DIGITISATION

Reliance has strengthened the customer supply interface on digital platform, empowered customers and channel partners through e-Commerce transactions on smart devices. Digitisation has facilitated information sharing on mobility platforms and sales force enablement on e-CRM mobile applications for efficient operations and effective customer engagement. To enhance agility, productivity and efficiency of service levels, critical business approvals have been moved to mobility platforms.

Reliance has also embraced automation and paperless operations by implementing solutions like digitally signed invoices, ePOD (Electronic Proof of Delivery), auto service certification for transporters and automation of credit and debit notes for customers and Electronic Data Interchange (EDI) with shipping lines. Along with this, the Company has undertaken digitisation of supply chain planning processes to make petrochemical value chain Responsive, Demand Driven with "Quantified" Decision Making. This is to maximise integrated value across businesses to improve contribution and enable minimum human intervention for order processing. Digitisation of pricing was implemented to enable system based policy driven pricing leading to harmonised pricing cascade across petrochemical business.

For mitigating the cyber security risk due to proliferation of assets, business expansion and focus on B2C, Reliance has placed strong emphasis on information security. In the area of fleet risk management, a machine learning solution on Vehicle Tracking System was implemented by Reliance for distribution safety of liquids as well as solids.

Effective incorporation of digitisation has indeed provided visibility to segment and sector level leadership through dashboards on key business parameters to steer business effectively.

Dahej Manufacturing Division

With the view to promote community development, the petrochemical locations of RIL undertook community initiatives in and around the areas of operation. The focus areas included education, health and safety initiatives, women and youth empowerment and other community development programmes.

OUTLOOK:

KG-D6

In the near term, RIL’s focus is to maintain wells flowing in its KG-D6 block. This involves continuous field management optimisation to sustain well count and manage network. RIL will continue to minimise operating cost without compromising reliability and sustainability of field operations. As part of the early monetisation of existing discovered resources in KG D6 Block, efforts are underway to leverage the deflation in markets for optimising capex for future development. The contracting process is underway for R-Cluster development with optionality for use in MJ and Satellite development. RIL’s focus is to obtain approvals for the development of projects. RIL aims to sustain production until future projects are commissioned, while leveraging current market downturn to achieve lowest cost for future projects.

PANNA-MUKTA

Panna-Mukta is a major contributor to the RIL’s upstream business. The PSC for this block is scheduled to expire in December 2019. The JV partners are exploring options to extend the contract period in line with the Production Sharing Contract extension policy announced by the Government of India. The JV partners have been working towards mitigating asset integrity issues due to aging of the facilities.

TAPTI

During the year, the JV partners completed the process of handing over Tapti facilities consisting of three platforms to ONGC. The plug and abandonment of wells and decommissioning of associated facilities are already under progress.

CBM (SOHAGPUR EAST AND SOHAGPUR WEST)

RIL’s CBM project is country’s first large-scale unconventional natural gas project. The scale of the project brings its own set of execution challenges, primary among them are lack of infrastructure and challenging terrain.

RIL has completed Phase 1 of the project which included drilling and completion of more than 200 wells (spread over 450 sq. km.). Phase 1 required setting up of 2 gas gathering stations along with 8 water gathering stations for collection and processing of CBM Gas and water respectively. RIL has laid India’s largest High Density Poly Ethylene gas gathering network to connect these wells with the gathering stations. RIL’s CBM project is probably the largest surface footprint project in E&P sector in India.

RIL has commenced commercial production from its Coal Bed Methane (CBM) block SP (West)–CBM–2001/1 in March 2017 and is currently supplying CBM for commissioning the Shahdol Phulpur Pipeline. The production from RIL’s Sohagpur CBM fields will gradually ramp-up in next 15-18 months making RIL as one of the largest unconventional natural gas producer in India.

SHAHDOL-PHULPUR GAS PIPELINE PROJECT

Reliance Gas Pipeline Limited, a subsidiary of RIL, has completed the pipeline laying work for the entire 302 km Shahdol-Phulpur Pipeline from Shahdol (MP) to Phulpur (UP). With this new pipeline network the CBM Gas fields are now connected with the Indian Gas Grid providing access to end consumers.

Marketing and pricing freedom for CBM gas

For the development of alternate sources of natural gas including Coal Bed Methane, GoI notified marketing and pricing freedom to the Coal Bed Methane (CBM) on 11th April 2017. The reform measure allows CBM producers to sell the CBM at Arm's Length Price in the domestic market through a fully transparent and competitive bidding process with the objective of obtaining best possible prices. The New Domestic Gas Pricing Guidelines, 2014 and the Gas Utilisation Policy shall not be applicable to CBM and it also permits producers to sell gas to any affiliate, in the event contractor cannot identify any buyer. RIL has published a Notice Inviting Offer in leading national dailies and on its website, calling for the bids from the prospective customers to off-take CBM produced.

NORTH AMERICAN SHALE GAS OPERATIONS

BACKGROUND

CY 2016 was yet another year of tough market conditions for the Global Oil & Gas sector in general and for the North American Shale players in particular. CY 2016 prices were at lowest levels in a decade; which coupled with higher price differentials resulted in weak realisations across the industry. The Industry responded effectively with remarkable cuts in capital spending and leveraged weak services markets. Prices recovered only during second half of the year for both oil and the gas. In the local markets of Texas region, gas and oil differentials were low leading to better price realisation, but in the North East US market, gas basis differentials remained high due to midstream constraints. Expansion of pipeline capacity in the region has been slower than anticipated.

BUSINESS PERFORMANCE

The Company effectively dealt with macro headwinds. Development activity was slowed down and capex needs were kept at minimum levels. Focus was on conserving cash, without losing optionality on resources. Further, relentless focus was given on improving operational efficiencies and reducing costs, by leveraging weak market conditions. This was supplemented with variable production strategy in Marcellus JVs towards safeguarding returns in low price environment.

Zero drilling strategy was continued at Carrizo JV and at the Chevron JV. Activity at the Pioneer JV was brought down from 5 rigs at the start of the year to zero rig operations by end of Q1 CY 2016. The forced “no rig activity” during CY 2016 allowed JV partners and RIL to spend considerable effort to optimise forward development plans that will be implemented starting in 2017. Significant progress was made in pad optimisation with Chevron and in improving well designs with Pioneer. Operational trends remained strong across JVs, with improving costs and declining Capex. Reliance’s aggregate capital investments across JVs stood at around US$200 MM during CY 2016, reflecting a fall of 78% y-o-y.

Outlook for CY 2017 is more constructive compared to CY 2016. Industry fundamentals have improved as characterised by better demand supply conditions (also helped by OPEC slow down). This should augur well for prices going forward. The Company is, however, taking a cautious approach to development ramp-up and remains focused on conserving cash and retaining optionality. Reliance is pursuing reduced activity levels even in CY 2017. Zero rigs are in operation across Marcellus JVs, but is ensuring preparedness for ramp up when market conditions improve. At the Pioneer JV, partners are focused on pilot testing new development approach. Thrust remains on preserving long-term value through high-grading of development and land portfolio, well cost reduction, optimisation of well spacing and completions for enhanced recoveries.

OPERATIONAL PERFORMANCE

The joint ventures drilled 26 wells and put 42 wells on production, taking cumulative number of producing wells to 1,088 by the end of CY 2016. Drilling and completion activities were completely stopped in Pioneer JV at the end of Q1 CY 2016. At Chevron JV, there was no drilling activity, but the JV completed Drilled Uncompleted ("DUC") wells.

Gross JV production aggregated at ~1.07 BCFe/d for all 3 JVs, down 15% y-o-y. Reliance’s share of production and sales were at 174.0 BCFe and 150 BCFe respectively in CY 2016, compared to 203.8 BCFe and 171 BCFe in CY 2015. This decline in volumes was largely due to slowdown in development activities adopted across JVs in view of challenging market conditions. As the Marcellus JV implemented variable production strategy for curtailing production to prevent uneconomic realisation, it also had an impact on volumes during the year.

