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Reliance Industries LimitedFinancial Presentation Q1 FY 2001-02
July 31, 2001
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Background
Major Subsidiaries & Associates
BCG Matrix
GE Nine Cell Matrix
Hofers Product Eolution !atrix
Contents
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"#erating Eniron!ent
$inancial Perfor!ance
Business %eie
%eliance Petroleu!
%eliance 'nfoco!
Su!!ar(
Contents
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Background
The Reliance Group, founded b !hirubhai"# $mbani %1&32'2((2), is India*s largestpri+ate sector enterprise, ith businessesin the energ and materials +alue chain#Group*s annual re+enues are in e-cess of./0 3( billion# The flagship compan,Reliance Industries Limited, is a ortune
Global (( compan and is the largestpri+ate sector compan in India# !hirubhai"# $mbaniounder hairman RelianceGroup !ecember 2, 1&32 ' 5ul 6, 2((2
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Refiner
Reliance 7etroleum Reliance Retail %R R L)
Reliance Global 8anagement /er+ices %7) Ltd
Reliance Biopharmaceuticals Ranger arms Ltd
Reliance 9ngineering $ssociates %7) Ltd
Reliance :il ; Gas ind 7etrochemicals Business
8a
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5amnagar Refiner= The 5amnagar Refiner is apri+ate sector crude oil refiner oned bReliance Industries Limited in 5amnagar, India#The refiner as commissioned on 14 5ul 1&&&ith an installed capacit of 661,((( barrels per
da %1(,1(( m>?d)# It is the largest greenfieldrefiner in the orld# @ith the completion of theR7L refiner, 5amnagar has emerged as theARefining "ub of the @orld ith the largest
refining comple- ith an aggregate refiningcapacit of 1#24 million barrels of oil per da in
an single location in the orld#
Refiner
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Refining acti+ities of Reliance Industries Limitedare carried out at the 5amnagar refiner comple-ith refining capacit of 2C million tonnes perannum#The refiner is able to process a ide +ariet of
crudes' from +er light to +er hea+ %from 1 to4 degree $7I) and from seet to +er hea+ %ithsulphur content from ( to 4#D)#
@ith an annual crude processing capacit of(,((( barrels %&2,((( m3) per stream da%B7/!), R7L is the si-th largest refiner in theorld#
Refiner
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Reliance 7etroleum Reliance 7etroleumLimited =/et up b Reliance Industries Limited %RIL), oneof India*s largest pri+ate sector companies#
R7L has a strategic alliance ith he+ron India"oldings 7te Limited, /ingapore, a holl onedsubsidiar of he+ron orporation ./$ %he+ron),hich currentl holds a D eEuit stake in the
ompan
Reliance 7etroleum Reliance7etroleum Limited
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Reliance Retail is the retail business ingof the Reliance business#
Reliance Retail continues to consolidate
its presence and operations ith more than&(( stores in o+er( cities here it isoperational toda#
9':ffice 7lanet 7ri+ate Limited, Reliances
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8an Brands come under the Reliance RetailBrand like ='Reliance resh#Reliance ootprint#Reliance Time :ut#
Reliance !igital#Reliance @ellness#Reliance TrendF#Reliance $utoFone#
Reliance /uper#Reliance 8art#Reliance i'/tore#Reliance "ome itchens#
Reliance 5eel#
Reliance Retail %RRL)
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Reliance Global /er+ices 7+t Ltd is one of the fastgroing IT solutions and ser+ices pro+ider ithoffices in ./$, "derabad'India, deli+ering best'in'class ser+ices to help clients reduce costs,enhance organiFational fle-ibilit, and impro+e
business and IT performance#It encompass='9R7 specialiFed in /$7#
ustom application de+elopment# $pplication maintenance and support#
8anagement'consulting ser+ices
Reliance Global 8anagement/er+ices %7) Limited
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# Reliance Global management teamcomprises of ace professionals, each ithears of managerial e-perience, richindustr knoledge and multidimensional
skills# The form a formidable think tankith their industr knoledge,understanding of client reEuirements,processes and ke client backgrounds
Reliance Global 8anagement/er+ices %7) Limited
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Reliance Life /ciences %Rabale, India), is buildinga protein manufacturing facilit at the !hirubhai$mbani Life /ciences enter at Rabale, near8umbai#
The compan has in+ested more than Rs& billion%02(( million) to build the comple-, hich ill beReliance*s first such facilit# It ill use mammaliancell and microbial fermentation technolog to
produce proteins#
The protein plant ill ha+e initial capacit for1(,((( liters of mammalian cell culture and 1,(((
liters of microbial cell culture #
Reliance Biopharmaceuticals
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Reliance resh to become a separateentit Reliance Industries is likel toturn their consumer retail pro
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R9$L is a Reliance Group ompan dedicated to9ngineering procurement and construction of+arious pro
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These parts are used in a ide range ofdemanding and critical end'useapplications# Building on this coree-pertise#
