Analysis of

RIL Annual
Report
Midterm Assignment

Nadeem Akhter,
19PGDM-BHU040
 Table of Contents
CORPORATE GOVERNANCE REPORT ................................................................................................. 2
STRUCTURE ................................................................................................................................... 2
GENESIS ........................................................................................................................................ 2
CONTENT ...................................................................................................................................... 4
MANAGEMENT DISCUSSION AND ANALYSIS REPORT ..................................................................... 15
STRUCTURE ................................................................................................................................. 15
GENESIS ...................................................................................................................................... 15
CONTENT .................................................................................................................................... 17
INDEPENDENT AUDITORS’ REPORT................................................................................................. 26
STRUCTURE ................................................................................................................................. 26
CONTENT .................................................................................................................................... 28
BOARD’S REPORT............................................................................................................................ 36
STRUCTURE ................................................................................................................................. 36
CONTENT .................................................................................................................................... 37
BUSINESS RESPONSIBILITY REPORT ................................................................................................ 45
STRUCTURE ................................................................................................................................. 45
GENESIS ...................................................................................................................................... 46
CONTENT .................................................................................................................................... 47

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 CORPORATE GOVERNANCE REPORT

STRUCTURE

• Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements)

Regulations, 2015 – Listed companies need to have a separate section on Corporate
Governance in the Annual Report.

• With a detailed compliance report on Corporate Governance.

• Compliance report includes both mandatory and non-mandatory requirement.

• Non-compliance of any mandatory requirement with reasons thereof and the extent to
which the non-mandatory requirement have been adopted should be specifically highlighted.

GENESIS

CG encircles the whole idea of committing to values, conducting a business ethically, and
distinguishing personal & corporate funds in the management of a company. The definition is
extracted from the Gandhian principle of trusteeship and the Directive Principles of the Indian
Constitution Corporate Governance is viewed as business ethics and a moral duty.

Parties In CG:

Parties who are active participants of the corporate governance include- the regulatory body
(the Chief Executive Officer, the board of directors. management, shareholders and Auditors).
Other stakeholders who are involved include suppliers, employees, creditors, customers and
the community at large

Key Elements Of CG:

Key elements of good corporate governance principles include Honesty Trust Integrity
Openness Performance orientation Responsibility Accountability Mutual respect Commitment
to the organization.

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Key components of good corporate administration standards incorporate – Honesty, Trust
,Integrity ,Openness ,Performance ,direction, Responsibility, Accountability, Mutual regard,
Commitment to the association.

A Historical Background

The chronicled improvement of Indian corporate laws has been set apart by many intriguing
distinctions. After independence, India acquired one of the world's most unfortunate economies
but it had a factory sector accounting for a tenth of the national product. The nation likewise
acquired four working stock exchanges with plainly characterized rules administering listing,
trading and settlements, a well-developed equity culture and a financial framework loaded
with well developed loaning standards and recuperation methodology. As far as corporate laws
and financial framework is concerned, India developed far superior than most different states.
The 1956 Companies Act based on this establishment, as did different laws overseeing the
working of joint-stock companies and protection of investors' rights.

Early corporate evolution in India was more pronounced by the managing agency system. This
not only contributed to the beginning of dispersed equity ownership but also instituted the
convention of management enjoying controlled rights disproportionately way more than their
stock ownership.

The situation deteriorated in consequent years and corruption, nepotism and inefficiency took
over and became the trademarks of the Indian corporate sector. Outrageous tax rates
emboldened creative accounting practices and fed the firms with allurement to develop
complicated compensation structures with large "under- table" returns at senior levels. In non-
appearance of a stock market competent enough to raising equity capital efficiently, three
central federal government development finance institutions together with about thirty other
state-government owned development finance institutions and turned out to be the main lenders
of long-term credit to companies.

Recent Developments in Corporate Governance in India:

Liberalization of the Indian economy began in 1991. Since then, we have witnessed wide-
ranging changes in both laws and regulations, and a major positive transformation of the

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corporate sector and the corporate governance landscape. Perhaps the single most important
development in the field of corporate governance and investor protection in India has been the
establishment of the Securities and Exchange Board of India in 1992 and its gradual and
growing empowerment since then. Established primarily to regulate and monitor stock trading,
it has played a crucial role in establishing the basic minimum ground rules of corporate conduct
in the country. Concerns about corporate governance in India were, however, largely trigger
by a spate of crises in the early 1990's-particularly the Harshad Mehta stock market scam of
1992- followed by incidents of companies allotting preferential shares to their promoters at
deeply discounted prices, as well as those of companies simply disappearing with investors'
money.

Progression of the Indian economy started in 1991. From that point forward, we have seen
wide-extending changes in lawsand regulations, and a significant change of the corporate
division and the corporate administration scene. Most significant advancement in the field of
corporate administration and investor protection in India, has been the foundation of the
Securities and Exchange Board of India in 1992 and its steady and magnifying strengths from
that point onwards. Built up fundamentally to control and screen stock exchanging, it has been
an essential part in building up the standard procedures of corporate conduct in the nation.
Concerns regarding corporate administration in India was massively triggered by a spate of
emergencies in the mid 1990's.

These concerns about corporate governance stemming from the corporate scandals, complexed
with a perceived need of starting up the corporate sector to the forces of competition and
globalization, gave rise to several investigations. One of the first such ventures was the
Confederation of Indian Industry Code for Desirable Corporate Governance, advanced by a
committee chaired by a leading industrial magnate. The committee was formed in 1996 and
submitted its code in April 1998. Later two committees were constituted by the SEBI to look
into the issue of corporate governance. The first Committee acknowledged its report in early
2000, and the second one was reported three years down the lane.

CONTENT

This report has been assembled in consonance with the provisions of the Securities and
Exchange Board of India Regulations and it enlists the details of Corporate Governance
systems and processes at Reliance Industries Limited (RIL).

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At RIL, Corporate Governance functions on the very ideology of cultivating a valuable
relationship and trust with all the stakeholders and relies on the belief that a business conduct
can be ethical only when it abides by the six core values- Customer Value, Ownership Mindset,
Respect, Integrity, One Team and Excellence.

Company’s Philosophy On Code Of Governance

Corporate Governance encircles a bunch of practices to assure proper management which in

turn ensures accountability, transparency and fairness in all transactions in the broadest sense.
The crux of Corporate Governance relies on promotion and maintenance of integrity as well
as transparency and accountability in the management’s higher profiles. It has in this way
gotten urgent to cultivate and support a culture that incorporates all parts of good administration
via cautiously adjusting the complex between relationship among the Board of Directors, Board
Committees, Finance, Compliance and Assurance groups, Auditors and the senior
administration.

RIL not just holds on to the endorsed Corporate Governance rehearses according to the Listing
Regulations, but at the same time is resolved to sound Corporate Governance standards and
practices. It continually endeavours to adapt to ;.higher tiers and has undertaken to accomplish
better expectations and give oversight and direction to the administration in strategy
implementation, risk management and fulfilment of expressed objectives and goals.

On independent premise, a growth by a CAGR of Revenues 22.7%, EBITDA before

exceptional items 24.3% and Net Profit before exceptional items 25.1% has been achieved.
The financial markets have endorsed sterling performance and the market capitalisation has
increased by CAGR of 30.4% during the same period. The Company has helped transform the
Indian economy with large projects and world-class execution

The company believes, Corporate Governance is not just a destination, but a journey to
constantly improve sustainable value creation. It is an upward-moving target that RIL
collectively strives to achieve. Multiple initiatives towards maintaining the highest standards
of governance have been detailed in this report.

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Appropriate Governance Structure with Defined Roles And Responsibilities

The Company has set up an internal administration structure with characterized jobs and duties
of each constituent of the framework. The Company's share holders name the Board of
Directors, which thus administers the Company. The Board

has built up different Committees to release its duties in a compelling way. The Chairman is
liable for cultivating and advancing the uprightness of the Board while supporting a culture
where the Board works amicably for the drawn out advantage of the Company and its partners.
The Chairman manages the Board for powerful administration in the Company and plays a lead
part in dealing with the Board and encouraging compelling correspondence among Directors

Ethics / Governance Policies

RIL holds fast to moral guidelines to guarantee uprightness, transparency, freedom and
responsibility in managing all the partners. Consequently, it has embraced different codes and
strategies to accomplish the obligations in a moral way. Some of the prominent codes and
approaches are-

• Code of Conduct and Our Code

• Code of Conduct for Prohibition of Insider Trading
• Code of Practices and Procedures for
• Fair Disclosure of Unpublished Price
• Sensitive Information
• Health, Safety and Environment (HSE) Policy
• Vigil Mechanism and Whistle-blower Policy
• Prevention of Sexual Harassment Policy
• Corporate Social Responsibility Policy
• Policy for selection of Directors and determining Directors’ independence
• Remuneration Policy for Directors, Key Managerial Personnel and other employees
• Dividend Distribution Policy
• Policy for determining Material Subsidiaries
• Policy on Subsidiary Governance
• Policy on Materiality of Related Party Transactions and on dealing with Related Party
Transactions

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• Policy on Determination and Disclosure of Materiality of Events and Information and Web
Archival Policy
• Policy for Preservation of Documents
• Group Risk Management Policy
• Materiality Policy for Commodity exposure
• Commodity and Freight Risk Management Policy
• Foreign Exchange and Derivatives Risk Management Policy
• Investment Governance Policy
• Data Privacy Policy
• Information Security Policy
• Intellectual Property Policy

Risk Management, Internal Controls And Compliance

The Company has set up the "Reliance Management System" (RMS) as an aspect of its renewal
program. RMS is empowered through broad utilization of innovation to help the risk
management process , guarantee the continuous viability of interior controls in measures,
consistence with appropriate laws and guidelines. All compliance activities are upheld by a
strong online compliance monitoring system (iRCMS) to guarantee acquiescence . The
progressing adequacy of compliance management exercises is assessed autonomously by the
Group Audit Function.