FINANCIAL PERFORMANCE

Financial performance of the Shale Gas business was impacted by strong macro headwinds. WTI oil prices averaged 11% lower at US$43.3/bbl in CY 2016 while HH Gas prices averaged 8% lower at US$2.46/MMbtu during this period. Also, Gas and condensate Benchmark differentials remained high further impacting realisation. Despite Reliance implementing mitigating measure like proactive hedging while also focusing on export of Condensates that offer superior netbacks, the impact of weak prices was offset only partially. For the full year CY 2016, the realised price was US$2.43/Mcfe which was 19% lower than the average levels in 2015 there by impacting revenues, earnings and cash flows. Average unit realisation, observed declining trend during H1 CY16, however with prices recovering during Q4CY16, realisations were as high as US$2.85/Mcfe during Q4 CY16 vs. US$2.42/Mcfe in Q4 CY 2015.

Operational efficiencies and Opex trends remained encouraging across JVs. Tight control over costs and improvement in efficiencies helped achieve sequential improvement in lease operating costs and overheads. Absolute opex were lower by over 7% across JVs, but could offset the impact of lower prices only to some extent. Consequently, EBITDA of Shale gas assets dropped by over 61% y-o-y to US$117 million in CY 2016, reflecting lower realisation and volumes.

PIONEER JV

The Eagle Ford Shale JV with Pioneer faced significant challenges during 2016. Both production and realisations were down.

Due to downward trend in WTI, JV stopped all drilling and Completion activities by Q1 CY 2016. However during early 2016 JV pursued various cost reduction and efficiency improvement initiatives which included renegotiating services contracts which brought down the drilling and completions cost substantially. Time off from Drilling and completion activities was effectively utilised to analyse performance of producing wells closely and identify areas of improvement. Learnings from this analysis is being utilised in optimising forward development strategy for 2017. Pilot testing of new well designs and spacing is planned in 2017 with 1 rig being mobilised end of Q1 CY 2017. Thrust on further reducing well costs continues.

JV put only 18 wells online during CY 2016, thus the Producing well count to 630 at the year-end, as compared to 612 well at the end of CY 2015. Gross JV production was 29% down 181 Bcfe compared to 256 Bcfe in CY 2015, while Reliance share of net sales volume was 24% down at 72.9 Bcfe, compared to 96.5 Bcfe in CY 2015. Production and sales volumes declined on account of sharply lower development activity and natural production decline. However, the share of liquids improved slightly from 64.6% to 65.2% in CY 2016, as the JV decided to restart ethane extraction from the Natural Gas Liquid (NGL) stream on account of improved price realisation. Ethane extraction helped in recovering loss due to lower prices realised for gas to some extent.

CHEVRON JV

JV pursued Zero Rig strategy in CY 2016 while it focused on completing some DUC wells. Remarkable reduction in operating costs and average well costs were key achievements during the year. JV delivered remarkable reduction reflecting increased execution efficiency on pads, water transportation and procurement gains. Thrust was on optimising forward development through pad optimisation and land portfolio optimisation efforts.

Producing well count improved to 376 at the year-end, as compared to 346 wells at the end of CY 2015. Gross JV production remained stable at 166 BCFe, despite slowdown in activity which is reflective of improved operational efficiency and strong well performance. Reliance share of Net Sales volume stood at 56.7 BCFe, compared to 56.5 BCFe in CY 2015.

JV is pursuing zero rig development while working towards 1st quartile on various performance parameters for 2017 and making well inventory robust and economical at lower gas prices.

CARRIZO JV

In view of the prevailing challenging price environment in the North East region, the Carrizo JV had decided to defer development activities and stay focused on optimising production from existing wells in the Northeastern Pennsylvania region in 2015/2016. Hence the JV continued to pursue ‘zero development’ and ‘variable production’ strategy. JV managed volumes as a function of price/netback by shut-in of wells in low price scenarios, while maintaining well integrity.

However, during 2016 overall curtailment of production was lower than that in 2015 as realisations improved towards 2nd half of CY 2016. This was reflected in higher volumes achieved in Carrizo during CY 2016 as compared to 2015.

Gross JV production of 43 BCFe was 16% higher y-o-y, while Reliance share of net sales at 21 BCFe, reflected a 13% growth y-o-y.

Initial development activities in the Northeastern Pennsylvania (NEPA) region have matured and infill drilling in the NEPA region and potential development of acreages in the C-counties provides opportunity for future growth.

UPDATE ON ARBITRATION AND OTHER LEGAL ISSUES

DOMESTIC GAS PRICING ARBITRATION

Following the continued delay on the part of the Government of India in notifying the gas price for the block KG-DWN-98/3 ('KG D6 Block') in accordance with the formula Government had approved, RIL, BP and NIKO issued a Notice of Arbitration on 9th May, 2014 to the Government of India, seeking declaration that the Contractor has the right to sell gas produced from KG D6 Block at approved competitively determined, arm’s length prices, and that the Government approved the price under the 'Domestic Natural Gas Pricing Guidelines 2014' notified on 10th January, 2014, in terms of the Production Sharing Contract ('PSC').

On 18th October, 2014, in supersession of its earlier notification of 10th January, 2014, the Government notified the New Domestic Natural Gas Price Guidelines 2014. In RIL's view, the methodology used for valuation of gas under these guidelines, does not reflect true arms-length market price of gas in India as required under the PSC signed with the Government.

RIL, BP and Niko have filed an application for appointment of the presiding arbitrator before the Supreme Court of India and the same is presently pending consideration.

KG D6 COST RECOVERY ARBITRATION

RIL sought Government’s confirmation that no action was being planned following news reports that the Government may curtail the Company’s entitlement to recover its costs on the basis of there being a shortfall in production from levels specified in the development plan. According to the Company, the PSC for KG D6 Block permits full ‘cost recovery’ of its costs of exploration, development and production from the value of petroleum produced from the KG D6 Block.

RIL on behalf of all Contractor constituents – BP and Niko served an arbitration notice on the Government on 23rd November, 2011 (‘Cost Recovery Arbitration‘). Parties have filed their respective pleadings before the Arbitral Tribunal and are in the process of completing the arbitration proceedings.

PUBLIC INTEREST LITIGATIONS

Three public interest litigations have been filed before the Hon’ble Supreme Court of India against the Company in relation to the production sharing contract for KG D6 Block seeking substantially similar reliefs in the nature of; (i) disallowance of cost recovery; (ii) quashing the Government’s decision to approve the certain gas price formula, and (iii) termination of PSC for KG D6 Block for Contractor’s failure to achieve the committed production. The Company has submitted that the underlying issues in the PILs are already subject matter of Cost Recovery Arbitration and the Gas Price Arbitration. Petitioner in one of the PILs has recently filed an application for amendment of the petition, which is yet to be heard by the court.

PMT ARBITRATION

In December 2010, the Company and BG Exploration and Production India Limited (together, the ’Claimants‘) referred a number of disputes, differences and claims arising under two Production Sharing Contracts entered into in 1994 among the Claimants, Oil and Natural Gas Corporation Limited (ONCG) and the Government (the 'PSCs') to arbitration. The disputes relate to, among other things, the limits of cost recovery, profit sharing and audit and accounting provisions of the PSCs. The Government’s defense dated 31st January, 2012 raised certain jurisdictional objections and asserted a number of substantial counterclaims, including claims for underpayment of profits and failure to complete agreed work programmes. Following an initial merits hearing in May 2012, the Tribunal passed a number of final partial awards, largely in the Claimants’ favour.

Thereafter, the Tribunal by majority issued a final partial award ("FPA"), and separately, two dissenting opinions in the matter on 12 October 2016. Claimants have challenged certain parts of the FPA before the English Courts and the English court has initiated steps to effect service of the Challenge proceedings upon the Government.

Once award on merits becomes final and absolute, Parties will be heard by the Tribunal on the Cost Recovery Limit (CRL) increase request of the Claimants and quantum. Given the complexity of issues involved, the hearings on CRL increase and quantum are expected to take a few months to be heard leading to a final arbitral award on adjustments required to the Cost and Profit Petroleum due to the Parties.

