Reliance Industries

Dear Shareowners,
 
 I have great pleasure in sharing with you the highlights of another
 year of great achievements.  We set new records for turnover, net
 profits and dividend payout.
 
 Reliance achieved several milestones during the year. We became Indias
 first company in the private sector to surpass cash profit of Rs.25,000
 crores and net profit of Rs.15,000 crores (excluding exceptional
 income). We increased our dividend payout to 130% amounting to Rs.1631
 crores, a new record for us as well as for private sector in India.
 
 In our upstream business, we had nine discoveries in the various
 explorations blocks in India. We also added to our international
 footprint by signing production sharing contracts in several countries.
 
 We also made very creditable progress in the implementation of the KGD6
 project. This is one of the largest and most complex deepwater gas
 projects in the world. As we bring this field to commercial production
 it will be a proud day for Reliance and an important day in Indias
 hydrocarbon history.
 
 Energy prices, both oil and gas, scaled new heights globally this year.
 The development of new hydrocarbon resources is now more challenging
 and expensive than ever before. Reliance has successfully taken up this
 challenge in building a world class organization and mobilizing
 resources to develop its upstream portfolio.
 
 Our Jamnagar refinery clearly demonstrated its best-in-class operations
 with another year of high capacity utilization and record margins.  The
 flexibility, scale and complexity of the refinery were manifest in its
 operating performance far exceeding the regional benchmarks. We were
 also able to capture the Clean and Green premium from supplying low
 sulphur petroleum products to discerning markets worldwide.
 
 During the year we took over the operations of Gulf Africa Petroleum
 Corporation (GAPCO) and started shipping products to the East African
 market. GAPCO owns and operates large storage terminalling facilities
 and a retail distribution network including 250 retail outlets in
 several countries.
 
 Reliance Petroleum Limited (RPL), a subsidiary of our Company has
 completed 90% progress in building a new refinery. This will be an even
 more complex and flexible refinery than the existing refinery. Based on
 the progress so far, we expect to complete the new refinery ahead of
 schedule.
 
 Both Reliance and RPL Shareholders have gained from the value creation
 during the projects implementation.
 
 The Indian economy grew at nearly 9% this year.  Our Polyester and
 Polymer businesses also exhibited impressive growth.
 
 In Polyester, we commissioned the largest expansion in the world last
 year and consolidated our market position both in India and globally.
 In addition, we entered into agreements to acquire the assets of Hualon
 Malaysia, which will add another 5 lakh tonnes of globally competitive
 capacity. Reliance will now account for nearly 7% of global Polyester
 production this year.
 
 Our polymers business also benefited from a 15% growth in demand in
 India. We have expanded customer reach, introduced new applications and
 increased market share to 55% in our polymer business.
 
 Reliance Retail Ltd. (RRL) continued its roll out of stores during the
 year across various verticals and formats. With 590 stores in 57
 cities, spanning 13 states, and over 3.5 million square feet of trading
 space, I am confident that our newest business will scale the same
 heights as all our other businesses have. Additionally, I believe that
 with the stated aim of generating 1 million jobs in retail, this is a
 truly transformational venture whose success will further our national
 priorities.
 
 Last year, at our Annual General Meeting I had talked about infusing a
 new spirit of innovativeness in the company. Innovation is truly the
 new watchword for companies that want to survive beyond and into the
 next century. Our recent measures including that of setting up an
 Innovation Council comprising some of the best minds, has borne fruit.
 We were recently ranked 19th in the list of the “Worlds 25 Most
 Innovative Companies” compiled by Business Week in collaboration with
 the Boston Consulting Group.
 
 Our pride in our people and performance was endorsed by influential
 global bodies. Reliances Hazira manufacturing division won the “Deming
 Quality Control Award” for the Operations Business Unit (2007), making
 it the worlds first petrochemical company to win this award. Our
 Jamnagar refinery was adjudged the winner of “Golden Peacock National
 Training Award 2007” while the Hazira manufacturing division won the
 “Golden Peacock Innovation Award 2007”.
 
 India is globalizing rapidly and is today a force to reckon with in the
 marketplace. Indias growth is creating wealth and jobs across the
 world. We are an integral part of this evolution and have the
 responsibility to accelerate Indias growth by reinvesting our cash
 flow in our businesses.
 
 I am confident that Reliance will firmly establish itself as one of the
 worlds most successful and admired companies in the years to come.
 
 I would like to express my gratitude to our Board of Directors for
 their unstinting support and guidance. I am also grateful to all our
 stakeholders - our customers, suppliers, bankers, employees and
 shareholders, who have reposed their trust in us and given us their
 constant support.
 
 With best wishes,
 Sincerely,
 
 Mukesh D Ambani
 Chairman & Managing Director
 April 21, 2008