1. 1 Reliance Industries Limited Financial Presentation April - December 2001 January 31, 2002

2. 2 Forward Looking Statements This presentation contains forward-looking statements which may be identified by their use of words like “plans,” “expects,” “will,” “anticipates,” “believes,” “intends,” “projects,” “estimates” or other words of similar meaning. All statements that address expectations or projections about the future, including, but not limited to, statements about the strategy for growth, product development, market position, expenditures, and financial results,are forward-looking statements. Forward-looking statements are based on certain assumptions and expectations of future events. The Reliance group companies referred to in this presentation cannot guarantee that these assumptions and expectations are accurate or will be realised. The actual results, performance or achievements, could thus differ materially from those projected in any such forward-looking statements. These companies assume no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events, or otherwise.

3. 3 Operating Environment Financial Performance Business Review Reliance Petroleum Reliance Infocom Summary Contents

4. 4 Operating Environment

5. 5 Petrochemicals - Challenging Times Continue Profitability of petrochemicals companies globally has remained under pressure due to weak demand and declining product prices Extended downtrend in global petrochemicals cycle New capacity additions in Middle East and Asia during 2001, added significantly to global surplus Weak demand environmentIndian polyester demand growth restricted to 5% Sharp decline in end product15%-32% fall in selling pricesprices Impact only partly offset bynaphtha prices down only declining feedstock prices17%

6. 6 Trends in Feedstock & Product Prices - International % change in international prices Apr-Dec 2001 over Apr-Dec 2000 There has been a sharp decline in international prices of RIL’s products during the 9 month period Raw Material

7. 7 % change in domestic prices Apr-Dec 2001 over Apr-Dec2000 Domestic prices of RIL’s products have also fallen sharply, impacting margins Trends in Feedstock & Product Prices - Domestic Raw Material

8. 8 Key Elements of Reliance’s Strategy Strong fundamentals and financial strength have enabled Reliance to better withstand the industry downtrend High operating rates104% in Apr-Dec 2001 Emphasis on speciality20% of polymers products30-60% of polyester 5-20% price premium Focus on domestic markets87% of revenues Diversified revenue streamsPolyester, Polymers, Oil & Gas Consolidation of industryImproved pricing power

9. 9 RIL’s Performance Highlights Apr-Dec 2001 Production volumes8.6 mn. tonnes, up 9% Total ExportsUS$ 494 mn. (Rs. 2,381 crores) 13% of Total Sales Market shares polyester 53% intermediates 78% polymers 49% Capex in 9 monthsRs.592 crores (US$ 123 mn.) Record production volumes achieved despite a weak economic scenario in the country

10. 10 Financial Performance

11. 11 RIL+RPL - Financial Highlights April-Dec 2001 Rs.crs.$ mn. Sales43,8879,101 Operating Profit6,5711,363 Cash Flow5,2781,095 Net Profit3,411707 Total Assets54,66311,336 Reliance continues to be the No. 1 business group in India in terms of all major financial parameters

12. 12 RIL Income Statement for 9 months FY 2001-02 Capex for the 9 month period is just Rs 592 crores (US$ 123 mn) - 17% of cash flows and only 47% of depreciation Apr-Dec 2001 Apr-Dec 2000 % Change Rs.crs.$ mn.Rs.crs.$ mn. Sales18,0913,75219,2874,132(6.2) Trading Sales299622,277488 Total Sales18,3903,81421,5644,620(14.7) EBITDA3,8758044,049867(4.3) Extra-ordinary Income35874 Interest 730151925198(21.1) Depreciation1,2592611,14124410.4 Tax/Deferred Tax102219621 Net Profit2,1424441,88740413.5 Cash Profit3,4017053,02864812.3