YEMEN ARBITRATION

Considering the deteriorating security situation in Yemen, consortium of Reliance Exploration & Production DMCC ("Reliance") and Hood Energy Limited ("Hood") declared Force Majeure thereby suspending its obligations under the Production Sharing Agreements ("PSAs") for the Yemen blocks 34 and 37 and subsequently terminated the PSAs on account of continued Force Majeure. Yemen Government issued demands under the Letters of Credit ("LCs") established pursuant to the terms of the PSAs on account of alleged non-performance of PSA obligation. Reliance and Hood initiated Arbitration proceedings against Yemen Government under the terms of the PSAs and the arbitration hearings have been concluded in 2016 and the Parties are presently awaiting Tribunal's award.

DISPUTE WITH NTPC

NTPC had filed a suit for specific performance of a contract for supply of natural gas by RIL. The main issue in dispute is whether a valid, concluded and binding contract exists between the parties for supply of Natural Gas of 132 Trillion BTU annually for a period of 17 years. Cross examination of NTPC's witness has been completed and RIL’s fact witnesses is to be cross examined by NTPC.

GAS MIGRATION ARBITRATION

ONGC filed a Writ Petition before the Hon’ble Delhi High Court alleging that RIL, through wells located in proximity to the border of KGD6, has extracted gas from ONGC operated blocks KG DWN 98/2 (KGD5) and G4 PML. RIL and ONGC, in consultation with Director General of Hydrocarbons, appointed DeGolyer and MacNaughton (D&M) as an independent expert to ascertain whether there has been migration of gas across RIL and ONGC blocks. The Writ Petition was disposed of with a Direction to the Parties to cooperate with D&M in preparing its report and the Government to take decision (if any) on the said report. Following submission of its report by D&M, Government of India appointed a one man committee headed by Mr. Justice (Retd) AP Shah to examine the D&M report and make recommendations. Following the issue of the Shah Committee’s report, Government sent a Notice dated 4 November 2016 to the Contractor entities of Block KG-D6 demanding remittance of US$ 1.55 bn purportedly on account of alleged gas migration from ONGC’s blocks, to be paid within 30 days. RIL, on behalf of all constituents of the Contractor for Block KG-D6, filed a Notice of Arbitration on 11 November 2016 and the arbitration proceedings are presently underway.

CORPORATE SOCIAL RESPONSIBILITY

During FY 2016-17, RIL undertook numerous need based activities to benefit the surrounding communities. RIL's contribution is mapped under the broad areas of education, health, social infrastructure development, environment, promotion of sports, response and relief operations in the event of natural disasters, etc.

• RIL provided scholarship to underprivileged and meritorious students, and provided computer aided learning facility to over 9,500 students.
• RIL organised a cardiac health camp and a health awareness camp for senior citizens which involved participation of 316 patients and 100 senior citizens.
• RIL, as a part of humanitarian assistance, provided physiotherapy treatment and special education in Dhirubhai Ambani Early Intervention and Rehabilitation Centre to about 68 physically challenged children and adults, distributed nutrition kits to over 400 HIV vulnerable children and contributed to Yanam Old Age Home via monetary means.
• RIL promoted rural youth sports by organising inter-village volleyball tournament among 26 teams of different villages, inter-sports and cultural meet in 10 schools involving about 400 students, co-sponsoring regional sports and state level basketball, organising sports camps for around 105 children, etc.

MARKET ENVIRONMENT

The year was a period of flux for the Media & Entertainment (M&E) industry, and a tale of two halves. Strong growth witnessed in first half of the year (H1) due to positive momentum in channel launches and increased connectivity saw a sharp deceleration in later half of the year (H2), as advertisers’ scaled back marketing spends temporarily. Growth is expected to be back on track in the current year, as underlying trends on rising content consumption and economic growth remain robust.

The Indian M&E industry is expected to grow at a 13.9% CAGR to reach `2,419 billion by 2021, from its estimated size of `1,262 billion in 2016, due to positive demographic trends, improving connectivity driving reach, and availability of segmented content offerings. (Source: KPMG in India analysis, 2017).

GROWTH DRIVERS

1. Improvement in socio-economic indicators
2. Impetus on vernacular to drive growth in regional markets
3. Supportive policy initiatives such as:
• Digitising the cable distribution segment and granting industry status to the film industry.


• Increasing Foreign Direct Investment (FDI) limit from 74% to 100% in cable and Direct to Home (DTH) satellite platforms and from 26% to 49% in broadcasting of news channels.


• Goods & Services Tax (GST): M&E will stand to benefit as entertainment tax will fall under the ambit of GST and input credits will be available to all segments across the board.
4. Digitisation – "See your customer"

The high quality content and digital services provided by the Network18 group dovetails with the launch of the Jio telecom platform; underscoring an ecosystem approach to digital outreach to the new-age Indian.

It is expected that by 2020, the ratio of digital cable subscribers to DTH subscribers will be 53:47, with 90 million digital cable subscribers and 79 million DTH subscribers.

5. 4G rapidly gaining acceptance – Amplifies reach

With all key telecom companies in India broadening their 4G offering and gaining consumer acceptance through falling data prices, the uptake in online video consumption is growing fast. Further, the reach of telecom providers is much wider than traditional cable/DTH can offer.

6. Rural and Digital coverage through Broadcast Audience Research Council (BARC)

BARC India is the only government registered TV ratings service in India, which released individual viewer ratings in June 2015 and rural viewership data from October 2015; thus covering India more holistically. Further, BARC has also announced a phased roll-out of Digital measurement platform ‘EKAM’ recently, which will help track the hithertounmonitored digital content consumption.

FINANCIAL AND OPERATIONAL PERFORMANCE

FINANCIAL OVERVIEW

Network18 improved its market-standing and continued investing for growth in what was a challenging year for the media industry. The operating revenues on a consolidated basis stood at `1,491 crore, down by 2.4% from `1,527 crore in FY 2015-16.

Sustained investments into new businesses and entry into more regional markets impacted the financial performance. FY 2016-17 EBIT was negative at (`201) crore on a consolidated basis as compared to `173 crore in the previous year.

OPERATIONAL OVERVIEW

Television business

 CNN News 18 interviewed the
Hon'ble Prime Minister of India Shri
Narendra Modi

Regional News includes ETV News Channels and IBN Lokmat.

Highlights of the year: Three channels launched - namely News18 Kerala, News18 Tamil Nadu and News18 Assam/N.E. IBN Lokmat bagged the prestigious 'Ramnath Goenka Excellence in Journalism Awards'.

Entertainment

Hindi General Entertainment includes Colors, Rishtey, MTV India - the No.1 youth channel, MTV Beats and MTV Indiesworld’s largest platform for independent sub-cultures.

Highlights of the year: MTV and Nescafe partnered to launch a film-making challenge on MTV Nescafe Labs.

English Entertainment has VH1- the No. 1 channel in its genre, Comedy Central - India’s 1st 24-hour English comedy channel, and Colors Infinity, an English entertainment channel.

Highlights of the year: VH1 was the live TV streaming partner for Global Citizen Festival India.

Kids Entertainment constitutes of Nickelodeon - the No. 1 channel in the Kids category, Sonic, Nick Jr./Teen Nick and Nick HD+.

Highlights of the year: Nickelodeon school contact program reached out to nearly 500 schools across multiple cities in the country.

Regional Entertainment: The Network18 group has rebranded all of the acquired regional entertainment channels of ETV (now part of the Viacom18 stable) under the common umbrella brand of Colors. These 5 channels in Kannada, Bangla, Marathi, Gujarati and Oriya mirror the cultural ethos and richness of the respective regions through unique content and provide the group with a thrust into vernacular entertainment which is the growth engine of the future.

Highlight of the year: A second Kannada entertainment channel "Colors Super" was launched.

Infotainment: HistoryTV18 is a leading factual entertainment channel. Lifestyle channel fyiTV18 was launched.

Highlights of the year: Launched local tent poles this year with- 'Man Vs Job' which showcased some of India’s most unconventional and interesting occupations.

New age lifestyle content

Film business

Film business includes Viacom18 Motion Pictures.

Highlights of the year: Its productions "Force2" and "Motu- Patlu–King of Kings" were well received by the audience.

