Proxy Advisory Report
Reliance Industries Limited
BSE Code: 500325 | NSE Code: RELIANCE | ISIN: INE002A01018
Sector: Refineries | Meeting Type: Annual General Meeting
e-Voting Platform: Karvy
e-Voting Period: From 8th June, 2015 to 11th June, 2015
Meeting Date: 12th June, 2015 at 11:00 a.m.
Meeting Venue: Birla Mastushri Sabhagar, 19, New Marine Lines, Mumbai –
400 020, Maharashtra
Notice: Click here | Annual Report: FY2014-15
Company Email: investor_relations@ril.com
Company Phone: +91 22 2278 5000 | Company Fax: +91 22 2278 5111
Company Registered Office: 3rd Floor, Maker Chambers IV, 222 Nariman Point,
Mumbai – 400 021, Maharashtra
Proxy Advisory
Corporate Governance Research
Corporate Governance Scores
Stakeholders’ Education
RELIANCE INDUSTRIES LTD
www.ril.com
Meeting Date: 12th June 2015
Meeting Type: Annual General Meeting
SES RECOMMENDATIONS
TABLE 1 - AGENDA ITEMS AND RECOMMENDATIONS
1
2
3(a)
3(b)
4
5
6
7
8
Resolution
Adoption of Accounts
Declaration of Dividend
Reappointment of Mr. Hital R. Meswani as Director
Reappointment of Mr. P.M.S. Prasad as Director
Appointment of Statutory Auditors
Appointment of Mr. Raminder Gujral as Independent Director
Continuation of Mr. Pawan Kumar Kapil as Executive Director
Ratification of Remuneration to Cost Auditors
Private placement of Non-convertible Debentures
Type
Recommendation
O
O
O
O
O
S
S
S
S
FOR
FOR
FOR
FOR
AGAINST
AGAINST
FOR
FOR
FOR
Focus#
C/G
T
MAY, 2015
S. No.
O – Ordinary Resolution; S – Special Resolution
# Focus terminology
C –Compliance: The Company has not met statutory compliance requirements.
F – Fairness: The Company has proposed steps which may lead to undue advantage of a particular class of shareholders and can have adverse
impact on non-controlling shareholders including minority shareholders
G – Governance: SES questions the governance practices of the Company. The Company may have complied with the statutory requirements
in letter. However, SES finds governance issues as per its standards.
T– Disclosures & Transparency: The Company has not made adequate disclosures necessary for shareholders to make an informed decision.
The Company has intentionally or unintentionally kept the shareholders in dark.
EXPLANATION
In view of the fact that e-Voting neither has any scope of interaction of shareholders with the management, nor there is any
possibility for amendment of resolution and management cannot explain its rationale any further than what is provided in
Notice, therefore to ease decision making and e-voting process for the users of the reports SES has discontinued using
recommendations such as - MODIFY, SPLIT, WITHDRAW and CONDITIONAL FOR/ AGAINST. Henceforth SES will give only FOR
or AGAINST recommendation. However in Analysis section of the Report, SES will continue to analyse and indicate any of the
discontinued recommendations subject to further disclosures etc. This will enable the companies to draft the future notices
in a manner which will give relevant information to shareholders to take a considered decision.
TECHNICAL NON-COMPLIANCE
The Company is technically non-compliant with the provision of Section 12(3)(c) of the Companies Act, 2013
which provides as under:
(3) Every company shall—
(c) get its name, address of its registered office and the Corporate Identity Number along with
telephone number, fax number, if any, e-mail and website addresses, if any, printed in all its
business letters, billheads, letter papers and in all its notices and other official publications;
The Company has not disclosed its Telephone number and Fax number of registered office in the notice of AGM
as available on the BSE website. However it has printed all the information as mentioned in Section 12(3)(c) in
annual report. Though technically it is non-compliance, however, as there is no governance issue in such noncompliance, SES is not raising any concern.
© 2012 | Stakeholders Empowerment Services | All Rights Reserved
2|P A G E
PROXY ADVISORY REPORT | FOR LIMITED CIRCULATION | REPORT RELEASE DATE: 27
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RESEARCH ANALYST: WAHEED SHAIKH
RELIANCE INDUSTRIES LTD
www.ril.com
Meeting Date: 12th June 2015
Meeting Type: Annual General Meeting
KEY ISSUE
The law relating to appointment of Auditors as contained in Companies Act is as under;
139. (1) Subject to the provisions of this Chapter, every company shall, at the first annual general meeting, appoint
an individual or a firm as an auditor who shall hold office from the conclusion of that meeting till the conclusion of
its sixth annual general meeting and thereafter till the conclusion of every sixth meeting and the manner and
procedure of selection of auditors by the members of the company at such meeting shall be such as may be
prescribed:
Provided that the company shall place the matter relating to such appointment for ratification by members at every
annual general meeting:
Explanation — For the purposes of this Chapter, “appointment” includes reappointment.
139(2) No listed company or a company belonging to such class or classes of companies as may be prescribed, shall
appoint or re-appoint—
TH
an individual as auditor for more than one term of five consecutive years; and
an audit firm as auditor for more than two terms of five consecutive years:
Provided that—
Provided further that as on the date of appointment no audit firm having a common partner or partners to the
other audit firm, whose tenure has expired in a company immediately preceding the financial year, shall be
appointed as auditor of the same company for a period of five years:
Provided also that every company, existing on or before the commencement of this Act which is required to comply
with provisions of this sub-section, shall comply with the requirements of this sub-section within three years from
the date of commencement of this Act.
