RELIANCE INDUSTRIAL INFRASTRUCTURE LIMITED1 · RELIANCE INDUSTRIAL INFRASTRUCTURE LIMITED1 ... delay in respect of dividend warrants, the Company has ... defined Policy Framework

RELIANCE INDUSTRIAL INFRASTRUCTURE LIMITED 1

2 Company Information

3 Notice of Annual General Meeting

5 Report on Corporate Governance

16 Secretarial Audit Report

17 Shareholders' Referencer

30 Directors' Report

32 Auditors' Certificate on Corporate Governance

34 Auditors' Report on Financial Statements

36 Balance Sheet

37 Profit and Loss Account

38 Cash Flow Statement

39 Schedules forming part of Balance Sheet and Profit and Loss Account

44 Significant Accounting Policies and Notes on Accounts

52 List of Investor Service Centres of Karvy

55 Attendance Slip and Proxy Form

Contents

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Board of Directors

Mahesh K. Kamdar Chairman

Chandra Raj Mehta

Sandeep H. Junnarkar

Bharat C. Gosalia

S. C. Malhotra

Dilip V. Dherai Executive Director

Company Secretary

Swatantra Kumar Sethi

Audit Committee

Chandra Raj Mehta Chairman


S. C. Malhotra

Shareholders’ / Investors’ Grievance Committee



Bharat C. Gosalia

Remuneration Committee



S. C. Malhotra

Auditors

Chaturvedi & Shah

Solicitors & Advocates

Kanga & Co.

Bankers

HDFC Bank Limited

ICICI Bank Limited

IDBI Bank Limited

Syndicate Bank

Registered Office

NKM International House, 5th Floor,178 Backbay Reclamation,Behind LIC Yogakshema Building,Babubhai Chinai Road,Mumbai - 400 020.Phone : 022 - 6767 1871Fax : 022 - 6663 1074Website : http://www.riil.ine-mail : [email protected]

Share Transfer Agent

Karvy Computershare Private Limited46, Avenue 4, Street No.1,Banjara Hills, Hyderabad - 500 034.Phone : 040 - 2332 0666/ 0711/ 3031/ 3037Fax : 040-2332 3058Website : http://www.karvy.come-mail : [email protected]

Company Information


Notice is hereby given that the Twentieth Annual General Meetingof the Members of Reliance Industrial Infrastructure Limited will beheld on Wednesday, 2nd July, 2008 at 11.30 a.m., at 4th Floor,Walchand Hirachand Hall, Indian Merchants' Chamber, IMC Marg,Churchgate, Mumbai - 400 020, to transact the following ordinarybusinesses :

1. To consider and adopt the audited Balance Sheet as at 31stMarch, 2008, the Profit and Loss Account for the year endedon that date and the Reports of the Board of Directors andAuditors thereon.

2. To declare a dividend on Equity Shares.

3. To appoint a Director in place of Shri Bharat C. Gosalia, whoretires by rotation and being eligible, offers himself forreappointment.

4. To appoint a Director in place of Shri S. C. Malhotra, whoretires by rotation and being eligible, offers himself forreappointment.

5. To appoint Auditors and to fix their remuneration and in thisregard to consider and if thought fit, to pass, with or withoutmodification(s), the following resolution as an OrdinaryResolution :

"RESOLVED THAT Messrs Chaturvedi & Shah, CharteredAccountants, be and are hereby appointed as Auditors of theCompany, to hold office from the conclusion of this AnnualGeneral Meeting until the conclusion of the next AnnualGeneral Meeting of the Company on such remuneration asshall be fixed by the Board of Directors."

By Order of the Board of Directors

Swatantra Kumar SethiCompany Secretary

Mumbai30th May, 2008

Registered Office:NKM International House, 5th Floor,178 Backbay Reclamation,Behind LIC Yogakshema Building,Babubhai Chinai Road,Mumbai - 400 020e-mail : [email protected]

Notice

NOTES :

1. A Member entitled to attend and vote at the AnnualGeneral Meeting (the Meeting) is entitled to appoint aproxy to attend and vote on a poll instead of himselfand the proxy need not be a Member of the Company.The Instrument appointing the Proxy should, however,be deposited at the Registered Office of the Companynot less than 48 hours before the commencement ofthe Meeting.

2. Corporate Members intending to send their authorisedrepresentatives to attend the Meeting are requested to send acertified copy of the Board Resolution authorising theirrepresentative to attend and vote on their behalf at theMeeting.

3. In terms of Article 143 of the Articles of Association of theCompany, Shri Bharat C. Gosalia and Shri S. C. Malhotra,Directors, retire by rotation at the ensuing Annual GeneralMeeting and being eligible, offer themselves forreappointment. Brief resume of these Directors, nature oftheir expertise in specific functional areas, names ofcompanies in which they hold directorships andmemberships / chairmanships of Board Committees, theirshareholding and relationships between directors inter-se asstipulated under Clause 49 of the Listing Agreement with theStock Exchanges, are provided in the Report on CorporateGovernance forming part of the Annual Report. The Board ofDirectors of the Company commends their respectivereappointments.

4. Members are requested to bring their Attendance Slip alongwith their copy of the Annual Report to the Meeting.

5. Members who hold shares in dematerialised form arerequested to write their DP ID and Client ID and those whohold shares in physical form are requested to write their FolioNumber in the attendance slip for attending the Meeting.

6. In case of joint holders attending the Meeting, only such jointholder who is higher in the order of names will be entitled tovote.

7. (a) The Company has already notified closure of Registerof Members and Transfer Books from Friday,6th June, 2008 to Thursday, 12th June, 2008 (bothdays inclusive) for determining the names of Memberseligible for dividend on Equity Shares.

(b) The dividend on Equity Shares, if declared at theMeeting, will be paid on or after 2nd July, 2008 tothose Members whose names shall appear on theCompany's Register of Members on 5th June, 2008; inrespect of shares held in dematerialised form, thedividend will be paid to Members whose names arefurnished by National Securities Depository Limitedand Central Depository Services (India) Limited asbeneficial owners as on that date.

8. (a) In order to provide protection against fraudulentencashment of dividend warrants, Members who holdshares in physical form are requested to intimate theCompany's Share Transfer Agent, Karvy

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Computershare Private Limited, under the signature ofthe Sole / First joint holder, the following informationto be incorporated on dividend warrants :

(i) Name of the Sole / First joint holder and theFolio Number.

(ii) Particulars of Bank Account, viz. :Name of the Bank;Name of the Branch;Complete address of the Bank with PinCode Number;Account type, whether Savings Account(SA) or Current Account (CA); andBank Account Number.

(b) Members who hold shares in dematerialised form maykindly note that their Bank Account details, asfurnished by their Depositories to the Company, willbe printed on their dividend warrants as per theapplicable regulations of the Depositories and theCompany will not entertain any direct request fromsuch Members for deletion of or change in such BankAccount details. Further, instructions, if any, alreadygiven by such Members in respect of shares held inphysical form will not be automatically applicable toshares held in electronic form. Members who wishto change such Bank Account details are,therefore, requested to advise their DepositoryParticipants about such change with completedetails of the Bank Account.

(c) To avoid loss of dividend warrants in transit and unduedelay in respect of dividend warrants, the Company hasprovided a facility to the Members for remittance ofdividend warrants through the Electronic ClearingSystem (ECS). The ECS facility is available at locationsidentified by Reserve Bank of India from time to timeand covers most of the cities and towns. Membersholding shares in physical form and desirous of availingthis facility are requested to contact the Company'sShare Transfer Agent, Karvy Computershare PrivateLimited.

9. All unclaimed dividends declared upto the financial year ended31st March, 1994 have been transferred to the GeneralRevenue Account of the Central Government as required underthe Companies Unpaid Dividend (Transfer to GeneralRevenue Account of the Central Government) Rules, 1978(the Rules). Members who have not so far claimed orcollected their dividends declared upto the aforesaid financialyear are requested to claim such dividends from the Registrarof Companies, Maharashtra, CGO Complex, 2nd Floor, "A"Wing, CBD-Belapur, Navi Mumbai - 400 614, Telephone(091)(022) 2757 6802, by making an application in Form IIof the Rules.

10. Pursuant to the provisions of Section 205A(5) and 205C ofthe Companies Act, 1956, the Company has transferred theunpaid or unclaimed dividends for the financial years from1994-95 to 1999-2000 to the Investor Education andProtection Fund (IEPF) established by the CentralGovernment.

Dividends for the financial year ended 31st March, 2001 andthereafter, which remain unpaid or unclaimed for a period of7 years from the date they became due for payment will betransferred by the Company to IEPF. Information inrespect of such unclaimed dividends and the last datefor claiming the same are provided in theShareholders' Referencer, forming part of the AnnualReport. Members who have not so far encashed the dividendwarrant(s) for the aforesaid years are requested to seek issueof duplicate warrant(s) by writing to the Company's ShareTransfer Agent, Karvy Computershare Private Limited,immediately.

It may be noted that the Company had sent reminders to theMembers in this regard. Members are requested to notethat no claim shall lie against the Company or IEPF inrespect of any amounts which were unclaimed andunpaid for a period of seven years from the dates thatthey first became due for payment and no paymentshall be made in respect of any such claims.

11. Members who hold shares in physical form in multiple foliosin identical names or joint holding in the same order ofnames are requested to send the share certificates to theCompany's Share Transfer Agent, Karvy ComputersharePrivate Limited, for consolidation into a single folio.

12. Non-resident Indian Members are requested to inform theCompany's Share Transfer Agent, Karvy ComputersharePrivate Limited, immediately of :

(a) Change in their Residential status on return to India forpermanent settlement.

(b) Particulars of their Bank Account maintained in Indiawith complete name, branch, account type, accountnumber and address of the Bank with Pin CodeNumber, if not furnished earlier.

13. Members may please note that the Company has not issuedany new share certificate consequent to change in name ofthe Company from Chembur Patalganga PipelinesLimited to CPPL Limited (with effect from 11thSeptember, 1992) and thereafter to Reliance IndustrialInfrastructure Limited (with effect from 16th March,1994) but has sent change of name stickers to be affixed onthe share certificates. Members holding shares in physicalform who have not received these stickers may please write tothe Share Transfer Agent, Karvy Computershare PrivateLimited, for forwarding the stickers to them.

14. Members are advised to refer to the Shareholders'Referencer provided in the Annual Report.

By Order of the Board of Directors

Swatantra Kumar SethiCompany Secretary

Mumbai30th May, 2008


Corporate Governance is based on the principles of integrity, fairness,equity, transparency, accountability and commitment to values. Goodgovernance practices stem from the culture and mindset of theorganisation. As stakeholders across the globe evince keen interestin the practices and performance of companies, CorporateGovernance has emerged on the centre stage.

Keeping in view the Reliance Corporate Traditions, Reliance IndustrialInfrastructure Limited (the "Company") endeavours to implementthe best Corporate Governance practices by adhering to the welldefined Policy Framework.

The Company continuously reviews its policies and practices ofCorporate Governance with a clear goal not merely to comply withstatutory requirements in letter and spirit but also to implement thebest international practices of Corporate Governance, in the overallinterest of all the stakeholders.

The Company recognises that good Corporate Governance is acontinuing exercise and reiterates its commitment to pursue thehighest standards of Corporate Governance in the overall interest ofall the stakeholders.

The Company's Governance framework is based on the followingmain principles :

Constitution of a Board of Directors of appropriatecomposition, size and commitment to discharge itsresponsibilities and duties.Ensuring timely flow of information to the Board and itsCommittees to enable them to discharge their functionseffectively.Independent verification and safeguarding integrity of theCompany's financial reporting.A sound system of risk management and internal control.Timely and balanced disclosure of material informationconcerning the Company to its stakeholders.Transparency and accountability.Compliance with the applicable laws and regulations.Fair and equitable treatment of its employees, customers,shareholders, investors and other stakeholders.

In accordance with Clause 49 of the Listing Agreements withthe Stock Exchanges (Clause 49) and some of the bestpractices followed internationally on Corporate Governance,a report containing the details of governance systems andprocesses at Reliance Industrial Infrastructure Limited is asunder :

1. Company’s philosophy on Code of GovernanceThe Company's philosophy on Corporate Governance envisagesattainment of the highest levels of transparency, accountabilityand equity in all facets of its operations, and in all interactionswith its stakeholders including shareholders, employees, lenders,Government and society at large.The Company is committed to achieve and maintain the highestinternational standards of Corporate Governance. The Companybelieves that all its actions must serve the underlying goal ofenhancing shareholder value over a sustained period of time.

2. Board Composition and Particulars of Directors

Board Composition

The Board of Directors of the Company (the Board) consists

of 6 Directors, out of which 2 are Independent Directors.Composition of the Board and category of Directors are asfollows :

Category Name of the Directors

Non-Independent Mahesh K. Kamdar – ChairmanNon-Executive Directors Bharat C. Gosalia

S. C. Malhotra

Executive Director Dilip V. Dherai

Independent Chandra Raj MehtaNon-Executive Directors Sandeep H. Junnarkar

No Director is related to any other Director on the Board interms of the definition of 'relative' given under the CompaniesAct, 1956.

Directors’ Profile

Brief resume of all the Directors, nature of their expertise inspecific functional areas and names of companies in which theyhold directorships, memberships / chairmanships of BoardCommittees and their shareholding in the Company are providedbelow :

(a) Shri Mahesh K. Kamdar is a graduate in Commerce fromMumbai University. He has extensive experience andpossesses expertise in the fields of pipes and steel and alsoother related products used in engineering, pharmaceutical,chemical and petrochemical industries.Shri Kamdar is a Director of the Company since 23rd July,1990. He was appointed as a Whole-time Directordesignated as "Executive Director - Commercial" of theCompany with effect from 1st July, 1993. He wasreappointed in the same capacity with effect from 1st July,1998 and again with effect from 1st July, 2003. He ceasedto be a Whole-time Director of the Company with effectfrom 27th February, 2006. He was elected as the Chairmanof the Board of Directors of the Company with effect from27th February, 2006. Since then he continues to be on theBoard of Directors of the Company as Chairman of theBoard and a Director liable to retire by rotation. He doesnot hold any membership of a Committee of the Board.Shri Kamdar is also on the Board of Reliance GasTransportation Infrastructure Limited, Paridhi TradecomPrivate Limited, Symphony Impex (India) Private Limited,Reliance Exports Private Limited, SANA Tradecom PrivateLimited, The India Film Combine Private Limited, RelianceHospital Management Services Private Limited andWestward Reality Private Limited. He does not hold anymembership of a Committee of the Board in any Company.Shri Kamdar holds 482 shares of the Company in his nameas on 31st March, 2008.

(b) Shri Chandra Raj Mehta is a Chartered Accountant andCompany Secretary. He has had a distinguished career withthe Government holding senior level positions in differentcapacities. He was a member of the Company Law Boardand was also Regional Director, Department of CompanyAffairs. He has rich experience in Corporate Laws, Financeand Administration.

Report on Corporate Governance

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Shri Mehta is a Director of the Company since 29th August,2006. He is the Chairman of the Audit Committee,Shareholders' / Investors' Grievance Committee andRemuneration Committee of the Company.

Shri Mehta is also on the Board of Fortune FinancialServices (India) Limited. He is a Member of the AuditCommittee and the Remuneration Committee of FortuneFinancial Services (India) Limited.

Shri Mehta does not hold any share of the Company ason 31st March, 2008.

(c) Shri Sandeep H. Junnarkar is a Science graduate witha postgraduate degree in Law. He qualified as a Solicitor inthe year 1977. He has had a brilliant academic career andis a Partner in the law firm Messrs Junnarkar & Associates.His areas of specialization include banking laws, corporatelaws including monopolies laws, exchange control laws andsecurities regulations.

Shri Junnarkar is a Director of the Company since27th April, 1991. He is a Member of the Audit Committee,Shareholders' / Investors' Grievance Committee, andRemuneration Committee of the Company.

Shri Junnarkar is also on the Board of Everest IndustriesLimited, Excel Crop Care Limited, IL&FS InfrastructureDevelopment Corporation Limited, Jai Corp Limited,Reliance Industrial Investments and Holdings Limited,Reliance Ports and Terminals Limited, Reliance UtilitiesLimited, Sterlite Industries (India) Limited, SunshieldChemicals Limited and Tilaknagar Industries Limited. Heis also a Member of the Bombay Incorporated Law Society(Section 25 Company). He is the Chairman of theShareholders' / Investors' Grievance Committee of SterliteIndustries (India) Limited and a Member of the AuditCommittee of Everest Industries Limited, Sterlite Industries(India) Limited, Reliance Utilities Limited and TilaknagarIndustries Limited and a Member of the RemunerationCommittee of Everest Industries Limited and Excel CropCare Limited.

Shri Junnarkar does not hold any share of the Companyas on 31st March, 2008.

(d) Shri Bharat C. Gosalia graduated in Civil Engineeringfrom Vallabh Vidhyapith and did his Masters (M.S.) inStructural Engineering, from Ohio University, United Statesof America. He has expertise in engineering andmanagement of company affairs and has 45 years ofexperience at the top management level, substantial partof which being at the helm of affairs.

Shri Gosalia is a Director of the Company since22nd March, 1997. He was appointed as a Whole-timeDirector designated as "Executive Director and President"with effect from 1st July, 1997. He was reappointed inthe same capacity with effect from 1st July, 2002. Heceased to be Whole-time Director of the Company witheffect from 30th June, 2005. Since then he continues tobe on the Board of Directors of the Company as a Directorliable to retire by rotation. He is also a Member of theShareholders'/ Investors' Grievance Committee of theCompany.

Shri Gosalia does not hold any share of the Company ason 31st March, 2008.

(e) Shri S. C. Malhotra graduated in Mechanical Engineeringfrom Banaras Hindu University. He has more than 45 yearsexperience in execution of projects related to chemical /petrochemical and petroleum industries.

Shri Malhotra is a Director of the Company since 16thDecember, 1989. He was appointed as a Whole-timeDirector designated as "Executive Director - Technical"of the Company with effect from 1st July, 1993. He ceasedto be Whole-time Director with effect from 28th June,1997. Since then he continues to be on the Board ofDirectors of the Company as a Director liable to retire byrotation. He is a Member of the Audit Committee andthe Remuneration Committee of the Company.

Shri Malhotra is also on the Board of Reliance Ports andTerminals Limited.

Shri Malhotra does not hold any share of the Company ason 31st March, 2008.

(f) Shri Dilip V. Dherai is a Chemical Engineer (B. Tech)from the University Department of Chemical Technology(UDCT), Mumbai having graduated in the year 1979. Hehas vast experience / expertise in activities related toimplementation and commissioning of large projects.

Shri Dherai is a Director of the Company since 1st July,1994. He was appointed as a Whole-time Directordesignated as "Executive Director - Projects" with effectfrom 1st July, 1994. He was reappointed in the samecapacity with effect from 1st July, 1999 and again for aperiod of five years with effect from 1st July, 2004. Hedoes not hold any membership of a Committee of theBoard.

Shri Dherai holds 1 650 shares of the Company in his nameas on 31st March, 2008.

3. Board Meetings, its Committee Meetings and Procedures

(a) Institutionalised decision making process

With a view to institutionalise all corporate affairs and setup systems and procedures for advance planning for mattersrequiring discussion / decisions by the Board, the Companyhas defined guidelines for the meetings of the Board andCommittees thereof. These Guidelines seek to systematisethe decision making process at the meetings of the Board/Committees in an informed and efficient manner.

(b) Scheduling and selection of Agenda Items for BoardMeetings

(i) Minimum four Board Meetings are held every year,which are pre-scheduled. Apart from the above,additional Board Meetings are convened by givingappropriate notice to address the specific needs ofthe Company. In case of business exigencies orurgency of matters, resolutions are passed bycirculation.

(ii) All departments of the Company are encouraged toplan their functions well in advance, particularly withregard to matters requiring discussion / approval /


decision at the Board / Committee meetings. Allsuch matters are communicated to the CompanySecretary in advance so that the same could beincluded in the Agenda for the Board / CommitteeMeetings.

(iii) The Board is given Presentations covering futureoperations of the Company, business environment,business opportunities, business strategy and riskmanagement practices before taking on record thequarterly / annual financial results of the Company.

(iv) The information placed before the Board includes :Business plans, capital budgets and any updates.

Quarterly results of the Company.

Minutes of meetings of Audit Committee andother Committees of the Board, as alsoResolutions passed by circulation.

Appointment or resignation of Chief FinancialOfficer and Company Secretary.

Materially important show cause, demand,prosecution and penalty notices.

Quarterly details of foreign exchange exposuresand the steps taken by the Management tolimit the risks of adverse exchange ratemovement, if material.

Fatal or serious accidents, dangerousoccurrences, material effluent or pollutionproblems.

Any material default in financial obligations toand by the Company, or substantial non-payment for services rendered by theCompany.

Any issue, which involves possible publicliability claims of substantial nature, includingany judgment or order which may have passedstrictures on the conduct of the Company ortaken an adverse view regarding anotherenterprise that can have negative implicationson the Company.

Details of any joint venture, acquisitions ofcompanies or collaboration agreement.

Transactions that involve substantial paymenttowards goodwill, brand equity or intellectualproperty.

Significant labour problems and their proposedsolutions. Any significant development inHuman Resources.

Sale of material nature of investments andassets, which is not in normal course ofbusiness.