13. 13 RIL Consolidated Income Statement for 9 Months Apr-Dec 2001 Rs.crs$ mn. Sales18,3933,815 Total Expenditure14,9593,102 Operating Profit3,435712 Share in Income of Associates736153 Other Income36075 Extra-ordinary Income35874 Interest732152 Depreciation1,259261 Tax10221 Net Profit2,795580 Consolidated net profit reflects the true picture of RIL’s returns on its investments

14. 14 Segment Information for 9 Months PetrochemicalsRefiningOthers Segment Revenue17,35625,4971,038 Segment Results (EBIT)1,8881,971588 Capital Employed12,37920,5806,167 Return on Capital 20.3%12.8%12.7% Employed (ROCE) Return on Capital Employed significantly higher than cost of capital for a large petrochemical and refining enterprise Rs Crores

15. 15 RIL Income Statement for Q3 FY 2001-02 Profit for the period includes Rs.358 crores (US$ 74 mn) on account of sale of L&T stake Q3 FY 2001-02 Q3 FY 2000-01 % Change Rs.crs.$ mn.Rs.crs.$ mn. Sales5,4671,1346,4301,377(15.0) Trading Sales2996212527 Total Sales5,7661,1966,5551,404(12.0) EBITDA1,1592401,406301(17.6) Interest2184529463(26.0) Depreciation441923948412.0 Tax/Deferred Tax367347 Net Profit82217168414620.3 Cash Profit1,2632621,07823117.2

16. 16 Sales revenue decline of 6% in the 9 month period reflects mainly the sharp decline in product prices Composition of Sales Revenue Change Impact of volume change-1% Impact of product price change-5% Total impact on Sales Revenues-6% Elements of Sales Change

17. 17 RIL Profitability Ratios Margins have remained largely stable despite the tough operating environment Apr-Dec 2001Apr-Dec 2000 OPM %*19.018.6 NPM %11.89.8 ROE %20.818.4 ROCE %19.918.4 EPS - Rs. ($) annualised 27.1(0.56)23.8(0.51) Cash EPS - Rs($)43.0(0.89)38.3(0.82) * excluding FX gains

18. 18 At the current market price, RIL shares are trading at 9 times consolidated EPS Apr-Dec 2001 NPM %22.2 ROE %26.1 ROCE %31.3 EPS - Rs. ($) annualised35.3(0.73) RIL Consolidated Profitability Ratios

19. 19 RIL Liquidity Ratios RIL’s strong cash flows and refinancing initiatives have enabled lowering of interest costs Apr-Dec 2001FY 2000-01 Debt : Equity 0.580.72 Gearing36.1%41.0% Interest Cover3.5x3.3 Total Debt/Cash Flow1.8x1.8x

20. 20 Reliance is India’s Largest Exporter Reliance’s high exports demonstrate the international quality of its products, and its ability to compete against global leaders Reliance group is India’s Rs.8,382 crs (US$ 1,738 mn) largest exporter in 9 months RIL is India’s 2nd largest Exports still only 13 % of exporter after RPL RIL’s Sales RIL’s manufactured exportsRs. 2,083 crs (US$ 432 mn) Exports to most quality Exports to over 100 conscious customers countries globally

21. 21 Unlocking Value through Sale of L&T Stake Sold 2.5 crore shares of L&T (10% of equity) to Grasim at a price of Rs.306.60 per share Stake sold at 47% premium to prevailing market price of Rs.208.50 per share Sale proceeds of Rs.766.50 crores (US$ 160 mn) received in cash Capital gains of Rs.358 crores (US$ 74 mn) Cash flows and capital gains have accrued to RIL

22. 22 Unlocking Value through Sale of L&T Stake No strategic rationale for retaining investment in L&T in view of successful completion of Reliance’s major projects Divestment of non-strategic stake to unlock significant value for shareholders Enhancement of returns on RIL’s investments Increased availability of funds for announced investments in oil and gas, infocom, reduction of debt, and other uses L&T stake sale is in line with Reliance’s stated philosophy of unlocking value from investments to maximise shareholder wealth

