Reliance Industries : RIL's Q2 (FY 2016-17) Financial and Operational Performance of Reliance Industries Limited

Mumbai, 20th October 2016

QUARTERLY CONSOLIDATED NET PROFIT OF ` 7,206 CRORE ($ 1.1 BILLION), UP 43.1% QUARTERLY CONSOLIDATED PBDIT OF ` 13,551 CRORE ($ 2.0 BILLION), UP 24.8% RECORD QUARTERLY PETROCHEMICALS SEGMENT EBIT

RECORD QUARTERLY STANDALONE NET PROFIT ` 7,704 CRORE ($ 1.2 BILLION), UP 17.9%

Reliance Industries Limited (RIL) today reported its financial performance for the quarter/ half year ended 30th September 2016. Highlights of the un-audited financial results as compared to the previous year are: CONSOLIDATED FINANCIAL PERFORMANCE

(In ` Crore)	2Q	1Q FY17*	2Q FY16*	% chg. w.r.t. 1Q FY17	% chg. w.r.t. 2Q FY16	1H	1H FY16*	% chg. w.r.t. 1H FY16
	FY17*					FY17*
Turnover	81,651	71,451	74,490	14.3%	9.6%	153,102	156,999	(2.5%)
PBDIT	13,551	13,589	10,857	(0.3%)	24.8%	27,140	22,499	20.6%
Net Profit (Excluding Exceptional Items)	7,206	7,113	5,035	1.3%	43.1%	14,319	11,059	29.5%
Net Profit	7,206	7,113	9,345	1.3%	(22.9%)	14,319	15,369	(6.8%)
EPS (`)	24.4	24.1	31.7	1.3%	(23.0%)	48.5	52.2	(7.0%)
EPS (`) (Excluding Exceptional Item)	24.4	24.1	17.1	1.3%	42.9%	48.5	37.6	29.3%

(* Based on Ind AS)

HIGHLIGHTS OF QUARTER'S PERFORMANCE (CONSOLIDATED)

• Revenue (turnover) increased by 9.6% to ` 81,651 crore ($ 12.3 billion)

• PBDIT increased by 24.8% to ` 13,551 crore ($ 2.0 billion)

• EBIT margin at 11.3%, up by 148bps

• Profit Before Tax (excluding exceptional item) increased by 40.8% to ` 9,884 crore ($ 1.5 billion)

• Cash Profit (excluding exceptional item) increased by 27.7% to ` 10,341 crore ($ 1.6 billion)

• Net Profit (excluding exceptional item) increased by 43.1% to ` 7,206 crore ($ 1.1 billion)

  HIGHLIGHTS OF QUARTER'S PERFORMANCE (STANDALONE)

• Revenue (turnover) decreased by 0.3% to ` 64,344 crore ($ 9.7 billion)

• Exports decreased by 11.5% to ` 37,717 crore ($ 5.7 billion)

• PBDIT increased by 13.9% to ` 12,835 crore ($ 1.9 billion)

• Profit Before Tax increased by 20.2% to ` 10,173 crore ($ 1.5 billion)

• Cash Profit increased by 13.5% to ` 9,985 crore ($ 1.5 billion)

• Net Profit increased by 17.9% to ` 7,704 crore ($ 1.2 billion)

• Gross Refining Margin (GRM) of $ 10.1/bbl for the quarter

  CORPORATE HIGHLIGHTS FOR THE QUARTER (2Q FY17)

• In July 2016, Reliance Jio Infocomm Limited, a subsidiary of Reliance Industries Limited , issued

  ` 2,000 crore of 5 year Non-Convertible Debentures (NCDs), bearing a coupon of 8.32% per annum, payable annually.

• In September 2016, Reliance Jio Infocomm Limited launched its digital services with the Jio Welcome Offer.

• In September 2016, Reliance Sibur Elastomers Private Limited, a subsidiary of Reliance Industries Limited has signed facility agreement for availing a term loan facility of US$ 330 million by way of External Commercial Borrowings.