Reliance 9ngineering pro+ides contractmanufacturing ser+ices for originaleEuipment manufacturers#
This ser+ice includes procurement to rigidspecifications and build'to'printassembl oflo to moderate +olume products#
Reliance 9ngineering $ssociates7ri+ate Limited %R9$L)
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1C
In 2((2, Reliance found natural gas in therishna Goda+ari basin off the coast of$ndhra 7radesh near Hishakapatnam#Reliance Industries %RIL) commenced
natural gas production from its !'6 block inthe rishna'Goda+ari %G) basin# The gasreser+e is C trillion cubic feet in siFe#9Eui+alent to 1#2 billion barrels %16 million
tonnes) of crude oil, but onl trillion cubicfeet are e-tractable#
Reliance atural gas
BCG MATRIX
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1
BCG MATRIX
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1&1&
RelianceBCG Matrix
!ogs%JLo groth,Lo marketshare)Reliance
7etrochemicals
IH
ash os%JLo
groth, "igh marketshare)%Reliance :il ;Gas,Reliance
Biopharmaceuticals,RelianceRanger farms Ltd)
III
Kuestion 8arks%J "ighgroth, Lo market share)
R9LI$9 79TR:L9.8
I
/tarsII%J"ighgroth,"ighmarketshare)
5amagarRefinar,Reliance
Global 8G8T/er+ices,Reliance9ngineering$ssociated ltd%Real),Reliance
Retail ltd%RRL)
Relati+e 8arket /hare 7osition
"igh1#(
8edium#(
Lo(#(
Indust
r/alesGro,
thRate
"igh2(
Lo'2(
8edium
(
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2(
5ustification= %/T$R)=5$8$G$R R9I9RM= The rating on RelianceIndustries Ltd# reflects the compan*s global scale ofintegrated operations ith a strong competiti+e position inits core petrochemical and oil refining business and
intermediate financial risk profile#R9LI$9 GL:B$L 8$$G989T /9RHI9/=InThe /cenario :f Reliance Global 8anagement /er+ices"as $chie+ed $ onsiderable 7osition In The @orld8arket# Besides $ll These actors $ "igh In+estment $nd
Groth Rate Is Being 7rocured#R9LI$9 9GI99RIG $//:I$T9/ %7)LT!=Reliance engineering associates %p) ltd has not beenin form of pro+iding lot of amount as per current baseNhence it needs lot of amount to stand the business#
RelianceBG 8atri-
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5ustification= %/T$R)=R9LI$9 R9T$IL=Reliance Retail isthe retail business ing of the Reliancebusiness ha+ing high groth rate andhigh market share# The are not forlong term in+estment but thegenerated cash for the organiFation
5ustification#
RelianceBG 8atri-
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5ustification= %K.9/TI: 8$R)
R9LI$9 79TR:L9.8 LT!= In thecurrent reliance market condition, this issomething eEualiFing to high groth rateand lo or optimum in+estment#
RelianceBG 8atri-
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5ustification= %$/":@/)R$G9R $R8/ LT!= Ranger armdeals in food , fruits and +egetables andconsumer products hasn*t achie+ed a
dominant market position, that*s hat don*tgenerate much cash# @e need much cashbecause things are changing e+er minutein Reliance Retail of the market conditionsto stand the firm rigidl# lo groth and
high in+estment is primaril obser+ed#
RelianceBG 8atri-
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5ustification= %$/":@/)
R9LI$9 BI:7"$R8$9.TI$L/= RelianceBiopharmaceuticals is pro+iding orld'class therapies andrecombinant biopharmaceuticals for the treatment of bothacute and chronic diseases in 9uropean market# ThisreEuires focused efforts at keeping large amount of cashto gro their market share#
R9LI$9 :IL/ ; G$/= rishna'Goda+ari %G) !'6 block is amongst the fi+e largest deepater gas pro
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2
5ustification= %!:G/)
Reliance 7etrochemicals=Re+enue for the
petrochemicals segment for the ear 2(('2((&decreased marginall from Rs 3,((( crore to Rs#2,C6C crore %./0 1(#4 billion)# $ccording torecession period it had lo market share in a
highl lo groth market #
RelianceBG 8atri-
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GE Nine-cell Matrix
It is based on the pioneering eorts o the !eneral"lectric #!"$ co%pany o the united statessupported by the consulting ir% o &c'insey (co%pany)
*he nine cells o the !" %atri+ are grouped on thebasis o lo to high industry attractieness, andea. to strong business strength)
*hree /ones o three cells each are %ade,
denoting dierent co%binations represented bygreen, yello and red colours)
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GE Nine-cell Matrix
Green Oone=' *he signal is go ahead to groand build, indicating e+pansion strategies)
Mello Fone-the signal is ait and seeindicating hold and %aintain type o strategies
i%ed at stability and consolidation) Red Fone- the signal is stop indicating the
retrench%ent strategies o diest%ent andli4uidation or the rebuilding approach or adopting
turnaround strategies)
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GE Nine-cell Matrix
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GE NINE CELL MATRIX
3I!./TRM $TTR$TIH99//
"IG"
L:@
L:@
"IG"
M9LL:@-Reliance
communication-Reliance 7oer
GR99'7etroleum Refining
; 8arket Business':il ; Gas9-ploration 7roduct' Big 9ntertainment
GR99
R9! M9LL:@'Reliance apital
'RelianceInfrastructure
'Reliance Retail
GR99
R9!R9LI$9
79TR:"98I$L/
R9!'
