1. 1 Reliance Industries Limited Financial Presentation Q1 FY 2001-02 July 31, 2001

2. 2 Background Operating Environment Financial Performance Business Review Reliance Petroleum Reliance Infocom Summary Contents

3. 3 Background

4. 4 Rs. crores$ bnRank Sales60,00012.81 Exports9,0001.91 Cash Flow7,0001.51 Net Profit4,7001.01 Assets55,00011.81 Market Cap56,00011.91 Reliance is the largest, fastest growing, and the most valuable business group, in India - just 23 years young India’s No. 1 Group

5. 5 Reliance and the Indian Economy Reliance group’s leadership position in the Indian economy, is reflected in its all-round contribution: - 3% of India’s GDP - 5% of India’s total exports - Nearly 10% of government’s indirect tax revenues - 2.3% of the gross capital formation in the country, in the last 5 years Reliance makes significant contributions to the Indian economy on various parameters

6. 6 Leadership in the Corporate Sector Reliance group’s pre-eminent role in the Indian corporate sector: - 30% of the total profits of the private sector - 10% of the profits of the entire corporate sector - over 12% of total market capitalisation - weightage of 22% in the Sensex - weightage of 19% in the Nifty - 1 out of every 4 investors in India is a Reliance shareholder RIL and RPL are now the top 2 companies in India on all major financial parameters

7. 7 * Date of first IPO; all figures are for RIL & RPL Consistent Track-Record of Profitable Growth Compounded Annual Rate of Growth (%) Since 1977*10 Year5 Year Sales334050 Net Profit414226 Cash Profit403631 Assets363427 Market Cap434141 EPS212320 Record high levels of compounded double digit growth rates on all major parameters, across all timeframes

8. 8 Corporate Philosophy World scale, and world class State-of-the-art technologies Global competitiveness Leadership in chosen areas of business Superior Project Execution Financial Conservatism Highest standards for Health, Safety and Environment Consistent overall shareholder value enhancement Reliance benchmarks itself with global best practices in all aspects of its operations

9. 9 Financial Objectives Emphasis on capital productivity, and returns, to generate attractive spreads over cost of capital Targets of minimum 20% ROE, and 20% 5 year EPS CARG, across business cycles Conservative gearing - maintain top end credit ratings New investments based on achievement of hurdle rates of 20% ROCE, and low gestation period to further enhance ROE Strong and conservative financial discipline in place

10. 10 Operating Environment Q1 FY 2001-02

11. 11 Operating Environment Operating margins for the global petrochemicals industry were under considerable pressure in Q1 Significant capacity additions in the petrochemicals industry in the Middle East and Asia, and the US slowdown…… …….caused a sharp decline in international and domestic selling prices of major petrochemicals products In addition, continuing volatility in crude oil prices led to volatility in prices of the principal petrochemicals feedstock, naphtha The global petrochemicals industry is witnessing amongst the most challenging conditions in its history

12. 12 Change in feedstock and product prices % change in international prices Q1 FY’02 over Q1 FY’01 Selling Prices of Products (US$/MT) PE-12% PP-10% PVC -29% POY -9% PSF -14% PTA -9% MEG-21% PX -1% …..but international selling prices of products declined sharply Raw Material Costs Crude oil ($/bbl) -1% Naphtha Prices ($/MT) 0% Average naphtha prices in US$ terms remained flat Q-on-Q …...

