Reliance Industries Ltd.

Transcription

1 Company Profile BSE: NSE: RELIANCE ISIN: INE002A01018 Industry: Refining Index: BSE Sensex /CNX NIFTY Face Value: Rs.10 per share Mkt Price: Rs (4 June 2012) Fiscal Year End: March Promoters i. Mukesh Ambani & family Total Stake % Pledged 44.8% - Financials Particulars Mar 12 (Rs bn) Net Sales 3300 Net Worth 1660 Eq Capital 32.7 Mkt Cap 2640 Overview (Rs) 52 week H-L Current P/E (x) 13.2 Industry P/E (x) 13.9 Current P/B (x) 1.6 Source: IIAS Research Write to us Institutional Investor Advisory Services 15 th Floor, West Wing, PJ Tower Dalal Street, Mumbai solutions@iias.in Meeting Date: Proxy Deadline: 07 June 2012, 11:00 am 05 June 2012, 11:00 am Notice Date: 20 April 2012 Reliance Industries Ltd. Annual General Meeting (AGM) Meeting Venue: Birla Matushri Sabhagar, 19 New Marine Lines, Mumbai Agenda Items No. Type* Description of resolution IIAS Recommendation 1 Ord. Adoption of accounts. See Analysis 2 Ord. Declaration of dividend. FOR 3 Ord. Reappointment of directors (a) M.L. Bhakta, (b) H.R. Meswani (c) D.C. Jain (d) P.M.S. Prasad. 4 Ord. Reappointment of auditors Chaturvedi & Shah, Deloitte Haskins & Sells, and Rajendra & Co. 5 Ord. Reappointment of NR Meswani as executive director and fixing his remuneration. 6 Ord. Reappointment of PK Kapil as executive director and fixing his remuneration. * Ordinary/Special Resolution ^ as non-independent (see analysis on pg 8) Executive Summary (click on respective category for detailed analysis) Accounts Board Appointments Auditors Managerial Remuneration FOR ^ FOR FOR FOR AGAINST FOR FOR The consolidated revenues of Reliance Industries Ltd. ( RIL or the company ) increased by 34.1% over FY11 to Rs bn. PAT increased to Rs. 197 bn, a rise of only 2.2% due to high raw material costs in the core business. We have raised concerns regarding the contingent liabilities and unaudited accounts of subsidiaries, which together aggregate to Rs bn. Any adverse developments here will affect the net worth of the company. The board of RIL has 13 directors, of which seven are independent and five are executive. The posts of chairman and managing director are not separated - the promoter, Mukesh Ambani, is both the chairman and managing director of RIL. Of the directors being reappointed, we have raised concerns about the independence of M.L. Bhakta. He may however be appointed as a non-executive, non-independent direstor. We have expressed out reservations about the tenure of all three auditors. Chaturvedi & Shah, and Rajendra & Co have been auditors for at least 35 years, while Deloitte Haskins and Sells was appointed in FY06. None of the three auditors has changed its signing partner for the last five years. The ratio of non-audit to audit fees has been close to the threshold of 50%. The terms of remuneration for both, N.R. Meswani and P.K. Kapil are openended. The company has not disclosed details of variable pay (amount payable as commissions to N.R. Meswani and performance-linked incentive for P.K. Kapil). However, based on historical analysis and comparison with industry peers, the terms of the proposed remuneration are reasonable. 4 June 2012 Reliance Industries Limited 1 P a g e

2 Financial Performance (Standalone) Particulars (Rs bn except per share figures) FY10 FY11 FY12 Total Income EBITDA EBITDA Margin 16.6% 16.1% 11.8% PAT PAT Margin 8.4% 8.1% 6.0% EPS RONW 12.6% 13.9% 12.3% ROACE 11.4% 12.6% 12.2% Debt/EBITDA Source: Company Filings, IIAS Research Price Performance 20.0% 10.0% 5.9% 5.7% 13.2% 10.0% 0.0% -10.0% 3 yr 5 yr RIL Sensex -20.0% -30.0% -20.6% Nifty -40.0% -38.6% -50.0% Source: IIAS Research List of shareholders holding more than 1% in RIL Sl. No. Name of the Shareholder No. of Shares held Shares as % of Total No. (millions) of Shares 1 Life Insurance Corporation of India Reliance Chemicals Limited Reliance Polyolefins Limited Franklin Templeton Investment Funds Government of Singapore Total Source: BSE Change in Shareholding Pattern (%) Year Promoter DII FII Others Mar Dec Sep Jun Mar Shareholding Pattern Others, 27.0 Promoter, 44.8 Mar Mar Mar Source: BSE FII, 17.6 As of 31 March 2012, Source: BSE DII, June 2012 Reliance Industries Limited 2 P a g e