M9LL:@
89!I.8
89!
3:879TITIH97:/ITI:
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Hofers product ar!et e"olution atrix
5oer6s and schendel proposed a 17 cell %atri+,that considers the stages o deelop%ent o theproduct or %ar.et and the co%petitie position odierent businesses in a co%pany6s corporate
portolio)
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Hofers product ar!et e"olution atrix
business in the deelop%ent or groth stage hasa potential to be a star)
I the %ar.et share is large in these groth orientedstages, %ore resources %ust be inested to deelop
co%petitie position) 8ut i %ar.et share is lo, a strategy to i%proe the
sa%e %ust be deeloped)
I the industry is relatiely s%all and %ar.et share is
lo despite high groth stage, %anage%ent %ustconsider diesting and redeploying resources inother co%petitie business)
H#$ER% &R#'(CT MAR)ET
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H#$ER % &R#'(CT MAR)ET
E*#L(TI#N MATRIX
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3&
Reliance and t+e Indian Econo,
9eliance group6s leadership position in the Indianecono%y, is relected in its all-round contribution
- 3: o India6s !;P
- 7: o India6s total e+ports
-
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4(
Leaders+ip in t+e Corporate %ector
9eliance group6s pre-e%inent role in the Indian corporate sector
- 30: o the total proits o the priate sector
- 10: o the proits o the entire corporate sector
- oer 12: o total %ar.et capitalisation
- eightage o 22: in the =ense+
- eightage o 1>: in the
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@ ;ate o irst IPAB all igures are or 9IC ( 9PC
Consistent Trac!-Record of &rofitale Gro.t+
Do%pounded nnual 9ate o !roth #:$
=ince 1>EE@ 10 Year7 Year
=ales 33 ?0 70
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Corporate &+ilosop+,
Gorld scale, and orld class
=tate-o-the-art technologies
!lobal co%petitieness
Ceadership in chosen areas o business
=uperior ProHect "+ecution
Financial Donseratis%
5ighest standards or 5ealth, =aety and "niron%ent
Donsistent oerall shareholder alue enhance%ent
RelianceReliance
benchmarksbenchmarks
itself withitself with
global bestglobal best
practicespractices
in all aspectin all aspect
of itsof its
operationsoperations
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(
9s) crores bn 9an.
=ales 0,00012) 1
"+ports >,0001)> 1
Dash Flo E,0001)7 1 1
Reliance is the largest, fastest groing, and the most +aluablebusiness group, in India '
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1
$inancial #1ecti"es
"%phasis on capital productiity, and returns, to generateattractie spreads oer cost o capital
*argets o %ini%u% 20: 9A", and 20: 7 year "P= D9!,
across business cycles
Donseratie gearing - %aintain top end credit ratings
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2
:perating 9n+ironment
K1 M 2((1'(2
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#peratin2 En"ironent
Aperating %argins or the global petroche%icals industry ere
under considerable pressure in Q1
=igniicant capacity additions in the petroche%icals industry in
the &iddle "ast and sia, and the K= slodonLLLL)caused a sharp decline in international and do%estic selling
prices o %aHor petroche%icals products
In addition, continuing olatility in crude oil prices led to olatility
in prices o the principal petroche%icals eedstoc., naphtha
he global petrochemicals industr! is witnessing amongst themost challenging conditions in its histor!