Best Corporate Governance Practices

RIL makes progress towards most noteworthy Corporate Governance guidelines and practices.
It, thus, tries to constantly improve and receive the best of worldwide Corporate Governance
codes and practices. A portion of the executed administration standards and best practices
incorporate the following-

• The Company has self-reliant Board Committees that look over matters concerning Risk
Management, HSE, Internal Audit,
• Stakeholder Relationship, Directors’ Remuneration and the nomination of Board members.

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• The Company has appointed an autonomous firm of Chartered Accountants to carry out
circumstantial audit of share transfer and other ancillary functions are carried out by
Registrar and Transfer Agents.
• The Company undergoes quarterly secretarial compliance certification from an
independent company secretary who
• is in whole-time practice
• The Company additionally has a few other Executive panels of senior administration who
survey the progressing viability of operational and budgetary risk alleviations and
administration rehearses.

Code of Conduct

The Company has set up a complete Code of Conduct and Our Code (the Codes) pertinent to
the Directors and representatives. The Codes give direction and backing required for moral
lead of business and consistence of law. The Codes mirror the fundamental beliefs of the
Company viz. Client Value, Ownership Mindset, Respect, Integrity, One Team and Excellence.

Core Skills / Expertise /Competencies Available with The Board

The Board contains qualified individuals who have required aptitudes, experience and
capabilities that permit them to make powerful commitments to the Board and its Committees.

The under mentioned ability/skills have been distinguished for the successful working of the
Company and are at present accessible with the Board:

• Leadership / Operational experience

• Strategic Planning

• Industry Experience, Research & Development and Innovation

• Global Business

• Financial, Regulatory / Legal & Risk Management

• Corporate Governance

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Selection of Independent Directors

Taking into account the prerequisite of ranges of abilities on the Board, prominent individuals
having a stand in their particular field/calling and who can adequately add to the Company's
business and strategic choices are considered by the Human Resources, Nomination and
Remuneration Committee, for arrangement, as an Independent Director on the Board.

In the assessment of the Board, the Independent Directors satisfy the conditions determined in
the Listing Regulations and are autonomous of the administration.

Lead Independent Director

The Role of the Lead Independent Director is as under:

• Administers the meetings of the Independent Directors

• Assures adequate and timely communication to the Independent Directors
• Collaborates between the Chairman and Managing Director.
• Officiates the meetings of the Board and Shareholders in the absence of the Chairman and
Managing Director.
• Perform such other duties as may be delegated to the Lead Independent Director by the
Board / Independent Directors.

Board and Committees

The Company’s strategic direction, management policies and their effectiveness is appraised
by the Board. The Board ensures that shareholders’ deep-rooted interests are being
apportioned.

The Board has established seven main Committees

• Audit Committee
• Human Resources
• Nomination and Remuneration Committee
• Stakeholders’ Relationship Committee
• Corporate Social Responsibility and Governance Committee
• Risk Management Committee

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• Health, Safety and Environment Committee
• Finance Committee

The Board is approved to comprise other Committees, every once in a while, contingent upon
business needs. The Company's internal rules for Board/Committee gatherings encourage
dynamic cycle at its gatherings in an efficient way

Criteria for Directors

The Human Resources, Nomination and Remuneration Committee has concocted a measure
for assessment of the performance of the Directors including the Independent Directors. The
said measures gives certain boundaries like participation, association with business,
correspondence between board members, cooperation, domain knowledge, consistence with
set of principles, vision and technique, benchmarks set up by worldwide companions and so
on., which is in consistence with relevant laws, guidelines and rules.

Remuneration Policy

The Company’s remuneration policy is directed towards rewarding performance based on

review of achievements periodically. The compensation strategy is in consonance with existing
industry practice.

Remuneration Of The Managing Director And Whole-Time Directors For The Financial
Year 2019-20

Considering the COVID-19 flare-up in India, which has demanded a tremendous cost for the
cultural, monetary and modern wellbeing of the country, Shri Mukesh D. Ambani, the
Chairman and Managing Director, has deliberately chosen to forego his pay.

The Board of Directors noticed his choice to forego his pay until the effect of COVID-19
subsides. The Chairman and Managing Director had his pay topped at ' 15 crore since 2008-09
so as to set an individual case of balance in administrative pay levels. Furthermore, presently,
he is renouncing his pay until the organization and all other organizations are completely back

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to their income potential. On a comparable note, other Executive Directors have additionally
communicated their choice to attract compensation up to half of their compensation privilege
and as suggested by Human Resources, Nomination and Remuneration Committee.

The residency of office of the Managing Director and Whole-time Directors is for 5 (five) years
from their date of arrangements and can be ended by either party by giving three months'
notification in writing. There is no different arrangement for instalment of severance expenses.

Disclosure On Materially Significant Related Party Transactions That May Have

Potential Conflict With The Company’s Interests At Large

The Company’s major related party transactions are generally with its subsidiaries and
associates. The related party transactions are entered into based on considerations of various
business exigencies, such as synergy in operations, sectoral specialisation and the Company’s
long-term strategy for sectoral investments, optimisation of market share, profitability, legal
requirements, liquidity and capital resources of subsidiaries and associates. All the contracts /
arrangements / transactions entered by the Company during the financial year with related
parties were in its ordinary course of business and on an arm’s length basis. During the year,
the Company had not entered into any contract / arrangement / transaction with related parties
which could be considered material in accordance with the policy of the Company on
Materiality of Related Party Transactions. The Company has made full disclosure of
transactions with the related parties as set out in Note 32 of Standalone Financial Statements,
forming part of the Annual Report. There were no materially significant related party
transactions which could have potential conflict with interest of the Company at large.

The Company’s Policy on Materiality of Related Party Transactions and on dealing with
Related Party Transactions is available on the website of the Company.

Whistle-Blower Policy

The Company establishes protected, moral and consistent direct of all its business exercises
and has set up a component for revealing illicit or unscrupulous conduct. The Company has a
Vigil Mechanism and Whistle-blower strategy under which the representatives are urged to
report infringement of appropriate laws and guidelines and the Code of Conduct – unafraid of

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any reprisal. The reportable issues might be unveiled to the Ethics and Compliance Task Force
which works under the management of the Audit Committee. Workers may likewise report
infringement to the Chairman of the Audit Committee. Till date, there has been no example of
forswearing of admittance to the Audit Committee. The Vigil Mechanism and Whistle-blower
Policy is accessible on the site of the Company.

Prevention Of Sexual Harassment Of Women At Workplace

The Company is committed to provide a work environment that ensures every employee is
treated with dignity, respect and afforded equal treatment.

Adoption Of Mandatory And Discretionary Requirements

The Company has complied all mandatory requirements of Regulation 34 of the Listing
Regulations and has adopted the following discretionary requirements of the Listing
Regulations:

• COMMUNICATION TO SHAREHOLDERS- Half-yearly reports covering financial

results were sent to the members at their registered addresses. In addition to half-yearly
reports, quarterly reports were also sent to the members, whose e-mail IDs are registered
with the Company / Depository Participants.
• AUDIT QUALIFICATION- The Company is in the regime of unmodified opinions on
financial statements.
• REPORTING OF INTERNAL AUDITOR- The Internal Auditor directly reports to the
Audit Committee.

Commodity Price Risks / Foreign Exchange Risk And Hedging Activities

The Company is dependent upon ware value chances because of variance in costs of raw
petroleum, gas and downstream oil-based commodities. Organization's payables and
receivables are in U.S. Dollars and because of changes in unfamiliar trade costs, it is dependent
upon unfamiliar trade chances. The Company has set up a vigorous structure for identification
and observing and alleviation of product cost and unfamiliar trade risks. The risks are followed

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and observed consistently and mitigation strategies are received in accordance with the Risk
management system.

Risk Management Policy With Respect To Commodities Including Through Hedging

Commodities Exposure

The Company is exposed to price volatility on various Petroleum, Petrochemical and other
Energy related commodities, as part of its business operations. Due to the dynamic markets,
prices of such Commodities fluctuate and can result in Margin Risk. This policy prescribes the
guidelines for hedging Commodities Price risks.

Hedging Policy

Exposures are identified and measured across the Company so that appropriate hedging can be
done on a Net basis. For Commodities hedging, there exist Over The Counter (OTC) and
Exchange markets that offer financial instruments (derivatives), that enables managing the
Price risk.

Strategic decisions regarding the timing and the usage of derivatives instruments such as Swaps
/ Futures / Options, are taken based on various factors including market conditions, physical
inventories, macro-economic situation. These decisions and execution are done in line with the
Board approved Commodities Risk Management framework. The Risk Management
Committee looks overs and governs all hedging actions taken.

Plant Locations In India

1. Refining & Marketing

• DTA Jamnagar Refinery, Gujarat, India
• SEZ Jamnagar Refinery, Gujarat, India

2. Petrochemicals
• Barabanki Manufacturing Division- Uttar Pradesh, India

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 • Dahej Manufacturing Division- Gujarat, India
• Hazira Manufacturing Division- Gujarat, India
• Hoshiarpur Manufacturing Division- Punjab, India
• DTA Jamnagar Refinery- Gujarat, India
• SEZ Jamnagar Refinery- Gujarat, India
• Nagothane Manufacturing Division- Maharashtra, India
• Patalganga Manufacturing Division- Maharashtra, India
• Silvassa Manufacturing Division- Union Territory of Dadra and Nagar Haveli, India
• Vadodara Manufacturing Division- Gujarat, India
• Vadodara Composites Division- Gujarat, India

3. Oil & Gas

• KG D6 Onshore Terminal- Andhra Pradesh, India
• Coal Bed Methane Project (CBM)- Madhya Pradesh – 484 110, India

4. Textiles
• Naroda Manufacturing Division- Gujarat, India

Certifications:

• No Disqualification certificate from company secretary in practice

• CEO and CFO certification
• Compliance certificate of the auditors
• Certificate on compliance with Code of Conduct.

