Corporate Governance

of
 Company Introduction
Founded by Dhirubhai H. Ambani in 1958
Reliance Industries Limited (RIL) is one of the largest Indian private sector
companies
Fortune Global 500 company.
The company is headquartered in Mumbai, India.
total revenues being more than $ 44 billion.
3.5% of India’s GDP
10% of indirect tax
6% of total exports
 Businesses
Started with textiles -Backward vertical integration
 exploration and production of oil and gas
 petroleum refining and marketing petrochemicals (polyester, fibre intermediates, plastics
and chemicals)
 textiles
 retail
 financial services
 insurance
 power
 telecommunications
 special economic zones.
• Reliance enjoys global leadership in its businesses, being the largest
polyester yarn and fibre producer in the world
• Among the top five to ten producers in the world in major
petrochemical products.

• 2nd July 2002 – Dirubhai Ambani died.

• In 2003 Government of India issued a postal stamp (denomination
5/- INR) in Dhirubhai’s honour. 
• Mukesh was awarded Reliance Industries and IPCL and this group
came to be known, as Reliance Industries Ltd.
• Anil became head of Infocomm, Reliance Energy and Reliance
Capital known as the Anil Dhirubhai Ambani Group
RIL Corporate Governance Philosophy
corporate governance standards must be globally benchmarked.
committed to meeting the aspirations of all our stakeholders.
customers have benefited from high quality products delivered at the
most competitive prices.
employee satisfaction is reflected in the stability of our senior
management, low attrition across various levels and substantially
higher productivity.
Reliance not only adheres to the prescribed corporate practices as per
Clause 49 but is constantly striving to adopt emerging best practices
worldwide.
Since our IPO 32 years back, we have grown revenues and net profit
by a Compounded Annual Growth Rate (CAGR) of 28.42% and
30.91% respectively.
Corporate governance is a journey for constantly improving
sustainable value creation and is an upward moving target.
~ Independent Statutory Auditors :
> M/s Deloitte Haskins and Sells,
> M/s Chaturvedi & Shah (C&S),
> M/s Rajendra & Co.,
~ Guidelines for the Board/Committee Meetings.
~ Key Board activities during the year.
~ Corporate Social Responsibility (CSR).
~ Reporting on Triple Bottom-Line Performance
~ Internal Checks and Balances.
~ Legal Compliance Unit.
~ Shareholders communications.
~ Employees Stock Option Scheme.
~ Best Governance Practices.
~ Role of the Company Secretary in Overall
~ Governance Process.
~ Observance of the Secretarial Standards issued by the Institute of Company Secretaries of
India.
Board Composition
The Board consists of 13 directors, out of
which 7 are independent Directors.
The categories of the Board are as
follows;
◦ Promoter Director
◦ Executive Directors
◦ Non-Executive Non- Independent Directors
◦ Independent Directors
 Lead Independent Director
 Shri Mansingh L. Bhakta
 The role of Lead Independent Director is as follows;

◦ To preside over all meetings of independent Directors.

◦ To ensure that there is adequate and timely flow of information to
independent Directors.
◦ To liaise between the Chairman & Managing Director,the Management and
the independent Directors.
◦ To advise on the necessity of retention or otherwise of consultants who report
directly to the Board or the Independent Directors.
◦ To preside over meetings of the Board and Shareholders when the Chairman
and Managing Director is not present or where he is an interested party.
◦ To perform such other duties as may be delegated to the Lead Independent
Director by the Board / Independent Directors.
 BOARD OF DIRECTORS
 Shri Mukesh D. Ambani
 Shri Nikhil R Meswani
 Shri Hital R. Meswani
 Shri P.M.S. Prasad
 Shri Pawan Kumar Kapil
 Shri Ramniklal H. Ambani
 Shri Mansingh L. Bhakta
 Shri Yogendra P. Trivedi
 Dr. Dharam Vir Kapur
 Shri Mahesh P. Modi
 Prof. Ashok Misra
 Prof. Dipak C. Jain
 Dr. Raghunath Anant Mashelkar
Board Meetings, Board Committee Meetings
and
Procedures
Institutionalized decision making process

 The Board of Directors is the apex body constituted by the

shareholders.
 The Chairman and Managing Director is assisted by the
Executive Directors / senior managerial personnel in

overseeing the functional matters of the Company.