3 Category: Accounts Resolution 1: Adoption of Accounts. To consider and adopt the financial statements for the year ended 31 March 2012 together with the reports of the directors and auditors thereon. IIAS Evaluation Parameters for Adoption of Accounts Parameter Evaluation Risk Level Details Are the accounts qualified? No - Are the contingent liabilities likely to have a material impact on the net worth? Yes Moderate Refer Box 1 Have the financials of the company been restated in the past five/three years? No - Has the company changed its accounting policy in the last two years? No - Does the audit committee comprise of a majority of independent directors and financial Yes - experts? Other matters Moderate Refer Box 1 Overall Moderate Source: Company Filings, IIAS Research Discussion IIAS does not provide voting recommendations on the resolution for adoption of accounts. Our comments on the financial results, directors report, auditors reports and annexures to auditors reports, management discussions and notes to accounts are given below: Box 1: Observations on Accounts Items Performance Discussion On the income side, standalone revenues from operations increased by 31.4% to Rs bn. On the costs side, consumption of raw materials increased by 42% to Rs bn on account of higher crude oil prices. Profits declined marginally over FY11 EBITDA decreased by 3.3% to Rs. 398 bn and PAT declined 1.2% to Rs. 200 bn. Business Segments Provisions The company s main business segments span multiple stages of the petroleum value chain. In calculating contribution of business segments to total revenues, we have excluded inter-segment transactions. The segments along with their contribution to total revenues (consolidated) are given below. Petrochemicals Production and marketing of petrochemical products like polyethylene, polyester yarn, polyester fibre, aromatics etc. This segment contributed 23.4% to total revenues. Refining Production and marketing of petroleum products. This segment contributed 70.2% to total revenues. Oil and Gas Exploration, production and development of crude oil and natural gas. This segment contributed 3.8% to total revenues. Others Business segments not reportable separately this year including textile, retail business, SEZ development and telecom and broadband business. This segment contributed 2.6% to total revenues. Exports accounted for 61.7% of revenues from the refining and petrochemicals business segments. The provisions of the company aggregate to Rs.48 bn, including short term provisions (Rs. 44 bn on account of proposed dividend, customs and excise duties and taxes) and long term provisions for annuities, liabilities for derivative transactions etc. The total provisions amount to 2.8% of the net worth of the company. 4 June 2012 Reliance Industries Limited 3 P a g e

4 Contingent Liabilities Deferred Tax The claims against the company not acknowledged as debts amount to Rs bn. Additionally, the company has disputed a demand for income tax outstanding of Rs 12.9 bn. The disputed liabilities of the company add up to Rs bn. If guarantees to banks and financial institutions on behalf of subsidiaries etc. are taken into consideration, the total contingent liabilities and disputed claims add up to Rs 127 bn. This is 7.5% of consolidated net worth. The deferred tax liability at the end of year stood at Rs 121 billion in FY12. Other observations Source: Company Filings, IIAS Research The foreign currency exposure left unhedged by the company amounted to Rs. 899 bn. The statutory auditors have not audited the financial statements of certain subsidiaries having total assets of Rs.22 bn and total revenues are Rs.0.9 bn. These statements have been audited by other auditors. In addition, other subsidiaries and joint ventures with assets of Rs bn and revenues of Rs85.3 bn have unaudited financial statements. These statements have been compiled by the management and have not been verified by independent auditors. The unaudited financials aggregate to Rs bn in assets and Rs bn in revenues. These and disputed liabilities add up to Rs bn, or 14.4% of net worth. Thus, any adverse developments here will materially affect the net worth of the company. 4 June 2012 Reliance Industries Limited 4 P a g e

