Mukesh D. Ambani
Chairman and Managing Director

Dear Fellow Shareowners,

I am happy to report that we have delivered superior financial performance, improved capital efficiency and continued strong project execution. Our focus on delivery and growth continued to yield results in what was a difficult year for many of our peers globally. Our financial and operational performance in FY 2016-17 was outstanding, reflecting in record net profit. I would like to express my gratitude to everyone at Reliance for the hard work they have put in to achieve this.

Global economic growth in 2016 was stable aided by a recovery in commodity prices and increased global trade. Global oil prices were supported by co-operation between OPEC and non-OPEC producers for cutting production. While underlying demand trends are encouraging, tightening rates in US and possible end of accommodative monetary policy in other developed countries could impact emerging economies.

GDP growth in India was robust at 7.1%, supported by strong consumption growth and government spending. The introduction of GST is a significant reform measure and will overtime help India in simplifying tax structure and compliance, aligning it with practices in developed countries.

Reliance delivered robust operational and financial performance during the year, resulting in net profit of `29,901 crore (US$ 4.6 billion), growth of 18.8% y-o-y. The most significant factors affecting year-to-year comparisons of earnings and cash flow generated by our operating activities are improvement in the petrochemicals and refining margins. Refining and petrochemicals businesses achieved record levels of profitability, underpinned by our ability to access feedstock competitively from global markets, maintain high operating rates and place products in growth markets. The refining business delivered double-digit GRMs for the second year in a row, benefiting from the global demand for transportation fuels and stable product cracks.

Lower oil price environment continues to drive strong demand growth across key markets. Global oil demand for 2016 grew by 1.6 mb/d, led by China and India. India has now become a major force in driving global oil demand growth and is now the world’s third largest oil consumer. India’s oil demand grew 5.2% during the year led by strong growth in gasoline and jet fuel. Diesel demand growth in India however remained muted as industrial cycle lagged consumption. The pace of petrochemical product demand growth was lower compared to previous years. Polymer demand in India was up 7% y-o-y while polyester demand grew by 3% y-o-y.




During the year, our refineries processed 65 different grades of crude including five new grades. This illustrates the flexibility and complexity of our refining assets at Jamnagar.

Refining and Marketing

Refining and Marketing segment EBIT increased by 6.5% y-o-y to a record level of ` 25,056 crore (US$ 3.9 billion), supported by higher GRM and crude throughput. GRM for the year stood at eight year high level of US$ 11.0/bbl as against US$ 10.8/ bbl in the previous year. RIL’s GRM outperformed Singapore complex margins by US$ 5.2/bbl, the highest premium achieved in the last eight years.

Though regional refining margins trended downwards, our high-conversion refining system was able to take advantage of firm margins on middle distillates and wider discounts on difficult-to- process crudes in a well-supplied market. During the year, our refineries processed 65 different grades of crude including five new grades. This illustrates the flexibility and complexity of our refining assets at Jamnagar which can process heavy and sour crudes to produce high value transportation fuels.

During the year, light products mainly gasoline and naphtha witnessed a sharp decline in cracks. This was partially offset by firm middle distillate cracks and efficient yield shift management in our refineries to capture higher margins.

Our petroleum retail operations continued to gather momentum with 1,221 fuel outlets operational at the end of the year. These outlets are registering industry leading pump throughputs which were as high as twice the industry average in March 2017. Our success in petroleum retail is testimony to our superior value proposition to consumers and our ability to leverage technology for ensuring consistent delivery. These attributes have also helped us ramp-up our bulk marketing business leading to market share gains.

Our petcoke gasification initiative is aimed at reducing the energy cost for the Jamnagar complex on a sustainable basis. We have achieved the installation and mechanical completion for the gasification project linked to our DTA refinery and the pre-commissioning activities are ongoing. On completion, this will make Jamnagar complex highly energy efficient with the lowest energy cost for any integrated Refinery and Petrochemicals facility globally.


Petrochemicals segment EBIT increased sharply by 27.5% to a record level of `12,990 crore ($ 2.0 billion), supported by favorable product margins and growth in volumes. Favorable naphtha cracking economics, firm domestic demand and higher volumes in the polyester chain were the key factors driving profitability. EBIT margin of 14% is at a five year high level, reflecting strong polymer margins and recovery in polyester chain economics.