Non-compliance of any regulatory, statutory orlisting requirements and shareholders servicesuch as non-payment of dividend, delay in sharetransfer etc.

Quarterly summary of all long term borrowingsmade, bank guarantees issued, loans andinvestments made.

Internal Audit findings and External AuditReports (through the Audit Committee).

Status of business risk exposures, itsmanagement and related action plans.

Making of loans and investment of surplusfunds.

Proposals for investment, mergers andacquisitions.

Recommendation / declaration of Dividend.

General notices of interest of Directors.

Terms of reference of Board Committees.

(v) The Chairman of the Board and the CompanySecretary in consultation with other concerned teammembers of the senior management, finalise theagenda papers for the Board meetings.

(c) Board Material distributed in advance

Agenda and Notes on Agenda are circulated to the Directorsin advance, in the defined Agenda format. All materialinformation is incorporated in the Agenda papers forfacilitating meaningful and focused discussions at themeeting. Where it is not practicable to attach any documentto the Agenda, the same is tabled before the meeting withspecific reference to this effect in the Agenda. In specialand exceptional circumstances, additional or supplementaryitem(s) on the Agenda are permitted.

(d) Recording Minutes of proceedings at Board andCommittee meetings

The Company Secretary records the minutes of theproceedings of each Board and Committee meeting. Draftminutes are circulated to all the Members of the Board /Committee for their comments. The final minutes areentered in the Minutes Book within 30 days from theconclusion of that meeting.

(e) Post Meeting Follow-up Mechanism

The Guidelines for the Board and Committee meetingsfacilitate an effective post meeting follow-up, review andreporting process for the decisions taken by the Board andCommittees thereof. Action taken report on the decisions /minutes of the previous meeting(s) is placed at theimmediately succeeding meeting of the Board / Committeefor noting by the Board / Committee.

(f) Compliance

The Company Secretary while preparing the Agenda, Noteson Agenda, Minutes etc. of the meeting(s), is responsible forand is required to ensure adherence to all the applicable lawsand regulations including the Companies Act, 1956 readwith the Rules issued thereunder and the SecretarialStandards recommended by the Institute of CompanySecretaries of India.

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4. Attendance of Directors at Board Meetings, last Annual General Meeting and number of other Directorship(s) andChairmanship(s) / Membership(s) of Committees of each Director in various companies

Name of the Attendance at meetings No. of Other No. of Membership(s) / Director during 2007-08 Directorship(s) (*) Chairmanship(s) of

Board Last Board Committees ofMeetings AGM Other Companies (**)

Mahesh K. Kamdar 3 No 1 -Chandra Raj Mehta 4 Yes 1 1Sandeep H. Junnarkar 4 Yes 10 5

(including 1 as Chairman)Bharat C. Gosalia 4 Yes - -S. C. Malhotra 4 Yes 1 -Dilip V. Dherai 3 Yes - -

* The Directorships held by Directors as mentioned above, do not include Alternate Directorships and Directorships of Foreign Companies,Section 25 Companies and Private Limited Companies.

** In accordance with Clause 49, Membership(s) / Chairmanship(s) of only the Audit Committees and Shareholders' / Investors' GrievanceCommittees of Indian Public Companies (excluding Reliance Industrial Infrastructure Limited) have been considered.

5. Number of Board Meetings held and the dates on whichheld

Four Board meetings were held during the year. The Companyhas held at least one Board meeting in every three months andthe maximum time gap between any such two meetings was notmore than four months. The details of the Board meetings are asunder :

Sr. Date Board No. ofNo. Strength Directors Present

1. 28th April, 2007 6 5

2. 12th July, 2007 6 5

3. 15th October, 2007 6 6

4. 21st January, 2008 6 6

6. Board Committees

Details of the Committees of the Board and other relatedinformation are provided hereunder :

(a) Audit Committee

Composition: The Audit Committee of the Boardcomprises of two Independent Non-Executive Directors,namely, Shri Chandra Raj Mehta, Chairman and ShriSandeep H. Junnarkar and one Non-Independent Non-Executive Director, namely, Shri S. C. Malhotra. All themembers of the Committee are financially literate. TheChairman of the Committee, Shri Chandra Raj Mehta, is aChartered Accountant and Company Secretary andpossesses accounting / financial management expertise.The constitution of the Audit Committee meets therequirements of Section 292A of the Companies Act, 1956and Clause 49 of the Listing Agreement.

Shri Swatantra Kumar Sethi, Company Secretary, is theSecretary to the Audit Committee. Executives from

Finance Department, Secretarial Department as alsoRepresentatives of the Statutory and Internal Auditors areinvited to attend the Audit Committee Meetings.

Objective: The primary objective of the Audit Committeeis to monitor and effectively supervise the Company'sfinancial reporting process with a view to providingaccurate, timely and proper disclosures and the integrityand quality of the financial reporting.

Terms of Reference: The terms of reference / powers ofthe Audit Committee are as under :

(i) Powers of the Audit Committee

To investigate any activity within its terms ofreference.To seek information from any employee.To obtain outside legal or other professionaladvice.

To secure attendance of outsiders with relevantexpertise, if it considers necessary.

(ii) The role of the Audit Committee includes

Oversight of the Company's financialreporting process and the disclosure of itsfinancial information to ensure that thefinancial statement is correct, sufficient andcredible.

Recommending to the Board, the appointment,reappointment and, if required, thereplacement or removal of the StatutoryAuditors and fixation of audit fees.

Approval of payment to the Statutory Auditorsfor any other services rendered by theStatutory Auditors.


Reviewing with the management, the annualfinancial statements before submission to theBoard for approval, with particular referenceto :

Matters required to be included in theDirectors' Responsibility Statement to beincluded in the Board's Report in terms ofsub-section (2AA) of Section 217 of theCompanies Act, 1956.Changes, if any, in accounting policies andpractices and reasons for the same.Major accounting entries involvingestimates based on the exercise of judgmentby the management.Significant adjustments made in thefinancial statements arising out of auditfindings.Compliance with listing and other legalrequirements relating to financialstatements.Disclosure of related party transactions, ifany.Qualifications in draft audit report.

Reviewing with the management, the quarterlyfinancial statements before submission to theBoard for approval.

Review of uses / application of funds raisedthrough an issue (public issue, rights issue,preferential issue, etc.).

Reviewing with the management, performanceof statutory and internal auditors and adequacyof internal control systems.

Reviewing the adequacy of internal auditfunction, if any, including the structure of theinternal audit department, staffing andseniority of the official heading thedepartment, reporting structure coverage andfrequency of internal audit.

Discussion with Internal Auditors any significantfindings and follow up thereon.

Reviewing the findings of any internalinvestigations by the Internal Auditors intomatters where there is suspected fraud orirregularity or a failure of internal controlsystems of a material nature and reporting thematter to the Board.

Discussion with Statutory Auditors before theaudit commences, about the nature and scopeof audit as well as post-audit discussion toascertain any area of concern.

To look into the reasons for substantial defaultsin the payment to the depositors,debentureholders, shareholders (in case of nonpayment of declared dividends) and creditors.

To review the functioning of the WhistleBlower Mechanism.

Carrying out such other function as may bespecifically referred to the Committee by theBoard of Directors and / or other Committee(s)of Directors of the Company.

To review the following information :

The management discussion and analysis offinancial condition and results ofoperations;Statement of significant related partytransactions (as defined by the AuditCommittee), submitted by management;Management letters / letters of internalcontrol weaknesses issued by the StatutoryAuditors;Internal audit reports relating to internalcontrol weaknesses; andThe appointment, removal and terms ofremuneration of Internal Auditors.

Meetings: Four meetings of the Committee were heldduring the year which were attended by all the members ofthe Committee. Executives from Finance Department,Secretarial Department as also Representatives of theStatutory and Internal Auditors attended the AuditCommittee Meetings by invitation.

The details of the meetings are as under :

Sr. Date Committee No. ofNo. Strength Members Present

1. 28th April, 2007 3 3

2. 12th July, 2007 3 3

3. 15th October, 2007 3 3

4. 21st January, 2008 3 3

The Chairman of the Audit Committee was present at thelast Annual General Meeting.

(b) Remuneration Committee

Composition: The Remuneration Committee of theBoard comprises of two Independent Non-ExecutiveDirectors, namely, Shri Chandra Raj Mehta, Chairman andShri Sandeep H. Junnarkar and one Non-Independent Non-Executive Director, namely, Shri S. C. Malhotra.

Terms of Reference: The Remuneration Committee hasbeen constituted to determine / review the remunerationpackage of the Managing Director(s) / Whole-timeDirector(s).

Meetings: There was no meeting of the RemunerationCommittee during the year.

Remuneration Policy, details of remuneration andother terms of appointment of Directors :

The remuneration policy of the Company is directedtowards rewarding performance, based on review ofachievements on a periodical basis. The remunerationpolicy is in consonance with the existing industry practice.

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The Whole-time Director is paid remuneration as per theAgreement entered into between him and the Company andis duly approved by the Remuneration Committee ofDirectors, the Board of Directors and the Members inGeneral Meeting.

The aggregate value of salary, allowances and perquisitespaid for the year ended 31st March, 2008 to Shri Dilip V.Dherai (reappointed as a Whole-time Director designated asExecutive Director - Projects with effect from 1st July,2004 for a period of 5 years) was Rs.22.73 lacs (salary andallowances Rs.22.18 lacs and perquisites Rs.0.55 lac).Besides salary, allowances and perquisites, the aforesaidWhole-time Director is also entitled to company'scontribution to provident fund, gratuity and encashment ofleave as per the rules of the Company.Service Contract of Whole-time Director can beterminated, by either party, by giving 3 months notice inwriting.The Company pays sitting fees to all the Directors otherthan the Whole-time Director, at the rate of Rs.10 000/-for attending each meeting of the Board and / orCommittee thereof. Sitting fees paid for the year ended31st March, 2008, are as follows :Shri Mahesh K. Kamdar : Rs. 30 000/-, Shri Chandra RajMehta : Rs.1 20 000/-, Shri Sandeep H. Junnarkar :Rs.1 20 000/-, Shri Bharat C. Gosalia : Rs.80 000/-,Shri S. C. Malhotra : Rs.80 000/-.There were no other pecuniary relationships ortransactions of the Non-Executive Directors vis-à-vis theCompany.

(c) Shareholders'/ Investors' Grievance Committee

Composition: The Shareholders' / Investors' GrievanceCommittee of the Board comprises of two IndependentNon-Executive Directors, namely, Shri Chandra Raj Mehta,Chairman and Shri Sandeep H. Junnarkar and one Non-Independent Non-Executive Director, namely, Shri BharatC. Gosalia.

Terms of reference: The Committee, inter alia, approvesissue of duplicate share certificates and oversees and reviewsall matters connected with transfer of shares of theCompany. The Committee also looks into redressal ofshareholders' / investors' complaints related to transfer ofshares, non-receipt of Annual Reports, non-receipt ofdeclared dividends etc. The Committee overseesperformance of the Share Transfer Agent of the Companyand recommends measures for overall improvement in thequality of investor services. The Committee also monitorsimplementation and compliance of the Company's Code ofConduct for Prohibition of Insider Trading in pursuance ofthe Securities and Exchange Board of India (Prohibition ofInsider Trading) Regulations, 1992.

The Board has authorised Shri Mahesh K. Kamdar,Chairman of the Board, Shri Bharat C. Gosalia, Director,Shri Dilip V. Dherai, Executive Director and Shri SwatantraKumar Sethi, Company Secretary, severally, to approve thetransfer of shares, transmission of shares, folioconsolidation, change of name, transposition, certificatesplit and consolidation, dematerialisation orrematerialisation of shares, replacement of certificates etc.

Meetings: Four Meetings of the Committee were heldduring the year which were attended by all the members ofthe Committee.

The details of the meetings are as under :

Sr. Date Committee No. ofNo. Strength Members Present

1. 28th April, 2007 3 32. 18th July, 2007 3 33. 15th October, 2007 3 34. 21st January, 2008 3 3

Compliance Officer: Shri Swatantra Kumar Sethi,Company Secretary has been designated by the Board as theCompliance Officer for complying with the requirements ofthe Securities and Exchange Board of India (Prohibition ofInsider Trading) Regulations, 1992 and the ListingAgreement with the Stock Exchanges.

Investor Grievance Redressal

The number of complaints received and resolved during theyear under review and their break-up is as under :

Type of Complaints No. of Complaints

Non-receipt of Annual Reports 04Non-receipt of Dividend Warrants 43Non-receipt of Certificates 17

Total 64

There were no outstanding complaints as on 31st March,2008. 10 requests for dematerialisation were pending forapproval as on 31st March, 2008, which were approvedand dealt with by 2nd April, 2008. No request for transferwas pending as on 31st March, 2008.

Procedure at Committee MeetingsThe Company's guidelines relating to Board meetings areapplicable to Committee meetings as far as may be practicable.Minutes of the proceedings of the Committee meetings areplaced before the Board meetings for perusal and noting.

7. Code of Business Conduct and Ethics for Directors andManagement PersonnelThe Board vide Resolution passed on 26th December, 2005,adopted the Code of Business Conduct and Ethics for Directorsand Management Personnel (the Code). This Code is acomprehensive Code applicable to all Directors andmanagement personnel. The Code while laying down, in detail,the standards of business conduct, ethics and governance, centresaround the following theme :"The Company's Board of Directors and Management Personnelare responsible for and are committed to setting the standards ofconduct contained in this Code and for updating these standards,as appropriate, to ensure their continuing relevance,effectiveness and responsiveness to the needs of local andinternational investors and all other stakeholders as also toreflect corporate, legal and regulatory developments. This Codeshould be adhered to in letter and in spirit."A copy of the Code has been put on the Company's websitewww.riil.in.


The Code has been circulated to all the members of the Boardand management personnel and the compliance of the same isaffirmed by them annually.A declaration signed by the Executive Director (Chief ExecutiveOfficer) is given below :I hereby confirm that :The Company has obtained from all the members of the Boardand management personnel affirmation that they have compliedwith the Code of Business Conduct and Ethics for Directors andManagement Personnel in respect of the financial year 2007-08.Dilip V. DheraiExecutive Director

8. Whistle Blower Mechanism

The Company promotes ethical behaviour in all its businessactivities and has put in place mechanism of reporting illegal orunethical behaviour. Employees may report violations of laws,rules, regulations or unethical conduct to their immediatesupervisor / notified person. The reports received fromemployees will be reviewed by the Audit Committee. TheDirectors and management personnel are obligated to maintainconfidentiality of such reportings and ensure that the whistleblowers are not subjected to any discriminatory practices.

9. General Body MeetingsDetails of the last three Annual General Meetings of theCompany are as under :

Year Venue of the Meeting Day and TimeDate

2004-05 4th Floor, Friday 3.30 p.m.Walchand Hirachand Hall, 16.09.2005Indian Merchants’ Chamber,IMC Marg, Churchgate,Mumbai - 400 020

2005-06 4th Floor, Wednesday 11.00 a.m.Walchand Hirachand Hall, 12.07.2006Indian Merchants’ Chamber,IMC Marg, Churchgate,Mumbai - 400 020

2006-07 4th Floor, Thursday 11.30 a.m.Walchand Hirachand Hall, 12.07.2007Indian Merchants' Chamber,IMC Marg, Churchgate,Mumbai - 400 020

Note :(a) No Special Resolutions were passed at the Annual General

Meetings held for the years 2004-05, 2005-06 and 2006-07.(b) During the year ended 31st March, 2008, there were no

resolutions passed by the Company's Members throughpostal ballot. At the ensuing Annual General Meeting also,there is no resolution proposed to be passed through postalballot.

10. (a) Disclosures on materially significant related partytransactions i.e. transactions of the Company ofmaterial nature, with its promoters, the Directors orthe Management, their relatives or subsidiaries etc.that may have potential conflict with the interests ofthe Company at large

None of the transactions with any of the related parties

were in conflict with the interests of the Company.Attention of Members is drawn to the disclosures oftransactions with the related parties set out in Notes onAccounts - Schedule '16', forming part of the AnnualReport.The Company's related party transactions are generallywith its Associate. The related party transactions areentered into based on considerations of various businessexigencies such as synergy in operations, sectoralspecialisation and the Company's long term strategy forsectoral investments, optimisation of market share andprofitability, legal requirements, liquidity and capitalresources of Associates.All related party transactions are negotiated at arms lengthand are only intended to further the interests of theCompany.

(b) Details of non-compliance by the Company,penalties, strictures imposed on the Company byStock Exchanges or SEBI or any statutory authority,on any matter related to capital markets, during thelast three yearsThere has been no instance of non-compliance by theCompany on any matter related to capital markets duringthe last three years and hence no penalties or strictureshave been imposed on the Company by the StockExchanges or SEBI or any other statutory authority.

11. Means of Communication

(a) Half Yearly Reports : Half Yearly Reports coveringfinancial results are sent to members at their registeredaddresses.

(b) Quarterly Results : Quarterly Results are published in'Financial Express' and 'Navshakti' (Vernacular).

(c) SEBI EDIFAR: The Company uploads its Annual Report,financial results, shareholding pattern and otherinformation on the SEBI EDIFAR Website maintained byNational Informatics Centre (NIC): www.sebiedifar.nic.in.

(d) Annual Report : Annual Report containing, inter alia,Audited Annual Accounts, Directors' Report, Auditors'Report, and other important information is circulated tomembers and others entitled thereto. The ManagementDiscussion and Analysis Report forms part of the AnnualReport.

(e) Reminder to Investors: Reminders for Unpaid Dividendare sent to the shareholders as per records every year.

(f) Website: The Company's website www.riil.in contains aseparate dedicated section, 'Investor Relations', whereinformation for shareholders is available. The AnnualReport of the Company is also available on the website in auser-friendly and downloadable manner.

(g) Designated Exclusive email-id: The Company hasdesignated the following email-ids exclusively for investorservicing:(i) For queries on Annual Report:

[email protected](ii) For queries in respect of shares in physical mode:

[email protected]

12

12. General Shareholder Information

(a) Company Registration Details The Company is registered in the State of Maharashtra, India. The CorporateIdentity Number (CIN) allotted to the Company by Ministry of CorporateAffairs (MCA) is L60300MH1988PLC049019.

(b) Annual General Meeting Wednesday, 2nd July, 2008 at 11.30 a.m.(Day, Date, Time and Venue) At 4th Floor, Walchand Hirachand Hall, Indian Merchants' Chamber,

IMC Marg, Churchgate, Mumbai - 400 020.

(c) Financial Calendar Financial Year April 1 to March 31

Results for Quarter ending Last week of July, 200830th June, 2008 (tentative)Results for Quarter/ Half Year Last week of October, 2008ending 30th September, 2008(tentative)

Results for Quarter ending Last week of January, 200931st December, 2008 (tentative)

Results for Year ending Last week of April, 200931st March, 2009 (tentative)Annual General Meeting (tentative) July, 2009

(d) Book Closure Period Friday, 6th June, 2008 to Thursday, 12th June, 2008 (both days inclusive) forpayment of dividend.

(e) Dividend Payment Date On or after 2nd July, 2008.

(f) Listing of Equity Shares at (i) Bombay Stock Exchange Limited (BSE),Phiroze Jeejeebhoy Towers,Dalal Street, Mumbai - 400 001.

(ii) National Stock Exchange of India Limited (NSE)"Exchange Plaza", Bandra-Kurla Complex, Bandra (E),Mumbai - 400 051.

(g) Payment of Listing Fees Annual Listing Fee for the year 2008-09 (as applicable) has been paid by theCompany to BSE and NSE.

(h) Stock Code(i) Trading Symbol at Bombay Stock Exchange Limited 523445

National Stock Exchange of India Limited RIIL(ii) Demat ISIN Numbers in Equity Shares INE046A01015

NSDL and CDSL

(i) Share Price Data (in Rs. per share)

Month Bombay Stock Exchange (BSE) National Stock Exchange (NSE)Month’s Month’s Month’s Month’s

High Price Low Price High Price Low PriceApril - 2007 520.00 378.00 518.45 371.15May - 2007 515.00 451.00 522.80 447.05June - 2007 503.40 452.00 503.40 454.00July - 2007 617.00 470.00 616.70 467.25August - 2007 541.90 426.25 549.85 427.10September - 2007 1 394.55 479.00 1 396.75 479.00October - 2007 3 202.25 1 464.25 3 175.00 1 466.60November - 2007 3 049.00 1 820.00 3 050.00 1 810.00December - 2007 2 188.75 1 779.00 2 190.60 1 780.00January - 2008 2 933.00 1 640.15 2 935.75 1 640.80February - 2008 1 966.00 1 352.20 1 965.00 1 350.05March - 2008 1 325.00 776.45 1 350.00 778.60

Source : BSE and NSE websitesThe closing market price per equity share on 15th April, 2008 was Rs.952.25 on BSE and Rs.950.00 on NSE.


(j) Share price performance in comparison to broadbased indices - BSE Sensex and NSE Nifty as on 31stMarch, 2008

Percentage change in

RIIL share price Sensex

Financial Year2007-08 132.39 19.68

2 years 133.93 38.69

3 years 903.28 140.95

5 years 2 520.00 413.15

Percentage change in

RIIL share price Nifty

Financial Year2007-08 131.84 23.89

2 years 133.35 39.15

3 years 895.69 132.58

5 years 2 510.14 384.00

(k) Share Transfer Agent

Karvy Computershare Private Limited46, Avenue 4, Street No.1,Banjara Hills, Hyderabad - 500 034Website : www.karvy.comE-Mail : [email protected] Nos. : +91-40-23320666/0711/ 3031/3037Fax No. : +91-40-2332 3058

List of Investor Service Centres of Karvy ComputersharePrivate Limited forms part of the Annual Report.

