1. Reliance Industries Limited
First Half Results
October 31, 2000

2. Index Reliance - India’s No. 1 Group
Management Philosophy and Strengths
Financial Performance
Business Outlook
Future Growth Plans
Shareholder Value Enhancement
Summary

3. India’s No. 1 Group

4. Reliance - India’s No. 1 Group
Rs. Crs. $ bn Rank
Sales 55,
Cash Flow 7,
Net Profit 4,
Market Cap 62,
Financial numbers based on consensus analyst estimates
Reliance is India’s largest, and fastest growing group
First generation enterprise - built on organic growth
RIL’s ROE is the highest amongst Asian chemicals companies, and ranks amongst the top 1 percentile for global chemicals companies
Reliance Industries Ltd.

5. Key Role in Indian Economic Growth
Reliance has leveraged global scale and competitiveness in its operations to build leadership in the vast Indian markets
Reliance generates over 3% of India’s GDP
Reliance contributes over 5% of the government’s total tax revenues - the largest by any business house
India’s largest, and the amongst the world’s largest, shareholder families - over 5 million retail investors
Reliance is now playing a leadership role in creation of a world class infocom infrastructure in India
Reliance Industries Ltd.

6. Presence in All Major Growth Sectors
Fully integrated player capturing value across the entire energy chain
India’s largest private E&P operator, with acreage > 100,000 sq. kms.
E&P
World’s largest grassroots refinery with 25% share of Indian market
R&M
Integrated, globally ranked producer, with leading market shares in India
Petrochemicals
Reliance Industries Ltd.

7. Presence in All Major Growth Sectors
Power
Telecom
India’s largest captive power facilities, IPPs, and generation and distribution infrastructure
Existing basic and cellular circles covering 380 million people, and 1/3rd of India’s geography
New economy and services sector initiatives will sustain high growth rates in the future
Building state-of-the-art, world class, infocom infrastructure to capture growth opportunities across the entire digital value chain
Infocom
Reliance Industries Ltd.

8. Consistent Track Record of Growth
Compounded Annual Rate of Growth (%)
Since 1977* 10 Year 5 Year
Sales
Net Profit
Cash Profit
Assets
Market Cap
EPS
* Date of first IPO
Only Indian group to report consistent sales and profit growth for 42 consecutive quarters in a row, over the last more than 10 years
Reliance Industries Ltd.

9. Group Structure RIL Reliance Petroleum Reliance Capital Reliance
Oil & Gas
Petrochemicals - polyester
and polymers
Textiles
64%
Upto 50%
26%
27%
47%
Reliance
Petroleum
Reliance
Capital
Reliance
Infocom
Reliance
Telecom
BSES
Nationwide
broadband
network
Basic
(existing)
Refining
Power
generation
Financial
Services
Value added
services
T & D
Marketing
Cellular
(existing)
Voice, data
and image
Reliance Industries Ltd.

10. Leadership in India’s Capital Markets
RIL RPL Group
Weightage in
BSE Sensex 12% 11% 23%
NIFTY 10% 9% 19%
MSCI - India 9% - 9%
MSCI - Asia Pacific 0.7% - 0.7%
The Reliance Group’s leadership is reflected in the significant weightages in benchmarks related to India
Reliance Industries Ltd.

11. Management Philosophy and Strengths

12. Management Philosophy
Reliance is the leading Indian group to think, and act, truly world scale and world class
World scale operations
Leading edge, state-of-the-art, technologies
Global best practices
Global competitiveness
Integration
Market leadership
Financial conservatism
Shareholder value enhancement
Reliance Industries Ltd.