This subsection indicates that the companies have three year time to comply with maximum tenure of two terms or one
term as the case may be. And in order to give effect to this subsection rules were framed and Rule 6 of Chapter 10 reads as
under
6. Manner of rotation of auditors by the companies on expiry of their term.
Illustration explaining rotation in case of audit firm
Number of consecutive years for which an audit
firm has been functioning as auditor in the same
company [in the first AGM held after the
commencement of provisions of section 139(2)]
Maximum number of consecutive
years for which the firm may be
appointed in the same company
(including transitional period)
Aggregate period which the
firm would complete in the
same company in view of
column I and II
I
II
III
3 years
13 years or more
10 years (or more than 10 years)
A plain reading indicates that if an Audit firm has already completed 10 year or more tenure it can be appointed
for a period of three more consecutive years maximum. SES is of the opinion that three consecutive years mean
one appointment/tenure of three consecutive years and the same cannot be split into three terms of one year
each. SES view is based on the logic that the provisions under subsection 2 of section 139 does not suspend
provisions of subsection 1 for three years, on the contrary the same restricts the 5 year tenure to three. The law
has to be read harmoniously.
The Company has availed transitory provision by appointing the same Auditors who had a tenure in excess of 10
years for one more year in AGM held in 18th June, 2014. Therefore it can no longer avail the transitory provisions
this year again.
SES finds that proposed appointment of the Auditor is not in accordance with the law.
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A.
B.
MAY, 2015
This sub section of Companies Act, 2013 provides a tenure of 5 continuous years to every Auditor appointed.
RELIANCE INDUSTRIES LTD
www.ril.com
Meeting Date: 12th June 2015
Meeting Type: Annual General Meeting
COMPANY BACKGROUND
TABLE 2 - MARKET DATA (As on 22nd May, 2015)
2,89,371.91
*Shares
3,23,56,88,765
**PE Ratio
st
Source: Capitaline
*As on 31 March, 2015
(In ₹ Crores)
**Based on EPS for FY 15
TABLE 4: PEER COMPARISON (2014)
2015
2014
2013
3,29,076.00
3,90,117.00
3,60,297.00
4,73,210.09
2,60,060.53
8,721.00
8,936.00
7,998.00
3,417.29
1,468.66
3,37,797.00
3,99,053.00
3,68,295.00
4,76,627.38
2,61,529.19
PBDT
37,956.00
36,607.00
35,749.00
15,685.60
8,195.80
Net Profit
Revenue
Other Income
Total Income
I O C L*
B P C L*
22,719.00
21,984.00
21,003.00
7,019.09
4,060.88
EPS
70.20
68.00
64.80
28.91
56.16
Dividend/Share (₹)
10.00
9.50
9.00
8.70
17.00
Dividend Pay-Out (%)
16.56
16.24
16.14
34.98
35.18
OPM %
12.25
10.21
10.76
4.39
3.67
NPM %
6.90
5.64
5.83
1.48
1.56
Dividend pay-out includes Dividend Distribution Tax. Source: BSE
* Data for FY 14-15 is not yet available
TABLE 5: MAJOR PUBLIC SHAREHOLDERS (%) (MAR'15)
TABLE 6: MAJOR PROMOTERS (%) (MAR'15)
Life Insurance Corporation Of India
9.18
Kankhal Trading LLP
4.59
Reliance Chemicals Limited
1.92
Bhuvanesh Enterprises LLP
4.16
Reliance Polyolefins Limited
1.89
Ajitesh Enterprises LLP
3.93
Abu Dhabi Investment Authority
1.27
Badri Commercials LLP
3.93
Abhayaprada Enterprises LLP
3.85
Trilokesh Commercials LLP
3.85
Petroleum Trust
3.72
SHAREHOLDING PATTERN (In %) (MARCH)
DISCUSSION
23.39
24.85
25.89
26.99
12.56
11.24
11.01
10.71
18.81
18.61
17.76
17.55
45.24
45.30
45.34
44.75
2015
2014
2013
2012
Others
DII
FII
Graph 1: Yearly Shareholding Pattern
Promoter
‘Reliance Chemicals’ and ‘Reliance
Polyolefins’ have been stated as public
shareholders by the Company. However,
shareholders should note that the two
companies are fully owned subsidiaries
of the Company and therefore are
related parties. SES believes that
shareholding by related parties should
not be included in ‘Public shareholding’.
SES recommends the shareholders to
seek clarification on the issue from the
Company. During FY 14-15 promoter
shareholding in the Company decreased
from 45.30% to 45.24% due to fresh
issue of shares under ESOP.
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4|P A G E
MAY, 2015
TABLE 3: FINANCIAL INDICATORS (STANDALONE)
12.74
TH
M Cap (₹ Cr.)
PROXY ADVISORY REPORT | FOR LIMITED CIRCULATION | REPORT RELEASE DATE: 27
894.20
Price (₹)
RELIANCE INDUSTRIES LTD
www.ril.com
Meeting Date: 12th June 2015
Meeting Type: Annual General Meeting
BOARD OF DIRECTORS
Tenure
(Year)
Directorship
[1]Committee
Membership
Pay (₹
Lakh)
Mukesh D. Ambani
MD(P)(C)
Industrialist
34
5
0 (0)
1,500.00
Nikhil R. Meswani
ED(P)(R)
Industry Specialist
29
2
2 (1)
1,203.00
Hital R. Meswani
Up
ED(P)(R)
Industry Specialist
20
3
2 (0)
1,203.00
P.M.S. Prasad
Up
ED(R)
Industry Specialist
6
2
1 (0)
603.00
Pawan Kumar Kapil
Up
ED(R)
Industry Specialist
5
1
0 (0)
241.00
NED(P)(R)(W)
CSR
1
4
0 (0)
83.64
Mansingh L. Bhakta
LID
law & Taxation
38
1
0 (0)
112.00
Yogendra P. Trivedi
ID
Economics
23
8
3 (2)
136.00
Dharam Vir Kapur
ID
Industry Specialist
14
6
4 (3)
127.00
Ashok Misra
ID
Academics
10
2
3 (0)
117.00
Dipak C. Jain
ID
Academics
10
4
2 (0)
111.00
R. A. Mashelkar
ID
Scientist
8
12
4 (0)
128.00
Adil Zainulbhai
ID
Consultant
1
7
6 (4)
128.00
Nita M. Ambani
Reference: ID – Independent director, LID - Lead Independent Director, NED – Non-executive director, ED – Executive director, C –
Chairman, P - Promoter, MD - Managing Director, R - Liable to retire by rotation, W-Women
[1]Committee memberships include committee chairmanships
Up - Director up for appointment/ reappointment
Note: Directorships, committee membership and committee chairmanship includes such positions in Reliance Industries Limited
Items deserving attention due to contentious or governance issues
GRAPH 2 - BOARD PROFILE
Liable to retire by rotation
Board Composition
ID as per
Company: 54%
ID as per SES: 15%
5
NID as per
SES: 85%
7
1
Retiring
Non Retiring
NID as per
Company: 46%
ID
As per provisions of Section 149 and 152 of the Companies
Act, 2013 Independent Directors shall not be liable to retire
by rotation and unless provided by the Articles of the
Company at least 2/3rd of the Non-Independent Directors
should be liable to retire by rotation. The Company is
Compliant with the provisions of the Companies Act, 2013 as
five Non-Independent Directors are/ were appointed as
directors liable to retire by rotation.