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 MANAGEMENT DISCUSSION AND ANALYSIS REPORT

STRUCTURE
1. Requirement of the listing agreement of the company with the stock exchange.
2. Regulation 34 of the listing regulation – As part of Directors Report or as an addition
there to, M D & A report should form part of the annual report to the shareholders.
3. Should include discussion on following:
• Industry structure and developments
• Opportunities and threats
• Segment wise or product wise performance
• Outlook
• Risks and concerns
• Internal control system and their adequacy
• Discussion on financial performance with respect to operational performance
• Material development in human resource / industrial relations front, including the
number of people employed.

GENESIS
Management Discussion and Analysis or otherwise called MDNA is a new addition to
corporate annual reports, made in 1970s. Irrespective of its recent opening, MDNA plays a
vital role in corporate communications, more importantly since it enables to project future
trends of financial conduct along with the context in which the performance has been delivered.
Equity analysts and genuine investors look into MDNA not only to get an in-depth idea
regarding the past financial conducts but also to get a catch on the leading indicators that
suggests the company’s expected performance in the upcoming years.

MDNA’s are expected to be shrewd and concise by contributing the reader with beneficial
judgements. MDNA can be inefficient if its purpose is not fully absorbed. Hence, it is pre-
requisite to know the genesis and the purpose for advocating MDNA.

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Origin

In the face of stock market conflict in mid-1960s, the SEC required the administration of the
US listed companies to confer and share views on unusual and non-recurring items in their
earnings statement so that the investors would not be mistaken by it. This requirement for an
elaboration on such financial aspects seeded the MDNA section that are seen in today’s annual
reports.

A year later in 1969 based on the recommendation of security specialists, SEC set up a
Disclosure Policy Group, also known as Wheat Commission to study various disclosure issues.
The Commission concluded that forward looking statements are crucial to generate future
estimates. However, this can turn out to be expensive due to potential litigation, need to update,
and undue reliance placed by the lenders on these statements.

In 1974, SEC broadened the narrative disclosures by adding operational trends but didn’t turn
out to be much valuable since in most companies, financial ratios were discussed with an
arithmetic bent, without going into the business reasons for the change in ratios over the years.

After much consideration and review by a committee assigned for this sole purpose, SEC
brought in the Safe Harbor rule in 1979, to protect companies and strengthen them to discuss
trends in their financial performance with a prospective aspect.

The Safe Harbor rule safeguarded the management for making specific forward-looking
statements that had a equitable basis and were made in good faith. On September 2nd, 1980,
SEC further expanded the disclosures. Companies were now asked to discuss their business
from their sole perspective in the industry instead of putting forward a collective view. It
specifically looked forward to discussion on the Results of Operations, Financial conditions,
and Liquidity and capital resources, thus fleshing out the MDNA in full.

The bolstered requirement of MDNA was to put forward an opportunity for the users of
financial statements to look into the company operations through the view point of the
management and supplement the quantitative financial statements.

Need in India

Regulation 34 2 (e) of LODR, 2015 requires every listed company to include management and
discussion analysis report in its annual report. Neither the Companies Act nor SEBI’s LODR

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define the contents of MDNA. The only guidance, if any, that is available on MDNA in India
is in ICSI’s Referencer on Board’s Report, which is a crisp gist of the MDNA requirements
specified by the SEC.

Most MDNA’s seen today in India are conventional consents fulfilling the administrative
requirement but failed to offer the purpose that was most intended . Exceptions are companies
that are listed in the US or companies that are followed by the global analysts, which provide
more information makings their MDNA purposeful.

CONTENT
Forward-looking Statement

• The report contains forward-looking statements, identified by words like ‘plans’,

‘expects’, ‘will’, ‘anticipates’, ‘believes’, ‘intends’, ‘projects’, ‘estimates’ and so on.
• All statements that address expectations or projections about the future, but not limited
to the Company’s strategy for growth, product development, market position,
expenditures and financial results, are forward-looking statements.
• The Company’s actual results, performance or achievements could thus differ from
those projected in any forward-looking statements.

Overview

Global

The global economy grew at 2.4% in CY 2019, slowing from 3% in CY 2018 amid global trade
war, tariff related uncertainties, and Brexit. Chinese growth moderated but held up at 6.1%
despite escalation of trade tensions with the United States (US). EU growth also weakened to
1.1%. Global trade environment remained challenging due to heightened trade tensions. Global
demand for ethylene increased by 4% y-o-y to 167 MMT in 2019. However, capacity addition
across key petrochemical products significantly outpaced demand growth, pushing down prices
and margins to multi-year low for these products. Global growth outlook has changed since the
outbreak of COVID-19. There has been coordinated global monetary policy easing and fiscal
support from governments. These policy support measures would act as cushions offsetting
weakness in growth to some extent.

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 India

The Indian economy grew by 4.2% in FY 2019-20 still remaining one of the fastest growing
major economies in the world. Services credit averaged at a healthy 10% y-o-y growth even as
credit growth deteriorated. Auto sales suffered due to weak credit conditions, demand softness,
and change in regulatory norms. India’s oil demand remained flat in FY 2019-20 as compared
to the previous year, with consumption-led demand growth in gasoline (+6.2% y-o-y) and LPG
(+6% y-oy). ATF growth (-3.5% y-o-y) was subdued as air traffic growth remained soft, while
diesel demand (-1% y-o-y) was impacted by weaker economic growth. Thrust on policy
initiatives continued. FY 2019-20 saw consolidation of Public Sector Banks, which should
strengthen the banking sector. Non-performing loans in the banking sector have come down to
9.3% from >10% before FY 2019-20. With continued policy initiatives, India further continued
its climb in the Ease of Doing Business rankings, climbing up 14 places to reach the 63rd rank.

Highlights and Key Events

Reliance executed on the next phase of its growth journey in FY 2019-20, forging
transformative partnerships across businesses. In the Energy businesses, Reliance is working
to complete the contours of a defining strategic partnership with Saudi Aramco (Aramco).

In the fuel retail business, Reliance and British Petroleum (BP) formed a new joint venture to
grow the retail service station network and aviation fuels business across India.

Financing Strategy

Reliance Treasury is focused on securing liquidity and capital for all its businesses. It makes
sure that the capital is made available at the optimum risk adjusted cost and is made available
at the time when businesses require it. During FY 2019-20, Reliance tied-up financing for $5.9
billion, by raising some new debt and by refinancing some of its existing loans as part of its
on-going liability management exercise.

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(i) EUR 405 million Schuldschein – These facilities were tied-up as a combination of fixed and
floating rate facilities and a combined average tenor of over five years. The deal was priced at
the lower end of the pricing range across all tranches. A mix of banks and institutional investors
as well as smaller retail banks participated in the transaction. RIL is the first non-European
domiciled borrower and the first Asian corporate to enter this traditionally German-centric debt
market utilising a broad marketing strategy. This transaction was the largest syndicated
Schuldschein issuance by a non-European company and the largest in the Oil & Gas sector
globally. The deal received significant oversubscription of order book at 2.7 times This deal
was awarded Schuldschein of the year by Global Capital, a leading financial publication for
issuers and investors.

(ii) US$200 million and JPY 5.30 billion Korea Trade Insurance Corporation (K-Sure)
supported ECA financing with door to door tenor of over ten years. Reliance group is now the
largest exposure for K-Sure globally (excl. sovereigns).

(iii) ECA financing comprising of EUR 341 million direct facility and USD$365 million
facility guaranteed by The Export-Import Bank of Korea with a door to door tenor of ten years.

Refinancing

As part of its liability management exercise, during FY 2019-20, Reliance successfully tied up
long-term financing via US$1.1 billion syndicated term loan facility. The facility will be used
to refinance the equivalent debt maturing in FY 2020-21. Reliance will lengthen the maturity
of its long-term debt portfolio through this refinancing exercise.

Financing In Subsidiaries

During FY 2019-20, Reliance Jio Infocomm Limited (RJIL) successfully tied up US$600
million and JPY 15.90 billion Korea Trade Insurance Corporation (K-Sure) supported ECA
financing with door to door tenor of over ten years. This transaction was guaranteed by RIL
and was awarded ‘Best ECA-backed Telecoms Finance Deals of the Year’ by Trade and Export
Finance (TXF).

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Transfer Of Liabilities

To align RJIL’s capital structure with that of global technology peers and to have significant
financial strength to address the Digital Services opportunity in India, a scheme of arrangement
was entered into by RJIL with certain classes of its creditors to transfer certain identified
liabilities to RIL. In March 2020, pursuant to the approval of Hon. National Company Law
Tribunal, Ahmedabad Bench, the identified liabilities of RJIL have been transferred to RIL
with effect from the Appointed Date mentioned therein.

Capital Resources

During FY 2019-20, Reliance and its subsidiaries tied up facilities across various financing
products and maturities. The table below shows debt levels for the year ended March 2020 and
March 2019 for Reliance on a consolidated basis.

Liquidity And Treasury Management

Reliance maintains a strong focus on liquidity to ensure that the group always has adequate
cover to face any potential short term market disruptions. Cash from operating activities is
strong. Investments in the form of cash and cash equivalents provides an additional liquidity
buffer. Reliance’s liquidity management and investment plans are created within the context
of its annual financial and strategic planning processes and reviewed on an ongoing basis.
Reliance believes that the Group has sufficient working capital resources for running all its
businesses smoothly. RIL continuously monitors and optimises working capital requirements
by leveraging diverse trade financing solutions covering receivable and payment products and
executing innovative structured trade products.

Financial Services – New Business Segment

During FY 2019-20, based on an internal reorganisation of its business segments and increased
focus during business reviews carried out by the management, RIL identified ‘Financial
services’ as a separate business segment. The anchor ecosystem of Jio (387.5 million
customers), and Reliance Retail (11,784 stores) provides a strong distribution channel for
financial products. The strategy of the Financial Services business centres around creating

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tailor-made financial products and offering them as extensions of other products that are being
offered to customers in the anchor ecosystem of Reliance’s consumer businesses. This
synergistic relationship will benefit both the financial services and the anchor

ecosystem businesses.