13. Organisational Attributes
Reliance’s mantra is innovation in thinking, and efficiency in execution - turning dreams into reality
Young committed team - over 20,000 people, with an average age of just 35 years
Entrepreneurial, new ideas driven approach
Speed in thought and action
Agility in responding to an ever changing environment
Commitment to excellence
Informal work culture
A pure meritocracy - performance brings rewards
Production volumes increased 33% to a record level of 5.27 million tonnes in the first nine months of
This is despite the temporary dislocation in feedstock supplies at the Hazira petrochemicals complex in October 1998.
Total production volume slated to touch nearly 7 million tonnes for the full year - final production volume for the year likely to be 20% higher than beginning of the year estimates.
Sales revenues were up 11% at Rs billion (US$ 2.6 billion) in the first nine months.
This comprised of the impact of volume growth at 23%, partially offset, to the extent of 12%, by the decline in average product selling prices.
Reliance sold 95% of its production within India.
Value added export opportunities selectively pursued with export revenues increasing 145% to Rs billion (US $ 121 million).
Exports focussed on quality conscious markets of US and Europe, in recognition of the superior quality of Reliance’s products.
Reliance Industries Ltd.

14. Core Competencies
Reliance’s core competence lies in its ability to conceptualise and implement multi-billion dollar projects
Largest in-house pool of intellectual capital
Attracting and retaining the best people, and nurturing the ‘intrapreneurial’ spirit
Unique financial engineering capabilities
Demonstrated ability to implement complex, multi-billion dollar projects in record time frames
Ability to create world class assets at 30%+ capital cost advantage compared to peer group
Absorption of diverse and complex technologies and optimal operation of plants
Production volumes increased 33% to a record level of 5.27 million tonnes in the first nine months of
This is despite the temporary dislocation in feedstock supplies at the Hazira petrochemicals complex in October 1998.
Total production volume slated to touch nearly 7 million tonnes for the full year - final production volume for the year likely to be 20% higher than beginning of the year estimates.
Sales revenues were up 11% at Rs billion (US$ 2.6 billion) in the first nine months.
This comprised of the impact of volume growth at 23%, partially offset, to the extent of 12%, by the decline in average product selling prices.
Reliance sold 95% of its production within India.
Value added export opportunities selectively pursued with export revenues increasing 145% to Rs billion (US $ 121 million).
Exports focussed on quality conscious markets of US and Europe, in recognition of the superior quality of Reliance’s products.
Reliance Industries Ltd.

15. Recent Achievements
Unique combination of resource mobilisation and project management skill-sets - rare even in the global context
Investment of over Rs. 35,000 crores (US$ 9 bn) in new refinery and petrochemicals complexes completed in the last 5 years
World’s largest 27 mn tpa grassroots refinery completed in world record time of 36 months
Implemented India’s largest port project in 18 months - capacity of over 50 mn tpa
Implemented India’s largest rail/ road loading and despatch terminal with capacity of 10 mn tpa
Implemented India’s largest 500 MW captive power plant in less than 12 months
Implementation of large projects in months less than the time taken by peer group
Reliance Industries Ltd.

16. Global Competitiveness
30% + capital cost advantage over global peer group, in creation of new assets
Capacity expansion through debottlenecking, providing further capital cost advantage over new capacity creation
Personnel, and SG&A, costs amongst the lowest in the universe of global chemicals companies
Globally competitive power costs - all manufacturing complexes run on 100% captive power facilities
Competitive financing, from the domestic and international markets
Reliance’s sustainable competitive strengths translate into superior
returns and profitability ratios for the company
Reliance Industries Ltd.

17. Differentiation Strategy
Market reputation and customer relationships are key
long term advantages
Reliance’s differentiation strategy is built around:
World class quality of products
Widest range of product grades
Reliability of supplies at competitive prices
Extensive nation-wide distribution network
Just in time deliveries for even the smallest customer - significant savings in inventory costs
Technology and product development support
Reliance Industries Ltd.

18. Current Financial Performance

19. Financial Highlights - H1 2000-01
Sales Rs. 15,009 crs. (US $ 3,258 mn)
Operating Profit Rs. 2,643 crs. (US $ mn)
Net Interest Cost Rs crs. (US $ mn)
Cash Profit Rs. 2,012 crs. (US $ mn)
Net Profit Rs. 1,347 crs. (US $ mn)
Annualised CEPS Rs (US $ )
Annualised EPS Rs (US $ )
Strong performance despite sharp rise in feedstock costs
Reliance Industries Ltd.

