Management's Discussion and Analysis

Integrated approach brings together the financial and nonfinancial value drivers which are essential contributors to Reliance’s success. This multifaceted approach is an attempt to report on economic, environmental and social parameters - in a manner that can help stakeholders to understand how the Group creates and sustains value over the long-term.

The Company has expanded its classic 4P growth approach to include Peace and Partnerships, in line with the United Nation’s 2030 Agenda for Sustainable Development. The Sustainable Development Goals set out by the United Nations have been interwoven within the 5P’s growth model, which focus on the following:

RIL has been publishing Annual Sustainability Reports since FY 2004-05 as per the Global Reporting Initiative (GRI) guidelines. The reports were externally assured with an A+ rating indicating highest level of comprehensive disclosures. RIL is also a member of World Business Council of Sustainable Development (WBCSD) and Global Reporting Initiatives (GRI). WBCSD’s ‘Reporting matters’ has recognised RIL’s sustainability report as leading example on aspect of reliability.

Reliance continues to meet the growing energy demand, while working towards minimising the environmental footprint of its ongoing operations, as well as future projects. This year, more focused approach for sustainability initiatives is undertaken along with large awareness drives.

CONTINUOUS IMPROVEMENT - MINIMISING ENVIRONMENTAL FOOTPRINT

All manufacturing sites have adopted ‘Integrated Management System’ complying with Environment (ISO- 14001), Quality (ISO-9001) and Occupational Health and Safety Management System (OHSAS-18001). All newly commissioned plants are also being included under the Integrated Management System at the sites.

In the Company’s drive towards achieving environmental excellence, efforts continue to establish environmental best practices at all the manufacturing sites. A dedicated ‘Environmental Compliance Review Committee’ at each manufacturing site periodically reviews compliance status and provides further guidance as necessary. This was complemented by an environmental compliance audit process conducted at each manufacturing site during the year.

Initiatives implemented to reduce the environmental footprint include:

• State-of-the-art effluent treatment plants commissioned to completely recycle the effluent generated from the new plants.
• Co-processing of waste generated as fuel in cement kilns has been initiated.
• A recycling plant of 65 tonnes per day capacity is operational for recycling used PET bottles.
• A project commissioned this year to capture CO2 emission from MEG / EO production process.
• On-line emission analysers are being installed in most of the stacks.
• Similar actions have been taken to monitor and report the treated effluent quality on-line.

During the year, significant efforts have resulted in improvement of the following environmental parameters at manufacturing location, as indicated below. The parameters indicate percentage change in absolute total values compared to previous year in spite of the increase in production and commissioning of new projects.

Improvement in FY 2015-16 over FY 2014-15

• Reduction in total GHG emissions per tonne of product by 2.4%
• Reduction in TPM emissions by 0.1%.
• Reduction of SOx emissions by 12.4%
• Increase in water recycling by 4.7%
• Increase in material recycled by 14%

For more details please refer to the Sustainability Report http://www.ril.com/Sustainability/CorporateSustainability.aspx

As a part of continuous improvement, various energy efficiency initiatives were undertaken during the year which include:

• Enhanced heat recovery by revamping of air preheaters to recover more energy from flue gases;
• Improved heat rate by uprating Gas Turbines;
• Installation of advanced technologies like Divided Wall Column (DWC);
• Optimum utilisation of fuel for steam and power generation using ProSteam Optimiser, an on-line power and steam optimisation tool working on advisory mode that has now been made available to all petchem and refinery sites;
• Innovative projects like steam-to-steam heat exchangers to utilise low pressure steam;
• Reliance’s wide energy Dashboard to enable easy access to energy performance on the fly, including equipment level performance monitoring system.

At Reliance, as a culture, ‘World Environment Day’, ‘Earth Day’, ‘International Day for the Preservation of the Ozone Layer’ and ‘World Water Day’ are celebrated. At RIL’s Jamnagar location, a total of 2,581 acres of greenbelt has been developed.

INCULCATING ‘CARE FOR ENVIRONMENT AMONG STAKEHOLDERS’

Reliance ensures that its commitment towards environmental protection is extended to all its stakeholders. The Company makes continuous efforts to ensure that its supplier partners adhere to and comply with the principles of:

1. Compliance with laws and regulations
2. Labour and human rights standards
3. Occupational health and safety
4. Environmental protection and conservation
5. Protection of confidentiality and intellectual property
6. Business integrity

Reliance has been working relentlessly towards supplier management through various steps like supplier evaluation, managing supplier database, segmentation, stakeholder mapping, supplier performance, supplier development and supplier collaboration. Reliance is also in a process of implementing various initiatives like green packaging/ 3R’s, supplier partnering, contract worker care, business to local community, training and skill development and supplier development among other initiatives. RIL’s sustainable sourcing procedures focus on: world class supplier base, contractor care, responsible care, development of India’s engineering talent, innovation through supplier collaboration, green packaging and managing human rights across the supply chain.

PROMOTING USE OF ECO-FRIENDLY FUELS

Reliance works towards the development and implementation of climate change mitigation projects. This is primarily done through energy efficiency initiatives at all the manufacturing sites (as listed in the Director’s report page no. 226), where use of cleaner fuels and renewable energy has been adopted. During the year, Reliance has initiated several activities for the deployment of renewable energy, like rooftop solar photovoltaic projects, biogas generation project and carrying out wind resource assessment for exploring possibility of installation of wind turbines.