13. 13 % change in domestic prices Q1 FY’02 over Q1 FY’01 Selling Prices of Products (Rs/kg) PE-8% PP0% PVC -10% POY +3% PSF -9% PTA -6% MEG-11% PX +6% ……. but domestic selling prices of most products also declined Raw Material Costs Crude oil ($/bbl) -1% Naphtha Prices (Rs.kg) -1% Naphtha landed prices in rupee terms marginally lower Q-on-Q Change in feedstock and product prices

14. 14 RIL’s Q1 Performance Highlights Plants operated at average capacity utilisation rate of 103% Production volumes increased 7% to record 2.8 million tonnes Domestic market sales accounted for nearly 90% of total sales Exports stood at US$ 159 million (Rs. 749 crores) – exports were Rs. 86 crores per annum just 5 years back Market shares were 55% for polyester, 77% for polyester intermediates, and 50% for polymers RIL has maintained its track record of strong operational performance despite challenging industry conditions

15. 15 Financial Performance Q1 FY 2001-02

16. 16 Q1 FY 2001-02 Q1 FY 2000-01 % Change Rs.crs.$ mn.Rs.crs.$ mn. Sales6,3901,3586,1361,3734% Trading Sales-- 479107 EBITDA1,3022771,2352755% Interest2575529867-14% Depreciation3968436682 Tax306286 Deferred Tax1 Net Profit61813154312214% Cash Profit1,04522293721012% RIL Income Statement for Q1 FY 2001-02 Net Profit increased 14% in a difficult operating environment

17. 17 Q1 FY 2001-02 Q1 FY 2000-01 % Change Rs.crs.$ mn.Rs.crs.$ mn. Gross Sales15,2553,24312,5982,82021% EBITDA2,2354751,86641820% Interest500106470105 Depreciation595126501112 Tax66145212 Net Profit1,07422884318927% Cash Profit1,7353681,39631324% RIL+RPL Income Statement for Q1 FY 2001-02 RIL and RPL have combined cash flows of Rs. 1,670 crores (US$ 355 mn) in Q1

18. 18 Q1 FY 2001-02 Rs.crs.$ mn. RIL’s EBITDA1,302277 Income from Associates24352 and Subsidiaries Interest25855 Depreciation39684 Tax306 Deferred Tax1- Net Profit860 183 Proforma Consolidated RIL Income Statement for Q1 FY 2001-02 The true picture of RIL’s profitability is reflected by the proforma consolidated income statement, which includes financials of subsidiaries, RPL, RCL, RIIL and BSES

19. 19 Elements of RIL’s Net Profit Growth High capacity utilisation rates leading to volume growth Higher proportion of sales in domestic market Increased share of speciality products, contributing higher margins Productivity improvements and cost reduction Interest cost savings, owing to lower debt and refinancing Dividends of only Rs. 16 crores (US$ 3.4 mn) from RPL accounted in Q1 on pro-rata basis – total dividends on Reliance’s 64% stake for full year Rs. 153 crores (US$ 33 mn) Profit growth arising from successful twin business strategies of improving sales realisations and lowering costs

20. 20 Composition of 4% Sales Revenue Growth Impact of volume growth 6% Impact of price changes -2% RIL - Elements of Sales Growth Production volume up 7% to 2.8 million tonnes Overall average capacity utilisation rate – 103% Polymers capacity utilisation rate 110%, polyester 95% and polyester intermediates 105%

21. 21 RIL Profitability Ratios RIL has amongst the highest Returns on Equity (ROEs) amongst the top petrochemicals companies globally Q1 FY 2001-02Q1 FY 2000-01 OPM %18.4%17.4%* NPM %9.7%8.9% ROE %18.3%16.4% EPS - Rs. ($)23.4(0.50)20.4 (0.46) Cash EPS - Rs($)38.5(0.82)34.3 (0.77) * excluding FX gains

22. 22 Proforma consolidation of financials, to include income from subsidiaries, RPL, RCL, RIIL and BSES, reflects the true picture of returns on RIL’s investments Q1 FY 2001-02 NPM %13.5% ROE %25.2% EPS - Rs. ($) 32.6(0.69) Proforma Consolidated Profitability Ratios

23. 23 RIL Liquidity Ratios RIL’s financial strength is reflected by its conservative liquidity ratios and top end credit ratings Q1 FY 2001-02FY 2000-01 Debt : Equity 0.830.72 Gearing44%41% Interest Cover3.5x3.3x Total Debt/Cash Flow2.01.8