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C+an2e in feedstoc! and product prices
D change in international prices K1 M(2 o+er K1 M(1
/elling 7rices of 7roducts%./0?8T) P" -12: PP -10:
PMD -2>: PAY ->: P=F -1?: P* ->: &"! -21: PN -1:
L))but international selling pricesof products declined sharpl
Ra 8aterial osts
Drude oil #Obbl$ -1:
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D change in domestic prices K1 M(2 o+er K1 M(1
/elling 7rices of 7roducts%Rs?kg) P" -: PP 0:
PMD -10: PAY 3: P=F ->: P* -: &"! -11: PN :
PP# but domestic selling prices of
most products also declined
Ra 8aterial osts
Drude oil #Obbl$ -1:
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6
RILs 30 &erforance Hi2+li2+ts
Plants operated at aerage capacity utilisation rate o 103:Production olu%es increased E: to record 2) %illion tonnes
;o%estic %ar.et sales accounted or nearly >0: o total sales
"+ports stood at K= 17> %illion #9s) E?> crores$ e+ports
ere 9s) crores per annu% Hust 7 years bac.
&ar.et shares ere 77: or polyester, EE: or polyester
inter%ediates, and 70: or poly%ers
RIL has maintained its track record of strong operationalperformance despite challenging industr! conditions
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C
Financial Peror%anceFinancial Peror%ance
Q1 FY 2001-02Q1 FY 2001-02
RIL I % f 30 $4 5660 65
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K1 M 2((1'(2 K1 M 2((('(1 D hange
Rs#crs# 0 mn# Rs#crs# 0 mn#/ales 6,3&( 1,3 6,136 1,3C3 4D
Trading /ales ' ' 4C& 1(C
9BIT!$ 1,3(2 2CC 1,23 2C D
Interest 27E 77 2> E -1?:
!epreciation 3> ? 3 2
Ta- 30 2
!eferred Ta- 1
et 7rofit 61 131 43 122 14D
ash 7rofit 1,0?7 222 >3E 210 12:
RIL Incoe %tateent for 30 $4 5660-65
"et Profit increased #$% in a difficult operating environment
RIL7R&L I % f 30 $4 5660 65
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&
K1 M 2((1'(2 K1 M 2((('(1 D hange
Rs#crs# 0 mn# Rs#crs# 0 mn#
Gross /ales 1,2 3,243 12,& 2,2( 21D
9BIT!$ 2,23 4C 1,66 41 2(D
Interest 700 10 ?E0 107
!epreciation 7>7 12 701 112
Ta- 1? 72 12
et 7rofit 1,(C4 22 43 1& 2CD
ash 7rofit 1,E37 3 1,3> 313 2?:
RIL7R&L Incoe %tateent for 30 $4 5660-65
RIL and RPL have combined cash flows of Rs& #,'() crores*+S -.. mn/ in 0#
&rofora Consolidated RIL Incoe
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6(
K1 M 2((1'(2Rs#crs# 0 mn#
RILs 9BIT!$ 1,3(2 2CC
Income from $ssociates 243 2
and /ubsidiaries
Interest 2
!epreciation 3&6 4
Ta- 3( 6
!eferred Ta- 1 '
et 7rofit 6( 13
&rofora Consolidated RIL Incoe
%tateent for 30 $4 5660-65
he true picture of RIL1s profitabilit! is reflected b! theproforma consolidated income statement, which includes
financials of subsidiaries, RPL, RCL, RIIL and S3S
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Eleents of RILs Net &rofit Gro.t+
5igh capacity utilisation rates leading to olu%e groth5igher proportion o sales in do%estic %ar.et
Increased share o speciality products, contributing higher
%argins
Productiity i%proe%ents and cost reduction
Interest cost saings, oing to loer debt and reinancing
;iidends o only 9s) 1 crores #K= 3)? %n$ ro% 9PC
accounted in Q1 on pro-rata basis total diidends on 9eliance6s
?: sta.e or ull year 9s) 173 crores #K= 33 %n$
Profit growth arising from successful twin business strategies
of improving sales realisations and lowering costs
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omposition of 4D /ales Re+enue Groth
Impact of +olume groth6D
Impact of price changes '2D
RIL - Eleents of %ales Gro.t+
7roduction +olume up CD to 2# million tonnes
:+erall a+erage capacit utilisation rate Q 1(3D
7olmers capacit utilisation rate 11(D, polester &D and
polester intermediates 1(D
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RIL &rofitailit, Ratios
RIL has amongst the highest Returns on 34uit! *R53s/amongst the top petrochemicals companies globall!
