems provide reasonable assurance that our internal financialcontrols are designed effectively and are operating as intended.

Directors and Key Managerial Personnel

In accordance with the provisions of the Act and the Articles of Association of theCompany Shri P.M.S. Prasad and Shri Nikhil. R. Meswani Directors of the Company retireby rotation at the ensuing Annual General Meeting. The Board of Directors on therecommendation of the Human Resources Nomination and Remuneration Committee hasrecommended their re-appointment.

Dr. D. V. Kapur has ceased to be a Director of the Company w.e.f. July 21 2017. TheBoard places on record its appreciation towards valuable contribution made by Dr. D. V.Kapur during his tenure as a Director of the Company

The Board of Directors on recommendation of the Human Resources Nomination andRemuneration Committee has re-appointed Shri Mukesh D. Ambani as Managing Director of theCompany for a period of 5 (five) years with effect from April 19 2019 subject toapproval of shareholders as his current term of office is upto April 18 2019.

The term of office of Shri Adil Zainulbhai as an Independent Director will expire onMarch 31 2019. The Board of Directors on recommendation of the Human ResourcesNomination and Remuneration Committee has recommended re-appointment of Shri AdilZainulbhai as an Independent Director of the Company for a second term of 5 (five)consecutive years on the expiry of his current term of office.

The shareholders of the Company at its Annual General Meeting held on July 21 2017have approved re-appointment of Shri Yogendra P. Trivedi Prof. Ashok Misra Shri MansinghL. Bhakta Prof. Dipak C. Jain and Dr. Raghunath A. Mashelkar as Independent Directors ofthe Company for a second term of 5 (five) consecutive years on the Board of the Companyby passing special resolution and appointed Dr. Shumeet Banerji as an Independent Directorof the Company for a term of 5 ve) consecutive years. (fi

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence prescribed under the Act and theListing Regulations.

The following policies of the Company are attached herewith marked as Annexure IV Aand Annexure IV B:

a) Policy for selection of Directors and determining Directors’ independence; and

b) Remuneration Policy for Directors Key Managerial Personnel and other employees.

Performance Evaluation

The Company has devised a Policy for performance evaluation of the Board Committeesand other individual Directors (including Independent Directors) which include criteriafor performance evaluation of Non-executive Directors and Executive Directors. Theevaluation process inter alia considers attendance of Directors at Board andcommittee meetings acquaintance with business communicating inter se board memberseffective participation domain knowledge compliance with code of conduct vision andstrategy.

The Board carried out an annual performance evaluation of the Board CommitteesIndividual Directors and the Chairperson. The Chairman of the respective Committees sharedthe report on evaluation with the respective Committee members. The performance of eachCommittee was evaluated by the Board based on report on evaluation received fromrespective Committees.

The report on performance evaluation of the Individual Directors was reviewed by theChairman of the Board and feedback was given to Directors.

Employees’ Stock Option Schemes

The Company’s Employees Stock Option Scheme viz. ESOS-2006 has been in place sinceyear 2006-07 and the Company has made grants under ESOS-2006 to the eligible employees ofthe Company and its subsidiaries. The Human Resources Nomination and RemunerationCommittee of the

Board of Directors of the Company inter alia administers and monitors theEmployees’ Stock Option Plan of the Company. The Company during the year obtainedapproval of the members for a new scheme viz. ESOS-2017 and pursuant to the said approvalit was decided to withdraw ESOS-2006 and cancel balance of options not granted.Accordingly ESOS-2006 stands cancelled. However existing options granted and which arein force will continue to be governed by ESOS-2006. The Company did not make any grantunder ESOS-2017 during the FY 2017-18. Other than the above there has not been anymaterial change in the Employee Stock Option Schemes during the current financial year.

The Schemes are in line with the SEBI (Share Based Employee Benefits) Regulations 2014("SBEB Regulations"). The Company has received a certificate from the Auditorsof the Company that the Schemes are implemented in accordance with the SBEB Regulationsand the resolutions passed by the members. The certificate would be available at theAnnual General Meeting for inspection by members. The details as required to be disclosedunder the SBEB Regulations and certificate from Auditors are put on the Company’swebsite and may be accessed at: http://www.ril.com/DownloadFiles/IRStatutory/ESOS-2006-Disclosure.pdf and http://www.ril.com/DownloadFiles/IRStatutory/ESOS-2017-Disclosure.pdf

Auditors and Auditors’ Report

Statutory Auditors

M/s. S R B C & Co. LLP Chartered Accountants and M/s. D T S & AssociatesChartered Accountants were appointed as Auditors of the Company for a term of 5 (five)consecutive years at the Annual General Meeting held on July 21 2017. They haveconfirmed that they are not disqualified from continuing as Auditors of the Company.

The Notes on financial statement referred to in the Auditors’ Report areself-explanatory and do not call for any further comments. The Auditors’ Report doesnot contain any qualification reservation adverse remark or disclaimer.

Cost Auditors

The Board has appointed following cost auditors for conducting the audit of costrecords of products and services of the Company for various segments for the FY 2018-19:

(i) For Textiles Business - Kiran J. Mehta & Co. Cost Accountants;

(ii) For Chemicals Business - Diwanji & Co. Cost Accountants K.G. Goyal &Associates Cost Accountants V.J. Talati & Co. Cost Accountants Suresh D. ShenoyCost Accountant Shome & Banerjee Cost Accountants and Dilip M. Malkar & Co.Cost Accountants;

(iii) For Polyester Business - V.J. Talati & Co. Cost Accountants Shri Suresh D.Shenoy Cost Accountant and V. Kumar & Associates Cost Accountants;

(iv) For Electricity Generation - Diwanji & Co. Cost Accountants and Kiran J.Mehta & Co. Cost Accountants ;

(v) For Petroleum Business Shri Suresh D. Shenoy Cost Accountant;

(vi) For Oil & Gas Business V.J. Talati & Co. Cost Accountants and Shome &Banerjee Cost Accountants.

Shome & Banerjee Cost Accountants were nominated as the Company’s Lead CostAuditors.

Secretarial Auditor

The Board had appointed Dr. K.R. Chandratre Practising Company Secretary to conductSecretarial Audit for the FY 2017-18. The Secretarial Audit Report for the financial yearended March 31 2018 is annexed herewith marked as Annexure V to this Report. TheSecretarial Audit Report does not contain any qualification reservation adverse remarkor disclaimer.

Disclosures

Meetings of the Board

Six meetings of the Board of Directors were held during the year. The particulars ofmeetings held and attended by each Director are detailed in the Corporate GovernanceReport which forms part of this Report.

Audit Committee

The Audit Committee comprises Independent Directors namely Shri Yogendra P. Trivedi(Chairman) Dr. Raghunath A. Mashelkar Shri Adil Zainulbhai and Shri Raminder SinghGujral. During the year all the recommendations made by the Audit Committee were acceptedby the Board.