(l) Share Transfer System

Presently, the share transfers which are received in physicalform are processed and the share certificates are returnedwithin a period of 7 days from the date of receipt, subjectto the documents being valid and complete in all respects.The Board has authorised Shri Mahesh K. Kamdar,Chairman of the Board, Shri Bharat C. Gosalia, Director,Shri Dilip V. Dherai, Executive Director and Shri SwatantraKumar Sethi, Company Secretary, severally, to approve thetransfer, transmission etc. of the Company's shares. Asummary of transfer / transmission of shares of theCompany so approved is placed at every Shareholders' /Investors' Grievance Committee Meeting. The Companyobtains from a Company Secretary in practice half-yearlycertificate of compliance with the share transferformalities as required under Clause 47(c) of the ListingAgreement with Stock Exchanges and files a copy of thecertificate with the Stock Exchanges.(m) Distribution of Shareholding as on 31st March, 2008

Sr. No. Category No. of Shares % to total Shares

1. Promoters:Reliance Industries Limited 68 60 064 45.43

2. Mutual Funds & UTI 1 21 742 0.813. Banks, Financial Institutions and Insurance Companies 24 725 0.164. FIIs 2 42 186 1.605. Private Corporate Bodies 19 51 113 12.926. Indian Public 57 93 870 38.387. NRI / OCBs 1 06 300 0.70

Grand Total 1 51 00 000 100.00

(n) Top 10 Shareholders as on 31st March, 2008

Sr. No. Name of the Shareholder(s) No. of Shares % to total Shares

1 Reliance Industries Limited 68 60 064 45.432 Reliance Capital Limited 1 60 100 1.063 Religare Securities Limited 1 34 740 0.894 Deutsche Securities Mauritius Limited 97 333 0.645 Sharekhan Limited 64 503 0.436 Jayantilal Premji Shah 62 500 0.417 Gulabchand Chandulal Bafna 60 250 0.408 Angel Broking Limited 54 049 0.369 BSMA Limited 45 000 0.3010 Karvy Stock Broking Limited 43 792 0.29

14

(o) Shareholding Pattern by Size as on 31st March, 2008Sr. Category Electronic Physical TotalNo. (Shares) % to total % to total % to total

Holders Shares Shares Holders Shares Shares Holders Shares Shares

1 01 - 100 94 542 21 08 401 13.96 5 346 5 33 535 3.54 99 888 26 41 936 17.502 101 - 500 6 225 14 92 150 9.88 521 1 41 800 0.94 6 746 16 33 950 10.823 501 - 1000 894 6 94 266 4.60 33 24 900 0.17 927 7 19 166 4.774 1001 - 5000 565 12 16 976 8.06 20 32 200 0.21 585 12 49 176 8.275 5001 - 10000 69 4 70 411 3.12 2 15 800 0.10 71 4 86 211 3.226 10001 - 50000 50 10 12 025 6.70 0 0 0.00 50 10 12 025 6.707 50001 - 100000 3 2 02 632 1.34 0 0 0.00 3 2 02 632 1.348 100001 & Above 3 71 54 904 47.38 0 0 0.00 3 71 54 904 47.38

Total 1 02 351 1 43 51 765 95.04 5 922 7 48 235 4.96 1 08 273 1 51 00 000 100.00

(p) Geographical Distribution of Shareholders as on 31st March, 2008

Sr. Name of Electronic Physical TotalNo. the City % to % to % to % to % to % to

Holders total Shares total Holders total Shares total Holders total Shares totalHolders Shares Holders Shares Holders Shares

1 MUMBAI 25 601 23.65 1 01 42 919 67.17 1 659 1.53 2 35 637 1.56 27 260 25.18 1 03 78 556 68.73

2 DELHI 6 863 6.34 8 42 281 5.58 345 0.32 54 400 0.36 7 208 6.66 8 96 681 5.94

3 AHMEDABAD 5 869 5.42 3 75 690 2.49 438 0.40 47 900 0.32 6 307 5.82 4 23 590 2.814 KOLKATA 4 606 4.25 4 79 749 3.18 186 0.17 27 500 0.18 4 792 4.42 5 07 249 3.36

5 BENGALURU 2 972 2.74 1 62 268 1.07 139 0.13 14 404 0.10 3 111 2.87 1 76 672 1.17

6 VADODARA 2 094 1.93 95 693 0.63 179 0.17 20 000 0.13 2 273 2.10 1 15 693 0.76

7 CHENNAI 2 433 2.25 1 40 979 0.93 175 0.16 18 500 0.12 2 608 2.41 1 59 479 1.05

8 PUNE 3 185 2.94 2 44 636 1.62 67 0.06 8 700 0.06 3 252 3.00 2 53 336 1.689 HYDERABAD 1 794 1.66 1 44 255 0.96 105 0.10 11 400 0.08 1 899 1.76 1 55 655 1.04

10 OTHERS 46 934 43.35 17 23 295 11.41 2 629 2.43 3 09 794 2.05 49 563 45.78 20 33 089 13.46

Total 1 02 351 94.53 1 43 51 765 95.04 5 922 5.47 7 48 235 4.96 1 08 273 100.00 1 51 00 000 100.00

(q) Corporate Benefits

Dividend declared for the last 10 years

Financial Year Dividend Dividend RateDeclaration Date (%)

2006-07 10th March, 2007 35%

2005-06 12th July, 2006 35%

2004-05 16th September, 2005 32%

2003-04 25th September, 2004 32%

2002-03 6th September, 2003 32%

2001-02 25th June, 2002 32%

2000-01 28th June, 2001 32%

1999-00 29th March, 2000 31%

1998-99 22nd September, 1999 30%

1997-98 2nd September, 1998 29%

(r) Dematerialisation of Shares

95.04% of the Company's Paid up Equity Share Capital hasbeen dematerialised upto 31st March, 2008 (94.35% upto31st March, 2007). Trading in Equity Shares of theCompany is permitted only in dematerialised form.

(s) Liquidity

The higher trading activity is witnessed on NSE. Relevantdata for the average daily turnover for the financial year2007-08 is given below :

BSE NSE TOTAL

In no. of shares 1 28 998 1 68 427 2 97 425

In value terms (Rs. in crore) 18.10 22.35 40.45

[Source : This information is compiled from the data availablefrom the websites of BSE and NSE ]

(t) Outstanding GDRs / Warrants and ConvertibleInstruments

The Company has not issued any GDRs / Warrants or any


other instrument, which is convertible into Equity Shares ofthe Company.

(u) Locations of Manufacturing Plants

The Company is mainly engaged in the business of settingup / operating Industrial Infrastructure. The Company isalso engaged in related activities involving leasing andproviding services connected with computer software anddata processing. Therefore, the Company does not haveany manufacturing plant.

(v) Address for Correspondence

(i) Investor Correspondence

For transfer / dematerialisation of shares, paymentof dividend on shares and any other query relating tothe shares of the Company :

For Shares held in Physical form

Karvy Computershare Private LimitedUnit - Reliance Industrial Infrastructure Limited46, Avenue 4, Street No.1, Banjara Hills,Hyderabad - 500 034E-Mail : [email protected]

For Shares held in Demat form

To the investors' Depository Participant and / orKarvy Computershare Private Limited.

(ii) Any query on Annual Report

Company SecretaryReliance Industrial Infrastructure LimitedNKM International House, 5th Floor,178 Backbay Reclamation,Behind LIC Yogakshema Building,Babubhai Chinai Road,Mumbai - 400 020.Email: [email protected]

(w) Transfer of unpaid / unclaimed amount of Dividendto Investor Education and Protection Fund

During the year under review, the Company has credited asum of Rs.5.83 lacs to the Investor Education andProtection Fund (IEPF) pursuant to Section 205C of theCompanies Act, 1956 and the Investor Education andProtection Fund (Awareness and Protection of Investor)Rules, 2001.

The cumulative amount transferred to IEPF upto31st March, 2008 is Rs.35.49 lacs.

13. Compliance Certificate of the Auditors

Certificate from the Auditors of the Company, MessrsChaturvedi & Shah, confirming compliance with the conditionsof Corporate Governance as stipulated under Clause 49 of ListingAgreement, is annexed to the Directors' Report forming part ofthe Annual Report.

This Certificate has also been forwarded to the Stock Exchangeswhere the shares of the Company are listed.

14. Adoption of Mandatory and Non-MandatoryRequirements of Clause 49

The Company has complied with all the mandatory requirementsof Clause 49. The Company has adopted the following Non-mandatory requirements stipulated under Clause 49 :

(a) Remuneration Committee :

The Company has constituted the RemunerationCommittee to recommend / review remuneration of theManaging Director(s) and Whole-time Director(s).

(b) Shareholder Rights :

Half yearly Reports covering financial results are sent toMembers at their registered addresses.

(c) Audit Qualification :

The Company is in the regime of unqualified financialstatements.

(d) Whistle Blower policy :

The Company has a whistle blower mechanism wherein theEmployees are free to report violations of laws, rules,regulations or unethical conduct to their immediatesupervisor or such other person as may be notified by themanagement to the workgroups. Such reports received willbe reviewed by the the Audit Committee of Directors fromtime to time. The confidentiality of those reportingviolations shall be protected and they shall not be subjectedto any discriminatory practices.

15. CEO and CFO Certification

The Chief Executive Officer and the Chief Financial Officer ofthe Company give annual certification on financial reportingand internal controls to the Board in terms of Clause 49 andquarterly certification on financial results while placing thefinancial results before the Board in terms of Clause 41.

16. Secretarial Audit Report

The Company has appointed Dr. K. R. Chandratre, PracticingCompany Secretary, to conduct Secretarial Audit of theCompany for the financial year ended 31st March, 2008, whohas submitted his report confirming compliance with all theapplicable provisions of various corporate laws. The SecretarialAudit Report is annexed.

17. Capital Integrity Audit

The Audit Report, confirming that the total issued capital of theCompany is in agreement with the total number of shares inphysical form and the total number of dematerialised shares heldwith National Securities Depository Limited and CentralDepository Services (India) Limited, is placed before the Boardon a quarterly basis. A copy of the Audit Report is submitted tothe Stock Exchanges where the shares of the Company arelisted.

18. Fee to Statutory Auditors

The fee (exclusive of Service Tax) to the Statutory Auditors forthe year was Rs.10 lacs (previous year Rs.8.15 lacs) includingRs.1 lac (previous year Rs.0.60 lac) as fee for Certification infinance and tax matters.

16

The Board of DirectorsReliance Industrial Infrastructure LimitedNKM International House, 5th Floor,178 Backbay Reclamation,Behind LIC Yogakshema Building,Babubhai Chinai Road,Mumbai - 400 020

I have examined the registers, records and documents of RelianceIndustrial Infrastructure Limited ("the Company") for the financialyear ended on March 31, 2008 according to the provisions of-

The Companies Act, 1956 and the Rules made under that Act;

The Depositories Act, 1996 and the Bye-laws framed underthat Act;

The Securities and Exchange Board of India (SubstantialAcquisition of Shares and Takeovers) Regulations, 1997;

The Securities and Exchange Board of India (Prohibition ofInsider Trading) Regulations, 1992; and

The Listing Agreement with the Bombay Stock ExchangeLimited and the National Stock Exchange of India Limited.

1. Based on my examination and verification of the recordsproduced to me and according to the information andexplanations given to me by the Company, I report that theCompany has, in my opinion, complied with the provisions ofthe Companies Act, 1956 ("the Act") and the Rules madeunder the Act and the Memorandum and Articles of Associationof the Company, with regard to:

(a) maintenance of various statutory registers and documentsand making necessary entries therein;

(b) closure of the Register of Members;(c) forms, returns, documents and resolutions required to be

filed with the Registrar of Companies;(d) service of documents by the Company on its Members and

the Registrar of Companies;(e) Notice of Board meetings and Committee meetings of

Directors;(f) the meetings of Directors and Committees of Directors

including passing of resolutions by circulation;(g) the 19th annual general meeting held on 12th July 2007;(h) Minutes of proceedings of General Meetings and of Board

and other meetings;(i) approvals of the members, the Board of Directors, the

Committees of Directors and government authorities,wherever required;

(j) constitution of the Board of Directors and appointment,retirement and re-appointment of Directors;

(k) remuneration paid to the Directors other than Whole-timeDirector;

(l) appointment and remuneration of the Whole-timeDirector;

(m) appointment and remuneration of Auditors;

(n) transfers and transmissions of the Company's shares andissue and delivery of original and duplicate certificates ofshares;

(o) declaration and payment of dividends;(p) transfer of certain amounts as required under the Act to

the Investor Education and Protection Fund;(q) borrowings and registration, modification and satisfaction

of charges;(r) Investment of Company's funds including inter corporate

loans and investments and loans to others;(s) contracts, common seal, registered office and publication

of name of the Company; and(t) generally, all other applicable provisions of the Act and

the Rules made under that Act.

2. I further report that:

(a) the Company's Directors have complied with therequirements as to disclosure of interests and concerns incontracts and arrangements, shareholdings / debentureholdings and directorships in other companies andinterests in other entities;

(b) the Company has obtained all necessary approvals underthe various provisions of the Act;

(c) there was no prosecution initiated against or show causenotice received by the Company and no fines or penaltieswere imposed on the Company under the Act against theCompany, its Directors and Officers.

3. I further report that the Company has complied with theprovisions of the Depositories Act, 1996 and the Bye-lawsframed thereunder by the Depositories with regard todematerialisation / rematerialisation of securities andreconciliation of records of dematerialised securities with allsecurities issued by the Company.

4. I further report that:

(a) the Company has complied with the requirements underthe Listing Agreements entered into with the BombayStock Exchange Limited and the National Stock Exchangeof India Limited;

(b) the Company has complied with the provisions of theSecurities and Exchange Board of India (SubstantialAcquisition of Shares and Takeovers) Regulations, 1997including the provisions with regard to disclosures andmaintenance of records required under the Regulations;

(c) the Company has complied with the provisions of theSecurities and Exchange Board of India (Prohibition ofInsider Trading) Regulations, 1992 including theprovisions with regard to disclosures and maintenance ofrecords required under the Regulations.

Dr K R ChandratrePractising Company Secretary

Certificate of Practice No. 5144Place : MumbaiDated : 11 April 2008

Secretarial Audit Report


1. At a Glance

Presently, the Company has over 1 lac folios ofshareholders holding Equity Shares in the Company.

Face value of the Company's Equity Shares is Rs.10.

The Company's Equity Shares are listed on BombayStock Exchange Limited (BSE) and National StockExchange of India Limited (NSE).

The Company's Equity Shares are under compulsorytrading in demat form only.

Over 95% of the Company's Equity Shares are held indemat form.

The Company's Equity Shares are freely transferableexcept as may be required statutorily.

Karvy Computershare Private Limited (Karvy),Hyderabad, an ISO 9002 Certified Registrar and TransferAgent, is the Share Transfer Agent (STA) of theCompany.

2. Investor Service and Grievance Handling Mechanism

All share related transactions viz., transfer, transmission,transposition, nomination, dividend, change of name / address /signature, registration of mandate / Power of Attorney,replacement / split / consolidation of share certificates / demat /remat of shares, issue of duplicate certificates etc. are beinghandled by Karvy. Karvy, the largest Registrar in the countryhaving a vast number of Investor Service Centres across thecountry, discharges investor service functions effectively,efficiently and expeditiously.

Investors are requested to correspond directly with Karvy, onall share related matters. List of Investor Service Centres ofKarvy is enclosed as Annexure - 1.

The Company has an established mechanism for investorservice and grievance handling, with Karvy and the ComplianceOfficer appointed by the Company for this purpose, being theimportant functional nodes. The Company has appointedInternal Auditors to concurrently audit the shares relatedtransactions of the Company being handled at Karvy andcommunication exchanged with investors, regulatory and otherconcerned authorities.

The Company has prescribed service standards for variousinvestor related activities being handled by Karvy, which arecovered in the section on 'Initiatives Taken by the Company'.These standards are periodically reviewed by the Company.Any deviation therefrom is examined by the Internal Auditorswho also advise the corrective actions thereon and inform theCompany on the matters on a monthly basis.

The Board of Directors of the Company has constituted aShareholders' / Investors' Grievance Committee (theCommittee) which, inter alia, approves issue of duplicatecertificates and oversees and reviews all matters connectedwith transfer of shares and other processes. The Committeealso reviews the redressal of shareholders' complaints relatedto transfer of shares, non-receipt of Balance Sheet, non-receiptof Dividend etc. The Committee oversees the performanceof the STA and recommends measures for overall improvement

Shareholders' Referencer

Contents

1. At a Glance

2. Investor Service and Grievance Handling Mechanism

3. Company's Recommendation to the Shareholders /Investors

4. Concepts and Procedures for Shares Related Matters

(a) Dividend

(i) Payment of Dividend

(ii) Payment of Dividend through Electronic ClearingService (ECS) Facility

(iii) Course of Action in case of Non-receipt ofDividend, Revalidation of Dividend Warrant etc.

(iv) Unclaimed / Unpaid Dividend

(b) Dematerialisation / Rematerialisation of Shares

(c) Nomination Facility

(d) Transfer / Transmission / Transposition / DuplicateCertificates etc.

(e) Miscellaneous

(i) Change of address

(ii) Change of name

(iii) Authority to another person to deal with shares

(f) Shareholders' General Rights

(g) Duties / Responsibilities of Investors

5. Initiatives Taken by the Company

6. Information Regarding Tax on Dividend and Sale ofShares

7. Investor Servicing and Grievance Redressal at ExternalAgencies

8. Other Information

9. Contact Details

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in the quality of investor services. A summary of investorrelated transactions and details is also considered by theCommittee.

3. Company's Recommendation to the Shareholders/Investors

In pursuit of the Company's objective to mitigate / avoid riskswhile dealing with shares and related matters, the followingare the Company's recommendations to the shareholders /investors :

Open Demat Account and Dematerialise your shares

Investors should convert their physical holdings of sharesinto demat holdings. Holding shares in demat form helpsinvestors to get immediate transfer of the shares. No stampduty is payable on transfer of shares held in demat form andrisks associated with physical certificates such as forgedtransfers, fake certificates and bad deliveries are avoided.

Consolidate Multiple Folios

Investors should consolidate their shareholding held in multiplefolios. This would facilitate one-stop tracking of all corporatebenefits on the shares and would reduce time and efforts requiredto monitor multiple folios.

Register ECS Mandate and furnish correct bank accountparticulars with the Company/Depository Participant(DP)

Investor should provide an ECS mandate to the Company incase of shares held in physical form and ensure that the correctand updated particulars of his bank account are available withthe Depository Participant (DP) in case of shares held indemat form. This would facilitate direct credits of dividends,refunds etc., from companies to his bank account and avoidpostal delays and loss in transit.

Fill and submit Nomination Form

Investors should register the nominations, in case of physicalshares, with the Company and in case of dematerialised shareswith their DP. Nomination would help successors to get theshares transmitted in their favor without any hassles.

Keep holding details confidential

Folio number (DP ID and Client ID in respect of dematerialisedshares) should not be disclosed to unknown persons. Signedblank transfer deeds (delivery instruction slips in respect ofdematerialised shares) should not be given to unknown persons.

Deal with Registered Intermediaries

Investors should transact through a registered intermediarywho is subject to regulatory discipline of SEBI, as it will beresponsible for its activities, and in case intermediary doesnot act professionally, investors can take up the matter withSEBI.

Obtain documents relating to purchase and sale of shares

A valid Contract Note / Confirmation Memo should beobtained from the broker / sub-broker, within 24 hours ofexecution of purchase or sale of shares and it should be ensuredthat the Contract Note / Confirmation Memo contains ordernumber, trade number, trade time, quantity, price and

brokerage. In case the investor has any doubt about the detailscontained in the contract note, he can avail the facilityprovided by BSE / NSE to verify the trades on the BSE / NSEwebsites. It is recommended that this facility be availed inrespect of a few trades on a random basis, even if there is nodoubt as to the authenticity of the trade / transaction.

Monitor holdings regularly

Demat account should not be kept dormant for long. Periodicstatement of holdings should be obtained from the concernedDP and holdings verified. Where the investor is likely to beaway for a long period of time and where the shares are held inelectronic form, the investor can make a request to the DP tokeep the account frozen so that there can be no debit to theaccount till the instruction for freezing the account iscountermanded by the investor.

Register for SMS alert facility

Investors should register their mobile numbers with DPs forSMS alert facility. National Securities Depository Limitedand Central Depository Services (India) Limited proactivelyinform investors of transaction in the demat account bysending SMS. Investors will be informed about debits and creditsto their demat account without having to call-up their DPsand investors need not wait for receiving TransactionStatements from DPs to know about the debits and credits.

Exercise caution

There is likelihood of fraudulent transfers in case of folioswith no movement or where the shareholder has either expiredor is not residing at the address registered with the Company.The Company / DP should be updated on any change of addressor contact details. Similarly information of death of shareholdershould also be communicated.