Digital business

Digital Content includes Moneycontrol.com - Leader in the finance category, Firstpost.com - India’s first and the biggest digital-only newsroom, OTT video platform VOOT, and regional news destination News18.com.

Highlights of the year: Viacom18’s digital video destination VOOT was rated one of the top apps of 2016 on the Google PlayStore.

Digital Commerce

Digital Commerce includes HomeShop18 and Bookmyshow.

Highlights of the year: Bookmyshow was the ticketing partner for big sport events like India Super League (ISL) 2016 and India vs England Test cricket series, apart from prestigious global citizen festival where top British rock band Coldplay performed.

Print/publication business

It has a portfolio of highly reputed publications comprising 'Forbes India', 'Overdrive', 'Better Photography' and 'Better Interiors'.

Highlights of the year: Launched 'W Power Trailblazers' and '30 under 30' lists.

GROWTH PLAN

India's M&E industry is interestingly poised, with tailwinds of distribution bottlenecks easing (via cable-digitisation and the advent of 4G). A reviving economy and an improved understanding and reach into India’s vast consumer market make the space an exciting one.

Network18 aims to be a one-stop-shop of broadcast and digital touch points with India’s increasingly aspirational populace. Creation and curation of high quality content and cutting-edge news continues to be the focus. The coming year will see further impetus on deepening its presence in regional and digital – to align with the two platforms of future growth identified – vernacular content and digital delivery.

INNOVATION

Moneycontrol is one of the first platforms in the country to be available on Facebook Messenger in a bot-sized package, allowing users to chat with Moneycontrol to get the latest updates on Indian stocks and market news.

Post re-launch as News18.com (an umbrella brand for general news), initiatives like ‘iVideos’ for original HD videos, ‘Immersive’ long format content, ‘Power Circuit’ for political buzz news, 360 degree/vertical tech and auto videos, showcase endeavours to continuously innovate on content format and features.

Firstpost pioneered a four-hour live digicast – an amalgamation of broadcast television, web streaming and Facebook Live – of the assembly election results of 5 states. Facebook recognised Firstpost as one of the most innovative users of FB Live in India and abroad.

CORPORATE SOCIAL RESPONSIBILITY

At Network18, the business priorities co-exist with social commitments to drive holistic development of people and communities. It seeks to touch and transform people’s lives by promoting healthcare and education and deepen its social engagements.

Through the umbrella of Reliance Foundation, the Network18 group conducted a health outreach programme in Mumbai, where Static Medical Units for primary and preventive healthcare (including diagnostics) were established.

A programme named “Young Champs” was also run by the group in Mumbai. It was aimed at providing training to sports persons to promote nationally recognised sports in rural areas.

Programmes like 'Where is my Home?' (Highlighting issues of home-buyers affected by project delays), 'Going Green' (environmental problems) and 'March on Women!' (Women’s issues in India) aimed to create social awareness and potentially find some solutions through enhancing dialogue amongst stakeholders.

CNBC Awaaz Studio

FINANCING STRATEGY

Reliance adheres to conservative financial policies and maintains significant cash balances in order to be able to complete projects on a timely basis, capitalise on opportunities, attract world-class project partners and carry out capital investment programs through business cycles.

Reliance has achieved a diversified capital structure using a mix of different instrument classes and financial products across maturities and currencies. As a pioneer in debt markets and the largest offshore borrower from India, Reliance has excellent access to global capital markets and enjoys strong relationships with more than 100 banks and financial institutions. It is also one of the largest corporate user of Export Credit Agencies (ECA) backed financing globally which gives it the ability to raise long-term resources from global financial markets at very competitive rates.

The endeavor is to optimise the cost and tenor of the borrowing and diversify concentration risk across different instruments, types of investors, geographies and currencies.

During FY 2016-17, Reliance has successfully refinanced longterm financing of US$1.75 billion syndicated loan and US$550 million club loan/ bilateral loans aggregating to US$2.3 billion resulting in substantial interest savings over the remaining life of these loans. Of these, US$1.75 billion syndicated loan saw an initial participation from 18 banks. This was further syndicated to additional 13 banks taking the total number to 31 banks. This deal saw the largest amount of syndication in any facility for Reliance since 2007.

FINANCING FOR ETHANE PROJECT

In October 2016, US$ 572 million financing was tied up to partially finance six state-of-the-art Very Large Ethane Carriers (VLECs) – the vessels being first of their type and size globally. These carriers transport Ethane imported from the United States to provide feedstock security to existing crackers at Dahej, Hazira and Nagothane.

This financing deal carries a door-to-door tenor 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” from K-sure and is one of the most well structured and innovative financing deal done by the Group. This deal has won five global awards, the details of which are listed in Awards and Accolades section.

U.S. EX-IM BANK GUARANTEED NOTES

During FY 2016-17, Reliance continued to be the only private sector energy company globally to issue notes guaranteed by the Export- Import Bank of the United States (“Ex-Im Bank”). In October 2016, Reliance priced US$184 million 1.87% Ex-Im Bank guaranteed notes due 2026 which replaced a floating rate liability with a fixed rate liability. This was the lowest coupon achieved for a US$ denominated Ex-Im Bank guaranteed Note with similar average life in recent years.

Further, in December, 2016, Reliance priced US$205 million 2.444% Ex-Im Bank guaranteed notes due 2026 - the first ever Ex-Im Bank Direct Loan facility transfer to an Ex-Im Bank guaranteed capital markets offering.

FINANCING IN SUBSIDIARIES

During FY 2016-17, Reliance Jio Infocomm Limited (RJIL) raised financing from its shareholders, banks and other institutions to finance its ongoing capital expenditure.

RJIL issued secured long-term INR non-convertible debentures aggregating to `5,000 crore comprising of `3,000 crore debentures with maturity of three years and `2,000 crore debentures with maturity of five years. RJIL was the first issuer outside the financial services industry in India to raise funds digitally through the EBP (Electronic Debt Bidding Platform) route in June 2016.

Apart from tying up debt financing from multiple financial institutions, RJIL has the approval to raise up to `45,000 crore by way of issuance of Non-Cumulative Optionally Convertible Preference Shares (OCPS) to its existing equity shareholders on rights basis in order to strengthen its capital structure and fund ongoing capital expenditure. RJIL has raised `15,000 crore out of OCPS Series II and `18,660 crore out of OCPS Series III.

During FY 2016-17, Reliance Sibur Elastomers Pvt. Ltd (RSEPL) tied up a US$330 million term loan from commercial banks. This 10 year financing was the longest tenor US$ denominated loan raised in Asia (ex Japan) in the last 10 years.

CAPITAL RESOURCES

During FY 2016-17, Reliance and its subsidiaries tied up facilities across various financing products and maturities. The table below shows debt levels for the year ended March, 2017 and March, 2016 for Reliance on a consolidated basis.

The consolidated net debt level has increased during the year, as it drew down on funding to finance the ongoing capital expenditure for its refining, petrochemical and telecom businesses.

CREDIT RATING

Reliance's financial discipline and prudence is reflected in the strong credit ratings ascribed by rating agencies. The table below depicts the credit rating profile :

RATINGS DEFINITIONS:

S&P BBB+: An obligation rated ‘BBB’ exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.

Moody’s Baa2: Obligations rated Baa are judged to be medium-grade and subject to moderate credit risk and as such may possess certain speculative characteristics.

CRISIL AAA: Instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk.

Ind AAA: Instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligation. Such instruments carry lowest credit risk.

LIQUIDITY AND TREASURY MANAGEMENT

Reliance has strong focus on effective management of its cash flows that creates a strong buffer to deal with unexpected calls on liquidity and ensures that all business and financial commitments are met on time.

Sources of liquidity include operating cash flows, committed fund and non-fund based lines from banks and a high quality liquid investment portfolio.

The working capital requirement across the group is met through a range of financing arrangements including Buyers Credit, Suppliers Credit, Working Capital Demand Loan and Packing Credit. Active management of receivables through post shipment financing and forfaiting is also undertaken to manage short term working capital financing requirement.

The "cash to cash cycle" is tightly monitored in order to have smooth and continuous business operations with optimal working capital structure.