CLEAN DEVELOPMENT MECHANISM (CDM)

RIL has registered a number of CDM projects with the United Nations Framework Convention on Climate Change (UNFCCC) as listed below:

SPILL PREVENTION

RIL has robust systems to prevent operational spills. There have not been any significant spills at RIL facilities during the FY 2015-16.

2. PEOPLE

At Reliance, success of the organisation is believed to be truly driven by its ‘People’. People are Reliance’s most valuable assets. Reliance is dedicated to ensure that people realise their full potential at work with dignity, equality and in a healthy environment. Reliance fosters a culture that is performance oriented, promotes reward for results and helps its people grow.

Reliance’s values and behaviours have instilled a deeper sense of connect and engagement for its people.

HR VISION:

“A modern, progressive people environment, where purpose driven talent is attracted, engaged, motivated by a consistent meritocratic HR framework and where high quality leaders capable of realising RIL business goals are identified, encouraged and rewarded.”

HR TRANSFORMATION JOURNEY

RIL embarked upon the ‘R-HR’ Transformation journey in 2014 to create world class HR practices. The Company aims at continuing excellence and being an Employer of Choice. RIL wishes to inspire highly talented professionals to join and grow with the Company.

R-HR Transformation was a 24-months agenda and driven through four waves of transformation. These have set a strong foundation for the Company to create greater transparency, empowerment and meritocracy for people practices.

Wave 1 included setting and rolling out foundational processes for putting structured position grading, a newage HR operating model and a renewed performance management process. Wave 2 focused on strengthening talent management processes, driving succession planning and Career Acceleration Programme (CAP) for internal young talent. Wave 3 was focused upon building enhanced resourcing capabilities for internal and external talent and a superior candidate experience.

During FY 2015-16, Reliance launched Wave 4 of the R-HR Transformation journey which drives the strategic organisational capabilities around leadership development and establishing an enterprise wide learning and governance framework for employees. With the spirit of continuous excellence, RIL has now further set its goals to digitise the People Management System (PMS), leveraging latest technology interventions.

HR TRANSFORMATION WAVES

HUMAN RESOURCES - GOVERNANCE, INTEGRATION, RISK AND ASSURANCE

At Reliance, ‘Human Resource - Governance, Integration, Risk and Assurance’ team has been formed under the stewardship of newly constituted RMS Framework. This team would enable Human Resource function to strengthen overall HR functioning and raise the bar of excellence in people policies, practices, systems, data and organisation. The team is strategically driving key people focused transformational initiatives across Reliance and is responsible for driving a mature governance and management assurance process.

HEALTH AND WELLBEING

Reliance focuses on achieving excellence in health and wellness initiatives which in turn enhance the health status of stakeholders. Reliance management philosophy is “One Reliance, Healthy Reliance!” Reliance has implemented an unique initiative, ‘REFERS’ (Reliance Employee and Family Emergency Response Services) which offers 24x7 assistance in case of any medical, accident, fire and securities exigencies for employees and their family members. In addition, emergency medical services are provided to Reliance employees and their family members 24x7 across the country through strategic tie–ups with multi-speciality hospitals.

RIL’s efforts in the field of health and well-being has been recognised by highly reputed agencies including the Joint Commission International (JCI), National Accreditation Board for Hospitals, and National Accreditation Board for Laboratories etc. Health and Safety at work dimension within the ‘Employee Engagement Framework’ achieved a score of 93%, which is 8% more than the Kanexa Global Standard.

During the FY 2015-16, RIL invested ₹337.31 crore on Health, Safety and Environment initiatives.

Reliance strives to achieve excellence in improving its employees’ occupational and personal health. The aim is to ensure a healthy and productive work environment by minimising health hazards and providing state-of-theart facilities. To achieve this, Reliance has set up worldclass occupational and family welfare centres, follows international HSE best practices at all manufacturing, E&P locations and major office complexes. The Company’s medical and occupational health departments focus extensively on the prevention. Health awareness programs are the integral part of Reliance’s Wellness initiatives, specially focusing on prevention of life style diseases such as hypertension, diabetes, etc. and also work life balance and specialised programs for women’s health. Across the locations, health awareness is created through vitality fair, yoga workshop, tool box talk at shop floor, and health tips, among others.

SAFETY

RIL targets zero injuries and incidents. The Operating Management System (OMS) is a framework to deliver and sustain conformance to the essentials, followed by excellence, in operating activities and processes. The OMS provides a systematic and consistent approach for reducing Health, Safety, Security and Environment (HSSE) risks in operating activities.

Delivering safe, compliant and reliable operations will lead to sustainable competitive advantage. In order to achieve the goal, Reliance requires improvements in all aspects of the Elements of Operating, i.e., plant, process, people and performance. The Group Essentials (GE) outlines the risk mitigation strategies, legal and regulatory compliances, RIL’s conformance with the requirements and a rigorous application of basic operations knowledge. It also creates a platform for sustainable improvement, allowing Reliance to capture additional value through efficiency and sustaining excellence in operating.

Reliance conducts its operations considering safety of its employees, suppliers and vendors, as well as communities in which Reliance operates. A fully equipped and wellqualified HSE organisation is in place at all locations providing necessary governance, documentation and HSE assurance. To support its HSE organisation, Reliance is backed by a Centre of Excellence at the Corporate, which brings in subject matter expertise in various fields of HSE, apart from governance.