Mode of Postage

Share Certificates and high value dividend / interest warrants /cheques / demand drafts should not be sent by ordinary post. Itis recommended that investors should send such instrumentsby registered post or courier.

4. Concepts and Procedures for Shares Related Matters

(a) Dividend

(i) Payment of Dividend

Dividend is paid under two modes viz.:

Electronic Clearing Service (ECS) and any othermode through electronic means like NationalElectronic Fund Transfer (NEFT), Real TimeGross Settlement (RTGS) and through Directcredit.

Payment by mailing dividend warrants.

(ii) Payment of dividend through ElectronicClearing Service (ECS) facility

What is payment of dividend through ECSFacility and how does it operate?

Reserve Bank of India's ECS Facility providesinvestors an option to receive dividend / interestdirectly in their bank accounts rather than receiving


the same through post. Under this option, investor'sbank account is directly credited and an advicethereof is issued by the Company after thetransaction is effected. The concerned bank branchcredits investor's account and indicates the creditentry as "ECS" in his / her passbook / statement ofaccount. If any investor maintains more than onebank account, payment can be received at any oneof his / her accounts as per the preference of theinvestor. The investor does not have to open a newbank account for the purpose.

What is payment of dividend through NEFTFacility and RTGS Facility and how do theyoperate?

National Electronic Fund Transfer (NEFT) ispayment of dividend electronically through RBIclearing to selected bank branches which haveimplemented Core Banking Solutions (CBS). Thisextends to all over the country, and is notnecessarily restricted to the 68 designated centreswhere payment can be handled through ECS. Mostof the Public Sector Banks (PSB) have implementedCBS where some of their bank branches arenetworked through computer. This facilitates aconstituent to do banking anywhere with any ofthe Bank's branches. Almost all the Private SectorBanks have implemented networking of all theirbranches. The PSBs while implementing CBS havegiven their constituents a new bank account number.To facilitate payment through NEFT, theshareholder is required to ensure that the bankbranch where his / her account is operated, is underCBS and also record the particulars of the new bankaccount with the DP with whom the demat accountis maintained. Initially the payment through NEFTwill be implemented for payment which is beingremitted to the investor holding bank accounts withPrivate Sector Banks and selectively for other PSB.Based on this experience it will be extended to covera larger network of banks in the future. At presentRBI carries out six settlements a day through NEFTwhich will result in almost instant credit to theinvestors bank account. Real Time Gross Settlement(RTGS) facilitates payment electronically for highvalue payments. Payment through RTGS will bedone for dividend payments of a sum aboveRs. 10 00 000 (Rs. Ten Lacs and above) subject tothe implementation of CBS by the recipient bankand the Indian Financial Service Code (IFSC)available to the recipient bank.

What is payment of dividend through DirectCredit and how does it operate?

The company will be appointing one bank as itsDividend banker for distribution of dividend. Thesaid banker will carry out direct credit to thoseinvestors who are maintaining bank account withthe said bank, provided the bank account details areregistered with the DP for dematerialized sharesand / or registered with the STA prior to the paymentof dividend for shares held in physical form.

What are the benefits of ECS (paymentthrough electronic facilities) ?

Some of the major benefits are :

Investor need not make frequent visits to hisbank for depositing the physical paperinstruments.

Prompt credit to the bank account of theinvestor through electronic clearing.

Fraudulent encashment of warrants is avoided.

Exposure to delays / loss in postal service isavoided.

As there can be no loss in transit of warrants,issue of duplicate warrants is avoided.

Which cities provide ECS facility?

SEBI in consultation with Reserve Bank of Indiahas extended the ECS Facility to the investorsresiding at 68 location centres, namely, Ahmedabad,Agra, Allahabad, Amritsar, Aurangabad, Bengaluru,Baroda, Bhilwara, Bhopal, Bhubaneshwar, Burdwan,Calicut, Chandigarh, Chennai, Coimbatore,Dehradun, Dhanbad, Durgapur, Erode, Gorakhpur,Guwahati, Gwalior, Haldia, Hubli, Hyderabad, Indore,Jabalpur, Jaipur, Jalandhar, Jammu, Jamshedpur,Jodhpur, Kakinada, Kanpur, Kochi/Ernakulam,Kolhapur, Kolkata, Lucknow , Ludhiana, Madurai,Mangalore, Mumbai, Mysore, Nagpur, Nashik,Nellore, New Delhi, Panaji, Patna, Pondicherry,Pune, Raipur, Rajkot, Ranchi, Salem, Shimla,Sholapur, Siliguri, Surat, Thiruvananthapuram,Tirupati, Tirupur, Trichur, Trichy, Udaipur,Varanasi, Vijaywada and Visakhapatnam.

The Reserve Bank of India may extend this serviceto some more centres.

How to avail of ECS Facility?

Investors holding shares in physical form may sendtheir ECS Mandate Form, duly filled in, to theCompany's STA. The Form may be downloadedfrom the Company's website www.riil.in under thesection "Investor Relations" or from the Company'sSTA's website http://karisma.karvy.com/intranet/jsp/docs/ECS.doc (for accessing this link registrationmay be required, address link for registration is http:// karisma.karvy.com/karisma/html/index.htm).

However, if shares are held in dematerialised form,ECS mandate has to be sent to the concernedDepository Participant (DP) directly, in the formatprescribed by the DP.

Why cannot the Company take on record bankdetails in case of dematerialised shares?

As per the Depository Regulations, the Companyis obliged to pay dividend on dematerialised sharesas per the bank account details furnished by theconcerned Depository. Therefore, investors arerequested to keep their bank particulars updatedwith the Depository Participants.

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Can ECS Facility be opted out by investors?

Investors have a right to opt out from this mode ofpayment by giving an advance notice of four weeks,prior to payment of dividend, either to theCompany's STA or to the concerned DP, as thecase may be.

How to register a request for obtainingpayment through ECS for the shares held indematerialized form?

The investor should approach the DP and submit arequest letter to the DP along with a copy of thecancelled cheque of the investors' bank account.The DP in turn will record the 9 digit MICR numberalong with the account particulars of the investor.This action would facilitate future payment ofdividend, etc. to be received in electronic mode.Recording the 9 digit MICR number with the DPwill also facilitate receipt of payment through NEFTor RTGS.

(iii) Course of Action in case of Non-receipt ofDividend, Revalidation of Dividend Warrantetc.

What should a shareholder do in case of non-receipt of dividend?

Shareholders may write to the Company's STA,furnishing particulars of the dividend not received,and quoting the folio number / DP ID and Client IDparticulars (in case of dematerialised shares). TheSTA shall check the records and issue duplicatedividend warrant if the dividend remains unpaid inthe records of the Company after expiry of thevalidity period of the warrant which is normallythree months from the date of its issue. If thevalidity period of the lost dividend warrant has notexpired, shareholders will have to wait till the expirydate since duplicate warrant cannot be issued duringthe validity of the original warrant. On expiry ofthe validity period, if the dividend warrant is stillshown as unpaid in the records of the Company,duplicate warrant will be issued. The STA wouldrequest the concerned shareholder to execute anindemnity before issuing the duplicate warrant.

However, duplicate warrants will not be issuedagainst those shares wherein a 'stop transferindicator' has been instituted either by virtue of acomplaint or by law, unless the procedure forreleasing the same has been completed.

No duplicate warrant will be issued in respect ofdividends which have remained unpaid / unclaimedfor a period of seven years in the unpaid dividendaccount of the Company as they are required to betransferred to the Investor Education and ProtectionFund (IEPF) constituted by the Central Government.

Why do the shareholders have to wait till theexpiry of the validity period of the originalwarrant?

Since the dividend warrants are payable at par atseveral centres across the country, banks do notaccept 'stop payment' instructions. Hence,shareholders have to wait till the expiry of thevalidity of the original warrant.

What is the procedure for revalidation ofdividend warrants?

Shareholders who have not encashed their dividendwarrants within the validity period may send theirrequest of revalidation to the Company's STAenclosing the said dividend warrants. The Company'sSTA will after due verification of the records, issuea revalidated dividend warrant. The revalidatedwarrant will be valid for a period not exceeding 3months from the date of such warrant.

How can a bank or any other person beauthorised to receive dividends on behalf ofshareholders?

Shareholders may write to the Company's STAfurnishing the name and address of the authorisedperson / bank along with folio number and currentcommunication address. The Company's STA willdespatch the respective shareholders' dividendwarrants to the concerned person / bank. Thisfacility is applicable only for the shareholdersholding shares in physical form.

(iv) Unclaimed / Unpaid Dividend

What are the statutory provisions governingunclaimed dividend?

Prior to amendment of Section 205A and enactmentof Section 205C by the Companies (Amendment)Act, 1999, companies were required to transfer tothe General Revenue Account of the CentralGovernment, any moneys transferred to the 'unpaiddividend account' and which remained unpaid orunclaimed for a period of 3 years from the date oftransfer, to the unpaid dividend account. Witheffect from 31st October, 1998, any moneystransferred to the 'unpaid dividend account' of theCompany and remaining unpaid or unclaimed for aperiod of 7 years from the date it becomes due,shall be transferred to the Investor Education andProtection Fund (IEPF). Investors are requestedto note that no claims shall lie against theCompany or IEPF for any moneys transferredto IEPF in accordance with the provisions ofSection 205C of the Companies Act, 1956.

What is the status of unclaimed and unpaiddividend for different years?

In view of the statutory provisions, as aforesaid,the status of unclaimed and unpaid dividend of theCompany is captured in the following Chart 1 :


Chart 1: Status of unclaimed and unpaid dividendfor different years

Dividend upto Dividend from Dividend for1993- 94 1994- 95 to 1999-2000 2000-01 and thereafter

Transfer of Transferred to Transferred to Will be transferred to IEPFunpaid dividend General Revenue Account Central Government's on due date(s)

of the Central Government Investor Educationand ProtectionFund (IEPF)

Claims for Can be claimed from Cannot be claimed Can be claimed from theunpaid dividend ROC, Maharashtra * Company's STA within

the time limits providedin Chart 2 given below

* Shareholders who have not encashed their dividendwarrant(s) relating to one or more of the financial year(s)upto and including 1993-94 are requested to claim suchdividend from the Registrar of Companies, Maharashtra,CGO Complex, 2nd Floor, "A" Wing, CBD-Belapur, NaviMumbai - 400 614, Telephone (091)(022)27576802, inForm II of the Companies Unpaid Dividend (Transfer toGeneral Revenue Account of the Central Government)Rules, 1978.

Chart 2 : Information in respect of unclaimed andunpaid dividends declared for 2000-01 and thereafter

Financial year Date of declaration Last date for claimingended of Dividend unpaid Dividend

31.03.2001 28.06.2001 27.06.200831.03.2002 25.06.2002 24.06.200931.03.2003 06.09.2003 05.09.201031.03.2004 25.09.2004 24.09.201131.03.2005 16.09.2005 15.09.201231.03.2006 12.07.2006 11.07.201331.03.2007 10.03.2007 09.03.2014

(b) Dematerialisation / Rematerialisation of Shares

What is dematerialisation of shares?

Dematerialisation (Demat) is the process by which sharesheld in physical form are cancelled and destroyed and theownership thereof is entered into and retained in a fungibleform on a depository by way of electronic balances.Trading in demat form is regulated by the DepositoriesAct, 1996 and is monitored by the Securities and ExchangeBoard of India (SEBI). The two depositories presentlyfunctioning are National Securities Depository Limited(NSDL) and Central Depository Services (India) Limited(CDSL).

Why dematerialise shares?

Trading in Compulsory Demat

SEBI has notified various companies whose shares shallbe traded in demat form only. By virtue of suchnotification, the shares of the Company are also subjectto compulsory trading only in demat form on the StockExchanges.

Benefits of Demat

(i) Elimination of bad deliveries.(ii) Elimination of all risks associated with physical

certificates.(iii) No stamp duty on transfers.(iv) Immediate transfer / trading of shares.(v) Faster settlement cycle.(vi) Faster disbursement of non cash corporate benefits

like rights, bonus, etc.(vii) SMS alert facility.(viii)Lower brokerage is charged by many brokers for

trading in dematerialised shares.(ix) Periodic status reports and information available

on internet.(x) Ease related to change of address of investor.(xi) Elimination of problems related to transmission of

demat shares.(xii) Ease in portfolio monitoring.

How to dematerialise shares?

The procedure for dematerialising shares is as under :

(i) Open Beneficiary Account with a DepositoryParticipant (DP) registered with SEBI.

(ii) Submit Demat Request Form (DRF) as given by theDP, duly signed by all the holders with the namesand signatures in the same order as appearing in theconcerned certificate(s) and the Company records.

(iii) Obtain acknowledgment from the DP on handingover the share certificate(s) along with the DRF.

(iv) Demat confirmations are required to be completedin 21 days as against 30 days (excluding time fordespatch) for physical transfer. Service standardsprescribed by the Company for completing dematis four days from the date of the receipt of requisitedocuments for the purpose.

(v) Receive a confirmation statement of holdings fromthe DP. Statement of holdings is sent by the DPsfrom time to time. Presently, confirmation is givenby DPs on an immediate basis through email orSMS facilities, thus enabling shareholders to furthertrade in the shares immediately. Shareholders shouldnot send share certificate(s) / document(s) to theCompany / Company's STA directly.

Additional information on the matter may be receivedfrom - Shri S. P. Venugopal, Deputy General Manager,Demat Advisory Cell, Karvy Computershare PrivateLimited 46, Avenue 4, Street No.1, Banjara Hills,Hyderabad 500 034, India Telephone Nos: +91 40 23320666 / 2332 0711 / 2332 3031 / 2332 3037; e-mail:[email protected]

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How to get dividend on dematerialised shares? Willsuch shareholders be eligible for receiving AnnualReport every year and also to attend GeneralMeetings?

Dividend of shareholders holding shares in dematerialisedform (residing at 68 centres stated hereinabove) will becredited through ECS / electronically to the bank accountsas opted by them while opening the Beneficiary Accountswith the DP. In other cases, dividend warrants will bedespatched to them with the bank account details, asfurnished by the Depositories, printed thereon. Holdingshares in dematerialised form will not have any adverseeffect on the rights of the Shareholders. As members ofthe Company, they will be entitled to receive AnnualReport, attend General Meetings and participate and votethereat to the extent of their shareholding.

Is pledge of dematerialised shares possible?

Dematerialised shares can be pledged for the purpose ofavailing of any funding / loan arrangement with a bank.

What is SMS alert facility?

NSDL and CDSL have launched SMS Alert facility fordemat account holders whereby investors can receivealerts for debits (transfers) to their demat accounts andfor credits in respect of corporate actions for IPO andoffer for sale. Under this facility, investors can receivealerts, a day after such debits (transfers) / credits takeplace. These alerts are sent to those account holders whohave provided their mobile numbers to their DepositoryParticipants (DPs). Alerts for debits are sent, if the debits(transfers) are up to five ISINs in a day. In case debits(transfers) are for more than five ISINs, alerts are sentwith a message that debits for more than five ISINs havetaken place and that the investor can check the detailswith the DP.

What is rematerialisation of shares?

It is the process through which shares held in demat formare converted into physical form by issuance of sharecertificate(s).

What is the procedure for rematerialisation ofshares?

(i) Shareholders should submit duly filled inRematerialisation Request Form (RRF) to theconcerned DP.

(ii) DP intimates the relevant Depository of the requestthrough the system.

(iii) DP submits RRF to the Company's STA.

(iv) Depository confirms rematerialisation request tothe Company's STA.

(v) The Company's STA updates accounts and printscertificate(s) and informs the Depository.

(vi) Depository updates the Beneficiary Account of theshareholder by deleting the shares so rematerialised.

(vii) Share certificate(s) is despatched to the shareholder.

(c) Nomination Facility

What is nomination facility and to whom it is moreuseful? What is the procedure of appointing anominee?

Section 109A of the Companies Act, 1956 provides thefacility of nomination to shareholders. This facility ismainly useful for individuals holding shares in sole name.In the case of joint holding of shares by individuals,nomination will be effective only in the event of thedeath of all joint holders. Investors, especially those whoare holding shares in single name, are advised to avail ofthe nomination facility by submitting the prescribed Form2B to the Company's STA. Form 2B may be downloadedfrom the Company's website, www.riil.in under the section"Investor Relations". However, if shares are held indematerialised form, nomination has to be registered withthe concerned DP directly, as per the format prescribedby the DP.

Who can appoint a nominee and who can beappointed as a nominee?

Individual shareholders holding shares in single name orjoint names can appoint a nominee. In case of jointholding, joint holders together have to appoint thenominee. While an individual can be appointed as anominee, a trust, society, body corporate, partnershipfirm, karta of HUF or a power of attorney holder cannotbe nominee(s). Minors can, however, be appointed as anominee.

How to avail of nomination facility for more thanone folio?

There can be only one nomination for one folio. Folioshaving different order or combination of names ofshareholders will require separate nominations.

Can a nomination once made be revoked / varied?

It is possible to revoke / vary a nomination once made. Ifnomination is made by joint holders, and one of the jointholders dies, the remaining joint holder(s) can make afresh nomination by revoking the existing nomination.

Are the joint holders deemed to be nominees tothe shares?

Joint holders are not nominees; they are joint holders ofthe relevant shares having joint rights on the same. Inthe event of death of any one of the joint holders, thesurviving joint holder(s) of the shares is / are the onlyperson(s) recognised under law as holder(s) of the shares.Joint holders may together appoint a nominee.

Can a Non Resident Indian (NRI) nominate ?

Yes, Non Resident Indian (NRI) can nominate. But, aPower of Attorney holder cannot nominate on behalf ofNRI.

Can an NRI be a nominee?

NRI can be a nominee on repatriable or non-repatriablebasis subject to Reserve Bank of India's permission asapplicable.


What rights are conferred on the nominee and howcan he exercise the same?

Nominee is entitled to all the rights of the deceasedshareholder to the exclusion of all other persons. In theevent of death of the shareholder, all the rights of theshareholder shall vest in the nominee. In case of jointholding, all the rights shall vest in the nominee only inthe event of death of all the joint holders. The nomineeis required to apply to the Company by reporting deathof the nominator along with the attested copy of thedeath certificate.

The nominee has an option to decide to register himselfas a shareholder or he / she could send an application tohave the shares transferred to any other person to whomthe nominator could have otherwise transferred the shares.If the nominee opts to transfer the shares to a thirdparty, he / she should submit to the Company's STA, thetransfer deed(s) duly stamped and executed, along withthe relevant certificate(s) and other documentaryproof(s).

(d) Transfer / Transmission / Transposition / DuplicateCertificates etc.

How to get shares registered in favour oftransferee(s)?

Transferee(s) need to send share certificate(s) along withshare transfer deed in the prescribed Form 7B, duly filledin, executed and affixed with share transfer stamps, tothe Company's STA. It takes about 7 days for theCompany's STA to process the transfer, although thestatutory time limit fixed for completing a transfer isone month under the Listing Agreement and two monthsunder the Companies Act, 1956. The Government ofIndia, Ministry of Finance, Department of Revenue, hasfixed the Stamp Duty on Transfer (whether with orwithout consideration) of shares at the rate of twentyfive paise (25 paise) for every Rs.100 or part thereof ofthe market value of the shares on the date of executionof the transfer deed. The transfer deed is valid for aperiod of one year from the date of presentation or tillthe book closure date, whichever is later. In case thetransfer deed has expired, the holder may approach theRegistrar of Companies to get the same revalidated. Incase of dematerialised shares, the shares are credited tothe purchaser's account by the respective DepositoryParticipant under the directions of the concernedDepository. Presently, transfer of dematerialised sharesdoes not attract stamp duty.

What should transferee (purchaser) do in casetransfer form is returned with objections?

Transferee needs to immediately proceed to get theerrors / discrepancies corrected. Transferee needs tocontact the transferor (seller) either directly or throughhis broker for rectification or replacement with goodshares. After rectification or replacement of the sharesthe same can be resubmitted for affecting transfer. Incase the errors are non rectifiable, purchaser has recourseto the seller and his broker through the Stock Exchangeto get back his money. However, in case of off markettransactions matter should be settled with the seller only.

Can shares be transferred to a minor, HinduUndivided Family, Firm, Trust etc. ?

Yes, shares can be transferred to a minor. In such a casethe share transfer deed is required to be signed by thenatural guardian on behalf of the minor.

In the case of Hindu Undivided Family (HUF), shares canbe transferred in the name of the Karta of HUF, in thecase of a Firm, shares can be transferred to a partner ofthe firm and in the case of a Trust, shares can betransferred to a trustee of the trust.

What is the procedure for transfer of shares in thecase of Non Residents ?

In the case of transfer of shares by Non Residents, inaddition to the normal procedure for transfer of shares,prior approval of Reserve Bank of India (RBI) is requiredto be obtained by the Non Resident investors.

Can single holding of shares be converted into jointholdings or joint holdings into single holding? Ifyes, what is the procedure involved in doing thesame?

Yes, conversion of single holding into joint holdings orjoint holdings into single holding or transfer within thefamily members leads to a change in the pattern ofownership, and therefore, procedure for a normal transferas mentioned above needs to be followed.

How to get shares registered which are received byway of gift? Does it attract stamp duty?