ID - Independent Director; NID - Non-Independent Director
As per Clause 49(ii)(A) of the Listing Agreement, the
Company should have at least 33% Independent
Directors if the Chairman of the Board is a Non-Executive
Director and should have at least 50% independent
directors if the Board Chairman is a promoter or an
executive director. As per SES Classification the Company
is non-compliant with the provisions of Clause 49 of
Listing Agreement, as the Company has only 15% ID in
Board Composition.
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Expertise/
Specialization
PROXY ADVISORY REPORT | FOR LIMITED CIRCULATION | REPORT RELEASE DATE: 27
Director
MAY, 2015
TABLE 7 - BOARD PROFILE
RELIANCE INDUSTRIES LTD
www.ril.com
Meeting Date: 12th June 2015
Meeting Type: Annual General Meeting
Number of
Meetings
Attendance <
75%
67%
9
-
50%
0%
4
-
ID
100%
50%
6
-
ID
NID
75%
25%
4
-
ID
ID
33%
33%
1
Mr. Prasad (0/1)
Company
SES
Company
Audit
Stakeholders’
Relationship
Nomination &
Remuneration
CSR
3
ID
NID
100%
4
ID
NID
4
ID
4
Risk Management
3
SES
Reference: ID – Independent director, NID – Non-Independent director, ED – Executive director, C – Chairman, P – Promoter, # - Number
of Members
TABLE 9 - BOARD GOVERNANCE SCORE
Criteria
What is the percentage of Independent Directors on the Board?
Response
Score
Maximum
15%
0
10
How many Independent Directors have tenure greater than 10 years?
5
3
10
How many Independent Directors have Shareholdings > ₹ 1 Cr?
3
3
5
Is the Chairman Independent?
No
0
10
Is there a Lead Independent Director?
Yes
10
10
How many Independent Directors are ex-executive of the Company?
0
10
10
Have all directors been elected by the Company's shareholders?
Yes
10
10
Are any directors on the Board related to each other?
Yes
0
10
4
10
15
Yes
10
10
56
100
How many promoter directors are on the Board?
Did Independent Directors meet atleast once without management?
Score
DIRECTORS’ AFFILIATIONS AND RELATIONSHIPS
1. Mrs. Nita M. Ambani is the spouse of Mr. Mukesh D. Ambani who is promoter director of the Company.
2. Mr. Nikhil Meswani and Mr. Hital Meswani are brothers. They are sons of Mr. Rasiklal Meswani, who was
one of the Founder Directors of the Company.
3. During the year, the Company has paid ` 0.36 Crore as professional fees to M/s. Kanga & Co., a firm in which
Mr. Mansingh L. Bhakta is a partner.
© 2012 | Stakeholders Empowerment Services | All Rights Reserved
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Overall Independence
#
PROXY ADVISORY REPORT | FOR LIMITED CIRCULATION | REPORT RELEASE DATE: 27
Chairman’s
classification
Committee
MAY, 2015
TABLE 8 - BOARD COMMITTEE PERFORMANCE
RELIANCE INDUSTRIES LTD
www.ril.com
Meeting Date: 12th June 2015
Meeting Type: Annual General Meeting
REMUNERATION ANALYSIS
TABLE 10 - EXECUTIVE DIRECTORS' REMUNERATION ANALYSIS
In ₹ Crores
2015
2014
2013
Fixed Pay
Total Pay
Fixed Pay
Total Pay
Fixed Pay
Total Pay
Mukesh D. Ambani
P
5.59
15.00
5.58
15.00
5.65
15.00
Nikhil R. Meswani
P
2.83
12.03
2.92
12.12
2.73
11.05
Hital R. Meswani
P
2.83
12.03
2.91
12.11
2.73
11.05
P.M.S. Prasad
NP
2.36
6.03
2.36
6.03
2.35
5.47
Pawan Kumar Kapil
NP
1.34
2.41
1.44
2.49
1.34
1.99
MAY, 2015
Note: Fixed pay includes basic pay, perquisites & allowances. P- Promoter, NP- Non- Promoter
₹ 15.00
₹ 15.00
₹ 15.00
₹ 15.00
₹ 15.00
16
12
96.54
88.19
69.93
73.08
79.52
8
4
0
2011
2012
2013
2014
2015
MD (RHS)
Indexed TSR (LHS)
Graph 3: Executive Compensation vs. Total Shareholders Return
₹ 13.02
TH
20
₹ 4.22
₹ 0.84
Executive
₹ 1.23
Non-Executive
Promoter
Non-Promoter
Graph 4: Average director remuneratiion
Note: Indexed TSR (Total Shareholders Return) represents the value of ` 100 invested in the Company at beginning of a 5-year period
starting 1 April 2009. One period return is calculated as (Final Price – Initial Price + Dividend) / Initial Price.