5 Resolution 2: Declaration of dividend. To declare a final dividend of Rs. 8.5 per share having face value of Rs. 10. IIAS Evaluation Parameters for Dividend Payout Parameters Result Risk Level Details Has the payout ratio been consistent over the last three/five years? Yes - refer Table 1 Is the payout ratio in line with industry peers? No Low See discussion Is the growth in dividend commensurate with the growth in profit? Yes - refer Table 1 Has the company generated enough cash to pay the proposed dividend? Yes - refer Table 1 Does the company have a stated dividend policy? No Low IIAS Recommendation FOR Discussion Over the last three years, RIL has had an average dividend payout ratio of around 12%. During the same time, consolidated profits have grown at a CAGR of 11.4%. The company s cash flows from operations are sufficient to pay the proposed dividends (refer Table 1 below). Table 1: Key ratios (Consolidated) Particulars in Rs bn Mar 10 Mar 11 Mar 12 Profit after tax Cash flow from operations Closing Cash Balance Interim dividends Final proposed dividend Total Dividend Payout Ratio (industry average = 18.7%) 14.8% 9.9% 14.4% Source: IIAS Research, Reuters We note that RIL s dividend payout at 14.8% is lower than the industry average (18.7%). However, the company has also been returning money to shareholders via share repurchases. In FY12, the company repurchased 3.6 mn shares at Rs. 870 as part of a buyback scheme to repurchase 120 mn shares at the same price. Overall, we believe that dividend payout is adequate and we recommend voting FOR the resolution. 4 June 2012 Reliance Industries Limited 5 P a g e

6 Category: Board Appointments Resolution 3: Reappointment of directors. Resolution 3a: To reappoint M.L. Bhakta as director. Resolution 3b: To reappoint H.R. Meswani as director. Resolution 3c: To reappoint D.C. Jain as director. Resolution 3d: To reappoint P.M.S. Prasad as director. IIAS Evaluation Parameters for Board Appointments Parameter Risk Level Details Is the chairman of the board an independent director? No High Refer Table 2 Is there a separation in the roles between the Chairman and CEO? No High Refer Table 2 Proportion of independent directors on the board 54%* Low Refer Table 2 Proportion of non-executive directors on the board 62% Low Refer Table 2 Is there at least one woman director on the board? No Low Does the company have a policy on the retirement age of directors? No Moderate Does the company have a policy on the tenure of directors? No Moderate Do all the board committees have at least one independent director? No High** Is there any whistleblower policy for the independent directors? No Low Overall High Source: Company Filings, IIAS Research * According to IIAS definition, the percentage of independent directors is 23.1% ** The finance committee has no independent director. Table 2: Board Composition Sl. No Name of director IIAS Director Category Occupation Age Tenure (yrs) % of attendance Compensation (Rs.mn) 1 Mukesh D. Ambani Promoter Chairman & MD % Nikhil R. Meswani 3 Hital R. Meswani 4 P.M.S. Prasad 5 Pawan Kumar Kapil 6 R. H. Ambani 7 M. L. Bhakta 8 Y. P. Trivedi 9 Dr. D. V. Kapur 10 M. P. Modi Executive Executive Executive Executive Non-executive, Nonindependent Nonindependent, Non-executive Nonindependent, Non-executive Nonindependent, Non-executive Nonindependent, Head Petrochemicals Division Head Petroleum, Manufacturing, Technology & Projects Head Upstream and Refining Head Central Technical Services % % % % 19.9 Retired % 2.2 Legal advisor % 2.3 Senior advocate, Supreme Court % 2.5 Former MD, NTPC* % 2.4 Fellow, Economic Development Institute, % June 2012 Reliance Industries Limited 6 P a g e

7 11 Prof. A. Mishra Non-executive Independent World Bank Former Director, IIT Bombay % Prof. D. C. Jain Independent Dean, INSEAD % Dr. R. A. Mashelkar Independent Scientist % 2.3 Source: Company filings and IIAS research * NTPC:- National Thermal Power Corporation Table 3: Proposed Appointments IIAS Checklist IIAS Director Checklist M.L. Bhakta H.R. Meswani D.C. Jain P.M.S Prasad Category of Appointment Independent Executive Independent Executive IIAS Director Classification Non-Independent Executive Independent Executive Independence and Tenure N.A N.A Age Attendance Other Affiliations Shares Held** ESOPS** Compensation Qualification** IIAS Recommendation FOR FOR FOR FOR **Refer Director Profile section Director Profiles M.L. Bhakta, 79, is the lead independent director of the company. He is a senior partner at Kanga & Company, a leading firm of advocates and solicitors in Mumbai. He has been a non-executive director for at least 35 years and was appointed as independent director in the year M.L. Bhakta He is a member of the remuneration committee and the shareholders /investors grievance committee. He is on the board of four other companies ; (1)Ambuja Cements Limited (2) Micro Inks Limited, (3) JCB India Limited (4)Abhijeet Power Limited He holds 0.3 mn shares in the company as of 31 March, H.R. Meswani, 43, is an executive director of the company. He heads the petroleum, manufacturing, technology and projects division. He graduated in chemical engineering from University of Pennsylvania and a subsequently took an economics degree from Wharton Business School. He joined RIL in 1990 and was appointed as an executive director in H.R. Meswani He is a member of the finance committee, the shareholders /investors grievance committee and the health-safety-&-environment committee. He is on the board of two other companies - (1) Reliance Industrial Investments and Holdings Limited (2) Reliance Commercial Dealers Limited. He holds 0.2 mn shares in the company (as of 31 March 2012). 4 June 2012 Reliance Industries Limited 7 P a g e