20. Income Statement H H
% Change
Rs. crs.
$ mn.
Rs. crs.
$ mn.
Total Sales 8, ,989 15,009 3,
Sales(excl. RPL 8, , , ,
exports)
EBITDA , ,
Interest
Depreciation
Tax
Net Profit 1, ,
Cash Profit 1, ,
Profit under US GAAP is Rs. 1,114crs. ($ 242mn), which is 19% lower primarily due to the impact of foreign exchange fluctuations
Reliance Industries Ltd.

21. Growth in Production and Sales
Composition of 48 %
Sales Revenue Growth
Impact of volume growth 25 %
Impact of price increases %
Production volumes increased 35 % to 5.3 million tonnes
Reliance Industries Ltd.

22. Sharp Increase in Feedstock Costs
Avg. H over
Avg. H
International prices of
key raw materials : higher by 25% - 40%
Domestic selling prices
of major products : higher by 1% - 30%
Naphtha prices did not fully track the increase in crude oil prices - impact also partly neutralised by higher product selling prices
Reliance Industries Ltd.

23. Profitability Ratios
RIL has maintained its healthy profitability ratios
Reliance Industries Ltd.

24. Liquidity Ratios
Conservative liquidity ratios reflect inherent financial strength
Reliance Industries Ltd.

25. Growth in Exports
Selective export opportunities contribute to diversification of markets, and optimal utilisation of installed facilities
Primary thrust on domestic markets, with 87% of revenues coming from sales within India
Focus of exports on the quality conscious markets of Europe and the US, with an emphasis on speciality grades
Manufactured exports up 300% to Rs. 1,684 crores (US$ 366 mn)
Total exports, including RPL’s products, at Rs. 3,837 crores (US$ 833 mn)
RPL will now directly export its products, to take advantage of the new risk management policy announced by the government
Reliance Industries Ltd.

26. Business Performance
and Outlook

27. Business Mix Break-down of total revenues
Exports of RPL’s products in the first half accounted for 14% of the total revenues
Reliance Industries Ltd.

28. Break-down of RIL’s sales - excluding exports of RPL’s products
Business Mix
Break-down of RIL’s sales - excluding exports of RPL’s products
Contribution of the oil and gas division to RIL’s revenues and profitability is steadily increasing
Reliance Industries Ltd.

29. Oil and Gas - Plans and Outlook
Reliance is generating attractive dollar denominated revenues from its growing oil and gas business
RIL is India’s No.1 private sector E&P player with 100,000 sq. kms in exploration acreage
Oil and Gas production from existing fields is growing at 5%-10% per year
Potential to increase gas production by 3 times
14 exploration blocks recently awarded under attractive new policy regime, with fiscal and other benefits
Results from initial studies of the new exploration blocks are encouraging
Reliance Industries Ltd.

30. Polyester (PFY, PSF and PET)
Reliance is the world’s 3rd largest polyester producer
Compounded domestic demand growth in double digits - RIL’s production increased 15% in the first half
India’s 1.4 mn tonnes polyester market is still less than 1/3rd the size of the Chinese market
Specialities, with premium pricing of 10%, now account for 25%-60% of RIL’s total production
Industry consolidation is leading to improved pricing power, expanded product range, and higher product integration
Reliance is the only polyester producer, making investments to participate in future demand growth in India
Reliance Industries Ltd.

31. Polyester (PFY, PSF and PET)
Polyester margins improving
Industry operating at peak capacity utilisation
No capacity additions over the last 2-3 years, owing to then prevailing weak industry conditions
No new capacity in the pipeline
Reliance will benefit significantly, owing to the scale of its operations and integration
Per capita consumption of polyester in India remains amongst the lowest in the world
Reliance Industries Ltd.