Mr. Ambani, the Managing Director of the Company, is the highest paid member of the board followed by
Meswani brothers, all of which belongs to promoter group. The other non-promoter executive director Mr.
Prasad and Mr. Kapil has paid remuneration of ` 6.03 Crores and ` 2.41 Crores respectively during FY 14/15. The
aggregate remuneration paid to the executive directors of the Company was 47.50 Crores in FY14/15 of which
82.23% is paid to promoter directors. SES believes that the remuneration policy of the Company is skewed in
the favour of the promoter directors.
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140
120
100
80
60
40
20
0
Director Remuneration
Indexed TSR
DISCUSSION - INDEXED TSR vs. EXECUTIVE REMUNERATION GROWTH
RELIANCE INDUSTRIES LTD
www.ril.com
Meeting Date: 12th June 2015
Meeting Type: Annual General Meeting
DISCLOSURES
DISCLOSURE REQUIRED IN DIRECTOR’S REPORT
Corporate Social Responsibility Committee
Composition
☑
Risk Management Policy
☑
Corporate Social Responsibility Policy
☑
Performance evaluation of Board,
Committees and Directors
☑
Corporate Social Responsibility Activities
☑
Related Party Transactions
☑
Corporate Social Responsibility Spending
☑
Ratio of the remuneration of each director
to the median employees remuneration
☑
Extract of the Annual Return
☑
Secretarial Audit Report
☑
Statement to the effect that independent
director possesses appropriate balance of
skills, experience and knowledge
Receipt of commission by a director from
the holding company or subsidiary company
☑
Declaration by Independent Directors
☑
Establishment of Vigil Mechanism
☑
Particulars of loans, guarantees or
investments
☑
Voting rights not exercised directly by
employees for shares to the ESOP scheme
☑
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☑
Company’s policy of appointment and
remuneration of directors, KMP and
employees
Criteria for determining qualifications,
positive attributes, director’s independence
☑
TH
☑
MAY, 2015
The Companies Act, 2013 and Listing Agreement requires the listed companies to make certain disclosures in
the Annual Report & Board of Directors Report. The table below shows the status of compliance of such some
important requirements by the Company.
RELIANCE INDUSTRIES LTD
www.ril.com
Meeting Date: 12th June 2015
Meeting Type: Annual General Meeting
RESOLUTION ANALYSIS
RESOLUTION 1: ADOPTION OF ACCOUNTS
To consider and adopt:
a) The audited financial statements of the Company for the financial year ended March 31, 2015 the Reports
of the Board of Directors and Auditors thereon; and
b) The audited consolidated financial statements of the Company for the financial year ended March 31, 2015.
Note: Detailed analysis of the accounts is not within the scope of SES’ activities. SES accepts the Report of the Directors and
the Auditors to be true and fair representation of the company’s financial position. The analysis below is aimed at enabling
shareholders engage in discussions with the Board/ Management during the AGM.
AUDIT QUALIFICATIONS
The Auditors have not made any qualifications in their report.
AUDITORS’ COMMENTS ON STANDALONE ACCOUNTS
The Auditors states that the financial statements and other financial information include the Company’s
proportionate share in jointly controlled assets of ` 967 Crores, liabilities of ` 190 Crores, expenditure of ` 440
Crores and the elements making up the Cash Flow Statement and related disclosures in respect of an
Unincorporated Joint Venture which is based on statements from the respective Operators and certified by the
management. The Auditors have not raised any concern in this regard.
AUDITORS’ COMMENTS ON CONSOLIDATED ACCOUNTS
Unaudited accounts of the following entities have been included in the consolidated accounts:
Consolidated Entity (all figures in ` Cr)
Certain Subsidiaries & Associate
Total assets
Total revenue
5,548.00
Net profit
11.00
Net cash flows
Nil
2.00
Source: Company’s Annual Reports
The amount is non-material with respect to the consolidated accounts of the Company.
ACCOUNTING POLICIES
These financial statements have been prepared to comply with the Generally Accepted Accounting Principles in
India (Indian GAAP), including the Accounting Standards notified under the relevant provisions of the Companies
Act, 2013.
FINANCIAL INDICATORS
Debtors Turnover
FY 14/15
FY 13/14
70.60
36.58
Shift
92.99%
Company’s Discussion
No discussion by the Company
© 2012 | Stakeholders Empowerment Services | All Rights Reserved
9|P A G E
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SES ANALYSIS
PROXY ADVISORY REPORT | FOR LIMITED CIRCULATION | REPORT RELEASE DATE: 27
This is a standard resolution. The Auditors have not raised any concern. No governance issues have been
identified. SES recommends that shareholders vote FOR the resolution.
MAY, 2015
SES RECOMMENDATION
RELIANCE INDUSTRIES LTD
www.ril.com
Meeting Date: 12th June 2015
Meeting Type: Annual General Meeting
FY 14/15
FY 13/14
9.00
9.09
Inventory Turnover
Interest Coverage Ratio
Shift
Company’s Discussion
-0.92%
No discussion by the Company
17.04
12.42
37.18%
Current Ratio
1.27
1.42
-10.16%
-
Debt Equity Ratio
0.41
0.43
-4.92%
-
12.25%
10.21%
20.07%
-
6.90%
5.64%
22.51%
-
10.72%
10.81%
-0.78%
-
Operating Profit Margin
Net Profit Margin
Operating Cash Flow/ Sales
(All figures in ` Crore)
FY 14/15
Total contingent liabilities
Net worth of the Company
FY 13/14
57,105.00
44,958.00
2,16,159.00
1,97,074.00
26.42%
22.81%
Contingent liabilities as a percentage of net worth
Source: Company’s Annual Reports
Major portion of contingent liabilities is constituted by guarantees.