Financial And Operational Performance

This financial services segment achieved a turnover of `1,271 crore and an EBIT of `473 crore
in FY 2019-20.

Reliance’s Goals For Sustainable Development

Clean Energy

Ensure maximum use of clean energy in all the operations collaborate with best available
technologies licensors. Ensure benchmarking of energy consumption across all the sites with
best-in-class technologies and new emerging technologies.

• 7 RIL plants have set targets under Perform, Achieve and Trade scheme

• 52kW roof top solar panels at Patalganga

• Company-wide forums like Mission Kurukshetra and focused annual event like energy
conservation week

Managing Environmental Impacts

Ensure industry-leading energy cells at each site working towards energy security with focus
on reducing consumption and increased use of clean energy to progressively reduce GHG
emissions intensity. Demand minimum level of HSE compliance from all stakeholders.

• Total GHG reduction of 351.4 ktCO2e due to energy conservation efforts

• About 2 billion PET bottles recycled annually

• 2.2+ crore saplings have been planted across all RIL sites

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Waste Management

Ensure efficient use of solid catalysts including investment in development of bio-catalysts to

replace solid catalysts.

• Hazardous waste is recycled as alternate fuels and raw material (AFR) to cement industries

• Clean-ups in Mumbai with 8500 MT of solid waste removed in 12 months

• Used plastic waste to resurface a 40km road

• Installation of anaerobic digester for disposal of degradable waste

Water Management

Deploy world-class technologies across all sites to reduce freshwater consumption per unit of
production by maximising wastewater recycle and minimising external discharge.

• 74.4 million M3 of water recycled in FY 2019-20

• Desalination of water at Jamnagar

• Overall rainwater harvesting capacity was increased in 3 sites

Governance Of Natural Capital Management At Reliance

Manufacturing locations prepare environmental and sustainability action plans, as part of their
Annual Operating Plan. The progress of implementation of such plans are regularly reviewed
at site level and by the ‘Environmental Compliance Review Committees’, every quarter. These
plans and their status of implementation are further reviewed and assessed by the group Safety
and Operation Risk (S&OR) team. The S&OR team present the performance and initiatives to
the Board every quarter. Health, Safety & Environment (HSE) Board Committee monitors and
ensures the highest level of environmental, health and safety norms within the company.

During the year, these efforts were rewarded when

• Hoshiarpur manufacturing division achieved the distinction of being the first polyester yarn
manufacturing site in India to receive the coveted ‘GreenCo Gold rating’.

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• Dahej manufacturing division was awarded the ‘International Green Apple Environment
Award, 2019’ by ‘The Green

Organization, UK’ for environmental best practices/green initiatives implemented.

Energy Efficiency

At RIL, energy management encompasses energy related technologies, systems, tools,

standards, best practices and procedures and also the supporting business processes and
organisational structures. Cost-optimal investment into energy efficient technologies, coupled
with supporting organisational and governance practices meets the challenge of energy savings
and reduced production costs while maintaining product quality, safety and desired production
volumes. At Reliance, the consideration towards cleaner air is built into each stage of business
operations viz;

(a) strategic decision making, (b) process design and later (c) continuously improving
efficiency through its operational life.

Strategic Investments

a. Stabilised Gasification operations produce syngas of 950 TPH which has helped to reduce
Natural gas consumption.

b. Reliable supply of hydrogen from gasification complex has minimised hydrogen generation
from our own units.

c. Gas turbines at Jamnagar are being retrofitted in a phased manner to facilitate syngas firing
capability with

reduced NOX and SOX emissions.

d. The cogeneration power plants at Hazira Manufacturing Division (HMD) and Dahej
Manufacturing Division (DMD) and the hot oil unit at Patalganga Manufacturing Division
(PMD) have optimally switched fuels and reduced their energy

costs, owing to the reduction in natural gas prices.

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Design Stage

The Company’s initiatives on clean technology, energy efficiency and renewable energy
include:

• Use of heat pump compressors at reboilers of butane- 1 distillation column and butane
prefractionation column at

High Purity Iso-Butylene (HPIB) plant.

• Use of steam condensate as a heat source for distillation column reboiler at HPIB plant.

Operations Stage

a. Optimisation of steam, power and hydrogen on an hourly basis across various complexes at
JMD.

b. Minimised flaring from new paraxylene plant’s Reformate Splitter Column with an
innovative Subcooled Reflux Scheme.

c. Generation of medium pressure steam in Heavy Naptha Unionfining Unit and platformer
section by installation

of hot separator. Replicated the benefit of modifying crude preheat exchangers for better heat
recovery and to reduce fuel

consumption in crude heaters.

e. Optimisation of dryer regeneration cycles in gas dryers of C2 Complex to reduce steam

consumption.

f. Replicating the use of an advanced distillation technology for the separation of petrochemical
Naphtha.

g. Increasing process efficiency by inhouse modifications in carbon recovery package in

Petcoke Gasification.

h. Evaluation of an advanced Heat Integrated Distillation technology is in progress.

i. To reduce GHG emissions at the complex level, New Cracker Furnace configuration is being
studied.

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Human Capital and People Connect

Reliance believes the highest act of value-creation lies in saving human life, ensuring human
health, and enhancing human wellbeing and happiness. The drive to solve societal challenges,
the passion to perform and the dedication demonstrated every day by people has made Reliance
one of the largest conglomerates in India. The scale of Reliance’s operations lead to creation
of indirect employment - over 50 lakh people.

With unity in diversity of skill, ability, gender and generations, RIL has built industry leaders
across Retail, Digital Services, RIL, Media and Foundation. The work culture revolves around
company’s values, and the themes of innovation, diversity & inclusion, human centricity and
embracing the future with boldness. This is bolstered by company’s approach to exponential
learning opportunities which is augmented by a digitally connected ecosystem.

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 INDEPENDENT AUDITORS’ REPORT

STRUCTURE
• An Audit is the examination of a company’s accounting system, controls, accounting
records, and the financial statements resulting there from.

• Sec 134 (2) of the Companies Act, 2013 requires that the auditors report shall be
attached to every financial statement.

• Section 143 (2) of the Companies Act, 2013 provides that the auditor shall make a
report to the members of the company on the accounts examined by him/her and on every
financial statement required by or under this act to be laid before the company in the general
meeting.

• The auditors report shall also state -

• Has sought and obtained all the information and explanations necessary for the purpose
of audit and if not the details there off.

• Proper books of account as required by law have been kept by the company

• Report on the accounts of any branch office of the company audited by a person other
than the company’s auditor has been sent to him.

• Company’s balance sheet and profit and loss account dealt with in the report are in
agreement with the books of account and return.

• Financial statements comply with the accounting standards

• Observations or comments of the auditors on financial transactions or matters which

have any adverse effect on the functioning of the company.

• Any director is disqualified from being appointed as a director under Sec 164 (2)

• Any qualification, reservation, or adverse remark relating to the maintenance of

accounts and other matters connected there with.

• Has adequate internal financial control system in place and the operating effectively.

• Such other matters as may be prescribed.

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Where any of the matters required to be included in the audit report under this section is
answered in the negative or with a qualification, the report shall state the reasons there off.

Besides a report on the matter mentioned above, Companies (Auditor Report) Order, 2003
(CARO) requires the auditors to comment on certain other matters.

• Important matter covered by CARO are as follows:

1. Maintenance of proper records and physical verifications of fixed assets and

inventory.

2. Loans taken from or granted to companies and firms in which directors are
interested.

3. Adequacy of internal control systems

4. Transactions (other than loans) with companies and firms in which directors are
interested.

5. Compliance with legal requirements relating to acceptance of public deposits.

6. Existence of adequate internal audit system in specified companies.

7. Maintenance of cost records.

8. Record of payment of statutory dues.

9. Default in repayment of loans.

Forming an Opinion and Reporting on Financial Statements

• Unmodified Opinion – Financial statements are prepared, in all material respects, in

accordance with the applicable financial reporting framework.

• Auditor has obtained reasonable assurance that financial statements as a whole are free
from material misstatement – whether due to fraud or error.

• Financial Statements gives a true and fair view of the state of the company’s affairs as
at the end of its financial year and profit or loss and cash flow for the year.

• Modifications to the Opinion –

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• Qualified Opinion – Auditor, either on the basis of evidence obtained or otherwise
concludes that misstatements are material but not pervasive (spreading widely) to the financial
statements.

• Adverse Opinion – An adverse opinion is issued when the effects of a disagreement is

so material and pervasive to the financial statements with appropriate audit evidence that the
auditor concludes that a qualification of the report is not adequate to disclose the misleading or
incomplete nature of the financial statements.

• Disclaimer Opinion: Possible effect of a limitation on scope is so material and pervasive

that the auditor has not been able to obtain sufficient appropriate audit evidence and is
accordingly unable to express an opinion on the financial statements.

• IF books of accounts are seized by the I T Department, the company will not furnish
any record. In such a case, disclaimer opinion will be expressed by the auditor.

CONTENT
Opinion

In auditor’s opinion and to the best of their information and according to the explanations given
by the company, the Financial Statements give the information required by the Companies Act,
2013, as amended (“the Act”) in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India, of the state of affairs of
the Company as at March 31, 2020, its profit including other comprehensive income, its cash
flows.

Key audit matters How our audit addressed the key audit matter

A. Capitalisation of property, plant and equipment

During the year ended March 31, 2020, the Company has incurred significant capital
expenditure. Further, out of the total dditions to property, plant and equipment of ` 1,13,300
crore in the current year, significant part of the capitalisation pertains to the Gasification
project, including modification of power plant equipments i.e. Gas Turbines, Auxiliary Boilers,
HRSGs, Process Furnaces, etc. to make them compatible to multiple feedstock, including those
received from petcoke gasifier. All

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units of the gasification complex and related integrated projects have been successfully
commissioned and capitalised during the year. Significant level of judgement is involved to
ensure that the aforesaid capital expenditure/additions meet the recognition criteria of Ind AS
16 - Property, Plant and Equipment, specifically in relation to determination of trial run period
and costs associated with trial runs for it to be ready for intended use.