The procedure for registration of shares gifted (held inphysical form) is same as the procedure for a normaltransfer. The stamp duty payable for registration of giftedshares would be @ 25 paise for every Rs.100 or partthereof, of the face value or the market value of theshares prevailing as on the date of the document, if any,conveying the gift or the date of execution of the transferdeed, whichever is higher. The procedure for registrationof shares gifted (held in demat form) is the same as theprocedure for transfer of shares in demat form in offmarket mode.

What is the procedure for getting shares in thename of surviving shareholder(s), in case of jointholding, in the event of death of one shareholder?

The surviving shareholder(s) will have to submit a requestletter supported by an attested copy of the deathcertificate of the deceased shareholder and accompaniedby the relevant share certificate(s). The Company's STA,on receipt of the said documents and after due scrutiny,will delete the name of the deceased shareholder from itsrecords and return the share certificate(s) to the survivingshareholder(s) with necessary endorsement.

If a shareholder who holds shares in his sole namedies without leaving a Will, how can his legalheir(s) claim the shares?

The legal heir(s) should obtain a Succession Certificateor Letter of Administration with respect to the sharesand send a true copy of the same, duly attested, alongwith a request letter, transmission form, and the share

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certificate(s) in original, to the Company's STA fortransmission of the shares in his / their name(s).

In case of a deceased shareholder who held sharesin his / her own name (single) and had left a Will,how do the legal heir(s) get the shares transmittedin their name(s)?

The legal heir(s) will have to get the Will probated by theCourt of competent jurisdiction and then send, to theCompany's STA, a copy of the probated copy of theWill, along with relevant details of the shares, the relevantshare certificate(s) in Original and transmission form fortransmission of the shares in his / their name(s).

How can the change in order of names (i.e.transposition) be effected?

Share certificates along with a request letter duly signedby all the joint holders may be sent to the Company'sSTA for change in order of names, known as'transposition'. Transposition can be done only for theentire holdings under a folio and therefore, requests fortransposition of part holding cannot be accepted by theCompany / STA. For shares held in demat form, investorsare advised to approach their DP concerned fortransposition of the shares of the Company.

What is the procedure for obtaining duplicate sharecertificate(s) in case of loss / misplacement oforiginal share certificate(s)?

Shareholders who have lost / misplaced share certificate(s)should inform the Company's STA, immediately aboutloss of share certificate(s), quoting their folio numberand details of share certificate(s), if available. The STAshall immediately mark a 'stop transfer' on the folio toprevent any further transfer of shares covered by thelost share certificate(s). It is recommended that theshareholders should lodge an FIR with the police regardingloss of share certificate(s). They should send their requestfor duplicate share certificate(s) to the Company's STA.Documents required to be submitted along with theapplication include Indemnity Bond, Surety Form, copyof FIR and in case of companies, Memorandum ofAssociation and Certified Copy of the Board Resolutionalso.

What should a shareholder do in case he finds theoriginal share certificate(s) after receipt ofduplicate share certificate(s)?

Such a shareholder is requested to surrender the originalshare certificate(s), after cancellation, to the Company'sSTA immediately, if the duplicate share certificate(s) havebeen issued to him / her. Further, as the shareholder hasbeen issued duplicate share certificate(s), he / she wouldbe liable to indemnify any innocent third party(ies)purchasing the original share certificate(s), directly orindirectly, with or without the knowledge of the originalshareholder, as it tantamounts to passing of adverse title.

What is the procedure for splitting of a sharecertificate into smaller lots?

Shareholders may write to the Company's STA enclosingthe relevant share certificate for splitting into smaller

lots. The share certificates, after splitting, will be sent bythe Company's STA to the shareholders at their registeredaddress.

How to get the certificates issued in variousdenominations consolidated into SingleCertificate?

Consolidation of share certificates helps in saving costsin the event of dematerialising shares and also providesconvenience in holding the shares physically. Shareholdershaving certificates in various denominations under thesame folio should send all the certificates to Karvy forconsolidation of all the shares into a single certificate.

If the shares are not under the same folio but have thesame order of names, the shareholder should write toKarvy for the prescribed form for consolidation of folios.This will help the investors to efficiently monitor theholding and receivable thereon.

(e) Miscellaneous

(i) Change of address

What is the procedure to get change of addressregistered in the Company's records?

Shareholders holding shares in physical form, maysend a request letter duly signed by all the holdersgiving the new address along with Pin Code.Shareholders are also requested to quote their folionumber and furnish proof such as attested copies ofRation Card / Passport / Latest Electricity orTelephone Bill / Lease Agreement etc. If shares areheld in dematerialised form, information aboutchange in address needs to be sent to the DPconcerned.

Can there be multiple addresses for a singlefolio?

There can only be one registered address for onefolio.

(ii) Change of name

What is the procedure for registering changeof name of shareholders?

Shareholders may request the Company's STA foreffecting change of name in the share certificate(s)and records of the Company. Original sharecertificate(s) along with the supporting documentslike marriage certificate, court order etc. should beenclosed. The Company's STA, after verification,will effect the change of name and send the sharecertificate(s) in the new name of the shareholders.Shareholders holding shares in demat form, mayrequest the concerned DP in the format prescribed byDP.

(iii) Authority to another person to deal with shares

What is the procedure for authorising anyother person to deal with the shares of theCompany?

Shareholders need to execute a Power of Attorney


in favour of the concerned person and submit anotarised copy of the same to the Company's STA.After scrutiny of the documents, the STA shallregister the Power of Attorney and inform theshareholders concerned about the registrationnumber of the same. Whenever a transaction isdone by the Power of Attorney holder thisregistration number should be quoted in thecommunication.

(f) Shareholders' General Rights

(i) To receive not less than 21 days notice of generalmeetings unless consented for a shorter notice.

(ii) To receive notice and forms for Postal Ballots interms of the provisions of the Companies Act, 1956and the Rules issued thereunder.

(iii) To receive copies of the Balance Sheet and Profitand Loss Account along with all annexures /attachments (Generally known as Annual Report).

(iv) To participate and vote at general meetings eitherpersonally or through proxy.

(v) To receive dividends and other corporate benefitslike bonus, rights etc. once approved.

(vi) To demand poll on any resolution at a general meetingin accordance with the provisions of the CompaniesAct, 1956.

(vii) To inspect statutory registers and documents aspermitted under law.

(viii)To require the Board of Directors to call anextraordinary general meeting in accordance withthe provisions of the Companies Act, 1956.

(g) Duties / Responsibilities of Investors

(i) To remain abreast of corporate developments,company specific information and take informedinvestment decision(s).

(ii) To be aware of relevant statutory provisions andensure effective compliance therewith.

(iii) Not to indulge in fraudulent and unfair trading inshares nor to act upon any unpublished price sensitiveinformation.

(iv) To participate effectively in the proceedings ofshareholders' meetings.

(v) To respond to communications seeking shareholders'approval through Postal Ballot.

(vi) To respond to communications of SEBI / Depository/ Depository Participant / Brokers / Sub-brokers /Other Intermediaries / Company, seeking investorfeedback / comments.

5. Initiatives Taken by the Company

(a) Service Standards

The service standards that have been set by the Companyfor various investor related transactions / activities areas follows:

(i) Registrations

Sr. Particulars Service StandardsNo. (No. of working days)1. Transfer 72. Transmission 43. Transposition 44. Deletion of Name 35. Folio Consolidation 36. Change of Name 37. Demat 48. Remat 49. Issue of Duplicate Certificate 35

10. Replacement of Certificate 311. Certificate Consolidation 312. Certificate Split 3

(ii) Correspondence

Sr. Particulars Service StandardsNo. (No. of working days)

Queries / Complaints

1. Non-receipt of Annual Report 22. Non-receipt of Dividend Warrant 43. Non-receipt of Share Certificate 24. Non-receipt of Stickers 3

(Change of name of the Company)

Event Based

1. TDS certificate 22. Others 2

Requests

1. Change of Address 22. Revalidation of Dividend Warrants 33. Bank Mandate / Details / ECS 24. Nomination 25. Power of Attorney 26. Multiple Queries 47. Request received for issue 3

of duplicate certificates8. IEPF Letters 3

(b) Undelivered Share Certificates & Warrants

The Company with the help of its STA has been engagedin a continuous exercise of tracking investors who couldnot be reached at their existing address.

(c) Intimation Letters to Investors

The Company gives an opportunity by sendingintimation letters to investors for claiming theiroutstanding dividend amount which is due for transfer toInvestor Education and Protection Fund.

(d) Consolidation of Folios

The Company has initiated a unique investor servicingmeasure for consolidation of small holdings within thesame household. In terms of this, those shareholders

26

holding less than 10 shares (under a single folio) in theCompany, within the same household, can send such sharesfor transfer along with transfer forms duly filled in andsigned, without payment of stamp duty; the stamp dutyinvolved in such cases will be borne by the Company.

Benefits of Consolidation of Folios(i) The present day scenario provides the investor with

the comfort of maintaining the portfolios throughdematerialisation. Investors need to open multipledemat accounts in case the shares are held in differentcombinations. Consolidation of the folios wouldminimise the necessity to open multiple demataccounts and thereby maintenance costs can bereduced.

(ii) Consolidation of folios would also help inshareholder(s) getting a single share certificate forall the shares held by them thereby reducingdematerialisation costs if the shareholder(s) optsfor converting the shares into electronic mode.

(iii) Maintenance of multiple folios would result inpayment of dividend amounts through multiplewarrants, resulting in higher chances of pilferage /misplacement in postal transit. Consolidation offolios would lead to payment of dividend through asingle warrant and hence the shareholder is assuredof receiving the dividend on all the shares held byhim by a single transaction.

(iv) In case of dividend being credited directly to thebank account of the investor, the requirement forthe investor to verify his bank account to ensurethat dividend for all the shares has been crediteddoes not arise. The dividend for all the shares heldby him would be credited as a single transaction.

6. Information Regarding Tax on Dividend and Sale ofShares

The provisions relating to tax on dividend and sale of sharesare provided for ready reference of Shareholders:

(a) No tax is payable by shareholders on dividend. However,the Company is required to pay dividend tax @ 15% andsurcharge @ 10%, together with education cess@ 2% and higher education cess @ 1%.

(b) Short Term Capital Gains (STCG) tax is payable@ 15% and surcharge @ 10% above income level ofRs.10 lacs in case of 'individuals' together with educationcess @ 2% and higher education cess @ 1%, in caseshares are sold within 12 months from the date ofpurchase, provided Securities Transaction Tax (STT) asmentioned below has been paid.

(c) No Long Term Capital Gains (LTCG) tax is payable onsale of shares through a recognized stock exchange,provided Securities Transaction Tax (STT) as mentionedbelow has been paid and shares are sold after 12 monthsfrom the date of purchase. In any other case, lower ofthe following is payable as long term capital gain tax:

(i) 20% of the capital gain computed after substituting'cost of acquisition' with 'indexed cost of acquisition';

(ii) 10% of the capital gain computed before substituting'cost of acquisition' with 'indexed cost of acquisition'.

(d) Securities Transaction Tax (STT) is payable as under -

(i) @ 0.125% by both the purchaser and the seller inrespect of delivery based transactions.

(ii) @ 0.017% by the seller in respect of derivatives.

(iii) @ 0.025% by the seller in respect of transactionsin securities not being settled by actual delivery.

7. Investor Servicing and Grievance Redressal at ExternalAgencies

(a) Ministry of Corporate Affairs

Ministry of Corporate Affairs (MCA) has launched amajor e-Governance initiative christened as "MCA 21"on the MCA portal (www.mca.gov.in). One of the keybenefits of this initiative includes timely redressal ofinvestor grievances. MCA 21 system accepts complaintsunder the eForm prescribed, which has to be filed online.The nature of complaint may relate to(i) Shares / Dividends(ii) Debentures / Bonds(iii) Fixed Deposits - non receipt of amount(iv) Miscellaneous - non receipts(v) Any other

The status of complaint can be viewed by quoting theService Request Number (SRN) provided at the time offiling the complaint.

(b) Investor Education and Protection Fund (IEPF)

IEPF is for promotion of investors' awareness andprotection of the interests of investors. IEPF throughInvestor Helpline is assisting investors- free of charge-in redressal of their grievances. It provides a facility,to the investors, to lodge their grievance on the websiteitself. This facility is available on websitewww.investorhelpline.in. The complaints can be lodgedon various issues such as:(i) Refund Order/ Allotment Advice related.(ii) Non-receipt of Dividend.(iii) Non-receipt of Share certificates / Units after

allotment / Transfer / Bonus / Transmission etc.(iv) Non-receipt of Debentures / Bond Certificate

or Interest / Redemption Amount.(v) Offer for Rights Issue.(vi) Non-receipt of Investments and returns thereon

on Collective Investment Schemes / PlantationCompanies.

(vii) Non-receipt of Annual Report / AGM Notice /Proxy Form.

(viii) Non-registration of Change in Address ofInvestor.

(ix) Non-receipt of Fixed / Public Deposits relatedamounts.

(x) Demat related Grievances.


(c) Securities and Exchange Board of India (SEBI)

SEBI, in its endeavour to protect the interest ofinvestors, has provided a platform wherein the investorscan lodge their grievances. This facility is available onthe SEBI website (www.sebi.gov.in) under the InvestorGuidance Section. The complaints can be lodged onvarious issues such as:

(i) Non receipt of dividend.

(ii) Non receipt of share certificates after transfer.

(iii) Matters pertaining to non-receipt of allotmentadvice / Refund Orders.

(iv) Matters pertaining to Debentures.

(v) Non receipt of letter of offer of rights.

(vi) Any other.

After lodging the complaint, the Investors can trackthe status as well.

(d) Stock Exchanges

(i) National Stock Exchange of India Limited(NSE)-NSE has formed an Investor GrievanceCell (IGC) to redress investors' grievanceselectronically. IGC is manned by a team ofprofessionals who possess relevant experiencein the areas of capital markets, company andlegal affairs; especially trained to identify theproblem faced by the investor, and to find andresolve at the earliest. The investors have tolog on to the website of NSE i.e.www.nseindia.com and in the Investors ServiceCentre Section they can fill in Form I or FormII depending upon the type of complaint andfile the same electronically with NSE. Generally,complaints are resolved within a period of 45days.

(ii) Bombay Stock Exchange Limited (BSE) - BSEprovides an opportunity to its members to filetheir complaints electronically through itswebsite www.bseindia.com under the InvestorDesk Section. Here again as in case of NSE, theInvestors can fill in various complaint formsdepending upon the nature of their complaintand file them electronically.

(e) Depositories

(i) National Securities Depository Limited (NSDL)-In order to help its clients resolve their doubts,queries, complaints, NSDL has provided anopportunity wherein they can raise their queriesby logging on to www.nsdl.co.in under the 'QueryNow' section or an email can be markedmentioning the query to [email protected].

(ii) Central Depository Services (India) Limited(CDSL) - Investors who wish to seek generalinformation on depository services may mailtheir queries to [email protected]. Withrespect to the complaints / grievances of thedemat accountholders relating to the services

of the Depository Participants, mails may beaddressed to [email protected].

8. Other Information

(a) Permanent Account Number (PAN)

SEBI has vide circular MRD/DoP/Cir-05/2007 dated27th April, 2007 made PAN the sole identificationnumber for all participants in the securities market,irrespective of the amount of transaction. Nowonwards, it has become mandatory to quote PAN beforeentering into any transaction in the securities market.PAN Card is now mandatory for operating a demataccount. Application for fresh allotment of PAN canbe made through Internet. Further, requests for changesor correction in PAN data or request for new PAN card(for an existing PAN) may also be made throughInternet. The detailed procedure on this has beenmentioned on the website (www.tin-nsdl.com). TheIncome Tax Department of India has highlighted theimportance of PAN on its websitewww.incometaxindia.gov.in wherein lot of queries withrespect to PAN have been replied in the FAQ section.

(b) Insider Trading

'Insider Trading' is a process in which any person, whois or was connected with the company or is deemed tohave been connected with the company, on the basis ofpossession of unpublished price sensitive information,trades in the shares of the Company for personal gainsto the detriment of other innocent investors. In orderto prevent insider trading and protect the rights ofinnocent investors, SEBI has enacted the SEBI(Prohibition of Insider Trading) Regulations, 1992. Asper Regulation 13 of the said Regulations, initial andcontinual disclosures are required to be made by investorsas under:

(i) Initial Disclosure

Under Regulation 13(1), any person who holdsmore than 5% shares or voting rights in anylisted company shall disclose to the company[in Form A] the number of shares or votingrights held by such person, on becoming suchholder, within 4 working days of : (a) the receiptof intimation of allotment of shares; or (b) theacquisition of shares or voting rights, as the casemay be.

(ii) Continual Disclosure

Under Regulation 13(3), any person who holdsmore than 5% shares or voting rights in anylisted company shall disclose to the company[in Form C] the number of shares or votingrights held and change in shareholding or votingrights, even if such change results in shareholdingfalling below 5%, if there has been change insuch holdings from the last disclosure made undersub-regulation (1) or under this sub-regulationof the said Regulation 13; and such changeexceeds 2% of total shareholding or voting rightsin the company.

28

9. Contact Details

Ministry of Corporate Affairs'A' Wing, Shastri BhawanRajendra Prasad Road,New Delhi - 110 001Tel : +91 11 2338 4660 / 2338 4470 / 2338 9403Website: www.mca.gov.in

Depositories

National Securities Depository LimitedTrade World, A Wing, 4th & 5th Floors,Kamala Mills Compound, Senapati Bapat Marg,Lower Parel, Mumbai 400 013Tel : +91 22 2499 4200Fax :+91 22 2497 2993 / 2497 6351e-mail: [email protected]: www.nsdl.co.in

Central Depository Services (India) LimitedPhiroze Jeejeebhoy Towers, 16th Floor,Dalal Street, Mumbai 400 023Tel : +91 22 2272 3333Fax : +91 22 2272 3199 / 2272 2072e-mail: [email protected]: www.cdslindia.com

Share Transfer AgentKarvy Computershare Private Limited46, Avenue 4,Street No. 1, Banjara Hills, Hyderabad 500 034Tel : +91 40 2332 0666/2332 0711/ 2332 3031/2332 3037Fax : +91 40 2332 3058e-mail: [email protected]

Securities and Exchange Board of IndiaSEBI Bhavan, Plot No. C4-A, 'G' Block,Bandra-Kurla Complex, Bandra (East),Mumbai 400 051Tel : +91 22 2644 9000 / 4045 9000e-mail: [email protected]

Securities and Exchange Board of IndiaOffice of Investor Assistance and EducationSEBI Bhavan, Plot No. C4-A, 'G' Block,Bandra-Kurla Complex, Bandra (East),Mumbai 400 051Tel : +91 22 2644 9188 / 2644 9199Fax :+91 22 2644 9039e-mail :[email protected]

Registrar of Companies, MaharashtraEverest, 100 Marine Drive,Mumbai 400 002Tel : +91 22 2281 2639Fax : +91 22 2281 1977e-mail : [email protected]

Company Law Board(Western Region Bench)2nd Floor, NTC House,15, N.M. Marg, Ballard Estate,Mumbai 400 038Tel : +91 22 2261 1456

Regional Director (Western Region)Ministry of Corporate AffairsEverest, 5th Floor, 100, Marine Drive,Mumbai 400 002Tel : +91 22 2281 7259Fax :+91 22 2281 2389e-mail: [email protected]

Bombay Stock Exchange Limited (BSE)Phiroze Jeejeebhoy Towers,Dalal Street,Mumbai 400 001Tel : +91 22 2272 1233 / 4Fax : +91 22 2272 1919e-mail : [email protected] :www.bseindia.com

The National Stock Exchange of India Limited (NSE)"Exchange Plaza" Plot No. C/1, 'G' Block,Bandra-Kurla Complex, Bandra (E),Mumbai 400 051Tel : +91 22 2659 8100 - 8114Fax : +91 22 2659 8120e-mail :[email protected]: www.nseindia.com

General Shareholder Information covering inter alialisting details, stock market data, the Company's shareprice performance etc. is provided in the Report onCorporate Governance forming part of the AnnualReport.

NOTE:

The terms 'shareholders' and 'investors' have been usedinterchangeably. The contents of this Referencer are for thepurpose of general information of readers; for full particulars /provisions, readers are advised to refer to the relevant Acts /Rules / Regulations / Guidelines / Clarifications.


DEALING IN SECURITIES MARKET

DO'S

Transact only through Stock Exchanges.

Deal only through SEBI registered intermediaries.

Complete all the required formalities of opening an accountproperly (Client registration, Client agreement forms etc).

Ask for and sign "Know Your Client Agreement".

Read and properly understand the risks associated withinvesting in securities /derivatives before undertakingtransactions.

Assess the risk - return profile of the investment as well asthe liquidity and safety aspects before making yourinvestment decision.

Ask all relevant questions and clear your doubts with yourbroker before transacting.

Invest based on sound reasoning after taking into accountall publicly available information and on fundamentals.

Give clear and unambiguous instructions to your broker /sub-broker / Depository Participant.

Be vigilant in your transactions.

Insist on a contract note for your transaction.

Verify all details in contract note, immediately on receipt.

Crosscheck details of your trade with details as availableon the exchange website.

Scrutinize minutely both the transaction and the holdingstatements that you receive from your DepositoryParticipant.

Keep copies of all your investment documentation.

Handle Delivery Instruction Slips (DIS) Book issued byDP's carefully.

Insist that the DIS numbers are pre-printed and youraccount number (client id) be pre-stamped.