23. 23 Business Review

24. 24 Oil & Gas - Review RIL is the largest private sector E&P operator in India, with total acreage of 175,000 square kilometers Reliance holds 30% interest in the producing Panna, Mukta and Tapti oil and gas fields Over the last few years, Reliance has acquired 18 new blocks: - 2 blocks in pre-NELP round of bidding - 12 blocks in NELP-1 in 90:10 consortium with Niko (Canada) - 4 blocks in NELP-2 in 90:10 consortium with Hardy Oil (UK) In February 2001, Reliance entered into an agreement with Tullow (UK) for acquiring participating interest in 5 blocks Well balanced portfolio of 25 deep and shallow water, offshore and onshore E&P blocks

25. 25 Oil & Gas - Update Exploration work consisting of seismic surveys, data processing, and interpretation in progress Drilling of first well to commence over next few months Estimated initial capex of Rs. 1,500 crores (US $ 300 million) over the next 3 years Later stage exploration capex can be self-financing through monetisation of future revenues Contribution of Oil and Gas business to revenues likely to grow significantly in the future

26. 26 Oil and Gas - Production Growth Oil Production in kT Gas Production in kTOE Output from existing Oil & Gas fields has broadly been maintained at previous year levels Oil 307 310 275 300 325 Apr-Dec 2000Apr-Dec 2001 1% 516 502 450 500 550 Apr-Dec 2000Apr-Dec 2001 -3% Gas

27. 27 Polyester - Update Polyester demand increased by only 5% during Apr-Dec 2001 Demand slowdown due to historically low cotton prices, general economic slowdown, and the recent unrest in some weaving and texturising markets Reliance is responding by creating new markets for speciality grades and growing high potential segments Increasing focus on polyester grades finding application in segments with higher growth potential such as home furnishings, automobiles, and industrial textiles Strong emphasis on specialities to counter demand slowdown and to take advantage of the longer term growth prospects

28. 28 Polyester - Production Growth Production in ‘000 tonnes Much higher production growth rate for RIL reflects acquisition of control over JCT’s polyester capacity 1074 1153 1000 1050 1100 1150 1200 Apr-Dec 2000Apr-Dec 2001 534 614 450 500 550 600 650 Apr-Dec 2000Apr-Dec 2001 Industry Reliance 7% 15%

29. 29 Fibre Intermediates - Production Trend Fibre intermediates production remained flat, both for Reliance and the Industry, in view of low polyester demand growth Production in ‘000 tonnes Industry Reliance 2725 2757 2550 2590 2630 2670 2710 2750 Apr-Dec 2000Apr-Dec 2001 2174 2164 2075 2125 2175 Apr-Dec 2000Apr-Dec 2001 1%

30. 30 Polymers - Update Healthy demand growth for RIL’s polymers during Apr-Dec 2001: - PP16% - PE10% - PVC21% Demand from high growth user industries like telecom, packaging, food and beverages, consumer durables Domestic demand / supply balance is progressively improving with healthy growth RIL is the leading player in the rapidly growing polymers market in India with a 49% market share

31. 31 Polymers - Production Growth Production in ‘000 tonnes Polymers demand has shown further strong growth of 15% during the first nine months of FY 2001-02 Industry 13% Reliance 6%

32. 32 Reliance Petroleum

33. 33 RPL’s Performance Highlights Apr-Dec 2001 Capacity utilisation 107 % (Apr-Dec 2001) 109 % (Oct-Dec 2001) Crude processed21.8 MMT, up 12 % ExportsUS$ 1,263 mn. (Rs. 6,001 crores) RPL has operated at significantly higher capacity utilisation rates compared to its global peer group

34. 34 RPL – Higher Operating Rates Integration with group’s downstream operations, ability to tap exports markets and flexibility of product slate enabled RPL to operate at much higher rates

35. 35 Comparison with Benchmark GRMs RPL has reported significantly higher GRMs than its global peer group, and with lower volatility Apr-Dec 20012000 RPL5.36.0 US Gulf Coast1.532.58 Mediterranean1.854.84 Rotterdam0.492.25 Singapore1.933.30