Estimation of oil reserves, decommissioning liabilities and impairment evaluation of

development rights

On estimation of Oil and Gas reserves and Note B.2 (s) on Accounting for Oil and Gas activity,
Note C(B) on Decommissioning Liabilities, Note C(C) on Property Plant and
Equipment/Intangible Assets and Note B.2 (j) on Provisions and Note

B.2 (i) on impairment of non- financial assets and Note 17 of the financial statements.

The determination of the Company’s oil and natural gas reserves requires significant
judgements and estimates to be applied. Factors such as the availability of geological and
engineering data, reservoir performance data, acquisition and divestment activity, drilling of
new wells and commodity prices all impacts the determination of the Company’s estimates of
oil and natural gas reserves.

Estimates of oil and gas reserves are used to calculate depletion charges for the Company’s oil
and gas assets. The impact of changes in estimated proved reserves is dealt with prospectively
by amortising the remaining carrying value of the asset over the expected future production.
Oil and natural gas reserves also have a direct impact on the assessment of the recoverability
of asset’s carrying values reported in the financial statements.

Further, the recognition and measurement of decommissioning provisions involves use of

estimates and assumptions relating to timing of abandonment of well and related facilities
which would depend upon the ultimate life of the field, expected utilisation of assets by other
fields, the scope of abandonment activity and pre-tax rate applied for discounting. Accordingly,
the same is considered as a key audit matter.

C. Litigation matters (Oil and Gas)

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The Company has certain significant open legal proceedings under arbitration for various
complex matters with the Government of India and other parties. Due to complexity involved
in these litigation matters, management’s judgement regarding recognition and measurement
of provisions for these legal proceedings is inherently uncertain and might change over time as
the outcomes of the legal cases are determined. Accordingly, it has been considered as a key
audit matter.

G. Investments in Reliance Energy Generation and Distribution Limited

management has identified impairment indicators by considering internal/external sources of

information in Reliance Energy

Generation and Distribution Limited (REGDL) and RHUSA Inc. (subsidiary of REGDL). As
at March 31, 2020 the Company has an investment of ` 15,842 crore in REGDL. Further, the
Company has also given a guarantee on the borrowings of RHUSA Inc. (subsidiary of REGDL)
of ` 22,700 crore. As a result, an impairment assessment has been performed by the

Company by comparing the carrying value of these investments (including the guarantee given
by the Company on the borrowings of RHUSA Inc.) to their recoverable amount to determine
whether an impairment was required to be recognised.

For the purpose of the above impairment testing, value in use has been determined by the
management by considering estimates such as future oil and natural gas prices, reserves
volumes, discount rates etc. Management has also involved external specialists for determining
of reserve volumes and value in use.

H. Transfer of identified liabilities from Reliance Jio Infocomm Limited

During the year, Reliance Jio Infocomm Limited (subsidiary of the Company or ‘RJIL’) and
certain classes of its creditors have entered into a scheme of arrangement whereby the certain
identified liabilities aggregating to `104,365 crore together with interest accrued (but not paid
thereon), hedges along with receivables or payables and all other balances with respect to the
identified liabilities of RJIL have been transferred to the Company with equivalent
consideration, in accordance with the order dated March 13, 2020 issued by National Company

30 | P a g e
Law Tribunal. Being a significant transaction that occurred during the current year, it has been
considered as a key audit matter.

Auditors’ Responsibilities For The Audit Of The Standalone Financial Statements

• Identify and assess the risks of material misstatement of the Standalone Financial Statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks,
and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate

in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing
our opinion on whether the

Company has adequate internal financial controls with reference to financial statements in
place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of

accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of

accounting and, based on the audit

evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt

on the Company’s ability to continue as a going concern. If we conclude that a material

uncertainty exists, we are required to draw attention in our auditors’ report to the related
disclosures in the financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditors’ report. However, future events or conditions may cause the Company to cease to
continue as a going concern.

31 | P a g e
• Evaluate the overall presentation, structure and content of the Standalone Financial
Statements, including the disclosures, and whether the Standalone Financial Statements
represent the underlying transactions and events in a manner that achieves fair presentation.

Other Matter

The accompanying Standalone Financial Statements and other financial information includes
the Company’s proportionate share in unincorporated joint operation in respect of total assets
of ` Nil as at March 31, 2020, total expenditure of ` 177 crore and the elements making up the
Cash Flow Statement for the year ended March 31, 2020 and related disclosures in respect of
an unincorporated joint operation which is based on statements from the operator and certified
by the management.

ANNEXURE 1

(i) (a) The Company has maintained proper records showing full particulars, including
quantitative details and situation of fixed assets.

(b) The Company has a regular programme for physical verification in a phased periodic
manner, which, in auditor’s opinion, is reasonable having regards to the size of the Company
and the nature of its assets. No material discrepancies were noticed on such verification.

(c) According to information and explanations given by the management, the title deeds/lease
deeds of immovable properties included in property, plant and equipment are held in the name
of the Company except for leasehold land of ` 83 crore in respect of which the allotment letters
are received and supplementary agreements entered; however, lease deeds are pending
execution.

(ii) The management has conducted physical verification of inventory at reasonable intervals
during the year and no material discrepancies were noticed on such physical verification.

(iii) According to the information and explanations given to us, the Company has not granted
any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other
parties covered in the register maintained under Section 189 of the Act.

32 | P a g e
(iv) According to the information and explanations provided, the Company has not granted any
loans or provided any guarantees or security to the parties covered under Section 185 of the
Act. The Company has complied with the provisions of Section 186 of the Act in respect of
investments made or loans or guarantee or security provided to the parties covered under
Section 186 of the Act.

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the
Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the
provisions of clause 3(v) of the Order are not applicable to the Company.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to
the rules made by the Central Government for the maintenance of cost records under Section
148(1) of the Act, related to the manufacturing activities, and are of the opinion that prima
facie, the specified accounts and records have been made and maintained. We have not,
however, made a detailed examination of the same.

(vii) (a) The Company is generally regular in depositing with appropriate authorities
undisputed statutory dues including Provident fund, Employees’ State Insurance, Income-tax,
Sales-tax, Goods and Services tax, Duty of Custom, Duty of Excise, Value Added Tax, Cess
and Other Statutory Dues applicable to it.

(b) According to the information and explanations provided to us, no undisputed amounts
payable in respect of Provident fund, Employees’ State Insurance, Income-tax, Sales Tax,
Goods and Service tax, Duty of custom, Duty of excise, Value added tax, Cess and Other
Statutory Dues were outstanding, at the year end, for a period of more than six months from
the date they became payable.

(viii) In our opinion and according to the information and explanations provided by the
management, the Company has not defaulted in repayment of loans or borrowing to a financial
institution, bank or government or dues to debenture holders.

(ix) In our opinion and according to the information and explanations provided by the
management, the Company has utilised the monies raised by way of debt instruments and term
loans for the purposes for which they were raised.

(x) Based upon the audit procedures performed for the purpose of reporting the true and fair
view of the Financial Statements and according to the information and explanations provided
by the management, we report that no fraud by the Company or no material fraud on the

33 | P a g e
Company by the officers and employees of the Company has been noticed or reported during
the year.

(xi) According to the information and explanations provided by the management, the
managerial remuneration has been paid/provided in accordance with the requisite approvals
mandated by the provisions of Section 197 read with Schedule V to the Act.

(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause
3(xii) of the Order are not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations provided by the management, transactions
with the related parties are in compliance with Section 177 and 188 of the Act where applicable
and the details have been disclosed in the financial statements, as required by the applicable
accounting standards.

(xiv) According to the information and explanations provided to us and on an overall

examination of the balance sheet, the Company has not made any preferential allotment or
private placement of shares or fully or partly convertible debentures during the year under
review and hence, reporting requirements under clause 3(xiv) of the Order are not applicable
to the Company and, not commented upon.

(xv) According to the information and explanations provided by the management, the Company
has not entered into any non-cash transactions with directors or persons connected with him as
referred to in Section 192 of the Act.

(xvi) According to the information and explanations provided to us, the provisions of Section
45-IA of the Reserve

ANNEXURE 2

Report on The Internal Financial Controls

Auditors have audited the internal financial controls over financial reporting of Reliance
Industries Limited (“the Company”) which includes joint operations as of March 31, 2020 in
conjunction with our audit of the Standalone Financial Statements of the Company for the year
ended on that date.

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Management’s Responsibility for Internal Financial Controls

The Company’s Management is responsible for establishing and maintaining internal financial
controls based on the internal control over financial reporting criteria established by the
Company considering the essential components of internal control stated in the Guidance Note
on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of
Chartered Accountants of India.

Auditors’ Responsibility

Auditor’s responsibility is to express an opinion on the Company’s internal financial controls

over financial reporting with reference to these Standalone Financial Statements based on our
audit. Audit conducted is in accordance with the Guidance Note and the Standards on Auditing
as specified under Section 143(10) of the Act, to the extent applicable to an audit of internal
financial controls and, both issued by the Institute of Chartered Accountants of India. Those
Standards and the Guidance Note require that we comply with ethical requirements and plan
and perform the audit to obtain reasonable assurance about whether adequate internal financial
controls over financial reporting with reference to these Standalone Financial Statements was
established and maintained and if such controls operated effectively in all material respects.

Opinion

In auditor’s opinion, the Company has, in all material respects, adequate internal financial
controls over financial reporting with reference to these Standalone Financial Statements and
such internal financial controls over financial reporting with reference to these Standalone
Financial Statements were operating effectively as at March 31, 2020, based on the internal
control over financial reporting criteria established by the Company considering the essential
components of internal control stated in the Guidance Note on Audit of Internal Financial
Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

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 BOARD’S REPORT

STRUCTURE
• Companies Act – 2013 – Sec 134 (3)

• Every company is required to attach a report by BOD to its financial statements

presented in a general meeting.