In case you are not transacting frequently make use of thefreezing facilities provided for your demat account.

Pay the margins required to be paid in the time prescribed.

Deliver the shares in case of sale or pay the money in caseof purchase within the time prescribed.

Participate and vote in general meetings either personallyor through proxy.

Be aware of your rights and responsibilities.

In case of complaints, approach the right authorities forredressal in a timely manner.

DON'TS

Don't undertake off-market transactions in securities.

Don't deal with unregistered intermediaries.

Don't fall prey to promises of unrealistic returns.

Don't invest on the basis of hearsay and rumors; verifybefore investment.

Don't forget to take note of risks involved in theinvestment.

Don't be misled by rumours circulating in the market.

Don't follow the herd or play on momentum - it could turnagainst you.

Don't be misled by so called hot tips.

Don't try to time the market.

Don't hesitate to approach the proper authorities forredressal of your doubts / grievances.

Don't leave signed blank Delivery Instruction Slips of yourdemat account lying around carelessly or with anyone.

Don’t sign blank Delivery Instruction Slips(DIS) and keepthem with Depository Participant(DP) or broker to savetime. Remember your carelessness can be your peril.

30

Directors’ Report

Dear Members,

Your Directors are pleased to present the 20th Annual Report andthe audited accounts for the financial year ended 31st March, 2008.

Financial Results

The financial performance of the Company for the financial yearended 31st March, 2008 is summarised below :

(Rs. in Crore)

2007-2008 2006-2007

Gross Profit before interest and depreciation 38.51 40.93

Less : Interest 2.84 7.40Depreciation & Impairment 6.41 7.25Less : Transfer from

General Reserve - 1.36Less : Transfer from

Revaluation Reserve 1.08 -5.33 5.89

Profit before Tax 30.34 27.64

Less : Provision for Taxation :– Current Tax 3.40 11.93– Fringe Benefit Tax 0.06 0.06– Deferred Tax 5.09 (3.46)

8.55 8.53Profit after Tax 21.79 19.11

Add : Balance in Profitand Loss Account 18.63 17.07

Amount Available for Appropriation 40.42 36.18

Appropriations :Debenture Redemption Reserve - 1.53

General Reserve 10.00 10.00

Dividend on Equity Shares 5.28 5.28

Tax on Dividend 0.90 0.74

Balance carried to Balance Sheet 24.24 18.63

40.42 36.18

Dividend

Your Directors have recommended a dividend of Rs.3.50 per EquityShare (last year Rs.3.50 per Equity Share) on 1 51 00 000 EquityShares of Rs.10/- each for the financial year ended 31st March, 2008,which, if approved at the ensuing Annual General Meeting, will bepaid to those members whose names appear in the Company's Registerof Members on Thursday, 5th June, 2008; in respect of shares heldin dematerialised form, it will be paid to members whose names arefurnished by National Securities Depository Limited and CentralDepository Services (India) Limited as beneficial owners as on thatdate.

The total cash outflow on account of this dividend includingdistribution tax will be Rs.6.18 crore.

The Company has consistently paid dividend since the financial year1991-92.

Management Discussion and Analysis

Financial and Operational Review :

The Company has earned a gross income of Rs.80.13 crore for thefinancial year 2007-2008, as compared to Rs.75.67 crore in theprevious year, an increase of 5.9%.

The Company has earned a higher net profit of Rs.21.79 crore forthe year as compared to Rs.19.11 crore in the previous year, anincrease of 14.02% over the previous year.

Interest expenditure for the year under review has decreased to Rs.2.84crore from Rs.7.40 crore in the previous year.

Depreciation and impairment during the year was lower at Rs.5.33crore as compared to Rs.5.89 crore in the previous year.

Return on equity is higher at 15.6% as compared to 15.3% in theprevious year and return on capital employed remained at 13.6% asin the previous year.

Earnings per Share is Rs.14.43 as compared to Rs.12.66 in theprevious year.

Resources and Liquidity :

The debt to equity ratio of the Company is 0.40:1 as at 31st March,2008 as compared to 0.87:1 as at 31st March, 2007. The Company'slong term debt is Rs.59 crore as on 31st March, 2008.

The Company's net worth as on 31st March, 2008 was Rs.151.25crore, with paid-up capital of Rs.15.10 crore and accumulated reservesand surplus of Rs.136.15 crore.

Industry Structure and Developments :

The infrastructure related project and construction industry in Indiais characterised by a few large and a very large number of small tomedium size players involved in ports, roads, real estate construction,IT Parks etc.

Due to this involvement of wide range of companies and due togovernment policies, the infrastructure sector continues to beliberalised and allows private sector participation in virtually allinfrastructure sub-sectors. The sectors such as ports and roads arenow open to private investors together with financial incentives forprivate sector entry and operation.

Opportunities :

Indian economy continued to perform well and remained one of thefastest growing economies. Government of India continues to provide,in its annual budget, for major expenditure outlays on infrastructurelike highways and ports.

The Company has been getting orders for setting up port facilityand supply of IT Infrastructure equipments and software on lease.This is expected to provide growth opportunities to the Company.

Outlook :

The Company will continue to maintain its focus in the infrastructureand project related areas.

Challenges, Risks and Concerns :

The Company faces normal business challenges of market competitionin its business and needs to continuously seek attractive growthopportunities. The Company adopts suitable business strategies to


counter these challenges.

As a part of the overall risk management strategy, the Companyconsistently insures its assets and generally follows a conservativefinancial profile by following prudent business practices.

Internal Controls :

The Company has a proper and adequate internal control systemcommensurate with its nature of business and meets the followingobjectives :

Providing assurance regarding the effectiveness and efficiency ofoperations;

Efficient use and safeguarding of resources;

Compliance with policies, procedures and applicable laws andregulations; and

Transactions being accurately recorded and promptly reported.

The Company also has budgetary control system to monitorexpenditures against approved budgets on an ongoing basis.

The Audit Committee of the Board of Directors regularly reviewsthe adequacy of internal control system.

Human Resource Development :

The Company has a team of able and experienced professionals. TheCompany believes that the quality of its employees is the key to itssuccess in the long run. The Company continues to have cordialrelations with its employees. It employs 148 persons and providespersonal development opportunities with all round exposure to them.

Directors

In terms of Article 143 of the Articles of Association, Shri BharatC. Gosalia and Shri S. C. Malhotra retire by rotation and being eligible,offer themselves for reappointment at the ensuing Annual GeneralMeeting. Brief Resume of the Directors, nature of their expertise inspecific functional areas, names of companies in which they holddirectorships and memberships / chairmanships of Board Committees,their shareholding and relationships between them inter-se, asstipulated under Clause 49 of the Listing Agreement with the StockExchanges, are provided in the Report on Corporate Governanceforming part of the Annual Report.

Group

Pursuant to an intimation from Promoter i.e. Reliance IndustriesLimited, the names of the Promoters and entities comprising the'group' as defined in the Monopolies and Restrictive Trade Practices('MRTP') Act, 1969, are disclosed in the Annual Report of theCompany for the purpose of the Securities and Exchange Board ofIndia (Substantial Acquisition of Shares and Takeovers) Regulations,1997.

Directors' Responsibility Statement

Pursuant to the requirement under Section 217(2AA) of theCompanies Act, 1956, with respect to Directors' ResponsibilityStatement, it is hereby confirmed that:-

i. in the preparation of the accounts for the financial year ended31st March, 2008, the applicable accounting standards havebeen followed and that there are no material departures fromthe same;

ii. the Directors have selected such accounting policies andapplied them consistently and made judgments and estimatesthat are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at 31st March,2008 and of the profit of the Company for the year endedon that date;

iii. the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordancewith the provisions of the Companies Act, 1956, forsafeguarding the assets of the Company and for preventingand detecting fraud and other irregularities; and

iv. the Directors have prepared the accounts for the financialyear ended 31st March, 2008 on a "going concern" basis.

Auditors

Messrs Chaturvedi & Shah, Chartered Accountants, Statutory Auditorsof the Company hold office until the conclusion of the ensuingAnnual General Meeting and are eligible for reappointment.

The Company has received letter from them to the effect that theirreappointment, if made, would be within the limits prescribed underSection 224(1B) of the Companies Act, 1956 and that they are notdisqualified for such reappointment within the meaning of Section226 of the said Act.

Secretarial Audit Report

As a measure of good corporate practice, the Board of Directors ofthe Company appointed Dr. K. R. Chandratre, Practicing CompanySecretary, to conduct Secretarial Audit of the Company. TheSecretarial Audit Report for the financial year ended 31st March,2008, is provided in the Annual Report.

The Secretarial Audit Report confirms that the Company hascomplied with all the applicable provisions of the Companies Act,1956, the Depositories Act, 1996, the Securities and Exchange Boardof India (Substantial Acquisition of Shares and Takeovers) Regulations,1997, the Securities and Exchange Board of India (Prohibition ofInsider Trading) Regulations, 1992 and the Listing Agreement withthe Stock Exchanges.

Particulars of Employees

In terms of the provisions of Section 217(2A) of the CompaniesAct, 1956 read with the Companies (Particulars of Employees) Rules,1975 as amended, the names and other particulars of the employeesare set out in the annexure to the Directors' Report.

However, having regard to the provisions of Section 219(1)(b)(iv)of the said Act, the Annual Report excluding the aforesaid informationis being sent to all the Members of the Company and others entitledthereto. Any member interested in obtaining such particulars maywrite to the Company Secretary at the Registered Office of theCompany.

Energy Conservation, Technology Absorption and ForeignExchange Earnings and Outgo

The particulars relating to energy conservation, technologyabsorption and foreign exchange earnings and outgo, as required tobe disclosed under Section 217(1)(e) of the Companies Act, 1956read with the Companies (Disclosure of Particulars in the Report ofBoard of Directors) Rules, 1988 (the "Rules") are as under :

32

i. Part A and B of the Rules, pertaining to Conservation of Energyand Technology Absorption, are not applicable to the Company.

ii. Foreign Exchange Earnings and Outgo :

Earnings - Rs. Nil

Outgo - Rs. 7 455.53 lacs

Transfer of Unpaid and Unclaimed amounts to InvestorEducation and Protection Fund (IEPF)

Pursuant to the provisions of Section 205A(5) of the CompaniesAct, 1956, the declared dividends which remained unpaid andunclaimed for a period of 7 years have been transferred by theCompany to the Investor Education and Protection Fund (IEPF)established by the Central Government pursuant to Section 205C ofthe said Act.

Corporate Governance

The Company is committed to maintain the highest standards ofCorporate Governance. Your Directors adhere to the requirementsset out in the Listing Agreement with the Stock Exchanges and haveimplemented all the stipulations prescribed.

The Report on Corporate Governance as stipulated under Clause 49of the Listing Agreement with the Stock Exchanges forms part ofthe Annual Report.

The declaration regarding compliance with the Company's Code ofBusiness Conduct and Ethics for Directors and ManagementPersonnel forms part of the Report on Corporate Governance.

The requisite Certificate from the Auditors of the Company, MessrsChaturvedi & Shah, confirming compliance with the conditions ofCorporate Governance as stipulated under the aforesaid Clause 49, isannexed to this Report.

Acknowledgement

Your Directors would like to express their grateful appreciation forassistance and co-operation received from the Government, Banks,other Business constituents and Members during the year under review.Your Directors also wish to place on record their deep sense ofappreciation for the committed services of the Employees of theCompany.

For and on behalf of the Board of Directors

Mahesh K. KamdarChairman

Mumbai15th April, 2008

Auditors’ Certificate on Corporate GovernanceTo the Members,Reliance Industrial Infrastructure Limited

We have examined the compliance of conditions of Corporate Governance by Reliance Industrial Infrastructure Limited, for the year ended on31st March, 2008, as stipulated in Clause 49 of the Listing Agreement of the said Company with stock exchanges.The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination has been limited to a reviewof the procedures and implementation thereof adopted by the Company for ensuring compliance with the conditions of the CorporateGovernance as stipulated in the said Clause. It is neither an audit nor an expression of opinion on the financial statements of the Company.In our opinion and to the best of our information and according to the explanations given to us, and based on the representations made by theDirectors and the Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in Clause49 of the above mentioned Listing Agreement.We state that such compliance is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with whichthe Management has conducted the affairs of the Company.

For Chaturvedi & ShahChartered Accountants

Amit ChaturvediPartner

Membership No. 103141MumbaiDated : 15th April, 2008


Persons constituting Group coming within the definition of 'group' as defined in the Monopolies andRestrictive Trade Practices Act, 1969 include the following :

Reliance Industries Limited (Promoter)

Abcus Retail Private Limited

Advantage Retail Private Limited

Bigdeal Retail Private Limited

Delight Proteins Limited

Gapco Kenya Limited

Gapco Rwanda SARL

Gapco Tanzania Limited

Gapco Uganda Limited

Gapoil Tanzania Limited

Gapoil Zanzibar Limited

Gulf Africa Petroleum Corporation (Mauritius)

Peninsula Land Kenya Limited

Recron (Malaysia) Sdn Bhd

Reliance Agri Products Distribution Limited

Reliance Aromatics and Petrochemicals Private Limited

Reliance Autozone Limited

Reliance Brands Limited

Reliance Chemicals Private Limited

Reliance Commercial Associates Limited

Reliance Dairy Foods Limited

Reliance Digital Media Limited

Reliance Energy and Project Development Private Limited

Reliance Exploration & Production DMCC

Reliance F&B Services Limited

Reliance Financial Distribution and Advisory Services Limited

Reliance Food Processing Solutions Limited

Reliance Footprint Limited

Reliance Fresh Limited

Reliance Gems and Jewels Limited

Reliance Global Management Services Limited

Reliance Haryana SEZ Limited

Reliance Home Store Limited

Reliance Hypermart Limited

Reliance Industrial Investment and Holdings Limited

Reliance Industries (Middle East) DMCC

Reliance Integrated Agri Solutions Limited

Reliance International Exploration and Production Inc.

Reliance Jamnagar Infrastructure Limited

Reliance Leisures Limited

Reliance Lifestyle Holdings Limited

Reliance Loyalty & Analytics Limited

Reliance Netherlands BV

Reliance Nutraceuticals Private Limited

Reliance Petroinvestments Limited

Reliance Petroleum Limited

Reliance Pharmaceuticals (India) Private Limited

Reliance Polyolefins Private Limited

Reliance Retail Finance Limited

Reliance Retail Insurance Broking Limited

Reliance Retail Limited

Reliance Retail Securities and Broking Company Limited

Reliance Retail Travel & Forex Services Limited

Reliance Strategic Investments Limited

Reliance Supply Chain Solutions Limited

Reliance Trade Services Centre Limited

Reliance Trends Limited

Reliance Universal Ventures Limited

Reliance Ventures Limited

Reliance Wellness Limited

Reliancedigital Retail Limited

RESQ Limited

Retail Concepts and Services (India) Limited

RIL (Australia) Pty Ltd

Strategic Manpower Solutions Limited

Transenergy Kenya Limited

Wavely Investments Limited

34

To the Members of Reliance Industrial Infrastructure Limited

1. We have audited the attached Balance Sheet of RelianceIndustrial Infrastructure Limited as at 31st March, 2008,the Profit and Loss Account and also the Cash Flow Statementfor the year ended on that date annexed thereto. These financialstatements are the responsibility of the Company’s management.Our responsibility is to express an opinion on these financialstatements based on our audit.

2. We conducted our audit in accordance with the Auditing Standardsgenerally accepted in India. Those standards require that we planand perform the audit to obtain reasonable assurance about whetherthe financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting theamounts and disclosures in the financial statements. An audit alsoincludes assessing the accounting principles used and significantestimates made by the management, as well as evaluating theoverall financial statement presentation. We believe that ouraudit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors’ Report) Order, 2003issued by the Central Government of India in terms of sub-section(4A) of Section 227 of the Companies Act, 1956, we enclose inthe Annexure a statement on the matters specified in paragraphs4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph3 above, we report that :

(i) We have obtained all the information and explanationswhich to the best of our knowledge and belief were necessaryfor the purposes of our audit ;

(ii) In our opinion, proper books of accounts, as required bylaw, have been kept by the Company, so far as appears fromour examination of those books ;

(iii) The Balance Sheet, Profit and Loss Account and Cash FlowStatement dealt with by this report are in agreement withthe books of account ;

(iv) In our opinion, the Balance Sheet, Profit and Loss Accountand Cash Flow Statement dealt with by this report are incompliance with the Accounting Standards referred to insub-section (3C) of Section 211 of the Companies Act,1956 ;

(v) On the basis of written representations received from theDirectors as on 31st March, 2008 and taken on record bythe Board of Directors, we report that none of the Directorsis disqualified as on 31st March, 2008 from being appointedas a director in terms of clause (g) of sub-section (1) ofSection 274 of the Companies Act, 1956 ;

(vi) In our opinion and to the best of our information andaccording to the explanations given to us, the said accountsread together with the Significant Accounting Policies andother notes thereon give the information required by theCompanies Act, 1956, in the manner so required and give atrue and fair view in conformity with the accountingprinciples generally accepted in India :

(a) in the case of the Balance Sheet, of the state of affairsof the Company as at 31st March, 2008;

Auditors’ Report

(b) in the case of the Profit and Loss Account, of theProfit for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the Cashflows of the Company for the year ended on thatdate.


Amit ChaturvediMumbai PartnerDated : 15th April, 2008 Membership No. : 103141

Annexure to the Auditors’ ReportReferred to in paragraph 3 of our report of even date

1. In respect of its Fixed Assets :a. The Company has maintained proper records showing full

particulars including quantitative details and situation ofFixed Assets on the basis of available information.

b. As explained to us, the Fixed Assets have been physicallyverified by the management during the year, which in ouropinion is reasonable having regard to size of the Companyand nature of its assets. No material discrepancies werenoticed on such physical verification.

c. In our opinion, the Company has not disposed offsubstantial part of its fixed assets during the year and thegoing concern status of the Company is not affected.

2. In respect of its Inventories :

a. The Inventories have been physically verified during theyear by the management. In our opinion, the frequency ofverification is reasonable.

b. In our opinion and according to the information andexplanations given to us, the procedures of physicalverification of inventories followed by the managementare reasonable and adequate in relation to the size of theCompany and the nature of its business.

c. The Company has maintained proper records ofinventories. As explained to us, there were no materialdiscrepancies noticed on physical verification of inventoryas compared to the book records.

3. The Company has not granted or taken any loans secured orunsecured to / from companies, firm or other parties covered inthe register maintained under Section 301 of the CompaniesAct, 1956.

4. In our opinion and according to the information and explanationsgiven to us, there is an adequate internal control systemcommensurate with the size of the Company and nature of itsbusiness with regard to purchase of inventory, fixed assets andwith regard to sale of goods and services. During the course ofour audit, we have not observed any continuing failure to correctmajor weaknesses in internal control system.


5. In our opinion and according to the information and explanationsgiven to us, there are no transactions made in pursuance ofcontracts or arrangements that needed to be entered in theregister maintained under Section 301 of the Companies Act,1956. Therefore, the provisions of clause 4 (v)(b) of theCompanies (Auditor’s Report) Order, 2003 is not applicable tothe Company.

6. The Company has not accepted any deposit from the public.

7. In our opinion the Company has an internal audit systemcommensurate with the size and nature of its business.

8. We have been informed by the Management that the CentralGovernment has not prescribed maintenance of cost recordsfor the Company under Section 209(1)(d) of the CompaniesAct, 1956.

9. In respect of Statutory dues :

a. According to the records of the Company, the Company isregular in depositing with appropriate authorities undisputedstatutory dues including Provident Fund, InvestorEducation and Protection Fund, Employees’ StateInsurance, Income Tax, Sales Tax, Wealth Tax, ServiceTax, Customs Duty, Excise Duty, Cess and other materialstatutory dues applicable to it.

b. According to the information and explanations given tous, no undisputed amounts payable in respect of IncomeTax, Wealth Tax, Service Tax, Sales Tax, Customs Duty,Excise Duty and Cess were in arrears, as at 31st March,2008 for a period of more than six months from the datethey became payable.

c. According to the information and explanations given tous, there are no dues of Income Tax, Wealth Tax, ServiceTax, Sales Tax, Customs Duty, Excise Duty and Cess onaccount of any dispute, which have not been deposited.

10. The Company does not have accumulated losses at the end ofthe financial year. The Company has not incurred any cashlosses during the financial year covered by our audit or in theimmediately preceding financial year.

11. Based on our audit procedures and according to the informationand explanations given to us, we are of the opinion that theCompany had no dues payable to Financial Institutions, Banksor Debenture holders.

12. In our opinion and according to the information and explanationsgiven to us, no loans and advances have been granted by theCompany on the basis of security by way of pledge of shares,debentures and other securities.

13. In our opinion, the Company is not a chit fund or a nidhi /mutual benefit fund / society. Therefore, the provisions of clause4(xiii) of the Companies (Auditor’s Report) Order, 2003 arenot applicable to the Company.

14. The Company has maintained proper records of transactions andcontracts in respect of dealing in or trading in shares, securities,debentures and other investments and timely entries have beenmade therein. All shares, securities, debentures and otherinvestments have been held by the Company in its own name.

15. In our opinion and according to the information and explanationsgiven to us, the Company has not given any guarantee for loanstaken by others from Banks or Financial Institutions during theyear.