RELATED PARTY TRANSACTIONS
Outstanding (` Crore)
Loans, Advances and Deposits Given
Receivables
FY 14/15
FY 13/14
26,752.00
26,106.00
2.47%
2,417.00
4,659.00
-48.12%
-
715.00
689.00
3.77%
-
Payables
Shift
Comments
Major components of Loans
to 100% subsidiaries
Source: Company’s Annual Reports
STANDALONE VS CONSOLIDATED ACCOUNTS
(In ` Crore)
Standalone Accounts
Consolidated Accounts
FY 14/15
FY 13/14
FY 12/13
FY 14/15
FY 13/14
FY 12/13
3,29,076.00
3,90,117.00
3,60,297.00
3,75,435.00
4,34,460.00
3,97,062.00
22,719.00
21,984.00
21,003.00
23,566.00
22,493.00
20,879.00
Total Assets
3,97,785.00
3,67,583.00
3,18,511.00
5,04,486.00
4,28,843.00
3,62,357.00
Net Worth
2,16,159.00
1,97,074.00
1,79,995.00
2,18,482.00
1,98,670.00
1,82,030.00
Revenue
Net Profit
Source: Company’s Annual Reports
The Company at year end has about 1.06 lac crores as capital work in progress (CWIP). A large portion of CWIP
is in subsidiaries, therefore despite increase of assets on consolidated level proportionate change in turnover is
not observed.
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10 | P A G E
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CONTINGENT LIABILITIES
PROXY ADVISORY REPORT | FOR LIMITED CIRCULATION | REPORT RELEASE DATE: 27
SES is of the opinion that board should take note of structural shift (positive and negative both) in various financial
parameters which have a bearing on company’s future performance and positioning in market place and disclose an analysis
of the same to shareholders. SES believes that 25% change either way should be the threshold for triggering analysis and
disclosure requirements.
MAY, 2015
Source: Company’s Annual Reports
RELIANCE INDUSTRIES LTD
www.ril.com
Meeting Date: 12th June 2015
Meeting Type: Annual General Meeting
RESOLUTION 2: DECLARATION OF DIVIDEND
Declaration of Dividend on Equity Shares.

The Company has proposed a dividend of ` 10.00 per equity share for the FY 2014-15.
SES RECOMMENDATION
No concern has been identified. The Company has sufficient cash to pay the dividend. SES recommends that
shareholders vote FOR the resolution.
60
64.80
68.00
70.20
16.14%
16.24%
16.56%
40
20
20%
15%
10%
9.00
9.50
10.00
0
5%
0%
2013
Dividend (LHS)
2014
EPS (LHS)
2015
Payout (RHS)
Graph 5: Dividend Payout and EPS
© 2012 | Stakeholders Empowerment Services | All Rights Reserved
TH
80
The Board has recommended a dividend of `
10.00 per share. The payment of dividend will
lead to a cash outflow of ` 3,559.00 Crores
(including tax on dividend of ` 615.00 Crores)
from the Company. The Company has
sufficient cash to pay the dividend.
PROXY ADVISORY REPORT | FOR LIMITED CIRCULATION | REPORT RELEASE DATE: 27
Dividend and EPS (`)
Dividend and Earnings
MAY, 2015
SES ANALYSIS
11 | P A G E
RELIANCE INDUSTRIES LTD
www.ril.com
Meeting Date: 12th June 2015
Meeting Type: Annual General Meeting
RESOLUTION 3: REAPPOINTMENT OF EXECUTIVE DIRECTORS
Re-appointment of the following Directors, retiring by rotation:
(a) Mr. Hital R. Meswani
(b) Mr. P.M.S. Prasad
SES RECOMMENDATION
No concern has been identified with respect to profile or performance of Mr. Meswani and Mr. Prasad. SES
recommends that shareholders vote FOR the resolution.
Past Experience
Mr. Hital R. Meswani
Executive Director
Industry Specialist - Petroleum
B.Sc. (Chemical) & B.Sc. (Economics)
Yes
25 Years of experience in Reliance
Group
Mr. P.M.S. Prasad
Executive Director
Industry Specialist - Petrochemicals
B.Sc.
No
34 Years of experience in Reliance
Group
SR (M) & RM (M)
RM (M)
FOR
FOR
Committee positions in the
Company
SES Recommendation
A – Audit Committee, SR – Stakeholders’ Relationship Committee, NR – Nomination & Remuneration Committee, CSR –
Corporate Social Responsibility Committee, RM – Risk Management Committee, M – Member, C - Chairman
PAST REMUNERATION OF THE DIRECTOR
In ` Crore
Executive Director
FY 14/15
FY 13/14
FY 12/13
Fixed Pay
Total Pay
Fixed Pay
Total Pay
Fixed Pay
Total Pay
2.83
12.03
2.91
12.11
2.73
11.05
Hital R. Meswani
P.M.S. Prasad
2.36
6.03
2.36
6.03
2.35
5.47
The remuneration paid to Mr. Meswani and Mr. Prasad is reasonable in comparison to the size and operations
of the Company.
DIRECTORS’ TIME COMMITMENTS
Criteria
Total Directorships
Total Committee memberships
Total Committee Chairmanship
Full time role/ executive position
Mr. Hital R. Meswani
3
2
-
Mr. P.M.S. Prasad
2
1
-
Note: committee memberships include committee chairmanships
DIRECTORS’ PERFORMANCE
Attendance record
Last 3 AGMs
Board meetings held last year
Board meetings in last 3 years (avg.)
Mr. Hital R. Meswani
3/3
100%
100%
© 2012 | Stakeholders Empowerment Services | All Rights Reserved
Mr. P.M.S. Prasad
3/3
100%
100%
12 | P A G E
TH
Current full time position
Functional Area
Education
Part of promoter group?
PROXY ADVISORY REPORT | FOR LIMITED CIRCULATION | REPORT RELEASE DATE: 27
DIRECTOR’S PROFILE
MAY, 2015
SES ANALYSIS
RELIANCE INDUSTRIES LTD
www.ril.com
Meeting Date: 12th June 2015
Meeting Type: Annual General Meeting
RESOLUTION 4 & 7: STATUTORY AUDITORS & COST AUDITORS
#4: Appointment of Auditors and fixing their remuneration.