K1 M 2((1'(2K1 M 2((('(1
:78 D 1#4D1C#4D
78 D CD#&D
R:9 D 1#3D16#4D
97/ ' Rs# %0) 23#4%(#()2(#4 %(#46)
ash 97/ ' Rs%0) 3#%(#2)34#3 %(#CC)
@ e+cluding FN gains
& f C lid t d & fit ilit R ti
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Proforma consolidation of financials, to include income fromsubsidiaries, RPL, RCL , RIIL and S3S, reflects the true
picture of returns on RIL1s investments
K1 M 2((1'(2
78 D 13#D
R:9 D 2#2D97/ ' Rs# %0) 32#6%(#6&)
&rofora Consolidated &rofitailit, Ratios
RIL Li8uidit, Ratios
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RIL Li8uidit, Ratios
RIL1s financial strength is reflected b! its conservative li4uidit!
ratios and top end credit ratings
K1 M 2((1'(2M 2((('(1
!ebt = 9Euit 0)30)E2
Gearing ??:?1:
Interest o+er 3)7+3)3+
Total !ebt?ash lo 2)01)
C i $i i l M
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Conser"ati"e $inancial Mana2eent
credit ratings ro% D9I=IC and FI*D5 or do%estic debt International debt rated 88 #=table outloo.$ ro% =(P and 8a2
ro% &oody6s constrained by soereign ceiling
Geighted aerage %aturity o oreign e+change deno%inateddebt o K= 1,300 %n #9s) ,000 crores$ is 21 years
nnual ore+ deno%inated interest liability coered %ore than E
ti%es by K= deno%inated e+ports, and oil and gas reenues
Reliance1s strong financial position provides a high degree of
financial fle6ibilit! to capture future opportunities
R li i I di L E
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Reliance is Indias Lar2est Exporter
9eliance is India6s largest e+porter ith group e+ports o K= 2
bn #9s) >,3E0 crores$ in FY 2001
Indiidually too, 9IC and 9PC are India6s top 2 e+porters
9IC6s %anuactured e+ports declined 10: to K= 17> %n #9s)
E?> crores$ in Q1
9IC e+ports products to oer 100 countries, including to the
%ost 4uality conscious custo%ers in the K= and "urope
9IC recently beca%e India6s irst %anuacturing entity to receiethe status o !olden =uper =tar *rading 5ouse
Reliance1s high e6ports demonstrate the international 4ualit! of
its products, and its abilit! to compete against global leaders
C i G + i E R
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Consistent Gro.t+ in Exports Re"enues
36ports still represent onl! #)% of total sales even after 7
times increase in absolute terms over the last . !ears
6 1(C 366 61,4C 2,&6(
C,C6 ,C3(
13,4(414,33
1&,&6
2,C31
(
(((
1((((
1(((
2((((
2(((
3((((
3(((
&'&6 &6'&C &C'& &'&& &&'(( (('(1
9-ports Total /ales
Rs#crores
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6&
8usiness 9eie8usiness 9eie
& d t Mi
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C(
&roduct Mix
omposition of RILs sales
Petrochemicals businesses dominate RIL1s portfolio, with an7'% share of sales 8 share of oil and gas business likel! toincrease
hemicals
1(D
7lastics ; Int#
32D
abrics
1D7olester
22D
ibre Int#
32D
:il ; Gas
3D
#il 9 Gas Re"ie.
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#il 9 Gas - Re"ie.
9IC is India6s largest priate sector "(P operator in India
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Reliances 7roduction K1 M(2 K1 M(1 Dhange
Ail #in .*$ 100 >2 :
!as #in .*A"$ 17 17E :
#il and Gas - Existin2 &roduction
5utput from the 2 currentl! producing oil and gas fields of
Panna:;ukta and apti *P;/ has further increased in 0#
he -% share in RIL1s revenues b! 5il and
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C3
eliance s #il 9 Gas ope ties/"$LL:@ @$T9R BL:/8CAD' 1 'utch Ashore8CAD' 2 =aurashtra8CAD' 3 =aurashtra @8CAD' ? &u%bai Ashore8CAD' 7 &u%bai Ashore
8CAD' 'erala-'on.an8CAD' 1 'rishna !odaari8CAD' 1> 'rishna !odaari8CAD' 20 'rishna !odaari8CAD' 27
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&ol,ester - Bac!2round
Ceading global ran.ings, and loest cost positions
- 2nd largest producer o P=FOPAY
- 3rd largest producer o PN
- ?th largest producer o P*
=trong de%and potential in do%estic %ar.ets - per capitaconsu%ption a%ongst the loest in the orld
5igh tari protection re%oed - i%port duties already at restingpoint o 20:, as per the G*A bound rates
nti du%ping duties i%posed on PAY e+ports ro% leadingregional producers, to counter unair co%petition
he Indian pol!ester market has witnessed compounded
double digit annual demand growth rates over 2 decades
&ol,ester - Re"ie.
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&ol,ester - Re"ie.