CRISIS MANAGEMENT AND EMERGENCY RESPONSE

Reliance aims to guard against potential risks which could harm people or disrupt the operations. Crisis management and Emergency response plays significant role in achieving this objective as early response can reduce the consequence. In order to strengthen the emergency response capabilities, assessment of emergency management plans and training on execution of command and control was conducted at various manufacturing sites. Regular alerts on natural disasters like Tsunamis are also received from Indian Tsunami Early Warning Centre (ITEWC), Hyderabad.

SAFETY AUDITS

In FY 2015-16, the process of first and second party audits continued at all sites. The audit schedule was published at the beginning of the year and different audits were conducted during the year such as: Process Safety Management, Workplace Safety Management including Electrical safety, Fire Safety Management, Highly Toxic Material Management, Contractor Safety Management, Environment Management and Distribution Safety Management. The audit findings were presented to the Board of Directors and actions were taken to further improve safety parameters.

Employee health and safety at work dimension within the ‘employee engagement framework’ is at 93%, which is 8% higher than Kenexa global standards.

NURTURING AND MANAGING TALENT

Reliance has now instituted sustainable practices to identify and develop high calibre talent who will lead Reliance on its next growth path into the future. Over the last 2 years, Reliance has changed the way it looks at its internal talent development and external hiring. Wave 4, which is part of the HR Transformation journey, has helped Reliance move to an integrated learning architecture that enables the Company to focus its learning investment on developing the technical, functional and leadership capabilities needed to drive future business growth. Wave 4 aligns all Reliance’s learning to strategic priorities through a single learning entity called R-University.

A key pillar of the learning strategy is the democratisation, digitisation and fostering of a learning culture across Reliance. Reliance is using e-learning, social, collaborative and other technology platforms as enablement tools. Learning opportunities are available on a cloud-based learning management system so that employees are able to access learning content anywhere, anytime. Reliance has also formed multiple partnerships, e.g., Bersin by Deloitte, Skillsoft and Corporate Executive Board to keep the learning content and approach current. To strengthen the leadership bench strength, Reliance has built an integrated transition programme for Reliance leaders along with globally renowned partners such as Duke CE. These ‘Step-up Programs’ have been launched to assure the development of leaders to assume next level leadership roles. Reliance introduced a Career Acceleration Programme (CAP) in order to strengthen leadership skills amongst employees.

Learning at Reliance has been provided a directional push towards a fully enabling and seamless learning experience. Focus has moved from mass training programs to customised programs and also availability of learning at the point of need of individual’s career development. Upgradation of physical learning infrastructure and virtual learning infrastructure across locations and sites will help Reliance in creating a standardised learning environment. R-University’s three-tier governance structure (Group Learning Council, R-University Council and Academy Council) and process optimisation have further integrated the learning landscape along with bringing increased transparency and business alignment to learning. The initiatives aim to place the learner at the center of the learning process.

Training courses have been divided into mandatory and non-mandatory categories based on the training content and learner’s current role. There has been enhanced focus on compliance training and many of these trainings are available for all Reliance employees through e-learning modules. RIL imparted more than 15 lakh man-hours of training to its people, both through internal and external subject matter experts in FY 2015-16. A significant number of employees were trained on health, safety and environment for more than 7.5 lakh man-hours. Other than permanent employees, contract staffs were also covered through various training programs by providing more than 3.5 lakh man-hours of training.

CONTINUOUS IMPROVEMENT METHODOLOGIES

Reliance strives to embed a culture of Continuous Improvement (CI) activities in its DNA. As a result, different skills of the Six Sigma methodology including DMAIC, Lean, Design for Six Sigma and Innovation have been imparted to the employees. As a part of implementation of Operation Management System (OMS), new waves have been started to achieve higher levels of operational excellence and it is structured as CI-7 Step methodology for Exemplar Projects to improve different processes, based on identification of gap against Reliance’s OMS requirement. A web based portal called “Continuous Improvement Portal” (CI-Portal) has been developed where CI projects are entered and executed within the system. A total 74 projects with expected contribution gain of around ₹77 crore are in progress through this CI-portal.

DIVERSITY AND INCLUSION

Reliance focuses on three aspects of diversity: gender diversity, multigenerational diversity and inclusivity. Reliance promotes equal opportunity for all its employees. The Company believes in equality irrespective of gender, sexual orientation, disability, caste, religion or age.

Employee strength as on 31st March, 2016 for RIL is 24,121 which includes 1,238 female employees. RIL is one of the foremost companies to allow women professionals in shift operations.

The Company’s endeavour is to make Reliance the “most admired brand” through inclusive excellence. RIL today employs people from 19 different nationalities adding to its diverse employee base. RIL has 40 foreign national employees in the leadership cadre.

Over the years, the Company has tried to improve its multigenerational diversity as well. The Company demographics is moving towards younger population and average age of RIL employee stands at 41 years.

R-AADYA INITIATIVE: EMPOWERING WOMEN TO EMPOWER INDIA

“R-Aadya Awaken the Senses” is the flagship gender diversity initiative designed to help Reliance’s women employees navigate through their careers. The programme is designed to give them opportunities through the 4 pillars of the programme which include providing mentorship conversations, leadership interactions, forums and conferences and trainings and workshops (Classroom and E-learnings). R-Aadya, with about 30 women executives is making excellent progress with its active participation as well as support from mentors in the organisation.

Under the R-Aadya mobile app, the Company has launched a feature through which women can send a distress call or emergency message to a specified contact or group in an emergency situation. The Company’s monthly magazine – ‘WOW – Reliance World of Women’ talks about the stories and accomplishments of the Company’s women employees and other initiatives.