Corporate Social Responsibility and Governance Committee (CSR&G)

During the year the Corporate Social Responsibility and Governance Committee(CSR&G) was re-constituted by appointing Dr. Shumeet Banerji as a member of theCommittee. The CSR&G Committee comprises Shri Yogendra P. Trivedi (Chairman) ShriNikhil R. Meswani Dr. Raghunath A. Mashelkar and Dr. Shumeet Banerji.

Vigil Mechanism

RIL has established a robust Vigil Mechanism and a Whistle-blower policy in accordancewith provisions of the Act and Listing Regulations. The Vigil Mechanism is supervised byan ‘Ethics & Compliance Task Force’ comprising a member of the Board as theChairperson and senior executives as members.

Protected disclosures can be made by a whistle-blower through an e-mail or dedicatedtelephone line or a letter to the Task Force or to the Chairman of the Audit Committee.The Vigil Mechanism and whistle-blower policy is put on the Company’s website and canbe accessed at :http://www.ril.com/DownloadFiles/IRStatutory/Vigil-Mechanism-and-Whistle-Blower-Policy.pdf

Particulars of Loans given Investments made Guarantees given and Securities provided

Particulars of loans given Investments made guarantees given and securities providedalong with the purpose for which the loan or guarantee or security is proposed to beutilised by the recipient are provided in the standalone financial statement (Please referto Note 3 9 2 6 31 and 37 to the standalone financial statement).

Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed under the Act are provided in AnnexureVI to this Report.

Extract of Annual Return

Extract of Annual Return of the Company is annexed herewith marked as Annexure VIIto this Report.

Particulars of Employees and related disclosures

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 asamended a statement showing the names and other particulars of the employees drawingremuneration in excess of the limits set out in the said rules are provided in the AnnualReport which forms part of this Report.

Disclosures relating to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are provided in the Annual Report which forms part ofthis Report.

Having regard to the provisions of the first proviso to Section 136(1) of the Act andas advised the Annual Report excluding the aforesaid information is being sent to themembers of the Company. The said information is available for inspection on all workingdays during business hours at the Registered Office of the Company. Any memberinterested in obtaining such information may write to the Company Secretary and the samewill be furnished on request.

General

Your Directors state that no disclosure or reporting is required in respect of thefollowing matters as there were no transactions on these items during the year underreview:

Details relating to deposits covered under Chapter V of the Act.

Issue of equity shares with differential rights as to dividend voting or otherwise.

Issue of shares (including sweat equity shares) to employees of the Company under anyscheme save and except Employees’ Stock Options Plan referred to in this Report.

The Company does not have any scheme of provision of money for the purchase of its ownshares by employees or by trustees for the benefit of employees.

Neither the Managing Director nor the Whole-time Directors of the Company receive anyremuneration or commission from any of its subsidiaries.

No significant or material orders were passed by the Regulators or Courts or Tribunalswhich impact the going concern status and Company’s operations in future.

No fraud has been reported by the Auditors to the Audit Committee or the Board.

Acknowledgement

The Board of Directors would like to express their sincere appreciation for theassistance and co-operation received from the financial institutions banks Governmentauthorities customers vendors and members during the year under review. The Board ofDirectors also wish to place on record its deep sense of appreciation for the committedservices by the Company’s executives staff and workers.

For and on behalf of the Board of Directors
Mukesh D. Ambani
Chairman and Managing Director
Mumbai April 27 2018

ANNEXURE I

Dividend Distribution Policy

The Board of Directors (the "Board") of Reliance Industries Limited (the"Company") at its meeting held on April 24 2017 had adopted this DividendDistribution Policy (the "Policy") as required by Regulation 43A of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 (the "ListingRegulations").

Objective y The objective of this Policy is to establish the parameters to beconsidered by the Board of Directors of the Company before declaring or recommendingdividend.

The Company has had an uninterrupted dividend payout since listing. In future theCompany would endeavor to pay sustainable dividend keeping in view the Company’spolicy of meeting the long-term growth objectives from internal cash accruals.

Circumstances under which the shareholders may or may not expect dividend

The Board of Directors of the Company while declaring or recommending dividend shallensure compliance with statutory requirements under applicable laws including theprovisions of the Companies Act 2013 and Listing Regulations. The Board of Directorswhile determining the dividend to be declared or recommended shall take into considerationthe advice of the executive management of the Company and the planned and furtherinvestments for growth apart from other parameters set out in this Policy.

The Board of Directors of the Company may not declare or recommend dividend for aparticular period if it is of the view that it would be prudent to conserve capital forthe then ongoing or planned business expansion or other factors which may be considered bythe Board.

Parameters to be considered before recommending dividend

The Board of Directors of the Company shall consider the following financial / internalparameters while declaring or recommending dividend to shareholders:

• Profits earned during the financial year

• Retained Earnings

• Earnings outlook for next three to five years

• Expected future capital / liquidity requirements

• Any other relevant factors and material events

The Board of Directors of the Company shall consider the following external parameterswhile declaring or recommending dividend to shareholders:

• Macro-economic environment-Significantchanges in macro-economic environmentmaterially the businesses in which the Company is engaged in the geographies in which theCompany operates

• Regulatory changes Introduction of new regulatory requirements or materialchanges in existing taxation or significantlaffect the regulatoryrequirementswhichbusinesses in which the Company is engaged

• Technological changes which necessitate significant new investments in any ofthe businesses in which the Company is engaged

Utilisation of Retained Earnings

The Company shall endeavor to utilise the retained earnings in a manner which shall bebeneficial to the interests of the Company and also its shareholders.

The Company may utilize the retained earnings for making investments for future growthand expansion plans for the purpose of generating higher returns for the shareholders orfor any other specific purpose as approved by the Board of Directors of the Company.

Parameters that shall be adopted with regard to various classes of shares

The Company has issued only one class of shares viz. equity shares. Parameters fordividend payments in respect of any other class of shares will be as per the respectiveterms of issue and in accordance with the applicable regulations and will be determinedif and when the Company decides to issue other classes of shares.

Conflict in Policy

In the event of any conflict between this Policy and the provisions contained in theListing Regulations the Regulations shall prevail.

Amendments

The Board may from time to time make amendments to this Policy to the extent requireddue to change in applicable laws and Listing Regulations or as deemed fit on a review.