24. 24 Conservative Financial Management AAA credit ratings from CRISIL and FITCH for domestic debt International debt rated BB (Stable outlook) from S&P and Ba2 from Moody’s – constrained by sovereign ceiling Weighted average maturity of foreign exchange denominated debt of US $ 1,300 mn (Rs. 6,000 crores) is 21 years Annual forex denominated interest liability covered more than 7 times by US$ denominated exports, and oil and gas revenues Reliance’s strong financial position provides a high degree of financial flexibility to capture future opportunities

25. 25 Reliance is India’s Largest Exporter Reliance is India’s largest exporter with group exports of US$ 2 bn (Rs. 9,370 crores) in FY 2001 Individually too, RIL and RPL are India’s top 2 exporters RIL’s manufactured exports declined 10% to US$ 159 mn (Rs. 749 crores) in Q1 RIL exports products to over 100 countries, including to the most quality conscious customers in the US and Europe RIL recently became India’s first manufacturing entity to receive the status of Golden Super Star Trading House Reliance’s high exports demonstrate the international quality of its products, and its ability to compete against global leaders

26. 26 Consistent Growth in Exports Revenues Exports still represent only 10% of total sales even after 8 times increase in absolute terms over the last 5 years Rs.crores

27. 27 Business Review

28. 28 Product Mix Composition of RIL’s sales Petrochemicals businesses dominate RIL’s portfolio, with an 86% share of sales – share of oil and gas business likely to increase

29. 29 Oil & Gas - Review RIL is India’s largest private sector E&P operator in India Number of properties increased from just 2 to 25 over the last 2 years Four new exploration blocks awarded in Q1, in second round of bidding under New Exploration Licensing Policy (NELP) 100 strong team currently manning operations Fiscal incentives to enhance overall returns from this business RIL’s E&P investments are expected to enhance overall feedstock integration levels and generate attractive returns

30. 30 Reliance’s ProductionQ1 FY’02Q1 FY’01%Change Oil (in kT)100928% Gas (in kTOE)1651576% Oil and Gas - Existing Production Output from the 2 currently producing oil and gas fields of Panna-Mukta and Tapti (PMT) has further increased in Q1 The 3% share in RIL’s revenues by Oil and Gas is from the 2 PMT fields alone – the 23 new exploration blocks are still to make any contribution

31. 31 Reliance’s Oil & Gas Properties SHALLOW WATER BLOCKS BLOCK 1: Kutch Offshore BLOCK 2 : Saurashtra BLOCK 3 : Saurashtra * BLOCK 4 : Mumbai Offshore BLOCK 5: Mumbai Offshore BLOCK 8 : Kerala-Konkan BLOCK 18 : Krishna Godavari BLOCK 19 : Krishna Godavari BLOCK 20 : Krishna Godavari BLOCK 25 : North East Coast DEEP WATER BLOCKS BLOCK D4 : Krishna Godavari BLOCK D5 : Kerala Konkan * BLOCK D6 : Krishna Godavari BLOCK D7 : Kerala Konkan * BLOCK D10 : Mahanadi ONSHORE BLOCKS BLOCK 17 : Assam * NON-NELP BLOCKS GK-1 : Kutch Offshore SR-2 : Saurashtra TULLOW BLOCKS T1: Krishna Godavari T2: Kutch Offshore T3: Kutch Offshore T4: Kutch Offshore T5: Cambay * Recently awarded under NELP - II Onland Deep Water NELP - I Legend Deep Water Shallow Water Earlier Awarded Exploration Blocks Shallow Water NELP - II Tullow Blocks Mukta Tapti Panna 25 D10 20 D6 D4 T1 18 19 8D7 D5 5 4 3 SR2 2 GK1 T3 1 T2 T4 T5 17 Well balanced portfolio of 25 deep and shallow water, offshore and onshore E & P blocks, aggregating over 1,75,000 square kilometers