CAMPUS MARQUEE PROGRAM

RIL’s annual intake of Management trainees through its Campus Marquee Programme from premier institutes is one of the highest in the country along with a strong internship process which brings a rich pool of young talent into the Company.

Ultimate Pitch: The Ultimate Pitch has been launched as an annual B-School – Business Plan competition at premier institutes and the final shortlisted teams are provided mentoring towards their entrepreneurial aspirations.

The highlight of the Grand Finale of ultimate pitch was that all 12 Finalist teams got a chance for a unique interaction with Chairman and MD Shri. Mukesh D. Ambani.

EMPLOYEE ENGAGEMENT

RIL conducts a global engagement survey wherein all employees participate in complete confidentiality through an independent survey conducted by IBM Kenexa. The overall employee engagement scores have gone up substantially as a result of transformation initiatives. The Company constantly works on feedback and ensures that improvements are made both at an organisational and manager level and communicated back to its employees.

Leadership support dimension is at 84% which is 9% higher than Kenexa Global standard.

STAKEHOLDER ENGAGEMENT

Reliance’s relationships with all its stakeholders have a direct and indirect impact on their business activities and reputation. RIL has identified eight key stakeholders (Investors and Shareholders, Employees, Customers, Suppliers, Trade unions, Government and Regulatory authorities, Local community and NGOs) with whom the Company discusses common solutions through strategic dialogues. The Company proactively engages with its stakeholders in order to inform them of its business strategy and operations, shape their products and services, manage and respond to social expectations and improve the environment in which RIL conducts its business.

ETHICS AND HUMAN RIGHTS

All Reliance employees, suppliers and vendors are required to respect human rights of not only each other, but also of the community in which Reliance operates. Ethics and Compliance Task Force oversees and monitors implementation of ethics and compliance within Reliance. It comprises of the Reliance Group Head of HR, General Counsel, Group Controller and Group Company Secretary. All the Company’s units maintain 100% compliance with local and national laws, regarding ethics and human rights. Reliance also takes into account global standards and the Company strives to comply with all global norms on human rights, including the principles outlined in the United Nation’s Universal Declaration of Human Rights. All employees are exposed to these topics through organised training programmes. 100% of its non-supervisory permanent employees at its manufacturing locations are covered under collective bargaining agreements with trade unions which also comply with the local and national laws.

3. PRODUCTS AND PROCESSES

Sustainable growth is an ongoing process, which requires a transformational vision as well as adaptation to rapidlyevolving products and processes. Reliance’s Innovation Council provides vision to innovation efforts at the organisation level. Through R&D, novel products and processes are developed to improve profitability and sustainability at Reliance.

INNOVATION, RESEARCH AND TECHNOLOGY

INNOVATION

At Reliance, innovation is a way of life that allows the Company to create real, sustainable value for all its stakeholders. With this in mind, the Reliance Innovation Council (RIC), a unique corporate entity, was established in 2008. These global thought leaders and iconic personalities fold the future in and lay out an innovation agenda for the organisation.

Mr. Mukesh D. Ambani, Chairman and Managing Director of Reliance, is also an RIC member. Besides being on many prestigious boards, he was recently elected a Foreign Member of the prestigious US National Academy of Engineering.

Dr. Raghunath A. Mashelkar is the Chairman of the RIC, an eminent scientist and the President of Global Research Alliance. For his various contributions to India, he has been honoured with Padma Vibhushan, the second highest civilian honour bestowed in India.

Prof. George M. Whitesides is a Professor at Harvard University and the world’s foremost chemist. He is also a co-founder of companies with a combined market capitalisation of over US$30 billion.

Prof. Jean-Marie Lehn is a professor at the Collège de France in Paris, who was awarded the Nobel Prize in Chemistry in 1987 for his studies on the chemical basis of ‘molecular recognition’. Over the years his work has led to the definition of a new field of chemistry.

Prof. Robert Grubbs is a professor at Caltech, and received the 2005 Nobel Prize in Chemistry for his work in the field of olefin metathesis.

Dr. William A. Haseltine is chairman of Haseltine Global Health LLC, a virtual pharmaceutical company. He is also well-known for his pioneering work in cancer and HIV / AIDS.

Prof. Gary Hamel is one of the world’s most influential business thinkers and renowned business strategy experts.

The Reliance Innovation Leadership Centre (RIL-C) was set up to serve the innovation vision of the council. This centre implements Reliance’s innovation agenda by deploying the best and next transformational innovative practices.

INVESTING IN RESEARCH AND TECHNOLOGY

R&D MISSION

RIL shall develop innovative products, processes and catalysts to increase and sustain the profitability and growth of Reliance in a compliant, safe and reliable manner. To achieve this mission, RIL has transitioned from a smart buyer of technology to a fast customiser of technology and a flagship developer through largely in-house developed technology that creates significant value. R&D enables the innovation based growth agenda for Reliance.

ORGANISATIONAL STRUCTURE

R&D is governed and operated by a well-defined set of teams, viz., Strategic teams, Leadership teams and Functional excellence teams.

The R&D function at Reliance has two distinct themes:

1. Breakthrough R&D for potential new businesses.
2. R&D to support near-term needs and step-out processes for existing businesses

The entire R&D organisation enthusiastically embraces Reliance’s Values, Behaviours and Code of Conduct. Risk management is an integral component of the strategic framework. R&D successfully complies with and implements the Operating Management System being driven across Reliance. R&D also implements initiatives such as New Product Development and Introduction (NPDI), Stage- Gate®, etc. to formally manage innovation.