TheBoard has constituted seven standing
Committees;
◦ Audit Committee

◦ Corporate Governance and Stakeholders’ Interface Committee

◦ Employees Stock Compensation Committee

◦ Finance Committee

◦ Health, Safety and Environment Committee

◦ Remuneration Committee

◦ Shareholders’ / Investors’ Grievance Committee

 Scheduling and selection of Agenda Items for Board
meetings
 Minimum six pre-scheduled Board meetings are held every year.
 The meetings are usually held at the Company’s Registered Office at Maker
Chambers IV, 222, Nariman Point, Mumbai - 400 021.
 All divisions/departments of the Company are advised to schedule their
work plans well in advance, particularly with regard to matters requiring
discussion.
 The Board is given presentations covering Finance, Sales, Marketing, major
business segments and operations of the Company.
 The Chairman of the Board and the Company Secretary in consultation with
other concerned members of the senior management, finalize the agenda for
the Board meetings.
Board material distributed in advance

 Agenda and Notes on Agenda are circulated to the Directors, in advance,

in the defined Agenda format.
 All material information is incorporated in the Agenda for facilitating

meaningful and focused discussions at the meeting.

Recording Minutes of proceedings at Board and
Committee meetings
 The Company Secretary records the minutes of the proceedings of
each Board and Committee meeting
 The minutes are entered in the Minutes Book within 30 days from
conclusion of the meeting.
Post Meeting Follow-up Mechanism

 The Guidelines for Board and Committee meetings facilitate an

effective post meeting follow-up, review and reporting process for
the decisions taken by the Board and Committees.
 The important decisions taken at the Board / Committee meetings
are communicated to the departments / divisions concerned
promptly.
Compliance
 The company secretary will prepare the Agenda, Notes on Agenda,
etc..
 He is responsible for and is required to ensure adherence to all the
applicable laws and regulations including the Companies Act, 1956
 Board Meetings held
S.NO. DATE BOARD NO. OF
STRENGTH DIRECTORS
PRESENT
1 April 23, 2009 13 12

2 June 19,2009 13 7

3 July 24,2009 13 12

4 August 21,2009 14 11

5 October 7,2009 14 12

6 October 29,2009 14 12

7 January 22,2010 13 12

8 March 25,2010 13 13
AUDIT COMMITTEE
AUDIT COMMITTEE
• Secretary – Shri Vinod M Ambani
Audit committee-members
◦ Shri Yogendra P. Trivedi (Chairman)
◦ Shri Mahesh P. Modi
◦ Dr. Raghunath A. Mashelkar (upto Aug 21, 2009)
◦ S. Venkataraman (upto July 24, 2009)
◦ Shri R. Ravimohan (from Aug 21, 2009 to December
28, 2009)
 OBJECTIVE
Quality and integrity
Compliance with the legal and regulatory
requirements
PURPOSE OF THE COMMITTEE
Oversee the accounting and financial reporting
process
The various issues of the auditors
TERMS & REFERENCE
POWERS OF THE AUDIT
COMMITTEE
To investigate
Seek information – employee
Obtaining legal advice
To secure the attendance of the outsiders
if necessary
ROLE OF THE AUDIT COMMITTEE

 Oversight of the company’s financial report and

disclosure of the financial information.
 Recommending the board

◦ Appointment

◦ Reappointment

◦ Fixation of audit fees

• Approval of payment to the auditors – other services
 Contd..,
• Reviewing the financial statements before submission to the board
for approval
◦ Changes if any in the accounting policies
◦ Accounting entries including estimates
◦ Significant adjustment made - financial statements
◦ Legal requirements relating to financial statements
◦ Disclosure – party transactions
• Reviewing with the management – the quarterly financial statements
• Reviewing with the management-performance of the auditors
 Contd..,
Reviewing with the management – adequacy of the
internal audit function.
Discussion with the internal auditors – findings
Reviewing the findings of the investigation of the
internal auditors – fraud – management
Discussion with the statutory auditors –before the
commencement of the audit
To look into the reasons of default payments
To review – function – whistle blowing mechanism
 Contd..,
To review the following information:
◦ Management analysis and financial condition and results of
the operations
◦ Statement of significant related party transaction (submitted
by the management)
◦ Management control/letter of internal control weaknesses
◦ Internal audit reports – weaknesses
◦ Appointment of the removal, reappointment of the internal
auditors
◦ Use of funds raised
 AUDIT COMMITTEE MEETINGS
 Six meetings of the Audit Committee were held during the

year ended March 31, 2010, as against the minimum

requirement of four meetings.