Appointment for a period of one (1) year.
#7: Approval of the remuneration of the Cost Auditors.
#7: This is a standard resolution under Section 148 of the Companies Act, 2013. No concern has been identified
with respect to remuneration of Cost Auditors. SES recommends that shareholders vote FOR the resolution.
SES ANALYSIS
DISCLOSURES
Name of the auditor up for appointment
Auditors’ eligibility for appointment
Auditors’ independence certificate
Disclosed in the notice of AGM and Annual Report
Disclosed in the Annual Report
Not disclosed
SES is of the opinion that the Company must disclosed the Certificate of independence as required under the
provisions of the Companies Act, 20013 and Rules thereunder.
AUDITORS’ INDEPENDENCE
Auditors
Audit Partners
M/s. Chaturvedi & Shah
Tenure: >19 years D. Chaturvedi
Tenure: >19 years
M/s. Deloitte Haskins & Sells LLP Tenure: 10 years* A. B. Jani
Tenure: 2 years
M/s. Rajendra & Co.
Tenure: >19 years A. R. Shah
Tenure: 9 years
*Prior to appointment of M/s. Deloitte Haskins & Sells LLP in FY 2004-05, M/s Deloitte Touche Tohmatsu
International was the International Auditors of the Company since FY 1996-97. M/s. Deloitte Haskins & Sells LLP
is a member of the Deloitte Touche Tohmatsu group, therefore SES considers that the total association of M/s.
Deloitte Group to be 19 years.
Audit Partner, Mr. Chaturvedi and Mr. Shah, has a tenure of more than 3 years. As per MCA voluntary guidelines
on corporate governance, Audit partner has to be rotated every 3 years.
Financial interests in or association with the company: None Disclosed
© 2012 | Stakeholders Empowerment Services | All Rights Reserved
13 | P A G E
TH
PROXY ADVISORY REPORT | FOR LIMITED CIRCULATION | REPORT RELEASE DATE: 27
#4: The current Auditors, M/s. Chaturvedi & Shah, M/s. Deloitte Haskins & Sells LLP and M/s. Rajendra & Co.
have been associated with the Company for more than 10 years. Provisions of the Companies Act, 2013 “The
Act” state that Auditors should not have tenure of over 10 years. Although the Act and the Rules thereunder
provide a transition period of 3 years in certain cases. SES is of the opinion that the Company should rotate its
Auditors in ensuing AGM. The Company has already utilized the transition period available under the act by
appointing the Auditors for a term of one year in last AGM concluded on 18th June, 2014. The proposed
resolution for appointment of Auditors for a term of one year resulting in violation of law. Therefore SES
recommends that shareholders vote AGAINST the resolution. Further, the new Auditors should be appointed
for a period of 5 years (in accordance with the Companies Act, 2013).
MAY, 2015
SES RECOMMENDATION
RELIANCE INDUSTRIES LTD
www.ril.com
Meeting Date: 12th June 2015
Meeting Type: Annual General Meeting
AUDITORS’ REMUNERATION
Auditors' Remuneration
FY13/14
41%
Audit
Audit-Related
Non Audit
Graph 6: Remuneration Components
11.00
12.00
9.00
10.00
8.00
7.00
8.00
8.00
9.00
6.00
4.00
2.00
2.00
2.00
2.00
0.00
Audit Fee
FY 12/13
FY 13/14
Audit Related Fee
FY 14/15
Non Audit Fee
Graph 7: Historical Trends in Auditors' Remuneration
MAY, 2015
44%
FY14/15
TH
TERM OF APPOINTMENT
The current Auditors, M/s. Chaturvedi & Shah, M/s. Deloitte Haskins & Sells LLP and M/s. Rajendra & Co. have
been associated with the Company for more than 10 years. Provisions of the Companies Act, 2013 “The Act”
state that Auditors should not have tenure of over 10 years. Although the Act and the Rules thereunder provide
for a transition period of 3 years in certain cases, SES is of the opinion that as a good governance practice, the
Company should rotate its Auditors in the current year. Further, the new Auditors should be appointed for a
period of 5 years (in accordance with the Companies Act, 2013).
The provision of section 139 of the Companies Act, 2013 provide for transition period of 3 years to the companies
to comply with the provisions of the Act. The transition period of three years can be avail by the company in one
go either by appointing retiring auditors for a term of 1 year or 2 years or for 3 years but not in three installments
i.e once the appointment of Auditors has been made for a term of up to 3 years, the Company cannot use the
transit period again if earlier utilization was less than 3 year. The reason for this interpretation is that Section
139 of the Act of 2013 mandates appointment of Auditors for 5 years and there is no respite under this section
except one time transitory provision of upto three years. The Company in the proposed resolution seeking
appointment of the above mentioned Auditors, as Statutory Auditors, for a term of 1 year only who have been
associated with the Company for more than 10 years and the Company had utilized the transition period avail
under the by appointing the Auditors for a period of 1 year in the last AGM concluded on 18th June, 2014.
Therefore SES as a good governance policy recommend the rotation of Auditor in the ensuing AGM.
COST AUDITOR REMUNERATION
The Board, on recommendation of the Audit Committee, has approved the appointment and remuneration of
the Cost Auditors of the Company to conduct Audit of cost records of the Company across various segments, for
the financial year ending 31st March, 2016.
Sr.No
1
2
3
4
Name of the Cost Auditor
M/s. Diwanji & Associates
M/s. K.G. Goyal & Associates
M/s. V.J. Talati & Co.
M/s. Kiran J. Mehta & Co.