FUNCTIONS OF R&D

R&D includes a) Breakthrough R&D b) R&D HSE and c) R&D Product Stewardship and it is bound by R&D operating model which describes the operating principles pertaining to the R&D organisation.

1. Breakthrough R&D -

   R&D efforts focus on:

   Biofuels and Biochemicals: RIL’s ‘Algae to biocrude and biochemicals’ effort aims at establishing a green platform that harnesses natural resources, such as freely available sunlight, sea water, carbon dioxide and low cost nutrients (nitrogen, phosphorus) to produce abundant quantities of biomass that can be converted to biocrude and biochemicals. Research efforts on algae are focused on physiology, biochemistry, molecular biology, genomics and development of technologies for algae cultivation, harvesting and processing technologies for converting biomass to bio-crude and bio-chemicals. Reliance has achieved significant technical breakthroughs in improving photosynthesis efficiency and has developed best-in-the-world gene stacking capabilities. Reliance also has expertise in metabolic engineering using lambda Red/PCR technology for gene stacking to improve the production of fuels and chemicals from microorganisms.

   Hydrothermal Liquefaction (HTL): HTL is a depolymerisation process that uses high temperature and pressure conditions to convert biomass to biocrude, mimicking the way Earth made crude oil millions of years ago. Reliance has built the largest HTL demonstration unit in the world. The Company has collaborated with partners (Pacific Northwest National Laboratory via Genifuel) whose HTL technology was recognised by a very prestigious award (R&D 100 Award) in FY 2015-16. RIL has subsequently improved the HTL process using in-house proprietary homogeneous catalyst development and other engineering capabilities.

   Producing Algae and Co-products for Energy (PACE): RIL’s collaborative project with some of the top universities and research institutions in the US, was awarded US$9 million by the US DoE for developing and demonstrating algae for producing energy and coproducts. Reliance is the sole demonstration partner for this first-of-its-kind effort wherein it will validate and demonstrate an integrated process for producing biocrude and other value-added products from algae.

   Clean Energy: RIL is the sole industry partner in the New Millennium Indian Technology Leadership Initiative (NMITLI) project with the Council of Scientific and Industrial Research (CSIR) on indigenous Polymer Electrolyte Membrane (PEM) fuel cell technology development. After successful lab-scale demonstration of PEM fuel cell technology at low power, a scaled-up cell of 3 kilowatt-electric capacity has been designed. A fuel cell test bed has been built, for which the engineering was done by RIL, while stacks were built by CSIR. These components have been integrated and are now functional. The assembly is undergoing testing.

2. R&D – Health, Safety and Environment (HSE)

   • The R&D team has developed breakthrough in ionic liquid catalysts that are fifty times less expensive than competitive ionic liquid products. These catalysts are more benign, reusable, recyclable and can be made at scale. They are highly effective replacements for toxic hazardous acids. Reliance is developing a breakthrough safer and environmentally friendly process for manufacturing Linear AlkylBenzenes (LAB) using these ionic liquid catalysts. Furthermore, this platform technology will lead to many other breakthrough processes.
   • Sulphur is a refinery by-product. In its elemental form, sulphur has limited use. RIL has developed a technology that increases the efficacy of sulphur as a fertiliser. It is estimated that Indian soils are 40% deficient in sulphur and RIL‘s new sulphur fertiliser (Relfarm™) will greatly improve agriculture productivity throughout India.

3. R&D – Product Stewardship

   Reliance R&D is a successful steward for commercialisation of technologies. It is the first in the world to successfully extract benzene from diolefin and gasoline products. RIL has also pioneered the use of Light Emitting Diodes (LEDs) for CPVC manufacture.

   R&D - Refining

   Reliance has made efforts to pursue R&D in the areas of coking, hydro processing, Fluidised Catalytic Cracking (FCC), crude processing, molecule-based process optimisation and value addition from low value refinery streams. The Company is venturing into new areas like biomass gasification, carbon dioxide capture and its utilisation, value addition and utilisation of refinery by-product sulphur and nanotechnology-based applications besides conventional refining areas.

   

    

   Fifty times less expensive
   R&D team at Reliance has developed breakthrough in ionic liquid catalysts that are fifty times less expensive than competitive ionic liquid products.

   Through R&D, Reliance provides advanced technical support through computational fluid dynamics and advanced simulation tools. The modelling and simulation group is engaged in resolving several important refinery and petrochemicals reliability issues.

   R&D - Petrochemicals

   Reliance provides technology support to olefin crackers, polymers, fibre intermediates, LAB and polyester. The focus areas include:

   1. Efficient asset utilisation
   2. Development of specialty product grades / materials / catalysts
   3. Value addition to by-product streams
   4. Leveraging opportunities at the chemicals / oil interface
   5. Development of environmentally friendly processes

   R&D Retail

   Reliance Dairy is one of the numerous initiatives of Reliance Retail that exhibits the vision of continually generating value for every citizen of the country. The dairy initiative has taken the lead in creating a social business that is transparent, technology-driven and reaches out to millions of dairy farmers with a truly inclusive growth model. Dairy initiative currently operates across 9 states procuring milk every day directly from farmers, bringing in more efficiency and transparency in the dealings with farmers. This has created a win-win situation for both the producers and the consumers alike, where the farmers get better rates and consumers are assured of quality.