32. Polymers (PP, PE and PVC)
Domestic demand for RIL’s plastics growing at compounded rate of 10%-15% per year
Demand for polypropylene, which accounts for nearly 2/3rd of RIL’s plastics production, is growing at over 20% per annum
Huge domestic demand potential - India’s 2.7 mn tonnes plastics market compares with China’s consumption of 12.6 mn tonnes
Diverse applications in fast growing sectors, such as telecom, food and beverages, FMCG, automobiles, etc.
Reliance is the most globally competitive player, operating in perhaps the world’s fastest growing plastics market
Reliance Industries Ltd.

33. Polymers (PP, PE and PVC)
RIL’s market leadership and global competitiveness will minimise the impact of regional oversupplies
New capacity additions in Middle and Far East may pressure industry margins in the short term
Reliance’s overall competitiveness, and leadership in rapidly growing home markets, will cushion the impact on the company
Import duties close to WTO resting points - limited room for further reduction in the short term
Rupee depreciation enhances pricing flexibility
Improved outlook from 2002, owing to limited capacity additions beyond 2001
Reliance Industries Ltd.

34. Reliance Petroleum
RPL operates the largest, and most complex, refinery in India, with over 25% of total domestic capacity
World’s largest grassroots refinery, with capacity of 27 mn tpa - the 7th largest refinery in the world at any single location
30% + capital cost advantage, over global peer group
Flawless start-up, and quick synchronisation of entire refinery complex within a world record timeframe of 3 months
Capacity utilisation of 101% achieved in the second quarter of operations - a unique achievement even in the global context
RPL and RIL are now India’s top 2 private sector companies
Reliance Industries Ltd.

35. RPL’s Financial Highlights - H1 2000-01
Sales Rs. 14,308 crs. ($ 3,106 mn)
Operating Profit Rs. 1,479 crs. ($ 321 mn)
Interest Cost Rs. 456 crs. ($ 99 mn)
Cash Profit Rs. 1,023 crs. ($ 222 mn)
Net Profit Rs. 726 crs. ($ 158 mn)
Annualised CEPS Rs ($ 0.10 )
Annualised EPS Rs ($ 0.07 )
Record performance in the very first half year of operations
Reliance Industries Ltd.

36. Highest Profitability in the Indian Refining Sector
RPL’s unique configuration, and high complexity, have contributed to the highest levels of value addition, and enhanced GRMs
RPL’s Gross Refining Margin (GRM) of over US$ 6 per barrel, is the highest in the Indian refining sector
RPL’s ability to optimise the feedstock and product mix on a dynamic basis, provides a competitive edge vis-à-vis other refineries
Processing of heavier crude oils has enabled RPL to take advantage of differential pricing trends, contributing to higher GRMs
A unique achievement, as many international refineries have taken 3 to 5 years before processing heavier crude oils
Reliance Industries Ltd.

37. RPL - India’s Largest Manufacturer Exporter
RPL achieved peak operating rates despite the slowdown in domestic demand, owing to acceptability of its products in export markets
Exports of RPL’s products were Rs. 2,138 crores (US$ 464 million) in the first half
Products exported to the US, Europe and the Far East (including Japan)
Significant exports reflect superior quality of products, meeting the most stringent international environment specifications
Exports facilitated by dedicated port and logistics infrastructure
RPL will now be India’s largest manufacturer exporter
Reliance Industries Ltd.

38. RPL - Regulatory Environment
RPL is required to sell 5 controlled products (gasoline, diesel, kerosene, LPG, ATF) to oil PSUs
Market determined import parity prices received for controlled products
Payments received directly from oil PSUs normally within 10 days - not linked to the OCC pool mechanism
All other products marketed directly by RPL - 20%-30% output consumed by group companies
Complete flexibility in sourcing of crude oil, and determining product mix
RPL’s margins are determined by international market related prices, even under the current regulatory environment
Reliance Industries Ltd.

39. Reliance Petroleum - Benefits to RIL
RIL’s investment in RPL has rapidly created significant shareholder value, in a business regarded as having long gestation
RPL will pay a dividend this year - contributing to RIL’s cash flows
RIL will consolidate RPL’s financials, from the year , fully reflecting the benefits of its investments in the company
The value of RIL’s stake in RPL translates into a value of nearly Rs. 180 per RIL share
RIL’s unrealised capital gains on this account are nearly Rs. 12,500 crores (over US$ 2.7 bn)
RPL will deploy its cash flows to enter into retail marketing from the year 2002
RPL also has the ability to significantly enhance capacity at marginal incremental cost, to capture future demand growth
Reliance Industries Ltd.