16. The Company has not raised any term loan during the year.

17. According to the information and explanations given to us andon an overall examination of the Balance Sheet of the Company,we are of the opinion that there are no funds raised on shortterm basis that have been used for long term investment.

18. During the year, the Company has not made any preferentialallotment of shares to parties and companies covered in theRegister maintained under Section 301 of the Companies Act,1956.

19. The Company has not raised any monies by way of issue ofdebentures during the year.

20. The Company has not raised any money by way of public issueduring the year.

21. In our opinion and according to the information and explanationsgiven to us, no fraud on or by the Company has been noticed orreported during the year.


Amit ChaturvediMumbai PartnerDated : 15th April, 2008 Membership No. : 103141

Annexure to Auditors’ Report (continued)

36

(Rs. in Thousand)

Schedule As at As atNo. 31st March, 2008 31st March, 2007

SOURCES OF FUNDS Rs. Rs. Rs. Rs.

Shareholders’ Funds :Share Capital 1 151,000 151,000Reserves and Surplus 2 1,361,467 1,216,195

1,512,467 1,367,195Loan Funds :Secured Loans 3 - 550,000Unsecured Loans 4 590,000 590,000

590,000 1,140,000Deferred Tax Liability 163,355 112,467

Total 2,265,822 2,619,662APPLICATION OF FUNDS

Fixed Assets : 5Gross Block 3,853,154 3,837,105Less : Depreciation 3,496,283 3,432,258 Lease Adjustment (98,267) (112,102)Net Block 455,138 516,949Capital Work-in-Progress - 24,452

455,138 541,401Investments 6 161,448 113,460

Current Assets, Loans and Advances :Current AssetsInterest Accrued on Investments 248 248Inventories 7 44,146 48,874Sundry Debtors 8 123,723 38,909Cash and Bank Balances 9 11,574 21,005

179,691 109,036Loans and Advances 10 1,840,476 2,107,307

2,020,167 2,216,343Less : Current Liabilities and Provisions : 11Current Liabilities 265,329 215,029Provisions 105,602 36,513

370,931 251,542Net Current Assets 1,649,236 1,964,801

Total 2,265,822 2,619,662

Significant Accounting Policies 15Notes on Accounts 16

Reliance Industrial Infrastructure LimitedBalance Sheet as at 31st March, 2008

As per our Report of even dateFor Chaturvedi & ShahChartered Accountants


MumbaiDated : 15th April, 2008

For and on behalf of the Board


Chandra Raj MehtaSandeep H. Junnarkar

DirectorsBharat C. GosaliaS. C. Malhotra

Dilip V. Dherai Executive Director - Projects

Swatantra Kumar Sethi Company Secretary

}


(Rs. in Thousand)

Schedule 2007-2008 2006-2007No.

INCOME Rs. Rs. Rs. Rs.Income from Operations 672,590 559,250Other Income 12 128,758 197,434

801,348 756,684EXPENDITURE

Establishment and Other Expenses 13 416,323 347,429Interest and Finance Charges 14 28,368 74,038Depreciation and Impairment 64,078 72,494Less : Transferred from Revaluation Reserve 10,825 -Less : Transferred from General Reserve - 13,644 (Refer Note 3 of Schedule 16) 53,253 58,850

497,944 480,317

Profit before Tax 303,404 276,367Provision for Taxation :- Current Tax 33,944 119,272- Fringe Benefit Tax 640 621- Deferred Tax 50,888 (34,657)

85,472 85,236Profit after Tax 217,932 191,131

Balance brought forward from last year 186,262 170,655

Amount Available For Appropriation 404,194 361,786

APPROPRIATIONSDebenture Redemption Reserve - 15,259General Reserve 100,000 100,000Interim Dividend on Equity Shares - 52,850Proposed Dividend on Equity Shares 52,850 -Tax on Dividend 8,985 7,415

161,835 175,524Balance carried to Balance Sheet 242,359 186,262

Basic and Diluted Earnings per share of Rs. 10/- each (in Rs.) 14.43 12.66(Refer Note 8 of Schedule 16)

Significant Accounting Policies 15Notes on Accounts 16

Reliance Industrial Infrastructure LimitedProfit and Loss Account for the year ended 31st March, 2008










}

38

(Rs. in Thousand)

2007-2008 2006-2007Rs. Rs. Rs. Rs.

A. CASH FLOW FROM OPERATING ACTIVITIES :Net Profit before tax as per Profit and Loss Account 303,404 276,367Adjusted for:

Profit on Sale of Fixed Assets (Net) (13) (12,131)(Profit) / Loss on Sale of Current Investments (301) 278Dimunition in Current Investments - 62Depreciation and Impairment 64,079 72,494Lease Equalisation 13,835 49,275Transferred from General Reserve (10,825) (18,262)Dividend Income (4,361) (7,481)Interest / Other Income (117,046) (177,587)Interest and Finance Charges 28,368 74,038

(26,264) (19,314)Operating profit before working capital changes 277,140 257,053Adjusted for:

Trade and Other Receivables (285,187) 18,715Inventories 4,729 (1,972)Trade and Other Payables 95,198 56,432

(185,260) 73,175Cash generated from operations 91,880 330,228Taxes paid (55,098) (142,399)Net Cash from Operating Activities 36,782 187,829

B. CASH FLOW FROM INVESTMENT ACTIVITIES :Purchase of Fixed Assets (10,963) (81,718)Sale of Fixed Assets 104 13,420Purchase of Investments (1,175,788) (616,503)Sale of Investments 1,128,100 627,959(Increase) / Decrease in Loans 470,113 (117)Dividend Income 4,361 7,481Interest / Other Income 130,147 48,419Net cash from / used in Investing Activities 546,074 (1,059)

C. CASH FLOW FROM FINANCING ACTIVITIES :Repayment of Long Term Borrowings (550,000) -Dividend Paid (13,919) (106,199)Interest Paid (28,368) (74,038)

Net Cash used in Financing Activities (592,287) (180,237)Net Increase / (Decrease) in Cash and Cash Equivalents (A+B+C) (9,431) 6,533Opening Balance of Cash and Cash Equivalents 21,005 14,472Closing Balance of Cash and Cash Equivalents 11,574 21,005

Reliance Industrial Infrastructure LimitedCash Flow Statement for the year 2007-2008










}


Schedules forming part of the Balance Sheet

(Rs. in Thousand)

As at As at31st March, 2008 31st March, 2007

Rs. Rs. Rs. Rs.SCHEDULE 1 : SHARE CAPITAL

Authorised :200,000,000 Equity Shares of Rs.10/- each 2,000,000 2,000,000

( 200,000,000)

Issued, Subscribed and Paid up :15,100,000 Equity Shares of Rs.10/- each fully paid up 151,000 151,000

( 15,100,000)

SCHEDULE 2 : RESERVES AND SURPLUS

Capital ReserveAs per last Balance Sheet 295,296 295,296

Share Premium AccountAs per last Balance Sheet 96,000 96,000

Revaluation ReserveAs per last Balance Sheet 210,057 210,057Less : Transferred to Profit and Loss Account 10,825 - (Refer Note 3 of Schedule 16) 199,232 210,057

Debenture Redemption ReserveAs per last Balance Sheet 30,685 15,426Add : Transferred from Profit and Loss Account - 15,259

30,685 30,685Less : Transferred to General Reserve 30,685 -

- 30,685General ReserveAs per last Balance Sheet 397,895 316,157Add : Transferred from Debenture Redemption Reserve 30,685 -

428,580 316,157Add : Transferred from Profit and Loss Account 100,000 100,000

528,580 416,157Less : Transferred to Profit and Loss Account - 13,644

528,580 402,513Less : Charge on account of transitional provisions

under Accounting Standard 15 - 4,618528,580 397,895

Profit and Loss Account 242,359 186,262Total 1,361,467 1,216,195

Cumulative amount (net) withdrawn on account of Depreciation on Revaluation is Rs. 157,659 thousand (Previous Year Rs. 157,659 thousand).

SCHEDULE 3 : SECURED LOANSNon Convertible Debentures - 550,000

Total - 550,000

SCHEDULE 4 : UNSECURED LOANSLong Term- From Other than Banks 590,000 590,000

Total 590,000 590,000

40

(Rs. in Thousand)


Rs. Rs.SCHEDULE 6 : INVESTMENTS

LONG TERM INVESTMENTSOther Investments :In Equity Shares -Quoted, fully paid up :

86,000 Equity Shares of Reliance Industries Limited 5,834 5,834(86,000) of Rs.10/- each

4,300 Equity Shares of Reliance Capital Limited 146 146(4,300) of Rs.10/- each

86,000 Equity Shares of Reliance Communications Limited 4,342 4,342(86,000) of Rs.5/- each

6,450 Equity Shares of Reliance Energy Limited 819 819(6,450) of Rs.10/- each

86,000 Equity Shares of Reliance Natural Resources Limited 78 78(86,000) of Rs. 5/- each


LeaseGross Block Depreciation Adjustment Net Block

Description As at Additions Deductions As at For the Upto Upto As at As at01.04.07 31.03.08 year 31.03.08 31.03.08 31.03.08 31.03.07

Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.Freehold Land 4,262 - - 4,262 - - - 4,262 4,262Leasehold Land 3,473 - - 3,473 207 2,136 - 1,337 1,544Buildings 23,227 - - 23,227 759 11,346 - 11,881 12,640Plant and Machinery 1,710,223 14,935 - 1,725,158 38,690 1,524,780 - 200,378 224,133Construction Machinery 1,380,020 - - 1,380,020 22,617 1,250,642 † - 129,378 151,995Furniture and Fixtures 5,082 - - 5,082 255 3,810 - 1,272 1,527Equipments 6,980 15 148 6,847 410 4,684 - 2,163 2,649Vehicles 8,653 1,247 - 9,900 872 3,776 - 6,124 5,749

Sub-Total 3,141,920 16,197 148 3,157,969 63,810 2,801,174 - 356,795 404,499

Assets leasedprior to 01.04.2001 :LPG Cylinders 695,185 - - 695,185 272 695,109 98,267 98,343 112,450

Sub-Total 695,185 - - 695,185 272 695,109 98,267 98,343 112,450

Total 3,837,105 16,197 148 3,853,154 64,082 3,496,283 98,267 455,138 516,949

Previous Year 3,973,184 66,769 202,848 3,837,105 72,494 3,432,258 112,102 516,949

Capital Work-in-Progress - 24,452

Notes : (i) Leasehold Land includes Rs.2,344 thousand (Previous Year Rs.2,344 thousand) in respect of which lease deed is pendingexecution.

(ii) Leasehold Land includes one fully paid Equity Share of Rs. 1 thousand in a Company.(iii) Gross Block includes Rs. 530,088 thousand being the amount added on revaluation of Plant and Machinery as at 01.04.1997.

(Refer Note 3 of Schedule 16)† includes provision for loss on impairment, Rs. 4,946 thousand (Previous Year Rs. 4,946 thousand),

SCHEDULE 5 : FIXED ASSETS(Rs. in Thousand)



(Rs. in Thousand)


Rs. Rs.Unquoted, fully paid up :

1,108,500 Equity Shares of Reliance Europe Limited 39,338 39,338(1,108,500) of Sterling Pound 1/- each

(Company under the same management)- Equity Shares of Ral Investment Private Limited - 81

(8,100) of Rs.10/- each18,000 Equity Shares of Rosche Trading Private Limited 180 180

(18,000) of Rs.10/- eachIn Debentures -Unquoted, fully paid up :

140,000 Zero Coupon Unsecured Optionally Fully Convertible 14,000 14,000(140,000) Debentures of Ral Investment Private Limited

of Rs. 100/- each30,000 Zero Coupon Unsecured Optionally Fully Convertible 3,000 3,000

(30,000) Debentures of LPG Infrastructure (India) Private Limitedof Rs. 100/- each

In Others -Quoted :

110,100 Units of 6.75% Tax Free US64 Bonds of Unit Trust of India 11,010 11,010(110,100) of Rs. 100/- each

(Deposited with Mumbai Port Trust)CURRENT INVESTMENTSIn Others -In Units, Unquoted :

58,257 ABN AMRO Flexi Debt Fund - 582 9,785(972,204) Regular Weekly Dividend of Rs. 10/- per unit

- Standard Chartered Liquidity Manager - - 24,847(2,526,814) Weekly Dividend of Rs. 10/- per unit

82,174 Standard Chartered Liquidity Manager - 82,119 -(-) Plus Daily Dividend of Rs. 1,000/- per unit

Total 161,448 113,460

(Rs. in Thousand)


Rs. Rs. Rs. Rs.

Aggregate Value of : Book Market Book MarketValue Value Value Value

Quoted Investments 22,229 270,117 22,229 173,205Unquoted Investments 139,219 91,231

Investments Purchased and Sold during the year : Face Value CostRs. Nos. Rs.

Mutual Fund UnitsABN AMRO Flexi Debt Fund - Regular Weekly Dividend 10 80,222,778 802,362Standard Chartered Liquidity Manager - Weekly Dividend 10 34,298,475 343,216Standard Chartered Liquidity Manager - Plus Daily Dividend 1000 749,643 749,800

SCHEDULE 6 : INVESTMENTS (continued)

42

(Rs. in Thousand)


Rs. Rs. Rs. Rs.SCHEDULE 7 : INVENTORIES

Stores and Spares 44,146 48,874

Total 44,146 48,874

SCHEDULE 8 : SUNDRY DEBTORS(Unsecured) - Considered Good Unless Otherwise Stated

Debts outstanding for a period exceeding six months 5,069 4,151Less : Considered Doubtful 918 918

4,151 3,233

Others 119,572 35,676

Total 123,723 38,909

SCHEDULE 9 : CASH AND BANK BALANCES

Balances with Scheduled Banks :In Current Accounts 11,324 20,755In Deposit Accounts 250 250

Total 11,574 21,005

SCHEDULE 10 : LOANS AND ADVANCES(Unsecured and Considered Good)

Advances recoverable in cash or in kind or for value to be received 1,732,816 2,020,165Advance Tax (net of provisions) 107,660 87,142

Total 1,840,476 2,107,307

SCHEDULE 11 : CURRENT LIABILITIES AND PROVISIONSCurrent Liabilities :Sundry Creditors - Micro and Small Enterprises @ - -Sundry Creditors - Others 259,860 195,642Unpaid Dividends # 5,469 19,387

265,329 215,029Provisions :Provision for Wealth Tax 37 33Provision for Leave Encashment/Superannuation/Gratuity/Exgratia 43,730 36,480Provision for Proposed Dividend 52,850 -Provision for Tax on Dividend 8,985 -

105,602 36,513

Total 370,931 251,542

@ The Company has not received information from vendors regarding their status under the Micro, Small and Medium EnterprisesDevelopment Act, 2006 and hence disclosure relating to amounts unpaid as at year end together with interest paid / payable under this Acthave not been given.

# These figures do not include any amount, due and outstanding, to be credited to Investor Education and Protection Fund.



(Rs. in Thousand)

2007-2008 2006-2007Rs. Rs. Rs. Rs.

SCHEDULE 12 : OTHER INCOME

Dividend:From Current Investments 4,269 5,675From Long Term Investments 92 1,806

4,361 7,481

Interest on Loans and Deposits 118,822 166,983(Tax deducted at source Rs. 624 thousand ;Previous Year Rs.37,378 thousand)

Profit on Sale of Current Investment 301 -Profit on Sale of Fixed Assets 21 12,366Miscellaneous Income 5,253 10,604

Total 128,758 197,434

SCHEDULE 13 : ESTABLISHMENT AND OTHER EXPENSES

Salaries, Wages and Bonus 83,088 74,371Contribution to Provident Fund and Other Funds 5,810 3,488Employees’ Welfare and other amenities 3,638 3,308

92,536 81,167Stores and Spares Consumed 70,439 67,189Repairs and Maintenance :- Plant and Machinery 33,190 31,500- Buildings 72 33- Others 64 689

33,326 32,222Operating Expenses 161,569 100,236Plant Utilities - 6,000Electric Power 213 164Rent 32,010 30,660Rates and Taxes 3,156 4,216Insurance Charges 4,423 5,364Professional Fees 7,584 10,991Payment to Auditors 1,000 815Exchange Differences (Net) 5 6Miscellaneous Expenses 10,054 7,886Loss on Sale of Current Investment - 278Loss on Sale of Fixed Assets 8 235

Total 416,323 347,429

SCHEDULE 14 : INTEREST AND FINANCE CHARGES

Fixed Loans 24,767 24,515

Debentures 3,255 49,500

Others 346 23

Total 28,368 74,038

Schedules forming part of the Profit and Loss Account

44

SCHEDULE 15 : SIGNIFICANT ACCOUNTING POLICIES

A. Basis of Preparation of Financial Statements :(i) The financial statements are prepared under the historical cost convention, except for certain fixed assets which are revalued,

in accordance with generally accepted accounting principles in India and the provisions of the Companies Act, 1956.(ii) The Company generally follows the mercantile system of accounting and recognises significant items of income and expenditure

on accrual basis.B. Use of Estimates :

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets andliabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period.Difference between the actual results and estimates are recognised in the period in which the results are known / materialised.

C. Own Fixed Assets :(i) Fixed Assets are stated at cost net of cenvat and includes amounts added on revaluation, less accumulated depreciation and

impairment loss, if any. All costs including financing costs, upto the date of commissioning and attributable to the fixed assetsare capitalised.

(ii) Compensation paid to various land owners / occupiers for acquisition of Right of User in the lands along the pipeline route underthe Petroleum and Minerals Pipelines (Acquisition of Right of User in Lands) Act, 1962 has been included in cost of Plant andMachinery.

D. Leased Assets :In respect of fixed assets given on finance lease prior to 1st April, 2001, income is accounted for in the year in which lease rentals falldue, by applying the interest rate implicit in the lease to the net investment.In respect of fixed assets given on finance lease on or after 1st April, 2001, assets are shown as receivables at an amount equal to netinvestment in the lease. Initial direct costs are recognised immediately as expense in the Profit and Loss Account. Income from leasedassets is accounted by applying the interest rate implicit in the lease to the net investment.

E. Depreciation :Depreciation on Fixed Assets is provided on straight line method at the rates and in the manner prescribed in Schedule XIV to theCompanies Act, 1956 except that :(i) on plant and machinery comprising of transport facilities and monitoring systems (for petrochemical products and for raw

water) and on construction machinery, depreciation has been provided on written down value method at the rates and in themanner prescribed in Schedule XIV to the Companies Act, 1956.

(ii) on revalued assets, depreciation has been provided on written down value method and charged over the residual life of the assets.(iii) The cost of leasehold land is amortised over the period of lease.(iv) cost of pipeline corridor structure is amortised over the residual life of the asset.

F. Impairment of Assets :An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to Profitand Loss Account in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period isreversed if there has been a change in the estimate of recoverable amount.

G. Foreign Currency Transactions :(i) Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction.(ii) Monetary items denominated in foreign currencies, if any at the year end are restated at year end rates.(iii) Non monetary foreign currency items are carried at cost.(iv) Any income or expense on account of exchange difference either on settlement or on translation is recognised in the Profit

and Loss Account.H. Investments :

Current Investments are carried at the lower of cost and quoted / fair value, computed category wise. Long term investments are statedat cost. Provision for diminution in the value of long term investments is made only if such decline is other than temporary.

I. Inventories :Inventories are measured at cost. Cost is determined on weighted average basis.

J. Employee Benefits :(i) Short term employee benefits are recognised as an expense at the undiscounted amount in the profit and loss account of the

year in which the related service is rendered.(ii) Post employment and other long term employee benefits are recognised as an expense in the profit and loss account for the

year in which the employee has rendered services. The expense is recognised at the present value of the amount payabledetermined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long termbenefits are charged to the profit and loss account.

Significant Accounting Policies


K. Borrowing Cost :Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of suchassets. A qualifying asset is one that takes necessarily substantial period of time to get ready for its intended use. All other borrowingcosts are charged to revenue.

L. Provision for Current Tax and Deferred Tax :Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act,1961. Deferred tax resulting from "timing differences" between the taxable and accounting income is accounted for using the tax ratesand laws that are enacted or substantively enacted as on the balance sheet date. Deferred tax asset is recognised and carried forwardonly to the extent that there is a virtual certainty that the asset will be realised in future.

M. Provision, Contingent Liabilities and Contingent Assets :Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result ofpast events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed innotes. Contingent Assets are neither recognised nor disclosed in the financial statements.

Notes on AccountsSCHEDULE 16 : NOTES ON ACCOUNTS1. The previous year's figures have been reworked, regrouped, rearranged and reclassified, wherever necessary. Amounts and other

disclosures for the preceding year are included as an integral part of the current year financial statements and are to be read in relationto the amounts and other disclosures relating to the current year.

2. Loans and advances includes interest free loans of Rs. Nil (Previous Year Rs. 249 thousand) given to various employees as perCompany's policy. Maximum amount outstanding during the year Rs. 249 thousand (Previous Year Rs.294 thousand).

3. Gross Block of Fixed Assets include Rs.530,088 thousand (Previous Year Rs.530,088 thousand) on account of revaluation of FixedAssets carried out in the past. Consequent to the said revaluation there is an additional charge of depreciation of Rs. 10,825 thousand(Previous Year Rs. 13,644 thousand) and an equivalent amount which was hitherto being withdrawn from General Reserve, has beenwithdrawn from Revaluation Reserve and credited to the Profit and Loss Account.