   R&D Jio

   Globally there are 3,745 (brands) devices announced by 339 manufacturers which support LTE. Handsets with multiband, multimode support, becoming the default offering.

   Jio is also deploying Fiber-to-the-home (FTTH) technology for wire-line broadband and Carrier-Wi-Fi technologies for broadband via public hotspots.

   The Company has also undertaken extensive testing of technology products and services being offered. The tests have been positive and have established smooth operations of all aspects of the network. Voice products, including Voice over LTE (VoLTE) as well as Voice over Wifi (VoWifi), work seamlessly.

   R&D – ENABLERS

   Infrastructure

   Reliance’s new R&D laboratory facility in Navi Mumbai is equipped with state-of-the-art equipment including X-ray diffraction, mass spectrometers, chromatographs, nuclear magnetic resonance imaging, electron microscopes, infrared spectrometers, X-ray photoelectron spectrometers, rheometers, etc. Other Reliance R&D centres (Hazira, Vadodara, Patalganga, Jamnagar, Gagva) are also very sophisticated. These laboratory and pilot plant facilities provide capabilities for catalysis, chemistry, process engineering, modelling, simulation, material science, synthetic biology, biotechnology, polymer processing, reaction engineering, advanced analytical sciences and product application development.

   Collaboration

   Reliance actively collaborates with various international and national institutions for R&D related activities. Some of Reliance’s prominent collaborators are: University of Helsinki (Finland), Ghent University (Belgium), Monash University (Australia), KAUST (Saudi Arabia), NUS (Singapore), KIER (South Korea), Ben-Gurion University of the Negev (Israel), IIP Dehradun, IIT Mumbai, IIT Kharagpur, IIT Chennai, NCL Pune, Florida State University, University of Massachusetts Amherst, University of Delaware, Penn State University, Kansas State University, University of Alabama, Stanford University and Massachusetts Institute of Technology among others.

   R&D Personnel

   There are currently more than 400 professionals working to support RIL’s research and technology activities. RIL runs initiatives and campus recruitment drives across universities and colleges to attract fresh talent and the next generations of engineers and scientists.

   

    

   ₹ 1,259 crore
   R&D expenditure in FY 2015-16

   Internal Crowd Sourcing

   R&D Social allows researchers to blog about ideas and seek feedback from an internal community akin to social networking exploiting efficient digital technology platforms.

   Patents

   Through R&D, Reliance aims to build a strong intellectual property portfolio. In FY 2015-16, a total of 36 patents were granted. An external survey of PCT applications filed by Indian organisations found that Reliance was ranked third amongst Indian applicants. Moreover, the quality of RIL’s inventions is evidenced by the enquiries it started receiving from domestic and international manufacturers for licensing its technologies.

   R&D EXPENDITURE

   	FY 2015-16	FY 2014-15	FY 2013-14	FY 2012-13	FY 2011-12
   Capital	631	722	810	738	654
   Revenue	628	498	408	380	335
   Total	1,259	1,220	1,218	1,118	989

   Reliance R&D aims to contribute to not only the ‘Make in India’ initiatives, but also towards creating a strong culture of invent and innovate in India. Several of RIL’s projects are targeted towards inclusive growth.

   R&D OUTLOOK

   The chemical industry will stay central to global growth aspirations. However, it will be affected by several megatrends as it continues its evolution. Most important among these megatrends are climate change and energy sources. The ‘Make in India’ campaign is likely to promote opportunities in manufacturing to meet internal and global market demand and will result in an increase in energy demand. Alternatively, India’s power generation mix is seeing increased penetration of renewable energy sources. R&D activities are vital to achieve national development with environmentally sound growth trajectories. Reliance recognises this and is committed to R&D in renewable energy as well as efficient processes to support its hydrocarbons business.

Business Transformation and successful implementation and sustenance of the Reliance Management System, are keys to realise the Company’s strategic goals and targets in the areas of Reliability and Enterprise Asset Management. These are targeted through continuous and strategic improvement initiatives.

RIL leverages technology as well to improve Integrity, Reliability and Effectiveness by:

1. Use of robotics and drones for high risk jobs and inspection of inaccessible positions.
2. Implement new technologies in Rotary / Inspection and corrosion monitoring:
   1. Critical equipment monitoring and early event detection.
   2. Model-based automated real-time corrosion monitoring system.
   3. Develop high temperature thickness probe using the same material of high temperature Long-Range Ultrasonic Testing (LRUT).
   4. Usage of newly developed corrosion under insulation monitoring tool using microwave technique.

SMART MANUFACTURING ECOSYSTEM WILL:

• Enable intelligent analysis of all data on a near real-time basis using models, to increase safety, improve energy efficiency, equipment reliability and overall efficiency.
• Enable aggregating data from various systems, assets and people to get a near real-time 360 degrees view into operations for faster and better decision-making leading to higher operational performance.
• Facilitate Asset Tracking (personnel, equipment and vehicle) thereby resulting in improved safety, better asset utilisation and enhanced security.

NELSON COMPLEXITY INDEX

RIL’s refineries at Jamnagar are amongst the largest and most complex refining assets globally, with a Nelson Complexity Index of 12.7.

The refinery’s superior configuration gives RIL the ability to process a wide variety of crudes and meet stringent product specifications.

1. Ability to process difficult crudes, which are cheaper.
2. Ability to produce high value added refinery product slate.
3. Ability to make superior grade refinery fuel products, such as BS-IV and Euro-IV + grade gasoline and diesel.