For and on behalf of the Board of Directors
Mukesh D. Ambani
Chairman and Managing Director
Mumbai April 27 2018

ANNEXURE II

Companies which became / ceased to be Company’s Subsidiaries Joint Ventures orAssociate Companies as per the provisions of the Companies Act 2013:

1. Companies / Bodies Corporate which became Subsidiaries during the financial year2017-18:

No.
1 Aanant Commercial Private Limited
2 Dreketi S.A
3 Jalaja Commercials Private Limited
4 Naroda Power Private Limited
5 Reliance Content Distribution Limited
6 Reliance Digital Media Distribution Limited
7 Reliance GAS Lifestyle India Private Limited
8 Resolute Land Consortium Projects Limited
9 Santol Commercials Private Limited
10 Tangerine Agro Private Limited

2. Companies / Bodies Corporate which ceased to be Subsidiaries during the

Sr. No. Name of the Company
1 Aanant Commercial Private Limited
2 Aurora Algae Pty Ltd
3 Aurora Algae RGV LLC
4 Central Park Enterprises DMCC
5 Cluster Commercial Private Limited
6 Delta Corp East Africa Limited
7 Devashree Commercials Private Limited
8 Dignity Mercantile Private Limited
9 Girisha Commercials Private Limited
10 Jalaja Commercials Private Limited
11 Reliance Aerospace Technologies Limited
12 Reliance Commercial Land & Infrastructure Limited
13 Reliance Commercial Trading Private Limited
14 Reliance Eagleford Midstream LLC
15 Reliance Global Business B.V.
16 Reliance Global Commercial Limited
17 Reliance Jio AsiaInfo Innovation Centre Limited
18 Reliance Petroinvestments Limited
19 Reliance Supply Solutions Private Limited
20 Reliance Trading Limited
21 Reliance Universal Commercial Limited
22 RIL (Australia) Pty Limited
23 Wave Land Developers Limited

3. Companies / Bodies Corporate which have become Joint Venture or Associate during thefinancial year 2017-18.

Sr. No. Name of the Company
1 Balaji Telefilms Limited (Associate)

4. Companies / Bodies Corporate which ceased to be a Joint Venture or Associate duringthe financial year 2017-18. Nil

For and on behalf of the Board of Directors
Mukesh D. Ambani
Chairman and Managing Director
Mumbai April 27 2018

ANNEXURE III

Annual Report on Corporate Social Responsibility (CSR) activities for the financialyear 2017-18

1. A brief outline of the Company’s CSR Policy including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR Policy and projects or programs. Refer Section: Corporate Social Responsibility (CSR) in the Board’s Report
2 The Composition of the CSR Committee Refer Section: Disclosures: Corporate Social Responsibility and Governance Committee in the Board’s Report
3. Average netprofit years ofthe Companyforlastthreefinancial 35154.19 crore
4. Prescribed CSR expenditure (two percent of the amount mentioned in item 3 above) 703.08 crore
5. Details of CSR spent during the financial year:
Total amount to be spent for the financial year 703.08 crore
Total Amount spent during the year 745.04 crore
Amount unspent if any Not applicable
Manner in which the amount spent during the financial year Details given below

Details of amount spent on CSR activities during the Financial Year 2017-18

Sr. No CSR project or Activity Identified Sector in which the project is covered (Clause number of Schedule VII to the Companies Act 2013 as amended) Project or Programme 1. Local Area or Other 2. Specify the State and district where projects or programme was undertaken Amount Outlay (Budget) Project or Program wise (` in crore) Amount spent on the Projects or Programs: Sub Heads (1) Direct Expenditure on Projects or Programme (2) Overheads (` in crore) Cumulative Expenditure up to the reporting period (` in crore) Amount Spent (Direct or through Implementing Agency)
A B C D E F G H
Rural Transformation
1 RF Bharat India Jodo Enhancing Rural Livelihoods Cl (i) Eradicating hunger poverty and malnutrition;Cl (iv) ensuring environmental sustainability;Cl (x) Rural Development Projects PAN INDIA 62.10 37.50 264.64 Implementing Agency - Reliance Foundation*
2 Information Services - Enabling access to need based locale- specific content in agriculture marine fisheries public health disaster response and other areas by leveraging technology Cl (i) Eradicating hunger poverty and malnutrition;Cl (iv) ensuring environmental sustainability PAN INDIA 22.80 16.20 62.92 Implementing Agency - Reliance Foundation
3 Community Development - Rural Development Projects Cl (x) Rural Development Projects As per Note 1 10.00 9.60 21.43 Implementing Agency - Reliance Foundation
4 Partnership with Non- Government Organisations Cl (i) Eradicating hunger poverty and malnutrition;Cl (iv) ensuring environmental sustainability;Cl (x) Rural Development Projects PAN INDIA 35.00 31.40 45.67 Implementing Agency - Reliance Foundation
5 CSR Initiatives at manufacturing locations Cl (iv) ensuring environmental sustainability; Cl (x) Rural Development Projects As per Note 2 74.00 86.11 144.60 Direct/ Implementing Agency - Reliance Foundation
Health
6 Health Outreach Programme - Static Mobile Medical Units and camps for primary and preventive healthcare including diagnostics Cl. (i) Promoting health care including preventive health care Maharashtra - Mumbai Thane 9.00 4.10 20.23 Implementing Agency - Reliance Foundation
7 Drishti Corneal transplant and other activities for visually impaired Cl (i) Promoting health care including preventive health care PAN INDIA 3.00 2.70 7.05 Implementing Agency - Reliance Foundation
8 To develop innovative technology that will help train medical students and clinicians for better diagnosis and improved healthcare Cl (i) Promoting health care including preventive health care Maharashtra - Mumbai 1.00 0.11 51.61 Implementing Agency - Reliance Foundation
9 Sir HN Reliance Foundation Hospital and Research Centre Cl (i) Promoting health care including preventive health care Maharashtra - Mumbai 163.00 111.10 1141.48 Implementing Agency - Reliance Foundation
10 Health Programme - Mother & Child Health Cl (i) Promoting health care including preventive health care As per Note 3 1.00 1.00 1.95 Implementing Agency - Reliance Foundation
11 Lodhivali Hospital & ART Clinic Cl (i) Promoting health care including preventive health care Maharashtra - Raigad 4.00 4.14 9.68 Implementing Agency - Reliance Foundation
12 Partnership with Non- Government Organisations Cl (i) Promoting health care including preventive health care As per Note 4 24.00 11.05 22.67 Implementing Agency - Reliance Foundation
13 Community Development Cl (i) Promoting health care including preventive health care As per Note 1 2.00 1.52 3.08 Implementing Agency - Reliance Foundation
14 CSR Initiatives at manufacturing locations Cl. (i) Promoting health care including preventive health care As per Note 2 8.00 12.17 62.02 Direct
Education
15 Vocational Skilling Initiative Cl (ii) Promoting Education As per Note 5 7.50 2.50 9.03 Implementing Agency - Reliance Foundation
16 Reconstruction of School at Uttarakhand Cl (ii) Promoting Education Uttarakhand - Rudraprayag Uttarkashi 3.22 3.14 13.58 Implementing Agency - Reliance Foundation
17 Dhirubhai Ambani Scholarship Programme Cl (ii) Promoting Education Gujarat - Junagadh 0.49 0.02 8.65 Implementing Agency - Reliance Foundation
18 Reliance University Cl (ii) Promoting Education Maharashtra - Raigad 139.00 303.57 589.69 Implementing Agency - Reliance Foundation / Reliance Foundation Institution of Education and Research**
19 Digital Education Initiatives Cl (ii) Promoting Education As per Note 6 - - 3.70 Implementing Agency - Reliance Foundation
20 Partnership with Non- Government Organisations Cl (ii) Promoting Education As per Note 7 76.00 45.99 116.65 Implementing Agency - Reliance Foundation
21 CSR Initiatives at manufacturing locations Cl (ii) Promoting Education As per Note 2 15.00 15.72 96.49 Direct
Sports for Development
22 Promoting Grassroot Sports Cl (vii) Training to promote Rural Sports Nationally recognized sports and Olympic sports PAN INDIA 64.00 37.61 59.46 Implementing Agency - Reliance Foundation Youth Sports ***
23 Reliance Foundation Jr. NBA Programme Cl (vii) Training to promote Rural Sports Nationally recognized sports and Olympic sports PAN INDIA 4.00 2.95 13.44 Implementing Agency - Reliance Foundation
24 RF Young Champs Cl (vii) Training to promote Rural Sports Nationally recognized sports and Olympic sports Maharashtra - Thane 6.00 2.48 9.65 Implementing Agency - Reliance Foundation
25 Partnership with Non- Government Organisations Cl (vii) Training to promote Rural Sports Nationally recognized sports and Olympic sports Maharashtra - Thane 0.10 0.07 0.07 Implementing Agency - Reliance Foundation
Disaster Response
26 Disaster Relief Cl (x) Rural Development Projects As per Note 8 11.79 1.09 17.72 Implementing Agency - Reliance Foundation
Urban Renewal
27 Environment - RF - Urban Renewal Initiatives Cl (iv) Ensuring environmental sustainability ecological balance Maharashtra - Mumbai 2.00 0.34 4.20 Implementing Agency - Reliance Foundation
Arts culture and heritage
28 Promoting Traditional Arts and Culture Cl (v) Protection of national heritage art & culture Maharashtra - Mumbai 1.00 0.85 2.14 Implementing Agency - Reliance Foundation
29 CSR Initiatives at manufacturing locations Cl (v) Protection of national heritage art & culture As per Note 2 1.00 0.01 12.86 Direct
Grand Total 750.00 745.04 2816.36