40. Reliance Telecom - Cellular Operations
Rapid growth in coverage and subscriber base, currently over 125,000 subscribers in 45 cities
Subscriber growth in first six months at 62%, far surpassing industry growth rate of 39%
Average revenue per user (ARPU) of over Rs. 1,000 per month - in line with trend in metros
Coverage being extended to nearly 100 cities by 2001
Reliance’s licensed area covers 13 states, 1/3rd of India’s geographical area, and 380 mn population
India’s largest network, and the growing presence in large contiguous areas, fits in perfectly with the group’s infocom plans
Reliance Industries Ltd.

41. Future Growth Plans

42. Reliance Value Creation Philosophy
Huge domestic market
Deregulation
Project execution
Growth Opportunity
Superior returns on investments
Reliance
Cash flows
Brand equity
Shareholder value enhancement
Reliance is India’s leading business house, consistently pursuing growth opportunities to maximise shareholder value
Reliance Industries Ltd.

43. 2000-01 : Consensus analyst estimates
Growing Cash Flows
RIL’s cash flows have consistently grown over the last 5 years - the reinvestment needs in existing business are small in comparison
: Consensus analyst estimates
Reliance Industries Ltd.

44. Capturing New Opportunities
Maintain, and enhance, market leadership in existing E&P, R&M, petrochemicals, and power businesses
Deploy significant free cash flows from existing businesses to capture attractive growth opportunities in New Economy and services sectors
Reliance’s strategy for the new infocom businesses leverages its demonstrated project management capabilities, financial engineering skills and brand equity
Investments in existing and new businesses will surpass hurdle return targets, and enhance shareholder value
Reliance’s leadership in Indian markets will be further strengthened with its new infocom initiatives
Reliance Industries Ltd.

45. Huge Market Opportunity
Infocom currently represents the largest market opportunity in India in the services sector
India is the only remaining telecom market opportunity in the world, with enormous growth potential
Inadequate existing infrastructure
Extremely low penetration rates:
India China
Fixed Lines (mn)
Cellular (mn) 3 70
Internet (mn) 4 19
(Analyst forecasts for CY 2000)
Recently announced deregulation measures open up vast markets for growth
Reliance Industries Ltd.

46. Fast Paced Market Deregulation
Path-breaking telecom reforms have been announced, opening up all markets to the private sector:
Basic telephony (including WLL*)
National Long Distance (NLD)
International Long Distance by 2002
Cellular - new operators in all circles
International gateways
Subsea/ submarine connectivity and landing stations
3G services - nationwide*
Internet service providers (ISPs) already allowed
Attractive low entry fee, and/or revenue sharing model
* under consideration
Telecom reforms have opened up rapidly growing, multi-billion dollar voice, data and image markets in India
Reliance Industries Ltd.

47. Global Trends in Convergence Strategies
Paradigm shift in the profile of the telecom industry - traditional circuit switched to router based IP networks
Move towards vertically integrated, convergent offerings in voice, data and value-added services, with end-user/application focus, not limited to bandwidth plays
Traditional telcos modifying core strategies to provide seamless, end-to-end connectivity, and the full range of applications/solutions
Data-centric players acquiring incumbent telcos, to enhance customer access, and range of offerings
Shift away from a regional focus to global reach
Deregulation has provided the opportunity for creation of a world class infocom business in India
Reliance Industries Ltd.

48. Reliance’s Infocom Initiatives
Reliance’s low-cost communications infrastructure, and integrated approach, will provide a lasting competitive edge
Reliance is building a nationwide, terabit bandwidth, broadband network connecting India’s top 115 cities - representing over 50% of the country’s GDP
All optic, facilities based, intelligent IP networks - robust and scaleable
Reliance will leverage its bandwidth and related infrastructure to capture value across the entire digital chain
A complete bouquet of services, and high quality end-to-end connectivity, will enable it to offer a superior value proposition to customers
Reliance Industries Ltd.