DEBOTTLENECKING

RIL has undertaken several initiatives focusing on debottlenecking, capacity enhancement and yield improvement to enhance its competitive strength.

SOLOMON INDEX

RIL’s refineries have continued to remain in top quartile performance compared to global peers on all major Solomon benchmarking parameters.

Key strengths as per Solomon study are energy efficiency, operational availability and utilised processing complexity.

Operational availability is defined as the percentage of time, a unit or facility available to operate in its intended manner. Higher Utilised Processing Complexity (UPC) generally increases Gross Refining Margin.

DIGITAL TECHNOLOGY

Digital technology is a core enabler of RIL’s future growth strategy that incorporates business process digitisation, personal productivity tools, big data and analytics, robotics, social and mobility initiatives. Mobility, analytics and security will enable Reliance to develop the next generation valued added service that the customers demand and provide them the ability to engage, interact and transact as per their convenience. Going forward, RIL looks to leverage advancement of solutions and technologies in the area of Internet of Thing (IoT), RFID (Radio Frequency Identification) and advanced analytics to create innovative solutions for value added business functions such as Vessel Tracking, Pricing Optimisation, Customer Relationship Management, Energy Management, etc.

PRODUCT STEWARDSHIP

Reliance works towards increasing the recycling and reuse of materials, and thereby inculcating the 3R (reduce, reuse and recycle) philosophy into the production process.

It is Reliance’s constant endeavour to make products that have a positive impact on the environment and cater to consumer needs. Some of the instances of product stewardship are listed below:

PRODUCT STEWARDSHIP IN REFINING

The RIL’s DTA refinery at Jamnagar is producing unleaded gasoline, since its inception. A new technology has been implemented in the Jamnagar DTA Refinery to reduce benzene and sulphur from the FCC gasoline, and upgrade it to clean fuels of Euro III / Euro IV standards. This shall help to reduce environmental impact of these fuels at the end use stage.

PRODUCT STEWARDSHIP IN PETROCHEMICAL

Reliance works towards increasing the recycling and reuse of materials, and thereby inculcating the 3R (reduce, reuse and recycle) philosophy into the production process. Some of the instances of product stewardship are listed below:

POLYMERS:

1. Promotion of Flexible Intermediate Bulk Container (FIBC) for silage storage to improve the preparation and storage of fodder as compared to traditional silo digging.
2. Promotion of DWC pipes which can replace the traditional cement pipes which are more prone to breakage.
3. RIL has developed an innovative multilayer film for milk packaging where milk in a pillow pouch can be stored for 30 days without refrigeration to reduce wastage of milk and result in low carbon footprint.

POLYESTERS:

1. Specialty hygiene fibres for lighter and thinner performance wipes.
2. Recron® Skylark for trousers with linen look and twinkling effect.
3. Recron® Skylark for jari based fabrics which can be dyed at low temperatures.

For more information please refer Business Responsibility Report, Principle 2.

PRODUCT STEWARDSHIP IN OIL AND GAS EXPLORATION AND PRODUCTION

Over the last few years, the Reliance E&P production team has adopted innovative approaches to increase recovery of oil and gas reserves by keeping the wells flowing at its Indian East Coast KG basin deep water offshore operation. Some examples of innovative approaches are:

1. Installation of onshore booster compressors, thereby allowing oil and gas to flow easier through the subsea infrastructure pipelines
2. Injecting surfactant into subsea producing wells, facilitating well fluid to be carried up to the surface
3. High pressure gas injection (at depth of 600m) at sea bed to assist well fluids flowing to surface
4. Reactivation of previously shut in wells by taking advantage of reduced arrival pressure at the onshore facility

A number of these innovative approaches have been adopted for the first time at such water depth of 1100m by using remotely operated vehicles through a dedicated world-class multi-support vessel. It is worthwhile to mention that Reliance has also extended these expertise to the Indian Coast Guard in locating debris of ill-fated Dornier aircraft.

PRODUCT STEWARDSHIP IN RETAIL

Reliance Retail through its “Kushal Kela Vikas Abhiyaan” is helping banana growers realise higher income through provision of latest agri-inputs, progressive pre and postharvest, trainings on plantation nutrition management and buyback programs. This initiative taken across 3 states have led to approx. 15 – 30% increasing banana yield, a 15% increase in A-Grade marketable produce and 40% reduction in rejections leading to an increase in farmers income by 20 – 30%. The agenda is to next target on Papaya crops, to improve their process of cultivation.

PRODUCT STEWARDSHIP IN JIO

The Company is rolling out the largest Greenfield LTE deployment in the world. It is launching a state-of-theart pan India digital services network to provide reliable (4th generation) fast internet connectivity, high-quality communication services and rich digital services. The Company has set up a next generation network which is amongst the best in the world. The network has advanced features such as Software Defined Networking (SDN) and Network Functions Virtualisation (NFV). It is ready for future evolution of technology including transition to 5G with minimal additional capital expenditure in the network.

4. PROSPERITY (PROFIT)

During the year, Reliance added value of ₹89,768 crore including payment to the national exchequer aggregating to ₹43,117 crore. This contribution is used for developmental activities which helps in building of a prosperous society. Additionally, large procurements made by RIL for its regular business as well as for ongoing capex projects has a huge cascading impact – creating jobs and business opportunities for entire socio-economic spectrum.