Our company continues to benefit from integrated business model, wide product portfolio and scale economics which provides us a high degree of earnings stability. India remains a key growth market for petrochemical products in the global context and our new capacity additions are poised to capture growing domestic demand.

We successfully commissioned our new Paraxylene (PX) capacity at Jamnagar. This plant is built with state-of-the-art crystallisation technology from BP which is highly energy efficient. With the commissioning of this plant, our PX capacity has doubled and Reliance has emerged as the world’s second largest producer of PX with about 11% of global production.

In order to provide feedstock security and flexibility to our cracker portfolio on the west coast of India, we have created a virtual floating ethane pipeline between North America and Dahej in Gujarat. The ethane receipt and handling facilities at Dahej has been commissioned in a record time of less than three years and ethane cracking has commenced at our crackers. Ethane sourcing from North America will improve the cost competitiveness of our existing crackers and enable us to optimise the portfolio in a volatile market environment.

At Jamnagar, we are in the process of starting up the largest refinery off-gas cracker (ROGC) in the world along with related downstream capacities. This is a pioneering initiative and a unique opportunity available at Jamnagar due to the scale of our refinery operations. The cracker is tightly integrated with our refineries and will use refinery off-gases as feedstock. This cracker will have one of the lowest cost positions globally. The incremental volumes will target a deficit Indian market which also continues to be among the fastest growth market for petrochemical products.


At Jamnagar, we are in the process of starting up the largest refinery off-gas cracker (ROGC) in the world along with related downstream capacities.

Oil & Gas

Reliance is on its way to become the largest unconventional natural gas producer in India with the commencement of commercial production from our CBM fields at Sohagpur.

Oil & Gas

Our upstream business in India continued to be impacted by weak gas prices and declining volumes. Production volumes across our domestic as well as US Shale operations were lower by 23% and 14% respectively. Weak upstream price environment and lower volumes impacted the segment EBIT for the year.

I am happy to share that Reliance is on its way to become the largest unconventional natural gas producer in India with the commencement of commercial production from our CBM fields at Sohagpur. Gas from CBM fields will be delivered to customers on Indian Gas Grid through our new 302 kilometer long Shahdol-Phulpur pipeline. Government has notified marketing and pricing freedom as a reform measure to develop alternate sources of natural gas including CBM.

Reliance Retail

In our consumer business, it is gratifying to see an unprecedented growth trajectory continuing. Reliance Retail revenues increased by 60% on y-o-y basis to ` 33,765 crore. With this, Reliance Retail has become the first organised retail Company in India to cross the milestone of US$ 5.0 billion revenue. Reliance Retail also sustained its profitability with EBITDA crossing ` 1,000 crore mark. Reliance Retail has created the widest reach in the organised retail segment in India with 3,616 stores operational in 702 cities. It has established leadership position in all key categories including food & grocery, fashion & lifestyle and digital products. It has also created the largest cash & carry chain in the country.

Reliance Retail has adopted multi-channel strategy and has integrated “offline-online” models to truly differentiate the customer experience. Reliance Retail also became the first organised retail chain in India to support UPI-based payments.


Reliance Retail has created the widest reach in the organised retail segment in India with 3,616 stores operational in 702 cities.


Jio has been a path breaker on multiple parameters, not only in India, but even on global stage. Jio added 100 million subscribers in 170 days, the fastest achieved by any technology company in the world.

Reliance Jio

I am delighted to report on the achievements of our newest business Jio. Jio has been a path breaker on multiple parameters, not only in India, but even on global stage. Jio added 100 million subscribers in 170 days, the fastest achieved by any technology company in the world. Jio has built a world-class all-IP data strong future proof network with the latest 4G LTE technology. Jio has revolutionised the Indian telecom landscape by making voice calls for Jio customers absolutely free, across India, to any network. Jio makes India the highest quality, most affordable data market in the world.

Today, data consumption on Jio network is higher than the total mobile data consumption in the US and twice that in China. It is the first Exabyte network in the world. Our investments and technology innovations have created a data strong network that delivers unmatched quantity and quality of data. Jio has led the digital transformation of India by providing data at prices that are affordable to all Indians. Our Jio team is customer obsessed and has the passion to deliver a superior experience to all our customers.