4. As per Accounting Standard 15 "Employee Benefits", disclosures of Employee benefits as defined in Accounting Standard are givenbelow:Defined Contribution Plan:Contribution to Defined Contribution Plan, recognised as expense for the year are as under -

(Rs. in Thousand)

2007-2008 2006-2007Employer’s Contribution to Provident Fund 2,618 1,588Employer’s Contribution to Superannuation Fund 526 256Employer’s Contribution to Pension Scheme 911 623

Defined Benefit Plan:

The employees' gratuity fund scheme managed by a Life Insurance Corporation of India is a defined benefit plan. The present valueof obligation is determined based on the actuarial valuation using the Projected Unit Credit Method, which recognises each period ofservice as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the finalobligation. The obligation for leave encashment is recognised in the same manner as gratuity.

(i) Reconciliation of opening and closing balances of Defined Benefit Obligation(Rs. in Thousand)

Gratuity Leave Encashment(Funded) (Unfunded)

2007-2008 2006-2007 2007-2008 2006-2007Defined Benefit Obligation at the beginning of the year 6,327 5,941 36,218 31,369Current Service Cost 375 464 1,289 1,292Interest Cost 506 446 2,675 2,380Actuarial (gain) / loss 1,482 356 6,809 4,406Benefits paid (190) (880) (5,549) (3,230)Defined Benefit Obligation at the year end 8,500 6,327 41,443 36,218

SCHEDULE 15 : SIGNIFICANT ACCOUNTING POLICIES (continued)

46

(ii) Reconciliation of opening and closing balances of fair value of plan assets(Rs. in Thousand)

Gratuity (Funded)2007-2008 2006-2007

Fair Value of Plan Assets at the beginning of the year 6,140 6,469Expected return on plan assets 593 551Actuarial gain / (loss) - -Employer contribution 202 -Benefits paid (190) (880)Fair Value of plan assets at year end 6,746 6,140Actual return on plan assets 593 551

(iii) Reconciliation of fair value of assets and obligations(Rs. in Thousand)


As at 31st March As at 31st March2008 2007 2008 2007

Fair value of plan assets 6,746 6,140 - -Present value of obligation 8,500 6,327 41,443 36,218Amount recognised in Balance Sheet 1,754 187 41,443 36,218

(iv) Expense recognised during the year(under the head "Salaries Wages and Bonus" - Refer Schedule 13)

(Rs. in Thousand)Gratuity Leave Encashment(Funded) (Unfunded)

2007-2008 2006-2007 2007-2008 2006-2007

Current Service Cost 375 464 1,289 1,292Interest Cost 506 446 2,675 2,380Expected return on plan assets (593) (551) - -Actuarial (gain) / loss 1,482 356 6,809 4,406Net Cost 1,770 715 10,774 8,078

(v) Details of Investment for employees' gratuity fund scheme managed by a LIC are not available with the Company

(vi) Actuarial assumptions(Rs. in Thousand)


2007-2008 2006-2007 2007-2008 2006-2007Mortality table (LIC) 1994-96 1994-96 1994-96 1994-96

(Ultimate) (Ultimate) (Ultimate) (Ultimate)Discount rate (per annum) 8% 7.5% 8% 8%Expected rate of return on plan assets (per annum) 8% 7.5% 8% 8%Rate of escalation in salary (per annum) 4% 3% 6.5% 6.5%

The estimates of rate of escalation in salary is considered in actuarial valuation, take into account inflation, seniority,promotion and other relevant factors including supply and demand in the employment market. The above information iscertified by the actuary.The expected rate of return on plan assets is determined considering several applicable factors mainly, the composition of planassets held, assessed risks, historical result of return on plan assets and the Company's policy for plan asset management.

SCHEDULE 16 : NOTES ON ACCOUNTS (continued)


5. Segment Information :The Company is mainly engaged in Infrastructure Activity in India. All activities of the Company revolve around this main business.As such, there are no separate reportable segments as per Accounting Standard on Segment Reporting (AS - 17).

6. Related Party Disclosures :As per Accounting Standard 18, disclosures of transactions with the related parties as defined in the Accounting Standard are givenbelow :(i) List of Related Parties with whom transactions have taken place and Relationships :

Name of the Related Party Nature of RelationshipReliance Industries Limited AssociateShri Dilip V. Dherai Key Managerial Personnel

(ii) Transactions during the year with related parties (excluding reimbursements) :a) With Associate :

Reliance Industries Limited(Rs. in Thousand)

2007-2008 2006-2007Opening Balance as on 1st April :- Unsecured Loans taken 350,000 350,000- Investment in Equity Shares 5,834 5,834- Sundry Debtors 26,716 49,826- Sundry Creditors 31,341 1,466- Guarantee taken 40,425 40,425Transactions :Income from Operations 314,607 459,734Dividend from Long Term Investments - 1,806Plant Utilities - 6,000Repairs and Maintenance - 29,875Interest Expenses 24,500 24,500Sale of Fixed Assets - 1,825

Closing Balance as on 31st March :- Unsecured Loans taken 350,000 350,000- Investment in Equity Shares 5,834 5,834- Sundry Debtors 10,453 26,716- Sundry Creditors - 31,341- Guarantee taken 40,425 40,425

b) With Key Managerial Personnel :(Rs. in Thousand)

2007-2008 2006-2007

Payments to Shri Dilip V. Dherai 2,439 1,840(Refer Note 10 (ii) to Schedule 16)


48

7. Finance Lease Disclosures :(i) Assets given on finance lease on or after 1st April, 2001 :

(Rs. in Thousand)

Total Within one year Later than one Later than fiveyear and not years

later than five years

2007-2008 2006-2007 2007-2008 2006-2007 2007-2008 2006-2007 2007-2008 2006-2007Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.

Gross investment 886,964 11,667 192,349 7,951 694,615 3,716 - -in lease

Less : Unearned 180,349 253 9,858 141 170,491 112 - -finance income

Present value of 706,615 11,414 182,491 7,810 524,124 3,604 - -minimum leaserental

(ii) A general description of significant leasing arrangements :

a) Assets are given on lease for periods ranging from five to seven years.

b) Lease Rentals are charged on the basis of agreed rate of interest.

8. Earnings Per Share :2007-2008 2006-2007

(i) Net Profit after tax available for equity shareholders(Rs. in thousand) 217,932 191,131

(ii) Weighted average of number of equity shares used as denominator for calculating EPS 1,51,00,000 1,51,00,000(iii) Basic and Diluted Earnings per share (Rs)

(Face value of Rs. 10/- each) 14.43 12.66

9. Deferred Tax Liability :Deferred tax liability comprise of the following :

(Rs. in Thousand)

2007-2008 2006-2007Rs. Rs. Rs. Rs.

(i) Deferred Tax LiabilityRelated to Fixed Assets 224,317 157,019

(ii) Deferred Tax AssetFinance Lease 47,455 32,879Loss / Diminution on Investments - 6Provision for Doubtful Debts 312 312Expenditure U/s 43B of Income Tax Act, 1961 13,195 11,354

60,962 44,552

163,355 112,467



10. Managerial Remuneration :

(i) The Company has been advised that computation of net profits for the purpose of managerial remuneration under Section 349of the Companies Act, 1956 need not be enumerated, since no commission by way of percentage of profit is payable for theyear to any of the Directors of the Company.

(ii) Establishment and Other expenses include Managerial Remuneration by way of :- (Rs. in Thousand)

2007-2008 2006-2007Salaries 2,218 1,714Perquisites 55 18Contribution to Provident Fund and Superannuation Fund 166 108

Total 2,439 1,840

The above remuneration excludes provision for gratuity and leave encashment since these are based on actuarial valuation doneon an overall company basis.

(iii) Miscellaneous Expenses include Rs. 430 thousand (Previous Year Rs. 530 thousand) towards sitting fees paid to non-executive directors.

11. Payment to Auditors : (Rs. in Thousand)

2007-2008 2006-2007(i) Audit Fees 700 590(ii) Tax Audit Fees 200 165(iii) For Certification 100 60

Total 1,000 815

12. Value of Imports on CIF basis in respect of :Equipments / Stores imported by the Company during the financial year is Rs. 744,620 thousand (Previous Year Rs. Nil)

13. Expenditure in Foreign Currency on account of :(Rs. in Thousand)

2007-2008 2006-2007i) Travelling Expenses 280 227iii) Other Matters 653 771

14. Additional Information :(Rs. in Thousand)


(i) Estimated amount of contracts remaining to be executed oncapital account and not provided for (net of advances) 23,864 30,864

(ii) Contingent Liability in respect of claims against theCompany not acknowledged as debts 1,200 1,200

(iii) Income tax assessments of the Company have been completed upto Assessment Year 2005-2006. The total demand raised bythe Income Tax department upto the said assessment year is Rs. 52,088 thousand (Previous Year Rs. 44,465 thousand). Basedon the decisions of the Appellate authorities and the interpretations of other relevant provisions, the Company has beenlegally advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision has beenmade.


50

15. Value of Stores and Spares Consumed :2007-2008 2006-2007

(Rs. in % of total (Rs. in % of totalThousand) Consumption Thousand) Consumption

Imported 1,899 2.70 695 1.05Indigenous 68,540 97.30 66,494 98.95

70,439 100.00 67,189 100.00










}



I. Registration Details

Registration Number L 6 0 3 0 0 M H 1 9 8 8 P L C 0 4 9 0 1 9

Balance Sheet Date 3 1 - 0 3 - 0 8 State Code 1 1

II. Capital raised during the year (Rs. in Thousand)

Public Issue N I L Rights Issue N I L

Bonus Issue N I L Private Placements N I L

III. Position of Mobilisation and Deployment of Funds (Rs. in Thousand)

Total Liabilities 2 6 3 6 7 5 3 Total Assets 2 6 3 6 7 5 3

SOURCES OF FUNDS :

Paid up Capital 1 5 1 0 0 0 Reserves and Surplus 1 3 6 1 4 6 7

Secured Loans N I L Unsecured Loans 5 9 0 0 0 0

Deferred Tax Liability 1 6 3 3 5 5

APPLICATION OF FUNDS :

Net Fixed Assets 4 5 5 1 3 8 Investments 1 6 1 4 4 8

Net Current Assets 1 6 4 9 2 3 6

IV. Performance of Company (Rs. in Thousand except, per share data)

Turnover (Income) 6 7 2 5 9 0 Total Expenditure 4 9 7 9 4 4

Profit Before Tax 3 0 3 4 0 4 Profit After Tax 2 1 7 9 3 2

Earnings per share in Rs. 1 4 . 4 3 Dividend Rate % 3 5

V. Generic Names of Principal Products / Service of the Company (As per monetary terms)

Item Code No. (ITC Code) N O T A P P L I C A B L E

Product Description Infrastructure Activity

Balance Sheet Abstract and Company’s General Business Profile

52

Sr. City / Centre STD Phone - Office Fax Nos. E-mailNo. Code

1 AGRA 0562 2526660 to 63 2526663 [email protected],[email protected]

2 AHMEDABAD 079 26420422 / 26400527 / 28 26565551 [email protected] ALIGARH 0571 2509106 to 08 2429272 [email protected];

[email protected] ALLAHABAD 0532 2561073 to 74 2561073 [email protected],

[email protected] ANANTAPUR 08554 249601 / 249607 / 249608 ~ [email protected],

[email protected] ANKLESHWAR 02646 243291 / 243292 / 243392 / 243955 ~ [email protected],

[email protected] AURANGABAD 0240 2363517 / 23 / 24 / 30 ~ [email protected], [email protected] BANGALORE 080 26621192 / 26621193 26621169 [email protected] BAREILLY 0581 ~ 2476797 [email protected], [email protected] BELGAUM 0831 2402544 / 2402722 / 2402880 2402933 [email protected] BELLARY 08392 254531 / 254532 254533 [email protected],

[email protected] BHARUCH 02642 242082 / 242394 / 241546 ~ [email protected],

[email protected] BHAVNAGAR 0278 2525005 / 2525006 ~ [email protected],

[email protected] BHIMAVARAM 08816 231766 / 67 / 68 / 69 ~ [email protected], [email protected] BHOPAL 0755 2559332 / 2559337 / 2574569 / 2574589 / 2760890 [email protected],

2574731 [email protected] BHUBANESHWAR 0674 2547531 to 34 / 2547382 2511012 [email protected] CALICUT 0495 2760882 / 2760884 ~ [email protected], [email protected] CHANDIGARH 0172 5071726 / 5071727 / 5071728 / 5079702 ~ [email protected], [email protected] CHENNAI 044 28153445 / 28151034 / 28153658 28153181 [email protected] CHILAKALURIPET 08647 257501 257502 [email protected] COIMBATORE 0422 2237501 to 506 / 2231387 / 2237990 ~ [email protected], [email protected] CUTTACK 0671 2335187 / 3110827 / 3109972 ~ [email protected], [email protected] DEHRADUN 0135 2713351 / 2714046 / 2714047 2714047 [email protected],

[email protected] DINDIGUL 0451 2436077 / 2436177 ~ [email protected] DURGAPUR 0343 2586375 to 77 ~ [email protected],

[email protected] ELURU 08812 227851 / 52 / 54 ~ [email protected] ERODE 0424 2225603 / 225615 / 2225616 / ~ [email protected]

2225617 / 222562428 GHAZIABAD 0120 2701886 / 2701891 ~ [email protected],

[email protected] GOBICHETTIPALAYAM 04285 226275 / 226276 ~ [email protected] GORAKHPUR 0551 2333825 / 2333814 2346519 [email protected],

[email protected] GUNTUR 0863 2326684 / 2326686 2326687 [email protected], [email protected] HALDIA 03224 276755 to 57 ~ [email protected], [email protected] HUBLI 0836 2353962 / 2353974 / 2353975 2353961 [email protected], [email protected] HYDERABAD 040 23312454 / 23320251 23312946 [email protected] INDORE 0731 5069891 / 5069892 / 5069893 5069894 [email protected] JAIPUR 0141 2375099 / 2363321 / 2375039 2364660 [email protected],

[email protected] JAMNAGAR 0288 2557862 to 65 ~ [email protected] JAMSHEDPUR 0657 2487020 / 2487045 / 2487048 ~ [email protected],

[email protected] JUNAGADH 0285 2624154 / 2624140 / 2624125 ~ [email protected] KAKINADA 0884 2387382 / 2387383 2387381 [email protected], [email protected] KANPUR 0512 2330127 / 2331445 / 3092333 / 3096000 2558334 [email protected], [email protected]

Annexure 1 to Shareholders’ ReferencerList of Investor Service Centres of Karvy Computershare Private Limited


42 KARAIKUDI 04565 237192 / 237193 ~ [email protected] KARUR 04324 241892 / 241893 / 241894 241891 [email protected] KOCHI 0484 2310884 / 2322152 2323104 [email protected], [email protected] KOLKATA 033 24634787 to 89 / 24647231 / 24647232 / [email protected], [email protected]

24644891 / 24644866 / 2463478746 LUCKNOW 0522 2236820 to 26 2236826 [email protected],

[email protected] MADURAI 0452 2350855 / 2350852 to 854 2350856 [email protected], [email protected] MANGALORE 0824 2492302 / 2496332 / 2492901 2496352 [email protected], [email protected] MATTANCHERRY 0484 2223243 ~ [email protected],

[email protected] MUMBAI 022 26730799 / 843 / 311 / 867 / 153 / 292 26730152 [email protected],

[email protected] MUMBAI 022 30325600 / 30325624 / 30325645 2285731 [email protected] MYSORE 0821 2524292 / 2524294 2524293 [email protected], [email protected] NADIAD 0268 2563210 / 2563245 / 2563248 ~ [email protected] NASIK 0253 2577811 / 5602542 / 5602543 / 5602544 ~ [email protected] NELLORE 0861 2349935 / 2349936 / 2349937 2349939 [email protected],

[email protected] NEW DELHI 011 23324401/23353835 / 981 23324621 [email protected], [email protected] PALGHAT 0491 2547143 ~ [email protected] PANJIM 0832 2426870 / 2426871 / 2426872 2426873 [email protected]

[email protected] PATNA 0612 2321355 / 56 ~ [email protected], [email protected] PONDICHERRY 0413 2220636 / 2220640 2220659 [email protected],

[email protected] PRODDATUR 08564 250822 / 250823 / 250824 ~ [email protected],

[email protected] PUNE 020 4048790 25456842 [email protected], [email protected] RAJAHMUNDRY 0883 2434468 / 2434469 2434471 [email protected]; [email protected] RAJKOT 0281 2239403 / 2239404 / 2239338 / 2294316 ~ [email protected], [email protected] RANCHI 0651 2330386 / 2330394 / 2330320 ~ [email protected], [email protected] RENUKOOT 05446 254201 ~ [email protected] ROURKELA 0661 2510771 / 2510772 ~ [email protected], [email protected] SALEM 0427 2335700 to 704 2335705 [email protected] SHIMOGA 08182 228795 / 228796 / 227485 2226747 [email protected],

[email protected] SURAT 0261 8357356 / 8351976 / 8369928 8368693 [email protected], [email protected] TANJORE 04362 279407 / 279408 ~ [email protected] THENI 04546 261285 / 261108 ~ [email protected], [email protected] TIRUPATI 0877 2252756 ~ [email protected],

[email protected] TIRUPUR 0421 2205865 / 5330158 ~ [email protected] TRICHUR 0487 2322483 / 2322484 ~ [email protected] TRICHY 0431 2798200 / 2791000 2794132 [email protected] TRIVANDRUM 0471 2725987 / 2725989 to 991 2725987 [email protected], [email protected] TUMKUR 0816 2261891 / 2261892 / 2261893 ~ [email protected], [email protected] UDUPI 0820 2530962 / 2530963 / 2530964 ~ [email protected], [email protected] VADODARA 0265 2225325 / 2225389 2363207 [email protected], [email protected] VALLABH-VIDHYANAGAR 02692 248980 / 248873 ~ [email protected],

[email protected] VARANASI 0542 2225365 / 2223814 2223814 [email protected],

[email protected] VIJAYAWADA 0866 2495200 / 400 / 500 / 600 / 700 / 800 2495300 [email protected], [email protected] VISHAKAPATNAM 0891 2752915 to 18 2752915 - 18 [email protected], [email protected] VISHAKAPATNAM 0891 2511685 / 2511686 ~ [email protected],

- GAJUWAKA [email protected]

Sr. City / Centre STD Phone - Office Fax Nos. E-mailNo. Code

54

THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK


ATTENDANCE SLIP

Registered Office : NKM International House, 5th Floor, 178 Backbay Reclamation,Behind LIC Yogakshema Building, Babubhai Chinai Road, Mumbai - 400 020.

PLEASE FILL THIS ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE OF THE MEETING HALLJoint Shareholders may obtain additional Attendance Slip at the venue of the Meeting

DP. Id* Master Folio No.

Client Id* No. of Shares

NAME AND ADDRESS OF THE SHAREHOLDER

I hereby record my presence at the 20th Annual General Meeting of the Company held on Wednesday,2nd July, 2008 at 11.30 a.m. at 4th Floor, Walchand Hirachand Hall, Indian Merchants’ Chamber, IMC Marg, Churchgate,Mumbai - 400 020.

*Applicable for investors holding shares in dematerialised form Signature of Shareholder / Proxy

I/We ..............................................................................................................................................................................................of ......................................................................................................................................................................................... beinga member / members of Reliance Industrial Infrastructure Limited hereby appoint ......................................................................of .................................................................................................. or failing him ..........................................................................of....................................................................................................................................................................................................as my / our proxy to attend and vote for me / us on my / our behalf at the 20th Annual General Meeting of the Company, tobe held on Wednesday, 2nd July, 2008 at 11.30 a.m. and at any adjournment thereof.** I wish my above Proxy to vote in the manner as indicated in the box below:

Resolutions For Against

1. Adoption of Accounts, Reports of the Board of Directors and Auditors2. Declaration of a dividend3. Reappointment of Shri Bharat C. Gosalia, Director retiring by rotation4. Reappointment of Shri S. C. Malhotra, Director retiring by rotation5. Appointment of Auditors

Signed this __________ day of ___________________ 2008.

*Applicable for investors holding shares in dematerialised form

Please see the instructions overleaf. Signature

Affix15 paiseRevenueStamp

PROXY FORM

Registered Office : NKM International House, 5th Floor, 178 Backbay Reclamation,Behind LIC Yogakshema Building, Babubhai Chinai Road, Mumbai - 400 020.

DP. Id* Master Folio No.

Client Id*

56

NOTE : (1) The Proxy, to be effective, should be deposited at the Registered Office of the Company at NKMInternational House, 5th Floor, 178 Backbay Reclamation, Behind LIC Yogakshema Building,Babubhai Chinai Road, Mumbai - 400 020 not less than 48 hours before the commencement ofthe aforesaid meeting.

(2) A Proxy need not be a Member of the Company.

** (3) This is only optional. Please put a ‘X’ in the appropriate column against the resolutions indicated in the Box.If you leave the ‘For’ or ‘Against’ column blank against any or all the resolutions, your Proxy will be entitledto vote in the manner as he/she thinks appropriate. Should you so desire, you may also appoint the Chairmanor the Company Secretary of the Company as your Proxy, who shall carry out your mandate as indicatedabove in the event of a poll being demanded at the meeting.