Reliance invests in highly rated securities and has a welldiversified portfolio. It has a mix of directly managed and indirectly deployed portfolio through Mutual Funds. Investment portfolio is designed to provide a stable return by efficient allocation to various asset classes. A constant review, careful and swift calibration of duration of Fixed Income portfolio helped deliver superior returns and alpha over comparable benchmarks. The investment portfolio is monitored and operated under a prudent risk management framework.

AWARDS AND ACCOLADES

During FY 2016-17, Reliance and its subsidiaries won the following awards for its innovative financing –

Main gate Jamnagar refinery

A. STRATEGIC FRAMEWORK AT RELIANCE

Reliance's Group Strategic Framework sets out its strategy, financial framework and risk management and establishes the goals of Reliance. It also describes the strategic intent of Reliance and the expectations and boundaries within which each of its businesses must operate and thereby providing guidance for each of the businesses - both established and emerging. The setting of clear and effective business objectives for the group is a key aspect of the system of internal control. Reliance drives growth, value, innovation and transformation in society by leveraging its existing know-how and asset base and investing in opportunities strategic to its existing businesses and those of the future.

Refer page no. 24 & 25 of Corporate Overview for a quick view into the strategic framework and outcome for Reliance.

B. THE INTEGRATED APPROACH

Reliance believes in the interconnectedness of the impacts. To enhance Reliance’s value creation and creation of a competitive business model, the Company has adopted the six capitals postulated as part of the International Integrated Reporting Council’s (IIRC) framework. RIL's performance and impacts associated with it are collectively referred to as ‘six capitals’ which include:

1. Natural capital
2. Human capital
3. Intellectual capital
4. Manufactured capital
5. Financial capital
6. Social and Relationship capital

The Company's financial performance is inherently linked to its optimum usage of natural resources and healthy relationships with internal as well as external stakeholders. While RIL’s operations work towards achieving a high level of profitability, there is a great impetus on the personal and professional development of its human capital as well. The Company is incessantly working towards bringing about technological disruptions which prove to be the game changer in their individual industries. While these innovative solutions ensure fast paced growth, they also help in reducing the operational footprint. The Company ensures the efficient and optimal utilisation of its assets to gain a competitive advantage while also taking care of the communities where it operates. RIL leverages digital technology and smart manufacturing applications to create innovative solutions for business functions. The Company’s integrated approach to value creation encapsulates its commitment to a sustainable future.

The Integrated Report demonstrates RIL's continued involvement to integrate six capitals (Natural, Human, Intellectual, Manufactured, Financial and Social and Relationship) throughout the organisation and create value for the benefit of its stakeholders.

C. RISK AND GOVERNANCE

Reliance recognises that effective risk management is crucial to its continued profitability and the long-term sustainability of its businesses. The strategic aims and activities undertaken at Reliance for risk and governance are as follows:

1. An Enterprise Risk Management Framework ensures mitigation of strategic risk while seamlessly governing the execution of operations.
2. Reliance Management System (RMS) seeks to build competitive advantage through continuous reinvention and use of technology.

RIL STRATEGIC FRAMEWORK

Group Strategic Framework establishes the goals of RIL. It also describes the strategic intent of RIL and the expectations and boundaries within which each RIL business must operate.

MANAGING NATURAL CAPITAL AT RELIANCE

Natural capital refers to the planet's stock of water, land, air, and renewable and non-renewable resources. To ensure a robust environment management system, Reliance focuses on the five areas depicted below:

RIL has instituted an Environment Policy in accordance with the principles of environmental management. RIL has constituted an ‘Environmental Compliance Review Committee’ at each manufacturing location that reviews environmental performance every quarter, with the aim to go beyond compliance. Reliance’s refinery and petrochemical units have installed and commissioned on-line analysers for monitoring emissions and discharges which are connected to PCB servers. All the manufacturing sites have adopted ‘Integrated Management System’ complying with Environment (ISO- 14001), Quality (ISO-9001) and Occupational Health and Safety Management (OHSAS-18001) Systems. As a part of capacity building, people were trained on topics such as noise and air dispersion modelling and life cycle assessment studies. To spread environmental awareness, the ‘World Environment Day’, ‘Earth Day’, ‘World Water Day’, ‘International Day for the Preservation of Ozone Layer’, among others were celebrated across sites with suitable programmes.

CLEAN AIR

EMISSION REDUCTIONS THROUGH CLEAN TECHNOLOGY

RIL has taken decisive steps to improve energy efficiency in its operations, thereby reducing greenhouse gas emission. A dedicated team works relentlessly to identify and implement energy conservation initiatives, resource optimisation and renewable energy projects at all RIL’s manufacturing sites. The Company’s initiatives on clean technology, Energy efficiency and renewable energy include:

Clean technology

Energy efficiency

Renewable energy

RIL has registered eight CDM projects with the United Nations Framework Convention on Climate Change (UNFCCC). These projects are related to energy efficiency, use of renewable energy and cleaner fuels. The Company has built in-house capacity to develop CDM projects and obtain the registration and issuance of the same in the form of Certified Emission Reductions (CERs) from the UNFCCC.

RIL is working towards reducing the carbon intensity of its energy mix by implementing energy and carbon reduction initiatives.

RIL regularly monitors emissions as it is a part of its environmental management plan. In addition to greenhouse gas emissions, the Company closely monitors the emissions of Total Particulate Matter (TPM), Oxides of Sulphur (SOx) and Oxides of Nitrogen (NOx). RIL has implemented various initiatives for emissions reduction in FY 2016-17.

CLEAN WATER

RIL seeks to maximise water efficiency in its processes by implementing numerous water conservation initiatives. In the arid areas of Jamnagar, a substantial quantity of water required for the refinery is obtained by desalination of sea water thereby saving the fresh water resources. RIL's sites continue to make process modifications to enhance water recycling and reuse.

PREVENTING SOIL CONTAMINATION

RIL ensures responsible disposal of waste generated by partnering with various agencies to encourage end-of-life recycling and reuse. The Environment policy at RIL encourages the manufacturing divisions to take appropriate measures to prevent environmental incidences and maximise recycle to reduce waste generated and disposed.

The waste generated is converted into a useful ‘bio-manure’ by vermi-composting method, thereby reducing the load of waste disposal. The wastewater generated from the manufacturing plants is treated and used for green-belt development, thereby minimising effluent discharge.

Reliance has implemented the catalytic hydrothermal liquefaction technology to convert waste plastics, such as HDPE, PP, PBR, SBR and natural rubber to crude oil equivalent. This has resulted in reduction of waste generation from the process.

Reliance undertakes adequate measures to prevent spills during handling and transportation of materials. The Company monitors spills at all its manufacturing divisions through an online incident reporting system. Additionally, it has a robust system to prevent operational spills. There has not been any major accident giving rise to significant spills at Reliance’s facilities since its inception.

PRESERVATION OF FLORA AND FAUNA

RIL conducts environment impact assessments for all new and expansion projects and engages external experts to undertake periodic monitoring of its impacts on biodiversity. In FY 2016-17, a site specific Biodiversity Assessment study was completed at Hazira Manufacturing Division.

To promote biodiversity, more than 1.38 crore saplings have been planted across all RIL sites and other intervention areas till date. RIL has also added 5,129 acres of green belt, a contribution from all manufacturing divisions since inception.

Through a unique partnership with Ministry of Environment and Forests, Government of India and Gujarat Ecological Commission, RIL is involved in setting up the National Centre for Marine Biodiversity (NCMB) - India's first Centre of Excellence for the study of India's coastal biodiversity at Jamnagar.

DILIGENT USAGE OF SCARCE RESOURCES

In order to increase material efficiency, RIL has taken various measures such as converting waste to organic manure and biogas generation, recycling of used oil, slop oil and oily sludge, recycling of waste PET bottles in its operations and spent catalysts through authorised re-processors.

RIL’s refineries have continued to remain in top quartile performance based on Solomon’s energy intensity index. 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 (GRM). With the completion of Gasification plant, Paraxylene plant, ROGC plant and associated units, Reliance’s Jamnagar will be among the highest conversion refineries globally, with no ‘bottom-of-the-barrel’ products.

