In the light of corporate governance standards envisaged by the recent amendments to the Companies Act, 1956, and the provisions of Sebi's revised Clause 49 of the Listing Agreement, this case study evaluates the quality of corporate governance standards and present practices in the textile, synthetics and petrochemical industry in India, based on the annual report of Reliance Industries Limited (RIL), a major Indian corporate house for the financial year 2006-2007. The study is expected to serve as a pointer to the effectiveness of current corporate governance practice in RIL, in particular, and the Indian corporate sector, in general.

In India, the question of corporate governance has assumed importance mainly in the wake of economic liberalization, deregulation of industry and business, as also the demand for a new corporate ethos and stricter compliance with the legislation. The new economic policy adopted by the Government of India since 1991 has necessitated the demand for the introduction and implementation of a proper corporate governance policy in the management of companies not only in the interest of their stakeholders but also for the development of the economy.

The present study seeks to critically examine the prevailing corporate governance practices in the corporate sector in India within a regulatory framework.

In order to assess the structures and processes for corporate governance followed by the Indian corporate houses and their effectiveness in terms of substance and quality of reporting of governance practices in annual reports, we have conducted an empirical study on one renowned Indian companies in the textile, synthetics and petrochemical industry viz., Reliance Industries Limited (RIL). The study has been made to evaluate the state of compliance of key governance parameters in RIL in line with the statutory and non-mandatory requirements stipulated by the revised Clause 49 of the (SEBI) Listing Agreement as also the provisions required by the Companies Act, 1956.