32. 32 Polyester - Background Leading global rankings, and lowest cost positions: - 2nd largest producer of PSF/POY - 3rd largest producer of PX - 4th largest producer of PTA Strong demand potential in domestic markets - per capita consumption amongst the lowest in the world High tariff protection removed - import duties already at resting point of 20%, as per the WTO bound rates Anti dumping duties imposed on POY exports from leading regional producers, to counter unfair competition The Indian polyester market has witnessed compounded double digit annual demand growth rates over 2 decades

33. 33 Polyester - Review Present capacity of POY, PSF and PET 900,000 tonnes per year to be increased 33% to 1.2 million tonnes per year, in next 2 years Capacity expansion planned through attractive acquisition deals, and building cost competitive facilities at existing sites RIL is the only player making investments to capture future growth opportunities in polyester in India RIL’s market share of POY, PSF and PET has grown to 55% - reflecting acquisitions of 250,000 tonnes over the past few years Demand fundamentals point to sustainable double digit growth rates for polyester in India in the medium to long term

34. 34 Polyester - Existing Production IndustryReliance (Production inQ1Q1%Q1Q1% ‘000 tonnes)FY’02FY’01changeFY’02FY’01change Polyester3703496%20517815% (PFY, PSF, PET) Intermediates880891-1%681728-6% (PTA, MEG, PX) Polyester demand growth of 6% quarter-on-quarter

35. 35 Polymers - Background Reliance amongst the top 10 players globally in polymers India the world’s fastest growing polymers market Likely to be the world’s third largest market within this decade RIL’s major polymer, PP, accounting for 60% of production, witnessed demand growth of over 19% this year Import tariffs already down to 35% - gradual further reduction by 5% per year over the next 3 years RIL enjoys a leading 50% share in the rapidly growing polymers market in India

36. 36 Polymers - Existing Production Industry Reliance (Production inQ1Q1%Q1Q1% ‘000 tonnes)FY’02FY’01changeFY’02FY’01change Plastics83770718%4163878% (PE, PP, PVC) Polymers demand growth of 16% quarter on quarter Higher industry production growth rate reflects impact of capacities of new players operating at higher rates compared to the last year

37. 37 POY26%750 - 12,000 2% - 27% PSF59%2,800 - 10,2005% - 19% PE21%665 - 6,6551.8% - 18% PP20%330 - 3,3301% - 10% Emphasis on Higher Margin Speciality Grades S peciality as % Premium over of Total Volume Commodity Q1 FY’02 (Rs./MT) (%) Speciality grades yield premium pricing and contribute to higher margins, product differentiation, and relative insulation from commodity cycles

38. 38 Reliance Petroleum

39. 39 Capacity of 540,000 b/d comparable to US and European supersites World’s largest greenfield refinery and 7th largest in the world Complexity at top end of global range –Capability to produce higher value products from lower cost, heavier grade crude RPL - World class refinery US supersites refer to a sample of refineries with capacities of at least 225 kbpd and complexities of at least 9.5 European supersites refer to a sample of refineries with capacities of at least 245 kbpd and complexities of at least 6.5 Certain US and European supersites include petrochemical facilities Sources: RPL, Wood Mackenzie Comparisons kb/d 0 100 200 300 400 500 600 RPLUS supersite European supersite 0 2 4 6 8 10 12 14 Complexity Index Shell Singapore Reliance Jamnagar US supersite European supersite Shell Singapore 16 RIL Petrochem plants RPL refinery

40. 40 RPL - Peer comparisons Source: Study by Solomon Associates, Inc. on RPL (March 1999) 1. Indian peers refer to seven Indian refineries that participated in the 1996 study by Solomon Associates, Inc. 2. Asian peers refer to four refineries that are among the better refineries in Asia according to Solomon Associates, Inc. 3. US pacesetter refineries represent a group of seven refineries located in the U.S. and Canada, which have achieved first or second quartile rankings in all of the major indicators in the past three or four studies by Solomon Associates, Inc. 4. Europe pacesetter refineries refer to a group of six refineries located in Europe which have achieved similar rankings as the US pacesetter refineries Total cash operating costsEnergy intensity index Crude sulfurCrude gravity US cents / Utilized Equivalent Distillation Capacity Weight %Degree API