Jamnagar admin block

KEY NATURAL CAPITAL INPUTS

KEY NATURAL CAPITAL OUTCOMES

The Company's intent is to ensure minimisation of environmental impact through mitigation and offset initiatives. While positive impacts like enhanced renewable portfolio and enhanced water and waste recycling help RIL offset negative impacts, mitigation of unavoidable impacts is carried out through advanced technological interventions such as clean technologies and investment in pollution control equipment.

CONTINUOUS IMPROVEMENT OVER 5 YEARS (MANUFACTURING LOCATIONS)

CREATING EMPLOYMENT OPPORTUNITIES

The Reliance Group is one of the biggest private sector employers in the country that has created employment for more than 1.40 lakh individuals. Through Jio, employment opportunities were created directly and indirectly for more than 50 lakh people. Reliance continues to maintain a progressive people environment, where purpose driven talent is attracted, engaged and motivated by a consistent, meritocratic HR framework.

RIL’s expansion into diversified segments requires special skill sets. RIL’s entrepreneurial culture is aimed to encourage the young generation to play a vital role in the organisation's growth.

NURTURING AND MANAGING TALENT

RIL nurtures its people by placing great emphasis on learning and development, career progression and employee welfare. In its journey to become a learning organisation, Reliance has been immensely focused on developing individual and organisational learning agility. The organisation has taken big steps to focus its learning investment on developing the technical, functional and leadership capabilities needed to drive future business growth. Reliance has taken big strides in enhancing accessibility of training programmes and maximising organisational performance through business aligned investments, enhancing connectedness and automation. Through R-University, Reliance has accredited 13 academies and streamlined governance through Group Learning Council, Reliance University Council and Academy Council.

The Company continues to develop top talent from its people by ensuring easy access to innovative and relevant learning. A key pillar of the learning strategy at Reliance is the democratisation, digitisation and fostering of a learning culture. Reliance strengthened the collaborative learning culture by inculcating next generation Social Media technologies. RIL launched the Digital J3, a device agnostic Video and Text blogging platform, for employees to record and share their learning experience, ask questions, and start discussions with peers across Reliance. Over 23,000 employees used the various social learning platforms, viewed more than 5.5 lakh pages, and created 171 video blogs and more than 500 text blogs.

Reliance aims to nurture talent and potential leaders at all levels of career development to provide a robust pipeline of new age leaders for tomorrow. For the FY 2016-17, 16 senior leaders have been identified for the step up program to shoulder larger roles at group leadership levels.

Additionally, FY 2016-17 witnessed the successful launch of second edition of the flagship Career Acceleration Program (CAP) which identifies and develops young talented professionals with a high potential. Of the 46 participants of CAP 2016 batch, 21 have been given the platform to progress their careers either through promotions or job enhancements.

In FY 2016-17, Reliance imparted 76+ lakh man-hours of training to its people across the group. Other than permanent employees, contract staff were also covered through various training programs.

The strategic learning partnerships with professional organisations like Skillsoft, Corporate Executive Board, among others and with renowned business thinkers like Josh Bersin and Gary Hamel have provided its employees access to worldclass opportunities to learn and enhance their professional and personal skills.

In FY 2016-17, a GST Awareness Campaign was driven through the social learning platform and was provided to 19000+ employees, to build knowledge around Goods and Services Tax and how it impacts citizens of India and the businesses at Reliance.

To encourage employees to experience broad range of learning modes, Reliance launched a culture building initiative called SPECTRUM covering 18000+ employees which manifested in the organisation witnessing a significant increase in learning hours contributed by the digital channel.

Reliance has sown the seeds for Player – Coach Culture by initiation of INSPIRE program. The program has leaders across the organisation coming forward to teach, share experiences, mentor and coach the new generation to exhibit their commitment towards learning.

As part of its Learning Strategy, Reliance is now focused on enabling full cycle/self-paced/ongoing capability development through anytime, anywhere access to personalised, on-demand learning resources. One of the key focus areas for Reliance is to enable self-driven career management and dynamic development needs identification (independent of organisation structure) followed by driving in-role excellence and enabling self-review of desired vs existing state using a comprehensive talent construct encompassing capabilities, qualifications, experiences, traits and drivers.

Reliance is making significant progress in Learning Analytics and Evaluation to gather specific insights from integrated systems to enable a seamless learning experience for the learner and the learning management for the organisation.

DIVERSITY AND INCLUSION

Reliance recognises and respects different cultures, national origin, race, religion and sexual orientation. Reliance focuses on three aspects of diversity: gender diversity, multigenerational diversity and inclusivity.

The Company promotes equal opportunity for all its employees and employs people from 21 nationalities including 95 foreign nationals in the leadership team. Employee strength as on 31st March, 2017 for RIL is 24,167 which includes 1,226 female employees. RIL supports and creates awareness on employing differently abled employees. The total number of permanent employees with disabilities as on 31st March 2017 was 71.

Reliance is committed to building a system that encourages the development of future leaders from within the folds of the Company. Dedicated to special needs of women in the workforce, the Company has laid emphasis on implementing next-generation policies like 6 month’s maternity leave followed by 6 month’s part-time working to help new mothers balance child-care priorities with work. RIL has undertaken pro-active measures such as 24x7 toll-free helpline for women, reserved parking for expectant mothers, self-defense workshop among others. R-Aadya is a common platform for women employees to connect, converse and collaborate. The program is designed to give them opportunities through its 4 pillars which include providing mentorship conversations, leadership interactions, forums and conferences and trainings and workshops (Classroom and E-learnings).

HEALTH AND WELLBEING

Reliance's state of the art facilities provide a healthy working environment for its employees. Periodic medical examinations are carried out for all the employees and their spouses. Health score is generated through Health Management System (HMS) for each individual. Round the clock emergency medical services are provided to all Reliance employees and their family members across the country through strategic tie–ups with multi-specialty hospitals. Occupational Health Centres (OHC) located at each of the manufacturing locations and corporate office offers preventive, promotive, curative and rehabilitative health services.

"Reliance Employee and Family Emergency Response Services (REFERS)" offers round-the-clock assistance in case of any medical, accident, fire and security exigencies to employees and their family. "R-Swasthya", creates a culture where its employees choose to live healthier lifestyles. Reliance promotes wellness culture among employees and family members. It organises Good Health and Health improvement awards across all its locations. JioHealthHub, an IT-enabled platform, simplifies management of health records by enabling the users to upload medical data and maintain a medical profile. Additionally, RIL owns web based Health Management System (HMS), which is a robust databank containing health records of all the employees.

Task Based Health Risk Assessment (TBHRA) is a unique program which has given focused approach to evaluate the effect of occupational hazards on individuals specific to their tasks and also provide exposure data linked to each employee or group of employees during medical surveillance. The Company undertook an ambitious work life balance (mental health program) Project "WISH" across all locations with a focus on emotional health.

RIL 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 1500 projects have been identified and control measures implemented till date.

The Company's OHCs are equipped with state-of-the-art diagnostic and therapeutic equipment. They are recognised by highly reputed agencies including the Joint Commission International (JCI), National Accreditation Board for Hospitals, and National Accreditation Board for Laboratories (NABL) among others.

Reliance has achieved the first Platinum healthy workplaces award from the Arogya World India Trust in collaboration with Public Health Foundation of India.

During the FY 2016-17, RIL invested `367.4 crores on HSE initiatives.

SAFETY

The Company’s commitment towards providing a healthy and safe work environment to its employees, contractors, and all the visitors forms the foundation of its safety processes. Reliance’s ultimate goal is to establish a zero accident work environment. A fully equipped and well-qualified HSE organisation is in place at all locations providing necessary governance, documentation and HSE assurance. To support its HSE organisation, Reliance is supported by a Centre of Excellence at the Corporate, which brings in subject matter expertise in various fields of HSE, apart from governance. RIL has implemented ‘Learning from Incidents’ across its sites to interpret incidents and make improvements in the existing practices. A team of qualified specialists provides recommendations and the action plan is monitored through a comprehensive and robust tracking system to ensure complete adoptability of the plan. Delivering safe, compliant and reliable operations leads to a sustainable competitive advantage.