49. Nationwide Broadband Network Connecting Top 115 Cities in India
Largest broadband network of its kind, covering around 60,000 route kilometers, with significant future scaleability
Work already in progress
Reliance Industries Ltd.

50. Voice Offerings
Reliance will provide all voice services on a nationwide basis, thereby delivering superior service to a large customer base
Reliance to offer the complete range of services covering voice, data, and image, and value added services/ applications
Voice services to provide end-to-end connectivity, to customers on a nationwide basis
Leading presence targeted in all segments of the voice market - present size approximately Rs. 35,000 crores (US$ 8 billion):
- Local
- National Long Distance
- International Long Distance
- Mobile
Reliance Industries Ltd.

51. Data and Other Value Added Services
Internet data centres
Colocation
Web-hosting
Secure VPNs
Reliance Infocom’s communications infrastructure
Managed software services
E-commerce
Media-casting
Serving ISPs/ ASPs/ content and other service providers
Bandwidth selling/ trading
Call centres
Reliance’s comprehensive offerings strategy will reduce risk, and generate attractive returns even in an intensely competitive scenario
Reliance Industries Ltd.

52. Strategy for Last Mile Connectivity
Reliance’s initial focus on connecting business customers
Strategy for providing last mile access for the household segment to be driven by market revenue potential
Selection of technology for last mile access (fibre, DSL, cable, wireless, satellite, etc.) based on techno-commercial viability
Existing cable networks not appropriate for last mile connectivity:
- poor quality of infrastructure
- inability of existing cable to provide two way communication
- Unorganised structure, with 65,000 small cable operators
- illegal networks/ operations abound
Reliance’s strategy for building the last mile access will be consistent with dynamics of the Indian market place
Reliance Industries Ltd.

53. Competitive Landscape - Incumbents At a Disadvantage
Government owned telcos face constraints of:
- existing legacy infrastructure
- procedural delays
- funding
Existing private operators in local telephony are limited in number, and have no significant first mover advantage:
- regional focus, with operations limited to a single state
- early stage of operations, and limited number of subscribers
- high upfront licence fees penalty
- capital cost disadvantages
- funding constraints
Reliance Industries Ltd.

54. Competitive Landscape - New Players
Bandwidth supplier model of some government bodies:
- delays in implementation
- limited revenue potential
- cost and funding issues
A few private sector players focussing on data-centric services:
- Inability to provide bundled voice and data services, leading to significantly reduced revenue potential
- No end-to-end connectivity
- Extensive dependence on third party infrastructure, resulting in quality of service and/or cost issues
- Implementation and funding issues
Reliance has the credibility as a sponsor, and the vision and ability, to capture the total infocom opportunity in a world class manner
Reliance Industries Ltd.

55. The Reliance Advantage
Scale - leading to cost advantages
Project management skills - track record of executing complex projects with significant capital cost advantage
Financial strength - leads to ability to negotiate better prices with equipment/ project suppliers and contractors
End-to-end connectivity to end customers without reliance on external infrastructure - the only way to ensure high quality connectivity in the Indian context
Strategy of capturing all possible revenue streams, also leads to the ability to provide the best value proposition to customer
Reliance will lead the market with sustainable advantages in terms of cost and the ability to provide high quality service to customers
Reliance Industries Ltd.

56. Successful Track record in Brand Marketing and Customer Service
Reliance is a strongly customer-centric and marketing oriented organisation, with a history of identifying and developing attractive market opportunities
History of success in brand marketing, advertising, market positioning and retail marketing
Widely credited with creation of equity cult in the country – developed a 5 mn base of retail investors
Created an entire market for polyester where none existed
Established the most successful premium fabrics brands in India – Vimal and Harmony
Reliance Industries Ltd.