41. 41 – Complexity – Good product fit RPL - Higher GRMs – Low crude delivery cost – Favorable tariff environment Drivers of high refining margins – Fiscal benefits $ / bbl

42. 42 RPL – Consistent Increase in Operating Rates RPL’s record capacity utilisation rate of 108% is far ahead of the average 85% for other refineries in India and Asia Pacific region, 86% for Europe, and 92% for North America Integration with group’s downstream operations and ability to tap exports markets significantly contribute to high operating rates

43. 43 RPL - Income Statement for Q1 FY 2001-02 RPL is India’s largest company in terms of sales and is second only to RIL in terms of net profits, net worth, and assets Q1 FY 2001-02 Q1 FY 2000-01 % Change Rs.crs.$ mn.Rs.crs.$ mn. Gross Sales8,8651,8845,9831,33948% EBITDA93319863114148% Interest2435217239 Depreciation1994213530 Tax357245 Net Profit456973006752% Cash Profit69014745910350%

44. 44 Elements of RPL’s Net Profit Growth High capacity utilisation rates of 108% leading to 26% volume growth from 5.8 to 7.3 million tonnes Increased processing of heavier and relatively less expensive varieties of crude oil Improved product mix to take advantage of niche opportunities Import tariff rationalisation in October, 2000, as well as in March and April, 2001, leading to higher effective import tariff differentials Ongoing productivity gains and cost reductions Strong volume growth and superiority of RPL refinery’s configuration have contributed significantly to net profit growth

45. 45 RPL - Profitability Ratios RPL’s ROE ranks amongst the highest in refining companies globally Q1 FY 2001-02Q1 FY 2000-01 OPM %10.3%10.3% NPM %5.1%5.0% ROE %21.4%20.8% EPS - Rs. ($)3.8 (0.08)2.8 (0.06) CEPS - Rs. ($)5.5 (0.12)4.1 (0.09)

46. 46 RPL - Liquidity Ratios AA+ rating from CRISIL and FITCH – a unique achievement for a company of this scale in just over a year of operations Recently concluded India’s largest syndicated loan facility for US$ 750 mn (Rs. 3,500 crores) – enhancing financial flexibility Q1 FY 2001-02FY 2000-01 Debt : Equity 0.890.86 Gearing47%44% Interest Cover3.32.9 Total Debt / Cash Flow2.22.3

47. 47 RPL - India’s Largest Exporter RPL is India’s largest exporter with exports of US$ 1,375 mn (Rs. 6,410 crores) in FY 2001 Q1 exports of RPL’s products have increased 200% to US$ 306 mn (Rs. 1,440 crores) Exports to the US and other discerning markets reflect: – global competitiveness – international quality of products – operational flexibility – world class logistics capabilities RPL’s ability to deliver international quality products provides a significant competitive edge in a decontrolled environment

48. 48 Integration with Marketing RPL proposes to enter the business of retail marketing of controlled products in India, in line with government policies RPL is currently evaluating a multi-pronged strategy, encompassing: - potential joint ventures and alliances - acquisitions of marketing and distribution assets, and/or - development of its own distribution and marketing infrastructure RPL’s Memorandum Of Understanding with Indian Oil Corporation for formation of a JV for marketing, and the company’s participation in the process for disinvestment of IBP, reflect this strategy RPL’s entry into marketing will enhance integration and provide opportunities for generating attractive returns

49. Reliance Telecom

50. 50 Reliance Telecom - Review 165% growth in cellular subscriber base over last one year– double the industry growth rate of 87% Current subscriber base of over 236,000 with services in 113 cities across 15 states Leading market shares in all 7 circles Pre paid account for 90% of cellular revenues – low risk strategy Strength of Reliance Mobile brand and expertise in building retail consumer franchise demonstrated Reliance’s existing mobile operations span 1/3 rd of India’s geographical area and cover nearly 400 million people