ETHICS AND HUMAN RIGHTS

The Company’s Code of Conduct ensures that all its employees, suppliers and vendors are required to respect human rights of not only each other, but also of the community in which it operates. As RIL grows, it needs to ensure that ethics and compliance remain the foundation of its business practices. RIL has instituted a set of policies, codes, and guidelines to govern its employees. This mechanism includes directors, senior executives, officers, employees (whether permanent, fixedterm or temporary), and third parties including suppliers and business partners associated with RIL. The well-defined policy lists tenets on ethical business conduct, definitions and the framework for reporting concerns.

An Ethics and Compliance Task Force has been established which oversees and monitors implementation of ethical business practices within Reliance. It comprises of the Reliance Group Head of HR, General Counsel, Group Controller and Group Company Secretary. The Company has various grievance redressal channels to deal with issues related to ethics and noncompliance.

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 strives to comply with all global norms on human rights, including the principles outlined in the United Nation’s Universal Declaration of Human Rights. RIL has formed Internal Complaints Committees at all of its operational locations where employees can register their complaints against sexual harassment. This is supported by the Anti-Sexual Harassment Policy which ensures a free and fair enquiry process with clear timelines for resolution. All employees are sensitised on these topics through structured training programmes. No cases of child labour, forced labour, involuntary labour, sexual harassment and discriminatory employment were reported during the period.

FREEDOM OF ASSOCIATION

The Company has recognised employee unions and associations at various sites, which encourage the employees to participate freely in constructive dialogue with the management. Almost 100% of its non-supervisory permanent employees at its manufacturing locations are covered under the collective bargaining agreements with trade unions which also comply with the local and national laws.

LEADERSHIP EXPECTATIONS

Leadership behavioural change begins with a clear definition of what is expected from RIL's leaders. RIL has a defined Leadership Expectations (LEs) framework applicable to all senior level and group level leaders. LEs serve as a consistent guiding compass in how RIL operates, how it leads effectively, how it makes decisions and what it judges to be important. A shift in the profile of RIL's leaders is taking place, as it progresses on embedding LEs. Reliance is working on creating awareness about Leadership Expectations through R-Radio interviews and blogs of leaders in which they share about their own personal experiences on four different components of Leadership Expectations i.e. Act Decisively, Deliver Results, Value Expertise and Inspire People. RIL is also conducting targeted workshops to create role models at leadership levels. RIL's new behavioural learning interventions under “The Learning Curve” and leadership development programs are based on its Leadership Expectations framework.

EMPLOYEE ENGAGEMENT

Leadership connect with employees through multiple channels like Leadership Talk, webcasts, governance meetings. R-VOICE is a fully confidential employee feedback survey to gain actionable insights into making the Company a great place to work. It is a platform to understand the employee sentiment on leadership support, manager support, work environment, and performance and benefits. As a result, Reliance’s Leadership Support score in the survey has increased to 84% which is 9% points above global benchmark. The engagement scores have shown a steady improvement in the last 3 years with highest improvement observed in leadership support scores in the areas of vision communication and leadership trust. Peer recognition programme – “R-Sammaan” encourages individuals to acknowledge the contributions from their colleagues. Large scale events such as ‘Bring Your Family to Work’ week and ‘Reliance Founder’s Day’ are lasting memories for its employees. Business Today recognised Reliance as one of the top 25 best companies to work in India. Reliance is moving away from the ‘structured workspace’ concept and fast embracing a collaborative and inclusive open office concept, for which RIL has won the Herman Miller-REACH award in 2016.

HR TRANSFORMATION JOURNEY

In pursuit of excellence, RIL has defined world-class HR practices through its R-HR Transformation journey. Reliance has transformed as an organisation in terms of its policies, processes and systems. FY 2016-17 evidenced the first year of operations post RIL's HR Transformation initiatives where-in it continued to improve, streamline and integrate its processes while embarking on a journey of digitisation and automation. At RIL, autonomous, self-sufficient teams were created for handling responsibility for specific business outcomes to drive employee empowerment and smooth decision making. This inculcated a culture of meritocracy, transparency, empowerment and entrepreneurship across the organisation.

HR Platform is a pioneering HR service which leverages microservices architecture to provide seamless and real-time delivery and resolution of business requirements.

Human Resources – Governance, Integration, Risk and Assurance Team, focusses on strategically driving key people-focused transformational initiatives across Reliance. It establishes governance and related management assurance processes. It facilitates in adoption of progressive HR policies and institutionalising governance meetings – from team level to the highest governing body.

RESEARCH AND TECHNOLOGY

R&D MEGA TRENDS

There is an increasing focus on renewables and a low carbon economy. The demand for advance materials is increasing and the commodity chemicals are giving way to high performance specialty polymers and chemicals. It is evident that intelligent nano materials and bio materials will transform the society. Digitisation and advance analytics will enable maximisation of value from existing operations.

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 a significant value. R&D enables the innovation based growth agenda for Reliance.

R&D ORGANISATION

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

The entire R&D organisation enthusiastically embraces Reliance’s Values, Behaviors and Code of Conduct. Risk management is an integral component of the strategic framework. R&D has also implemented initiatives such as New Product Development and Introduction (NPDI), Stage-Gate, Electronic lab notebook etc. to formally manage innovation.

BREAKTHROUGH R&D

Some of the focus areas in the Company’s breakthrough R&D are as mentioned below:

BIOFUELS AND BIOCHEMICALS (ALGAE TO OIL):

Through its Algae to Oil initiative that converts sun’s energy & CO₂ to Hydrocarbons, RIL is exploring multidisciplinary biology and engineering scientific streams in order to create a safe and sustainable source of biofuels, biochemicals and nutritional products. RIL has developed some of the world’s most innovative algae cultivation systems, which the Company is using for its path-breaking research. Algae bio-crude would not only help reduce India’s dependence on energy import, but also fortify the rural economy by creating jobs. Demonstration facilities have been commissioned in both open pond and photo-bioreactor (PBR) systems at RIL's world-class algae development and demonstration facility near Jamnagar.

RIL has set a landmark in biofuels industry by commissioning the world’s largest Hydrothermal Liquefaction (HTL) demonstration unit at R&D Biofuels site at Gagwa.

BIODIESEL (JATROPHA)

RIL has made significant progress in the development of high yielding Jatropha hybrids. The hybrids will be ready for field testing in the subsequent year. RIL is also partnering with global leaders in hybrid development and evaluation with an objective of setting together best technology available worldwide. If the technology development is successful, it will help create a resource to enable production of biodiesel, helping address energy security needs for India.

FUEL CELL

Work is underway to develop Polymer Electrolyte Membrane (PEM) fuel cell. 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 PEM fuel cell technology development.

A 3 kilowatt electric capacity fuel cell has been successfully demonstrated. Based on this technology, a complete fuel cell based system prototype, meeting the technical and cost targets, is being developed and tested in field applications for eventual deployment.

COAL BED METHANE (CBM)

Work is underway to develop a technology to produce methane from underground coal reserves which will help to increase production of coal-bed methane. The Bio CBM process is targeted at converting unminable coal to methane, a fuel that can improve our country’s energy security. The unminable coal, if not redeemed for its value in the form of methane production, would be a waste of natural resources.

Various simulation studies have been undertaken to understand the effect of coal field parameters. Commercially viable productivity of methane has been demonstrated in the lab scale using a nutrient rich medium. Further optimisation to bring down the cost is underway.

NEAR-TERM R&D

Reliance has emerged as a world class developer of new and sustainable technologies in alignment with global mega trends with its R&D Group leading the way. Some of the key initiatives in this direction are as mentioned below:

POLYPROPYLENE (PP) GRADES USING RELIANCE PROPRIETARY IN HOUSE DEVELOPED CATALYST TECHNOLOGY

RIL has achieved the development and commercialisation of RIL proprietary precursor RELSTM and catalyst RELCATTM for polymerisation of propylene to produce different grades of PP required for different market sectors in record time. The development is protected with more than 40 patents filed and granted globally.

This in-house technology development has placed RIL and India in the global league of catalyst technology owners.