8 Prof. D.C. Jain, 54, is an independent director of the company. He has more than 26 years of experience in management education. He is the Dean of INSEAD, a reputed business school in France. D.C. Jain He has a masters degree in management science and a a Ph.D. in Marketing, from University of Texas. He joined the board of RIL in He is a member of the employees stock compensation committee. He is on the board of six other companies - (1) Hindustan Media Ventures Limited (2) HT Global Education (3) John Deere & Company (4) Global Logistic Properties (5) Northern Trust Bank (6) Reliance Retail Limited He does not hold any shares in the company. P.M.S. Prasad, 60, is an executive director of the company he heads the Upstream and Refining division. He has been an employee of RIL for 31 years and he joined the board in He holds Bachelor s degrees in Science and Engineering. P.M.S Prasad He is a member of the Health, Safety & Environment Committee of the company. He is on the board of three other companies - (1) Reliance Commercial Dealers Limited (2) Mangal Deep Commercials Private Limited (3) Nandika Mercantile Private Limited He holds mn shares in the company (as of 31 March 2012). Source: Company filings and IIAS research Discussion M.L. Bhakta, 79, has been associated with RIL for at least 35 years, as a non-executive, non-independent director (from 1976 to 2000) and as an independent director since He has been serving as an independent director for the last 12 years. Given his long association with the company, IIAS does not consider him independent. However, he may be appointed as a non-independent, nonexecutive director. D.C. Jain, 54, was appointed as an independent director of the company in 2005 and has served on the board of RIL for six years till date. Upon reappointment at this AGM and the completion of a third term, he will have served for nine years on the board of RIL as an independent director. IIAS recommends that independent directors should not serve on board for more than nine years. Thus, going forward, IIAS will not consider him as independent should he come up for re-appointment. 4 June 2012 Reliance Industries Limited 8 P a g e

9 Category: Auditor Resolution 4: Re-appointment of statutory auditors and fixing their remuneration. To reappoint Deloitte Haskins and Sells, Chaturvedi & Shah, and Rajendra & Co. as joint auditors of the company and to authorize the board of directors of the company to fix their remuneration. IIAS Recommendation: AGAINST IIAS Evaluation Parameters for Auditor Appointment Parameter Result Risk Level Details Has the Board obtained a Certificate of Independence from the auditor? No Low Is the tenure of the auditor firm more than 6 years? Yes High See discussion Is the audit firm being re-appointed within 6 years from their last appointment? NA Is the tenure of the audit partner more than 3 years? Yes High Does the company have an auditor rotation policy in place? No Moderate Are non-audit to audit fees within acceptable limits i.e less than 50%? No Low Refer Table 4 IIAS Recommendation AGAINST Source: Company Filings, IIAS Research Discussion The company s accounts are jointly audited by Deloitte Haskins and Sells, Rajendra & Co and Chaturvedi & Shah. Of these, Rajendra & Co and Chaturvedi & Shah have been the statutory auditors for at least 35 years. Deloitte Haskins and Sells were appointed as International Accountants in FY97. They were appointed as joint auditors in FY06 and the three firms have been joint auditors since then. None of the three firms has rotated its signing partner in the last five years. IIAS believes that the auditors must be rotated every six years and the signing partner must be rotated every three years to maintain independence. IIAS also recommends that non-audit fees should be less than 50% of the total remuneration paid to auditors. As shown in table 4 below, non-audit fees have consistently been around 50% of total auditor remuneration for the last three years. The ratio was 52.9% this year. Table 4: Auditor s remuneration Particulars (Rs. mn) FY10 FY11 FY12 Audit fees Statutory audit Tax audit Cost Audit Non audit fees Certification and consultation fees Total Non-audit fees Total fees Non-audit to total fees 49.2% 50% 52.9% Source: IIAS Research Chart 1: Distribution of audit and non-audit fees 100% 75% % Threshold 25% % Non-Audit Fees (Rs mn) Audit Fees (Rs. mn) Source: IIAS Research Based on the above, we recommend voting AGAINST the resolution. 4 June 2012 Reliance Industries Limited 9 P a g e