Jio customers have access to an eco-system of digital services and apps created to enrich their user experience. The suite of services include live TV, on demand movies, music, magazines and news among others.

The compelling value proposition and high quality of Jio services has led the largest and the fastest migration from free to paid services in the digital services domain. The JIO PRIME membership program has been a resounding success with 72 million plus customer subscription by 31st March 2017.

Jio is present in all 29 states of India with direct physical presence in more than 18,000 urban and rural towns and over 2,00,000 villages. We are committed to provide Jio services in nearly all the cities, towns and villages of India, covering over 95% of our country’s population.

Strong Cash Flows and Balance Sheet

Our Company generated PBDIT of ` 55,529 crore (US$ 8.6 billion) for the year. During the year, we invested
` 1,14,742 crore (US$ 17.7 billion), the highest ever not only for our Company, but in the corporate history of India. This capex has been funded while maintaining investment grade ratings. Our strong balance sheet and conservative financial profile are reflected through the strong credit ratings. We have maintained two notches above India’s sovereign rating for our international debt at BBB+ by S&P. This capex across energy and materials businesses and digital services will significantly enhance Reliance’s cash flows and reduce volatility in earnings in the coming years.

During the year, our Company has successfully refinanced long-term financing of US$ 1.75 billion syndicated loan and US$ 550 million club loan aggregating to US$ 2.3 billion resulting in substantial interest savings over the remaining life of these loans. This was the largest amount syndicated by RIL since 2007.

We have tied up for ~US$ 572 million financing to purchase six state-of-the-art Very Large Ethane Carriers (VLECs). This financing deal carries a tenure of 12 years and comprises of US$286 million tranche insured by Korea Trade Insurance Corporation (K-Sure). This deal got a “Better than Sovereign Rating” and is one of the most well-structured and innovative financing deal done by the Company. This deal has been globally recognised and has won five global awards.



CNBC TV18 had 86% market share during the annual budget speech.

Commitment to Health and Safety

We are committed towards providing a healthy and safe work environment to our employees, contractors and all the visitors to our sites. We have successfully implemented Operating Management Systems for reduction in Health, Safety, Security and Environment (HSSE) risks.

We had started the ‘Change Agents for Safety Health and Environment’ (CASHe) programme more than a decade ago. Over the years, the CASHe programme has evolved into a movement encompassing the entire enterprise with thousands of improvement projects. The programme has been instrumental in creating a culture of implementing health, safety and environment projects on a priority basis. The program has helped in reducing health and safety risks across the Company and over 1,500 projects have been identified and control measures implemented till date.

True to our vision to be a “Cloud First, Mobile First” organisation, our employees can access transactional, analytical, and informational capability on their mobile devices thus improving productivity, response times, safety and operational reliability.

Safety is an integral part of our culture, and we will be launching several Smart Workforce initiatives which explore the use of sensor-equipped wearables like goggles, helmets and suits to ensure worker safety and improve labour efficiency and utilisation.

Sustainable Growth

Sustainability at Reliance embraces environmental and social responsibility by creating value for its stakeholders. We are working to maximise the use of clean energy in our operations. During the year, Reliance contributed ` 674 crore towards various community development initiatives focused in the areas of rural transformation, health, education, sports for development, disaster response, urban renewal and arts, culture and heritage. Through these initiatives, Reliance has positively impacted 12 million lives across the nation including the vulnerable and marginalised communities. We work incessantly to include all stakeholders in our growth journey and the organisational value depends greatly on the value it creates for the society at large.

I would like to thank all my colleagues across the country and the globe for their unflinching dedication, commitment and contribution to strengthening Reliance. During the year, the Reliance team shaped the contours of future growth platforms in the Consumer and the Energy and Materials businesses. I am proud to be part of this gifted team that has strived tirelessly over the last few years to create unparalleled hydrocarbon assets, while ushering in the digital age to the remotest parts of our country.

We are looking forward to continue on our mission of generating sustainable value for our stakeholders and India. I would like to place on record my sincere appreciation to the Board of Directors for their guidance. I would like to express my gratitude to all our stakeholders for their continuing faith in Reliance.

With best wishes,

Mukesh D. Ambani
Chairman and Managing Director
June 14, 2017