Commenting on the results, Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries Limited said: "The Company has achieved outstanding second quarter results with strong refining business performance and record petrochemicals segment earnings. Refining business sustained high profitability in a tough environment highlighting our exceptional refining assets, dynamic response to market trends and robust operations. Petrochemicals segment gained significantly from higher volumes, integration and supportive product margins.

Our projects in the hydrocarbon chain are at advanced stages of mechanical completion and pre- commissioning activities. These projects will further strengthen our position as a leading operator in

the energy and materials businesses. We are delighted and humbled by the enthusiastic adoption of Jio by India. Jio is built to empower every Indian with the power of data".

2Q FY 2016-17: FINANCIAL PERFORMANCE REVIEW AND ANALYSIS (CONSOLIDATED)

Result for the quarter / half year ended 30th September 2016 are in compliance with Ind AS notified by the Ministry of Corporate Affairs. Consequently, result for the quarter ended 30th September 2015, half year ended 30th September 2015 and previous year ended 31st March 2016 have been restated to comply with Ind AS to make them comparable.

For the quarter ended 30th September 2016, RIL achieved a turnover of ` 81,651 crore ($ 12.3 billion), an increase of 9.6%, as compared to ` 74,490 crore in the corresponding period of the previous year. Increase in revenue is primarily on account of increase in volumes in refining, petrochemical and retail businesses.

Cost of raw materials increased by 4.7% to ` 43,134 crore ($ 6.5 billion) from ` 41,191 crore on Y- o-Y basis primarily on account of higher volume of crude processed and increased petrochemicals production during the quarter.

Exports from India operations were lower by 11.5% at ` 37,717 crore ($ 5.7 billion) as against

` 42,636 crore in the corresponding period of the previous year due to lower product prices.

Employee costs were higher by 17.7% at ` 2,017 crore ($ 303 million) as against ` 1,713 crore in corresponding period of the previous year due to higher payouts and increased employee base.

Other expenditure decreased by 8.6% to ` 9,062 crore ($ 1.4 billion) as against ` 9,919 crore in corresponding period of the previous year primarily due to lower expenses on account of exploration in relinquished blocks and blocks under evaluation. This is in line with Successful Efforts Method adopted under Ind AS.

Operating profit before other income and depreciation (before exceptional item) increased by 20.2% on a Y-o-Y basis to ` 11,176 crore ($ 1.7 billion) from ` 9,301 crore in the previous year. Strong operating performance from refining and petrochemicals businesses was partially offset by lower contribution from Oil & Gas business due to lower volumes and weak price environment.

Other income was higher at ` 2,393 crore ($ 359 million) as against ` 1,460 crore in corresponding period of the previous year due to higher interest income and profit on sale of investments.

Depreciation (including depletion and amortization) was ` 2,774 crore ($ 416 million) as compared to ` 2,842 crore in corresponding period of the previous year.

Interest cost was at ` 893 crore ($ 134 million) as against ` 993 crore in corresponding period of the previous year primarily on account of lower exchange loss.

2Q FY16 included exceptional items which represents the net impact on account of sale of an associate EFS Midstream LLC and provision for impairment in Reliance Holding USA Inc. The gain on sale of investment in EFS Midstream LLC was ` 4,574 crore while the provision for impairment in shale gas assets was ` 264 crore. In the reported financials of 2Q FY16 (based on IFRS), impairment was considered at ` 2,659 crore (net of taxes). With the migration to Ind AS w.e.f 01.01.2015, and consequent fair valuing of the asset, the provision for impairment has been revised to ` 264 crore. Furthermore, based on independent expert opinion the Company has not provided for deferred tax asset /liability on these transactions.

Profit after tax excluding exceptional items was higher by 43.1% at ` 7,206 crore ($ 1.1 billion) as against ` 5,035 crore in the corresponding period of the previous year.

Basic earnings per share (EPS) excluding exceptional items for the quarter ended 30th September 2016 was ` 24.4 as against ` 17.1 in the corresponding period of the previous year.