 

Note 1: Assam - Golaghat; Gujarat - Bharuch Jamnagar Navsari Surat; UT of DNH - Silvassa Haryana - Rewari; Karnataka - Dakshina Kannada;
Madhya Pradesh - Bhopal Annuppur Shahdol; Maharashtra - Mumbai Palghar Raigad Thane; Tamil Nadu - Thiruvallur;
Uttar Pradesh - Kanpur Dehat; West Bengal - East Midnapur
Note 2: Andhra Pradesh - East Godavari; Gujarat - Bharuch Jamnagar Surat Vadodara Ahmedabad ; Madhya Pradesh - Shahdol ; Maharashtra - Nagpur Raigad;
Uttar Pradesh - Allahabad Barabanki; Punjab - Hoshiarpur
Note 3: Maharashtra - Mumbai Yavatmal Gangakhed; Gujarat - Jasdan Bharuch; Madhya Pradesh - Seoni Chhindwara; Rajasthan - Sawai Madhopur Banswara
Note 4: Maharashtra - Ahmednagar Mumbai Nashik Thane; Rajasthan - Udaipur; Telangana - Warangal; Uttarakhand - Dehradun
Note 5: Andhra Pradesh - East Godavari; Maharashtra - Mumbai; West Bengal - Kolkata
Note 6: Andhra Pradesh - Anantpur Chitoor Guntur Kadapa Krishna Kurnool Prakasham Srikakaulam Vishakapatnam East Godavari Nellore Warangal Vizianagar;
Gujarat - Junagadh Mehsana Vadodara Ahmedabad; Madhya Pradesh - Shahdol; Telangana - Khammam Ranga Reddy
Note 7: Chhattisgarh - Raipur; Delhi - Delhi New Delhi; Gujarat - Ahmedabad; Maharashtra - Mumbai
Note 8: Jammu & Kashmir - Jammu; Uttarakhand - Rudraprayag

 

* Reliance Foundation (RF) is a company within the meaning of Section 8 of the Companies Act 2013 and has a comprehensive approach towards development with an overall aim to create and support meaningful and innovative activities that address some of India’s most pressing developmental challenges with the aim of enabling lives living and livelihood for a stronger and inclusive India.
** Reliance Foundation Institution of Education and Research (RFIER) is a company within meaning of Section 8 of the Companies Act 2013 to promote encourage support and assist educational research and medical activities.
*** Reliance Foundation Youth Sports (RFYS) is a company within meaning of Section 8 of the Companies Act 2013 and has a comprehensive approach towards development of grassroot sports.
**** The above mentioned cumulative total includes only the above mentioned projects. There were additional projects which are not included in the total. Some of CSR activities have been carried with support of several other Non-Government Organisation or charitable institutions.

Responsibility Statement

The Responsibility Statement of the Corporate Social Responsibility and Governance(CSR&G) Committee of the Board of Directors of the Company is reproduced below:

‘The implementation and monitoring of Corporate Social Responsibility (CSR)Policy is in compliance with CSR objectives and policy of the Company.’

Yogendra P. Trivedi Nikhil R. Meswani
Chairman CSR&G Committee Executive Director
Mumbai April 27 2018

ANNEXURE IV A

Policy for selection of Directors and determining Directors’ independence

1. Introduction:

1.1 Reliance Industries Limited (RIL) believes that an enlightened Board consciouslycreates a culture of leadership to provide a long-term vision and policy approach toimprove the quality of governance. Towards this RIL ensures constitution of a Board ofDirectors with an appropriate composition size diversified expertise and experience andcommitment to discharge their responsibilities and duties effectively.

1.2 RIL recognises the importance of Independent Directors in achieving theeffectiveness of the Board. RIL aims to have an optimum combination of ExecutiveNon-Executive and Independent Directors.

2. Scope and Exclusion:

2.1 This Policy sets out the guiding principles for the Human Resources Nomination andRemuneration Committee for identifying persons who are qualified to become Directors andto determine the independence of Directors in case of their appointment as independentdirectors of the Company.

3. Terms and References:

In this Policy the following terms shall have the following meanings:

3.1 "Director" means a director appointed to the

Board of a company.

3.2 "Human Resources Nomination and Remuneration Committee" means thecommittee constituted by RIL’s Board in accordance with the provisions of Section 178of the Companies Act 2013 and Regulation 19 of the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations").

3.3 "Independent Director" means a director referred to in sub-section(6) of Section 149 of the Companies Act 2013 and Regulation 16 (1) (b) of ListingRegulations.

4. Policy:

4.1 Qualifications and criteria

4.1.1 The Human Resources Nomination and Remuneration (HRNR) Committee and the Boardshall review on an annual basis appropriate skills knowledge and experience required ofthe Board as a whole and its individual members. The objective is to have a Board withdiverse background and experience that are relevant for the Company’s globaloperations.