10 Category: Managerial Remuneration Resolution 5: To reappoint N.R. Meswani as Executive Director and fix his remuneration Resolution 6: To reappoint P.K. Kapil as Executive Director and fix his remuneration IIAS Evaluation Parameters for Managerial remuneration N.R. Meswani Parameters Result Risk Level Details Is the remuneration for promoter? No - Refer Table 5 Is the current remuneration higher than peers? No - Refer Table 6 Is the proposed remuneration in line with industry peers? Yes - Refer Table 6 Is there a significant hike in remuneration from previous term/year? No - Refer Table 5 Is the remuneration commensurate with the growth in profits/operations? Yes - Refer Chart 2 Is the proposed resolution open-ended? Yes Moderate Refer Table 5 Is there a component of performance-linked pay in the proposed salary? Yes - Refer Table 5 Does the person have the requisite qualifications? Yes - See discussion Has the company disclosed a clear remuneration policy to the shareholders? Yes - IIAS Recommendation FOR IIAS Evaluation Parameters for Managerial remuneration P.K. Kapil Parameters Result Risk Level Details Is the remuneration for promoter? No - Refer Table 5 Is the current remuneration higher than peers? No - Refer Table 6 Is the proposed remuneration in line with industry peers? Yes - Refer Table 6 Is there a significant hike in remuneration from previous term/year? No - Refer Table 5 Is the remuneration commensurate with the growth in profits/operations? No Low Refer Chart 3 Is the proposed resolution open-ended? Yes Moderate Refer Table 5 Is there a component of performance-linked pay in the proposed salary? Yes - Refer Table 5 Does the person have the requisite qualifications? Yes - See Discussion Has the company disclosed a clear remuneration policy to the shareholders? Yes - IIAS Recommendation FOR Discussion N. R. Meswani, 46, is an executive director of the company he heads the petrochemicals division which contributed 23.4% to the group s revenues and 45.9% to group s net profits. He is the son of R. Meswani, one of the founder-directors of RIL. He joined RIL in 1986 and was promoted to the board as an executive director in He is a chemical engineer, an alumnus of University Institute of Chemical Technology (UICT), Mumbai. He is a member of the finance committee and the shareholders /investors grievance committee. He holds 0.3 mn shares of the company as of 31 March P.K Kapil, 66, is an executive director of the company he is the head of the central technical services department. He joined Reliance in 1996 and was instrumental in setting up the Jamnagar refinery. He was appointed on the board as an executive director in A chemical engineer by qualification, he was formerly an executive director with Indian Oil Corporation where he primarily spearheaded the technical aspect of operations. He is a member of the Health, Safety and Environment committee of the company. He holds mn shares in the company as of 31 March June 2012 Reliance Industries Limited 10 P a g e