Present capacity o PAY, P=F and P"* >00,000 tonnes per year
to be increased 33: to 1)2 %illion tonnes per year, in ne+t 2 years
Dapacity e+pansion planned through attractie ac4uisition deals,
and building cost co%petitie acilities at e+isting sites
9IC is the only player %a.ing inest%ents to capture uture groth
opportunities in polyester in India
9IC6s %ar.et share o PAY, P=F and P"* has gron to 77: -
relecting ac4uisitions o 270,000 tonnes oer the past e years
=emand fundamentals point to sustainable double digit growth
rates for pol!ester in India in the medium to long term
& l t E i ti & d ti
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&ol,ester - Existin2 &roduction
Industr Reliance
#Production in Q1 Q1 : Q1 Q1 :R000 tonnes$ FY602 FY601 change FY602 FY601 change
Polyester 3E0 3?> : 207 1E 17:
#PFY, P=F, P"*$
Inter%ediates 0 >1 -1: 1 E2 -:
#P*, &"!, PN$
7olester demand groth of 6D Euarter'on'Euarter
& l B ! d
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&ol,ers - Bac!2round
9eliance a%ongst the top 10 players globally in poly%ers
India the orld6s astest groing poly%ers %ar.et
Ci.ely to be the orld6s third largest %ar.et ithin this decade
9IC6s %aHor poly%er, PP, accounting or 0: o production,
itnessed de%and groth o oer 1>: this year
I%port taris already don to 37: - gradual urther reduction by
7: per year oer the ne+t 3 years
RIL enjo!s a leading .)% share in the rapidl! growing pol!mersmarket in India
&ol,ers Existin2 &roduction
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&ol,ers - Existin2 &roduction
Industr Reliance#Production in Q1 Q1 : Q1 Q1 :
R000 tonnes$ FY602 FY601 change FY602 FY601 change
Plastics 3E E0E 1: ?1 3E :
#P", PP, PMD$
Pol!mers demand growth of #'% 4uarter on 4uarter
>igher industr! production growth rate reflects impact of
capacities of new pla!ers operating at higher rates compared to
the last !ear
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PAY 2: E70 - 12,000 2: - 2E:
P=F 7>: 2,00 - 10,200 7: - 1>:
P" 21: 7 - ,77 1): - 1:
PP 20: 330 - 3,330 1: - 10:
Ep+asis on Hi2+er Mar2in %pecialit, Grades
=peciality as : Pre%iu% oer
o *otal Molu%e Do%%odity
Q1 FY602 #9s)O&*$ #:$
Specialit! grades !ield premium pricing and contribute to highermargins, product differentiation, and relative insulation fromcommodit! c!cles
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9eliance Petroleu%9eliance Petroleu%
R&L - :orld class refiner,
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Dapacity o 7?0,000 bOd
co%parable to K= and"uropean supersites
Gorld6s largest greenield
reinery and Eth largest in the
orld
Do%ple+ity at top end o global
range
Dapability to produce higher
alue products ro% loer
cost, heaier grade crude
R&L :orld class refiner,
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 !"#$ %ood &acken'ie
Comparisons
kb(d
0
100
200
300
400
500
600
RPL US supersite European
supersite
0
2
4
6
8
10
12
14
Complexit)*ndex
Shell Singapore
Reliance
JanagarUS supersite European
supersite
Shell Singapore
16
RIL
Petrochem
plants
RPL
refinery
R&L &eer coparisons
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R&L - &eer coparisons
Source Stud) b) Solomon +ssociates$ *nc. on !"# ,&arch -999
-. *ndian peers refer to se/en *ndian refineries that participated in the -996 stud) b) Solomon +ssociates$ *nc.
2. +sian peers refer to four refineries that are amon0 the better refineries in +sia accordin0 to Solomon +ssociates$ *nc.
1. US pacesetter refineries represent a 0roup of se/en refineries located in the U.S. and Canada$ which ha/e achie/ed first or second
uartile rankin0s in all of the ma3or indicators in the past three or four studies b) Solomon +ssociates$ *nc.