• Report include the following –

1. The extract of the annual report as provided under section 92 (3). Under this
section every company is required to prepare annual return

2. Number of meetings of the board

3. Directors Responsibility Statement

4. A statement on declaration given by independent directors (ID). Under sec 149

(6), every ID is required to declare that he / she meets criteria of independence.

5. In case of company covered under Sec 178 (1) - Company’s policy on Directors
Appointment and Remuneration. Under sec 178, BOD of every listed company and
such other company as may be prescribed shall constitute the nomination and
remuneration committee.

6. Explanations or comments by BOD on every qualification, reservation, and

adverse remark or disclaimer made by 1. Auditor in his report and 2. Company Sec in
his secretarial audit report.

7. Particulars on loan, guarantees and investment under sec 186 which imposes
restrictions on loan, guarantees and investments made by companies.

8. Particulars of contracts or arrangements with related parties referred to in sec

188 (1) in the prescribed form.

9. State of company affairs

10. Amount if any, which it proposes to carry to any reserves.

11. Amount if any which it recommends should be paid by way of dividend.

36 | P a g e
 12. Material changes and commitments between end of financial year and date of
report.

13. Conservation of energy, technology absorption, foreign exchange earnings and

outgo, in such manner as may be prescribed.

14. A statement indicating development and implementation of a risk management

policy.

15. Details of policy developed and implemented by the company on CSR

initiatives taken during the year.

16. In case of a listed company and other public company having such paid up share
capital as prescribed - A statement indicating manner in which formal annual evaluation
has been made by the board of its own performance and its committees and individual
directors.

17. Such other matter as may be prescribed.

CONTENT
Financial Performance Review And Analysis

The Company achieved a consolidated revenue of ` 6,59,205 crore (US$ 87.1 billion), an
increase of 5.4% as compared to ` 6,25,212 crore in the previous year. Increase in revenue is
primarily on account of higher revenues from the Consumer businesses. Digital Services
business and Retail business recorded an increase of 40.7% and 24.8%, respectively, in revenue
as compared to previous year. Revenues for the Refining and Petrochemicals business declined
in line with fall in average oil and product prices for the year. Average Brent oil price declined
13% y-o-y, while realisations for key petrochemical products declined by 15%-32% y-o-y. This
was partially offset by higher crude throughput and petrochemicals production during the year.

Dividend

The Board of Directors has recommended a dividend of ` 6.50 (Six rupees and Fifty paise only)
per equity share of ` 10/- (Ten rupees) each fully paid-up of the Company (last year ` 6.50 per

37 | P a g e
equity share of ` 10/- each). Pro-rata dividend shall be paid in proportion to face value paid-up
on the partly paid shares.

Global Pandemic – Covid-19

COVID-19 is significantly impacting business operation of the companies, by way of

interruption in production, supply chain disruption, unavailability of personnel, closure /
lockdown of production facilities etc. On March 24, 2020, the Government of India ordered a
nationwide lockdown for 21 days which further got extended till May 3, 2020 to prevent
community spread of COVID-19 in India resulting in significant reduction in economic
activities. Further, during March 2020 / April 2020, there has been significant volatility in oil
prices, resulting in uncertainty and reduction in oil prices.

In assessing the recoverability of Company’s assets such as investments, loans, intangible

assets, Goodwill, Trade receivable etc. the Company has considered internal and external
information. The Company has performed sensitivity analysis on the assumptions used basis
the internal and external information / indicators of future economic conditions and the
Company expects to recover the carrying amount of the assets.

Rights Issue Of Equity Shares

The Board of Directors of the Company has approved the issue of equity shares of ` 10/- each
of the Company on rights basis to eligible equity shareholders of the Company at an issue price
of ` 1,257/- per fully paid-up equity share (including a premium of ` 1,247/- per equity share),
25% of the issue price viz. ` 314.25 per equity share will be payable on application, in the ratio
of 1 equity share for every 15 equity shares held by eligible equity shareholders as on a ‘record
date’.

Issue Of Debentures

The Company has issued and allotted on private placement basis, unsecured, redeemable, non-
convertible Debentures (NCDs) aggregating ` 11,295 crore from the end of the financial year
till the date of this report.

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Scheme Of Amalgamation Of Reliance Holding Usa Inc., Reliance Energy Generation
And Distribution Limited With The Company

The Company has filed a composite scheme of amalgamation and a plan of merger amongst
Reliance Holding USA Inc.

(“RHUSA”), Reliance Energy Generation and Distribution Limited (“REGDL”) and the
Company (the “Scheme”), which inter alia provides for merger of RHUSA with REGDL and
merger of REGDL with the Company

Scheme Of Arrangement Between The Company And Reliance O2c Limited

The Board of Directors of the Company has approved a scheme of arrangement under Sections
230 to 232 and other applicable provisions of the Act, between (i) the Company, its
shareholders and creditors, and (ii) Reliance O2C Limited and its shareholders and creditors
(the “Scheme”).

Agreements With Facebook, Inc.

The Company, Jio Platforms Limited (“JPL”) and Facebook, Inc. (“Facebook”) signed binding
agreements for an investment of ` 43,574 crore by Facebook into JPL, which values JPL at `
4.62 lakh crore pre-money enterprise value (US$ 65.95 billion, assuming a conversion rate of
` 70 to a US$) and post-money equity value of ` 4.36 crore. This investment will translate into
a 9.99% equity stake of Facebook in JPL on a fully diluted basis.

Retail Business

Reliance Retail achieved a turnover of ` 1,62,936 crore in FY 2019-20, registering a growth of

24.8% y-o-y. EBITDA margin improved to 6.6% vs 5.3% last year. The business delivered an
EBIT of ` 8,263 crore in FY 2019-20, registering a growth of 49% y-o-y.

Digital Services

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Digital service business achieved revenue of ` 68,642 crore, an increase of 40.7% y-o-y.
Segment EBITDA was at `22,517 crore for the year, as against `15,341 crore in previous year.
Segment EBITDA increased by 46.8% with EBIT margin of 21%. The Digital business made
net addition of 81 million mobility subscribers during the year, with year-end mobile
subscribers’ base at 387.5 million.

Media And Entertainment

Network18 improved its financial performance even amidst substantial weakness in the
advertising environment, as business mix pivoted towards subscription and syndication. Broad-
based cost controls across verticals further helped improve the business profitability, amidst an
uncertain macro-environment. During FY 2019-20, Network18 reported revenues of ` 5,357
crore (growth of 4.7% y-o-y) and EBITDA of ` 617 crore.

Directors’ Responsibility Statement

Your directors state that:

a) in the preparation of the annual accounts for the year ended March 31, 2020, the applicable
accounting standards read with requirements set out under Schedule III to the Act have been
followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied them consistently and made
judgements and estimates that are reasonable and prudent so as to give a true and fair view of
the state of affairs of the Company as at March 31, 2020 and of the profit of the Company for
the year ended on that date;

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

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

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

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

Corporate Governance

The Company is committed to maintain the highest standards of Corporate Governance and
adheres to the Corporate Governance requirements set out by the Securities and Exchange
Board of India (“SEBI”). The Company has also implemented several best governance
practices. The report on Corporate Governance as stipulated under the Listing Regulations
forms part of the Annual Report. The requisite certificate from the Auditors of the Company
confirming compliance with the conditions of Corporate Governance is attached to the report
on Corporate Governance.

Corporate Social Responsibility (Csr)

Over the past decade, the Company has focused on several corporate social responsibility
programmes and has touched the lives of millions of Indians. The Company continued its
endeavour to improve the lives of people and provide opportunities for their holistic
development through its different initiatives in the areas of, Rural Transformation; Health;
Education; Sports for Development; Disaster Response; Arts, Culture, Heritage and Urban
Renewal. The Company supported major national campaigns like Swachhata hi Seva and Jal
Shakti Abhiyan. It responded fast to national emergencies and disasters including floods and
more recently, COVID-19 pandemic which has earned accolades from one and all.

Performance Evaluation

The Company has a policy for performance evaluation of the Board, Committees and other
individual Directors (including Independent Directors) which include criteria for performance
evaluation of Non-Executive Directors and Executive Directors.

Employees’ Stock Option Schemes

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The HRNR Committee inter alia administers and monitors Employees’ Stock Option Schemes
of the Company. No grants have so far been made under Employee Stock Option Scheme–
2017. Employee Stock Option Scheme–2006 (“ESOS–2006”) was withdrawn during FY 2017-
18. However, options granted under ESOS–2006 continue to be governed by ESOS–2006.

Auditors And Auditors’ Report

Statutory Auditors

S R B C & CO LLP, Chartered Accountants and D T S & Associates LLP (formerly known as
D T S & Associates), Chartered Accountants were appointed as Auditors of the Company for
a term of 5 (five) consecutive years, at the AGM held on July 21, 2017. The Auditors have
confirmed that they are not disqualified from continuing as Auditors of the Company.

Cost Auditors

The Board has appointed following Cost Accountants as Cost Auditors:

i. Textiles Business – Kiran J. Mehta & Co;

ii. Chemicals Business – Diwanji & Co., K.G. Goyal & Associates, V.J. Talati & Co., Suresh
D. Shenoy, Shome & Banerjee and Dilip M. Malkar & Co.;

iii. Polyester Business – V.J. Talati & Co., Suresh D. Shenoy, V. Kumar & Associates and
K.G. Goyal & Associates;

iv. Electricity Generation – Diwanji & Co. and Kiran J. Mehta & Co.;

v. Petroleum Business – Suresh D. Shenoy;

vi. Oil & Gas Business – V.J. Talati & Co. and Shome & Banerjee;

vii. Gasification – Suresh D. Shenoy; and

viii. Composite Solution – Kiran J. Mehta & Co.