VALUE ADDITION TO REFINERY SULPHUR

RIL has developed an innovative sulphur based fertiliser RelFarmS that is more efficient in crop yield compared to conventional sulphur fertilisers and can effectively remediate sodic soils making them usable for agriculture. RIL has developed a proprietary sulphur based additive “RelBitS” for producing sulphur extend asphalt for road pavement application. Replacement of 20-30% of bitumen with RelBitS helps to improve the quality of a road in terms of mechanical strength, corrosion and water resistance, marshal stability, fatigue, resilient modulus etc.

MULTI ZONE CATALYTIC CRACKING (MCC) PROCESS

MCC is a new process developed for direct cracking of crude along with other distress streams for maximising propylene, ethylene and Benzene, Toluene and Xylene (BTX) yields. This technology combines several processes in a single riser platform which is unique and first time in the world, leading to reduction in cost of production of olefins. MCC technology development demonstrates the fundamental transformation of RIL from technology in-licensor to flagship developer of world class refining technologies. RIL has been granted patents in USA, Australia and Singapore.

ENHANCED PROPYLENE RECOVERY TECHNOLOGY (EPR) IN FLUIDISED CATALYTIC CRACKING (FCC)

RIL has developed and implemented an innovative and unique process which has enhanced recovery of propylene and LPG from the fuel gas at minimal additional operating cost. The EPR process can be implemented in both existing as well as grass-root FCC units, particularly in high capacity and high severity units. The process has been patented worldwide and has received multiple awards namely Petrofed, International Chamber of Commerce (ICC), and Indian Institute of Chemical Engineers (IIChe).

R&D – HEALTH, SAFETY AND ENVIRONMENT (HSE)

R&D at RIL gives a lot of emphasis on HSE, few examples of R&D initiatives focusing on HSE are mentioned below:

A. RIL’S LOW COST CO₂ CAPTURE PROCESS

Capturing industrial CO₂ emissions is a key to sustainability and environmental protection. RIL has developed an innovative fluid bed process that can capture CO₂ from flue gas and other industrial emissions at a 70% lower operating cost than existing amine systems. This technology makes it practical to produce chemicals from CO₂ and also provides feedstock for biological systems such as algae based products.

B. REPLACEMENT OF ASBESTOS FIBRE IN CEMENT ROOF SHEET PRODUCT BY USING SHORTCUT POLYESTER FIBRE

Asbestos is a naturally occurring mineral found in underground rock formations. Mining of Asbestos in banned in India due to accompanying health hazards, but its usage is not. Thus, the industry depends on 100% imports. RIL is working on replacement of Asbestos fiber in cement roofing sheets which are used for sheds and poor people’s huts, with the application of cost effective new engineered Recron^® 3s fibers. They also have a better affinity with cement and improves the working performance.

Till date, 30% Asbestos fiber replacement is proved successfully and further research is being carried out to develop the product for replacement of 100% Asbestos. This project will reduce the overall imports of the Asbestos in the country.

R&D PRODUCT STEWARDSHIP

R&D REFINING

The key focus areas for R&D in Refining domain are coking, hydro processing, Fluidised Catalytic Cracking (FCC), reforming, crude processing, reliability improvement and process optimisation, based on molecular level characterisation and models. The Company is also venturing into new areas like biomass gasification, value addition/utilisation of refinery byproduct sulphur and nanotechnology-based applications besides conventional refining areas. The Company is also looking into areas like syngas conversion to chemicals and value addition of refinery by-product streams like metal recovery from slate.

R&D PETROCHEMICALS

Reliance Petrochemicals R&D supports aromatic complexes, olefin crackers, polymers, fibre intermediates, LAB, polyester and effluent treatment. The focus areas include:

ADVANCE PROCESS CONTROL (APC) & REAL TIME OPTIMISATION (RTO)

At Reliance, there is a strong focus on improving and optimising process units continuously by minimising process variations, increasing unit throughput, optimsing yield and minimising utility consumption through APC and RTO applications. With a strong APC/RTO team, which does in-house implementation (from concept to commissioning) and maintenance, RIL ensures improved stability, reliability and profitability of the process units in a sustainable manner. RIL has close to 200 APC/RTO applications running continuously in 66 different units of Refinery, Petrochemical and Polymer plants optimising and utilising assets to the full potential.

R&D JIO

Jio envisages to usher in the era of "visuality", where video will replace voice as the new communication medium. It is future ready and can be upgraded as technologies advance to 5G, 6G and beyond. Jio has so far filed 54 global patents.

R&D ENABLERS

INFRASTRUCTURE

The state-of-the-art R&D department, headquartered in Navi Mumbai, is supported by regional R&D centres spread across India. The Company’s R&D centres are among the best equipped in the country for conducting high end interdisciplinary research.

Scientist working at R&D Lab

COLLABORATION

Reliance continues to actively collaborate with various reputed institutes/partners in India and overseas. Some of Reliance’s prominent collaborators are: University of Helsinki (Finland), Pacific Northwest National Laboratory, ICGEB(New Delhi), Bharathidasan University, Ruia college, 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

RIL runs initiatives and campus recruitment drives across universities and colleges to attract fresh talent and the next generations of engineers and scientists. To support RIL’s research and development activity, RIL has a highly talented pool of 900+ scientists, technologists and engineers from reputed Indian and international institutes, few of them are listed below:

Some of these scientists are having membership or fellowship in reputed bodies viz. IIChe, NBRI & FANE among others.

INTERNAL CROWD SOURCING

The R&D Social platform enables the researchers to blog their ideas and seek feedback from an internal community similar to social networking exploiting efficient digital technology platforms.

INTELLECTUAL PROPERTY

Reliance has emerged as an active patent filer in recent years. The company is continuing its efforts towards building a cohesive, comprehensive and business-aligned patent portfolio. In FY 2016-17, a total of 60 patents were granted to Reliance. Reliance has qualified in the Asia IP Elite, a selected club featuring companies from Asia Pacific region which emphasise on integrating intellectual property with commercial decision making. This recognition has been granted by the publisher of "Intellectual Asset Management", a leading Europe-based bi-monthly magazine.

DIGITISATION IN R&D

R&D is continuously developing and implementing fit-forpurpose management systems, work processes and tools for achieving technical excellence. It also aims to create a high performance environment for people to innovate and contribute towards organisation & individual growth. Few of the examples of digitisation and process centric initiatives are mentioned below:

A) NEW PRODUCT DEVELOPMENT & INTRODUCTION (NPDI)

RIL has implemented a SAP based tool to manage R&D projects using a structured stage gate based methodology. This is an end to end digital process chain from "Concept to Commercialisation".

B) ELECTRONIC LABORATORY NOTEBOOK (ELN)

RIL has implemented best in class Electronic Laboratory Notebook (ELN) which is seamlessly integrated with Laboratory Information Management System (LIMS) as part of R&D digitisation initiatives to establish a robust and reliable laboratory execution systems. ELN user interface is entirely flexible and can be tailored by creating experiment templates that allow the scientist to easily enter information as well as directly capture results from interfaced analytical instruments and barcode systems for sample lifecycle management.

C) INTELLECTUAL PROPERTY MANAGEMENT SYSTEM (IPMS)

R&D at RIL has implemented an enterprise wide Intellectual Property Portfolio Management application from product leaders “Thomson Reuters” for centralisation of patent filing which enables focused patent filing to build a strong patent portfolio. It helps in having a centralised repository for various stakeholders input/decision, simplifying patent maintenance and audit of patents.

INNOVATION

At Reliance, innovation is a way of life that allows the Company to create real, sustainable value for all its stakeholders. Reliance considers innovation from an organisational point of view – not just from a product, process or R&D point of view.

RELIANCE INNOVATION COUNCIL

The Reliance Innovation Council (RIC) is a unique corporate entity that 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 among 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 College 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 expert.
Follow Reliance Innovation on Twitter: @RILInnovation

The Reliance Innovation Leadership Centre (RIL-C) was set up to serve the innovation vision of the Company. RIL-C and the Company’s leadership implement Reliance’s innovation agenda by deploying the best and next innovation practices.