5
Shri. Suresh D. Shenoy
6
M/s. V. Kumar & Associates
Industry
Chemicals
Chemicals
Chemicals, Oil & Gas and Polyester
Textiles and Chemicals
Polyester, Chemicals and
Petroleum
Polyester
© 2012 | Stakeholders Empowerment Services | All Rights Reserved
Audit fees (` in Lacs)
8.39
3.45
9.04
3.79
8.75
4.96
14 | P A G E
PROXY ADVISORY REPORT | FOR LIMITED CIRCULATION | REPORT RELEASE DATE: 27
9% 11%
50%
44%
Audit fee (in ₹ Cr)
Remuneration components
RELIANCE INDUSTRIES LTD
www.ril.com
Meeting Date: 12th June 2015
Meeting Type: Annual General Meeting
Sr.No
7
8
9
10
Name of the Cost Auditor
M/s. Bandyopadhyaya Bhaumik & Co.
M/s. Shome & Banerjee
M/s. Dilip M. Malkar & Co.
M/s. Shome & Banerjee (Lead Auditor)
Industry
Chemicals
Oil & Gas and Chemicals
Electricity and Chemicals
Lead Audit Fees
Audit fees (` in Lacs)
1.60
7.52
4.22
6.00
PROXY ADVISORY REPORT | FOR LIMITED CIRCULATION | REPORT RELEASE DATE: 27
TH
MAY, 2015
The above mentioned Cost Auditors, have not furnished a certificate regarding their eligibility for appointment
as Cost Auditors of the Company. In terms of Section 148 read with Rule 14 of The Companies (Audit and
Auditors) Rules, 2014, Board is required to appoint Cost Auditors on the recommendation of the Audit
Committee. Further, the remuneration to the Cost auditors is to be approved by the Board (on the
recommendation of the audit committee) and is also required to be ratified subsequently by the shareholders.
No concern has been identified in this regard.
© 2012 | Stakeholders Empowerment Services | All Rights Reserved
15 | P A G E
RELIANCE INDUSTRIES LTD
www.ril.com
Meeting Date: 12th June 2015
Meeting Type: Annual General Meeting
RESOLUTION 5: APPOINTMENT OF INDEPENDENT DIRECTOR
Appointment of Mr. Raminder Singh Gujral as an Independent Director

Appointment for a period of five (5) years.
SES RECOMMENDATION
The Company has not disclosed the total number of directorships and committee memberships of Mr. Gujral as
required under clause 49 (VIII) (E) of the listing agreement. SES feels that proper disclosures have not been made
which would enable shareholders to take informed decision. Due to such non disclosures and non-compliance
SES recommends that shareholders vote AGAINST the resolution.
MAY, 2015
SES ANALYSIS
COMPLIANCE
Yes
TH
Yes
Yes
Yes
Yes
Yes
DIRECTOR’S PROFILE
Criteria
Current full-time position
Functional Area
Education
Past Experience
SES Recommendation
Mr. Raminder Singh Gujral
Not Applicable
Finance
B.A, L.L.B, M.B.A. & M.A.
Retired as Finance Secretary
AGAINST
A – Audit Committee, SR – Stakeholders’ Relationship Committee, NR – Nomination & Remuneration Committee, CSR –
Corporate Social Responsibility Committee, RM – Risk Management Committee, M – Member, C - Chairman
DIRECTORS’ INDEPENDENCE
Criteria
Current tenure/association
Directorships at group companies
Relationships with the Company
Nominee director
Shareholding / ESOPs
SES Classification
Mr. Raminder Singh Gujral
Nil
None
None
No
None
Independent
DIRECTORS’ TIME COMMITMENTS
Criteria
Total Directorships
Total Committee memberships
Total Committee Chairmanship
Full time role/ executive position
*Mr. Raminder Singh Gujral
Not disclosed
Not disclosed
Not disclosed
Not disclosed
© 2012 | Stakeholders Empowerment Services | All Rights Reserved
16 | P A G E
PROXY ADVISORY REPORT | FOR LIMITED CIRCULATION | REPORT RELEASE DATE: 27
Is Company complying with the retirement policy?
Has the Company disclosed the Independence Certificate provided
by the Independent Directors
Has the Company disclosed the terms of appointment of
Independent Directors
Has the Company disclosed Board evaluation and Directors’
Evaluation Policy
Did Independent Directors meet at least once without the
Management
Does the Company has a Lead independent Director?
RELIANCE INDUSTRIES LTD
Meeting Type: Annual General Meeting
www.ril.com
Meeting Date: 12th June 2015
Note: committee memberships include committee chairmanships
PROXY ADVISORY REPORT | FOR LIMITED CIRCULATION | REPORT RELEASE DATE: 27
TH
MAY, 2015
* Mr. Gujral is not yet appointed as director on the Board of Reliance Industries, therefore his directorship in
this company is not considered. He is being appointed from the date of the coming into effect of the resolution
under the AGM. As per clause 49 (VIII) (E) of the listing agreement, in case of the appointment of a new director
or re-appointment of a director the Company should disclose names of companies in which the person holds
the directorship and the membership of committees of the Board. However, no disclosure is made by the
Company regarding the directorship, committee membership & chairmanship in the notice of AGM. Therefore
regardless of suitability of Mr. Gujral for the position of Independent Director, SES has finds that the Resolution
lacks proper disclosures as required/ mandated by law.
© 2012 | Stakeholders Empowerment Services | All Rights Reserved
17 | P A G E
RELIANCE INDUSTRIES LTD
www.ril.com
Meeting Date: 12th June 2015
Meeting Type: Annual General Meeting
RESOLUTION 6: CONTINUATION OF EMPLOYMENT OF EXECUTIVE DIRECTOR
Approval of continuation of employment of Mr. Pawan Kumar Kapil as a Whole-time Director designated as
Executive Director

The Company is seeking shareholders’ approval by way of special resolution for continuation of Mr. Kapil
as Director beyond age of 70 years
SES RECOMMENDATION
No concern has been identified. SES recommends that shareholders vote FOR the resolution.