The initiatives in digital services is expected to act as a catalyst to the start-up ecosystem of digital India, thereby empowering millions of Indians. R&D and innovation at RIL are aimed at meeting social and economic needs of India. CSR initiatives at RIL impacts a large number of people from less-privileged sections of society. For details please refer and follow through the following pages;

Page 10-11 Enhancing the Quality of Life; Page 12-13 Making Lives Better; Page 14-17 Jio- Starting up and Reimagining to a digital life; Page 18-19 Nurturing Digital Entrepreneurship; Page 20-21People Innovation and Research and Technology; Page 22-23 An integrated approach towards Sustainable growth – 5P’s; Page 24-25 Strategic Framework and Outcome; Page 38- 39 Reliance Foundation; Page 60-61 Financial Performance and Review

5. PEACE AND PARTNERSHIPS

RIL is determined to foster peaceful, just and inclusive societies, which are free from discrimination. Strengthened global solidarity is crucial to ensure sustainable development across the world. It is therefore imperative to ensure global partnerships and strategic tie-ups with various organisations locally and internationally to achieve the collective goal of sustainable development.

PARTNERING RESPONSIBLY

Reliance Industries along with nine other companies will collaborate in a number of areas to reduce their GHG footprint with combined GHG emissions from their operations.

PARTNERING FOR GROWTH AT RELIANCE

HYDROCARBON BUSINESS - PARTNERING FOR EXPERTISE

Partnerships represent an important dimension of the E&P business. Reliance and BP entered into a transformational partnership with focus on delivering growth and adding value to India’s energy sector. The partnership commemorates a perfect blend of BP’s deep-water and development expertise with Reliance’s project management skills. In partnership with BP, Reliance plans to become a major player across the gas value chain in India. Reliance has also forged strategic partnerships with Chevron, Pioneer Natural Resources and Carrizo Oil and Gas for development of shale gas resources in the US.

RIL entered into a long-term supply contract for Basrah Heavy Crude in order to improve the overall cover in the long-term.

Reliance is working in close association with local Public Works Departments (PWDs) and the railways to exemplify the cost-benefit ratio. Reliance has partnered with The Indian Centre for Plastics in the Environment (ICPE) to help sustain an environment friendly image of plastics by highlighting the positive role of plastics in conserving resources and its 100% recyclability.

RIL and its partners, in conventional and shale business closely work together and channelise expertise to target high quality prospects and optimise existing and future development plans.

RIL and Myanmar Oil and Gas Enterprise (MOGE) have signed production sharing contracts.

RIL signed a MoU with Petroleos Mexicanos (PEMEX) to cooperate for assessment of potential upstream oil and gas business opportunities in Mexico and jointly evaluate valueadded opportunities in international markets.

RETAIL

Reliance brands has a portfolio of over 40 international brands.

Payless ShoeSource, which runs the largest family footwear store chain in western hemisphere was launched in India in an exclusive partnership with Reliance Retail during the year.

The successful partnership with Marks and Spencer (M&S) continued to grow with strong same store sales growth, as well as roll out of new stores during the year.

Reliance Fresh has joined hands with Akshay Patra, an NGO to serve nutritious meals to more than 10,000 schools across India.

For more details, please refer to page no. 93.

JIO

As part of its broadband plans, Jio has invested in a new, state-of-the-art 8,100 km cable system, the Bay of Bengal Gateway (BBG). BBG provides direct connectivity to South East Asia and the Middle East, then onward to Europe, Africa and Far East Asia through seamless interconnection with existing cable systems. In addition to Jio, the BBG partners include: Dialog Axiata, Etisalat, Omantel, Telecom Malaysia, and Vodafone. BBG has deployed the latest submarine cable 100 gigabits per second transmission technology, utilizing wavelength add/drop branching units along the route, with an initial equipped capacity of 9 terabits per second. Providing robust, reliable, low latency connectivity, BBG strengthens one of the fastest growing global internet routes.

In addition, the Company has entered into agreements with RCOM for change in spectrum allotment.

For more information please refer page no. 96.

PARTNERING FOR PEOPLE CHANGE

Stakeholder engagement process is well-defined at RIL for identification and selection of stakeholders (both internal and external). RIL’s materiality analysis process follows a structured approach, taking care of key concerns and priorities of all of RIL’s internal as well as external stakeholder groups.

TALENT POOL

The Company has initiated the Campus Marquee Progamme to build a talent pool of high caliber professionals from world renowned universities in addition to providing its employees with global exposure through multiple partnerships with world renowned universities.

For more information please refer page no. 113.

HEALTHCARE SERVICES

Reliance joined hands with Bill and Melinda Gates Foundation, Merck Sharpe Foundation, Tata Trust and the United States Agency for International Development to form Project ASMAN, a first-of-its kind ‘Continuum of Care – Health Alliance’ in India.

PARTNERING FOR INNOVATION

GenNext Hub is a Reliance-backed startup programme powered by Microsoft Ventures, to catalyse the startup ecosystem for a digital India. Headquartered in Reliance Corporate Park, Navi Mumbai and launched in September 2014, it has completed two batches of the programme with a total of 22 startups successfully graduating from the Hub.

PARTNERING FOR RESEARCH AND EXECUTION

• RIL is the sole industry partner in the New Millennium Indian Technology Leadership Initiative (NMITLI) project with the Council of Scientific and Industrial Research (CSIR).
• RIL has a rigorous screening process for registration of contractors and include top performing Engineering/ Supervision companies, construction companies, installation and commissioning service providers, joint ventures and consortium.

For more information please refer page no. 118.