4.1.2 In evaluating the suitability of individual Board members the HRNR Committee maytake into account factors such as:

General understanding of the Company’s business dynamics global business andsocial perspective;

Educational and professional background;

Standing in the profession;

Personal and professional ethics integrity and values;

Willingness to devote sufficient time energy in carrying out their duties andresponsibilities effectively.

4.1.3 The proposed appointee shall also fulfill the following requirements:

Shall possess a Director Identification Number;

Shall not be disqualified under the Companies Act 2013;

Shall give his written consent to act as a Director;

Shall endeavour to attend all Board Meetings and wherever he is appointed as aCommittee Member the Committee

Meetings;

Shall abide by the Code of Conduct established by the Company for

Directors and Senior Management Personnel;

Shall disclose his concern or interest in any company or companies or bodies corporatefirms or other association of individuals including his shareholding at the first meetingof the Board in every financial year and thereafter whenever there is a change in thedisclosures already made;

Such other requirements as may be prescribed from time to time under the CompaniesAct 2013 Listing Regulations and other relevant laws.

4.1.4 The HRNR Committee shall evaluate each individual with the objective of having agroup that best enables the success of the Company’s business.

4.2 Criteria of Independence

4.2.1 The HRNR Committee shall assess the independence of Directors at the time ofappointment / re-appointment and the Board shall assess the same annually. The

Board shall re-assess determinations of independence when any new interests orrelationships are disclosed by a Director.

4.2.2 The criteria of independence as laid down in Companies Act 2013 and ListingRegulations is as below:

An independent director in relation to a company means a non-executive director otherthan a managing director or a whole-time director or a nominee director

a. who in the opinion of the Board is a person of integrity and possesses relevantexpertise and experience;

b. (i) who is or was not a promoter of the company or its holding subsidiary orassociate company;

(ii) who is not related to promoters or directors in the company its holdingsubsidiary or associate company;

c. who has or had no pecuniary relationship with the company its holding subsidiaryor associate company or their promoters or directors during the two immediatelypreceding financial years or during the current financial year;

d. none of whose relatives has or had pecuniary relationship or transaction with thecompany its holding subsidiary or associate company or their promoters or directorsamounting to two per cent or more of its gross turnover or total income or 50 lakh rupeesor such higher amount as may be prescribed whichever is lower during the two immediatelypreceding financial years or during the current financial year;

e. who neither himself nor any of his relatives

(i) holds or has held the position of a key managerial personnel or is or has been anemployee of the company or its holding subsidiary or associate company in any of thethree financial years immediately preceding the financial year in which he is proposed tobe appointed;

(ii) is or has been an employee or proprietor or a partner in any of the threefinancial years immediately preceding the he is proposed to be appointed of -

(A) a firm of auditors or company secretaries in practice or cost auditors of thecompany or its holding subsidiary or associate company; or

(B) any legal or a consulting firm that has or had any transaction with the companyits holding subsidiary or associate company amounting to 10 per cent or more of the grossturnover of such firm;

(iii) holds together with his relatives two percent or more of the total voting powerof the company; or

(iv) is a Chief Executive or director by whatever name called of any nonprofitorganisation that receives twenty-five per cent or more of its receipts or corpus from thecompany any of its promoters directors or its holding subsidiary or associate companyor that holds two per cent or more of the total voting power of the company; or

(v) is a material supplier service provider or customer or a lessor or lessee of thecompany.

f. shall possess appropriate skills experience and knowledge in one or more fields offinance law management sales marketing administration research corporategovernance technical operations corporate social responsibility or other disciplinesrelated to the company’s business.

g. shall possess such other qualifications as may be prescribed from time to timeunder the Companies Act 2013.

h. who is not less than 21 years of age.

4.2.3 The Independent Directors shall abide by the "Code for IndependentDirectors" as specified in Schedule IV to the Companies Act 2013.

4.3 Other directorships / committee memberships

4.3.1 The Board members are expected to have adequate time and expertise and experienceto contribute to effective Board performance. Accordingly members should voluntarilylimit their directorships in other listed public limited companies in such a way that itdoes not interfere with their role as directors of the Company. The HRNR Committee shalltake into account the nature of and the time involved in a Director’s service onother Boards in evaluating the suitability of the individual Director and making itsrecommendations to the Board.

4.3.2 A Director shall not serve as Director in more than 20 companies of which notmore than 10 shall be Public Limited Companies.

4.3.3 A Director shall not serve as an Independent

Director in more than 7 Listed Companies and not more than 3 Listed Companies in casehe is serving as a Whole-time Director in any Listed Company.

4.3.4 A Director shall not be a member in more than 10 Committees or act as Chairman ofmore than 5 Committees across all companies in which he holds directorships

For the purpose of considering the limit of the Committees Audit Committee andStakeholders’ Relationship Committee of all Public Limited Companies whether listedor not shall be included and all other companies including Private

Limited Companies Foreign Companies and Companies under Section 8 of the CompaniesAct 2013 shall be excluded.

For and on behalf of the Board of Directors
Mukesh D. Ambani
Chairman and Managing Director
Mumbai April 27 2018

ANNEXURE IV B

Remuneration Policy for Directors Key Managerial Personnel and other employees

1. Introduction:

1.1 Reliance Industries Limited (RIL) recognises the importance of aligning thebusiness objectives with specific and measureable individual objectives and targets. TheCompany has therefore formulated the remuneration policy for its directors key managerialpersonnel and other employees keeping in view the following objectives:

1.1.1 Ensuring that the level and composition of remuneration is reasonable andsufficient to attract retain and motivate to run the company successfully.

1.1.2 Ensuring that relationship of remuneration to performance is clear and meets theperformance benchmarks.

1.1.3 Ensuring that remuneration involves a balance between fixed and incentive payreflecting short and long term performance objectives appropriate to the working of thecompany and its goals.

2. Scope and Exclusion:

2.1 This Policy sets out the guiding principles for the Human Resources Nomination andRemuneration Committee for recommending to the Board the remuneration of the directorskey managerial personnel and other employees of the

Company.

3. Terms and References:

In this Policy the following terms shall have the following meanings:

3.1 "Director" means a director appointed to the

Board of the Company.

3.2 "Key Managerial Personnel" means

(i) the Chief Executive Officer or the Managing Director or the Manager;

(ii) the Company Secretary; (iii) the Whole-time Director; (iv) the Chief FinancialOfficer; and

(v) such other officer as may be prescribed under the Companies Act 2013.

3.3 "Human Resources Nomination and Remuneration Committee" means thecommittee constituted by RIL’s Board in accordance with the provisions of Section 178of the Companies Act 2013 and Regulation 19 of the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations").

4. Policy:

4.1 Remuneration to Executive Directors and Key Managerial Personnel

4.1.1 The Board on the recommendation of the Human Resources Nomination andRemuneration (HRNR) Committee shall review and approve the remuneration payable to theExecutive Directors of the Company within the overall limits approved by the shareholders.

4.1.2 The Board on the recommendation of the HRNR Committee shall also review andapprove the remuneration payable to the Key Managerial Personnel of the Company.