4. Europe pacesetter refineries refer to a 0roup of six refineries located in Europe which ha/e achie/ed similar rankin0s as the US pacesetter refineries
Total cash operating costs Energy intensity index
Crude sulfur Crude gravity
(
1(
12(
2
3(3
4(
Indian peers $sian peers 9uropepacesetters
./pacesetters
R7L
US cents / Utilied E!uivalent "istillation Capacity
(
2(
4(
6(
(1((
12(
Indian peers $sian peers 9uropepacesetters
./pacesetters
R7L
(#(
(#
1#(
1#
2#(
2#
I ndi an pe ers $si an p ee rs 9urope
pacesetters
./
pacesetters
R7L
#eight $
26
2
3(
32
34
36
3
Indian peers $sian peers 9urope
pacesetters
./ pacesetters R7L
"egree %PI
R&L - Hi2+er GRMs
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! Do%ple+ity
! !ood product it
R&L Hi2+er GRMs
! Co crude deliery
cost
! Faorable tarieniron%ent
;riers o high reining %argins
! Fiscal
beneits
(
1
2
3
4
6
C
$pr'5une*(( 5ul'/ep*(( :ct'!ec*(( 5an'8ar*(1 $pr'5une*(1
R7L
./ Gulf oast
8editerranean
Rotterdam
/ingapore
,
?b
b l
R&L ; Consistent Increase in #peratin2 Rates
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9PC6s record capacity utilisation rate o 10: is ar ahead o the
aerage 7: or other reineries in India and sia Paciic region, :or "urope, and >2: or 7:
10:
0:
7:
>0:
>7:
100:
107:
110:
Q1 FYS01 Q2 FYS01 Q3 FYS01 Q? FYS01 Q1 FYS02
R&L - Incoe %tateent for 30 $4 5660-65
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R&L Incoe %tateent for 30 $4 5660 65
R% is Indias largest company in terms of sales and is secondonly to RI% in terms of net profits, net worth, and assets
K1 M 2((1'(2 K1 M 2((('(1 D hange
Rs#crs# 0 mn# Rs#crs# 0 mn#
Gross /ales ,6 1,4 ,&3 1,33& 4D
9BIT!$ &33 1& 631 141 4D
Interest 2?3 72 1E2 3>
;epreciation 1>> ?2 137 30
*a+ 37 E 2? 7
et 7rofit 46 &C 3(( 6C 2D
Dash Proit >0 1?E ?7> 103 70:
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Eleents of R&Ls Net &rofit Gro.t+
5igh capacity utilisation rates o 10: leading to 2: olu%egroth ro% 7) to E)3 %illion tonnes
Increased processing o heaier and relatiely less e+pensie
arieties o crude oil
I%proed product %i+ to ta.e adantage o niche opportunities
I%port tari rationalisation in Actober, 2000, as ell as in &arch
and pril, 2001, leading to higher eectie i%port tari dierentials
Angoing productiity gains and cost reductions
'trong volume growth and superiority of R% refinerysconfiguration have contributed significantly to net profit growth
R&L - &rofitailit, Ratios
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R&L &rofitailit, Ratios
RPL1s R53 ranks amongst the highest in refining companiesgloball!
K1 M 2((1'(2K1 M 2((('(1
AP&: 10)3:10)3:
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(() rating from *RI'I% and +I*- . a uni$ue achievement for a
company of this scale in /ust over a year of operationsRecently concluded Indias largest syndicated loan facility for 0'1
"5# mn Rs3 4,5## crores . enhancing financial fle6ibility
K1 M 2((1'(2M 2((('(1
;ebt "4uity 0)>0)
!earing ?E:??:
Interest Doer 3)32)>
*otal ;ebt O Dash Flo 2)22)3
R&L - Indias Lar2est Exporter
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2 p
9PC is India6s largest e+porter ith e+ports o K= 1,3E7 %n #9s)
,?10 crores$ in FY 2001
Q1 e+ports o 9PC6s products hae increased 200: to K= 30 %n
#9s) 1,??0 crores$
"+ports to the K= and other discerning %ar.ets relect
!global co%petitieness
!international 4uality o products
!operational le+ibility!orld class logistics capabilities
R%s ability to deliver international $uality products provides asignificant competitive edge in a decontrolled environment
Inte2ration .it+ Mar!etin2
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2 2
9PC proposes to enter the business o retail %ar.eting o controlledproducts in India, in line ith goern%ent policies
9PC is currently ealuating a %ulti-pronged strategy, enco%passing
- potential Hoint entures and alliances
- ac4uisitions o %ar.eting and distribution assets, andOor
- deelop%ent o its on distribution and %ar.eting inrastructure
9PC6s &e%orandu% A Knderstanding ith Indian Ail Dorporation
or or%ation o a JM or %ar.eting, and the co%pany6s participation in
the process or disinest%ent o I8P, relect this strategy
R%s entry into marketing will enhance integration and provideopportunities for generating attractive returns
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9eliance *eleco%9eliance *eleco%
Reliance Teleco - Re"ie.
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Reliance Teleco - Re"ie.
17: groth in cellular subscriber base oer last one year
double the industry groth rate o E:
Durrent subscriber base o oer 23,000 ith serices in 113 cities
across 17 states
Ceading %ar.et shares in all E circles
Pre paid account or >0: o cellular reenues lo ris. strategy
=trength o 9eliance &obile brand and e+pertise in building retail
consu%er ranchise de%onstrated
Reliance1s e6isting mobile operations span #?-rd of India1sgeographical area and cover nearl! $)) million people
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9eliance Inoco%9eliance Inoco%
Reliance Infoco - Re"ie.