 Executives of

◦ Accounts Department

◦ Finance Department

◦ Secretarial Department and Management Audit Cell

 Representatives of the Statutory and Internal Auditors

attend the Audit Committee Meetings.

 The Cost Auditors

◦ appointed by the Company under Section 233B of the

◦ Companies Act, 1956 - cost audit reports are

discussed.
CGSI COMMITTE
The Corporate Governance and
Stakeholders’ Interface Committee
(CGSI) Board comprises three
Independent Directors, namely,
Shri Yogendra P. Trivedi,
Dr. Dharam Vir Kapur and
Shri Mahesh P.Modi.
Functions
Observance and practices of CG
 Provision of correct inputs to the media so
as to preserve and protect the Company’s
image and standing
 Provide correct information to the investors,
institutions and public at large.
Interactions
Cont….

 Ensuring institution of standardised

channels of internal communications across
the Company to facilitate a high level of
disciplined participation.
Recommendation for nomination of
Directors on the Board.
Cont….
 Two meetings of CGSI committee were
held.
 Selection of independent directors
Employees Stock Compensation
Committee
4 directors
formulate detailed terms and conditions of the
Employees Stock Option Scheme includes:
 the quantum of options to be granted under
Employees Stock Option Scheme per
employee and in aggregate
Cont….
 the conditions under which option vested in employees may lapse in case
of termination of employment for misconduct.
 the exercise period within which the employee should exercise the option
 the specified time period within which the employee shall exercise the
vested options in the event of termination or resignation of an employee
 the right of an employee to exercise all the options with in the time period.
the procedure for making a fair and reasonable adjustment to the number of
options and to the exercise price in case of corporate actions such as rights
issues, bonus issues, merger, sale of division and others;

1 meeting were held at the end of the march

Remuneration Committee

No of Members – 3
No of meeting - 2 per Year
 Remuneration Policy
Directed towards rewarding performance
Review of achievement in periodic basis
It is in consonance with existing industry
practice
Remuneration for
Executive directors – 15 crores
Non Executive directors –21 lakhs(per
meeting)
Investor Grievance Committee

No of members – 5
No of meetings per year – 6
Compliance Officer - Shri Vinod M. Ambani,
Company Secretary
Duties
Approvers issue of duplicate share certificate
Oversees and reviews the transfer of securities
Redress shareholders’/ investors’ complaints related
to transfer of shares, non-receipt of Balance Sheet,
non- receipt of declared dividend, etc.
Oversees performance of the Registrar and Transfer
Agents
Monitors implementation and compliance of the
Company’s Code of Conduct for Prohibition of
Insider Trading.
Types of Complaints Number of Complaints
 Non-Receipt of Annual  206
Reports
 Non-Receipt of Dividend
 3513
Warrants
 Non-Receipt of Interest/
Redemption Warrants  524

 Non-Receipt of Certificates  510

 Total
 4753

Complaints handled in the year

2009 - 2010
Corporate Governance Rating
Key Parameters
Equitable treatment of share holders
Ownership Rights of Share holders
Transparency and Disclosures
Composition of the board
Functioning of the Board
Management assessment
Value creation for various Stake holders
Subsidiary Monitoring
Framework
 Financialstatements, in particular the investments
made by the unlisted subsidiary companies, are
reviewed quarterly by the Audit Committee of the
Company

 Allminutes of Board meetings of the unlisted

subsidiary companies are placed before the
Company’s Board regularly

A statement containing all significant transactions

and arrangements entered into by the unlisted
subsidiary companies is placed before the
Company’s Board.
Communication channel
 Quarterly Results
 News Releases, Presentations
 Annual Report
 Reminder to Investors
 Shareholders’ Feedback Survey
 General Shareholder Information
 Company Registration Details
Shareholders’ Feedback Survey
Transparency in RIL

SEBI has issued Show Cause Notices in

connection with the sale of shares of
erstwhile Reliance Petroleum Limited by
the Company. The Company has
submitted its reply to the same.
Required Changes

Related party transactions

Ownership Issues

Shareholder Voting rights

Need of Corporate governance Index

Thank You