4.1.3 The remuneration structure to the Executive Directors and Key ManagerialPersonnel shall include the following components: (i) BasicPay (ii) Perquisites andAllowances (iii)StockOptions

(iv) Commission (Applicable in case of Executive Directors) (v) Retiralbenef its (vi)Annual Performance Bonus

4.1.4 The Annual Plan and Objectives for Executive Directors and Senior Executives(Executive Committee) shall be reviewed by the HRNR Committee and Annual Performance Bonuswill be approved by the Committee based on the achievements against the Annual Plan andObjectives.

4.2 Remuneration to Non-Executive Directors

4.2.1 The Board on the recommendation of the HRNR Committee shall review and approvethe remuneration payable to the Non-Executive Directors of the Company within the overalllimits approved by the shareholders.

4.2.2 Non-Executive Directors shall be entitled to sitting fees for attending themeetings of the Board and the Committees thereof. The Non-Executive Directors shall alsobe entitled to profit related commission in addition to the sitting fees.

4.3 Remuneration to other employees

4.3.1 Employees shall be assigned grades according to their qualifications and workexperience competencies as well as their roles and responsibilities in the organisation.Individual remuneration shall be determined within the appropriate grade and shall bebased on various factors such as job profile skill sets seniority experience andprevailing remuneration levels for equivalent jobs.

For and on behalf of the Board of Directors

Mukesh D. Ambani

Chairman and Managing Director

Mumbai April 27 2018

ANNEXURE V

Secretarial Audit Report

For the Financial Year ended March 31 2018

[Pursuant to Section 204(1) of the Companies Act 2013 and Rule 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014]

To

The Members

Reliance Industries Limited 3rd Floor Maker Chambers IV 222 Nariman Point Mumbai400 021

I have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by Reliance Industries Limited(hereinafter called ‘the Company’). Secretarial Audit was conducted in a mannerthat provided me a reasonable basis for evaluating the corporate conducts / statutorycompliances and expressing my opinion thereon.

Based on my verification of the Company’s books papers minute books forms andreturns filed and other records maintained by the Company and also the informationprovided by the Company its officers agents and authorised representatives during theconduct of secretarial audit I hereby report that in my opinion the Company has duringthe audit period covering the financial year ended on March 31 2018 (‘AuditPeriod’) complied with the statutory provisions listed hereunder and also that theCompany has proper Board-processes and compliance-mechanism in place to the extent in themanner and subject to the reporting made hereinafter:

I have examined the books papers minute books forms and returns filed and otherrecords maintained by the Company for the financial year ended on 31 March 2018 accordingto the provisions of:

(i) The Companies Act 2013; the Companies Act 1956 (the Act) and the rules madethereunder;

(ii) The Securities Contracts (Regulation) Act 1956 (‘SCRA’) and the rulesmade thereunder;

(iii) The Depositories Act 1996 and the Regulations and Bye-laws framed thereunder;

(iv) Foreign Exchange Management Act 1999 and the rules and regulations madethereunder to the extent of Foreign Direct Investment Overseas Direct Investment andExternal Commercial Borrowings;

(v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (‘SEBI Act’): -

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 2015;

(c) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009

(d) The Securities and Exchange Board of India (Share Based Employee Benefits)Regulations 2014;

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008;

(f) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Act and dealing with client;

(g) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009 (Not applicable to the Company during the Audit Period);

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations1998 (Not applicable to the Company during the Audit Period); and

(i) The Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015.

I have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by The Institute of Company Secretaries of India; and

(ii) The Listing Agreements entered into by the Company with the Stock Exchanges.

During the period under review the Company has complied with the provisions of theAct Rules Regulations Guidelines Standards etc. mentioned above.

I further report that having regard to the compliance system prevailing in theCompany and on examination of the relevant documents and records in pursuance thereof ontest-check basis the Company has complied with the following laws applicable specificallyto the Company:

(a) Merchant Shipping Act 1958 and Rules made thereunder;

(b) Petroleum Act 1934 and Rules made thereunder

(c) Oil Field (Regulation and Development) Act 1948 and Rules made thereunder;

(d) The Mines Act 1952 and Rules made thereunder.

(e) The Petroleum and Natural Gas Regulatory Board Act 2006 and the Rules madethereunder.

I further report that

The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The changes in thecomposition of the Board of Directors that took place during the period under review werecarried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings. Except whereconsent of the directors was received for scheduling meeting at a shorter notice agendaand detailed notes on agenda were sent at least seven days in advance. A system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.

All decisions at Board Meetings and Committee Meetings are carried out unanimously asrecorded in the minutes of the meetings of the Board of Directors or Committees of theBoard as the case may be.

I further report that there are adequate systems and processes in the Companycommensurate with the size and its operations to monitor and ensure compliance withapplicable laws rules regulations and guidelines.

I further report that during the audit period the Company has

• Issued and allotted Unsecured Listed Redeemable Non-convertible Debentures onPrivate Placement aggregating Rs. 20000 Crore in six tranches as per the terms of issueof respective tranche.

• Redeemed Non-convertible Debentures aggregating Rs. 133 Crore as per the termsof issue.

• Increased its Authorized Share Capital from Rs. 60000000000/- (Rupees SixThousand Crore only) divided into 5000000000 (Five Hundred Crore) equity shares of Rs.10/- (Rupees Ten only) each and 1000000000 (One Hundred Crore) preference shares of Rs.10/- (Rupees Ten only) each to Rs. 150000000000/- (Rupees Fifteen Thousand Crore only)divided into 14000000000 (Fourteen Hundred Crore) equity shares of Rs. 10/ (Rupees Tenonly) each and 1000000000 (One Hundred Crore) preference shares of Rs. 10/ (Rupees Tenonly) each.

• Issued and allotted 3080334238 fully paid-up equity shares of Rs. 10/-(Rupees Ten only) each by way of Bonus issue in the proportion of 1 (One) fully paid-upequity share of Rs. 10/- (Rupees Ten only) each for every 1 (One) fully paid-up equityshare of Rs. 10/- (Rupees Ten only) each held as on Record Date i.e. September 9 2017fixed for this purpose.

• Approved ‘Reliance Industries Limited Employees’ Stock Option Scheme2017’ ("ESOS 2017") for employees of the Company.

• Approved ‘Reliance Industries Limited Employees’ Stock Option Scheme2017’ ("ESOS 2017") for employees of the subsidiary companies of theCompany

Dr. K. R. Chandratre
FCS No. 1370 C P No: 5144
Place: Pune
Date: April 27 2018

ANNEXURE VI

Particulars of Energy Conservation Technology Absorption and Foreign Exchange Earningsand Outgo required under the Companies (Accounts) Rules 2014

A. Conservation of Energy

(a) Steps taken to conserve energy

In light of the global challenges concerning energy security Reliance IndustriesLimited (RIL) considers energy management as one of the key components of its responsiblebusiness strategy.