SES ANALYSIS
MAY, 2015
DIRECTOR’S PROFILE
A – Audit Committee, SR – Stakeholders’ Relationship Committee, NR – Nomination & Remuneration Committee, CSR –
Corporate Social Responsibility Committee, RM – Risk Management Committee, M – Member, C - Chairman
PAST REMUNERATION OF THE DIRECTOR
In ` Crore
Executive Director
FY 14/15
Fixed Pay
Total Pay
FY 13/14
Fixed Pay
Total Pay
FY 12/13
Fixed Pay
Total Pay
Pawan Kumar Kapil
1.34
2.41
1.44
2.49
1.34
1.99
The remuneration paid to Mr. Kapil is reasonable in comparison to the size and operations of the Company.
DIRECTORS’ TIME COMMITMENTS
Criteria
Total Directorships
Total Committee memberships
Total Committee Chairmanship
Full time role/ executive position
Mr. Pawan Kumar Kapil
1
-
Note: committee memberships include committee chairmanships
DIRECTORS’ PERFORMANCE
Attendance record
Last 3 AGMs
Board meetings held last year
Board meetings in last 3 years (avg.)
Mr. Pawan Kumar Kapil
3/3
71%
78%
As required under Section 196(3) of the Companies Act, 2013, the Company is seeking shareholders’ approval
by way of special resolution for continuation of Mr. Kapil as Director beyond 70 years of age. This is an enabling
resolution. No concern has been identified in this regard.
© 2012 | Stakeholders Empowerment Services | All Rights Reserved
18 | P A G E
PROXY ADVISORY REPORT | FOR LIMITED CIRCULATION | REPORT RELEASE DATE: 27
TH
Mr. Pawan Kumar Kapil
Executive Director
Industry Specialist - Refinery
B.E (Chemical Engineering)
No
19 Years of experience in Reliance Group
None
FOR
Current full time position
Functional Area
Education
Part of promoter group?
Past Experience
Committee positions in the Company
SES Recommendation
RELIANCE INDUSTRIES LTD
Meeting Type: Annual General Meeting
www.ril.com
Meeting Date: 12th June 2015
RESOLUTION 8: PRIVATE PLACEMENT OF NON-CONVERTIBLE DEBENTURES
Approval of offer or invitation to subscribe to Non-Convertible Debentures on private placement.
SES RECOMMENDATION
This is an enabling resolution. The debentures to be issued are not convertible into equity shares and thus the
issue will not affect the interests of common shareholders. No concern has been identified in this regard. SES
recommends that shareholders vote FOR the resolution.
Therefore the Company seeks approval of the shareholders by way of a Special Resolution to enable the
Company to offer or invite subscriptions for NCDs on a private placement basis.
The Company also states that none of the directors, key managerial personnel or their relatives are concerned
or interested in the resolution.
© 2012 | Stakeholders Empowerment Services | All Rights Reserved
19 | P A G E
TH
The Company states that in order to augment long term resources for financing, inter alia, the ongoing capital
expenditure and for general corporate purposes, it may offer or invite subscription for secured / unsecured
redeemable non-convertible debentures, in one or more series / tranches on private placement, issuable /
redeemable at par.
PROXY ADVISORY REPORT | FOR LIMITED CIRCULATION | REPORT RELEASE DATE: 27
Keeping in view the aforesaid legal provisions, the members of the Company, at the 40th Annual General Meeting
held on 18th June, 2014, had authorised the Board of Directors of the Company to offer or invite subscription for
non-convertible debentures, in one or more series/ tranches, aggregating up to ` 10,000 crore on private
placement. The members may note that the Company has not made any private placement of non-convertible
debentures pursuant to the said authorisation.
MAY, 2015
SES ANALYSIS
RELIANCE INDUSTRIES LTD
www.ril.com
Meeting Date: 12th June 2015
Meeting Type: Annual General Meeting
DISCLAIMERS
Sources
Company Information
Only publicly available data has been used while making the report. Our
data sources include: BSE, NSE, SEBI, Capitaline, Moneycontrol,
Businessweek, Reuters, Annual Reports, IPO Documents and Company
Website.
The recommendations made by SES are based on publicly available
information and conform to SES's stated Proxy-Advisory Guidelines.
Further, SES analysis is recommendatory in nature. SES understands the
different investment needs of our clients. Therefore, SES expects that the
clients will evaluate the effect of their vote on their investments
independently and diligently and will vote accordingly. Subscribers may
also carry out an impact analysis of their votes and keep the same as an
addendum for their records. In our opinion, Institutional investors are
positioned significantly differently from other shareholders due to their
ability to engage the board and the management to bring out desired
result. As a firm, it is our endeavour to improve the level of corporate
governance while not causing any disruption in company's proceedings
and therefore we respect the independence of investors to choose
alternate methods to achieve similar results.
Contact Information
Stakeholders Empowerment
Services
Disclaimer
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www.sesgovernance.com.
While SES has made every effort and has exercised due skill, care and
diligence in compiling this report based on publicly available information,
it neither guarantees its accuracy, completeness or usefulness, nor
assumes any liability whatsoever for any consequence from its use. This
report does not have any approval, express or implied, from any authority,
nor is it required to have such approval. The users are strongly advised to
exercise due diligence while using this report.
This report in no manner constitutes an offer, solicitation or advice to buy
or sell securities, nor solicits votes or proxies on behalf of any party. SES,
which is a not-for-profit Initiative or its staff, has no financial interest in
the companies covered in this report except what is disclosed on its
website.
The report is released in India and SES has ensured that it is in accordance
with Indian laws. Person resident outside India shall ensure that laws in
their country are not violated while using this report; SES shall not be
responsible for any such violation.
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20 | P A G E
TH
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the
written consent of Stakeholders
Empowerment Services
PROXY ADVISORY REPORT | FOR LIMITED CIRCULATION | REPORT RELEASE DATE: 27
The analysts involved in development of this report certify that no part of
any of the research analyst’s compensation was, is, or will be directly or
indirectly related to the specific recommendations or views expressed by
the research analyst(s) in this report.
MAY, 2015
SEBI Reg. No. INH000000016
Analyst Certification