36. 36 RPL - Income Statement for 9 Months FY 2001-02 RPL’s net profits have increased by 18 % despite lower product prices, and the downtrend in regional refining margins Apr-Dec 2001 Apr-Dec 2000 % Rs.crs.$ mn.Rs.crs.$ mn. Change Gross Sales25,4975,28823,4575,0259% EBITDA2,6965592,36350614% Interest735152727156 Depreciation608126469100 Tax84178719 Net Profit1,2692631,08023118% Cash Profit1,8773891,54933121%

37. 37 RPL - Income Statement for Q3 FY 2001-02 RPL is India’s largest private sector company in terms of sales Q3 FY2001-02 Q3 FY2000-01 % Rs.crs.$ mn.Rs.crs.$ mn. Change Gross Sales8,1661,6939,1491,960-11% EBITDA866180884189-2% Interest2465127158 Depreciation2014217237 Tax174337 Net Profit4028340887-1% Cash Profit6031255801244%

38. 38 RPL - Factors Contributing to Profit Growth High capacity utilisation rates of 107%, leading to 12% volume growth from 19.4 to 21.8 million tonnes Improved product mix enabling RPL to take advantage of niche opportunities Stability of earnings through risk management Ongoing productivity gains and cost reductions Strong volume growth and superiority of RPL refinery’s configuration have contributed significantly to net profit growth

39. 39 RPL - Profitability Ratios RPL’s ROE is amongst the highest in refining companies globally Apr-Dec 2001 Apr-Dec 2000 OPM %9.8%9.4% NPM %5.0%4.6% ROE %18.5%22.3% Annualised EPS - Rs. ($)3.25 (0.07)3.03 (0.06) Annualised CEPS - Rs. ($)4.81 (0.10)4.35 (0.09)

40. 40 RPL - Liquidity Ratios Apr-Dec 2001 Apr-Dec 2000 Debt : Equity0.970.86 Gearing49.3%46.2% Interest Cover3.42.82 Total Debt / Cash Flow2.823.15 RPL’s cash flows for less than 3 years are adequate to extinguish its entire debt

41. 41 RPL - India’s Largest Exporter Reliance’s high exports demonstrate the international quality of its products, and its ability to compete against global leaders RPL India’s largest exporterRs.6,001 crs (US$ 1,263 mn), in 9 months Exports up by 27 % Gasoline, diesel, naphtha Total exports of 6.6 mn were largest items of exports tonnes Exports to most quality Exports to over 14 countries conscious customersglobally

42. 42 New Auto Fuel Policy RPL’s competitive strengths are expected to be further enhanced when product specifications are tightened In a recent report on Auto Fuel Policy, the Expert Committee has recommended : - Euro - II in the entire country from April 2005 - Euro - III to be introduced in seven mega cities from April 2005 and extended to other parts of the country from 2010 RPL already meets Euro II norms With minimal investments, RPL can supply Euro III grade products Other Indian refineries as per the reports need Rs. 17,000 crs. for Euro II compliance and another Rs. 18,000 crs. for Euro III compliance

43. 43 RPL - ECB Deal of the Year RPL’s US$ 750 million syndicated loan has been named ‘Indian Capital Markets Deal of the Year’ by IFR Asia This was the largest commercial term loan for an Indian borrower Attractive features of this deal included : - amortising structure with step-up pricing - average life of 5 years The facility oversubscribed by 1.5 times with participation of leading banks from 13 countries This attractive loan facility will enhance the RPL’s financial flexibility, reduce interest cost and improve profitability