Major energy conservation initiatives taken during the FY 2017-18:

Refining and Marketing

Jamnagar Manufacturing Division (DTA)

Heat recovery from LCGO (Light cycle gas oil) pump-around stream at stripper re-boilerof coker gas conditioning section to avoid medium pressure steam consumption;

Recover low level heat from overhead fin fans of crude distillation unit’sfractionator column and utilise the same to preheat raw crude feed resulting in reducedsteam consumption;

Heat recovery from deheptaniser (Train 1) column overhead stream in DTA-Aromatics toincrease the temperature of feed to the xylene column in Isomar unit. This resulted inreduction of fuel consumption in re-boiler of xylene column and additional generation ofmedium pressure steam from column overhead circuit.

Installed an in-house developed control system for steam ejectors (from firstprinciples) to reduce Medium Pressure steam consumption in Crude Distillation Units.

Jamnagar Manufacturing Division (SEZ)

In Alkylation unit use low pressure steam to heat the feed to de-butaniser column andthereby reduce medium pressure steam consumption in its reboiler.

Petrochemicals

Hazira Manufacturing Division

Re-define the speed control strategy of the induction fans of cracking furnaces tooptimise quantity of combustion air and thereby also optimise consumption of fuel gasmotor power;

Optimisation of reflux in debutaniser depentaniser and benzene columns to suit theloading of the plant resulting in reduced steam consumption in the column re-boilers;

Improved heat recovery from flue gases in Cracker furnace’s convection coils bywater washing;

Installation of a parallel steam header for evacuating increased low pressure steamgenerated from reactor exotherm in PTA Plant and reducing pressure drop in the pipelines

New pressure control system in benzene tower resulting in higher heat recovery toNaphtha stream and thereby reduced fuel fired in cracker furnace;

Reduction in consumption of high pressure steam by replacing thermodynamic steam trapswith inverted bucket steam traps in extrusion section of Polypropylene Plant;

Vadodara Manufacturing Division

Improved heat recovery in heat exchanger network through modifications in 1 ststage hydrogenation in Pyrolysis Gasoline Hydrogenation Unit;

Reduced consumption of high pressure steam by preheating feed to Clay Tower using leansulfolane solvent from Ethylene Di-Chloride side reboiler outlet;

Installation of flash vessel to generate steam from reactor exotherm in LDPE Plant

Reduced steam consumption in cycle gas heater by preheating feed gasses with hot washwater in EOEG Plant;

Heat recovery for pre-heating of boot water and finishing of recycled water usingstripper overhead vapours in PBR Plant.

Dahej Manufacturing Division

Replacing process off gas consumption with excess nitrogen available and generatingadditional power in off gas expander in PTA Plant.

Optimising pressure of intermediate pressure steam to increase flash steam generationand reduce net steam consumption in PTA Plant.

Nagothane Manufacturing Division

Achieved increase in cracked gas compressor turbine efficiency by refurbishment ofcomponents and modification of internal design;

Refurbished ethylene refrigeration compressor turbine internals and improving operatingefficiency;

Refractory replacement and improving the heat recovery performance resulted inincreased efficiency of gas cracker furnace;

Patalganga Manufacturing Division

Achieved increased heat recovery in combined feed exchanger of platformer throughchemical cleaning

Other initiatives taken at various manufacturing divisions

At Barabanki Naroda Silvassa and Hoshiarpur manufacturing division old pumps werereplaced with energy efficient ones. Conventional tube lights were replaced with LED tubelights.

RIL has been gearing up to contribute to the major clean energy initiatives of the Govtof India namely "Renewable Purchase Obligation (RPO)’ and ‘PerformAchieve & Trade (PAT)’.

On March 28 2018 the cracker based manufacturing units of RIL namely at HaziraDahej Vadodara and

Nagothane have each been notified as ‘Designated Consumer’ for PAT Cycle III(performance years 2017-18 to 2019-20).

Majority of RIL’s electrical power requirement is met through Cogenerationprocess which as per Electricity Act 2003 needs to be promoted along with Renewablesources.

Major Subsidiaries (Retail and Jio) and major office locations

Installed LEDs that resulted in energy savings of 1379 Gcal/hour

Installed strip curtain that resulted in energy savings of 35 Gcal/hour

Increased solar rooftop capacity that resulted in total energy savings of 27 Gcal/hour

Installed motion sensors that resulted in energy savings of 35 Gcal/hour

Improved HVAC and switch sensor systems that resulted in total energy savings of 329Gcal/hour

(b) The capital investment on energy conservation equipment
Sr. No Manufacturing Division Capital investments on energy efficient equipment’s Energy savings (Gcal/hr) Financial saving
(` in crore) (` in crore per Annum)
(I) Refining & Marketing
1 Jamnagar manufacturing division (DTA) 53.72 40.56 67.16
2 Jamnagar manufacturing division (SEZ) 6.63 5.40 9.03
(II) Petrochemicals
3 Hazira manufacturing division 3.46 25.92 31.17
4 Vadodara manufacturing division 13.31 7.28 15.29
5 Dahej manufacturing division 0.09 8.22 7.04
6 Nagothane manufacturing division 3.00 11.85 18.75
7 Patalganga manufacturing division 1.40 0.07 0.98
8 Other manufacturing divisions 1.03 0.23 0.99

B. Technology Absorption

Research and technology at RIL helps create superior value by harnessing internalresearch and development skills and competencies and creates innovations in emergingtechnology domains related to RIL’s various businesses. Research and technology atReliance focuses on (i) new products processes and catalyst development to supportexisting business and create breakthrough technologies for new businesses (ii) advancedtroubleshooting and (iii) support to capital projects and profit and reliabilityimprovements in manufacturing plants.

1) Major efforts made towards technology absorption Refining and Marketing

Light coker naphtha processing in SEZ fluidised catalytic converter (FCC) to enablehigher propylene and ethylene production

DTA coker feed window widening with respect to metals and asphaltenes by usingclarified slurry oil (CSO) with feed

Low cost green process development for valuable metal extraction from gasification slagDevelopment of process for waste plastic conversion to oil

Value creation from refinery waste by-product : Using sodium free di-sulphide oils(DSO) to replace dimethyl disulphide (DMDS) in gas and naphtha cracker and hydrotreater

Straight run fuel oil (SRFO) processing in coker unit to improve profitability

• Green process and catalyst for direct synthesis and

of dimethyl carbonate (DMC) from CO2

methanol Process and catalyst to produce CO from CO2

Optimized coker antifoulant for increasing throughput and reliability In-housedeveloped flasher for removal of H2S

from brine at low capex recovery using Process development for CO2

novel adsorbent concept

Development of high active FCC catalyst

Proprietary accelerated deactivation protocol used to select the best vacuum gas oilhydrotreater (VGOHT) catalyst

Catalyst trials in FCC for continuous yield improvement/profitability

Catalytic gasification studies in outside lab proving the concept in continuous benchscale unit

Separation of active catalyst from FCC ecat

Process for direct conversion of syngas to olefins to ethanol Electro-reduction of CO2and syn gas to value Differentoptionsfor CO 2 products

Fast characterisation of crude using near-infrared (NIR) to provide assay updatesupport.