51. Reliance Infocom

52. 52 Reliance Infocom to be the holding company for all infocom and related businesses of Reliance group Reliance Infocom to invest up to Rs. 25,000 crores (US$ 5 bn) over the next 5 years Project proposed to be financed with 2:1 debt:equity RIL is the lead investor with 45% equity stake Reliance Infocom - Review Reliance is leveraging its superior project execution capabilities and successful experience in telecom business

53. 53 First company to receive licences for providing fixed line services in 16 circles – national footprint excluding Tamilnadu and J&K Fixed line licences also enable tapping of mobile segment through low cost WiLL services – in addition to existing GSM business First company to receive National Long Distance (NLD) licence Work on 60,000 route kms, world class IP backbone on schedule – project on target for completion by end 2002 Participating in process for disinvestment of VSNL, India’s monopoly international long distance carrier Reliance Infocom - Update Reliance Infocom’s comprehensive business model targets opportunities in high growth voice and data markets

54. 54 Plans announced for Indian telecom markets by several domestic and international players scrapped Consolidation of telecom industry in India gathers pace Significant reduction in equipment and fibre costs owing to global telecom slowdown and cancellation of large number of projects Phased approach by Reliance towards infocom investments, based on: – strong cash flows – attractive IRRs – low payback period Reliance Infocom - Update Reliance Infocom is building amongst the lowest cost integrated communications networks in the country

55. Summary

56. 56 India’s Top 5 Wealth Creators in 2000-01 RIL is the No. 1 wealth creator in the year 2000-01 - wealth creation exceeds the next company by a factor of 4 times

57. 57 RIL’s Superior Share Price Performance RIL shares have consistently outperformed the broad market over all time frames % change Period RILSensexNifty Year to date-8%-17%-16% 1 year-8%-23%-20% 2 year76%-28%-19% 3 year129%2%14% 5 year204%-5%5% Since 1994*53%-24%- 10 year 257%100%- * Last equity placement from RIL

58. 58 Returns from RIL to Financial Institutions Amount (Rs. crores) Private placement in October 1994945 Current value of RIL shares (4.9 crore shares @Rs. 313)1536 Income from dividends including reinvestments150 Total profit earned by FIs till date741 Profit from an equivalent investment in Sensex-148 (including dividends and reinvestments) Total returns over market returns889 UTI, LIC, and GIC have earned total returns of Rs. 889 crores over market returns, on their original investment of Rs. 945 crores RIL stock price has appreciated 53% from its placement price, outperforming the Sensex by 77% over this period Reliance Industries Ltd.

59. 59 Price Performance of Leading Index Movers % change Period RIL HLLITC Year to date-8%6%-14% 1 year-8%-8%3% 2 year76%-20%-22% 3 year129%27%22% 5 year204%160%170% The RIL stock is the best performing index heavyweight over virtually all time frames

60. 60 RPL’s Superior Share Price Performance % change Period RPLSensexNifty 1 year-9%-23%-20% 2 year49%-28%-19% 3 year152%2%14% 5 year260%-5%5% RPL shares have outperformed the broad market over all time frames, creating superior value for both RPL and RIL shareholders

61. 61 Summary Production volumes in existing petrochemicals business likely to cross 11 million tonnes in the current year Global petrochemicals operating margins likely to remain under pressure during the current year RIL’s investment in RPL now generating attractive returns RIL’s future investments in Oil and Gas and infocom to generate significant returns in the medium to long term RIL’s proforma consolidated EPS of Rs. 32.6 (US$ 0.69) reflects the true picture of returns on its overall investments RIL will endeavour to maintain its demonstrated and consistent track record of shareholder value enhancement

62. 62 Reliance Industries Limited India’s World Class Corporation