11 The terms of appointment for both directors are discussed below. Table 5: Appointment Terms N.R. Meswani and P.K. Kapil N.R. Meswani P.K. Kapil Proposed Proposed Remuneration Sl. Remuneration for Details of remuneration Remuneration (Rs. Remuneration (Rs. for FY12 (Rs. No FY12 (Rs. mn) Mn) Mn) mn) 1 Salary Perquisites and Allowances Total Fixed Component Retirement Benefits* Not specified 1.8 Not specified Commission on net profit Not specified# Performance-linked Incentive - Not specified^ 6.5 Total Total 19.9 * The company has stated that retirement benefits and stock options will not be included in computing the overall limit of remuneration. N.R Meswani and P.K. Kapil did not receive any shares in the company in FY12. # M.R. Meswani, along with M.D Ambani and H.R Meswani, is entitled to receive commissions on net profits. The exact figure to be paid here is not specified, but the total sum paid as commissions to the three of them will not exceed 0.4% of net profit ^ P.K. Kapil has a performance-linked component in his compensation, the details of which are not specified. The proposed increase in the fixed component of N.R Meswani s remuneration is only Rs. 1.1 mn. However, the fixed component itself formed only 25% of his remuneration in FY12, and it is necessary to analyze his total remuneration before commenting on the proposal. Similarly, the fixed component of P.K. Kapil s proposed remuneration remains unchanged; however, his total remuneration contains a performance linked component and that is analyzed below. The charts and Table 6 below show a comparison of N.R. Meswani and P.K Kapil s remuneration with the company s performance and with remuneration of industry peers. Chart 2: Performance vs Pay (N.R. Meswani) Chart 3: Performance vs Pay (P.K Kapil) PAT (RIL) Compensation (N.R. Meswani) Mkt Cap - RIL Compensation (P.K. Kapil) PAT (RIL) Mkt. Cap (RIL) Source: IIAS Research Source: IIAS Research 4 June 2012 Reliance Industries Limited 11 P a g e

12 For peers of RIL, we have considered large, family-owned businesses, namely Jindal Steel Power Ltd., Bajaj Auto Ltd. and Bharti Airtel Ltd. Table 6: Comparison of pay with peers Company Name/Designation Net profits(rs. Bn) Remuneration(Rs. Mn) RIL N.R. Meswani(E.D) RIL P.K. Kapil (E.D) Jindal Steel Power Ltd. (JSPL) Arun Mukherjee(E.D) Bajaj Auto Ltd. Sanjiv Bajaj (E.D) Bharti Airtel Ltd. Manoj Kohli (Joint M.D) Although in absolute terms, N.R. Meswani s compensation is the higher than his peers, we believe it is reasonable considering the size of RIL and the scope of his responsibilities as head of a division that contributes 45.9% to RIL s net profits. Also, the change in compensation is broadly in line with the performance of the company. In the case of P.K Kapil, we find that although the remuneration has increased in FY12 without commensurate growth in profits, the proposed compensation is reasonable considering the scale of RIL s operations. Based on this, we recommend voting FOR both the resolutions. 4 June 2012 Reliance Industries Limited 12 P a g e

13 Disclaimer This document has been prepared by Institutional Investor Advisory Services India Limited (IIAS). IIAS is a full service Institutional Shareholder Advisory Service Company. The information contained herein is from publicly available data or other sources believed to be reliable, but we do not represent that it is accurate or complete and it should not be relied on as such. IIAS shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. This document is provided for assistance only and is not intended to be and must not alone be taken as the basis for any Voting or investment decision. The user assumes the entire risk of any use made of this information. Each recipient of this document should make such investigation as it deems necessary to arrive at an independent evaluation of the individual resolutions which may affect their investment in the securities of companies referred to in this document (including the merits and risks involved). The discussions or views expressed may not be suitable for all investors. This information is strictly confidential and is being furnished to you solely for your information. This information should not be reproduced or redistributed or passed on directly or indirectly in any form to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject IIAS to any registration or licensing requirements within such jurisdiction. The distribution of this document in certain jurisdictions may be restricted by law, and persons in whose possession this document comes, should inform themselves about and observe, any such restrictions. The information given in this document is as of the date of this report and there can be no assurance that future results or events will be consistent with this information. This information is subject to change without any prior notice. IIAS reserves the right to make modifications and alterations to this statement as may be required from time to time. However, IIAS is under no obligation to update or keep the information current. Nevertheless, IIAS is committed to providing independent and transparent recommendation to its client and would be happy to provide any information in response to specific client queries. Neither IIAS nor any of its affiliates, group companies, directors, employees, agents or representatives shall be liable for any damages whether direct, indirect, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information.. The disclosures of interest statements incorporated in this document are provided solely to enhance the transparency and should not be treated as endorsement of the views expressed in the report. The analyst for this report certifies that all of the views expressed in this report accurately reflect his or her personal views about the subject company or companies and its or their securities, and no part of his or her compensation was, is or will be, directly or indirectly related to specific recommendations or views expressed in this report. The information provided in these reports remains, unless otherwise stated, the copyright of IIAS. All layout, design, original artwork, concepts and other Intellectual Properties, remains the property and copyright of IIAS and may not be used in any form or for any purpose whatsoever by any party without the express written permission of the copyright holders. 4 June 2012 Reliance Industries Limited 13 P a g e