Secretarial Auditor

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The Board had appointed Dr. K.R. Chandratre, Practising Company Secretary, to conduct
Secretarial Audit for the financial

year 2019-20.

Disclosures

Meetings Of The Board

Seven Meetings of the Board of Directors were held during the year. The particulars of the
meetings held and attended by each Director are detailed in the Corporate Governance Report.

Audit Committee

The Audit Committee comprises Shri Yogendra P. Trivedi (Chairman), Dr. Raghunath A.
Mashelkar, Shri Adil Zainulbhai, Shri Raminder Singh Gujral and Shri K. V. Chowdary.
During the year, all the recommendations made by the Audit Committee were accepted by the
Board.

Corporate Social Responsibility And Governance Committee

The Corporate Social Responsibility and Governance (“CSR&G”) Committee comprises Shri
Yogendra P. Trivedi (Chairman), Shri Nikhil R. Meswani, Dr. Raghunath A. Mashelkar and
Dr. Shumeet Banerji.

Human Resources, Nomination And Remuneration Committee

The Human Resources, Nomination and Remuneration Committee comprises Shri Adil
Zainulbhai (Chairman), Shri Yogendra P. Trivedi, Dr. Raghunath A. Mashelkar, Shri Raminder
Singh Gujral, Dr. Shumeet Banerji and Shri K. V. Chowdary.

Stakeholders Relationship Committee

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The Committee comprises Shri Yogendra P. Trivedi (Chairman), Smt Arundhati Bhattacharya,
Shri K. V. Chowdary, Shri Nikhil R. Meswani and Shri Hital R. Meswani.

Vigil Mechanism

The Company has established a robust Vigil Mechanism and a Whistle-blower policy in
accordance with provisions of the Act and Listing Regulations. An Ethics and Compliance
Task Force (ECTF) comprising an Executive Director, General Counsel,

Group Controller and Group Company Secretary has been established which oversees and
monitors implementation of ethical business practices in the Company. The task force meets
periodically to review the complaints and incidents and reports them to the Audit Committee.
Protected disclosures can be made by a Whistle-blower through an e-mail or dedicated
telephone line or a letter to the ECTF or to the Chairman of the Audit Committee.

Prevention of Sexual Harassment At Workplace

As per the requirements of the Sexual Harassment of Women at Workplace (Prevention,

Prohibition & Redressal) Act, 2013 (“POSH Act”) and Rules made thereunder, the Company
has formed an Internal Committee to address complaints pertaining to sexual harassment in the
workplace. The Company policy mandates prevention of sexual harassment and to ensure a
free and fair enquiry process with clear timelines for resolution. To build awareness, the
Company has been conducting online training programmes on a periodic basis.

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 BUSINESS RESPONSIBILITY REPORT

STRUCTURE
• Requirement of the listing agreement of the company with the stock exchange.

• Regulation 34 of the listing regulation – Business Responsibility Report - As part of the

annual report to the shareholders.

• Effective from financial year ending on or after December 31, 2012.

• Requirement is applicable top 100 / 500 listed companies based on market

capitalization.

• Initiatives taken by companies form an environmental, social, and economic

perspective

• Report is prepared in five sections – A to E.

• Requirement of the listing agreement of the company with the stock exchange.

• Regulation 34 of the listing regulation – Business Responsibility Report - As part of the

annual report to the shareholders.

• Effective from financial year ending on or after December 31, 2012.

• Requirement is applicable top 100 / 500 listed companies based on market

capitalization.

• Initiatives taken by companies form an environmental, social, and economic

perspective

• Report is prepared in five sections – A to E.

• Section A – General information about company – Name, address, business, location,

market etc.

• Section B – Financial Details of the company – Paid Up Capital, turnover, profit,

spending on CSR activities etc.

• Section C – Participation of subsidiaries companies, suppliers and distributors in the

business responsibility activities of the company.

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• Section D – Details about directors and head responsible for BR, existence and non-
existence of principle wise BR policies and governance related to BR.

• Section E – Information on the company's performance on each of the nine principles.

GENESIS
MCA with the support of The Indian Institute of Corporate Affairs2 (“IICA”) in the year 2011
issued National Voluntary Guidelines on Social, Environmental and Economic Responsibilities
of Business (“Guidelines”) wherein it was stated that companies should not be just responsible
but also socially, economically and environmentally responsible. Through such reporting, the
Guidelines expect that businesses will also develop a better understanding of the process of
transformation that makes their operations more responsible. These Business Responsibilities
(BR) will also help in identifying some of the best practices that can serve as guidance models.

SEBI’s circular took this initiative forward by mandating certain companies to compulsorily
prepare BR. This was mainly because the need was felt for companies to be more answerable
to their stakeholders at the same time ensuring that through such reporting, stakeholders also
take an active interest in the functioning of the companies.

In 2012, the Securities Exchange Board of India (SEBI) passed a circular amongst the top 100
companies, regarding market capitalisation, making it mandatory for firms to report their
environmental, social and governance initiatives. This report, Business Responsibility Report
(BRR), has to be filed as part of their annual reports based on nine principles of National
Voluntary Guidelines (NVG). At the time of introduction, only the top-100 BSE-listed firms
were required to present BRRs as part of annual reports. In 2016, after signing a memorandum
of understanding (MoU) with Global Reporting Initiative, the mandate was extended to top-
500 BSE listed companies.

The main purpose behind BRR was to help companies self-identify how sustainable and
responsible their business is and for that the nine principles of NVG hold real importance.
These reports also present insights about a company’s overall approach, economically and
socially, helping various stakeholders make wiser decisions.

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CONTENT
At Reliance Industries Limited (RIL), sustainability is viewed as environmental and social
responsibility, which allows the Company to deliver on stakeholder expectations. RIL
continues to communicate the Company’s obligations and performance to all its stakeholders
through its Business Responsibility Report (BRR).

This report conforms to the Business Responsibility Reporting (BRR) requirement of the
Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015 (SEBI LODR) and the National Voluntary Guidelines on Social,
Environmental and Economic Responsibilities of Business (NVGs) released by the Ministry of
Corporate Affairs (MCA), Government of India

Annexure 1

General Information About The Company

Corporate Identity Number (CIN) of the Company- L17110MH1973PLC019786

Name of the Company- Reliance Industries Limited

Financial year reported- 2019-20

Sector(s) that the Company is engaged in – Refining, Petrochemicals (Polymers, Polyester

and Fibre Intermediates), Exploration and Production of Oil & Gas and Textiles .

Industrial Group Description

061 Extraction of crude petroleum

192 Manufacture of refined petroleum

products

201 Manufacture of basic chemicals,

fertilisers and nitrogen compounds,
plastic and synthetic rubber in
primary forms

203 Manufacture of man-made fibers

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062 Extraction of natural gas

131 Spinning, weaving and finishing of

textile

139 Manufacture of other textiles

Total number of locations where business activity is undertaken by the Company:

International locations:

RIL has undertaken business activities in eight international locations (on a standalone basis).
The major locations include North America, South America, Europe, the Middle East and Asia

National locations:

RIL has carried out business activities in over 50 domestic locations. The Company’s
manufacturing divisions are at Barbanki, Dahej, Hazira, Hoshiarpur, Jamnagar, Nagothane,
Naroda, Patalganga, Silvassa and Vadodara. The Exploration and Production (E&P) units are
at KG-D6 – Gadimoga. Besides, there are CBM blocks and various regional marketing offices.

Financial Details Of The Company:

Disclosures Information/Reference sections

Paid-up capital (Rs) Rs 6,339 crore as on 31st March, 2020

Total turnover (Rs) Rs 3,65,202 crore as on 31st March, 2020

Total profit after taxes (Rs) Rs 30,903 crore as on 31st March, 2020

Total spending on Corporate Rs 909 crore as on 31st March, 2020 (*2.08%)

Social Responsibility (CSR) as
percentage of profit after tax
(%)

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List of activities in which the The major areas in which the CSR expenditure has been incurred
Corporate Social include:
Responsibility (CSR)
1. Rural 5. Disaster response
expenditures have been
transformation
incurred 6. Arts, culture and heritage
2. Health
7. Urban renewal
3. Education

4. Sports for
development

Other Details:

Disclosures Information/Reference sections

Subsidiary companies The number of RIL’s subsidiary companies as on

31st March, 2020 is 166.

Participation of subsidiary company/ RIL undertakes various Business Responsibility

companies in the BR initiatives of the parent (BR) initiatives throughout the year and
company encourages its subsidiary companies to
participate in its group-wide BR initiatives on
several themes. All subsidiaries are aligned with
the Group’s CSR agenda and philosophy which
gets implemented through Reliance Foundation,
Reliance Foundation Youth Sports (RFYS) and
Reliance Foundation Institution of Education and
Research (RFIER).

Participation and percentage of participation As part of its BR initiatives, RIL also collaborates
of other entity/entities that the Company does with the relevant external stakeholders such as
suppliers, distributors, local communities,
government and other entities in the value chain.

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business with, in the BR initiatives of the RIL engages with several stakeholders such as
Company suppliers, distributors, local communities,
government and other entities in the value chain.

BR Information:

Directors responsible for the implementation of the BR policy/policies

• DIN Number: 00001879

Name: Shri Yogendra P. Trivedi (Chairman)

Designation: Non-Executive Director

• DIN Number: 00001620

Name: Shri Nikhil R. Meswani

Designation: Executive Director

• DIN Number: 00074119

Name: Dr. Raghunath A. Mashelkar

Designation: Non-Executive Director

• DIN Number: 02787784

Name: Dr. Shumeet Banerji

Designation: Non-Executive Director

Details of the BR head

Name: Shri. Nikhil R. Meswani

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DIN Number: 00001620

Designation: Executive Director

Email id: nikhil.meswani@ril.com

Annexure 2

NVG Principles

1. Businesses should conduct and govern themselves with Ethics, Transparency and
Accountability
2. Businesses should provide goods and services that are safe and contribute to sustainability
throughout their life cycle
3. Businesses should promote the well-being of all employees
4. Businesses should respect the interests of, and be responsive towards all stakeholders,
especially those who are disadvantaged, vulnerable and marginalised
5. Businesses should respect and promote human rights
6. Businesses should respect, protect and make efforts to restore the environment
7. Businesses, when engaged in influencing public and regulatory policy, should do so in a
responsible manner
8. Businesses should support inclusive growth and equitable development
9. Businesses should engage with and provide value to their customers and consumers in a
responsible manner

Annexure 3

Principle-Wise Performance

Principle 1: Integrity, Ethics, Transparency and Accountability

The Company has constituted a Corporate Social Responsibility and Governance Committee
which assists the Board in formulating and monitoring the implementation of sustainability and
overall governance regarding social responsibility.