57. Successful Track record in Brand Marketing and Customer Service
Reliance is essentially a story of success in brand marketing, and in creating and sharing value on a large scale
Serves subscriber base of over 125,000 for its cellular services
Serves over 25,000 industrial and small consumers in its petrochemicals business
Preferred supplier status with majority of customers
Known for taking service to the next level of hand-holding and mentoring
Derives sizeable revenues from selling key raw materials to co-producers
– ability to provide comfort level, and ensure competitiveness of customers is enhanced
Reliance Industries Ltd.

58. Reliance Infocom - Current Status
Backbone presently being implemented in 12 states - Tamil Nadu, Andhra Pradesh, Karnataka, Maharashtra, Gujarat, Rajasthan, Delhi, Haryana, Uttar Pradesh, Madhya Pradesh, Orissa, W. Bengal
Over 30,000 strong construction force at work
Fast growing team of highly qualified and experienced industry professionals from all over the world
Rollout of services based on market revenue potential
Fibre being sourced internationally - 100% in-house project management
The nationwide backbone to be completed by end 2002
Reliance will rollout its services and offerings in a phased manner, starting in the next financial year
Reliance Industries Ltd.

59. Reliance Infocom - Corporate Structure
Reliance Infocom’s proposed corporate structure is designed to enhance overall value for RIL shareholders
Reliance Infocom will be the holding entity implementing all infocom and related ventures, under its umbrella
RIL will be the lead investor in Reliance Infocom with upto 50% equity holding
Balance equity to be held by Reliance’s promoters/strategic/financial investors
Reliance Infocom will enter into JVs and alliances wherever required
Reliance Industries Ltd.

60. Shareholder Value Enhancement

61. Corporate Governance
Reliance considers good corporate governance as the primary driver for generation of superior shareholder value
Reliance is committed to the highest international standards of corporate governance
Reliance provides US GAAP reconciliation for the benefit of its international investors since the past more than 3 years
Endowed a chair for Corporate Law and Governance, at the National Law School
Reliance has adopted policy documents - “Values and Commitments”, “Code of Ethics”, “Business Policies” and “Insider Trading Policy”
Shareholders’ approval for ESOP has been obtained - programme will be introduced shortly
Reliance Industries Ltd.

62. Conservative Financial Management
RIL has achieved quantum growth in the scale of its operations, while pursuing conservative financial policies
Top end domestic AAA credit rating
international ratings constrained by sovereign ceiling
RIL’s cash flows for approximately 2 years are sufficient to extinguish its entire net debt
Conservative management of foreign exchange risk
Dollar revenues from oil and gas provide additional cover
External debt of $ 1.3 billion has weighted average maturity of 22 years
Reliance Industries Ltd.

63. Growth without Further Equity Dilution
Reliance has achieved exponential growth without any equity offering for the past 6 years:
- increase in capacity from 1 million tonnes to nearly 10 million per annum
- 1000% growth in capacity
- over 500% growth in total revenues
- over 800% increase in net profit after tax
Reliance was the only Indian company to announce, in 1997, that it would not make an equity offering till 2000
Under current Indian regulations, Reliance’s stock buyback precludes issue of any further equity till 2003
RIL has achieved exponential growth without any equity offerings, generating superior returns for investors
Reliance Industries Ltd.

64. Increased Promoters’ Stake
RIL’s promoters’ have increased their equity stake by 2%, to over 40% during the current financial year
Shares have been acquired through open market purchases, under the existing regulatory framework
Existing guidelines allow the promoters to acquire an additional 5% of equity in every 12 month period on a rolling basis
Room for further acquisition of 3% stake i.e. 30 mn shares in the current year, taking stake to over 43%
This level of management stake, is unprecedented, in the Indian context, in a company of this scale and size
RIL’s promoters have publicly expressed their intention to increase their equity stake, through secondary market purchases over a period of time
Reliance Industries Ltd.

65. Shareholding Pattern Promoter group 40% Institutions - Domestic 20%
Institutions - Foreign 20%
FIIs 13%
GDRs 7%
Public %
Over 2 million retail small investors hold less than 100 shares each, accounting for 13% of equity, which has rarely been traded
One in every 4 retail investors in India is an investor in Reliance group shares
Reliance Industries Ltd.