44. Cellular Business

45. 45 Reliance Telecom - Update Reliance has successfully established an extensive GSM network in the central and eastern part of the country Reliance's cellular subscriber base has continued to grow strongly to cross 345,000, with services in 118 cities and 15 states 124% growth in GSM based cellular subscriber base in calendar year 2001 as compared to industry growth rate of 76% Roll out plans for the recently acquired Kolkata circle being finalised currently Pre-paid services account for over 90% of cellular revenues – low risk strategy Strength of Reliance Mobile brand and expertise in building retail consumer franchise demonstrated

46. Reliance Infocom

47. 47 Reliance’s Integrated Business Model Reliance’s low-cost communications infrastructure, and integrated approach, will provide a lasting competitive edge Reliance is building a 60,000 kms, 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 infocom infrastructure to capture value across the entire digital chain Reliance will offer a complete bouquet of voice, data, and value added services, and high quality end-to-end connectivity, including the last mile Backbone for own services, as well as carrier’s carrier

48. 48 Reliance Infocom – Update Reliance Infocom currently has nearly 1,500 full time employees, with a target to increase this to 8,000 over a period of time Work on backbone on schedule for completion by end 2002 Work on providing fibre to the identified buildings at various stages of completion Completed procurement of entire fibre requirement Orders for equipment/ switches to be placed shortly Evaluation of proposals for handsets in progress

49. 49 Reliance Infocom – Update Reliance Infocom will endeavor to offer the highest quality services and provide the best value to its customers Data centre at Thane near Mumbai already operational Work at data centre at Bangalore in progress – scheduled to be operational in this year Rollout plans for various voice services currently being finalised National footprint and the Reliance brand to be leveraged Customer acquisition strategy to be based on bundled offers in enterprise relationships, and segment specific value propositions

50. 50 Reliance Infocom – Update Licenses already obtained for providing basic services in 18 circles (including Gujarat through Reliance Telecom) covering 95% of India’s population, and for providing national long distance (NLD) services ServiceNo. of LicensesLicense Fees (Rs.crores) CashBank GuaranteeTotal Basic17 circles3981,7922,190 NLD1 (Nationwide)100400500

51. 51 Reliance Infocom – Qualcomm Investment RCL plans to leverage the cost, capacity, and quality advantages of CDMA to offer the most competitive wireless voice and data services nationwide Qualcomm has committed to invest up to US$ 200 million (Rs. 1,000 crores) in Reliance Communications (RCL) for acquisition of a minority stake This is the largest investment in basic services in any single telecom services licensee company in India RCL is Reliance Infocom’s subsidiary providing voice services on a nationwide basis – basic telephony, including WLL service with limited mobility, and NLD RCL proposes to provide limited mobility wireless services by deploying CDMA 2000 1X technology of Qualcomm - the pioneer and world leader of CDMA digital wireless technology

52. 52 Reliance Infocom – Investment Plans and Capex Reliance Infocom will target leading market shares and attractive returns on capital employed Reliance Infocom to invest up to Rs. 25,000 crores (US$ 5 billion) over the next 5 years Proposed financing with 2:1 debt:equity RIL is the lead investor with 45% equity stake RIL’s investment in Reliance Infocom: Rs. 2,600 crores (US$ 550 million) to date

53. Summary

54. 54 RIL’s Share Price Performance RIL shares have consistently outperformed the benchmark indices over all time frames % change PeriodRILSensexNifty Year to date 3%1%1% 1 year-19%-25%-23% 2 year-6%-38%-33% 3 year137%-1%10% 5 year123%-6%7% 10 year 311%43%-

55. 55 Summary RIL provides exposure to major growth sectors of the economy - oil & gas, petrochemicals, refining and marketing, power, infocom Continued industry downtrend has adversely affected margins of petrochemicals producers globally RIL’s superior performance amongst international peers reflects its global competitiveness and the success of its business strategies RIL’s investments in oil & gas and infocom are expected to generate significant returns in the medium to long term for maximisation of overall shareholder value Reliance has adopted strategies for enhancing operational and financial flexibility, and outperforming peers in an uncertain industry environment

56. 56 Reliance Industries Limited India’s World Class Corporation