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The Committee also oversees the implementation of policies mentioned in the Business
responsibility manual covering the principles and core elements of the Guidelines. The
Committee reviews the Business Responsibility Report and recommends the Board for the
approval.

Principle 2: Safe and sustainable goods and services

As a global business leader, RIL continuously endeavours to address environmental and social
concerns, which is reflected in its business processes and products. Some products created
during FY 2019-20 have been listed below:

• RELX Composites
• Ionic liquids replacing Hydrofluoric Acid – replacing hazardous catalyst
• Recycling of PET bottles

Principle 3: Employee Well-Being

Health and safety of employees is of paramount importance to RIL, and to create safe
workplace, emphasis is given on health and safety related training programmes.

RIL’s contractual employees receive mandatory safety training before entering the Company’s
premises and also acquire on-the-job training through the contractor and the Company.

At RIL, 94% of its permanent workforce received safety and skill upgradation trainings. 59%
of women employees received trainings through classroom and web-based training
programmes.

Principle 4: Stakeholder Engagement

RIL has chosen to address the societal issues and engage with the disadvantaged, vulnerable
and marginalised stakeholders. The Company has identified communities from the poor and
marginal sections of the society as its primary stakeholders. These include the rural population
living below subsistence level, children and youth from poor socio-economic background,
adolescent girls and women, HIV patients, visually impaired and others. The Company directly
engages with these communities to understand their needs and other major challenges impeding

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their development and accordingly plan interventions to benefit them. In the process, the
communities are also capacitated and engaged to carry forward the development agenda.

Principle 5: Respect and promote Human Rights

The Company requires its suppliers to comply fully with all legal requirements regarding
labour practices and human rights, including freedom of association and collective bargaining.
There is a robust mechanism in place to monitor the performance of the significant suppliers,
especially with respect to their performance against the Company’s Supplier Code of Conduct.
The Company prohibits child, forced or compulsory labour in any of its operations and also
ensure the same is followed across its supply chain.

Principle 6: Product Life Cycle Sustainability

As a global business leader, RIL continuously endeavours to address that environmental and
social concerns that are reflected in its business processes and products. Some such products
created during FY 2019-20 have been listed below:

• PET-based fabric recycling.

• Slag waste to chemicals – Green process to recover metals from slag waste
• Ionic liquids replacing Hydrofluoric Acid (HF) – Replacing hazardous catalyst

Principle 9: Provide value to consumer responsibly

RIL has introduced products such as Recron® GreenGold, which uses CertainT, a proprietary
DNA-molecular based traceability system that identifies, tags, tests and tracks the original
recycled PET pellets to finished products. For improving human health impacts and the
protection of environment, the Company has sourced REACH (Registration, Evaluation,
Authorisation and Restriction of Chemicals) compliant materials, and its requirements include
that its Tier 1 suppliers also procure REACH-compliant materials. Management and staff at
RIL facilities, assets and functions identify and manage risks, promoting safe, compliant and
reliable operations. RIL is committed towards customer safety through its business operations.
RIL reviews the environmental, health and safety impacts of its products continuously to ensure
that they do not pose any risks to people and the environment.

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Annexure 4- National Guidelines On Responsible Business Conduct

General Disclosures

Company Details : Year of registration: 1973

Employees : Percentage of women- On the Governance Structure: 14%

Associate entities :

• Names of subsidiary / associate and JV companies: 166 / 14

• Details of Trust/Society/Section 8 company to further its CSR agenda:

Names: Reliance Foundation, Reliance Foundation Youth Sports and Reliance

Foundation Institution of Education and Research

Organisation form and year of establishment: Not-for-profit companies established in

2010, 2016 and 2017, respectively, under Section 8 of the Companies Act, 2013.

Main objects/purpose: To create and support meaningful and innovative activities that
address some of India’s most pressing development challenges, with the aim of
enabling lives, living and livelihood for a stronger and inclusive India

Amounts and sources of funds received in the reporting year: Rs 1,022 crore received
towards CSR funding. Of this, Rs 909 crore is from RIL and the rest is from the Group
Companies.

Management And Process Disclosures

Governance, Leadership And Oversight

All the policies are approved by the Chairman, the board or its committees. Corporate Social
Responsibility and Governance (CSR&G) Committee of the Board of Directors is responsible
for the implementation of RIL’s policies. The CSR&G Committee oversees the sustainability
performance on a continuous basis. The Committee reviews the policies and practices

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developed in line with the sustainability strategy. A dedicated Legal Compliance Cell ensures
that the Company conducts its businesses with high standards of legal, statutory and regulatory
compliances. The CSR&G Committee reviews the business alignment with the principles and
core elements annually.

Stakeholder Engagement

RIL has identified eight internal and external stakeholder groups: Customers, Local
Communities, Employees, Suppliers, Trade Unions, NGOs, Investors & Shareholders and
Government and regulatory authorities

The Company weaves stakeholder engagement throughout the sustainability reporting process,
and the organisation continuously engages the stakeholders as it relates to its business needs
and to understand their priorities

RIL’s CSR policy outlines its commitment towards improving the lives of India’s most
marginal and vulnerable communities. The development initiatives have systematically
analysed and identified the population that is catering to the marginal and vulnerable criteria.

Communications

RIL aims to build strong relationships with its stakeholders and communicate the impacts of
the Company’s policies and procedures through various medium like Supplier meets, Customer
meets, community meetings, Annual General Meetings, workshops, intranet and regular
updates, among others

The performance against the Guidelines is communicated to the stakeholders through

stakeholder interactions, Business Responsibility Report, Annual Report and Sustainability
Report

Sustainability reporting and Business responsibility reporting measure, understand and

communicate the Company’s economic, environmental, social and governance performance,
and then set goals, which helps create positive impact on the society and manage change more
effectively.

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Independent Reasonable Assurance Statement To Reliance Industries Limited On Their
Sustainability Disclosures In The Integrated Annual Report For Financial Year 2019-20

Introduction

KPMG have been locked in to give confirmation on the chosen Sustainability exposures
introduced in the Integrated Annual Report of Reliance Industries Limited for FY 2019-20 and
assumes the liability to give sensible affirmation on the Report content as portrayed in the limit,
extension and constraints, as a feature of the Company's sustainability revealing assurance
process.

Reporting Criteria

RIL’s report has been developed based on the applicable accounting standards and has
incorporated the principles of the International Integrated Reporting Framework into the
Management’s Discussion and Analysis section of the Report.

Its sustainability performance reporting criteria has been derived from the GRI Standards of
the Global Reporting Initiative, United Nation’s Sustainable Development Goals (UN SDGs),
American Petroleum Institute - The International Petroleum Industry Environmental
Conservation Association (API/IPIECA) Sustainability Reporting Guidelines, and Business
Responsibility Reporting Framework based on the principles of National Voluntary Guidelines
on Social, Environmental and Economic Responsibilities of Business (NVG – SEE), World
Business Council for Sustainable Development’s focus areas and Accountability’s
AA1000APS 2008 (Principles of Inclusivity, Materiality and Responsiveness).

Assurance Standards

Assurance is conducted in accordance with reasonable Assurance requirements of International

Federation of Accountants’ (IFAC) International Standard on Assurance Engagement (ISAE)
3000 (Revised) Assurance Engagements other than Audits or Reviews of Historical Financial
Information. Under this standard, we have reviewed the information presented in the report
against the characteristics of relevance, completeness, reliability, neutrality and
understandability

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Assurance Procedures

Involves performing procedures to obtain evidence about the reliability of specified

disclosures. The nature, timing and extent of procedures selected depend on judgment,
including the assessment of the risks of material misstatement of the selected sustainability
disclosures whether due to fraud or error. Assurance procedures also includes:

• Assessment of RIL’s reporting procedures regarding their consistency with the application
of GRI Standards.
• Evaluating the appropriateness of the quantification methods used to arrive at the
sustainability disclosures presented in the Report.
• Verification of systems and procedures used for quantification, collation, and analysis of
sustainability disclosures included in the Report.
• Understanding the appropriateness of various assumptions, estimations and materiality
thresholds used by RIL for data analysis.
• Discussions with the personnel responsible for the evaluation of competence required to
ensure reliability of data and information presented in the Report.
• Assessment of the stakeholder engagement process through personal interviews and review
of relevant documentation.
• Assessment of data reliability and accuracy.

Independence

The assurance was conducted by a multidisciplinary team including professionals with suitable
skills and experience in auditing environmental, social and economic information in line with
the requirements of ISAE 3000 standard. The work was performed in compliance with the
requirements of the IFAC Code of Ethics for Professional Accountants, which required that the
members of the assurance team be independent of the assurance client, in relation to the scope
of this assurance engagement, including not being involved in writing the Report. The Code

57 | P a g e
also includes detailed requirements for practitioners regarding integrity, objectivity,
professional competence and due care, confidentiality and professional behaviour.

Responsibilities

RIL is holds the responsibility for developing the Report contents and for identification of
material sustainability topics, thereby establishing and maintaining appropriate performance
management and internal control systems and derivation of performance data reported. The
assurance engagement is based on the assumption that the data and information provided is
complete and true. Any liability or co-responsibility for any decision a person or entity would
make based on this assurance statement is expressly disclaimed.

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