66. RIL’s Approach to Share Buyback
India’s largest share buyback for Rs crores (US$ 250 mn), with a maximum price of Rs. 303 per share
RIL has completed all formalities for commencement of its share buyback:
- validity till June 12, 2001 and then renewable
Day-to-day timing of buyback will depend on volatility in capital markets, short term speculative pressures, relative stock price performance, etc.
Significant reduction in share price volatility, beta and WACC since buyback announcement
Rs. 303 is the maximum buyback price, required to be specified only because of Indian regulations
Reliance Industries Ltd.

67. RIL share’s superior price performance
% Change
RIL Sensex Nifty
YTD 30% -26% -21%
1 year 30% -17% -11%
2 year 176% +32% +42%
3 year 61% -2% %
5 year 145% 8% +19%
10 year 214% 187% -
The RIL stock price has consistently outperformed the broad market indices over all time frames
Reliance Industries Ltd.

68. Returns to GDR/FCCB Investors
% change
Issue Date Issue Current ($) Absolute Relative
Price ($) Price to Sensex
GDR 1 May
GDR 2 Feb
FCCB Nov
The RIL GDR has outperformed the Sensex, even in US$ terms
Reliance Industries Ltd.

69. Best Sensex Performer - Jan to Oct 2000
Production volumes increased 33% to a record level of 5.27 million tonnes in the first nine months of
This is despite the temporary dislocation in feedstock supplies at the Hazira petrochemicals complex in October 1998.
Total production volume slated to touch nearly 7 million tonnes for the full year - final production volume for the year likely to be 20% higher than beginning of the year estimates.
Sales revenues were up 11% at Rs billion (US$ 2.6 billion) in the first nine months.
This comprised of the impact of volume growth at 23%, partially offset, to the extent of 12%, by the decline in average product selling prices.
Reliance sold 95% of its production within India.
Value added export opportunities selectively pursued with export revenues increasing 145% to Rs billion (US $ 121 million).
Exports focussed on quality conscious markets of US and Europe, in recognition of the superior quality of Reliance’s products.
RIL is the best performing Sensex stock year-to-date
Reliance Industries Ltd.

70. RIL Best Performer Amongst Leading Global Petrochemicals Stocks
RIL is amongst the best performing petrochemicals stocks globally
Reliance Industries Ltd.

71. RIL’s Declining Beta 2
1.2
0.9
- One Year Rolling Beta
Source : Morgan Stanley
RIL’s beta has declined below 0.9 from about 1.2, since the time of the buyback announcement 6 months back
Reliance Industries Ltd.

72. Summary

73. Summary
A world class enterprise, at the intersection of the ‘old’ and the ‘new’ economy
RIL’s profits from its existing petrochemicals businesses are growing faster than most companies globally
Free cash flows being deployed in value generating infocom investments
Opportunity to gain exposure to potential market leader in convergent voice, data, and image offerings in the huge Indian markets
Reliance is the demonstrated leader in identifying and capturing attractive market opportunities in India
Production volumes increased 33% to a record level of 5.27 million tonnes in the first nine months of
This is despite the temporary dislocation in feedstock supplies at the Hazira petrochemicals complex in October 1998.
Total production volume slated to touch nearly 7 million tonnes for the full year - final production volume for the year likely to be 20% higher than beginning of the year estimates.
Sales revenues were up 11% at Rs billion (US$ 2.6 billion) in the first nine months.
This comprised of the impact of volume growth at 23%, partially offset, to the extent of 12%, by the decline in average product selling prices.
Reliance sold 95% of its production within India.
Value added export opportunities selectively pursued with export revenues increasing 145% to Rs billion (US $ 121 million).
Exports focussed on quality conscious markets of US and Europe, in recognition of the superior quality of Reliance’s products.
Reliance Industries Ltd.

74. Reliance Industries Limited India’s World Class Corporation