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9eliance Inoco% to be the holding co%pany or all inoco% and
related businesses o 9eliance group
9eliance Inoco% to inest up to 9s) 27,000 crores #K= 7 bn$
oer the ne+t 7 years
ProHect proposed to be inanced ith 21 debte4uity
9IC is the lead inestor ith ?7: e4uity sta.e
Reliance Infoco Re"ie.
Reliance is leveraging its superior project e6ecutioncapabilities and successful e6perience in telecom business
Reliance Infoco - (pdate
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First co%pany to receie licences or proiding i+ed line serices
in 1 circles national ootprint e+cluding *a%ilnadu and J('
Fi+ed line licences also enable tapping o %obile seg%ent through
lo cost GiCC serices in addition to e+isting !=& business
First co%pany to receie
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&6
Plans announced or Indian teleco% %ar.ets by seeral do%estic
and international players scrapped
Donsolidation o teleco% industry in India gathers pace
=igniicant reduction in e4uip%ent and ibre costs oing to global
teleco% slodon and cancellation o large nu%ber o proHects
Phased approach by 9eliance toards inoco% inest%ents,
based on
!strong cash los
!attractie I99s
!lo paybac. period
Reliance Infoco (pdate
Reliance Infocom is building amongst the lowest costintegrated communications networks in the countr!
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=u%%ary=u%%ary
Indias Top < :ealt+ Creators in 5666-60
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%Rs#crs) %./0 mn) %Rs#crs) %./0 mn)
RIL 41,1&1 ,3 ,(1 1,C2C
IT 1&,& 4,2C 1,&4 41
"! 6,4&( 1,3&2 1,&4C 41
B7L ,C1C 1,226 1,C6 3C&
estle 4,C& 1,(4C 1,2C( 2C2
Total C,26 16,C 14,&1 3,213
8kt# ap on
31'8ar'(1
$ddition in
2((('(1
RIL is the "o& # wealth creator in the !ear 2))):)# : wealthcreation e6ceeds the ne6t compan! b! a factor of $ times
RILs %uperior %+are &rice &erforance
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&&
p f
RIL shares have consistentl! outperformed the broad marketover all time frames
D change
7eriod RIL /ense- ift
Mear to date 'D '1CD '16D
1 ear 'D '23D '2(D
2 ear C6D '2D '1&D
3 ear 12&D 2D 14D
ear 2(4D 'D D
/ince 1&&4 3D '24D '
1( ear 2CD 1((D '@ Cast e4uity place%ent ro% 9IC
Returns fro RIL to $inancial Institutions
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Returns fro RIL to $inancial Institutions
$mount %Rs# crores)
7ri+ate placement in :ctober 1&&4 &4
urrent +alue of RIL shares %4#& crore shares SRs# 313) 136
Income from di+idends including rein+estments 1(
Total profit earned b Is till date C41
7rofit from an eEui+alent in+estment in /ense- '14%including di+idends and rein+estments)
Total returns o+er market returns &
.TI, LI, and GI ha+e earned total returns of Rs# & crores o+er
market returns, on their original in+estment of Rs# &4 crores
RIL stock price has appreciated 3D from its placement price,
outperforming the /ense- b CCD o+er this period
Reliance Industries Ltd#
&rice &erforance of Leadin2 Index Mo"ers
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&rice &erforance of Leadin2 Index Mo"ers
D change
7eriod RIL "LL IT
Mear to date 'D 6D '14D
1 ear 'D 'D 3D2 ear C6D '2(D '22D
3 ear 12&D 2CD 22D
ear 2(4D 16(D 1C(D
he RIL stock is the best performing inde6 heav!weight overvirtuall! all time frames
R&Ls %uperior %+are &rice &erforance
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1(2
p f
D change
7eriod R7L /ense- ift
1 ear '&D '23D '2(D
2 ear 4&D '2D '1&D
3 ear 12D 2D 14D
ear 26(D 'D D
RPL shares have outperformed the broad market over all timeframes, creating superior value for both RPL and RILshareholders
%uar,
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1(3
%uar,
Production olu%es in e+isting petroche%icals business li.ely to
cross 11 %illion tonnes in the current year!lobal petroche%icals operating %argins li.ely to re%ain under
pressure during the current year
9IC6s inest%ent in 9PC no generating attractie returns9IC6s uture inest%ents in Ail and !as and inoco% to generate
signiicant returns in the %ediu% to long ter%
9IC6s proor%a consolidated "P= o 9s) 32) #K= 0)>$ relects
the true picture o returns on its oerall inest%ents
RIL will endeavour to maintain its demonstrated andconsistent track record of shareholder value enhancement
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Reliance Industries Limited
Indias @orld lass orporation