In-house corrosion model developed to estimate true corrosivity of crude to optimisecrude purchases.

In-house platformer model developed and is being used to maximise value of C5-C12 pool.

Development of in-house RIL model for VGOHT.

Corrected naphtha composition in crude assays to improve accuracy of linear programming(LP) model

Online corrosion monitoring dashboard developed with CFD based shear computations tomonitor 44 locations in heavy vacuum gas oil loop (HVGO) loop.

Web-portal developed to visualize the corrosive / passive molecules in crudes or blendsand study their impact on corrosion.

Fluxant recipe optimisation for gasifier operations

Petrochemicals:

Development of a Reliance proprietary process to manufacture Chlorinated PolyvinylChloride (CPVC) resin

Development of Reliance proprietary catalyst for reforming dehydrogenation ofhydrocarbons

Development of novel speciality materials like self- healing elastomers for extendedlife of a tire

Development of high strength fiber and film for ballistic armours

Purification of crude terephthalic acid using ionic liquids based technology tosignificantly reduce operations and capital cost

Novel processes for production of polymer monomers such 1-hexene butadiene isoprene

Low energy catalytic process for n-alkane to aromatics

Value addition of carbon dioxide and syngas to chemicals

Eco-smart Polyvinyl Chloride (PVC) development for specialty applications

New ionomeric material development based on butyl rubber styrene butadiene rubberpolybutadiene rubber for pharmaceutical and automobile applications

Bio-compostable polymers development for packaging applications to reduce plastic wastegeneration and adverse environmental effects

Development of engineering thermoplastics and biodegradable polymers based onsustainable resources like CO2

Development of engineering thermoplastics e.g. polyphenylene sulfide for automobileindustrial and aerospace applications

Sulphur based interpenetrating network emissions polymers with lower H2S& SO2 development for various applications in construction industry

Novel polyolefins product development ranging from medium to high molecular weight forhigh strength niche applications

Unique polyolefin product development for 3D printing

Hydrophilic polypropylene development for construction and packaging applications

Novel styrene butadiene rubber development for automobile segment with higher fuelefficient and longer durability with lower carbon emission

Impact copolymer (ICP) and homo grade polypropylene development through Relianceproprietary advanced catalyst system for better operational reliability and higher productperformance

High melt flow polypropylene grades for automobile industry by next gen Relianceproprietary catalyst system

Gas phase polyethylene process and products development through Ziegler-Natta (ZN)catalyst

Metallocene polyethylene products and process development for packaging applications

High green strength butyl rubber product development for automobile segment

Poly isobutylene development through novel catalytic route for higher yield withsuperior microstructure

Self-adhesive materials development for health sector

Development of linen like polyester for fancy effect in fabric

Development of wipe free spinneret

Reduced plate thickness spinnerets for productivity enhancement

Non-circular cross section filaments for moisture management

Development of Recro-therm fibre for low weight and warmth in suiting shirting andbottom wears

Development of speciality polyester fibre for concrete application

Development of specialty polyester fibre for soil stabilisation

Development of fancy yarn from mix profiled capillaries fibreDevelopmentofmoisturemanagement through topical treatment and capillary profilemodification

Development of durable antibacterial fibre through topical treatment route

Development and launch of high quality performance flame retardant polyester

Biofuels and Bio-Chemicals

Development of ‘Green Bio crude’ and byproducts from algae using sea watersunlight and low cost nutrients

Development of high yielding biofuel hybrid crops

Development of high yielding waste land based non-edible crops for large scalecultivation for production of biofuels/chemicals

In-house research and external technology for converting abundantly availablecellulosic biomass in India to fuels and chemicals

Application of biotechnology to enhance the productivity of biofuels species

Testing the best hybrids produced by us and others at different agro-climatic zones toidentify most productive cultivators

Popularizing the cultivation of bio-fuel crops by growers by conducting method andvarietal demonstrations

Development of catalytic hydrothermal liquefaction technology for converting wet wasteto wealth

Development of catalyst for upgrading crude biofuel to reduce acidity (Total AcidityNumber) and enhancing the oil stability

Developed capabilities to design novel metabolic pathways for biochemicals from syngasdemonstrated production of chemical in syngas utilizing bacteria

Other R&D activities

Development of indigenous polymer electrolyte membrane (PEM) fuel cell technology

Work is underway to develop a technology to produce methane from unminable undergroundcoal reserves. If the technology is successful it will help increase production ofcoal-bed methane

One step process for production of carbon nanotubes (CNT) for non-woven mats (NWM)composites and fibre

Advance process control (APC)/ Real time optimisation (RTO) implementation in all ourmajor manufacturing facilities

Modelling and simulation scale up support and advance trouble shooting

2. The benefits derived like product improvement cost reduction productdevelopment or import substitution

The potential benefits derived from R&D and Technology absorption adoption andinnovation initiatives in FY 2017-18 is approximately Rs. 486 crore.

Apart from the above monetary savingsthere are other benefits from R&D i.e.

1. Transition from smart buyer of technology to a flagship developer of technology

2. Future ready for next generation businesses and mitigating disruption in existingbusiness.

3. Sustaining competitive advantage 4. Generating new intellectual properties 5.Product stewardship

3. Information regarding imported technology (imported during last three years)

Details of technology imported Technology imported from Year of import Status implementation / absorption
Liquid Phase Isomerization Exxon Mobil 2017-18 Plant under construction
AMT-ADP process for azeotropic distillation AMT USA 2015-16 Design and construction under progress
Halogenated Isobutylene Isoprene Rubber (HIIR) JV with Sibur Yarsintez Russia 2015-16 Detail engineering under progress
New generation FDY spinning machines TMT Japan 2015-16 Plant commissioned
SSP and IDY spinning Dalian China and TMT Japan 2015-16 Plant commissioned

4. Expenditure incurred on Research and Development

Sr. No Particulars (` in crore)
a) Capital 1026
b) Revenue 798
Total 1824

(II) Total Foreign exchange Earned and Used

Particulars in crore
Foreign Exchange earned in terms of Actual Inflows 169763
Foreign Exchange outgo in terms of Actual Outflows 221977

C. Foreign exchange Earnings and Outgo

(I) Activities relating to export initiatives to increase exports Developments of Newexport markets for Products and Services and Export Plan.

The Company has continued to maintain focus and avail of export opportunities based oneconomic considerations. During the year the Company has exports (FOB value) worth169325 crore (US$ 26.0 billion).

Note: Actual inflows does not include total savings in Foreign Exchange throughproducts manufactured by the Company and deemed exports amounting to 73736 crore (US$11.3 billion).

For and on behalf of the Board of Directors
Mukesh D. Ambani
Chairman and Managing Director
Mumbai April 27 2018